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Q&A with Bank of America Inland Empire Market President Retiree Al Arguello; A 53 Year-Long Career

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This year marks Al Arguello’s 53 years with Bank of America, and his retirement as Inland Empire president. We sat down with Al to talk about the evolution of the banking industry and the changes he’s seen within the Inland Empire overall.

Q: How has the banking industry changed since you began your career?

I started working for Bank of America right out of high school as a bank teller in 1968, so you can imagine I have seen quite a bit of change in the past 53 years. There were no ATMs, no online banking services, and certainly no smart phones.  The bank was only open from Monday through Thursday, and not even for a full day – we closed at 3 p.m. 

Architectural drawing of Bank America San Bernardino

Everything was done on paper, carbon copies and files. Even deposits from the Inland Empire were sent every evening by courier to a central vault in downtown Los Angeles. And if a branch manager was late getting a deposit to a courier, he or she had to drive to L.A. to make sure it was properly recorded.

On some days, like when Social Security checks arrived, the local bank branch became the social gathering of the week for senior citizens as they waited in line to deposit their checks. I even used to set up 50 or more chairs for seniors on those days. Bank of America has always supported local community businesses, and on some days, we’d even have a local auto dealer bring over a new car to display on the branch lobby floor as an incentive for people to apply for a car loan.

Today, more than 80% of checks are deposited outside the four walls of a bank branch – which tells you a lot about how people have embraced technology for the most common self-service transactions. But bank branches will always play an important role for Bank of America, more commonly serving as destinations for more complex financial needs, loans and planning. 

Q: How has the Inland Empire changed over the past years?

I’ve been fortunate enough to have been a resident of the Inland Empire for more than 35 years now and have seen incredible growth. 

The Inland Empire is a large area, and that includes the Coachella Valley. When I started, the Coachella Valley was a tale of two cities – the wealthy areas and the very poor ones.  What was rewarding was to see was the creation of some great nonprofit organizations that supported those less fortunate, and to help direct bank capital and grants to the region serving as a catalyst for economic growth for disadvantaged communities.   

Another major change was the continued expansion of the Ontario airport as a major freight center, and the overall establishment of the Inland Empire as a major logistics center. More than 40 percent of all the imports that come into our local ports make their way to our warehouses. Add tourism, hospitality and leisure to logistics, and Ontario Airport truly fueled the Inland Empire’s economic muscle over the past decades.  

Q: What are some of your proudest accomplishments during your time as a bank president? 

As an immigrant from Nicaragua, and the first to attend college in my family, working at the bank sparked my lifelong passion to help the financial lives of customers in our communities. In my 14 years as Bank of America’s Inland Empire president, I came into the role just before the great Recession and the foreclosure crisis that rocked the nation but certainly the region. As the crisis unfolded, I brought together many of the leaders across the housing industry to identify solutions for families at risk of losing their homes and to establish sustainable ways to maintain homeownership. This was the beginning of the Housing Opportunities Collaborative of the Inland Empire, which supports nonprofit agencies helping distressed families facing foreclosure and so much more today. 

Coming out of the recession, small businesses in the region were also suffering along with new start-ups.  I took the same collaborative approach in creating the Micro Enterprise Collaborative of Inland Southern California, which encourages micro-business development in the region and helps identify resources and access to capital. Today, the Micro Enterprise Collaborative has helped countless local entrepreneurs grow and succeed. 

I also am proud of helping to direct tens of millions of dollars in philanthropic capital to many important organizations across the Inland Empire – from the High Desert to San Bernardino and Riverside, and out to Palm Springs and the rest of the Coachella Valley. The bank has one of the largest corporate philanthropies, and I had the important honor of helping nonprofits address basic needs like food and housing security, jobs and education needs, and even the arts that serve as important economic drivers. The new Cheech Museum for Latin Art in Riverside is estimated to generate over $20 million annually for the region, for example. 

In the end, I hope I’ve made lasting impacts helping to address the region’s challenges to forward economic stability for families, workers, veterans, homeless and distressed communities.

Q: Given your tenure at the bank working closely with the Inland Empire business community, is there any advice you’d give to business owners?

As our local businesses slowly but surely regain their footing after a uniquely challenging year, we’ve seen encouraging signs of progress towards economic recovery with increased confidence from small businesses expecting their revenue to increase over the next 12 months and plans to hire. As business owners navigate the path forward, it’s important to take what we’ve learned from the past year and apply it to the changing future. Small steps such as investing to ensure you attract top talent, evaluating short and long-term goals, and implementing operational shifts such as increasing your digital sales strategy and reevaluating your company’s impact on the community all can help. And, as I have already pointed out, it’s also important to invest in your community to ensure overall strong quality of life.

The Inland Empire Business Journal (IEBJ) is the official business news publication of Southern California’s Inland Empire region - covering San Bernardino & Riverside Counties.

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Banking & Financial Services

All Eyes On The Fed… But Will It Change The US Forecast?

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Federal Reserve Policies At The Root Of Recent Bank Collapses; California: A Better Recovery Than We Thought!

The recession forecasted by so many still hasn’t shown up and is looking less and less likely to anytime soon, according to Beacon Economics‘ latest outlook for the United States and California. Moreover, the recent bank failures that have been capturing headlines are being ‘wrongly viewed’ as heralding a coming downturn, something that misses the actual drivers behind the collapses and that key economic data refutes.

“These bank failures are not a reflection of an unhealthy U.S. economy, they are all about Federal Reserve policy,” said Christopher Thornberg, Founding Partner of Beacon Economics and one of the forecast authors. “Sad by true; the body that is supposed to be the wise shepherd of the nation’s banking system is largely responsible for creating the very stressors that caused Silicon Valley Bank to fail, and the run on others to begin.”

According to the outlook, the U.S. banking system, overall, is the victim of quixotic and rapid changes in Fed policy over the last three years as they have tried to maintain both full employment and price stability – which can be mutually exclusive. “In their existential panic over full employment during the pandemic, the Fed destabilized prices by injecting historic amounts of cash into the economy; in their existential panic over price instability, they destabilized the banking system through interest rate increases,” said Thornberg.

The new outlook acknowledges that the sudden crosscurrents from the bank failures have made the forecast fuzzier because stress in the banking system will eventually show up in the broader economy in the form of tightening credit. However, the new forecast does not believe those stressors, on their own, will rise to the level of a recession. “Cash is still king in the U.S. economy,” said Thornberg. “But if the Fed decides to continue raising interest rates in its quest to slow inflation, it will do more damage to the bank credit industry and that will trigger negative consequences for the overall economy.”

Assuming the Fed slows their roll, which they’ve shown some signs of doing, Beacon Economics is expecting slow growth and no recession in the near-term future. The forecast has real U.S. GDP growth in the first quarter coming in between 1% and 2%, although the margin of error has increased given the policy uncertainty.

In terms of the macro economy, the new outlook points to copious evidence of its health: unemployment in the nation remains rock bottom, consumer spending continues despite inflation, earnings growth is still running above 6% for the median worker, U.S. household net worth remains 30% ($30 trillion) higher than it was pre-pandemic, banks are not experiencing an increase in problem loans, and interest rates have started to stabilize causing asset markets to do the same.

In California, the news grew rosier this month after the state released its annual employment revisions, although a declining workforce continues to hamper economic growth. The revision shows that California recovered more and faster from the pandemic’s job losses than previously estimated: There are 197,000 more people employed in the state today than there were pre-pandemic. The original estimates had the gain at a mere 70,000.

However, in terms of the percentage increase, California’s job growth has been about five times slower than states such as Florida and Texas. “The underperformance we’ve seen is certainly not due to any unwillingness on the part of the state’s employers to hire workers,” said Taner Osman, Research Manager at Beacon Economics and one of the forecast authors. “Rather, California’s labor force contracted during the pandemic and there are well over 300,000 fewer workers in the state today than there were before COVID hit; there are simply not enough workers to fill the number of job openings.”

Deeply linked to its declining workforce is California’s famously expensive housing market, where prices surged an astounding 41% during the early days of the pandemic. Today, higher interest rates have led to a collapse in demand and home sales have returned to their pre-pandemic trough. However, home prices remain 27% above where they were pre-pandemic and the new forecast only expects them to fall by 6.3% in 2023. “Given California’s acute long-term housing shortage, it’s not surprising that price drops will be limited,” said Osman. “And this isn’t anything like the Great Recession because consumer balance sheets are so much stronger today and unemployment rates are at all-time lows.”

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Banking & Financial Services

Why the Bank Failures Don’t Change the Economic Outlook (Mostly); Recession Remains Unlikely in 2023, Says Leading Forecast

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Federal Reserve Policies At The Root Of Recent Bank Collapses; California: A Better Recovery Than We Thought!

The recession forecasted by so many still hasn’t shown up and is looking less and less likely to anytime soon, according to Beacon Economics‘ latest outlook for the United States and California. Moreover, the recent bank failures that have been capturing headlines are being ‘wrongly viewed’ as heralding a coming downturn, something that misses the actual drivers behind the collapses and that key economic data refutes.

“These bank failures are not a reflection of an unhealthy U.S. economy, they are all about Federal Reserve policy,” said Christopher Thornberg, Founding Partner of Beacon Economics and one of the forecast authors. “Sad by true; the body that is supposed to be the wise shepherd of the nation’s banking system is largely responsible for creating the very stressors that caused Silicon Valley Bank to fail, and the run on others to begin.”

According to the outlook, the U.S. banking system, overall, is the victim of quixotic and rapid changes in Fed policy over the last three years as they have tried to maintain both full employment and price stability – which can be mutually exclusive. “In their existential panic over full employment during the pandemic, the Fed destabilized prices by injecting historic amounts of cash into the economy; in their existential panic over price instability, they destabilized the banking system through interest rate increases,” said Thornberg.

The new outlook acknowledges that the sudden crosscurrents from the bank failures have made the forecast fuzzier because stress in the banking system will eventually show up in the broader economy in the form of tightening credit. However, the new forecast does not believe those stressors, on their own, will rise to the level of a recession. “Cash is still king in the U.S. economy,” said Thornberg. “But if the Fed decides to continue raising interest rates in its quest to slow inflation, it will do more damage to the bank credit industry and that will trigger negative consequences for the overall economy.”

Assuming the Fed slows their roll, which they’ve shown some signs of doing, Beacon Economics is expecting slow growth and no recession in the near-term future. The forecast has real U.S. GDP growth in the first quarter coming in between 1% and 2%, although the margin of error has increased given the policy uncertainty.

In terms of the macro economy, the new outlook points to copious evidence of its health: unemployment in the nation remains rock bottom, consumer spending continues despite inflation, earnings growth is still running above 6% for the median worker, U.S. household net worth remains 30% ($30 trillion) higher than it was pre-pandemic, banks are not experiencing an increase in problem loans, and interest rates have started to stabilize causing asset markets to do the same.

In California, the news grew rosier this month after the state released its annual employment revisions, although a declining workforce continues to hamper economic growth. The revision shows that California recovered more and faster from the pandemic’s job losses than previously estimated: There are 197,000 more people employed in the state today than there were pre-pandemic. The original estimates had the gain at a mere 70,000.

However, in terms of the percentage increase, California’s job growth has been about five times slower than states such as Florida and Texas. “The underperformance we’ve seen is certainly not due to any unwillingness on the part of the state’s employers to hire workers,” said Taner Osman, Research Manager at Beacon Economics and one of the forecast authors. “Rather, California’s labor force contracted during the pandemic and there are well over 300,000 fewer workers in the state today than there were before COVID hit; there are simply not enough workers to fill the number of job openings.”

Deeply linked to its declining workforce is California’s famously expensive housing market, where prices surged an astounding 41% during the early days of the pandemic. Today, higher interest rates have led to a collapse in demand and home sales have returned to their pre-pandemic trough. However, home prices remain 27% above where they were pre-pandemic and the new forecast only expects them to fall by 6.3% in 2023. “Given California’s acute long-term housing shortage, it’s not surprising that price drops will be limited,” said Osman. “And this isn’t anything like the Great Recession because consumer balance sheets are so much stronger today and unemployment rates are at all-time lows.”

View the new The Beacon Outlook including full forecast tables here.

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Banking & Financial Services

Bank of America Private Bank Announces New Inland Desert Market, Names Patricia Chavez as Market Executive

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Reflecting the growing wealth and economic expansion of the Inland Empire, Bank of America Private Bank today announced Patricia Chavez has been named as the Market Executive for the Private Bank’s newly created Inland Desert market. This market will serve Private Bank clients across the Inland Empire from offices in Palm Springs, Palm Desert, Ontario, and Riverside. Chavez will oversee a team of dedicated private client advisors who deliver custom investment management, wealth structuring, estate planning, philanthropy, private business financing, banking, credit and trust service needs to high net worth individuals, families and institutions.

“We believe Patricia’s extensive leadership and experience make her the perfect candidate to lead this market,” said Mark Benson, Private Bank Managing Director/ West Division Executive. “Throughout the Private Bank’s long history, we have helped our clients by providing personalized investment management, credit and banking solutions and as a bridge between generations. Under Patricia’s leadership, the local team will continue to deliver private banking capabilities to help clients create a legacy that gives meaning to their wealth today and in the future.”

Chavez is a third-generation Bank of America employee who began her career as a teller in La Mirada in 1989.  She most recently served as Managing Director and Philanthropic Market Executive for the West and Central North Divisions for Bank of America Private Bank, and prior to that was a Business Banking executive for the Inland Empire for 14 years. She serves on the board of trustees for the Autry Museum of the American West, sits on the College of Business and Public Management Advisory Board of the University of La Verne, and previously served on the boards of Habitat for Humanity Riverside, Foothill Family Shelter Upland and the Inland Empire Economic Partnership.

Chavez earned her M.B.A. with a concentration in Finance from the University of La Verne, her Bachelor’s degree in Business Administration with an emphasis in Marketing from California State University Fullerton, and is a graduate of Pacific Coast Banking School.  Last year, she was recognized as a “Top Woman of Influence in Banking” by the Los Angeles Business Journal and as a “Latina to Watch” by the Association of Latino Professionals For America (ALPFA).

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