GonzoBanker is pleased to honor Carmen Jordan as GonzoBanker of the Month to kick off 2009. Why do we consider Carmen Gonzo? Simply put, Carmen demonstrates a trait that the folks at Cornerstone value immensely: the guts to niche. Carmen is senior vice president and manager of Corporate Energy Services Lending at Amegy Bank in Houston, Texas, a division she founded in 2002. In our humble opinion, Carmen has tenaciously built a strong base of loyal customers through up and down cycles. How about results? Carmen and her team of eight have originated over $2B in new loans since 2002 and been responsible for a full 10% of Amegy’s profitability. In terms of personal achievements, Carmen has posted a remarkable zero loan losses in 18 years of banking. She became the youngest and first female member of Amegy’s senior loan committee in 2006, and was recently listed as #10 of 25 Women to Watch by U.S. Banker. No malo.
GonzoBanker spent some time with Carmen recently in a bid to gain her perspective on the current banking environment and ask for a few tips on Gonzobanking in the volatile world of energy lending.
Name: Carmen Jordan
Title: Senior Vice President and Manager of Corporate Energy Services Lending at Amegy Bank ($12.3B)
GonzoBanker Title: NicheCommercial Lender Extraordinaire
The Early Days: Carmen received her Bachelor’s Degree in Business Administration and Finance from Lamar University in Beaumont, Texas. After graduation, she went to work as a branch manager for First Interstate Bank in Texas. In 1997, after 6-1/2 years at First Interstate, she made the move to Amegy, shifting gears to become a commercial lender. In reviewing her career to date, Carmen remarked good naturedly that having followed her First Interstate manager to Amegy, “I’ve had the same boss for 18 years.” GonzoBanker says, now that’s a team!
Taking on Gas & Oil, with a Passion. Established in commercial lending, Carmen began her foray into the world of gas and oil by building several energy services companies into her Amegy portfolio. Carmen recalled that her interest in energy services got started when “one particular prospect took me on a tour of his workover rigs in south Louisiana. He took the time to carefully explain each piece of equipment on the rig and how the rig was used by exploration and production companies to enhance production of the wells.”
That tour of the rigs ended up leading to bigger things. In 2002 Carmen stepped up to found Amegy’s energy services lending division. “We realized that the few banks in the middle market segment that had energy services divisions tended to focus on the higher corporate end, so there was a definitely a need for a bank that would handle private equity mid-market sponsored deals and acquisitions for private equity firms.” This has turned out to be the division’s primary niche. “It was surprising to me how much growth there was to be had in the industry,” said Carmen. “We thought we knew everybody, but as the industry grew the opportunities just multiplied. We are smaller than many of our competitors but we took the leap anyway and with hard work on the part of our team, we’ve become the ’go to’ bank for private equity.”
When Commodities Plummet – Transforming Calamity into Money. Today’s economic environment offers plenty of challenges. But, taking a page from Albert Einstein, Carmen has found opportunity in the midst of difficulties. “No one anticipated the pace at which [oil and natural gas] prices would plummet,” said Carmen. “We know it can and will happen; this industry cycles every few years and we do structure deals accordingly. However, we haven’t seen a crash of this magnitude in decades and so, like everyone, we were caught a little by surprise.”
According to Carmen, energy service lending is a function of understanding the overall market dynamics and product demand and which products or services will be most affected by a decrease in commodity prices. 
Here’s proof how “gritty” Carmen’s become in this business: seismic data is generally one of the first capital expense items cut in a declining commodity price environment. So, while Carmen believes that commercial and energy lending are similar in that the working capital lines are typically secured by accounts receivable and term loans are secured with equipment, she feels the difference lies in “the extreme volatility of commodity prices and subsequent demand for our customers’ products and services. The bottom line is it is prudent to limit the amount of term debt in this industry.”
[Fiscal] Conservatism Rises from the Ashes. Carmen is justifiably proud that in a virtually stalled credit market, Amegy is one of the few banks still active in the energy space. The bank’s inclination toward structuring conservative deals, which during the “go go” days sometimes got in the way of making deals, according to Carmen, has become a marked strength. “There is a lot of strain on the industry, and if there’s a deal to be done, it is definitely in the bank’s favor to be able to do a good, strong conservative deal. Fortunately, that’s something we’re experienced at, and comfortable with.”
Carmen feels that the success of the energy lending division in both flush times and the current lean ones has been about “holding to our basic standards of appropriate leverage. If that means losing a deal occasionally, it means losing a deal. You need to know who you’re dealing with and maintain the discipline to only do relatively conservative deals. You can’t say enough for good performing credit in a downturn.”
Justify, Don’t Apologize. This is the approach Carmen urges for all commercial lenders. According to Carmen, recent hyper-competition among banks has caused margins to be very thin, with many banks not charging enough to cover risk-adjusted losses. “Nowadays it’s easy to feel almost apologetic when you can’t offer a client approval on the same terms they had before,” Carmen noted. “We need to be in there saying, here is our cost structure; this is what we need to break even.”
Soccer Mom, Literally. When Carmen isn’t in the office, she loves hanging out with her husband Matt, and two girls, Kelsey, nine years old, and Kendall, 21 months. And, in a twist on the soccer mom adage, Carmen not only chauffeurs Kelsey to soccer practice, she is an avid soccer player herself. Carmen is also very involved with mentoring young women within the community and within the Amegy organization.
Movies and Books. Carmen is a fan of movies that offer a strong entertainment component; and recently enjoyed watching Napoleon Dynamite with her kids. On her own time, she’s an avid reader and is currently immersed in The Last Voyage of Columbus: Being the Epic Tale of the Great Captain’s Fourth Expedition, Including Accounts of Swordfight, Mutiny, Shipwreck, Gold, War, Hurricane, and Discovery.
Feeding the iPod. High School Musical 3 is on the playlist, inspired, Carmen admits, by her older daughter’s musical tastes. “My own musical taste is so eclectic, I wouldn’t know where to start,” she laughed.
GonzoBanker is inspired by Carmen’s no-nonsense, results-oriented approach to lending and is proud to donate $250 in her name to Big Brothers and Big Sisters of Greater Houston, an organization Carmen has been involved with in both chair and advisory roles since 2001.
Article written by Diana Ferguson
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