VALLEY NATIONAL BANK

VALLEY NATIONAL BANK PROGRESSING WITH ARIZONA VALLEY NATIONAL BANK FINANCING AMERICA'S MOST FLOURISHING FRONTIER

Among the many remarkable things about Arizona that astound the rest of the country, by no means least is the home-grown institution familiarly known as the Valley Bank. Visiting businessmen invariably do a “double take” when they first hear that it is the largest bank in the 8 Rocky Mountain States. Rapidly ticking off their mental geography they still protest, “Bigger than Salt Lake banks or Denver banks?” Natives, with considerable sardonic amusement, give the visiting egos another twinge with the information that the Valley National Bank is now 62nd in size among the nation's 15,000 commercial banks. And they toss in a figure to command respect anywhere—the bank's total resources of $413 million (June 30, 1956). Arizonans seem to take their bank's position and size right in stride. In the first place, the Valley Bank and its top officials have always been as accessible as the corner druggist.

About the only time executive doors are closed are for top-level conferences—or when the principal is laboriously writing out a speech in longhand on a schoolboy's yellow pad. Before even attempting to dig into the reasons behind the phenomenal growth of a little country bank into the rarified atmosphere of the 100 largest banks in the United States, let's throw in a few more facts that point up its accomplishments and present standing.

Arizonans, including Indians on reservations, now total about one million. Numerically speaking, one person in every Arizona family is a Valley Bank customer, for this 40-office bank annually serves some 350,000 customers. Indeed, half of all the money on deposit in Arizona is on deposit in the Valley National Bank.

And just counting current instalment loans on the books, one out of every 10 persons in the state is indebted to the bank right now. For a number of years the Valley Bank's loan volume to Arizonans has averaged one million dollars every working day.

This level of participation in a state's economy, ofcourse, requires considerable manpower. The bank's employees, together with their families, if settled in one spot would aggregate enough to constitute Arizona's 14th largest city.

The story of a country bank that went to town is primarily the story of two brothers - Walter and Carl Bimson. Walter served as president for 20 years, until 1953. and then moved up to the chairmanship as Carl became president. Under their guidance the bank's deposits climbed steadily from $6 million to $377 million a rate of increase that statisticians can only diagram on narrow, vertical charts.

It is well, at the outset, to remember that there are no fabulous Texas or California oil wells to account for this monumental financial growth. Also, there are many other fine banks in Arizona, although the Valley is by far the largest.

A great many people give the Valley Bank credit, to a marked degree, for the fabulous Arizona boom of the past dozen years. Booms don't boom without cash, knowhow and active support. The Valley National has supplied large quantities of all three so that Arizona might expand from a one-horse state into a splendid desert-and-mountain empire, doubling its population in the process.

Through all these hustling years, the bank has been busy proving that its faith in the future of this state was based on cold analysis and sound conviction. It has helped erect factories where the desert once lay bare and sun-baked. It has grubstaked builders to make subdivisions bloom where only alfalfa sprouted before. It has helped start new farms and ranches and helped the ranchers operate them profitably. It has coaxed new businesses, military bases and flying schools into Arizona, to produce new wealth. It has spread Right, a pioneer bank on the Arizona frontier advertizes to call attention to its proud assets.

Below, in this modest building in Graham County was born a bank destined to set banking history.

the word about Arizona's scenery and sunshine broadside throughout the land, to bring tourists in by droves. Then it financed new hotels, motels and resorts to take care of the tourists.

And tourists who come to Arizona have a way of returning promptly, bag and baggage, to settle down as residents. Perhaps they are influenced by the bank's perennial question, "Why not work where it's fun to live?"

The bank has set up hundreds of people in business and helped countless others enlarge their businesses to capitalize on the opportunities of a burgeoning state. It has staked thousands of ex-G. I.'s to homes of their own. Under the bank's guidance, farm hands have become independent ranchers; building trades people have become nationally-famous subdivision builders. Perhaps capping all of the Valley Bank's accomplishments, at least as far as sheer drama goes, this Arizona institution made it possible for a whole modern town to spring forth full-blown in the desert... the brand-new copper community of San Manuel.

We said before that the guiding hand was that of the Bimson brothers. In order to bring them into focus it will be necessary first to digress and follow the progress of this bank from its inception.

The birthplace was a frontier town now dwindling away in adobe dust, Solomonville, near the eastern border of the state's Southern region. The bank was then known as the Gila Valley Bank (pronounced "Heel-ah" in the Spanish tradition). It was launched in 1899 by a hardy little band of frontiersmen who scraped together $25,000 in capital and opened for business in a corner of the town's general store.

As soon as it was securely established, the Gila bank started to expand. Its first branches were opened in the copper towns of Clifton and Morenci, and then it settled This Bank solicits accounts, offering to depositors liberal treatment and every facility consistent with sound banking principles.

THE GILA VALLEY BANK

Buy and sell foreign exchange, and have for sale steamship tickets to and from all European and Asiatic ports.

down to weather a series of crises-meteorological as well as financial.

For instance, there was the Clifton flood of 1905. When it started, the manager of the bank's local branch was sick at home. So his wife and a deputy sheriff lugged the bank's whole cargo-gold, silver, greenbacks and ledgers - up to a cave in the side of a cliff and took turns standing shotgun-guard throughout the night. When the savage waters finally retreated, one wall of the bank was gone and there was a foot and a half of silt on the floor. But not one penny had been lost.

Then came the great panic of 1907. Money vanished from circulation and there were bank runs throughout the nation. But the Gila Valley survived.

In 1910, the bank had seven branches and hit a million dollars in deposits. In 1914, it became the largest bank in Arizona. That was also the year in which it took over the name "Valley" Bank. The occasion was a rescue in the truest Western tradition, with the hero (Gila Bank) arriving in the nick of time to save the heroine (the old Valley Bank of Phoenix) from catastrophe.This, also, is ancient history by now. In a nutshell, the Gila Bank officers re-opened the Valley Bank of Phoenix, ran it separately for a period and then, in 1922, merged the Gila into it. Retained was the single name, "Valley Bank."

The Valley Bank continued to grow, adding new branches as well as new customers. Then, in 1929, occurred the great market crash. In the ensuing pile-up, banks folded in clusters and bankers by the dozen jumped out of 11th story windows. The Valley Bank had an 11th floor window, all right, having just built a new building of that height. But nobody jumped out of it and the bank stood

As a matter of recorded history, whatever his inner reservations, his first meeting with bank officers found him commanding, "Make loans! the biggest service we can perform today is to put money into into people's hands. Use it to get buying underway, to get business and farm production underway. Start making loans tomorrow. Let the bank's customers know that the Valley Bank is in the lending business and we'll have recovery."

One of the first experiments that Bimson tried was persuading the governor of the state to close down every bank in Arizona. It was not so much an experiment, of course, as a desperate measure of salvation. The great nation-wide bank holiday had started up in Michigan and spread to neighboring California. Bimson feared that Arizona might be in for panic and bank runs. On the night that the governor of California issued his bank-closing proclamation, Bimson routed the governor of Arizona out of bed in his pajamas and pleaded with him to do likewise. The next morning at 8 o'clock he met the governor at the state-house with a prepared proclamation and it was signed. The bank holiday, epidemic throughout America, had come at last to Arizona.

But the money started flowing into the paralyzed channels of commerce in Arizona of 1933, and the results were apparent almost immediately. The bank made loans to businessmen for inventory and expansion. It loaned money to schoolteachers for summer school and vacations. It made educational loans to students, 4-H loans to youngsters and improvement loans to homeowners. It sent its representatives out to "the forks of the creeks and edges of the desert" to offer loans to merchants so they could stock refrigerators, electric ranges and modern plumbing. Then it loaned money to ranchers and farmers so they could buy these gadgets and bring themselves and their families into the 20th century.

Even today Bimson insists on broadening the base of bank services to customers. "I'd rather make ten loans for $1,500 each than one for $15,00o," he says.

At the time it was axiomatic among bankers not to make instalment loans to "plain people" in the depths of a depression. To encourage small-income folks to go into debt, they said to Bimson, was nothing short of immoral.

"Immoral!" exploded Bimson. "Immoral to show a man how he can buy a washing machine so his wife won't break her back over a washboard? Immoral to help an enterprising individual equip and start a small business of his own? Immoral to enable a teacher to go to summer school so she can earn more pay and teach better? Immoral? Nonsense!

And he went right ahead making loans up and down the streets of Arizona.

Today, with easy credit available in blaring headlines at most stores, it may be difficult to understand the audacity of banker Bimson in the early thirties. In those days, his decision took conviction and courage, both of which he had in ample supply.

One of the things that Valley National pioneered in was the Saturday Morning Bank. Youngsters could come in on Saturday, when school was out, and borrow small sums for part-time money-making enterprises, like raising cows or pigs or bees. There was one hard-working lad who parlayed his Valley Bank loan into a net worth of $5,125. Another developed a thriving goat farm. And a kid so sick with asthma that he couldn't stay in school borrowed $20 and bought a pair of parakeets. By the time he was 21 he had a large aviary.

But for every youngster who was given a leg up by the Valley Bank, there were at least a dozen grown-ups helped along the road toward security and self-reliance. Many an Arizonan, with more ambition than money, got his start to success with capital and equally valuable advice from the Valley Bank. A bakery driver borrowed enough to build a small grocery store and wound up owning a chain of grocery stores and restaurants. A man with tuberculosis, who had come to Arizona for his health, got a loan to launch a modest music store and worked it up to a $30,00o-a-year business. And so it went in instances without number.

The bank didn't stop at just making loans. When its money walked out the door, a bank official walked right out with it, to ascertain that the money was well-invested and to help the borrower get off to a healthy start. He was given expert counsel on where to locate his business, how much to spend on insurance and advertising, how to set up his books. If he hadn't asked for as much money as the bank thought he'd need, the bank encouraged him to ask for more.

Policies like these were bound to make new friends for the Valley Bank. And it is a pleasant peculiarity of banking that new friends usually mean new customers. Within four years after he'd taken over, Walter Bimson had multiplied the bank's total of deposits 5½ times. By 1940, they were seven times as large as in 1933.

As the customers poured in, the bank branched out. It reached into the far corners of the state to open branch offices up along the edge of the Indian country, down along the Mexican border, over toward the Colorado River. The bank was obliged to house some of its branches, cow-country style, in abandoned saloons and quonset huts. But its energetic expansion proved a boon not only to the Valley Bank but also to the communities into which it went and to the state as a whole. As one executive of the bank explained recently: "Branch banking has been a godsend to our economy. A branch bank can do so much more for a community than can be done by a strictly local bank with smaller loaning power. It can put the financial resources of the whole state at the disposal of one community, assuming its potential growth justifies it."

Even so, with so much money working for the state the bank would on occasion run short of lending money. Therefore, Valley Bank loans were often sold to Eastern banks and insurance companies. This had the effect of pouring their investments into a state they otherwise would never have even thought of. At the same time, Bimson would return with the money from the sale and immediately proceed to loan it out again. For every $2 worth of mortgages written by the Valley Bank, Bimson sold $1 worth to outside interests and re-loaned the proceeds to the man across the street. But more of this later on. Depression or no depression, the bank's losses were remarkably low and its profits high.

About this time Carl Bimson joined the organization. A tall, rangy, powerfully-built man with large hands and prominent ears, Carl still reminds you physically and mentally of the Abe Lincoln type. A strong-boy in his youth, lifting things that other young men couldn't budge, bending horseshoes with bare hands, laughing whole-heartedly at life, Carl's interest had gone into engineering.

Anyway, Carl had an attractive offer from a utility in Utah, and was leisurely considering it when he visited his brother Walter in Phoenix. Within three months he, too, had fallen in love with the state. He turned down the Utah offer and went to work for the Valley Bank.

Uncle Sam had launched his historic FHA home build-ing and modernization program. The objective was to pump-prime the stagnant construction industry and, with it, the whole economy. The Bimsons grabbed onto the Federal Housing Act with cries of glee. Carl went to work organizing a new department to handle FHA business. He sent teams out from the bank to sell the public on FHA. He and his crew rang doorbells up and down the streets of Arizona, persuading people that they could afford to build long-needed porches, patios; fix the roofs, add bedrooms and baths, overhaul plumbing with FHA loans.

Other bankers around the country were leery of this new-fangled economic contraption. They thought it was slightly bolshevistic and dragged their heels. But the Valley Bank thought it was just what the doctor ordered. It made one of the first FHA loans in the nation to a couple needing a new room for a new baby. And the first FHA home-loan in Arizona, to permit a man to build a home of his own. Shortly afterward, the Valley Bank made its biggest FHA loan of all. It loaned Carl Bimson to the FHA.

His job was to promote the program, statewide. Bimson hit the sawdust trail and traveled from one end of Arizona to the other, making speeches wherever he could get a handful of people to listen to him. He talked to builders, plumbers, lumber men and hordes of miscellaneous citizens.

The crusade paid off. Houses sprouted new roofs and sported new coats of paint. Farms got electric lighting plants. Contractors got contracts and carpenters got work. Soon the Valley Bank rated fifth in the nation among all the U. S. banks in FHA loans. And before long Arizona was first among all states in FHA modernization loans. It was pretty big potatoes for a state which was nearly the smallest (in population) of the 48.

"I'm sure," says Walter Bimson candidly, "that there were a lot of people who, for the first 10 years of our operation, thought we were operating a radical bank. But, of course, the things we pioneered are being done now by all banks."

Certainly the most colorful of the bank's wartime undertakings was its "300 Club." Flying cadets at Arizona's air bases needed money to buy new uniforms for graduation. The government gave them uniform allowances, but