Tuesday, May 28, 2024 May 28, 2024
78° F Dallas, TX

6 Questions for Kent Eastman

The Texas state president of Capital One Bank talks commercial lending.
photography courtesy of Capital One Bank

Eastman, who’s turning 50 in November, assumed his new duties as state president in August. Previously he was market president of Dallas/Fort Worth and executive vice president, commercial banking, for Capital One, which has 172 locations in Texas.

1. Does your new job mean you’ll be spending less time in DFW?

I’ll be here probably three to four days a week, because so much of what we can do, with all of our technology, doesn’t necessarily involve traveling. But at the same time, it’s important for me to get out into other markets and have a better understanding of them.

2. How has the recession affected the state, from your perspective?

Texas has held up relatively well compared to the rest of the country. You’re still seeing strength in places like San Antonio, which had some good news recently with the Toyota plant there expanding. We’ve also had some good recruitment here on the economic-development front in the DFW area.

3. What sort of lending does Capital One do in Texas?

We’re in the commercial-lending segment as well as in lending to small businesses and consumers. We didn’t have any exposure to some of the more high-risk type products that some banks got into, which is why we’ve had very solid capital levels and [in June] were able to repay the $3.5 billion in TARP money we received.

4. How has the recession impacted your business specifically?

Companies are looking harder at—and postponing–some decisions about capital expenditures or M&A activity, so some of those lending opportunities have been somewhat flat. At the same time we’ve seen a little more confidence and optimism out there in the last 60 days. We’re continuing to have growth and to originate credit across the state everyday, though our underwriting has tightened somewhat.

5. What’s caused the coming “disaster” for commercial real estate that some are predicting?

The recession really started with the consumer–largely in the mortgage crisis–and then it began to affect consumer expenditures. Retailers were impacted by that and then you began to have layoffs, which created additional stress at the consumer level and additional reductions in consumer spending. So a lot of companies, particularly retailers, have exited leases or not renewed leases. So, many commercial properties don’t have the levels of occupancy that they experienced just a couple of years ago. As those tenants vacate and those leases roll off, it begins to affect the cash flows at the individual property level.

6. Do you think it’s going to be serious enough to foul up the recovery?

I see it as something that will slow the rate of recovery, not as something that’s going to stop the recovery. I’m expecting we’ll see that the recovery began in the third quarter or, if not then, in the fourth quarter, and I think it will continue.