COMPANY PROFILE: First National fuels Alaska’s economy

From its humble beginnings in 1922, the bank has grown to become the state’s largest locally owned institution

By First National Bank Alaska Marketing Staff

If you lived in Alaska in the 1980s, you probably remember a much different banking landscape than the one you see today. Back then the state was dotted with local banks — from Security National Bank to Peninsula Savings & Loan, from Alaska Mutual Bank to United Bank Alaska.

Those banks are gone now, victims of Alaska’s notorious boom-and-bust economy. But through all the ups and downs, one local bank has not only survived, but thrived: First National Bank Alaska.

“People who have grown up with First National know that the bank is successful because of the strong foundation laid by those who had a genuine interest in helping Alaskans succeed,” Betsy Lawer, vice chair and chief operating officer said. “And those of us who have been with the bank know our reason for success today is the same reason for our success many years ago: Our customers and our customer service.”

First National is Alaska’s largest and oldest locally owned bank. In business since 1922, it’s grown from a tiny, two-employee bank to a linchpin of Alaska’s economy, with 800 employees and 27 branches in 16 communities across the state. Today, it’s a full-service bank that offers a wide variety of financial services — from lines of credit to high-tech cash management solutions — to businesses across the oil industry.

According to Vice President Bill Inscho, two words set the bank apart from others in the field: customer service.

"We appeal to customers who place a high value on customer service — on rock-solid, bulletproof support,” he said.

One tiny Alaska bank

Sensing the potential of the growing population, Ervin rounded up a group of investors for a bank of his own and applied for a national charter. In 1922, First National Bank of Anchorage opened its doors with Ervin as cashier, one employee and $55,000 in working capital.

The timing was good, because large-scale commerce was just gaining a toehold in Alaska. The next year, President Warren G. Harding would tour the state, driving the famous golden spike to complete the Alaska Railroad.

Attending a Harding speech in Valdez was a young family whose fate would become inextricably linked with First National: Warren Cuddy, a U.S. district attorney; his wife, Lucy Hon Cuddy; and their two boys, David, 4, and Dan, 2.

The Cuddy era

Warren Cuddy died in 1951. In a tribute to the respect with which he was held in the business community, his obituary in the Anchorage Daily Times recounted the story of the sale of the old Anchorage Commercial Co. to the Northern Commercial Co.:

"This transfer involved the largest department store in the city," the paper said. "Many thousands of dollars were at stake. The sale price had to be established, and all the legal documents drawn to the satisfaction of both parties. This transaction was initiated and completed with Mr. Cuddy representing both the buyers and the sellers, each vesting him with full authority to protect its interest."

Warren’s son Dan replaced him as president, a position he still holds today.

First National and the oil industry

Betti Cuddy and her daughter Betsy accompanied the royalty checks from that lease sale on a jet chartered to take them to New York for deposit. (It was on that trip that Betsy, then a student at Duke University, became interested in banking. Upon returning to Duke she changed her major to business, and today is First National’s vice chair and chief operating officer.)

Under Cuddy’s guidance, the bank has steered a steady course since then. During the 1980s, which saw the closure of more than a dozen Alaska banks, First National continued to grow and thrive.

Today, it is stronger than ever: It just passed the $2 billion asset threshold, and consistently is rated among the most secure banks in the nation by bank ratings firms.

Working capital for support firms

“Typically, an oilfield services company will only bill their clients once every 30 days,” Inscho said. “But the nature of the industry is such that unexpected expenses frequently pop up without consideration of a company’s billing and receiving cycle, so companies turn to us to make sure they have the capability to handle those kinds of things. They know we have the capital and assets on hand to make sure they’re taken care of.”

First National prides itself on being a part of the past, present and future of the oil industry.

“We have Alaskans working to make Alaska a better place to live,” Betsy Lawer said. “If we don’t do our part, we are doing the state of Alaska an injustice.”

And First National will be there all along the way.

“First National has built a reputation with the oil industry by learning the trade and always providing good customer service,” she said. “And that will never change.”

Service not just a slogan

“Right now, I’m working with a startup company. The owner came over to First National because he didn't want to be shuffled from one person to another. He wanted to work with the same person every time he had a question," Page said. "And he wanted that person to understand what it's like doing business in Alaska."

“First, as the owner of a startup, he really needed liquidity so we set him up with ‘Business Manager,’ an accounts receivable product custom-tailored to his needs. His isn't a cookie-cutter business. Second, we got him quick answers, and we called him instead of waiting for him to call us.”

“That’s the great thing about First National,” Inscho said. “I’ve had customers call after 5 p.m. and set up weekend meetings on short notice. That always seems to surprise them —‘Those aren’t bankers’ hours,’ they’ll say. But that’s how we do business here.”