Anglin Reichmann Armstrong Partner Jay Reichmann Retires

Wrapping up a career spanning 32 years, partner Jay Reichmann has retired from Anglin Reichmann Armstrong.

Reichmann joined the firm in 1998 when it had less than 10 employees and played a key role in its growth. His client and firm relationships will continue to be served by the firm’s teams in Huntsville and Pensacola.  

“After much thought and discernment, it feels like the right time to make a change and pursue other opportunities,” Reichmann said. “I am grateful to my colleagues and clients for the opportunity to lead and grow a public accounting firm and meet so many wonderful people over the years.

“I will miss those daily relationships the most.” 

Managing Partner Gary Anglin, who founded the firm in 1990, worked with Reichmann since he joined the firm. On the leadership team, their practices serve government contractors, manufacturers, construction clients and professionals. The firm was recently named a Top 400 firm and expanded to Pensacola in September 2018.  

Anglin said Reichmann was active in the firm’s operations, administration and business development in addition to working with business and individual clients primarily in tax and consulting. In recent years, Reichmann focused on growing the firm’s manufacturing niche and mergers and acquisition consulting.  

“We can’t thank Jay enough for his contributions to the firm,” Anglin said. “I greatly appreciate the role he played in helping to lay the foundation that we continue to build upon. We all wish him and his family the best.”

Anglin Reichmann Armstrong is a regional accounting and advisory services with technical expertise in government contracting and other niche services as well as tax, estate, wealth management and business transition services. In 2020, Anglin was named to INSIDE Public Accounting’s Top 400 Fastest Growing Firms” list and Accounting Today’s “Best Accounting Firms to Work For.”

Bank Independent Launches 10th Annual Toy Share Drive

Bank Independent will kick off its 10th annual Toy Share drive for area children.

From Nov. 13 -Dec. 4, donations of new, unwrapped toys can be left any Bank Independent location. In these pandemic times, the bank also offers two “less-hands-on” ways to lend a helping hand: Toy Share can accept monetary donations through PayPal and through an Amazon shopping “Wish list.”  All items will be distributed to local children in need through partner organizations across North Alabama.

“The generosity of our friends and neighbors makes a huge impact in the lives of children in our own communities,” said Macke Mauldin, president and CEO of BancIndependent Inc., the parent company of Bank Independent. “We know this year will look a little different from previous years as we adjust to the restrictions placed upon us all by the current pandemic.

“However, I’m confident that this year we’ll make Christmas morning brighter for more families than ever before.”

In 2019, the Bank’s Toy Share drive provided nearly 3,700 toys and more than $700 in cash donations to partner organizations in time for distribution to local families for Christmas.

“The 2020 Toy Share drive will still have ambitious goals, but we will also focus on the safety and convenience of everyone involved,” said Nikki Randolph, Bank Independent Community Engagement Officer. “We are establishing drive-by collection events over a four-week period so donors can drop off toys. Based on the success of previous drives this year, we’re using PayPal to accept monetary donations on our bibank.com/help page.

“And for a touchless shopping alternative, we’re offering a link to an Amazon Wish List with pre-selected gift ideas for infants on up to teenagers.”

Toy Share donation and shopping links can be found at bibank.com/help.  Drive-by Collection Events will take place from 8 a.m. to 5 p.m. at Bank Independent offices in Decatur and Moulton on Nov. 13; Muscle Shoals, Athens and Russellville on Nov. 20 ; Florence on Nov. 27; and Madison and Lexington on Dec. 4.

Charitable organizations distributing Toy Share donations include the Angel Tree Program in partnership with Lexington High School; Christmas Charities Year Round of Madison County; Committee on Church Cooperation in Morgan County; Cornerstone Church in Lawrence County; Department of Human Resources in Franklin, Lawrence and Limestone counties; Lauderdale County Christian Children’s Home; Rogersville Volunteer Fire Department; Safeplace of the Shoals and William Porter Foundation of the Shoals.

Bryant Bank Donates $125,000 to UAH Nursing, Athletics Programs

Charger Blue has a shade of green today, thanks to a donation from Bryant Bank.

Representatives of the bank’s Huntsville office visited the University of Alabama in Huntsville College of Nursing and Athletics Department to make two donations in a total of $125,000.

Ken Watson, president of Bryant Bank Huntsville, presents a $25,000 gift to UAH Director of Athletics Cade Smith, left, and Mallie Hale, Vice President for University Advancement. (UAH Photo/Michael Mercier).

The UAH Charger Athletics program received an unrestricted gift of $25,000 that will go to support the 14 men’s and women’s programs.

“To get such a generous contribution during the pandemic is just truly unbelievable,” said Dr. Cade Smith, UAH Director of Athletics. “This is the second year in a row they have made this gift, and we were certainly blessed last year through their generosity as well.

“For this gift to come right now speaks volumes, and it is hard to put into words how grateful we are for Bryant Bank.”

The second donation was made to the UAH College of Nursing and was the annual $100,000 gift as part of a 30-year, $3 million partnership.  Specifically, this pledge supports the bank’s continuing commitment to providing UAH College of Nursing students scholarships for Early Promotion into UAH Nursing Program.

“The UAH College of Nursing is so appreciative of the support Bryant Bank has shown us over the years and for continued support in the future,” said Dr. Marsha Howell Adams, dean and professor of the UAH College of Nursing. “This scholarship has had a major impact on the lives of our nursing students by promoting their ability to be successful in our nursing program.”

Established in 2014, EPNP is an honors program offered by the College of Nursing to highly qualified students who enter UAH as freshmen and declare nursing as their major. Through this program they may take all the lower division nursing coursework on the UAH campus and are guaranteed placement in upper division nursing courses.

“Today, we are very proud to provide a total of $125,000 in contributions to the UAH College of Nursing and athletics programs,” said Ken Watson, president of Bryant Bank of Huntsville.  “Over the past seven years, the annual $100,000 donation has helped UAH recruit outstanding undergraduate nursing school students who are high achievers academically, but also very important members of our health care community upon graduation.

“We are also excited to again make this $25,000 donation to the athletics program to assist with the recruitment and development of its student-athletes and to promote its athletic programs … charge-on!”

(Top photo: Ken Watson, President of Bryant Bank Huntsville, presents $100,000 gift to UAH College of Nursing. (l-r) Associate Dean, Graduate programs Dr. Karen Frith; Ken Watson; College of Nursing Dean Marsha Howell Adams; Provost Christine Curtis; Associate Dean, Undergrarduate Programs Dr. Amy Lanz; and Vice President of Advancement Mallie Hale.)

Huntsville Scores Dual Triple-A Credit Rating for 12th Straight Year

For the City of Huntsville, it is the same song, 12th verse.

And it is sweet music.

For the 12th time in 12 years, since Mayor Tommy Battle first assumed office, Moody’s Investors Service and Standard & Poor’s Rating Services have awarded Huntsville Triple-A credit ratings.

Triple-A is the highest mark a city can achieve and is awarded to a minority of government entities in the nation. Further, just 1 percent of 19,502 cities and counties receive the top ratings from both services.

The credit rating agencies cited the strength of Huntsville’s economy, which is considered broad and diverse.

Strong city management with strong financial policies and practices and budget flexibility were noted as consistent qualities in the credit rating.

“Huntsville continues to show its strength in conservative fiscal management and a thriving economy,” said Battle. “I am grateful to my outstanding administration and to our elected council members for supporting a responsible, balanced budget and prudent investments that make Huntsville a great place to live and a great place for business.”

The rating services pointed to a robust economy mentioning several key developments in the city along with expansion of existing employers.  

“Despite the onset and continued impacts of the pandemic, the local economy remains stable,” they said.

The reports also considered the community’s above average wealth, below average unemployment, strong regional tax base and Huntsville’s position as an economic engine for northern Alabama.

City Finance Director Penny Smith said the recent rating was set for the city to refund/refinance more than $100 million in warrants, which will provide average savings of some $1.5 million in interest per year over the next 10-plus years.

Loan Forgiveness FAQs by SBA Answer Some Questions, but Others Remain

The Small Business Administration and the Department of Treasury recently issued a set of Frequently Asked Questions about Paycheck Protection Program loan forgiveness.

Below is a summary of the key information from the released FAQs:

  • The FAQs clarified that C-corporation owner-employee health and retirement benefits are eligible PPP expenses in addition to their $100,000 salary cap. Eligible owner-employee retirement is capped at 2.5 months of the 2019 amount.
  • The FAQs also clarified that S-corporation owner-employee retirement benefits are allowed; however, no health benefits are eligible in addition to the $100,000 salary cap.
  • Retirement and health benefits for non-owners are eligible if “paid or incurred.” There is no cap on retirement benefits for non-owners like there is for owners.
  • Retirement and health benefits cannot be prepaid unless they are “incurred” during the covered period.
  • Dental and vision insurance is included under health insurance and is an eligible payroll cost.
  • For self-employed borrowers, no owner-employee health or retirement benefits are allowed in addition to the $100,000 salary cap.

The FAQs clarified several questions for borrowers about PPP; however, there are still many questions to be answered. Below, we discuss some of the outstanding questions surrounding PPP and key considerations for those waiting to apply for loan forgiveness.

Will pending legislation be approved?

There is pending legislation that could change the loan forgiveness process. Two senators introduced the “Continuing Small Business Recovery and PPP Act” on July 27, 2020. The bill, which reportedly has bipartisan support, includes several key features; it would:

  • Allow a potential automatic forgiveness feature for loans of $150,000 or less, along with a simplified process for loans up to $2 million;
  • Allow borrowers to choose any covered period ending by Dec. 31, 2020 of at least eight weeks;
  • Allow borrowers to include new qualified expenses; and
  • Provide a second round of PPP loan draws for borrowers with a 50 percent or more decrease in revenues.

Are borrowers’ eligible expenses limited to their PPP loan proceeds?

Why is this important? If the loan forgiveness application does not limit the eligible expenses to the borrowers’ PPP loan proceeds, borrowers would be able to include additional eligible expenses on their loan forgiveness application, which could significantly reduce any “penalties” associated with the full-time employee equivalent (FTE) reduction limitation.

For example, a borrower receives a PPP loan of $1,000,000. The borrower incurs $2,000,000 of eligible PPP expenses during the covered period; however, the borrower has reduced FTE employees by 50 percent. Under this scenario, if the borrower can include $2,000,000 in eligible expenses, there would theoretically be no reduction in loan forgiveness. Alternatively, if the borrower’s eligible expenses are limited to the loan proceeds of $1,000,000, there could potentially be a reduction in loan forgiveness of $500,000. Additional guidance is needed from the SBA to address this issue.

Will a tax deduction be allowed for expenses paid with PPP funds that were forgiven?

The IRS initially issued notice 2020-32 that stated a tax deduction would not be allowed for the expenses paid with PPP loan proceeds that are forgiven. Congress has mentioned an intent to change this with legislation, but it has not happened to date.

If Congress doesn’t pass legislation to make these expenses deductible, borrowers are presented with a timing issue on their tax returns. What happens when a borrower applies for loan forgiveness before Dec. 31, 2020, but receives a decision approving loan forgiveness in 2021? Presumably, the expenses would be deductible on the borrower’s 2020 and would become nondeductible in 2021. Guidance is needed from the IRS on this timing issue and whether an amended 2020 income tax return would need to be filed.

What will the SBA audit process look like for PPP loans over $2,000,000?

This has easily been one of the biggest questions since the SBA issued FAQ 31 in April. We still don’t know what this review process will look like. The SBA is expected to release their audit policies and procedures for loans over $2,000,000. It would be advantageous for borrowers to have an understanding of the SBA’s audit process before they submit their loan forgiveness applications.

(From Warren Averett)

 

 

Banking Industry Sees Digital, Mobile Services Increase During Pandemic

With the onset of the global pandemic, businesses rolled up their collective sleeves and grimly faced the arduous task of shifting gears.

And financial institutions quickly found themselves in the spotlight. When it comes to continued access to money, whether it be a loan, savings, or one’s paycheck, everyone feels the effect when that access is hindered.

The banking industry with its customers faced technological hurdles and economic hardships. But banks stepped up with solutions to protect their customers and employees as well as keeping themselves insulated against financial catastrophe – such as the crash of 2008.

“The current COVID pandemic focused a spotlight on the importance of providing uninterrupted services to all customers, including, personal, business and government,” said Tim Singleton, senior commercial lending manager for Bank Independent. “In many ways, the banking industry became hyper-vigilant preparing for multiple unknown economic factors.”

If one thing is certain, COVID-19 has been an accelerant for increased consumer usage of digital banking technologies.

Although most banks were already invested in digitalized and mobile banking services, the pandemic quickly prompted many of non-to-low-end digital users into the age of mobile banking.

Many banks, which had mobile banking tools and were already maintaining digital relationships with customers, had to quickly adjust to a sudden increase in demand for mobile services.

According to data collected by Fidelity National Information Services, April 15, 2020 witnessed a 145 percent spike in the average daily traffic for mobile banking platforms, as compared with the March’s numbers. Along with the uptick in traffic, new registrations for mobile banking apps jumped 207 percent.

“Wells Fargo has seen increased digital and mobile logins, mobile deposit volume, checks deposited using mobile devices and online wire transfers since COVID-19 started,” said Stephen Norris, regional bank president for Wells Fargo. “All of this translated into more digital banking access and transactions than ever before.”

For Wells Fargo, those numbers are significant when compared 2019’s second quarter statistics. For April 2020, digital logins were up 21.5 percent, mobile deposit dollar volume was up 108.3 percent, and online wires transactions were up 49.6 percent. There were also 31.7 million checks deposited using mobile devices, which was a 35.9 increase over a year ago.

Naturally, there were learning curves and the need for increased bandwidth capacity.

“Our IT department ensured an uninterrupted workflow for our team members who suddenly found themselves working remotely,” said Singleton. “The robust features built into Sync Mobile and Online found popularity with our customers.”

Bank Independent’s loan processing teams shifted gears by using the digital signature platform, in lieu of traditional signatures to close documents.

Since the pandemic exploded, customers have significantly changed how they do their banking. According to an FIS survey, 45 percent of consumers said they started using some form of mobile wallet following the pandemic’s onset. Once comfortable with usage, it is seen as another option, in addition to the face-to-face banking.

However, there are customers who prefer the return of “brick and mortar” banking.

“I think the industry will scramble to find the balance between digital and personal,” said Singleton. “Our customers have voiced their desire for things to return to ‘normal.’

“We have a plan in place that will accommodate our customers in a manner that is safe and secure for both the customer and our team members.”

 

 

 

To Get a Loan or Not Get a Loan – That is the Question in the Age of COVID-19

If you talk to a commercial real estate developer, they will say there is plenty of money out there for the lending and, believe it or not, it is cheap money.

If you talk to a Realtor or homebuilder, they will tell you there is no better time to sell, buy or build a home because interest rates are low, and lenders are lending.

But, by all economic measures, the worldwide pandemic has had an enormously negative impact on the overall economy and employment numbers. It is not a secret that the very existence of thousands of restaurants, hair salons, fitness centers, hotels, airlines, personal services, and tourism businesses have been threatened.

And yet, since the effects of the pandemic began in March, dozens of restaurants have either opened or are moving forward with plans to open in Madison County including Outback at Town Madison, Culvers in Madison, Bark & Barrel Barbecue at Stovehouse, and Jack Brown’s Beer & Burger Joint in downtown Huntsville.

The pandemic hasn’t stopped government contractors and manufacturing plants from expanding. Look at Redline Steel, Moog, Mazda Toyota and Booz Allen Hamilton.

So, what is the truth about banking, lending, and the financial fallout on businesses, small and large across the Tennessee Valley?

Is it, or is it not a good time to start or expand a business right now, especially if you need a bank loan to do so?

“Banks are always lending money for good projects – any kind of project where the owner or borrower has their own money in it and are taking some of the risk, and the bank is taking acceptable risk,” said David Nast, president and CEO of Progress Bank.

“If you have an owner who is a good operator, has been in the business for some time, and have their own money in the bank in support for their company so the bank is not loaning all the money and taking all the risk, then banks are willing to lend money.”

He said there are always certain economic cycles where certain industries are considered higher risk than others and restaurants are already high risk, even during normal times.

“Banks look, in general, at what is going on in the economy and, with the fallout from COVID-19, any new start-up with limited experience and limited equity in the project is going to be tougher to do right now,” Nast said. “On the other hand, a business owner who has been in business a while and has good money in a new project like building a larger company building to expand their business, employees and product/service offerings is always going to offer opportunities more interesting to a bank.”

But it isn’t necessarily just because a customer wants to open a restaurant that puts them under more scrutiny right now.

“Restaurants are clearly struggling, but if you are a big well-known chain that planned three years ago to open in Huntsville, most of those companies are continuing with those plans,” Nast said. “Those companies have the capital, the brand recognition, and the capability to open successfully.

“However, if you are a small Mom and Pop shop whose dream has always been to open a restaurant, I’m not sure this is the ideal time to do that.”

He said other businesses such as hair salons and health spas may find the same resistance from lending institutions because they have so many restrictions on them, including questions about whether clients will be willing to go patron those businesses.

“It doesn’t feel like the right time to put your life savings into a business like that right now,” Nast said.

Sean Kelly, Huntsville market executive for Regions Bank, said the capital is there but there is no one-size-fits-all approach to providing financing.

“Regardless of industry, whether a client is in the commercial office or retail space, the manufacturing space, or other industries, we believe the key to a successful banking relationship is to work collaboratively with clients on ways we can offer insights on cash flow, financial management and other needs to help them through whatever need they are facing,” he said. “At Regions, we take the time to get to know our clients. We talk about their business model, how they are adapting during the pandemic, and what needs and opportunities are ahead for them.

“From there, we work to develop financial solutions that meet their individual needs. We work with clients to determine where the opportunities are and how can we best meet individual needs and work to provide customized solutions where prudent.”

Penny Billings, BancorpSouth president for the Huntsville market, said their business lending practices have changed very little since the pandemic and she is optimistic about starting a new business.

“As always, our lending practices are relative to the type of business, the proposed collateral, and the guarantor strength,” she said. “This has not changed. We are fortunate to be in a community where the economy has continued to be strong and supportive of those businesses that have been adversely impacted.

“Starting a business at any time can be tough, but there are probably some opportunities depending on the type of business you’re interested in starting. With our current environment, it’s the perfect time for savvy entrepreneurs to think outside the box for solutions to fix trending problems they see or maybe even add digital elements to their existing business plans.”

Perhaps one of the points of confusion is that today’s pandemic crisis is too closely compared to the 2008 financial crisis.

“While similar in their disruption of the economy, the two situations are entirely different,” said Nast. “The mood is different. 2008 was an enormous financial crisis and at the time, the mood was terrible because we knew we were in for a protracted recession like we had never seen before, and there was no end in sight.

“Not to minimize the negative impact of today’s crisis on many small businesses, the 2008 crisis prepared us in many ways to be more proactive in helping clients get through it this time. We have been able to react quickly and put strong measures in place locally, and at the state and federal level, to prevent a total collapse like what we saw in 2008.

“When you are in the banking business, you are here to help people live their dreams and be successful, so you hate seeing any business fail, but banks have been much more accommodating than they were then.”

Kelly said Regions set aside a credit provision of $700 million in the second quarter of this year for loan loss reserves.

“We did this as a precaution amid the uncertainty the pandemic has caused. It is important to remember, though, that Regions and banks across the industry remain very well capitalized,” he said. “We have diversified our business, we have lessened risk in our loan book, and we have streamlined our operations and efficiencies, and we are operating from a position of strength.

“We are prepared to serve and support our clients and communities through the pandemic.”

Billings said Payroll Protection Program loans are an extremely important accommodation that eased the pain for a lot of commercial customers.

“BancorpSouth generated more than 15,000 PPP loans with total funding of more than $1.23 billion,” Billings said. “Everyone felt a great sense of pride as our company started funding these loans. Many of our customers said the PPP loans provided the necessary financial relief to help them meet their payroll, preserve jobs, and keep their doors open.

“Small businesses are the lifeblood of our communities; therefore, we’ve been doing everything we can to provide resources and financial relief to help them navigate these challenging times.

Nast agreed PPP helped a lot of businesses.

“At Progress Bank, we are now beginning the forgiveness phase and those loans are being forgiven, so they are not having to pay that money back. It was a nice stimulus that helped a lot of businesses stay open,” he said.

The initial days of the PPP program were challenging for Regions as well, Kelly said.

“Those initial days included a lot of long nights and weekends as we worked through a wave of applications from clients who had never been in need of Small Business Administration financial resources before,” he said. “We cross-trained a significant portion of our workforce from various departments to process applications for this type of financing. In the end, we were able to help 45,000 customers receive $5 billion in loans that saved or supported 600,000 jobs.”

On the residential front, Billings said the right time to buy a home is different for everyone and in every market.

“But the housing market is thriving due to record low mortgage rates and more people working from home during the pandemic,” she said. “A lot of customers are refinancing, buying new homes, or doing home improvements. New home construction is booming right now, and homebuilders are working hard to keep up with demand in our market.”

Furthermore, she said BankcorpSouth has seen an increase in consumer equity lines of credit as people renovate and update their existing homes.

“People have been spending more time at home and working at home to support the control of the virus, and as a result, sales for specific items such as computers, household appliances, and gardening supplies, have risen,” she said.

“Across the nation, commercial construction was impacted by the shelter-in-place orders implemented in the early months of the pandemic, causing many builders to halt their construction plans. However, the industry is forecasted to recover as the economy improves. In Huntsville, we haven’t seen a significant impact. As you can see in our community, large commercial projects are underway.”

Kelly provides some good local context on commercial real estate.

“It is true that commercial real estate, on a national level, is facing a challenge during the pandemic,” he said. “But here in Huntsville, our office-space market is in a good position, even during COVID-19. We’re seeing occupancy rates around 90 to 95 percent. Our business sector here includes a lot of government contractors that lease space in the area. Even with many people working remotely, the leasing activity remains strong. That’s an outlier from much of the rest of the country.

“Our nation was, and still is, facing a tremendous challenge. But the banking industry is well capitalized, and we can serve as part of the solution.”

Banking Industry Sees Digital, Mobile Services Increase During Pandemic

With the onset of the global pandemic, businesses rolled up their collective sleeves and grimly faced the arduous task of shifting gears.

And financial institutions quickly found themselves in the spotlight. When it comes to continued access to money, whether it be a loan, savings, or one’s paycheck, everyone feels the effect when that access is hindered.

The banking industry with its customers faced technological hurdles and economic hardships. But banks stepped up with solutions to protect their customers and employees as well as keeping themselves insulated against financial catastrophe – such as the crash of 2008.

“The current COVID pandemic focused a spotlight on the importance of providing uninterrupted services to all customers, including, personal, business and government,” said Tim Singleton, senior commercial lending manager for Bank Independent. “In many ways, the banking industry became hyper-vigilant preparing for multiple unknown economic factors.”

If one thing is certain, COVID-19 has been an accelerant for increased consumer usage of digital banking technologies.

Although most banks were already invested in digitalized and mobile banking services, the pandemic quickly prompted many of non-to-low-end digital users into the age of mobile banking.

Many banks, which had mobile banking tools and were already maintaining digital relationships with customers, had to quickly adjust to a sudden increase in demand for mobile services.

According to data collected by Fidelity National Information Services, there was a 145 percent spike in the average daily traffic for mobile banking platforms April 15, as compared with the March’s numbers. Along with the uptick in traffic, new registrations for mobile banking apps jumped 207 percent.

“Wells Fargo has seen increased digital and mobile logins, mobile deposit volume, checks deposited using mobile devices and online wire transfers since COVID-19 started,” said Stephen Norris, regional bank president for Wells Fargo. “All of this translated into more digital banking access and transactions than ever before.”

For Wells Fargo, those numbers are significant when compared 2019’s second quarter statistics. For April 2020, digital logins were up 21.5 percent, mobile deposit dollar volume was up 108.3 percent, and online wires transactions were up 49.6 percent. There were also 31.7 million checks deposited using mobile devices, which was a 35.9 increase over a year ago.

Naturally, there were learning curves and the need for increased bandwidth capacity.

“Our IT Department ensured an uninterrupted workflow for our team members who suddenly found themselves working remotely,” said Singleton. “The robust features built into Sync Mobile and Online found popularity with our customers.”

Bank Independent’s loan processing teams shifted gears by using the digital signature platform, in lieu of traditional signatures to close documents.

Since the pandemic exploded, customers have significantly changed how they do their banking. According to an FIS survey, 45 percent of consumers said they started using some form of mobile wallet following the pandemic’s onset. Once comfortable with usage, it is seen as another option, in addition to the face-to-face banking.

However, there are customers who prefer the return of “brick and mortar” banking.

“I think the industry will scramble to find the balance between digital and personal,” said Singleton. “Our customers have voiced their desire for things to return to ‘normal.’

“We have a plan in place that will accommodate our customers in a manner that is safe and secure for both the customer and our team members.”

 

 

 

Huntsville No. 2 for Career Opportunities in COVID-19 Recession

We’re not No. 1, but No. 2 is pretty good.

In a recent study, Huntsville ranked No. 2 among the best places for career opportunities in the COVID-19 recession . SmartAsset analyzed 200 of the largest metro areas across seven metrics related to employment, income and access to professional development through higher education or career counseling.

Huntsville placed in the top 10 of the study for two different categories: It had the sixth-lowest unemployment rate in May 2020, at 7.6 percent, and the eighth-highest income growth over a career, at 30.47 percent.

While the metro area finishes in the bottom half of the study for its low number of career counselors and post-secondary teachers per 1,000 workers, it ranks within the top 50 for its relatively small drop in total employment over the past year (-7.26 percent) and its relatively high 2019 median income (almost $42,000).

The top 10 according to SmartAsset are: College Station-Bryan, Texas; Huntsville; Gainesville, Fla.; Lincoln, Neb.; Champaign-Urbana, Ill.; Provo-Orem, Utah; Tallahassee, Fla.; Boulder, Colo; Tucson, Ariz.; and Phoenix-Mesa-Scottsdale, Ariz.

SmartAsset is a financial technology company that provides personal finance advice on the web. The company offers free and personalized tools for personal finance decisions around homebuying, retirement, taxes and more.

 

Huntsville Shows Resilience as New Economic Numbers Are Mixed Bag

New economic impact numbers have been released and according to the Huntsville Madison County Chamber of Commerce Research Director Ken Smith, they provide a snapshot into exactly what kind of impact COVID-19 has had on our local economy, and how that information compares to the national numbers.

While there is some bad news in the data, albeit expected; there is quite a bit a good news going forward as Huntsville proves to be overwhelmingly resilient.

According to Smith’s presentation on a recent teleconference call with Chamber members, there was a big dip in employment coming off March into April with Huntsville employment at 226,000. The one-month change showed an 8.3 percent dip, which Smith said is a significant drop. However, compared to the U.S. employment numbers of -13.1 percent, Huntsville stayed well ahead of the national statistics.

Furthermore, according to early calculations for May, employment has already started ticking back up, showing a 2 percent increase in employment from April to May.

“We are looking at what analysts are saying is a two-year recovery for GDP and a possible three-year recovery for employment to get back to pre-pandemic levels,” said Smith. “We are about 7.5 percent below where we were this time last year, as compared to 13 percent for the U.S. economy. That translates into 10.6 percent unemployment locally, which is a big jump, but not bad when compared to the U.S., which was up to 14.4 percent.

“The Federal Reserve recently announced they are not likely to raise interest rates until after the year 2022. So this gives us hope and a sign it will be the same for the local Huntsville economy, and it will rebound, which falls in line with what the Federal Reserve has been predicting.”

Looking at the two-year picture, backing up to January 2018, the numbers show the precipitous drop in April wiped out any gains over the past few years, and the same can be said for the U.S. economy, which lost 20,000,000 workers over the past month. It added back 3 million in May.

“We at the Chamber use trends in our marketing to potential new clients interested in moving their business into the area,” said Smith. “They like to see that our economy is strong.

“If you look out over 20 years instead of two years, you can see Huntsville’s employment growth is about twice the rate of the U.S. and it has been trending that way since 2000.

Smith’s data charts show the dip in 2008, which was the recession. It took Huntsville about five years to recover and get employment back to pre-recession levels. It took the U.S. six years.

“But what they’re predicting now is a larger drop but a shorter recovery,” said Smith. “That is a three-year recovery in employment and four years for the U.S. to recover.”

Looking at employment by industry, there are no surprises.

The biggest local job loss was in the leisure and hospitality industry, losing 8,000 jobs from March to April. That includes all the arts, entertainment, and recreation, and hotel and food services.

The second biggest loss for Huntsville was in professional and business services.

Huntsville lost 4,100 jobs during that same time period, and where engineering and technology workers did not see a big job loss, the losses were in support services such as office and administrative, cleaning services, document preparation, and employment services. With companies closed or people working from home, there was a lot less need for some of that support.

The third largest drop was some 1,500 jobs in a sector that included repair and maintenance businesses, hair and nail salons, and nonprofit organizations.

Smith said Huntsville’s employment by industry matches up pretty well against the U.S. hospitality and leisure sector, which lost 7.2 million jobs.

“Huntsville dropped about 36 percent, so we see over one-third unemployment in leisure and hospitality, where the U.S. lost almost half in that sector at about 46 percent,” said Smith. “Huntsville expects to gain it back.”

In areas where Huntsville fared pretty well, the retail trade industries only lost about 5 percent, compared to the U.S. at about 14 percent.

Huntsville also did well in manufacturing, losing only about 4 percent compared to the U.S. losing about 10 percent overall.

In the areas of construction, wholesale trade, and transportation, Huntsville lost very few jobs compared to the national numbers, but transportation is not a very big industry in the local market.

Huntsville also did not lose many jobs in finance or in the government sector.

Looking at the good news, Moody’s Analytics did an analysis at the end of May showing a sharp drop with a continued recovery through the rest of this year 2020.

“A lot of people might think, ‘Well, all we did was put on the brakes. Why can’t we just start right back up and go back to where we were two months ago?’,” said Smith. “That’s typically not going to happen. We saw after the 2008 recession it took five years to get back to pre-recession levels.

“Here, they are expecting a recovery, but not an immediate one. Huntsville is looking at two years for GDP and three years for the employment to recover, which is one year earlier than the U.S.

Why is Huntsville’s recovery faster than the U.S.?

Moody’s points to some of the area’s key strengths.

“It’s interesting to see how the short-term and long-term statistics show us in expansion mode, which is pretty positive,” said Smith.

Some of those strengths are Huntsville’s extremely highly skilled and educated workforce in areas of advanced manufacturing at key companies like Mazda Toyota, for example; and research jobs such as those at Blue Origin and Aerojet Rocketdyne. Moody’s mentions all three specifically.

Huntsville’s robust population growth and favorable migration is part of it too. It comes on the heels of new population numbers recently released showing Huntsville’s population hitting over 200,000 for the very first time, so that is definitely something to note.

In terms of weaknesses, Smith said Huntsville still gets knocked down because of our dependence on the government sector with an underrepresented private sector.

Also wage growth is slow, due in part to a higher-educated workforce whose wages are already on the upper end, so there is less room to grow.

“Lastly, if we look into the Moody’s forecast a little more deeply, you can see the year-by-year percent growth, and you can see where we were trending before 2019,” said Smith. “We were outpacing the U.S. economy in growth and jobs so this is why we say Huntsville’s economic recovery and employment growth is better, and will be faster than the U.S.”

Smith also said the Chamber still has companies interested in locating their businesses in the Huntsville community and they are working on several projects on the commercial side.

“We are still seeing a lot of investment companies and private investors looking to continue their projects here, so from the Chamber perspective, we are primed and ready!

“It’s a very difficult time for many people, especially small business, but the balance of the skilled workforce and job growth makes Huntsville residents better able to support their families than some,” said Chamber President and CEO Chip Cherry. “There’s a lot of job growth and information that shows companies are hiring, and there is a lot going on Redstone Arsenal too, so there are still a lot of opportunities in this market.

“We are not recession-proof, but we are a lot more resilient than some,” Cherry said.