Banker flies planes, plays Conjunto and oversees a $2 billion bank established by NAFTA

September 24, 2018

Alex Hinojosa is quite the Renaissance man.

When he’s not serving as managing director of San Antonio-based North American Development Bank, Hinojosa might be making wine from the grapes he grows in his vineyard or harvesting olives on his farm in Rio Medina.

Or he might be playing some ’70s rock, conjunto or a “little country” music on his guitar or drums. Or painting a portrait in oil or acrylic.

Or he might even be piloting his Cessna 150. Or he could just be looking after his grandkids.

“I have a lot of hobbies,” Hinojosa said, adding that it’s been a way for him to stay connected to his six children.

Occasionally, he combines his passion for flying with his day job by hopping in his plane for a business meeting.

“I fly for business maybe about once a quarter, somewhere in Texas that’s easier to get to in my own plane rather than driving,” he said. “Right now, to get to (the Rio Grande) Valley … there are no really direct flights that work for a full day.”

Hinojosa has a lot of interest in the U.S.-Mexico border zone. After all, it’s on both sides of the border that NADBank finances water, sewer, landfill, road, stormwater, renewable energy and other projects. The bank is equally funded by the U.S. and Mexican governments.

The bank was established by legislation that was part of the North American Free Trade Agreement, signed in 1992. Since its formation, the bank has financed 246 projects. It currently has projects in four U.S. states — Texas, New Mexico, Arizona and California — and six Mexican states, Baja California, Sonora, Chihuahua, Coahuila, Nuevo León and Tamaulipas.

“There are many communities that we have helped,” he said.

Hinojosa, 62, joined the bank in 2012 as deputy managing director and was promoted to managing director in November. He oversees a staff of 117 and $2 billion in assets. NADBank generated $29.3 million in net income last year, a 51 percent increase from 2016.

Hinojosa recently sat down with the San Antonio Express-News at the bank’s headquarters in downtown San Antonio’s International Center. Here’s an edited transcript of the conversation.

Q: Did you grow up in San Antonio?

A: I grew up in the Castroville-La Coste area. I went to Medina Valley High School. I came to (San Antonio to attend) St. Mary’s University and have pretty much stayed here. (He earned a bachelor’s degree from St. Mary’s and a Master of Business Administration from the University of Texas at San Antonio.)

Q: What did your parents do for a living?

A: My dad was a welder, and my mom, when she worked, was a seamstress.

Q: What there something in your youth that set you on your career path?

A: I was working in a welding shop in shipping and receiving during high school. My dad had brought me in. I would see this young man with a coat and a tie, and a brand-new car, coming in regularly. He looked not that much older than me. I asked what he did, and they said, well, that’s the auditor. So, that’s what changed it for me. Everybody addressed him as mister. I thought, well that’s nice.

Q: Talk about your career path.

A: I started off as an auditor, but then I knew that I wanted to get into being in accounting within a big corporation. (His bio says he led investment banking efforts at Cabrera Capital Markets and Frost Bank.) Then I wanted to be a finance director, so I got the opportunity (at San Antonio Water System).

Q: Are most people you meet familiar with NADBank?

A: In the border region or in the border states, yes. Both sides, Mexico and the United States, know us very well. I guess the three federal agencies (that oversee the bank), the Department of Treasury, the Environmental Protection Agency and the State Department, and their Mexican counterparts. Outside of that, we’re a well-kept secret.

Q: What was the reason behind the bank’s establishment?

A: At the time, there was concern that the growth of industries and companies along the border would damage the environment. So they said, what can be done? Well, we can help the cities and the counties and the municipios be prepared for improvements to their infrastructure. That’s how the bank was created.

Q: Who are the bank’s customers?

A: We help a lot of cities, public entities and private companies. A lot of them are public-private associations. As an example, we are financing a desalination plant that has a contract with the Ensenada water company. It’s a private company but doing a public service.

Q: What’s your typical loan?

A: Our sweet spot can range from $15 million to about $50 million. We have a rigorous review process. Every loan we do has to be approved by our board, so we can’t get down to small projects — under $1 million or $2 million, because it’s expensive. What we’re really trying to do is work on (big projects, such as) wastewater treatment plants, solar farms and wind generation plants.

Q: You also provide grants for smaller projects, too?

A: We do about $14 million, $15 million in grants for about 10, 12 projects a year. Those are EPA monies that we administer.

During our first 12 years, we were mostly an administrator for grant money from the EPA. That was extremely helpful to the border communities, especially in Mexico. In ’94, perhaps 22 percent of the wastewater flows were being treated in border states. Currently, we’re probably at 89, 90 percent. It’s not all NADBank money, of course, because the money we invested had to be matched by the Mexican entities, both federal and local. That high level of wastewater treatment is much, much higher than the rest of the country. So it has worked.

Q: Are there certain projects you don’t want to get involved with?

A: There are certain projects that are riskier. Anything that has to do with a lot of land is a bit riskier. There are some projects that I would like to get into, but we don’t have a mandate to do.

Q: Like what?

A: Telecommunications.

Q: Building infrastructure so people have internet?

A: Exactly. (But) it’s not an approved sector for us at this point. Right now, we’re also looking at natural gas. There are a lot of U.S. companies that have natural gas that are going to sell into Mexico, and there are a lot of Mexican companies that are getting ready to build the pipelines. We’d like to get more into that.

Q: What’s the toughest part of your job?

A: The toughest part of the job is always trying to make sure all of the employees have a good understanding as to how we’re trying to help a community. As you know, any organization will have different departments with different functions. One’s mitigating risk, while the other’s trying to get the loan approved. One is looking at the legalities, while the other is looking at the technical aspects. Bringing them all together is important so that we say, OK, here’s how we’re going to help this community.

Q: Have the trade tensions between the U.S. and Mexico had any impact on the bank?

A: No, I don’t think they have. Of course, we’re always keeping our eye on the cost of the exchange rate and the cost of trade, moving equipment, because that does affect the project sponsors.

Q: So is the renegotiation of NAFTA going to have much impact on NADBank?

A: Well, I think that the renegotiation of NAFTA may provide some opportunities. I’m assuming that when it gets done they will have certain goals, or certain needs. I have mentioned this to our federal government, we are standing by, ready to help. We are basically a tool for both the Mexican government and the U.S. government to carry out their goals — as it was back in 1994 when they wanted the environment looked at and they gave us the water, and the wastewater, and landfills to work on. In the same manner, we may be called once NAFTA 2.0 is done.

Q: Has President Donald Trump’s policies had any impact on the bank?

A: No, we have our mandate. We’ve followed it.

Q: Are there any concerns about Mexico’s leftist president-elect, Andrés Manuel López Obrador?

A: No. He was elected and we are standing by for when the transition team comes in. I’m sure that they will have ideas as to things to look at, but we’re standing by.


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