Ning Weng likes to give people a sheet of paper with two columns of numbers on it.
On the left-hand side - representing the two years before Mr. Weng's arrival as chief executive officer at Asian American National Bank - are losses totaling more than $1 million and nonperforming loan indicators in the double digits. The right-hand side, covering the years since 1993, shows the bank in the black, with nonperformers dropping below 1% of total loans.
He's happy to report that he and his management team are responsible for the right-hand side.
"Right now all the problems are behind us," Mr. Weng said. "Right now, the bank is positioned to have a major growth."
However, Mr. Weng, 50, still uses the "left-hand side" as a lesson in what not to do.
Asian American Bank, a $32 million-asset institution based in Houston, has the distinction of being the most dramatic turnaround story in community banking. Its resurgence began in 1993 and propelled it into the top spot in an American Banker survey of top turnaround banks - defined as those that had a host of "serious" problems in 1993 but that are still alive and kicking today.
The bank, which was started by a group of immigrant Chinese merchants in 1983, operated under a cease-and-desist order from the Office of the Comptroller of the Currency in 1991 through 1993 and was close to being shut down by regulators.
Mr. Weng attributed the bank's revival to an aggressive workout schedule and an extremely restrictive lending policy that decreased the percentage of "criticized loans" from 25.96% to 0.35% last year.
"We forced people to pay," Mr. Weng said, adding, "we have been very unpopular in our community."
Asian American National Bank's community is Houston's burgeoning Asian population, which at the bank's inception was in dire need of capital to fund its growing businesses. U.S. Census Bureau figures show that Houston had nearly 9,000 Asian-owned businesses in 1987 - a 34% increase from 1982.
The bank quickly became an important part of the local lending scene.
Rocky Lai, president of Arena Management Co., Houston, started banking at Asian American in 1986. He said the bank helped Asian-American businesses grow. In turn, he stayed with the bank, even through its difficult years.
"Being Asian, we like to support the bank," he said.
The bank's popularity and its push to lend to the fast-growing Asian population almost led to its downfall.
What went wrong? Mr. Weng doesn't mince words.
"Everything was wrong," he said, ticking off the problems: no capital, management's lack of banking knowledge, and inept execution of what it did know. He said even the bank's location was bad.
After 10 years, a bank with an initial capitalization of $2.5 million had loan losses totaling $2.4 million. Its Camel rating was the worst possible, and shareholder lawsuits mounted quickly.
Mr. Weng puts much of the blame on former management, saying they "fought each other all the time." He noted that the bank had set up shop in Houston's Old Chinatown instead of the city's booming Asian neighborhoods on the southwest side.
Asian American National Bank now has branches in both neighborhoods.
But Yhi-Min Ho, its former president and an original investor, defended the former management. Mr. Ho admitted that he, along with other directors, hadn't hired enough qualified bankers.
"I was doing it on a part-time basis," said Mr. Ho, who is dean of the University of St. Thomas business school in Houston.
However, he said, the bank's problems were largely fruit of the Texas oil bust in the late 1980s and the subsequent collapse of the real estate market.
"When the economy busted, the bank was loaded with bad loans," he said. "That Asian American survived, it was quite an accomplishment in itself."
Mr. Weng, a native of China, led a group of investors in buying a controlling interest in the bank in 1992.
A longtime banker whose resume includes managerial posts at Chase Manhattan Bank and Continental Illinois National Bank, Mr. Weng favors management's having "absolute control" of the bank. His management team includes Anne S. Chang, senior vice president and chief operating officer, and Lisa L. Liu, senior vice president and chief lending officer.
Asian American National Bank is tightly held, with more than 50% owned by insiders. The number of directors has been sliced from 20 to five, which Mr. Weng says makes it easier to reach consensus.
Mr. Weng acknowledged that the bank hasn't grown much in terms of assets and deposits.
One reason: He was busy working to settle six lawsuits by shareholders and former directors; deals from 1992 through 1995 paid $703,000 to achieve settlements.
Now, the focus is on increasing loans through the bank's promise of fast service. Asian American National Bank offers customers an answer on a loan in three business days, he said.
"Because the bank is small, we cannot lend too much money to customers," Mr. Weng said. "Our niche is, we react so fast."
He also has his sights set on opening branches, gaining access to more outside capital, and possibly buying another bank.
"We're very proud of our achievements so far," he said, "but by no means do we feel complacent."