A bale of North Alabama cotton sails on a ship for a month on its way to Vietnam. Workers there fashion it into a men’s shirt, pack it up and ship it back to a buyer for a retail store in Mobile.
That’s not a farfetched scenario, say Alabama bankers who earned a prestigious award for helping make the remarkably complex world of importing and exporting easier for businesses.
Birmingham-based Regions Bank is one of 10 U.S. entities recognized with the nation’s highest export service honor — the 2024 President’s “E” Award for Export Service for providing financial solutions for corporate banking clients.
“Our focus at Regions Bank is helping business clients maximize opportunities for growth, and our work with exporters helps American businesses expand their global reach while building on their success,” says Ronnie Smith, head of Corporate Banking for Regions.
A 1961 executive order created the “E” Award as the highest recognition a person or entity can receive for making a significant contribution to the expansion of American exports in the global marketplace.
“Regions Bank has a strong legacy of supporting vibrant trade,” says Carson Strickland, head of the Regions Global Trade Finance Relationship team. Strickland is based in Mobile and has been with Regions for more than 25 years.
Regions works with all types of exporters, he says, mostly in the Regions footprint of the Southeast, Midwest and Texas but elsewhere in the country as well. Many of the exported products come from agricultural production.
“The large majority are manufacturing something or distributing something internationally, or selling something another company makes,” he says.
“There are at least a couple of hundred companies that we support of all sizes,” Strickland says, “from your mom-and-pop businesses up to your Fortune 10 companies at this point.”
Exported materials travel anywhere they can be sold.
“If you think about your kind of base product exports, you think about your commodities and raw materials and things like that, they go all over the world,” Strickland says. “I would say more of that goes into emerging or developing economies.
“We just produce as a country a lot more than what we use,” Strickland says.
American businesses, including those in Alabama, have plenty to sell internationally.
In February, Gov. Kay Ivey announced that Alabama’s exported goods and services were worth more than $27.4 billion in 2023, setting a new record. The state’s largest export market is Germany, followed by Canada.
Transportation equipment, which includes motor vehicles, auto parts, ships and aerospace products, remains Alabama’s No. 1 export category, totaling $14.8 billion.
Other categories registering more than $1 billion in exports during 2023 were minerals and ores ($2.2 billion), chemicals ($2.2 billion) and primary metals ($1.8 billion), according to Alabama Department of Commerce data.
Alabama exports went to 190 countries in 2023, landing everywhere from the world’s biggest economies to tiny locations like the Solomon Islands, Palau and Gibraltar, data shows.
Higher-value exports and products, like capital equipment, consumer goods and food products tend to go to more developed markets like North America, Europe and Japan, Strickland explains.
Bryan Ford, head of treasury management in the Regions Memphis office, has worked at Regions for more than 17 years.
“In the agriculture space, we have a fairly deep relationship with the cotton industry,” Ford says, and quite a bit of the region’s cotton is exported globally.
As a country, “we produce 20-something million bales of cotton a year,” Strickland says. “We use about 3 domestically and the rest of it goes somewhere else.”
A lot of basic manufacturing has moved into southern Asia, in countries like Pakistan, Bangladesh and Vietnam.
“Those types of countries buy a lot of commodities, agricultural and otherwise, from the U.S. to produce products that get sold to consumers all over the world,” Strickland says.
Ford says, “It really does span the world, just depending on the client and what it is they’re producing and exporting.
“We often are helping our clients because many are looking to expand their business beyond the U.S. and domestic opportunities,” Ford adds. “They’re looking internationally. Sometimes one of the first questions that Carson’s team will get is, ‘How do I start?,’ ‘How do I do this?’ That’s where we’re able to help clients understand what resources and tools are available through Regions Bank to help them with that strategic goal they have of exporting their goods.”
Regions’ global trade finance options include treasury management to improve cash flow and mitigate risk, letters of credit to support contracts with foreign buyers, working capital solutions, and financing to help international companies receive goods and services from U.S.-based operations.
Strickland says they also point clients to sources of legal, transportation and logistics information such as government agencies.
“The main things we’re helping companies to do to grow their international sales are to help manage risk and provide financing or working capital,” Strickland says.
Risks can include uncertainty about payment, currency exchange issues, an extended sales cycle and whether the customer actually receives the items.
“When you think about selling internationally, goods are on the ocean for a longer period of time,” says Ford.
“The export component is just different” in that way, Strickland says.
“You’ve got a container of goods that’s on the water potentially 45 to 60 days,” Strickland explains. “Compare that to a company sitting in Huntsville that’s got a customer in Atlanta. That’s a same-day delivery in most cases. All of that creates specialized financing solutions for that company.”
The biggest surprise for anyone not well versed in America’s import/export market, Strickland says, might be that “we import more than we export.”
Even with imported goods, “there’s a very high likelihood that something in that product actually came from the U.S. originally” — like the Alabama cotton shirt example.
When American businesses sell something internationally, “to put it as simply as I can think of,” Strickland says, “you’re getting somebody else’s money, so you’re injecting that back into the U.S. economy rather than just relying on what’s going on domestically to drive economic growth.”
Another export benefit is more humanitarian in nature.
“Countries that trade with each other tend not to fight with each other as much,” he says. “You’re relying on the flow of goods, the flow of capital between countries. It might not appear that way, but they tend to get along better than if they were not doing that.”
Regions Bank has been an EXIM Delegated Authority Lender since 1994 and an EXIM (the nation’s export credit agency) Letter of Credit policyholder since 1991. In February 2020, EXIM’s Board of Directors unanimously approved an increase in the delegated authority for Regions, allowing the bank to increase support for exports of U.S. goods and services from small and medium-sized companies in the states in which it operates.
The bank’s first export recognition came in 1968 when the Merchants National Bank of Mobile, a predecessor bank to Regions, received the President’s “E” Award for Export Service.
Regions has been recognized by other government agencies for its work to support exports. The U.S. Small Business Administration recognized Regions in 2019 and 2023 as its Export Lender of the Year. EXIM named Regions Bank Lender of the Year in 2020 and awarded Deal of the Year Recognition in 2022.
Regions Financial Corp., with $155 billion in assets, is a member of the S&P 500 Index.
Regions serves customers across the South, Midwest and Texas, and through its subsidiary, Regions Bank, which operates approximately 1,250 banking offices and more than 2,000 ATMs.
Deborah Storey and Mike Kittrell are freelance contributors to Business Alabama. She is based in Huntsville and he in Mobile.
This article appears in the October 2024 issue of Business Alabama.
