Chairman's message: observations from Michael Tompkins.

IMAGINE IT IS spring 2010. I sit reflecting on 2008 and 2009, recalling them as two of the toughest years in my professional life.

Thankfully, I served as 2008 NAA Chairman of the Board. Without that break and solace from my friends, I might have grabbed my golf clubs to escape the cycles of growth, fear and the grind to allow myself, for a moment, insightful judgment.

I loved the growth part, but that was 2004 through 2007. Then, I was so hung up in the growth, I failed to recognize that our industry had moved into the fear cycle. Our company had managed to attract the prime time performers. We provided the capital and then stepped out of the wax: It was a great plan embraced by many

Then, 2008 presented some cruel economic circumstances for which we were not prepared. We were introduced to the new lexicon of subprime mortgages, which seemed more like a reverse form of musical chairs. When the music stopped, you did not want to be sitting with mortgages or the misery factors that measured the consumers' tolerance for economic torture. Our consumers were faced with the four burdens of a housing bust: higher energy and food costs, the credit crunch and then the Miler: sliding job and household formation data.

I had spent my life feeling confident that, given enough time, I could solve any business challenge. Well, in this case, I was coming up short. Our capital relationships were either shutting down directly or were applying credit underwriting that made no sense to us. The compensation rewards that we spent years developing for our prime time performers suddenly were irrelevant.

I had two questions, how long and how deep would this credit environment carry? Out of either pride or my optimism about holding our core group together at all costs, I remained confident.

Eventually, we caught a break. Institutions' flight to high quality recognized that high-quality sponsors generally outperform the market. Their cost of funds initially pressured our margins, however, our ability to stay in the game was the primary objective. Our commitment to a narrow operational focus and execution had been a hallmark to our continued success. We officially had moved into the grind cycle. In other words, we worked more for a lot less.

I recently saw a business cartoon in which a CEO was asking his photographer to capture his inner strength in his photo. The cartoon struck me as a humorous reminder of what many leaders felt in 2008: the year was marked with uncertainty and a want for liquidity that created daily inner turmoil for many of us. Fortunately, my relationships formed through NAA eased the ravages of an indiscriminate market shift. It was then that I realized the greatest value of a national organization supporting its members through education, legislation and networking. My membership in a national organization, such as NAA, was the key to helping me manage the grind.

So I imagine that here we are now, in 2010, seeing greater opportunities. However, we continue to grind to meet our objectives while yearning for the return of the growth cycle. We promise to balance our ambition with insightful judgment the next time.

NAA's Chairman of the Board, Michael Tompkins, CAPS, CPM, CCIM