J. Bruce Bugg Jr. ‘Preacher Of Relationships | SA Express INC

On March 10, Mayor Ron Nirenberg met with Gov. Greg Abbott in Austin to discuss incoming evacuees from the Grand Princess cruise ship, the third group of its passengers to be quarantined in San Antonio.

The evacuees were the city’s first exposure to the COVID-19 crisis.

When Nirenberg left the governor’s office, he found Dya Campos, H-E-B’s director of governmental and public affairs, and J. Bruce Bugg Jr. awaiting their turn with Abbott. It was practically San Antonio Day at the state Capitol.

Bugg, chairman of Southwest Bancshares, parent company of the Bank of San Antonio, said he and Campos met with the governor that Tuesday to go over an ominous forecast of how the coronavirus pandemic could play out in Texas.

“Dya had shared with me that (H-E-B) had retained the services of Johns Hopkins University to help model what this could look like in the state of Texas,” Bugg recalled. “I asked her if she would mind briefing the governor and myself. She was very open about how (H-E-B was) planning for the future, and I think that certainly captured my attention — and I know it captured the governor’s attention.

“He was already in the early stages of a different kind of planning and had taken different steps, but I think it hit a flashpoint really in early March.”

Bugg is a member of Abbott’s Strike Force to Open Texas, a group of business leaders who advise the governor on finding a balance between slowing the spread of COVID-19 and keeping businesses viable and workers working. Other members include Landry’s CEO Tilman Fertitta, Ross Perot Jr., International Bancshares Corp. Chairman and CEO Dennis Nixon and former Rackspace Chairman Graham Weston.

Abbott has come in for heavy criticism of his handling of the public health crisis, centering on whether he allowed Texas businesses to reopen too soon. As COVID-19 cases have spiked in recent weeks, a Quinnipiac University poll last week found that Abbott’s approval rating had slid to 48 percent.

Bugg is unfailingly courteous, but he doggedly defends Abbott’s decisions related to the outbreak in Texas. He is a loyalist.

In addition to serving on the Open Texas strike force, Bugg is an Abbott appointee to the Texas Transportation Commission, which he chairs.

He was also founding chairman of the Bexar County Performing Arts Center Foundation and led the private-sector fundraising for what became the Tobin Center for the Performing Arts.

There’s something old-fashioned about Bugg, a Missouri native and son of a casket manufacturer. His demeanor is smooth and personable, his manners polished.

A tax lawyer by training — he came to Texas to attend Southern Methodist University and graduated from its law school — Bugg is also toweringly ambitious and skilled at leveraging his connections.

“I’m a preacher of relationships. Relationships matter to me deeply in all walks of my life,” he said. “Those relationships were built by the ability to really sit down and communicate, just like you and I are right now.”

The pandemic is putting his skills to the test.

Bugg discussed the crisis with the San Antonio Express-News. The following transcript has been edited for clarity and length.

Q: Do you know anyone who’s tested positive for the coronavirus?

A: I have a couple of friends who have tested positive. Fortunately, their symptoms have basically afforded them the opportunity to just stay home and self-quarantine. They have not had to go to the hospital. I don’t know anyone that has been affected with COVID-19 who actually had to go to the hospital and, God forbid, end up on a ventilator, knock on wood.

And I don’t personally know anyone who contracted COVID-19 and passed away. But COVID-19 is real. One of the things that concerns me the most is it’s not the people who are sick that we run into, whether at a board meeting or going to a restaurant or whatever. Those who have symptoms seem to self-quarantine. They know they have the symptoms; and they either stay home, they go to their doctor or if it gets much worse, they go to the hospital. It’s the asymptomatic people — that’s the scary part.

It’s just something that we all have to take very, very seriously. And I can’t emphasize enough, it’s a shared responsibility. Everyone has to take responsibility for their own actions in these circumstances. I believe there’s a new social compact that all of us can agree on, regardless of what your political persuasion is. This is something that affects Republicans, Democrats, Independents, Black, white — it’s coming after all of us. There really is a new social compact around COVID-19, and that is, you do your part and I’ll do my part, and we’ll protect each other.

A: I like to walk 6 miles a day — that’s kind of my exercise regimen. So I walked into town, the city of Bandera, and went to Bandera’s city park. There’s an area where you just have a big oval that you can walk around. That Memorial Day weekend, I noticed that the crowds were just teeming along the banks of the Medina River. And as I was walking along, trying to pay attention to the business shows I listen to on the weekends, I was looking at that crowd and thinking that can’t be good — from the standpoint of social distancing and trying to keep our COVID-19 infection rate down.

I didn’t see one mask in the crowd. People were having a good time, just like normal times. They had charcoal fires going and grilling their hamburgers and drinking cold beer and getting in the water and swimming — just like it used to be. But the impression that it left me with was people have kind of just decided that they’ve had enough of COVID-19. They’re ready to get back to their normal lifestyle. And this would probably not end up being a good thing. And I think that’s what really was the spark that lit the increase in the COVID-19 infection rate.

A: I think it was more of a function of — there were shelter-in-place orders, and once those orders were lifted by the local communities, then it was “happy days are here again.” And that was not what the governor was saying, clearly. He was articulating very clearly social distancing. If you go back and look at the news conferences he held, he was sitting 6 feet away from whomever was with him.

He was emphasizing that the reason why we can start to open nonessential businesses in Texas is that the plan was, and is, to go gradually and to be driven by data and doctors, as he said. And to use the CDC (Centers for Disease Control and Prevention) rules for social distancing and all the safeguards that we all now know, such as washing your hands routinely. When you go out in public, wear a face mask.

I think it really goes back to human nature. When the shelter-in-place orders were lifted, I think that was widely interpreted as freedom. Now we can go back to our normal lives, and this is Memorial Day. We’ve been cooped up for months, and we’re ready to go and have a good time. And I think that’s what you saw on full display, not only what I personally witnessed, but what was going on probably throughout the state of Texas, in our parks and areas where you can have recreation.

A: It’s 66½ acres. It’s not the Ponderosa. I bought it in 1993.

A: The headlines at the time were frankly terrifying because no one really knew what COVID-19 was. But we all knew it wasn’t good. And so the PPP loans were launched as part of the COVID-19 emergency legislation in Washington. Essential businesses were allowed to remain open, but nonessential businesses were, through the governor’s executive orders, closed.

All during this period of time, we were all trying to get our arms around what COVID-19 really meant. When you’re operating a business, you have to get up in the morning and go to work and make your business work. Some people that were deemed to be in nonessential businesses no longer had that choice. And they had to shelter in place and not return to their business. And those businesses were the ones that were, of course, hardest hit.

So, I recognized early on that with this PPP, this could be a meaningful role that the Bank of San Antonio could play — and, by extension, the Bank of Austin and Texas Hill Country Bank (both of which Bugg also serves as chairman) could play. We took on a new federal program that could help not only nonessential businesses but essential businesses — to help them hold on and make it through from the beginning of this terrible pandemic, through what some call the Valley of Death, and get to the other side.

I think it was kind of our finest hour in the community banking business as a whole. Many community banks throughout the United States stepped up and did the same thing that we did. But there was not a lot of time to think about it. It was a time to swing into action to help people. We were fortunate in that we had the SBA (Small Business Administration) preferred lender status before COVID-19. We had had a years-long relationship with SBA. So we were able to swing into action very quickly. And we had a very talented team.

A: COVID-19 has had a damaging effect on the arts generally, whether it’s performing arts or visual arts. I’m also a trustee of the McNay Art Museum, and we have been employing social distancing rules and trying to just stay open. But as far as the performing arts, the Tobin Center is uniquely suited to be able to allow patrons to come to the H-E-B Performance Hall because of the unique configuration of our seating. It’s all computer-controlled. We can have seats that are literally 6 feet from the next seat. And so we have a business plan at the Tobin Center that we have executed on. And whereas we can hold 750 people in the H-E-B Performance Hall, we are self-limiting to 350 seats in the H-E-B Performance Hall. But the patrons still have to have the confidence to be able to come and see that performance.

We’re all in this together in the arts. My son is a musician and lives in Nashville (Tenn.), and his sole source of income is being a member of a Christian rock music band. They were on a national tour when the COVID-19 pandemic hit. In fact, they were on the West Coast. I remember my son, Jim, calling me and saying, “Dad, we’re finishing up our show in L.A., and we’re getting ready to go to Portland and on to Spokane and Seattle. But we’re hearing something about this coronavirus thing. Is it safe for us to go?” I did some quick research on the Johns Hopkins University website and told him — this is early days — “For your own health, I think you really need to shut it down and head back to Nashville,” which they did.

A: He’s a guitarist, and he plays with Chris Renzema’s band.

A: One of my favorite words is optionality. And by combining the three banks into a $1.5 billion bank, that puts us into the area where we could think about doing an IPO. We have no plans to do that today, but it creates an option to do that. Once we complete the merger, our intent is to continue to grow organically. That’s how we got to where we are now, and that approach has served us well. We have not made any acquisitions. Optionality also opens the door to considering an acquisition, but we have no plans today for acquiring another bank. We have no plans today for doing an IPO. But at $1.5 billion, it gives us the ability to think about it.

A: We’re working on our regulatory filings for the merger right now. So while we’re navigating the COVID-19 pandemic, we can work on a regulatory merger application. We can work on how we’re going to execute the merger from an operational standpoint, things that are not sexy but are really super important to get right. And I don’t see this as a year when growth is going to knock the lights out of anybody’s park. And so what better time is there to execute on getting our merger successfully completed?