LibertyBank’s newest Central Oregon branch, located at the south end of Bend off Third Street, apparently looks so inviting it was already attracting customers inside before the bank even opened for business.
“We’ve had people walking in looking to conduct transactions, or pulling up to the teller window, and we have to turn them away because we’re not open for business yet,” LibertyBank Vice President and Manager Jackie Westover said. “We fully expect this office to be successful in a short period of time.”
This is LibertyBank’s fifth Central Oregon office, it’s fourth in Bend, and the first of the new generation look to its office design, which is commonly seen in Eugene and other markets west of the Cascades. Some of the features of the new branches include warmer colors, a market stand set up like a miniature store complete with books, software and minted coins for sale, and a client lounge area where people can enjoy coffee and cookies while surfing the internet for news and information or checking their accounts online.
The new, 4,500-square-foot branch also installed three flat screen televisions, two that hang over the teller windows, broadcasting news to customers waiting their turn in the lobby line.
“Our philosophy is to build relationships with our clients – and we prefer to call people clients rather than customers because rather than trying to sell them something we like to find out what their individual needs are and customize products and services that fit their goals,” said Paul Stednitz, senior vice president and regional manager for LibertyBank’s Central Oregon region. “This is a very high traffic area, and we’re fully expecting this office to be successful in a short period of time.”
While the local economy continues to sag, Stednitz says LibertyBank’s account base is growing steadily, as far as consumer checking and savings accounts, but even so the bank reported a fourth-quarter loss of $655,000, citing problems with construction loan losses as the reason.
LibertyBank’s profits for its fiscal year, which ended June 30, were down 68 percent compared to the previous year when it reported a net profit of $4 million. During the 2006-07 fiscal year, Eugene-based LibertyBank, the largest privately held bank with headquarters in Oregon, recorded record profits of $12.4 million.
“The decrease in earnings was due to an increase in the loan loss provision of $15.7 million set aside during the year, compared to $3.4 million one year ago,” the bank said in a statement. The loss provisions were related to construction loans.
The bank’s chief executive, Bob Fenstermacher, said “The soft housing market continues to have a significant effect on builders and developers in the bank’s market area, with the most affected areas concentrated within Central and Southern Oregon.
“Many of our builders and developers in those areas continue to have difficulty selling their inventory due to the slowdown in the residential real estate market,” he said. “As a result, LibertyBank significantly increased its loan loss reserves during the year to account for potential charge-offs in its construction and land development loan portfolio.”
In the statement, LibertyBank said it is still considered well-capitalized by FDIC standards, with assets rising 1.5 percent to $942 million compared to a year ago when deposits rose 0.8 percent to $772 million.
LibertyBank said problems stemming from troubled real estate loans come primarily from the Bend area, as well as Southern Oregon and Northern California. Stednitz says the fact that LibertyBank is a family-owned institution helps it weather down times better than other banks.
“During these tough economic times the advantage to being privately-held is that the owners understand we have to put aside profits for potential loan losses,” he said.
Meanwhile, the company still has its sites set on expansion in Central Oregon. Stednitz said LibertyBank plans to open another branch office in Redmond, its second location in that city, as well as yet another Bend branch, this time near the St. Charles Medical Center campus.
“Deposits in Redmond have grown faster for us than in any other LibertyBank office,” he said.
LibertyBank turned its focus from residential lending to commercial lending back in 1985 when it was a savings and loan. Bank officials decided in 1999 that real estate lending was such a commoditized product, with people shopping around for loans until they found the lowest rate possible, that it behooved LibertyBank to focus on construction lending.
In fact, Stednitz says LibertyBank recently entered into a partnership with Summit Mortgage, which leases office space from the bank, so that clients can still shop for home mortgages inside their branch office without the bank having to allocate resources toward those types of loans.
“Their philosophy is aligned with our philosophy,” Stednitz said, “Most mortgage companies think of a loan as a transaction, but they think about their clients like we do and try to help them find a product line that fits their individual needs.”
LibertyBank will hold its grand opening the week of August 18, with plans to hold a soft opening at the end of July. August 21 will be the official ribbon cutting ceremony with the Bend Chamber of Commerce at 1pm.
“Each time we add a new location we take it as an opportunity to better service the residents in that community and to extend our standard of service to even more individuals,” Stednitz said.
Services available at the new branch include a drive-through ATM, drive-through banking, a night depository, notary public and safe deposit boxes.
