Growing Local Economy Impacts Banks in Positive Ways
Cascade Business News asked several leaders at local banks and credit unions to share their thoughts on changes in the banking industry, pending regulatory legislation, current focus in their companies and some advice to businesses looking to grow their companies in Central Oregon.
Kyle Frick at Mid Oregon Credit Union, Stephen Wymer of OnPoint Community Credit Union, Peggy Hobin of Washington Federal, Coby D. Horton of US Bank and Gary O’Connell of Summit Bank contributed to this feature including how their institution is cultivating their business in Central Oregon growing economy.
What you are focusing on now in your financial institution?
Kyle Frick — For the past several years we have been focused on building our organization for growth, both physically and culturally. In June 2016 we opened a new branch in La Pine. In July, we purchased an administration building to provide needed space for our growing support staff as we have increased our underwriting, contact center and administration resources to accommodate our growth. We opened our Sisters branch in March 2017. We are showing very strong member, deposit and loan growth for Q1 of 2017.
Cory J Allen — I lead the Columbia Bank Commercial team in Central Oregon. The team consists of myself, three relationship managers, a portfolio manager, a credit analyst and a commercial specialist. Combined, this team has over 65 years in the banking and finance industry. We provide local underwriting and decision making for all commercial and industrial lending types, including but not limited to, term equipment loans, real estate loans (owner occupied and investment) and working capital lines of credit. We also manage local deposits including treasury management for commercial clients. Another way to consider it is, if you are a business (including non-profits) and/or have a commercial lending need, we want to help.
Stephen Wymer — At OnPoint Community Credit Union our focus is on our community, our membership and our employees, specifically by recommending effective financial products, services and technology to support the specific needs of our membership, trusted financial services delivered by professional, engaged and knowledgeable staff.
Peggy Hobin — Our vision is to “Be the most trusted and highly-recommended regional bank in the Western U.S.” We take that commitment seriously and understand that to accomplish this vision Washington Federal must focus on the client experience. Consequently, we go-all-out to provide solutions for our clients based on their individual needs. We find that the mutual benefit of this approach strengthens the client financial well being as well as our communities at large.
More than ever we’re aware that our colleagues are the foundation of this company’s’ strength and long-term success over the last 100 years. We’ve worked to create, and maintain, a culture of empowerment that enables our teams to assist their clients with innovative solutions. We know that every client has a choice and people bank with people.
Gary O’Connell — The entrepreneurial talent and potential in this community is unlimited and it is thrilling to play a part in contributing to that environment on behalf of our team at Summit Bank. As the only local community bank in Central Oregon, Summit Bank shares the same passion for supporting the professional and business environment with a thoughtful offering of business banking and lending solutions, all locally delivered, underwritten and decisioned. The local aspect of Summit Bank combined with its SNL ranking as one of the top 2 percent financial performing community banks in the country has positioned Summit Bank to lean in further to support the community. We recently completed a successful stock offering to further support this effort in Central Oregon and the Eugene community as well.
How have the changes in the Central Oregon banking community impacted your bank?
Kyle Frick — Changes that have happened with other financial institutions have benefitted us positively. We have experienced growth of members and businesses who want a relationship with a stable, local financial institution that supports the community. We have been successful with small business and commercial lending where we can help companies with our more flexible underwriting guidelines and businesses that have been challenged to find finance options from conventional lenders.
Cory J Allen — The many changes in the Central Oregon community have had very little impact to our operations. Columbia Bank is a very well capitalized bank with a disciplined lending approach. As such, we were able to grow through acquisition and organic growth during the economic downturn as we were well positioned going into the cycle and there were numerous opportunities for acquisition. This has also allowed us to provide stability and create new opportunities for the bank.
Businesses can turn to us if they feel effected by change or instability with their current lending institutions and we are very clear with what they can expect from us. Speaking to Central Oregon, our team is run similar to that of a franchise. We are all part of the Columbia Bank team, however we manage and make decisions based on our local market and budget. Obviously there are trends and influences that may impact the bank as a whole, however our primary focus on local successful commercial and industrial businesses has and remains our specialty and niche market.
Stephen Wymer —As most people experienced, Central Oregon faced significant challenges during the recession. Because the these economic challenges, OnPoint has cautiously and effectively followed and supported the economic rebound by providing consumer, commercial and small business loans. Central Oregon remains a very competitive financial and banking market, offering many choices and services both local and non-local.
OnPoint continues to stay focused on opportunities that have a positive impact for our membership and supports the local economy; doing the right things, at the right time, for the right reasons. We strive to continually learn and grow within our communities. We provide financial training for students in the schools with partners such as financial beginnings. We listen and partner with people and groups in our communities to build effective relationships, grow membership and support local businesses.
OnPoint is fortunate to have highly knowledgeable and engaged employees making decisions that positively impact Central Oregon every day. Keeping great employees and creating a positive place to work will always remain of upmost importance. We endeavor to provide a trusted resource to help assist anyone with their financial needs. The impact of our growing Business Membership in Central Oregon has offered OnPoint opportunities to expand products and services. In addition to providing effective consumer loan products and every day financial services, we also provide mortgages, wealth and financial management services, commercial & small business loans, credit cards and services such as online business banking.
Peggy Hobin — The banking/finance landscape has changed over the last few years and not just in Central Oregon. More and more community banks are being acquired and I believe that leaves many business clients uneasy. Often we find that clients choose our bank for these three reasons:
• The loan officer they work with “know their stuff” they have solid banking and
credit knowledge.
• Their banker lives in the community where they live.
• Their banker understands the local challenges.
This is where I see Washington Federal filling a significant need. Over the last 100 years we have grown to over $15 billion in assets and are one of the highest capitalized banks in the U.S. I think the amazing part of our story is we have maintained the same core values and culture through the 100 years. Since our inception we have been a true portfolio lender. This means that we do not sell any of our loans on the secondary market. We gather local deposits to fund our loans and we have local teams to assist clients. We receive deposits from our communities then, turn around and lend that money to homeowners, builders, businesses and local investors. To do this successfully, it’s important we understand our communities and clients and make good financial decisions for both.
Our culture lends itself to the benefits of a community run bank along with bringing the financial strength and capacity to assist all types of clients with their banking needs. We appreciate our client relationships and we understand that regardless of who they are they will all experience cycles in business or life. When choosing a financial institution it’s important for businesses to make sure they select a financial partner that has the ability, and desire, to assist during growth and hardship.
In the last recession I had a front row seat, and was privileged, to work hand-in -hand with clients to weather the storm. I can honestly say, in my 32 years of banking this was the most gratifying experience of my life. Because of it I, and many peers, are better people and definitely better bankers.
Coby D. Horton — Coming out of the last recession has not been easy on any financial institution as the industry was dealing with mounting loan losses, raising costs of regulations and a prolonged time period of near zero interest rates. Though this was a difficult time for everyone and U.S. Bank was certainly not immune to the recession’s effects, we were operating from a position of strength.
In respect to lending, we pretty much stick to what we know. Just because everyone else is doing it, doesn’t mean that it will work for us. This philosophy has served us well over a long period of time. We certainly won’t grow quick in the short run but over a period of time, we will outperform our peers.
That being said, we still know our market and we have the ability to locally make financial decisions that make sense. Because of this, we were able to growth very nicely both during and after the recession. Secondly, we’re a full service financial services company and didn’t have to rely heavily on interest income to keep the business running. Through a suite of products and services in treasury management, wealth management, trust and other services, we were able to accommodate all of our customers’ financial needs.
Gary O’Connell — The changes in Central Oregon from the last recession to the present time is why we are here today. By our count, about 8 financial institutions either left the market or were acquired by out of area banks. That created a tremendous opportunity for Summit Bank to invest in the Central Oregon community in April of 2015 to support what we felt were underserved segments of the banking community — professional, small and medium business, medical, manufacturing, distribution and food and beverage production.
Is there legislation pending that can impact the banking world?
Kyle Frick — Currently, regulatory relief is high on our radar as the members of the House Financial Services Committee expressed many questions about the one-size-fits-all regulatory climate under the Dodd-Frank Act, as well as the effect on consumers and community financial institutions during a hearing on the Financial CHOICE Act. Details on the Financial CHOICE Act were made public recently by Rep. Jeb Hensarling (R-Texas), the committee chair. Rep. Ed Royce (R-Calif.) said the effect of Dodd-Frank burdens means “the smaller the institution, the greater the disadvantage,” which is a problem he said he hopes is remedied. Rep. Scott Tipton (R-Colo.) questioned the burdens of the Dodd-Frank Act, saying those burdens meant community financial institutions are now forced to ask how they can comply, rather than ask how they can better serve consumers.
Cory J Allen — The biggest issue on a national level remains the Dodd-Frank Act. Since the financial reform and adoption of Dodd-Frank, regulatory and compliance cost for all banking institutions have skyrocketed. This has caused a ripple effect in the industry and we continue to see consolidation of banks to offset and absorb the additional cost of doing business. The current administration has discussed the desire to roll back or amend parts of Dodd-Frank but it remains to be seen what, if any, actions will be taken.
Another significant local change in regulation is the state level legalization of marijuana. The marijuana industry as a whole is facing tremendous obstacles in terms of finding a home for deposits, leased space and traditional bank products. Even those not directly related to the industry, but receiving funds from marijuana proceeds have faced challenges. For example, if you own a commercial property and receive lease income from a marijuana company, you may be considered in default of your loan agreements or face challenges with insurance products. This obviously creates challenges as banking institutions are federally regulated. Until the federal law is changed or states create better protection for the industry, the marijuana industry will continue to face challenges with traditional banking products.
Stephen Wymer — Tax reform is on the watch list for factors that will impact business in general. Additionally, ongoing Oregon legislation regarding sales tax initiatives and business taxes will be an ongoing concern and could have costly impact to local existing businesses and businesses looking to locate in Central Oregon.
Peggy Hobin — There is a lot of discussion of rolling back regulations in 2017. Most visible is the Dodd–Frank Consumer Protection Act. As we all know some regulation is necessary, however, at Washington Federal we believe it should be based on risk. Most banks spend significant funds and workforces stress testing and enforcing regulations. These resources could be better used in other areas of the bank that directly benefit our clients.
Some regulatory requirements have made it difficult to assist our clients at the level we prefer. It extends time lines for processes and creates rules that don’t always align with our commonsense underwriting approach. As I mentioned previously we do not sell our loans so we are very aware of the importance for making good decisions, based on sound principles, for the successful outcome for both our clients and Washington Federal. Any relief we receive will be welcomed and have a positive effect on our client’s experience.
Coby D. Horton — There is a lot going on both at the federal and state levels pertaining to banking legislation. Probably the most visible topic covered is the current administration’s attempt to deregulate financial institutions and repeal several aspects of Dodd-Frank. Dubbed the CHOICE Act, the bill deregulates financial regulatory bodies like the Consumer Financial Protection Board (CFPB) and makes them subject to more congressional accountability. The act also gives banking organizations relief from certain regulatory requirements if they maintain a leverage ratio of 10 percent. If much of this act gets traction, financial institutions should see some relief from bureaucratic “red tape” which should positively impact banking customers.
Gary O’Connell — Yes, that is always a consideration from an enterprise risk standpoint and right now there is a lot of focus on these matters. Summit Bank supports regulatory relief for community banks to the extent that it can benefit the business and professional clients we serve. Ultimately it is our clients who feel this burden when doing business is made more difficult than necessary due to regulatory restrictions. We are all about
financial responsibility and regulations but it must be tempered and tiered to the size and complexity of the financial institution as opposed to a one size fits all approach that holds smaller banks to big bank regulatory standards.
Best advice to businesses looking to grow their companies in Central Oregon.
Kyle Frick — Get involved with the Central Oregon community. We have excellent resources here to support our businesses: EDCO, the Chambers of Commerce, COCC Small Business Development Center, Opportunity Knocks and many more. Support our focus on education to improve our workforce, future jobs and the expansion of OSU Cascades, COCC and the school districts with organizations like Better Together. Get involved with efforts to support Central Oregon business in the Oregon Legislature. Support our local communities through events and organizations that provide for needs that help us continue to become the great place we envision and know as Central Oregon.
Cory J Allen — My best advice would be to uncover and utilize all the resources that are available to you. The local Central Oregon community has an excellent entrepreneur network who wants to help other local businesses succeed. Identifying your needs is the first step which is often masked in the numerous challenges that face business owners on a daily basis.
There are several groups in the area that can help identify these needs and provide support such as an Opportunity Knocks group where there is most likely someone who has experienced or is going through the same challenges facing you.
If you are looking for a lending source, collaborating with the appropriate equity/lender provider is crucial to setting yourself up for success. Start with talking to a local bank (like Columbia Bank) who not only understands commercial lending, but knows the other sources of equity/lending resources that are available to businesses of all life cycles. We here at Columbia Bank want to be sure we understand your needs and unique business model so we can provide recommendations even if it isn’t something that we can directly help with.
There are often situations where we provide referrals to other agencies that we partner with to accommodate the immediate need and then Columbia Bank comes in at a later time. I always recommend speaking with EDCO (Economic Development for Central Oregon) as they have an abundance of resources and information and are here to help businesses succeed in Central Oregon. Lastly be sure to build a strong team and relationship with your key professional partners including your banker, CPA and attorney.
Stephen Wymer — Having owned and operated several closely held small businesses: Write a business plan-update often and whenever prudent; things can change quickly so be nimble and know your numbers; you will never stop learning! Know what you don’t know; Connect with solid financial institutions, develop trusted peers, listen to constructive feedback and build good working relationships; Work with positive people that will listen and provide candid feedback and guidance necessary for your business and employees to thrive; helping to improve the lives of those around you and the communities you serve.
Peggy Hobin — Regardless of the industry we’re in, I believe we can grow our business in Central Oregon if we live by a few simple principles.
Some of the best advice I learned early on was “don’t try to be all things to all people.” Staying focused on your purpose and what you “bring to the table” helps strengthen your company.
We’ve always tried to be strategic in our approach to growth. We set business plans, track against those plans, and modify them when necessary. I believe that if you don’t set goals you have no way of measuring yourself, your team and your company against pre-determined objectives. When everyone is crystal clear what the goals of the organization are, it allows the team to rally together and take pride in successfully accomplishing them.
Remember that people work for people, not companies. It’s rare when a business can successfully operate and grow without talented people. We’re always looking for ways to improve our culture, our benefits, and the reasons why employees would want to keep working for us. I believe that many companies forget that true loyalty comes when employees believe that the organization and its leadership team care about them personally and professionally. This ultimately results in long-tenured employees, which has a very real and direct effect on company growth.
Passion is contagious: When you love what you do it shows to the people surrounding you every day. Showing excitement and enthusiasm cannot be underscored enough in terms of how it relates to your team working harder, being more focused, and ultimately growing your company.
Challenge yourself to always keep improving: technology is changing the world we live in every day. In order to stay relevant, it is important to innovate, regardless of your industry, as well as want to get better. I believe that you are either moving forward or you are becoming obsolete.
Unfortunately, there is no guarantee for business success. However, these principles will help alleviate some of the common pitfalls that many businesses face as they look to gain traction and growth.
Coby D. Horton — The single biggest piece of advice that I could give to anyone in business is to never go it alone. And I’m not talking about bankers, CPAs and lawyers (all who are certainly important) but rather the experts who’ve “been there, done that.” The entrepreneurship vibe in Central Oregon now is phenomenal. There are a ton of resources and people who are able and willing to help you and your business become successful.
Take for instance the newly created Business Resources of Central Oregon – Engaging the entrepreneurial spirit. This is a fantastic online resource for access to capital, peer groups/clusters and education & mentoring. I would encourage both new and veteran entrepreneurs alike to check this out. Then find someone to compliment you in an area you are weak in. Meet routinely over coffee. There is a lot to be learned from a lot of people in our community.
Gary O’Connell — At the risk of stating the obvious, failure to plan is a common mistake. I get that so many business owners are busy with their operations, but getting strategic about access to capital and a financial structure is critical to executing any plan. I would suggest every business owner, CFO, and any other decision maker sit down with their bank. In the same way that a business tries to test a proof of concept for its product or service, consider taking the same approach to financial planning – test the concept with your banker. Bring the concept to us and let us help you understand and further develop the requisite financial plan that will be needed to grow your business.
