Dec 18, 2019 — “In less than one year, Oregon Pacific Banking Company [OPB] has become a significant new financial institution in the greater Florence area and is privileged to open our new facility to better serve you, the residents of our fine community,” the letter from OPBs board read.
It was Oct. 30, 1980 and the fledgling bank was opening a state of the art bank in Florence, the first to have “in-house computer services.” To celebrate, Chairman of the Board A.J. Brauer, vice chairman Henry Johnson, board directors Bob King, Gary Hoberg, Dick Kirby, Jack Garrison and the bank’s CEO, Jim Mandersheid, penned an open letter to the community.
The letter continued, “We desire to be a concerned, responsible and progressive citizen, ready to help serve the needs of our growing community. Our chief goal is to always give you the best hometown personalized banking service possible.”
The letter was published in the Siuslaw News, and adjacent to it was a picture of the new building with the following caption:
“We are proud of our new facility and hope you will come join us in our celebration. We have the warmest, friendliest service in town. Come meet the gang.”
Four decades later, OPB is inviting members of the community to again “meet the gang” as it celebrates its 40th anniversary.
“December 17 is the 40th anniversary of the bank’s charter being filed with the State of Oregon as an Oregon bank,” current OPB president and CEO Ron Green said. “This organization started with five local small-business people that had the idea that a local bank could make a difference for local people and local businesses. I’m really proud to say that 40 years later, that has always been our commitment and continues to be our commitment. It’s to serve the needs of Florence, to be a part of and contribute greatly to future success. That’s something to be proud of.”
As to the importance of the bank to the community, Greene stated that the economy of the Siuslaw region flows through the bank.
“I know that there are small business loans and home loans that nobody in this community will make but us,” he said. “Banks like OPB that are centered in the communities they serve have a risk if that community doesn’t do well. We have 60 employees here, and we’re heavily concentrated to the success of Florence.”
Green pointed out the bank’s work with single-wide manufactured homes, “such as the older homes you’ll find in the Greentrees subdivision,” he said. “We’re the only lender around that will lend on those. A lot of small-business loans — we take chances on new businesses that maybe don’t have a track record. I feel OPB is a vital part of the economic engine of Florence.”
But there was a time when it almost wasn’t.
Green has seen many changes at OPB since he began in 2007 as a credit officer, with responsibilities for the bank’s loans and lending risk management.
“I think the evolution of being a one-branch bank, where it’s only focus was Florence, to now having four offices has been a pretty dramatic shift,” he said. “The bank has grown. But also, the biggest challenge was the recession.”
In 2007, when the recession first began, 40 banks were licensed to operate as a state bank and headquartered in Oregon.
“Today, there are 17,” he said. “During the recession of 2008, there were six banks in Oregon that failed,” Green said. “In addition to the six banks, there were a number of banks that consolidated and sold to larger regional banks for various reasons but are not here today after the fact.”
For the newly hired risk management officer, it became clear that risk was everywhere in the industry.
“We feel very proud and fortunate to have survived, but it was a very difficult time,” Green said.
There are a few factors Green stated that were resons for OPB’s survival, the first being a committed board of directors.
“They were committed to making sure we can wade through this,” Green said. “The board and management put a lot of its own personal money into recapitalizing the bank.”
It didn’t hurt that before the recession, the bank was abundantly capitalized.
“So, the fact that we had a little surplus capital before having the operating losses from non-performing loans helped us essentially survive. But we needed additional capital to grow, which we knew was an opportunity for us.”
While the bank survived, times were extremely tough. Up through early 2014, when Green was named CEO and President, the “bank’s earnings were fairly paltry,” he said. “We were having a difficult time improving the earnings.”
As the pangs of the recession waned, the number one goal of the bank was to increase profitability.
“Profitability was not to line the pockets of shareholders or management, but to really strengthen the bank’s condition so it could continue to be what it had been for 35 years at that time — an active financial institution in this community,” Green said.
So that became the bank’s focus: strengthening operations and making things more efficient.
“Then in 2015, we opened the Eugene office, which was the start of some growth of the bank,” said Green.
OPB now operates four branches in Oregon: Florence, Coos Bay, Eugene and Roseburg, in addition to the Trust and Loan Production office in Medford. In October, OPB announced its third quarter net income was $1.05 million, with the pangs of the recession far behind.
But Green’s focus of pride for OPB doesn’t come from the growth.
“The thing I’m most proud of is the culture of philanthropy and volunteering that we have,” he said. “Off the top of my head, I bet at least 80 percent of our employees here locally are on some board or volunteer their time through a nonprofit agency. It’s a way to give back and promote the economic success of Florence, along with the social success.”
A healthy community bank needs a healthy community, so “we’re helping to solve the problems where there’s areas of need. That’s what an organization like ourselves could do because of our ability to do that, and the sheer number of employees that we have.”
One of the most regular works of financial philanthropy the bank does is through it’s Friday jeans program.
“We are a bank, and we want to look professional, even though we are smaller, rural community,” Green said. “But Fridays, the employees started the idea that we would wear jeans to work.”
So, if an employee wants to wear jeans on Friday, they have to give money to charity. There’s no set amount, with each employee giving what they can afford.
“Those funds are pooled together and gifted to a local charity of the employees’ choice,” Green said. “I would say it’s probably between $400-$500 every week, and each week we rotate. We’ve rotated from virtually every 501(c)3 in town.”
The fact that employees would give that amount of money weekly for philanthropy proves to Green how important the employees are for the community.
“The face of our bank in Florence has to be branch manager Lori Gates,” he said. “Everybody knows Lori, and she’s worked for us over 36 years combined. She is such a wonderful beacon of joy and positivity and represents the bank and the community so well.”
Green also pointed to regional team leader Kim Erickson, and others such as Julie McMillian and Mike Webb.
“Some of these people have worked together for over two decades,” said Green. “They probably spend more time with their coworkers than they do with their own families. So, we have a very genuine group of individuals who care about each other, who care about the community. Clearly, we have to have financial success, but I believe that if we take care of our employees, take care of your community, take care of our customers, then the financial success of the bank will come as a result of that behavior.”
As for the next 40 years, Green sees change at an exponential rate due to technology.
“The technology that’s driving how consumers and how small businesses want to bank is going to forever change the landscape of banking,” Green said. “We have adopted every imaginable mobile and online tool that people can use. It’s exciting and frightening at the same time.”
Green pointed to the “Amazon experience,” where the ease and speed of online retailing will affect all facets of business. To compete, banks will have to mirror some of the same consumer experience that are found online.
“However, that starts with relationships,” Green said. “People will always matter. People want to work with people. That’s the backbone of an organization like ours in the smaller towns that we serve.”
At the same time, many of the traditional transactions that the bank once did face-to-face have now been replaced by ATMs and online services.
“Very few consumers come into the bank anymore because they can do all of their banking on their mobile device,” Green said. “Transactional banking will be something that most people will do and take care of themselves.”
But Green said banking isn’t just about taking money out of a checking account, “It’s also about meeting financial needs and growing their family’s plan for retirement or building a home or growing a small business,” Green said. “That’s where we can provide advocacy and advice to make sure the community is a success into the future.”