According to the new president and CEO of the homegrown bank, all of us in business have had to make changes to our business models to survive. Bank of the Cascades is no different. The old business model of Bank of the Cascades was 90 percent of the loans were real estate development and 10 percent consumer loans. The new business model is 60 percent business loans and 40 percent consumer loans.
I recently had the opportunity to interview Terry Zink, the recently appointed president and CEO of Bank of the Cascades. I came away with a whole new perspective on the banking system and realized there is a difference between banks, an interesting difference. Bank of the Cascades defines itself as a community bank and here’s what Zink had to say.
Zink retired in 2010 from the banking Industry after 30 plus years in the business. Zink had worked with the “Trillion Dollar” banks including Wells Fargo and was the president and CEO of Fifth Third Bank Chicago. As Zink explained it the “Trillion Dollar” banks are the ones who define the concept of “too big to fail.” Policy and programs are not based on community needs but on a larger international scope he said. Banks like Bank of the Cascades are referred to as “Billion Dollar” banks. These are small community focused banks.
After the banking fiasco of 2008, Zink said for the first time in his career he was “hesitant to tell people what he did for a living.” When Cascade Bancorp called last year the thought of “making a difference” was very appealing. Zink explained to me as a community bank the bank assets are directly invested in the community. The community’s businesses, homes and development are what define a community bank. A community bank lives and dies by the community’s success. In fact last year the Bank of the Cascades’ situation was similar to many businesses in this community, on the verge of collapsing. It was only with the raising of $177 million in capital and the sale of $ 110 million in mainly non-performing and substandard loans that the bank survived. This year they began fresh with a clean slate and brought in Zink as the new president and CEO.
“All of us in business have had to make changes to our business models to survive,” said Zink. “Bank of the Cascades is no different. The old business model of Bank of the Cascades was 90 percent of the loans were real estate development and 10 percent consumer loans. The new business model is 60 percent business loans and 40 percent consumer loans. Consumer loans are defined as residential real estate, credit cards, car and lines of credit.”
Bank of the Cascades has changed their business model to meet the needs of the community. Evidence of this is the announcement made in February of lending out $1 billion over the next three years to support the local communities and customers. They are actively working with Economic Development of Central Oregon and Venture Box (a mentorship program that offers start-up businesses a chance to work with individuals who have already succeeded in the start-up world) to support new business development as well as working with Central Oregon Community College to support their entrepreneur programs. They are working on a new program specifically for new business development. If you have a good idea and it’s backed up with a solid business plan Zink says they want the opportunity to support it.
In their banking products they have started a new checking account that itemizes spending by category. If you have ever ended the month thinking….”where did all my money go”…this is a product for you says Zink “It gives a sense of organization to expenditures and thereby clarity to how you spend your money. It’s helpful for businesses as well as families.”
Zink wants to encourage the community to come into the bank with an agenda. Deposit money yes, develop a relationship with the bank and use their services even better. If you are buried with credit card debts with ridiculously high rates bring the statements into the bank and evaluate your options with one of his team he offers. “They may be able to consolidate the debts with a lower interest rate. If your home is under water, meaning what you owe on it is greater than the value, they can help you refinance through HARP.” HARP is a government funded program that was ineffective in the past. The rules and regulations to the program were changed and Zink says it is now very effective in helping the underwater homeowner lower their interest rates and payments.
Remember the movie, It’s a Wonderful Life? While listening to Zink speak of investing in the local economy in terms of businesses and families I kept thinking of the lead character to the movie, George Baily. The theme of that movie was community. George was using community funds to build homes for and support local businesses and families in the community. In the movie George Baily didn’t get it done alone, it required community support, as it does now.
Bank of the Cascades is headquartered in Bend. There are 32 branches in Oregon and Idaho and 11 locations in Central Oregon.
