Idaho Independent Bank has maintained solid footing in a constantly changing banking landscape since it opened its first branch in Hayden in 1993, says Jack Gustavel, IIB’s chairman, CEO, and founding member.

He also claims that while many of the bank’s competitors “went down or were recapitalized,” IIB had a strong foundation that helped it weather the Great Recession.

Although IIB wasn’t unscathed by the economic crisis, Gustavel says, “We’ve continually done better over the last few years. Problem assets are very low in relation to our peers, and our earnings are improving.”

He says the bank has over $500 million in assets, up from $450 million at the bottom of the downturn. Prior to the recession, the bank’s assets peaked at around $600 million, he says.

“When we went through the financial crisis, there were some difficult times, but I felt good about it,” Gustavel says. “We came out the other side well capitalized.”

Compared with the trough of the recession, “Assets are going up, and deposits are up,” he says, adding, “Loans are stable and going up.”

In its third-quarter earnings release, IIB reported net income of $1.2 million, or 14 cents a share, for the first nine months of 2014, compared with income of $1.8 million, or 22 cents a diluted share, for the year-earlier period.

Income from the sale of nonperforming assets helped create the higher income during the first nine months of 2013, although core profitability also improved in 2014, Gustavel says.

Loans totaled $245.5 million as of Sept. 30, up 9.7 percent compared with year-earlier loans, while deposits totaled $409.9 million, down 2.1 percent compared with a year earlier.

The bank’s year-end earnings report for 2014 will be released next month. Gustavel says he can’t talk about those numbers in detail until then. He says, however, that the bank’s performance was stronger in the fourth quarter than in the first three.

“I’m anticipating much better results,” Gustavel says.

IIB employs 200 people and has 11 branches in all in Idaho, including its main branch in at 1620 W. Riverstone Drive, in Coeur d’Alene, and its Hayden branch, at 8882 N. Government Way, where the bank houses its backroom and data processing operations.

IIB has three branches in Boise, and one each in Meridian, Nampa, Caldwell, Star, Mountain Home, and Ketchum. “We’re not well represented in the eastern part of the state, but I think we’ve covered the markets well that we’re interested in,” Gustavel says.

When IIB opened its first branch almost 22 years ago, three major Idaho banks had merged recently or were in the process of doing so, he says.

In one of those transactions, First Security Bank of Idaho had bought out First National Bank of North Idaho, where Gustavel had been president and CEO from 1974 to 1992.

He says he contemplated retirement then, “but I couldn’t stand prosperity.” 

So he went to work on starting up another bank, a feat that hadn’t been done in Idaho for 20 years, he claims.

“I saw an opportunity and need for an independent bank,” Gustavel says. As an independent community bank, IIB’s continuing mission is to provide personalized service by focusing on relationships rather than transactions, he says.

IIB’s founding group included one of his daughters, Lynn Taylor, who is a senior vice president with the bank, in Coeur d’Alene. In all, three of Gustavel’s four children work at the bank.

His son, Kurt Gustavel, is IIB’s president and chief operating officer, and is based in Boise. He came over from Boise-based West One Bank, which was acquired by Portland-based U.S. Bank in 1995.

Another daughter, Jill Hathaway, is a Coeur d’Alene-based commercial lending officer with IIB.

The bank’s Coeur d’Alene branch originally was located at 912 Northwest Blvd., in space currently occupied by bankcda, an independent community bank launched in Coeur d’Alene in 2001.

“We outgrew that and needed more space,” Gustavel says.

IIB developed the 20,000-square-foot, three-story building at 1260 W. Riverstone Drive and established its corporate headquarters there in 2004. It was one of the first buildings constructed in the Riverstone mixed-use development.

“We built and own our building,” Gustavel says. The architectural style harkens back to early 20th century masonry buildings.

“We wanted it to have the feel of an old-style community bank,” he says. “We envisioned a brick building with nice carpets and dark wood.”

Much of the Riverstone commercial and residential complex has been developed since then.

“The development around us is all first-class,” he says. “I think we have a great location at the entrance to Coeur d’Alene.”

IIB has kept up with technology, and offers a suite of electronic banking services, Gustavel says. 

“We’re right there with technology,” he says. “We can do most of the things that bigger banks can do. If we have the service to boot, that’s an advantage.”

While the bank has maintained its independence thus far, Gustavel won’t rule out that IIB never will be the subject of a merger or acquisition.

“We’re always operating under the assumption we’re going to be independent and relationship oriented,” he says. As a publicly held company, however, the bank also is obligated to act in the best interest of its shareholders.

“If we get an offer we can’t refuse, we’ll have to analyze the offer versus our projections over the long run,” he says. “If we would sell, it wouldn’t be because we’re in trouble.”

In the current regulatory climate, it’s more costly to operate a bank than it was a decade ago, Gustavel says.

“The threshold for earnings to cover costs is higher,” he says. “There are incentives to be bigger. That’s why we see mergers and acquisition below the big-bank level.”

At age 75, Gustavel isn’t looking to retire yet.

“I like to work. I like banking,” he says. “Being the founder, I have the desire to see that everything keeps going the way that I originally thought it would.”