RiverBank sets course for continued rebound
Institution aims to exceed total assets of $225 million in next five to seven yearsAugust 16th, 2018
Spokane-based RiverBank plans to grow its assets by 8 percent to 14 percent a year during the next five to seven years to reach total assets exceeding $225 million, says bank CEO Dan Byrne.
The goal aligns with RiverBank’s climb from a recession-related low of $103.5 million in total assets in December 2013 to $132.5 million in March of this year, according to reports submitted to Federal Deposit Insurance Corp.
Byrne says total assets have risen since then to $136 million at the end of June, which equates to a 31 percent increase in assets from the recession-related low point.
RiverBank’s total loans totaled $106.4 million as of March 31, compared with $99.9 million a year earlier, and deposits totaled $113.8 million, up from $108 million.
First-quarter net income attributable to the bank was $261,000, up from $69,000 in the year-earlier quarter.
Like other financial institutions, says Byrne, RiverBank struggled financially as a result of the Great Recession.
In August 2011, RiverBank entered into a consent order with the Federal Deposit Insurance Corp. and the Washington state Department of Financial Institutions that placed it under tighter regulatory scrutiny. The order required RiverBank to hire and retain qualified managers, notify regulators when it planned to add or replace board members or senior executive officers, and increase the board’s participation in bank affairs. It also required it to increase its capital, keep a fully funded allowance for loan or lease losses, reduce troubled assets, and develop a financial plan that set specific goals in several areas.
The consent order was lifted in 2013.
Byrne says the bank recovered through “a lot of hard work to try to resolve problems we had.”
In some cases, the bank had to repossess or sell collateral, he says.
In others, “We worked with our borrowers, put them on slightly different payment plans, and allowed them to work through the issues and help them to get healthy again to where they could support those loans. We’ve had a number of those that turned out to be very good success stories,” he says.
Byrne says RiverBank is an independent bank that mainly works with businesses, real estate professionals, and the agricultural industry. The community bank was founded in 2006 at 202 E. Spokane Falls Blvd., where the bank’s only brick-and-mortar branch operates today. Roughly 60 percent of the bank’s business is real estate oriented, including financing multifamily housing projects of various sizes, he says.
RiverBank operates on a model uncommon in the region, with its one physical branch. Instead of bank clients visiting the bank for financial needs, bankers go out into the community and visit clients, he says.
“It’s more efficient for you if we come to you than if you come to us,” says Byrne.
Byrne says RiverBank typically has between 31 and 35 employees depending on market ebbs and flows.
The bank currently is seeking to fill two openings, he says, and with its current asset-growth plans, it will need to hire more employees, he says.
Before joining RiverBank five years ago, Byrne worked for more than 30 years at the former Spokane-based Sterling Bank, which was acquired by Portland, Ore.-based Umpqua Bank in 2014. Although RiverBank has no plans to merge, Byrne says he does see similarities between the banks’ financial struggles.
Sterling Bank had grown significantly, says Byrne, but it worked quite a bit with the construction industry, which was hit hard during the recession.
“It was a similar issue where there was significant deterioration in the loan portfolio that led to reduction in earnings and losses in result of the portfolio of loans going bad,” he says. Sterling Bank managed to recover as well.
The Sterling acquisition was part of a larger trend in which 10 Pacific Northwest bank mergers or acquisitions were announced in 2013 alone, according to an earlier report in the Journal.
Byrne says a positive trend affecting the banking industry now is recent loosening of recession-related regulations that had raised compliance costs for RiverBank.
“Just recently, I think the regulators are finally getting it that they’ve been too harsh on small banks,” he claims.
On the negative side, recent and anticipated upticks in interest rates are “causing some irrational pricing in the marketplace right now,” he claims.
Additionally, the banking sector and other industries have become aware of the dangers of cybercrimes and have taken to educating their customers of those risks, Byrnes says. RiverBank has implemented a number of “old school” banking procedures, such as calling and confirming whether unusual wire requests are from the actual client, he says.
“We’ve been able to stop a handful (of fraud attempts) just in the last six months because of those procedures,” he says.
In addition to growing assets, Byrne says, looking forward, the bank is focusing on expanding its customer base and adding mobile branches.
“You have the option to retain your independence when you’re profitable and meeting market standards for returns on investment,” he says. “Coming out of the recession, we were negative for a couple years. Now, we’re becoming positive, and we’re moving in the right direction,” he says.