Part 12
Dear Clients, Friends and Neighbors,
In this, the 12th in the Q & A series, I’d like to reflect on the highlights I am most proud of as we approach our anniversary. In addition, I would like to share my thoughts, if I were, hypothetically speaking, a consumer looking for an established bank to join or an investor looking for an established bank to invest in.
Question: Heritage Oaks Bank is approaching its 27th anniversary as a community bank. What are some highlights you are most proud of?
Answer: The Holiday season is always a good time to look back on one’s career and reflect on the accomplishments we have achieved over these past years. For me, having arrived on the bank’s 10th anniversary, these past 17 years have been the most rewarding of my life. When I arrived at Heritage Oaks Bank in January 1993, the bank had one office in downtown Paso Robles. We were just over $50 million in total assets and our capital was not quite $3 million. We had a staff of just 34 people all working out of our 12th Street office.
Today, Heritage Oaks Bank operates out of 15 full-service offices along with our corporate office in downtown Paso Robles. Our offices stretch from Santa Barbara in the south (operated as Business First Bank) to San Miguel in the north. We have total assets of about $925 million and our capital is just under $90 million. We now have 280 full and part-time employees, and many of these positions are heads of households.
What many people don't realize about a community bank such as Heritage Oaks Bank, is what we give back to our community. Our staff volunteers literally give thousands of hours in community service each year. We are members of every Chamber of Commerce in our two county marketplace and we have representatives in just about every service organization. We support a vast number of non-profit organizations through both dollar donations as well as volunteer hours. I am very proud to say that our staff gives tirelessly to our community because they live right here and want to be involved.
What is most important about a community bank is the economic support we give to the health and vitality of our community. Over our 27 years, we have made thousands of loans to small business owners, new home owners, consumers, and professionals in every walk of life. We have supplied the capital our community has required to grow and remain financially healthy. Today, we are experiencing a very difficult recession. Washington continues to try to figure out how to spend our way out of this recession.
In the end, it will be jobs on main street that get our economy rolling again and those jobs on main street are created by small business owners who look to banks like Heritage Oaks Bank to help finance their growth. I am proud to know that Heritage Oaks Bank was not a cause of this recession but we will be part of the solution.
Question: If you were a consumer looking for an established bank to join, what is it you'd want to know about the organization before making a final decision?
Answer: I would first of all define consumer as any potential bank client looking to establish a new relationship for any number of reasons. I would look at a bank the same as I look at anyone I do business with. How long have they been in business? What is their reputation in the community? Are they financially sound? Does the level of service meet my expectations? Does the bank have the same values as I hold? Is the bank a good corporate citizen? Do they offer the products I am looking for and is their follow-up after the sale right for me?
As the President of Heritage Oaks Bank, I ask our management and staff to ask themselves these questions each and every day. I expect every person on our staff to treat every client with the same level of respect we would expect for ourselves. It is just that simple. Banking is not just a numbers business, it is first and foremost, a people business. We are here to provide financial solutions to our clients. We have been a part of our community for 27 years by doing things right. As we grow, we build capital and provide the financial strength our clients expect. And finally, we have a firm commitment to give back to our community in every way we can.
Question: If you are an investor looking for an established bank to invest in, what is it you'd want to know about the organization before making an investment?
Answer: Investing in banks today can be a challenging endeavor, especially if you are not skilled at analyzing bank stocks. It used to be that you could expect to double your money investing in a new bank within 5 years. Not any more. This recession has put the reality back into the bank stock space, but at the same time, there are good opportunities for those willing to spend the time doing their research.
So much of what a bank can and can't do is based on its level of capital. With the level of risk in the economy, bank regulators are looking for banks to carry a larger base of capital than in years past, and I would expect this will most likely persist for several years to come. Today, asset quality is as important as capital for investors as poor asset quality can have a major impact on earnings and future capital levels. Getting past our current economic outlook, investors are very interested in what the future will look like. Does the bank have the ability to grow? Is it a market leader with a good reputation?
In closing, this will be my last Q&A for 2009. I hope that I have provided you with some good insight into Heritage Oaks Bank over this past year. I will be looking forward to 2010 with a new Q&A in the first quarter. I hope that everyone has a very safe and healthy holiday season. We are all hoping that 2010 brings a better economic outlook to the Central Coast.
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