The economic roller coaster of the past decade often provided more dips than highs. Recent years demonstrate positive momentum upward at both the national and regional levels.
“We’re not declaring ‘mission accomplished,’ but we’re now in a good position. Like most other community and national banks, we’re enjoying an economic rebound,” says Eric Sprink, president and CEO of Everett’s Coastal Community Bank.
Around 2008, 14 community banks were based in Snohomish County. There are now six following the acquisition this year of Prime Pacific Bank by Bend, Oregon,-based Bank of the Cascades.
“It’s been a relatively slow recovery, but we’ve seen improvement year over year, which has accelerated the past two years,” says Bryan McDonald, Heritage Bank’s executive vice president and chief lending officer. Heritage’s metro markets, including Snohomish County, have experienced impressive growth. Commercial lending activity increased 30 percent and mortgages 40 percent in the first half of 2016 compared to the same period in 2015, he said.
Other institutions are actively expanding their footprint in the county. Peoples Bank opened an Edmonds branch in July. The bank’s new Everett flagship location celebrated its opening Sept. 15.
“What we like about Snohomish County is the ability to build longstanding relationships,” says Tony Repanich, Peoples Bank’s executive vice president and chief retail banking and marketing officer. “We’re very bullish about the long-term prospects in Snohomish County and look forward to continuing being part of the community.”
Economic confidence
The county is home to a number of large employers including Boeing and the U.S. Navy. Not only do large institutions provide jobs, they anchor medium and smaller businesses.
“Companies like Boeing have periods of reductions and additions, but are generally stable. Having large, stable employers allows small businesses to invest with confidence in the foreseeable future,” Sprink says.
The area also benefits from companies such as Amazon, Expedia and Microsoft. Support businesses and employees often locate to Snohomish County where it is more affordable.
Job growth and wage increases are occurring at a “tremendous pace,” according to Sprink. Coastal itself invested in the long-term, positive viability of the county.
“It was a bold statement. We decided to plant our corporate flag and start lending money back into the community and growing the franchise at the height of the recession. We hired close to 40 employees in 2010-2011,” Sprink says.
The move paid off with Coastal experiencing more than 20-percent annualized growth since 2010. Their employees now number 146. In general, Heritage Bank’s small business clients are also progressively strengthening their positions. McDonald specifically cites strong growth and expansion in construction and its supporting trades.
“Loan growth is a significant driver in terms of our viewpoint regarding the strength of the market. Are they expanding, buying equipment, re-investing in themselves?” McDonald says. “We’re seeing more investing as of 2016 than even last year. Confidence is returning.”
Northern exposure
Location positively influences everything from retail commerce to housing and business. A unique economic influence is Snohomish County’s relative closeness to the Canadian border.
“We bank a lot of Canadian citizens who like having an account in the U.S. because they enjoy shopping here. They are on our roads supporting the economy. To be honest, we relish having that business,” says Cheryl Bishop, Skagit Bank’s CEO.
The county is a strategic location for Skagit Bank. In 2016, they opened a loan production office in Everett.
“It fills in a gap for us between Seattle and the Canadian border. If the economy wasn’t as booming and robust as it has been, we wouldn’t have moved into Everett. With the departure of some of the larger banks in the early 2000s, though, it gave us a great opportunity,” Bishop says.
Skagit Bank intends to use the Everett production office as a test market for eventually opening a full-service branch.
Sprink echoes the sentiment that closeness to the Canadian border can be a boon.
“When the Canadian dollar was really strong in 2010-2012, it was a huge benefit and part of Snohomish County’s economic recovery. Hotels were filling up and visitors were spending money at restaurants, shops and activities,” Sprink says. “Since the dollar flipped, it’s slowed down, but everything is a cycle.”
Buildable land
The area’s natural resources also play a factor. The county still boasts open land and building flexibility. The real estate sector is strong across the board in single-family housing, apartments, office and industrial space.
“I think a lot of people are increasingly looking at this area. The farther away you get from Seattle, the less expensive it becomes. Businesses can also find larger spaces and warehouses that might not be available at all elsewhere,” says Mark Duffy, president and CEO of Everett’s Mountain Pacific Bank.
Geography also plays a role at the consumer level. During the recession, people were less likely to move households and sometimes were forced to downsize. With unemployment rates low and consumer confidence high, individuals are again on the move.
“Construction is strong. Very strong. Some of our housing contractors and subcontractors have recently had their best years ever,” Duffy says.
“One unique aspect is the number of older and retired people looking for one-floor ramblers,” Duffy says. “There is a lot of new construction for those types of homes, but it’s hard for that to happen in areas with existing high density. A lot of people are looking to this area instead.”
Furthermore, Duffy feels confident this is not another real estate bubble destined to burst. He observes that customers receiving mortgage loans are better qualified and buying for the long term rather than flipping for profit.
Community identity
The backbone of any business, including banks, is community support. Snohomish County’s residents and workforce are major factors in overall optimism.
“We look to be part of communities with strong identities where we can really engage with business leaders,” Repanich says. “People are looking to make connections here and there is an ability to build strong, long-lasting relationships. That’s the root of our business.”
The area’s workforce is also a draw. According to Bishop, the availability of talented employees was a crucial component in the successful opening of Skagit Bank’s new Everett loan production office.
“There is a really good workforce in Snohomish County. We’re partially bullish about being in the area because we’re able to find good people. It’s extremely important to find the right people in order to grow,” Bishop says.
The collective voice of the community also is represented via organizations such as Economic Alliance Snohomish County. Formed in 2011, the group advocates for economic development, expansion and retention as well as public policy issues.
“Being able to represent and advocate for Snohomish County with a clear consistent voice is key when meeting with people who influence the area’s future,” Sprink says. “When people listen, action happens. There are very few communities in the country who are as well organized. The Economic Alliance is fantastic for our economic vitality.”
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