The new president and CEO of The Bank of Washington, headquartered in Lynnwood, took time last week during a visit to the Everett branch to talk with The Herald Business Journal about the state of The Bank of Washington, local banking and the economy.
Steele took charge of The Bank of Washington this month after a career that started in 1979 as a financial analyst for Weyerhaeuser Co.
After a couple of years crunching numbers for the tree-growing company, Steele joined Rainier Bank. He spent the next 18 years with the Seattle-based institution as a commercial and private banker as the bank was absorbed into Seafirst Bank. Then Seafirst parent BankAmerica Corp. merged with NationsBank Corp. in 1998 to create Bank of America. Steele decided it was time for him to go small.
He joined Commerce Bank. Many of his former Seafirst colleagues worked there and tried to recreate the "feel" Seafirst had offered customers.
"I had a good time at Commerce Bank," Steele said.
After the Great Recession started in 2008 and the mortgage crisis threatened banks of all sizes, Steele
joined Charter Bank as president and CEO to turn around the failing institution. After three years of overhauling management, hiring new forward-facing staff and realigning branches, Steele had Charter Bank turning a profit again and doubled its loan portfolio, but its owner, Boston Private Bank & Trust, then sold Charter to Sterling Bank.
Steele said he has nothing against Sterling Bank and likes its bankers, but he didn't want to become a senior executive in a large organization.
Soon after Charter Bank's sale in May, the opportunity to run The Bank of Washington surfaced.
Steele took over a commercial bank with 40 employees and branches in Everett, Mukilteo, Lynnwood, Edmonds and Redmond. It had been hit hard by the recession and the collapse of the housing market but survived because its board didn't panic and unload assets tied to bad loans, Steele said. Instead, the board held that collateral and raised capital from existing shareholders.
Unlike some other Snohomish County banks that survived with outside investors, Steele said that The Bank of Washington's internal recapitalization kept its local ownership undiluted. Holding those bad loan assets until their value recovered means the bank is selling them at a profit now, he said.
"We've weathered the financial storm and are now poised for growth," said board chairman Gary Schmitt. "We feel extremely fortunate to gain a veteran banker of Marty's caliber to take the helm and inspire our community banking team."
"It's a great opportunity," Steele said. We have a local, great, committed board with a lot of their own money in the bank."
The Bank of Washington's capitalization ratio stands at a healthy 14 percent, Steele said, with asset liquidity at 28 percent.
"We have the desire, incentive and capacity to loan money," he said.
Steele said the recent uptick in interest rates has been good for the bank's loan activity. It has given prospective home buyers incentive to get in the market and gives consumers a sense of security that the broader economy really is improving.
The Bank of Washington has confidence in the region's recovery. Steel said the bank is hiring two executives and needs to fill new sales positions in Snohomish and King counties. He expects loan growth of 25 percent this year.
"It's going to be fun," Steele said. "We don't have a lot of baggage left (from bad loans) and we're hiring good people."
Kurt Batdorf: 425-339-3102; firstname.lastname@example.org. More from The Herald Business Journal: www.theheraldbusinessjournal.com