Published July 2002

‘LEADING THE CHARGE’
As CEO of Cascade Bank, Carol Nelson has overseen thrift’s
successful conversion to a commercial institution

By Kimberly Hilden
Herald Business Journal Assistant Editor

When an executive recruiter contacted Carol Nelson about the President/CEO position at Cascade Bank, she wasn’t really looking to make a professional change.

A Senior Vice President and Regional Executive at Bank of America, Nelson was enjoying her career, a career that involved overseeing a region of 42 bank branches from north Seattle to the Canadian border.

But “when they talked about the fact that it was a CEO position, that it was a publicly traded company and headquartered in Everett, those things all really aligned to make me stop and think about it,” the Edmonds resident said.

She thought about it, and, after 23 years with the same company (hiring on at SeaFirst Bank, which later became Bank of America), Nelson became head of Cascade Bank in early 2001, succeeding Frank McCord, who continued as Chairman.

Nelson knew going in that she was taking the helm of a bank that was changing its course after 85 years, transitioning from a federally chartered stock savings bank to a state-chartered commercial bank. But she was no stranger to that arena, having spent the first half of her career on the commercial side as a lender and a manager.

She said she saw Cascade’s transition as “a challenge and an opportunity.”

“Moving from a thrift to a commercial bank is not an easy thing to do, and there are lots of measures of your success,” she said, among them the balance sheet, loan portfolio, income statement, interest margin and stock performance.

“And then probably one of the biggest things is just changing the culture in the bank,” Nelson said, describing the culture of a commercial bank as having a faster pace with “a greater sense of urgency to accomplish goals and to provide extraordinary service.”

So far, the year-old conversion has been a success, with the bank’s profits hitting record highs, business loans on the rise and the efficiency ratio continuing to improve.

Performance highlights for 2001 included record earnings of $5.6 million, business loan growth of 22 percent and the expansion of the net interest margin to 3.01 percent from 2.86 percent, according to Cascade Financial Corp., the bank’s parent company, of which Nelson also is President and CEO.

That positive growth trend has continued, with first-quarter 2002 financials showing:

• A 54 percent increase in net income, compared to first-quarter 2001, to $1.8 million.
• The efficiency ratio (operating expenses to revenues) improving to 54 percent, compared to 64 percent a year before.
• An increase in return on equity to 15.33 percent, compared to 11.47 percent in first quarter 2001.

“As a commercial bank, I think we’ve made tremendous progress,” said Nelson, who sees business banking products and commercial real estate construction and development as the “growth engine” that will continue to propel Cascade’s performance in years to come.

One performance goal for the future includes targeting 15 percent earnings-per-share growth, she said. “In order to do that, we need to expand.”

Currently, Cascade has 14 branches in Snohomish and King counties, and Nelson said east King County could be a growth area for the bank. She also said she’d like to see Cascade grow at a pace of one branch per year.

But customer service — make that “extraordinary customer service” — also must be part of the equation for the bank to continue to grow and establish its niche, Nelson said — and that goes back to changing the company culture.

“It’s a beginning of a cycle that you are trying to start that is self-perpetuating,” Nelson said. “And it really includes things like personally demonstrating leadership by the way you treat people, by respecting the opinions of others, by just the feeling that you give your employees about being present and leading the charge.”

It also includes bringing in others with the same vision and work ethic. In Nelson’s case, that meant hiring two former Bank of America colleagues: Debbie McLeod to head Retail Banking and LeAnne Frank to head Quality Service and Technology.

“That was kind of the beginning, bringing those two individuals with me. Since that time, we have had other individuals that have joined the bank as well that have (a shared vision),” she said.

Today, Cascade’s executive management team includes — along with Nelson, McLeod and Frank — Rob Disotell, Chief Credit Officer; Steve Erickson, Real Estate Lending Executive; Lars Johnson, Chief Financial Officer; David Little, Business Banking Executive; and Vera Wildauer, Marketing and Loan Administration Executive.

This team, along with Cascade’s bank personnel, is focused on meeting the needs of business — the principals of each business as well as the employees of the business — and the needs of the communities surrounding the bank’s branches, Nelson said.

To ensure that customer focus, Cascade has put customer-service goals into incentive programs and employee evaluations, she said.

“Our branding, our tagline, is ‘real people, real solutions,” and we are working hard to deliver on that promise,” Nelson said.

Related: Nelson donates time and experience to community causes

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