Published March 2001

In south county, The Bank
is a growing presence

By Kimberly Hilden
Herald Business Journal Assistant Editor

When The Bank of Edmonds opened its doors back in July 1996, there was excitement about the new venture, but it was tinged with trepidation, said Gary Schmitt, President and CEO of the full-service bank.

“You worry when you first start,” said Schmitt, who recalled that on the first day of operation, the bank had 20 customers, one office and $130,000 in deposits.

How things have changed.

Today, the bank serves more than 10,000 customers from three offices — in Edmonds, Mukilteo and Lynnwood — and at the end of third-quarter 2000, total assets topped $50 million and deposits had reached $46 million. This past year, the bank completed a secondary stock offering, increasing the bank’s lending limit to about $1.5 million.

“It’s been a good economy,” said Schmitt, “Hopefully, we took advantage of some of the opportunities that were presented. But it truly has been a good time.

“We may be moving into a somewhat more taxing time for all of us,” he said about the banking community. “The next 12 to 18 months ... probably all of us (will) be better tested as to how good we really are.”

And Schmitt speaks from experience. Before being recruited by the late John Beck, an Edmonds civic leader instrumental in The Bank of Edmonds’ founding, Schmitt had retired from a 32-year career with U.S. Bank, which, according to its Web site, has almost 1,000 banking offices in 16 Western and Midwestern states.

Joining a smaller operation has meant becoming his own office “support person,” word-processing and all, Schmitt said, but it also has enabled him to get to know his market quickly.

“It is truly exciting to be close to the customers,” he said. “At U.S., you got a feel for how our activities, products, etc. were being received by the customers by reading sales printouts. ... Over time, you can see a financial trend, and from that financial trend, you sense whether or not something’s working. At a community bank, not only are we close to the customers, but we’re very close to the people who are serving the customers, so the feedback’s instant.”

One thing Schmitt wasn’t expecting from the smaller bank was high-tech savvy.

“I think we found that one of the surprises was that technology that we were able to put together was as good in all cases and better in many cases (than larger banks) because we were purchasing (from) service bureaus that had to stay cutting edge,” he said.

The Bank uses Fiserv, a provider of information management services, to operate its “electronic backroom,” running the computers and driving the ATMs, Schmitt said, while using Concentrix software to produce electronic loan and account documents.

“It’s all online, so each document is prepared exactly for each customer,” Schmitt said, adding that such a program means there’s no waste when banking regulations change, because there are no forms to throw out and reorder.

For commercial customers, the bank offers Bank Manager, a modem-to-modem program with three levels of service, Schmitt said. The first level enables business customers to look at their balances and transactions. On the second level, business customers can move money between their accounts, and on the third level, they can do “virtually everything” for their business banking, including wiring money to a third party.

When it comes to the Internet, the bank has used its site, www.the-bank.com, as an informational tool that enables consumers to e-mail the bank with transaction requests.

“It’s not Internet banking. We have looked at Internet banking. We are concerned with the security aspects,” Schmitt said, adding that customer demand for Internet banking hasn’t been strong.

“We continue to watch (those) two things: The security will get better on the Internet, we believe, and the customer demand ... we’ll continue to talk about it.”

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