BY BRANDON SAWYER
Terry E. Zink
President and CEO, Bank of the Cascades
Oregon Business: Bend was hit hard by the Great Recession. How did your bank survive?
Terry Zink: Probably as well as it could have. When Bend and surrounding areas went into a fairly deep recession, the bank was struggling to stay afloat. We ended up in 2011 getting recapitalized, and that helped enormously. We didn’t take any TARP money, so we didn’t get “bailed out” by the government. They felt that we were going to fail, and they weren’t going to take a chance. We were given up for dead, but thankfully we have a good management team in place now, and we were able to weather the storm.
OB: So the bank found investors to recapitalize?
TZ: Yeah, we had an infusion of capital in 2011, and it allowed the bank to get by. The regulators require you to maintain capital levels, and we would have drifted below what was considered safe. So it worked out very well for the bank, for the employees and for the shareholders.
OB: How does Cascade’s imminent merger with Idaho-based Home Federal Bank fit into your business strategy?
TZ: Prior to 2011, BOTC was a $2.5 billion bank, and with the crisis, the bank dropped down to about $900 million. But we still had the same credit facilities, the same processing capability — all that stuff was the same as when we were a much larger bank. What the merger does is allow us to right-size our infrastructure so we’ll go back to being a $2.5 billion bank. It’s like having a V-8 engine that’s only running on four cylinders. Now that you’ve got all the cylinders functioning together, it will perform at a much better level.
OB: Are more mergers likely down the road?
TZ: It’s difficult to survive if you’re under a billion dollars and you’re trying to keep up with all the regulations. We believe consolidation is going to continue to be a way of putting banks together. What our mission really is, is to get around $5 billion in size, be a strong player in the Pacific Northwest and be a community bank that people can count on. We’ll continue to look for ways to help the consolidation effort along, because it’s going to happen and banks are actually looking for partners. It isn’t the old days where everybody felt like they could operate independently.
OB: Technology continues to change the way people and businesses bank. Bitcoin is all the rage currently. What’s next?
TZ: The capability of doing P2P payments with mobile devices. I believe that checks will be a thing of the past in the next five years. About 80% of all the transactions that take place today are electronic, and that’s just going to continue to grow. The threats to banking today aren’t necessarily other banks; it’s really the Amazons of the world, the Walmarts of the world. Those are places where, depending on how things go, the pressure’s going to come from for the normal everyday transaction account.