The Power of Tailored Banking

PNW Metal Recycling PNW Metal Recycling

Brand Story - Instead of squeezing clients inside a box, Washington Federal simply builds new boxes.

For decades, R.S. Davis and Rivergate Scrap Metal worked arm-in-arm as complementary businesses—R.S. Davis sold significant volumes of scrap metal to Rivergate, who would further process the materials and then sell them to customers mostly within the region.

Yet as the global demand for recycled raw materials was increasing, the two companies wanted to find ways to better compete on a worldwide scale.

Their decision in 2013 to create a joint venture, PNW Metal Recycling, was relatively straightforward—driven by the desire to improve operational efficiency and scale across one business. But when the companies chose to merge all three entities into one overarching organization, it carried an entirely new set of complexities.

For one, the merger required major investments in equipment and real estate. The company’s tax bases and credit facilities had to be consolidated into one holistic entity. Beyond finances, businesses that were family operated for more than 50 years had to reconfigure their leadership structures and ownership percentages.

Yet with 100 collective years of family history on the line — including three generations of ownership and employees of more than 20 years — the company shareholders had to find a way to create a business that would support future generations.

To facilitate the process, they worked with Alicia Brewer, vice president and senior relationship manager at Washington Federal Bank.

JEK 8031 RevAlicia Brewer, vice president and senior relationship manager at Washington Federal.

Brewer began working with Rivergate during her previous role at a national bank, where she witnessed how national banks applied similar, cookie-cutter metrics to businesses to streamline their portfolio management (which held trillions of dollars in assets). At Washington Federal, however, Brewer was able to manage accounts on an individual basis, which lent itself to more dynamic financing solutions.

“We weren’t trying to cram PNW Metal Recycling into a box so they would look like all the companies we bank,” says Brewer. “Instead, we were building that box for PNW.”

Financing the merger carried significant risk for the bank — the venture would require a sizable amount of capital; plus, PNW was becoming a bigger player in a global market where steel and commodity prices can fluctuate wildly.

GrapplePNW utilizes wireless controlled motorized grapples to load HMS and P&S into the different hatches of the break bulk ship.

But Washington Federal had confidence in the vision for PNW. Both Rivergate and R.S. Davis had a demonstrated history of making sound investments and operating through tough economic cycles. Each of the families built their companies from the ground up. “These guys have been doing this since they were teenagers,” says Brewer. “It’s easy to buy into that operational experience and commitment to the business.”

And so Brewer went to work. She began by parsing three separate sets of financial data to determine the merger’s viability (while factoring in the companies’ growth). The bank had to build customized financing structures and lending facilities around PNW’s unique inventory and working capital needs.

Washington Federal’s executive team got involved too, donning hard hats to visit job sites and holding multiple formal meetings with PNW’s leadership.

Finally, Brewer came to Washington Federal’s executive team with a bankable solution. As a result, Washington Federal provided PNW Metal Recycling with the requisite capital to support the merger, as well as the working capital to manage their growth through its global exporting efforts.

SH 1The multi-generational ownership group of PNW. From left to right: Mick Doane, Jamie Stateler, Fouad Daoud, Bert Bors, Justin Bors, Sean Daoud, Georgen Bors, and Hank Doane.

In 2017 PNW Metal Recycling posted a record year for growth, revenue and profitability. The company ships all over the world and continues to grow year-over-year, even despite difficulties posed by trade tariffs in 2018 that largely closed off the Chinese market for recycling exports. Most importantly, the merger has allowed PNW to make key strategic decisions that have led to increased volumes, lowered costs, and a stronger ability to weather volatile market cycles.

Throughout the merger, Hank Doane, PNW Metal Recycling’s senior vice president of marketing and finance, regarded Brewer as far more than the company’s banker. “She was my sounding board,” he says. “Her presence was invaluable — having her there as a knowledgeable, impartial advisor was critical.” Even now, Brewer meets with PNW’s leadership nearly every week.

“We don’t make big decisions without her,” says Doane.

Doane also appreciated having such easy access to Brewer. “All banks have similar capabilities, but most are so bureaucratic,” Doane continues. “With Washington Federal, Alicia was the face of the bank. To have that direct relationship is so unique, and showed how Washington Federal was committed to us. And thankfully, their faith paid off.”

Port OH 2Semi-trucks offloading HMS and P&S to be live loaded into the break bulk ship via the motorized grapples.

This commitment to client relationships — through good times and bad — is central to Washington Federal’s core philosophy. After all, Washington Federal has been in business for more than 100 years, with one of the highest capital ratios among the nation’s 100 largest publicly-traded banks. Many clients have banked with them for several generations.

Gary Haines, Washington Federal’s northern Oregon regional president, says the ability to build long-term relationships with personalized banking services is a main benefit to being a regional bank.

“Our world is to be there for our clients,” says Haines. “We’ll continue to support our clients whether cycles are up or down. That’s what a good partner does — they believe in you, and they stick with you through both the ups and the downs. And that’s just the way we do business here.”

 


Brand stories are paid content articles that allow Oregon Business advertisers to share news about their organizations and engage with readers on business and public policy issues.  The stories are produced in house by the Oregon Business marketing department. For more information, contact associate publisher Courtney Kutzman.

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