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Reinvesting in community has differentiated Prineville
Bancorporation from the competition and allowed them to gain deposit market share by
building relationships while helping to strengthen the local economy in Central Oregon
Financial
Pacific Banks
(PNVL-OTC: BB)
Prineville Bancorporation
555 NW Third Street
Prineville, OR 97754
Phone: 541-447-4106
Robin Freeman
President and Chief Executive Officer
Interview conducted by:
Lynn Fosse, Senior Editor
CEOCFOinterviews.com
Published – May 25, 2007
BIO:
Robin Freeman is the President and Chief Executive Officer of Community First Bank.
Mr. Freeman came to Central Oregon in 2003 specifically to take this position as President
& CEO of Community First Bank. Prior to moving his family to the region, he was
the President of Rocky Mountain Bank in Billings, Montana. Born and raised in the
Mid-West, Freeman began his professional life as a CPA in Minneapolis, Minnesota before
embarking on his nearly 15-year career in community banking.
In the short time he has been in Central Oregon,
Robin has been publicly credited with an amazing turn-around of this institution. Over the
last two years every trend is moving in a positive direction from deposits and earnings to
loan loss and team turnover. In fact, under Freeman’s leadership the bank was named
one of the 100 Best businesses to work for in the entire state of Oregon and just
experienced its seventh consecutive record-breaking quarter (in terms of earnings
performance). Since Freeman’s arrival the bank has more than doubled its stock
price and increased net income over 500%. Mr. Freeman serves on the Board of
Governors for the regional Boys &Girls Clubs, as a director on the board of the
Independent Community Banks of Oregon and the Economic Development for Central Oregon. As
a whole, the bank's community involvement is unmatched with more than 80% of its team
members actively participating in one or more local non-profit organization.
Company Profile:
Community First Bank was founded in Prineville Oregon 27 years ago and still exclusively
serves the Central Oregon region today. Central Oregon as a region is an exciting and
dynamic place to be. It is the sixth fasting growing MSA is the entire United
States. “We are the last, truly local community bank in our marketplace,” said
Freeman. “We re-invest 100% of our local deposits right back here into Central
Oregon. In our opinion that’s what a real community bank should do – put its
money where it’s mouth is. This is important because these funds finance the dreams
of local people. Homebuilders and homebuyers. New businesses and the jobs those
business create.”
CEOCFO:
Mr. Freeman, what is your history with Prineville Bancorp?
Mr. Freeman: “I have been with
Prineville Bancorp since August of 2003. I joined the bank and the holding company at that
point, so it has been a little over three-and-a-half years that I have been with the
company. In that period, the company has grown from approximately $75 million in assets to
ending the year 2006 at $175 million in assets.”
CEOCFO:
How have you accomplished that growth?
Mr. Freeman: “The organization had some
turnover prior to my joining Prineville Bancorp, so that when I arrived one of the primary
things I did was start to put a team together and in the succeeding years, hired a new
CFO. We also added a chief credit officer, a chief business development officer and then
worked to improve the branch management team for our bank branches so that we had strong,
active branch managers in each of our communities. Our market area has six primary
communities and we have a branch in each of those communities. Our concept is to have each
of our branch managers be very active in the communities, with a somewhat decentralized
management allowing them to make decisions locally. Even though the branches are not
significantly removed from each another, we still treat each branch a bit differently.
Therefore, the first thing was to put a team together from the senior management team
right through to the day-to-day branch managers and the front line team members, that were
able to implement the operating plan which was also changed to focus more as a local
community bank and develop banking relationships as opposed to being a transactional type
organization.”
CEOCFO:
Will you tell us about the economy in Central Oregon?
Mr. Freeman: “That has been something
that has helped our growth. Central Oregon is one of the fastest growing markets in all of
the US. Central Oregon also has the Bend, Oregon MSA, so Pineville where the bank is
headquartered is in Crook, County, which, is outside of the Bend MSA but it is still part
of Central Oregon. The Bend, Redmond, Pineville market has been very strong from the
standpoint of tourism, retirement, second homes, overall economic development and then
just all around livability. The last three years of 2003-2006, have been very strong
economically both on the residential housing front and also on the commercial development
front to meet the needs of the new residences and businesses. For instance, the City of
Bend has grown from 50,000 population to over 75,000 population in three years. Redmond
Oregon and Pineville have seen similar growth rates and the entire region has grown at a
fairly significant clip over the last three years, so that has created a strong
economy.”
CEOCFO:
You pride yourselves on offering top-notch products; will you tell us about the breadth of
your offering and what makes what you are offering a bit better?
Mr. Freeman: “In the banking industry,
that is an interesting discussion, because we all offer similar products (checking,
savings type deposit products and loan products for the most part). Where we have
differentiated ourselves is we are one of the few local community banks still left in the
market. Our competition is mostly the larger either regional or national banking
companies. Because we are solely concentrating on this market, we have a good feel for the
market, people who understand the market and we have local decision makers. We have been
able to develop relationships and a greater knowledge of the market, which we have been
able to use to set ourselves apart from the others. We do our best to offer a complete
line of products while focusing on low fees and high rates. We are also embracing
technology to bring new products and services to this market and to better serve our
client’s needs. This ranges from our mobile ATM that “brings the bank to
you”, to our new CRM software program that enables us to truly understand the full
scope of our customers needs."
CEOCFO:
You have a full offering; are there products and services you would like to add?
Mr. Freeman: “We do not have any big
holes in our product offering, but we would like to improve for instance on the retirement
planning side and the retirement plans themselves. Because we are a business bank and want
to offer the full line of business services, we are working to improve our investment
division and better explain and promote the services that we can provide on the investment
side. We are also looking at adding a few services to the commercial small
business-banking suite of products. One of the newer offerings that is an add-on to our
product line is that we are looking at what is called remote merchant deposit capture.
This would mean that instead of deposits being brought into the financial institution,
they can actually be imaged electronically at the customer’s place of business and
transmitted electronically and securely to our bank. This would allow customers to avoid
the time of going to the bank and it speeds up the collection and availability of their
deposited items. That is something relatively new in the marketplace in the last two
years. There are very few offered in our market now and we are looking to adding that in
the next six months or so.”
CEOCFO:
How do you reach your new customers?
Mr. Freeman: “We do advertising, but it
is typically centered around event participation. We sponsor the annual Home & Garden
Show for the Central Oregon area that is held at the local event center at the Deschutes
County Fair & Expo Center. We also participate in many of the local community events,
from rodeos to parades and everything in between. These events bring in many of the local
constituents to one place at one time. The people of Central Oregon are passionate about
local traditions, so to us involvement is part of our effort to endear ourselves in the
hearts and minds of our customers and prospects. We do a lot of sponsorship. Our
advertising is centered around the support of those sponsorships: providing people and
dollar support for that. With that comes the advertising for the events and so we try to
place ourselves in the community organizations. We concentrate on our community
involvement and activities, which then brings the local residents of the community into
the bank because of our support.”
CEOCFO:
You reinvest the money from deposits into your local area; how important is that for your
customer and the bank?
Mr. Freeman: “Yes. Actually we
re-invest 100% of local deposits right back into the market we serve. We think reinvesting
in the community is essential for the bank because that is what is going to make a
stronger economy locally. Therefore, if we bring in deposits from customers, we want to be
able to reinvest those funds whether it is in our facilities, loans to our customers and
even the profits that are reinvested into the community events I mentioned earlier. We
think it is important for us because that is a differentiating factor. It keeps our
economy strong and it keeps our community strong. It may be harder to judge from the
customers, but we have gained deposit market share in each of the last three years with
this strategy. That tells us that we are not only growing as fast as the market, but we
are growing faster meaning that we are picking up some market share. We think that the
customers value that proposition and are willing to select us as one of their financial
institutions because of that commitment and investment that we are making.”
CEOCFO:
Are your customers taking advantage of a large variety of your products or is there work
to be done in that area?
Mr. Freeman: “Absolutely there is work
to be done in that area because three to four years ago, I think the bank was not as
focused on developing relationships as we are now. Therefore, we were willing to
participate in a transaction that might not have generated as many relationships that we
would have liked. Our goal now is to increase the number of relationships with each
customer. We have made improvements in that area, but we absolutely need to do more with
that.”
CEOCFO:
Are new branches in your strategy?
Mr. Freeman: “Yes. One of our
challenges has been that the company three to four years ago, was much smaller. We had
five branches but we did not have enough volume therefore our efficiencies were fairly
low. Our primary focus the first three years that I have been here was to get to a size
where the efficiencies were better. This last year we added a branch in Redmond, Oregon,
which was a market that was in the middle of all of our branch footprint. However, we did
not have anything there and it was one of the fastest growing communities in the region,
so we added a branch there. This year we are also adding two new branches in Bend, which
is the largest market in our region. Then in 2008 we are planning on another two branches
in Bend. In addition, we may add one in Prineville, which has grown from about seven or
eight thousand people a few years ago, to over ten thousand now and expected to grow more
in the next few years. We see a need to add to our branch footprint to allow convenience
and meet the needs of the growing community.”
CEOCFO:
You announced a third consecutive record-breaking year; it appears you know what you are
doing!
Mr. Freeman: “Thank you, however I was
able to come into a situation that had nowhere to go but up. And timing-wise we were able
to experience a great local economy that has been very strong for the last three
years, if not before that. A number of things went right, and I was able to put the right
team together to take advantage of those things. It is gratifying to see some of the plan
that started out a few years ago come to fruition. There are many challenges in the
banking industry, but we are excited about our opportunities here in the next few years
too.”
CEOCFO:
How have you maneuvered around the interest rate climate?
Mr. Freeman: “One of the things that
allows banks to offset some of the flat yield curve or the aggressive deposit pricing that
happens in the banking industry is growth. We have been able to grow 100% plus over the
last three years, so even as interest rates may have caused a tightening of our margin,
overall our growth in volume has offset that. Because of the strong economy we and most of
the other banks here locally, have not had to become overly aggressive on the pricing of
loans. Therefore, we have been able to maintain a reasonable if not a bit above average
net interest margin over that period.”
CEOCFO:
Why should potential investors be interested in Prineville?
Mr. Freeman: “I think people should be
interested in Prineville because of the growth. While we are a bit concerned of where the
economy will go in the next six months to a year, we are in a region that is perfectly
positioned to take advantage of the demographics in the United States. We are in a region
that is attractive year-round, from winter skiing and winter activities, to summer golf,
fishing and hiking and all the things that go with the mountains and high dessert. In
addition, we are at a size, the market and the bank that growth rates can continue to be
above average.”
CEOCFO:
In closing, as CEO, what is your daily focus?
Mr. Freeman: “It has changed a bit, but
a lot of my day is spent with the executive team and our managers to some degree, working
on customer relationships and also working on strategy. Probably more than I like is spent
on emails and administrative activities. I find that more and more I am able to work with
our people and continue to push our vision, philosophy and strategy out to them, which is
creating a great culture within the bank.”
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