Why is it important for a community financial institution to have access to liquidity?

Liquidity is the lifeblood of a community bank. Without liquidity, we cannot serve our primary purpose of lending funds in the communities where we live and do business. Liquidity is critical to both our day-to-day operations and to our long-term viability. As a community bank, we are a reliable source of liquidity for our customers. In turn, the Seattle Bank serves as a consistent source of liquidity for Sound Community Bank.

What are your primary sources of available liquidity?

In addition to the Seattle Bank, our primary sources of liquidity are deposits, loan and investment cash flows, and the Federal Reserve Bank of San Francisco.

Why is the Seattle Bank a part of your mix of funding sources?

The Seattle Bank is our most flexible source of liquidity. It provides funds to augment any fluctuations in our planned cash flows from deposits and loans. The fact that we have a significant amount of available credit with the Seattle Bank

Why is affordable housing important to a community?

At the most fundamental level, affordable housing provides individuals and families with shelter and security, which are basic human needs. But equally important, it creates stability for those individuals and families and for the community as a whole. When people have a safe, secure, and affordable place to live, they can focus on other aspects of their lives—school, jobs, community involvement—and they become more engaged and productive citizens.

What other issues are related to affordable housing?

Studies have shown that healthy, dynamic neighborhoods see reduced rates of crime. There’s also evidence that opportunities for education and employment rise in communities that have adequate affordable housing. So we’re talking about more than just providing an apartment or a home. Affordable housing is an investment in the overall community.

What are some examples of the type of projects you’ve built?

We recently completed development of a mixed-use apartment building in a lower-income neighborhood in Eugene. Our vision was to bring quality, affordable

As a local lender, how would you describe your role in the community?

Our role as bankers is to act as a conduit, providing our customers with funding that, in turn, helps to develop the economic viability of our communities. We need to reach out to everyone we can to develop an understanding of the needs in our towns, and then construct products and services that meet those needs. We work with our customers to counsel them on their financial needs. We must also stay abreast of economic opportunities at the state and national levels that can benefit our customers and communities.

What are the unique challenges you face?

One of the best and most difficult aspects of living and working in small towns is that our customers are also our neighbors and friends. We interact with them daily, in grocery stores, schools, and churches, and sometimes we have to help them make some tough choices. It is incumbent that we, as bankers, work with our community members to be a steady, constructive, positive influence in their financial lives.

What are the resources you need to help you fulfill your role as a banker?

I believe that information is key to success. We must seek out information from as many sources as possible to ensure that we are offering the products and services that our customers need. Affordable housing is a major issue in many of the towns we serve. Providing flexible loan terms for multi-family and first-time homebuyers is imperative. Providing funding for our “main street” businesses is also very important.

What is the importance of customer service in your business?

As a community financial institution, providing high-quality service is critical to our ability to compete. Of course our members are looking for a great rate, but they’re also looking for someone who is willing to listen, to understand their particular situation, and present them with options that they might not have known about or understood. It takes time, but if you’re willing to make that investment, you can add more than one new loan to your balance sheet. You can gain your customer’s trust and build a relationship that will bring them back time and again.

What is the value of customer service in your other business relationships?

It’s really the same. We look for partners who are willing to understand our business and consider which of their products will be a good fit for our needs.

How would you characterize the level of customer service you get from the Seattle Bank?

We have been using the Seattle Bank cooperative for many years, and during that time, we’ve developed a trusted partnership. It’s fair to say that our FHLBank relationship has become integral to our strategic plan. We’ve been fortunate to have worked with knowledgeable and thoughtful relationship managers, who have taken the time to understand our needs and offer appropriate solutions. The level of service and efficiency we’ve experienced has been top-notch.

What are the elements that you believe will help to facilitate an economic recovery?

Bob: There are a number of factors in play—and they are closely intertwined. For example, in the five western Montana counties we serve, unemployment currently averages 11 percent. A weakened real estate market stresses the multitude of businesses that help to support it—from a variety of contractors and suppliers to retail stores and restaurants—which, in turn, results in fewer jobs.

Ron: There are some bright spots—the medical sector is one example in Montana—and that’s encouraging. But breaking the current economic cycle and stabilizing our economy is really a matter of restoring business and consumer confidence. There is quite a bit of capital sitting on the sidelines, but until businesses and consumers are confident that our economy is gaining strength, they are hesitant to take on any additional risk and start investing again.

What is most important to your business at this time?

Ron: For us, flexibility is key. We’ve seen a lot of consolidation in our industry, and there will likely be more. We’re also going through a great deal of regulatory reform and facing a complete overhaul of our housing finance system. Change is inevitable, but it’s critical for us, as a community financial institution, to maintain the flexibility we need to serve our customers so that we can continue to be a catalyst for economic growth and stability in our communities.

Bob: Business and community needs can vary from one town or county to the next. Community financial institutions appreciate those differences and work to create solutions that address specific needs. Flexibility is key.

What is most important for the communities you serve?

Bob: Our communities have struggled over the past few years. Reduced funding from the federal and state governments is problematic for K-12 and college education, public services, and housing and support services for those in need. We see continued funding challenges ahead, so we have to find the resources at the local level to meet their needs.