Charter Bank lauded as Small Business of 2004
Puget Sound Business Journal - May 21, 2004
by Lynn Porter
Charter Bank CEO Keith Jackson talks passionately about what he believes in - and he believes in small banks.
Small banks can customize financial solutions and, technologically, they can offer almost everything larger banks do, he said.
Before Charter Bank opened its doors in Bellevue in 1998, its management team commissioned a survey. The results stated that proprietors of family-owned businesses that had annual revenues of $20 million or less felt they weren't getting great service from big banks.
"Forty percent of them were very frustrated with a large bank, and they were all banking with a large bank," said Jackson.
Chief complaints were that they had to use an 800 number to get problems solved at their banks, many of which had headquarters out of state. And they also said they were required to get their credit reapproved often, Jackson said.
Charter focused on ways to service those target customers and have converted many of them to clients.
Besides its Bellevue headquarters, Charter Bank has branch offices in Redmond, Kent and Seattle.
It is ranked among the fastest-growing community banks in Washington, and has seen assets increase from nearly $138 million in 2001 to $194.5 million in 2003.
Earnings went from $607,623 in 2001 to nearly $1.6 million in 2003.
Revenues grew from nearly $9.2 million in 2001 to $9.5 million in 2003, despite a slight decrease in 2002.
"We believe that with a little help from a recovering economy we should be able to continue to grow the bank, said Jackson, who added that the bank should open branches in Tacoma and Everett "sometime in the future."
Charter Bank is the 2004 winner of the Eastside Small Business Award.
While Charter does intend to keep growing, Jackson said it doesn't plan to add a lot of branches. It's not a traditional bank and a branch office on every block isn't needed, he said.
The bank's target customers are small and midsized businesses in the greater King County region. Those business owners use courier services or the postal service to send checks to the bank, he said. They are comfortable having a bank 15 miles away.
"They just don't need to come into an office," Jackson said.
To service clients, Charter has implemented other innovative plans.
One program reimburses debit card holders for transaction fees at non-Charter ATMs throughout the United States - a relatively rare thing in community banking, Jackson said.
The bank also has automated its customer access to account activity. Whenever there is account activity, customers can opt to have a bank statement e-mailed to them. The statement provides a snapshot of activity for the past 24 hours.
The bank is "reasonably conservative" in its loan portfolio, which Jackson thinks serves shareholders well.
"We have a strong credit culture because of all of our experience," said Jackson, noting that management came from larger banks. Charter's account officers have an average of 25 years experience in banking.
Bank management also recently did something Jackson thinks will serve shareholders well. In December 2003, management went to institutional investors for more long-term debt investment capital in the form of $4 million of long-term debt. That move, Jackson believes, will equate to higher earnings for investors, as the money can be used to finance loans.
"With this we can go ahead and grow the bank by $40 million or $50 million more than we could otherwise," he said.
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