By Mark Stevenson,
President and CEO,
Capital Pacific Bancorp
How can a bank be a socially responsible corporation?
From profitability to practices, the banking industry has been under the microscope. We’re all familiar with the perception that banks care more about lending money, managing money, and making money than about customers, community, employees and the environment. At Capital Pacific Bank, we’ve proved that a bank can succeed by turning that tired image upside down.
The Capital Pacific story illustrates how a financial institution with socially responsible practices and financial transparency – one that puts clients, community and employees first – can also fulfill its mission to generate profits and build value for shareholders. In Capital Pacific Bancorp’s 11-year operating history as a public company serving the Portland, Oregon area, we have demonstrated that these elements can go hand-in-hand. And, as a publicly traded company, we provide the opportunity for anyone to participate in this exciting endeavor as a stockholder and owner.
Evolving with the Social Responsibility Movement
Being a successful and socially responsible bank – or any company, for that matter – starts with strategy, a mission, and a vision. We began our journey in 2003, at a time when consolidation in the banking industry was in full swing. The individuals who founded our bank, many of whom today serve on our management team and board of directors, saw the opportunity to provide financial solutions to small and midsize businesses, educational institutions, and the large number of nonprofit organizations in our region.
These businesses, which provide tremendous value to the community and the economy, need a bank and bankers with the specific skills and knowledge that can often prove difficult for large financial institutions to provide. Their unique requirements presented the opportunity for us to carve out a market niche that met a need and also made good business sense.
Along with establishing a clearly defined focus, the bank made a conscious commitment to live and breathe this space, and to serve as a resource, guide and advisor, – not merely a provider of products. In addition to offering the experience and expertise that wins new business and retains long-term clients, we frequently hear from non-client companies and organizations asking for guidance, and we freely share our expertise, ideas and referrals.
On the surface, offering advice and a helping hand with no expectation of remuneration might sound noble, but not very businesslike, – especially for a bank. However, over the years, we’ve found many of these conversations and relationships eventually translate to new and loyal long-term clients. In all cases, this people-and-solutions-first approach enhances our reputation throughout the community, generates leads and referrals, and is simply a satisfying way to run a business.
The commitment to lead with service and caring is at the core of what a socially responsible company should be, but it surprises some that a bank could make this work. As many companies in a competitive, one-size-fits-all world have discovered, leading with “How can we help meet your needs?” rather than “What can we sell you?” has proven to be very successful.
If a bank, or any business for that matter, focuses primarily on price, terms, and selling products the business quickly turns into a commodity. It can hardly be a surprise, therefore, when customers take a hike just to save a few dollars. When a company focuses on building relationships, providing value, and doing what’s best for its customers, it becomes a valuable and trusted resource that engenders loyalty.
That’s the opportunity I saw when I joined Capital Pacific Bank in 2005 after more than two decades in commercial banking and corporate finance. I was drawn to the bank’s potential and its clear market focus, and also the organizational commitment to leading with what was best for the customer and the community, and allowing the business opportunities and profits to naturally follow.
Capital Pacific Bank’s mission and values haven’t changed since the first customer walked through our doors. However, over time we have refined and built on those values. Back in 2003, the concepts of social responsibility and sustainable operations were evolving. We evolved, too, in a process of discovery that led us to realize that our approach to doing business was entirely consistent with this growing movement.
“Institutionalizing” Social Responsibility
Looking at our operations and business practices, we were off to a great start, working every day to grow the bank and expand our commitment to our values and operating principles.
But it was our employees’ initiative that kicked our commitment to an institution-wide socially responsible and sustainable business structure into high gear. In a service business, employees are your most valuable assets, and they truly stepped up. In late 2008, our employees formed an internal “Green Team” to drive change and new ideas, and integrate them in our everyday business activities.
Comprised of employees from throughout the bank, the team began with small goals, looking for ways to reduce waste and conserve resources. Their innovative thinking has led to local and statewide recognition for initiatives such as recycling, reduced paper usage, and resource conservation practices.
Over time, the team’s efforts grew beyond recycling and energy efficiency to working closely with (and educating) our management team to help build and formalize a corporate culture of social responsibility and sustainability that today flourishes throughout the company.
The Green Team’s leadership has led to innovative products such as our recently introduced SolarFlex lending product, which finances installation of solar panels and energy efficiency upgrades for homeowners through Clean Energy Works Oregon, a locally based nonprofit.
It was our employees’ grassroots efforts, initial ideas and research that led us to become a Certified B Corporation early in 2014, which was a natural outgrowth of our business practices and operating philosophy. Because we’re a for-profit, publicly owned corporation, our management team and board of directors have the highest responsibility to implement actions that are best for all the company’s constituents, including our investors.
We unanimously agreed that joining the ranks of Certified B Corporations was best-of-class corporate practice, adding value to the company and the community. Our B Corporation status has given us new benchmarks to spark creative thinking and further improvement. As an added bonus, we’ve attracted new customers and talented employees who share in these values. As a B Corporation, we have joined more than 1,100 other organizations from more than 121 industries in 35 countries that are using the power of business as a force for social and environmental good.
Building Business with Like-Minded Clients
Our corporate commitment to socially responsible and sustainable practices, and our ability to serve our targeted customer base, has rewarded us with unsolicited leads from like-minded companies and organizations. Capital Pacific has become a go-to resource for companies oriented toward sustainable operational practices. Our loan and deposit portfolios reflect our ability to attract equally committed corporations and organizations that appreciate our experience and approach.
As we have grown the number and scope of relationships with “regular” small and midsize businesses throughout the region, the bank now serves more than 180 clients in the nonprofit, education and sustainable-focused business sectors. These clients account for approximately 50 percent of the bank’s total deposits, which is a tremendous contribution from what might be called a “niche” market strategy.
Another benefit of managing a business in a socially responsible way is customer loyalty. Our customers stay with us, and we’re grateful for the regular testimonials and referrals we receive from happy clients. Important to the health and growth of our bank, satisfied clients are good for business. A bank competing primarily on pricing, hitting customers with hidden fees, or failing to provide the level of expertise required shouldn’t be surprised when customers leave to shave a few basis points off their interest rates. Like any bank, we have some customer attrition, but we’re confident it isn’t because they’re looking for more expertise, more effective financial solutions, or a bank that shares their values for how to treat a customer.
This brings me back to my original point: yes, a bank can definitely be a socially responsible organization and still achieve the goals for financial performance and profitability. And for many people, that might be a real eye-opener.
For more information on the Bank go to- www.capitalpacificbank.com
About Capital Pacific Bancorp
Capital Pacific Bancorp, publicly traded on the OTCQB market under the symbol “CPBO” and based in Portland, Oregon, is the parent company of Capital Pacific Bank, which provides comprehensive banking expertise to businesses, professionals and nonprofit organizations. Backed by a tradition of high touch customer service, Capital Pacific Bank delivers a full array of products and services and advanced technology solutions to help businesses meet their financial goals. Capital Pacific Bank is a Certified B Corporation, one of six Certified B Corporation banks in the U.S., reflecting the Company’s commitment to meeting rigorous standards for environmental and social responsibility, financial and operational transparency and performance, and community involvement. The Bank serves more than 165 clients in the nonprofit, education and sustainable focused business sectors, which represent approximately 50 percent of the Bank’s total deposits. Capital Pacific Bank itself has a longstanding commitment to sustainability, having received numerous awards and recognition for its social responsibility and sustainable business practices.
Article by Mark Stevenson, President and CEO of Capital Pacific Bancorp. Mr. Stevenson joined Capital Pacific Bank as CEO in 2005, leading the bank through its formative years to its current position as Portland’s leading business-focused community bank. He has more than 30 years of experience in commercial banking, credit management and corporate finance, including serving as senior vice president and credit approval manager for U.S. Bank’s national corporate and international banking groups. He served as a managing director of debt capital markets for Piper Jaffrey & Co. for eight years, where he specialized in providing high quality capital structure advisory services to corporate clients. Mark is a director of I Have a Dream Foundation, and Kompanion, Mercy Corps’ microcredit finance institution in Kyrgyzstan. He recently joined the FDIC Advisory Committee on Community Banking, and is immediate past chair of the Oregon Bankers Association, having completed his term as chair in July 2013. Mark has a degree in Economics and Spanish from Stanford University.