In February, when West Coast Bank of Lake Oswego, Ore., began heavy advertising for a new free checking account, its executives feared that business customers might think it was abandoning them.
So the bank also stepped up marketing to business owners — through the softer-sell approach of sponsoring more community events catering to them.
In the past month West Coast has underwritten three golf tournaments, two for local chambers of commerce and one for the Oregon Remodelers Association. It has also hosted award dinners for other chambers of commerce and is the lead sponsor for the Austin Family Business Program at the Oregon State University’s College of Business, which conducts seminars for family-owned and other closely held businesses in the area.
“We have a very sophisticated product line for business customers, but it’s not significantly different from those of other institutions,” said John Baker, director of marketing at the $1.8 billion-asset West Coast Bancorp. “So we thought our marketing dollars would be best spent building relationships with business owners at these events.”
Most community banks regularly do such sponsorship to foster name recognition and customer loyalty. West Coast has focused on it companywide and at each of its branches — it increased its sponsorship budget 15% this year and encouraged branch managers to underwrite as many events as they can for their communities and for local business groups.
James Bradshaw, an analyst at D.A. Davidson & Co. in Portland, said that West Coast is now sponsoring more events than other banks in the Portland area — and that it is smart to do so in such a crowded territory.
Big banks dominate the market, according to the Federal Deposit Insurance Corp.; West Coast ranks sixth with a 2.47% share of the deposits as of June 30, 2004, above dozens of other, mostly community banks.
“The Portland metro area is an intensely competitive market, and so anything West Coast can do to get in front of potential customers is a big plus,” Mr. Bradshaw said.
Mr. Baker said the marketing initiatives — the sponsorships as well as the ad campaign promoting free checking to attract low-cost deposits — have helped the bank boost its loans and deposits.
Its commercial and industrial loans rose 39% in the first quarter compared with the year-earlier period, to $357 million, and loans rose 14% over all, to $1.4 billion. Demand deposits, from both retail and business customers, rose 21%, to $395 million, and deposits rose 9.3% over all, to $1.5 billion. (But because of an $800,000 writedown on the value of its Freddie Mac preferred stock and a $500,000 lawsuit settlement with a borrower, West Coast’s first-quarter net income fell 13.5%, to $4.5 million.)
Loan and deposit growth was even stronger in the second quarter because of the marketing drives, Mr. Baker said. The company is to announce its second-quarter results Tuesday.
West Coast has also begun sponsoring more events for communities as a whole, such as Newburg, Ore.’s, annual Queen’s Coronation festival and Community Appreciation Barbecue; the annual Hazel Dell Parade of Bands in Vancouver, Wash.; and the annual Super Senior Awards at the Lincoln County Fair in Newport, Ore.
Mr. Bradshaw said business and retail customers alike appreciate the bank’s support, particularly those in smaller towns whose events are often ignored by larger benefactors. “West Coast’s employees get involved in these events, and that really helps to put a face on their bank,” he said. “More banks ought to be doing these kinds of things — it fits the definition of a community bank.”
