Victor Bartruff knows the value of cooperation among rival community bankers. He might not be chief executive of Oregon's largest independent bank if not for the help of two competitors.
Four years ago, Mr. Bartruff's West Coast Bancorp was battling what it considered a hostile takeover attempt by Western Bank, a rival from Coos Bay, Ore. Desperate for support in the proxy fight, Mr. Bartruff persuaded two other Oregon community banking companies to buy chunks of West Coast stock.
The last-ditch move kept the shares out of the rival's hands and blocked the takeover bid at the annual meeting. It soon led to a friendly and successful merger of equals with one of the two allies, Commercial Bancorp of Salem.
Now, the $743 million-asset West Coast reaches both north and south from its base in the tony Portland suburb of Lake Oswego. The company owns four banks and a trust company and is actively looking to bring others into the fold, even as it displays strong internal growth and solid performance.
Officials intend to use the parent's resources to support the subsidiaries, providing efficiencies of scale and allowing customers to do business at any of 32 branches in Oregon and Washington. They won't merge the banks into a single monolith.
Having learned lessons from the takeover battle about cooperation and the needs to grow and be aggressive to survive, Mr. Bartruff and West Coast are determined to preserve the spirit and independence of Oregon community banking.
"It really sets the stage for what we did and why," Mr. Bartruff said of the struggle against Western. "We really believe that especially in the Northwest there is a strong need for community banks."
"It was a hostile takeover. I don't think any board appreciates that approach," said Richard C. Williams, president and chief executive officer of $420 million-asset Centennial Bancorp, Eugene. Centennial and Commercial each bought 4.9% of West Coast in the 1993 effort to block Western Bank.
The West Coast model is working, and it is winning attention from analysts. The company earned $2.5 million in the first quarter, up 24% from the 1996 period. Returns on assets and equity were 1.43% and 15.08%, respectively, for the first quarter.
"Their whole idea is to ensure that community banking stays around and can be competitive with the major banks," said James Bradshaw, bank analyst at Pacific Crest Securities in Portland. "It's actually worked famously for years now. They built a real team approach to banking."
The company offers a full slate of mortgage lending, Small Business Administration products, and leasing, some of which its competitors don't have, Mr. Bradshaw said.
And the stock is now trading at $28.75 a share, more than 2.8 times book value and 19 times earnings. The price is almost triple that in 1993, when Western made its bid.
The decision to fight Western wasn't "a bad decision by any stretch of the imagination," Mr. Bradshaw said. "They're independent and have a pretty rosy future going forward."
In fact, Mr. Bartruff is projecting internal growth of 15% to 20% a year and said he hopes to acquire one bank a year through the end of the century. West Coast is focusing on Oregon and the area of Washington State south of Seattle. The company put its headquarters in the Portland area because it expected much of its new growth to be there.
He said the company is looking at some acquisition candidates but has no definite plan.
"This is like marriage," Mr. Bartruff said. "You have Cokes, then dates, then an engagement. Then you go down the aisle. We're having lots of Cokes right now."
And with other chief executives in Washington and Oregon aging, Mr. Bradshaw speculated, "more and more guys will start to listen to their sales pitch down the road."
The success of West Coast has been driven by the cooperative management style of Mr. Bartruff and executive vice president Rodney Tibbatts, former chief executive of Salem-based Commercial.
After their March 1995 merger of equals, the first of its kind in the state, the two men ran the company as co-presidents, divvying up the duties between them in an effort to ensure a smooth transition and merger of cultures.
Consultants and analysts have frequently questioned the wisdom of mergers of equals, which can often be hindered by ego clashes. They're especially critical of co-presidencies, suggesting that they create confusion about who is in charge without contributing to the company's welfare. Even employees interviewed admitted that there was some concern at the start.
"There was a little doubt internally as to whether it would work," said Addy Hesse, senior vice president for marketing. "There were some days with some confusion. It's human nature."
But observers and employees agree that the joint leadership at West Coast worked because Mr. Bartruff and Mr. Tibbatts clearly defined their responsibilities, both to each other and to the company, and consistently respected those boundaries.
Mr. Tibbatts held sway over trust and investor issues, while day-to-day affairs and personnel issues were handled by Mr. Bartruff, who has some training in behavioral analysis. "I like to work with people, and to help them work better with each other," he said.
In fact, employees agreed, the example set by the co-presidency was a role model for the blending of the two corporate cultures.
"By mutually supporting each other and respecting each other," Ms. Hesse said, "it made the rest of us have more confidence and trust in one another."
"It went much better than I thought it would," agreed branch manager John Bryson Jr. "You never detected any conflict. There was never any playing for position."
Mr. Bartruff had actually had prior experience with a merger of equals. The affable 49-year-old, a Baptist, had presided over a merger of two Baptist churches in Lake Oswego in the late 1970s, and he said he even drew some inspiration from the success and growth of the new church.
Baptists, he said, are known more for starting new churches than merging existing ones-much like bankers. "That in some ways prepared me for this," he said. "I saw it could work in that situation, so my doubts were less."
Dual leadership prevailed at West Coast for almost two years, as the company experienced significant internal growth, spun off a trust department into a subsidiary, and made two acquisitions. The second, of Vancouver Bancorp in July 1996, marked West Coast's first venture across the Columbia River into Washington State, where officials now hope to expand further.
But there was still concern early this year about a possible perception among investors and other observers that the company lacked a single clear leader.
That's when the 58-year-old Mr. Tibbatts stepped forward, voluntarily taking a demotion-and pay cut-to executive vice president, while Mr. Bartruff took the sole helm of the company. Mr. Tibbatts is now in charge of investor relations and the search for acquisition candidates, and he reports to Mr. Bartruff.
"We want to operate as effectively and efficiently as we can. That made some sense to centralize the function and the role. (Mr. Bartruff) has demonstrated the commitment, vision, and commonality to lead us into the future," said Mr. Tibbatts, who plans to retire in a few years.
"They've had good success over the years, and frankly I think they've done a very good job," said George St. Laurent, chairman of Western Bank, which was acquired by Washington Mutual Inc. in February 1996 and operates as a division of the Seattle-based thrift giant. "Customers are happy to have a good-sized independent bank in place. You have to give them good marks on that score."
