Oregon's South Umpqua Bank has decided not to leave all the trend- setting to the big boys of banking.

Recently, the $200 million-asset bank opened a new branch in its headquarters city of Roseburg that is decidedly futuristic. It features videos and retail-style displays promoting everything from value-added packages of financial services to T-shirts with the bank's logo.

There's also a "computer cafe" where bank customers can sip South Umpqua's own brand of coffee while they call up their accounts or surf the Internet.

In another area is an investment services center, where customers can sit in easy chairs and read financial publications or watch a big-screen television tuned to a financial cable channel.

"I want customers to come in and browse, just as they would in a Nordstroms or Eddie Bauer," said chief executive Ray Davis. "Banks are selling financial products, but most banks don't show off their products. We're in the retail business, so shouldn't we be putting our products out there where people can taste them?"

The strategy is all part of Mr. Davis' vision to push his bank into the future.

"I don't think anything we're doing is rocket science," he said. "We're taking ideas that have been out there for some time and repackaging them to make them more meaningful to our customers."

In designing the branch, Mr. Davis received a good bit of assistance from Charlene Stern, chief executive of Stern Marketing Group, Berkeley, Calif. The two sat down and did their best to reinvent banking, with an emphasis on retail selling.

"What you have in banks today is a dysfunctional retail environment," Ms. Stern said. "Fully 95% of customer interaction in banks is with tellers, who aren't selling anything."

Ms. Stern said she thinks the new facility has given South Umpqua a definite advantage.

"There isn't a bank like South Umpqua in the country," Ms. Stern said. "They've got a competitive edge on all their competition, big and small."

A big part of South Umpqua's push involves computer technology, surprising in an area with a heavy weighting of senior citizens. The reception, though, has been very positive.

"The people in our community have encouraged change," Mr. Davis said. "And you know who uses the Internet the most in our lobby? Senior citizens. They love it."

Mr. Davis arrived at South Umpqua two years ago from Atlanta-based U.S. Banking Alliance, which offered a wide diversity of services for member banks. When South Umpqua's board of directors decided it was time to build for the future, they turned to Mr. Davis.

"South Umpqua was a sleepy little community bank that had always done O.K., but the board of directors knew it was time for a change and made a major commitment," he said.

Although the bank is still evolving, the results, a return on average assets of 1.47% and a return on equity of 16.4%, have been impressive.

Situated along the Interstate-5 corridor between Eugene and Medford, South Umpqua has also embraced an expansion strategy. A big step involved moving into Eugene, the state's second-biggest market.

The bank recently purchased a $1.45 million structure in the university city that will serve as the hub for an innovative operation,

Half a dozen small offices, with just 1,200 square feet, will be set up in various neighborhoods, according to Mr. Davis. Each satellite office will have an automated teller, an automated loan machine, and three or four employees.

Mr. Davis said the concept is South Umpqua's way of battling the superregionals.

"As a small community bank, we're locked out of the prime sites such as supermarket branches. We get what's left over," Mr. Davis said. "So what we're going to do is take the grocery store branch out of the grocery store and put it on the corner."

Mr. Davis said high-tech and expansion are critical, but neither overshadows South Umpqua Bank's strongest suit, customer service.

"Instead of ROA and ROE, we have what we call ROQ - return on quality," he said. "The level of service in our bank is probably what has made the biggest difference. It's our main concern."

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