More small banks in the Pacific Northwest are setting up foreign trade divisions to serve the Asians pouring into the region.
Last month the $2.9 billion-asset Banner Bank in Walla Walla, Wash., launched an international banking department run by two former managers of Washington Mutual Inc.'s now-defunct commercial unit.
The department is issuing international letters of credit in-house and will soon offer trade financing, currency exchange, and wire transfers, said D. Michael Jones, the president and chief executive of Banner Corp., the bank's holding company.
Banner used to outsource such services to bigger banks, he said, but as customer inquiries increased it saw an opportunity.
"A lot of small companies don't like dealing with large banks, because their trade finance offices are in Los Angeles or San Francisco," Mr. Jones said. "They are much more comfortable talking to someone locally who has the expertise to help them, so that they know it's going to get done right."
Banner did not get into the business just for the fee income, he said - it also wants the new customers' checking and line-of-credit business.
Big banks and those that cater to Asian-Americans in the Northwest have long provided trade finance services. The handful of community banks that have entered the market in the last few years include the $2.2 billion-asset Columbia Banking System Inc. in Tacoma and two in Spokane: the privately held Washington Trust Bank, which has $2.5 billion of assets, and Sterling Financial Corp., which has the $6.9 billion.
Warren Gross, the president of the Export Finance Assistance Center of Washington, said community banks are getting involved because about 4,000 small businesses in the region now trade overseas, far more than a decade ago.
Immigration is driving the trend. According to the Census Bureau, the Asian population in Washington jumped 53% between 1990 and 2000, and it continues to climb.
Columbia Bank's fee income from trade finance has risen steadily since 1999, when it began offering the services in-house, said Kathy Peterman, the vice president and manager of its international banking unit.
About 10% of Columbia's customers now use its trade finance services, and about 70% of that group are Asian-American, Ms. Peterman said.
"We've seen a large increase" in trade finance business, "especially in the last two years," she said. "We've added one more full-time employee because of that."
One reason for the increase is "that we're getting to be well known in the community for our customer service," Ms. Peterman said.
Another, she said, was Wamu's announcement last July that it would shut 53 commercial lending offices and lay off 850 employees.
Mr. Jones said that was good luck for Banner too. The closings brought him Christine Martin and Debbie Gelbach, both of whom had worked for him when he was the president of the $7 billion-asset West One Bancorp in Boise. (U.S. Bancorp bought West One in 1995.)
Wamu had asked Ms. Martin and Ms. Gelbach to stay on until Feb. 1 to wind down the international trade finance operations, Mr. Jones said. He hopes that many of their customers will migrate to Banner.
James Bradshaw, an analysts at D.A. Davidson & Co. in Portland, Ore., said other northwestern banking companies, such as the $1 billion-asset Cascade Financial Corp. in Everett, Wash., and the $715 million-asset Columbia Bancorp in The Dalles, Ore., are considering offering trade finance services in-house.
