Timberland Bank: They say it’s your birthday

Timberland Bank is set to celebrate a birthday next month. It will turn 100 on Dec. 7, 2015 after it opened years ago as Southwest Washington Savings and Loan on Dec. 7, 1915.

A lot has happened to the Hoquiam-based bank and the community it serves in the ensuing years, said President and Chief Executive Michael Sand, who has spent 39 years with the bank. He started in 1977 as a part-time loan officer and rose through the ranks to become president and CEO in 2003.

Sand replaced longtime executive Clarence Hamre, who was elected president in 1971. Hamre remained on the board until 2008, Sand said.

In the late 1970s, life in Grays Harbor County was good. Logging and fishing were still vital industries, and there was a shortage of housing for those moving to the Harbor, which meant Timberland was in the right position to make loans to home builders.

But Timberland and the Harbor had to roll with punches over the next 30-some years, including double-digit interest rates, the Spotted Owl controversy and the Great Recession.

“It really put the brakes on the industry,” said Sand about the effect the protected status of the owl had on the logging business.

Many people left the area for other opportunities, including Timberland, which realized they had to look elsewhere for growth. That led the bank to open branches in Edgewood, Auburn and Puyallup, followed by Lacey, Yelm, Spanaway and Poulsbo. The bank also acquired several branches from Venture Bank.

And that brings us to the Great Recession, which was triggered by the downturn in real estate.

Timberland was insulated from the worst of the slower economy because it had made loans to smaller home builders, not larger builders over-leveraged in the market, Sand said. It was still a tough time because 18 banks failed in Washington state, the result of being over-exposed to real estate, or undercapitalized, or the victims of risky investments.

Timberland agreed to accept money from the U.S. Treasury known as TARP, or the troubled asset relief program, but the bank didn’t need the money, Sand said. They agreed to take it in case the recession grew worse.

On the public relations front, however, accepting TARP money became a headache because the bank was viewed as needing bailout funds, he said. That was not the case, and the bank was happy to repay the federal government’s $16.5 million in December 2013.

Recession-wise, the bank hit a low point in 2010, Sand said, but has grown every year since and reported a fiscal year profit of $8.3 million in 2015.

After 100 years of banking, through good times and bad, community banking hasn’t changed, he said.

“It’s taking care of people,” Sand said. “That’s our business.”

This story was originally published November 29, 2015 at 1:00 AM with the headline "Timberland Bank: They say it’s your birthday."