Jeanne Firstenburg succeeds husband as First Indy president
Thursday, April 29, 2010
First Independent Bank today announced that Chief Operating Officer Jeanne Firstenburg is taking over as president, with plans to shore up the bank’s asset quality and double or triple the size of the $900 million bank in coming years.
Firstenburg, 62, succeeds her husband, Bill Firstenburg, who will retain his role as chief executive officer, chairman of the board and president of the bank’s holding company, First Independent Investment Group. With the change, he is handing over involvement in the daily operations of the bank, which is Clark County’s second largest in market share, and will instead focus on his duties at the family-owned holding company.
“I’m 70 years old and I figure it’s time to (leave),” Bill Firstenburg said. “She’s younger than I am and she’s very well qualified and so I’m trying to get into a position where I can take more time off.”
Her ascendency marks the first time in the private, family-owned bank’s 100-year history that it will be run by someone who isn’t a shareholder or a blood relative. Founder E.W. Firstenburg turned over the bank to son, Bill, some 30 years ago.
Still the bank, as they say, is all in the family. As the wife of the bank’s owner and former president, Jeanne Firstenburg says the family gave her more latitude to prove herself when she started with the bank in 2002 than a true outsider would have received. She’s a trusted family member, even if she’s not a blood relative.
The bank also retains the benefits afforded by family ownership and control. The holding company, which is 100 percent owned by the Firstenburgs, has offset the bank’s loan losses more than once in the past nine months, with cash infusions totaling $44 million.
“To my knowledge, there’s not a bank in the state that has provided the closely held family support that First Independent Bank has provided,” said Brad Williamson, director of the Washington state Division of Banks. “It’s very comforting to us as regulators.”
The transition in the bank’s top management isn’t unexpected. Jeanne Firstenburg, who was the bank’s first female executive, has been closely involved in managing bank operations, and has overseen significant changes during her tenure. Outsiders familiar with the bank say her increasing involvement as executive vice president and chief operating officer in recent years nearly makes the title change more of a formality, though she rejects that characterization.
“Since I represent so much change, a lot of people gave me credit for every change. But at no point have I stood in the president’s role to oversee all the functions of the bank,” Jeanne Firstenburg said. “It really is a new day for me to have responsibility and authority to oversee the whole institution.”
During her tenure, First Independent’s total deposits in Clark County have risen from $492 million in 2002 to $714 million in 2009, according to the Federal Deposit Insurance Corp. Jeanne Firstenburg has also overseen an expansion of the bank’s online and remote banking services, opened a wealth management division and hired an entirely new executive team. The balance of the bank’s board of directors has also shifted to include more outsiders than family members.
“She’s a powerhouse and she’s very focused on what she wants to do and she’s going to get it done,” said Kim Capeloto, chief executive officer of the Greater Vancouver Chamber of Commerce and a former banking executive. “She has proven she has the capacity and the knowledge to take that position on with vigor and help First Independent continue on the path it’s been on to reinvent itself in a very challenging banking environment.”
As president, Jeanne Firstenburg’s first order of business will be diversifying the bank’s loan portfolio. First Independent had loans worth $65 million in non-accrual status — on which borrowers have long stopped making payments — as of March 31, according to the bank. That’s compared with $71 million on Dec. 31 and $36 million in December 2008, according to the FDIC. The increase has pushed the bank’s troubled-asset ratio above the national median. But, with the cash infusions from the holding company and set-asides to cover loan losses, the bank remains well capitalized by federal standards.
Like many other banks in the county, First Independent had an unhealthy concentration of commercial real estate loans that went sour during the recession, bank officials admit.
Firstenburg plans to move away from real estate and increase lending to nonprofit, health care and professional organizations. With oversight of both loans and deposits in her new role, Firstenburg expects better integration between the two, a prior weakness that she says led in part to the bank’s concentrated real estate lending.
She is also eyeing potential mergers and acquisitions that would more than double the community bank’s total assets to $2 billion to $5 billion, from $917 million as of Dec. 31.
“We’re leaving survive mode and entering thrive mode,” Jeanne Firstenburg said. “Our vision of the community banks that survive (the recession) … will be local but cover a broader regional area.”
Although the bank is well-capitalized and could undertake some of the expansion on its own, it will also need to raise capital from outside sources, said Stacey Graham, chief strategy officer at First Independent.
Though the bank plans to maintain private ownership and its community focus, that may mean bringing in investors that would dilute the family’s share of the bank.
Such an expansion would be risky for the traditionally conservative bank, which started as a bond bank and has only recently evolved into an integrated financial services institution. But very few community banks have the resources or the wherewithal to undergo a fast expansion after two years of financial upheaval, leaving a large opportunity for those that can, said the Division of Bank’s Williamson.
Jeanne Firstenburg sees the opportunity and she’s ready to lead the bank there.
“We see a lot of banks taking advantage of this environment,” she said. “It’s taken us 100 years to get to this point; it won’t take ten years to get that large (again). It’s time for us to grow.”