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Bank layoffs hit Oak Harbor hard
A decision by Pacific Northwest Bank leaders to hire out mortgage lending will mean about 80 people will lose their jobs, including 43 employees in the Oak Harbor office.
Chuck Foisie, the banks executive vice president, said Pacific Northwest Bank is joining a growing list of financial companies that are outsourcing residential mortgage lending operations. Big companies like Bank One Corp., Mellon Financial Corp. and Merrill Lynch have already taken this step.
Pacific Northwest Bancorp, formerly InterWest, will still offer residential loans to customers, but the bank holding company will outsource the mortgage origination process. The corporation expects to reduce the costs of processing, underwriting and closing mortgage loans to the tune of about $3.5 million next year. That comes with an anticipated revenue reduction of about $2.1 million the same year.
Foisie said laying off the employees in several department was a very painful business decision, but the bank is doing what it can do lessen the blow on the families involved. He said the company has hired an employee assistance service company to help those people find new jobs.
One of the factors that led to the decision, Foisie said, was that it is currently a very good time for people in residential lending to find a new job. With historically low mortgage rates, the real estate lending business is red hot.
The layoffs are effective at the end of the year. Those who are losing their jobs account for more than a fifth of the banks 216-person workforce in Oak Harbor.
City leaders are distressed about the job losses. Oak Harbor Mayor Patty Cohen said the news of the losses was clearly disturbing for the city, especially in the current economic situation. She said city leaders have been tightly focused on building and enhancing the overall business environment of the city, and any major layoffs just make that harder.
One of the reasons the city is trying to encourage business growth is because the citys budget, which relies partly on sales tax, has been severely crunched by citizen initiatives and the economic downturn over the last few years. While its not the end of world, the loss of what Cohen characterizes as living wage jobs means less money to circulate.
Priscilla Heistad, the Oak Harbor Chambers executive director, said the layoffs are a pretty big deal for Oak Harbor. Thats a lot of people for Oak Harbor, she said, considering some of our biggest employers have about 100 people.
Heistad said she expects the job losses to have some effect on local small businesses. While some people may be able to find other jobs in the area, she said others are bound to move away.
On the brighter side, Heistad said the layoffs may be an opportunity for some folks to start businesses of their own in town.
We live in a desirable place to live, she said, but the job market is tough, which is why there are so many home-based businesses here. ... You have to create your own opportunities.
Cohen said Patrick Fahey, Pacific Northwest Bancorp president and CEO, came and talked with city officials immediately after announcing the layoffs to the employees. She said the company has been extremely responsible and respectable in the way theyve dealt with this situation.
Still, she said its undeniably a difficult time for those who are losing their jobs. No matter what spin you put on it, she said, its extremely troublesome to accept.
This announcement is just the latest is a series of changes for the growing banking corporation. The company started out as Island Savings and Loan in Oak Harbor over 40 years ago, then it changed its name to InterWest Savings Bank some 20 years ago.
By the 1990s, InterWest was expanding by leaps and bounds, aggressively purchasing other banks around the region. In 1998, the company purchased Pacific Northwest Bank and brought that banks founder, Patrick Fahey, into the company fold.
In 2000, Fahey was appointed company president, CEO and chairman by the banks board of directors. He largely replaced Oak Harbor resident Barney Beeksma, who helped found the bank as Island Savings and Loan.
Fahey quickly got to work making changes that year. He switched InterWests charter from a savings back to a commercial bank and consolidated the many subsidiaries under one name.
Then Fahey changed InterWests name and address in an effort to position the corporation as the regions premier commercial bank. InterWest became Pacific Northwest Bancorp which he said has a more serious, regional appeal and the corporate headquarters was moved from Oak Harbor to Seattle.
Today, Pacific Northwest Bank is the largest commercial bank headquartered in the Pacific Northwest. With the recent acquisition of Portland-based Bank of the Northwest, Pacific Northwest now operates 59 commercial centers in western and central Washington, as well as Portland. The bank has about $3 billion in assets.
The recent move to outsourcing residential loans will not only cut costs and help even out the highs and lows of the cycle, Foisie said, but it allows Pacific Northwest to continue providing top-notch customer service. He said these third-party providers of service that concentrate solely on residential loans have the financial ability to provide customers with the best in technological services.
Its all about customer service, Foisie said.
You can reach News-Times reporter Jessie Stensland at email@example.com or call 675-1166.