Siulsaw Bank sees profits, deposits rise in 3rd Quarter.

Featured this morning in the business section of the Register-Guard was Siuslaw Bank. The following is the article.

Siuslaw Bank sees profits, deposits rise in 3rd quarter

By Ilene Aleshire

The Register-Guard

Published: Oct 23, 2008 12:13AM

Siuslaw Bank bucked a national trend of falling bank profits, reporting higher profits, increased deposits and increased loans in the third quarter.

The bank's profits rose 2 percent in the third quarter, to $1,247,800, compared with a year ago.

Deposits rose by about $4.6 million, to $235.6 million, and loans rose by about $16 million to $212.5 million, bank President Lonnie Iholts said Wednesday.

The increase in deposits has come partly from depositors fleeing from other financial institutions, Iholts said. The bank has touted its five-star ranking by the financial rating firm of bankrate.com, noting that it is the only commercial bank in the state to receive this top rating.

The bank's loan growth is coming primarily in the Eugene metro market, Iholts said, although the bank is seeing loan activity in all areas that it serves, including Cottage Grove, Florence and Veneta - "one of our newest markets."

"We've always had a forward pipeline of loans in process," Iholts said. "We have not pulled our commitments like some institutions have. We have had the liquidity to fund them."

Chief Executive Officer Johan Mehlum credited the bank's performance to its employees and to the policies established "by a seasoned board of directors."

Iholts said: "The philosophy of this company, since it was founded in 1964, has been community banking."

Being a community bank "means making sure (proposed) projects are truly viable and hopefully steering people away from those that are not," he said.

In recent years, he said, "At times people were probably not too happy at being told no. Sometimes it's tough to let customers go and see them go somewhere else. But right now, our staff is feeling pretty darned good about why we were doing it. ... (And) we're starting to pick up some of the pieces that others have created."

Iholts said that, when the bank has turned down loan requests, it has tried to keep the door open for future dealings with that customer.

That means, for example, it is sometimes talking now with customers who went to other banks and received variable rate loans but now want to refinance.

Being a closely held, private company gives Siuslaw some advantages, Iholts said. "You don't have a bunch of shareholders expecting everything has to be up, up, up," he said. "And you don't have (earnings) projections every quarter that, if you miss by a penny, you've had it."

Siuslaw is continuing its 20 cents per share quarterly cash dividend to common share­holders and 21 cents to preferred shareholders.

The dividend is payable to shareholders of record as of Oct. 24 and payable on or before Nov. 3.

Siuslaw Bank's parent company, Siuslaw Financial Group has its headquarters in Florence. Siuslaw Bank has offices in Cottage Grove, Creswell, Eugene, Mapleton, Oakridge, Pleasant Hill, Springfield and Veneta.