Kevin Riley

Bank merger won't hurt local jobs

Local Bank of the Cascades employees got a clearer look at the future Monday.

On the heels of Billings, Montana-based First Interstate BancSystem's $589 million acquisition of the Bend-based community bank Nov. 17., First Interstate CEO Kevin Riley, and Bank of the Cascades CEO Terry Zink met with local staff at Inn at The Commons.

"Lot of times when you do mergers, especially mergers where there is overlap in the market, it's costly on the job front," Zink said. "This one won't be, and we're excited our employees will land on their feet."

Bank of the Cascades operates six locations in Jackson County and three in Josephine County. The transaction is expected to close in mid-2017.

First Interstate Bank — no relation to the former financial institution later engulfed by Wells Fargo — will grow to $12.1 billion in assets and 131 banking offices from South Dakota to the Pacific Coast with the addition Bank of the Cascades' $3.2 billion in assets and 50 branches.

Before meeting with bank staff, Riley said that the acquisition not only extends the institution's footprint, but it also buffers First Interstate against energy and agriculture industry cycles.

"When you look at growth potential, Oregon and Idaho are two of the fastest-growing states in the United States," he said. "All economies are cyclical, some are tourist based, some are real-estate based and some are energy or ag based, and what this does is give us a little bit of geographical diversification so as one economy might be struggling, another economy might be booming because they are dependent on something else."

Riley characterized First Interstate as a small, middle-market lender with an average loan size under $300,000.

"Even though we have a legal lending limit of a far greater amount, we focus on taking care of the communities in which we live, work and play, giving 2 percent of our pre-tax dollars to communities," he said.

Since assuming leadership of First Interstate, Riley's mandate has been to modernize the institution and prepare it for growth.

"In order for us to grow, we had to have systems in place," he said. "We brought in a lot of talented people over the last few years, we've changed processes and put a lot of technology in place in order to have an opportunity to do a transaction like this. You can't go out and get bigger if your foundation is crumbling because you haven't put the necessary stuff in place."

The deal pushes First Intestate through the Dodd-Frank $10 billion threshold, adding stress tests and additional regulatory oversight. Congress has indicated it would roll back some of the requirements instituted following the 2008 financial crisis with Donald Trump moving into the Oval Office in two months. Riley said First Interstate will proceed as if no change will take place.

"A lot of this regulation, in my opinion, is good and sound banking practices," Riley said. "It's just cumbersome in having regulators reviewing it."

For Zink, the deal ends a nearly five-year mission to turn around a bank hard-hit by recession. Lured out of retirement at the start of 2012, Zink oversaw a rebuilding program backed by private investors.

"We were in a precarious spot," Zink said. "We had been recapitalized, we had a lot of credit losses and we needed to get the ship righted. We spent a period of time doing that, then we grew the franchise."

He said the banks assets fell from about $2.5 billion to $900 million as a result of the financial crisis. During this tenure, the bank grew to $3.2 billion.

"The thing I was most concerned with is that Bank of the Cascades had a very important legacy," Zink said. "While it would have been easy to sell to a big bank and be done with it, that wasn't our intent."

Passing the baton to First Interstate, he said, achieved the goal.

— Reach reporter Greg Stiles at 541-776-4463 or Follow him on Twitter at, on Facebook at

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