Banking news and stories to help you maximize the financial success of your business Q4 2021
Navigating Together
Commencement Bay Marine Services and Tacoma Youth Marine Center
IN THIS ISSUE Preparing a Business Succession Plan a publication of
Leasing vs. Buying Assets Cybersecurity Tips: Ransomware
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Darriel Menefee
Vecteezy.com
John Strearns
Contents
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Business Profile: Commencement Bay Marine Services............... 2 Heritage Direct: Mobile Check Deposits........................................ 6 Social Networks: Be Careful What You Share................................. 9 Heritage Bank Community Development Entity.......................... 14 Year-End Financial Planning Checklist........................................... 19
IN EVERY ISSUE Heritage Helps........................................................................... 8 Our community involvement is part of our company’s DNA and something we’re very proud of. In this section, we highlight the good we're doing in our communities.
PNWonderland........................................................................ 12 Explore the unique sights and experiences of our Pacific Northwest.
Business Banking Mentor....................................................... 16 Whether you need to purchase a vehicle, machinery or larger premises to expand your business and operate more effectively, there is a question you need to answer: lease or buy?
My Heritage.............................................................................. 18
Banking Business is a quarterly publication of Heritage Bank Director of Marketing Shaun Carson Editor-In-Chief Whitney Gibson
Creative Director Erica Bolvin
Managing Editor Stephanie Neurer
Contributors John Chambers Darriel Menefee Kristina Washington John Stearns
3615 Pacific Avenue Tacoma, WA 98418 800.455.6126 HeritageBankNW.com
Meet our relationship managers and learn about their heritage.
Cybersecurity..................................................................... 20-21 Take these steps to protect your business and finances from fraud.
Financial Dictionary................................................................. 21 Empowering you to make smart business decisions by demystifying banking terminology.
© 2021 Heritage Bank, member FDIC, Equal Housing Lender. The information in this magazine is general education or marketing in nature and is not intended to be accounting, legal, tax, investment or financial advice. Although Heritage Bank believes this information to be accurate as of the date published, it cannot ensure that it will remain accurate. Statements of individuals are their own and do not necessarily reflect the position or ideas of Heritage Bank. Contact us at 800.455.6126 or visit HeritageBankNW.com to make an appointment with one of our local experienced relationship managers to discuss your individual business banking needs.
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A MESSAGE FROM OUR CEO
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s we continue to navigate the ups and downs of the pandemic and resulting economic shifts, we are reminded that resiliency is the key to success. Flexibility and adaptability—and a business’s willingness to embrace them—provide an opportunity to mitigate risk and provide an opportunity for a competitive advantage.
Heritage Bank
In this issue, we cover several topics that we think will benefit businesses no matter where they are in their journey. In our featured article, Finding the Right Successor for Your Business, we talk about the importance of putting together an exit plan for business owners. Whether you are ready to start the process now or later, having a plan can lead to a smoother transition overall. Maybe your business is not at that stage yet and you are looking for ways to be more efficient. On page 6 we highlight the benefits of depositing checks with your mobile device, and on page 16 we compare the pros and cons of leasing versus buying assets. We also provide cybersecurity tips so you can keep your business and customers safe. Regardless of where you are at today, ensuring the health of your business remains our top priority. We have new banking options that might benefit your business, so we encourage you to talk to your relationship manager to discuss what is right for you. Thank you for reading Banking Business and for trusting us as your banking partner. Sincerely,
Jeff Deuel CEO
2021 Winner ABA Foundation Community Commitment Award for Affordable Housing Heritage Bank financed a $15,160,000 construction loan and provided an equity investment of over $21,000,000 to help Plymouth Housing build their 2nd & Mercer building in Seattle, Washington, which includes 91 studio apartments for single adults who have stabilized after homelessness. This is the second of eight new buildings that Plymouth plans to build to address chronic homelessness in King County. The goal is to have an additional 500 apartments within the next four years. Jeff Deuel is chief executive officer at Heritage Bank. He has more than 39 years of banking experience. Prior to joining Heritage, he worked at JPMorgan Chase, WaMu, Bank United, First Union, CoreStates and First Pennsylvania Bank. Jeff is a past chair of the Washington Bankers Association. He currently serves on the board of the Oregon Bankers Association and Pacific Coast Banking School. He is an avid cyclist and has climbed to the top of Mt. Rainier.
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Navigat
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Banking Business a publication of Heritage Bank
Heritage Bank
ting together Heritage Bank helps propel Commencement Bay Marine Services, providing downwind benefits for youth marine programs. The coronavirus pandemic—a boon to home remodelers improving houses to which people were largely confined for work and school—also motivated many boat owners to improve their vessels or get into boating as they sought safe family activities. That was wind in the sails for Commencement Bay Marine Services, which offers boat repair, maintenance, parts, cleaning, vessel haul-out and launch assistance and more at its Thea Foss Waterway location in Tacoma. It was able to increase its maintenance capacity with timely help from Heritage Bank. In turn, that has helped Tacoma’s nonprofit Youth Marine Foundation, which owns Commencement Bay Marine Services and adjacent Tacoma Fuel Dock. Revenue from those businesses helps support the foundation and its youth marine programs. The fuel dock also provides youth employment opportunities. The foundation, operating its programs out of the Tacoma Youth Marine Center that neighbors Commencement Bay Marine Services, introduces the Puget Sound waterways to Pierce County youth who might not otherwise experience boating, according to Monique Valenzuela, CEO of Commencement Bay Marine Services and executive director of the foundation. Benefits include exposure to maritime occupations and sciences, leadership skills, safe boating and human relationships with the environment. The Tacoma Youth Marine Center has four large training vessels on which youth can experience the water, including a 90-foot sailboat and 78-foot motor vessel that was originally built for the U.S. Coast Guard. It also has a fleet of more than 35 smaller vessels, including kayaks, inflatable boats and small sailboats. The foundation’s biggest partner is the Sea Scouts, a program of the Boy Scouts of America, which makes its local base at the Tacoma Youth Marine Center and provides the bulk of the center’s programming, Valenzuela said. The Sea Scouts own the two large vessels and serve as training platforms for the Sea Scouts’ Visit HeritageBankNW.com to read programs for young men and women more of our business profiles, then 13 to 20, Valenzuela said. “While they’re learning how to run the ship, navigate the ship, run the sails…they think it’s a lot of fun, but Equal Housing Lender | Member FDIC
make an appointment with a banker who knows your industry.
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Photo by David Putnam, courtesy of Youth Marine Foundation
Foundation programs include hosting high-school students for marine science learning in the center’s classroom and on the 90- and 78foot vessels that serve as “floating classrooms” to expose students to the Puget Sound ecosystem.
in reality, running a commercial vessel, it’s a lot of character development and leadership and communication growth,” she said. “We start with 13-year-olds who can’t even drive their grandma’s car…but they get to drive a boat in the middle of Commencement Bay.” Sea Scouts have gone on to become marine professionals, elected officials and job creators, Valenzuela said. The foundation provides moorage for the Sea Scouts’ vessels and leases the ships for its own programs at the Tacoma Youth Marine Center. The foundation leases the space for the center, and maintenance and fuel businesses from the Port of Tacoma.
Foundation programs include hosting highschool students for marine science learning in the center’s classroom and on the 90- and 78foot vessels that serve as “floating classrooms” to expose students to the Puget Sound ecosystem, where they can take water samples and gain other experiences, Valenzuela said. “It’s very real-time, hands-on learning,” she said. “Once a month they put their life jackets on, they’re getting on a boat and now Commencement Bay is their classroom. Because of the strength of the foundation and the businesses, we are training future marine scientists, and we’re building an empathy (for the Sound environment) that may not otherwise be there if you haven’t been on the water.” The programs open the water to everyone, regardless of whether they come from a boating family, she said. Additionally, the foundation is working with the Tacoma School District this year to introduce middle-schoolers to the water in a new program called Operation Middle School Diversity. “I want every middle-schooler to come to the water they look at every day and experience it,” Valenzuela said.
Heritage reaches out in the storm
As the pandemic was hitting last year, businesses were shutting down, and Commencement Bay Marine Services was in a state of limbo, a Heritage Bank executive reached out to the business even though Heritage wasn’t its bank at the time, said Valenzuela, who was familiar with Heritage through volunteering with its executives on various community boards or causes. “Without skipping a beat, we had someone from Heritage that I’ve worked with before, basically saying, ‘Hey guys, I love your mission. Just to let you know, this is what I’m doing for other customers and other businesses,’” Valenzuela said. “And we just kind of said, ‘You know what, that’s the kind of service we need to continue our mission as a nonprofit.’” The bank’s effort to reach out to a noncustomer it cared about was enough to get Commencement Bay Marine Services to move its banking business within about a month’s time. “The thing I love about Heritage Bank is that they are committed to their community whether you are their customer or not,” she said. “They have their finger on the pulse; they’re always giving.” Heritage, through one round of the Paycheck Protection Program (PPP), helped stabilize the business during the critical early stages of the pandemic,
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then arranged a second PPP round as business began to pick up, allowing Commencement Bay Marine Services to add staff and purchase expensive inventory like engines and other parts that were needed as people spent money improving their watercrafts, Valenzuela said. “With Heritage Bank’s help, we were able to double our mechanic staff for the first time,” she said. “We had more business than we could handle, but due to the collaboration of Heritage Bank and their support, and helping us get our PPP loan, we were actually able to secure the loan for what it was intended—add staff and give people more hours.” That added staff included one young man who, while in high school last year, became the first mechanic intern at the business. The business’s head mechanic mentored the youth one period each day and he became a full-time mechanic with the business, beginning a career he had long desired. “If we didn’t have the support of Heritage Bank and we couldn’t keep our mechanics full time, we may not have had that infrastructure to change the life of this young man,” Valenzuela said. “He’s now full-time employed with us as a mechanic, at 19, and has full medical (and) dental benefits. That’s nothing to shake a stick at.” Heritage Bank does good directly, she said, “but even indirectly, that’s the effect they’re having on our community. By supporting small businesses like ours, they’ve helped launch this kid into a career of upward mobility.” And it’s a win for Commencement Bay Marine Services, which—in its 14th year in business, the last three under the direction of Valenzuela—is well-positioned to continue serving boaters, supporting its employees and exposing youth to maritime science and industry.
“...having our healthy businesses, having Heritage Bank invest in us, helps us realize these once-in-alifetime opportunities.” MONIQUE VALENZUELA, COMMENCEMENT BAY MARINE SERVICES
Photo courtesy of Youth Marine Foundation
Over the summer, the Tacoma Youth Marine Center also diversified with its first bilingual youth training program on the 78-foot ship, working with Seattle’s El Centro de la Raza (The Center for People of All Races). “That reach was amazing and one that may not have been possible if we had to close our doors to Commencement Bay Marine Services, which helps fund such programs,” Valenzuela said. “So having our healthy businesses, having Heritage Bank invest in us, helps us realize these once-ina-lifetime opportunities. As a Latina myself, the maritime industry was not one that I was aware of, nor knew of, yet was able to connect with students who spoke English as a second language. I’m able to speak in both English and Spanish with them to make it really, really successful.” Those kinds of experiences embody the foundation’s mission, and Heritage Bank’s support for the business ensures youth will continue to be inspired and learn for years to come, she said. Asked what insight she might have on the benefits of working with Heritage, Valenzuela said she likes that she can call and get someone live to help her with banking issues anytime, and that the bank lets her run the business. “Especially for other small-business owners, you are in the business at which you are an expert,” she said. “Let Heritage be the banking experts so that you have comfort you can go about your day knowing they’re taking care of you.” Equal Housing Lender | Member FDIC
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Learn more about mobile check deposit and other features of Heritage Direct at HeritageBankNW.com. If you’re ready to get started, simply download the app. Just search for “HB Direct” in your app store.
Are You Visiting the Branch to Deposit Checks?
Why You Should Be Using Your Phone Instead uch like anything else, depositing checks has evolved over the years. Selfservice ATMs eliminated the need to visit a branch in person, which also meant no more rushing to the bank before they closed. But driving to the ATM can still be a hassle, especially for busy business owners. Then came along mobile check deposit. While depositing a check with your phone isn’t new technology, 42% of mobile users had only just used the feature for the first time in 2020.1 While that’s a big jump in first-time use, it’s not really all that surprising considering the pandemicinduced restrictions we’ve been experiencing over the last year. It’s just a fact that more people are gravitating towards the convenience of mobile. Now 70% of people say mobile check deposit is an important or critical feature of their bank.1 This useful feature is really that simple too: enter amount, take a couple photos and hit submit. And it can be done from wherever you happen to be—at work, home or on vacation—just as long as you have a wireless signal and mobile device. This is especially convenient for businesses. Maybe a customer pays with a check in the store. There’s no special trip needed to deposit that money in your business’s bank account. Maybe an employee is out collecting checks from vendors. There’s no need to go back to the office and mail in the checks. Businesses that deposit checks with a mobile device may also see better cash flow. With 20 billion checks being written, nearly two-thirds are business related.2 The sooner your business gets its money in the bank, the better. Worried about security? It’s just as safe as depositing a check in person or at an ATM. At Heritage, we take our customers’ personal information very seriously and have a number of enhanced security measures to ensure it stays safe. When you use the Heritage Direct mobile app to deposit checks, the photos are never stored on your phone and any information sent to the bank is encrypted, meaning cybercriminals can’t see any details.
ABOUT THE AUTHOR Kristina Washington has been with the bank since 2007, starting as a part-time teller in Federal Way. Since then, she’s worked in several departments before becoming one of our business digital services experts. Outside of work, Kristina enjoys playing and watching sports, spending time outdoors and traveling.
RESOURCES
miteksystems.com/blog/2020-pandemic-catapults-mobile-check-deposit-to-the-banking-forefront smallbiztrends.com/2015/02/deposit-checks-by-smartphone-business.html
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OTHER METHODS FOR CHECK MANAGEMENT
Remote Deposit Capture (RDC) Scan and submit your deposits electronically from the convenience of your desktop. You can deposit an unlimited number of checks and multiple accounts may be tied to one machine.
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Night Drop If it’s outside of normal business hours, simply place daily cash, checks and credit card slips in one of our secure night drops located on the exterior of one of our branches.
Lockbox Services Heritage Bank partners with Retail Lockbox, Inc. who provides an all-in-one lockbox service solution. This service package includes lockbox document receipt and processing, cloud-based document management and scanning, remittance consolidation, e-commerce, invoice management and online merchant payments. HeritageBankNW.com
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PARTNERING WITH EVERGREEN BUSINESS CAPITAL TO SUPPORT SMALL BUSINESSES
EVERGREEN BUSINESS CAPITAL is the Northwest’s leading Small Business Administration (SBA)/Certified Development Company (CDC) Loan Program expert. Since 1980, they’ve partnered with lenders in Washington, Oregon, Alaska and Northern Idaho to provide loans for businesses in the Northwest. Their mission is to provide economic development solutions that support small business stability, growth and job creation. In 2015, they formed Evergreen Business Capital Community Finance (EBCCF). Sharing many elements of their mission and values as Evergreen Business Capital, EBCCF focuses on providing small business capital to underserved entrepreneurs: minorities, women, veterans and owners of start-up businesses.
Much like Heritage Bank, EBCCF believes that providing access to capital to small businesses in underserved areas creates jobs and builds stronger communities. It’s important to provide loans to areas that have typically been underserved by traditional lending institutions. Which is why the program targets low-to-moderate income communities and Historically Underutilized Business Zones (HUBZones). Heritage Bank committed $75,000 over three years to support the program’s staffing and operations. During that time, 62 small businesses have been helped, $30,497,000 in combined funding has been allocated to small businesses using the SBA 504 program and 245 jobs have been created.
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In 2018, they launched a microlending program for borrowers needing funds for inventory, working capital, fixed assets or other business needs, but who may not be able to get approved through a bank or traditional lender.
The microloans range from $1,000 to $15,000, have flexible terms and low closing costs. In addition, EBCCF provides technical assistance to help owners develop their business, marketing and funding plans.
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Banking Business a publication of Heritage Bank
A lot of people use social media sites
such as Facebook, LinkedIn, Twitter and Instagram to stay in touch with family and friends, meet new people and interact with businesses. However, identity thieves can use social media networks in hopes of learning enough information about individuals to be able to figure out passwords, access financial accounts or commit identity theft. Identity thieves create fake profiles on social networks pretending to be financial institutions and other businesses, and then lure unsuspecting visitors into providing Social Security numbers, bank account numbers and other valuable personal information. They also create fraudulent profiles and send elaborate communications to persuade “friends” to send money or divulge personal information. Here are some safety measures you can take to protect yourself on social media.
> Check your security settings
on social network sites. Make sure they block out people you
don’t want seeing your page. If you have doubts about your security settings, avoid including information such as your birthday or the year you graduated college.
> Use caution when communicating
with businesses. If you communicate with a company on social media, keep in mind your posts could become public, even though you can protect your posts to some extent through your account settings. You should never include any personal, confidential or account information in your posts.
Before posting information such as photos and comments, you should research the page’s privacy policies to find out what can be shared with other parties, including companies who want to send you marketing emails and how they will keep personal information secure.
help you connect with others or build your network. They could also be selling your information to marketing sites and others, possibly even to people who might use your information to commit fraud.
> Periodically search to see if
someone has created a fake account using your name or personal information on social networking sites. Checking common search engines for your name and key words or phrases (such as your address and job title) may turn up evidence that someone is using your information in a dishonest way.
> Be cautious about giving third-
party programs or apps (such as sites for games or quizzes) the ability to use information from your social networking pages. These third parties may use information from your page to
social networks: be careful what you share
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FINDING THE RIGHT SUCCESSOR FOR YOUR BUSINESS Putting a succession plan in place helps ensure the future stability of your business when you either step aside (so the business is well-run in your absence) or want to sell (leading to a smooth transfer of ownership and job security for your staff).
Finding Your Successor
Maybe you’ve already decided who will succeed you. A family member, key employee or another shareholder are common examples of ideal successors as they understand the business and are familiar with both your customers and suppliers. In the event you don’t have someone lined up, start by drawing up a list of all the possible candidates, whether they’re likely to take over or not. Then, look at each person on the list and consider to what extent they have shown: • Business common sense • A passion for the business • Business management skills, including financial and human resources management • Leadership skills • Strong relationships with other employees, customers and suppliers
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If one or more people are internal candidates, give them a particular task that involves skills such as introducing a new product line or marketing to a new customer segment. After evaluating each person’s qualities, you’ll
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have a clearer idea of who your preferred successor could be or a shortlist of two or three people.
Using External Sources
If you’re struggling to find a person inside your business, look at using your external networks to find a suitable person. This can include your accountant, bank manager, industry contacts, other small business owners, chambers of commerce, etc.
Train Your Successor
Once you’ve identified your successor and they’ve agreed to step in as owner, it’s important to train them thoroughly to gain the necessary skills, expertise and experience to take over the leadership of the business. Start by asking your successor to work in each area of your business for a certain period of time so that they know exactly what’s involved with the financial management, sales and marketing, customer service and other operations. Have the potential successor shadow you for a time, matching your tasks and time each day. Much of your expertise will be learned from experience and may not be written down. Now is the time to document all your activities to be able to leave a manual of your leadership style and decisions.
Decide on Your Future Position
Think about your role in the business, if any, that you’ll have after you’ve left to provide ongoing support for your successor, such as: • The time you can commit each week • If it’s an advisory role only or part-time working • The period of time you’ll be available • The effect your presence is likely to have on your successor and staff It’s important to address these points in advance and include them in your succession plan.
Determine When You’ll Step Aside
It’s a wise idea to fix a date when you’ll transfer the dayto-day running of the business to your successor. Setting a date gives you time to prepare for your departure, your successor time to prepare to take over and your other staff time to anticipate a change in leadership. As the date approaches, it’s appropriate to gradually become less involved in the business’s management as your successor gradually takes over the leadership role.
Plan an Exit Strategy
It’s important to plan your exit strategy from the business, taking into account all of the tax, investment and legal implications of transferring ownership. For example, the transfer of ownership may be subject to tax if your successor buys the business for less than its fair market value. Seek the advice of your accountant, lawyer and other advisers, such as business valuation experts and investment professionals, for any tax or legal implications. Decide how you’ll transfer ownership of your business: • If you are a sole proprietor, it should be relatively easy to transfer the business to another person (in effect selling the assets and possibly charging an amount for goodwill) • If you’re in a partnership, then it’s more difficult, as you are in effect terminating the existing partnership and expecting the buyer of your portion of the partnership to continue • A corporation should also be easier by selling your shares in the company to the new owner Effective succession planning gives you the reassurance that your business will be in good hands after you’ve retired. However, it’s rarely an easy task. Begin your succession plan as early as possible and seek as much advice as you need in order to make the transition as smooth as possible.
“It’s important to plan your exit strategy from the business, taking into account all of the tax, investment and legal implications of transferring ownership.”
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PNWONDERLAND
Scenic Fall Road Trips in the Northwest
So hop in your car, jam to some music and cruise to some of the PNW’s best travel spots.
Drive the Cascade Loop (Washington)
The Cascade Loop is one of Washington’s most iconic drives. Divided into nine regions, you’ll experience ocean views, tall mountains, flat farmlands and lush evergreen forests. Check out each region and the unique attributes and activities they have to offer, then plan your trip around that. Stop in Wenatchee to sample local wines or shop the local farmers market. Join other fishermen in Methow Valley. Hike mountains and waterfalls in the North Cascades. There’s no shortage of things to do or epic sights to see.
See the Big Rocks at Cannon Beach (Oregon)
If you’re ready to be a little closer to the water, drive down to the Oregon coast. There’s shopping, food, art galleries and plenty of beaches to walk on. If you’re up for a hike, go to Ecola State Park and hike Ecola Point to Indian Beach. Other highly recommend spots along the way are Cannon Beach, where you can spend time exploring Haystack Rock, and the Oregon Dunes, which offers fascinating seafront sandscapes as well as a world-class golf course.
Explore the Wallowas (Oregon)
Look down from the alpine summit and see the high desert of Indian country. Turn around and see past Hells Canyon into the next state. To get there, you can hike, take a horse or ride the gondola that rises 3,700 feet from Wollowa Lake Village to the peak of Mt. Howard. One of the coolest parts of the Wallowas is the land carved by the Oregon Trail that’s hardly changed since pioneers crossed by wagons.
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he upper left corner of the United States is home to some spectacular sights and activities. From whale watching in the Puget Sound to picking apples in the Yakima Valley to swimming in an actual crater. And while each season offers its own set of activities, one of the best times to travel is in the fall. The bright yellow, red and orange colors of the trees, cooling temperatures and clear skies means less crowds and impressive views.
Wonder at the Palouse (Washington)
Located in southeastern Washington, the Palouse is characterized by gentle rolling hills covered in wheat fields. Still somewhat of a mystery that the hills exist, they were formed over tens of thousands of years ago from windblown dust and silt. To really take the landscape in, stop at the 3,612-foot-high Steptoe Butte. And if you really want a picture worth a thousand words, visit during early morning or early evening when the sun is low near the horizon.
Hike the Pacific Crest Trail (Washington)
When you’re ready to get out of your car and stretch your legs, make sure to check out the Pacific Crest Trail. Spanning 2,650 miles from Mexico to Canada, there are several places you can stop at, and early-to-mid fall is one of the best times to visit. On this 10-mile round trip, Cutthroat Pass, offers views of gold larches and fiery blueberry bushes. Need something a little easier? Hike from Snoqualmie Pass to the Kendal Katwalk trail, which is only six moderately easy miles. Wherever your road trip takes you, make sure to plan ahead. Check for closures and ensure you have the required permits and cash for tolls or fees. RESOURCES cascadeloop.com sevenwondersofwashingtonstate.com/the-palouse.html sunset.com/travel/northwest/fall-trips-northwest#pacific-northwest-trip-pct traveloregon.com/things-to-do/destinations/mountains/the-wallowas
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Washington’s Small Business Flex Fund
A simple, low interest and flexible loan for Washington’s smallest businesses and nonprofits. Many small businesses and nonprofits in Washington state experience significant barriers to accessing the financial resources they need to develop and grow, and the COVID-19 pandemic only made things more difficult. This is especially true for organizations in low-income areas and those led by women and people of color. Whether they’re childcare centers, healthcare service providers, restaurants, local farms or community-based nonprofits, these small and local organizations provide essential goods and services while creating jobs that contribute to the health of our statewide economy. And yet they face unique challenges when trying to get the money they need to sustain or grow. That’s why the Small Business Flex Fund was created, a new loan program designed to help small businesses access funds at competitive interest rates. To be eligible to apply, small businesses and nonprofits must employ 50 or fewer full-time equivalent (FTE) employees, have annual revenues of less than $3 million per year and experience a direct economic disruption as a result of COVID-19. Though it was developed to help Washington’s smallest businesses and nonprofits rebuild after the unprecedented public health and economic crisis, any COVID-19 relief funds you have received for your small business are separate and do not impact your ability to apply for and receive a loan through the Small Business Flex Fund. The fund also works with and through local Community Development Financial Institutions (CDFIs) which have been serving the types of under-resourced communities and underbanked businesses the Small Business Flex Fund aims to help for decades. You will have access to a network of nonprofit community-based lenders that will be there every step of the loan process and will assist with the application and connect you to business support services in your community.
Low Interest Rates • Borrow up to $150,000 • 3%—4.5% interest rates • No fees & interest-only payments for the first year • 60 & 72-month* loan terms Loan Use is Flexible • Payroll • Utilities & rent • Marketing & advertising • Building improvements or repairs • Other business expenses Apply Online If you think you’re eligible and are ready to apply, visit SmallBusinessFlexFund.org. Interested borrowers will preapply through the online portal by filling out a form. Through the portal, eligible borrowers will be matched with a local, communitybased lender. Then, the lender will assist with every step of the application and provide additional support services. * 72-month loan term only available until 12/31/21
In addition to funding from the Washington State Department of Commerce, catalytic initial loans are provided by Heritage Bank and WaFed Bank. In a joint statement they said, “As long-term supporters of Washington small businesses and the far-reaching influence they have in their communities, Heritage and WaFed Bank recognize the importance of supporting these vital businesses and are proud to promote unique public-private partnerships like the Small Business Flex Fund that assists in the continuing economic recovery from the impact of the pandemic.”
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Financing For Valuable Community Development Projects
Our motto has always been that when banks and neighbors work together, great communities grow stronger. As we’ve watched local businesses struggle with the pandemic for over a year now, we know it’s our responsibility to respond with new strategies to help. One of the ways we’re doing this is through the creation of our own Community Development Entity (CDE) which will encourage investments in low-income communities through a subsidized loan fund offering payment amounts that average 50% of conventional loan alternatives. The program was funded with $50 million dollars from Heritage Bank and encourages investment in small businesses and commercial real estate located in often underserved communities. As one of only a handful of CDEs in Washington and Oregon that’s able to facilitate these loans, we can offer better rates and terms with more flexibility than the market. Approximately 60% of our existing loans serve small- to medium-sized businesses, ranging from manufacturers to distributors to professional services. We understand the decision-making process that businesses go through when deciding how to grow and where to locate. When considering moving to a low-income community, many
businesses cite unproven demand and uncertainty around finding workers as key considerations. Businesses that qualify for a loan through the program must offer accessible jobs to ensure the local community members are benefiting from the project. We hold the uncompromising belief that the answer to community prosperity is driven by diverse groups of people, including those in low-income communities. Importantly, issues of equity continue to affect many Americans, especially minority- and women-owned businesses. We actively work alongside our communities to build networks of local leaders to provide community services, such as providing children and young adults with financial education or serving on nonprofit boards; by revitalizing or stabilizing low- to moderate-income geographies; by providing affordable housing opportunities and investments; and through our active philanthropic granting and sponsorships to local nonprofits. As such, we seek to provide services, investments and loans that fulfil our communities’ credit needs. Benefits include: — Below-market fixed rates* — Lower origination fees — Lower debt coverage ratios — Longer maturities — 7 years of interest-only payments
HBCDE, LLC, a subsidiary of Heritage Bank, has been certified by the Community Development Financial Institutions Fund of the United States Department of Treasury as a Community Development Entity to provide loans, investments and services to low-income communities.
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If you’re interested or have any questions about your eligibility, please contact your relationship manager. *Target interest rate of 3%, subject to change based on project risk and changes in market interest rates.
Banking Business a publication of Heritage Bank
HERITAGE BANK CDE ADVISORY BOARD We’ve assembled a special Advisory Board to help the Heritage Bank CDE develop and implement strategies that benefit the low-income community members we’re looking to serve. We appreciate each member’s expertise and willingness to serve. Dave Foreman, CFO Opportunity Council | Bellingham, WA
David Foreman is the CFO of Opportunity Council and also serves as the managing director of OC Housing Partners, a related social enterprise. Prior to joining Opportunity Council in 2015, he spent over 25 years as a learner and leader in domestic and international faith-based nonprofits and private social service organizations. David is a Certified Public Accountant licensed in Oregon, is a former National Head Start Fellow and is a former trainer and technical assistance provider with the National Center on Program Management and Fiscal Operations for the Office of Head Start. Dave is active in the community and his service includes participation on the board of Impact Capital. Lowel J. Krueger, CPA, MBA, Executive Director Yakima Housing Authority | Yakima, WA
Lowel Krueger was born and raised in the lower Yakima Valley area. He holds a Master of Business Administration from Washington State University and completed the Senior Executives in State and Local Government program from Harvard University’s John F. Kennedy’s School of Government. Lowel became interested in affordable housing while working for the Washington State Auditor’s Office and was the lead auditor on several public housing authority audits. He was the chief financial officer for the Yakama Nation Housing Authority where he worked with the management team to obtain over $11 million in funding for affordable housing projects on the Yakama Reservation. Currently, Lowel is the executive director of the Yakima Housing Authority, serving over 1,700 families. Lowel has been innovative in his approach to affordable housing by leading the first housing authority in the United States to complete the renovation of its former public housing units through the Rental Assistance Demonstration program. Lowel is active in the community and his service includes acting as the vice chair of Washington State Housing Finance Commission, as an Executive Committee member and board member of Impact Capital (2011) and as a member of the NAHRO Community Revitalization and Development Committee. Marcus Mundy, Executive Director Coalition of Communities of Color | Portland, OR
Marcus Mundy has served as the Coalition of Communities of Color’s executive director since 2018. Prior to joining the Coalition, Marcus was principal at Mundy Consulting LLC, an Oregon state certified minority small business. His practice assisted clients in various disciplines, including achieving equity, diversity and inclusion in personnel, contracting, supplier diversity, development and administrative areas; and achieving compliance with respect to applicable laws, regulations and accreditation standards for healthcare businesses and others. Prior to his role at Mundy Consulting, Marcus served as the president and CEO of the Urban League of Portland, was the vice president and regional compliance officer for Kaiser Permanente Northwest and has held a host of other leadership positions. Marcus earned a Bachelor of Business Administration from Howard University and attended Howard University’s Graduate School of Business. He received his Master of Business Administration degree from the University of Oregon’s Executive MBA program. Marcus is active in the community and his service includes participation on the boards of OHSU Foundation Board, State Labor Commissioner’s Oregon Council on Civil Rights, Oregon Community Foundation’s Regional Advisory Initiative, Coalition for a Livable Future, EcoDistricts and Upstream Public Health.
Equal Housing Lender | Member FDIC
Estela Ortega, Executive Director El Centro de la Raza | Seattle, WA
Estela Ortega is one of the founders of El Centro de la Raza and serves as its Executive Director since 2009. Her social justice work began in the late 60’s protesting the Viet Nam war, picketing for Farmworker rights, working on political campaigns and registering Chicanos to vote in the barrios of Houston, Texas. Estela has spent the last 50 years helping build El Centro into a civil rights organization, a hub for all who want to engage in civic action through community empowerment; providing human, educational, housing, economic development, cultural and advocacy programs. Ortega is also responsible for the development of Plaza Roberto Maestas a $45 million community-inspired affordable housing project next to El Centro de la Raza. Estela’s unwavering commitment to building community and advocating for those most marginalized has earned recognition from the Seattle Seahawks, the National Education Association, the Northwest Progressive Institute, and in 2020 she was named one of the Seattle Times 13 Most Influential People of the Decade. Christopher Persons, CEO Community Roots Housing | Seattle, WA
Christopher Persons grew up in central Michigan and studied at the University of Michigan before becoming a small business owner. Chris’s career in missionbased organizations began at a grass roots youth center in Flint where he took a pilot program of the Genesee County Department of Human Services and incorporated it as a standalone nonprofit. From there, Chris went on to lead the Community Reconciliation Center in Grand Rapids before moving to Chicago. Chris was the executive director of Streetwise Newspaper before taking the helm at Inspiration Cafe, a homeless and housing services agency. Chris guided the organization through two mergers, started a housing program and opened a restaurant that doubled as a job training and employment center. Chris and his family moved to Seattle in 2007 when he became CEO of Community Roots Housing. He has led the organization through significant transition and growth overseeing the development of several award-winning properties, the creation of the Community Roots Housing Foundation and the creation of the Capitol Hill EcoDistrict, which leads the community’s efforts around resilience and equity. Chris is active in the community and his service includes participation on the boards of Housing Partnership Network and Seattle Crescent Collaborative. Rogelio Riojas, President & CEO Sea Mar Community Health Centers | Seattle, WA
Rogelio Riojas, MHA, has served as president and CEO of Sea Mar Community Health Centers since 1978. Sea Mar is a health and human services nonprofit organization committed to providing quality, comprehensive health, human and housing services to diverse communities, specializing in service to Latinos. Under his leadership, the organization has grown from a small community clinic in the South Park neighborhood of Seattle, to a large multi-faceted health and human services organization serving more than 240,000 individuals annually in 10 counties throughout Washington. He has a bachelor’s degree in economics and political science and a master’s degree in health administration from the University of Washington. Rogelio is active in the community and his service includes participation on the University of Washington Board of Regents, Board of Directors of Coordinated (continued on page 17)
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BUSINESS BANKING MENTOR
The Pros and Cons of Leasing or Buying Assets
Whether you need to purchase a vehicle, machinery or larger premises to expand your business and operate more effectively, there is a question you need to answer: lease or buy? In a nutshell, the answer depends on how each purchase impacts your working capital and if you can afford the drop in cash reserves. For example, if an asset costs $300,000, you could lease it, buy it, finance it or a combination. You’re less likely to buy it if the purchase soaks up all your cash reserves (which you rely on for working capital or other growth opportunities). You may choose to lease or finance the purchase instead to preserve this capital. Of course, the reverse is also true. If you have $3 million in cash and the business is making a healthy profit, it’s probably best to buy the asset as you can afford to.
Reasons to Buy
Usually long term, it’s cheaper to buy an asset than lease it as you can claim the depreciation over time, and in some cases (such as buildings and land), the asset can appreciate. Some things to keep in mind if you buy: — The asset plays an integral role in your overall business success and you’ll use it on a regular basis. — You want control over the asset as it is critical to your business. If access is denied, your business is over. — It’s easy to update, upgrade or you can scale up if
demand increases. — There is a healthy second-hand market if you eventually want to sell it. — The supplier has great support and maintenance is either easy for you to do or they have a program in place to help with repairs and replacements. — If it’s an option, you can source the piece of equipment second-hand so it’s more affordable.
Deciding to Lease
When you lease an asset, you’re renting it for a set period of time. The leasing company retains ownership of the asset while your business has the exclusive use of it for the term of the lease. Some things to keep in mind if you lease: — The asset could become obsolete fast and you don’t want to pay for upgrades. — You don’t want to spend your cash reserve or go into debt. — The asset needs special support and you don’t want to employ a full-time person to manage or pay for this overhead. — You’re unsure how long you’ll need the asset for and prefer to lease over a shorter time until it’s proven. — You’re unsure of current market demand and may need to upgrade (or downgrade) in the near future. You don’t want to be stuck with an asset that is either too small/fast or too big/slow. — You want to maintain a cash buffer to invest in more stock, develop a new product or service or just use it as spare working capital to keep the business ticking.
Your equipment provider will likely offer financing and lease terms; before you commit, check with us. We have highly competitive financing options available when it’s time to purchase new or replace equipment. Ve c
tee
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Issue 3 | 2021 Q4
Banking Business a publication of Heritage Bank
(continued from page 15) Community Care Network and the President’s Advisory Committee of South Seattle Community College.
— A lease will typically run for anything between 12 and 60 months. Once the agreement is entered into both parties are obligated to see out the term of the lease. — Throughout the course of the lease agreement, you’ll pay the supplier regular payments for the right to use that asset. For accounting and bookkeeping purposes, most leases are classified as an expense and can be claimed directly against your profit and loss.
Borrowing To Buy
A hybrid option is to finance the asset with a bank loan. You get the benefits of both; you own the asset, have monthly payments and preserve your cash reserve.
Important Questions to Consider
Before deciding whether to buy or lease, it’s prudent to take a few important factors into account. — How long will you need the asset for? Is it for a shortterm project? — Is it cost-effective? Will the extra business you make cover the expense of leasing or purchasing? — Will the asset become outdated in the near future? For example, signing a five-year lease on a computer that will become obsolete in three years doesn’t make much sense. — What are your current financial priorities? Are there other purchases that should be made first?
Consider Upgrades and Maintenance Costs
There are usually options where the lease agreement can include upgrading the asset to a newer model once the agreement expires. Likewise, some lease agreements may also include maintenance and servicing costs. By leasing some assets, you could avoid paying any upkeep costs associated with them, saving your business money over the long term. It’s important to look closely at any lease agreement before you sign it. You may find that some agreements give you the opportunity to purchase the asset at a reduced cost when the lease expires or allows you to exchange the asset and upgrade to a newer model when the lease expires as long as you enter into a new agreement at the same time. Always be sure that you understand the terms of an agreement before you sign it. Run a cost comparison and a cash flow analysis between leasing an asset and buying. Discuss with your accountant about the potential impact that leasing or purchasing may have on your cash flow and ask what alternative options might be available.
Equal Housing Lender | Member FDIC
Fred Safstrom, CEO Housing Hope | Everett, WA
Fred Safstrom has served Housing Hope for over 25 years, first as a member of the Board of Directors. He earned a Bachelor of Business Administration with an emphasis in finance from Seattle University and completed the Nonprofit Executive Leadership Institute at the University of Washington’s Evans School of Public Policy and Governance. His experience includes 24 years with Cascade Bank, including 10 years as president and COO, and a five-year term as executive director of the Everett Public Facilities District. Fred is active in the community and his service includes participation as the board treasurer of Housing Consortium of Everett and Snohomish County and as a member of the City of Everett New Market Tax Credit Advisory Board.
Heritage Bank CDE Loan Leadership Committee
A group of internal Heritage Bank employees have volunteered to oversee and coordinate the work of the CDE. Each of the committee members has a unique set of skills and experiences, and we appreciate their leadership in bringing the CDE’s benefits to our communities. Alex Pace, VP Commercial Banking Alex joined Heritage Bank in 2015 after eight years working as a personal banker. Now he focuses on small business customers, commercial real estate and affordable housing. He currently serves as treasurer for Casa Latina, a nonprofit organization empowering Latino immigrants through educational and economic opportunities. Kathy Swift, SVP Commercial Banking Kathy has 35 years of banking experience as well as expertise managing a portfolio of both for-profit and nonprofit companies, including real estate loans, lines of credit, tax-advantaged bonds and affordable housing credits. She serves as a board member for Catholic Charities of Oregon, Jesuit Volunteer Corps Northwest, the Parish Trust Fund for the Archdiocese of Western Oregon and Portland Community Reinvestment Initiative (PCRI). She also works with Save First, a financial wellness nonprofit for families and Cascadia Behavioral Healthcare in Portland. Kaylene Lahn, SVP Corporate Secretary Kaylene has been with Heritage Bank since 1999, joining the team as a Senior Staff Accountant after spending three years at the public accounting firm of Knight, Vale and Gregory. She has taken on several roles at Heritage, including Controller in 2001 and Internal Control Officer in 2005 before being appointed Corporate Secretary in 2008. She earned her bachelor’s degree in accounting from Western Washington University and is a Certified Public Accountant. Jeane Daley, CDP, VP Training & Development Manager / DEI Officer Jeane joined Heritage as the training and development manager where she assesses company-wide training needs as well as develops suitable training programs for employees. In 2019, she received her Certified Diversity Professional credential from the National Diversity Council and now leads our Diversity, Equity and Inclusion (DEI) Council. In addition to her current position, she’s responsible for the overall management, development, implementation and delivery of DEI throughout the bank. Michael Rogers, VP CRA Officer Michael oversees Heritage Bank’s Community Reinvestment Act (CRA) performance, working on various compliance areas including training, monitoring reviews, policies and procedures and more. During his career, he’s had two regulation proposals written into law for CRA modernization. In his community, he serves on the board for Rural Development Initiatives, Central Oregon Fuse, Oregon Coalition on Housing and Homelessness and Friends of Amity. HeritageBankNW.com
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MY HERITAGE
Images courtesy of Darriel Menefee
DARRIEL MENEFEE Musician & Composer
I began my musical career in 1977 in the Tacoma/
Seattle area. I first started playing drums for various local groups and choirs, which eventually led to touring opportunities in the Western and Southeastern coasts of the U.S., Canada and Bahamas. I continued to perfect my craft and perform in workshops and concerts with some of gospel music’s finest artist, such as Willis DeVone, Pastor Patrinell Wright, Dr. Helen Stevens, Rev. Timothy Wright, Ricky Grundy, Min. Keith Pringle, Richard Smallwood, Yolanda Adams, Vanessa Bell Armstrong and Daryl Coley. At the age of 17, I began directing the youth and young adult choirs at the Altheimer Memorial Church of God in Christ—growing the group from six to 60 members. During this same time, I served for almost 13 years as music director at the Emmanuel Church of God in Christ. In 1992, I joined the Washington State Chapter of the Gospel Music Workshop of America (GMWA), where we hosted the very first West Coast Regional Conference of the GMWA at the Rialto Theater. The chapter made several city, county and state appearances throughout my tenure and leadership, like the Tacoma/Pierce County Taste of Tacoma and Annual First Night and New Year’s celebration where we sang during the countdown. I enjoyed my time at the Washington State Chapter, as it allowed me to continue pursuing my love and passion for 18
Issue 3 | 2021 Q4
music. But after serving as music director for three years, assistant chapter representative for two years and chapter representative for two years, I resigned my membership. However, this didn’t mean my time in the industry was over. I continued to conduct workshops, concerts and worship seminars throughout Washington, Oregon, California, Alaska and Vancouver BC. I was even featured as a special guest worship leader for the “Praise Under the Son” concert in Vancouver BC, held at Broadway Church. My musical experiences eventually led me abroad to Tokyo, Japan, where I conducted Gospel Music Workshops on the Camp Zama Military Base. I also traveled to New Delhi, India, and performed at the World Sacred Music Festival with jazz singer LaVonn Hardison. Eventually settling down in the PNW, I served as the music director at the New Life Baptist Church in Lacey, Washington for over 20 years. I led the mass choir, youth choir, worship team, band and media team ministries.
ABOUT THE AUTHOR Darriel Menefee started at Heritage Bank in 2008 and has 30 years of experience in banking. He’s worked a wide variety of positions within the bank—from teller to personal banker to branch manager to his current position as a commercial lender. He is currently a board member for both Tacoma Arts Live and Making a Difference Foundation. In his free time he likes to listen to music and golf. He’s been married to his high school sweetheart for 37 years and they have three children and six grandchildren.
Banking Business a publication of Heritage Bank
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Year-End Financial Planning Checklist To help get where you want to be, it’s critical to know where you are right now. Use this quick checklist to assess different parts of your financial life and note any major changes, opportunities, or questions you have. To discuss any part of this checklist in more detail, contact a Heritage Bank Wealth Advisor to schedule an appointment today. LIFE CHANGES What’s new with you? Big events, like the ones listed below, can be the catalyst for changes to your financial strategy. • Recently moved • Changed jobs • Lost a job
• Got married
• Ended a marriage
• Added to your family (birth or adoption)
• Had a severe illness or need for additional healthcare (you or a family member) • Lost a loved one
• Received a gift or inheritance TAXES Last year’s Coronavirus Aid, Relief, and Economic Security (CARES) Act included tax relief and corrections to 2017’s Tax Cuts and Jobs Act. Your filing may be impacted, so be sure to consult your tax professional. • Forecasted 2021 net investment income
• Stayed up to date on new tax acts and changes
• Kept track of important statements (mortgage payments, investment performance reports, etc.) • Received a coronavirus loan
• Reviewed potential deductions and credits for 2021 • Tracked donations to charity and other financial gifts
• If applicable, maintained records of received unemployment benefits • Made any qualified charitable distributions
INVESTMENTS Your investment strategy is designed to grow with you. While we take a long-term approach for your future, periodic adjustments may be needed. • Checked status of all retirement accounts
• Rolled over workplace retirement plan assets • Claimed Social Security benefits
• Confirmed current investment strategy and goals • Reviewed income and savings needs
• Reviewed portfolio positions and asset allocation to determine the need to rebalance RETIREMENT It’s always the right time to save for your retirement. Make sure you’re informed about the status of your accounts and any upcoming milestones. • Age 50: Making catch-up contributions to IRAs and qualified retirement plans
• Age 55: Taking distributions from 401(k) plans without penalty, if retired
• Age 59½: Taking distributions from IRAs without penalty, if retired • Ages 62 to 70: Applying for Social Security benefits • Age 65: Applying for Medicare
• Age 72: Starting to take required minimum distributions (RMDs) from your IRA account(s) • Reviewed outstanding loans and mortgages • Reviewed dividend distributions
• Reviewed employee stock options INSURANCE Protecting you and your loved ones is paramount. Ensure you’re ready for the unexpected. • Reviewed costs of current insurance policies • Reviewed property and casualty policies
• Considered if any recent life events require changes to coverage • Reviewed health insurance coverage
• Participated in employer open enrollment or purchased coverage via a state exchange • Reviewed Medicare enrollment options
• Reviewed 2020 Health Savings Account contributions
• Spent any remaining Flexible Spending Account balances ESTATE AND LEGACY PLANNING What will you pass on? Consider reviewing your planned wishes for your assets.
• Maxed out 401(k) contributions, including catchups
• Created or made changes to your will
• Took required minimum distributions
• Made any cash or large gifts to family members
• Maxed out IRA contributions, including catchups
• Planned any charitable contributions
• Opened a retirement plan if newly self-employed
• Contributed to educational accounts
This communication is designed to provide accurate and authoritative information on the subjects covered. It is not however, intended to provide specific legal, tax, or other professional advice. For specific professional assistance, the services of an appropriate professional should be sought. Distributions from traditional IRAs and employer sponsored retirement plans are taxed as ordinary income and, if taken prior to reaching age 59½, may be subject to an additional 10% IRS tax penalty. • Rebalancing may be a taxable event. • Securities and insurance products are offered through Cetera Investment Services LLC (doing insurance business in CA as CFG STC Insurance Agency LLC), member FINRA/SIPC. Advisory services are offered through Cetera Investment Advisers LLC. Neither firm is affiliated with the financial institution where investment services are offered. Investments are: *Not FDIC/NCUSIF insured *May lose value *Not financial institution guaranteed *Not a deposit *Not insured by any federal government agency. 1000 SW Broadway, Suite 2170, Portland, OR 97205, (888) 360-0052. Equal Housing Lender | Member FDIC
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Protect Yourself from Ransomware Attacks Individuals and businesses have become targets to a growing online fraud scheme known as ransomware. Ransomware is a form of malware used by cyber criminals to freeze your computer or mobile device, steal your data and demand that a “ransom”—typically anywhere from a couple of hundreds to thousands of dollars—be paid. Individual computers or laptops, enterprise networks and or servers used by government agencies, financial institutions and healthcare providers are all at risk to malware exposure. Banks and law enforcement officials are bolstering their efforts to neutralize some of the more significant ransomware scams by educating consumers and business individuals on the safe practices they can use to prevent these scams.
Tips for consumers:
— Don’t click. Visiting unsafe, suspicious or fake websites can lead to the intrusion of malware. Be cautious when opening e-mails or attachments you don’t recognize even if the message comes from someone in your contact list. — Always back up your files. By maintaining offline copies of your personal information, ransomware scams will have a limited impact on you. If targeted, you will be less inclined to take heed to threats posed by cyber criminals. — Keep your computers and mobile devices up to date. Having the latest security software, web browser and operating system are the best defenses against viruses, malware, and other online threats. Turn on automatic updates so you receive the newest fixes as they become available. — Enable popup blockers. To prevent popups, turn on popup blockers to avert unwanted ads, popups or browser malware from constantly appearing on your computer screen.
Tips for businesses:
— Educate your employees. Employees can serve as a first line of defense to combat online threats and can actively help stop malware from infiltrating the organization’s system. A strong security program paired with employee education about the warning signs, safe practices, and responses aid tremendously in preventing these threats. — Manage the use of privileged accounts. Restrict users’ ability to install and run software Ransomware attacks— applications on network devices, especially those that target in an effort to limit your networks smalltobusinesses— exposure malware. are
KNOW
evolving in complexity
— Employ a data backup and and are on the rise. recovery plan for all critical information. Backups are essential All devices vulnerable, for lessening theare impact of but more and more mobile potential malware threats. Store attacks are being reported. the data in a separate device or offline in order to access it in the + in $1 Billion A projected event of a ransomware attack. losses from ransomware — Make sure all business devices attacks in 2016 alone, are up to date. Ensure antivirus according to the FBI. and anti-malware solutions are set to automatically update and Ransom fees vary, from conduct regular scans so that your $200 – $10,000. operating systems run efficiently.
Contact your local FBI field office immediately to report a ransomware event and request assistance. Visit fbi.gov/contact-us/field to locate the office nearest you. For more cybersecurity tips, visit HeritageBankNW.com and click the Resource Center button at the top right.
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Issue 3 | 2021 Q4
© 2016 American Bankers Association
Ra m le
KNOW Ransomware attacks— especially those that target small businesses—are
evolving in complexity and are on the rise.
All devices are vulnerable, but more and more mobile attacks are being reported.
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• A projected $1 Billion + in losses from ransomware attacksisin a2016 Ransomware typealone, of malicious softwa• according to the FBI.
mobile device until a sum of money is paid leading to stolen data large financial lo Ransom feesand vary, from $200 – $10,000.
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IDENTIFY Three ways ransomware can take shape: Spear phishing emails ©• 2016 Bankers Association TheAmerican sender appears to be someone
you may know or someone relevant to your business. • The message is often personalized, and may include your name or a reference to a recent transaction. Advertisements or pop-up windows • Your computer freezes, and a popup message appears. • The message may threaten a loss of your files or information, or may also tell you that your files have been encrypted. Downloadable Software • Ransomware is also present in downloadable games and file-sharing applications. © 2016 American Bankers Association. Reprinted from www.aba.com with Permission. All Rights Reserved.
Banking Business a publication of Heritage Bank
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FINANCIAL DICTIONARY PHISHING SCAMS: DON’T TAKE THE BAIT Identity thieves like to go “phishing”—pronounced “fishing”—on the internet for consumers’ personal financial information using fake emails and websites to trick people into providing Social Security numbers, bank account numbers and other valuable details. Typically, the most common phishing emails pretend to be from a bank, a retail store or government agency to lure you into divulging personal financial information, and often use a variety of tricks to make the email look legitimate. They might include a graphic copied from a bank’s website or a link which looks like it goes to a bank’s site, but actually leads to a fake site. Here are some tips to avoid becoming a victim of a phishing scam.
>
Be suspicious if someone contacts you unexpectedly online and asks for your personal information.
It doesn’t matter how legitimate the email or website may look. Only open emails which look like they are from people or organizations you know, and even then, be cautious if they look questionable. For example, scam artists may hack into someone’s email account and send out fake emails to friends and relatives, perhaps claiming the real account owner is stranded abroad and might need your credit card information to return home.
>
> >
Be especially wary of emails or websites which have typos or other obvious mistakes. Remember, no financial institution will ever email you and ask you to put sensitive information such as account numbers or PINs in your response.
In fact, most institutions publicize they will never ask for customer personal information over the phone or in an email because they already have it. Assume a request for information from a bank where you’ve never opened an account is probably a scam.
Don’t follow the link and do not enter any personal information.
Verify the validity of a suspicious-looking email or a pop-up box before providing personal information.
Criminals can create emails stating that “you’re a fraud victim” or a pop-up box with another urgent-sounding message to trick people into providing information or installing malware (malicious software). If you want to check something out, independently contact the supposed source (perhaps a bank or organization) by using an email address or telephone number you know is valid.
Loan Amortization
Loan amortization means paying off a loan over time in equal installments. Part of each payment goes towards the principal amount and part of it goes towards interest. Although your total payment remains equal each month, the principal and interest amounts will change over time. At the beginning of the loan, a higher percentage of the payment will go towards interest. But throughout the life of your loan, more and more of each payment will go towards the principal. Lenders use amortization schedules to present a loan repayment schedule based on a specific maturity date, and it will typically show your beginning balance, monthly payments, interest, principal and ending balance. Loan amortization and amortization schedules are helpful if you want to better understand how your payments are applied over the life of the loan. It also gives businesses the advantage of having a clear set payment amount each month, resulting in a more manageable loan repayment schedule. ABOUT THE AUTHOR John Chambers worked his way from teller to personal banker to commercial banking officer, working closely with manufacturers and contractors. He also spends time supporting his community by serving as a board member at ChildStrive and volunteering at Domestic Violence Services of Snohomish County, Boys and Girls Club of Snohomish County, The TEARS Foundation, Mary’s Place, Northwest Harvest and Hopelink.
Information provided by the FDIC
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HOME EQUITY LINE OF CREDIT
Let your dreams become a reality
Put your most valuable asset to work for you with a home equity line of credit. - Make home improvements - Consolidate higher-interest debt - Finance major purchases It’s a convenient and flexible way to tap into the equity of your home. Plus, make home equity line transfers in seconds with online banking. Call or visit your local branch to apply today.
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