Banking Business Q4 2023 by HeritageBankNW

Banking news and stories to help you maximize the financial success of your business Q4 2023

EL CENTRO DE LA RAZA

A Half-Century Legacy Helping All Races

IN THIS ISSUE Automating Lead Generation Meet our Vancouver Team Identifying Your Key Business Drivers

a publication of

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El Centro de la Raza / Jovelle Tamayo

Contents

“Everyone has something that they can do in terms of moving humanity forward in a positive way.” – Estela Ortega, El Centro de la Raza

Customer Profile: El Centro de la Raza ......................................................2 Keeping Track of Your Finances...................................................................9 Industry Profile: Professional Services..................................................... 13 Commercial Banking Center Profile: Vancouver.................................... 14 The Elan One Card: An Integrated Payment Solution........................... 17 Nonprofit Corner: Building Communities One Loan at a Time............ 18 Automating Lead Generation................................................................... 20

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

IN EVERY ISSUE

Contributors Dennis D’Ambrosio Lauren Kramer Heath McLellan Jamie Louie-Smith John Stearns

Wealth Strategies....................................................................... 7 Timely insights and tips from our Wealth Strategies team.

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.

Business Banking Mentor....................................................... 10 Identify your key business drivers.

PNWonderland........................................................................ 12

Cover photo Olli Tumelius

CORPORATE CITIZENSHIP 2022

3615 Pacific Avenue Tacoma, WA 98418 800.455.6126 HeritageBankNW.com

Explore the unique sights and experiences of our Pacific Northwest.

My Heritage.............................................................................. 22 Meet our relationship managers and learn about their heritage.

Cybersecurity and Fraud Prevention..................................... 24 Take these steps to protect your business and finances.

Financial Dictionary................................................................. 25 Empowering you to make smart business decisions by demystifying banking terminology.

© 2023 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

I’m thrilled

Heritage Bank

to present the final issue of 2023 that’s filled with insights, stories and updates that reflect our unwavering commitment to you and the communities we serve. In a rapidly evolving financial landscape, Heritage continues to be a beacon of stability, trust and innovation. Over the years, we have relentlessly pursued excellence, adapting to the changing needs of our customers while maintaining the core values that define us. This magazine serves as a testament to our ongoing journey, highlighting our achievements and sharing the stories of the people who make it all possible.

In this issue, you’ll find a range of engaging articles that are centered on how to manage your business more effectively. From easy ways to help you keep track of your finances (page 9) to identifying your key business drivers (page 10). Plus, we cover some of the latest challenges and trends professional service businesses face (page 13) and which red flags to look out for when you get an unexpected text message from your bank (page 24). In the new year, we look forward to bringing you more in-depth interviews with our dedicated staff who work tirelessly to ensure your financial well-being as well as insights from industry experts on the latest trends shaping the financial world. We aim to provide you with the knowledge and inspiration you need to make informed decisions for your financial future. In closing, I want to express my gratitude for your trust and continued partnership. The year ahead holds immense promise, and we look forward to achieving new milestones together. Should you have any questions or concerns, please do not hesitate to reach out to us. Our dedicated team is here to serve you. Thank you for reading Banking Business and for choosing us as your banking partner.

Jeff Deuel CEO

Heritage’s “Best” Awards

Thanks to our employees, customers and communities, we were recognized as one of the best in the following categories: Washington’s Best Workplaces (X-Large Company) Puget Sound Business Journal Best Places to Work in Oregon & SW Washington (Large Company) Portland Business Journal Best Bank – Best of the South Sound South Sound Magazine

Jeff Deuel is chief executive officer at Heritage Bank. He has more than 40 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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Seattle’s

El Centro de la Raza

legacy helping all y r u t n e c race lfa h s A BY JOHN STEARNS

Heritage Bank pulled off a miracle approving Paycheck Protection Program (PPP) funding for El Centro de la Raza during the pandemic, according to the Seattle nonprofit’s executive director, Estela Ortega. El Centro de la Raza (The Center for People of All Races) had deposited some fundraising proceeds at Heritage a couple years before the pandemic, but it had no lending relationship with the bank. Desperate to access PPP funding early in the pandemic after an unsuccessful online registration attempt with another bank, Ortega called a Heritage banker about 9:00 a.m. one April 2020 morning. El Centro was approved for a PPP loan the next morning. She didn’t forget the bank’s quick, staff-securing assistance to the organization, which offers 43 programs for children, youth, families and seniors in nine categories: advocacy and culture, benefits and resource navigation, child and family services, financial empowerment, food and health, housing, small business services, workforce development and youth services. When El Centro de la Raza was weighing equal loan proposals from Heritage and another lender for the nonprofit’s next affordable housing project, an 87-unit multifamily development in south Seattle’s Columbia City neighborhood, the PPP experience tipped the balance. “I had a choice between Heritage Bank and another bank, and what Heritage Bank did for us under the PPP loan, I said, ‘We’ve got to go with Heritage Bank,’” Ortega said. In April 2023, Heritage CEO, Jeff Deuel, referenced that loan in the bank’s first quarter earnings release, saying Heritage was providing construction financing totaling $35.1 million and $9.4 million of permanent financing for the project. In addition to affordable housing, the project also will build an office for a local nonprofit, a church to redevelop the longstanding Columbia City Church of Hope and a new child care center for El Centro de la Raza, Deuel said.

Issue 11 | 2023 Q4

Banking Business a publication of Heritage Bank

Olli Tumellius

Equal Housing Lender | Member FDIC

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Rendering by SMR Architects

Rendering of the Columbia City affordable housing project in Seattle

1968, occupation of Alcatraz Island in 1969, occupation of Fort Lawton in Seattle by Native Americans seeking restoration of treaty rights, farmworker strikes in California and the Yakima Valley and more, the site notes. Before the school occupation, a federal war on poverty had been defunded, resulting in the end of a Chicano: English and Adult Basic Education Program at the Duwamish branch of South Seattle Community College, affecting about 70 Latino students and 10 staff, including its staff leader, Maestas. “The English as a Second Language Program had become more than just a place for people to come and learn English,” Ortega said in an interview.

“Heritage is proud to be a partner in bringing more affordable housing to families of Columbia City and pairing it with affordable child care,” he said. “There clearly is a commitment to communities of color, from developing child development centers to housing and other areas,” Ortega answered when asked about insights she might offer others on the benefits of working with Heritage. The Columbia City housing development is the second such project El Centro de la Raza has done. It follows the successful 112-unit Plaza Roberto Maestas next to the nonprofit’s headquarters in south Seattle’s Beacon Hill neighborhood. That project is named after the group’s founder and Ortega’s late husband, Roberto Maestas. Birth of an organization Maestas and several colleagues sowed the seeds of El Centro de la Raza when, on October 11, 1972, they were allowed inside Beacon Hill School, an abandoned and decaying elementary school, after expressing interest in renting or buying it. As they entered the building, scores of supporters emerged from cars and surrounding locations to join the trio in peacefully occupying the building, which had no heat or water, for three months. “At that moment, Beacon Hill School ceased to exist, and El Centro de la Raza was born,” reads a detailed history on the organization’s website, which includes an informative video documentary. The era was one of unrest with the Vietnam War and related protests, assassination of Martin Luther King Jr. in

Issue 11 | 2023 Q4

Participants had needs with social issues like employment, child care, questions about how to register children for school, how to find a job and more. It became a type of emergency center for people’s needs, she said. “So, when it got defunded, there was a discussion, ‘What are we going to do?’” Ortega said. “‘Do we stick together or does everybody just go their own separate ways?’ And people wanted to stick together.” At the time, old schools like Beacon Hill and others in Seattle were being abandoned for more modern facilities. Then-Governor Daniel J. Evans had said communities should utilize the facilities, Ortega recalled. “Roberto knew about that, proposed, ‘Hey, here’s this school; it’s abandoned. The governor says we should make use of it, so let’s do it,’” she said, remembering similar occupations occurring nationally and regionally. “So, there was some sort of, you might say, idea that, ‘Hey, other communities are doing this, this building is abandoned. We can’t afford to buy it, so why don’t we just occupy it for the public good.’ And that’s what happened.” The group, after three months of occupying the school, was allowed to rent it for $1 per year and worked feverishly to improve it. El Centro eventually bought the building in 1999 for about $1.2 million. Today, it’s the headquarters for an organization with a budget of about $20 million, a staff of about 190 and assisted by about 800 volunteers. In 2022, some of El Centro de la Raza’s impacts included serving 20,956 individuals and 5,239 families. Help included 541 COVID vaccines given at 13 clinics, 9,353 meals served to seniors, 90,328 diapers distributed to families, 279,933 pounds of food distributed, 96,672 food bank visits and 521 entrepreneurs/aspiring entrepreneurs

Banking Business a publication of Heritage Bank

El Centro’s headquarters was formerly an abandoned school

El Centro de la Raza / Jovelle Tamayo

helped, with 16 businesses created and average participant business revenue growth of 7% in 2022. Latinos weren’t alone in fighting for social justice in 1972. Maestas was connected with local African American, Native American and Asian leaders who formed relationships, friendships and trust working together on different issues, Ortega said. Maestas worked closely with Larry Gossett of the Black community, Asian activist Bob Santos and Indigenous leader Bernie Whitebear, collectively known as the “Gang of Four,” and building a coalition and broad support base, according to the nonprofit’s history video. They also became known as The Four Amigos, inspiring the name for the Columbia City housing project: The Four Amigos-Beloved Community. “Although the founding of El Centro de la Raza was sparked by Latinos and acquired a Spanish name, it began, and remains, ‘The Center for the People of All Races,’” the organization’s website says, calling it a home for people interested in continuing the struggle for a better world. It adds, “Since the beginning, El Centro de la Raza has provided a gathering place for Seattle’s otherwise dispersed…and in 1972, largely invisible Latino community and welcomes all individuals with open arms.” Of the people El Centro served in 2022, 49%, were Latino/ Latina, 47% were not and 4% did not identify an ethnicity. Ortega noted that Chicano Mexicanos, as they were known in 1972, comprised only about 25,000 people in King County, were geographically dispersed and not seen as a strong political force. She estimates the number today at about 275,000, perhaps approaching 300,000 when considering undercounts. “Our sort of political muscle, if we can use that term, came from communities of color, the faith community, the antiwar movement,” she remembered. That broad support fueled the building’s transfer to the group, she said. According to its website, El Centro’s mission is: “To build the Beloved Community through unifying all racial and economic sectors; to organize, empower, and defend the basic human rights of our most vulnerable and marginalized populations; and to bring critical consciousness, justice, dignity, and equity to all the peoples of the world.” Its vision is: “A world free of oppression based on poverty, racism, sexism, sexual orientation, and discrimination of any kind that limits equal access to the resources that ensure a healthy and productive life in peace, love and harmony for all peoples and our future generations.”

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Tireless leader and advocate Ortega has been with El Centro almost since day one. She joined the occupation about three weeks after it began, met Maestas, they had a “whirlwind romance,” married in December 1972 and were together until his death in 2010. She became executive director in 2009. She was introduced as “la mas chingona,” or “the ultimate badass,” by emcee Enrique Cerna during an October 2022 celebration of El Centro de la Raza’s 50th anniversary, according to a Seattle Times story. Ortega laughed at the description when reminded of the article. “I’m really a very nice person,” she said. And a hard worker. At 73, she shows no signs of slowing down. “Work gives life,” she said. “That’s my motto. I have a lot of energy.” Nonetheless, she’s ensuring people in the organization are trained to maintain its mission when she eventually steps down. When Maestas was asked what would happen when he was gone, he’d say, “Nothing,” because structures were in place not to rely on one person, Ortega recalled. “When Roberto passed away, obviously I was distraught, but I went to work the very next day and continued,” she said. Big, key projects Getting the $45 million Plaza Roberto Maestas affordable housing project completed in 2016 was a major accomplishment and has proved successful. A number of groups came to El Centro for advice on how it got the

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El Centro de la Raza

project done as they sought to do their own projects, Ortega said, happy to share advice. “I always tell people that you can’t make any mistakes in the world of affordable housing; because, if you make a mistake and it costs somebody money, you’ll never be able to do a project again,” she said. The Columbia City project, about $60 million, is underway and targeted for completion in fall 2024. El Centro is partnering with a developer on another housing project, of 84 units, across the street from its Beacon Hill headquarters that also will have about 3,800 square feet of commercial space that could house an after-school program or expanded services for the elderly, depending on community desires. In Federal Way, 22 miles south of its Beacon Hill headquarters, El Centro opened another office in 2019 to expand its presence in the highly diverse south King County. It plans about 228 units of additional affordable housing and a child development center on two and half acres it purchased next to the office last fall that includes the roller rink Pattison’s. El Centro continues to operate the rink and plans to improve it, which also serves as a revenue source. Also at that site, El Centro plans a 6,000-square-foot mercado, or market, for the local community to sell food or wares. It will complement the organization’s business-education efforts. El Centro de la Raza has also proposed a 400-unit project, in partnership with Mercy Housing, adjacent to the Mount Baker light rail station in south Seattle. The team is one of several the city of Seattle is considering for three development sites in the area. The city is expected to pick development teams in early 2024. Additionally, it has three new child development centers opening in the next two years. El Centro is already preparing for those centers, knowing there’s a shortage of trained early childhood development teachers. It plans to recruit in high schools and elsewhere, encouraging people to consider early childhood development as a career. El Centro will pay for initial training and get students on track to obtain associate and bachelor’s degrees in early childhood development. “That’s what we’re having to do so that we can get trained professionals because ours is not a day care; it’s not a babysitting thing,” she said. “It is an early childhood development program; it prepares kids for kindergarten.” Workforce housing and early childhood development are El Centro’s largest programs.

Issue 11 | 2023 Q4

El Centro’s early childhood development centers are one of the organization’s largest projects

Its many other programs include helping people obtain GEDs and prepare them to enter apprenticeship programs; classes in computer and banking training; veteran services; emergency housing; working with people to ensure employers are paying their wages; myriad youth programs, after-school programs and summer programs; offering navigators to help people with unemployment, filling out job applications, finding a doctor and determining food stamp eligibility; and more. “The list goes on and on,” Ortega said. “I think what’s important is that we emphasize the importance of multiracial unity,” she said. “When Roberto passed away, I was asked, ‘What was his greatest contribution?’ I said his commitment to multiracial unity and organizing community and that everyone has a role to play. Everyone has something that they can do in terms of moving humanity forward in a positive way.” She urges people to get to know El Centro, perhaps through its Café con El Centro de la Raza Tour (Coffee with El Centro) the first Thursday of the month from 8:30 a.m. to 9:30 a.m. It’s a chance to take a look around and ask questions. “It doesn’t have to be that you’re coming to volunteer,” Ortega said. “You can come because you’re just curious and you want to learn more about this organization.

ABOUT EL CENTRO DE LA RAZA’S RELATIONSHIP MANAGER, ALEX PACE Alex joined Heritage Bank in 2015 and he now focuses on affordable housing finance for Washington State. He currently serves as treasurer for Casa Latina, a nonprofit organization empowering Latino immigrants through educational and economic opportunities. Alex also serves on the board of Housing Development Consortium, which serves member organizations interested in affordable housing. Alex is an avid supporter of housing as a human right and providing affordable homes for everyone in our community.

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Choosing a Retirement Plan that Fits Your Business If you have yet to develop a retirement plan for your business, or if you’re not sure the plan you’ve chosen is the right one, here are some things to consider.

• The SIMPLE IRA must cover employees who have earned at least $5,000 in any prior two years and are reasonably expected to earn $5,000 in the current year.5

How much can my business afford to contribute?

• The 401(k) and defined benefit plan must cover all employees who are at least 21 years of age. These retirement plans are open for employees who have either worked 1,000 hours in the space of one full year or to those who have worked at least 500 hours per year for three consecutive years.

The cost of contributions may be managed by the plan type. • A simplified employee pension plan (SEP) is funded by employer contributions only and contributions are made to separate IRAs for eligible employees.1 • Savings Incentive Match Plan for Employees of Small Employers (SIMPLE) IRAs blend employee and employer contributions. For example, some employers match employee contributions up to 100% of the first 3% of compensation. Others may contribute 2% of each eligible employee’s compensation. It’s up to the employer to decide the formula based on what works best for the business.2 • A 401(k) is primarily funded by the employee; the employer can choose to make additional contributions, including matching contributions.3

What plan accommodates high employee turnover?

The cost of covering short-tenured employees may be managed by eligibility requirements and vesting. • With the SEP IRA, only employees who are at least 21 years old, earn at least $650 in compensation and have been employed in three of the last five years must be covered.4

Vesting is immediate on all contributions to the SEP IRA, SIMPLE IRA and 401(k) employee deferrals, while a vesting schedule may apply to 401(k) employer contributions and defined benefits.

Do I want to maximize contributions for myself (and my spouse)?

The SEP IRA and 401(k) offer higher contribution maximums than the SIMPLE IRA. For those business owners who are starting late, a defined benefit plan may offer even higher levels of allowable contributions.

My priority is to keep administration easy and inexpensive.

The SEP IRA and SIMPLE IRA are straightforward to establish and maintain. The 401(k) can be more tedious, but complicated testing may be eliminated by using a Safe Harbor 401(k). Generally, the defined benefit plan is the most complicated and expensive to establish and maintain of all plan choices.

1 Like a Traditional IRA, withdrawals from a SEP IRA are taxed as ordinary income and, if taken before age 59½, may be subject to a 10% federal income tax penalty. In most circumstances, once you reach age 73, you must begin taking required minimum distributions. 2 Like a Traditional IRA, withdrawals from a SIMPLE IRAs are taxed as ordinary income and, if taken before age 59½, may be subject to a 10% federal income tax penalty. In most circumstances, once you reach age 73, you must begin taking required minimum distributions. 3 In most circumstances, you must begin taking required minimum distributions from your 401(k) or other defined contribution plan in the year you turn 73. Withdrawals from your 401(k) or other defined contribution plans are taxed as ordinary income, and if taken before age 59½, may be subject to a 10% federal income tax penalty. 4 Investopedia.com, June 29, 2022 5 Investopedia.com, November 26, 2021

We’re here to help. Visit HeritageWealthStrategies.com to find an advisor near you.

The content is developed from sources believed to be providing accurate information. The information in this material is not intended as tax or legal advice. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation. This material was developed and produced by FMG Suite to provide information on a topic that may be of interest. FMG Suite is not affiliated with the named broker-dealer, state- or SEC-registered investment advisory firm. The opinions expressed and material provided are for general information and should not be considered a solicitation for the purchase or sale of any security. Heritage Wealth Strategies is a marketing name of Cetera Investment Services. 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.

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Embracing Community:

Recap of Heritage Bank Volunteer Day

n September 13, 2023, our entire bank proudly embraced its commitment to the community through a company-wide volunteer day. With nearly 600 dedicated employees and over 50 enthusiastic participating organizations, this event showcased our dedication to giving back and making a meaningful impact on our communities. The results of this company-wide volunteer day were nothing short of remarkable. Collectively, employees logged 1,770 volunteer hours in just three short hours. Houses got painted, food was repacked, community spaces were cleaned up, donations were sorted and so much more. As we look ahead, our commitment to social responsibility remains unwavering, and we’re excited about the positive 8

Issue 11 | 2023 Q4

change we continue to create together. Here are some of the projects employees worked on. Anacortes Rotary At the Rotary Park in Anacortes, Washington, employees built 200 feet of fencing, weather-proofed two kiosks, pruned more than a mile of the trail and collected multiple bags of garbage. FOOD For Lane County In just three hours, the team was able to sort, package and categorize nearly 12,000 pounds of donated food, which will be distributed throughout Lane County, Oregon. Housing Hope Employees visited a property in Sultan, Washington, that had an unusable playground for over two years. The

team of four spread wood chips, weeded and brought joy back to the park for children in the nearby apartment complex to enjoy. Clark County Food Bank Employees repacked over 6,600 pounds of food, which will provide 5,500 meals to those in need in Clark County, Washington. NW Furniture Bank Together, the team built eight desks, five coffee tables, two nightstands, three cabinets and one couch that will be put out in one of the two furniture retail stores located in Tacoma and Vancouver, Washington. This furniture is provided for free to people fleeing domestic violence, who have lost their home to a disaster or are leaving transitional housing. Banking Business a publication of Heritage Bank

KEEPING TRACK OF YOUR FINANCES

or business owners, the most important thing to remember when it comes to running your business is to document everything. From keeping receipts to processing the employee payroll, it all has to be written down or entered into a system and tracked to help you when it comes time to do things like pay taxes or project your cash flow. Develop good habits around your bookkeeping and record keeping from the start so you can track the money coming in and going out of your business.

PEN, PAPER AND A SHOEBOX

Believe it or not, some small businesses still use this method, and if their business processes very few transactions, it’s just as effective as software. Just because a system is “old” doesn’t mean it won’t work. You may not have the latest payment technology if you’re invoicing your customers or are being paid on the spot by cash or check. If this is the case, you’ll need to: • Keep all your receipts, both for making and receiving payments. • Track your past, present and future jobs in a receipt book. • Maintain a written record of who your customers are, how often they call and how much they pay.

A SPREADSHEET

ACCOUNTING SOFTWARE

If you’re serious about starting a business, it’s probably wise to subscribe to accounting software (many are free) that links to your bank account. It’s a foolproof way to document everything you need to collect, and you’ll reduce the risk of errors. Good software will do a lot of the thinking for you, with features to generate professional-looking invoices, keep track of who owes you money, help you enter everything accurately for your accountant at tax season and remind you when things are due. If you use cloud-based accounting software, you’ll gain benefits such as: • Seeing all your accounts in realtime. The software will link to your bank account and display information all in one place inside the software. • Increased security. In case of theft or a computer crash, your data is backed up in the cloud and your financial information will likely remain safe. • Accessing your financial data anytime, anywhere with simply an internet connection on an enabled device.

KEEPING TRACK OF CASH

Systems help identify trends that can help you make decisions and grow your business, such as:

A simple spreadsheet can be a good option when you’re just starting out and you’re trying to keep expenses low. As your business becomes more complicated, you can make the move to accounting software.

• Which products and services generate most of your revenue.

Using a spreadsheet allows you to:

• Who pays late and needs reminding.

• Create your own system to set up a budget and track invoicing. • Share the records with your accountant in an organized way.

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• Which customers provide the bulk of your sales. • Where your money is going and the highest costs.

• Which products have the best profit margin. Understanding the cash trends of

your business means you’re in a better position to improve your profit and can spot ways your business can improve. Whichever method you use, a good system will allow you to make better decisions based on what’s happening in your business now and in the future.

Heritage Direct can help! Heritage Direct, our business online banking software, is a great tool for keeping track of your finances. It allows you to see a holistic view of your business: payroll, balance and transaction reporting, recurring payments and transfers, ACH and wire payments, online statements, user accounts and more. Not only that, but the interface is completely customizable, with drag and drop widgets that are tailored to each users’ unique needs. Widgets are small components that allow you to quickly see information or perform a variety of common tasks, like making a payment, transferring funds or placing a stop payment on a check. Then, when a user downloads and opens the Heritage Direct mobile app, they’ll see the exact same personalized workspace as they do on their computer, a great feature for those small businesses who do most of their business on the go.

Other features include:

• Up to 365 days of balance and transaction reporting history • Direct Connect with Quicken & QuickBooks • Customizable security controls • Single sign on for remote deposit capture—meaning no extra username or password to remember

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BUSINESS BANKING MENTOR

Identifying Your Key Business Drivers Key business drivers are resources and activities that drive the operational and financial performance of the business. Identifying and monitoring the key drivers of your business will help you track what’s happening and trigger red flags for when remedial action is needed. While a whole range of internal and external factors can affect the performance of your business, you should focus on a handful of key drivers that: • Reflect the performance and progress of your business. • Can be measured. • Can be compared to a standard. • Can be acted upon.

Issue 11 | 2023 Q4

Banking Business a publication of Heritage Bank

Sales or revenue is one indicator that is easy to monitor. But sales might not be the actual driver for your business. The driver could instead be the number of sales calls you make, your follow-up service campaign or the amount of traffic that hits your website as these are the measurable drivers that help you generate sales.

BENCHMARKING

Use your historical figures (such as a budget or last year’s figures) as a benchmark for your current performance. Past figures provide hard facts and established patterns for your business while also identifying potential problems and opportunities. In addition to your internal benchmarking, compare your business with similar businesses in your industry.

KEY DRIVERS

The range of business drivers varies enormously from business to business. For example: • Sales leads in a capital goods or service business • Sales per market in a retail business • Machine downtime in a factory Even direct competitors may use different drivers than yours. For example, prime location is not a key driver for an internet-based business, but it might be for a brick and mortar competitor that relies on well-located retail stores to attract foot traffic. Here are some drivers that could be relevant to your business.

Online presence

The volume of online activity can be a key driver if your business relies on the internet. Increases or decreases in web traffic, online inquiries and social media followers or activity are all easy to track and compare month-to-month.

Your inventory levels

Good stock control allows you to keep relatively low inventory levels while still keeping customers happy. Your stock turnover rate is the ratio of cost-of-sales to stock. Most businesses aim for a high stock turnover rate because it indicates an efficient use of capital resources. If the ratio decreases, you may be overstocking or purchasing stock that you can’t sell. Break down your stock figures into separate product categories to make it easier to pinpoint problems.

Inquiry levels

Inquiry levels (the number of leads/quotes given) can provide an early warning of peaks or troughs in your sales. If you have an established conversion rate (the ratio of leads

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to sales) and know the size of an average sale, you can use the inquiry level to forecast turnover. When you review sales, monitor: • Where leads come from to understand which marketing efforts work. • Which categories of product are selling well. • How your priority products (those with the best margins and the best payment terms) are selling. • Changes in conversion rates.

Your costs

Like sales, costs (and therefore profit margins) should be monitored frequently, ideally every week. Focus on your key variable costs and what causes them to increase or decrease. Maintaining a healthy gross profit margin is critically important. If your margins are falling, work to pinpoint why this is happening so you can take corrective action. The cause could be any number of things, such as higher material costs, a changing product mix, production inefficiencies or offering too many discounts.

Collecting debts

If you have overdue debts, this could pose an issue, especially if any of your customers are likely to default and leave you out of pocket. If your debtors’ book is large and bad debts could place your whole business in danger, then it’s a key driver to monitor. Monitor your debt collection system and implement necessary improvements immediately. An effective way to control debtors is to produce an aged list of debtors every week, showing which bills are overdue and by how many days. Any payments that are overdue, or simply large, should be highlighted and tracked so you can take prompt action. Be consistent—late payers should know that you will continue to contact them.

“Soft” and indirect drivers

For most businesses the key drivers include major costefficiency items, but drivers often include “soft” factors. For example, effective networking (the ability to build new business relationships) has proven to be a key driver for new or small businesses. The measurement of drivers is sometimes indirect. For example, if you have identified employee morale as a driver, you could monitor it by tracking voluntary overtime, absenteeism and sick days. The drivers may change with time due to the growth of your business, changes in your market or simply seasonal changes.

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PNWONDERLAND

Spooktacular Adventures in the PNW Halloween is a fun time of year to explore haunted venues and visit attractions that get your blood curdling and your heart thumping with fear. There are lots of interesting Halloween events happening in the Pacific Northwest this fall, many geared towards adults looking for a good scare. This is a roundup of our top scariest picks for haunted, horrific fun.

Washington

Head to Stalker Farms in Snohomish and be plunked in the middle of a horror movie—complete with original story lines, trained actors, custom-made costumes and talented makeup artists. This experience delivers some horrifically entertaining moments that go far beyond the typical Halloween haunted attraction. Snohomish, WA, 2023 season starts September 30, 2023. stalkerfarms.com The second annual Wilkeson Spookeasy is a historic haunting tour that blends entertainment with history and cocktails. Participants embark on a town-wide adventure, raiding Wilkeson in search of illegal hooch while enjoying a selection of tastings at seven pouring locations. The event also features a lively Prohibition-era costume contest and karaoke. Wilkeson, WA, October 21, 2023 | 6:00 p.m. visitrainier.com/events/wilkeson-spookeasy

Charles Knowles

The sixth annual Witches Night Out brings hundreds of visitors to historic downtown Enumclaw to compete for

the best costume, best hat and best broom. Plus, there’s a scavenger hunt, prizes, dancing and tons of vendor booths to browse. Enumclaw, WA, October 14, 2023 | 3:00 p.m. visitrainier.com/events/witches-night-out Field of Screams is a haunted walk in the dark featuring scares like no other. The mile-long walk takes approximately an hour to complete. Upon entering, just past the giant ghouls, you’ll make your way through the Junkyard, Clown Town, Dark Room and Survival Bunker—to name a few. About halfway through, you’ll make your way to the Outbreak Zombie Thrill Ride, where you must get past the zombie walkers that are thirsty for your flesh! Richland, WA, weekends in October. fieldofscreamstri.com

Oregon

Famous for being the backdrop of Disney Channel’s classic movie “Halloweentown,” this small city likes to celebrate all month long. Though you can visit anytime, like any other city, October is when the town transforms into the Spirit of Halloween! They light the pumpkin (just like in the movie) on the first Saturday of October following the Big Halloween Parade and it stays lit for the entire month. On the weekends, you can find family-friendly attractions like a haunted house, spooky shuttle rides and the Great Big Halloween Exhibit. St. Helens, OR, September 16-October 31. spiritofhalloweentown.com Did you know Portland was haunted? Now you can experience it during Portland Ghosts, an hour-long walk through the oldest sections of downtown Portland. You’ll visit some of the most haunted locations in the region, with several of them tied to the infamous Shanghai Tunnels—a labyrinth of interconnected basements, makeshift rooms and low-ceilinged tunnels used to sneak illegal goods (and victims) between shore and ship. Portland, OR, nightly, yearround. portlandghosts.com

Idaho

The Old Idaho Penitentiary

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The Old Idaho Penitentiary, considered one of the most haunted destinations in Idaho, hosts a range of spooky activities, such as the Behind the Scenes Tour (October 14, 2023), which gives visitors age 13+ a chance to explore offlimits areas of the old penitentiary that are usually closed to the public, and Squawky & Spirits (October 27-28, 2023), which features music, entertainment and food trucks as well as ghost stories and haunted cell house experiences. Boise, ID, visit website for event details. Tours available year-round. history.idaho.gov/oldpen Banking Business a publication of Heritage Bank

iStock / Moyo Studio

INDUSTRY PROFILE:

Professional Services

Professional services cover a range of businesses, such as accountants, attorneys, insurance, consultants, architects, designers, software developers, engineers, health, medical, training, scientists and management. Owners depend on factors such as skill, knowledge, experience, reputation, capacity, ethics and creativity to differentiate their business and build a competitive advantage.

SUCCESS CHARACTERISTICS

• Delivering personalized one-on-one service that leverages the expertise and credibility of staff • Keeping up to date with changes in technology and legislation so the customer does not have to • Posting thought leadership research and insights online to communicate with clients and keep them informed of latest trends • Expanding services by forming strategic alliances with complementary professional services to share resources and access to expertise • A part of associations to network, learn, share and keep updated on relevant issues (industry changes, compliance, legislation, etc.) • Market their key point of difference if specializing in lesser-represented areas

CHALLENGES

• Motivating remote staff and keeping them on task • Deciding what software is needed to track workflows • Keeping customers engaged and safe • How to keep the company culture intact when a large portion of employees may work from home

RESOURCES

Association of International Certified Professional Accountants aicpa.org Institute of Management Accountants imanet.org American Accounting Association aaahq.org American Bar Association americanbar.org National Bar Association nationalbar.org National Association of Women Lawyers nawl.org International Mentoring Association mentoringassociation.org

• Managing efficiencies, staff non-compliance and time management

TRENDS

The McKinsey Global Institute (MGI) estimates that more than 20% of the global workforce (most of them in high-skilled jobs in sectors such as finance, insurance and IT) could work the majority of its time away from the office and be just as effective. It’s happening also because advances in automation and digitization make it possible through the use of technologies. Using social media A lot of professional service firms use social media as a way to improve brand awareness, increase their client base, improve client satisfaction and deepen client relationships. It’s one of the best and most effective ways to market the business, monitor competitors and find/engage with clients online. Virtual firms Rapid technology change, increased pressure to reduce costs, the impact of COVID-19 and increased use of mobile technology is making the concept of virtual firms more attractive to many in the industry. In the future, more professional firms will go fully virtual and have no permanent office. Better software Services management software has improved in the last few years, making it

continued, page 23

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Heritage’s Vancouver Office

Connected to Southwest WA Businesses and Communities

Kim Nguyen, Photos by Kim

BY JOHN STEARNS

eritage Bank’s Vancouver, Washington, lending office this year has arranged everything from a $100,000 line of credit for a Longview, Washington, coffee company to a $13 million-plus loan toward a 50-unit multifamily housing project with 10,000 square feet of retail space in Camas, east of Vancouver. Closer to its downtown Vancouver office, Heritage provided a $7.1 million loan toward a 15-unit townhome project near Beaches Restaurant on the Columbia River. In August, it closed a $3 million loan for a local trucking company to buy new tractor trailers. In the works over the summer was a $6 to $8 million package for a new day care facility and school in Battleground. It also was proposing a large line of credit for a Clark County

Issue 11 | 2023 Q4

nonprofit, according to Casey Moltrum, senior vice president-commercial banking team leader in the office. Bankers in the office—located in Suite 300 of the Vancouver Center at 700 Washington St., adjacent to Esther Short Park—possess expertise in numerous sectors to serve the credit needs of customers throughout southwest Washington. The office has clients as far north as Toledo, about an hour up I-5 from Vancouver, to just south of Portland, and east and west along the Columbia River from Vancouver. Gordon Rodewald, senior vice president-commercial banking officer, for example, has about 40 years of commercial and industrial (C&I) lending experience,

Banking Business a publication of Heritage Bank

including deals for schools, contractors, nonprofits, mergers and acquisitions and more, Moltrum said. Rodewald’s lending specialties include C&I asset-based lending to include revolving lines; capital expenditure lines; equipment acquisition and other balance sheet assets for contractors (in areas like HVAC, excavation, electrical and power and engineering), environmental cleanup, trucking and distribution, schools and nonprofits; owner-occupied C&I land acquisition, development and construction; marine vessels; and business acquisition and leverage lending. For his part, Moltrum has significant C&I, commercial real estate and consumer lending experience spanning nearly 30 years of banking in southwest Washington. Among his specialties are C&I asset-based lending that includes revolving lines; capital expenditure lines; equipment acquisition and other balance sheet assets for contractors in all trades, trucking and distribution, manufacturing and recycling; C&I land acquisition, development and construction; multifamily acquisition, construction and redevelopment; and residential land acquisition and development to include singlefamily construction. With the additional expertise of the Vancouver team’s three other commercial banking officers, “We can handle just about everything that comes in the door,” Moltrum said.

BUSINESS IN CLARK COUNTY BY THE NUMBERS Major industries: health care and social assistance, professional and business services, retail trade, leisure and hospitality, manufacturing Major employers: PeaceHealth, Vancouver and Evergreen Public School Districts, Vancouver Clinic, ilani Casino Resort, Bonneville Power Administration, the City of Vancouver, Kaiser Permanente, Hewlett-Packard, Clark College Over 243,900 jobs Small businesses comprise about 95% of the local economy 5th largest small business presence in Washington Source: esd.wa.gov/labormarketinfo/county-profiles/clark

ABOUT OUR COMMERCIAL TEAM Combined banker experience: 280 years Volunteer hours served in 2022: 365 Charitable giving in 2022: $50,045 Top nonprofits: Clark County Food Bank, Community Foundation of SW Washington, Columbia River Economic Development Council

CONTACT OR VISIT

The office has numerous contractors, trucking companies, transportation brokers and schools among its clients, he said.

700 Washington Street, Suite 300 Vancouver, WA 98660 360.992.6200

“We have a lot of folks that can do a lot of things,” he said.

Cindi Stariha, AVP, Branch Relationship Officer

The Vancouver team’s other commercial banking officers are Brian Fleetwood and Dawn Redmond, both vice presidents, and Zachary Gantenbein, senior vice president, who’s based out of Vancouver but works in Astoria, Oregon. Bruce Clawson, senior vice president and regional manager-commercial lending, also works out of the Vancouver office. Fleetwood’s lending specialties are C&I asset-based lending that includes revolving lines; capital expenditure lines; equipment acquisition and other balance sheet assets for the food industry, child care facilities, auto dealers, office supplies and distribution and contractors; C&I land acquisition, development and construction; and multifamily acquisition, construction and redevelopment.

Cindi started as a vault teller and has since worked her way to branch management. She offers a full banking relationship—from deposits to loans to business needs—to help her customers achieve their financial goals. Cindi currently serves on the board for Learning Avenues Child Care Centers and volunteers at the Clark County Food Bank, as well as being a proud supporter of United Way, Habitat for Humanity, the local humane society, Wounded Warrior Project, USO and Veterans of Foreign Wars.

Redmond’s lending specialties are residential land acquisition and development that includes single-family

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construction; multifamily land acquisition, development, construction and redevelopment; light industrial land acquisition, construction and redevelopment; and women-owned businesses. Gantenbein’s lending specialties are C&I asset-based lending that includes revolving lines; capital expenditure lines; equipment acquisition and other balance sheet assets for forest products, coastal businesses, contractors (HVAC and excavators), solar development and energy, environmental cleanup, manufacturing and breweries; C&I land acquisition, development and construction; multifamily acquisition, construction and redevelopment; and marine vessels. The office also includes three relationship banking officers for customers’ deposits and treasury management needs: Andrew Harper and Linda Reid, senior vice presidents, and Teresa Carpenter, vice president. Kristy Weaver, senior vice president and regional managerrelationship banking, also has an office there. Other team members include Lisa Thompson, mortgage loan officer, Susan DeRenzo, wealth strategies adviser, various support staff and a retail banking branch with about four people. “The core group of us have all worked together for many, many years,” Moltrum said of his commercial banking colleagues. “It’s very much a family environment for our team,” he said. “We’re a pretty close-knit group of people.” Vancouver office employees are close to their community, too, volunteering individually and sometimes as a team for numerous nonprofit organizations in the region. “The whole team is very active in the community, which is great,” Moltrum said. Team causes have included helping Store to Door, doing grocery shopping for the elderly and disabled; Share, helping arrange lunches for children; FISH (Friends in Service to Humanity), sorting food; walking dogs for Oregon Dog Rescue in Tualatin; helping Camp

Fire Columbia prepare for Camp Namanu’s centennial celebration; planting trees with Friends of Trees in Vancouver; and helping the Clark County Food Bank. Among commercial banking officers’ work, Rodewald is a member of the Rotary Club of Vancouver; is on the finance committee at The Proto-Cathedral of St. James the Greater, which includes overseeing the construction of new ADA accessibility projects including ramp and other accessibility enhancements to the 138-year-old historic structure in Vancouver; marriage advocate with the Marriage Tribunal of the Archdiocese of Seattle; and is a member of the Knights of Columbus fraternal charitable organization. Redmond enjoys helping Fosterful, an organization serving children experiencing foster care, as board chair and finance committee member; is a board member and finance committee member for Share; serves on the design review committee for the city of Camas; and serves as charter member of Professional Women in Building, part of the Building Industry Association of Clark County. Fleetwood’s volunteer efforts include being a board member and treasurer for Learning Avenues Childcare Centers; is a member of the Support People Committee for the Columbia River Economic Development Council; participating in events for the Clark County Food Bank; regularly attending activities for the Southwest Washington Contractors Association and for the Building Industry Association of Clark County; attending activities for the Vancouver Chamber; and attending monthly networking events for a local business social group with local small business owners and others. Gantenbein serves on the board for North Coast Merchants Fastpitch Softball and coaches two teams in that organization; coaches the sixth grade Warrenton, Oregon, girls basketball team; and, coming up, has agreed to serve on the budget committee for the Clatsop Community College board. Moltrum is an Identity Clark County board member and coach for Rose City Volleyball in Portland.

Visit heritagebanknw.com/business to learn more and connect with a banker near you.

Issue 11 | 2023 Q4

Banking Business a publication of Heritage Bank

Shutterstock

ELAN ONE CARD Increase efficiency and control with an integrated payment solution

For most organizations, the focus on cost reduction

initiatives is vital for growth. The Elan One Card combines corporate travel and purchasing card programs into a single streamlined payment solution. The Elan One Card integrates transactions with one process, one team, one card issuer and one invoice. Plus, it provides your organization with access to business travel and procurement benefits that make doing business safer, easier and more rewarding.

Save time, money and resources

The Elan One Card helps lower costs by enabling your organization to do more with fewer resources. Many clients have saved as much as $63* per transaction by implementing the Elan One Card payment program. Multiply that by the hundreds or even thousands of purchases made every year, and the savings are significant.

• Centralize payment and corporate liability • Monitor adherence to spending policies and negotiated volume thresholds • Integrate transaction data seamlessly with your systems • Tailor the program to meet the unique needs of your organization

Gain greater visibility into expenses

We consolidate data on all your organizational expenditures, giving you better visibility to enterprise-wide spending. Leveraging Visa®, the world’s largest credit card network, the Elan One Card provides your employees access to goods, services and cash at millions of card accepting locations throughout the world.

The Elan One Card can simplify financial management and streamline your business processes, whether related to travel or purchasing. By managing one card program for your organizational expenses, you can eliminate costly steps from your procure-to-pay process.

With the Elan One Card, your organization captures transaction data on every purchase at the point of sale. Some of the available level III purchase data includes travel data such as the airline, lodging and car rental and purchasing data such as detailed tax information, discount amount, ship to/from zip code, order date, quantity, unit cost and more.

With this powerful solution, your organization can:

Extend the value of your Elan One Card

• Automate payment and reconciliation processes

• Simplify administrative tasks and maximize cost savings • Reduce paperwork, including requisitions, purchase orders, invoices and checks • Enhance cash management with cycle-based payments

Stay in control and monitor adherence

We provide your organization with built-in security so you can: • Manage business travel and purchasing expenses

Anytime anyone in your organization needs to make an unplanned business purchase and doesn’t have an Elan One Card—like job candidates, contractors, volunteers or infrequent travelers—consider using Elan Easy Pay®. Easy Pay is a fast, efficient and secure way to send a temporary, single-use virtual credit card to anyone for immediate use on a mobile device. For questions about the Elan One Card, visit elanfinancialservices.com or contact your relationship manager.

*National Association of Purchasing Card Professionals, “Why Use Purchasing Cards,” napcp.org

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NONPROFIT CORNER

Building Communities, Shutterstock

One Loan at a Time

Affordable housing is a critical component of a thriving and inclusive society. It not only provides individuals and families with stable homes but also strengthens communities and fosters economic development. Unfortunately, the affordable housing crisis is a pressing issue worldwide, with millions of people struggling to find safe and affordable places to live. This is a multifaceted problem that affects nearly every community. Skyrocketing rents and housing prices have pushed many lowincome households to the brink, often forcing them into substandard living conditions or homelessness. Banks play an invaluable role in lending to affordable housing projects. At Heritage, we understand that investing in such projects is not just about financial transactions but also about fulfilling a vital social need. That’s why we’re committed to offering competitive lending solutions tailored to the unique challenges of these types of projects. However, financing affordable housing projects can be a complex endeavor, and solving this crisis requires a comprehensive and multi-pronged approach.

In 2022, our loans and investments helped build or preserve 785 units of housing. – $80,300,000 in construction loans – $15,600,000 in permanent loans – $81,790,000 in Low-Income Housing Tax Credit equity

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In addressing this challenge, collaboration becomes a powerful tool. Banks often partner with government agencies, faith communities and nonprofit organizations as a way to tackle the affordable housing crisis from multiple angles.

Government Agencies Funding & Policy Support: Government agencies play a central role in addressing the affordable housing crisis. They have the resources, authority and regulatory power to make significant changes. Collaborating with them provides access to critical funding streams, such as grants and tax incentives, as a means to develop affordable housing projects. Moreover, these partnerships can help advocate for favorable housing policies, zoning changes and land use regulations that facilitate affordable housing development. Infrastructure & Expertise: Government agencies often possess the infrastructure and expertise necessary for large-scale housing projects. They can provide valuable guidance on zoning, building codes and construction standards, ensuring that affordable housing developments are safe and sustainable. This expertise can be leveraged to create housing solutions that meet both regulatory requirements and community needs.

Faith Communities Land & Property Resources: Faith communities, including churches, synagogues, mosques and temples often have underutilized land or properties. Partnering

Banking Business a publication of Heritage Bank

with them can provide a valuable source of real estate for affordable housing developments. Many faith organizations are eager to contribute to their communities’ well-being and view affordable housing as a way to fulfill their missions of compassion and service. Community Engagement: Faith communities have deep roots in their neighborhoods and can serve as conduits between affordable housing initiatives and the community. Their moral and social influence can help reduce stigma associated with affordable housing and garner community support for new developments.

Nonprofit Organizations Expertise & Outreach: Nonprofit organizations specializing in affordable housing bring valuable expertise to the table. They have experience in project management, finance and social services, which are crucial for the success of affordable housing initiatives. Nonprofits also excel at outreach and community engagement, helping to connect individuals and families in need with affordable housing options.

Holistic Support: Nonprofits often offer comprehensive support services to residents of affordable housing, including financial counseling, job training and access to health care. These services go beyond just providing shelter and aim to break the cycle of poverty, empowering residents to improve their lives and financial stability.

Conclusion

The affordable housing crisis is a complex problem that requires innovative and collaborative solutions. Partnering with these different entities creates a powerful alliance capable of addressing various aspects of this crisis, from funding and policy advocacy to land resources and community support. As we move forward, it’s essential to recognize and celebrate the success stories born out of these partnerships, as they inspire hope and demonstrate that we can make significant progress in providing affordable housing for all. By combining resources, expertise and a shared commitment to social justice, we can create sustainable solutions that benefit communities and transform lives.

Catholic Charities of Oregon

A Heritage Bank Partnership

Here’s an inspiring example of a successful collaboration between Heritage and community/government organizations. Francis + Clare Place

We provided financing for 61 affordable housing units in Portland, Oregon. These units will house individuals who have been living on the street and will provide substantial social safety-net services to help them reintegrate into the community. This Catholic Charities of Oregon sponsored transaction is the second of two complexes located in an area that has been especially hurt by homelessness. Francis + Clare Place required significant collaboration and assistance between the Archdiocese of Oregon and St. Francis Parish, who sold Catholic Charities the excess land. Both the Portland Housing Bureau and Oregon Housing and Community Services had to step up with additional funding to fill in a large gap caused by significant project cost increases over the time the development process began until June 2023 when the deal closed.

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Vecteezy

Automating Lead Generation Lead generation is an important tactic for bringing in a constant supply of new potential customers. While marketing can take some time, there are ways you can automate your lead generation. This means that once it’s set up, it works for you while you’re taking care of other matters. By accessing the right automation tools for your business, you’ll be able to spread your small business content across multiple platforms when you need to. There are many tools that can improve your digital presence, simply by leveraging social media, email and web services. With an effective marketing automation package, you can: • Expand awareness of your brand through consistent messaging across multiple channels, which will ultimately bring more clients and customers to your business. • Scale your marketing so that as your business grows you can handle a larger volume of leads without sacrificing the quality of your marketing materials. • Save yourself time and resources by streamlining your lead generation process, allowing you to focus on other crucial aspects of your business. • Personalize your marketing communications so the interactions are more relevant to individual users, which increases the chances of conversion. • Get data to your audience, their habits and their preferences, enabling you to refine your marketing strategies and increase your profitability. You can set up a schedule of when and where certain content will be posted to your website, blog, social media platforms and potential customers’ email accounts.

Automate your business content Automation involves being able to program your marketing strategies using powerful mobile apps and web services or by employing the services of an inbound marketing software platform like Hubspot, Marketo or Keap. To automate your business content, you’ll first need to identify your target market and the characteristics that make them more likely to buy from you. Once you’ve done that, you can create a lead magnet to encourage them to give you their contact information in exchange for a valuable resource.

Issue 11 | 2023 Q4

Banking Business a publication of Heritage Bank

Lead magnets

Content marketing

A lot of marketing automation uses lead magnets to gain leads. Some types of lead magnets you might consider using are:

Content marketing is a great way to engage your audience, provide value and nurture leads. You can automate some of your content marketing to increase your conversion rate.

• Guides or reports that have value-led content, the results of research or certain insights that a person can only access by downloading your documents. • Videos to demonstrate a new product or service, case studies, customer stories or how your business runs. • Free trials of products (often for software or applications where the delivery cost is zero). • Webinars that highlight your expertise and give your audience valuable insights. People are often willing to give their email address to obtain a valuable resource. Once you have their email address, you can implement automated email sequences, which allow you to nurture your leads over time. Email marketing As a small business owner, email marketing is one of your most effective tactics to improve performance at every stage of your marketing efforts. A useful email marketing automation tool lets you set up trigger-based workflows so you can leverage opportunities to nurture your leads. For example, some triggers you can use include: • Welcome emails. Thank any new subscribers to your blog or e-newsletter and give them a preview of the kind of content they’ll get. • Lead nurturing. If a potential customer has downloaded your e-book or white paper, have an automated email sent to their inbox suggesting what they do next (perhaps downloading a paid-for piece of content). • Abandoned shopping carts. Some businesses will automatically send emails when a customer has abandoned their shopping cart. This needs to be done delicately to avoid a hard-sell approach with the aim of encouraging customers to go through with their purchases. • Calls to action (CTAs). These encourage your potential customers to take the next step on the journey toward a purchase. For example, they might read some of the content on your landing page and fill out your sign-up box to receive your e-newsletter.

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For example, you can automate: • Social media, allowing your posts to go up at optimal times, further increasing your reach and engagement. • Email newsletters that compile recent blog posts, promotions or curated content. These can then be sent to your subscribers at scheduled times or at specific intervals. • Content promotion, so when you have new content to promote it’s automatically highlighted in your various marketing channels, such as through emails and social media. Successful content marketing will still require human involvement, just less of it when it’s automated. It’s best if your content is high-quality and meets the needs of your target audience. Remember to review your strategies based on performance and use feedback to guide any improvements to your campaigns. Additional automated lead generation tools Websites can be optimized to include their own lead generation and conversion tools, which in turn can help your business. You could implement: • Sales representative notifications. For example, if a lead goes through a few steps and views your pricing page, automatically advise your sales team so they can follow up. • Retargeting ads, which display to users who have visited your website or otherwise engaged with content you’ve produced. • Automated referral programs offering discounts or other rewards in exchange for successful referrals. • SMS campaigns where texts with updates, promotions or reminders are sent to people who have given their phone number. Some automated lead generation tools are designed to expand your reach whereas others are meant to help you build your relationship with the leads you have. It’s important to find the right balance between the two so you are consistently bringing in new leads and nurturing existing leads.

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MY HERITAGE

HEATH MCLELLAN

Pitching in the big leagues didn’t work out, but banking has a been a career hit Like a lot of young baseball players, I harbored ambitions in high school and college to go pro. But after being invited to play rookie ball with the Atlanta Braves as a left-handed pitcher, graduating Washington State University in 1996 and playing about a month in the Braves organization, life threw me a reality pitch. First, I witnessed the caliber of competition among the dozens of others aspiring to play in Major League Baseball. They were all superstars at one point in their career. You realize some of them can really still play and some of them are still developing into their bodies. Then there are guys like me who are there to see how far they could go—and you recognize pretty quickly the competition, the numbers and who you’re up against. I then suffered an arm injury, a severed biceps tendon, which was exacerbated soon after by a car accident, followed by a medical opinion that I could potentially throw again after surgery, but I’d likely sever the tendon again someday. The doctor recommended I hang up the cleats if I ever wanted to play catch with my kids in the future. That was a profound piece of advice from a sports medicine doctor and, knowing how my arm felt, I determined I was done. That was it. My body and my mind said, “You’ve

gotten everything you can out of this game, let’s move on.” I still get to enjoy the game today, though. I coach pitching at Peninsula High School in Gig Harbor, Washington, and for 13- to 18-year-olds at the Narrows Baseball Club in Gig Harbor. I’ve been coaching for more than 10 years, starting when my oldest son, Jak, was playing locally (he’s now 20 and playing for Big Bend College in Moses Lake, Washington). My youngest, Gavin, 17, is a senior at Gig Harbor High School, where he plays soccer. I love to give back to the game and community by teaching pitching for young men. The Narrows team has enjoyed success and has also sent several young men on to play college ball. In July, one of our guys, Owen Wild, who came up through the Narrows club, played at Gig Harbor High and pitched over the last three seasons for Gonzaga University, was drafted in the seventh round by MLB’s Tampa Bay Rays. He’s one of those guys we could potentially see in the big leagues someday. After ending my baseball career and before entering banking, I bought into the Emerald City Smoothie franchise in 1997 with my brother and a good friend. Tex and Mary Hefner had started Emerald City in Federal Way, Washington, and I grew up with their son, Brian, which was the connection for joining the business. The three of us (me, my brother and friend) who bought in expanded Emerald City in the Seattle suburbs, with two in Redmond, one in Sammamish, one in downtown Seattle, plus one mobile operation. We sold our stake in the business after almost 10 years.

Issue 11 | 2023 Q4

Photos courtesy

of Heath McLellan

It was a great experience. It was retail seven days a week—from seven in the morning to eight at night, every day. But it was really a good opportunity for the three of us that owned it to get our feet wet in the business world and learn good habits, bad habits, how to always remember that service is first, that people always have a place to go with their money and hopefully they come back to you because of how you treat them. It was an absolutely wonderful experience for us. That service knowledge translated to my next job, selling real estate for about six years, and provided a great foundation for banking. I got into real estate near the end of my Emerald City ownership. We had managers Banking Business a publication of Heritage Bank

Industry Profile: Professional Services, continued from page 13 running the stores by then. My wife, Becky, and I were starting a family, and I needed to make some additional money, so I sold homes for about six years with Windermere. When the Great Recession and mortgage crisis hit in 2008, I moved into banking, handling liquidations of foreclosed homes for Westsound Bank. When that bank failed, I was offered a job in special credits for Charter Bank in Bellevue. After four years driving every day between my home in Gig Harbor and Bellevue, a grueling commute at times, I took a junior lending position close to home in Tacoma with what was then Columbia Bank. I did that for two years before joining Heritage Bank in 2014. I now work in the downtown Tacoma office at 909 A St. What drives me at work every day is the people I work with here in Tacoma; we’re truly like a family. We’ve been through so much with each other, including births and marriages. We’ve been through all sorts of things that have happened to our families. Every day, the reason I get out of bed and come to work is because I know they’re coming in, and we are the type of group where we roll up our sleeves, we help each other out. We’re accountable for each other. We’re really a solid group when it comes to delivering a service to our clients. I tell everybody in banking, “Our money’s just as green as the next bank.” The one thing that matters is that when you pick up the phone to call anybody here at Heritage Bank, we actually answer the phone. If I have a client who calls me on a Sunday because they forgot to fund their payroll and they’re going to be overdrawn on Monday, I always tell them, “Go back to bed, relax, we’ve got you taken care of, we’ll cover you for a day.” I think that’s the kind of service that separates us from others. That’s the only thing that can really separate a bank from anybody else is the people on the inside that are working and doing the day’s chores. I love the people that I work with here. Speaking of love, Becky and I have been married for 23 years. I’ve known her since we were in middle school in Redmond, Washington. We were friends in middle and high school. She went to Central Washington University in Ellensburg, and we stayed close while I was at WSU, deciding to tie the knot a few years later. Today, she teaches preschool at Saint Patrick Catholic School in Tacoma. Jak and Gavin are our world. Being a father is probably the coolest thing that has ever happened to me. There is no more reward than watching your children grow up into respectful, productive members of society. Aside from the joy of family and teaching baseball, I enjoy helping my community when called upon. Some causes I like to volunteer for or support include Safe Streets Tacoma, Community House, Nexus, St. Vincent de Paul and FISH Food Bank. I previously served on the boards of Emergency Food Network and the Gig Harbor Tides Scholarship Foundation. To stay fit and relieve stress, I enjoy walking when I can, a habit I started during the height of COVID, and I also lift weights occasionally. I turn 50 in February, so I want to make sure the body keeps healthy as I approach life’s later innings.

ABOUT HEATH MCLELLAN Heath McLellan, senior vice president-commercial banking team lead at Heritage Bank’s downtown Tacoma office, currently focuses on owner-occupied real estate, commercial and industrial lending, investor real estate, equipment financing and multifamily lending.

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easy to bundle together bidding and quoting, project management, timesheets, scheduling and accounting. Offshoring basic services By hiring contract employees located in rural U.S. or overseas, professional services firms can cut their costs by sending some process orientated services offshore. This includes the provision of IT services in the cloud, leaving the high touch/customer contact services to be provided locally. Value revenue Traditionally, professional services firms have charged customers on an hourly basis. In line with increasing wages and rapid pressure from clients to decrease pricing, many professional firms are shifting towards value-oriented billing (charging a recurring monthly fee). It is expected that more professional services firms will shift to valuebased pricing as they try to become “advisors” rather than just being service providers paid by the hour. Automation of back-end Back-end service automation is becoming increasingly important for companies to eliminate paperdriven processes. Professional service companies such as accounting and legal services are automating back-end processes to match front-end services. Cybersecurity With regulatory agencies enforcing stricter requirements for several sectors, including financial services, firms will have to review and improve their process controls to include digital platforms within security guidelines. Mergers and consolidation Companies are being acquired and merged in record numbers, and new companies backed by solid financing and offering a different business model are being launched. Accounting and law firms are good examples of businesses that merge to take advantage of synergies such as pooling administration tasks. heritagebanknw.com

BEWARE

The Dangers of Trusting Text Messages from Your Bank In February, a Gig Harbor business owner reported being scammed out of $85,000 by what appeared to be his bank.2 He initially received a text asking if he authorized a large transaction at a popular retail store. When he replied no, he immediately received a phone call from his “bank” (aka the imposter) claiming there was fraud on his account. They asked him to verify a one-time pin using the same number his bank allegedly used to reach him before. As soon as he shared the pin, the person on the other end of the phone was able to hack his account. This happened within a matter of minutes. And it can happen to you, too. Always be cautious when it comes to texts, emails or calls from your bank. It’s okay to ask questions! If the communication from your bank is legitimate, they’ll be happy you were diligent in protecting your information.

In today’s digital age, we rely on our smartphones for almost every aspect of our lives. From ordering groceries to turning up the thermostat, the convenience of mobile technology is undeniable. One area where this convenience can turn into a potential threat is in our banking. While text messages from your bank may seem like a convenient way to stay updated on your finances, there are significant reasons to be cautious about trusting them blindly. According to the Federal Trade Commission (FTC), fake bank fraud warnings were the most common form of text message scam, with consumers reporting losing $330 million to text message scams in 2022—more than doubling what was reported in 2021.1 Texts from your bank can be a convenient way to get real-time updates about your account, including when transactions post, your balance is low, a credit card payment is due, etc. You may even be able to perform certain tasks, like transferring money between accounts or checking your balance. In most cases though, real texts from your bank are purely informative in nature, and there’s really no reason to engage with them. If you get a text from your bank, the first thing you should do is determine whether you opted in to this service. If you haven’t, chances are it’s a scam and you should report it immediately.

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REAL-LIFE SCENARIO

Learn more Heritage Bank Privacy, Security & Fraud Prevention heritagebanknw.com/fraudresources Banks Never Ask That banksneveraskthat.com Federal Trade Commission ftc.gov

Issue 11 | 2023 Q4

1 www.ftc.gov/news-events/news/press-releases/2023/06/new-ftc-data-analysis-shows-bank-impersonation-most-reportedtext-message-scam 2 www.fox13seattle.com/news/business-owner-scammed-of-thousands-warning-others-hoping-to-prevent-fraud 3 consumer.ftc.gov/consumer-alerts/2023/05/have-you-been-getting-scammy-text-messages

Banking Business a publication of Heritage Bank

“The most-reported text scam looks like a fraud alert from your bank, but it’s fake. It might say there’s suspicious activity on your account and tell you to call a number. Or to reply “yes or no” to confirm a big purchase (that you didn’t really make). But don’t do it. There is no real problem. They just want your money or personal information.” 3

If you did, there are several red flags you should be aware of that can help you determine whether it’s legitimate or not. Banks will never ask for personal or confidential information via text messages nor will they ask you to verify your identity, log in to your account, etc. by clicking a link. Most text scams try to create a sense of urgency and rely on scare tactics to get you to act quickly. Your bank will never send you threatening texts or pressure you to make rush decisions. If you receive an unexpected text message from your bank, here’s what to do: • Slow down and think before you take any action. • Do not respond to the text if it’s asking for personal information. (Note: Some banks, like Heritage, will ask you to confirm yes or no if a transaction is fraudulent. But they won’t ever ask for usernames, passwords, Social Security numbers, etc. If you indicate yes and are asked to take further action, always verify that what they’re asking you to do next is legitimate.) • Never share your passwords/one-time codes or let anyone log in to your accounts. • Do not click on any links. When in doubt, always contact your bank using the phone number on the back of your card or the number on their official website—not the number that texted you. If the text is in fact fraudulent, report it to both your bank and the FTC. At Heritage, we take your privacy and security very seriously. We have tons of resources available on our website about how to keep your personal information safe. If you ever suspect fraud on your account or receive an unexpected text, call or email from someone claiming to be Heritage Bank, call us immediately at 800.455.6126.

ABOUT THE CONTRIBUTOR: DENNIS D’AMBROSIO Dennis joined Heritage Bank in 2019. He is currently the vice president, fraud risk/investigations manager. Dennis has more than 25 years of experience in banking and fraud risk management and is vice president of the Northwest Chapter of International Association of Financial Crimes Investigators (IAFCI).

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FINANCIAL DICTIONARY Net Profit Margin

Net profit margin, or simply net margin, is a key metric that expresses the profitability of a company or business relative to its total revenue. It’s calculated by dividing the net profit (or net income) of the company by its total revenue and then multiplying by 100 to express the result as a percentage. Net profit is what remains after accounting for all expenses, including operating costs, interest and taxes. It’s the percentage of a company’s revenue that it keeps as a profit. The net profit margin is an important financial indicator as it provides insights into a company’s ability to efficiently manage its costs and generate profit from its core business activities. A higher net profit margin indicates that the company is effectively controlling its expenses and operating profitably, while a lower margin might suggest inefficiencies or higher operating costs. While net profit margin is a useful metric, it does have some limitations. For example, it’s not good when comparing companies in different sectors. Additionally, it can be influenced by one-off situations like the sale of an asset, which could temporarily boost profits. It’s best to look at several ratios and financial metrics when analyzing the profitability of a company. Contact your banker if you’d like to learn more or have any questions. ABOUT THE CONTRIBUTOR: JAMIE LOUIE-SMITH Jamie worked in commercial banking for 17 years before becoming the chief financial officer for a nonprofit drug and alcohol addiction treatment center. Her expertise in the financial industry, passion for helping others and varied years of experience give her the ability to work well with a diverse client base. Returning to the industry as a commercial banking officer, she specializes in lending to nonprofits, medical/dental professionals and other community-based businesses.

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Banking Business Q4 2023

Articles inside

Customer Profile: Seattle's El Centro de la Raza

Identifying Your Key Business Drivers

Embracing Community: Recap of Heritage Bank Volunteer Day

Choosing a Retirement Plan that Fits Your Business

FINANCIAL DICTIONARY:Net Profit Margin

Beware the Dangers of Trusting Text Messages From Your Bank

My Heritage: Heath McLellan

Automating Lead Generation

Building Communities, One Loan at a Time

ELAN ONE CARD

Heritage’s Vancouver Office Connected to Southwest WA Businesses and Communities

Industry Profile: Professional Services

Spooktacular Adventures in the PNW

KEEPING TRACK OF YOUR FINANCES