Business Profile: Compendium

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Finding Inspiration

Compendium is a place where people love to come to work every day.

As President and CEO Kobi Yamada says, “I don’t go into future for Compendium looks bright. “Every day people the office, I go to the playground.” Compendium makes are in search of purpose and meaning. We are interested products that inspire people from pop-open cards to in being the company that amplifies what inspires and gift books, notebooks and journals to greeting cards and connects us as humans. We can do it beautifully and with children’s books. Little touches that make a big difference great care and intention.” and brighten our everyday lives. To Kobi, connections don’t just stop at inspiring products As a teenager, Kobi fell in love with the idea of “the but extend to the company partnerships. “Heritage Bank human potential,” is all about community, meaning anything really knowing the people inspiring or the science you are working with, of higher effectiveness. and that we’re all in This concept carried this together. We’re not him all the way through looking for a short-term college to today. “My transaction but long-term dad brought home a success, and with Heritage pop-open card made by Bank, we have a great winCompendium and I just win partnership.” loved it and I identified with the inspirational tone,” said Kobi. Heritage Bank “Our relationship with Heritage Bank is respectful, synergistic and we are In college, Kobi grateful for it. And, it’s not came across a second just about Compendium Compendium product in a store and contacted the owner. succeeding but all parties succeeding,” he concluded. “I was on my way to Japan to start a career and I decided not to go. Instead, I took a 90% pay cut and came to work at Compendium,” added Kobi. The owner at the time couldn’t afford employees and the company was barely afloat, but Kobi was all in. “When I was a kid, I had eight paper routes, so I understood long hours and trying to make something work.” Going from one employee to a building full of talent, the

ABOUT COMPENDIUM'S HERITAGE BANK RELATIONSHIP MANAGER, BRITNI BABINGTON

Britni Babington has over 10 years of banking experience and has worked at Whidbey Island Bank and Puget Sound Bank, both of which have merged into Heritage Bank. Her main responsibility as a relationship manager is ensuring all aspects of her customers’ financial needs are taken care of, from deposits to loans to treasury management services. She works with all types of operating companies, including service firms, dental and veterinary practices, manufacturers, distributors and more. She also assists with commercial real estate, including owner-occupied buildings, multi-family and residential development. Outside of work, Britni serves on the board for the Risk Management Association, Puget Sound Chapter and likes to spend time with family, go golfing and cook.

AN INSPIRED APPROACH TO AFFORDABLE HOUSING

According to the National Association of Home Builders (NAHB), nearly a third of the nation’s households are financially burdened when it comes to owning or renting a suitable home, and more than 30 percent of their income goes toward housing.

The association cites the following factors—labor and materials prices; interest rates and financing costs; federal, state and local regulations; and supply and demand—as parts of the overall housing cost equation. Further analysis by NAHB shows that regulatory requirements make it difficult to increase the supply of affordable housing. In the Pacific Northwest, affordable housing is a focused concern. In markets with high job growth, like the greater Puget Sound and Portland areas, financing for affordable housing developments (for moderate incomes and previously homeless individuals) can take three to five years for developers. It’s important for vibrant communities to have affordable housing for all income levels and a bank that can structure affordable housing transactions quickly and locally.

Kathy Swift

Left page: Cornelius Place opened in March 2019 and features 45 apartment homes, a YMCA center, a landscaped courtyard and space for social gatherings and resident programs. Right: The Liberty Bank Building project honors the legacy of the bank, which was the first Black-owned bank in the Pacific Northwest, providing financial services to those who were otherwise unable to obtain them.

CORNELIUS PLACE

CORNELIUS, OREGON

Cornelius has long been known for its agriculture heritage and continues to serve the farming community throughout the Portland metro area. While this area has experienced tremendous growth, affordable housing to meet the needs of the community was lacking. Heritage Bank, along with the city of Cornelius and development partners BRIDGE Housing and Bienestar, is proud to be part of the project featuring a mixed-use, three-story building offering affordable housing, a new state-of-the-art library and YMCA. The two apartment floors are open to seniors whose income qualify for affordable housing and will include accommodations for mobility and/or hearing impairment. Because of the unique nature of the partnerships, it was a bit more complicated to finance the construction. The banks that were initially approached turned it down, but then Heritage Bank stepped in around 2017, which helped bring the project to completion in March 2019. Kathy Swift, senior vice president, nonprofit development officer, at Heritage Bank in Portland shares insights on the project. Q: What makes Heritage Bank’s ability to finance the project different than other banks?

Heritage Bank was able to use creative financing with

BRIDGE Housing and the city of Cornelius to structure a $10 million-dollar loan for the construction of the building and a tax credit investment for the housing portion. This unique approach made the difference that helped the transaction to move forward. Q: Is this normal operating procedure for Heritage Bank?

Yes. Heritage Bank’s belief since its founding is that our communities grow stronger when banks and neighbors work together. Our relationships with and understanding of our clients are what makes us unique. Q: What makes this project so special?

The building is across the street from an elementary school. There will be inter-generational cooperation with volunteer opportunities for senior residents to interact with the kids at the elementary school as well as the library and YMCA. The building’s location puts seniors in the heart of the community with Bienestar,

El Centro Cultural and other culturally specific support close by. It is also the start of Heritage Bank’s commitment in the city for affordable housing—and bringing communities like this one together.

Community Roots Housing / OutsideThinc

ABOUT KATHY SWIFT

Kathy Swift is the senior vice president, nonprofit development officer at Heritage Bank. 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, which provides housing and mental health services throughout the Portland area.

LIBERTY BANK BUILDING

SEATTLE, WASHINGTON

Africatown Community Land Trust, the Black Community Impact Alliance, Byrd Barr Place, Capitol Hill Housing, local organizations and community members celebrated the opening of Liberty Bank Building in Seattle’s Central District. The building honors the legacy of the bank that once occupied that space and offers 115 affordable apartments for low- to moderate-income households. There are also three affordable retail spaces for local minority-owned businesses on the ground floor.

Tacoma Housing Authority Left: Tacoma's Arlington Drive Youth Campus is within walking distance of schools, public transit and Metro Parks' Eastside Community Center. The campus helps address the barriers facing homeless youth and young adults.

Liberty Bank Building was one of the first and largest affordable housing projects in Seattle for Heritage Bank. Financing included two construction loans totaling $17.5 million and a tax credit investment of $9.6 million through our tax credit syndicator, Enterprise Community Investment. Liberty Bank Building was chosen as an Urban Finalist in Affordable Housing Finance's Readers' Choice Awards for its innovation, impact and creative problem-solving.

ARLINGTON DRIVE YOUTH CAMPUS

TACOMA, WASHINGTON

The Tacoma Housing Authority designed this campus that will serve the 90 or more unaccompanied youth or young adults who are homeless on any given night in Pierce County. The building will be built next to its Salishan community and will be comprised of two parts: a 12-bed crisis residential center for homeless youth, ages 12 to 17 years old, and 58 apartments for homeless young adults, ages 18 to 24 years old. The campus is in walking distance to schools, Metro Parks’ Eastside Community Center, a regional health clinic, public transportation and New Salishan. Heritage Bank financed a $11,800,000 construction loan for the project.

CHUCK AUSTIN PLACE

YAKIMA, WASHINGTON

The Yakima Housing Authority began construction in July 2020 on Chuck Austin Place, a $17 million project that will include 41 affordable housing apartments for veterans, a dental clinic and other support services. It’s anticipated to be complete in August 2021. The center’s name honors local veteran Chuck Austin who joined the Marines in 1943 when he was just 17 and served in World War II, the Korean War and the Vietnam war. Heritage Bank financed a $7,700,000 construction loan for the project. Heritage Bank believes in the possibilities for each and every person—and the power of community to improve the lives of those around us. That’s why we offers one-stop financing for nonprofit developers. From construction and permanent financing, to the purchasing of federal low-income housing tax credits, to making the housing transaction balance out and offer less debt and more equity. The process requires a dedicated team of experts. While most larger banks have a centralized approach to real estate and construction loans, Heritage Bank credit decisions are made in the local market. Heritage financed more the $67 million in affordable housing projects in 2020.

CYBERSECURITY FOR SMALL BUSINESS

In today’s world, it’s important to be vigilant in protecting your business’ computer systems and data. Every issue of Banking Business will contain tips to protect your business from losses due to a digital security breach.

Require strong authentication

Ensure employees and other users connecting to your network use strong user IDs and passwords for computers, mobile devices and online accounts by using combinations of upper and lowercase letters, numbers and symbols that are hard to guess. Consider changing passwords regularly.

Secure the business’s tablets and smartphones

Mobile devices can be a source of security challenges, especially if they hold confidential information or can access your company’s network. Require employees to passwordprotect their devices, encrypt their data and install security apps to prevent criminals from accessing the device while it is connected to public networks. Develop and enforce reporting procedures for lost or stolen equipment.

Set cybersecurity procedures and training for employees

Consider reducing risks through steps such as preemployment background checks and clearly outlined policies for personal use of computers. Limit employee access to only the data systems they need for their job, and require permission to install any software. Train employees about cybersecurity issues, such as suspicious or unsolicited emails, asking them to click on a link, open an attachment or provide account information. The Federal Communications Commission created a Small Biz Cyber Planner, a resource to help small businesses create customized cybersecurity plans.

fcc.gov/cyberplanner

Use this simple step-by-step tool to create a custom cybersecurity plan for your company.

FINANCIAL DICTIONARY

Insured Cash Sweep

Insured Cash Sweep (ICS) is a way to keep your deposits local while ensuring FDIC insurance applies to all of it. You utilize one account at Heritage Bank, and we place your funds using ICS into deposit accounts at other ICS Network banks in amounts below $250,000, the standard FDIC insurance maximum. As a result, you can access FDIC insurance coverage from many institutions while working directly with just one bank. You’ll earn interest based on our deposit rates and receive a single regular monthly statement from Heritage Bank showing your ICS balances and other key information. You can also check your ICS balances and track other important information online, 24/7, through a specially designed Depositor Control Panel. Your confidential information remains protected.