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Sunday, June 7, 1992 - Page updated at 12:00 AM

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Loyalty Evoked By Rainier Bank A Thing Of Past?

Early this century, when the town's big money came from forests, fish and Yukon gold, two Seattle banks used a popular new strategy to remain competitive.

They merged.

The 7-year-old National Bank of Commerce, a small bank with a big name, combined with a competitor.

The deal created what eventually would become Rainier National Bank, the predecessor to Security Pacific Washington, and it set up a head-to-head rivalry with another emerging banking giant at the time.

Flash ahead to today.

It's the last decade of the century, and again two banks are using a popular strategy to remain competitive. But their merger is not like those of the past.

Instead of merging to grow with a booming economy, they're merging to survive in a stagnant one - by cutting staffs, consolidating branches and cutting expenses. They say there aren't enough customers to go around.

In the old days, they merged to thrive. Today, they merge to survive.

Take the recent buyout of Security Pacific by BankAmerica, parent of Seafirst.

For the buyer, the deal may mean a better chance at surviving. But for Seattle, one cost of the buyout is the loss of a bank with a special local appeal - Rainier.

Some say Rainier disappeared when Security Pacific bought it in 1987. Others, though, say the bank lost only its name and kept its local leadership and personality. This year's buyout, they say, marks the end of a way of doing business.

Throughout most of this century, the old Rainier was second in size to Seattle-First National (today's Seafirst), and the smaller bank earned a sentimental, underdog attachment to the community, one that historians, bankers and customers say its competitors never matched.

Many people wonder if that sort of loyalty between a bank and its customers will ever exist here again.

A COMMUNITY ETHIC

The National Bank of Commerce, like all banks, was founded to make money. Robert Spencer, a Midwesterner, saw boom-town Seattle in the 1880s and figured he could make some good money here.

But to hear some people describe Rainier, the bank that NBofC became, the bank's profit motive was secondary.

Customer Aileen Langhans sounds choked up at times, speaking of the bank she joined 34 years ago at age 5.

"The way they cared for people," she said.

"We used to go down there all the time with our birthday money and our allowance and everything. They were always so friendly. They'd treat us like something special."

This isn't just childhood nostalgia.

Langhans, now an ultrasound technician in Everett, has tried other banks as an adult. She has even "interviewed" several banks lately to find a replacement because of the buyout. She said others haven't come close to the personal service she has gotten at every NBofC/Rainier branch she has ever entered.

That's why she has spent so much time, to the wonderment of her friends, sending homemade certificates of appreciation to about 150 branches. She also lobbied heavily against the proposed buyout last year by writing and telephoning lawmakers and bank presidents.

"I felt, and I still feel, that the loss of this bank will be a great loss to the community because of the way they cared for people," she said.

Langhans may be rare for her activism, bankers say, but not for the strength of her feelings toward Rainier.

People "liked the good things that Rainier did in the community," said Chuck Riley, a U.S. Bank executive vice president who has competed against Rainier since 1958. "Rainier had a good conscience."

Bank executives were known for their community involvement and for instilling that ethic in their employees. They made it known that employees were expected to join Kiwanis and Lions, to become part of their communities.

"And in those days you were expected to live in the town where your bank was located," said Dick Brandt, vice chairman of Security Pacific Washington. "So not only would the banker get involved, but your family - they represented the bank too."

Bob Truex, the bank's chief executive in the 1970s and '80s, became a visible community leader. He led business organizations. He spoke out on civic issues, raised money for charity and was active politically. He led the Save Our Elephants campaign in the mid-1980s, raising money for new housing for the animals at Woodland Park Zoo.

That campaign demonstrated Truex's marketing acumen - he made a communitywide idea look like his own, one observer said - but also his sincere concern. He even gave fliers to competing banks to be stuffed in statements mailed to customers.

Truex arrived in 1973 after working, ironically, for Bank of America in California. There, he led his bank's social-policy committee, meeting once with student protesters who had just set a bank branch on fire during the Vietnam War.

In Washington, he started a similar social-policy committee, which launched programs to remodel inner-city homes and lend money to small businesses owned by minorities.

His employees considered him charismatic and committed, a man who would take a graveyard data-processing shift to breakfast, could reel off vice presidents' biographies extemporaneously at an annual meeting, and called branch employees by name during regular visits.

By 1977, four years after Truex arrived, women and minorities made up 41 percent of the bank's management.

Even before Truex came, though, the National Bank of Commerce under Maxwell Carlson and Bob Faragher was known as a progressive employer.

Melvine "Mel" Verzani, who

became the bank's first female branch manager in 1970, cites her bosses for sending her to the Pacific Coast Banking School at a time when only four women attended with 600 men.

"This bank, it's been very, very good to me," said Verzani, who as a senior vice president for operations is now helping to dismantle the bank before retiring.

CONSERVATIVE STRATEGIES

Early leaders of NBofC were extremely conservative, even refusing for years to borrow money from the Federal Reserve.

That philosophy changed somewhat under Truex.

Employees remember Truex driving up his first day in a needle-nosed, two-seated Jaguar.

"The signal was, put on your tennis shoes, we're picking up the pace," said Dan Nelson, chairman of West One Bancorp in Boise and a 23-year Rainier veteran who considered Truex his mentor.

Truex tried right away to tone down his image to avoid offending his new employees. He even traded in his roadster for a sedan - albeit still a Jag.

He began the bank's controversial name change from National Bank of Commerce to Rainier, a name he considered more marketable. The name caught on so well, after initial protests, that some people today believe the name alone is responsible for the strong ties the bank had to the community.

Truex also oversaw construction of a 40-story headquarters tower, decentralized authority to give branches more power and emphasized large-scale corporate lending.

The bank continued to gain attention for its thorough business approach. At meetings where several banks gathered to review proposals from large companies such as Boeing and Paccar, Rainier's loan officers usually knew the most and asked the best questions, one competitor said.

The officers were known for going beyond reading business plans, also leaving their offices to walk the farms and fish-packing plants they had read about.

That strategy made it tough for competitors to steal Rainier's clients - business owners were close to their loan officers - but it also made the bank appear to lack aggression at times.

In the early 1980s, when banks including Seattle-First National were getting rich off of oil loans, Rainier's loan officers insisted the deals were too risky.

Truex initially pounded his fist on the table at a staff meeting, demanding to know why other banks were making so much money off the deals. Apparently, he listened to his staff. When a shareholder challenged the bank at one annual meeting for losing out on easy money, Truex answered, "Pioneers get arrows in their backs."

Soon after, oil prices plummeted and Seafirst nearly collapsed because it had bought so many oil loans. This, of course, made Rainier look prophetic - and made those loyal customers even more loyal because they believed their money was safe.

Seafirst was rescued by BankAmerica after a new state law allowed interstate banking in Washington. It's that law that has led to the disappearance of Rainier.

LOSS OR OPPORTUNITY?

Fish processors, utility companies, nonprofit housing agencies and individuals like Langhans are mourning the loss of Rainier.

They say the city will miss the bank's philanthropy and suffer from a loss of competition. They are nervous because bank consolidation is expected to continue - and Washington already has been left without a large commercial bank of its own.

"It's a shame, our not having a regional bank," said Robert Spector, a free-lance business writer who wrote "Banking Without Boundaries, A History of Security Pacific Bank Washington."

"I don't know how a bank not based in a region can have the same feeling about a region that a local bank would," he said.

Nelson of West One said the biggest loss may be the head-to-head battle of two large banks.

"Now you've got one big bank, and a bunch of little ones that will try" to fill the void, he said.

Spector said many things have changed since Rainier was bought five years ago by Los Angeles-based Security Pacific. The new owner laid people off, closed divisions - including international banking - and began controlling decisions more and more from its California headquarters.

Truex had retired in 1987, after the sale, and died about one year later. Although the new president, John Getzelman, a Security Pacific manager, became very involved in the Seattle Symphony and other local organizations, the bank lost its sense of a strong local tie, Spector and local bankers said.

Former Chairman John Mangels, who retired in 1990 after a long career that started as a part-time teller, was quoted in 1987 as saying, "One of the great lies in America, along with `The check is in the mail,' is that `Everything will be the same after the merger.' "

The changes - and the recent sale to BankAmerica - have many people wondering whether Truex would regret selling to Security Pacific if he were alive today. The deal was viewed at the time as a financial success for Rainier's shareholders.

"It's hard to say," said Peter Truex, Bob Truex's son and a commercial real-estate broker in Seattle. "He always told us around the dinner table that there were too many banks around the United States. I think that he would chalk this one up as being good business."

On the other hand, "to see Seafirst signs going up on all the old Rainier Bank branches. I can't help but think it's stirring him a bit."

A few people believe Rainier will live on through people at Seafirst and the two other banks buying Security Pacific branches in Washington: West One Bancorp of Boise and KeyCorp of New York.

Richard Sproul, a Key Bank executive vice president who spent 25 years at Rainier, pointed out that many bankers scattered throughout Seattle institutions were trained in the NBofC way.

"If you let your emotion take hold, it's like an era gone by," he said. "But . . . there are a lot of positive things going forward as a result of that strong culture, that level of professionalism."

Some other things remain unchanged as well.

Full-page newspaper ads tout the services and products of Washington Mutual Savings Bank, U.S. Bank of Washington, Key and West One. Bank presidents stand in Central Area playgrounds to announce new community programs.

Rather than competition dying, as predicted, there are signs that it is being renewed.

Copyright (c) 1992 Seattle Times Company, All Rights Reserved.

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