The Bank of Oswego is now 'HomeStreet'
Seattle-based financial institution completes it's acquisition of Lake Oswego's troubled community bank
Seattle-based HomeStreet Inc. announced last week that it has completed the purchase of The Bank of Oswego and that its two branches in Lake Oswego in Lake View Village downtown and on Mercantile Drive in Lake Grove are now operating under the HomeStreet banner.
We are happy to welcome the customers and employees of the Lake Oswego branches to HomeStreet, company President and CEO Mark K. Mason said Friday morning. We look forward to the growth opportunities from the acquisition as a result of the Portland-Vancouver areas strong employment and population growth.
HomeStreet takes over a bank that was always intended to be a small, community-based financial institution, although The Bank of Oswego had shrunk to a shadow of even its former self after being enveloped in legal issues. As of July 31, the banks loans and other assets totaled $41.5 million and deposits totaled $46.9 million; thats down from $97.4 million in assets and $109.4 million in deposits at the end of 2013.
As part of the transaction announced Friday, HomeStreet did not assume any liability related to ongoing litigation involving former CEO Dan Heine, former CFO Diana Yates or any other former officer or director of the community bank. Heine, who founded The Bank of Oswego in 2004, and Yates are awaiting trial in November on more than two dozen criminal charges, including conspiracy to commit bank fraud and making false bank entries.
Prosecutors for the U.S. Attorneys Office have alleged that both were involved in a scheme to hide bad loans from the banks board of directors, shareholders and regulators in an effort to portray the banks financial condition as much better than it was.
In November 2015, U.S. District Court Judge Michael Simon ordered The Bank of Oswego to cover Heines legal costs in the pending criminal trial. If convicted, Heine and Yates face a maximum of 30 years in prison for each count, as well as the forfeiture of any money or property obtained as the result of the violations.
Last week, Bank of Oswego President and CEO Stephen G. Andrews offered no comment on the pending litigation, but he told The Review that the banks board of directors had been keen to pick a partner that would treat employees well and has a demonstrated history of immersing themselves into the fabric of the community in a similar fashion as The Bank of Oswego.
I think the community will enjoy having HomeStreet Bank as a community partner, Andrews said. Homestreet has agreed to honor all of our community philanthropic commitments for the year, and they enjoy a long history of supporting the community.
Mason said HomeStreet values being a good corporate citizen and wants to continue the philanthropic work in order to make sure those groups and services that The Bank of Oswego has traditionally supported continue to be supported.
In the longer term, he said, wed like to get a little bit deeper involved in the community and make sure we understand those events or agencies that are really most important to the community, so that we can focus our assistance in the right areas as well.
Mason said a substantial number of The Bank of Oswegos employees have transitioned to HomeStreet, particularly those in front-office service positions, although not everyone will be continuing with the company.
As you would expect when one bank buys another bank, there are some duplicate services back-office functions, primarily, he said. We do try wherever possible to offer similar positions or other positions theyre qualified for that we may have open, (but) some of those people will no longer be with the company.
Andrews told The Review he would not be staying with HomeStreet, but would remain on the board of directors of Oswego Resolution Inc. probably for the next two years.
Its very part-time, he said. Were just going to be winding down the affairs of the company. The corporation is just remaining open so it can make a potential future distribtion to shareholders.
Andrews had warm words of praise for the bank he joined in September 2014.
The Bank of Oswego culture embodied a warm sense of community and endeavored to make our branches reflect a welcoming presence where customers felt like an invited guest, Andrews said. I am confident our remaining staff will carry on this practice.
Reached at his home in Florida, Heine had similar praise for our community bank, which was uniquely created for Lake Oswego.
The effort required to build a community bank is daunting under any circumstances, but to do so at a time when many start-up banks failed because of the terrible economic recession is remarkable, Heine said. This success could not have been possible without great community support and encouragement.
During his tenure at The Bank of Oswego, Heine was known as much for his involvment in the community as for the personal relationships he nurtured and the fresh-baked cookies he served inside the financial institution. He was named Community Leader of the Year in 2007 by the Lake Oswego Chamber of Commerce for his work with a variety of local groups, including the Lakewood Center for the Arts and the Lake Oswego Schools Foundations Invest in Success program.
The hallmarks of our success focused on developing relationships by offering truly personalized service, while becoming an integral part of the community and serving the many nonprofits and civic organizations, said Heine, who retired from the bank in August 2014. It is with heartfelt gratitude that I say Thank you, Lake Oswego, for your support and friendship.