The City of Castle Rock may be facing some tough financial decisions after receiving news their local branch of Heritage Bank, where the city is a customer, will be closing.
Mayor Paul Helenberg brought the issue to the attention of the City Council during their Aug. 26 meeting and said, when the bank does close, the city may have to commute to a nearby branch or find a new bank entirely, as there would be no other banks left to do business with in town.
"There’s nothing local we can do," said Helenberg. "We can’t put all our money in a credit union. They aren’t insured enough to cover our finances."
Notice of the closure had been sent out Aug. 22, informing customers the branch was scheduled to close Nov. 15. Heritage Bank Market Executive Brett Bryant stated Friday the decision was not based on the financial health of the company itself, but rather the ability of the individual branch to remain profitable.
Bryant said current interest rates require a branch to have about $40 million deposited to be financially viable, while Castle Rock has only around $19 million. He added the Castle Rock branch used to be part of Cowlitz Bank (which was shut down by the FDIC in 2010 and acquired by Heritage Bank that July) and was kept open on a tentative basis as bank officials waited to see if it would grow.
Bryant said competition from the two credit unions in Castle Rock, as well as a slowed economy, prevented the branch from growing at necessary rates, despite what he called "aggressive" efforts from branch staff to increase its customer base. Castle Rock, as well as Kalama, were the two branches that did not make the cut, though Bryant said his bank is prepared to continue offering un-staffed banking services to the customers in those areas.
"We’ve made the difficult decisions to close those branches," he stated. "That does not mean that we’re going to stop serving those communities. There are a lot of other ways for communities to do banking."
Bryant said courier service can be made available to customers such as the City of Castle Rock, as well as machines able to deposit checks by scanning them. Courier service was discussed as a possible option during the City Council meting, though officials said they were wary of having to pay for extra services or needing to travel out of town to make deposits, as the nearest Heritage Bank branches are in the Longview/Kelso area.
City Clerk/Treasurer Ryana Covington said, whatever the city decides to do, they are required to deposit cash and checks within 24 hours of receipt and, while they can also change banks entirely, doing so may not end up being the cheapest solution.
"If you change banks again," said Covington, "you’re going to have to change all of your checks, deposit receipts and all that because they have our account numbers on them."
She also noted the likely impact on the community of closing the branch, stating it would mean the loss of six jobs as well as a fixture in the downtown business core.
Bryant did state employees at the Castle Rock and Kalama branches will be given an opportunity to interview for positions in Longview and Kelso, and those who decline will be offered severance packages.
Helenberg said it is his intent to join Kalama Mayor Ron Poulsen in petitioning Heritage Bank to keep the branches open for the sake of their city administrations as well as their community members.
"It puts a really big burden on the people of this community," he said. "It definitely wouldn’t hurt to send a letter."
When asked what conditions would need to be met in order to keep the Castle Rock branch open, Bryant said the volume of business would need to essentially double by Nov. 15 in order to maintain a staffed location.
The next Castle Rock City Council meeting is scheduled for Sept. 9 at 7:30 p.m. at the Senior Center. Those with questions or in need of accommodations may call (360) 274-8181, though accommodation requests must be made by 9 a.m. three days prior to the meeting.