First Federal Savings & Loan Association

“We’re here and we are staying!”

Business View Magazine interviews Jim Schlotfeldt, President & CEO of First Federal Savings & Loan Association, for our focus on Top U.S. Banking Institutions.

Nearly 100 years ago, American Savings & Loan was founded in McMinnville, Oregon as a new banking choice for residents of Yamhill County. Fourteen years later, in 1936, a mutual charter was granted and the name was changed to First Federal Savings & Loan Association. In the decades since, First Federal has evolved with increased services and more branches, but the commitment to its customers and communities has never waned. To this day, that dedication remains as the bank’s primary focus – with exceptional results, including being named one of the 2020 Top 200 Healthiest Banks in America from DepositAccounts.com, a subsidiary of LendingTree, and being a Portland Business Journal Corporate Philanthropy Award winner for 11 years in a row.

First Federal pledges to help customers identify and achieve their financial goals through exceptional service and strives to provide the best banking experience possible. Its mission statement says it loud and clear: “We’re here, in the Yamhill Valley. Our mission is to provide superior banking products and services; to promote home ownership and business vitality in the support of our communities. Yes, we’re here…and we are staying!”

President and CEO, Jim Schlotfeldt

Headquartered in McMinnville, where it all began, First Federal Savings & Loan Association is now the seventh largest bank in the state of Oregon and the 1,536^th largest bank in the nation, with about 90 employees, in total, at eight locations. According to President & CEO, Jim Schlotfeldt, “Since we became First Federal in 1936, we’ve added five full-service branches and two limited-service branches in local retirement communities. As one of two surviving Mutual Chartered Savings & Loan Associations in Oregon, we remain committed to providing local banking options to our communities in Yamhill County and the surrounding areas. In 1936, we were $136,000 in assets and now we exceed $500 million and offer a full suite of products for consumers and businesses.”

As a solid testament to its staying power, construction on a new, three-story First Federal headquarters building in McMinnville (a city of about 34,000) is in progress. The existing headquarters was built in 1975, and as branch administration outgrew that location, they acquired nearby properties and departments were housed in separate buildings. Today, First Federal owns an entire city block – an acre of land – in McMinnville, where they’re now building; tearing down one of the buildings onsite to make room. The new facility will have enhanced capabilities to provide remote delivery of product, including an expanded customer care call center. The long-term plan is to invest in a modern environment to attract quality employees and deliver products using the latest technology. The building should be complete in the fall of 2021.

“We offer a full suite of services for consumers and businesses,” says Schlotfeldt. “On the consumer side, our biggest product is residential loans and home equity loans, and on the commercial side, commercial real estate and commercial loans for small business. Technology-wise, we have online and mobile apps for anything from standard depository accounts to applying for a mortgage loan on your phone. We also added credit monitoring at no charge through our Credit Sense app.”

Of course, having the right partners is key to success. Of particular importance for First Federal is the long-time relationship with Elan Advisory Services. Schlotfeldt notes, “Elan provides services for community banks that we wouldn’t necessarily be able to offer, given our size. They have the scale and capacity to run credit card programs, and so we’re offering a First Federal branded credit card that they administer. We’ve worked with them in different ways in excess of 10 years. Another valuable partner is FISERV. They’re our technology provider for our core banking systems and ancillary systems. That allows us to offer the same technology that the big banks do for a better customer experience.”

Every business has had to adapt during the COVID-19 crisis, and First Federal has gone above and beyond to accommodate its staff and customers, especially seniors. The first step was to close all their building lobbies, operating only from drive-up windows for a period of time (those lobbies have recently opened again). Work teams were also separated and had people working remotely – separating key functions and teams to avoid losing an entire discipline with an infection. The senior community campuses are still closed to outsiders, so First Federal staff have been calling clients in those communities to see how they can help, reaching out by telephone to check in on them.

Groundbreaking Ceremony

Lindsay Liddell, First Federal Marketing Manager, explains, “We have online video guides, as well as downloadable tutorials, to help ease ‘going digital’. We’ve done a lot of phone calls, where we’re also on the computer with a client and walk them through the tutorial, step by step, so that they can take advantage of our digital products from the convenience of their own home. We’re here for them.” The bank also did an inhouse emergency loan program that was booked on their paper, rather than the PPP. And they offered payment deferrals from 90 to 180 days. As a result, they now have a large number of loans on deferral and some that have come off because they realized they didn’t need it.

Yamhill County is a major wine producing area, in addition to traditional farming and agriculture. The wine industry draws a lot of tourists, hence, the local economy is tied to a large hospitality sector which has really been hurt during the pandemic. First Federal has seen its banking clients in areas all the way to the coast being greatly impacted with the lack of tourism. Schlotfeldt admits, “It’s been tough but things are starting to come back. And businesses that are able to scale down their expenses will be all right, but that’s the trick – surviving on a limited revenue at this point.”

First Federal has all the advantages of a “traditional bank.” Phones are answered by an actual person; there is no automated attendant. They have an active community presence and know their customers by name. But that doesn’t mean they are caught in the past. As Schlotfeldt attests, “There is definitely a new norm, and it accelerated the trend in technology that was already occurring. For instance, we have a smart phone app where you can deposit your check by mobile deposit. In the first month of this COVID-19 environment, we saw a 45 percent increase in the use, and I suspect that usage will remain high. We expect there will be an increase in adoption of our digital products, overall.”

The bank’s marketing strategy revolves around being current and in front of its ideal customer. First Federal is active on social media platforms, supports the local sports teams , is present at local events, and always looks to prioritize local vendors – combining traditional advertising opportunities with a digital approach. Staff members are encouraged to volunteer in the community through service days at local organizations, highway cleanups, and other worthwhile initiatives. Liddell reports, “Last year, our 90-plus employees totalled over 3,500 volunteer hours and our corporate donations exceeded $250,000. We were even able to do some volunteering during COVID. When everything was shut down, we reached out to our local non-profits and asked if there was anything our employees could take home. One fun project we did was to make candy leis for all of the graduation senior classes in our county. We wanted to celebrate their success and we like to keep busy. “

In 2019, the bank hired a full-time Community Impact Coordinator – a role that helps connect First Federal with local communities. “She has allowed us to push forward with our support of financial education in the school district,” says Liddell. “To provide digital learning resources for teachers in a fun game-like format for high school and middle school students. We also have a summer internship program with Linfield University, where we pair college students with local, non-profit organizations. That partnership allows non-profits to complete projects in a unique learning environment for a student.

What’s on the horizon for First Federal? Schlotfeldt declares, “We’re going to stay locally-owned and that’s why we’re building our new office headquarters. We’d like to increase market share; improve efficiency, margins, and profitability. But I think the biggest test of time or the biggest achievement will really be to capture that next generation of customers and account holders. To do that, we need to stay relevant to the customer’s ever-changing preferences, and improve our ability to deliver, as each generation has its own expectations of satisfaction. We’re in this for the long term and therefore we’re going to do the right thing, ahead of making more money for the quarter.”

AT A GLANCE

First Federal Savings & Loan Association

What: Full-service banking establishment

Where: Head office in McMinnville, Oregon

Website: www.firstfedweb.com