Panhandle State Bank Chuck Bauer Leads His Company Away From The Mega-Banking Trend Of The Industry

Before the latest surge in independently owned banks popped up in North Idaho, there was Panhandle State Bank.

And if Chuck Bauer and his team of executives have any say in the matter, 16-year-old Panhandle will outlast them all.

Since 1985, Bauer has guided the small but profitable bank through the ebbs and flows of the Sandpoint economy. When he arrived here, the timber economy was in the tank and virtually no snow fell to the dismay of winter tourism businesses.

“It was a recessionary time when I came here,” Bauer said in his office that features artwork by one of this two daughters. “Things have changed a lot since then.”

Sandpoint has grown in sometimes painful spurts, the most recent of which has the bank ready to expand itself. A Ponderay branch will be Panhandle’s third, and should open in October near the new Wal-Mart.

“During the summer, some of our customers were saying it was taking an hour to get downtown to do their business,” said Dave Smith, a senior vice president with Panhandle. “That’s just too long. The Ponderay branch should help with that.”

In 1995, the bank’s assets grew 24 percent to $82.9 million. That compares to just about $18 million 10 years ago, said David Jensen, senior vice president and credit supervisor for the bank. Panhandle’s 1994 performance placed it among the top 300 banks of its size nationally.

Bauer, Jensen, Smith and Executive Vice President Curt Hecker meet daily to chart the bank course, an unusual decision-by-committee setup to run a bank, Bauer admits. But also an unusually successful one.

“I think there’s been only one time since I’ve been here that I’ve had to cast a deciding vote on an issue in this committee,” Bauer said. “We just talk amongst ourselves and work it out.”

Banks with local owners have found an increasingly comfortable niche in the banking business as large banks continue to merge and reduce their services. When West One Bank of Boise announced its merger with U.S. Bancorp of Portland, Panhandle took out a full-page ad to tout its local service.

The banking trend has led to the expansion of other North Idaho independent banks, including Idaho Independent Bank, Mountain West Savings Bank and others.

“The big banks are trying to push customers away from traditional services,” said Smith, who handles the cashier end of the bank. “They’re charging people to see a teller. We’re just as likely to go the opposite way.”

The bank’s loan decisions are made here, its board of directors are locals and the bank contributes heavily to the Sandpoint arts community - the bank’s second floor doubles as an art gallery - and to other civic organizations. The combination endears the bank to its Bonner and Boundary county customers.

“We try to keep our products very simple,” Jensen said. “If the customer doesn’t understand what they’re buying into, they won’t want to buy it.”

But with tough markets pulling down the timber industry, threats of Louisiana-Pacific Corp. shutting down its Sandpoint operations and an uncertain future for Schweitzer Mountain Resort, the local economy has backed off its explosive growth of recent years.

“I think we’re leveling off,” Bauer said. “I don’t see anything in the near future that will add a lot here. We still need to diversify our economy here.”

After 11 years of mostly 10- and 12-hour days, Bauer, 62, will crown 40 years of banking by retiring in June. Plans for him and his wife include travel to Australia, New Zealand and Alaska.

As with most workaholics, Bauer won’t be able to simply walk away from the bank. “I’ll continue to do some marketing for us,” he said. “There’s a new devil in this business called compliance - at the state and federal levels. There’s a lot of work to be done there.”

Hecker will become bank president when Bauer steps down.

Bauer found the lakes, trees and mountains of North Idaho far more appealing than the dry desert of Toppenish, Wash., near Yakima, where he ran an independent bank before coming to Sandpoint. “I just didn’t like living there.”

The story is far different for him here, where Bauer enjoys downhill skiing and spending what little time he can outside work on the water.

“Those who really get to enjoy North Idaho are the visitors, the tourists,” he said. “The rest of us have to spend our time making a living here.”

, DataTimes ILLUSTRATION: Photo