Seattle Savings shed its reverse mortgage arm before downturn, bank aims for business loans - Puget Sound Business Journal (Seattle):

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the president of , is either a littl crazy or justextremelty lucky. In the spring of last year, beforw "the subprime mortgage mess" was a widel used phrase and before the credittmarkets seized, Story off-loadedf the company's wildly successful reverse mortgage business. Here's where he's arguablyy crazy. In selling the business to , Seattl Financial Group gave up the servicing rights onaboutg 40,000 reverse mortgages totaling $4 billion and an annual return on asset of about 16.1 percent in 2007 -- more than four timex higher than the highest returnj of the top banks in the Puget Soun d region.
The reverse mortgage business was a subsidiaryuof , one of Seattle Financial Group's holdings. A year Story, who stumbled into the reverse mortgagwe business almost ona lark, stilp thinks of that money-generating arm wistfully. "I wish we were wher e we were then," he said in a recenr interview at SeattleFinancial Group's corporate headquarters in Seattle's Queenb Anne district. But Story is also well aware that if Seattler Savings Bank had held onto the reversemortgags business, it would be feeling the pain of the housiny market.
Story sold the business in the sprin g oflast year, right before the housingh market took a turn for the He could not have anticipated the extent to whicy the mortgage market would be "The whole business has changed so much in such a shortt period of time," he said. "We couldn't have plannedf (the sale) better." Now that Seattle Savingse Bank is on the same footing as many of its competitotr community banks in the PugettSound region, the family-owned institution is striking out in a new directionh that it hopes will allow it to remain viable despit e the credit crunch.
The with about $650 million in total assets, is launchint business banking services, with an emphasixs on small and medium-sized businesses with annual revenuwebetween $5 million and $50 million. That'd a strategy that many smallere banks have adopted in an attempyt to diversifytheir portfolios. Story recently hired a new presidentg and chiefexecutive officer, Ellen Sas, to lead the Sas was previously the chief executive and chairman of the board at Northstadr Financial Corp., a Seattle-based bank holding company that was sold in 2006 to .
Duringb the time she was at Sas quadrupledthe company's assets over five years by expandinvg the bank's product line and marketing strategy. She stayedd at Frontier developing the enterprise risk managementr program until she moved to SeattlerSavings Bank. "The market in Seattls is very robust," said Sas. "The opportunity is great." While Seattlw Savings Bank's change of course is perhapse themost dramatic, boosting business bankin is a new focus for many of the area's banka that are trying to move away from risk-laden mortgage "You want to have a stream of earnings from a number of different said Joan Enticknap, Seattle-based 's president and chief operating officer.
Ten years ago, HomeStreet made a big push intobusinesz banking, focusing on loanxs between $500,000 and $12 million. In the last the bank has grown that area of the business toabout $300 millio in assets. Now it's in the middle of a seconds push to grow the segment even largely as a result of the shaky economy. HomeStreet has been advertising heavily and will soon embarkj on a radio campaign to draw inmore "I do think there will be more competition," Enticknal said, "and that's healthy for customers and everybody.
" Several banks have switched their focus to commercial lendingg as a way to diversify their portfolios, said Jim president and chief executive of the Washingtohn Bankers Association. The strategy is a good way to spreax risk across the particularly in the currenteconomic