By DeAnn Rossetti
Having grown up in Poulsbo, Wash., a small Scandinavian town on the Kitsap Peninsula, Island resident Jim Mitchell is a big believer in small community operations.
He also loves the challenge of a start-up — which is why he’s founding Puget Sound Bank, a new small commercial bank slated to open in Bellevue in mid-March.
In June 2004, Mitchell’s friend and business partner, Daurell Bell, came to him with the idea of opening a bank.
“We thought it would make great economic and investment sense,” said Mitchell. “It’s the perfect time to start a bank, because the economy is picking up, businesses are expanding and interest rates are going up.”
Mitchell also said that he and Bell both have extensive banking experience and contacts, and a seasoned board of directors to back them up.
Mitchell received a bachelor’s degree in business from Seattle University, and a master’s in business administration from the University of Washington and his JD from the Southwestern University School of Law.
He began his career in 1977 as an assistant vice president at Security Pacific Bank. He eventually became first vice president before moving on to U.S. Bank as senior vice president in charge of commercial lending in 1990.
In 2002, he was hired by Sterling Savings Bank and started its corporate banking group in Seattle, lending to companies with $5 million in sales to $250 million in sales. Mitchell also began a corporate lending group at Sterling Savings and built it to a team of 11 employees.
Mitchell said a cycle of larger banks acquiring small banks has left a void. He also points to the current $30 billion in loans and $30 billion in deposits in King County alone as being a sign of a solid area to create a small bank.
There are two primary goals that must be reached before opening a community bank, said Mitchell. First, the founders must raise enough capital and obtain regulatory approval, or a charter, from the state department of finance and the Federal Deposit Insurance Corporation (FDIC).
Mitchell and his partners have raised $19 million in capital toward their target sum between $15 million and $20 million. Most of that money was raised by selling shares to primarily local shareholders.
“Having local people as kind of ambassadors for the bank will help in our success,” he said
“Most small banks start out with $10 million or less, so $20 million is a large amount, and an advantage for us as a small bank,” he continued. “If we hit our target sum, we’ll have the legal lending limit of $4 million, which creates a bit bigger playing field.” Mitchell and his partner expect approval from the FDIC by mid-January, and if successful, will open the bank by mid-March.
The bank will be located on the 18th floor of the Bellevue Place building, in downtown Bellevue. Puget Sound Bank will be involved in 45 percent commercial banking, 40 percent commercial real estate and 15 percent private banking for high net worth individuals. The bank will use courier service each day to pick up deposits and do other banking for companies, so the company won’t have to send an employee to the bank location to do their banking.
Mitchell, who lived on Mercer Island for six years in the 1980s, and again since 1990, said Mercer Island’s convenience and small-town atmosphere are what kept him here. He has been active in the Mercer Island Boys & Girls Club.
Mitchell’s wife, Jude, owns a workman’s compensation claim company on Mercer Island. Their three children graduated from Mercer Island High School.
Some of the advantages that Puget Sound Bank will have are “high touch” customer service, local, vs. out-of-state decision-making on loans and other banking needs, and experienced commercial lenders who can work with companies and offer value-added suggestions to like a consultant.
“Large banks have done poorly with customer service and with their specific routines,” said Mitchell. “We are going to be `out of the box,’ and more flexible.”
Puget Sound Bank will also have state-of-the-art Internet banking, cash management and automatic voice response for account information and bank products, like certificates of deposit.
“I like starting something from scratch, building a dream team and being able to look back with a sense of accomplishment on what you’ve built,” said Mitchell. “My job as CEO is to build the best-running bank possible. What happens after that will take care of itself.”
Mitchell can be reached at 206-276-4757.