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Building on record earnings By Greg Stiles Jan 23, 2017 12:00 AM A A People's Bank of Commerce posted record earnings and grew its assets to all-time highs in 2016. Fresh off a year when it netted nearly $1.9 million, the Medford-based community bank is embarking on a $6 million construction project to replace its longtime Biddle Road office. People's Bank acquired the vacant, one-acre, former Marie Callender's property on the corner of Progress Drive for just over $1 million last summer. President Ken Trautman said the bank will break ground within the next few weeks for a three-story, 20,000-square-foot building that will house lending and other banking operations. The project is expected to be finished in the first quarter of 2018. Trautman said the building's design is aimed at the future rather than present banking practices. "We did a walk-through at Procare Software (the One Main Building) and Lithia's headquarters and came up with our own design," Trautman said. "The corners are rounded; it's modern and comfortable with a lot of windows and light." The office was designed by OgdenRoemerWilkerson Architecture and will be built by Adroit Construction. What you won't see is a drive-up window. "When we think about banking, we old-timers think about drive-ups, ATMs and night drops," the CEO said. "The only one of those three people still use are night drops. Our clients don't use drive-up. The cost and space requirements just take away from parking, wrapping around the building. ATMs are obsolete because every time you use your debit card at a store they ask you if you want cash back. Person-to-person transfers allow you to send money with your phone, so that's been a game changer in the financial industry." During the recession, People's Bank expanded operations in Central Point and Grants Pass, positioning itself for commercial lending growth. Although Central Point presently has total deposits of $240 million, including $20 million at People's Bank, building the proposed Costco will inevitably unleash more commercial development. Rather than build more offices in Phoenix, Talent or Shady Cove, Trautman envisions expanding to commercial centers in the Willamette Valley sometime after 2020. "You don't need more than one branch in a market because of technology," he said. "Your lending people will come to you wherever you are because they want to talk to decision makers who can make their dreams come true." Of Oregon's 22 state-chartered banks, People's Bank is 11th in size. "We decided five years ago to grow the bank organically during a downtime," he said. "It came at pretty significant cost, but now we're seeing the results of past investments. There are $3.3 billion in deposits in Jackson and Josephine counties, and we want to be the dominant player in the market." In the past five years, the company has grown to 70 employees from 20, and assets have grown to $265 million from $126 million in 2011. Trautman said performance in 2016 was similar to other West Coast banks. "The economies have gotten better throughout the West; it just took Southern Oregon longer to recover than the rest of the country," he said. "We've started to see activity not related to government spending in the last two years. The rest of the country has been going well for four to five years. Portland has been in a boom, but we haven't seen it until now." Following 34 percent bottom-line growth in 2016, Trautman said he is bullish for 2017. "We're more efficient, and our backroom operations can handle more transactions without more costs," he said. "So we can double our size without a lot of additional personnel." — Reach reporter Greg Stiles at 541-776-4463 or [email protected]. Follow him on Twitter at www.twitter.com/GregMTBusiness, on Facebook at www.facebook.com/greg.stiles.31 An artist's rendering of the Biddle Road People's Bank.