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Leadership team changing at People's Bank

Could your workplace still function if three of its top leaders were taken out by COVID-19?

Ken Trautman, chief executive officer of Medford-headquartered People’s Bank, decided to find out.

He laid out the scenario for his team.

He was dead. The chief financial officer was dead. The chief operating officer was in a coma, hanging onto life with the help of a ventilator.

People’s Bank employees buckled down and came through the 10-day real world exercise with flying colors. Trautman said one of the hardest parts was remembering to keep his mouth shut while observing group Zoom videoconference meetings.

“The first day, I kept forgetting I was dead,” he said.

To lead People’s Bank during the exercise, the board of directors picked Julia Beattie to serve as the acting chief executive officer.

“That’s where we got to see her leadership style,” said Trautman.

With her intelligence, experience and talent, Trautman said it was natural to pick Beattie.

She was recently promoted to be president of the locally owned, locally managed chain of banks that stretches from Grants Pass to Klamath Falls. Trautman plans to retire in about three years from the bank he co-founded and opened in 1998. Beattie will be working alongside him as he prepares to move into retirement.

The transition is part of a wave of leadership changes underway at the bank.

Trautman, Chief Operating Officer Jeri Reno and Chief Credit Officer John Boyd are making plans to retire, and Chief Financial Officer Russ Milburn has already retired.

Lindsey Trautman, who has been with People’s Bank since 2005, was recently promoted to the chief financial officer position. She is Ken Trautman’s daughter-in-law.

Ken Trautman said People’s Bank didn’t set out to pass the torch to a female-led leadership team. The bank just picked the best candidates for the president and chief financial officer positions, and they happened to be women.

Lindsey Trautman said Beattie, the new president, has great leadership skills and is passionate about her customers.

“She’s a leader at heart,” Lindsey Trautman said. “She’s not afraid to speak out and make tough decisions.”

Lindsey Trautman said the COVID-19 pandemic caused People’s Bank to look more closely at its succession plan to make sure it has strong leaders available to keep the bank afloat.

To make the emergency exercise even more challenging, employees were in the midst of processing a flood of applications from businesses applying for federal COVID-19 aid through the Paycheck Protection Program.

“It may have been challenging to test the succession plan in the midst of PPP and COVID-19, but things never happen at a good time. People have to be ready to take the helm,” Lindsey Trautman said. “You can see how people react under stress.”

Ken Trautman said the pandemic has taught People’s Bank it must think in broader terms about what challenges and disasters might strike.

“This is an uncertain world,” he said.

From its inception in the late 1990s, the bank has faced a wave of challenges.

With mergers and acquisitions leading to the loss of locally owned and controlled banks, Ken Trautman teamed with Mike Sickels to found People’s Bank. Sickels retired a decade later but continued to serve on the bank's board of directors. The bank has grown into a Southern Oregon chain with $494 million in assets.

Beattie, whose banking career started in 1991, joined People’s Bank in 2013.

“A lot of community banks have gone away. We’re the last standing community bank headquartered in Southern Oregon,” she said.

Beattie said the banking industry has changed dramatically since her career began. People were still writing a lot of checks and coming inside banks to do business with bank tellers. Banks had to adapt to an increasingly digital world.

The Great Recession was a major challenge for People’s Bank, which specializes in commercial loans. When the housing bubble burst, builders who had taken out construction and development loans faced financial disaster.

“A lot of banks went down during the Great Recession, but People’s Bank survived,” Beattie said. “It had some bumps and bruises, but we’re stronger today as a result of those experiences.”

The bank chain has diversified its revenue streams so it’s less reliant on interest income, Ken Trautman said.

People’s Bank is now facing a new challenge with the COVID-19 pandemic.

Banks and other financial institutions are tasked with processing and administering forgivable Paycheck Protection Program loans funded by the federal government. The COVID-19 relief loans are a lifeline to help keep businesses and nonprofit organizations afloat and their workers employed.

People’s Bank employees worked around the clock to process a flood of loan applications from local businesses. The bank hired eight college students who were related to bank employees, then stationed them near their relatives to help work on the applications while limiting the potential spread of COVID-19, Beattie said.

People’s Bank typically makes 100 loans a year, Ken Trautman said.

Employees’ marathon work sessions to process more than 1,000 loans in a few months led to more than $93.5 million of federal aid being funneled to struggling local businesses.

In the beginning of the Paycheck Protection Program, Ken Trautman said the bank noticed hardly any loan applications coming in from Latino-owned businesses, even though they make up 13% of businesses in the area. The bank teamed up with a radio station for Spanish-language messages and a certified public accounting firm with bilingual employees to boost the number of loan applications from Latino business owners.

Ken Trautman said the bank wanted to do its best to make sure the entire Southern Oregon community would be covered by the Paycheck Protection Program.

Beattie said Ken Trautman was adamant with the team that they fully embrace the intent of the program and process as many loans as possible.

“It was a big, big challenge, but it was also a tremendous opportunity,” she said.

Beattie said that for a banker, Ken Trautman has always had an unusual mix of personality traits. He’s cautious and fiscally conservative like a banker, but also has the forward-thinking mindset of an entrepreneur looking to capitalize on risk, she said.

Starting a locally owned chain of banks helped Ken Trautman empathize with the people who come to People’s Bank for loans to start their dream businesses.

“I appreciate what our customers do to start a business. You put everything on the line,” he said.

As for the future of People’s Bank, it’s on a trajectory to keep increasing its assets, which will allow it to serve even bigger clients. With no community banks north of Redding, the chain could expand into Northern California. The bank could also spread into Northern Oregon, Ken Trautman said.

“It’s going to be an exciting time — but full of change,” he said.

Reach Mail Tribune reporter Vickie Aldous at 541-776-4486 or valdous@rosebudmedia.com. Follow her on Twitter @VickieAldous.

Lindsey Trautman, new chief financial officer of People's Bank, Ken Trautman, current chief executive officer for People's Bank and Julia Beattie, new president of People's Bank, talk in a conference room of Friday. (Jamie Lusch / Mail Tribune)