|| Print ||
|Articles - May 2010|
|Friday, April 16, 2010|
The economy may be turning around for some in 2010, but banks haven’t seen the end of the carnage yet. Nationally, 41 banks failed between January and April and were fed to stronger banks in a sort of FDIC-assisted survival of the fittest. But Roseburg-based Umpqua Bank seemed to be full of good news amid the first-quarter plague: it repaid in full its $214 million in Troubled Asset Relief Program funds, acquired two banks in a market it’s been coveting and launched a small- business lending program.
Umpqua did not escape the crisis unscathed. The bank had more than $800 million in residential development loans when the housing bubble burst in 2007 and wrote off $197 million in losses on loans in 2009. Its parent company, Umpqua Holdings, posted substantial losses last year. But Umpqua is relatively healthy despite short-term disappointments, and it’s positioning itself to emerge as a strong regional bank after the present malaise abates.
“They’re better capitalized than peer banks, their credit quality is superior to peer averages and they’re exhibiting behavior of the bank that’s more on the offensive than on defensive,” says Jeff Rulis, a research analyst at D.A. Davidson in Lake Oswego. “They are looking to grow versus other banks that are still worrying about their own internal issues.”
Umpqua’s been able to grow rapidly in its key markets thanks to FDIC-assisted acquisitions, which are basically mergers that occur over a weekend. Umpqua quadrupled its Washington presence a year after acquiring the failed Bank of Clark County in Vancouver by picking up two failed Puget Sound banks and their combined $1 billion in assets, and it’s poised to gobble more this year.
And after the crisis is over, customers will remember that it was Umpqua the FDIC trusted to smooth things over, Rulis says.
Umpqua surmounted its losses because it marked down bad residential development loans early and aggressively, says CEO Ray Davis. The TARP funds also helped by further cushioning Umpqua’s relatively healthy capital ratios and insuring them against any economic surprises.
Even with aggressive write-downs, Umpqua’s nonperforming assets, which comprise mostly delinquent loans, made up 2.38% of its assets in 2009. It’s hard to say what that number should be for regional banks in the current climate. Washington Trust’s NPAs were 1.06% of its assets for 2009; PremierWest Bancorp’s NPAs were 8.37% of its assets for 2009. PremierWest is one of 10 Oregon-based banks operating under federal orders to improve their financial positions.
Umpqua’s problems were in residential development loans, Davis says. But many in the industry say lenders should be bracing for the impact of persistently high vacancy rates on developers who took out commercial development loans.
Davis isn’t worried about that. “The naysayers have been saying this for two years now: ‘The bottom’s going to fall out.’ They’ve been saying it for two years and nothing’s really happened,” he says. “We do not see systemic issues in our commercial loan portfolio… There will be issues that pop up but nothing widespread.”
Despite forecasts that more banks will continue to fail in 2010, Davis is confident that the worst is over for Umpqua. The bank opened a personal wealth management division in September, expanded its international banking division in December, and plans to build between six and eight new branches in Oregon and Washington this year.
“2009 to me was just the worst year ever. It was just terrible,” Davis says. “2010 is going to have challenges but it’s not going to be 2009.”
Tuesday, March 04, 2014
BY DEBRA RINGOLD | GUEST CONTRIBUTOR
How can we strengthen the performance of institutions charged with teaching what Francis Fukuyama calls the social virtues (reciprocity, moral obligation, duty toward community, and trust) necessary for successful markets and democracy itself?
Thursday, April 03, 2014
BY OB STAFF
Learn how to green your workplace and lower your environmental footprint at the office. Oregon Business presents a two-hour "Greening Your Workplace" seminar on May 28th, 2014 at the Nines Hotel in Portland.
Friday, March 21, 2014
TOM COX | OB BLOGGER
During a recent talk to HR Directors, I asked if they saw leaders trying to solve every problem, instead of delegating to and empowering staff. Every head nodded. Every single one.
Monday, March 03, 2014
Check out interviews with employees from some of the 100 Best Companies to Work For in Oregon winners and find out what makes their company a great place to work.
Tuesday, February 25, 2014
BY BRANDON SAWYER
Sales of small businesses surged in 2013 according to the biggest Internet marketplace of such transactions, BizBuySell, increasing to 7,056 reported sales, a 24% increase over 2012, when they dropped 7%. Portland Metro sales tracked by the site grew 9% to 73, capping three years of solid growth. On top of that, Portland’s median sale price jumped 67% to $250K, versus just 13% to $180K nationally. Portland was one of just six metros tracked where the median sale price matched the median asking price, with sellers getting, on average, 92% of what they asked.
Tuesday, April 08, 2014
BY HANNAH WALLACE | OB BLOGGER
It may be obvious, but most farmers don’t make a lot of money. According to preliminary data from the 2012 Agriculture Census, 52% of America’s 2.1 million principal farm-operators don’t call farming their primary occupation. Farm cooperatives may offer a solution.
Thursday, February 20, 2014
BY VIVIAN MCINERNY | OB BLOGGER
As retailers consolidate and newspapers fold, the business of modeling shifts to ad agencies, apparel companies and new media.
|How Doug Badger spends his downtime|
|Port at a crossroads|
|100 Best awards 2014|
|Our man in Congress|
|Scientists make first embryo clones from adults|
|Man urinates in reservoir, ruins 38M gallons of water|
|Recreational marijuana use linked to brain changes|
|Former NYC mayor announces $50M gun law election push|
|U.S. consumer inflation rises: higher food, rent costs|
|U.S. Airways apologizes for tweeting explicit image|
|Bubba Watson wins second Masters Tournament|
Marketing the state brings new business, new jobs and a better quality of life for everyone.
Living in the beautiful Pacific Northwest means enjoying our wonderful surroundings, while remaining aware of the multiple types of natural disaster threats that we face: winter storms, windstorms, floods, landslides, earthquakes, volcanoes and tsunamis.“
Oregon State University's hospitality degree program invests in next-generation leaders.
On Saturday, April 26, more than 1,900 local Comcast employees and their families, friends and community partners will “make change happen” as they volunteer to improve schools and nonprofits in Oregon and Southwest Washington as part of Comcast’s 13th Comcast Cares Day.
NAI Norris, Beggs & Simpson just completed their newly rebranded First Quarter Market Reports. Not only does it feature a brand new format, but the report ensures accuracy due to the annual truing up of their database.
Samuel Hernandez, an Associate at Barran Liebman, is the recipient of a 2014 Oregon State Bar Litigation Section Rising Litigator Award.