Home Federal Bank Broadens Footprint


A bank chief says that one of the prime reasons that his group seized the opportunity to take over the failed Liberty Bank was to gain an even firmer foothold in the Central
Oregon marketplace.

With the acquisition, including four branches in Bend and one in Redmond, Home Federal Bank based in Nampa, Idaho, almost overnight became a dominant player in our region following its scooping up of Prineville-based Community First Bank last year, which had eight offices between La Pine and Madras.
With the addition of Liberty, Home Federal said its assets grew 80 percent to $1.5 billion.

President and CEO Len Williams said: “Our objective is to be in the top one or two community banks in each market we are in, and we wouldn’t have taken the leap if it were not for the opportunity to deepen our presence in Central Oregon.

“The location got us interested, but the culture, the existing employees and the community sealed the deal.

“Since the first acquisition a year ago we have been looking for further opportunities locally, so when Liberty came on the radar we jumped at the chance. We had also taken a run at Columbia River Bank previously but missed out on that one.

“Now we have significant share in three main geographic markets, including Boise and the Central and Western areas of Oregon.”

Although the name has changed, operations at the former Liberty Bank offices are “business as usual,” Williams said. “It’s the same people, the same locations — with much more capacity and ability to service clients. We are excited to welcome Liberty Bank customers and employees to the Home Federal Bank family.

“Business clients are also what we know and do well,” he added. “It’s exactly the same thing that Liberty is good at. The issues here were really driven by the real estate market. Hopefully that’s down near the bottom.

“I’ve been in this business for 33 years, and what I find is the key cure to real estate problems is time. And now we’ve got the time to work through them.”

Liberty Bank didn’t have the capital, or cash, it needed, Williams said, while Home Federal does. “That’s the strength that Home Federal brings. It will free up money for increased lending and community contributions that Liberty Bank was unable to do for a while.

“We also look forward to supporting the community of Central Oregon and continuing our philosophy of taking care of those that take care of us and are also our commercial lifeblood.”

In addition to a higher profile in Central Oregon, the Liberty Bank purchase means Home Federal will now also operate in Lane, Josephine, Jackson, and Multnomah counties in the state, including the communities of Eugene, Grants Pass and Medford, Oregon, giving it 15 offices up and down
Interstate 5.

A few senior executives of Liberty Bank lost their jobs in the takeover but, Williams said, “There are 230 employees and the vast majority will stay,” adding that part of Liberty’s appeal was the staff of long-term, steady employees.

“I view it as the best of all worlds from the markets we’re going into as well as the employees’ perspective with all the jobs retained and offices staying open.

“Liberty hasn’t been able to make loans of late, so now we’re open for business and the community should benefit from it.”

Commenting on the strategic impact of the acquisition, Williams added: “This acquisition is consistent with our growth strategy. We have been prudent and selective in our acquisition pursuits by focusing on the intermountain region.

“We are excited about the opportunity to diversify our market concentration and serve new communities.”

Banking offices previously operated by Liberty Bank reopened as branches of Home Federal Bank on August 2 following the Federal Deposit Insurance Corp. (FDIC) assisted takeover of deposits and certain assets, subject to a loss-sharing agreement.

Based on preliminary financial information, the acquisition by Home Federal includes approximately $387 million of assets, including $94 million of cash and securities and $264 million of loans.

Deposits assumed in the acquisition total approximately $689 million, which includes all insured and uninsured deposits. Other real estate owned acquired in the transaction totaled approximately $21 million.

The transaction also includes the purchase of other assets and liabilities and the bank anticipates an additional cash settlement of approximately $300 million due to the assumption of
net liabilities.

Home Federal was a prime suitor due to having a liquid balance sheet and a strong capital position and is in a financial position to buy banks when many are struggling to survive because it always has been relatively conservative, Williams said. After going public in 2007, it invested the proceeds in agency-backed securities, instead of going “crazy in construction and development.”

As of June 30, 2010, its total risk-based capital ratio was 35 percent, which is over three times greater than the level of capital that banking regulators require for a financial institution to be well-capitalized.

Home Federal Bank was founded as a community bank in 1920 and today is a subsidiary of publicly traded Home Federal Bancorp.

Based in Nampa, outside of Boise, Idaho, Home Federal Bank has $822 million in total assets and $522 million in total deposits. It has 16 branches in southwestern Idaho.

Liberty Bank began in 1979 as Central Oregon Savings & Loan Association in Bend. It moved to Eugene in 1987. As of March 31, Liberty Bank had total assets of approximately $794 million and total deposits of $718 million.

There were 140 bank closures nationwide in 2009, including three in Oregon, and more than 100 banks have closed in 2010. Liberty Bank is the third Oregon bank to close in 2010.


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