((L-R) Wendy McGrane, Cory Allen, Gary O’Connell, Ryan Brown, Chris DuPont, Kevin Cole and Sandy Wagner)
Chris Dupont
SVP, Commercial Banking Team Lead
Central Oregon Commercial Banking
Umpqua Bank
umpquabank.com
Has the current interest rate environment and banking news changed your approach to lending or working with clients?
Our approach is very hands-on and relationship-oriented, which is really important for our customers during any period of disruption. Our team here in Central Oregon has proactively reached out to many of our customers, an-swering any questions they have and making sure they understand our strong position as their bank. In terms of lending, our approach continues to be very relationship-centric and locally focused. While the interest rate envi-ronment impacts all banks, our focus has always been on developing full banking relationships. This means we gen-erally compete on overall value, as opposed to competing just on price, which puts us in great shape to keep lend-ing and supporting our customers.
What advice do you give to anyone concerned about their bank deposits or overall banking relationship?
Perspective is key: Generally, the banking industry remains safe, sound, and highly capitalized. Most banks aren’t vulnerable in the combination of ways that have impacted a handful of institutions. For Umpqua customers, our li-quidity is strong, and our deposit base is granular and diversified. We’re in great position to continue supporting their business in the months ahead.
More specifically, it’s important to remember the FDIC insures up to $250,000, and banks like Umpqua offer solu-tions that can cover deposit levels well above that number. If a business has large deposit accounts, talking to their bank about additional insurance coverage is a good place to start.
What is your bank doing to manage your liquidity and overall investment strategies?
Within the past two months over $6 billion, or roughly two-thirds, of our securities portfolio was marked to fair value as a result of our merger with Columbia Bank. This gives Umpqua a significant amount of additional balance sheet and liquidity flexibility.
Our investment strategy is one part of a much larger, robust risk management program. We have a well-balanced and prudent approach that accounts for a variety of factors and possible scenarios, and we are well-positioned to make strategic adjustments as needed in the face of disruptions.
Any additional comments you’d like to add?
The disruptions of the past few years have underscored the importance of having the right banking team in your corner to navigate choppy waters. If you’re a business owner, there’s no time like the present to assess your banking relationship and make sure you have an accessible, strategic partner that can contribute to your success in both good and challenging times.
Wendy McGrane
Vice President | Community RM Team Manager
US Bank
usbank.com
What is your bank doing to manage your liquidity and overall investment strategies?
U.S. Bank maintains strong capital and liquidity positions, along with a disciplined asset liability management framework, to ensure sound balance sheet actions. Our investment portfolio is well-balanced, with appropriate levels of liquidity to help ensure we are prepared for unexpected events.
Has the current interest rate environment and banking news changed your approach to lending or working with clients?
We have a consistent approach throughout the economic cycle. Because of that, customers will experience our typical credit underwriting process.
What advice do you give to anyone concerned about their bank deposits or overall banking relationship?
Customers are paying close attention to the industry as a result of the disruption early in March and are looking for banks that have an appropriate risk profile and a diversified business model. With regards to U.S. Bank, they can feel confident that we will continue to be a strong banking partner, as we are big enough and have enough scale to make a difference, but small enough to truly be part of the communities we serve. Our diversified funding sources, ample liquidity levels and strong credit quality, supported by disciplined underwriting standards, are all hallmarks of our approach to risk management. Customers with questions or concerns should reach out to their banker.
Any additional comments you’d like to add?
As a long-time banker in here in Central Oregon, I understand that each customer has unique priorities when it comes to managing risk. Our local Central Oregon banking team is available to discuss any specific concerns, listen, and provide suggestions to give our clients piece of mind. Please reach out to your banker to ask questions, or reach out to me directly, and I’ll connect you with the appropriate local team member.
Cory J. Allen
Senior Vice President and Central Oregon Team Leader
Washington Trust Bank
watrust.com
What is your bank doing to manage your liquidity and overall investment strategies?
Washington Trust Bank has always actively managed interest rate risk with a macro balance sheet view. Positioning and behavior across all components of the balance sheet, including bonds, loans, deposits, wholesale funding and cash must be considered so the enterprise outcome is reasonable through a wide range of industry conditions. We have an interdisciplinary group within the bank that manages this process, and our process has not changed because of recent events in the banking industry. We run many scenarios and conduct stress tests regularly to gameplan a wide range of external market conditions. A strong liquidity position with ample funding to meet our depositors’ needs is a mainstay of our strategy.
Has the current interest rate environment and banking news changed your approach to lending or working with clients?
As a 120-year-old community bank that has navigated the Great Depression, the financial crisis of 2008 and the COVID-19 pandemic, we closely monitor a wide range of economic and industry conditions. It’s normal and expected that across the business cycle, there will be times of stress, and we prepare for unexpected conditions. Beyond that, we manage our business as we always have. Know your customer, help them with their financial needs, and run a conservative business that’s built to withstand unexpected challenges. Our dedication to building long-term relationships and offering tailored products and services has contributed to our customers trusting us with their financial decisions for more than a century.
What advice do you give to anyone concerned about their bank deposits or overall banking relationship?
In times of stress, relationship matters. The recent banking events highlight the importance of focusing on the fundamentals of the bank that you work with. Part of a successful financial relationship is knowing and understanding your financial partner. A strong relationship should always include your ability to talk with your banker, particularly during times of uncertainty. At Washington Trust Bank, we pride ourselves in the accessibility we offer our clients to relationship managers, and the partnership we provide throughout their financial journey. Whether your banking needs are through consumer banking, business banking, private banking or wealth management teams, you should consider intangible assets such as service level, product options and access to decision-makers before making a major decision about your banking relationship. A discussion with your relationship manager will help you see if there are any products or services you could be taking advantage of to help strengthen your financial position.
Gary O’Connell
EVP, Market President
Summit Bank
sbko.bank
What is your bank doing to manage your liquidity and overall investment strategies?
Summit Bank has maintained the same asset liability management strategy we had in place prior to the bank failures. While we engage in some investment in treasuries and securities, we do so not to maximize profits or yield but to minimize risk and keep the duration and liquidity needs of the portfolio balanced. As reported in the bank’s April 12 earnings release (sbko.bank), our cash and securities totaled over $291 million, or 27% of assets, as of March 31, 2023. The conservative securities portfolio consists of US Treasuries and U.S. Government-backed agency and mortgage bonds. Summit Bank typically purchases only short-term securities, building a portfolio with an average historical duration of 2.3 years.
Has the current interest rate environment and banking news changed your approach to lending or working with clients?
Summit Bank has made no changes to its lending practice of meeting and knowing every new and existing client, underwriting and approving their loans locally, and managing their relationship locally. The “know your client” concept has paid dividends. When we know each and every client, we know the bank portfolio. When we know the bank portfolio, the market will see fewer surprises. There have been few, if any, surprises in the lending or the credit portfolio at Summit Bank, so we continue to do business the same way. Furthermore, our independence to do business this way has been earned not only through financial performance but also through independent ownership —
primarily individual shareholders mostly located in our communities in Oregon, as opposed to any substantial ownership interest by large, out-of-area equity groups. This enables us to execute our foremost value: take care of the client. What this means for loan decisions is that we can put a greater weighting on local market factors and local management acumen than our larger competitors do, while still giving consideration to potential impacts from macroeconomic factors. We can do this because we operate independently absent any conflicting institutional investor objectives. If the loan makes sense, we try to find a way to make it happen. This concept is the same now as it was before the current rate environment and recent banking news.
What advice do you give to anyone concerned about their bank deposits or overall banking relationship?
Our advice to business decision-makers is to know your bank and who they do business with, and expect your banker to know their bank’s financial position and performance. In Q1 2023, we experienced deposit growth of over $81 million. The growth was aided by our bankers’ ability to accurately convey the Summit Bank’s financial strength and stability when responding to client calls, a topic we have discussed internally and often for years. Over the course of hundreds of conversations with clients since early March, this has maintained and grown the level of confidence in us by businesses in our communities. We also utilized a no-cost solution we have had in place for over 10 years that provides unlimited FDIC insurance options for money markets and CDs, giving further assurance to depositors. While this has always been a valuable solution, there has been more attention paid to it by depositors recently in light of the current events in banking.
Any additional comments you’d like to add?
We understand why people were confused by the banking news in March. When SVB failed on March 10, for the first 48 hours or so, some bankers wondered, “Is this 2008 or early 2020 all over again?” We quickly learned that it wasn’t 2008, and it wasn’t early 2020 either. When the recent events unfolded, we compared notes with many other bank management teams. A consensus emerged quickly that the few bank failures were not a sign of a larger banking industry failure. It was not a contagion. The failures were isolated and attributed to management decisions by those banks that failed and not an industry wide trend. That said, there was a clear shift in the market psychology toward the banking industry, and that was real. Considering differing versions of what happened according to bankers, news sources, industry advocates, politicians and social media, we understand why it was hard for people to know what to believe. So, we made calls and we answered calls, client by client, and we discussed the environment from both our perspective and that of our clients. While there may be another round of bank failures this year, the factors and events described above make us feel prepared and confident that we can continue to grow and take advantage if more disruptions occur in the market this year.
Ryan Brown
Senior Relationship Manager
WaFd Bank
wafdbank.com
What is your bank doing to manage your liquidity and overall investment strategies?
WaFd Bank has consistently demonstrated conservative sound practices around liquidity management and overall investment strategies. This has mitigated WaFd from the risks most notably impacting the Banking industry this year. Each decision affecting the Bank’s liquidity position and overall investments are viewed through a long term lens which prevents against potential missteps resulting from decisions made purely based on short term gain. Candidly, this conservative approach has been in place throughout WaFd’s history and therefore nothing much has changed this year as it relates to the strategy other than an increased awareness of the stability and benefits this provides the Bank and our clients.
Has the current interest rate environment and banking news changed your approach to lending or working with clients?
The banking news and current interest rate environment has not fundamentally changed our approach to lending. However WaFd leaned in deeply to support our clients lending needs at a rapid pace over the past few years and we are therefore currently tempering the velocity of lending with a focus on supporting existing client relationships. This measured approach continues to reinforce the stability, safety, and soundness our clients trust in and rely on. Separately, with interest rates elevated relative to the past decade plus, certain projects may not be as economically feasible for clients and some have decided to take a breath to let the dust settle on a number factors impacting our local and national economy.
Specifically addressing how we are working with our clients in general; we are working with our clients in a deep-rooted consultative type of relationship during this current economic environment. The majority of clients I’ve worked with over the years I believe would attest this is consistent with the type of relationship we’ve built together regardless of environment. However it’s critical during these times to remain close with our clients, provide reliable information, and transparent communication. Our clients have shown they want and appreciate that.
What advice do you give to anyone concerned about their bank deposits or overall banking relationship?
I’d typically start by asking what is driving their concern. Here are a few facts: for deposits to be lost the Bank where those deposits are held would have to fail and the portion of those deposits exceeding $250,000 (FDIC insurance limit) could potentially be lost. We just witnessed two Bank failures and no deposits were lost; that is also a fact. And the Banks within the industry will bear the cost of that, understandably. Of course that does not ensure a future Bank failure will not result in deposit loss. For those concerned about potential deposit loss resulting from their Bank failing, we have products that provide up to $100,000,000 FDIC insurance as well. Admittedly I’m biased but I lean toward building and growing a banking relationship with a conservative stable Bank.
Any additional comments you’d like to add?
There is no Bank, regardless of size, that could withstand a 100% run on deposits. No Bank is holding in cash, dollar for dollar, every deposit on the books. They shouldn’t be; if they were they wouldn’t be supporting essential functions the Banking industry was designed to provide, i.e. taking mitigated risks in lending those dollars to support Businesses and generate economic growth. I don’t agree with some of the decisions and investment strategies that have been well documented in the industry this year either; and acknowledge another essential function of Banks is to provide a safe place where clients can rely on their deposits to be available when needed. Ultimately, there is a certain level of trust that is inherent and core to the entire system functioning as designed because (as previously noted) there is no Bank that could sustain a complete run.’
Kevin Cole
President/CEO
Mid Oregon Credit Union
midoregon.com
What is your bank doing to manage your liquidity and overall investment strategies?
Starting in fall of 2022, we began seeing more market pressure on deposit rates. Like nearly all financial institutions, we have increased deposit rates to retain and grow liquidity. It has been a nice reward for our savers who have not earned much on their funds since 2019. The failures of Silicon Valley Bank and Signature Bank did not significantly impact Mid Oregon. We prepared our team with the necessary information to share with members who had questions. When people looked at our risk profile, they felt comfortable placing more deposits with us. Mid Oregon hit a new record for total assets on March 31.
Mid Oregon’s investment strategy is straightforward. We invest primarily in loans to Central Oregonians to buy cars and homes and to expand small businesses. When we have surplus cash, it is invested in Government securities that are typically less than three years to maturity. We are currently reducing the investment portfolio to fund loans to members. As a member-owned cooperative, we are focused on providing the credit our members need. Our investment portfolio is managed to allow us to shift funds into loans when needed.
Has the current interest rate environment and banking news changed your approach to lending or working with clients?
No. Mid Oregon appreciates the loyalty of our members, and we work diligently to support them regardless of market conditions. The relationships we have with members are built over many years. The challenges in the banking industry are reducing credit availability for consumers and small businesses. Mid Oregon plans to help fill that void for Central Oregonians who need credit, but will require more deposits to do so.
What advice do you give to anyone concerned about their bank deposits or overall banking relationship?
The amount of deposit insurance that bank customers and credit union members receive should be maximized, and employees can ensure they are getting the full amount. It is also important to know your bank or credit union. Are they local? What types of investments do they hold? What types of loans do they make? What percentage of their deposits are uninsured? How committed are they to your community? People should also know there are slower and less dramatic impacts from bad investment strategies than the bank’s failure. For example, banks and credit unions may attempt to offset those losses by closing branches and laying off staff. This may result in poor service or reduced access to your money. Many people moved money to banks labeled “too big to fail” in the last couple of months when they could have been investing in their local credit union or community bank and helping resolve the credit crunch.
Any additional comments you’d like to add?
Where you bank matters. Communities need community banks, credit unions, and regional and national banks. Each type of financial institution fills different needs for consumers and small businesses. When you use a local, community-based financial institution, you are helping your neighbor gain access to the credit they need and supporting local investment. As the only financial institution headquartered in Central Oregon, Mid Oregon is committed to keeping our 150 employees local and working to build thriving communities. When members bank with us, they invest in Central Oregon.
Sandy Wagner
Central Oregon Regional Manager
SELCO Community Credit Union
selco.org
What is your bank doing to manage your liquidity and overall investment strategies?
SELCO has used the current rate environment as an opportunity to drive deposits, which ensures that we are on stable ground as banks and credit unions everywhere navigate the evolving economic environment. We have been particularly aggressive in offering some of the highest rates in the market on our certificates, including a nine-month certificate that tops 5% if a minimum deposit requirement is reached.
Otherwise, SELCO has not made any significant changes to its investment strategies. As a member-owned, not-for-profit credit union, SELCO employs a much different structure than for-profit banks of all sizes. Without the same profit motive, we tend to be more conservative in our investment decisions. That has put us on particularly solid ground, even in this volatile environment.
Has the current interest rate environment and banking news changed your approach to lending or working with clients?
To some extent, yes. It’s no secret that credit unions like SELCO return earnings to their members, including through particularly competitive interest rates on consumer loans. And consumer loans remain an important part of how we serve our members. But we have certainly shifted our focus to a more competitive pursuit of deposits. Ultimately, the silver lining to this high-rate environment, which has largely been framed as unfriendly to consumers, is that it has incentivized savings.
What advice do you give to anyone concerned about their bank deposits or overall banking relationship?
Recent bank failures have become a national topic and one that is understandably unnerving for many. One thing SELCO has made clear to our members is just how different not-for-profit, member-owned credit unions are than the banks that have recently failed. SELCO’s not-for-profit, cooperative structure holds credit unions like SELCO accountable to its members. Without a profit motive, institutions like SELCO tend to be cautious with their members’ money. At the end of the day, all decisions about our products and services are deliberate and with our members’ best interests in mind. It’s also important to remember that banks such as Silicon Valley Bank had unique portfolios, focused on tech, venture capital, and cryptocurrency interests. Typically, traditional financial institutions have more diverse portfolios and policies.
Any additional comments you’d like to add?
After several years of increasing saving rates, we have seen savings shift downward across the financial spectrum. Given the rising cost of everything from groceries to mortgages, it makes sense that people have less money to set aside. In many cases, it meant some had to dip into savings just to keep up. This is a concern, obviously, and a significant reason why banks and credit unions need to incentivize savings, which will improve the long-term financial health of our members and our communities. At the end of the day, we believe our commitment to our member’s financial well-being is one of the primary appeals of banking with a member-owned credit union.
