Can you BANK on your bank or credit union?
Published 5:00 pm Friday, October 31, 2008
CRBJ’s questions for area financial institutions
1. Daily financial conditions are changing rapidly on a domestic and global level. How is your financial institution faring in these difficult economic times?
2. Please explain what effect, if any, the federal government’s financial rescue/bail-out program will have on your financial institution or your customers.
3. The national media repeatedly warns of a “credit crunch,” suggesting borrowers seeking home, auto, business and other loans are having a tough time getting the money they need. What effect is this national credit crunch having on businesses and individuals seeking loans from your financial institution? Do you have money to loan, and are you making loans?
4. Will you please explain how funds deposited in your financial institution are protected so that depositors can “rest easy” about the safety of the money they have deposited?
5. What suggestions would you give area businesses and individuals to help them weather the current economic climate?
Bank of Astoria
by Cheri Folk
President & CEO
Daily financial conditions are changing rapidly on a domestic and global level. How is your financial institution faring in these difficult economic times?
The fundamentals of our bank remain sound during this uncertain economy. While the volatile economy is providing plenty of challenges, we are confident that Columbia (Bank of Astoria) is well positioned to manage through this cycle. We are well-capitalized, with ample sources of liquidity to service the loan and deposit needs of our customers. We have a diverse balance sheet, and healthy core deposits resulting from the relationships we have built with our customers.
Please explain what effect, if any, the federal government’s financial rescue/bail-out program will have on your financial institution or your customers.
For Bank of Astoria, it’s business as usual. We have money to lend and we are making loans every day. The federal stabilization will help ensure that credit is available. Without available credit, it would become increasingly difficult for consumers to borrow money. It would also be difficult for most people to run their business. Most businesses need working capital, which allows the business to efficiently operate while waiting for accounts receivable to be paid.
The national media repeatedly warns of a “credit crunch,” suggesting borrowers seeking home, auto, business and other loans are having a tough time getting the money they need. What effect is this national credit crunch having on businesses and individuals seeking loans from your financial institution? Do you have money to loan, and are you making loans?
We have money to lend. People with a good credit history will continue to have access to mortgage, credit card and other types of loans. Appropriately, most banks, including Bank of Astoria, are taking steps to carefully monitor risk in the current economic environment.
Will you please explain how funds deposited in your financial institution are protected so that depositors can “rest easy” about the safety of the money they have deposited?
Bank of Astoria is insured by the Federal Deposit Insurance Corporation, which means customers are protected. Not one penny of insured savings has ever been lost by a customer of a federally insured bank.
In addition, the FDIC has temporarily increased the insurance limits to $250,000 from $100,000 per individual depositor.
What suggestions would you give area businesses and individuals to help them weather the current economic climate?
It’s important to maintain your quality and commitment. The core values and goals that inspired entrepreneurs to launch their dreams are the same ones that will carry proprietors through this difficult economy.
Bank of the Pacific
by Dennis A. Long
CEO
Daily financial conditions are changing rapidly on a domestic and global level. How is your financial institution faring in these difficult economic times?
Because The Bank of the Pacific did not originate or purchase any sub-prime loans, and because we did not invest in any Fannie Mae or Freddie Mac stock, we have faired relatively well given the difficult economic circumstances banks operate in today. Both loans and deposits have increased since last year, as we have benefited from the misfortunes of WAMU and Mutual Fund withdrawals. Nevertheless, we have seen slowing in the demand for residential real estate loans even though we stand ready to provide more of that type lending within the market place.
Please explain what effect, if any, the federal government’s financial rescue/bail-out program will have on your financial institution or your customers.
Since the Bank did not play in the financial toxic waste pool, it will not directly benefit from the “Troubled Asset Repurchase Plan” (TARP). Indirectly, the program should serve to free up capital that will help restart the economy and stabilize home values. As that occurs, residential real estate markets should begin to improve and, as a result, stimulate loan volume. Not only will the buyers and sellers of homes benefit, but the local retailers will also benefit due to increased demand for goods and services relative to those home purchase transactions.
The national media repeatedly warns of a “credit crunch,” suggesting borrowers seeking home, auto, business and other loans are having a tough time getting the money they need. What effect is this national credit crunch having on businesses and individuals seeking loans from your financial institution? Do you have money to loan, and are you making loans?
The national credit crunch is very real. Most people take credit for granted, like an auto loan from a car dealer, or the renewal of a credit card, or a student loan, or a real estate loan. Most loans of this nature are pooled and sold into the secondary market for funding. Sometimes they are referred to as commercial paper, mortgage-backed securities, or collateralized debt obligations. Regardless of what they are called, when the funding sources for these instruments begin to dry up, it affects all of us on Main Street. While The Bank of the Pacific still has plenty of money to loan and has a keen desire to make more loans, it also relies on the secondary markets for mortgage loan placement. If that market continues to tighten up, it will become more difficult to place such loans. However, it is expected the recent TARP approval should help alleviate that potential adverse situation.
Will you please explain how funds deposited in your financial institution are protected so that depositors can “rest easy” about the safety of the money they have deposited?
Deposits are insured up to $250,000 per account by the Federal Deposit Insurance Corporation (FDIC). The FDIC is backed by the full faith and credit of the US of A. In addition, a husband and wife can have a joint account insured up to $500,000. They may also have individual accounts in trust for each other, in effect providing a marital community of up to $1,500,000. They may also each have an Individual Retirement Account (IRA) that is insured up to $250,000 each.
At the Bank of the Pacific, non-interest bearing accounts, whether personal or business, are presently 100% FDIC insured, regardless of the amount.
What suggestions would you give area businesses and individuals to help them weather the current economic climate?
Economic downturns are part of the normal business environment we have worked in for years. We have been through similar crises before. Each time, the businesses that proactively made adjustments based on pre-planning, were the ones that weathered the storm best. It is essential for a company to map out a plan in advance of adversity so that, at the first sign of any trouble, an appropriate course of action can be quickly implemented. Waiting and hoping things will improve is not a satisfactory response.
Compass Community Bank
by Steve J. Ferber
President & CEO
Daily financial conditions are changing rapidly on a domestic and global level. How is your financial institution faring in these difficult economic times?
Compass Community Bank is very pleased with deposit and loan growth. Our business plan has always noted that our community is somewhat counter-cyclical; that is, for the past 15-20 years, during times of economic stress nationally or throughout the Pacific Northwest, we tend to not experience the extreme lows associated with a large metropolitan region. Tourists can still afford to drive to Clatsop County for an affordable vacation. There certainly are some areas of the economy that could see a slowdown; however, we are seeing very good quality loan opportunities for area businesses. Additionally, despite the national media coverage of mortgage market volatility, home mortgages are readily available and our department is quite active.
Please explain what effect, if any, the federal government’s financial rescue/bail-out program will have on your financial institution or your customers.
The most significant direct impact is that FDIC insurance coverage has been increased to $250,000 per depositor and now banks have the option of offering unlimited FDIC coverage for non-interest bearing checking accounts through 2009. Both of these should provide a great deal of comfort to depositors at all FDIC insured banks.
The national media repeatedly warns of a “credit crunch,” suggesting borrowers seeking home, auto, business and other loans are having a tough time getting the money they need. What effect is this national credit crunch having on businesses and individuals seeking loans from your financial institution? Do you have money to loan, and are you making loans?
We have lots of money to loan! And, our loan activity has been very strong. Sure, some banks have curtailed their lending in various areas. But, we are very fortunate to have many well capitalized banks in our community willing to make local loans to businesses and consumers. The stories we’ve all heard in the press recently are generally related to large national companies having a difficult time obtaining very large loans. This is not the case locally. In fact, with the recent drop in the Prime rate, many local loans (particularly business loans) are more affordable than they have been in years.
Will you please explain how funds deposited in your financial institution are protected so that depositors can “rest easy” about the safety of the money they have deposited?
First, our capital base is extremely strong. Bank regulators require a minimum of 6% capital ratio in order to be considered “well capitalized.” At 64% (as of September 30, 2008) our capital ratio is well in excess of the minimum. So, we have a very strong “buffer” to protect our depositors. Second, our loan portfolio is solid; we do not have any problem loans impacting our earnings. Finally, FDIC insurance coverage has been increased as mentioned previously. In addition, at Compass Community Bank, we participate in the “CDARS” program. [CDAR is an organization of banks that participate in a deposit-matching network to protect depositor funds.] This allows us to provide virtually unlimited FDIC coverage for certificates of deposit. (OK, there is a $50 Million limit per customer!) If you are concerned about security for your cash, FDIC insured banks are your best alternative.
What suggestions would you give area businesses and individuals to help them weather the current economic climate?
Be conservative in your outlook. We highly recommend all businesses and individuals put together 2-3 year financial projections (or budgets) including a best, worst and most likely scenario for each year. Then, ask yourself if you can live with the worst-case scenario. Be brutally honest and develop contingency plans. Keep your borrowings to a minimum, maintain your liquid assets, control your costs and hold off on any discretionary expenditure until the economic outlook becomes clearer.
ShoreBank Enterprise Cascadia
by David Provost
COFO
Daily financial conditions are changing rapidly on a domestic and global level. How is your financial institution faring in these difficult economic times?
ShoreBank Enterprise Cascadia (SBEC) is not a commercial bank, rather it is a non-profit Community Development Financial Institution, or CDFI. As such, SBEC is not as susceptible to the vagaries of the financial markets and liquidity shortages that have impacted the regulated commercial banking sector.
That said, SBEC is doing quite well. We continue to see significant interest from qualified borrowers and businesses in our products and services. Moreover, we continue to see interest in funding our organization from foundations, government agencies and financial institutions, on a par with the interest shown prior to the onset of the current financial crisis.
Please explain what effect, if any, the federal government’s financial rescue/bail-out program will have on your financial institution or your customers.
As mentioned above, we are not a commercial bank, and, as such, we are not eligible for participation in the bailout program. We are hopeful that those commercial banks with whom we partner either as investors in our organization or as co-lenders on larger transactions are stabilized so that we can resume providing economic stimulus to the businesses and communities of the Lower Columbia and throughout Washington and Oregon on a larger scale than SBEC can do on its own.
The national media repeatedly warns of a “credit crunch,” suggesting borrowers seeking home, auto, business and other loans are having a tough time getting the money they need. What effect is this national credit crunch having on businesses and individuals seeking loans from your financial institution? Do you have money to loan, and are you making loans?
SBEC does have money to loan. The credit crunch is a function of liquidity in the market place and manifests itself in the reluctance of refusal of one bank to loan its excess funds to another bank, for fear that they will not be repaid; this resulting in some banks being short of cash and therefore unable to make loans, even to their best customers.
ShoreBank Enterprise Cascadia is far less dependent on the vagaries of daily cash balances and market liquidity than is the case in the commercial banking world. SBEC carefully plans its cash flow needs as far as 18 months in advance. This planning give it ample opportunity to solicit and receive the grants and investments it needs to meet its cash needs.
Will you please explain how funds deposited in your financial institution are protected so that depositors can “rest easy” about the safety of the money they have deposited?
N/A
What suggestions would you give area businesses and individuals to help them weather the current economic climate?
These are indeed uncertain times. Business and consumers will need to economize and spend wisely. One way to spend wisely is to consider spending locally. This means patronizing local stores who in turn employ local people. This type of spending tends to keep money circulating within communities longer than when consumers shop at large national chains and big box stores. Studies suggest that money spent locally tends to circulate as many as four and a half times within a community, compared to one and a half times in the case of spent in national chains.
ShoreBank Pacific
by David C.E. Williams
CEO
Daily financial conditions are changing rapidly on a domestic and global level. How is your financial institution faring in these difficult economic times?
We are doing just fine. We are recording our 10th quarter of record earnings and have reserved for bad debts at a prudent level. Our approach of focusing on the community impacts our lending, and applying local dollars in that community seems to be playing well with depositors and borrowers.
Please explain what effect, if any, the federal government’s financial rescue/bail-out program will have on your financial institution or your customers.
None for the bank. Raising the level of insured deposits makes the depositor more comfortable; however, we were the second bank in the country to enter into the CDARs program [CDAR is an organization of banks that participate in a deposit-matching network to protect depositor funds] which provides deposit insurance up to $50 million so depositors were well covered to begin with. We are well capitalized and have raised additional capital during this period so we are well equipped to handle the unknown event.
The national media repeatedly warns of a “credit crunch,” suggesting borrowers seeking home, auto, business and other loans are having a tough time getting the money they need. What effect is this national credit crunch having on businesses and individuals seeking loans from your financial institution? Do you have money to loan, and are you making loans?
We have lots of money to lend and are seeking additional borrowers. Not surprisingly we are not real anxious to lend on real estate but are doing a few deals. We are actively seeking commercial and industrial loans and owner-occupied real estate. We have not changed our lending criteria during this period and other than the issue addressed above, don’t expect to.
Will you please explain how funds deposited in your financial institution are protected so that depositors can “rest easy” about the safety of the money they have deposited?
Deposits have historically been insured up to $100,000 for most deposits and $250,000 for IRA accounts. This has changed with the workout plan and by the time that this is published will be dated. Now most deposits are insured by the FDIC up to $250,000 and non-interest bearing checking accounts (primarily businesses) are insured by the Federal government in their entirety. For those customers using the CDARs program they are insured up to $125 million which should give most customers comfort.
What suggestions would you give area businesses and individuals to help them weather the current economic climate?
The issue being addressed in the media speaks to the circumstances of the very large banks that were combined commercial and investment banks. Their behavior violated about every principle of lending (know your customer, assess if the project will be effective in the community, be engaged in the project and monitor the performance of the project and the customer, know of an outside solution if the project fails, know the other parties in the transaction, vendors, customers, etc.). The community banks do these things as a matter of course. They don’t pay the highest rates, in part because they don’t need to. Those that do will go out of business, or will enter into risky lending to make up their cost.
All of this is long way of saying bank with your local bank one committed to your community in the long run not a temporary money-making transaction. Know your banker and believe that they are operating in your interest. Make sure that they do have the community interest at heart.
Sterling Savings Bank
by John Moore
Assistant Vice President & Community Manager
Daily financial conditions are changing rapidly on a domestic and global level. How is your financial institution faring in these difficult economic times?
Sterling has a strong capital position and good liquidity. Our core business model remains very strong and we are dedicated to providing high-quality financial services in a safe and sound manner.
Sterling has a long history of conservative lending practices. Sterling chose not to originate sub-prime loans, so our exposure in this area is very limited.
Sterling, as always, is sticking to basic banking principles. We are taking steps to help our customers understand their options during times of uncertainty. With banking rules changing almost daily, the biggest value we can provide our customers right now is to be knowledgeable about what is happening in our industry.
Please explain what effect, if any, the federal government’s financial rescue/bail-out program will have on your financial institution or your customers.
The effects from the Emergency Economic Stabilization Act of 2008 have yet to be determined. Based on the swings in the stock markets over the past couple of weeks, the general public is not sure how this plan will affect our economy in the long term. As for the Troubled Asset Relief Program (TARP), it is really too early to tell how the program will affect Sterling, as there are not many published details about it yet. There may be an opportunity for Sterling to take advantage of this program, but we don’t know yet.
The national media repeatedly warns of a “credit crunch,” suggesting borrowers seeking home, auto, business and other loans are having a tough time getting the money they need. What effect is this national credit crunch having on businesses and individuals seeking loans from your financial institution? Do you have money to loan, and are you making loans?
Sterling has experienced a slowdown in residential construction and increased delinquencies in our residential construction lending portfolio. We are addressing those issues head-on and remain confident in our ability to work through these issues.
On the bright side, Sterling is still making loans. We have a strong credit culture and have always practiced conservative lending. We will continue to do as we’ve done in the past.
Will you please explain how funds deposited in your financial institution are protected so that depositors can “rest easy” about the safety of the money they have deposited?
Despite some news reports, this is still a good time to use a bank to make deposits and borrow money. Sterling is a safe and sound financial institution because it has a strong capital position and all deposits are insured by the FDIC up to $250,000. Our knowledgeable bankers focus on making sure our deposit customers are structured properly to reap full FDIC coverage.
What suggestions would you give area businesses and individuals to help them weather the current economic climate?
It is important to understand what things an individual can affect and what things are outside of his or her control. Stock markets may rise and fall but managing what is controllable is an important aspect of maintaining confidence in the outcome.
TLC Federal Credit Union
by Mike Pierce
CEO
Daily financial conditions are changing rapidly on a domestic and global level. How is your financial institution faring in these difficult economic times?
TLC Federal Credit Union is weathering the financial crisis extremely well. Our reserves are at an all-time (50+ years) high, our return on assets (net income) is well above the industry average, and our delinquent loan rate is one-third of the industry average. We are in the process of constructing a 24,000 square foot main branch in Tillamook and will begin a new Seaside facility early next year. TLC’s Board and management have been anticipating the current financial crisis for several years. In response to the early warning signs, we have taken steps to ensure our long-term viability and as a result continue to prosper despite harsh economic conditions.
When credit unions were originally established, their goal was to provide individuals and families with financial services that would prove safe and secure, even in the most turbulent of financial times. TLC Federal Credit Union has fulfilled that goal for over 50 years. We fulfill it today and we will continue to do so in the future.
Please explain what effect, if any, the federal government’s financial rescue/bail-out program will have on your financial institution or your customers.
Since TLC did not engage in sub-prime or Alt-A home loans we do not need to be “bailed out” in any way. The only portion of the government program that will impact our members is the benefit of an increased insured deposit limit ($100,000 to $250,000). Once again, our balance sheet is strong, which allows us the flexibility to move forward with new branch construction and continue to offer new products and services to our members.
The national media repeatedly warns of a “credit crunch,” suggesting borrowers seeking home, auto, business and other loans are having a tough time getting the money they need. What effect is this national credit crunch having on businesses and individuals seeking loans from your financial institution? Do you have money to loan, and are you making loans?
The national credit crunch has not had an impact on our ability to lend. TLC has millions of dollars available to lend to both consumers and small businesses. We are still actively making home, auto, personal and small business loans. Since, we do not borrow funds to make loans, 90 cents of every dollar that is deposited at TLC is used to fund loans for other TLC members who live or work in Tillamook, Lincoln or Clatsop Counties. TLC is a truly local financial institution and our deposits and loans remain here.
Will you please explain how funds deposited in your financial institution are protected so that depositors can “rest easy” about the safety of the money they have deposited?
Deposits are insured by NCUSFI, National Credit Union Share Insurance Fund, and insured to at least $250,000, under separate ownership coverage may be even higher. This coverage is available under NCUA, National Credit Union Association, and the regulator for federal credit unions.
What suggestions would you give area businesses and individuals to help them weather the current economic climate?
In economic times like these it is important to reduce debt, while also setting aside cash as a reserve. Yes, there are deals out there and individuals in good financial standing may want take advantage of those opportunities. However, indicators suggest that this recession will continue through at least 2009, so individuals and businesses need to make financial decisions with this in mind.
US Bank
by Kevin LaCoste
Region President, Columbia-Pacific Region
Daily financial conditions are changing rapidly on a domestic and global level. How is your financial institution faring in these difficult economic times?
U.S. Bank is faring very well, considering the challenges that face our industry today. Our prudent approach to lending, strong balance sheet and solid capital position have put us in a position to better serve our clients, even during these economically difficult times.
We’re also proud to say that U.S. Bank is rated by independent ratings agencies with some of the highest ratings in the industry. And we’ve paid a dividend to our shareholders every year for the past 145 years.
Please explain what effect, if any, the federal government’s financial rescue/bail-out program will have on your financial institution or your customers.
Because new information is still coming out about these programs every day, it’s anyone’s guess as to exactly what kind of impact it will have on the economy.
The national media repeatedly warns of a “credit crunch,” suggesting borrowers seeking home, auto, business and other loans are having a tough time getting the money they need. What effect is this national credit crunch having on businesses and individuals seeking loans from your financial institution? Do you have money to loan, and are you making loans?
At U.S. Bank, we’re open for business. We are definitely making loans and in fact, we are actively seeking out new business. We have always taken a disciplined approach in regards to our lending practices, so there really hasn’t been a need for us to make any significant changes in the way we run our day-to-day business, even in light of the current economic situation.
Will you please explain how funds deposited in your financial institution are protected so that depositors can “rest easy” about the safety of the money they have deposited?
Our deposit accounts are insured by the FDIC to the maximum allowed by law. It’s also important to note that we have capital ratios that far exceed regulatory standards for being considered well-capitalized.
What suggestions would you give area businesses and individuals to help them weather the current economic climate?
This is a time to be conservative as it relates to leverage and careful planning. Over the past few years we experienced rapid growth and rising home values. This has changed and it is important for businesses and consumers to adjust to the change
Wauna Federal Credit Union
by David Merrell
CFO
Daily financial conditions are changing rapidly on a domestic and global level. How is your financial institution faring in these difficult economic times?
As this liquidity crisis has unfolded over the last six months it has done so to the benefit of local institutions that did not participate in lending practices where success was dependent on home prices continuously rising at a pace exceeding income growth. As money center institutions have needed to sell assets to raise liquidity they have been available to our institutions at higher yields. As national institutions have pulled back lending we have been able to add more loans to our balance sheet. Our deposits have been also growing at a faster pace than had been experienced before with the added volume coming out of national financial institutions which have been suffering from what is now seen as speculative lending.
There has been an increase in the numbers of members encountering financial difficulties, but that began developing earlier as the housing downturn which started in 2006 impacted related industry in northwest Oregon. A higher level of earnings of the credit union has enabled it to deal with those loan losses and still grow member equity by $490,464 from the December 2007 level.
Earnings are growing at an absolute level at Wauna. Net Income through September 30 was $490 thousand, a $148 thousand increase over the same period in 2007. With a positively sloped yield curve and prudence in lending practices, we expect the strong earnings to continue, enabling the credit union to meet local loan needs and to invest in services to our members and local communities.
Please explain what effect, if any, the federal government’s financial rescue/bail-out program will have on your financial institution or your customers.
The only direct impact is the increase of the deposit insurance which enables a member to increase the amount of insured deposits by 2 ½ times the previous level. The stability it brings to the market will be beneficial to members and the credit union, but we still expect to benefit from increased deposit flow and lending opportunities until the capital levels and earnings of the large national institutions are restored.
The national media repeatedly warns of a “credit crunch,” suggesting borrowers seeking home, auto, business and other loans are having a tough time getting the money they need. What effect is this national credit crunch having on businesses and individuals seeking loans from your financial institution? Do you have money to loan, and are you making loans?
Wauna is not lowering lending standards or engaging in “speculative” loans as typified by sub-prime mortgages, but is prepared to meet all member loan needs. It is actively engaged in making auto loans, all types of mortgage loans, and small business loans to borrowers in Clatsop and Columbia counties. We are experiencing deposit growth to meet the added lending. With collateralized funding sources readily available Wauna would be able to expand loans well beyond deposit growth as sound strategic plans may dictate. We have in place risk systems to enable us to monitor market risk, funding needs and loan credit quality.
Will you please explain how funds deposited in your financial institution are protected so that depositors can “rest easy” about the safety of the money they have deposited?
The Emergency Economic Stabilization legislation raises the maximum insurance coverage for federally insured shares and deposits at credit unions and banks from $100,000 to $250,000 (the current $250,000 limit on Individual Retirement Accounts and other certain retirement accounts is not impacted by the new law). The provisions were added as a means to reinforce to consumers the safety of bank and credit union accounts in light of the financial crisis. It was also added in recognition of the Treasury’s guarantee program for money market mutual funds held by uninsured financial companies.
The increase in the coverage amount is effective upon enactment through December 31, 2009. House Financial Services Committee Chairman Barney Frank (D-MA) has indicated he will hold hearings on this issue early next year and it may be very difficult for Congress to roll back the coverage level to $100,000.
The law precludes an insurance premium from credit unions or an adjustment to their 1% deposit to fund the additional coverage. This means that funding for the coverage will come from the National Credit Union Share Insurance Fund’s operating funds or reserves.
Also, if necessary, while the additional temporary coverage is in effect, NCUA may increase its borrowing from the U.S. Treasury to fund the coverage.
What suggestions would you give area businesses and individuals to help them weather the current economic climate?
While the economy had been faltering in different sectors it had not officially been in a recession mode prior to this most recent part of the credit crisis. The recent months decline in retail sales would indicate we are now in a recession. Analysts expect it is most likely to last through the middle of 2009. As a business plans should be based accordingly.
As a business or an individual, prudent financial planning or spending is needed to reduce the potential for financial pain during this time. Wauna has made available to its members valuable but free service called BALANCE which helps the members to evaluate their financial position and develop plans to manage their circumstances.
Wells Fargo
by Kristin Talamantez
Manager, Astoria Branch
Daily financial conditions are changing rapidly on a domestic and global level. How is your financial institution faring in these difficult economic times?
We’re known and admired for our conservative financial position, and a disciplined acquisition strategy that will not change. Wells Fargo is the only bank in the United States, and one of only two banks worldwide, to have the highest possible credit rating from both Moody’s Investors Service and Standard & Poor’s Ratings Services.
We’re focused, as always, on building lifelong relationships with our customers and communities. Because of that, we continue to grow our customer base and also the number of our team members we hire to serve them. We also continue to grow our loans and deposits. As the oldest bank in the West, our strength, security and outstanding financial performance continue to compare favorably with our industry peers.
Wells Fargo continues to be one of the strongest and best capitalized banks in the world. On Wednesday, Oct. 15, we reported that we earned $1.64 billion in the third quarter by helping our customers succeed financially. We have seen a tremendous inflow of deposits recently, reflecting what we believe is a significant flight to quality.
Please explain what effect, if any, the federal government’s financial rescue/bail-out program will have on your financial institution or your customers.
It’s still pretty early in the process to state exactly what this program will look like to our customers and the impact it will have on Wells Fargo. In general we believe the Treasury’s plan is a positive step toward providing much needed capital for financial institutions that are in the best position to deploy it effectively to stimulate the U.S. economy and strengthen confidence in the U.S. banking system.
We absolutely have money to lend to businesses, government entities, universities and consumers. In the third quarter, Wells Fargo had average loans of $404.2 billion, a 15 percent increase from a year ago. We continue to provide new, appropriately-priced credit to our customers. And according to the most recent government data, Wells Fargo for the sixth year in a row is the #1 lender to small businesses in the nation, including Oregon and Washington.
The national media repeatedly warns of a “credit crunch,” suggesting borrowers seeking home, auto, business and other loans are having a tough time getting the money they need. What effect is this national credit crunch having on businesses and individuals seeking loans from your financial institution? Do you have money to loan, and are you making loans?
Effective now through Dec. 31, 2009, the basic FDIC insurance amount has increased from $100,000 to $250,000 per depositor. The FDIC provides separate insurance coverage for deposit accounts held in different categories of ownership. It is possible to qualify for more than the current $250,000 in coverage at Wells Fargo if you own deposit accounts in different ownership categories.
Will you please explain how funds deposited in your financial institution are protected so that depositors can “rest easy” about the safety of the money they have deposited?
We have been serving Oregonians since 1852. Our customers can sleep peacefully at night knowing their funds are safe and secure at Wells Fargo.
What suggestions would you give area businesses and individuals to help them weather the current economic climate?
Don’t panic or make any rash, sudden decisions. Call your banker and/or investment advisor. Review your long term financial goals and your current asset allocation to determine if any thoughtful changes are necessary. Also, your cash is safe at Wells Fargo. Taking a large sum out of the bank puts it at risk of robbery, fire or other mishap for which it is not insured.
Editor’s Note: Space limitations made including every bank or credit union in the region an impossibility. Some financial institutions contacted did not provide responses. CRBJ did not charge respondents a fee to be included.
Just what IS a credit union?
A federal credit union is a nonprofit, cooperative financial institution owned and run by its members. Members pool their funds to make loans to one-another. The volunteer board that runs each credit union is elected by the members.
To join a credit union, you must be eligible for membership. Each institution decides who it will serve. Most credit unions are organized to serve people in a particular community, group or groups of employees, or members of an organization or association.
Some history
President Roosevelt signed the Federal Credit Union Act in 1934, forming a national system to charter and supervise federal credit unions.
In 1970, the National Credit Union Administration (NCUA) became an independent federal agency and the National Credit Union Share Insurance Fund was formed to insure members’ deposits. The NCUSIF, like the FDIC’s Deposit Insurance Fund, is a federal insurance fund backed by the full faith and credit of the U.S. Government.
In 1977, legislation expanded services to credit union members, including share certificates and mortgage lending.
In 1985, federally insured credit unions capitalized the National Credit Union Share Insurance Fund by depositing 1 percent of their shares into NCUSIF.
What about deposit insurance?
Properly established member accounts in federally insured credit unions are insured up to $250,000 per individual account holder, per federally insured credit union. This includes principal and posted dividends up to a total of $250,000.
Joint account holders are insured up to $250,000 per joint account holder, per federally insured credit union. IRA and KEOGH accounts are insured, separate from other accounts, up to $250,000 per institution, including principal and posted dividends.
All federal credit unions and the vast majority of state-chartered credit unions are covered by NCUSIF insurance protection.
Credit unions that are insured by NCUSIF must prominently display the official NCUA insurance sign. No credit union may terminate its federal insurance without first notifying its members.
Approximately 8,600 federally insured credit unions now serve 85 million members with $600 billion on deposit.
Source: National Credit Union Administration Web site: www.ncua.gov
