Oregon’s slice of the Troubled Assets Relief Program has been meager. But that’s not necessarily a bad thing, because the banks that got TARP money haven’t been moving it through the economy any more ambitiously than the banks who passed on it.
STATEWIDE Oregon’s slice of the Troubled Assets Relief Program has been meager. But that’s not necessarily a bad thing, because the banks that got TARP money haven’t been moving it through the economy any more ambitiously than the banks who passed on it.
Most of the major financial institutions that received the first $200 billion in TARP funds actually cut back on lending in the fourth quarter. The prominent exception was U.S. Bank, headquartered in Minnesota but with a significant presence in Oregon, which received $6.6 billion in TARP money and boosted loans by 3.9%, easily outperforming larger banks such as Bank of America and Citigroup.
The other local bank to buck the trend vigorously was Eugene-based Pacific Continental Bank. The bank’s executives earned approval from the Treasury for $30 million under TARP, but after considering the offer carefully, they said thanks, but no thanks.
“We wanted to remain independent,” says Pacific Continental VP Maecey Castle.
It was an unusual response, but for Pacific Continental it has been an unusual year. How many banks saw dividends increase in 2008? While others were dodging brickbats for accepting TARP money and hoarding it, Pacific Continental raised $10 million on its own and boosted lending in the fourth quarter by $32 million.
Results have been underwhelming so far for the local banks that took the money. The Oregon bank that received by far the most TARP money, Umpqua Bancorp, saw its loan balance decline by $30 million over the quarter in which it received $214 million from the Treasury. “It takes time to get these programs up and running,” says Umpqua spokeswoman Lani Hayward.
Three months after receiving the TARP money, Umpqua issued a press release detailing how it intends to invest it, through four focused loan initiatives. Three of these loan programs target sectors with a real upside: helping municipalities finance public works, facilitating renewable energy projects and backing the local wine industry. As for the fourth loan initiative, a mortgage-lending program specifically for condos that were financed by Umpqua and have been slow to sell, that one might take a while to get rolling.
BEN JACKLET
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