What's New at First Federal

Bankers see no cause for concern

Published: August 9, 2008

By YVETTE SAARINEN
Of the News-Register

The closure of California's Indy-Mac Bank, and falling stock prices for investor-owned banks across the country, have raised fears in some quarters about the safety of customer deposits.

Local bankers say they have been getting calls or visits from customers with concerns. They say Baby Boomers, old enough to remember stories their parents told them about the stock market crash of 1929 and the Great Depression that ensued, have expressed particular unease.

That has prompted the Oregon Bankers Association to issue a strong statement of reassurance - one the local bankers just as strongly endorse.

"The overwhelming number of banks - including those headquartered here in Oregon - are safe and sound," according to OBA spokesman Casey Boggs. "Oregon's banks are well capitalized and have adequate reserves to address economic challenges. Banks are, and continue to be, the safest place for deposits."

Regulators say non-traditional sub-prime mortgage lending practices played a big role in the demise of IndyMac.

The majority of banks did not issue any sub-prime mortgages and carry none in their portfolios, regulators say. They say that holds doubly true in Oregon, which has largely escaped the excesses of go-go markets like Las Vegas, Phoenix and Miami.

Scott Chambers, professor of finance at Linfield College and founder of McMinnville's Headwater Investment Consulting, has served on First Federal's board of directors for 10 years. And he seconds that assessment.

Chambers said IndyMac was taken over by federal regulators because it was incurring big losses on its suspect loan portfolio. Since it was insured by the Federal Deposit Insurance Corp., the Feds moved in to protect its deposit base.

The last time there were widespread problems in the banking industry - in the 1980s - it was marked by a big run-up in housing prices, followed by a corrective plunge. Chambers said something similar is under way today, but local banks are well-positioned for the downward swing of the pendulum.

Some banks overextended themselves when the market took its sharp upswing, he said. When borrowers began defaulting, they found themselves in trouble.

That's not the case with banks like First Federal, founded in McMinnville in 1922.

President and Chief Executive Officer Rocky Wade said the ' 80s served as a tutorial for the bank's loan officers. Mindful of that experience, he said, they've stuck to their guns, abiding by basic banking principles even when a hot market tempted others to throw caution to the winds.

First Federal's portfolio holds 2,500 loans valued at $285 million, Wade said. Of those, only eight are currently delinquent 60 days or more - a remarkably low number.

He said the bank has yet to proceed with a single foreclosure as a result of the recent downturn.

The ultimate protection is capital on hand, Chambers said, and the more, the better. According to Wade, First Federal has risk-based capital of $50.4 million and tangible core capital of $48.9 million on its books.

First Federal Names Volunteer of the Year

April 30, 2008

Lucille Osborn has been selected as Yamhill County’s 2007 Hearts and Hands Volunteer of the Year. In honor of her award, First Federal has donated $500 to the charities of her choice. Osborn elected to have the contribution split between Newberg Area Habitat for Humanity, Faith in Action and the Chehalem Senior Center.

Osborn was honored for her commitment to volunteering with a variety of different organizations in the Newberg area. She currently volunteers on a weekly basis managing the database and donations for Newberg Area Habitat for Humanity. Newberg Habitat executive director Rick Rogers said, “Through the giving of her time and talent, Lucille Osborn makes Yamhill County a better place. She volunteers with a range of organizations and those organizations and the people they serve are better for her involvement.”

In addition to her work with Habitat, Osborn has volunteered regularly serving meals to seniors through the Meals on Wheels program, as well as with the Chehalem Senior Center and Newberg Faith in Action. Osborn also spent years overseeing the weekend church nursery at the Sherwood Community Friends Church.

The Hearts and Hands Volunteer Recognition Awards event was held on April 29th during National Volunteer Week and was sponsored by First Federal for the eighth year. The reception was held in honor of all the monthly Hearts and Hands volunteers for 2007. Over the last eight years First Federal has donated $52,000 to Yamhill County non-profit organizations in honor of Hearts and Hands volunteers.

Come Shred with First Fed!

March 15, 2008

COMMUNITY SHRED DAY
Saturday, April 12, 2008
9:00 - 1:00 p.m.
Newberg Branch parking lot
121 N Edwards Street, Newberg

Protect your identity by cross-shredding your unneeded documents! Join First Federal as we bring an onsite commercial shredding service to our Newberg Branch to provide you with quick, complimentary and confidential cross-shredding services.

First Federal has contracted with Iron Mountain to bring a shredding truck to our parking lot so that community members can watch as their confidential documents are destroyed. There is no need to remove staples, paper clips or binding—the shred truck can process any of these materials.

For more information on document retention, proper shredding, and protecting yourself from identity theft, visit:

http://www.ftc.gov/bcp/edu/microsites/idtheft/consumers/deter.html

Or contact Erin Stephenson, Community Relations Coordinator, at 503-472-6171 or estephenson@firstfedweb.com.

For you and your identity. . . We’re Here.