o Previously: In January 2009, Umpqua Bank took over the insured deposits and assets of the failed Bank of Clark County.
o What’s new: Umpqua on Friday assumed all of the deposits, loans and assets of the failed Evergreen Bank in Seattle.
o What’s next: Oregon-based Umpqua is considering opening three new branches in Clark County.
Umpqua Bank has taken over Seattle-based Evergreen Bank, which was closed Friday by the Washington Department of Financial Institutions.
o Previously: In January 2009, Umpqua Bank took over the insured deposits and assets of the failed Bank of Clark County.
o What's new: Umpqua on Friday assumed all of the deposits, loans and assets of the failed Evergreen Bank in Seattle.
o What's next: Oregon-based Umpqua is considering opening three new branches in Clark County.
All seven Evergreen branches reopened Monday as Umpqua Bank locations, bringing the total number of Umpqua branches in the Puget Sound area to nine. Oregon-based Umpqua already operated locations in Bellevue and Kent.
“This gives us a bigger toehold in the greater Seattle area; it’s a strategic play,” Ray Davis, Umpqua CEO, said.
Umpqua is unsure whether all seven former Evergreen branches will remain open, but the bank is now looking to add five to six more branches in the Puget Sound area, Davis said.
Umpqua with headquarters in Roseburg, Ore. has been expanding its reach in Washington since acquiring the insured deposits and assets of the failed Bank of Clark County in Vancouver in January 2009. The bank now operates five branches in Vancouver and is considering opening new branches in Ridgefield, Battle Ground and Camas, Umpqua’s executive vice president Ric Carey told The Columbian earlier this month.
“(The Evergreen deal) is much different than the Bank of Clark County (takeover). This wasn’t an overnight, weekend fast deal,” Davis said. “This was a real thought-out process by the FDIC. There was plenty of time to get ready.”
Like other failed banks, Evergreen Bank had accumulated large loan losses in its real estate construction and development portfolio, according to DFI.
As of Sept. 30, Evergreen Bank had about $488.5 million in assets and $439.4 million in deposits, according to the Federal Deposit Insurance Corp. The FDIC estimates that the cost of the takeover to the Deposit Insurance Fund will be $64.2 million.
“We are always disappointed when a bank is unable to continue safe and sound financial operations,” said Scott Jarvis, DFI director, in a written statement. “We are very pleased, however, to see the bank acquired by a Northwest bank as a whole bank purchase. This is a good outcome for bank depositors and borrowers.”
Umpqua Bank won’t pay the FDIC cash to acquire the bank, Davis said. But it will pay a 1 percent premium to assume all the bank’s deposits, according to the FDIC.
The bank has also signed a loss-share agreement on $379.5 million of Evergreen’s assets. Umpqua will write-down Evergreen’s immediate losses and the FDIC will reimburse the bank for 80 percent of any further losses, up to the estimated cost to the FDIC insurance fund.
Parent company Umpqua Holding Corp. has seen its stock price rise 35 percent over the past three months but shares fell about 5 percent in trading Monday to $13.16 per share after the announcement of the Evergreen takeover.
However, the company has historically seen a dip in stock prices after acquiring other banks, Davis said.
“Our decline today had probably nothing to do with Evergreen,” he said, “it was just a result of what’s going on in the financial industry.”
