A Letter to Our Clients

March 13, 2023

To the clients and friends of Oregon Pacific Bank,

As I am sure you have heard by now, last Friday the Federal Deposit Insurance Corporation (FDIC) placed Silicon Valley Bank into receivership. The FDIC has closed Silicon Valley Bank due to financial distress with intentions of opening it today under their control. A similar event occurred on Sunday when a bank in New York was closed and placed into receivership with the FDIC.  Fortunately, the FDIC announced on Sunday that they plan to give all depositors access to 100% of their money once the doors of these banks reopen. I am pleased to hear of this response and even more pleased to hear that hundreds of Silicon Valley Bank’s largest customers are committed to staying with the bank and working with the new owners.

Unlike the economic crisis of 2008, these banks were not closed due to problem loans. Their challenges arose due to their model of banking a single or limited number of industries. Silicon Valley Bank also had a large exposure to deposits from venture capital firms. The recent tech industry volatility caused many of these larger venture capital depositors to lose confidence in Silicon Valley Bank and withdraw their funds from the bank. As a result, Silicon Valley Bank no longer had sufficient cash to meet its operating needs and was forced to sell certain investments at a loss to raise cash. These losses depleted their capital, resulting in the subsequent closure of the bank by banking regulators. These events occurred in a matter of a few days, but the bank’s lack of diversification is what created their problem.

You are banking with Oregon Pacific Bank because you see the value in local relationships. You understand how a community bank works; that we reinvest your deposits into local loans, invest in nonprofit agencies and hire the best bankers in Oregon. This partnership is why banks like us have succeeded for so long and it is the lifeblood of our mission: To create value for our clients, shareholders, employees and the communities we serve.

Oregon Pacific Bank’s financial condition is very strong. We maintain levels of capital significantly above the thresholds required to be deemed “Well Capitalized”. We have strong levels of liquidity that allows us to continue our local investment strategy, and provide a backstop if issues arise. The quality of our loan portfolio has never been better or more widespread across many industries. We are proud bankers for loggers, doctors, manufacturers, wholesalers, contractors, educators, real estate developers, dentists, nonprofit organizations, radio stations, internet providers, restauranteurs, and countless other industries that make Oregon the economically diverse state that it is.

Another benefit of banking with a local community bank is you have direct access to relationship bankers, local decision makers, and executive leadership. I am always available should you have any questions. My direct office number is 541-902-9800. In addition to myself, our entire executive team is available to you. I encourage you to reach out to any of us at any time.

As of the date of this letter, there are still thresholds on how much FDIC deposit insurance is available for account owners. However, there are potential ways to strengthen this protection. If you have questions about how the Bank’s financial condition supports your deposits or how to maximize your FDIC insurance coverage, I encourage you to reach out to one of our bankers today.

Oregon Pacific Bank was formed over 43 years ago. We have survived several recessions, the collapse and rebuilding of Oregon’s timber economy, and the great recession of 2008. We helped over 800 local businesses during the pandemic with emergency stimulus funds, many who attribute their ability to survive 2020 to receiving these loans. Our local leadership and board of directors have been making strategic and conservative investments in Oregon for 43 years and we are ready to continue our mission of creating local value for decades to come.

Thank you for your partnership and confidence in Oregon Pacific Bank.

With great appreciation,

Ron Green

President, Chief Executive Officer

Oregon Pacific Bank