The times were vicious, the outlook for too many banks was bleak.
The Treasury Department told Umpqua Bank Chief Executive Officer Ray Davis it had $200 million available to buy preferred stock in Oregon's largest community bank in October 2008.
The federal government was offering money at a good price and Umpqua Bank already was on solid footing, well-capitalized at 12 percent, and was strong enough to partner with the Federal Deposit Insurance Corp. to take over smaller, failing banks.
By the following March, Umpqua Bank was saying thanks but no thanks, and paid the U.S. Treasury back as quickly as possible.
"We had to prove we were very strong," Davis said at the time. "It was an incredible compliment and our board was pleased. There was no question in anyone's mind we came out stronger."
Now, with the toughest economic challenges in more than a half-century in Umpqua's rearview mirror, Davis is sharing the lessons learned in his second book, "Leading Through Uncertainty: How Umpqua Bank Emerged from the Great Recession Better and Stronger than Ever" (Jossey-Bass; 224 pages).
State, regional and national economies were in the tank, yet Umpqua survived, collected the shattered pieces of some of its competitors and kept growing. Once a $2 billion cash and stock deal for Spokane-based Sterling Financial Corp. is completed in the first half of 2014, Umpqua's assets will exceed $20 billion.
Davis expects strong leaders to maintain a clear perspective and demonstrated his values during the recession.
"We came out of it faster than a lot of our peer banks and I thought we developed some worthwhile strategies that other businesses — not just banks — could use when things aren't so great," Davis said this week in a telephone interview.
Paramount, Davis said, was tackling problems head on.
"We knew what the problems were going to be and what we should be doing as we started to heal," Davis said. "You can't stick your head in the sand and go into denial; big problems don't go away by themselves."
In troubled times, he said, fear of the unknown, rumors and gossip can paralyze.
"In those times, businesses should be dealing with issues truthfully and transparently," he said.
Dealing truthfully doesn't make anything more or less difficult.
"When you are in denial, that's how you get caught in trouble," Davis said. "Some people try to time the truth. I won't tell you on Thursday, I will tell you on Monday, because it may go over better there. Both are mistakes — you've just got to get out there and tell the truth. People can deal with truth; if it's bad news they need to know so they can get on with their lives."
Davis said Umpqua didn't anticipate the housing market's collapse.
"Probably our biggest surprise was how far (the market) stayed down, and for how long," he said.
Even as his company grows beyond what industry insiders consider community bank size, Davis vows to retain the hometown performance.
"The ultimate test is not what we say," he said. "It's what our customers in the community say, and so far in every state Umpqua is in, they think we're a very good community bank."