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Umpqua leads in Jackson County bank deposits

Umpqua Bank has carved out a bigger chunk of Jackson County deposits, according to the latest figures released by the Federal Deposit Insurance Corp.

What grabbed the attention of some area bankers analyzing the FDIC's annual dipstick measurement conducted June 30, however, wasn't Umpqua's 0.3 percent gain, but the paltry combined overall growth in local deposits.

Deposits at the 12 banking institutions in Jackson County remained just under $3 billion, growing less than $9 million, or 0.29 percent, between 2014 and 2015. At the same time, deposits statewide increased $3.5 billion to $65.7 billion, up nearly 6 percent. Even in Josephine County, deposits were up nearly $60 million year-over-year.

"I'm a little surprised by Jackson County's marginal growth," said People's Bank of Commerce CEO Ken Trautman. "It makes you wonder if in this low-rate interest environment whether people have got fed up with marginal returns and are willing to accept higher levels of risk in the stock market, or some kind of alternative investments such as private financing of real estate or family transactions."

Following rapid growth years, total deposits grew less than $100 million between 2007 and 2008. Deposits crested at $2.875 billion in 2009 before the Great Recession kicked in. From there, deposits retreated by nearly $100 million in 2010 and another $55 million in 2011.

A new high-water mark was established in 2013 with deposits of $2.897 billion, but $3 billion has turned into a plate-glass ceiling.

That's not necessarily a point of concern, said University of Oregon economics professor Tim Duy, noting major banks nationwide have more money deposited than they can put to work.

"Banks are not bending over backwards to add deposits," Duy said. "At the same time, I think people have put as much into low-yield banking accounts as they are willing to in this environment and are drifting away, accumulating assets in other directions."

Umpqua has found a sweet spot, here and elsewhere. Founded in Southern Oregon, Umpqua now extends up and down the West Coast. Throughout its entire system, it  grew deposits by $1.8 billion between 2014 and 2015, taking advantage of areas where the economy has rebounded.

Here in Jackson County, Umpqua hurdled U.S. Bank into the No. 1 spot in 2014, after acquiring Sterling Savings Bank. Umpqua added more than $10 million in deposits in 2015, pushing its total to $557.5 million and securing 18.63 percent of the market. While U.S. Bank's share slipped to 16.25 percent, Wells Fargo (14.95 percent), and JPMorgan Chase (14.61 percent) edged up.

"I look at them all as good competition," said Neal Brown, Umpqua's regional executive vice president. "It's always harder for everyone because things are evolving and you have to change to stay ahead of the curve in your service delivery."

The market's lone locally based commercial bank, People's Bank, grew its share to 6.1 percent. Patience is a growth tool in Trautman's estimation.

"Banks are making their money on loans right now, because they aren't making anything when they're sitting on cash," the CEO said. "If you're a borrower right now, it's the best of all worlds." 

Reach reporter Greg Stiles at 541-776-4463 or business@mailtribune.com. Follow him on Twitter at www.twitter.com/GregMTBusiness, Facebook at https://www.facebook.com/greg.stiles.3,  and read his blog at www.mailtribune.com/Economic Edge.

Umpqua Bank continues to lead Jackson County banking institutions in total deposits. Mail Tribune / Bob Pennell