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Member Profile: Umpqua Bank
Umpqua Bank
Portland, Ore.
Asset Size: $4.88 billion
# Customers: 200,000 households
# Employees: 1,487
# Locations: 92
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Headquartered in Portland, Oregon, Umpqua Bank serves approximately
200,000 households from 92 locations along the Oregon and Northern California
Coasts, Central Oregon, and along the I-5 corridor from Sacramento to
Bellevue. The company has 1,487 employees, and in 2004, was named the
#1 large company to work for on Oregon Business Magazine’s list
of “The 100 Best Companies to Work for in Oregon.”
Umpqua Bank has partnered with numerous nonprofit and for-profit organizations
to develop affordable housing in the communities they serve. To date,
it has sponsored approximately $1.2 million in Affordable
Housing Program (AHP) grants, helping to create 180
units
of affordable housing, and drawn $2.4 million in Community Investment
Program (CIP) advances to fund development of another 83 units of affordable
housing. In addition, the Seattle Bank has committed nearly $1.0 million
in Home$tart Program grants to Umpqua Bank.
We recently interviewed Gary Hager, Vice President of Mortgage Operations,
about Umpqua Bank and its efforts to address the affordable housing and
economic development needs in the communities it serves.
| Seattle
Bank: |
Umpqua Bank
serves a fairly broad geographic area. Would you characterize
it as primarily rural or urban or both? |
| | Umpqua Bank serves both markets.
While our beginnings were primarily rural in Southwest Oregon,
our growth has been in more rural areas of California and Oregon,
as well as several urban areas, including Sacramento, Medford,
Eugene, Salem, Portland, and Bellevue. |
| What are the primary products
that you offer? |
| Umpqua Bank offers traditional
bank products and services to both retail and commercial customers.
Mortgage lending and construction lending are strategic product
lines that fit nicely into the community bank culture. We strive
to offer competitive pricing and products, and we look for opportunities
to develop unique products that meet the needs of our customers.
Our Community Interest Account is one example. It allows customers
to select from a list of charitable organizations and donate the
interest they earn on specific accounts or instruments to support
youth, the arts, and education. Products like these help us to
remain at the forefront in the communities we serve. |
| How would you characterize
the need for affordable housing across the region you serve? |
Gary Hager: | The
need for affordable housing throughout our region is growing. Northern
California, Oregon, and Western Washington are experiencing both
in-migration and new family formations. The fact is, however, that
in much of this same area, the challenges to satisfying those needs
are becoming more difficult to overcome. In the urban areas, we see
markets of moderate to high-cost housing. Median home sale prices
and average sale prices are escalating, thereby widening the gap
between acquisition costs and the qualifying loan amounts. While
reasonably priced homes can still be found, the inventory is limited,
and investors compete aggressively with first-time homebuyers. We
are seeing similar trends occurring in “small town” America. |
Seattle Bank: | What
role does Umpqua Bank play in addressing these needs? |
Gary Hager: | Umpqua
Bank is participating in many communities to resolve housing issues.
At times, we are a facilitator, helping our customers obtain down
payment assistance, such as with the Seattle Bank’s Home$tart
Program. We actively participate in many of the affordable housing
programs provided via state, regional, and national channels—the
States of Oregon, Washington, and California, Fannie Mae, Freddie
Mac, and of course, the Seattle Bank. |
Seattle Bank: | Do
you see Umpqua Bank’s role in this area as being unique in
any way? |
Gary Hager: |
There are several ways in which I think
Umpqua Bank plays a unique role. First, we have nurtured business
relationships with several
homeownership counseling agencies, and provided program information
and homebuyer education to maximize our effectiveness in affordable
program participations. Second, because of our size, we can sometimes
take advantage of limited but moderate funding programs that may
be “passed” upon by other lenders. The Seattle Bank’s “Home
of Your Own” allocation for the City of Portland is an example
of that. We found ourselves in a unique position with respect to
this program in that we were the only lender actively participating
in this Section 8 homeownership product in the Portland area. At
a corporate level, Umpqua Bank is unique in that it encourages employees
to utilize 40 hours annually of paid time to assist communities in
programs that primarily aid youth and education, but can also include
housing. For example, several staff members have committed to provide
financial counseling to prospective first-time homebuyers to help
a local housing authority in applying for and obtaining a federal
grant. This program of volunteer service, called Connect, is quite
unique in the banking community. |
Seattle Bank: | How
do your efforts in the affordable housing and community economic
development arena complement your product and service offerings? |
Gary Hager: | Our
commitment and energy devoted to affordable housing has reaped many
benefits. It has opened doors throughout our communities. We have
obtained a very solid reputation regarding these specialty product
lines. That heightened awareness on specialty products has paved
many roads to more standard banking product lines. |
Seattle Bank: | How
does your team work with for-profit and nonprofit agencies to promote
access to affordable housing? |
Gary Hager: | Meeting
the challenges involved in providing affordable housing generally
requires the partnership of multiple organizations. Our bank
has established relationships with certain for-profit and nonprofit
agencies within our communities, focusing on those that, we believe,
can help to deliver affordable housing in a timely fashion. We
encourage all of our field resources to be alert to the opportunities
in our communities and to help evaluate those opportunities. We
find ourselves meeting with housing authorities, homeownership
counseling agencies, state and federal housing agencies, county
planners, and others who are integral to delivery of affording
housing products. As a full service community bank, we have also
engaged construction financing for several new affordable construction
projects within our geographic domain.
|
Seattle Bank: |
Who
are some of your key community partners—both nonprofit and
for-profit agencies? |
Gary Hager: |
The
list is long—too long to name them all. But to name a few:
Community Outreach, St Vincent de Paul, Portland Community Land Trust,
Portland
Housing Center, Clackamas Community Land Trust, Community Housing
Resource Center, Oregon Housing and Community Services, Washington
State Housing Finance Commission, Community Vision, Portland Housing
Authority, Housing Authority of Washington County, Humboldt Bay Community
Development Corp., Sabin Community Land Trust, Hacienda Community
Development Corp., Fannie Mae, Freddie Mac, and of course, the Seattle
Bank. |
Seattle Bank: | How
have you used the Seattle Bank’s community investment products
to help in your efforts? |
Gary Hager: | We
have used the Seattle Bank’s AHP and Home$tart Program to a
considerable degree over the past few years. With AHP, we’ve
helped to create over 180 units of affordable housing, both rental
and homeownership units. With Home$tart, we’ve been able to
help over 70 first-time homebuyers to become homeowners—and
with additional funds commitments from the Seattle Bank, we expect
to be able double that number in the not-to-distant future. The Home$tart
Program’s “matched funds” provide prospective first-time
homebuyers with just what they need to become homeowners. The “Home
of Your Own” initiative helps when a higher level of assistance
is needed. Of that allocation, half was designated for Section 8
homeownership. With the dollars provided by the Seattle Bank, we
were able to quickly respond to the need and worked with the local
housing authority and housing center to seek out likely candidates
for this program. |
Seattle Bank: | What
tangible results have you seen based on your use of these programs. |
Gary Hager: | For
our customers and communities, the tangible results are certainly
in stabilizing families and neighborhoods. While the demand far exceeds
the availability of funding for low-income families, the expansion
of homeownership helps to satisfy these economic and social desires.
For our bank, generally the first-time homebuyers that we’ve helped tend
to be subsequent clients. Many are new customers, who have a sense of loyalty
to us for having facilitated their access to a piece of the American dream—that
is, owning a home. And, the dividends that we’ve reaped in terms of our
communities’ awareness of our actions have been priceless. |
Seattle Bank: | Can
you provide an example of a project that you’ve found to be
particularly successful in addressing the affordable housing needs
in your communities? |
Gary Hager: |
Well,
the Home of Your Own project in Portland has been very
successful, and we look forward to completing many more transactions
via the Home of Your Own allocation. In addition, we’ve developed
expertise in the community land trust model over the past three years.
We are currently dealing with over five community land trusts in
our markets, and we’ve closed on approximately 60 units to
date. This housing model is unique and is able to reach median income
level families in the 60 – 80 percent AMI area. |
Seattle Bank: | How
does the land trust model work? |
Gary Hager: |
Basically,
in a community land trust model, a non-profit sets up a trust, which
will hold title to the land. This removes the land component from
a purchase of a property as the land is not being sold. Only the
improvements are being sold. So the cost of a community land trust
purchase can be 30 – 35 percent less than that of a standard
purchase transaction. Qualifying for mortgage loans is easier. Homebuyers
get the benefits of owning a home. The non-profit retains title to
the land, and through the lease agreement, gets a nominal lease fee
of generally $35 – $40 per month. There are sale restrictions
to subsequent buyers to ensure that the property remains in an “affordability” status.
The homeowners and the nonprofit share in the appreciation of the
property, based upon pre-determined formulas. The model achieves
two major goals: lower income families can acquire a home,
and the home’s affordability is retained because the land is
held in the trust. |
Seattle Bank: | Overall,
what is the importance to your bank and your communities of having
access to the Seattle Bank’s affordable housing programs? Where
do you think your communities would be without them? |
Gary Hager: |
Our
continued success in the area of affordable housing is dependent
upon programs that help the communities we serve. Programs such as
those provided through the Federal Home Loan Bank of Seattle are
critical—in part because they often allow us to be the “first
investor in.” As such, the funding we provide is a key
leveraging factor that kicks a project into motion. The bottom line
is that without the kind of funding provided by the Seattle Bank,
many of these projects just wouldn’t happen. Families benefit,
our communities benefit—and in the end, so does our bank. |
For more information about Umpqua Bank, visit www.umpquabank.com. 
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