Statement on Current Banking Environment

Statement on Current Banking Environment

March 17, 2023

To the clients and community of First Federal Savings & Loan,

I am sure you have heard the news about the closures and receivership of Silicon Valley Bank and Signature Bank by the Federal Deposit Insurance Corporation (FDIC) due to financial distress. Unlike the economic crisis of 2008, these banks were not closed due to problem loans, as instead it was their lack of diversification that led to their downfall. Silicon Valley Bank and Signature Bank had business practices that proved to be unsound, particularly in the current environment of rapidly rising interest rates. What led to the demise of these banks was their extremely high growth rates in recent years coupled with their concentration of large, uninsured deposits from clients in the technology and cryptocurrency industries.

I want to assure you that First Federal’s financial position is strong and rooted in stable banking practices. We are recognized as one the top 100 healthiest banks in the country, and adhere to a traditional banking model that does not participate in the unsafe practices that have led to the recent high-profile failures of financial institutions. We maintain robust capital and liquidity that supports our locally-focused strategy while still providing a safety net should issues arise. Our loan portfolio and deposit base is diverse and includes consumers, nonprofits and small businesses, rather than focusing on one industry and a few large depositors. The credit quality of our loan portfolio has been outstanding in recent years and our capital remains strong. First Federal has access to ample liquidity to meet our customer needs. You can remain confident that First Federal is strong, stable, and poised to assist our customers now and into the future.

Deposit insurance is one of the significant benefits of having an account at an FDIC-insured bank, such as First Federal Savings & Loan. The standard insurance amount is $250,000 per depositor, per insured bank, for each account ownership category. By properly structuring account ownership or adding beneficial owners, the insurance coverage can increase by a multiple of the owners.

Should you have any questions about your deposits or FDIC insurance, I encourage you to speak directly to one of our team members who are always ready to serve you.

First Federal has been an unwavering financial partner within Yamhill County through the Great Depression, Global Financial Crisis, and numerous recessions along the way. With over 100 years serving the Willamette Valley, First Federal provides an unmatched commitment to the community through tailored business and personal banking solutions, as well as award-winning charitable giving and service.

Sincerely,

Jim Schlotfeldt
President and CEO