By Stacia Kalinoski
EUGENE, Ore. -- The sign on the front window says it all for Tony and Karoline Chavez. They've been loyal LibertyBank customers since it first opened more than 30 years ago.
"I was really saddened by it. I've been with them for so long. I just hate to see them go," Tony Chavez said.
But it was the real estate customers who couldn't stay loyal. State regulators shut the bank down Friday. It's the third bank in Oregon and the 108th in the nation to fail this year.
Len Williams is the president and CEO of Idaho-based Home Federal Bank, which just took over all 15 LibertyBank branches in Oregon.
He says this has been a work in progress for the past few years, spurred by a real estate crash that took the capital right out of LibertyBank.
The bank specialized in residential construction loans and grew right along with a booming real estate industry. It became the largest privately held bank in Oregon. That all came crashing down in 2007.
"This bank just faced a problem with the commercial real estate market," FDIC spokeswoman Tricia Wynegar said.
But it's a problem that Williams said his institution will be able to handle.
"We're looking for loans. We're in the lending business, and we've got plenty of capital to do it," he said.
Williams made the trip from Idaho to reassure longtime LibertyBank users and let customers like the Chavez' know that everything from ATM transactions to checks will be business as usual.
"Basically, it's a name change on the signs," Wynegar said.
It's also almost a doubling in assets for Home Federal, which was about the same size as LibertyBank. Now, Williams said those assets will total about $1.5 billion. He's been wanting to expand Home Federals' franchise into Oregon for some time and says despite the unfortunate circumstances, this was the perfect opportunity.
"When the market is down is probably the best time to come in, find the markets that make sense to us and that we know and understand, and find the markets and people that have a culture similiar to ours," he said.
Chavez just hopes the reason he did business with LibertyBank will ring true with Home Federal Bank.
"I know that our money is here for local businesses and I like that," said Chavez.
Williams said his bank brings in more money to support the communities it serves. Where LibertyBank had to reduce contributions due to financial constraints, Williams hopes to once again start giving back.
"We know it takes time. We've got to be patient," he said.
Williams said Home Federal Bank made its first splash into Oregon last year when they took over seven branches of Community First Bank in Central Oregon. Now all 15 LibertyBank branches will open on August 2 as Home Federal Bank.
As for jobs, Williams said the majority of LibertyBank's 220 employees will stay, but he says some at the top administrative level will likely lose their positions.
