Oregon Incentivizes New Bank Formation, Opening Door for First De Novo Banks in 18 Years

SALEM, Ore.--(BUSINESS WIRE)--Oregon is trying to jump-start community bank formation after nearly two decades without a new startup institution.

A new law signed by Governor Tina Kotek provides up to $1 million per year in state tax credits for three years to newly chartered Oregon banks, a move designed to help offset startup costs and attract investors interested in launching new institutions.

The measure, House Bill 4052, makes Oregon only the second state in the nation to adopt a dedicated incentive aimed at encouraging de novo bank formation.

“This law sends a clear signal that Oregon is open for new community banks,” said Scott Bruun, president and CEO of the Oregon Bankers Association.

Oregon has not chartered a new bank since 2007. Over the same period, the number of locally headquartered banks has declined sharply, falling from more than 50 two decades ago to about a dozen today.

Currently, Oregon has 13 state-chartered banks, a number expected to drop to 12 following a pending acquisition.

Supporters say encouraging new entrants could strengthen competition and expand access to capital for small businesses and local communities.

The tax incentive will apply to new Oregon-chartered banks that begin operations between 2027 and 2033.

Industry leaders say potential opportunities exist across the state, including rapidly growing regions such as Central Oregon, underserved rural markets in Eastern Oregon, and specialized commercial banking niches in Portland.

The Oregon Bankers Association said it plans to promote the incentive nationally to experienced banking teams and investors interested in organizing new institutions.

“Our goal is to connect capital with banking teams ready to build the next generation of community banks in Oregon,” Bruun said.

About the Oregon Bankers Association

Established in 1905, the Oregon Bankers Association is a full-service trade association with a membership that includes state and national commercial banks, savings banks and trust companies doing business in Oregon. The mission of the OBA is to be the voice of Oregon banking.

The Oregon Bankers Association serves a dynamic, innovative and community-minded industry. The competitive nature of banking gives Oregonians and Oregon businesses a wide variety of choices for their financial services. In our collective endeavors, the Oregon Bankers Association and its members strive to ensure that Oregon remains a great place to do business and a great place to do banking. To learn more, visit www.oregonbankers.com.