Posted by: Timothy Ellis (The Tim)

Tim Ellis is the founder of Seattle Bubble. His background in engineering and computer / internet technology, a fondness of data-based analysis of problems, and an addiction to spreadsheets all influence his perspective on the Seattle-area real estate market.

22 responses to “Washington is #1… For Troubled Banks”

  1. Dave0

    Like I’ve said before, let them all fail, I could care less. I’ll be blissfully unaware at my credit union.

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  2. Ray Pepper

    These regionals across the country must go down. Good (NEW) money will not chase old soured investments. Some of these regionals will be absorbed, as Venture was , but so many more will be replaced by new regionals with new money to loan.

    Complaining about the “rigid” guidelines of regulators is futile. These banks must close just as these homes that are upside down (greater then 20-80%) must continue to be foreclosed on. The sooner this is accomplished the sooner we will move on from this Bubble carnage. So many of these Loan Mods will result in foreclosures a few years from now because the owners are TOO UPSIDE DOWN. They will walk at a later date keeping a lid on appreciation.

    Don’t talk to me about the loss of jobs from all of these Sterling, Ranier Pacific, Frontier, Venture, Banner (?), and the many more that will occur. The worthy employees will find employment in new regional/large banks or the ones that absorbed them.

    To our Vets HOO RAH!!!!!!!!!!! From a 91C with the 6250th at Madigan I salute you all!

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  3. Markor

    I’m taking a chance with Cascade Bank due to 2% interest in checking, which beats most CDs. I may test the FDIC recovery process on this one.

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  4. AMS

    RE: Markor @ 3 – I hope you are not taking any chances! In other words, I hope every dollar you have in Cascade Bank is fully insured by the FDIC.

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  5. softwarengineer

    The Bank Down the Street from Me Has Just Put Up a Paper Sign Name Covering Up Its Previous Name

    I’d tell you the names of the old/new banks, but to tell you the truth, there’s so many different banks now, I can’t remember all their names…LOL

    Remember the good ole days when Seattle just had a few credit unions and about three main/stable banks. Now-a-days, different banks are cropping up in bankrupt groves and keep changing like for lease signs on closed down businesses.

    Ohhhh…the bank with the new paper sign was offerring 3.5% 18 Mo CDs about a year ago, should of grabbed one of those up…..not….

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  6. Acerun

    I love MAPS!!!

    Especially ones with tombstones.
    Keep up the great work Tim!

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  7. Willy Nilly

    So where should I park my cash? All my shiny pennies are currently @ WFC

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  8. voight-kampff

    RE: Dave0 @ 1
    Are credit unions really that much safer? ( I am not being sarcastic, I really want to know as Im thinking about going to one)
    Didnt credit unions make any construction loans here?

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  9. TJ_98370

    I can’t help but wonder about Gregoire’s assertion that federal regulators are being “inflexible”. What does she know that isn’t being said?

    So maybe the east coast sophisticates feel like they need to lay it down on us lumberjack / fisherman type Washingtonians.

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  10. AMS

    RE: voight-kampff @ 9 – When a credit union fails, NCUA pays instead of FDIC. Some banks are not as bad off, and some credit have been shut down.

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  11. TJ_98370

    RE: voight-kampff @ 9

    According to info available at the NCUA and FDIC websites, since the beginning 2008 credit union failures are running about 0.25% nationwide, and bank failures are running about 1.8% nationwide.

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  12. anonymous

    Credit Unions exist to serve their members, which are individuals and families. I don’t think they typically serve corporations. So while they probably gave construction loans for individual’s building their own home, they probably didn’t fund many large developments, apartment complexes, or office buildings.

    Also, there is probably a lot less incentive for risk and deception since there are no stockholders.

    The main reason to go with a credit union, however, is that they almost always have better interest rates and lower to no fees compared with regular banks. Better service too. That only makes sense since they don’t have to pay any dividends They can funnel that money into better financial products for the members.

    I don’t know about this cascade bank checking account rate though. Maybe TARP money is allowing banks to give a little better rates lately?

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  13. Ross Jordan

    RE: Dave0 @ 1 – Credit unions can fail too… Anyways, though the first reaction is to say screw the banks; unfortunately, having functional banks (lending to small businesses) is absolutely essential to re-starting the economy and getting unemployment down. This doesn’t bode well for Washington state.

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  14. wreckingbull

    RE: Markor @ 3 – The CR link points to a press release touting Cascades Q3 $1.6 million profit. At the very end there is this blurb.

    “Cascade Bank recently received notice from the FDIC that based on an off-site review of its financial information, the Bank will be subject to a corrective action program based upon the finalization of a full scope examination completed in June 2009. The concern was primarily focused on the deterioration of asset quality, concentration of credit in the real estate area, and liquidity. In light of the concern, the Bank was instructed to take steps to preserve capital; provide prior notice to the FDIC of certain management changes; seek prior regulatory approval of any severance or any golden parachute payments; and obtain a non-objection from the regulators before paying any cash dividend.”

    Does anyone know details of the corrective action program? I can’t find anything about this.

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  15. Pegasus

    You guys don’t get it. Be they banks or credit unions if residential real estate falls another 10 percent and commercial real estate stays down 35 percent you can figure out that the financial world as we know it has imploded. Wake up! Banks are now allowed to book their bad investments at what they bot them for to avoid bankruptcy and are lobbying to allow them to contol the rules that govern their accounting(fox in the henhouse). That will end well! Sooner or later the public will get wise to these scams and will attempt to yank their funds from these institutions. But alas too late. The FDIC is bankrupt except to charge banks that can not afford any expenses fees for years in advance. I am sure that CONgress will throw them additional bones when needed at our expense but when you realize that most banks are bankrupt when forced to mark assets to current value and that the FDIC is clearly not shutting many banks because they do not have funds to pay the account holders the amounts that they are insured for, one has to understand that the end and complete collapse of our financial system is imminent.

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  16. Groundhogday

    RE: Pegasus @ 16

    Dang, time to stock up on canned goods. ;-)

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  17. Scotsman

    Unemployment headed to 12%+? That won’t help banks recover their losses.

    http://blogs.reuters.com/james-pethokoukis/2009/11/11/12-reasons-unemployment-is-going-to-at-least-12-percent/

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  18. TJ_98370

    .
    This situation stinks of politics. We have a load federal bureaucrats careening around the country evaluating financial institutions. When they check out Washington State, home of WaMu (touted as being the largest bank failure in U.S. history) they must show that they are demonstrating due diligence. They must demonstrate control over the contagion that is WaMu and its local rube brethren.
    .
    It is unfortunate, but from the perspective of a federal government bureaucracy, the appearance of doing something is more important than actually being effective. By the time actual results are quantifiably provable, the crisis is long forgotten and no longer the focus of public attention. The truth does not really matter.
    .

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  19. The_Dude_Abides

    I would suggest investing in banks, or in the case of Washington Federal, an S&L, who you think will survive and perhaps even grow by way of FDIC-assisted purchases. Don’t let your anger or politics get in the way of making money. Many fortunes were made in 88-92 by either buying the distressed properties from the RTC or by buying the equities of the winning financial institutions.

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  20. AMS

    RE: The_Dude_Abides @ 20 – At the right price, just about anything looks attractive.

    I have heard parallel statements about girls and beer.

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  21. david thompson

    REALITY!! Corporate america and the U.S. Government ( which of course are one and the same) will always do exactly as they please while the rest of us will toil on through the good times and the bad. Don’t forget to vote. JOKE!

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