Seattle Bubble

It appears that most Washington State based banks are in pretty good shape. However, it is curious that the FDIC thought it necessary to focus in on HomeStreet Bank as Pndscm noted in another related thread.

The following includes a list of Washington State based banks associated with their respective “Texas Ratios” (as of Dec 2008). “Texas Ratio” is defined below. Banks with a ratio of 100 or higher are considered to be in serious danger of collapse and those with a ratio of 50 or higher are considered to be vulnerable.

The "Texas Ratio" certainly proved predictive with respect to Westsound Bank! Westsound shut down on May 8 and was taken over by Kitsap Bank.

Link to List of Troubled Banks; includes listing of all U.S. banks, their assets, and their "Texas Ratio" (as of Dec 2008).

Texas Ratio explained

Texas Ratio ---100* ((nonperforming assets – U.S. guaranteed loans) + other REO) / (equity+loss reserves)

------ WASHINGTON STATE BANKS -------

BANK NAME - TEXAS RATIO

Westsound Bank - 190
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City Bank - 77
Horizon Bank - 67
Venture Bank - 60
Seattle Savings Bank - 59
Anchor Mutual Savings Bank - 53
American Marine Bank - 50
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Rainier Pacific Bank - 46
Frontier Bank - 45
Mountain Pacific Bank - 44
AmericanWest Bank - 40
Twin City Bank - 39
Bank of Clark County - 38
Thurston First Bank - 38
Eastside Commercial Bank, National Association - 38
Golf Savings Bank - 38
North County Bank - 36
Security State Bank - 33
Viking Bank - 33
Washington First International Bank - 32
The Bank of Washington - 29
ShoreBank, Pacific - 28
Westside Community Bank - 28
First Heritage Bank - 27
HomeStreet Bank - 27
Sterling Savings Bank - 27
Business Bank - 27
State Bank Northwest - 26
Banner Bank - 25
Shoreline Bank - 24
Washington Business Bank - 24
Coastal Community Bank - 24
The Cowlitz Bank - 22
Inland Northwest Bank - 21
Riverview Community Bank - 20
Bank of Fairfield - 19
Prime Pacific Bank, National Association -19
Evergreen Bank - 19
Columbia State Bank - 18
Charter Bank - 18
First Savings Bank Northwest - 17
Regal Financial Bank - 17
Timberland Bank - 17
Bank of the Pacific - 16
Washington Federal Savings and Loan Association - 14
Heritage Bank - 13
Kitsap Bank - 13
Pacific Crest Savings Bank - 12
North Cascades National Bank - 12
Summit Bank - 12
First Independent Bank - 11
Cascade Bank - 11
RiverBank - 11
Plaza Bank - 10
Peoples Bank - 10
Skagit State Bank - 10
1st Security Bank of Washington - 9
Washington Trust Bank - 8
BANK REALE - 7
Pacific International Bank - 6
Fife Commercial Bank - 6
Islanders Bank - 5
Northwest Commercial Bank - 5
Pierce Commercial Bank - 4
Foundation Bank - 4
Bank of Whitman - 4
Whidbey Island Bank - 3
Baker-Boyer National Bank - 2
Fortune Bank - 2
South Sound Bank - 2
Yakima National Bank - 2
Cashmere Valley Bank - 2
First Sound Bank - 2
First Federal Savings and Loan of Port Angeles - 2
Twin River National Bank - 2
Wheatland Bank - 2
Sound Community Bank - 1
Community First Bank - 1
Yakima Federal Savings and Loan Association - 1
Farmers State Bank, Winthrop, Wash. - 0
Farmington State Bank - 0
Raymond Federal Bank - 0
Lamont Bank of St. John 0
Olympia Federal Savings and Loan Association - 0
Commencement Bank - 0
Central Valley Bank - 0
Puget Sound Bank - 0
Valley Bank - 0
Core Business Bank - 0
The Commerce Bank of Washington, National Association - 0
Issaquah Community Bank - 0
Sound Banking Company - 0
Hometown National bank - 0
Bank of Bellevue - 0
Bank of Everett - 0
UniBank - 0
Bank of Tacoma - 0

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U.S. Map of Troubled Banks
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Interesting to note that Anchor is supposedly one the “vulnerable” banks.

Anchor Bank Closes Poulsbo Branch

……It (Poulsbo branch) was one of four Anchor Banks in Wal-Marts to close, all at the same time. The others were in Covington, Hawks Prairie and Spanaway……
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Articles about two more "vulnerable" local banks linked below -

Article dated March 2, 2009;

Feds set strict rules for Horizon Bank

The Federal Deposit Insurance Corp. and the Washington state Department of Financial Institutions have laid down tough new rules for Horizon Financial Corp., following regulators’ announcement of “unsafe or unsound banking practices alleged to have been committed by the bank.”......

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Article dated April 1, 2009;

$20 million would save Venture Bank
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Venture Bank needs to raise about $20 million to reach a point where it is considered well-capitalized and isn't at risk of more action from federal regulators, bank officials told a crowd of nearly 180 people at the Masonic Center on Tuesday night......
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A couple of good Seattle Times articles related to the health of local banks are linked below -
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Washington banks sink deeper, quarterly figures show
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City Bank is not looking too good with a 43.95% non-performing assets to total assets ratio.
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First-quarter report card for Washington banks
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What is up with Georgia!

Troubled-bank central.

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Your right biliruben, this WSJ article addresses that fact:

Failed Banks Dot Georgia's Vista

The U.S. government's decision to let 10 big financial companies repay their taxpayer-funded investments is a break in the clouds for the banking system. In Georgia, though, the storm is raging unabated.
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The state is home to just 4% of all U.S. banks, but 20% of the nation's bank failures since August. More banks have collapsed in Georgia than in any other U.S. state, even foreclosure-racked California and Florida. Six Georgia banks have been seized by regulators this year, burned by too much expansion in the past decade and bad real-estate bets........
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I just discovered this very effective interactive graphic illustrating just how big the WaMu failure was, relative to other bank failures. It's worth a look.....
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Tracking the Nations Bank Failures
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That graph shows how big the banks were at the time of failure, but not the relative degree of failure. Some former WaMu owners are contending that it didn't actually fail, rather it was forced into receivership. It didn't seem to have cost the FDIC anything.

Hi Jon,
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You are right. The graphic doesn’t indicate the relative sizes of bad debt. However, it’s reasonable to assume that the bad debt would be approximately proportional, relative to other banks, otherwise WaMu would not have been in trouble in the first place, right? Maybe I’ll check it out later. I am really not that motivated right now. The thing that really struck me about the graph was how big WaMu was. I did not comprehend that simple detail before I saw the graph.
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Yes, apparently WaMu did not cost the FDIC anything, but the FDIC did set up a special sweetheart deal for JPM to buy out WaMu. I guess WaMu was too big to fail.

Banks are interesting business models. You can be a bank. You probably should be a bank. We should all be our own banks.

This thing about lending money or giving your money to a bank for safe keeping is a hoot. WAMU of course had, and has, plenty of assets, reserves, and income, but the collateralized loan department may have been a little over extended.

Please rememeber WAMU bought Ahmanson and had huge loan portfolios in California. Long Beach Mortgage was owned and controlled by WAMU. In the world of preditory lending Long Beach is right up there.

My opinion is that before scandal caused a run on the bank a lot of back room dealing was done. Look at home and commercial lending closely and the Savings and Loan scandal looks like good business.

I posted before about the trillions of dollars in our banking system and got shouted down. The fact is even a few hundred billion can sway the stock market. Look at what Warren Buffet did for Wells Fargo. So in my opinion we are all paying the price.

What the government should do is step in to chop banks up. Taking losses from defaulting loans will only continue the problem. It would be cheaper to forgive debt.

Twelve additional bank failures since I last posted this link.

Tracking the Nations Bank Failures

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From Market Ticker / Karl Denninger:

Banks: Here Come The Option ARM Blowups!

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Twenty four more bank failures during the month of July.
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Tracking the Nations Bank failures
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Hmmm, 24 bank failures, 24 hours in a day, 12 disciples and their wives is 24, the Fox hit 24, 24 is 42 backwards.

My numerology senses are tingling.