With the news in September that Seattle is #1 for delinquent construction loans, it probably comes as not much of a surprise that Washington State also happens to rank #1 in the nation for troubled banks, according to Calculated Risk’s unofficial problem bank list.
State Percent Washington 26.3% Utah 25.0% Arizona 21.3% Nevada 20.0% Oregon 19.5% Georgia 19.2% California 17.8% Florida 16.3% Michigan 13.2% Maryland 10.8% Colorado 10.6% This week we looked over the numbers to determine which states have the most stress in their banking sector. For the ranking, we added together the number of institutions that are on the Unofficial Problem Bank List and failures since 2008 and divided by the number of institutions headquartered in the state and failures since 2008. Interestingly, Georgia is not the top ranked state. Here is the top 10 list; actually top 11 as Maryland and Colorado are in a virtual tie. Please note that we only ranked states with at least 15 institutions headquartered within their borders, as we did not want the ranking influenced by a small banking market.
Washington State leads the way with more than 26 percent of its banking industry either under formal enforcement action or having failed. No wonder the esteemed governor wrote a letter to the state’s congressional delegation complaining about bank regulators (see Wall Street Journal article).
Here’s a map of Washington’s 23 troubled banks, according to Calculated Risk’s unofficial list, as well as Washington’s three recently-failed banks (via the FDIC), and WaMu, which the FDIC lists as a Nevada bank.
View Washington’s Troubled Banks in a larger map
Hat tip: Puget Sound Business Journal
Like I’ve said before, let them all fail, I could care less. I’ll be blissfully unaware at my credit union.
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!
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.
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.
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….
P.S. – While 26% of Washington’s banks are troubled according to CR’s unofficial troubled bank list, if you factor in the size of the banks by total assets, it’s actually 38%:
I love MAPS!!!
Especially ones with tombstones.
Keep up the great work Tim!
So where should I park my cash? All my shiny pennies are currently @ WFC
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?
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.
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.
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.
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?
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.
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.
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.
RE: Pegasus @ 16 –
Dang, time to stock up on canned goods. ;-)
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/
.
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.
.
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.
RE: The_Dude_Abides @ 20 – At the right price, just about anything looks attractive.
I have heard parallel statements about girls and beer.
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!