{"id":3416,"date":"2008-11-18T13:35:04","date_gmt":"2008-11-18T21:35:04","guid":{"rendered":"http:\/\/seattlebubble.com\/blog\/?p=3416"},"modified":"2008-11-18T13:35:04","modified_gmt":"2008-11-18T21:35:04","slug":"washington-banks-hit-with-more-bad-loans","status":"publish","type":"post","link":"https:\/\/seattlebubble.com\/blog\/2008\/11\/18\/washington-banks-hit-with-more-bad-loans\/","title":{"rendered":"Washington Banks Hit With More Bad Loans"},"content":{"rendered":"<p>Kirsten Grind had an interesting piece about local banks in the Puget Sound Business Journal last Friday: <a href=\"http:\/\/www.bizjournals.com\/seattle\/stories\/2008\/11\/17\/story1.html?b=1226898000^1733664&#038;brthrs=1\" title=\"Bad loans rising at Washington banks\">Bad loans rising at Washington banks<\/a><\/p>\n<blockquote><p>Bad loans are up dramatically at Washington state banks, surpassing the national average and reaching levels that local banking experts say are unprecedented.<br \/>\n&#8230;<br \/>\nWashington banks historically have seen lower levels of problem loans than their counterparts across the country. But their heavy construction lending has hit them hard in the wake of the housing slowdown, said Brad Williamson, director of the Division of Banks at the Washington State Department of Financial Institutions, which regulates state banks.<br \/>\n&#8230;<br \/>\nHow bad is it? Since the height of the housing market in the middle of 2006, Washington state\u2019s 97 banks \u2014 both publicly traded and private \u2014 have seen their problem loans jump from an average of 0.42 percent to 2.71 percent of all assets, according to the most recent data available from the Federal Deposit Insurance Corp. That compares with a national average of 1.89 percent.<\/p>\n<p>As a counterweight to bad loans, regional banks are bulking up with more capital, which acts as a buffer to the problem loans. And most publicly traded banks across the Puget Sound region are considered well capitalized.<br \/>\n&#8230;<br \/>\nBut a well-capitalized bank can still fail, and several already have. Both Washington Mutual and IndyMac, of California, were well-capitalized by federal regulatory standards in their last quarterly reports before their historic failures this year.<\/p><\/blockquote>\n<p>The basic message seems to be that local banks are in slightly more pain than the national average in terms of bad loans, but that bad loans aren&#8217;t a particularly useful predictor of bank failures.<\/p>\n<p>I was surprised to read that local banks actually have a higher percentage of bad loans than the national average.  That would seem to fly somewhat in the face of the &#8220;Seattle is special&#8221; mantra of many local economists.<\/p>\n<p>(<em>Kirsten Grind, <a href=\"http:\/\/www.bizjournals.com\/seattle\/stories\/2008\/11\/17\/story1.html?b=1226898000^1733664&#038;brthrs=1\" title=\"Bad loans rising at Washington banks\">Puget Sound Business Journal<\/a>, 11.14.2008<\/em>)<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Kirsten Grind had an interesting piece about local banks in the Puget Sound Business Journal last Friday: Bad loans rising at Washington banks Bad loans are up dramatically at Washington state banks, surpassing the national average and reaching levels that local banking experts say are unprecedented. &#8230; Washington banks historically have seen lower levels of&#8230;<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":false,"jetpack_social_options":{"image_generator_settings":{"template":"highway","default_image_id":0,"font":"","enabled":false},"version":2}},"categories":[198],"tags":[90,305,65,181,211],"coauthors":[],"class_list":["post-3416","post","type-post","status-publish","format-standard","hentry","category-news","tag-seattle_is_special","tag-banks","tag-business-journal","tag-grind","tag-loans"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v26.2 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Washington Banks Hit With More Bad Loans \u2022 Seattle Bubble<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/seattlebubble.com\/blog\/2008\/11\/18\/washington-banks-hit-with-more-bad-loans\/\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:title\" content=\"Washington Banks Hit With More Bad Loans \u2022 Seattle Bubble\" \/>\n<meta name=\"twitter:description\" content=\"Kirsten Grind had an interesting piece about local banks in the Puget Sound Business Journal last Friday: Bad loans rising at Washington banks Bad loans are up dramatically at Washington state banks, surpassing the national average and reaching levels that local banking experts say are unprecedented. &#8230; Washington banks historically have seen lower levels of...\" \/>\n<meta name=\"twitter:creator\" content=\"@The_Tim\" \/>\n<meta name=\"twitter:site\" content=\"@SeattleBubble\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"The Tim\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"2 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"WebPage\",\"@id\":\"https:\/\/seattlebubble.com\/blog\/2008\/11\/18\/washington-banks-hit-with-more-bad-loans\/\",\"url\":\"https:\/\/seattlebubble.com\/blog\/2008\/11\/18\/washington-banks-hit-with-more-bad-loans\/\",\"name\":\"Washington Banks Hit With More Bad Loans \u2022 Seattle Bubble\",\"isPartOf\":{\"@id\":\"https:\/\/seattlebubble.com\/blog\/#website\"},\"datePublished\":\"2008-11-18T21:35:04+00:00\",\"author\":{\"@id\":\"https:\/\/seattlebubble.com\/blog\/#\/schema\/person\/7de7c0dd14bee1a2c67f7ce86bc4505f\"},\"breadcrumb\":{\"@id\":\"https:\/\/seattlebubble.com\/blog\/2008\/11\/18\/washington-banks-hit-with-more-bad-loans\/#breadcrumb\"},\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"ReadAction\",\"target\":[\"https:\/\/seattlebubble.com\/blog\/2008\/11\/18\/washington-banks-hit-with-more-bad-loans\/\"]}]},{\"@type\":\"BreadcrumbList\",\"@id\":\"https:\/\/seattlebubble.com\/blog\/2008\/11\/18\/washington-banks-hit-with-more-bad-loans\/#breadcrumb\",\"itemListElement\":[{\"@type\":\"ListItem\",\"position\":1,\"name\":\"Home\",\"item\":\"https:\/\/seattlebubble.com\/blog\/\"},{\"@type\":\"ListItem\",\"position\":2,\"name\":\"Washington Banks Hit With More Bad Loans\"}]},{\"@type\":\"WebSite\",\"@id\":\"https:\/\/seattlebubble.com\/blog\/#website\",\"url\":\"https:\/\/seattlebubble.com\/blog\/\",\"name\":\"Seattle Bubble\",\"description\":\"local\u00a0real\u00a0estate\u00a0news, statistics,\u00a0and\u00a0commentary without\u00a0the\u00a0sales\u00a0spin.\",\"potentialAction\":[{\"@type\":\"SearchAction\",\"target\":{\"@type\":\"EntryPoint\",\"urlTemplate\":\"https:\/\/seattlebubble.com\/blog\/?s={search_term_string}\"},\"query-input\":{\"@type\":\"PropertyValueSpecification\",\"valueRequired\":true,\"valueName\":\"search_term_string\"}}],\"inLanguage\":\"en-US\"},{\"@type\":\"Person\",\"@id\":\"https:\/\/seattlebubble.com\/blog\/#\/schema\/person\/7de7c0dd14bee1a2c67f7ce86bc4505f\",\"name\":\"The Tim\",\"image\":{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\/\/seattlebubble.com\/blog\/#\/schema\/person\/image\/37756956c11dcc50d2559761ffa5ee70\",\"url\":\"https:\/\/secure.gravatar.com\/avatar\/19e5770990a1681615608091b2de571b10c3e03bbac7d07bb2ae15297ee72fbc?s=96&d=retro&r=g\",\"contentUrl\":\"https:\/\/secure.gravatar.com\/avatar\/19e5770990a1681615608091b2de571b10c3e03bbac7d07bb2ae15297ee72fbc?s=96&d=retro&r=g\",\"caption\":\"The Tim\"},\"description\":\"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. 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