That’s twice as many as last year; total loss $824 million in 3Q
The number of unprofitable Washington-based banks has nearly doubled in the past year, according to a new third-quarter report released by the Federal Deposit Insurance Corp.
Of Washington’s 80 state-chartered banks, 67.5 percent or 54 banks — including Vancouver-based First Independent Bank — weren’t profitable in the quarter ending Sept. 30. That’s up dramatically from 34 percent in the same quarter last year.
At the same time, the national average held steady at 26.4 percent of banks posting a loss in the third quarter, compared with 24.6 percent a year ago.
The list of 80 banks does not include national banks such as Bank of America, Chase or Wells Fargo that are headquartered and chartered elsewhere.
In Washington, the level of nonperforming and delinquent loans continued to rise in the third quarter to 10.04 percent of total loans, up from 9.2 percent in the second quarter.
Nationwide, those levels grew more slowly, rising to $366.6 billion, or 4.94 percent of all loans in the third quarter.
“The banks are still in a very stressful environment and it’s probably going to take at least several more quarters to know we hit the bottom and are maybe pushing through to the other side,” said Brad Williamson, director of the Washington state Division of Banks.
Why a much higher percentage of Washington banks were unprofitable in the quarter when compared with national averages was unclear. It may be that larger banks have more diverse portfolios and revenue sources, and thus are better positioned to weather the weak economy.
Overall, the nation’s banks reported $2.8 billion in profits in the third quarter, compared with an $824 million total loss among Washington banks. Real estate, construction and development loans still contribute the bulk of loan losses in Washington, though some commercial real estate loans have also started to sour, Williamson said.
Of Clark County’s two state-chartered banks, privately held First Independent Bank lost $2.3 million in the quarter, while Vancouver-based Riverview Community Bank posted a $427,000 profit.
First Indy, ranked No. 2 in market share for Clark County in June by the FDIC, held $739 million in deposits as of Sept. 30, down from $771 million the previous quarter. The bank also reported $65 million in noncurrent loans and leases, representing 8.34 percent of total loans as of Sept. 30.
Riverview, ranked No. 4 in local market share, held $663 million in deposits for the quarter, up from $650 million in the second quarter. The bank reported $31.7 million in noncurrent loans and leases, or about 4.85 percent of total loans.
Neither bank returned calls seeking comment.
