Cascade Bank Sinking A Little Slower?
Cascade Bank aka Cascade Financial Corp. of Everett, which was purchased by Opus this past fall, has reported a quarterly loss of $3.3 million as of March 31st; but that’s a significant decrease from the $8.6 million it lost a year ago.
Like many banks in Snohomish County, Cascade was hit hard by loan losses, mostly from loans to developers and home builders. Cascade had set aside $2.6 million for losses during the last quarter, a 54 percent decrease from the previous quarter, the company reported Tuesday. Its net charge off for bad loans was $2.9 million, a 51 percent drop. .
Cascades’ REO property also dropped from $34.4 million to $32.3 million last quarter. Under the new ownership, it seems that the bank is focused on minimizing their losses while shoring up its reserve to meet FDIC requirements. But this could mean fewer loans for REO investors or even more cautiousness from the bank when negotiating REO deals.
When Opus took over the bank back in the fall the concern was that Cascade would come less local focused ultimately decreasing the amount of loans issued for real estate purchases in the name of cautiousness and “belt-tightening.” But it has yet to be seen exactly how Cascade’s new trajectory will impact the local real estate market, especially REOs. However, a recent statement by the CEO of Cascade, Carol Nelson may indicate a trend towards conservative behavior.
“The economic recession severely impacted the Snohomish County area and Cascade Bank,” Nelson said in a statement. “After carefully considering all options, the board of directors and management determined Cascade Bank needed to substantially increase its capital base to meet regulatory requirements and remain competitive.”
Unfortunately for some REO investors, increasing the capital base could mean a reduction in the amount of loans given for real estate purchases in the Snohomish County area.
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