Business

<< Previous   of   Next >>   ADVERTISEMENT   CONTACT THE HERALD Mike Benbow, Business Editor benbow@heraldnet.com   Published: Wednesday, October 22, 2008 Cascade Bank hurt by bailout of mortgage giants By Mike Benbow Herald Writer EVERETT -- Everett-based Cascade Bank reported a major earnings loss Tuesday caused by the government bailout of Fannie Mae and Freddie Mac. Cascade, which held a significant amount of preferred shares of stock in the mortgage giants, reported a charge of $11.3 million after the government's conservatorship left the shares with little value. The charge left the bank with a third-quarter loss of $6.6 million, or 55 cents per share. That compares with earnings of $3.8 million, or 31 cents a share, during the same period a year ago. Without the investment loss in Fannie Mae and Freddie Mac, which before the bailout had been considered a safe move with strong dividends, the company would have reported quarterly earnings of $4.7 million, or 38 cents a share. "Although our quarterly and year-to-date results were hampered by the (bailout loss) from our Fannie and Freddie securities, our operating results during the third quarter were strong," said Carol Nelson, president and chief executive. She cited an increase of net income of 19 percent from a year ago and a 20 percent increase in noninterest income. "Additionally, loan and deposit totals again hit record levels," she said. After the bailout loss, at least one analyst suggested a "high likelihood" that Cascade would need to raise additional funds to be considered sufficiently capitalized under government banking regulations. Nelson said in her third-quarter report that Cascade "remains well capitalized for regulatory purposes." She said shareholder equity was $119 million, the same as it was a year ago and that book value of the bank's shares stood at $9.87 now, in comparison with $9.89 a year ago. Nelson said the bank has had strong growth in new checking accounts, resulting in a 32 percent increase in checking fees. She also noted a 9 percent increase in deposits and a 13 percent increase in total loans, raising the loan amount to $1.21 billion. Nelson also said that another positive development was an improvement in its credit numbers. She said the bank's nonperforming loans total was cut in half and that its charge-offs were modest. During the third quarter, the bank continued to increase the amount of money set aside for loan losses, adding $1.3 million, to bring the total to $4.8 million, she said, adding that that number compares with $850,000 set aside in 2007. READER COMMENTS Be the first to comment. You must be a registered user and verify your e-mail address to post comments to blogs or articles on HeraldNet. To register, click here. To read other terms and conditions, click here. Log out

1. Snohomish County man dies of swine flu 2. Lynnwood bank reprimanded by government 3. Police ID make of vehicle in fatal hit-and-run 4. Armed man shot by deputies in Arlington 5. IRS joins puppy mill investigation 6. Jetty Island ready for sand castles 7. Boeing's 6-month tally: 1 net order 8. Warriors & Patriots: Many American Indians served before getting full citizenship rights 9. Movin' out 10. Marshals seize swindler's home 2 - Top 10 Stories Most Talked about 3 - Top 10 Stories Most Emailed

• Warriors looking for balance • Three Scots vying for QB slot • Jackson looks for another title • Decorated veteran continues to serve as active volunteer • City Council reviewing sign regulations • Wildcats get a peek at newcomers • Lynnwood still in rebuilding mode • Shoreline feels a kindergarten growth spurt • Leave the patriotic pyrotechnics to professionals, cities urge • Trading dollars for kilowatts New PUD energy conservation programs save ... • By John Wolcott SCBJ Editor • Record crowd at Paine Field’s General Aviation Day as FHC Celebrate ... • Celebration of aviation's history and future presented in multiple venue ... • The time is ripe for small businesses to take no prisoners • EPA proposal to regulate global-warming gases would be costly for small ... • Innovation helps the town of Forks to offset tough economy • Powering the people