Everett bank posts loss in 1st quarter

Published 6:22 pm Tuesday, April 21, 2009

EVERETT — Everett-based Cascade Bank posted a $4.8 million loss for the first three months of 2009 as it increased the money set aside for potentially bad loans to nearly $14 million.

Cascade Chief Executive Carol Nelson said the bank’s basic performance was strong; loans and checking deposits are growing and revenues are up, but so are its nonperforming loans.

“By increasing our provision for loan losses, we have taken a proactive step to continue to stay ahead of the real estate and credit cycle curves,” Nelson said.

The bank noted that bad loans amounted to $17 million a year ago, or 1.5 percent of the total loans; $40 million the previous quarter, or 3.2 percent; and $51 million during the three-month period ending March 31, or 4.05 percent of all loans.

Nelson said the bank looked at its real estate loans and the homes used as collateral and ultimately had to write off $5.3 million in charge-offs. As a result of mortgage defaults, the bank now owns $9 million in real estate.

The bank is continuing to see deterioration in the real estate market in the region and that’s why it’s setting aside more money for potential losses, Nelson said.

She said Cascade continues to be a well-capitalized bank and has money available to lend.

“The underlying core business of the bank was good,” she said.

She said loans have increased by 8 percent in the past year to $1.25 billion, deposits grew 7 percent to $1.02 billion, and checking account balances grew 83 percent. Bank assets grew 10 percent to $1.66 billion.

Cascade received $39 million from the federal government’s TARP program, which has made the bank feel comfortable enough to expand, Nelson said. It’s opening a new branch in May in Edmonds.

“It’s very challenging out there, but I feel confident we will be able to weather the storm,” Nelson said.