Business

Idaho banks curb losses, gain breathing room

Each of the 10 biggest Treasure Valley banks maintained their rankings in the latest market share report by the Federal Deposit Insurance Corp., released June 30. Two bank mergers announced later will affect the Valley. The green pie slices reflect the first: Washington Federal, based in Seattle, will nearly triple its market share by buying all of Bank of America’s Idaho branches as part of a 51-branch purchase. Blue pie slices reflect the second: Banner Bank will move from being a fringe player in the market to the fourth largest after buying Nampa’s Home Federal Bank.
Each of the 10 biggest Treasure Valley banks maintained their rankings in the latest market share report by the Federal Deposit Insurance Corp., released June 30. Two bank mergers announced later will affect the Valley. The green pie slices reflect the first: Washington Federal, based in Seattle, will nearly triple its market share by buying all of Bank of America’s Idaho branches as part of a 51-branch purchase. Blue pie slices reflect the second: Banner Bank will move from being a fringe player in the market to the fourth largest after buying Nampa’s Home Federal Bank. Source: FDIC Market Share Report

It's been a slow climb out of the recession for banks doing business in Idaho, but recent reports hint that the industry is gaining strength.

That's obviously good news for bankers. But it's also good news for the business community, says Gavin Gee, director of the Idaho Department of Finance, which regulates the 14 banks chartered by the state.

"As a businessman, you look at banks as a reflection of the economy, especially the Idaho banks," Gee says. "They are loaning to Idaho businesses and to Idaho consumers. If they are healthy and growing and making money, that's an indication the economy and businesses are healthy and growing and making money."

The recession was littered with failing businesses and unemployed homeowners, leaving banks burdened with unpaid loans. Idaho-chartered banks charged off $16.1 million in bad loans by June 30, 2012, halfway through the calendar year. This June, that year-to-date number fell to $3.3 million as banks cleaned their lending portfolios. Past-due and nonaccrual loans have fallen from 4.2 percent of all loans in 2011 to 2.6 percent today.

Another positive indicator is state banks' "other real estate owned," or OREO, which fell from $79.1 million in June 2012 to $65.8 this June as banks sold off backlogs of seized homes and other foreclosed properties.

The state numbers don't include the Oregon-chartered Bank of the Cascades. The bank returned to stability by reducing its OREO holdings, including those in the Treasure Valley. The bank fell under a federal order in 2009 in part because it held $53.7 million in such real estate. The order was lifted in March after the bank worked its OREO holdings down to $5.6 million. They've since fallen to $2.6 million.

"The industry is getting healthier," says Mike Mooney, Bank of the Cascades vice president and Idaho regional manager. "The reports mirror what I've seen in our bank, though our improvement has been a little more rapid. We have very little OREO on our books in Idaho, and at one time, that was a sizeable number."

First Idaho Bank of McCall also had federal orders lifted this year. Idaho Banking Co. and Syringa Bank in Boise and Bank of Idaho in Idaho Falls remain under orders.

"Outside of the possibility that the federal government doesn't get its act together, we're seeing a lot of positive signs," Mooney says. "Look at all of the activity in Meridian, Nampa and Caldwell. The economy in Idaho is improving."

Zach Kyle: 377-6464

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