Cascade Bancorp released their 10-Q (quarterly SEC filing) yesterday. I have been following the company’s numbers fairly closely for some time now simply because I believe they are one of the best guages of the health of the local economy.
Digging straight into them, non-performing assets (NPA: delinquent loans) were, in the words of the bank’s press release, “modestly higher,” and continue to grow at an annual rate over 1,000% (11-fold). As of June 30 this year NPA grew to nearly $10 million, more than tripling since the beginning of the year. Bottom line: since the vast majority of the bank’s loans are to builders and home-buyers, the dramatic growth in delinqencies shows a rapid deterioration in the health of these two groups.
Taking a look at another stat, demand deposits (DD) at the bank continue to decline. Over the past year depositors have withdrawn over $150 million in DD, a drop of 24%. Bottom line: local businesses and consumers have 24% less cash on hand than this time last year, signaling a serious drop in general economic activity. $150 million ain’t peanuts, folks.
So while the headline reads, “Cascade Bancorp earnings up 6.9%,” the REAL numbers tell a more enlightening story.