Bank of the Cascades released their annual financial statement and report earlier this month.
-The bank is now sitting with $55 million in non-performing assets (delinquent loans). These increased 1,700% in 2007 and are now 1,146 times higher than in 2005.
-The bank currently holds $687 million in real estate construction/lot development loans. These are loans to developers and speculators, not mortgages which are typically considered a better credit risk.
If only 10% of this real estate portfolio goes the way of Rennaisance Ridge (imho, a very real possibility), the bank may find itself in a situation where it can no longer be considered “well capitalized.”
And if the $&!# hits the fan in the local real estate market, as the mortgage insurers recently warned, there is a very real possibility the bank may buy the farm – and I don’t mean foreclose.