We have borrowed a lot of money from Sterling Savings Bank over the past five years on our construction projects. Yet despite our perfect record of repayment, somehow they’re still having troubles. Go figure!
Well — I think the worst is behind them, and I think many of the well managed small construction lenders in our area, in Seattle, have gotten their arms around their loan losses. I’m not saying some of these banks aren’t going down — some are. I would bet against Homestreet, Seattle Savings Bank, and Horizon Bank, for example.
But Sterling, (STSA), trading at 2.60 today, could double with a positive earnings announcement — and I think they’ve been doing a lot to move their builder product, including ours, off their books. They have been offering up to $20,000 in buyer credit, and interest rates fixed at 3 7/8%, which has moved over 70 units in Seattle this month. Sterling is here to stay. At least my kids should be hoping so, because I’ve got their educational IRA’s invested in the stock. 🙂
Another regional bank is Banner Bank, in Woodinville (BANR). Traded down below $2, now it’s at $2.37. I just like them, and they seem to be considering new loans, including an apartment project for us. Considering new loans is a good sign.
Citybank, in Lynnwood (City with a “y”– CTBK), went the deepest into land in Snohomish County and has been hammered. But trading near a dollar, and now at $3.76, they’ve come back a bit.
None of this should be considered investment advice, but these three banks, at least in my conversations with their people, seem to be doing what it takes to get their ships righted. Time will tell.