Quarter of NW Banks Problematic, say Rating Agencies

An examination of the Northwest financial landscape shows economic improvement in the past year. Recent news on an increase in housing prices and growing consumer confidence are additional signs of a recovering economy.

The Northwest Credit Union Association (NWCUA) examined data to determine whether the financial services industry is also seeing improvement, comparing ratings from Bauer Financial and Bank Insight, a division of Thompson Reuters.

The industry is improving, but the news is better for credit unions than for banks.

Nearly 16 percent of Oregon and Washington-based banks are considered problematic or troubled. This is an improvement from a year ago where these same ratings came in at 20 percent.

These rates, which take into account capital levels, asset quality, earnings ratios and liquidity, were based on data released by federal regulators.

The Bauer and Bank Insight data finds credit unions are improving their financial health, with over 94 percent of Oregon and Washington credit unions considered strong or adequately capitalized.

OR & WA - Troubled CUs

An historical look back to see how strong financial institutions have been since the Great Recession finds  that since 2009, there were 453 failed banks and just 70 failed Credit Unions. On average for banks this failure rate is about 1.4% versus credit unions which had a failure rate of 0.2% over this period. 

So far in 2013 we have seen 13 banks fail and 7 credit unions fail. It might take some time until the full recovery for financial institutions is complete, however it is clear credit unions have remained strong during these tough past few years and continue to improve their financial health.


Questions? Contact Lynn Heider: 503.350.2225, lheider@nwcua.org.

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