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Follow the bailout money


On December 2 we posted about the eight Northwest banks that had applied for and been approved to receive federal bailout funds. None of the banks gave the slightest indication they really needed the money, only that the funds would improve the looks of their books. They’ve been quiet (and there’s been damn little regional news coverage about them) ever since. (See the excellent ongoing ProPublica reporting on the bailout.)

Those eight numbered six in Washington state, one each in Oregon and Idaho. They were (in order of size): Sterling Financial Corp in Spokane (WA), $303 million; Umpqua in Portland (OR), $214.2 million; Washington Federal in Seattle (WA), $200 million; Banner Corp in Walla Walla (WA), $124 million; Columbia Banking System in Tacoma (WA), $76.9 million; Cascade Financial Corp in Everett (WA), $39 million; Intermountain Community Bancorp in Sandpoint (ID), $27 million; Heritage Financial in Olympia (WA), $24 million.

Since then two small banks, both in Washington, have joined the list: Timberline Bancorp at Hoquiam, $16.6 million; and Washington Banking Company at Oak Harbor, $26.4 million.

Today, national Associated Press has out a fine article on the bailout recipients (more than 200 of them nationally) saying that “after receiving billions in aid from U.S. taxpayers, the nation’s largest banks say they can’t track exactly how they’re spending the money or they simply refuse to discuss it.” Read that story.

So what the Northwest banks doing with their money? There hasn’t been a lot of specificity. Newcomer Timberline had this to say (and this is a typical statement from the banks) in its press release: “The additional capital will enhance our capacity to support the communities we serve through expanded lending activities and economic development. At September 30, 2008, we were well capitalized and will continue to be well capitalized following the addition of new capital through the Treasury program.” Note the statement that “we were well capitalized” – that means they had plenty of money and didn’t need the federal money. If they don’t need it, then what are they doing with it?

We’re trying to inquire of the banks: What are they doing, or will they be doing, with the money? We’ll let you know what we hear – if anything.

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