Local Bank Hints Seattle's Economy Facing Headwinds

Seattle has been a relatively strong housing market throughout the housing slump, although it has declined in recent months. Seattle-based Horizon Financial (HRZB) said on their FQ2’09 conference call that housing inventory is shrinking-- a good sign. However, unemployment is about par with the national rate, the Boeing machinists strike didn't exactly help things, and construction loan delinquencies are on the rise.

On Seattle’s economy:

September's preliminary unemployment rate for Washington (inaudible) at 5.8% continues to look better relative to the U.S. unemployment rate of 6.1%.

On the Boeing machinists strike:

There are a total of 27,000 machinists with 24,000 in King County and Snohomish Counties. The other 3,000 are in Wichita. Average wages for the machinists range about $65,000 with overtime. So a month long strike is estimated to take out about $130 million from the local economy in lost wages.

Construction loans:

Our commercial and multifamily real estate loans are performing well as are the C&I loans in our portfolio. The largest part of the increase is for the land development and residential spec construction projects.

Unfortunately, we are also seeing an increase in delinquencies, with those loans 30 days to 89 days past due at September 30th totaling approximately $46 million, compared to $13.4 million at June 30th and $7 million at September 30th a year ago. This, of course, was another contributing factor to the increased provision expense for the quarter.

 

Comments

[closetothefray:]

As a banker and lender having been in the business within many Cities in Washington State for many years, I can tell you that Horizon Bank is a very good small bank but has no business giving any projections about the Puget Sound Real Estate Markets. They are in the very distinctive and intimate small market of Bellingham, Whatcom County which is occupied by many retirees, students, people from Canada and non diverse ethnic groups. It is only within the last few years that they have actually branched into any markets south of Skagit County. Their experience in the greater Puget Sound commercial real estate market and their staff should not be quoted as an expert indication of the greater Seattle economic climate.

2008 Oct 30 01:19 AM

[SA Editor J...:]

Dear Closetothefray,

Since Seattle has been a relatively strong housing market until now, investors are likely looking for signs of its health or lack of it as an indicator for national trends. Maybe you could give us some insight on the Seattle market?

Thanks,

Judy

2008 Oct 30 01:23 AM

[The Cereghi...:]

As the Investor Relations counsel for Horizon Financial, we assist in writing their quarterly earnings announcements and site all sources for the economic date used in their news releases and conference calls. Those sources are widely known and well respected data providers and economic analysts, including the Puget Sound Economic Forecaster, Real Estats and the State of Washington. Please refer to the news releases and conference call text for the sources of these stats.

Sources for news release and conference call:
The Puget Sound Economic Forecaster September 2008;
nwrealestate.com/nwrpu...;
Real Estats, September 2008
workforceexplorer.com/...;
washingtonceo.com/home...;
blogs.thenewstribune.c...
Bellingham Herald, 8-27-08:
Puget Sound Business Journal vol. 29, # 15, page 5;
Tacoma News Tribune, October 16, 2008, page B1



On Oct 30 01:19 AM closetothefray wrote:

> As a banker and lender having been in the business within many Cities
> in Washington State for many years, I can tell you that Horizon Bank
> is a very good small bank but has no business giving any projections
> about the Puget Sound Real Estate Markets. They are in the very distinctive
> and intimate small market of Bellingham, Whatcom County which is
> occupied by many retirees, students, people from Canada and non diverse
> ethnic groups. It is only within the last few years that they have
> actually branched into any markets south of Skagit County. Their
> experience in the greater Puget Sound commercial real estate market
> and their staff should not be quoted as an expert indication of the
> greater Seattle economic climate.

2008 Nov 13 08:39 PM

[Bellinghamster:]

Horizon Bank is based in Bellingham, not Seattle. Look at their website. They have no offices in King County, which is where Seattle is located. They are no indication of the Seattle market. They have nothing to do with Seattle.


On Oct 30 01:23 AM Judy Weil, SA Editor wrote:

> Dear Closetothefray,
>
> Since Seattle has been a relatively strong housing market until now,
> investors are likely looking for signs of its health or lack of it
> as an indicator for national trends. Maybe you could give us some
> insight on the Seattle market?
>
> Thanks,
>
> Judy

2008 Nov 18 02:07 PM

[Bellinghamster:]

Cereghino Group-You don't "site" sources--you "cite" them.Not important, but just for the record.


On Nov 13 08:39 PM The Cereghino Group wrote:

> As the Investor Relations counsel for Horizon Financial, we assist
> in writing their quarterly earnings announcements and site all sources
> for the economic date used in their news releases and conference
> calls. Those sources are widely known and well respected data providers
> and economic analysts, including the Puget Sound Economic Forecaster,
> Real Estats and the State of Washington. Please refer to the news
> releases and conference call text for the sources of these stats.
>
>
> Sources for news release and conference call:
> The Puget Sound Economic Forecaster September 2008;
> nwrealestate.com/nwrpu...;
> Real Estats, September 2008
> workforceexplorer.com/...;
>
> washingtonceo.com/home...;
>
> blogs.thenewstribune.c...
> Bellingham Herald, 8-27-08:
> Puget Sound Business Journal vol. 29, # 15, page 5;
> Tacoma News Tribune, October 16, 2008, page B1
>
>
>
> On Oct 30 01:19 AM closetothefray wrote:

2008 Nov 19 06:17 AM