PORTLAND, Ore. (AP) - Oregon banks that survived the 2008 financial crisis are mostly profitable again, with 25 of 29 state-chartered banks making money during the first quarter of 2012.
The Oregonian (http://is.gd/7Ecwlm ) reports money set aside as protection against loan losses is at the lowest level in two years and banks have higher levels of capital on hand relative to their assets. Capital gives banks a cushion if loans falter.
"We are guardedly optimistic that we are seeing improvements in the banking industry overall," said David Tatman, administrator for the Oregon Division of Finance and Corporate Securities, which regulates the state's banks. "What we're seeing in banks reflects the economy. The economy is improving quite slowly and banks are improving fairly slowly."
Optimism could change again if the recovery stalls, according to analysts, and concern remains about banks' exposure to commercial loans.
The state's financial institutions say they are healthier than they've been in a while.
"We'd love to see more small-business customers to take loans now, because we've got a lot of money to loan," said Neil D. Grossnicklaus, president of Willamette Valley Bank in Salem. "The economy continues to improve, but it's just a very slow go."
Bank deposits between 2007 and 2011 in Oregon grew by $12.5 billion, or 23 percent, according to the FDIC, and Bank of America, Wells Fargo and U.S. Bank accounted for $8.5 billion.
Oregon had 36 state-chartered banks in 2006. That number is now down to 29. Banks that closed were mostly small in comparison and operated in largely rural areas.
Some banks remain under regulatory order to shore up finances and could use investor money.
Portland's Albina Community Bancorp. reported a small profit last year after two years of multimillion-dollar losses but is threatened by its loan portfolio. Roughly $1 of every $9 that it loaned is in questionable repayment status on real estate, commercial and construction loans.
Others under state enforcement orders to shore up finances include Merchants Bancorp in Gresham, Pacific West Bank in West Linn, PremierWest Bancorp in Medford, Oregon Pacific Bancorp in Florence, Northwest Bank in Lake Oswego, Columbia Community Bank in Hillsboro and Bank of the Cascades.
Information from: The Oregonian, http://www.oregonlive.com