Archive for September, 2010

Late mortgage payments continue to be a growing problem in Whatcom County, according to the latest national report.

In July 3.8 percent of Whatcom County home loans were more than 90 days delinquent, up from a revised rate of 3.69 percent in June, according to data from CoreLogic. That’s the biggest month-to-month jump since November and is up significantly from January 2009, when the rate was 2.08 percent.

While Whatcom County’s delinquency rate has been steadily rising, it remains below the state average (5.63 percent) and the U.S. average (7.81 percent).

The rate of local foreclosures among outstanding mortgages also rose. In July the foreclosure rate in Whatcom County was 1.14 percent in July, up from a revised rate of 1.08 in June. The state rate was 1.65 percent, while the U.S. rate was 3.13 percent.

The real estate owned rate — the percentage of loans not sold at auction and returned to the lender — was 0.18 percent in Whatcom County in July, matching the revised June rate. The state rate was 0.32 percent in July, while the national rate was 0.62 percent.

Here’s something I’ve been working on for my Wednesday retail column…

Fred Moore and Aaron Fell have seen the struggles of other businesses in the boating industry during this recession, and they have been able to grow their company by learning those lessons.

Moore and Fell own Breakwater Marine, which is headquartered in Surrey, B.C. They plan on opening their first U.S. dealership in Ferndale next month, at 5330 LaBounty Drive, in the former Windward School facility near Interstate 5. The Ferndale dealership will sell new, used and consignment recreation and fishing boats as well as provide servicing and storage. Moore will manage the U.S. facility, while Fell will handle the Canadian operations.

Both Moore and Fell were former regional managers at Olympic Boat Centers, which filed for bankruptcy in July 2008. Both were laid off as a result of the bankruptcy, but decided to stay in the industry despite the grim outlook and opened the following winter in Canada.

“People thought we were crazy to do this given the economic climate,” Fell said. “But this climate forces you to learn good habits and run a tight business. We’ve also been focused on customer service, because building a loyal customer base is what you have to do right now.”

Fell said they also see a tremendous opportunity by opening in Ferndale, particularly in the consignment business. If someone in this area wants to sell a boat with them through consignment, they will be able to tap into the Canadian market through the company’s website and the Canadian visitors coming down I-5. If a Canadian wants to purchase a boat in Ferndale, they can ship it up to the Surrey or Nanaimo dealerships.

“The B.C. economy is very strong right now and there are customers up here looking for boats,” Fell said.

The dealership sells a variety of new boats, including Larson, Seaswirl and Fincraft. It also sells Mercury engines.

Fell said they plan to have the Ferndale facility open in mid-October. For more information, click (here).

Here’s some news you don’t see often in the banking industry these days… a regional bank has been able to get out of trouble on its own. Press release from DFI below:

The Washington State Department of Financial Institutions (DFI) and the Federal Deposit Insurance Corporation (FDIC) terminated the cease and desist order against Sterling Savings Bank put in place October 09, 2009, acknowledging Sterling’s successful efforts to recapitalize and meet specific operational requirements.

Since the cease and desist order was put in place, Golf Savings Bank was merged into Sterling Savings Bank with regulatory approval in June 2010, agreements were secured to raise $730 million in new capital and Sterling received approval for Robert H. Hartheimer – a former FDIC division director, regulatory consultant and investment banker – to join the board of directors.
“We are pleased to see Sterling succeed in its efforts to meet the recapitalization requirements cited in the cease and desist order, as well as the required actions providing more safe and sound operations,” DFI Director of Banks Brad Williamson said. “It’s unfortunate to see Washington’s financial institutions struggling in this difficult economy. It is also, in part, what makes Sterling’s recapitalization and operational improvements so encouraging.”

Greg Seibly, president and CEO of Sterling Financial Corporation, said in a release Monday night “Going forward, Sterling anticipates maintaining a Tier 1 capital ratio above 8 percent, which surpasses the current ‘well-capitalized’ standard for banks and the proposed Basel III global banking standards.”

“Sterling’s success is proof that a cease and desist order is not a death-knell for Washington’s banks, but rather a call to action,” DFI Director Scott Jarvis noted. “When a financial institution’s leaders take aggressive, well-planned, corrective action, success can be found at the end in safe and sound business practices – and in strong community and employee support.”

Here’s a press release about it from Western Washington University, which supports the Center for Economic Vitality

BELLINGHAM – Western Washington University’s Center for Economic Vitality (CEV) has been awarded a $664,726 Washington Export Assistance Program Grant to support its new Jump Start Washington Exports (JustWAEx) initiative, a program focused on supporting the export of Washington state products and services through research, training initiatives and hands-on assistance for businesses.

“This is an excellent opportunity for the CEV to use its expertise in assisting local and regional companies,” said WWU President Bruce Shepard. “It also shows what kind of partnerships are possible when such crucial funding can be secured, and it’s just one more way Western is having a real impact on jobs, lives, and the regional economy.”

The JustWAEx program will support products and services produced in the greater Puget Sound region, and its research and matchmaking services will be open to businesses directly or through other export assistance providers. The program’s strategic partnerships will include chambers of commerce throughout Washington and boards of trade in British Columbia.

While JustWAEx will support all businesses desiring to export or expand their exports, targeted outreach will be focused on industry clusters such as forest products, fresh agricultural products, manufacturing, and information and communications technology. The CEV has already worked with many businesses in these sectors, assisting a number of them with expansion into international markets.

JustWAEx will partner with the Edward Lowe Foundation to implement a statewide Companies to Watch recognition program, recognizing second-stage companies (those with 10-99 employees, more than $1 million in sales, and typically more than three years in operation) that demonstrate high performance in the marketplace, exhibit innovative products or processes, success in exporting or otherwise make those companies “worth watching.”

JustWAEx will also execute the following initiatives:

Export connection/matchmaking services – Will connect export-ready Washington state businesses with prospective agents, importers, and directly to qualified businesses in the British Columbia/Canada markets and abroad.
Technology matchmaking initiative: British Columbia/Washington state connections – will develop a virtual marketplace for matching Washington state exporters and B.C. buyers on a Web portal.

 
One-to-one confidential export business advising – For more than 25 years, the CEV has been advising businesses on export issues, practical experience in business ownership and management.
WWU students add value through service learning projects with export assistance – WWU’s College of Business will use its international business experience and expertise to contribute to achieving JustWaEx objectives. Through the use of undergraduate international business students and students in the M.B.A. program, prospective international markets for local firms will be studied.

Export Training services – training initiatives will be built on already existing programs, versus inventing new ones, and add our unique services as a value added benefit.

For information on the CEV’s new Washington Export Assistance Program or the Jump Start Washington Exports initiative, contact CEV Executive Director Tom Dorr at (360) 733-4014 or tom.dorr@wwu.edu.

The Workforce Board came out with its 2010 Employer Survey last week, which looks into how employers in Washington state are doing when it comes to finding qualified people to hire.

This year’s survey showed a steep decline in the percentage of employers having trouble finding qualified employees. According to the survey, 17 percent of employers had some trouble finding qualified employees in the past year, down from 50 percent in 2007. When asked about the consequence of hiring difficulties, 40 percent of those having difficulty said they didn’t fill a job opening. That translates into 10,900 employers statewide unable to fill a job opening, according to the survey.

The difficulty is finding someone with specific skills for a job. According to the survey, the highest percentage of employers struggled to find job applicants with a vocational certificate needed for the position. In an earlier report, the Workforce Board noted occupational areas such as installation, maintenance, accounting and nursing would see shortages through 2013.

To see the report, click (here).

North County Bank of Arlington was shut down by government regulators and taken over by Whidbey Island Bank.

The Arlington bank had four branches, none of which were in Whatcom County. Citing inadequate capital and severe loan losses, the Washington Department of Financial Institutions stepped in on Friday, Sept. 24 to close the bank and turn it over to the Federal Deposit Insurance Corp. The FDIC entered into an agreement with Whidbey Island Bank to assume a majority of deposits.

“North County Bank’s capital has been eroded by large loan losses associated with land development and construction lending,” said Brad Williamson, director of DFI’s Division of Banks, in a press release.

Throughout the weekend and during the transition, North County Bank customers can access funds. The branches in Arlington, Lake Stevens, Marysville and Everett will reopen Monday as branches of Whidbey Island Bank.

This is the 127th bank shut down by government regulators in 2010. The estimated cost to the FDIC for this closure is $72.8 million.

As of the end of June, North County Bank had $288.8 million in total assets.

It’s been somewhat quiet so far today, as government regulators shut down one bank in Florida. Details below. I’ll update with new posts if others are closed today:

No. 126 in 2010: Haven Trust Bank of Ponte Vedra Beach, Fla., was shut down, then taken overy by First Southern of Boca Raton, Fla. Haven had two branches. Estimated cost to the FDIC: $31.9 million.

With the recreation boat industry hit as hard as it has in this economy, one company has been moving forward with expansion plans. Details in the press release below:

Lake Union Sea Ray in Bellingham has expanded its parts and service operations with an all new 2,500 square foot service shop.  The service center is nearby the sales showroom, in the same building as Tri County Diesel. The showroom  is located on the water in Squalicum Harbor at 2121 Roeder Avenue.

Jim Rick, General Manager for Lake Union Sea Ray’s Bellingham location, says the new shop will enable them to better serve their customer’s needs in the 16’ to 28’ trailer boat segment and compliments their mobile service capabilities. Open since the fall of 2008 in Bellingham, Lake Union is a Brunswick Master Dealer which sells and services Sea Ray Bayliner, Boston Whaler, Trophy fishing boats and Meridian Yachts.  In addition to boat sales, Lake Union Sea Ray also retails in Mercury outboard engines and EZ Loader boat trailers.

The dealership is a factory authorized and certified and offers full service for Mercury and Mercruiser engines. Staffed with marine industry certified technicians, the new service center is geared up for winterization and all other parts and service needs.

Many members of the Lake Union staff are familiar faces and have been selling and servicing Bayliner, Trophy, Boston Whaler boats and Meridian Yachts in the Bellingham community for over 25 years.  They are eager to share their knowledge and recommend needed parts and service, finding a boat to suit a person’s needs, provide information about boating in the San Juan and Gulf Islands, or talk about fishing in  local waters.

For details about Lake Union Sea Ray in Bellingham, call 360-671-5560.

Here’s a press release from the Bellingham/Whatcom Chamber of Commerce about offering a new insurance program to its members:

The Bellingham/Whatcom Chamber of Commerce & Industry announced today that it has joined Business Health Trust, a statewide network of health insurance and other employee benefit programs. The Trust specifically provides insurance products and services through Chambers of Commerce in select markets in Washington State. Bellingham is the fifth Chamber, along with Seattle, Tacoma, Spokane and the Tri-Cities.

Business Health Trust will be available to Bellingham/Whatcom Chamber of Commerce & Industry member companies that employ between from 2 – 99 people, effective October 15, 2010. Products include the full range of health insurance and employee benefits, including medical, dental, vision, life, long-term disability and employee assistance programs.

“Over 90% of our members have less than 100 employees, and we are excited to provide them with an outstanding way to get competitive employee benefits through Business Health Trust,” said Ken Oplinger, President/CEO of the Chamber. “The cost of providing health insurance and other benefits to employees continues to increase year after year, making it the number one concern of many small business owners. Ensuring members of the Bellingham/Whatcom Chamber of Commerce & Industry have access to large group buying power could be the difference that allows those companies to continue providing employee benefits during these difficult economic times.”

“Helping small businesses succeed is a top priority for chambers of commerce,” said Emmy Jordan, Business Health Trustee and Senior Vice President of Membership and Business Development at the Greater Seattle Chamber of Commerce. “The Business Health Trust provides group buying power. This translates into affordable, high quality benefits for small businesses.”

For more information about Business Health Trust and enrollment, please contact the Bellingham/Whatcom Chamber of Commerce & Industry’s special BHT Hotline at 360/734-1716.

I’ve been out of the office most of the morning/early afternoon, dropping in at the Association of Washington Business 2010 Policy Summit, held at the Semiahmoo Resort in Blaine.

The beginning of the day had some interesting presentations about what’s happening with the national and global economy. The first presentation was from  Matthew Bishop, New Yor Bureau chief for The Economist magazine. I plan on writing about it more in my Biz Talk column, but he seemed optimistic about where the economy is going. He pointed out that we “dodged a bullet” during the financial meltdown and somehow avoided falling into a Depression.

We’re currently on the road to recovery, he said, but it’s different than most recoveries because this recession was from a financial crisis rather than a regular downturn in the business cycle. Looking back at previous recoveries from the financial-crisis type recessions, the U.S. and the global economy is actually ahead of schedule compared to the past. He said it’ll still be slow and extremely difficult for people looking for work, but things seem to be on the right track.

Bill Conerly of Businomics was the second morning speaker, who focused on Washington State’s economy. He seem to have a similar outlook: Things are getting better, but it’s a slow & gradual recovery that will be difficult to notice. One of the biggest issues for Washington going forward is housing/construction, and it’s going to take some job growth in other areas to help turn those two industries around.

Do you think these two on the mark about what’s happening? What do you think are the biggest challenges in the coming months?