THE PHOENIX MARKET TODAY
The housing crash and recession have battered the small Arizona banks
that grew and thrived on the state’s boom times. Now much leaner,
they await the economic rebound to help return them to profitability.
The dozens of small banks that serve the metro Phoenix and outlying
communities weren’t ready for the steep housing downturn or the credit
paralysis that followed. Most are bracing for a crisis if commercial
properties unravel much further.
Saddled by high exposure to real estate, more than 80 percent of the
small banks based here are losing money, and their debilitated status
could curb lending in general and blunt economic recovery.
Phoenix-based Desert Hills Bank was shut down March 26th,
and seven other banks operating in the state have failed over the past
year. Arizona’s banking industry ranks among the weakest in the
nation in measures such as higher percentage of non-performing loans,
highest number of unprofitable institutions and lowest return on
equity.
Here’s the latest update on how the counties you do business in are
performing. The New Year’s effect is still lingering in the sales
market, although conditions are improving and we expect more jumps as
we approach June 30th closing deadline of the homebuyer tax
credit. As expected, permitting began its seasonal upward swing led
by home building and spring pool installations. Last, foreclosures
broke their five-month downward trend and notched up and average of
4.62% in February.
