As of September 2002, Washington had 102 insured banks, with assets of $71.7 billion. Sixty-five of those banks were state-chartered.
The state in 2001/02 was experiencing its worst recession since 1980/81. The weak economy caused demand for commercial property to weaken: office and industrial vacancy rates rose sharply from 2000 to 2003, particularly in the Seattle area. However, low interest rates caused a rise in housing prices. But loan delinquency ratios for commercial real estate (CRE) increased in 2002.
The median return on assets (ROA) (the measure of earnings in relation to all resources) among insured banks headquartered in Washington improved from 2001 to 2002. Net interest margins (NIMs) (the difference between the lower rates offered to savers and the higher rates charged on loans) widened during that period, contributing to the improvement in ROA ratios. However, median past-due loan levels increased from 1999 to 2002, particularly among Washington's community banks (those with assets under $1 billion). Agricultural banks experienced the most pressure with regard to past-due loan levels.