Strange Days in Banking

Banner Bank is our second bank in Point Roberts.  I follow it the same way that I follow Sterling Savings Bank as its fortunes ebb and flow (currently more ebbing than flowing), but Banner has been rather more stable.  Banner Bank took the same big initial hit last fall and winter, but then has just been moving along in a relatively steady path.  It's a smaller bank than Sterling; it’s still paying a dividend on its common stock, even though it’s only 1 cent per share in each of the last couple of quarters.  I’ve seen no mention of it in relation to TARP funds.  All of which makes it seem like it's doing okay in this very difficult environment.

Clearly, Banner wasn’t on an upswing.  This past week, it announced $8+ million in losses, but they weren’t as large as expected--analysts had expected losses of twice that much.  And then, yesterday morning,  Banner's stock took off during the first part of the trading day, gaining almost 75 cents--which, if you are selling at less than $3.00 per share, is a very big increase.  And then, during the rest of the day, it lost all that gain and closed back at about $3.00.  

Banner normally has sales volume of about 220,000 shares per day; yesterday, the sales volume was up in the millions.  A big day for somebody, but not as a result of anything specific to Banner in the financial news that I could find.  Well, other than Obama’s interest in saving community banks that, it turns out, may be too small to fail.  Today, Banner lost another $.19, but with only regular volume.  Maybe just some strange clutch of events that have not yet been reported in the business news?  Maybe a misalignment of the stars?

Sterling’s troubles continue.  Yesterday, it announced enormous 3rd quarter losses, almost a $1/2 billion.  And today, on very high volume, it lost another 25% of its stock price, closing at 86 cents.  Even a quixotic purchase on my part seems dubious right now.

NOTE:  These banking issues reflect problems for the stock/shareholders, not for those who simply have accounts or loans at these banks.