How do the revised rules in the Bipartisan Budget Act of 2015 affect you and your business?
Lakewood-based FirstBank, for one, cut the value of its real estate loans that ended up in default by nearly half between late 2010 and late 2011. It reduced the dollar amount of those loans from $14.7 million to $8.7 million, according to the bank’s fourth-quarter balance sheet.
Sponsor Generated Content
Better yet, troubled real estate loans carried by FirstBank in Larimer and Weld counties were reduced to zero by the fourth quarter, according to Pat Brady, president of FirstBank Northern Colorado.
Very little of those loans was from commercial property, Brady said, and the bank has been working with homeowners to attempt to keep them in their homes by making use of various loan forgiveness options.
“For the most part, borrowers want to pay their bills,” Brady said. “They just might be in a bad spot after everything that has happened.”
The situation has been slightly different for Great Western Bank, which acquired the assets of TierOne Bank of Lincoln, Neb., in June 2010, after TierOne was declared insolvent by regulators.
Part of the deal made by Great Western includes a loss-share transaction with the Federal Deposit Insurance Corp. on $1.9 billion of TierOne’s assets, according to FDIC documents. In total, Great Western, headquartered in Sioux Falls, S.D., acquired $2.8 billion in assets from the troubled bank.
Great Western’s FDIC reports show that between the fourth quarter of 2009 and the same period in 2010, the amount of troubled real estate loans carried by Great Western jumped from $5 million to $132 million.
Subject to stringent reporting requirements because of its purchase of a troubled bank, Great Western has wasted no time clearing TierOne’s troubled loans off its books. By the fourth quarter of 2011, the amount of such loans carried by Great Western had decreased by nearly $40 million to $94 million company-wide.
The majority of Great Western’s problem assets are located outside Larimer and Weld counties, according to Great Western Regional President Rob Stumbaugh. Many of the loans were outside the realm of residential, however.
“Most of TierOne’s loans were commercial,” Stumbaugh said. “A lot of them were medical, mixed-use and multi-family, and case by case we find users who are looking for the opportunity to get into space that they like.”
Three other banks with a presence in Northern Colorado, Adams Bank and Trust, Cache Bank and Trust and Guaranty Bank and Trust, have also brought down the amount of troubled real estate loans on their books since reaching peak levels in the midst of the recession.
CBA launches program to help small businesses find capital
The Colorado Bankers’ Association has launched a new website, SmallBizLending.org, to help small-business owners understand their options when it comes to raising capital.
The website, which went live Feb. 29, is a collaboration between public, private and nonprofit lending institutions that will serve as a hub for resources small businesses need to find the right way for them to borrow money.
Entities from the Denver branch of the Federal Reserve to Small Business Development Centers statewide are featured on the website, and representatives from all different types of organizations have voiced support for the project, according to Caroline Joy of the CBA.
“Small businesses’ access to capital is a huge concern for everyone,” Joy said. “We don’t care how they get it, we just want them to get it.”
To that end, conversations began between the CBA and Gov. John Hickenlooper’s office in late summer 2011. SmallBizLending.org ties in with the governor’s Blueprints for Colorado economic development plan, Joy said.
Alternate sources of funding have proven useful among Northern Colorado businesses, including Peddlemaster, a Johnstown-based company that specializes in the design of portable vehicle hand controls for drivers with disabilities.
Company founder Rick Judson received a $12,000 loan from ACCION, a nonprofit dedicated to providing access to business credit that is featured as one of many resources on SmallBizLending.org. Judson used the loan to supplement his inventory.
In addition, Judson last year received a $100,000 Small Business Administration loan facilitated by Guaranty Bank that he used to upgrade his website and marketing practices.
SBA Colorado District Director Greg Lopez has been a big supporter of the website, Joy said. The SBA is working to make the parameters of SBA loans clearer to both lenders and borrowers, and SmallBizLending.org will work toward that goal.
First National Bank honored by Forbes magazine
First National Bank of Nebraska was named to Forbes’ “America’s Best Banks” list for 2012.
First National Bank, headquartered in Fort Collins, is a division of First National Bank of Nebraska, which is ranked 17th out of 100 of the country’s publicly traded banks and thrifts.
The list is based upon regulatory filings as of Dec. 1, 2011. Data used for the list shows that First National of Nebraska held $15 billion in total assets and had a Tier 1 ratio of 13 percent, well above that considered well-capitalized by regulators.
Molly Armbrister covers banking for the Northern Colorado Business Report. She can be reached at firstname.lastname@example.org or 970-232-3139.