Sometimes, though, banks choose to make shifts of their own volition.
Take, for example, Wyoming-based Capital West National Bank, which in late December announced that it would change its charter and merge names with First National Bank of Wyoming, its sister-bank in Laramie.
Both banks had operated under the same holding company, but the Wyoming branches were known under the name First National Bank of Wyoming, while the lone Colorado branch, located in Fort Collins, was called Capital West National Bank.
Now, all three branches operate under the Capital West name, and, in a bigger move, under a state charter, as opposed to the national charter that the bank used to hold.
Switching to a state charter has a number of benefits, according to Doug Woods, Fort Collins president of Capital West.
First on the list is oversight closer to home.
State charters mean that banking regulators at the state Division of Banking do most of the overseeing, rather than being regulated by the Office of the Comptroller of the Currency on a national level.
National regulators tend to focus more of their time and energy on large, national banks, Woods said.
Since the charter is remaining in Wyoming, regulators in that state will be overseeing Capital West’s finances. The Wyoming Division of Banking is located in Laramie, Wyo., the same city that Capital West is headquartered in, giving officials at the bank much closer physical access to their regulators than before.
Colorado’s Banking Commissioner, Fred Joseph, echoed this sentiment in May when discussing a similar move by a bank in Estes Park.
Bank of Estes Park, formerly called First National Bank of Estes Park, applied to change its charter from national to state early in 2012, and at the time, Joseph suggested both local regulators — not to mention smaller fees — as good reasons for banks to get a state charter.
Colorado isn’t the only state where it’s cheaper to be a state-chartered bank. Wyoming charters are the same way, Woods said.
A state-chartered bank’s capital-reserve requirements remain about the same as they are with a national charter, Woods said, but there’s one big benefit that should definitely be noted.
The bank will now have a loan limit in the neighborhood of $4 million, where previously its loan limit was more like $3.2 million.
This is good news for a bank that just last June came out from under five years of regulatory scrutiny. Because of credit quality issues on some real estate loans, Capital West, like so many other banks in the country, was placed under a consent order with regulators.
In June, because of changes in management and a few other key areas, the consent order was rescinded, and Capital West has been doing well since.
As of Sept. 30, according to the most recent numbers available, commercial lending by the bank has increased by 22 percent compared to the same period of 2011. The bank brought in $1.5 million in net profit in 2012, Woods said.
Increased lending limits give the bank more room to continue growing as it moves out of the recession and away from its consent order.
Speaking of growing, the bank may also soon be expanding its physical presence in Fort Collins with a second branch. The goal is to accomplish this by the end of the year, Woods said, though the idea is still in its nascent stages at this point.
Whenever and wherever Capital West decides to grow, it will take with it a new brand, created by Linden Marketing, another company that spans the Colorado-Wyoming border.
Capital West had its logo redesigned as part of its shift, something that officials at the bank began discussing in early fall as part of the change in the charter. Bringing the branches of the bank together under one name simplified things and unified the brand, Woods said.
Molly Armbrister covers banking for the Business Report. She can be reached at 970- 232-3139, at firstname.lastname@example.org or at twitter.com/MArmbristerNCBR.