CEOs: Banks healthier now as result of federal regs

BOULDER — Bankers in the Boulder Valley are still spending time and money adhering to “ever-changing” federal banking regulations, but because they adhere to them, their banks are much healthier than several years ago.

Bankers, speaking at BizWest’s CEO roundtable on banking Tuesday, said they believe the more stringent lending rules and capital requirements along with an improved economy have aided in shoring up their capital/asset ratios and have reduced the number of customers defaulting on loans.

Bankers also talked about how mobile banking, security concerns and a sparse talent pool of future bankers is affecting their industry. The roundtable was sponsored by the Boulder law firm of Berg Hill Greenleaf & Ruscitti LLP and accounting firm EKS&H.

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The Dodd-Frank Wall Street Reform and Consumer Protection Act was signed into law in 2010 following the Great Recession in 2007. A variety of critics have attacked the law, some arguing it is not enough to prevent another financial crisis or more bank bailouts, and others arguing it went too far and unduly restricted financial institutions.

“The local market is much healthier now, said Pat O’Brien, Boulder market president for Guaranty Bank and Trust Co. The amount of rigor required by the new regulations has helped create stronger loan portfolios, he said.

Brad Lesch, vice president, business banking for First Citizens Bank, said his bank, for example, has implemented a higher degree of loan monitoring, looking into customers who are 10-days past due, when in the past the bank would wait until a note became 30-days past due to look into it.

But added regulations on mortgage lending has led several banks to restrict home-mortgage lending and look for other ways to make money, such as providing wealth-management services and other new products.

Chris McVay, Longmont market president for High Plains Bank, said his institution continues to offer home mortgages, but very carefully.

“We use them as an entry point to attract new customers, who we hope will buy more of our products,” he said.

The Dodd-Frank regulations are being rolled out in layers and waves each year, said Susan Moratelli, Boulder president for ANB Bank. “We are constantly changing procedures to address concerns.”

Moratelli said that competition in the local market is increasingly fierce.

“It is a strong market, and for banks to differentiate themselves from competitors is a challenge,” she said. ANB Bank recently acquired Capital West Bank in Fort Collins, expanding its service area along the Front Range and into Wyoming.

Bankers are still straddling the line between brick-and-mortar branches and online banking using mobile devices.

Michael Calcote, chief financial officer for Elevations Credit Union based in Boulder, said the credit union is putting effort into digital-payment systems, but still sees a need for physical branches.

“Our customers seem to want both, but we are downsizing our branches. Previously, branches would be about 3,500 square feet, the one’s we are building now are half that size.”

While banks are hiring more people to keep up with added federal regulations, bankers say there is a shallow talent pool. They said that it is getting harder to find talented college graduates who will take a $30,000 a year entry level job to learn the community banking trade. Many new grads would rather get into the more lucrative field of investment banking.