New bank commissioner finally takes over

After almost a year and a half and several rounds of searching, the Colorado Division of Banking has found its new leader.

Starting April 12, Steve Strunk, an industry veteran with decades of turnaround experience, will become state Bank Commissioner. While he has never worked for a regulatory body, Strunk’s employment history includes a 10-year period in which he dealt with regulatory authorities on a nearly daily basis.

Colorado Securities Commissioner Fred Joseph has been acting bank commissioner since Richard Fulkerson retired in November 2008 after 13 years on the job. The Department of Regulatory Agencies struggled to find someone with the appropriate experience to take over permanently and a year ago expanded the search nationally. However, the last man standing was plucked from the Colorado Springs branch of an Oklahoma bank.

Since the mid-1970s, Strunk has served in an assortment of roles at federally and state-chartered banks of various sizes. Over that time, he has earned a reputation as a turnaround expert that has him on a first-name basis with the Federal Reserve Bank of Kansas City President Tom Hoenig.

“I enjoyed working with Steve and I know that his banking experience and background will serve him well as he takes on the very important responsibility of serving Colorado,” Hoenig said in the announcement of Strunk’s appointment.

Strunk’s longest stint at a single bank was also his most well-known turnaround. He was recruited to join Albuquerque’s Sunwest Financial Services Inc. in 1990. At the time, according to Strunk, regulators were doubtful about the $3.6 billion bank holding company, which held nonperforming assets in excess of 11 percent of total assets.

He worked for two years to clean up the books, implementing rather drastic changes such as beefing up the internal real estate appraisal department from three employees to 15. The move prompted an Office of the Comptroller of the Currency official to remark that the department was better equipped even than Citibank’s, Strunk said.

“It was really a landmark case for people in the industry,” he said.

Two years after Strunk joined Sunwest, the holding company was acquired by Boatmen’s Bancshares Inc., which was in turn acquired by NationsBank, which was then merged with Bank of America. Strunk stayed on until 1999, a year after the BofA merger. He spent the next nine months at Texas Capital Bank and then six years at Nevada State Bank before landing in Colorado.

“Moving to Colorado was the first time my wife and I actually selected a location to continue my career,” he said.

Colorado Springs experience

In 2006, Strunk joined New Mexico-based First Community Bank’s Colorado Springs branch as a commercial banker. He stayed just over two years.

“It became clear to me that they wouldn’t be a longtime player,” he said.

The Colorado locations of the bank were purchased by Great Western Bank following regulatory pressure for First Community to improve its financial standing. Strunk moved on to serve as the Colorado president for Kirkpatrick Bank, an Edmond-Okla.-based institution with just under $500,000 million in assets. The Colorado Springs branch of Kirkpatrick is the only one outside of Oklahoma.

Strunk didn’t apply for the commissioner job until Oct. 31, almost a year after it became available, because he was only at Kirkpatrick for a couple of months.

“I wanted to accomplish certain things,” he said. “I didn’t think that it was appropriate to leave without accomplishing those things.”

Strunk said that Kirkpatrick was generally healthy when he joined, but there were a few asset issues to work through. At the end of 2008, the bank’s nonperforming loans stood at $11.8 million. By the end of 2009, that had been cut by more than half to $5.5 million. He said he now feels comfortable enough with the bank’s portfolio and team to move on.

Strunk decided to take on the challenge of being the state’s top banking regulator because he feels truly passionate about the industry.

“In addition to banking being my occupation, it’s my hobby,” he said. “I eat and breathe banking.”

Strunk said he plans to review the most recent exams of all 107 banks under the supervision of the Division of Banking and hopes to visit all of them within the first year. He also plans to divide the state’s banks into quartiles based on their books in order to focus more resources on the least healthy institutions.

“I believe I can be of service to the state of Colorado and its residents,” he said, explaining that the top priority will be to protect the banking public. “I want bankers to know that I will be a strong, but fair, regulator.”

Kristen Tatti covers the banking industry for the Northern Colorado Business Report. She can be reached at 970-221-5400, ext. 219 or ktatti@ncbr.com.

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