CEO Roundtable: Colorado banking environment healthy as rates rise

BOULDER — Local bankers are mostly smiling when they look at their institutions’ balance sheets, even as interest rates finally begin ticking up after a prolonged period of historically low rates. 

In some instances, rising rates are “driving competitive pressures” between banks as customers may begin to comparison shop, MidFirst Bank vice president Susan Moratelli said Tuesday during BizWest’s virtual CEO Roundtable for the banking industry. 

But despite the Federal Reserve not-so-subtly hinting at multiple rate hikes, “it’s still a great time to borrow,” she said.

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Borrowers are beginning to request to lock in fixed rates for as long a period as they can, according to AMG National Trust Bank commercial banking president Thomas Chesney.

Bankers, Elevations Credit Union chief operating officer Ray Lindley said, are also seeing a drop in refinance volumes. 

As a result of rising interest rates, institutions are more often pushing creative products such as interest-rate swaps, Vectra Wholesale Banking director Kirk Monroe said.

In a rising-rate environment, “there are a lot of moving pieces that are making our jobs a little more difficult,” said Ryan Lee, senior vice president, commercial banking, and Boulder market leader for Community Banks of Colorado.

Still, bankers are overall very pleased with the pace of recovery from COVID-19-induced economic slowdown. 

Past-due loan ratios are low, and “we’re just not seeing [borrowers struggling to make payments] yet,” High Plains Bank market president Chris McVay said. 

Balance sheets are flush with deposits, said Bank of Colorado branch president Aaron Spear.

Alpine Bank regional president Chris Maughan agreed, adding, “We’re in a big liquidity position and are trying to deploy that liquidity.”

Banks, Lee said, are competing with one another to find investment opportunities for their accrued capital

Thankfully, “there are some interesting opportunities and businesses in this state,” he said.

One popular place for deploying capital is the commercial real estate market, which Monroe expects to remain hot as developers who have been on the sideline are checking back into the game.

In addition to commercial real estate — especially manufacturing and flex-industrial buildings — apartments provide another opportunity for investors, FNBO senior director and community manager Gretchen Wahl said. 

“There’s no question that multi-family is hot these days.”

On the residential real estate side, bankers see no reason to believe a slowdown is on the horizon.

Prices and interest rates might be up significantly, but so are incomes, Huntington Bank Colorado market manager Luis Ramirez said.

Like most industries, the banking sector is facing a labor shortage.

“Finding good people – holy cow – it’s difficult right now,” First Western Trust Bank market president Bonifacio Sandoval said. 

BizWest’s CEO Roundtable is sponsored in the Boulder Valley by Plante Moran, Berg Hill Greenleaf Ruscitti LLP and Bank of Colorado. Attending were Jim Cowgill, Plante Moran; Aaron Spear, Bank of Colorado; and George Berg, Donna Lance and Ashley Cawthorn, Berg Hill Greenleaf Ruscitti.