Alpine Bank improves its health in 1Q
July 20, 2010
GLENWOOD SPRINGS – Despite taking a $23 million loss during the first quarter of the year, Alpine Bank improved one important measure of its health, according to an organization dedicated to monitoring financial institutions.
Alpine Bank lowered its “troubled asset” ratio from 43.4 percent at the end of December to 36.1 percent at the end of March, according to Banktracker, which tabulates information that banks submit to the Federal Deposit Insurance Corp. each quarter.
The troubled asset ratio compares the sum of all troubled assets with the sum of capital, plus the loan loss reserve compiled by a bank. The ratio is used to gauge how much stress a bank is under. The banking industry considers an institution in threat of failure when its ratio is 100 percent, a figure known as the “Texas ratio.”
Alpine Bank shed about $60 million in non-performing or under-performing loans during the first quarter. It hired a New York financial advisory firm to auction off some of its troubled assets, such as property at the base of Aspen Mountain. In other cases, it sold property directly when the borrower couldn’t pay off a loan. That was the case with the WIN Institute building in Basalt.
In the auctions and sales, Alpine Bank generally accepted less than it had lent on the properties. “We look a loss on some of those and we expected that,” said Glen Jammaron, president and vice chairman of Alpine Banks.
The Glenwood Springs-based company has 37 banks in western Colorado. The real estate market seems to have “hit a floor” in its resort markets, Jammaron said. He agreed with assessments of other business leaders that tough times may persist in non-resort markets of western Colorado as workers struggle to find work.
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“If they’re out of work, they can only hold on so long,” Jammaron said.
While the bank successfully shed some of its troubled assets in the first quarter, new problems developed with other loans. As a result, it didn’t clear a net of $60 million of troubled assets off its books. Its total troubled assets fell from $138.74 million at the end of December to $114.9 million now.
Meanwhile, the bank is also building its reserves, a safety net against loan losses. It capital plus reserves was at nearly $318 million at the end of March.
Banks must report statistics for the second quarter of the year to the FDIC by the end of July, and they will be posted for public consumption in August. Alpine will report a much smaller loss for the second quarter, around $3.6 million, Jammaron said. Meanwhile, it continued to grow its reserves. He expects the bank’s ratio of troubled assets to capital plus reserves to remain steady for the rest of the year at the current 36 percent. Jammaron said 2010 will go down as only the second year since the bank was founded 37 years ago that it won’t show an annual profit.
Alpine is one of two banks with an Aspen presence that have headquarters in western Colorado. Timberline Bank, with headquarters in Grand Junction, had a troubled asset to capital plus reserve ratio of 17.1 percent at the end of the first quarter, according to Banktracker. That was up slightly from the end of December.
Timberline had $4.05 million in troubled assets and $23.61 million in capital plus reserves.
The figures for other Aspen banks that are based elsewhere were:
American National Bank, based in Denver, had troubled assets of $43.2 million and capital plus reserves of $198.68 million for a ratio of 21.7 percent.
Community Banks of Colorado, with headquarters in Greenwood Village, had troubled assets of $140.6 million and capital plus reserve of $159.5 million for a ratio of 88.1 percent.
U.S. Bank, based in Cincinnati, Ohio, had troubled assets of $6 billion and capital plus reserves of $22 billion for a ratio of 27.2 percent.
Vectra Bank, based in Farmington, N.M., had troubled assets of $105.4 million and capital plus reserves of $341 million for a ratio of 30.9 percent.
Wells Fargo Bank, with its headquarters in Sioux Falls, S.D., reported troubled assets of $45 billion and capital plus reserves of $114 billion for a ratio of 39.6 percent.
Banktracker’s analysis of information reported by the banks to the FDIC can be found at http://banktracker.investigativereportingworkshop.org/; click on the “find a bank” link.