Eagle County dumps Wells Fargo, says FirstBank is a better business choice
August 15, 2017
EAGLE — Eagle County's decision to dump Wells Fargo and bank with FirstBank had nothing to do with Wells Fargo's growing woes.
It is just good business, said Teak Simonton, Eagle County treasurer.
"In business, it's always good practice to review your service providers, and Eagle County had not done it for eight years," Simonton told the county commissioners Tuesday morning. "It wasn't related to anything Wells Fargo may have done wrong."
The county's deposits with Wells Fargo run in the neighborhood of $5 million, Simonton said. Moving the money will save the county up to $20,000 a year in fees.
“If $15,000 to $20,000 is on the table, there’s no reason not to save it.”Teak SimontonTreasurer, Eagle County
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At the end of 2016, Wells Fargo hit the county with $15,000 in fees. Simonton said it became imperative that they start to ask questions about whether the county should be paying that much.
"It's being strategic with the way we're handling the money. If $15,000 to $20,000 is on the table, there's no reason not to save it," Simonton said.
FirstBank best choice
While Wells Fargo's service was always professional, their statements are in "layers," which made them difficult to understand, Simonton said.
Simonton explained that if the county was trying to wire funds, then there's one fee for the wire, another fee for sending the wire and other fees attached to the transaction. Many banks do that, but Wells Fargo lists them in different places on its monthly statements, making it difficult to reconcile.
FirstBank has a less layered and easier-to-analyze fee structure, better locations for the county's businesses and lower annual fees, Simonton said.
"It was very clear that FirstBank was the best choice," Simonton said.
The county will retain Alpine Bank accounts in El Jebel because no FirstBank location is close enough. The closest is Glenwood Springs, Simonton said.
The county had 15 accounts split between Wells Fargo and Alpine banks. They'll consolidate that to five or six, Simonton said.
Moving that money out of Wells Fargo accounts that allow 0.45 percent in earnings against their fees and into money market accounts that pay 1.1 percent will also boost the county's investment income, Simonton said.
The county commissioners approve the banks where the county deposits its money.
Previous county regulations were "broad," and policy allowed the county to use any local bank that satisfied the requirements of the federal Public Deposit Protection Act, Simonton said.
Neither FirstBank nor Wells Fargo returned phone calls or emails requesting comment at press time.
Wells Fargo's woes
Wells Fargo's national problems are escalating, according to the financial media. The bank's stock fell after Friday's SEC filing alluded to problems it may have with insurance refunds due to customers who took car loans.
Wells Fargo is the nation's third largest bank, with assets of $1.95 trillion, according to Bankrate.com.
County's investment income up
Slightly higher interest rates pushed up the county's interest earnings, Simonton said in her quarterly financial report Tuesday to the commissioners.
The county is bound by law to extremely conservative investments, many tied to the federal interest rate, Simonton said.
That interest rate is up to 1.09 percent this year, compared to 0.88 percent in 2016.
That slight uptick in interest rates boosted the county's investment earnings to $358,299 so far this year, Simonton said, up $168,418 over last year.
The county's 2017 budget projects $580,000 in interest income. If interest rates stay up, then the county will earn more than $800,000 on its investments, Simonton said.
"It's mostly out of our control," Simonton said. "We are hopeful that interest rates will continue to rise, as the Federal Reserve has suggested is possible. That will allow us to have a slightly higher rate in our money market fund."
Simonton said that at any one time, the county carries around $80 million in investments. Right now, that includes:
• $15.316 million: 15 Treasury notes ranging from $250,000 to $2 million.
• $40.126 million: U.S. government agency bonds such as Federal National Mortgage, Federal Home Loan, First Federal Community Bank and other government agencies.
• $26.83 million: Corporate bonds such as Chevron, IBM, Apple, Microsoft, Toyota Motor Credit and Berkshire Hathaway.
Staff Writer Randy Wyrick can be reached at 970-748-2935 or email@example.com.