Edwards bank under federal ‘consent order’ | VailDaily.com

Edwards bank under federal ‘consent order’

DENVER, Colorado – Colorado Capital Bank – a Front Range-based bank with a branch in Edwards – has agreed with federal regulators to enter into a “consent order.” The order will keep the banks open, but details how the company will be meet new cash-to-loan guidelines.

Scott Hovey, president of the Edwards bank, said Colorado Capital, like many banks in the country, has run into problems with “non-performing” loans.

Hovey said federal regulators have laid out a plan for the bank, and the bank’s performance will be checked every quarter for the next couple of years.

Old banking guidelines held that banks should have about $1 in cash for every $10 in outstanding loans, Hovey said. The new guidelines have boosted that number to $1.30 or $1.40 for every $10 in loans, he said.

The main way the bank will build up its cash reserves is selling non-performing loans to other investors, Hovey said. Those loans will likely be sold at a discount.

Hovey said a number of private equity companies in the country are looking for non-performing loans, especially those backing real estate projects.

The bank is also going to build up its “loan loss reserve” funds, Hovey said.

In addition to the Edwards branch, Colorado Capital Bank has branches in Boulder, Castle Pines, Cherry Creek, Colorado Springs, the Denver Tech Center and Parker. The bank also has a “loan production office” in Durango. It has roughly $900 million in assets.

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