Local independent banks say they’re doing fine | VailDaily.com

Local independent banks say they’re doing fine

EAGLE COUNTY ” “So, uh, how are you guys doing these days?”

In the wake of a general meltdown among the nation’s big banks and other financial companies, officers at local banks have been fielding quite a few calls that include the “how are you doing” question. And, for the most part, they have good news.

“We always stayed away from subprime lending,” said Mark Ristow, president of Denver-based FirstBank’s Vail branch. Subprime mortgages ” loans made to customers with lower credit scores or incomplete financial information ” were the first domino to fall in the financial sector mess.

“A lot of subprime lenders were too focused on rate of return instead of customers’ ability to repay the loans,” Ristow said.

And, he added, FirstBank is “doing very well.”

Rachel Overlease, president of the Eagle branch of Glenwood Springs-based Alpine Bank, said her company may have a record year for revenue in 2008. And Scott Proper, vice president of Edwards-based Millennium Bank, said his company is also doing well.

Beyond just officers’ say-so, banks that insure customer accounts through the Federal Deposit Insurance Corporation have to report their earnings and balance to the feds. That information is available online.

Beyond the general questions about banks’ health, customers have also been asking how well their deposits are insured by the feds. Customers are generally insured up to $100,000, meaning any amount above that would be lost.

FirstBank gets around that limit one way, Millennium and Alpine another.

Federal insurance can protect depositors at any chartered bank. FirstBank has 25 separate charters for its branch locations. That means someone with, say, $1 million to deposit could end up with accounts at 10 FirstBank locations.

Millennium and Alpine participate in a bank cooperative to insure large deposits.

Overlease said someone with $1 million would have that money put into certificates of deposit at 10 member banks. The account is administered through just Alpine Bank, but the entire amount is insured.

Besides bank failures, the troubles affecting big financial firms have also resulted in tighter credit. The independents have always had tighter standards.

“We have the same loan products we’ve always had,” Ristow said.

But the independent banks have also gone through the easy-money period of the last several years with more conservative lending standards.

“We’ve been conservative, and we’re still conservative,” Overlease said. “And we’re being very cautious, perhaps overly so, right now.”

What does that mean for customers? Primarily that money’s available for people whose credit-worthiness can pass with banks’ loan officers.

That means not everyone can walk into a regional bank and qualify for a loan. That means someone with a speculative real estate project is going to have to make a pretty good case to get that project financed.

“Given the state of the speculative and development markets right now, they’d probably get some extra scrutiny,” Overlease said.

On the other hand, if a good customer with, say, a plumbing company needed to buy a truck, he probably could, if he had the right numbers on his financial statements and credit scores.

But, Proper said, more than scores should matter with a bank and a customer.

“A good banker should be able to make it easier for the right person to borrow,” Proper said.

Proper said he’s still out meeting new customers. But, he said, “Having a relationship

with a banker can really pay off right now,” he said. “A new relationship can be tricky right now.”

Business Editor Scott N. Miller can be reached at 970-748-2930, or smiller@vaildaily.com.

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