Vectra Bank Colorado and Amegy Bank of Texas have opened a regional energy banking office in Denver.
Both banks are affiliates of Zions Bancorporation.
The office will provide energy banking services such as lending, treasury management, commodity risk management and trust management for oil, gas and other mineral properties, as well as investment and international banking services.
The Rocky Mountain region is one of the three largest producers of natural gas and contains 20 percent of all energy business activities in the United States.
“Natural gas production will continue to grow over the next 25 years in this region, while other established areas are being depleted,” said Vectra Bank CEO Bruce Alexander. “This strategic partnership positions us to provide the kinds of financing solutions the industry will need to succeed in the Rocky Mountain region.”
While this is a new banking services for Vectra, Amegy has been in the energy business since 1997 and has loan commitments in the energy industry of $1.8 billion to more than 200 companies. Nearly half of Amegy’s energy loan portfolio is for oil and gas exploration and production.
Amegy Bank is one of the fastest growing banks in Texas and has assets of more than $10 billion. Vectra Bank Colorado has 40 full-service branches in Colorado and assets of $2.4 billion.
Commercial banks and savings institutions insured by the Federal Deposit Insurance Corp. reported net income of $145.7 billion in 2006, eclipsing the previous record of $133.9 billion set in 2005.
The improvement in earnings was attributed, in part, to strong growth in non-interest income at large banks, higher net interest income and lower expenses for bad loans.
This is the sixth year in a row that industry earnings set a new record.
More than half of all insured institutions (55.9 percent) reported increased profits in 2006, compared to 2005, but only 46.3 percent reported higher returns on assets (ROAs), a basic yardstick of earnings performance.
The industry’s ROA of 1.28 percent in 2006 was slightly lower than the 1.3 percent in 2005.
The average net interest margin — the difference between the average interest income that institutions earn on their loans and other interest-bearing investments and the average interest expense they incur to fund those assets — declined to an 18-year low of 3.31 percent in 2006 (from 3.52 percent in 2005).
Rising short-term interest rates caused the difference between short-term and longer-term interest rates to narrow and even become negative at times in 2006.
Other major findings in the “Quarterly Banking Profile” included troubled residential mortgage loans increasing during the fourth quarter by 15.6 percent or $3.1 billion, industry earnings remaining strong ($35.7 billion in net income for the fourth quarter of 2006, an increase of $3 billion or 9.3 percent from 2005), loan growth slowing (increasing by only $66.1 billion, the smallest quarterly growth since the first quarter of 2002), and deposit growth soaring (increasing by $247.2 billion, the largest quarterly increase ever reported).
Wells Fargo & Co. is considering allowing customers without Social Security numbers to obtain credit cards.
Wells Fargo was the first bank in the United States to accept Mexican Matricula Consular identification cards as a valid form of identification to open an account, and more than 1 million accounts were opened as a result.
The credit cards would be offered to people who already have checking accounts with the bank.
“Wells Fargo recognizes a great need for equal access to financial products and services for all customers who want to build credit, establish financial security and achieve the ‘American dream,’” said Marge Rice, the company’s vice president of regional banking communications.
Wells Fargo also has launched a Spanish-language financial literacy program aimed at 10 million Americans, encouraging the purchase of homes.
Bank of America recently launched a pilot credit card program that does not require a Social Security number in Los Angeles County, saying that it wants to help people establish credit.
The Internal Revenue Service and the U.S. Treasury Department have agreed to publish detailed guidelines to help automobile dealers, wholesalers and manufacturers regarding the proper treatment of the dollar-value, last-in, first-out (LIFO) inventory method for pooling purposes for crossover vehicles, which have characteristics of trucks and cars.
Federal courts in the 1980s ruled that the LIFO pooling rules require taxpayers to account for cars and trucks in different pools. Since these rulings were handed down, the line between trucks and cars offered for sale has blurred.
Crossover vehicles include sport-utility vehicles, minivans and pick-up trucks used as substitutes for cars, and it is not clear how they should be treated for LIFO purposes. A request for guidance was submitted on behalf of the National Automobile Dealers Association to resolve the issue arising from vehicles that do not fit clearly into either a car or a truck pool.
Lorna Gutierrez covers banking and finance for the Colorado Springs Business Journal.