Upheaval and uncertainty. There’s been no shortage of either at area banks, even those with solid balance sheets. In the past six months, some of these banks have also seen what’s often inevitable in Corporate America: Changes at the top.
Four financial institutions with a footprint in the area have recently lost or replaced their regional presidents or CEOs: Colorado Capital Bank, Academy Bank, Adams Bank & Trust and Kirkpatrick Bank.
Figuring out how these banks plan to move ahead is easier with some than with others. Bank presidents aren’t always willing to talk about their situations. But here’s what interviews and a Business Journal review of regulatory filings reveal about these banks’ challenges and prospects.
Colorado Capital has about $900 million in assets, a decent 10-percent Tier-1 capital ratio and has increased its deposits year-over-year.
During the same time period, however, lending declined substantially, and its nonperforming loans-to-capital ratio jumped from 19.2 percent to 35.5 percent, causing it to fall under regulatory scrutiny. A ratio of less than 20 percent is considered ideal.
On Sept. 9, the bank signed a consent order with the Federal Deposit Insurance Corp., in which it agreed to raise capital, hire a new CEO, hire a chief lending officer and work through its nonperforming loans.
Amid all of that, Colorado Capital co-founder and former CEO John Davis left the bank.
Scott Vencill, a Denver-area banker with 30-plus years of experience, was named interim CEO, pending regulatory approval, said Donna Lance, CFO for Colorado Capital.
Vencill has been instrumental in the recovery and growth of other banks in similar situations, she said.
He’ll need to call on that experience.
Colorado Capital is prohibited from increasing its total assets by more than 5 percent in any 12-month period, and cannot pay dividends without approval from regulators.
Most importantly, the bank has been ordered to either write off or collect its bad debt.
The bank is following through on regulatory orders, Lance said, and she believes the bank will work through its issues and emerge stronger. “We feel as though we are on solid footing. Our liquidity is very good,” she said.
Dickinson Financial Corp. II, the parent company of Academy Bank, owns five other banks, all of which are operating under FDIC constraints. Academy, which has a dozen branches in El Paso County, is the largest locally based bank, with assets of about $500 million.
Partly because of Dickinson’s difficulties, and partly because of its high concentration in commercial real estate loans, Academy has been besieged with one problem after another. It didn’t help matters when two of its executives — Terry Darby and Steve Ingham — left to work for Kirkpatrick Bank in June.
Whether Academy can thrive despite the challenges its parent company is facing remains to be seen. Its biggest challenge: a “cease-and-desist” order issued May 11 from the Comptroller of the Currency, requiring the bank, among other things, to increase its capital, and maintain proper documentation of loan collateral.
Meanwhile, although its deposits and assets have increased year-over-year, its nonperforming loans-to-capital ratio skyrocketed from 54.9 percent to 74.1 percent in the same time period — far above the ideal threshold.
Repeated phone calls to Dickinson CEO Paul Holewinski were not returned. Locally, a new president has not been named.
Founded in 1915, the family-owned bank has been operating in Colorado since 2000. Adams has about $500 million in assets. Well-capitalized, the bank has increased both its deposits and lending in the last year.
Although it is well-established in Nebraska, the bank faces plenty of obstacles in the Colorado Springs market.
Adams Bank has gone through three regional presidents in southern Colorado since 2007. Additionally, several long-term lending officers and a branch vice president resigned this summer.
A new regional president has yet to be named. Asked what the challenges would be for Adams Bank in moving forward in this market, President Chad Adams refused to comment.
Kirkpatrick Bank is the only one of the four that isn’t surrounded in either controversy or under the thumb of federal regulators.
Based in Oklahoma, Kirkpatrick has more than $510 million in assets, is highly capitalized, and increased its deposits by $20 million year-over-year.
In April, then-president Steve Strunk left to take the helm in Denver as Colorado’s banking commissioner.
He was replaced by Steve Ingham, who has 31 years’ experience in the banking industry, most recently at Academy Bank, where he helped the bank grow to become the largest in the region in less than seven years.
Which explains why Kirkpatrick put him at the helm. The bank wants to expand its footprint in the region.
“One of our goals is to look at acquisition targets,” Ingham said, “and we’re in the process of doing some of that right now.”
Going forward, the challenge for Kirkpatrick will be similar to what other healthy banks are facing, he said.
“For us it’s the continuing soft economy,” Ingham said. “Businesses aren’t expanding, and there’s a heightened level of underwriting scrutiny. It’s a challenge for all banks.”