What’s Working: Colorado moves past bank failures, while startup industry reassesses

“Talk to a person, not a building,” says Alpine Bank’s president. Plus: Companies are STILL hiring, reader’s economic outlook, and more!

By Tamara Chuang, The Colorado Sun

Glen Jammaron cringed when he read the most recent newsletter from a local Glenwood Springs real estate agent.?

“Right after the (Silicon Valley Bank failure), she said, ‘Here’s what’s going on in banking. You should have all your money in the top five banks,’” said Jammaron, president of Alpine Bank, which is not among the top five U.S. banks. “It’s like ‘now my Realtor is a banker and an expert on this.’”

Such messaging was like a?slap in the face to community banks. In the aftermath of the Silicon Valley Bank and New York’s Signature Bank two days later, billions of dollars flowed to top banks like JPMorgan Chase, Bank of America and Wells Fargo as customers feared a spreading crisis,?Bloomberg News?reported. Silicon Valley Bank wasn’t a community bank. It was the 16th largest in the country and served a niche audience: tech startups and venture investors who often deposited way more than the Federal Deposit Insurance Corp. insurance allowance of $250,000.?

Large banks operate differently and survive, it seems,?no matter what. When thousands of Wells Fargo employees were caught?misusing customer identities?to create millions of new accounts, the bank paid $3 billion in penalties in 2020. Wells Fargo is still?Colorado’s largest bank.?

If Alpine Bank ever tried to pull any shenanigans like that, Jammaron said he’d hear about it from his neighbors.

“We don’t do that in Glenwood Springs or Durango or anywhere. The folks I’d be doing that to, my kids go to school with their kids. I go to church with them. I shop at the same grocery store,” he said. “There’s a higher connection with the community because we’re investing our time here. We’re investing our money here.”

Alpine employees were busier in the days after the collapse of the two banks, but Jammaron’s staff was briefed and prepared. “We’ve got liquidity, we can take care of their concerns. And here’s how we help them understand what FDIC insurance does or doesn’t do. Here’s the alternatives if they have more than what is insured,” he said.?

The real estate agent’s letter this week? How to get your garden ready for spring.

A better source for the health of local banks is the Colorado Division of Banking. The division?reminded Coloradans that it routinely monitors?state-chartered banks and works with federal regulators to review commercial banks

“Our examinations show that our Colorado state-chartered banks and credit unions are financially strong and well managed, are in sound financial condition, and are ready to meet the needs of Coloradans,” the division said in a statement, which also said, “no customer in Colorado has lost a single penny of insured deposits since the FDIC was created in 1933.”

“Colorado banks remain financially strong and stable,” the Colorado Bankers Association chimed in. The failed banks were outliers with “an unstable deposit base.”

Local, community banks like Alpine, which has about 850 employees at 39 locations throughout the state, have a broader base. Teachers, construction workers, agricultural companies, the city of Glenwood Springs — all customers, Jammaron said.

“The information coming out of what happened to Silicon Valley Bank paints every other bank with a really broad brush and that your money is only safe with just the really big ones. And that’s not necessarily true,” he said. “If you really want to have a valuable banking relationship, go talk to your banker. Talk to a person, not a building.”

Perhaps the good news for local community banks is that Americans who aren’t wealthy, aren’t Gen Zers or remote workers aren’t overly concerned with the banking crisis, according to The Harris Poll, a market research firm that’s been around since 1956. Most Americans feel their money is safe in banks.?

“Surprisingly,” Will Johnson, The Harris Poll’s CEO,?wrote this week in Fortune, “the customers of small financial institutions were slightly more likely to believe that their money is safe (93%) than the customers of medium and large banks.”

Tips from the banking industry

• Use the FDIC calculator?to check on your bank and deposit to see whether you’re covered:?edie.fdic.gov. Or call the FDIC support center at 1-877-275-3342 (1-877-ASKFDIC).
• Check on your credit union.?Credit unions also provide information about deposit insurance. The National Credit Union Administration, the government agency that insures credit union deposits, has its own calculator at?mycreditunion.gov
• Open a joint account.?If you have more than $250,000 in the bank, open a second one with a spouse or someone else you trust.?Joint accounts?are insured for up to $500,000. That allows couples to protect up to $1 million at the same bank.
• Colorado’s bank profile, as assessed by the?FDIC’s for fourth quarter 2022.?>>?Read

This week’s poll:

Is inflation easing or are you still watching your budget? Before the next inflation report is released, tell us how your own household is dealing with the economy at?cosun.co/WWinflation2023

Read the rest of What's Working to learn about startups reassessing their situation and employers who are still hiring >>

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