GLENWOOD SPRINGS - Alpine Bank of Colorado is slowly but steadily weeding out its troubled assets and recovering its health, mirroring the improving economy of western Colorado, according to the latest available independent data.
The bank reduced its troubled assets to $71.8 million, as of Sept. 30, from $104.49 million at the same time the prior year, according to the Bank Tracker website. Bank Tracker downloads detailed finance reports that banks must file each quarter with the Federal Deposit Insurance Corp.
Alpine Bank is based in Glenwood Springs and serves 37 cities and towns in western Colorado, including Breckenridge, Dillon and Frisco. The bank was founded 40 years ago.
Alpine Bank reduced its non-accruing loans to $47.73 million from $90.97 million by the end of the third quarter this year compared with the same point last year, Bank Tracker's data showed.
Alpine Bank also had $24.07 million in real estate it obtained through foreclosures as of the end of September. That was up from $13.46 million worth of real estate it owned a year ago.
Alpine Bank president and vice chairman Glen Jammaron said the bank has experienced steady improvement since 2010, which officials knew was going to be a "bad year" as the full force of the recession hit. The bank lost $48.18 million in 2010 as it wrote off bad loans and sold repossessed real estate at a loss.
Two years later, earnings are up and past-due loans are trending down, Jammaron said.
"I really think things are going as expected," he said.
Alpine Bank showed a profit of $16.93 million through the third quarter. The bank also has $38.62 million in reserves in case of additional loan losses. It has $249.39 million in capital.
Bank Tracker and other organizations assessing the health of banks look at a "troubled assets ratio." The sum of the troubled assets is compared to the sum of capital plus loan reserves. The higher the value, the more likely a bank is feeling stress from troubled loans, Bank Tracker's website said.
Alpine Bank's troubled-asset ratio has dropped each quarter since peaking in the third quarter of 2010. Its ratio is now 24.9 percent. The national average as of Sept. 30 was 11.4 percent, according to Bank Tracker.
Jammaron acknowledged that Alpine Bank will see additional loans go bad. Some borrowers have struggled to make payments but won't be able to hold on, he said.
Signs of improvement in new residential construction in the Aspen area bode well for the bank as well as the economy in general.
"I think the upper valley was the first into (the recession) and the first coming out," Jammaron said.
Alpine Bank's assets grew to $2.35 billion at the end of September, and its deposits were $1.99 billion, both up slightly from the prior year. The bank's amount of loans was flat at $1.36 billion.
Jammaron said Alpine Bank's year-end report will feature a message saying it is steadily improving its profitability and looking forward to continuing that trend.
In addition to worrying about the economy, Jammaron is concerned about the 2,300 pages of regulations approved as part of the Dodd-Frank Act, the biggest regulatory step in the banking industry since the Great Depression. The regulatory overhaul takes effect in 2013.
Jammaron said small bankers are concerned because the rules are designed for the big players in the industry, not the small institutions that operate on Main Street USA.
"Regulatory pressures are pulling the community part out of the community bank," Jammaron said, borrowing a quote he said he heard elsewhere.