Regional holding companies based out of state control a large share of bank deposits in Colorado.
As loan delinquencies rise, these banks, which have lending exposure across multiple states, are being forced to take large write-offs and set aside reserves.
But as of the June 30 quarter, they still met the regulatory definition of being “well-capitalized.”
The big six, in terms of Colorado deposits, are Wells Fargo, US Bank, Wachovia, JP Morgan Chase, Bank of the West and KeyCorp. They accounted for more than 40 percent of bank deposits in the state as of June 30, 2007, the most recently available data from the Federal Deposit Insurance Corp.
Generally speaking, their levels of capital and problem loans are neither the weakest nor the strongest in the universe of banks operating in the state.
San Francisco-based Bank of the West, which is owned by French banking giant BNP Paribas, won’t report earnings until July 30.
Among those that have reported, delinquent loans are, not unexpectedly, on the rise as the economy softens.
With the exception of Wachovia and KeyCorp, the reporting banks remained profitable in the second quarter, although not as profitable as in the past.
Wachovia, based in Charlotte, N.C., reported an $8.9 billion loss in the second quarter on Tuesday and said it would eliminate its dividend and cut 11,000 positions.
Wachovia entered Colorado after acquiring World Savings Bank, a leading provider of “option-ARM” mortgages that allowed borrowers to add unpaid interest back to principal.
Cleveland-based KeyCorp reported a $1.13 billion loss in the quarter, which it attributed in part to its aggressive efforts to sell off real estate and construction loans.
In a show of strength, San Francisco-based Wells Fargo, the largest bank operating in the state, said it would raise its dividend by 10 percent.
