Regulators took over and sold two Colorado banks Friday evening after heavy losses on commercial real estate loans drained them of capital.
The Colorado Division of Banking closed Colorado Capital Bank in Castle Rock and Signature Bank in Windsor and appointed the Federal Deposit Insurance Corp. as receiver.
“Both banks are insolvent on a book basis and they were unsuccessful in their efforts to raise capital,” said state Banking Commissioner Fred Joseph.
Joseph said bank examination reports due next week showed the two institutions had no more capital, leaving them in violation of state law if they remained open.
The FDIC sold Colorado Capital to First-Citizens Bank & Trust Co. of Raleigh, N.C., which earlier this year acquired United Western Bank.
Signature Bank was sold to Points West Community Bank out of Julesburg.
The seven branches of Colorado Capital Bank are scheduled to reopen Monday as First-Citizens branches. The bank has locations in Castle Rock, Boulder, Denver, Colorado Springs, Greenwood Village, Edwards and Parker.
Branches of Signature Bank, located in Windsor and Greeley, will reopen as Points West Community Bank locations.
The FDIC said depositors at both banks can access their money by writing checks or using the automated-teller machine or debit cards this weekend as usual.
Checks drawn on the banks will continue to be processed and borrowers with loan payments due should send those in.
As of March 31, Colorado Capital Bank had approximately $717.5 million in total assets and $672.8 million in total deposits, the FDIC said.
Signature Bank had approximately $66.7 million in total assets and $64.5 million in total deposits.
Both banks held heavy concentrations of commercial real estate loans, said Denver banking analyst Larry Martin.
Colorado Capital grew rapidly earlier this decade by lending for such things as second homes in the mountains, golf course developments and raw land for development, Martin said.
“In the case of Signature, it was more in the homebuilding area than anything else,” Martin said.
The failure of Greeley-based New Frontier in 2009 depressed land prices in Weld County and hastened Signature’s demise, Martin said.
The FDIC will share losses on $580 million of Colorado Capital Bank’s assets and expects to take a $283.8 million hit. Signature’s closing will cost the FDIC an estimated $22.3 million.
The FDIC is directing Colorado Capital customers with questions to call 800-508-8289 or to visit .
Signature Bank customers can call 800-517-1843 or go online to signaturebank.html
The failures are the third and fourth in Colorado this year. Fifty-one banks have failed nationally so far this year.
Aldo Svaldi: 303-954-1410 or asvaldi@denverpost.com
