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CBA Statement Regarding the FDICs Quarterly Banking Profile Findings
Feb.24.2011
2/24/11
“Apparent with the historically high level of capital and loan loss reserves being held, many banks continued to fortify capital levels and loan loss reserves to meet regulatory demands, instead of bolster short-term profits. While assets in Colorado banks shrunk 5.6% year-over-year, loan loss reserves still increased 3.1% year-over-year keeping Colorado institutions very well prepared to weather any adverse economic conditions.
“Additionally, Colorado banks placed a large emphasis on loan modifications in 2010 restructuring over $465 million worth of loans in Colorado – almost four times the net-loss the industry realized in 2010. This caused banks to take large write-offs that affect profits but benefit borrowers and the surrounding communities.”
“Those two factors combined with the continuing low demand from qualified borrowers and the industry’s refusal to compromise responsible lending practices, helped create the annual loss.”