FirsTier of Louisville; a small community bank in Colorado; was taken over by the FDIC a couple of weeks ago. It is now on the long list of failed banks in the U.S.; let me ask you this, was FirsTier’s leadership negligent in its strategy? FirsTier had the same strategy as many other financial institutions, which was to pay high interest rates on accounts to attract deposits and then turn around and lend that money out to construction and other commercial real estate deals.
Between 2003 – 2007 money was flowing and everyone was building. The economy was expanding and bankers in Denver, Colorado were reaping the benefits. This strategy seemed sound and who could blame the CEO of FirsTier, he was making money for his investors, his bank and for himself; Tim Wiens was doing his job! Where the leadership went wrong was that when all other banks seem to be pulling out of the commercial real estate business FirsTier pushed on increasing their commercial portfolio over 50% in 2008. Was it negligent or was it optimism? I say a little of both.
In this country, all small businesses are built and trained to take risks; otherwise we would not be in business. Every entrepreneur who decides to open a business and leave cushy corporate America is taking a risk. He is risking his personal credit, probably some retirement savings and his family’s well being for the dream of making his own way. Going it alone! Staking his claim! There is something to be said for that. Failure or success; this country and its small businessmen need to continue to fight and make it. We cannot give in to fear or hard times we must perservere. So I say to Tim Wiens and all other small business owners: Hang on, Push through, (Just Keep Swimming!) it is always the darkest before light!