Archive for April, 2011

3 more Colorado banks in trouble…

Federal regulators issued major enforcement actions on Friday. Three banks in Colorado; Bank of Choice, Signature Bank and Pueblo Bank and Trust; were given directives by the Federal Deposit Insurance Corporation (FDIC) to raise capital or risk being shut down. When a bank is issued a directive by the FDIC this means that the bank usually has three options. The first option is to sell enough voting shares of stock to raise capital. The second is to be acquired by another financial institution. The final option is to be shut down by the FDIC. Bank executives would rather issue more stock  but many times that is unsuccessful because investors do not want to fund a failing bank. What will mostly likely happen is another financial institution will acquire the struggling banks thus taking advantage of customer base and deposits.

Below is more information about the Colorado banks.

Bank of Choice, which has 17 branch locations — including several in metro Denver — was categorized as “significantly undercapitalized” earlier this year by the FDIC after the bank reported a Tier 1 leverage capital ratio of 2.31 percent.

The FDIC defines banks as “adequately capitalized” if they have a Tier 1 risk-based capital ratio equal to or greater than 4 percent, and a Tier 1 leverage capital ratio equal to or greater than 4 percent. Tier 1 capital is the key measure of a bank’s strength and is comprised mainly of common stock and reserves.


Signature Bank in Windsor was given a directive on March 31 to become adequately capitalized within 30 days. The bank was notified by the FDIC on March 7 that it had become undercapitalized and was given 14 days to respond. The bank did not respond, the FDIC said.The bank was ordered to file a capital restoration plan with the FDIC by April 15, according to the March 31 document.


The Pueblo Bank and Trust Co., Pueblo, was ordered on March 18 to maintain a Tier 1 leverage capital ratio equal to or greater than 10 percent of the bank’s total assets and a Tier 1 risk-based capital ratio equal to or greater than 11 percent of the bank’s total risk-weighted assets. The Pueblo Bank also was ordered to establish a “reasonable” allowance for loan and lease losses, according to the FDIC consent order.


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What! I am not covered?

Homeowners’ insurance or even renter’s insurance isn’t a fun topic to discuss. We don’t want to think about what could happen to our homes, condos or apartments in a natural disaster or other catastrophic event. Denial doesn’t make these tragedies any less likely to occur, but it does make them potentially more devastating than they might otherwise be. Proper planning can make it a little easier to get through tough times.

Now, you may think you’ve addressed all of your insurance needs, and thus be inclined to skip the rest of this article. After all, you bit the bullet and went to an insurance agent, sat through a meeting in which your agent discussed every possible type of coverage anyone could ever possibly need, and picked what you thought was a reasonable selection of policies and coverage. Doesn’t that mean you’re done worrying about insurance?

The answer, sadly, is no. Insurance is designed to protect you against risks that you face, and because the risks you face change over time, so should your insurance. Because many people are uncomfortable with insurance, they often retain policies and types of coverage that they no longer need, but fail to obtain new policies and types of coverage that they may need for the first time. Here are some guidelines for deciding whether your insurance is doing its job for you.

What to check for
With hurricanes, mudslides, wildfires, earthquakes, and other natural disasters posing a threat, insuring your home is essential for most people. When you first get your policy, figuring out what it should look like is relatively easy. Since you know what you spent to buy your home and the things you have in it, you can be reasonably assured that your policy will insure you at least up to what you paid.

However, since real estate values rose so dramatically for such a long period, many insurance policies’ coverage limits have not kept pace. In addition, rising construction costs may require higher coverage amounts. If you don’t take an active role in managing your insurance, your insurance company may leave your policy coverage unchanged or make a small adjustment for general inflation.
For example, if you paid $200,000 for your home 15 years ago, and it’s worth $600,000 now, your homeowners’ policy may still have coverage limits that are a lot closer to $200,000 than $600,000. Indeed, many insurance companies have made changes to policies that eliminated unlimited payments for replacing your home and replaced them with provisions that put a cap on such payments — often 125% of the current policy limit. That might sound sufficient, but if the policy limit doesn’t reflect current conditions, then you still may be dangerously unprotected without even knowing it.

Furthermore, you to make sure that the contents (the flat screen TV, the IPAD, your clothes, your dishes and the couch) are all accounted for in your policy. Replacing your home is only half the battle, you have spent years accumulating stuff make sure you can replace it if need be.

Fortunately, this problem is relatively easy to fix. Just look at your policy and get in touch with your insurance company to make sure your coverage does what you need it to do. If you need changes, your insurance company may be able to accommodate your needs. If the company can’t, or if it chooses not to, you can always look elsewhere to get a policy that will work for you.

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Do you have a home safe?

The Earthquake in Japan is very tragic but there are many things we can learn.  The short article below shows how important it is to store your valuable documents and items (including cash) offsite in a safe deposit box.  Keeping these items at home and in a safe is just not a very good idea….

OFUNATO, Japan — Safes are washing up along the tsunami-battered coast, and police are trying to find their owners — a unique problem in a country where many people, especially the elderly, still stash their cash at home. By one estimate, about $350 billion worth of yen doesn’t circulate.

There’s even a Japanese term for this hidden money, “tansu yokin.” Or literally, “wardrobe savings.”

So the massive post-tsunami cleanup under way along hundreds of miles of Japan’s ravaged northeastern coast involves the delicate business of separating junk from valuables. As workers and residents pick through the wreckage, they are increasingly stumbling upon cash and locked safes.

Police departments already stretched thin now face the growing task of managing lost wealth.

“At first we put all the safes in the station,” said Noriyoshi Goto, head of the Ofunato Police Department’s financial affairs department, which is in charge of lost-and- found items. “But then there were too many, so we had to move them.”

Goto couldn’t specify how many safes his department has collected so far, saying only that there were “several hundreds” with more coming in every day.

Identifying the owners of lost safes is hard enough. But it’s nearly impossible when it comes to wads of cash being found in envelopes, unmarked bags, boxes and furniture.

With more than 25,000 people believed to have died in the tsunami, many safes could to go unclaimed. Under Japanese law, authorities must store found items for three months. If the owner does not appear within that time, the finder is entitled to the item, unless it contains personal identification such as an address book.

If neither owner nor finder claims it, the government takes possession.

Associated Press

Read more:Safes with people’s savings washing up on shore – The Denver Post



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Are Your Valuables Safe?

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Co-Founder Frank Robinson

Frank Robinson graduated from Boise State University with a degree in Business Administration, emphasis in Human Resources. He also has a Master of Arts in Organization Management from the University of Phoenix. Frank played professional football for the Denver Broncos and Jacksonville Jaguars for 3 years. Learn More...

Co-Founder Stewart Gallagher

Stewart Gallagher graduated from Colorado State University with a Major in Political Science and minors in both Economics and Philosophy.  Over the past 12 years Stewart has worked for 3 major financial intuitions holding various positions from teller to Assistant Vice President-Branch Manager. Learn More...