Glen Jammaron cringed when he read the most recent newsletter from a local Glenwood Springs real estate agent.
“Right after the (Silicon Valley Bank failure), she said, ‘Here’s what’s going on in banking. You should have all your money in the top five banks,’” said Jammaron, president of Alpine Bank, which is not among the top five U.S. banks. “It’s like ‘now my Realtor is a banker and an expert on this.’”
Such messaging was like a slap in the face to community banks. In the aftermath of the Silicon Valley Bank and New York’s Signature Bank two days later, billions of dollars flowed to top banks like JPMorgan Chase, Bank of America and Wells Fargo as customers feared a spreading crisis, Bloomberg News reported. Silicon Valley Bank wasn’t a community bank. It was the 16th largest in the country and served a niche audience: tech startups and venture investors who often deposited way more than the Federal Deposit Insurance Corp. insurance allowance of $250,000.
Large banks operate differently and survive, it seems, no matter what. When thousands of Wells Fargo employees were caught misusing customer identities to create millions of new accounts, the bank paid $3 billion in penalties in 2020. Wells Fargo is still Colorado’s largest bank.
If Alpine Bank ever tried to pull any shenanigans like that, Jammaron said he’d hear about it from his neighbors.
“We don’t do that in Glenwood Springs or Durango or anywhere. The folks I’d be doing that to, my kids go to school with their kids. I go to church with them. I shop at the same grocery store,” he said. “There’s a higher connection with the community because we’re investing our time here. We’re investing our money here.”
Alpine employees were busier in the days after the collapse of the two banks, but Jammaron’s staff was briefed and prepared. “We’ve got liquidity, we can take care of their concerns. And here’s how we help them understand what FDIC insurance does or doesn’t do. Here’s the alternatives if they have more than what is insured,” he said.
The real estate agent’s letter this week? How to get your garden ready for spring.
A better source for the health of local banks is the Colorado Division of Banking. The division reminded Coloradans that it routinely monitors state-chartered banks and works with federal regulators to review commercial banks
“Our examinations show that our Colorado state-chartered banks and credit unions are financially strong and well managed, are in sound financial condition, and are ready to meet the needs of Coloradans,” the division said in a statement, which also said, “no customer in Colorado has lost a single penny of insured deposits since the FDIC was created in 1933.”
“Colorado banks remain financially strong and stable,” the Colorado Bankers Association chimed in. The failed banks were outliers with “an unstable deposit base.”
Local, community banks like Alpine, which has about 850 employees at 39 locations throughout the state, have a broader base. Teachers, construction workers, agricultural companies, the city of Glenwood Springs — all customers, Jammaron said.
“The information coming out of what happened to Silicon Valley Bank paints every other bank with a really broad brush and that your money is only safe with just the really big ones. And that’s not necessarily true,” he said. “If you really want to have a valuable banking relationship, go talk to your banker. Talk to a person, not a building.”
Perhaps the good news for local community banks is that Americans who aren’t wealthy, aren’t Gen Zers or remote workers aren’t overly concerned with the banking crisis, according to The Harris Poll, a market research firm that’s been around since 1956. Most Americans feel their money is safe in banks.
“Surprisingly,” Will Johnson, The Harris Poll’s CEO, wrote this week in Fortune, “the customers of small financial institutions were slightly more likely to believe that their money is safe (93%) than the customers of medium and large banks.”
Tips from the banking industry
- Use the FDIC calculator to check on your bank and deposit to see whether you’re covered: edie.fdic.gov. Or call the FDIC support center at 1-877-275-3342 (1-877-ASKFDIC).
- Check on your credit union. Credit unions also provide information about deposit insurance. The National Credit Union Administration, the government agency that insures credit union deposits, has its own calculator at mycreditunion.gov
- Open a joint account. If you have more than $250,000 in the bank, open a second one with a spouse or someone else you trust. Joint accounts are insured for up to $500,000. That allows couples to protect up to $1 million at the same bank.
- Colorado’s bank profile, as assessed by the FDIC’s for fourth quarter 2022. >> Read
Post fail, Colorado startups reassess
Liz Giorgi, Soona’s co-founder and a SVB customer, felt the pain immediately. Her Denver-based company, which provides quick-turnaround product video and photo shoots for companies, has studios in Los Angeles, Austin, Minneapolis and Denver.
As SVB customers rushed to get their deposits, federal regulators froze the funds, leaving companies, like Soona, with no access to its cash to pay staff.
“While we are VC backed, we have more than 15,000 merchants on our platform paying us everyday,” Giorgi said on Twitter after SVB failed. “The money we have locked up is essentially our earnings from last year.”
She chose the bank because it was the only one (out of 27) that offered Soona a line of credit.
As it turned out, two days later, federal regulators made many SVB customers whole again. SVB was acquired by First Citizens Bank. Giorgi rethought her banking strategy.
“We have ultimately decided to diversify our banking relationships while still maintaining an open line with First Citizens Bank, as they have purchased the loans at SVB, including ours,” Giorgi said this week in an email. “For the time being, we are open to maintaining a relationship, but will continue to shop our lending relationship for the next few months.”
At the investor level, venture capitalists are working with their companies, too, said Kirk Holland, managing director at Access Ventures in Westminster. The tech world needs to be better at managing cash and treasury strategies with their banking situations.
“You’re already seeing a big change of focus,” he said. “You’re seeing some banks that are changing their services, like getting more people on sweep accounts where you have $5 million at a bank and they can sweep it into 20 different accounts of $250,000.”
But it’s still going to impact the future of new companies since one of the few banks offering credit to founders is gone.
“It feels like now, these lines of credit may not be available to venture-backed and tech companies as easily as they were before. Therefore, they may have to raise additional equity capital, which will lead to additional dilution,” Holland said.
➔ Speaking of venture capital: Last year was a downer of a year, a mere $5.7 billion in venture funding went to Colorado startups, declining 17% from 2021, according to the annual “State of VC Colorado,” compiled by Access Ventures and Colorado’s Office of Economic Development & International Trade. Actually, that’s really a lot of money! It was the second highest amount since 2012. Take a look at the chart:
>> View State of VC Colorado report
➔ COMING MONDAY: Women founders do seem to get the short shrift when it comes to raising venture capital. In the U.S., startups with an all-female founding team raised 1.9% of all venture capital in the U.S. last year. At least Colorado women fared slightly better, raising 3% of the capital allotted in the state. Check back Monday for the update at ColoradoSun.com
The latest job numbers show that employers are still hiring, though less so. And that’s reflected in a decline in job openings. On Colorado’s job board, ConnectingColorado.com, the number of openings dropped below 100,000 for the first time since the pandemic labor shortage began. On Friday, there were 94,293 openings, down from about 100,503 a week ago on the job board.
Employers have shared that hiring is getting better and some keep workers even if there’s not as much to do. It’s a trend seen after employers faced the big labor shortage in the past two years. There may be more stories coming out like this recent one in The Wall Street Journal, “These Tech Workers Say They Were Hired to Do Nothing.”
United Ground Express has a similar story. It’s fully staffed. But it’s having another job fair. The subsidiary of United Airlines has struggled to hire enough workers as travel recovered. Last year, United had three job fairs in Denver, attracting 1,000 people. It had made 400 offers.
On Tuesday, United Ground Express is hosting another one. It hopes to fill 75 openings for ramp workers, cleaning planes between flights (aka: “Cabin Appearance Agents”) and customer service. All jobs are located in Denver.
“Regarding our experience with candidate flow over the past year, it was challenging at the end of COVID but we have consistently been over 100% staffed for the past 8 months! United has experienced rapid growth and is projected to continue that growth over the next few years,” said Morgan Brown, UGE’s manager of talent acquisition, in an email. “We are currently hiring in anticipation of this growth.”
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➔ United Ground Express’ job fair jobs start at $18.37 to $19.37 an hour and include benefits like “immediate access to medical/dental/vision insurance” and flight privileges. Those interested can stop by the Courtyard Marriott Denver Airport on Tower Road Tuesday (April 11) between 9 a.m. and 3 p.m. >> Details
➔ Always hiring: State prisons. We’ve mentioned this plenty of times before, but the state Department of Corrections is still seeking workers. Pay starts at $50,000 a year and there are hiring bonuses. Here are upcoming job fairs for the Colorado Department of Corrections:
- April 12: 8292 Woodmen Valley View #5093, Colorado Springs
- April 13: Virtual
- April 20: Sterling Correctional Facility, 12101 CO-61 in Sterling
- April 27: Corrections Training Academy 2945 US-50 in Cañon City
>> More: cdoc.jobs
The economy: It is what it is
Readers of What’s Working seem less impacted by any terrible economic news out there. In the latest reader poll, one-third of 75 respondents said their economic outlook is that the “economy is what it is.”
That’s either from a sense of helplessness or hopeful thinking. A quarter of responses believe it’ll get better. But another quarter definitely felt a recession is near.
As many have concluded, the economy is personal.
“Outlook is based on current financial difficulty,” wrote Lois Rangely. “Lost my job in CA and took a $26,000 cut in pay for a job in Colorado.”
“At 76, rely on your retirement income to meet regular living expenses. Use your savings to enjoy life because you don’t have too much left!” Carl Bostek, from Montrose, advised.
“When you don’t have debt, economic adjustments are much easier to handle,” said Chris in Colorado Springs.
“I’m trying to just hold on as a single parent,” said a person who didn’t give their name.
For the most part, comments were more hopeful, even if the point when things will turn around was unclear.
“I tried to get a landscape project going. In spite of research, the estimate came back 3X my worst case scenario. I have abandoned the project,” wrote Tracey Griffith in Centennial. Even so, she believes that it’ll get better someday.
And, reminds another person, “I have always been a saver and am enjoying actually getting interest income from my accounts. It has been too long since I could say that.”
Thanks to everyone who contributed to the poll! Here’s the next one:
This week’s poll:
Is inflation easing or are you still watching your budget? Before the next inflation report is released, tell us how your own household is dealing with the economy at cosun.co/WWinflation2023
Sun economy stories not to miss:
➔ What to do with $38.5 billion? The Colorado legislature is working on a new state budget. Sun reporter Jesse Paul summarizes six things you need to know. >> Read
➔ Housing for ski workers. Here’s what Alterra, operator of Winter Park, and others are doing, reports Tracy Ross. >> Read
➔ Texas ruling and Colorado health coverage. A federal judge in Texas threw health insurance for more than 100 million Americans into disarray last week when he ruled that certain requirements for preventive care coverage are unconstitutional. Health care reporter John Ingold analyzes the impact in Colorado. >> Read
☀️ OUR RECOMMENDATIONS
Other working bits
➔ 6% of Coloradans do not use a bank. That’s an increase from 3.3% in 2019, according to FDIC data. It’s also one of the highest rates in the nation. A coalition of local financial and community institutions plan to discuss during a Bank On Colorado virtual session at 11 a.m. April 11. >> Register.
➔ Up to $50k to build apprenticeship programs. A new round of Scale-Up grants is available to employers and organizations who build their apprenticeship programs. Overseen by Apprenticeship Colorado, the grants come from federal funding that created Colorado’s Innovation, Diversity, Equity in Apprenticeship grant, or IDEA grants. Up to $50,000 is available (see earlier story). A virtual information seminar is April 12 starting at 11:30 a.m. (register here). Deadline to apply is May 5. >> Details
➔ Next FAMLI deadline for employers is April 30. The first quarter for Colorado’s new paid leave program, the aforementioned Family and Medical Leave Insurance Program (FAMLI), is in the bag. But what that means is the state-mandated program needs to keep tabs on how much employers paid their staff, so wage reports must be turned in. That’s due April 30. >> Details
The Daily Sun-Up podcast | More episodes
Thanks for sticking with me for this week’s report. As always, share your 2 cents on how the economy is keeping you down or helping you up at cosun.co/heyww. ~ tamara
Miss a column? Catch up:
- What’s Working: Colorado entrepreneurs must make money to spend it as recession talk increases
- What’s Working: Colorado’s unemployment rates weren’t what you thought they were
- What’s Working: Tipping for fast food, to-go pick ups, pot and … wedding gowns?
- What’s Working: How a Denver nonprofit is expanding the benefits of work
- What’s Working: Colorado is more transparent about wages than any other state
- What’s Working: Denver inflation falls to 6.4%, which means we still have high inflation
What’s Working is a Colorado Sun column about surviving in today’s economy. Email email@example.com with stories, tips or questions. Read the archive, ask a question at cosun.co/heyww and don’t miss the next one by signing up at coloradosun.com/getww.
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