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Unformatted text preview: e new investors lost everything trying to stabilize these six troubled Colorado banks. This will likely make it more difficult for Colorado’s surviving local banks to raise new capital as accredited investors become more cynical. Banks will likely feel more pressure to shrink their balance sheets by any means, a problematic strategy where performing, high-quality loans transition to new banking relationships and troubled customers have nowhere to go. Colorado banks are facing structural headwinds. Many Colorado bankers have insisted that loan demand is anemic, especially among the most credit worthy borrowers with equity to fund new ventures. Colorado’s banks are also expected to feel more of the pain from Operation Twist, because they rely more heavily on traditional yield spread products and have less ability to take loan underwriting risk (limited by CRE exposure) or pursue other diversified revenue sources. Larger regional banks with operations in Colorado should fare better under this scenario....
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This note was uploaded on 02/11/2013 for the course MGMT 231 taught by Professor Yu during the Spring '13 term at Bauder.

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