Frequently Asked Questions   July 2008

Q) Some media reports indicate there is a banking crisis, why aren't Bank of Colorado Customers affected?

A) It is a crisis of confidence in the U.S. financial system brought on by very large write downs reported at investment companies and commercial banks.  The write down of asset values, which resulted in huge operating losses were caused by subprime loans and large development loans in fast growing states.  Our banks have not made subprime loans or purchased loans from outside our eight state market area.  These types of loans and their nonperformance have prompted many banks to have severe problems.

Q) Are all banks the same?

A) No.  The news media has lumped commercial banks and investment banks together, but they are different.  As commercial banks we are insured by F.D.I.C. which is backed by our government and protects depositors.  (FDIC.gov) Investment banks are insured differently and are regulated differently.

Q) What is capital in a bank?

A) Capital is the difference between what is owned and what is owed.  It is the cushion for a bank to withstand the risks of the market place.  The higher the percentage of capital to assets, the stronger the bank.  Our capital ratio in each bank is well above regulatory requirements.

Q) What are bank reserves?

A) A bank is required to have money set aside in case loans are not repaid.  The higher the percentage of reserves to loans, the better.

Our banks' loan loss reserves are well above regulatory requirements.

Q) How do you know if your bank is safe and doing well?

A) First, all bank deposits in FDIC regulated institutions are insured by the FDIC and are safe for your deposits according to the rules of FDIC coverage.  Secondly, it is very difficult to determine if a bank is going to continue to perform well.  The best an individual can do is look at the public reports on the FDIC website that are published quarterly.  Although all banks earnings can fluctuate, good banks have consistently good earnings with few down quarterly results.

Q) What is Pinnacle Bancorp Inc.?

A) This is the name of our Holding Company that owns: Pinnacle Bank Wyoming, Pinnacle Bank Nebraska, Pinnacle Bank Texas, and Bank of Colorado.

Click here to view the video about FDIC Insurance and how to protect your deposits.