Federal stimulus checks, the U.S. Small Business Administration's Paycheck Protection Program and a statewide stay-at-home order all contributed to record-setting growth in Colorado Springs financial institution deposits.

Money on deposit in Colorado Springs banks and credit unions surged 17.1% from a year earlier to $15.8 billion as of June 30, according to reports from the Federal Deposit Insurance Corp. and the National Credit Union Administration. That is more than four times last year's 4.2% increase, the weakest growth in five years, and easily outpacing the 10.2% growth in 2012 that had been the fastest growth in records starting in 1998.

More than 8,700 federal Paycheck Protection Program loans made in Colorado Springs area

Amanda Averch, a spokeswoman for the Colorado Bankers Association, said deposits nationwide surged in the year ended June 30 from "Paycheck Protection funds flowing into accounts from small businesses and stimulus checks people received and held onto because they were being prudent with their spending during a time of economic uncertainty. We expect those funds to flow out of banks because of pent-up demand for product and service purchases that were delayed during the pandemic."

Deposits also surged statewide and nationwide. Colorado bank deposits grew 20.8%, or nearly $30 billion, to $172.3 billion, while nationwide bank deposits jumped 21.7% to $15.5 trillion. Colorado credit union deposits grew 12.1% in the 12 months ended June 30, while nationwide credit union deposits rose 16.5% from a year earlier to $1.49 trillion.

In Colorado's six other metro areas, Denver banks had the fastest deposit growth of 22.2% to $107.1 billion, while Greeley banks had the slowest growth at 15.1% to $5.1 billion.

Colorado Springs area deposits grow by smallest percentage since 2014

Mike League, CEO and president of 5Star Bank in Colorado Springs, said deposits surged at all banks not only from consumer stimulus checks and the $32 million in PPP loans it made, but also because consumers and businesses viewed his bank and others as a safe alternative to more volatile investments and more attractive than money market mutual funds that were paying historically low interest. Banks didn't have many places to lend the deposit windfall as the pandemic dramatically reduced loan demand for businesses, he said.

Jason Doyle, president of UMB Bank's operations in the Colorado Springs area, said the Missouri-based bank gained deposits from its role in financing a series of downtown projects, including the U.S. Olympic and Paralympic Museum, a new stadium for the Colorado Springs Switchbacks and a new apartment complex, among others. He said some of the bank's deposit gains also came from stimulus checks and the bank's PPP lending, which totaled 180 loans for $40.8 million.

Deposits at Colorado Springs banks and credit unions grow at fastest rate since 2012

The overall local increase was led by banks with a nearly 20% increase in deposits to $10.3 billion, although credit unions also had double-digit growth with a 12.2% gain to $5.48 billion. Banks benefited from the SBA program, under which up to $1.26 billion was loaned to more than 8,700 area businesses to help them keep employees. An exact amount of the loans, which can be forgiven if 60% of the money was used for payroll, is not available because the agency disclosed larger loans in broad ranges rather than exact dollar amounts.

“Like most financial institutions, Ent (Credit Union) experienced a significant year-over-year increase in deposits in our June reporting. The combination of government-provided stimulus for consumers and businesses, a ‘flight to safety’ among investors and decreased consumer spending due to the uncertainty of the pandemic all contributed to the increase in deposits,”  M.J. Coon, chief financial officer for Ent, the area's largest financial institution with more than $4 billion in deposits, said in an email.

Colorado Springs deposits growth weakest since 2013; two banks are culprits

Nearly 60% of the increase was generated by five of the area's largest financial institutions — Ent added $473 million, Wells Fargo Bank added $315 million, Chase Bank added $285 million, U.S. Bank added $146 million and 5 Star Bank added $107 million. All but nine of the area's 47 financial institutions reported double-digit deposit growth and Herring Bank, which operates locally as Colorado State Bank, reported deposits in Colorado Springs branch soared 168% to $113 million.

The number of branches operated by banks remained unchanged from a year earlier at 173, a break from a 9-year decline in brick-and-mortar branch closings triggered by customers shifting to online banking. The number of local branches peaked at 211 in 2010, in parallel with a nationwide trend away from operating branch offices.

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