During the past three years, First State Bancorp. in Albuquerque grew aggressively: It bought three banks, two in New Mexico and one in Colorado, and its asset size rose 70%, to $3.5 billion.

But it also bet heavily on construction and land development lending, which has become increasingly problematic. Noncurrent loans are on the rise, and it recently signed a pact with regulators agreeing to suspend dividends and payments on trust-preferred securities until it improves its capital position.

Subscribe Now

Access to authoritative analysis and perspective and our data-driven report series.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.