Banking industry sees influx of startups, expansions

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Like any entrepreneurial-minded individual, Jim Wyss wanted to share in the equity of an industry that had captivated his career for almost 30 years. “If you do good work, you want ownership in that work,” he said. The blood and sweat poured into a life-long career in banking paid off when Wyss and his partner and brother-in-law, Randy Rush, opened Integrity Bank & Trust in Monument in January. Rush, too, is a 30-year veteran of the financial industry, having worked at a large savings and loan.

Wyss is the chief executive officer and president of Integrity, and handles the retail and commercial side of the business. Rush is president of trust services and the executive vice-president of the bank. He assists customers with managing and growing their personal wealth.

Wyss and Rush admit it was a gutsy move to open a new bank just east of Interstate 25 in Monument, especially considering the influx of Monument-based banks during the last few years. First National Bank (a Las Animas- based bank) opened a branch in March 2002. Colorado National Bank has been doing business in the Monument market since March 2003, and Pandre Nichols, vice-president of marketing, said the bank’s newly constructed physical branch is scheduled to open in June. “We didn’t know there would be this many banks coming to the area,” Wyss, a 25-year resident of the Tri-Lakes area, said. “But competition is good, and we have a healthy respect for it.”

Wyss and Rush believe small banks are “easier” on individuals and the small-business owner. “It’s relationship banking,” Rush said.

Wyss and Rush hired their staff based on good people skills and a commitment to excellent customer service. “We fit the picture of the community bank,” Wyss said. Many of the 25 stockholders live in the Tri-Lakes area.

Wyss and Rush are ahead of their proposed budget for deposits and assets growth, and the entrepreneurs hope to be breaking ground this summer on a new site at Powers Boulevard and Barnes Road. Plans call for a two-story, 10,000-square-foot building – Integrity Bank & Trust will occupy the first floor – a 5,000 square-foot area – and lease the 5,000-square-foot second-story. Expansion is in the cards, but Wyss is committed to maintaining the small-bank atmosphere.

How does one distinguish between the small bank, the mid-size bank and the large bank, when expansions and mergers are as fast to catch on as a Colorado wild fire?

John Paulson, a vice-president and senior relationship manager of Bank One, said small banks are profitably contained, while mid-size banks will cease to exist as they merge with corporate banks in order to tap into the big bank’s assets. Mid-size banks can only grow so much, Paulson said. “If the business is over a million and one-half dollars in annual sales, the bank has to go to the next level of service, which entails the large store,” Paulson said.

Bank One, which has 12 branches in Colorado Springs, will finalize its merger with J.P. Morgan, the second largest bank in the United States, next month, Paulson said. He is trying to build the same small-bank customer service ideal through Bank One’s outreach services. Even though a physical bank branch may not be close to a certain area, the bank still attempts to secure business in the area through networking and referrals. “It’s a specialized level of product services that we offer through outreach,” Paulson said. Those products include retail services, which are “driving the industry,” Paulson said. “Retail banking, I believe, is why we are seeing so much growth and expansion.”

Retail banking is why NewGround, an international marketing and design/build firm specializing in the financial industry, with principal offices in Chicago, St. Louis, Berkeley, Calif., Portsmouth, N.H. and Toronto, is the plastic surgeon of banking facilities’ facelifts. Retail banking relates to consumer services, such as personal checking and savings accounts, loans, money markets, etc. Board directors and bank managers, no matter the size of their institution, are luring retail customers through creative design, extra amenities and warm and fuzzy décor.

“Traditional bank branches are yielding to retail environments,” said Kevin Blair, the president of NewGround. “Banks and credit unions realize they are in the retail business, and the traditional atmosphere is no longer acceptable to the customer.” Banks and other financial institutions are changing images through clever and dynamic logos and interiors that include, according to a NewGround press release, “floor-to-ceiling glass storefronts and teller pods that dissolve customer lines into free-flowing amoebas.” Blair said one Denver bank – Commercial Federal – has added a coffee bar in its lobby.

UMPQUA Bank, which is headquartered in Oregon, was the first bank to pull off the transformation, Blair said. The bank has been a model for other financial institutions, such as Bank of America, that want to remodel to a retail-type environment. A few banks have changed names to “leverage the focus of who they are or want to be,” Blair said.

Wyss said he thought the name, Integrity Bank & Trust, would best reflect the manner in which he wanted to do business.

Are consumers paying higher prices for banking makeovers? Blair said banks are absorbing most of the costs, but, like a Starbucks, once banks have branded identities, loyal customers will pay a premium for the product. In the past, financial institutions thought too much flash or color would be risky, presenting an image of frivolity; however, banks have traded conservative ideas for designs common to restaurants. “Banks across the country want to elevate their customers’ experiences, and it’s driven by a change in our society – an evolution of services based on a higher level of consumer expectations,” Blair said. “Customers want to be treated like guests.”

Promoting excellence in customer service is what most banks are banking on, regardless of the size. So what sets the banks apart?

Paulson said added features, such as lock boxes, and good loan deals are winning customers. Blair thinks a coffee bar and upscale designs enhances the banking experience, which brings in customers. Wyss and Rush believe immediate, personal attention is paramount to customer gain and retention.

“I don’t know if one area can become over banked,” Paulson said. “Only time will tell.”