2006 Financial services industry getting bigger

Filed under: Banking & Finance |

The one word that might best describe the financial services industry in Colorado Springs during 2006 is growth.

Opening new locations, launching new products and tapping into new markets seemed to be on just about every bank and credit union’s mind — except for Bank of America, which decided to close its call center in Colorado Springs.

And continued growth could bode well for some bank employees. The number of tellers has been declining because of technology, but with more branches and more locations, the total demise of tellers seems unlikely.

The following is a brief recap of some of the stories that made news in 2006.

Ent service center offers technology firsts

In January, Ent Federal Credit Union opened its 20th service center in Stetson Hills, at 6060 Championship View, south of the intersection of Barnes and Tutt roads.

More than 1,000 people attended the grand opening and had a chance to operate state-of-the-art ATMs and a safety deposit box security system that measures pressure points on the palms of the hand to identify members.

Ent officials said they were the first financial institution in the Pikes Peak region to use the new technology.

Garden of the Gods Bank headed downtown

Garden of the Gods Bank decided to move downtown, taking advantage of a special charter that allows mobile banking, said regional President Megan Harmon.

“For most of our business, we go to the customer,” Harmon said.

With a mini-fleet of unmarked armored vans, bank employees drive to member locations, pick up deposits, drop off cash and discuss loans seven days a week. There are no armed guards on board the plain white vans, and drivers wear plain clothes.

Garden of the Gods Bank made its way into Colorado Springs in 2003.

One purchase, 24 more branches for U.S. Bank

In June, U.S. Bancorp announced that it would acquire Vail Banks Inc., a move that will add 24 Colorado branch locations in 19 communities to its operations.

Vail Banks is the parent company for WestStar Banks, small community banks that dot the resort and bedroom communities around some of Colorado’s most popular ski and destination resorts.

WestStar’s 24 locations are in Aspen, Avon, Breckenridge, Cedaredge, Delta, Denver, Dillon, Edwards, Estes Park, Frisco, Fruita, Glenwood Springs, Granby, Grand Junction, Gypsum, Montrose, Norwood, Telluride and Vail.

Classic Cos., Corundum Group to launch bank

Classic Cos. owners Jeff Smith, Doug Stimple, George Lenz and Dan Winter decided to team with Corundum Group founders Ron Johnson and Steve Condon to create Central Bancorp, the parent company of Central Bank & Trust.

“It’s always been an articulated goal in our long-term business plan to enter the financial services market,” Stimple said. “The idea evolved out of a relationship that had grown out of some mutual investing. There just seemed to be mutual respect and compatibility of values.”

Johnson said the plan was the fruition of a common goal.

“We have wanted to start a bank for some time and so did the Classic group,” he said. “So we started talking about it about a year ago, and here we are.”

Classic’s four partners will own 51 percent of Central Bancorp, and Johnson and Condon will own the rest.

First Community Bank’s double vision a reality

In July, nearly two years after its move into Colorado Springs, First Community Bank expanded into its second office, a 10,058-square-foot branch at 5225 N. Academy Blvd.

More than just doubling its Colorado Springs footprint, the opening of the new branch represented an opportunity for the bank to also double its $25 million residential construction loan business and tap into the medical and dental office businesses surrounding the branch’s neighborhood near Academy and Union boulevards.

First Community Bank is a subsidiary of the New Mexico-based First State Bancorp.

4 generations: All in the Adams family

Adams Bank and Trust celebrated something in July that few businesses ever achieve — 90 years and four generations of continuous family ownership.

“I really feel blessed that we’ve been able to work together as a family. I really do,” said Todd Adams, the bank’s president and the older of the two brothers who now run the Nebraska-based bank, which has three Colorado Springs branches, including one at the southwest corner of Nevada and Pikes Peak avenues.

“It’s really something we’re proud of,” said younger brother Chad Adams, who serves as vice president and legal counsel for the bank.

It was Todd and Chad Adams’ great grandfather, G.D. Adams who opened the bank in 1916 in western Nebraska, in a town not far from the Colorado border.

Fewer than 10 percent of family owned businesses see existence until or past the third generation, according to the Family Business Network, an international organization that provides support for family-run businesses.

Financial institutions focusing on new generation

Gen Yers number some 60 million people in the United States. By most estimates, that’s nearly three times the size of their predecessors, Gen Xers. And it makes them the closest rival to the baby boomer generation, with more than 75 million people.

All this has marketing and consulting firms laboring to learn the secrets that will lure Gen Yers, and banks are also doing their own research.

“Banks are really just starting to notice how important this demographic is, and now the question is what are we going to do about it,” said Steve Williams, a principal with the Arizona-based bank consulting firm Cornerstone Advisors.

George Hofheimer, director of research for Filene Research Institute, said several of his organization’s studies show that banks and credit unions simply can’t afford to ignore Generation Y.

“These are people who are heading into their prime borrowing years,” he said. “It won’t be long until they’ll need home and auto loans.”

Right now, it’s Gen Xers that offer the most loan revenue potential for banks and credit unions, but within a decade Gen Y is expected to surpass Gen X’s potential, Hofheimer said.

“One of the biggest things for banks and credit unions to consider is how they’re going to change their delivery requirements, because this generation doesn’t want the same things others do,” he said.

Freedom Financial Serv. opens second location

Freedom Financial Services expanded into its second location, purchasing a 15,500-square-foot building at 5455 N. Union Blvd.

President Roy Clennan said the building gives the business a corporate base large enough to make the loan experience easier for the customer and more efficient for Freedom.

Freedom opened in 1995 and became a direct lender in November 2000.

The school bell now tolls for Ent Federal at UCCS

Ent Federal Credit Union opened the city’s first financial services branch on a college campus on Oct. 2.

The branch at the University of Colorado at Colorado Springs was the 21st service center for Ent, the region’s largest financial institution.

In what has become a trend, a number of banks and credit unions are establishing college campus branches. The school branches are seen as a way to capture future customers.

The opening of the service center coincides with the launch of the Lion One Card, a university photo ID that doubles as an ATM and Visa debit card for Ent members.

The campus service center will employ students, who can earn internship credit while on the job.

Adams Bank acquires local mortgage business

Adams Bank and Trust’s parent company, ADBANC Inc. purchased the Colorado Springs-based Colorado Online Mortgage.

Colorado Online Mortgage was established by Christine Meacham in 1988 under the name of Auer Mortgage.

This is the first purchase of this kind for Adams Bank and Trust, which has 16 branches in Colorado and Nebraska — three of which are in Colorado Springs — and assets of more than $440 million.

Colorado Online Mortgage President Hutch Hutchison said the best aspect of the transaction is that his staff will remain intact, which will enable the company to continue its business model.

Technology threatens teller jobs

Consumer banking options widened in the 1970s when ATMs made their debut. After ATMs came telephone banking, and then the Internet, which allowed consumers to perform almost every account transfer procedure without ever talking to a person.

The busy bank lobby became a quieter place, and long lines for tellers became a fading memory.

There are no hard numbers that detail the demise of bank tellers, and no one has made an effort to conduct a survey, but some statistics do point to a decline in the profession.

Retail banking jobs, most of which are teller or phone customer service positions, represent about 25 percent of all banking jobs. Less than 15 years ago, retail banking jobs represented nearly half the banking world’s work force.

While it’s clear that the number of tellers has been decreasing, most bankers agree that the position will never completely fade away, and many say that branch banking might be responsible for keeping tellers in the lobbies.

While technology has lessened the need for tellers, branch banking has made hiring tellers a necessity because large banks need to staff their multiple suburban branches.

Rob Larimer covers banking and finance for the Colorado Springs Business Journal.