Centennial Bank of West rides off into the sunset

Like the rugged, Western heritage that inspired its image, Centennial Bank of the West is fading from the Northern Colorado landscape as the bank and its name merge into Denver-based Guaranty Bank and Trust.

“We think we can get this accomplished by year end,´ said Paul Taylor, executive vice president and CFO for Centennial Bank Holdings Inc.

The total cost of the merger is expected to be around $1.5 million, with future cost savings on advertising and regulatory reporting requirements. Taylor said that the company would explore changing the holding company name and stock ticker symbol (Nasdaq: CBHI) as well.

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California-based Castle Creek Financial, headed by dealmaker John Eggemeyer, acquired Centennial Bank of the West in 2004 for $155 million and formed Centennial Bank Holdings Inc. Two months later, the company announced that it would purchase Guaranty Bank and Trust Co. of Denver. That $365 million deal closed in January 2005, bringing Centennial Bank Holdings’ assets to more than $2.4 billion.

“They (Guaranty) were twice as big as us,´ said Bill Farr, former president and CEO of Centennial Bank of the West, and a current member of the board of directors for Centennial Bank Holdings.

Within a year of the Guaranty deal, the company announced that it would also acquire Longmont-based First MainStreet Financial Ltd. and go public. In October, the company’s existing shares began trading at $12.05.

With all of that activity, Centennial Bank Holdings predictably experienced some growing pains while trying to merge the cultures of conservative, suit-and-tie Guaranty with old-fashioned, cowboy-boots Centennial.

The pains went beyond meshing cultures, though. In this year’s second-quarter earnings release announcing the decision to do away with the Centennial Bank of the West name, the company points out less-than-exemplary results.

“The level of our nonperforming assets has remained higher than we would like, particularly outside of the metro Denver market,” Centennial Bank Holdings president and CEO Dan Quinn stated in the release. “Centennial has struggled a little bit.”

Much of that struggle is attributed to a slowing real estate market, which has caused the bank to limit its exposure to residential and construction loans.

Centennial Bank Holdings assets decreased more than $116 million in the past year, not including the $94.4 million loss due to the sale of Collegiate Peaks Bank. As of June 30, the company had $37 million in nonperforming assets, compared with $31.8 million at the same time last year.

Centennial Bank Holdings stock has also suffered. It was trading at more than $9 this spring, but is now below $7 – down more than $4 from the initial offering.

Not much impact

For his part, Farr admits he will miss the name Centennial Bank of the West, but concedes that the change is in the best interest of the bank and its customers.

“Customers aren’t going to change a bank because of the name,” he said. “It’s a little sentimental, but it’s not going to have that much of an impact.”

Centennial Bank of the West got its start with the 1993 merger of Eaton Bank and Greeley Farmers Bank. It wasn’t until the Eaton Bank began to grow outside of Weld County that a more regional name was in order.

For Farr, Centennial had several meanings. It tied the bank to Colorado, the “Centennial State.” Even more significant was James Michener’s novel, “Centennial.” Michener set the sprawling story in Weld County locations that he knew from his days teaching at the University of Northern Colorado.

“It was a long name, but it represented this area so well,” he said.

The image of the Old West is in Farr’s blood. His great, great grandfather stepped off a stagecoach in Greeley in 1877. Unfortunately, the stagecoach image was driven off of Centennial Bank of the West signage years ago. When Wells Fargo entered the Northern Colorado market in 1998 through merger with Norwest Bank, the industry giant requested that Centennial Bank of the West stop using the stagecoach logo.

Sentiment aside, Farr sees the logic behind dumping the Centennial Bank of the West moniker.

“With a name change, you can go with one or the other,” Farr said. “They had more branches, and there’s more people in Denver.”

The change will allow customers to bank at any of the locations along the Front Range, rather than restricting them to either Centennial Bank of the West or Guaranty.

Other than the name and expanded branches, not much will change at the bank, Taylor said. There are no layoffs planned or major reshuffling.

“We’ve sort of operated as one bank already,” he said.