Drive along major roads into southwestern Nebraska, and things might seem a little familiar — at least from a banking perspective.
Travel along U.S. Highway 34 to McCook, and you’ll find AmFirst Financial Services Inc., parent of AmFirst Bank, which operates a branch in Longmont.
Venture to Sidney along Interstate 80, and you’ll find the headquarters of First Nebraska Bancs Inc., parent of Points West Community Bank, with branches in Greeley, Wellington and Windsor. A little farther east to Ogallala, you’ll find the home town of Adage LLC, parent of Adams Bank & Trust, which now operates in Berthoud, Firestone, Fort Collins and Longmont..
And keep heading east on I-80, and you’ll come across the Omaha homes of Pinnacle Bancorp Inc., parent of Bank of Colorado, and Lauritzen Corp., the behemoth of Nebraska bank holding companies and parent of First National Bank of Colorado, both of which have numerous branches in the Boulder Valley and Northern Colorado.
Nebraska banks have long had a presence in the Centennial State, attracted by a much larger population base, economic diversity and solid growth — especially when compared with smaller communities in western Nebraska.
“In many of those headquarters’ Nebraska communities, there is declining population,” said Larry Martin, chairman of Bank Strategies LLC, an independent consulting firm. “They want growth.”
They can find that along Colorado’s Front Range, with a projected population of greater than 6.1 million — 79 percent of the state — by 2030, according to a 2009 study by the State Demography Office, and much of that growth is concentrated in Northern Colorado.
The Greeley metropolitan statistical area — comprised of Weld County — ranked as the fourth-fastest-growing MSA in the nation from July 1, 2015, to June 30, 2016, according to data recently released by the U.S. Census Bureau.
But interest from Nebraska banks can be traced back much further, at least to the 1990s. The biggest Nebraska bank, First National Bank, opened its first branch here in 1993 and has $18.9 billion in total assets. Pinnacle Bancorp, in the state since 2000, has $9.6 billion, and it’s acquiring AmFirst Bank with its $260 million in assets.
Points West Community Bank and Adams Bank and Trust, two others headquartered in Nebraska, have more than $1 billion in combined assets. And FirsTier Bank, based in Kimball, Neb., soon will open a loan-production office in Greeley.
Until recently, another Nebraska-based institution, Gering-based First Express of Nebraska Inc., operated in Colorado as Western States Bank, a local brand for its Scottsbluff, Neb.-based Valley Bank and Trust Co. But a 2016 merger with Wyoming State Bank sent the headquarters to Laramie, Wyo., while retaining the Western States Bank name.
Along the Front Range, growth has given banks access to a diverse portfolio they don’t have in Nebraska, where their loans are heavily concentrated in the agricultural sector. That’s a volatile market, subject to ups and downs depending on the weather and the varying prices of commodities, equipment and fertilizers. The Front Range offers options and stability.
“The economy is more diverse along the Front Range,” Mark Driscoll, CEO of First National Bank of Colorado, said. “There are lots of entrepreneurs. The growth is terrific, and we’ve been able to grow with the market.”
Driscoll added that First National’s Nebraska portfolio still features consumer-lending and credit-card assets in addition to its “significant” agricultural holdings. Along the Front Range, though, First National has access to an ever-expanding plethora of opportunities in businesses looking to expand, commercial real estate, home and office building, home mortgages and home equity lines of credit. Its asset size and capital level let it serve a bigger level of borrower.
Driscoll called himself an “old-school banker” who looks at deposit growth in a county over time and the market shares of other banks when assessing when and where to open a new branch or launch a new product.
First National gets demographic information from third-party firms about home values, employment numbers and customer types, then compares that information against its existing customer base to analyze in detail what would work where.
“It’s more science than just what markets look good,” Driscoll said.
First National has $2.5 billion in deposits in Boulder, Broomfield, Larimer and Weld counties, spread across 25 offices, according to FDIC data. With their job growth and low unemployment, Driscoll said, the bank sees “all the basics of a strong economy.”
Of course, it’s hard for banks to integrate themselves into local economies if they’re not integrated into local communities. People and businesses don’t want to trust their money to a bank they see as an outsider.
The key, Martin said, is for banks to make loans back into the community from which it receives its deposits, rather than “sucking deposits out of the state and lending them somewhere else.” Banks can also hire locals as tellers, loan officers, managers or analysts, put them on their board of directors or take them on as advisory directors. They can also join the local chambers of commerce or fraternal organizations.
Driscoll said that First National has benefited from being in Colorado for nearly 25 years, which has been long enough to where people don’t necessarily think of it as being based in Nebraska. The Lauritzen Corp., its parent company, gave it near-complete autonomy from the start to help it meet the specific needs of its markets.
In First National’s case, its local hires include Driscoll, who graduated from Colorado State University, played football and was athletic director there. He said that much of the bank’s leadership lives locally and volunteers in local charities.
“You are how you act,” he said.