Banks enhance service in wake of branching

Like Colorado weather, Colorado banking over the last seven years has seen frequent changes, and more are on the way.

Setting the stage for change was passage in 1988 by Colorado legislators of a law that phased in out-of-state ownership of Colorado banks.

Other legislation passed in 1991 phases in unlimited intrastate branching by January 1997. In April of this year, a third bill was passed that will, by June 1997, permit interstate branching with few limitations.

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While Coloradans debated the issues of interstate banking, several large out-of-state banks waited just over the horizon.

As soon as they could, they blew into the state and purchased Colorado-based banks, bringing with them financial resources far greater than any single bank in this state had had access to in the past.

It is these deep pockets that are financing changes in Colorado’s banking industry.

As banks use their resources to reflect individual direction and maneuver for a position in the markets, some changes are highly visible to the customer.

Others are more subtle or occur in back rooms where customers rarely go.

Visible or not, the changes ultimately reach the customer in the forms of more options and more financial products.

Some of the more-visible changes are occurring in what Union Colony Bank’s president and CEO, Jim Tuggle, terms “customer enhancements.”

Since the purchase of Union Colony Bank in Greeley by First National Bank of Omaha, Neb., the bank now offers free ATM cards and, coming next spring as another free service, it plans to inaugurate a new system of high-technology check imaging.

Without the financial strength of Omaha, neither imaging nor free ATM cards would have been feasible, Tuggle said.

Greater capital bases have created larger lending limits, have armed lenders with better lending skills and are prompting banks into new markets. Automation and technology are changing the way loans are structured and serviced.

“Any large loan available in Northern Colorado we can do,´ said Sam Leeper, senior vice president at Bank One Greeley. Under Affiliated Bankshares, Bank One’s predecessor, large loans were more difficult, requiring outside approval.

But, “We are also better lenders today,” Leeper said, attributing that to lender training. Described by Leeper as “the best training I’ve had in 25 years,” Bank One’s training has ensured more-consistent lending decisions and greater accuracy in assessing risk factors. Bank One has become more “fact-oriented and less hunch-oriented, Leeper said.

Tuggle said Union Colony draws on Omaha’s long experience in agricultural lending to create and structure new loans for new kinds of agricultural borrowers.

Also, Omaha’s sophisticated technology allows better loan analyses, Tuggle said, making it possible for the bank to stretch out for more business from Greeley’s 1,800 small businesses.

Gary Levine, executive vice president of Key Bank of Colorado, characterizes Key Bank’s concentration in the market as small-business lending.

Levine defines a small business as a company having $3 million or less in annual sales and credit needs not exceeding $300,000 in working capital.

With Key Bank’s entrance into Colorado came its status as a preferred U.S. Small Business Administration lender.

The state’s third-largest SBA lender in 1994 with $10 million in loans, Key Bank established a single center to service all SBA loans made in its four Rocky Mountain Region states: Colorado, Wyoming, Utah and Idaho.

The bank also set up a network of field leaders, Levine said, and trains them to deal directly with potential SBA borrowers, to analyze loan requests, solve problems and prepare required SBA documents.

Norwest does not have one single focus in the marketplace, said Dan Gasper, president and CEO in Fort Collins of Norwest Bank of Colorado. Its strategy, Gasper said, is to “satisfy any and all needs of every credit-worthy customer.”

To accomplish that, Gasper points to Norwest’s 3,000 “stores,” a term encompassing its many and diverse entities, from banks to mortgage lenders, from investment services to leasing operations. From these entities comes the expertise to satisfy all the needs of a customer, Gasper said.

Through training, employees achieve good listening skills, identify needs and refer customers to the Norwest entity that can fill their needs, Gasper said.

Illustrating his point, Gasper related the time he went into a hardware store to purchase a bolt but returned home with the wood screw he really needed, thanks to an alert clerk’s questions.

“Somebody likes what we are doing,” Gasper said, noting that the Fort Collins branch has opened an average of 2,000 new household accounts each year since Norwest purchased the bank.

With all these changes, what’s the forecast in Colorado banking?

Steven Wacker, senior vice president at Bank One Greeley, envisions more “alternative deliveries” of services for customers who want them.

He expects to see more branches in supermarkets and convenience stores and more online computer and phone services for customers who want to bank at home.

Also, Wacker said, changes are occurring in technology to enable bankers to spend more time with a customer and less time shuffling paper.

Yet, Wacker said, there will always be that customer who likes to come into the bank on a daily basis, visit with the tellers and make banking a kind of social exercise. That, he said, is an advantage of the brick-and-mortar presence of the local bank that he doesn’t see going away.

Is there a definitive answer to whether Coloradans have benefited from interstate-bank ownership and from the widespread branching that has accompanied it?

James Dillon, deputy commissioner of the Colorado Division of Banking, doesn’t think branching will hurt the consumer because “eventually, branching will be passé, replaced by technology.”

The jury is still out on whether interstate banking has benefited the customer, Dillon said. Some people, he added, still argue that out-of-state ownership takes capital away from Colorado, which the state may or may not see if the Colorado economy goes flat again as it did in the mid 1980s.

“We may have to wait for hard times to come again to see whether we benefit,” Dillon said.