GREELEY – By the beginning of October, Cache Bank operations should be moved out of the basement of the home of its vice president in charge of operations and into the renovated former First Northern Savings Bank building at 924 11th St. in Greeley.Thirteen stockholders are committed. The regulator has been selected. Federal Deposit Insurance Corp. insurance has been obtained. The senior loan officer has been wooed back to banking from a one-year stint in the floor-covering business.
It doesn’t sound like a lot, but it’s taken more than a year for Joel Rothman, president of the business, to get to a point where he can actually open the doors of a bank.
“The most important thing to keep in mind is that starting up a bank takes time,” Rothman said. “I thought I could get a bank in six to seven months.”
Rothman, 51, got into banking as an occupation when he was hired four years ago as the president of the Bank of Greeley. Four years prior, he was connected to the Bank of Greeley as a stockholder.
Rothman’s job title changed to branch manager when the company was purchased by Key Bank in 1994. He left after three months, citing the change in service customers were offered after the big corporation took over. Rothman is an entrepreneur, having spent a total of 20 years as owner or shareholder in various businesses such as banking, trucking, convenience stores, gas wells and farming.
“Going from an independent bank [Bank of Greeley] to corporation was difficult,” he said. He said that his background, of being on the customer side of the loan officer’s desk so often, gives him the ability to see the needs of the small business.
“It’s been a good fit,” Rothman said.
Rothman said the majority of Cache Bank’s business will be with small-business and automobile loans. Business owners who want to borrow, for example, $7,000 to expand their businesses and find they can’t get it at big banks because loan limitations for business are so high, can come to Cache Bank, he said.
Finding stockholders to generate enough support and commitment was one of the first steps to making Cache Bank a reality. Rothman looked to his family. His father, Will Rothman, and father-in-law, John Shupe, were shareholders in the Bank of Greeley. They, along with 11 other business acquaintances, are shareholders for Cache Bank.
The minimum investment to start up a bank, required by state banking regulators, is $2 million. Rothman said he is raising $2.5 million to “take care of growth needs.”
Many of the details of starting Cache Bank were worked out in an office inside Shupe Brothers, John Shupe’s trucking firm. Rothman hired an attorney and certified public accountant firm to assist in the application process, including the state’s hearing for the charter. The fee to be put on the agenda to receive a charter is $10,000. It took Cache Bank 90 days to put together the application.
The application for the charter answers questions such as the financial status of stockholders, especially the principal stockholder, and projections for growth. Cache Bank also came under the scrutiny of other, nearby banks, whose officials were invited to make comments.
On May 16, 1996, Cache Bank was officially state chartered and regulated by the FDIC. The list of bank regulations sent to Cache Bank is contained in three 8 1/2 by 11 books. The rules include guidelines for posting deposits, annual percentage yields on accounts and what documentation is required on loans. The books measure about 14 inches tall when stacked on top of each other. Most banks pay for help to keep up with regulations.
Banks must also have insurance protection to cover the customer. If the bank closes or goes out of business, customer dollars are covered by the insurance company within FDIC guidelines and limitations. Rothman filed for FDIC insurance protection in early May. Approval takes a minimum of 120 days, he said.
He took the time between applications and hearings to staff the bank. Cache Bank staff members come from the pool of former Bank of Greeley coworkers, including vice president of operations Kathy Boyle. Prior to agreeing to work with Rothman, Jim Davies, Cache Bank senior loan officer, dropped out of the banking industry for two years to give Decor Ltd. its start. Boyle has 20 years of banking experience, as does Davies.
In July, Rothman began renovation on the old First Northern building.
“We looked at locations to build but felt we could hold down overhead this way,” he said. “We’re spending half what it would have been on a new building.”
An architect was hired, and building permits were applied for. Two drive-up teller stations and an automatic teller machine vendor was selected. Some frustrating days were spent scheduling phone service.
“Just getting U S West to schedule is something else,” Rothman said. “And it seems like every time I turned around and ordered some furniture, it was going to take six to eight weeks.”
But he said it was the regulatory process that’s taken the longest. To get on the state agenda, it took at least four months. To get FDIC approval took four months, Rothman said.
Most of that is behind him.
“We have a bright future,” he said. “There is a lot of competition for commercial banks, especially independents. But we will do a lot of service-oriented work.”ÿ