1st Choice vision doesn’t change with merger

On July 1, 1991, my decision is made. I turn in my resignation from my job as president of Affiliated Cache National Bank. It is time for me to undertake a new and uncharted direction.

I have convinced six other brave souls to invest seed money with me in an idea that last happened 15 years ago ­ start a new bank. The economy is struggling, and bank stocks are not very popular or profitable. It is a hard sale.

However, I see an opportunity. There’s a new shopping center I believe will do well and have lots of customer traffic. The larger banks have been doing a poor job of being community minded and customer-focused.

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The next twelve months are full of anxiety and concern. I get the 1st Choice Bank application ready for the regulatory agencies and raise the required capital. I knock on every possible door, and it is all we can do to raise $1.7 million ­ the minimum acceptable amount by the regulators.

The application process moves slowly through the government red tape, so some of my investors are concerned that something must be wrong and decide to not invest. Additional capital must be raised.

Finally, the regulatory approval is received. Now within 30 days we must get a modular building with all the required systems and a staff of seven ready for business. This includes everything from paperclips to computers.

On July 3, 1992, we open our doors for business with $1.7 million in capital and assets. Our vision statement is simple: Create a bank where people are proud to bank, proud to work and proud to invest their money.

Over the next seven-plus years, we grow to $435 million in total assets, seven locations and 130 employees. After the first year, the bank makes a decent rate of return ­- approximately 14 percent each year for our investors.

I wish I could say it is all my brilliance that made the bank as successful as it has been. But, if one was to look back, the bank has been favored with one of the best economies in our lifetime. The boom started almost the same time I opened for business, and it still continues. But the environment has changed.

Because of this success, others decided to follow. Everyone wanted into the local banking scene. Since I opened 1st Choice Bank in Greeley, there have been three other new charters, at least five bank sales and five other banks that opened offices in Greeley.

The result is that banking has become very competitive, and the return for the risk being taken is questionable: Of the three new banks started in the last three years, the investors’ return on investment would be greater if they had invested in a certificate of deposit.

The competition has created a highly leveraged situation in most banks. Deposits are priced higher in Northern Colorado than anywhere in the country. Credit standards have slackened, with many lenders doing loans with little or no equity provided by the customer.

Remember all of the new banks in the area have never seen an economic downturn, including 1st Choice Bank. Regulations are being relaxed such that banks are — or soon will — sell mutual funds, stocks, bonds, annuities and insurance.

Technology is moving very fast and is very expensive. I spent millions. I felt like the bank had a good technology package that was superior to other independents but could see that it was still not enough.

Also, I am concerned for my shareholders. Accounting standards are changing to eliminate pooling as the preferred accounting method for mergers, which is going to seriously reduce the number of buyers and what they are willing to pay for an acquisition. I am aware of two other local banks that attempted to sell and could not find a buyer at an acceptable price. Every business must have an exit strategy to enable their investors to get their money back.

I was fortunate enough to be in contact with Norwest/Wells Fargo. The organization is a large bank with a strong emphasis on community banking, and it allows a considerable amount of local decision-making. Not new to the area, it is one of the most advanced banks when dealing with technology.

I asked several other banks to visit with us about a merger but found Norwest/Wells Fargo was the best for the shareholders, customers and employees. The company’s vision is truly closer to who we are and what we see for the future than any other large organization.

As such, I started with a vision to take care of people and their banking needs. The bank tried to accomplish it by using strong technology and good customer service. Now, given the changing environment and the need to consider our options, I believe I have accomplished that vision by merging with Norwest/Wells Fargo.

I feel 1st Choice Bank has joined a company where people can be proud to bank, proud to work and proud to invest their money.

Darrell McAllister started 1st Choice Bank in 1991. Since then, he has served as CEO.