Cache B&T dips into Denver market

GREELEY — Cache Bank & Trust Co., still a fresh face in Northern Colorado banking, plans to do business in the land of old money.

Greeley-based Cache Bank is set to open a branch this month in Denver’s fabled 17th Street financial district, bank CEO Byron Bateman has confirmed.

The new office will be geared toward private banking services, targeting the well to do in Denver.

Cache Bank has emphasized the private banking model in Greeley since it opened in 1996. Much of its customer base includes law firms, accounting firms and medical firms.

The approach has helped Cache Bank grow its asset base to about $95 million among its three Northern Colorado offices. The bank’s trust department manages an additional $65 million in assets. Cache Bank also has a partnership with Smith Barney that covers another $120 million in investments.

Smith Barney will also have an office in the new Denver branch, to be located in the 410 Building at 17th and Tremont.

Private banking has been a profitable venture for a number of banking companies in the country. The success of private banking recently caused Bank One Corp. to split off its private client division into a standalone unit.

Private banking “earns us several hundreds of million a year in profits, and we believe we can make it much larger,´ said Bank One executive David E. Donavan in a recent article in American Banker magazine.

“It is a growing area,” Ron Phillips, a Colorado State University professor and banking expert, said of the private banking field. “Banks have got to really find their niche. In that sense ? it (Cache Bank’s move) makes sense.”

Cache Bank appears to enter the Denver market with some advantages.

Bateman spent 15 years in the downtown Denver market before he took over Cache Bank. The bank has hired Dick Hall, previously with Compass Bank, to run the Denver office and serve as Cache Bank’s southern region president.

Cache Bank’s board of directors also features a lineup of well-connected business executives, including Jerry Morgensen, CEO of Hensel Phelps Construction Co., and William Bensler, CEO of Flood & Peterson Insurance.

Cache Bank’s financial footing also seems suited for the move. Regulators require a bank’s equity capital to be at least 6 percent of assets. “We’re running at 13.5,” Bateman said.

The new office will open with six employees, raising the company’s staff to 53.

“I do think there’s a need for a highly service-oriented commercial bank that will provide trust services and investment services with a high-touch approach,” Bateman said.

Cache Bank has acquired state and federal approvals for the new branch. Bateman plans to launch the bank with about $1 million in deposits and $3 million in loans, which are now warehoused at the main Greeley bank.

“We hope that bank would contribute somewhere in the range of $20 million and $25 million assets and $15 to $20 million liabilities over the next 18 months,” he said. “We would liken it to the growth we’ve seen in our Fort Collins operations, which has been about $1 million loans and $400,000 to $500,000 in deposits (per month).”

Cache Bank opened a downtown Fort Collins branch in January 2002 at the corner of Mountain and College avenues. The company has two offices in Greeley.

The company is also looking beyond Denver for future expansion.

“We are constantly looking for other market opportunities,” Bateman said. “And they would certainly be along the I-25 corridor and principally in Colorado.”

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