Bank board members bring expertise, business

WINDSOR — Northern Colorado?s newest bank board of directors is ready to start directing, but they?ll have to wait until the bank ? Signature Bank in Windsor ? receives formal approval from the Federal Deposit Insurance Corporation.
Five men ? Water Valley developer Martin Lind, banker Robert Hinderaker, attorney Russell Sanford, civil engineer Mike Ketterling and Brian Niess, manager of Universal Forest Products in Windsor ? stand ready to help guide the new bank into existence and, hopefully, profitability.
A major milestone was reached in May when the Colorado State Banking Board approved Signature?s application for a charter to operate. Richard Fulkerson, Colorado Division of Banking commissioner, said Signature appears to be on track to soon.
?It looks like a pretty clean application,? Fulkerson said.
Like other locally owned banks, Signature is drawing its board of directors from the local community, recruiting those who can add another dimension of strength to the bank?s image as a solid, trustworthy establishment.
?We worked to select people who were leaders in the market we?re operating in, people with experience on other boards and a mixture of backgrounds so we could use their expertise in several areas,? said Hinderaker, a banker for more than 25 years who will serve as Signature?s president.

Rules govern membership
When a new bank is formed, it must also create a board of directors to manage its activities, according to Colorado law. Several specific conditions must be met regarding those directors, including:
? The number of directors shall be not less than three nor more than 25.
? At least three-fourths of the directors must be citizens of the United States.
? At least two-thirds must be residents of Colorado.
? A majority of the directors must reside within 100 miles of the bank?s primary location.
? A director convicted of a felony cannot serve on a bank board, but the board may waive this provision ?if it determines that the particular felony does not jeopardize the person?s ability to act as a director,? according to Part 5 of the Division of Banking rules.
Martin Lind, developer of the Water Valley subdivision in south Windsor where the bank will be located, said finding Signature?s original board members ? who will serve one year and then be eligible for reelection by the bank?s shareholders ? was a task not taken lightly.
?We really worked hard to make sure they?re local owner-operators with a history of being here and planning to be here for a long time and to be a person of honor, and I think that?s what we?ve got,? Lind said.
Don Churchwell, CEO of Home State Bank in Loveland, said his bank?s board of 12 directors were chosen to represent both internal and external dimensions of Home State?s community reputation.
?We look for two or three things,? Churchwell said. ?No. 1, they?re people with a good understanding of business. They?re people of vision, and who have a good understanding of their communities and who are probably successful business people. Integrity, honesty and confidentiality are most important with board members.?
Churchwell said Home State?s board is comprised of members of the Devereaux family ? which purchased the bank in 1970 and created its sister institution, American Bank, in 1974 ? along with Home State banking officers and ?outside? directors external to the bank?s operation.
Home State, which merged with American Bank in 2002, has six branches in Loveland and Fort Collins.

Multiple membership prohibited
Banking commissioner Fulkerson said the Depository Institution Management Interlock Act of 1978 prohibits bank directors from simultaneously serving on the boards of two or more competing banks.
?It just makes sense,? he said. ?As a bank owner you don?t want someone who?s on the board next door.?
However, if the banks are sister institutions as Home State and American once were, that would not be a problem, Fulkerson said.
?If they?re sister banks it?s not uncommon to have board members serve on both,? he said.
In Northern Colorado, for example, Mark Driscoll and Dennis A. O?Neal serve on the boards of directors of sister banks First National Bank in Fort Collins and Union Colony Bank in Greeley. Both banks are owned by Omaha, Neb.-based holding company Lauritzen Corp.
When it comes to multiple bank ownership, Fulkerson said the law generally provides no restrictions.
Fulkerson said it?s been his observation that banks most often seek out board members who can enhance their bottom line.
?They look for someone with business experience and someone who can bring business into the bank,? he said. ?There?s an expectation that they?re not only bringing their own expertise but that they can also bring new business to the bank.?

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