New Frontier expands frontier to Longmont

Competition in the Weld banking market is fierce, there’s no doubt. But has the county finally reached its breaking point?

Several local banks have taken measures to expand their reach out of the Northern Colorado market. The most recent addition to that list is a bank known for its tremendous growth and cautious branching philosophy.

Greeley-based New Frontier Bank has received approval to establish a Longmont branch.

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A new frontier

The bank has grown faster than any other in the region. Less than a year after New Frontier was founded in December 1998, it captured a little more than 1 percent of the deposit market share in Weld County. By the next year, the deposits increased by 250 percent and vaulted the bank from the No. 17 market-share spot to No. 7.

In June, New Frontier had $523 million in deposits and ranked first – at 16.28 percent of deposit market share – in the metro area ranked first in the country for population and bank branch growth.

The Colorado Division of Banking approved New Frontier’s Longmont branch on Dec. 27. Technically, the branch can open 30 days after approval, according to state bank commissioner Richard Fulkerson.

But New Frontier doesn’t envision opening that soon. As of Jan. 11, the bank had yet to officially close the deal on the Longmont building – a former Golden Corral restaurant at 2315 Main St.

The next step is to begin the process of receiving city approval, said Joe Tennensen, senior vice president of cultural enhancement for the bank. He added that the building will require extensive renovations, including adding a drive-through.

Renovating an existing building made more sense for the bank than building new.

“The location was good, that’s the main thing,” Tennensen said. “It’s in an area where a lot of renovation is going on.”

The building is a few blocks south of Colorado Highway 66, where a new Wal-Mart Super Center is being built.

Careful branching

Because land is not only hard to find, but also expensive, Tennensen said the existing building was a good fit for the bank. Expense is one of the reasons that New Frontier hasn’t done much branching, he explained.

Since its founding in December 1998, the bank was opened only one branch – on Main Street in Windsor. That branch opened in 2001, when there were only five banks in town. Now, Windsor has 10 banks, and New Frontier tops the deposit market share.

The rapid expansion of banks in Windsor is an example of one of the other reasons that New Frontier hasn’t branched more: There are too many branches already, Tennensen explained.

“We kept looking around and didn’t see anything,” he said. Larimer and Weld counties appear over-banked.

Longmont has 20 banking institutions with 32 offices. By comparison, Greeley’s market isn’t much different – 20 institutions with 34 offices as of June 30.

New Frontier saw an opportunity in Longmont as a number of larger institutions picked up smaller ones in the market.

However, that doesn’t mean competition is cooling off in the city.

Down south

“We’re seeing strong, stable growth in Longmont,´ said Dan Allen, chairman and CEO of Horizon Banks. “We’ve been here for over five and a half years and have been very successful.”

Horizon Banks holds the top spot in market share in Longmont, with $245.5 million, two branches and plans for another one at 17th Avenue and Hover Street. Horizon also has a branch in Loveland.

Another reason New Frontier avoided branching was its sensitivity to the company’s culture.

“We feel our culture is one of the keys to our success,” Tennensen said. “It’s more difficult to maintain that culture with distance.”

The key to maintaining the New Frontier experience, Tennensen said, is to have the right management. New Frontier lender Terry Seelhoff, who has been with the company about four years and has a background in agriculture, will head the Longmont office.

“He’s really a model leader for the company culture,” Tennensen said.

Diversity drift

New Frontier isn’t the first to look outside of Northern Colorado. Several Northern Colorado banks are looking south and west for opportunities.

Greeley-based Bank of Choice Holding made and announced three acquisitions in less than a year and a half.

The company’s first acquisition, announced in late 2004, took it out to the Western Slope where Palisades National Bank operates two branches. Plans for physical expansion have not yet been laid out for the $43.7 million bank.

On Nov. 4, Bank of Choice Holding jumped into the Denver market, closing on its acquisition for Aurora-based Colonial Bank. For $32.5 million, Bank of Choice picked up the $190 million bank that operates seven branches stretching as far south as Douglas and Elbert counties.

Additionally, the company inked a deal in November to buy First National Bank of Arvada.

Bank of Choice isn’t alone in its statewide wanderings. Since Centennial Bank Holdings Inc. was acquired in 2004 by a group led by dealmaker John Eggemeyer, the company has made numerous acquisitions outside of the Northern Colorado market and registered its stock for public trade.

Centennial has made no secret of its desire to expand in the Denver area. Its acquisitions include Denver-based Guaranty Bank and Trust Co., Wheat Ridge-based Foothills Bank and First National Bank of Strasburg.

Centennial has even officially changed its headquarters to Denver, although a company official said that the company still occupies its offices in Fort Collins.