Banking & Finance  January 20, 2006

Where do banks branch? Where the customers go

Ah, there’s nothing like the luscious smell of homemade bread. Unless, of course, it wafts through your office day in and day out, six days a week.

Gerard Nalezny, CEO of Fort Collins Commerce Bank, worked in the restaurant business before getting into banking, so he knows that even good aromas become tiresome after time. So when his new bank set up shop next to Panera Bread in central Fort Collins, he made sure the walls were sealed as tight as possible.

A bank adjacent to a bakery? A pizza parlor sending out deliveries while bank customers next door are making deposits? A quick stop for a latte and a loan?

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What’s going on? Business as usual.

But there’s a little more to it than that.

Banks are a retail service, said Bob Hinderaker, CEO/president of Signature Bank in Windsor and soon Greeley. So, in many cases, it makes sense to be where the customers are. And as bank branches proliferate and technology increases, there is no longer the need for all functions – bookkeeping, IT and the like – under each and every roof.

This makes locating in smaller spaces possible. And having neighbors simply makes good business sense, Northern Colorado bankers say.

Signature Bank, under construction in the southeast corner of the Water Valley development, sold the top floor of the new building to the law firm of Lind, Lawrence and Ottenhoff. “Our original plan was to build and lease space. We were looking for tenants that would add synergism to the building,” Hinderaker said.

Instead, they received a contact about a law firm interested in relocating from downtown Greeley. “We started discussions and found they wanted to own their building.”

Location follows niche

Hinderaker said a bank’s niche determines location. “Banks look for something that would match their overall business plan and market plan they’re looking at. With this proliferation of banking, many banks are going into areas with lower overhead and higher visibility.”

Such is the case with Fort Collins Commerce Bank, which opened seven months ago on South College Avenue in space previously used by Palmer Flowers. The central location was ideal, a quick shot from just about anywhere in the city. And neighbors?

“In terms of neighbors, banking is no more or less than any other retail business,” Nalezny said. “We’re primarily a service business, like any other retailer. If we put ourselves in high-traffic areas with good accessibility, that’s an advantage.”

Nalezny said he is sure Fort Collins Commerce Bank has gained customers from his neighbor Panera Bread. Within walking distance, he said, people can visit the bank, an accountant and stop in for lunch or dinner at Panera, then grab a Starbucks and a bouquet of flowers from Palmer’s new location.

It’s all part of the package of convenience for customers, he said. “It can only be good.”

Advantage Bank’s location between Dazbog Coffee and Domino’s Pizza in southeast Fort Collins just “kinda happened,´ said Branch President John Meyer. When the bank was shopping for a new location, it found a building already under construction – with a McMurray Avenue address and great visibility from Harmony Road – and approved for multiple tenants.

Meyer said he, too, believes the tenants help generate traffic for one another. “Our newest neighbor is Title America. That’s the type of business that is consistent with what we do and will provide additional synergies.” But, Meyer added, he doesn’t want to appear “too tied with Title America because we do business with many other title companies.”

He added, “I wouldn’t be surprised if we see more like this. Considering the cost factor (of new construction), it’s more efficient to do things like this; we accomplish as much with our location as a stand-alone (bank). It’s not a detriment or a negative. I would not be surprised to see more.”

Customer convenience

And then there are banks that take retail into their own hands. At First National Bank of Severance, you can stop in for a cup of joe and take care of bank business all at the same time. In fact, the bank has made it hard not to do so: An inside door connects the bank and The Coffee Vault, also owned by the bank.

“We thought of it as a good complementary business,´ said Branch President Scott Bailey. “A coffee shop is a good logical fit. A lot of people come into the bank and walk right through to the coffee shop.” Many caffeine addicts hit The Coffee Vault without venturing into the bank, too.

The shared space, however, “has brought new customers. It’s taken a little time for people to realize we do in fact have a coffee shop on the premises. It’s hard to see,” from County Road 74, the main thoroughfare through the growing community, he said.

Ah, there’s nothing like the luscious smell of homemade bread. Unless, of course, it wafts through your office day in and day out, six days a week.

Gerard Nalezny, CEO of Fort Collins Commerce Bank, worked in the restaurant business before getting into banking, so he knows that even good aromas become tiresome after time. So when his new bank set up shop next to Panera Bread in central Fort Collins, he made sure the walls were sealed as tight as possible.

A bank adjacent to a bakery? A pizza parlor sending out deliveries while bank customers next door are making deposits?…

Christopher Wood
Christopher Wood is editor and publisher of BizWest, a regional business journal covering Boulder, Broomfield, Larimer and Weld counties. Wood co-founded the Northern Colorado Business Report in 1995 and served as publisher of the Boulder County Business Report until the two publications were merged to form BizWest in 2014. From 1990 to 1995, Wood served as reporter and managing editor of the Denver Business Journal. He is a Marine Corps veteran and a graduate of the University of Colorado Boulder. He has won numerous awards from the Colorado Press Association, Society of Professional Journalists and the Alliance of Area Business Publishers.
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