John Busby joins Fort Collins Commerce Bank

Competition keeps certificate of deposit rates high and loan rates competitive in Northern Colorado. It also makes waves in the finite talent pool.

The most recent ripple is John Busby’s move to become a partner at Fort Collins Commerce Bank. Busby became the president of the Horizon Banks branch in Loveland when the location opened in mid-2004. He was no stranger to the Northern Colorado banking market at the time, though, having spent many years prior to that as regional president for Key Bank.

“I’m excited to form a strategic partnership with Mark (Kross) and Gerard (Nalezny),” Busby said of Fort Collins Commerce Bank’s executives.

In his role at Commerce Bank, Busby will explore potential expansion opportunities.

He added that he looks forward to continuing to assist his current customers with their banking needs.

“I’m impressed with the operating model of Fort Collins Commerce Bank,” he said.

The bank maintains a local board of directors and is capitalized by local shareholders. It is part of the Capitol Bancorp Ltd. system, a holding company for almost 50 community banks across the country. It offers startup and operating system assistance to locally chartered banks, which run autonomously in their areas.

As for Horizon Bank, there won’t be much change.

“There’s not going to be any large change or turnover,´ said Dan Allen, Horizon chairman and CEO.

Tim Merkle, who served as vice president of the Loveland branch since its opening, assumed the president role upon Busby’s departure.

Allen said that there weren’t any specific plans to hire a vice president for the branch to replace Merkle, but that the position wouldn’t necessarily remain vacant.

“We’re always looking for quality, trained bankers for any of our locations,” he said.

Allen added that the bank is also always looking for quality locations. Right now, Loveland is the northernmost branch of the Limon-based Horizon Banks system. Two branches are close to opening in Denver.

“We continue to look for expansion opportunities in Northern Colorado,” Allen said.

Banking profile looks good

Good news came out recently for banks looking to expand, and for the industry in general.

The Federal Deposit Insurance Corp. recently released its banking profile for the second quarter, reporting record net income and extraordinary assets growth. The industry’s second quarter total net income of $3.8 billion was $1.2 billion more than the previous record, set in the first quarter.

Year-over-year, the second quarter net income was up 10.9 percent. The FDIC report cites higher non-interest income and net interest income as factors for the record profitability. The gains were large enough to outweigh lower gains on sales of securities and other assets, which was down $2 billion or 87.8 percent, and higher non-interest expenses, which were up $3.3 billion or 4 percent.

Of some concern is the continued increase in non-current loans, those that are 90 days or more past due or in non-accrual status. In the second quarter, non-current construction and development loans increased by 10.8 percent or $215 million. It is the second consecutive quarter in which non-current construction and development loans increased.

Commercial and industrial loans also saw an increase in the amount non-current. The 2 percent growth of $160 million in non-current loans represents the first time in 15 quarters that the sector had an increase, the report stated.

Despite increased actual non-currents, the industry’s non-current loan rate declined by one basis point to .7 percent – putting it at the lowest level since institutions began reporting total non-current loan data 23 year ago. Also, non-currents in the aforementioned sectors were likely offset by a $397 million decline in non-current residential mortgages.

Industry-wide assets grew by more than $1 trillion during the past year. The 10 percent jump from second quarter 2005 is the first time the FDIC recorded such a large dollar increase during a 12-month period. The report indicated that loans and leases represented two-thirds of the second quarter asset increase.

Even as local bankers become “cautiously optimistic” about the health of the industry, the national trends show that growth is holding on – a good sign for those who are still chugging forward and looking to expand.

Kristen S. Bastian covers the banking industry for the Northern Colorado Business Report. She can be reached at (970) 221-5400, ext. 219 or [email protected].

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