Local potential attracts Kansas bankers

Northern Colorado already has four de novo banks either on the drawing board or already opened this year, but a Kansas group says they are sure there is room for one more.

Officials at bank holding company Stockton Bancshares Inc. based in Stockton, Kan., are scouting for talent and locations in Northern Colorado. They are looking specifically in the Fort Collins and Loveland areas, but are more interested in finding a strong team than a precise location.

Stockton Bancshares operates three banking subsidiaries in Kansas – Stockton National Bank in Stockton, Farmers and Merchants Bank of Hall City and Trego-WaKeeney State Bank. In all, the holding company claims $160 million in assets and operates four branches.

Stockton Bancshares would be a comparatively small fish in the Northern Colorado banking pond. Only about half of the banks chartered in the region hold fewer assets than the Stockton holding company. But it’s the growth opportunity here that is attractive to James Berkley, Stockton National Bank’s chairman and president.

“We are pretty familiar with the Colorado area,” he said.

Since the early 1990s, Stockton Bank has participated in loans with banks on projects in Colorado. One of its first was on a health-care facility construction project in Boulder County. Since then, Stockton has participated on other loans in commercial and home construction, often with a smaller Denver-based bank.

107 years old

As a portion of the bank’s history, its Colorado presence has been just a wink in time. The Stockton Bank charter dates back to 1900 when the bank opened as Exchange State Bank. That bank became the National State Bank of Stockton, which failed in 1930. At that time it was purchased by the Stockton National Bank. From 1956 to 1961, Jack Berkley purchased shares of the bank and finally gained controlling interest, and it’s been largely a family affair ever since.

Because the family is heavily vested in its current holdings, the company recently formed a de novo bank in Wichita. Jonathan Berkley, James’ son who also works at the bank, explained that there was interest in expansion, but branching wouldn’t have been incentive enough to pull in the right talent. Instead, the Berkleys formed RelianzBank and Relianze Bancshares Inc. in which its top brass – pulled from $1.2 billion Commerce Bank in Wichita – would have part ownership.

Seeking ‘right bankers’

And that’s the model the Berkleys hope to follow in Colorado, starting with finding the right banker to lead the effort.

“We would not do the de novo if we can’t find local talent in the market,” James Berkley said. “We do think we can find those folks, based on what we can offer them.”

What the Berkley family wants to offer is part ownership and operational autonomy. They anticipate being on the board of directors at the bank and involved in loan committee decisions but not having a hand in managing the operations.

Finding the right leader, and team, to run the bank is so important that it will guide the Berkleys’ decision as to where to open a bank. The location will depend on where the local banker feels would be the best spot, the Berkleys explained.

“If we can find bankers in both (Loveland and Fort Collins), we would do a location in both,” James Berkley said.

Crowded market

The Stockton bankers have their work cut out for them. They plan to enter a county that will have more than 30 institutions operating about 90 branches in the market. But the Berkleys feel that there is more growth potential in Northern Colorado than in Kansas or in other areas of Colorado.

“We’ve historically been an ag lender here in Kansas,” Jonathan Berkley said.

While the Berkleys said they would entertain the idea of ag lending for the Colorado bank, that is not really where it will be focused. Instead, commercial lending would probably be the bank’s sweet spot, again depending on whom they hire to head up the bank and where that person’s expertise lies.

“The very first thing is can we find a local person who is very good and knows the local market,” James Berkley said.

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