Activity picks up in banking sector

In another sign there might be an actual economic recovery in the wings, banks are opening new branches and preparing to begin lending money again. Smaller banks from around the state are planning to expand into Northern Colorado, and local banks have plans to branch outside their established territories.

A new loan production office has already opened its doors in Greeley. Patty Gates, formerly with Bank of Choice, will serve as the vice president of Business Development for the newly formed FMS Bank, an offshoot of Fort Morgan State Bank in Fort Morgan.

Officials at Fort Morgan State Bank saw a great deal of potential in Northern Colorado and decided to expand into the area with the loan office, which could become a full-service deposit and lending institution within 12 months, according to CEO John Sneed.

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The loan office, which will focus on providing residential mortgages initially, will retain servicing of the loans so that customers will continue to deal with a local source as long as they hold the loan, Gates said. In recent years, mortgage loans have been sold to investors almost as soon as the closing papers were signed, leaving consumers to deal with out-of-town financial institutions, so local servicing represents a back-to-basics innovation.

“We’re very confident in it,” Sneed said of the new branch’s ability to withstand current banking conditions. “Additional regulations make it difficult to get into the mortgage business, and we’re already in the mortgage business.”

The loan office, located at 1919 65th Ave., currently employs three people, and plans to add one or two more, Gates said. A grand opening is slated for the beginning of June.

Sneed said Weld County was a good fit for the new branch because it is “a very good market,” with more homes per square mile than Morgan County, where the home office is located. He also said he expects Weld County to grow dramatically in the next five years.

Fort Morgan State Bank will celebrate its 30th year in 2012.

Verus closing branch, Cache merging two

Verus Bank of Commerce also has plans to grow, and is preparing to do so by making a move that seems counterintuitive. It will close its branch at 1432 Mulberry St., Unit B, in Fort Collins in August.

Gerard Nalezny, co-chairman, said that the closure is simply taking advantage of a window of opportunity. He said that the company’s lease on the Mulberry property is set to expire in August, and that the facility lacks desirable features such as a drive-through.

Verus Bank had a strong first quarter 2011, according to Nalenzy, and plans to expand within the next two years.

“Closing an inferior branch facility now positions us better to add branches in the future,” he said. “We’re analyzing a number of markets for expansion opportunities, including Greeley.”

He added that Greeley has an affinity for community banking that Verus Bank, which was formed in February from Larimer Commerce Bank, Loveland Commerce Bank, and Fort Collins Bank of Commerce, finds attractive.

Once the Mulberry branch closes, Verus Bank will have two remaining physical locations, one at 3700 S. College Ave. in Fort Collins, and the other at 102 E. 29th St. in Loveland.

Nalezny also attributed the closure to trends in banking that are moving toward fewer physical branches. “People are using the Internet, remote deposits and mobile banking,” he said.

Cache Bank and Trust will merge two of its Greeley branches effective Aug. 29. All accounts at the downtown branch  at 924 11th St., will be moved to the corporate branch at 4601 20th St., and employees from the downtown branch will be transferred to one of the other offices.

Cache Bank has leased the downtown facility for 15 years, but the bank’s strategy is to operate bank-owned facilities, according to CEO Byron Bateman.

“We are committed to the downtown Greeley area and will continue to look for a sustainable branch which compliments our corporate strategy,” he said in announcing the merger earlier this month.

Wray State branching to Windsor

Also moving into the Northern Colorado market is Wray State Bank, based in Wray, which has filed a notice of intent with the Colorado Division of Banking to open a branch in Windsor. The Windsor State Bank, a full-service office that will make business loans and accept deposits, would be located at 1130 Main St., which formerly housed the now-defunct New Frontier Bank.

The notice of intent was filed in the first part of May, said Wray State Bank President Pete Wilson, and officials are waiting to hear what the regulator has to say on the matter.

“In this regulatory climate, there are things you have to do and take care of,” Wilson said. “But we don’t anticipate any holdup.”

Wray State Bank wants to branch into Northern Colorado to diversify its predominantly agriculture-based loan portfolio. “There is a good mix of industry in (Northern Colorado),” Wilson said.

Wilson estimates that the branch, if approved, will hire five people, and will cater to a market that appreciates smaller, relationship-oriented banking. Like Sneed of Fort Morgan State Bank, Wilson is confident in the branch’s ability to succeed.

“Our strength lies in the fact that we are patient, careful, and methodical,” Wilson said.

He and other officials expect to hear from the state regarding the new branch by May 24, but since the offices would have to be stocked with furniture and computers, there is no certain timeline for when it could open after its approval.