More banks showing interest in region

The banking industry in Boulder and across the Front Range has improved greatly from the bleak years of the financial crisis, as evidenced by the number of new institutions that want to make the area their home.

Bank of America Corp. (NYSE: BAC), which is the second-largest bank in the country with $2.15 trillion in assets, is set to open its first retail branch in Boulder in March, at 1965 28th St. The new location will compete head-to-head with the two largest banks serving the Boulder area: JPMorgan Chase & Co. and Wells Fargo, and several large regional banks, including Salina, Kan.-based Sunflower Bank, which opened in Boulder in October.

The 2,700-square-foot location will offer a full complement of traditional banking services, including tellers, small-business bankers and mortgage officers. It also will offer Merrill Edge Financial Solutions Advisors.

“In general, the industry is doing better,” said Jim Swanson, president of Bank Strategies LLC in Golden. “The number of problem institutions and problem assets out there has gone away and the health of institutions in the state and country in general has certainly improved over several years ago.”

The Colorado Front Range is a choice market for banks just entering the retail market.

“It has an expanding population base with a strong overall economy, and that is attractive to institutions that are not currently in the market and might be limited in the markets they are in,” Swanson said.

Colorado has seen some new entrants into the market recently, including Heartland Bank & Trust Co., which acquired Centennial Bank, and Glacier Bancorp, Inc., which acquired Cañon National Bank, a community bank based in Cañon City.

Swanson said that any bank entering the Front Range market will have a tough time building market share. “They face pretty entrenched competitors with a strong retail presence.”

Based on June 2015 data, three banks control 60 percent of deposits in Boulder County, JPMorgan Chase, FirstBank and Wells Fargo.

“They are strong competitors. It won’t be easy for them,” he said.

That said, one of the attractions of a growing market is that “they don’t need to steal market share in order to grow because the pie is getting bigger,” Swanson said.

Bank of America is also large so it has the “ability to come in and be pretty aggressive with pricing and promotions to ramp up what they are trying to do and build that market share,” he added. “That can help accelerate their growth and their market-share growth where smaller competitors may not be able to do that.”

Bank of America’s acquisition of Merrill Lynch in 2009 also will help it in the market since Merrill Lynch has existing relationships with businesses in the area that BofA can try to leverage through the retail outlets it is building.

Sunflower Bank is another new entrant to the Boulder and Longmont area. Based in Kansas, the 125-year-old regional bank began scouting Colorado locations in the past couple of years because “it is a well-diversified economic state and that’s always attractive from a banking perspective,” said Sunflower’s Northern Colorado regional president Mike Hindman. “You are able to diversify your risk and not get caught up in cyclicality at times.”

Boulder is extremely expensive, with very high real estate costs that precludes most banks from having retail locations on every corner, but “you still have to have a presence with decent facilities to compete,” he said. “People still like one-on-one customer service, so it is a judgment call.”

Sunflower hopes to add additional facilities along the Front Range but Hindman said that it has to grow into that. It already has more than eight locations in Southern Colorado, the Denver metro area and Longmont.

Hindman said Sunflower is not averse to opening other locations in the state.

“There’s markets that are very solid: Broomfield, Fort Collins and Colorado Springs. For us it boils down to people. To move into those markets, we have to make sure we are able to attract the right banker talent. That will determine, in the long run, how fast, and where we go,” Hindman said.

Sunflower Bank offers commercial banking, mortgages and wealth-management services.

“I think it is a fairly stable economy,” he said.

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