Independent Bank will acquire Guaranty Bancorp for $1 billion. Pictured is the Guaranty branch at 1550 E. Harmony Road in Fort Collins. BizWest/Chad Collins

Head-to-head competition? Bank on it

Next time you’re traveling along a three-mile stretch of Fort Collins’ busy Harmony Road from College Avenue east to Ziegler Road, count the number of financial institutions. If your eyes are sharp, you might spot at least 17 — with several other branch banks and credit unions lurking just off the main artery.

Same goes for Canyon Boulevard in Boulder. In just eight blocks of that east-west trafficway between Ninth and 17th streets, you’re likely to count at least 11 — with several more just a block or two to the north.

So many were locating on Boulder’s Pearl Street, two blocks north of Canyon, that the city council last February approved a temporary ban on new ground-floor banks in an effort to protect the retail vibrancy of the street and its pedestrian mall.

Matt Applebaum

“I don’t have anything against banks,” Councilor Matt Appelbaum said at the time, but “they don’t attract people, they don’t attract tourists and they’re certainly not open in the evening. They’re just dead spaces. … The point is to keep Pearl Street an active pedestrian place with ground-floor uses that are open in the evening. That’s what’s so critical.”

The 10-block stretch of Pearl designated in the ordinance included five ground-floor banks, including a Capital One location across the street from a Wells Fargo.

For decades, banks deciding where to locate new branches have either adopted a strategy of “spatial avoidance” — locating away from competitors to have more of a monopoly on an area — or “clustering,” in which major banks locate near other banks to negate their competitors’ advantage, as they have on Harmony and Canyon.

According to Jay Champion, chief operating officer of Elevations Credit Union, and Mark Driscoll, First National Bank’s Colorado market president, clusters simply reflect where the customers are.

Mark Driscoll

“They’ll often bank on what we call their ‘go home side’ so banks locate along those commuter routes,” said Driscoll. “Banks, particularly consumer banks, are dependent on their target market. You’ll have the grocery store, the dry cleaner and the bank. We have access to a lot more information about demographics and neighborhoods than we used to, and the science of locating branches is an important part of our decisions.”

“Most institutions want to put branches where they have the most access to customers,” Champion said. “You want to have good ingress and egress, and where people want to go anyway. It’s the same reason grocery stores locate on main thoroughfares; we all want to be in the same spots.”

Elevations “will continue to grow at a measured pace,” he said, noting that a new Elevations branch will open in mid-January at 2025 S. College Ave. in Fort Collins. “We’ll branch cautiously. You don’t have to be in every neighborhood in a market but you still have to be convenient to those customers.”

And the branches keep coming.

The Colorado Division of Banking has given Bank of Colorado the green light to open its 44th and 45th branches: on Feb. 15 in the historic Woolworth Building at 107 N. College Ave. in Old Town Fort Collins and in late January or early February at 435 S. Fourth Ave., Unit A, in Brighton. Driscoll said First National will open a branch on Table Mesa Drive in Boulder near the end of February.

Denver-based ANB Bank has submitted plans to the city of Loveland for a new branch at 808 W. Eisenhower Blvd. Just to the east, the square downtown block bordered by Sixth and Seventh streets and Lincoln and Cleveland Avenues contains a Key Bank, a Chase Bank and a Bank of the West.

“The decision about opening a new branch is always big because it’s a big investment of capital and people,” Driscoll said.

The proliferation of new branches might seem counterintuitive given the rise in online transactions. But then, many of these aren’t your father’s branch banks.

That new Capital One location at 1247 Pearl St. in Boulder is a hybrid bank and café, with baristas as well as tellers. Bank of Colorado’s Old Town Fort Collins branch will have two ATM Live kiosks where customers can push a button to communicate with a live teller.

Elevations in 2014 introduced its “Branch 2.0” model, with “transaction pods” replacing teller lines for more personalized service. Their new branches also look and feel like a Colorado craft-brew taproom or coffee shop with wood accents made of beetle-killed pine, which  makes the branch feel less “like a cold uninviting place,” Champion said. “And when you’re in an office, you sit next to the banker instead of across the desk.”

Champion said he sees almost every bank making some sort of transition. “Some are eliminating tellers and some are incorporating more tellers.

“What we’re seeing as an industry is that more of the routine day-to-day transactions — depositing a check, transferring money, paying someone else — are done self-service now,” Champion said. “The branches are evolving into advice, counseling and product centers for borrowing and wealth management. Customers might do research online and even start applying, but to completely fulfill it, they’ll still come to a branch. They’ll still come to pick up their debit card or talk to an adviser about a mortgage. The branch needs to be a consultative center because more people still want that professional advice.”

“People still appreciate the branch when they need certain transactions,” Driscoll said, “but those branches are different than they were 20 years ago. The buildings tend to be smaller, laid out differently, to serve people who need to get advice and be able to talk about their financial needs.”

On a per-member basis, Champion said, branch transactions have been decreasing 5 percent a year — but growth in membership has outpaced it. Driscoll added that “we had a big surge in new branches after the recession, but you’ll see that slow down. Teller transactions are down, but for us they have leveled off.”

As for location, Champion said, “you no longer want to be on every corner, but you still want to be on the right corner.”

Next time you’re traveling along a three-mile stretch of Fort Collins’ busy Harmony Road from College Avenue east to Ziegler Road, count the number of financial institutions. If your eyes are sharp, you might spot at least 17 — with several other branch banks and credit unions lurking just off the main artery.

Same goes for Canyon Boulevard in Boulder. In just eight blocks of that east-west trafficway between Ninth and 17th streets, you’re likely to count at least 11 — with several more just a block or two to the north.

So many were locating on Boulder’s Pearl Street, two blocks north of Canyon, that the city council last February approved a temporary ban on new ground-floor banks in an effort to protect the retail vibrancy of the street and its pedestrian mall.

Matt Applebaum

“I don’t have anything against banks,” Councilor Matt Appelbaum said at the time, but “they don’t attract people, they don’t attract tourists and they’re certainly not open in the evening. They’re just dead spaces. … The point is to keep Pearl Street an active pedestrian place with ground-floor uses that are open in the evening. That’s what’s so critical.”

The 10-block stretch of Pearl designated in the ordinance included five ground-floor banks, including a Capital One location across the street from a Wells Fargo.

For decades, banks deciding where…