Bank mergers open door to market-share shifts
Recent bank mergers and acquisitions in Colorado have opened the door for other Colorado banks to gain market share, according to Shawn Osthoff, president of Bank of Colorado in Fort Collins, especially in the Boulder Valley and Northern Colorado.
Anytime there are mergers and acquisitions in the banking industry, some customers are going to get disgruntled and switch banks and that is what happened this year, said Osthoff, with some of Colorado’s smallest banks gaining market share since June 30 last year.
Jenifer Waller, chief operating officer for the Colorado Bankers Association, said that Colorado saw quite a bit of merger and acquisition activity in the past year but most of it was among midsize banks, therefore the deposits for those institutions stayed in the mid-size institution range.
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“On a very positive note, overall, most of the mergers and acquisitions we’ve seen, the surviving entity retained a significant portion of the existing staff and are working to keep locations open. They have to do some consolidation but we’ve seen banks really working to minimize any disruption,” she said.
In January, McKinney, Texas-based Independent Bank, now Independent Financial, completed its acquisition of Guaranty Bancorp, which had 32 branches along the Colorado Front Range. Before the merger, Independent Bank had a 0.19 percent market share in Boulder, Broomfield, Larimer and Weld counties and Guaranty Bancorp had a 6.47 percent market share. In 2019, the combined entity’s market share in the area dropped slightly to 6.37 percent. The merger resulted in the closure of four branch locations in Fort Collins, Greeley and Loveland.
In October 2018, BOK Financial Corp. of Tulsa, Oklahoma, completed its acquisition of CoBiz Financial Inc., a commercial bank with a presence in both Colorado and Arizona. BOK Financial Corp. had a 0.11 percent market share last year in the Boulder Valley and Northern Colorado and CoBiz Financial had a 1.50 percent market share. The combined entity has a 1.05 percent market share in the four-county area in 2019.
In Boulder, Broomfield, Larimer and Weld counties, FirstBank Holding Co. and Bank of Colorado both saw a boost in their market share in 2019, with FirstBank jumping from 10.54 percent in 2018 to 11.01 percent in 2019. Bank of Colorado’s market share rose from 4.73 percent to 5.25 percent during the same time frame, according to the Federal Deposit Insurance Corp.
Other banks with holdings in Boulder and Northern Colorado saw their market shares increase as well, including Great Western Bank, Bank of the West, AMG National Trust Bank, Vectra Bank Colorado, Bank of America, KeyBank, First Western Trust Bank and BOK Financial Corp.
The three largest banks in the area by deposits — Wells Fargo Bank, JPMorgan Chase Bank and First National Bank of Omaha — all lost a bit of market share in the area in 2019 compared with 2018.
Ron Tilton, president of FirstBank, said that while the state saw 3 percent deposit growth overall from the first half of 2018 to the first half of 2019, FirstBank had nearly 5 percent deposit growth year over year.
FirstBank, which is the largest Colorado-based bank in the state, reclaimed its No. 2 spot in Colorado behind Wells Fargo Bank and just ahead of U.S. Bank based on deposits. Statewide, FirstBank had $13.34 billion in deposits behind Wells Fargo’s $31.98 billion in deposits. In the Boulder Valley and Northern Colorado, FirstBank recorded $2.76 billion in deposits as of June 30, 2019, compared to $2.48 billion for the same period in 2018.
And although its branch numbers have stayed around 99 in the state for the past couple of years, the key to FirstBank’s success in Colorado as a whole and the Boulder Valley and Northern Colorado is that it pays attention to traffic patterns around its existing branches to see where customers are visiting physical branches and how they access the bank.
“One of our strategies is to meet our clients where they want to bank,” Tilton said. That means a combination of both online banking and physical locations.
“If a branch is becoming very slow we will consider making a change like consolidating it with a branch nearby. We are always looking for new branches,” he said. In the last year, FirstBank closed 12 branches and opened eight others.
FirstBank opened a branch in old town Fort Collins a few years ago and another in downtown Boulder near the Pearl Street mall.
“We look for how traffic patterns flow, sites and opportunities,” he said.
Tilton believes there is much more room for growth in the Boulder Valley and Northern Colorado because of key retail areas that are emerging. Loveland and Greeley are also attractive locations because of development taking place along I-25 and Highway 34.
Colorado’s banking industry continues to be very competitive because of the uptick in construction, development and business expansion in those areas, “which is great news for all the banks,” said Bank of Colorado’s Osthoff.
Bank of Colorado saw its local deposits increase 15.5 percent from $1.11 billion in the first half of 2018 to $1.28 billion in the first half of 2019.
