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Bank consolidation: A trend to buck or embrace?

KIMBERLY NICOLETTI
HCBR

Since 2000, three local banks have consolidated. Whether that’s for better or worse depends upon whom you ask.

In general, privately owned banks boast personal and efficient service, while bigger institutions pride themselves on expansive product lines. And, of course, shareholders support consolidations when they’re financially lucrative.

The latest consolidation took place when U.S. Bank acquired WestStar in September and made the conversion on Dec. 9. The bank worked hard to maintain existing positions, cutting less than 10 percent of its staff, and it educated customers and employees to create a smooth transition. Dan Godec, outgoing president of the Colorado Mountain Region of U.S. Bank, saw a 15 percent to 20 percent increase in lobby traffic, most likely due to name recognition, he said.



“I can’t say it’s not been without some customer issues, but U.S. Bank has done everything possible to resolve those issues,” Godec said.

Alpine Bank, which is locally owned, sees an increase in its customers after a local bank consolidation, said Inger McDonald, Alpine customer service representative in Dillon. She has heard people complain about different fee structures, account number transfers and other changes when a new bank takes over their previous one.

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When Bank of the West acquired Community First National Bank in 2004, it only experienced a 5 percent decrease in its number of customers. John Stafford, vice president of corporate communications, attributes the loss to a variety of reasons, ranging from customers moving, to others preferring locally owned banks, “the same way some people shop at the locally owned hardware store instead of ACE.”

“The big thing that differentiates one consolidation from another is the quality of execution,” Stafford said. “(Ours) is a pretty orderly process, but that’s not true of all bank consolidations.”

Alpine Banks has vowed to remain independent, because it feels it serves its customers best that way. Bob Young, chairman, has been at Alpine for more than 30 years and several senior managers have worked at Alpine for more than 20 years.



The longevity affords bankers to build long-term relationships with customers and set a consistent direction for the bank, according to its website .

Each branch has autonomy that allows employees to use wise judgment when faced with special customer service cases, such as waiving a fee for a responsible, long-term customer.

“Everyone from the branch manager to the tellers are empowered to make decisions, and that empowers our customers,” McDonald said. “It’s a very local attitude and way of thinking.”

Jeff Campeau, president of 1stBank in Silverthorne and Dillon, said one of the main advantages of being privately owned involves the ability to create longer-term strategies.

“We don’t have short-term or quarterly earnings pressures by management or by Wall Street analysts, so it allows us to think more long term,” Campeau said. “Short-term pressures can oftentimes force changes in product lines or service levels (such as employee cuts). We offer a consistency of product, so the customer knows what to expect.”

While some people prefer locally owned banks, Susan Price, personal banker at Wells Fargo in Frisco, has seen people switch to Wells Fargo due to more services.

She said interest rates on loans might be better at larger institutions. Stafford said larger banks are able to better leverage technology, such as computer systems and software. An example of how that helps customers is free online banking.

Godec said U.S. Banks offers a wide variety of services that WestStar didn’t, such as remote capture deposits, which allow merchants to electronically scan checks and automatically deposit the amounts into their accounts. In addition, since U.S. Bank is the sixth largest in the nation, it allows customers to bank while traveling.

In the end, it all comes down to personal choice. A large privately held company could effectively compete with large corporations by offering a broad range of products, and larger institutions can add personal touches to their services.

Alpine Bank: privately held, est. 1973

American National Bank: privately held, est. 1990 when Sturm Financial Group bought four banks (Mesa National in Grand Junction, Cherry Creek, Western National in Colorado Springs and American National in Wyoming. Owners remain the same; only the names of the three banks have changed.)

Bank of the West: acquired Community First National Bank in 2004

Colorado Business Bank: acquired Women’s Bank in 1994

Community Banks of Colorado: privately held, est. 1988

1stBank: privately held, est. 1963

Millennium Bank: privately held, est. 2001

Wells Fargo: acquired Norwest Bank in 2000

U.S. Bank: acquired WestStar Bank (which was formerly Snow Bank) in 2006


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