|
||||
|
November 6, 2001 By Janelle Holden Montezuma County isn’t lacking for banks. With 15 banking locations in the county, and eight different banks, some might say the county is "overbanked." "It’s pretty close to a zero-sum game," admits Slim McWilliams, president of Citizens State Bank. "There is only so much business around." "Banks in the area are growing, but I wonder how thin we can cut the pie," said Bruce Weber, president of Vectra Bank in Cortez. Despite a finite pie, new banks and branches are moving here. Dolores State Bank recently opened a new branch in Cortez — a move bank President Ed Merritt says wasn’t targeted at gaining a new market, but serving existing customers. "This isn’t a new market for us, because the majority of our customers actually live in Cortez or around this area. So, for us, this was just a move to help our present customers," said Merritt. Safeway’s decision to include banking services in its new Cortez store also opened up new options for area bankers this spring. Partnered with Amicus FSB, an Internet-based bank, Safeway Select Bank offers customers computer banking in pavilion areas within Safeway stores. "It’s different than a traditional bank in that we don’t have the tellers, but what we do have is the physical in-store presence that other Internet banks don’t have," explained Chuck Dimascio, vice president of Colorado sales for Safeway Select Bank. "There is a customer associate or two in every store, so that if somebody does want a human presence to answer questions there’s somebody there to help them. But the most important thing is that they can bank when and where they want, whether it’s in the grocery store or calling our toll-free number." In order to sweeten the pie, so to speak, for customers wary of switching from a more traditional bank, Safeway offers 3.25 percent interest rates on savings accounts of $100 or more, no-fee services, and $35 in free groceries for new customers. Internet banking hasn’t really caught on in the area, according to McWilliams. Citizens Bank did a Internet-banking survey and found that less than 10 percent of the population uses Internet banking or is even interested in it. "Banking is a relationship more than a transaction. When I buy groceries, it’s a transaction, when I open a bank account it’s a relationship," explained McWilliams, who theorizes that consumers and businesses choose banks more on the basis of a personal recommendation or relationship than any other factor. "Bank products aren’t highly different from one bank to another," said McWilliams. "Any bank you go into will have a checking account, a savings account, a certificate of deposit, car loans, and house loans. They may vary on the details, but as much as we like to think otherwise I don’t believe people go to a bank because they have a checking account. A checking account is a checking account." And now that consumers have the assurance of the Federal Deposit Insurance Corporation backing their deposits, few worry about losing their money to bank failures. Bank-rating agencies can tell the consumer, based on a star or grading system, how a bank is doing in relation to other banks, and consumers can also find quarterly statements of bank conditions on the FDIC’s website. The statements list the bank’s total assets and liabilities, deposits, loans, and other data. "The more capital the bank has, the stronger it is, and more able to withstand down times," explained Merritt. "A lot of times people get hung up too much on totals, when really that doesn’t tell the whole picture. If you have a lot of loans that go bad on you, it doesn’t matter what the numbers are, you may not make it if the economy goes down." Banks, in general, don’t close down like other failed businesses, and when they do, their assets are often sold to another bank. "Banks aren’t like restaurants or sporting-goods stores, which go out of business very quickly. When you have too many it’s usually a long — and for the banks — painful adjustment. And I think that’s what we’re going to see here — there will ultimately be fewer banks," said McWilliams. With the Federal Reserve lowering interest rates to help keep the economy from diving even further into a recession, banks’ profits are also taking a dip. "It squeezes earnings for banks," admits McWilliams, "but the other side of that is — that to a certain degree the quality of the loans is slightly increased, because many of the borrowers are paying lower interest rates. If you’re paying lower interest rates, your payments are lower, and that makes it less likely that you’re going to default on the loan." Both McWilliams and Merritt said that keeping a locally owned bank in business is easier than it might be for a multinational because decisions are made locally, and the focus remains local. The Southwest Colorado Federal Credit Union, whose profits are divided between the bank’s members, says it is easier for them to weather an economic storm than other banks. "We don’t have to worry about satisfying our stockholders or shareholders in another town," said Duane Dale, the branch manager. "We don’t have to send all the money we make to Denver or to Salt Lake City." However, Vectra Bank Colorado, the big player on the block, says its decisions are made locally too. "Obviously, when you have a larger bank a lot of products have to be similar, but the automatic perception that local people don’t make the decisions is false. Decision-making is done locally," says Weber. Vectra Bank is a $2.2 billion bank, a subsidiary of Zions Bancorporation, a $25 billion bank holding company. Weber explained that the bank has a specific market approach for each of the three markets it serves in Colorado — rural, urban, and resort communities. Weber said local banks will feel the downturn in tourism that is likely to result from a recessed economy, but the ongoing migration to the county will help. "I still think that there is enough appeal to our rural life and our values that we will continue to see people moving in here," said Weber.
|
||||
|
Copyright © 2001 the Cortez
Journal. All rights reserved. |
||||
