Colorado Springs Plays Key Role for Cheyenne Wells Bank | Business
The small town of Cheyenne Wells remains the headquarters of Eastern Bank, but the bank is leaving an ever-growing footprint in Colorado Springs.
The Springs has become a key market for Bank of Eastern Colorado, accounting for half of the bank’s loans and housing the administrative center for much of its IT and other operations.
Cheyenne Wells Bank opened a branch in Colorado Springs in 2003 to branch out from its largely agricultural base. The bank now owns a Colorado Springs-based investment advisory firm as well as an office building, apartment building and several small residential properties in downtown Colorado Springs. Eastern Colorado Bank is one of 10 banks in rural Colorado and neighboring states that operate branches in the Colorado Springs area.
Eastern Colorado Bank was founded in 1944 in Cheyenne Wells, a town of about 750 people near the Kansas border, by Victor Weed, who had worked in several banks in Arkansas and western Kansas. His sons, Lou and Jim Weed, ran the bank until medical problems forced Jim to scale back his involvement and Lou retired, both in the late 1990s. It was then. that Jim’s son, Greg Weed, took over eastern Colorado. The bank now has assets totaling nearly $ 560 million spread across six branches in Colorado and western Kansas.
âWe started talking in 2001 of an expansion in Colorado Springs as the state went through a severe drought,â said CEO Greg Weed, who runs the bank with his sister, Megan Harmon. âWe were 100% based on agriculture and needed diversification. It was very clear that we had all of our eggs in one basket. Colorado Springs was a logical choice since if you were going to the mall or town, you were going to Colorado Springs. It was very familiar to us. “
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The bank escaped the drought, but the risk of its dependence on farm loans remained, so eastern Colorado opened a small office in the Mountain Shadows area led by Harmon, who is now the director. bank operations. The branch initially operated as the Garden of the Gods Bank and had only four employees with no teller line, ATM, or ATM machine.
âWe started with no deposits and maybe $ 1 million to $ 1.2 million in loans to existing clients.â¦ We had some good initial clients and then we built referrals from there,â Harmon said. “We were trying to get our feet wet to determine if what we did in eastern Colorado would work in Colorado Springs, and it worked.”
The branch grew steadily and moved three years later to rent space on the third floor of an office building at the east end of downtown – still without a teller line, ATM, or ATM machine. The bank abandoned the Garden of the Gods brand in 2011 and bought the building five years later.
âWe bought the building into receivership after the foreclosure and it was extremely run down. Before we bought it, we had to spend $ 100,000 on a building we didn’t own just to fix the air conditioning,â Weed said.
The bank eventually ran out of space on the third floor and renovated the first floor to make it its lobby – it still has no teller lines but has included its first entry lane and ATM. The second floor is currently being renovated to house the bank’s investment and mortgage operations.
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Weed and Harmon discovered that they could hire employees in Colorado Springs much more easily than in Cheyenne Wells. As a result, eastern Colorado information technology and compliance operations are headquartered in the Colorado Springs branch, which now has 28 employees, three more than the Cheyenne Wells headquarters.
âColorado Springs is a very popular place to live and recruit employees,â Weed said. âThe CEO, President, CFO and Accountant are all at Cheyenne Wells. We think it’s always important to support this community and create as many jobs as possible. Usually we don’t care where our employees work, but lenders have to be in the area where they are lending.
While Weed and Harmon have continued to expand in Colorado Springs, they are reluctant to expand too quickly. While the branch’s deposits grew rapidly in its early years, they declined for three of the four years after the Great Recession. Deposits have grown 6% to 10% per year for three of the past four years (deposits at all financial institutions jumped in 2020 amid COVID-19 restrictions) and now total $ 77.7 million.
âIf something grows too fast in eastern Colorado, it’s usually a weed. We saw a lot of our peers growing too fast before the Great Recession and now they’re not here. We’re not fans of it. ‘rapid growth,’ said Harmon. âThe slow, steady (growth) and conservative nature of Colorado Springs and eastern Colorado have both served us well. “
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The bank expanded into new business sectors, launching a mortgage transaction and acquiring a majority stake in Cascade Investment Group, a Colorado Springs management and investment advisory firm with nearly $ 400 million under management. Eastern Colorado bought Cascade Investment in 2020, just days before the pandemic triggered a statewide stay-at-home order and widespread trade restrictions.
“We want to offer our clients as many services as possible so that they don’t have to go elsewhere to get their bank accounts, retirement accounts and mortgage loans. It gives us a good change of long term success.” , Weed said. “These three services are among the most important and important financial decisions our clients make. We will continue to expand into new lines of business as our clients need them.”
Cascade Investment and the mortgage deal – which the bank plans to double in size over the next three to four years – will move to the second floor of the bank’s office building in downtown Colorado Springs after renovations are complete This year. The bank is also exploring locations in Colorado Springs where it could open more branches over the next three years.
In addition to its downtown offices, the bank also acquired the city center Casa Mundi apartment complex in September for $ 12.8 million from a group of investors led by resort developer Darsey Nicklasson. Eastern Colorado has provided both the construction loan and ongoing funding for the project, which opened in 2020, and will retain Nicklasson to manage the complex, Weed said.
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âWe were involved in the project from the start and were comfortable with people,â said Weed, who noted that the bank owns several small residential properties in and near the downtown area. “It is not (normally) our job to buy real estate, but we hope Colorado Springs will continue to prosper and we will continue to provide loans on these buildings and invest in our clients’ projects.”
The bank has achieved its diversification goal by dividing its assets between rural and urban areas – about half of the bank, by almost any measurement, is based in the Colorado Springs area, Weed said. This division means the rural side of the bank benefits from the sophisticated technology, top-notch employees and specialized operations that are located in Colorado Springs and available to all branches, he said.
âWe are now more diversified with loans across multiple industries as well as to both our employees and our customers,â Weed said. âThe reality is Colorado Springs is growing and rural Colorado is not. The advantage of this division between urban and rural areas is that during the Great Recession, urban areas were struggling but rural areas were booming, and then when oil and crop prices fell, urban areas were booming. It gave us the flexibility to work with clients and avoid foreclosure. “
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