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New bank seeking entrepreneurs

Copyright © 2012 Albuquerque Journal

Bank of the Rio Grande, headquartered in Las Cruces, has received approval to begin accepting deposits at its existing loan-origination office on Mountain Rd. in Old Town effective Nov. 1.

The bank plans to open its first full-service branch in Albuquerque in early 2013, when it moves into larger leased space a few yards east on Mountain. Bank of the Rio Grande intends to become the bank of choice for entrepreneurs.

Its parent company, Strategic Growth Bancorp Inc. of El Paso, last week announced it had agreed to acquire Mile High Banks, a 13-bank operation headquartered in Longmont, Colo. Mile High said SBG would simultaneously purchase the bank and recapitalize it with up to $90 million in new capital, provided regulators approve the deal.

Bank of the Rio Grande senior leaders say the failure of community banks like Charter and First Community has left a void that the big multi-state banks are not interested in filling, leaving room for a well-capitalized community bank to enter the Albuquerque market.

Bank of the Rio Grande chairman and CEO Kenneth S. McCormick said in an interview there will be fewer banks in the future, and some of them will be huge. “Big banks are getting stronger but less accessible,” he said.

Michelle A. Coons, president for Albuquerque and Santa Fe, has worked for Wells Fargo and Bank of the West. She joined Bank of the Rio Grande for the opportunity to offer customers what she called “a personal touch.” Big banks are organized around services they can provide business customers, she said. One group provides treasury service, another provides private banking, another handles commercial lending. Coons said customers get handed off to different departments and officers, depending on the service the customer needs. Bank of the Rio Grande is organized around the clients, and t’s up to each banker to make sure the clients get the services they need.

Problem solvers

“You can become their trusted adviser,” McCormick said. The bank’s staff “built their reputations solving problems for clients.”

Most banks’ marketing emphasizes customer service, and Bank of the Rio Grande is only one of 47 independent community banks operating in New Mexico looking for business. McCormick said his bank will be among the market leaders because it has unusually strong leadership, good relationships with business customers, superior technology, and “really good capitalization,” to the tune of $280 million. By way of comparison, the state’s 37 state-chartered banks reported an average equity capitalization of less than $22 million in 2011.

“The big banks’ model is to attract lots and lots of customers,” McCormick said. “Ours is a more defined client list.” Bank of the Rio Grande is looking for specific people “with banking needs we can help. We’re looking for entrepreneurs. We’re looking for people who want to build things.”

“We’ve put together a list of entrepreneurs and business leaders who I respect,” Coons said. For example, Bank of the Rio Grande is working with a business owner who wants to hand off his company to younger members of his family. Coons said bank board members know a lot of entrepreneurs and business owners who Bank of the Rio Grande can help.

A community need

“It’s a much-needed focus,” said Garrey Carruthers, a board member and dean of New Mexico State University’s College of Business. “We need to generate enthusiasm in New Mexico for our entrepreneurs.”

Carruthers, who served on First Community Bank’s board before it was absorbed by US Bank, describes himself as “a committed community banker kind of guy.”

First Community “was a great bank with great customer service,” he said. “Even though big banks have a role to play, New Mexicans are still wedded to the old community banks. It seems to me like we appreciate the decision-making being local. There is always risk when you loan money, but you reduce the risk when you know the people you are lending to and have been affiliated with them for a long time. The speed with which they can operate is usually superior to a big bank.”