Aspen will likely gain its seventh full-service retail bank within the next six months when FirstBank Holding Co. finds a suitable space in or around the commercial core, according to the company's president in the Roaring Fork Valley.
Erin O'Keefe said FirstBank intends to open branches in both Aspen and the midvalley. It opened a branch last year in Glenwood Springs.
She acknowledges that observers outside the banking industry - and possibly some of her potential competitors - ask if Aspen is already over-saturated with banks. Her response: "If there is someone out there that can't get a loan, there's not too many banks."
O'Keefe and Tom Ashley, FirstBank's executive vice president in the Roaring Fork Valley, said they don't intend to put any competitor out of business. They just plan to add competition to the mix - which will benefit consumers.
Aspen is particularly attractive because of its high amount of deposits and the typically robust real estate market. Deposits in Aspen and Snowmass Village banks were slightly more than $1 billion as of June 2012, according to Federal Deposit Insurance Corp. (FDIC) figures, O'Keefe said. That's about the same as the combined banks of Basalt, Carbondale and Glenwood Springs, she noted, and it's right on the heels of the $1.3 billion deposited in banks in the much larger town of Grand Junction.
In other words, Aspen's bank deposits confirm the small town is flush with money, more so than other little towns.
FirstBank has already dived into real estate loans in the upper valley without a physical presence there. It financed sales of several recent purchases of units at the Viceroy Hotel in Snowmass Village, O'Keefe said. It sees great potential to expand its lending volume in the rapidly recovering Aspen-area real estate market, she said.
Real estate and construction loans have been the "bread and butter" for FirstBank, according to O'Keefe. FirstBank avoided the financial problems that rocked many banks when the real estate bubble burst because of more conservative practices, she said. FirstBank makes sure borrowers "have skin in the game" and aren't gambling on drastic appreciation, she said.
Ashley noted that FirstBank was also well-capitalized as the fourth-largest privately held bank in the country. It avoided sub-prime lending, a practice the came back to haunt many banks when the recession struck in 2008, he said. FirstBank was one of the few financial institutions that was able to continue lending throughout the recession.
O'Keefe said she is surprised that the Aspen real estate market got hit as hard as it did. She believe the market has turned around. "We're feeling it just in the last six months," she said. As long as the national economy continues to improve, Aspen's market will march forward, she said. Glenwood Springs is more dependent on the oil and gas industry.
FirstBank has been in Vail for 50 years and its leadership planned aggressive expansion in the middle of the last decade. "Then the recession hit and slowed everything down," O'Keefe said.
Now O'Keefe and Ashley have the green light to open an Aspen branch, when they find the right location. They are seeking a high-visibility space of about 4,600 square feet. They are also watching how the economy evolves in Basalt and Carbondale before they decide where to locate in the midvalley.
Once they are open, she said, the services offered by the seven retail banks won't be drastically different. Customer service will dictate who gets what slice of the pie.
"It's going to come down to comfort level," O'Keefe said.