Starting a new bank in this era of economic jitters may be a little like opening a new beach resort in the middle of Hurricane Katrina. But, the directors of VisionBank are not only optimistic about their new venture, but downright bullish.

Senior management officials are confident they can attract business by making VisionBank’s newest branch, which opened Jan. 22 in the Village of Ponderosa in West Des Moines, a destination instead of just a place to do business—a Barnes and Noble of banking, if you will.

Visitors to the bank, located at 60th Street and Stagecoach Drive, just north of Mills Civic Parkway and east of Jordan Creek Town Center, are met by a concierge. This ambassador not only can direct customers to a teller or other bank officer, but also can perform various tasks while they wait. Meanwhile, guests can relax at tables in the Wi-fi’d lobby and check the web on installed computers, or their own laptops, while sipping free gourmet coffee. A small play center, with toys DVDs playing on a TV, can occupy children.  

“We hope people will walk in here and feel that this is more than ‘just a bank,’ ” says Matt Jenkins, Vice President of Cash Management. “We’re giving them the same experience and service that only very private banks now give to their exclusive customers.”

That business plan, marketed under the slogan “It’s Just Easier,” was on the mind of VisionBank’s senior management from the day the bank received its charter in 2006 and opened as the fourth bank within Ogden BancShares, Inc., a central Iowa multibank holding company. Formed in 1995, Ogden BancShares has total assets in excess of $500 million and operates banks head-quartered in Ogden, Boone and Ames, in addition to VisionBank.

In December 2007, VisionBank reported assets of $101.5 million. VisionBank (visionbankiowa.com) opened with a traditional branch in Grimes, then added another office at Westown Parkway and West Lakes Parkway in West Des Moines, down the street from where the new Mercy hospital is being built. This put them just abaft of the University Avenue banking strip in West Des Moines, Clive and Waukee, which has seen a flood of new financial institutions open in the last several years. Most are spinoffs or branches of banks with headquarters elsewhere in Iowa.

That bank boom was one reason VisionBank management decided to place their signature facility in the Village of Ponderosa, the newest planned community being developed in Polk County west of I-35. “We are a new type of bank, and the Village of Ponderosa is a new type of community,” says VisionBank Senior Vice President Dean Whitaker.

Thanks to previous dealings with Ponderosa’s developer, LADCO Development, VisionBank also was granted exclusivity rights to be the only bank built within the 95-acre retail-and-residential community. The branch, in the community’s retail area, sits on a hill at the intersection of two key community streets and is within walking distance of the two- and three-story family homes being completed daily. (For more about the Village of Ponderosa, see sidebar.)

But, VisionBank didn’t need to rely solely on the Ponderosa business. Bank President Tom Hromatka, Whitaker and fellow Senior Vice Presidents Jill Smith and John Humeston brought many of their customers with them when they left separate banks to form the new venture. For example, Whitaker and Smith both came from Commercial Federal, where they both managed sizeable commercial loan portfolios.

Whitaker says his prior experience with large banks proved to him that his clients would be better served by a bank that maintains local control over loan decision-making and other transactions. “To many larger banks that have eaten up local banks, the process of loan approval seemed more important to them than taking care of their customers in an expeditious and flexible manner,” he says. “As consolidation has occurred, decision-making about loans and other transactions have moved from Des Moines, where the principals are known, to strangers in Omaha or Minneapolis or San Francisco,” Hromatka says. “The decision on whether to accept a loan has been relegated to people who don’t know the local climate and are dealing with a rigid set of guidelines that they apply universally.”

And, even though larger banks have access to greater resources, bigger does not necessarily mean better for individuals.  From 2000 to 2006, the Des Moines area, particularly the University Avenue area spanning West Des Moines, Clive and Waukee, also has seen a proliferation of small banks, most of which are headquartered outside Des Moines. These banks hope to capitalize on the more advantageous economic climate in Des Moines, as opposed to their communities that may have maxed out on economic development.
 
“There are 17 institutions serving the region, versus only six five years ago,” Hromatka acknowledges. “But, we did some careful research to examine the banking density of this area, and we determined that the numbers were favorable in any case, even considering the banking explosion. Besides, we still offer what many of those banks can’t: local decision-making over their loan request or other transaction.”

The research also showed that lower interest rates were important, but that customers also wanted a bank that would take care of them in an expeditious and flexible manner, Whitaker says. “By forming a new bank, we had a blank slate,” he notes. “We were totally able to say, ‘What do customers want, and how can we give it to them?’ ” He notes that typically, with 25 percent of banking customers potentially willing to change institutions at any time, there’s plenty of opportunity for growth.

VisionBank hopes to attract some of those commercial customers with the newest technology, such as Virtual Business Checking™, which allows customers to deposit checks by scanning them at their desks and emailing them to the bank.
  
For individuals, VisionBank is rolling out an array of conveniences, including its concierge service, Wi-Fi internet access, and a “Latte With Your Loan.” Also, its ground-breaking VisionPerks program will offer premiums for points accumulated for debit card usage, referring new customers to the bank, or establishing an account, similar to the way credit cards offer rewards for use.

Still, skeptics have a right to question the timing, when the home mortgage industry is in decline and housing construction is down. Hromatka points out, however, that VisionBank’s portfolio lacks the riskier areas of the economy that have plummeted in recent months, such as subprime mortgages.

“We didn’t go into those matters,” Hromatka says, with a shrug. “Our portfolios are more traditional, and they contain a good mix; it’s not only real estate,” he says. “I don’t know if all of us saw this coming, or we were just lucky that we passed on these, but sometimes, it’s better to be lucky than good.”

For VisionBank to succeed, its officers are counting on the community’s desire for change. And, a cup of free gourmet coffee couldn’t hurt.

Source: Central Iowa Business Magazine