The banking industry can't get enough of Lawrence's steady growth, strong housing market and -- most of all -- millions of dollars in potential business.
It hasn't opened a new branch in 127 years, but a small southern Kansas bank just can't resist angling for some of Lawrence's torrid growth.
So the owners of First National Bank of Winfield are planning to open a Lawrence office Aug.1 next to a video store in a western Lawrence strip center.
It's just the latest in the lengthening string of banks drawn by the city's growing population, strong housing market and millions of dollars in personal and commercial assets.
Lawrence's standing as one of the state's top two banking markets is getting even hotter as established banks expand, area banks move in and others start anew. At least a half-dozen banks have plans in the works.
Among those scrambling for a presence: First National Bank of Winfield, which plans to do business at Clinton Parkway and Wakarusa Drive.
The branch, to be called Corner Bank-Lawrence, will be the first new opening for Winfield-based Cornerstone Alliance Ltd., whose three community-bank holdings in Winfield, Douglass and Oxford have roots stretching to the 1800s.
"This will get us started," said Bruce Schwyhart, president of Cornerstone Alliance, which has $155 million in assets. "We're going to pretty much let the market dictate what we're going to do. The big thing is just getting up there."
Lawrence is drawing plenty of interest from lenders these days.
The number of banks in the city has doubled during the past five years, putting it on pace with Johnson County as the hottest banking market in the state, said Jim Maag, executive vice president of the Kansas Bankers Assn. in Topeka.
Total deposits in Lawrence have jumped 25 percent during the past five years, to $919.7 million, nearly double the statewide rate of 14 percent. Lawrence's share of statewide deposits also has increased during the period, to 3.2 percent from 2.9 percent.
Among the reasons behind such "significant growth," Maag said: sustained population growth; proximity to the Topeka and Kansas City metropolitan areas; a solid quality of life; and plenty of money from aging baby boomers, many of them settling in Lawrence as they near retirement.
Market 'feeds on itself'
"The Johnson County-Douglas County area is really one of the dynamic growth areas in the Midwest, simply because of the synergy between education and good living conditions and a great labor market," Maag said. "It just kind of feeds on itself. "
"Both areas are perceived to be areas where there is a significant amount of wealth and upscale families, from an economic standpoint, and therefore it's a good market for banking."
Plenty of banks are taking notice, including:
- Hilco Mortgage Corp. of Baldwin, which paid less than $10,000 to take over a Fidelity Bank branch at 3220 Mesa Way that closed June 4. Hilco reopened the branch Tuesday, and provides loans for homes, businesses, construction and property. It's shooting for more than $24 million in loans during its first year, and may branch out into personal banking. "We're not on Wakarusa, but right now this branch might be better " because people on Wakarusa have to wait for the town to grow out that way," said Jack Crossman, branch manager.
- Commercial Federal Bank, an Omaha-based savings and loan that is building its first full-service branch in Lawrence at the northeast corner of Sixth and Eldridge streets.
- Ottawa-based Peoples Bank, which wants to build a main office for its Lawrence operations at Sixth Street and Wakarusa. The bank started in Lawrence with a small office at the Free State Business Center, 1201 Wakarusa, and recently opened a convenience store branch in southeast Lawrence, at 23rd and Harper streets.
- Emprise Bank, which also is looking to build at Sixth Street and Wakarusa Drive. No construction date has been set.
- The Lawrence Bank, which later this year looks to open northwest of Kasold Drive and Clinton Parkway. The new bank, the lone new charter for Lawrence thus far in 1999, is led by former Mercantile Bank executive Terry Sutcliffe, who also hopes to open a downtown location.
- First State Bank & Trust, 609 Vt., which has plans for a new Lawrence headquarters at the southwest corner of Sixth Street and Monterey Way. A third branch remains a possibility.
Cashing in on competition
Aside from being good for building contractors, land developers and real-estate agents -- who cash in on banks scrambling for new space -- the booming competition also pays off for customers, said Maag, whose association represents 393 banks chartered in Kansas.
"It's really a depositors' and borrowers' market because the market is so intense, you have many institutions vying for your business," Maag said. "It's really the best of all worlds. You're going to get better rates."
The increased competition does not come as a surprise to Chuck Warner, president of Mercantile Bank-Lawrence, which has six locations in town.
"It's like any other business: They go where the people are and where the economy's good," Warner said. "But in any business -- whether it's a retail store or a restaurant or any kind of service industry -- at some point there can be too many. Whether they'll all succeed and survive, it's like anything else. They may or may not.
"Welcome to business."
Corner Bank is coming into town with more than a temporary storefront. Officials plan to open a permanent office in western Lawrence within 18 months, at a cost of at least $1 million, and then use the vacated space for a related financial-services office offering short-term, high-risk loans.
Ed Samp, community bank president for the new Corner Bank-Lawrence, said that while competitive rates would help the bank attract customers -- "we don't want to be the cheapest bank in town" -- flexible service will be the bank's calling card.
Prospective homeowners who don't have time to leave work to apply for a mortgage can arrange for bank representatives to drop by their business during a lunch hour, he said, or even visit their homes after work or on weekends. The same goes for entrepreneurs or small-business owners.
"We'll work at their convenience, not at our convenience," said Samp, who worked 14 years for a $10 billion bank holding company in Missouri. "We all have our place in the market."
-- Mark Fagan's phone message number is 832-7188. His e-mail address is email@example.com.