Bank branches are popping up like Internet ads in and around Boise, Idaho.
Panhandle State Bank in northern Idaho, for example, has opened four branches near Boise in the past three years and last week jumped at the chance to add another when a back office of Household International's banking arm went up for sale.
Since 1997, two banks have opened in the region and 13 other banks - mostly from other markets - have started 50 branches there.
The rush to Idaho's capital can be explained by its soaring population and its emergence as a high-technology hotbed. In the 1990s, computer chip manufacturers began establishing their headquarters there, and other high-tech companies followed by opening plants. As a result, the Boise area's population has nearly doubled, to more than 400,000, since 1990.
"Because of the high-tech boom, there's been a high amount of migration of people, which has added a lot of diversity to the economy," said Curt Hecker, the president and chief executive officer of Panhandle's parent company, Intermountain Community Bancorp. "There're more opportunities now in light manufacturing and construction lending."
John S. Church, the president of Idaho Economics, a Boise consulting firm, said its business-friendly climate - and climate climate - are making the Boise area one of the fastest-growing regions in the country. Chip companies have set up headquarters there not only for reduced labor costs, but also because it is free of humidity - a necessity in chip production.
Hewlett-Packard, the computer printer giant based in Palo Alto, Calif., has a plant in the Boise area. Hundreds of reservation and credit call centers have also popped up, as hotels, credit card, and finance companies have been enticed by lower labor costs plus well as by the fact that a fiber optic "freeway" from Denver to Seattle travels right through Boise.
Another attraction is that Boise and the rest of Idaho has become a haven for retirees, especially from the more populous West Coast cities.
Though large banking companies still dominate the market - San Francisco's Wells Fargo & Co. and Minneapolis-based U.S. Bancorp have a combined 55% deposit share, according to the Federal Deposit Insurance Corp. - smaller banks are making inroads. The two start-ups, $51 million-asset Syringa Bank and $104 million-asset Idaho Banking Co., between them have four branches in the area, and two banks from Couer D'Alene are among the top 10 in deposit share. And D.L. Evans Bank in the eastern Idaho city of Burley has opened four branches in the Boise market in the past two years.
Robert Rogowski, a principal at Columbia Financial Advisors Inc. in Seattle, said big-bank acquisitions of several regional banks have made for more community bank competition. U.S. Bancorp bought $8.9 billion-asset West One Bancorp in 1995, and Wells Fargo bought $23 billion-asset First Security in Salt Lake City in 2000.
"Community banks have gravitated there because of the opportunities," Mr. Rogowski said. "Over the last four years, a number of them have done pretty well."
Panhandle, with assets of $274 million, has opened four branches in the Boise area since 1999 under the name Intermountain Community Bank. Last week the bank said that it would buy most of the assets of an Oregon bank just across the border near Boise. Intermountain would pick up about $60 million in deposits and the office of the only branch of Orchard Bank, a division of $10.5 billion-asset Household Bank FSB.
Household International, of Prospect Heights, Ill., said last week that it would sell the bank to HSBC Holdings PLC of London. Household Bank has been using the Oregon division as a base for its credit card operations in the region; Intermountain plans to convert it into a traditional branch.
Panhandle, founded in 1981 in the ski resort town of Sandpoint near the Canadian border, plans to expand further in southern Idaho by opening or buying branches or smaller banks, particularly throughout the Treasure Valley region stretching from Boise eastward to Twin Falls.
Mr. Hecker said the bank will target the high-tech industries and their vendors, as well as the growing number of the self-employed in Treasure Valley.
People who are their own boss "don't fit in well with the standardized credit system of larger banks," he said, "so our philosophy is to structure our loan packages and other products to those businesses."
