Community First Bancshares of Fargo, N.D., is reorganizing its branch network to bring more lending expertise into its far-flung outposts.
The $6 billion-asset company said last week that it will divide its nearly 160 branches into two categories: regional and community financial centers.
Branches focused on commercial lending will be designated regional financial centers, which will include one large office and several smaller ones in one geographical area. The lead branch will be a hub with experienced commercial loan officers who will support and direct lending in smaller, spoke branches.
Offices particularly isolated ones that focus on retail business will be community financial centers. They will have lending support from Community Firsts central loan officers.
The plan is a way to use good lenders well, said Ron K. Strand, vice chairman and chief operating officer. High-level lenders are limited, especially in a rural area.
Among the most active bank acquirers in the West in recent years, Community First has offices in 12 states: Wisconsin, Minnesota, Iowa, North and South Dakota, Nebraska, Wyoming, Colorado, Utah, New Mexico, Arizona, and California. Many branches are located in rural communities, and it has been difficult to staff those with experienced agricultural and commercial lenders, Mr. Strand said.
We can actually bring more expertise to the spoke banks than in the past, Mr. Strand said.
Jon G. Arfstrom, an analyst with Dain Rauscher Wessels in Minneapolis, said he likes the strategy. Its something thats necessary, given some of the markets that theyre in.
But Joseph Roberto, an analyst with Keefe, Bruyette & Woods Inc. in New York, seemed more skeptical. Well have to wait and see, he said.
Mr. Roberto said the realignment is part of the evolution of Community First, which announced last week that it had completed combining its 12 charters into a single national charter. They were much more decentralized in the past, and they are moving to being more centralized, he said.
He added that the move shows that the company is trying to meet earnings estimates.
Mr. Strand said that in the past the separate banks were often competing with each other for loans. He said local banks will still handle retail banking but will leverage the hubs commercial and agricultural lending expertise.
He said the branch overhaul began in strategic planning sessions last fall, is mostly finished now, and will be probably be all wrapped up in the third quarter.
Under the new system, computer networks, remote printing of documents, and site visits by lenders from the hub will provide spoke banks with support.
We are very confident that we will not diminish service to any bank but actually enhance service to some, Mr. Strand said.