Five years after beginning a period of unprecedented growth, an Albuquerque bank is ready to slow down.

Through rapid de novo branching, First State Bank, a subsidiary of First State Bancorp., has boosted its asset size by 235% since 1991.

The only bank with a major presence in Taos, Santa Fe, and Albuquerque, First State now has 14 branches and is one of the most aggressive players in the New Mexico market.

"We feel we've got the basic structure we want in the markets we serve," said H. Patrick Dee, chief operating officer of First State Bancorp. "Comparatively speaking, we're slowing down. We'll go from opening three of four branches a year to one or two. We want to digest what we've put on recently."

First State's era of growth is a radical change from its past, even as recently as the early 1990s. With barely more than $100 million in assets and a handful of branches in the southwestern resort community of Taos, First State was just another aging institution plodding along in a state that had yet to be discovered by out-of-state superregionals.

When the big boys finally moved in, First State shifted gears. Instead of being blindsided by New Mexico's banking revolution, it changed its strategy and, with help from an economic upturn, made a new name for itself.

In 1993, the bank went public and bought First State Bank of Santa Fe. And during the past two years, the bank has built eight new branches in the Albuquerque area.

The goal in Taos and Santa Fe is to be "all things to all people." In Albuquerque, First State has concentrated on serving the burgeoning business community, Mr. Dee said. Specifically, it's made an effort to appeal to new businesses and older existing companies disenchanted with big bank service.

"The key factor for us was when the big banks moved in ," Mr. Dee said. "People in New Mexico aren't so open to doing business with out-of-state banks. They like to do business with people based nearby."

And the state's rapid growth has ensured there's plenty of business to go around. Intel, which has had a plant near Albuquerque since the early '80s, has continued to expand its operation. Other companies have moved into the area or expanded, including Intuit, General Mills, America Online, MCI, and Taco Bell.

"All of our markets are pretty strong," Mr. Dee said. "It's pretty hard to find fault with anything here. We're all kind of pinching ourselves, things are going so well."

The rapid growth hasn't been without some drawbacks. R. Jay Tejera, managing director of Dain Bosworth Inc. in Minneapolis, said First State's profitability has suffered during the past couple of years.

With a return on equity of 9.2% and a return on assets of 0.7%, the bank's numbers are below the industry average. Net income for 1995 was $1.7 million, down from $2.4 million the year before.

"When you double your brick and mortar, it puts a lot of pressure on your bottom line, which has pushed profits down," Mr. Tejera said. "I hope that doesn't open them up to takeover by an aggressive entrepreneur or another bank."

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