Despite Best of Intentions, Slow Growth Forces Norlarco CU to Close Estes Park Branch

FORT COLLINS, Colo. – It seemed simple enough eight years ago when Norlarco CU decided to open a branch in Estes Park, a small growing mountain community located at the mouth of Rocky Mountain National Park. But the credit union finally bit the bullet recently – it owned up to the fact that the potential it initially saw hasn’t materialized and has decided to cut its losses by closing the branch. “No matter what we’ve done, the Estes Park branch has remained stagnant,” says Norlarco’s Business Development Coordinator Trish Joyner. Actually, Norlarco’s executive management team has been discussing closing the branch for the past three years but hoped that some spark would ignite the branch’s growth. It never happened. The Estes Park branch has been unable to increase its market capitalization, and its member base has remained at 1,100. Joyner said the member base has even been surpassed `significantly” by three branches Norlarco’s opened since July 2003. That includes a small branch just east of Fort Collins where Joyner says membership has tripled. Ironically, the causes of the problem surrounding the branch are some of the reasons Norlarco decided to open a branch in Estes Park to start with. Estes Park, Joyner explained, depends on tourism as its primary industry. Like many other mountain communities around the state, it is growing. A large portion of its population is comprised of retirees or people who primarily live in other major Colorado cities like Denver or Boulder. “We hired a specialist in retail branch operations and did an exhaustive study on our branches and their potential for growth,” explained Joyner. “Study findings showed that even though there was a significant deposit base in Estes, none of the five financial institutions in the area had a significant deposit base. A lot of deposits were being made into financials out of the Estes Park area. Even people who live in the Estes zip code but do business in Denver or Boulder or are retired, had their primary accounts outside Estes Park.” Joyner added that, “The study showed a significant opportunity to increase market share in Larimer County and part of Weld County located east of Fort Collins, which is where we opened our Windsor branch. But respondents interviewed came back with strong evidence that supported the anecdotal evidence we already had that showed the Estes branch wasn’t going to be a growth spot for us.” To put it in perspective, Joyner said the Estes Park branch had a negative loan growth in the past year, however the Loveland branch which is the closest Norlarco branch to Estes Park, had a 28% loan growth increase. Another fact – on a weekly basis, the Norlarco branch does as much in business as the CU’s other branches do daily. Joyner said the Estes Park branch is the first branch Norlarco has closed in the three years she’s been with the credit union. The CU leases the Estes Park facility, and Joyner said the CU will be looking to sublet it. Norlarco intends to have an ATM presence in Estes Park for deposits and withdrawals, and members can also use the credit union’s online banking. With the closing of the Estes Park branch, Norlarco will be left with seven branches plus its corporate headquarters. “Closing the Estes Park branch was not an easy decision to make, but it was a sound business decision in the interests of our total membership,” said Joyner. -