In an era when banks are shuttering locations, one local bank is expanding.

5 Star Bank — one of the healthiest of the locally chartered banks — will open a branch on the north end of town the first week in October.

Not only is the bank growing, but it’s building the branch from the ground up — unusual in a day and age during which growth, when it does occur, often involves acquiring existing branches from faltering banks.

For example, Ent Federal Credit Union this spring moved its 1,600-square-foot Falcon branch from a shopping center into a 5,200-square-foot stand-alone building.

First Commercial Bank, which is headquartered in Lone Tree and has a branch in downtown Colorado Springs, added two branches to its bank earlier this year by acquiring them from Liberty Bank Group in Denver.

New-construction bank branches, however, have been few and far between in the past couple of years.

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The contractor for 5 Star’s project, GE Johnson, is ahead of schedule, said 5 Star’s president, Mike League. The bank’s new digs are in the Corporate Offices Property Trust Business Park, at the corner of Interquest Parkway and New Allegiance Drive, off Interstate 25.

“We’re betting on the future of the Springs and betting on the growth of the north corridor,” League said.

The 5,000-square-foot branch, with a $2 million price tag, will be staffed with about eight employees, a teller line, six offices, a conference room and a drive-through window.

It will also house a new mortgage department. At the end of this month, the bank also will begin offering mortgage services through PHH Mortgage, a private-label outsourcing operation, at its three other branches: downtown on Sahwatch Street, Lake Plaza Drive and on Peterson Air Force Base.

Like any good banker, he attributes the bank’s strength to conservative strategies.

“My approach is to look at the long-term interests of the bank … and have prudent growth, with acceptable margins and spreads,” he said. “In today’s environment, you have to manage interest-rate risk, credit risk and reputation risk.

“It’s a competitive environment, but you can’t get caught in the current pricing environment,” League said, referring to the interest-rate game that many banks play in a bid to attract deposits.

It also helps that after selling its $67-million credit-card loan portfolio in April, the bank has additional liquidity to work with.

And so, while other local banks are struggling to stay afloat, League is in the uncommon position of choosing when, where and how to grow. In the next year or so, he plans to open another branch in the south end of the metro area.

Past due loans on the rise

Although the economy has started a slow recovery, in Colorado, loans 30 days or more past due as a percentage of total loans increased year-over-year in the second quarter, from 2.85 to 3.11 percent. That’s a decrease from the first quarter of this year, when that figure was 3.6 percent.

However, loans 90 days or more past due not only increased nearly 1 percent year-over-year for the second quarter, from 1.35 to 2.33 percent, but also increased from 2.04 percent in the first quarter.

Loan concentrations — loans as a percentage of a bank’s total risk-based capital — showed some improvement.

Although commercial and industrial loan concentrations edged up slightly from the first quarter, from 46.9 to 48.4 percent, commercial real estate loans — the bane of the state’s banking industry — dropped from 265.4 percent in the first quarter to 251.1 percent.

Tier 1 capital remained flat from the first quarter, at 8.91 percent, as did net loans to assets at 62.6 percent.

With 43 of the state’s 143 institutions, Colorado Springs captured $5.7 billion of the state’s nearly $68 billion in deposits, according to the latest Federal Deposit Insurance Corp. statistics.

Rebecca Tonn can be reached at or 719-329-5229. Friend her on Facebook.