Q&A: Scott Yeoman, president of Central Bank & Trust

Scott Yeoman waited three years after he was hired to open Central Bank & Trust, or about two years longer than he expected when he took the job in late 2006. The bank began making loans last month, and opened to the public Dec. 7.

The bank went through a tedious approval process with the Federal Deposit Insurance Corp.; rather than try to open Central as a new bank, the holding company earlier this year took a faster route by instead buying a New Mexico bank and opening Central as a branch of that bank.

Yeoman, 51, was previously president and CEO of Ottawa, Ill.-based UnionBancorp Inc. for 16 months and was slated to become chief operating officer of another Illinois bank that later merged with UnionBank. Before joining UnionBank, he was president and CEO of Associated Bank Lakeshore in Manitowoc, Wis., and he also served in executive posts with Continental Bank, Citicorp and American National Bank & Trust, all in Chicago.

Question: Why did it take so long to open Central Bank?

Answer: The challenge of getting open was a function of timing with what was going on in the broader economy. The premise of the bank was to be part of a broader financial services company. Central Bancorp was conceived as a financial holding company with insurance, real estate activities, title insurance, mortgage, wealth management and the bank.

It was a much more complicated undertaking to have all of those as part of the holding company because to be that type of holding company with a bank you needed a history we didn’t have. As a result, we had to do a behind-the-scenes restructuring with our (property and casualty) insurance and title insurance units in a separate holding company. It took nine months to get that done and, by that time, the economy had tanked and the FDIC told us they weren’t going to continue processing our application and we should buy a bank instead. We found a good opportunity to do that and we are now open.

Q: Is the bank attracting the business the owners expected?

A: We have a bunch of loans (about two dozen totaling more than $20 million) in the pipeline, but we are just starting to close them.

They include some business-expansion loans such as a restaurant expansion and an auto-repair shop expansion, and we have been bombarded with requests for real estate loans. We are especially looking for businesses in the professional, technical and service industries. We also have an appetite for home equity loans and some first mortgages.

The good news is that we don’t have a portfolio of existing challenged credits. Our lending limit is $2 million, but we can syndicate larger loans with other banks, both locally and regionally.

Q: Is this a good time to open a bank?

A: There is a lot of activity out there for loan requests. We are going to need to be selective because we don’t want to take on somebody else’s problems, but there are some good deals that can be made.
While this is a trying economic period, we believe the business cycle is at its low point and we expect property values to go up from here. To a certain extent, we are grateful we didn’t open 1½ years ago or we would have some bad loans on our books.

Q: What is Central’s business plan?

A: Our strategy comes from the belief that Colorado Springs would benefit from a locally owned institution that has more capabilities than just taking deposits and making loans.

We have created a business than can take care of our customer’s needs from cradle to grave and beyond.
Most local banks don’t have the breadth of services we do and most big banks have to fly somebody in to provide some of those services.
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Contact the writer at 636-0234.
Questions and answers are edited for space and clarity.