As one of the last family-owned community banks in Denver, The Bank of Denver found that it was increasingly difficult to compete with enterprise banks and other financial providers in a digital-first world.

After being focused on their commercial real-estate portfolio for over 20 years, The Bank saw value in a solution that could offer a seamless digital experience and provide affordable rates to customers while maintaining their return requirements.

Additionally, with reduced volume in their mortgage portfolio, The Bank saw value in diversifying their portfolio into consumer lending.

The high interest rate environment of 2022 also brought on its own set of challenges. Previously, The Bank had been one of the largest providers of car loans in Denver, but once it became more expensive to lend, The Bank also needed a way to contend with the low rates credit unions offered for auto loans.

Finding the right partner fit

Leaders at The Bank first heard of Upstart at a conference in 2021, where one of Upstart’s community bank customers, Four Corners Community Bank, shared the success of the partnership. Additionally, Four Corners and The Bank of Denver share a board member, who raved about how the Upstart team made the implementation and due diligence process as seamless and simple as possible.

The Bank of Denver team learned that, through the Upstart Referral Network, they could gain new, qualified customers for both personal and auto refinance loans. Qualified applicants on Upstart.com who met Bank of Denver’s credit parameters in its target geographies would receive personalized loan offers from The Bank. After that, these new customers would transition into a Bank of Denver-branded, all-digital experience from application through closing and as fast as same-day funding.

With a staff of only eleven employees at the time, it was also crucial for The Bank of Denver that Upstart could service both personal and auto loans, including third party vendor management for repossession and title management. This would allow This would allow The Bank to compete with more tech-savvy institutions through the partnership without allocating additional staff. Lori Radcliffe, President and CEO, said, “We saw the Upstart partnership as an opportunity to diversify and get into the market just by partnering. Instead of having a staff of eleven people, we can do it with just a couple, not even working on it full-time.”

In order to align the appropriate stakeholders, Radcliffe and the rest of the team brought in their Chief Operating Officer, auditor and board of directors.

“We were very impressed from day one through the entire due diligence process and training. It’s tough regulation-wise to check all the boxes, and the documentation process went very smoothly,” said Scott Kreutz, Senior Vice President at The Bank of Denver.

Once The Bank decided to move forward with the partnership, they worked alongside the Upstart team to establish KPIs for continued success and engagement for the program. From there, The Bank of Denver was able to launch with Upstart in less than 80 days.

Adapting to a rising rate environment

Given the inflationary environment of 2022, the Bank of Denver team has appreciated the flexibility of the Upstart partnership in adjusting volume and return targets. As fewer customers were refinancing their auto loans in a high rate environment, The Bank’s team was able to reallocate their volume target of $2 million dollars per month towards Upstart-powered personal loans to meet their requirements. The team also increased their expected net return to 7.25 percent to keep up with rising rates, which they can expect to achieve 30 days after increasing their target. 

Jason Thomas, an Installment Loan Manager for The Bank, explained that loan performance has been strong, and that his team has been monitoring and reviewing the loans on a daily basis.

“It’s been really great going back to the data analytics team and evaluating what we’re doing on a month-to-month basis, as well as what our targets are and how we’re meeting them,” Thomas said.

Cultivating long-term customer relationships

Bank of Denver has originated over $7.5M in loan volume and acquired over 400 new customers to expand relationships with.

Since going live with Upstart in August 2022, The Bank of Denver has originated over $7.5 million in loan volume and acquired over 400 new customers to expand relationships through both personal and auto refinance loans.

In addition to maintaining its steady growth rate, the next major step in The Bank of Denver’s partnership with Upstart will be cross-selling additional products and services to the new customers acquired through the Upstart Referral Network. As customers have spent more on products and services during an inflationary period and tapped their personal savings accounts, The Bank is increasingly interested in these new customers opening depository accounts.

Looking toward the future, The Bank also hopes that Upstart’s digital experience will attract Millennial and Gen Z customers, who have been traditionally difficult to attract given the competitive digital offerings in the market.

“We’ve tried to market and do consumer loans ourselves and just haven’t been successful. We believe fintechs are the wave of the future as far as attracting the younger generation, and we’ve been very happy with the Upstart program thus far," Radcliffe said.