Legacy Bank targets more affluent market in Valley - East Valley Tribune: Business

Legacy Bank targets more affluent market in Valley

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Posted: Friday, April 29, 2005 6:37 am

A long-time fixture of the Scottsdale community banking scene is running a new private bank that caters exclusively to the area’s affluent population.

Legacy Bank opened earlier this year with two locations — off Hayden Road in the Scottsdale Airpark and on Pinnacle Peak Road in northeast Phoenix. Julian Fruhling was named the bank’s president and chief executive officer earlier this year after working for Compass Bank.

Fruhling has been in the banking business for 30 years and has been a community banker for 25 of those years. Fruhling and Scott Morrison, who heads Legacy’s Pinnacle Peak office, were formerly with Founders Bank of Arizona, which was sold to Compass in 2000.

"At that point my family and I weren’t interested in moving out of Arizona . . . so I agreed to start the private banking division for Compass Bank," Fruhling said.

After 4 1 /2 years with Compass, Fruhling met with Lyle Campbell, who started Founders Bank and was founding Legacy Bank. Morrison already was on board, and Fruhling was immediately drawn to the new organization’s vision.

"The market has grown by 1.5 million people in the last 10 years, and the affluent base has increased significantly," Fruhling said. "We see what the competition is doing, and we just felt that there was a niche for a bank that’s focused on the affluent market."

Legacy Bank is backed by an Illinois-based, $1.5 billion banking organization owned by the Campbell family. The bank was capitalized at $15 million, three times Arizona’s current required amount for a state banking charter, Fruhling said.

"Eighteen of the 21 employees we have today have worked with me at some point, so we know the market," he said.

Legacy Bank’s inception is part of an ongoing trend of more small, local banks opening in the Valley. However, it is focused solely on wealthy clients, and its services are more expensive than the average community bank, Fruhling said.

"All people need to be able to handle commerce, so credit cards, daily checking, ATM access, it’s all the same," he said. "The difference is this clientele does not want to have to wait in line. They want to have the Starbucks approach coming in. You go into another retail office and you’re not going to find the amenities (that you find) here. It’s why there is a Wal-Mart and why there is a Saks Fifth Avenue."

The design of the bank’s Scottsdale Airpark location says big money, with lots of marble and glass, high-end furnishings and a hot beverage bar.

Fruhling admits it costs more money to open and operate a bank that caters to people with lots of money.

"It’s lower risk because we’re dealing with people who are not high risk takers per se," he said. "They’re not putting 5 percent down on a house. They could pay for the house in cash. They’re taking the (tax) deduction on the mortgage, and that’s why they have the mortgage."

The bank charges more because its services are more specialized and major decisions are made locally and swiftly, Fruhling said.

"We can huddle up at a moment’s notice," Morrison said. "If we had a client walk in this morning, late morning, and needed an answer (on financing) by this afternoon at 3 p.m., and we had all the available information to make that credit decision, it could be done. Larger institutions cannot maneuver that way."

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