Executives of a Granby bank holding company — the last of 12 in the state to still owe on federal bailout funds it got — say nearly two years of missed payments on that loan is not a problem.
Grand Mountain Bancshares is one of only three nationally to have missed at least 23 months of payments on bailout loans still outstanding, mostly dividends on the U.S. Treasury investment, and one of 26 financial institutions still in arrears, according to the latest government data.
But Grand Mountain CEO Frank DeLay said it’s because the government has prevented the community bank from paying the dividends — more than $1 million on the $3.08 million it received in 2009 under the Treasury’s capital purchase program, part of the Troubled Asset Relief Program, or TARP.
“We were placed under these restrictions based on the condition of our economy here, given the losses we incurred,” DeLay said. “We were fortunate to have gotten the funds.”
The agreement foresees the bank getting out from under the government’s watchful eye — board meetings are attended by a Treasury observer — in 2015.
Once a $145 million bank, Grand Mountain today holds $95 million of assets, federal data shows. It suffered severe losses during the financial meltdown, DeLay said, especially in real estate foreclosures tied to heavy job losses in the area. While the four-branch bank wobbled under the weight of foreclosed properties and the number of loans that had gone into default, a soft economy kept those numbers from improving.
“Here in Granby, we saw home values on average plummet by 40 percent, and commercial properties by a similar margin,” DeLay said. “Land values also took a great hit.”
Only recently has the bank’s relative health been on the upswing, according to data filed with the Federal Deposit Insurance Corp. Compared with other federal savings banks of similar size, Grand Mountain is improving.
For instance, the amount of delinquent loans has dropped to $2.7 million from $6.5 million just a year ago.
“Would we have gone under without the federal capital? I honestly don’t know,” DeLay said. “But I certainly wouldn’t have thought it would last this long.”
The bank’s TARP exit plan includes capital infusion by Colorado Springs businessman Charles T. Wittwer, who was approved by the Federal Reserve in February to acquire majority voting shares of the holding company.
DeLay said Wittwer’s investment — he would not disclose the amount — would repay the TARP funds and acquire the shares tied to them, instead of the government selling them at auction, which is often at a discount.
Once Grand Mountain is out, Colorado would not have any bank remaining in the TARP program, which began in 2008 and ultimately loaned more than $245 billion to the banking industry.
A dozen banks in the state received more than $212 million of TARP funds. The government has collected $224 million on that investment, Treasury data show.
David Migoya: 303-954-1506, dmigoya@denverpost.com or
