Scott Condon
The Aspen Times
Glenwood Springs, Colorado CO

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January 2, 2013
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Feds turned profit in TARP loan to Alpine Banks

Alpine Banks of Colorado no longer owes the federal government $70 million it borrowed in March 2009 through the Troubled Asset Relief Program (TARP).

The U.S. Department of the Treasury conducted an auction this fall to sell its stake in Alpine Banks, according to a department spokesman. The auction of preferred stock in the bank was open only to institutional investors.

The sale of preferred stock combined with dividends the government received for more than three years produced a profit for treasury department of about $3 million on the loan.

"Basically, what's happened is the TARP program got paid back," said Alpine Banks President and Vice Chairman Glen Jammaron.

Alpine Banks is based in Glenwood Springs and has branches in 37 locations around western Colorado, including Aspen, Snowmass Village, Basalt, El Jebel and Carbondale.

The bank sought the $70 million infusion of federal funds through the Capital Purchase Program, also known as the "Healthy Bank" program. The treasury department designed the program as a way to help institutions it deemed "healthy" to continue lending in tough times.

Part of the terms for the loan was the treasury purchased preferred shares in the banks with a 5 percent annual dividend. They also received warrants to purchase stock at a set price.

As the economy has improved, the treasury department has been selling its preferred stock in banks that participated in the program.

Alpine Banks' preferred stock was offered at an auction ending Sept. 12. The public interest website Pro Publica provided details on the results. The treasury department completed the sale of 70,000 shares of Alpine Banks of Colorado's preferred stock at $814.29 per share for net proceeds of $56.43 million, the website reported.

While the auction raised $13.57 million less than what Alpine Banks borrowed, the federal government still turned a profit on the loan. It sold another 3,500 shares of Alpine Bank preferred stock that it received by exercise of warrants. It received $950 per share for a net of $3.29 million, according to Pro Publica.

In addition, the federal government made roughly $13 million in quarterly dividend payments from Alpine Banks from May 2009 until September 2012, according to Pro Publica's research.

Pro Publica's Bank Tracker project is designed for "tracking every dollar and every recipient" that received federal dollars in the bank bailout during the Great Recession. Information on banks in Colorado that received TARP funds can be found at http://projects.propublica.org/ bailout/list/state/CO.

As a result of the auction, there are now "multiple" additional shareholders in Alpine Banks, Jammaron said. He estimated the number of new shareholders at a "couple dozen." They get paid a dividend on their investment but they hold non-voting shares, according to Jammaron. Therefore, the addition of new shareholders doesn't affect the operations of Alpine Banks, he said.

scondon@aspentimes.com


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