Some lose as Grand Mountain Bank merge gets shareholders’ OK
Grand Mountain Bank’s shareholders have approved a merger with the holding company for United Business Bank, but some longtime shareholders fought it.
In November, BayCom Corp, the holding company for United Business Bank, announced it was acquiring Grand Mountain Bancshares, the holding company for Grand Mountain Bank, in a cash transaction of almost $14 million. Shareholders, roughly 75% of who live in Grand County, will receiver $3.40 in exchange for each share of Grand Mountain Bank common stock.
After some concerns were raised about the sale price and possible detriments to the community, 70% of shareholders voted in favor of the merger Tuesday while 10.8% were against it.
About 3.5 million shares issued by Grand Mountain Bank were purchased at $1.70 to raise capital after the 2008 recession. Before that, about 584,000 stocks had been issued at a higher price, meaning that a fraction of shares could see a loss from the merge.
At the shareholders meeting, Sam Eberly, who first bought stock with his wife when the bank opened in 2003, said the merger would cost the couple more than $50,000.
“We have been with you since 2003,” Eberly said. “We’re here. We’re involved in the community activities. It’s not like we just bought this for some investment. We did it to help the community.”
After voicing his problems with the merger, he was met by applause and comments supporting his points from some other people attending the meeting.
Mike Tompkins, chairman of the Grand Mountain Bank board, was the only member of the eight person board to vote against the merger. Before the vote, he penned an over 900 word letter to the editor outlining his reasons against it.
“I am personally going to make a lot of money off this if it goes through, but I’m still voting against it and I’m vehemently against it,” he said at the meeting. “I don’t believe it’s good for our employees. I don’t believe it’s good for our community, and I don’t believe it’s good for our customers.”
However, Grand Mountain Bank President Frank DeLay defended the move, pointing to the relatively small size of United Business Bank compared to national banks like Wells Fargo.
“The bank isn’t being taken over by some big, mega bank,” DeLay said of the merger. “This is a true community bank.”
He said the majority of the board found the offering fair and pointed to the additional services that merger would provide customers, including improved technological interface. He highlighted unknown risk as part of the reason for the merger.
“(The board) recognizes that there’s certain risk in the market that are out there that we’re not sure about,” DeLay said. “We’re not sure about the next recession; we’re not sure about the economy in Grand County.”
While Grand Mountain Bank was never formally put up for sale, DeLay said that there had been talks for the past few years.
“I would say, the bank was being unofficially marketed,” DeLay explained. “We didn’t put a for sale sign in front of the bank like that, but there had been discussions with other banks over the last couple years.”
When concerns were expressed over whether the new bank would offer single-family mortgages, DeLay said he didn’t know exactly what the merger would do.
“I do know they do some things we don’t do on the mortgage side,” DeLay said. “There are some things that they won’t do, but there are some things that they can do that we don’t do right now.”
There will not be local representation on the United Business Bank board, but DeLay said there are no plans to close any of the five Grand Mountain Bank locations.
Following the merger, customers will have access to 11 branches in Colorado, along with other locations in New Mexico, California and Washington. The bank will also have the ability to lend more money and offer new business loans.
The company doesn’t anticipate a change in front line staff at the banks, so customers will continue working with the same employees. The merger also won’t require the bank to change account numbers.
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Grand County’s real estate transactions April 4-10 were worth more than $20 million combined.