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Farmers in Colorado are trying to keep going after the collapse of a regional bank. Federal regulators shut down the New Frontier Bank in Greeley, Colorado, which closed a major source of financing for farm operations just as spring planting had begun. Kirk Siegler reports from member station KUNC.
KIRK SIEGLER: Gary Teague grows corn and runs a feedlot near Fort Morgan. It's a small farming town in the high plains, about 80 miles northeast of Denver. Limbo is how you'd best describe his situation.
Mr. GARY TEAGUE (Farmer): How do you buy feed? How do you pay your employees? How do you do those kind of things? It's difficult.
SIEGLER: Each spring, Teague relied on a massive loan from New Frontier Bank to finance his farm and 155 employees. He then started to pay it back in the fall, when he turned a profit. With his bank collapsing, he's now under the gun to find a new bank and a new loan before federal regulators dissolve his old one.
Mr. TEAGUE: I can't plan for next week, much less, you know, the fall, and it's just difficult in that kind of situation.
SIEGLER: Teague and a couple hundred other farmers crowded into a 4H barn at the local fairgrounds this week, hoping to get some answers. They came to hear what the country's top ag official could do to help them through the crisis.
Secretary TOM VILSACK (Department of Agriculture): Welcome and good morning to all of you. I'm Tom Vilsack, secretary of Agriculture…
SIEGLER: The secretary came at the urging of several members of Colorado's congressional delegation. They had just gotten him to free up more than $250 million in USDA loan money to help these farmers. But when it was Gary Teague's turn to take the mike, it quickly became apparent that that wasn't going to go far enough.
Mr. TEAGUE: We've been farming, feeding cattle for 15 years. I don't need a bailout.
SIEGLER: What Teague needs, he says, is a bank.
Mr. TEAGUE: All I'm asking you to do is to make the phone call. Just call somebody that matters because it's our livelihood.
(Soundbite of applause)
SIEGLER: A sympathetic Vilsack said the USDA couldn't help all of these farmers. His agency's loans are geared towards smaller farms with less capital. New Frontier made a lot of loans to big farms. Still, Vilsack pledged to do all he could to buy them some more time.
Secretary VILSACK: These people are trying to save their farms, save their homes, and I think frankly, in difficult times when we're doing everything else to save a lot of folks and help a lot of folks out, the most we can do is try to help these farmers out.
SIEGLER: New Frontier's reach was huge. Federal bank regulators say its total portfolio ballooned at $2 billion in just a 10-year run. About a third of those assets were tied up in loans, the bulk farm loans. Up until the bank's collapse, it financed about a third of Colorado's entire dairy market. Vilsack is hoping other regional banks will step in to help these farmers, but many are flinching at taking on New Frontier's loans.
One of those banks is Bank of Choice in nearby Greeley. Darrell McAllister is the CEO, and he says he's seen a steady stream of former New Frontier loan customers come through his doors.
Mr. DARRELL MCALLISTER (CEO, Bank of Choice): Some of it, we're able to do.
SIEGLER: But McAllister says his bank won't be able to help everyone. He says the amount of loans New Frontier was backing is just too large a sum for other banks to absorb. And, he adds, with many of the farm loans, there's another problem.
Mr. MCALLISTER: Some of it, we feel the assets were overvalued, cash flow was not there, and we are not able to offer those loans to those individuals.
SIEGLER: All of this isn't very good news for farmers like Gary Teague. He says he's trying to stay upbeat, but he's not doing a very good job.
Mr. TEAGUE: This is one of the few things that you worry about. You know, this is the last thing you worry about, is having to find another financial lending institution in 30 days' time period. You just don't think about that, but these are not normal times.
SIEGLER: Indeed, New Frontier was reportedly one of the fastest- growing banks in the country. Now it's become one of the costliest bank failures in the U.S. so far this year.
For NPR News, I'm Kirk Siegler.