Heber Valley Bank is set to acquire the Park City branch of Frontier Bank by the end of the year, waiting only for banking regulators to approve the sale.
Frontier Bank first opened its doors in Park City in 1998 and has since expanded into the Southern California market, but with the economic downturn the bank has struggled to balance capital and revenue. When Heber Valley Bank approached Frontier Bank CEO Joe Kiley, he said he saw it as an opportunity to correct the balance sheets with his bank while still keeping the "community bank" motto of Frontier Bank alive.
"Heber Valley Bank made it attractive transaction for us," Kiley said. "They wanted to expand because they like (Park City) market and it leaves a community bank in Park City. Customers will have a strong bank."
"For us, we're in the banking business, and like everyone else, we're trying to survive. We've decided to focus on raising capital in California."
The majority of Frontier Bank deposits and loans come from the California market, an estimated 85 percent of the bank's overall business Kiley said. The Park City branch, the only branch now outside of California, accounted for a minority of the business, and while Kiley said it was a difficult decision, it was the right one for the bank and for its Park City customers.
"We're undercapitalized," Kiley said. "Now depositors will have a bank with good history of earnings that is still a community bank."
"It is very sad to leave the market," he added, " we'll be reducing our expenses and pointing the bank in right direction."
Heber Valley Bank has been searching for a way to enter the Park City market for a few years, said President and CEO Curt Taylor.
"Park City is a thriving, dynamic community that looks like it has strong economic future ahead of it," Taylor said on his reasoning to buy the branch."
Heber Valley Bank, or Grand Valley Bank, is headquartered in Heber and has seven other locations in Utah and Colorado, including Utah branches in Vernal and Midway and branches Colorado branches in Grand Junction, Fruita and Collabran.
Heber Valley Bank hopes to maintain the Frontier name, the employees of the branch and all services offered to its customers, making the sale more a name change than anything else.
All of the branches' deposit accounts will be transferred over automatically once Heber Valley Bank receives regulatory approval, and Taylor said he hopes that the change will be as unnoticeable as possible down to the online banking services. Heber Valley Bank offers online banking and check images, automated payments and deposits, electronic statements, remote deposit of checks, and mobile banking, all of which will be extended to Frontier Bank customers. Heber Valley Bank will also acquire Frontier's ATMs in Park City.
"The biggest change we are looking at is a more active involvement in giving loans to local community," Taylor said, "to the local business and residents. For example, Frontier was not very active in car loans. Well, we will be."
"We are a community bank," he added, "and Park City is right in our backyard. We've been doing business in area already, so the move is natural for us."