Greeley’s American Ag Bank closes after its clients struggle

GREELEY – American Ag Bank in Greeley closed on Sept. 30 after more than seven years of service to the agricultural community.
The bank closed quietly with signs posted in the windows of the building at 1901 56th Ave. However, issues behind the scene were not so quiet leading up to the closure.
Last year AgLand Inc., an Eaton-based agricultural cooperative, sued American Ag in Weld County District Court. The suit was dismissed in May “with prejudice” – this means the plaintiff cannot file a new lawsuit in the same jurisdiction based on the same facts or issues. Both Mitch Anderson, general manager and CEO of AgLand, and Jim Gustad, chief credit officer for American Ag’s parent company, American National Bank, declined to comment on the reason the suit was filed or the circumstances related to its dismissal.
However, court documents indicated AgLand and American Ag were at odds over the assets of Podtburg & Sons Dairy in Weld County.
In October 2003 Podtburg filed for protection from creditors under Chapter 11 of the bankruptcy code. American Ag then sued Podtburg, to collect on collateral for previous loans to Podtburg.
AgLand, which was also seeking to collect on Podtburg’s debts, consequently sued American Ag. AgLand claimed the bank, after collecting from Podtburg, was responsible for fulfilling Podtburg’s bills to AgLand.
Attempts to contact the Podtburgs were unsuccessful.
The closure of American Ag came and went without much notice from the local banking community.
“It’s not one that the rest of the banks even consider competition,´ said Larry Wood, president of Union Colony Bank in Greeley. “It was very specialized.”
The bank opened in late 1996 as a branch of the Denver-based Bank of Cherry Creek, owned by the Sturm Financial Group. Sturm consolidated the Bank of Cherry Creek, along with three other banks, under the name American National Bank in February.
The bank’s focus was medium- to large-sized agricultural loans, especially in the dairy industry.
“(American Ag) didn’t fit our business line. It didn’t fit our future plans in how we are going to take the business,´ said Dick Dewire, the Northern Colorado regional president for American National Bank.
He said the bank was set up to attract the agricultural community – it had only one substantial non-agricultural relationship. With the drought, the rise in milk prices and issues with herd health, Dewire said the bank was up against hard times.
“We were hit hard on three major fronts. Anything that could go wrong, did go wrong,” he said.
In 2003, American Ag faced the bankruptcies of several clients.
“The bankruptcies had affected our decision (to close the branch),´ said American National’s Gustad.
American National Bank is directing American Ag clients with deposits to its Boulder branch, 2835 Pearl St., and its loan customers to the Cherry Creek branch, 3033 E. First Ave.
This closure is not the first in Northern Colorado for this chain of banks. The Bank of Cherry Creek closed its Poudre Valley Banking Center in Fort Collins in 2002. The president of the Fort Collins branch said the reason for closure was the high level of competition forcing banks in Northern Colorado to grant higher interest rates on savings instruments.