In 1982, I was approached by Lynn French and Bob Korn about investing in a deal to purchase the Bank of Telluride. I had known Bob and his wife, Carol since I moved to Telluride in 1971, I’d never met Lynn French, but was told he was a judge in Delta County and was an acting District Court Judge by Korn.

The idea intrigued me from the beginning. The facts were that there was only one bank in Telluride and it was run by Dutch Peltier and owned by the “oldtimers” that owned the Dolores State Bank in Dolores, Don Majors, and Doc Merritt were the most active. They had chartered the bank in 1969, about the time that Joe Zoline showed up and started putting together the pieces for the Telluride Ski Area. Dutch, who worked for the Dolores Bank, did all the work to get the bank chartered and was given the job of President.

It was the only bank in town, although there was another bank in Norwood which was owned by Herman Booth and Dan Noble which was larger and more robust than the Telluride Bank. In fact, Norwood was more economically viable than Telluride in the early 70’s. They even had a doctor and a dentist.

A lot of people banked with Herman Booth who was a great man and helped a lot of people get their start in Telluride. They actually loaned money.

It was another thing entirely with the Bank of Telluride. The deal was that you could deposit money there, but the only way you could borrow any was if you were willing to put up a CD that matched the amount of the loan. What this means is that you could borrow $5,000 against a $5,000 Certificate of Deposit as collateral.

Money was hard to come by, profits were virtually non-existent and thus people that had money when they hit town got all the deals. The people that were toiling and building the community were out of luck.

You couldn’t buy a house even if you had the down payment because no one would loan you the money and don’t even think of going to Montrose—they hated us up there.

So, the plan was to buy the Bank of Telluride and make it a local bank that loaned money to locals to build businesses and homes and lives.

Ultimately, we put together a local group of investor which included Chip Kamin, Jerry Race (the Mayor), Barry Cook, Bob Korn, Mickey Salloway, and myself. We added some outside investors which Lynn French knew, borrowed 90% of the purchase price from Colorado National Bank which was the largest bank in Colorado, located in Denver and also happened to be the bank that Ron Allred and the Telluride Ski Resort borrowed their money from (near $60 million at the tops) and at the last minute threw in Montrose County Bank in Naturita for good measure—and closed.

The next day Lynn French fired Dutch Peltier and walked him to the door with a cardboard box. There was only one problem which turned up in the morning, he forgot to get the combination to the vault from him. It was a bit embarrassing to have to call Dutch who was sitting at home giggling and nicely ask him for his help and cooperation.

It was awhile before we figured out that we had paid the highest price a bank had ever sold for in Colorado and that there were a number of irregularities at the closing in Denver.

For the next eight years, we hung on to a true mess, but we made loans to our friends and our community. A typical discussion with the bank examiners went something like this:

“This is a bad loan,” said the examiner wearing knit clothes and a white belt, who lived in Houston.

“It is paying as agreed,” we replied.

“This is the picture of the house. This house isn’t worth $30,000 in Houston and you’ve loaned $100,000 against it. Plus, the owner works for the ski company and isn’t qualified for a loan of this size,” said the examiner.

“This isn’t Houston. There is a proper appraisal of the property in the file and the loan is paying as agreed. The borrower has never missed a payment and never been late. I can tell you that I personally know the borrowers and they would eat dirt before they missed a payment,” said management.

“It’s classified,” said the examiner. “We’ll take a look at it in November.”

It was very strange. Ultimately, Lynn French and Barry Cook were bought out as was Lynn’s buddy John Levin, another Judge. We had to hire Dutch Peltier back for quite a while and finally hired Mike Loken to be President and I became the Managing Partner of both banks. We stabilized Montrose County Bank which was going through a depression of sorts due to the uranium bust. One loan, we had over there, I remember was actually collateralized by car batteries and they were used.

The ski resort was struggling, the ski area improvements were tied up in lawsuits brought by Michael Zivian, David Sklare and Walter McClennan and the prime lending rate went to around 10%.

We sold the bank after almost ten years of loaning money locally and reinvesting in our community and its people.

When we sold the bank it was one of the most profitable banks in America based on percentage returns on assets and was one of the ten fastest growing banks in the country.

During our years of owning the bank, Telluride developed an economy and we helped many locals by loaning them money to buy lots and build houses or buy some old place and fix it up. We made loans to local businesses and developed Main Street into a thriving business community, the Mountain Village was launched, the Airport was built, the ski area was expanded and a lot of construction was commenced that supplied jobs and training for our fledgling construction industry.