Founders' Generation PassesTorch at Salt Lake's Draper

A slate of baby boomers has replaced the octogenarian directors who founded and ran Salt Lake City's Draper Bancorp for more than 30 years.

Twenty investors acquired a 60% stake in the bank from directors and the founder and president K. Vincent Bluth, who sold his entire stake. The stock purchase was valued at $24 million.

Draper's new investors then retired 9% of the company's shares, leaving them with a 51% stake.

Mr. Bluth retired last month, and one of the investors, Robert M. Dougherty, replaced him as president and chief executive officer of the $200 million-asset banking company.

Mr. Bluth represents a generation of bank founders retiring in an age when bank acquisitions are rampant. But the Utah banker is bucking the trend of selling to a larger institution.

"This is very unusual," said Chris Hargrove, a consultant at Professional Bank Services Inc. "For the vast majority, when it is time to retire, they sell to a larger bank."

Most bank founders sell to larger institutions rather than investors because it is difficult to find individuals to buy a large stake in a community bank, Mr. Hargrove said.

The investors were led by W. James Tozer, a Utah native who is a founder and major shareholder of Vectra Bank, a $500 million-asset Denver institution.

Mr. Tozer previously worked for Marine Midland Bank, Citibank, and Lincolnshire Managing Inc., a New York firm that specializes in leveraged buyouts.

Mr. Tozer and Mr. Dougherty have joined Draper's board of directors as part of a five-person slate that also includes a local accountant, retired judge, and president of a trucking company.

Mr. Dougherty previously was vice president of the corporate real estate division of the now defunct U.S. Bank in Salt Lake City.

Draper is the leading home construction lender in the Salt Lake City area and has four branches in nearby suburbs. It plans to open a fifth.

Last year, Draper had a return on assets of 2.22% and return on equity of 21.55%, both up from the previous year.

"Draper Bank has a well-deserved reputation as the leading bank serving the rapidly growing communities in the south Salt Lake Valley," Mr. Dougherty said in a statement.

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