Federal bank regulators are preparing to auction off $750 million worth of agricultural loans left behind by failed New Frontier bank of Greeley, the biggest sale of its kind in decades. Other Colorado banks were unwilling to take on the troubled loans. And the government's advertisement sheds new light into the bank's reckless practices: it invested heavily outside its home market in Colorado, extending its lending reach to Florida and Texas. Nineteen percent of the loans up for bid were made to Texas borrowers and 9 percent to Florida borrowers, according to the sale document. 'Investing outside of your territory can be hazardous to your financial health, as it was here,' said Fred Joseph, Colorado's acting banking commissioner. New Frontier's closure on April 10 -- hastened by shoddy lending practices and heavy reliance on high-interest certificates of deposit -- ranks as the third most expensive bank failure in the nation this year. The bank was so gorged with troubled assets that for the first time in more than 30 years regulators couldn't find another bank to liquidate it. Half the loans slated for the Aug. 18 online auction are distressed, or 90-days past due. In the months since New Frontier's closure, Federal Deposit Insurance Corp. officials have sought to liquidate it themselves, scrambling to match up bankers with borrowers but seeing little success given the loans' poor quality. Leroy Leavitt, president of New West Bank in Greeley and a banking management instructor at the University of Northern Colorado, echoed Joseph's assessment of the out-of-state loans, saying such practices are risky for a community bank. 'If you can't drive into the driveway of the dairy, you really don't know what you've got,' Leavitt said. New West has taken on about 1,000 new depositors bringing in $22 million since New Frontier's meltdown. But it's rejected most of the orphaned borrowers because their loans reflected poor cash flow or collateral that won't cover debts. 'Ninety percent of the loans we're reviewing from New Frontier are just so atrocious you just can't take them,' Leavitt said. FDIC spokesman David Barr said: 'Now we've got to the point where we need to auction these loans and get them back into the private sector. ... You'd have to go back to the '80s to find a sale of agriculture loans like this.' First Financial Network of Oklahoma City, a loan-sale adviser to the FDIC, will pool the agricultural notes into categories and auction them on the Web so that investors across the country can submit bids. First Financial is restricting the auction to banks, credit unions or other 'sophisticated' entities with knowledge about the agriculture industry, according to the sale notice. After purchase, the loans likely will see one of three fates: The same terms will be preserved, a new payment plan will be worked out or the note will be taken to foreclosure. 