Ephraim, Utah ? For more than a decade, a 9,000-member polygamist sect that believed civilization was about to end was borrowing money like there was no tomorrow.

Members of the sect — a renegade Mormon splinter group called the Fundamentalist Church of Jesus Christ of Latter-day Saints — took out one loan after another from the small-town Bank of Ephraim for business ventures that would prove highly speculative, even half-baked.

Among them:

• A watermelon farm where not a single melon was planted, forcing the bank to foreclose on the farm.
• A business with plans to convert military barracks into motels and housing; the business collapsed when the buildings were found to contain lead paint, asbestos and other hazards.
• A construction company that so underbid municipal sewer and street contracts that it was unable to pay for materials, let alone labor; the bank wrote off that loan, too.

Ultimately, the bad loans — along with the embezzlement of nearly $5 million by the bank’s head cashier — would lead to the collapse of the 99-year-old bank. Regulators shut it down in June at a cost of millions of dollars to shareholders and ordinary depositors who had nothing to do with the sect.

Ron Greene owns Ron Greene Chevrolet in Ephraim, Utah. The Bank of Ephraim's failure was the

A bank failure was “the last thing in my mind,” said Chevrolet dealer Ron Greene, who lost about $100,000. “I thought of it as the Rock of Gibraltar.”

The Bank of Ephraim had profited for many years from higher-interest loans to the sect, whose members live in the twin cities of Hildale and Colorado City astride the Utah-Arizona state line. But eventually the bank “got in too deep,” investing heavily in increasingly risky ventures with sect members who “didn’t have much to lose,” Utah Banking Supervisor Jim Thomas said.

“They were locked into a community that is — not normal,” Thomas said.

Hildale, Utah, and Colorado City, Ariz., are a jumble of unfinished houses on dirt streets, where residents follow a strict pioneer-style dress code. The men take multiple wives, producing dozens of children who supply cheap labor for business.

The insular sect is run by the reclusive Warren Jeffs, who lives in a compound surrounded by a 10-foot wall. Jeffs, 48, demands total obedience from his flock, and his church takes a share of business profits from members.

Jeffs is buying ranches in Colorado and Texas for what authorities believe may be an exodus. Jeffs does not grant interviews, and an attorney for the church, Rodney Parker, did not return calls for comment.

Keith Church, who joined the bank as president in 2000, said that after it failed, he learned from several people in the business community that sect members had taken a secret oath in 2000 to borrow as much money as they could to prepare for the day that civilization — along with the financial markets — collapsed.

At one point, the amount of money borrowed by members of the sect amounted to around $18 million, or about 90 percent of the institution’s loan portfolio — three times higher than what prudent bank management dictates, regulators said.