Fun times in Greeley!
New Frontier has been under FDIC scrutiny since October, shortly after third-quarter financial filings showed the bank’s "real estate owned," or property that came back to the bank through foreclosure, and past due loans were more than 100 percent of its capital. Typically, banks that exceed 50 percent of their capital are considered “troubled.”
New Frontier announced in a press release today that it is in “advanced discussions” with a group of Boulder County investors to raise $30 million in new capital for the bank. That group, Colorado Financial Holdings, LLC, of Boulder, has already filed with the FDIC to become a bank holding company through the acquisition of 100 percent of the voting shares of New Frontier Bancorp, parent of New Frontier Bank, according to FDIC documents.
The cease-and-desist order, which was effective Dec. 2, but not reported publicly until today, states that the bank was involved in “unsafe or unsound banking practices and violations of law and regulations.” The order requires the bank to provide plans to deal with several problems, including requiring regular oversight of operations and the removal of the positions of president Larry Seastrom and chief lending officer Greg Bell.
New Frontier and the FDIC agreed to the cease-and-desist under an agreement that states bank officials will not admit or deny the charges.One of New Frontier’s biggest problems was the amount of loans past due, resulting in foreclosed assets sitting on their books. As of Sept. 30, 2008, banking reports, the most recent available, the bank reported it had $180 million in past-due loans and other real estate owned, compared to about $70 million the year before.New Frontier most recently took a hit on confidence when Johnson Dairy announced it was filing for Chapter 11 bankruptcy. The dairy, which has loans through New Frontier Bank, notes that it had debts between $50 and $100 million.The bank also owns a large golf course on the Western Slope that’s been sitting on the books for some time.Check back for more updates today at http://www.greeleytribune.com/. For complete coverage, see Saturday’s Tribune.