Regulators shut Greeley's New Frontier Bank

State regulators shut New Frontier Bank in Greeley on Friday night after a sale of the troubled institution fell through.

No other bank stepped forward to assume New Frontier’s deposits, so the bank will close completely, unlike many other recent bank failures. The Federal Deposit Insurance Corp.’s insurance fund will take a $670 million hit, it estimates.

It’s the second Colorado bank failure in three weeks and the 23rd in the nation this year. Colorado National Bank in Colorado Springs closed March 20. Herring Bank of Amarillo, Texas, took over its offices and assumed the customers.

The FDIC has created the Deposit Insurance National Bank of Greeley, which will remain open for about 30 days to allow depositors time to open accounts at other insured institutions. Normal banking activities will continue during this time, and New Frontier checks will clear.

Bank of the West will provide operational management of the DINB. The main office and two branches of New Frontier will open Monday.

“The isolated bank failure will inevitably occur from time to time – in good economic conditions and bad,” Colorado Bankers Association President Don Childears said Friday night. “The first priority of our regulatory system is not to ensure that there will never be a bank failure but to protect the customer if one occurs.”

As of March 24, the FDIC said, New Frontier had total assets of $2.0 billion and total deposits of about $1.5 billion.

At the time of closing, there were about $150 million in insured deposits and $4 million in deposits that potentially exceeded the FDIC’s insurance limits.

Customers with accounts in excess of $250,000 should contact the FDIC toll-free at 1-800-830-4705 to set up an appointment to discuss their deposits. (The phone number will be operational tonight until 9; on Saturday from 9 a.m. to 6 p.m.; on Sunday from noon to 6 p.m.; and thereafter from 8 a.m. to 8 p.m.

New Frontier ran into trouble in its September regulatory exam, and it signed “consent orders” with regulators in December and January promising to raise new capital, replace top executives and revamp its procedures.

The bank reached a deal to sell controlling interest to a Boulder-based investment group led by Mark Wong and Gary Jacobs; bank turnaround specialist Jim Slavik would be CEO.

The deal fell apart, however, as New Frontier battled lawsuits, including one from customer Johnson Dairy that alleged improper lending procedures.