Daniel Watson of Mill Brothers Landscaping and Bonnie Watson work to put the final touches on a mulch bed for a Reflections for Youth house in west Berthoud on Earth Day. More than 20 volunteers from the Associated Landscape Contractors of Colorado provided materials and manpower to complete several improvements to the house, including regrading the road, preparing a vegetable patch, planting perennials and installing a watering system. This was part of a nationwide day of community service by landscapers
New Frontier Closure Spills Over into Berthoud
By Shari Phiel
Although not the first Colorado bank to close this year — Colorado National Bank in Colorado Springs was shut down on March 20 — the closing of Greeley-based New Frontier Bank, along with the Windsor and Longmont branches — has raised concerns for bank customers across the northern Front Range area.
New Frontier was closed down on April 10 when the Federal Deposit Insurance Corp. was unable to find a buyer for the failed bank. According to a statement released by the FDIC, New Frontier had total assets of $2 billion and total deposits of $1.5 billion as of March 24. The bank had an estimated $150 million in insured deposits and an additional $4 million in deposits at the time of closing that could exceed the FDIC’s insurance limit of $250,000 per depositor.
While bank closings are not entirely unusual (there have been 25 shut down this year already), what was unusual was the FDIC’s inability to find a buyer. For the first time in 27 years, the FDIC created its own temporary bank called the Deposit Insurance National Bank of Greeley and has contracted with San Francisco–based Bank of the West to assist with the closing. The DINB bank will remain open for 30 days.
“The FDIC has appointed us as an operational standpoint to monitor the closing out of all those accounts and to help out with the staff there,” said Berthoud Branch Manager Kimberly Buxbaum
The bank closing has been especially difficult for farmers in the area who typically rely on loans to get them through the spring and summer growing season until harvest time in the fall. Dairy farms have also relied heavily on the bank and are now looking for new lending sources, including U.S. Department of Agriculture programs.
Given its close proximity to Berthoud, the closing of New Frontier and the $700 billion federal bank bailout has many locals talking. Guaranty Bank President Debbie Davis, who could not comment on the closing of New Frontier, said customers have questions and concerns about the overall health of the banking industry.
Buxbaum said the same is true at Bank of the West. “We’re definitely getting a lot of questions from customers. We’re getting a lot of accounts that are opening.”
With the DINB closing date of May 8 approaching quickly, the FDIC is urging New Frontier customers to transfer their insured funds as quickly as possible. According to the FDIC statement, “They may do so by asking their new bank to electronically transfer their deposits from the DINB or by writing checks for the amount in their accounts.”
The FDIC will mail checks out following the end of the transition period to depositors who have not closed or transferred their accounts. The closing is expected to cost the FDIC’s Deposit Insurance fund as much as $670 million.
For more information about FDIC insured deposits, visit their Web site at www.FDIC.gov. Information about the New Frontier Bank closing can be found at www.FDIC.gov/bank/individual/failed/newfrontier.html.