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Home My WebLink About20090874RESOLUTION RE: APPROVE ADDITIONAL HOURS OF OPERATION FOR CLERK AND RECORDER TO ACCEPT FILING DOCUMENTS RELATING TO FDIC APPOINTMENT AS RECEIVERILIQUIDATOR OF NEW FRONTIER BANK ASSUMPTION ON APRIL 10, 2009 WHEREAS, the Board of County Commissioners of Weld County, Colorado, pursuant to Colorado statute and the Weld County Home Rule Charter, is vested with the authority of administering the affairs of Weld County, Colorado, and WHEREAS, on April 10, 2009, the Federal Deposit Insurance Corporation (FDIC) was appointed as receiver/liquidator of New Frontier Bank, as evidenced in the letter addressed to Steve Moreno, Weld County Clerk and Recorder, dated April 10, 2009, with attached Exhibits, from Fred J. Joseph, Acting State Banking Commissioner, State of Colorado, all being attached hereto as Attachment "A," and WHEREAS, because of the circumstances detailed in Attachment A, Steve Moreno, Weld County Clerk and Recorder, authorized the office to remain open after 5:00 p.m., on Friday, April 10, 2009, in order to accept the filing of the documents listed in Attachment A, and WHEREAS, Section 30-10-109, C.R.S., provides that "all county offices shall be kept open for the transaction of county business on the days, and during the hours, designated by resolution of the board of county commissioners," and WHEREAS, the Board deems it advisable to approve the additional hours of operation after 5:00 p.m., for the Weld County Clerk and Recorder on Friday, April 10, 2009, for the purpose of accepting, for filing, the documents listed in Attachment A. NOW, THEREFORE, BE IT RESOLVED by the Board of County Commissioners of Weld County, Colorado, that the Board hereby approves the additional hours of operation after5:00 p.m., for the Weld County Clerk and Recorder, on Friday, April 10, 2009, for the purpose of accepting, for filing, the documents listed in Attachment A, being: (1) An original Certificate Evidencing Appointment of a Receiver/Liquidator with appropriate attachments (3 pages); and (2) A complete copy of the Notice of Assumption of Possession filed with the Weld County District Court (11 pages). 2009-0874 CR0025 RE : APPROVE ADDITIONAL HOURS OF OPERATION FOR CLERK AND RECORDER TO ACCEPT FILING DOCUMENTS RELATING TO FDIC APPOINTMENT AS RECEIVER/LIQUIDATOR OF NEW FRONTIER BANK ASSUMPTION ON APRIL 10, 2009 PAGE 2 The above and foregoing Resolution was, on motion duly made and seconded, adopted by the following vote on the 13th day of April, A.D., 2009. ATTEST: Weld ounty Clerk to the Boar BY. Delp y Clerk . the Board APPROVED AS TO dunty Attorney Date of signature' qIl-i'GC1 OARD OF COUNTY COMMISSIONERS UTY, LORADO A Garcia, Chair S Day ;43-arbara Kirkmeyer 2009-0874 CR0025 Attachment "A" •Nr.�Fc� �r sw • reie ` Department of Regulatory Agencies Bill Ritter, Jr. Governor D. Rico Munn Executive Director April 10, 2009 Steve Moreno, Clerk and Recorder Weld County 1402 North 17th Avenue Greeley, CO 80631 Dear Mr. Moreno, Division of Banking Fred J. Joseph Acting State Bank Commissioner The Colorado State Banking Board has ordered the appointment of the Federal Deposit Insurance Corporation as receiver/liquidator of New Frontier Bank, Weld County, Colorado. Section 11-103-805, C.R.S. requires that documents evidencing this appointment be filed with your office. We appreciate your willingness to accept our filing outside of your normal business hours. This has greatly assisted our efforts to minimize disruption to Weld County residents who are customers of the Bank, local merchants, and others who are unavoidably affected by this action. In addition, we appreciate your willingness to preserve the confidentiality of this action by accepting this filing without prior notice. Attached for immediate filing and recording please find: (1) an original Certificate Evidencing Appointment of a Receiver/ Liquidator with appropriate attachments (3 pages); and (2) a complete copy of the Notice of Assumption of Possession filed with the Weld County District Court (1 1 pages). Thank you for your assistance in this matter. Sincerely, Fred J. Joseph Acting State Banking Commissioner cc: Bruce Barker, Weld County Attorney 1560 Broadway, Suite 975 Denver, Colorado 80202 Phone 303.894.7575 Fax 303.894.7570 www.dora.state.co.us PDPA 303.894.7588 a Consumer Protection V 2009-0874 BEFORE THE OFFICE OF THE CLERK AND RECORDER WELD COUNTY, COLORADO CERTIFICATE EVIDENCING APPOINTMENT OF RECEIVER/LIQUIDATOR IN THE MATER OF NEW FRONTIER BANK, WELD COUNTY, COLORADO This Certificate is filed pursuant to Section 11-103-805(3) of the Colorado Revised Statutes to evidence that the Federal Deposit Insurance Corporation was appointed Receiver/Liquidator of New Frontier Bank, Greeley, Colorado, effective on April/a/ 2009, at‘•'y, p.m. The appointment was tendered in accordance with Section 11-103-805(2) of the Colorado Revised Statutes, and upon order of the Colorado State Banking Board, a copy of which Order is attached hereto as Exhibit A. The appointment was accepted by the Federal Deposit Insurance Corporation in accordance with 12 U.S.C.S. § 1821(c), as evidenced by the consent signed on behalf of the corporation, a copy of which is attached hereto as Exhibit B. Dated this%day of April, 2009, at Denver, Colorado. FOR: COLORADO STATE BANKING BOARD .) Fred J. Joseph Acting Colorado State Bank Commissioner DORA Division of Banking 1560 Broadway, Suite 975 Denver, CO 80202 BEFORE THE STATE BANKING BOARD STATE OF COLORADO APPOINTMENT OF FEDERAL DEPOSIT INSURANCE CORPORATION AS RECEIVER/ LIQUIDATOR IN THE MA ITbR OF NEW FRONTIER BANK, WELD COUNTY, COLORADO Pursuant to Section 11-103-805 of the Colorado Revised Statutes, the Colorado State Bank Commissioner, upon order of the Colorado State Banking Board, tenders to the Federal Deposit Insurance Corporation the appointment as receiver/liquidator of New Frontier Bank, Weld County, Colorado. BY ORDER OF THE COLORADO STATE BANKING BOARD this /Of -c. day of April, 2009 at G -1,) p.m. Fred J. Joseph Acting Colorado State Bank Commissioner DORA Division of Banking 1560 Broadway, Suite 975 Denver, CO 80202 EXHIBIT A 1 Page 1 of 2 LexisNexis File & Serve Transaction Receipt This transaction was completed on Apr 10 2009 2:49PM MDT and was authorized for filing at the authorized date/time shown. This transaction will not be officially submitted to the court until the authorized date/time. You can update the authorized date/time by going to Scheduled Transactions (under the Filing & Service tab). Transaction ID: 24621481 Submitted by: Bill Russell, CO Attorney General Authorized by: Cathern H Smith, CO Attorney General Authorize and file on: 4/10/2009 6:30:00 PM MT Court: CO Weld County District Court 19th JD Case Class: Civil Case Type: Other Case Name: In the Matter of the Involuntary Receivership and Liquidation of New Frontier Bank, Weld County, Colorado Transaction Option: Billing Reference: Note to Clerk: Originating Event RG BA This filing was discussed with the clerk's office this afternoon. This is the initial filing pursuant to 11-103-802. This is filed on behalf of the Colorado Division of Banking. Please waive filing fees. If you have any concerns, please contact Assistant Attorney General Cathern Smith at 303-866- 4108. Thank you! Documents List 4 Document(s) Originating Document, 1 Pages Document ID: 21028345 Document Type: Petition Document title: Filing of Notice Pursuant to 11-103-802, C.R.S. Attached Document, 1 Pages Document ID: 21028403 Related Document ID: 21028345 Document Type: Filing Other Document title: Exhibit A Attached Document, 7 Pages Document ID: 21028439 Related Document ID: 21028345 Document Type: Filing Other Document title: Exhibit B Attached Document, 2 Pages Document ID: 21028466 Related Document ID: 21028345 Document Type: Filing Other Document title: Exhibit C Close All I] sending Parties fit Access: Public Access: Public Access: Public Access: Public PD Qrmat I - ri inaifsx at Statutory Fee: Linked: $224.00 PDF Format I OrlgnaLF9rrnat Statutory Fee: Linked: $0.00 PDF Format I Original Format Statutory Fee: Linked: $0.00 PDF Format I Original Format Statutory Fee: Linked: $0.00 Party Attorney Firm Fred J. Joseph, Acting Banking Commissioner (pending) Smith, Cathern H CO Attorney General Case Parties https://w3. fileandserve.lexisnexis.com/ WebServer/W ebPageslFileAndServe/prcReviewSu... 4/10/2009 Page 2 of 2 Party Attorney Firm ColorrdoJDiyision of 8a m (pending) Pro Se Pro Se- frQd_l._.?Qsee-hALting Banking Commissioner (pending) Smith, Cathern H CO Attorney General Close LexisNexis'a I About LexisNexis I Terms & Conditions I Privacy I Customer Support - I-888-529-7587 Copyright © 2009 LexisNexts@. All rights reserved. https://w3. fileandserve.lexisnexis.corn/WebServer/WebPages/FileAndServe/prcReviewSu... 4/10/2009 DISTRICT COURT, WELD COUNTY COLORADO 915 10th Avenue Greeley, CO 80631 4' COURT USE ONLY IN THE MATTER OF THE INVOLUNTARY RECEIVERSHIP/LIQUIDATION OF NEW FRONTIER BANK, WELD COUNTY, COLORADO JOHN W. SUTHERS, Attorney General CATHERN H. SMITH, Asst. Attorney General* 39715 CHRISTINE C. STRETESKY, First Asst. Attorney General * 31749 1525 Sherman Street, 7th Floor Denver, CO 80203 Main Number: (303) 866-4500 Facsimile: (303) 866-5395 *Counsel of Record Case No.: Div.: Ctrm.: FILING OF NOTICE PURSUANT TO 11-103-802, C.R.S. Pursuant to § 11-103-802, C.R.S.. the Colorado State Bank Commissioner, on behalf of the Colorado State Banking Board, by their attorney, the Colorado Attorney General, files a "Notice of Assumption of Po.ssession of New Frontier Bank by State Bank Commissioner " a copy of which is attached hereto as Exhibit A. Also attached hereto as Exhibit B is a copy of "Findings Regarding the Existence of an Emergency at New Frontier Bank, Weld County, Colorado" and as Exhibit C is a copy of "Findings and Order Approving Assumption of Possession of New Frontier Bank by State Bank Commissioner." Respectfully submitted on this 10'h day of April, 2009. JOHN W. SLITHERS Attorney General The original signature is on file at the Office of the Attorney General. Is Cathern H. Smith CATHERN H. SMITH, 39715* Assistant Attorney General Financial/Professional Boards Unit Business & Licensing Section Attorneys for Colorado Banking Board *Counsel of Record BEFORE THE STATE BANKING BOARD STATE OF COLORADO NOTICE OF ASSUMPTION OF POSSESSION OF NEW FRONTIER BANK BY STATE BANK COMMISSIONER IN TI lE MATTER OF NEW FRONTIER BANK, WELD COUNTY, COLORADO Pursuant to Section 11-103-802 of the Colorado Revised Statutes, the Colorado State Bank Commissioner, with the approval of the Colorado State Banking Board, by this notice does hereby assume possession of New Frontier Bank. The State Bank Commissioner assumes possession of New Frontier Bank effective the/°`day of April, 2009 at the hour of p.m. IN WITNESS THEREOF, I have set my hand and official seal this /e',T, day of April, 2009. FOR: COLORADO STATE BANKING BOARD The original sealed document is on file at the Office of the Attorney General. Fred J. Joseph Acting Colorado State Bank Commissioner DORA Division of Banking 1560 Broadway, Suite 975 Denver, CO 80202 EXHIBIT A 1 BEFORE THE COLORADO BANKING BOARD STATE OF COLORADO FINDINGS REGARDING THE EXISTENCE OF AN EMERGENCY AT NEW FRONTIER BANK, WELD COUNTY, COLORADO IN THE MATTER OF NEW FRONTIER BANK, WELD COUNTY, COLORADO This matter came before the Colorado Banking Board (the "Board") at its April 3, 2009 Emergency Board Meeting. Based upon the administrative record, the Board found that pursuant to § I I -103-802(1)(a) and (3Xb), C.R.S: (a) an emergency exists that may result in serious losses to the depositors; (b) the capital of New Frontier Bank, Weld County, Colorado ("New Frontier Bank" or "Bank") is inadequate and it is otherwise in an unsound condition; (c) New Frontier Bank's business is being conducted in an unlawful or unsound manner; and (d) New Frontier Bank is unable to continue normal operations. Consequently, the Board ordered the Commissioner of Banking (the "Commissioner") to: (i) institute emergency involuntary liquidation procedures against New Frontier Bank pursuant to § 11-103-802(3)(6), C.R.S.; (ii) take possession of the premises pursuant to § 11-103-802 (2xa), (3Xb), C.R.S.; and (iii) appoint the Federal Deposit Insurance Corporation ("FDIC") as receiver/liquidator pursuant to § 11-103-802(3)(b), C.R.S. Jurisdiction 1. New Frontier Bank is a State Bank chartered by the Colorado Banking Board pursuant to the Colorado Banking Code, Title 11, Article 103, C.A.S. 2. The Colorado Division of Banking (the "Division") has jurisdiction over New Frontier Bank. 3. Pursuant to § 11-101-301, C.R.S, the provisions of the Colorado Banking Code, 11-101- 101, C.R.S. et seq., apply to State Banks. 4. The FDIC insures the deposit accounts of New Frontier Bank through its Deposit Insurance Fund ("DIF"). 1 EXHIBIT B 1 5. Pursuant to § 11-103-802(3)(b), C.RS., if in the opinion of the Board an emergency exists that may result in serious losses to the depositors, it may take possession of a state bank and may immediately appoint the FDIC as receiver/liquidator without prior notice of a hearing. 6. Pursuant to § 11-103-802(1)(a), C.RS., the Board may take possession of a state bank upon a finding that one or more of the grounds below exist: a. the bank's capital is inadequate or it is otherwise in an unsound condition; b. the bank's business is being conducted in an unlawful or unsound mariner; c. the bank is unable to continue normal operations; d. examination of the bank has been obstructed or impeded; or e. control of the bank has been assumed by any person or persons convicted of fraud or a felony in this state or any other jurisdiction, or by any partnership, association, or corporation controlled, directly or indirectly, by any person so convicted, unless the banking board determines that such person has been duly rehabilitated or otherwise that the bank will be honestly and efficiently managed. Findings of Fact 7. New Frontier Bank is a 82 billion bank headquartered in Greeley, Colorado with two branches. 8. On December 2, 2008, following the conclusion of the September 22, 2008 joint State FDIC examination, New Frontier Bank entered in a comprehensive, consent Cease and Desist Order ("C & D Order") with the FDIC, requiring among other things: a. submission of a capital plan to meet and maintain: (i) Tier 1 capital equal to a minimum of 8 percent of total assets, and (ii) Total risk based capital equal to a minimum of 12 percent of total risk -weighted assets; b. necessary action to improve liquidity to a level sufficient to meet the Bank's liquidity needs; c. development of a written plan to reduce the level of classified assets; d. adoption of wide ranging operational improvements including improved loan underwriting and loan administration; and e. retention of qualified management. 9. From March 3, 2009 to March 20, 2009 the FDIC with assistance from the Division of Banking conducted a Special Purpose Visitation of New Frontier Bank at which it was determined that the condition of the Bank has significantly deteriorated since the September 22, 2008 examination and the Bank was not in compliance with the C & D Order. 10. During the March 2009 visitation the examiners conducted a limited scope review of approximately 30% of the loan portfolio, and reported the following asset quality trends: a. As of March 3, 2009, adversely classified assets represent 265% of Tier 1 capital and allowance for loan and lease losses up from 134% as of the September 22, 2008 examination; and b. As of February 27, 2009, past due loans are 24.84 % of gross loans and leases up from 8.12% as of the September 22, 2008 examination. II. In addition, the examiners found that the allowances for loan and lease losses (ALLL) had been depleted. Based upon the internal methodology and analysis of New Frontier Bank $61 million is required by March 31, 2009 to replenish ALLL. Based upon additional asset classifications, the examiners concluded that an additional $15 million or a total of $76 million is required to replenish ALLL. 12. The ALLL discussed above reduce both earnings and capital. On March 20, 2009, the FDIC notified New Frontier Bank that it was Significantly Undercapitalized under Prompt Corrective Action ("PCA") with the following capital ratios: a. Total Risk Based Capital Ratio: 5.4% b. Tier -1 Risk -Based Capital Ratio: 4.1% c. Tier I Leverage Ratio: 3.4% 13. On or about December 31, 2008, New Frontier Bank submitted its first capital plan to the Colorado Division of Banking and the FDIC. The recapitalization strategy of the first capital plan was to recapitalize by finding an investor group and participating in the U.S. Treasury Department's Troubled Assets Relief Program (TARP). The institution marketed itself extensively. On March 20, 2009, the only investor group that expressed interest withdrew. Furthermore, the FDIC has recommended denial of the Bank's TARP application to the U.S. Treasury Department 14. New Frontier Bank submitted a second capital plan to the Colorado Division of Banking and the FDIC on April 1, 2009 that relies heavily on government assistance, not private capital, to recapitalize the Bank in two phases and without establishing a date certain. The first phase of this proposed recapitalization assumes receipt of $53 million in TARP funds and participation in the recently announced but not yet functioning Legacy Loan Program (LLP) to cleanse the Bank's balance sheet of $560 million of loans and distressed assets. Phase two is contingent upon the success of the first phase and would begin "upon approval of the Bank's utilization of the TARP and LLP programs." Phase two envisions that the holding company would seek to raise additional capital through a private placement with its shareholders and infuse the capital into New Frontier Bank. As discussed above, the FDIC has recommended denial of the Bank's TARP application to the U.S. Treasury Department and the LLP is not a functioning program at this point. The Bank will not receive a near term infusion of capital from either of these sources. 3 15. New Frontier Bank failed to maintain sufficient liquid assets as required by the December 2008 C & D Order. Since December 2008, the Banks liquidity ratio has steadily declined: a. As of December I, 2008, the Bank's liquidity ratio was 20%. b. As of January 1, 2009, the Bank's liquidity ratio decreased to 17%. c. As of February 1, 2009, the Bank's liquidity ratio decreased to 13%. d. As of March 1, 2009, the Bank's liquidity ratio decreased to 10%. e. As of March 31, 2009, the Bank's liquidity ratio decreased to 5%. 16. The liquidity resources of New Frontier Bank are severely limited and diminishing. At the current rate of outflow, New Frontier Bank will deplete its cash and other sources of liquidity within a short period of time. 17. Due to the voluntary resignation of key officers, the failure to hire an experienced senior lending officer, and the removal of other officers through enforcement actions, the Bank is not operating under qualified management. 18. On March 27, 2009, the certified public accounting firm performing the December 31, 2008 consolidated audit of New Frontier Bancorp terminated its engagement stating that: "Due to the events that we became aware of within the past few weeks, we have determined that we are unable to complete the audit and form an opinion on the consolidated balance sheet of New Frontier Bancorp and subsidiary as if December 31, 2008 and the related consolidated statements of operations, changes in stockholders' equity, and cash flows for the year then ended. In addition, we have determined that we are unable to complete the examination of management's assertion regarding the effectiveness of internal control over financial reporting of New Frontier Bank as of December 31, 2008. Therefore, in accordance with the terms of our engagement letters, we are declining to issue our reports and hereby terminate our engagement." 19. On April 3, 2009, the FDIC advised the Board that it was unsuccessful in appointing a paying agent for the purpose of the orderly administration of the liquidation. The FDIC further advised the Board that it will be necessary for the FDIC to seek the charter of a new bank for liquidation, which process is expected to take a few more days. Conclusions of Law 20. Pursuant to § 11-103-802(1)(a), C.R.S. and based on the findings of facts in this case, the Board determines that: New Frontier Bank's capital is inadequate or it is otherwise in an unsound condition; the Bank's business is being conducted in an unlawful or unsound manner; and, the bank is unable to continue normal operations. 21. Based on the findings of facts in this case, the Board fords that an emergency exists that may result in serious losses to depositors and that it should take possession of New 4 Frontier Bank and appoint the FDIC receiver/liquidator without prior notice or opportunity for hearing pursuant to § 11-103-802(3Xb), C.R.S. 22. Based on the findings of fact in this case, the Board determines that it is in the best interest of the public, the depositors, and the orderly administration of the liquidation that the Commissioner be authorized to appoint the FDIC as Receiver to close the institution no later than midnight, next Friday, April 10, 2009. Actions Ordered or Approved 23. Therefore pursuant to § 11-103-802(1) and (3), C.R.S., the Colorado State Banking Board, without prior notice or hearing, directs and approves the assumption of possession of New Frontier Bank by Acting Commissioner Fred Joseph on April 10, 2009 and the appointment of the FDIC as Receiver/Liquidator. 24. Further administrative proceedings may be conducted as provided for in § 11-103-802(3), 25. The Board hereby authorizes the Commissioner to perform all functions necessary or appropriate for the implementation of this Order. DATED at Denver, Colorado this ,Day of altAl., of 2009. FOR: COLORADO STATE BANKING BOARD D. Terry Reitan Acting Chair Colorado State Banking Board Colorado Department of Regulatory Activities (DORA) Division of Banking 1560 Broadway, Suite 975 Denver, CO 80202 5 NOTICE OF RIGHT TO APPLY FOR RESCISSION IN THE MATTER OF NEW FRONTIER BANK, WELD COUNTY, COLORADO Pursuant to § 11-103-802(3)(b), C.R.S., within ten (10) days of the date of this Order, New Frontier Bank or the directors of New Frontier Bank may file an application with the Colorado Banking Board to rescind its determination. If New Frontier Bank fails to timely file its application, all actions by the Banking Board shall become final. 6 Certificate of First Class Mail Service This is to certify that I have duly served the Registered Agent and Directors of New Frontier Bank by depositing copies of the Findings Regarding the Existence of an Emergency at New Frontier Bank, Weld County, Colorado (including the attached Notice of Right to Apply for Rescission) and the Notice of Assumption of Possession of New Frontier Bank by State Bank Commissioner in the United States mail, fast -class postage prepaid, at Denver, Colorado, this j4� u day of -\.:).(11 2009 addressed as follows: Robert A. Weist Registered Agent 2425 351h Avenue Greeley, CO 80634 Robert J. Brunner 1779 37th Ave. Pl. Greeley, CO 80634 John O. Kammeier 647 54th Ave. Ct. Greeley, CO 80634 Jack P. Renfroe 3520 Holman Ct. Greeley, CO 80634 Larry G. Seastrom 5445 W. 7'" St. Rd. Greeley, CO 80634 Timothy W. Thissen 2701 F St. Greeley, CO 80631 Signature 7 Colorado Attorney General 1525 Sherman St. Denver, CO 80203 BEFORE THE STATE BANKING BOARD STATE OF COLORADO FINDINGS AND ORDER APPROVING ASSUMPTION OF POSSESSION OF NEW FRONTIER BANK BY STATE BANK COMMISSIONER IN THE MATTER OF NEW FRONTIER BANK, WELD COUNTY, COLORADO On April 3, 2009, pursuant to Sections 11-103-802(1), (3) of the Colorado Revised Statutes, the Colorado State Banking Board (Banking Board) issued its "Findings Regarding the Existence of an Emergency at New Frontier Bank, Weld County, Colorado." Also, on April 3, 2009, the FDIC advised the Board that it was unsuccessful in appointing a paying agent for the purpose of the orderly administration of the liquidation. The FDIC further advised the Board that it will be necessary for the FDIC to seek the charter of a new bank for liquidation, which process is expected to take a few more days. Based on the findings of fact in this case, the Board determined that it is in the best interest of the public, the depositors, and the orderly administration of the liquidation that the Commissioner be authorized to appoint the FDIC as Receiver to close the institution no later than midnight, Friday, April 10, 2009. The Board is fully advised of the entire record on file with it and the Colorado Division of Banking. It is the Banking Board's findings and judgment that an emergency exists that may result in serious losses to the depositors of New Frontier Bank. "The Banking Board by its Order hereby issues its approval for the State Bank Commissioner to take possession of New Frontier Bank without prior notice or prior hearing. EXHIBIT C 1 Dated this /O.z day of April, 2009, at Denver, Colorado. BY ORDER OF THE COLORADO STATE BANKING BOARD Fred J. Joseph Acting Colorado State Bank Commissioner DORA Division of Banking 1560 Broadway, Suite 975 Denver, CO 80202 Hello