Federal regulators seized Colorado National Bank in Colorado Springs on Friday evening and sold it to Herring Bank of Amarillo, Texas.
The takeover represents the first in Colorado since 1998, when regulators shut down Best Bank on fraud allegations, and the 19th in the country this year.
The Office of the Comptroller of the Currency closed Colorado National at 5 p.m. Friday and appointed the Federal Deposit Insurance Corp. as the bank’s receiver.
“The OCC acted after finding that the bank had experienced substantial dissipation of assets and earnings due to unsafe and unsound practices,” the regulator said in a statement.
The bank had a high concentration of land acquisition, development and construction loans, said FDIC spokesman David Barr.
“Essentially it was a common theme that we have seen in a lot of our bank failures,” he said.
The bank was among seven financial institutions in Colorado hit during the past year with cease-and-desist orders telling them to clean up their practices to prevent deepening woes or closure.
Regulators with the OCC cited the bank in September for poor liquidity and mismanagement of loans, among other issues. They ordered the bank to replace its senior loan officer with a “new, qualified and capable” executive; develop new plans to bolster capital; and seek independent reviews of its loans.
Herring Bank will reopen Colorado National’s four branches under its name this morning. Customers should not see any disruption, Barr said.
Herring Bank has agreed to assume the $82.7 million in deposits at Colorado National, along with $117.3 million of the bank’s $123.5 million in loans and other assets.
The FDIC, which will share in loan losses Herring suffers, estimates the bank’s failure will cost its insurance deposit fund $9 million.
Regulators also seized Colorado National’s affiliate TeamBank NA in Paola, Kan. Both are wholly owned subsidiaries of Team Financial Inc. in Paola.
Aldo Svaldi: 303-954-1410 or asvaldi@denverpost.com
Bank’s customers can call
Colorado National Bank in Colorado Springs customers with questions can call 800-830-4698 between 9 a.m. and 6 p.m. today, from noon to 6 p.m. on Sunday and from 8 a.m. to 8 p.m. during the week.
They also can go on the Web to .
