Re: “Bank pushed boundaries,” Dec. 27 news story.
New Frontier Bank, founded in a double-wide, became Northern Colorado’s cornerstone bank. It was to the Greeley region more than Citibank is to New York.
Half its loan portfolio was in agriculture and 30 percent was in construction and development — two segments that have suffered most in the recession.
The recession netted bailout checks for giant banks. New Frontier and other community banks got shut down, to the detriment of small businesses and farms.
The media have missed the big story, preferring to imply corruption with questionable sources.
A crisis brings out those who point fingers and say: “I didn’t do it, they did.”
In the New Frontier saga, shareholder Carroll Miller comes to mind.
Miller, a former New Frontier board member, questions the bank’s asset value. In 2004, however, the government cited New Frontier’s FDIC score (CAMEL) as “1” — the highest and best possible. New Frontier received high marks through 2008, meaning the FDIC was pleased until the economy failed. That makes New Frontier like the big banks, which were considered solvent until housing markets collapsed.
Miller either kept secret his concerns during years of economic growth (unlikely, since he didn’t sell his shares), or is disingenuous today.
Miller’s faux indignation, now that things are tough, is pathetic.
New Frontier’s experience is no exception as shareholders kick off a suit against the board of directors. Certainly some shareholders, who had less information, deserve an explanation. Shareholder Jerry Helgesen, a plaintiff against the board, does not fit that mold.
Helgesen knows about the FDIC’s recessionary haste. He is also a shareholder, and board member, of Signature Bank of Windsor — which is under an FDIC cease and desist order. Instead of chasing the fiduciary insurance policies of former friends, Helgesen should prepare for the likelihood of further regulatory action against Signature.
New Frontier grew no faster than the businesses it financed. When the economy faltered, New Frontier’s assets shrank. It’s that simple. Hasty action by government employees, seemingly eager to compensate for a decade of acquiescence and promotion of New Frontier’s model, exacerbated problems.
Insiders who point fingers in the wake of New Frontier’s closure should be scrutinized for their motivations. Finding the truth requires skepticism of what crawls from the woodwork telling “evil banker” stories.
M.D. Schum is with Windhover Creative Partners, LLC, in Monument, a communications consultant for New Frontier.
