New Frontier Bank seized by the FDIC to become the 23rd bank failure of 2009

April 13, 2009 by · Leave a Comment
Filed under: Bank Failure 

Another bites the dust.  New Frontier was a little bigger than the most we have seen this year at $2 billion in assets and $1.5 billion in bank deposits.  This trend will continue sadly and we will see the local and regional banks take the brunt of these while we bailout national banks that have lost literally trillions of dollars.  They are just too connect in too many ways and this is the reality we are dealing with.

News (Reuters):

U.S. regulators on Friday closed New Frontier Bank of Greeley, Colorado, and set up a temporary bank so depositors can open accounts at other insured institutions.

The Federal Deposit Insurance Corp said it immediately transferred New Frontier’s insured deposits to the Deposit Insurance National Bank of Greeley (DINB), except for brokered deposits, certificates of deposit and individual retirement accounts.

The Deposit Insurance National Bank will remain open for about 30 days so customers can move their funds to other banks.  New Frontier had total assets of $2 billion and total deposits of about $1.5 billion as of March 24.

It is the 23rd U.S. bank to fail this year, and its resolution is expected to cost the deposit insurance fund about $670 million.

The number of bank failures has increased dramatically as the struggling economy and falling home prices take their toll on financial institutions. The failures have been draining the FDIC’s deposit insurance fund, and the agency has taken steps recently — including an emergency assessment on banks — to replenish the fund.

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