FDIC milks pennies on the dollar from NFB loans

GREELEY – The Federal Deposit Insurance Corp., charged with liquidating the assets of failed institutions, has begun auctioning off the loan portfolio of New Frontier Bank. FDIC sales records indicate that an auction that closed on Sept. 3 garnered about 25 cents on the dollar for a portfolio of 415 performing and non-performing loans carrying a book value of $472.67 million. A Sept. 17 sale netted about 38 cents on the dollar, with a 1,780-loan portfolio valued at $102.85 million selling for $38.59 million.

The first New Frontier loan portfolio listed on the FDIC website contained $455 million in agricultural loans with due diligence starting on July 20 and bid day on Aug. 18. Another $250 million portfolio of performing and non-performing New Frontier agricultural loans was opened up for due diligence more recently, with bids due on Oct. 20. Closing and transfer of the winning bids is set for Nov. 5.

Tranches of New Frontier loans have also been packaged with loans from other closed banks. In an offering that closed on Sept. 29, New Frontier loans were among those of eight other failed institutions. The 142 loan participations included in the portfolio carried a book value of about $301 million.

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Another portfolio of $106 million commercial real estate and commercial and industrial Small Business Administration loans includes New Frontier assets among 14 other banks. Bidding on that portfolio closes on Oct. 27.

The FDIC has recently listed the former New Frontier offices in Longmont and Windsor for sale on its website for $1.92 million and $1.84 million respectively.

To read more about the sale of New Frontier loans, and how its failure has affected the market share among Northern Colorado banks, visit the current edition of the Business Report at www.ncbr.com.