First FarmBank looks up during downturn

For more than three years, First FarmBank has quietly toiled in an increasingly difficult market from its single location in east Greeley. Now the still-small bank is seeing strong loan growth and even venturing into its first physical expansion.

First FarmBank is the region’s second youngest and second smallest locally based bank, just behind Loveland Bank of Commerce on both counts. The bank was opened in February 2007 with a focus on ag, having been founded through a bank charter application filed by the Colorado Corn Growers Association.

In June First FarmBank received approval to open a loan production office in Imperial, Neb., about 35 miles east of Holyoke. But it’s not a big move for the bank, according to President Dan Allen.

“We have many customers and shareholders that live across the eastern plains of Colorado,” he said, adding that the bank already has a lender that lives in Nebraska. “It’s no different than what we’ve been doing.”

The difference is that customers will have an office to visit, rather than the lender making house calls. Allen said it isn’t likely that the office will ever convert to a full-service branch.

“There are other locations that would be better for us,” he said. “Ultimately, we would like to expand to other sites.” Branching isn’t a current focus, however.

Allen counts First FarmBank’s timing as a blessing; being so young during the downturn shielded it from much of its pain. The bank reported a modest profit of $134,000 for the first quarter. The bank has just over $1 million in assets that are past due 30 to 89 days, $198,000 past due up to 90 days and none in nonaccrual status. It also has no real estate owned.

“Because we’re so new, we were able to avoid the issues many other banks have had with their commercial real estate portfolios,” he pointed out.

As of the first quarter, the bank’s largest lending category was farm loans at $21.1 million, and the portfolio has more than doubled in the last year.

But that’s not to say that First FarmBank is shying away from that market. Year-over-year, its commercial real estate loan portfolio, excluding construction and development, nearly doubled to $7.8 million, putting it right in line with the farmland-secured real estate loan portfolio.

Allen said the bank is looking to maintain a diverse portfolio. He anticipates it will see lending to small businesses in and around Greeley increase. He envisions offering more consumer products, too, once the bank does decide to roam around its home on the range with more branches.

“We’re not trying to do anything crazy – just be controlled and measured in what we do,” Allen said. “Our plan is to be here still in 30 years.”

Not planning to be around 30 years, or even 30 more days, are a couple of top execs at the Federal Deposit Insurance Corp.

After nearly a year-and-a-half on the job, Joseph Jiampietro, senior advisor for markets to FDIC Chairwoman Sheila Bair, is on his way out. Jiampietro’s last day will be the day this column publishes – Aug. 13. His departure was announced on Aug. 4.

The FDIC announcement gave few details about why Jiampietro is leaving, but burnout might be a good guess. He was essentially charged with explaining and unwinding some of the more complex financial institution messes that faced the agency in the last year – and there were a lot. During Jiampietro’s tenure at the FDIC, more than 280 banks failed.

“Joe has given the FDIC invaluable service during a challenging time in the FDIC’s history,” Blair said in announcing his departure. “His input on marketing and resolution strategies and substantive expertise on capital markets has contributed to the FDIC’s ability to address many complex and difficult failed bank resolutions. This in turn has provided stability to the banking system and maximized the FDIC’s ability to recoup money for the Deposit Insurance Fund.”

On Aug. 6, the FDIC announced that General Counsel Michael Bradfield has also decided to resign his position effective on Aug. 13 after just over a year on the job. He had previously served as general counsel for the Federal Reserve Board but was in private practice immediately before jumping on board with the FDIC in May 2009.

The departures seem to be unprecedented – at least the announcements of them. A quick search of the FDIC press releases shows no previous announcements of a departure. No successors were announced, nor was it disclosed if a search is currently under way to fill the positions. It’s likely the benefits package for such jobs will include career-long supply of Rolaids.

Speaking of departures, Kristen Tatti has covered the banking industry for the Northern Colorado Business Report for six years, but this issue is her last. Send any comments or story ideas to editor@ncbr.com, and join us in wishing Kristen the best in her new career in public relations.

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