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2 Financial Institutions Shut Down By Regulators

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Mortgage Daily

                                                 July 13, 2015

A small Colorado bank was seized by regulators last week and sold to the highest bidder, while a similar demise was met by a Pennsylvania financial institution.

On Friday, the Colorado Division of Banking reported that it closed down Premier Bank, an entity with two branches.

Premier was established in December 1995. It had $32 million in total assets as of March 31 and $30 million in total deposits.

In April 2010, PB Financial Group Inc. and Premier Bank were hist with a cease-and-desist order by the Federal Reserve Board and the Colorado Division of Banking.

The Fed issued a Prompt Corrective Action Directive against Premier
in May 2012.

The state regulator named the Federal Deposit Insurance Corp. as receiver. In turn, the FDIC auctioned off
assets and deposits of the failed bank to United Fidelity Bank, fsb.

Assets included less than $1 million in residential loans,

$8 million in commercial real estate loans and under $1 million in construction-and-land-development loans.

Just 17 people worked at the Denver-based bank as of March 31.

After all is said and done, the FDIC projects that its Deposit Insurance Fund will be out more than $4 million as a result of Premier Bank’s failure —
only the sixth so far in 2015.

Also on Friday, the National Credit Union Administration announced the liquidation of Trailblazer Federal Credit Union. It was the sixth credit union to go down this year.

Just 1,535 members were served by the Washington, Pennsylvania-based financial institution, which was chartered in 1956. Assets exceeded $4 million.

“NCUA made the decision to liquidate Trailblazer Federal Credit Union and discontinue operations after determining the credit union was insolvent and had no prospect for restoring viable operations,” the regulator stated. “NCUA’s Asset Management and Assistance Center will take charge of certain assets of the closed credit union.”

Members and deposits of the liquidated credit union were moved over to Chrome Federal Credit Union.

For all of this year, 13 mortgage-related failures or closing have been tracked by Mortgage Daily.

The NCUA
recently finalized a rule that is intended to increase transparency and address safety and soundness concerns about credit union service organizations.

“The final rule extends certain requirements of the CUSO regulation to federally insured, state-chartered credit unions and imposes new requirements on federally insured credit unions (FICUs),” the Federal Register filing stated. “Under the amended rule FICUs with an investment in, or loan to, a CUSO must obtain a written agreement with the CUSO addressing accounting, financial statements, audits, reporting and legal opinions.”

CUSOs are required to provide more detailed data to the NCUA when they engage in complex or high-risk activities.

According to the filing, the rule limits the ability of a “less than adequately capitalized” credit union to re-capitalize an insolvent CUSO.

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