Regulators tell FNBR to sell holding

RBC — Federal bank regulators are forcing First National Bank of the Rockies to liquidate a portion of the bank’s holdings in some mortgage-backed securities.
FNBR signed an agreement in March with the Office of the Comptroller of Currency (OCC) agreeing to divest its holdings in A T Fund of Funds within the next 18 months.
According to the agreement, the comptroller has determined the bank “engaged in violations of law and unsafe and unsound banking practices relating to its board oversight, investment trading activities, credit administration, other real estate owned administration and management of liquidity.
Despite the order, bank officials say FNBR remains in stable condition, and the A T Fund of Funds investment represents less than 3 percent of the bank’s $440 million in assets.
“We are in the process of liquidating the fund,” bank Chairman and President Pete Waller said to the Denver Post. “We anticipate an orderly liquidation.” Waller said the bank remains well capitalized, remains profitable and is in sound condition.
First National Bank of the Rockies invested in A T Fund of Funds in 2005. The bank went through two previous OCC exams, and these investments were not a concern with the comptroller’s office.
Waller told the Grand Junction Daily Sentinel that the fund had performed well at one time, but had weakened in recent months due, in part, to the subprime lending crisis nationwide.
The OCC’s lengthy ruling requires the bank and its board to address a variety of things including revising and adopting a written program of policies and procedures designed to ensure the bank’s investment activities comply with the law and safe and sound banking practices; requiring the board to prepare a written analysis of any new product, service or significant expansion of any existing product; and establishing a compliance committee to be responsible for monitoring and coordinating the bank’s adherence to the provisions of the agreement.
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