First National Bank of the Rockies
252 W. Jefferson Ave.
Deposit account holders: 2,276
Oak Creek branch:
319 E. Main St.
Deposit account holders: 1,143
Steamboat Springs branch:
270 Anglers Drive
Deposit account holders: 1,143
Source: Greg Dixson, regional president
Steamboat Springs Federal regulators have determined that the First National Bank of the Rockies has broken the law, but bank officials pledge that its problems won't affect customers.
An agreement last month between the Grand Junction-based bank and the U.S. comptroller of the currency stated that "the Bank has 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."
First National Bank of the Rockies has branches in Steamboat Springs, Hayden, Oak Creek and other Western Slope municipalities.
Under the agreement, the bank must dispose of the A T Fund of Funds. The bank is on track to do so, said Peter Waller, chairman, president and CEO of the bank and its parent company, FNBR Holding Corp.
"It's our intent to fully comply with the agreement," Waller said. "We're not fighting it."
The bank's investment in A T Fund of Funds amounts to less than 3 percent of its assets, he said.
The issues with A T Fund of Funds relate to the crisis in subprime mortgage lending, Waller said. The fund is a collection of 22 funds that invest in mortgage products, Waller said. The administrator of the fund chooses and monitors those 22 funds, he said.
Waller said First National Bank of the Rockies had invested in A T Fund of Funds for more than three years and had never run into problems with regulators.
"The bank is examined every year," he said. "It just became an issue this past examination."
A document on the U.S. Securities and Exchange Commission's Web site indicates that A T Fund of Funds filed an application in February "declaring that it has ceased to be an investment company." The SEC indicated that, under the Investment Company Act of 1940, A T Fund of Funds no longer is registered as an investment company.
The comptroller's office opted to release to the public the agreement outlining steps the bank must take.
"There's a series of powers that the regulator has," said Kevin Mukri, spokesman for the Office of the Comptroller of the Currency. "When there's an issue that's a serious issue that we feel the public should be notified about is when we put out a public enforcement order."
Mukri said the office does not determine who needs to be notified regarding a problem - whether investors or bank customers are affected, for example.
Waller said the issues would not harm account holders.
"The bank is sound," he said. "Their deposits are secure. The bank will weather this matter out and is working expeditiously to complete all the requirements contained in that formal agreement, many of which were completed before the agreement was even signed."
Any risk "lies with the ownership of the bank," Waller said.
He said the matter is a difference of opinion between First National Bank of the Rockies and the comptroller of currency regarding A T Fund of Funds.
"They maintain that our ownership of that was a violation of law and they had to handle it in this manner," Waller said. "Our attorneys aren't so sure it was a violation of law. In my opinion, we would be exactly where we are right now without that formal agreement. : The only consequence of that formal agreement is that it put the bank's reputation at risk."
Mukri said his agency would publicize the bank's progress.
"The enforcement action is an agreement that there is an issue between the bank and OCC," Mukri said. "Once they've complied with that, we publicly rescind it, and we publish that, too."
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