New owners of failed Springs bank want to operate as a community bank

Mar 23, 2009 (The Gazette - McClatchy-Tribune Information Services via COMTEX) -- TFIN | Quote | Chart | News | PowerRating -- A Texas bank bought Colorado National Bank last week because it was able to hire a longtime former executive to operate the failed institution, which still has a strong customer base, the acquiring bank's CEO said Monday.

Jim Wilson, 60, worked at Colorado National from 1971 until resigning in 2006 after a disagreement over the bank's direction with its former owner, Paola, Kan.-based Team Financial Inc.

Herring Bank of Amarillo, Texas, bought Colorado National on Friday from the Federal Deposit Insurance Corp. after federal regulators seized the troubled bank and an affiliated institution amid mounting problem loans for construction and development.

Customers reacted to the failure calmly, with only a handful of depositors withdrawing their funds, Wilson said. Colorado National customers can continue to use their checks and ATM cards; direct deposits and automatic payments will continue, he said.

"We need two things to expand into a new area -- strong management and a strong customer base. If we can't find an individual to make independent decisions, then we won't come into an area. We would not have bid on Colorado National without Jim," said C. Campbell Burgess, Herring's president and CEO, who was at Colorado National's main branch on Monday.

Herring also hired longtime Colorado National executive Mike Kruse as senior lender and retained all of the bank's 25 employees except president Francis Easley, a Team Financial employee who will return to Missouri, Burgess said.

Although Colorado National's three branches at 3110 N. Nevada Ave., in Monument and Peyton will operate as branches of Herring, they will operate under a new name to be selected this week, he said.

Herring previously bid unsuccessfully to acquire a small failed bank in southwestern Texas, in December. Herring was contacted about a month ago by the FDIC as it sought buyers for Colorado National, Burgess said.

Under an agreement with the FDIC, Herring acquired all $82.7 million in Colorado National deposits and $117.3 million in assets at a $4.2 million discount and will share 20 percent of the losses on about $62 million in assets.

"We believe we can best work out these loans in Colorado Springs. It serves us best to correct the deficiencies on a local basis," Burgess said. "Our approach is to know our customer. We want to look the customer in the eye, know their plans and support those plans. Hopefully the community will understand that we are a community bank that wants to make decisions about our Colorado operations in Colorado."

Wilson said he wants to return Colorado National to its small community banking roots, serving many of the same customers that have been with the bank since it opened in 1963 as Northern National Bank. Norman Postles bought the bank in 1967 and ran it for 25 years before turning it over to his son, Geoffrey Postles, in 1992. The family sold the bank in 2001 to Team Financial for $13 million.

Team was ordered last fall by the U.S. Comptroller of the Currency's office to pump $1.6 million into Colorado National and $3.5 million into Team Bank, an affiliated institution also owned by the company. Team announced Friday that regulators had rejected its plan to recapitalize Team Bank, paving the way for its seizure. Once Team Bank was seized, the already troubled Colorado National couldn't survive on its own.

Herring Bank operates branches in and near Amarillo, near Fort Worth and in Seymour and Vernon, both of which are between Amarillo and Dallas. Herring had assets totaling $351.2 million and deposits totaling $300.2 million as of Dec. 31. The bank was started in Vernon, Texas, by rancher C.T. Herring in 1899 as a agricultural bank but later expanded into small business lending and consumer banking in Amarillo.

Burgess said he has visited Colorado Springs often since childhood, going to Cheyenne Mountain Zoo and Garden of the Gods and learning to ski at the now-closed Ski Broadmoor.

DETAILS

HERRING BANK

Headquarters: Amarillo, Texas

CEO: C. Campbell Burgess

Ownership: Family of founder C.T. Herring

Branches: Nine in Texas, three in Colorado

Assets: $351.2 million--

Deposits: $300.2 million--

-- As of Dec. 31

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