Regulators knew the reality was different. In mid-2007, theFederal Deposit Insurance Corp.,citing weak management, a rise in soured loans and an increased reliance on volatile funding, told executives to slow growth and add capital, according to board minutes of the privately held bank obtained under the Freedom of Information Act.
While Greeley, Colorado-based New Frontier’s loan losses rose, it took almost two years for state and federal regulators toshut the bank-- a delay that may have made the closing more costly. On April 10, the lender, whose assets had grown to $2 billion under Chief Executive Officer Larry Seastrom, became the 10th-most expensive failure of 2009, costing the FDIC $670 million. No other bank could be found to take over, and the FDIC had to charter a new one to assume the liabilities.
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