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Directors of troubled Springs bank agree to FDIC fines totaling $105,000

By: WAYNE HEILMAN
November 25, 2011
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Three directors and a former director of Rocky Mountain Bank & Trust have agreed to fines totaling $105,000 from the Federal Deposit Insurance Corp. for violations of the agency’s orders that were designed to return the troubled southern Colorado bank to financial health.

Douglas McClure, a Colorado Springs resident who was the bank’s chairman, president, CEO until last year and remains a director, was fined $30,000. Directors Gerald Montney of Colorado Springs and Marty Burleson of Florence as well as former director Duane Hays of Colorado Springs each were fined $25,000. All four agreed to the fines in late June and early July, but FDIC officials didn’t accept the agreements until Oct. 7 and the fines weren’t made public until Friday, when the agency released its monthly listing of disciplinary and enforcement actions.

Howard Smith, Rocky Mountain’s chief credit officer, said the bank wouldn’t comment beyond the agreements released Friday. McClure on Friday declined comment on his agreement, while Montney, Burleson and Hays could not be reached Friday for comment. It wasn’t clear from the FDIC’s disclosure what parts of the order were violated.

Rocky Mountain, which is chartered in Florence but operates from a headquarters in Colorado Springs, has been operating under a cease-and-desist order with the FDIC since April 2009. The order limits the bank’s lending and dividend payments and requires the bank’s owners to come up with additional capital, strengthen its management as well as reduce problem loans and large deposits.

The bank held $118 million in assets and $111.5 million in deposits at offices in Florence and southern Colorado Springs, according to its Sept. 30 report to the FDIC.

In the same report, Rocky Mountain said it had reduced the percentage of delinquent loans by nearly half to 11.7 percent of its $34.3 million loan portfolio and had reduced its securities portfolio by about one-fourth to $62.6 million, but much of the securities portfolio is made up of mortgage-backed securities that are no longer rated at investment grade. Rocky Mountain’s capital reserves also fail to meet the 9 percent level required in the FDIC’s order, equaling 6.6 percent of the bank’s assets as of the Sept. 30 report.

Rocky Mountain’s reserves aren’t likely to grow without its directors or other investors pumping money into the bank, especially because the bank lost $607,000 during the first nine months of the year. The bank earned $452,000 during the same period a year earlier.

Rocky Mountain is among four other area banks that have signed orders or agreements with the FDIC restricting their operations; the others include Academy Bank, Peoples National Bank and Pikes Peak National Bank in Colorado Springs and Park State Bank in Woodland Park.

Rocky Mountain was started as Bank of Florence in 1887 by Florence founder James McCandless and a partner, Henry Topping. McClure became president of the bank in 1993 and two years later changed the name to Rocky Mountain Bank & Trust. The bank opened a Colorado Springs branch in 1997.


Contact Wayne Heilman: 636-0234 Twitter @wayneheilman
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