The Federal Deposit Insurance Corp. was appointed receiver.
Regulators closed New Frontier at 6:30 p.m. Friday. The FDIC on Monday will reopen the bank, along with its branches in Longmont and Windsor, for 30 days to give depositors time to transfer their accounts to other banks. Regular deposit accounts are insured up to $250,000.
"In order to maintain the trust in Colorado's financial institutions and to protect depositors, I have delegated authority to the FDIC as receiver of New Frontier Bank and will immediately transfer all insured deposits to their control," said Fred Joseph, Colorado's bank commissioner.
Banking activities such as direct deposit and ATM and debit card transactions will continue as usual for New Frontier customers during the 30-day transition period, FDIC spokesman David Barr said in a release.
He said the FDIC will mail checks to customers who haven't closed or transferred their accounts at the end of the 30 days.
New Frontier had assets of $2 billion and deposits of about $1.5 billion as of March 24. At the time of closing, there were about $150 million in insured deposits and $4 million in deposits that potentially exceeded the insurance limits.
Don Childears, president and CEO of the Colorado Bankers Association, said isolated bank failures will inevitably happen from time to time, in good and bad economic times.
"The first priority of our regulatory system is not to ensure that there will never be a bank failure, but to protect the customer if one occurs," Childears said in a release.
"The FDIC's time-tested and methodical approach provides a seamless transfer of authority," he said. "This ensures the customers and community experience the least amount of disruption to their normal financial needs."
Colorado National Bank in Colorado Springs was shut down March 20.