J.D. Colbert, Native American Bank CEO Placed On Leave
Thursday, May 8, 2008
Submitted by Alyssa Macy
By JODI RAVE of the Missoulian
The CEO and president of the Native American Bank, the only multi-tribe-owned national bank in the country, has been placed on administrative leave.
”I'm shocked and surprised,” said J.D. Colbert on Wednesday. The NAB board of directors will meet Friday in Denver and is expected to release a statement the same day about the management shakeup.
"We're continuing on with a solid financial institution, probably more successful than any other bank in the country,” said Elouise Cobell, Native American Bank co-chair. “We're entering into a new phase. We want to continue a successful expert management team to take us into additional phases of the bank.”
News of the management showdown left one of the bank's largest depositors in disbelief.”
As a customer of the bank, this caused me great concern for two reasons,” Don Kelin, president of CADDO Solutions, a multimillion-dollar office supply company in Denver, said in a letter sent Wednesday to Cristina Danforth, chairwoman of the bank's holding company.
"This action immediately sent out an alarm to stakeholders (customers) using the bank - either the bank was in financial trouble or Mr. Colbert had done something wrong and caused severe damage,” said Kelin.
Colbert was put on administrative leave last Thursday.
The week before his removal, examiners from the Office of Comptroller of the Currency - which does on-site reviews of national banks - arrived at the bank's Denver headquarters for a scheduled audit. Colbert was removed from his duties before the OCC had completed a draft report.
"We don't speculate until we make a public enforcement action," said Kevin Mukri, a spokesman for the OCC. If the audit warrants attention, it will be posted on the OCC Web site, he said.
The last time the OCC took enforcement action against the NAB was in April 2003 when the bank was based in Browning. The bank achieved OCC compliance in March 2007.
The NAB posted a net income of $1.4 million in 2007. The bank's return on average assets, or profitability, was rated at 1.54 percent compared to bank peer group ratings of 0.94 percent, according to the company's 2007 fourth-quarter report. The bank's assets reached $99 million, a 20 percent increase compared to 2006.
Last August, the Democratic National Convention Committee announced the organization had made a $2 million deposit with the NAB in Denver, the host city for the 2008 Democratic convention.
Meanwhile, Kelin said he was assured by Bill Snider, NAB board chairman, that the bank remained financially sound and there was no concern for any wrongdoing by Colbert. �The decision to remove Colbert was made based on management issues."
Colbert, who became the bank's president and CEO in 2006, has been temporarily replaced by Donald H. McLean, who was given a 90-day contract to see the bank through its management transition, said Kelin.
The bank's board of directors also rehired Tracie Davis, the bank's former chief financial officer who resigned in February. She returned to the bank the same day the NAB board placed Colbert on leave.
Kelin said he's concerned about the apparent lack of consultation with tribal investors.
The Native American Bank was created in 2001 and is now owned by 26 federally recognized tribes and tribal organizations across the United States. The bank promotes economic development in Native communities, which have been historically underserved by mainstream banks. More than 85 percent of the bank's loans are made to Native people, including commercial, home mortgages, real estate and consumer loans.
The recent decision to remove Colbert, a Chickasaw and Creek, is being driven by non-Native executive board members, Kelin said.
It raises “very troubling questions about just who is running the bank and its future direction as to whether it will truly continue to serve Native peoples,” Kelin said. “Indeed all of the foregoing appear to point more toward power plays, personal vendettas and jealousies and an overall struggle for the soul of the Native American Bank.”
Kelin said Colbert does not appear to be receiving due process, but was removed in an arbitrary and capricious manner.
”Last month, the bank released statements to the press and shareholders about the success of the bank since J.D. Colbert has taken over as the president,” Kelin said. ”How can they issue a positive statement one month and then the next month do a 180-degree turn and place the Native American president on leave?”
He was a hero for the last 12 months and now he is being replaced.”
Confederated Tribes of Warm Springs, Oregon
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