Federal regulators give TierOne more time to boost capital at Neb. bank but impose more rules

Regulators give TierOne Bank more time to improve

LINCOLN, Neb. — TierOne Corp. will have at least another six weeks to strengthen its balance sheet, but federal regulators have imposed even tighter rules on the Lincoln-based bank company.

TierOne said Friday it had agreed to a new set of rules imposed by the federal Office of Thrift Supervision. TierOne failed to improve its capital position before regulators’ May 31 deadline.

The bank, which holds about $2.8 billion in assets, has been struggling under the weight of bad loans in areas of the country hit hard by the subprime mortgage crisis. It has been under strict scrutiny from regulators since early 2009.

A filing Thursday by the Office of Thrift Supervision said TierOne “engaged in unsafe or unsound banking practices,” such as having too many bad loans and not enough capital. The office ordered TierOne to stop such risky practices.

TierOne must submit a capital-restoration plan to regulators by July 15 that will spell out the bank’s plans through the end of 2011.

TierOne was removed from the Nasdaq stock market last Friday because the banking company has failed to file several overdue financial reports while it tries to satisfy federal regulators.

Earlier this year, TierOne’s independent auditor resigned, which makes it difficult for the company to file its overdue financial reports because it needs an auditor to verify the data. TierOne has been searching for a new auditor.

Online:

TierOne Corp.: www.tieronebank.com

Office of Thrift Supervision: www.ots.treas.gov