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BOZEMAN - Bank of Bozeman President Phillip Bratton wants to assure his customers their money is safe, despite a recent consent order from the Federal Deposit Insurance Corporation (FDIC).

"One hundred percent safe," Bratton said. "As long as it's under the $250,000 FDIC maximum."

The June 2 order details a series of 'unsafe' banking practices undertaken over the last few years. These include overlending and lending to borrowers unable to pay their loans.

"These were loans that were made three and four years ago, at the height of the real estate boom," Bratton said. "They were loans that I don't think were unsafe or to unqualified borrowers at the time, but with the real estate decline, have certainly become problem credits at this point."

Bratton said the bank stopped making commercial real estate loans in mid 2009 and was "well aware" of the FDIC order six months in advance of it being issued.

"The losses have been substantial," Bratton said. Since 2005 the bank has lost more than half of its capital reserves, leaving the bank with $6 million in capitol right now. He said the bank has until the end of the year to raise that amount to $10 million. A plan to get there has been approved by the FDIC.

"We're out selling stock right now to raise it to that point," Bratton said, adding the capitol level is the only stipulation of the consent order the bank has yet to comply with.

The 10-page document orders the bank to add two additional independent members to its Board of Directors, members who "(are) not an officer of the Bank, any subsidiary, or any of its affiliated organizations." These members also must not own more than 10 percent of the outstanding shares of the Bank or be related by blood or marriage to any officer, director, or major shareholder. The bank has until the beginning of October to appoint those members; one has already been appointed.

Bank of Bozeman managers will also be assessed on their ability to "restore all aspects of the Bank to a safe and sound condition," something Bratton said his team is doing.

"The bank has been very forthright with our depositors, telling them exactly where we are and helping them," Bratton assured.

In a Bank of Bozeman press release, Montana Banking Commissioner Annie Goodwin is quoted as saying, "There has been significant work done by the Board and management of Bank of Bozeman over the past year which has lead to progressive improvements. They have a strong team that is committed to asurign continued progress. We are confident this bank will persist on the positive course and come away stronger as a result."

View the full Bank of Bozeman consent order here.

The FDIC lists one other 2010 consent order for a Montana Bank, Beartooth Bank in Billings.