2 NY Banks Fail
Among four bank failures last week were two institutions in New York City. Both were scooped up by a big New Jersey-based bank.
On Thursday, New York's Banking Department closed LibertyPointe Bank and -- as is done when any federally insured bank or thrift fails -- appointed the Federal Deposit Insurance Corporation as receiver. The failure of the New York City bank was the result of its inability to meet the requirements of a July 2009 cease-and-desist order by the state and the FDIC. It also faced an FDIC prompt corrective action in October.
Valley National Bank won its bid to assume the four-year-old bank's $210 million in deposits as of Dec. 31, 2009, at an 0.15 percent premium. Valley National also acquired the 37-employee firm's $210 million in assets -- which included $8 million in home loans, $128 million in commercial mortgages and $26 million in construction-and-land-development loans. With the FDIC sharing in losses on $182 million of the assets, the expected cost to the Deposit Insurance Fund is $25 million.
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