WASHINGTON (TheStreet) -- Regulators seized three banks Friday, bringing this year's total number of U.S. bank and thrift failures to 30.
TheStreet.com Ratings had previously assigned E-minus (Very Weak) financial strength ratings to all three banks, and all were included in TheStreet.com's list of undercapitalized banks.
Park Avenue Bank
The New York State Banking Department closed Park Avenue Bank, which was headquartered in Manhattan and had $520 million in total assets. The Federal Deposit Insurance Corp. was appointed receiver and sold the failed bank's deposits for a small premium to Valley National Bank of Wayne, N.J., the main subsidiary of Valley National Bancorp (VLY).Valley National also acquired the failed bank's assets, with the FDIC agreeing to share in losses on $380 million of those assets. Park Avenue Bank's offices were set to reopen during normal business hours on Saturday. The FDIC estimated that the cost to its insurance fund would be $50.7 million. This was Valley's second acquisition of a failed New York City institution in two days. It took over the failed LibertyPointe Bank late Thursday. Valley National Bancorp granted the FDIC an "equity appreciation instrument," under which the holding company would make a cash payment to the FDIC based in part on the amount by which the weighted average price of Valley's stock exceeds $14.372 for the five trading days before the FDIC exercises the instrument. The agency can exercise the instrument from March 18 through April 10. > > Bull or Bear? Vote in Our Poll A similar arrangement netted the agency a cash payment of $23 million after New York Community Bancorp (NYB) acquired the deposits and most of the assets of AmTrust in December, although the payment was dwarfed by the $84.2 million "bargain purchase gain" reported by New York Community for the fourth quarter. New York Community's shares have returned 35% since the AmTrust acquisition.
Old Southern BankFlorida regulators shut down Old Southern Bank of Orlando and appointed the FDIC receiver. The FDIC sold the failed bank's $320 million in deposits for a 1% premium to Centennial Bank of Conway, Ark. Centennial is held by Home Bancshares (HOMB). Centennial Bank also acquired Old Southern's total assets of $316 million, with the FDIC agreeing to share in losses on $283 million of the acquired assets. The agency estimated that the cost to its insurance fund would be $94.6 million. Old Southern's branches were scheduled to reopen Monday as branches of Centennial Bank.
Select the service that is right for you!COMPARE ALL SERVICES
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV