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 - Get Report).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.