ISN Bank of New Jersey Fails

CHERRY HILL, N.J. (TheStreet) - New Jersey regulators on Friday closed ISN Bank of Cherry Hill on Friday, bringing the total number of bank failures for 2010 to 120.

The failed bank was included in TheStreet's Bank Watch List of undercapitalized institutions, based on second-quarter regulatory data provided by SNL Financial.

ISN Bank was undercapitalized since the fourth quarter of 2008, when a net loss of $2.2 million pushed the institution's Tier 1 leverage ratio down to 3.70% and its total risk-based capital ratio to 6.87%. These ratios need to be at least 5% and 10% for most banks and thrifts to be considered well-capitalized by regulators. The capital ratios need to be at least 4% and 8% for most to be considered adequately capitalized.

After six more quarters of net losses, the capital ratios had declined to 1.66% and 3.54% as of June 30, and the bank's ratio of nonperforming assets - loans past due 90 days or in nonaccrual status and repossessed real estate - comprised a crippling 25.36% of total assets.

After ISN Bank was shuttered by the New Jersey Department of Banking and Insurance, the Federal Deposit Insurance Corp. was appointed receiver and sold the failed institution to New Century Bank (OZRK) of Phoenixville, Penn. The acquiring institution does business under the brand name Customers First Bank (NCYB.PK).

ISN Bank had $81.6 million in total assets when it failed. The FDIC agreed to share in losses on $64.8 million of the assets acquired by New Century Bank.

The failed bank's office was set to reopen as a Customers Bank branch.

Thorough Bank Failure Coverage

ISN Bank was the first New Jersey institution to fail this year and the third since the current wave of bank failures began in 2008.

Florida leads all states with 23 bank closures during 2010, followed by 15 in Illinois and 11 failures in Georgia.

All bank and thrift failures since the beginning of 2008 are detailed in TheStreet.com's revamped interactive bank failure map:

The bank failure map is color-coded, with the states having the greatest number of failures highlighted in dark grey, and states with no failures in light green. By moving your mouse over a state you can see its combined 2008-2010 totals. Then click the state to open a detailed map pinpointing the locations and providing additional information for each bank failure.

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-- Written by Philip van Doorn in Jupiter, Fla.



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Philip W. van Doorn is a member of TheStreet's banking and finance team, commenting on industry and regulatory trends. He previously served as the senior analyst for TheStreet.com Ratings, responsible for assigning financial strength ratings to banks and savings and loan institutions. Mr. van Doorn previously served as a loan operations officer at Riverside National Bank in Fort Pierce, Fla., and as a credit analyst at the Federal Home Loan Bank of New York, where he monitored banks in New York, New Jersey and Puerto Rico. Mr. van Doorn has additional experience in the mutual fund and computer software industries. He holds a bachelor of science in business administration from Long Island University.