Park Avenue BankThe 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.
Statewide BankThe Louisiana Office of Financial Institutions closed Statewide Bank of Covington, La. As receiver, the FDIC arranged for Home Bank of Lafayette, La. to assume the failed bank's $209 million in deposits and $243 million in total assets, with no premium charged for the deposits. Home Bank is the main subsidiary of Home Bancorp ( HBCP). The FDIC agreed to share in losses on $164 million of the acquired assets and estimated that the cost to its insurance fund would be $38.1 million. Statewide Bank's offices were scheduled to reopen Saturday as Home Bank branches.
Ongoing Bank Failure CoverageAll previous bank and thrift failures since the beginning of 2008 are detailed in TheStreet.com's interactive bank failure map: