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Regulators close New Jersey bank

Regulators close New Jersey bank

April 20th, 2012 in News

WASHINGTON (AP) - Federal regulators have shuttered a bank in New Jersey, bringing to 17 the number of banks that have failed so far this year.

The Federal Deposit Insurance Corp. said Friday that it closed Fort Lee Federal Savings Bank, FSB, in Fort Lee, N.J.

The bank, with has a single branch, had about $51.9 million in assets and $50.7 million in deposits as of Dec. 31.

Alma Bank of Astoria, N.Y., agreed to assume Fort Lee Federal Savings Bank's deposits and $15.7 million of its assets.

The FDIC estimates that Fort Lee Federal Savings Bank's failure will cost the insurance fund $14 million.

Fort Lee Federal Savings Bank is the first FDIC-insured institution in New Jersey to fail this year.

The pace of bank closures has slowed sharply after ballooning following the financial crisis in 2008. By this time last year, 34 banks had failed.

In 2010, regulators seized 157 banks, the most in any year since the savings and loan crisis two decades ago. The 2010 failures cost the fund around $23 billion. The FDIC has said that year likely was the high-water mark for bank failures from the Great Recession.

Last year, 92 banks failed, costing the fund about $7.9 billion.

In 2009 there were 140 bank failures that cost the fund about $36 billion. That was more than in 2010 because the banks involved were bigger on average. Twenty-five banks failed in 2008, the year the financial crisis struck. Only three closed in 2007.

From 2008 through 2010, bank failures cost the fund an estimated $79 billion. The FDIC expects failures from 2011 through 2015 to cost $19 billion.

The deposit insurance fund fell into the red in 2009. With failures slowing, the FDIC's fund balance turned positive in the second quarter of last year.

At Dec. 31 it stood at $9.2 billion, nearly 18 percent higher than three months earlier, according to the FDIC.