york state banking department

Out of the blue the LibertyPointe Bank in NY was closed tonight and the branches will open under Valley National Bank, who bought the assets, on Friday morning. It is odd that a bank is closed on a Thursday, it happens, but not that often and shows just how troubled the banking industry is. To assume the troubles are over and everything is fine is a bit premature in my book.

Oh, the FDIC only lost a mere $24M tonight and entered a loss-share agreement for $181.5M.

Here is the rundown on LibertyPointe Bank:

LibertyPointe Bank, New York, New York, was closed today by the New York State Banking Department, which appointed the Federal Deposit Insurance Corporation (FDIC) as receiver. To protect the depositors, the FDIC entered into a purchase and assumption agreement with Valley National Bank, Wayne, New Jersey, to assume all of the deposits of LibertyPointe Bank.

The three branches of LibertyPointe Bank will reopen on Friday as branches of Valley National Bank. Depositors of LibertyPointe Bank will automatically become depositors of Valley National Bank. Deposits will continue to be insured by the FDIC, so there is no need for customers to change their banking relationship to retain their deposit insurance coverage. LibertyPointe Bank customers should continue to use their existing branches until they receive notice from Valley National Bank that it has completed systems changes to allow other Valley National Bank branches to process their accounts as well.

This evening, Friday, and over the weekend, depositors of LibertyPointe Bank can access their money by writing checks or using ATM or debit cards. Checks drawn on the bank will continue to be processed. Loan customers should continue to make their payments as usual.

As of December 31, 2009, LibertyPointe Bank had approximately $209.7 million in total assets and $209.5 million in total deposits. Valley National Bank will pay the FDIC a premium of 0.15 percent to assume all of the deposits of LibertyPointe Bank. In addition to assuming all of the deposits, Valley National Bank agreed to purchase essentially all of the failed bank’s assets.

The FDIC and Valley National Bank entered into a loss-share transaction on $181.5 million of LibertyPointe Bank’s assets. Valley National Bank will share in the losses on the asset pools covered under the loss-share agreement. The loss-share transaction is projected to maximize returns on the assets covered by keeping them in the private sector. The transaction also is expected to minimize disruptions for loan customers.

Customers who have questions about today’s transaction can call the FDIC toll-free at 1-800-591-2820. The phone number will be operational this evening from the time of closing until 9:00 p.m., Eastern Standard Time (EST); on Friday from 9:00 a.m. to 6:00 p.m., EST; on Saturday from 9:00 a.m. to 3:00 p.m., EST; on Sunday from 9:00 a.m. to 3:00 p.m., Eastern Daylight Time (EDT); and thereafter from 8:00 a.m. to 8:00 p.m., EDT.

The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) will be $24.8 million. Valley National Bank’s acquisition of all the deposits was the “least costly” resolution for the FDIC’s DIF compared to all alternatives. LibertyPointe Bank is the 27th FDIC-insured institution to fail in the nation this year, and the first in New York. The last FDIC-insured institution closed in the state was Waterford Village Bank, Williamsville, July 24, 2009.

H/T to Mark for the tip

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