Bank failure in New Jersey is nation's third in a week
Regulators have now closed three banks in the span of a week with the failure late Friday of City National Bank of New Jersey in Newark.
City National Bank of New Jersey was shuttered by the Office of the Comptroller of the Currency, which appointed the Federal Deposit Insurance Corp. as receiver. City National’s operations were sold to Industrial Bank in Washington, D.C. Industrial is a unit of IBW Financial.
City National, a minority depository institution, had about $120.6 million in assets and $111.2 million in deposits on Sept. 30, according to the FDIC.
Industrial, which is also a minority depository institution, agreed to buy essentially all of City National's assets and assume all of the failed bank’s deposits.
All three of City National’s existing branches will reopen Saturday under Industrial’s ownership. The FDIC estimates that the failure will cost the Deposit Insurance Fund about $2.5 million.
"The OCC acted after finding that the bank had experienced substantial dissipation of assets and earnings due to unsafe or unsound practices," the regulator said in a statement. "The OCC also found that the bank was undercapitalized and failed to submit a capital restoration plan acceptable to the OCC."
City National is the fourth bank to close in 2019, including two banks that failed on Oct. 25 in Ohio and Kentucky. The last bank to fail in New Jersey was Harvest Community Bank in Pennsville, which closed on Jan. 13, 2017. There were no bank failures in 2108.