Chemical to Get Bank's Assets
NEW YORK - Chemical Banking Corp. has agreed to acquire $35 million in assets of Community National Bank and Trust Company of New York, a Staten Island institution that was seized earlier this month by federal regulators.
Also, Chemical has already acquired the insolvent bank's insured deposits and branches from the Federal Deposit Insurance Corp., which was appointed receiver.
The FDIC retained $318 million of Community National assets, according to Community National Bancorp, the failed bank's holding company.
The parent said the closing of the bank by the Office of the Comptroller of the Currency left it unable to pay its debts.
The company said it accepted the removal of its common stocks, warrants, and 11% subordinated notes from the American Stock Exchange.
The Comptroller said the bank had become a concern in 1989 because of poor lending practices, inadequate supervision by directors, and ineffective internal controls.
The OCC initiated enforcement actions in 1990 and 1991, but management was not successful in correcting loan problems and reversing losses.
Community National lost $36 million this year and $16 million in 1990.