City National Bank of New Jersey has agreed to sell deposits and loans associated with a branch on New York's Long Island to Bethpage Federal Credit Union.
The $270 million-asset City National is selling assets and liabilities of its branch in Roosevelt, N.Y., said Preston Pinkett, the bank's president and chief executive. Bethpage will acquire only the deposits and assets of customers who choose to move to the credit union.
"It is an unconventional" agreement, but City National is "trying to make sure our customers are taken care of," Pinkett said.
Terms of the transaction were not disclosed. City National's Roosevelt branch held $15.3 million in deposits as of June 30, 2013, according to the Federal Deposit Insurance Corp. City National does not own the branch-related real estate, Pinkett said.
City National, in Newark, N.J., on Sept. 4 submitted the deal to the FDIC for approval. The bank and credit union expect the full transfer to be completed by December.
The sale is part of City National's wider cost-cutting program, and it expects to save about $700,000 yearly by eliminating the branch, Pinkett said.
City National, which is operating at a loss, has also cut employees and written off problem loans. The bank is operating under a December 2010 consent order from the Office of the Comptroller of the Currency that requires it to improve capital ratios and loan underwriting procedures, among other items.
"We're an African-American-owned and -managed bank and like lots of small banks, we've struggled through the ensuing years of the economic downturn," Pinkett said. "We're really just trying to right the ship."
The $5.7 billion-asset Bethpage FCU, in Bethpage, N.Y., operates 28 branches on Long Island. Bethpage officials could not be reached for comment.