Dive Brief:
- The Office of the Comptroller of the Currency closed City National Bank of New Jersey on Friday, making it the third bank in the country to fail within a week. The regulator appointed the Federal Deposit Insurance Corp. as receiver.
- Louisa Community Bank in Kentucky and Resolute Bank in Ohio both closed Oct. 25.
- The three bank failures bring the year's total to four. The Texas Department of Banking closed Enloe State Bank on May 31. No bank failures were reported in 2018.
Dive Insight:
Industrial Bank of Washington, D.C., agreed to buy City National's assets and assume all of the bank's deposits. It reopened all three of the Newark, N.J.-based bank's branches Saturday under the Industrial name.
City National had about $120.6 million in assets and $111.2 million in deposits as of Sept. 30, according to the FDIC. The regulator estimated 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's failure comes less than a week after the Kentucky Department of Financial Institutions closed Louisa Community Bank, and the OCC closed Maumee, Ohio's Resolute Bank.
Kentucky Farmers Bank Corp. in Catlettsburg, Ky., assumed Louisa's $29.7 million in total assets and $26.5 million in deposits and reopened its sole branch, according to the FDIC.
Buckeye State Bank in Powell, Ohio, assumed Resolute's $27.1 million in total assets and $26.2 million in total deposits and reopened its sole branch under the Buckeye name, the FDIC said.
Louisa's failure will cost the Deposit Insurance Fund about $4.5 million, the regulator estimated. That's more than double the $2.2 million the regulator said Resolute's failure would cost.
Enloe's failure in May, in contrast to this week's closures, stemmed from insider abuse and fraud by the bank's former officers, the FDIC inspector general said in a report. A local fire department responded to a report of papers being lit on fire at Enloe's branch May 11. Law enforcement officials deemed the activity suspicious, according to the Paris News. The fire came two days before regulators were set to examine the bank, according to S&P Global.
Legend Bancorp in Bowie, Texas, bought all of Enloe's insured deposits but only 14% of the bank's assets. The failure would cost the Deposit Insurance Fund about $27 million, or nearly three-quarters of Enloe's $36.7 million asset size, the FDIC estimated.
