New York State Banking Superintendent Closes Park Avenue Bank
March 12, 2010
New York N.Y.: Richard H. Neiman, Superintendent of Banks for New York State, announced that the Banking Department closed Park Avenue Bank in New York City, citing ineffective management and inadequate capital, and immediately appointed the Federal Deposit Insurance Corporation (FDIC) as receiver.
As receiver, the FDIC has entered into a purchase and assumption agreement with Valley National Bank, Wayne, New Jersey. Valley National Bank will assume all deposits and certain assets of Park Avenue Bank, except certain brokered deposits, which will be paid out by the FDIC.
Superintendent Neiman took possession of the business and property of Park Avenue Bank in order to protect depositors and the public, following Park Avenue Bank’s failure to adequately address the problems outlined in a Feb. 11, 2009 Cease and Desist Order and becoming undercapitalized. The consent order is available at http://www.banking.state.ny.us/ea090211.pdf.
Park Avenue Bank, which has four offices (one in Manhattan and three in Brooklyn), had total assets of approximately $520.1 million and total deposits of approximately $494.5 million, as of Dec.31, 2009.
“We determined that the management team’s inability to adequately address the problems outlined in the consent order led to the bank being critically undercapitalized. This issue, coupled with the high volume of non-performing loans held by Park Avenue, meant the bank could no longer operate in a safe and sound manner,” said Neiman. “Ensuring that that this transition is as seamless as possible, while guaranteeing the security of customers’ deposits, is a top priority for the Banking Department.”
Customers who have questions about today's transaction can call the FDIC toll-free at 1-800-640-2538. The phone number will be operational this evening until 9:00 p.m., Eastern Standard Time (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. Interested parties also can visit the FDIC's Web site at http://www.fdic.gov/bank/individual/failed/parkavenue-ny.html.The U. S. Congress created the Federal Deposit Insurance Corporation (FDIC) in 1933 to restore public confidence in the nation's banking system. The FDIC insures deposits at the nation's 8,011 banks and savings associations and it promotes the safety and soundness of these institutions by identifying, monitoring and addressing risks to which they are exposed. The FDIC receives no federal tax dollars – insured financial institutions fund its operations.
The New York State Banking Department is the regulator for all state-chartered banking institutions, virtually all of the United States offices of international banking institutions, all of the State’s mortgage brokers, mortgage bankers, check cashers, money transmitters and budget planners. The aggregate assets of the depository institutions supervised by the Banking Department are more than $2.4 trillion.In addition to regulating banking institutions, the Banking Department is active in informing and educating all New Yorkers on banking matters. To contact the Banking Department, please call 1-877-BANK-NYS or visit our Web site at www.banking.state.ny.us.