Citizens Community Bank Closure Marks 32nd Bank Failure in 2009

It’s Friday allright. Regulators shut down another bank today, that of New Jersey’s Citizens Community Bank, bringing the number of bank failures this year to 32.

From FDIC: Citizens Community Bank, Ridgewood, New Jersey, was closed today by the New Jersey Department of Banking and Insurance, which appointed the Federal Deposit Insurance Corporation (FDIC) as receiver. To protect the depositors, the FDIC entered into a purchase and assumption agreement with North Jersey Community Bank, Englewood Cliffs, New Jersey, to assume all of the deposits of Citizens Community Bank.

The failed bank’s sole office will reopen on Monday as a branch of North Jersey Community Bank. Depositors of Citizens Community Bank will automatically become depositors of the assuming bank.

As of December 31, 2008, Citizens Community Bank had total assets of approximately $45.1 million and total deposits of $43.7 million. North Jersey Community Bank paid a premium of 0.67 percent to acquire all of the deposits of the failed bank.

In addition to acquiring the failed bank’s deposits, North Jersey Community Bank agreed to purchase approximately $11.5 million in assets. The FDIC will retain any remaining assets for later disposition.

The FDIC estimates that the cost to the Deposit Insurance Fund will be $18.1 million. North Jersey Community Bank’s acquisition of the deposits of Citizens Community Bank was the “least costly” resolution for the FDIC’s Deposit Insurance Fund compared to alternatives.

The last FDIC-insured institution to fail in the state of New Jersey was Dollar Savings Bank, Newark, on February 14, 2004.

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