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Ken Tumin founded the Bank Deals Blog in 2005 and has been passionately covering the best deposit deals ever since. He is frequently referenced by The New York Times, The Wall Street Journal, and other publications as a top expert, but he is first and foremost a fellow deal seeker and member of the wonderful community of savers that frequents DepositAccounts.

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One Small New Jersey Bank Closed by the OCC


One Small New Jersey Bank Closed by the OCC

The first bank failure of April occurred today when the OCC closed Fort Lee Federal Savings Bank, FSB in New Jersey. That brings the total number of bank failures for 2012 to 17. The number of bank failures continues to be much less than last year. As a comparison, there had been 34 bank failures this time last year.

The closure of Fort Lee Federal Savings Bank was typical with the FDIC arranging for another bank to assume all deposits. The acquiring bank was Alma Bank in Astoria, New York. Readers may recognize this bank. It had offered a competitive liquid 1-year CD for most of 2011.

Alma Bank currently has no mention of its acquisition on its website. The FDIC just has the typical message in its Q&As section regarding what will happen to Fort Lee CD rates:

Interest on deposits accrued through close of business on April 20, 2012 will be paid at your same rate. Fort Lee Federal Savings Bank, FSB's rates will be reviewed by the new bank and may be lowered; however, you will be notified in writing of any changes. You may withdraw funds from any transferred account, regardless of whether your interest rate changes, without early withdrawal penalty until you enter into a new deposit agreement with the new bank.

There have been no credit union liquidations since March 26th when Shepherd’s Federal Credit Union in North Carolina became the fourth credit union closed in 2012.

Below is the summary of this week's bank failure:

17th Bank Failure of 2012 (1st in New Jersey)

  • Closed Bank: Fort Lee Federal Savings Bank, FSB, Fort Lee, NJ
  • FDIC Press Release
  • Size: 1 branch, $51.9 million in assets and $50.7 million in deposits
  • Acquiring Bank: Alma Bank, Astoria, NY
  • Possible Uninsured Deposits: all deposit accounts, including brokered deposits, have been assumed by Alma Bank
  • Rate Changes: Fort Lee Federal Savings Bank, FSB's rates will be reviewed by the new bank and may be lowered (FDIC Q&A)
  • Estimated Cost to Deposit Insurance Fund: $14.0 million
  • Enforcement Action: OCC 3/15/12 PCA
  • Financial Ratings: 1 star at Bankrate.com, 0 star at BauerFinancial, 1 star & Texas Ratio of 297.89% at DepositAccounts.com (see financial rating note)

Financial Ratings Notes: 0 star is lowest at BauerFinancial, 1 star is lowest at DepositAccounts.com & Bankrate.com, Texas Ratios over 100% is considered at risk. Ratings are based on December 2011 data.


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Wil   |     |   Comment #1
This explains something about which I've been wondering. For about the last two years there was a "new" branch of Fort Lee Federal Savings Bank on Main Avenue in Clifton, NJ with posters on the windows "Grand Opening Soon." The building looked completed and ready to go, but it never in fact opened. I guess the financial health of Fort Lee FSB must have been so bad that the bank couldn't afford to actually open the new branch.
KenBDG   |     |   Comment #2
Perhaps Alma Bank will finally open this branch. Keep a lookout for specials.