A fourth bank was closed in 2019 Friday, the federal insurer of bank deposits said in the early evening, when the City National Bank of New Jersey, with more than $120 million in assets, shuttered its doors.
The bank, according to the Federal Deposit Insurance Corp. (FDIC), was closed by the Office of the Comptroller of the Currency (OCC), the regulator of national banks. The FDIC also said the bank’s deposits will be assumed by Industrial Bank of Washington, D.C.
The deposit insurer said it estimated the cost to its Deposit Insurance Fund (DIF) will be $2.5 million. “Compared to other alternatives, Industrial Bank’s acquisition was the least costly resolution for the FDIC’s DIF,” the agency said.
The closing of City National (with $120.6 million in assets) is the third bank closure to be announced by the agency in a little more than a week. On Oct. 25, in separate announcements, the FDIC said both Resolute Bank in Maumee, Ohio ($27.1 million in assets) and Louisa Community Bank in Louisa, Ky. ($29.7 million in assets) had been closed. The combined cost of the two bank failures to the DIF, the agency said, was $6.7 million.
“The overall health of the banking system today remains strong, as reported in the FDIC’s most recent Quarterly Banking Profile,” FDIC said in a release. “On average, there are five bank failures each year in non-crisis times, according to FDIC data. There have been only three years since 1933 without a single bank failure,” the agency added.
In late May, the FDIC announced the first bank failure of 2019, when it closed Enloe State Bank in Cooper, Texas, at a cost of $27.6 million, or 75% of the bank’s $37 million in total assets. The FDIC subsequently said the cause of the Texas bank failure was insider abuse and fraud by former officers of the institution.
At the time of Enloe’s failure, it was the first bank failure announced by the FDIC in 18 months. In 2018, there were no bank failures – the first year since 2006 in which no bank failures were recorded by the deposit insurer (there were also no failures in 2005, according to the FDIC).
In 2017, a total of eight banks closed their doors. In the 10-year period 2007-2017, there were 529 insured-institution failures, according to FDIC records. Most of those (468) occurred between 2008-2012 – a period that included the height of the financial crisis.