ISN Bank, Cherry Hill, 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 New Century Bank (doing business as Customers Bank), Phoenixville, Pennsylvania, to assume all of the deposits of ISN Bank.
The sole branch of ISN Bank will reopen on Monday as a branch of Customers Bank. Depositors of ISN Bank will automatically become depositors of Customers Bank. Deposits will continue to be insured by the FDIC, so there is no need for customers to change their banking relationship in order to retain their deposit insurance coverage. Customers of ISN Bank should continue to use their existing branch until they receive notice from New Century Bank that it has completed systems changes to allow other New Century Bank branches to process their accounts as well.
This evening and over the weekend, depositors of ISN Bank can access their money by writing checks or using ATM or debit cards. Checks drawn on the bank will continue to be processed. Loan customers should continue to make their payments as usual.
As of June 30, 2010, ISN Bank had approximately $81.6 million in total assets and $79.7 million in total deposits. New Century Bank did not pay the FDIC a premium to assume all of the deposits of ISN Bank. In addition to assuming all of the deposits of the failed bank, New Century Bank agreed to purchase essentially all of the failed bank's assets.
The FDIC and New Century Bank entered into a loss-share transaction on approximately $64.8 million of ISN Bank's assets. New Century Bank will share in the losses on the asset pools covered under the loss-share agreement. The loss-share transaction is projected to maximize returns on the assets covered by keeping them in the private sector. The transaction also is expected to minimize disruptions for loan customers. For more information on loss share, please visit: http://www.fdic.gov/bank/individual/failed/lossshare/index.html.
Customers who have questions about today's transaction can call the FDIC toll-free at 1-800-913-3067. The phone number will be operational this evening until 9:00 p.m., Eastern Daylight Time (EDT); on Saturday from 9:00 a.m. to 6:00 p.m., EDT; on Sunday from noon to 6:00 p.m., 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/isnbank.html.
The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) will be approximately $23.9 million. Compared to other alternatives, New Century Bank's acquisition was the least costly resolution for the FDIC's DIF. ISN Bank is the 120th FDIC-insured institution to fail in the nation this year, and the first in New Jersey. The last FDIC-insured institution closed in the state was First BankAmericano, Elizabeth, on July 31, 2009.
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Congress created the Federal Deposit Insurance Corporation in 1933 to restore public confidence in the nation's banking system. The FDIC insures deposits at the nation's 7,830 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.
FDIC press releases and other information are available on the Internet at www.fdic.gov, by subscription electronically (go to www.fdic.gov/about/subscriptions/index.html) and may also be obtained through the FDIC's Public Information Center (877-275-3342 or 703-562-2200). PR-207-2010