Donald Glascoff’s (left) Park Avenue Bank has been shut down with its deposits sold to Valley National Bank, headed by Gerald Lipkin (right)

Federal and state regulators have shut down the Park Avenue Bank and sold its deposits to Valley National Bank, marking the second seizure and asset sale of a New York City bank in two days. The State Banking Department closed the bank citing ineffective management and inadequate capital as well as a high volume of non-performing loans. “We determined that the management team’s inability to address the
problems in the consent order led to the bank being critically
undercapitalized,” said Richard Neiman, supervisor of the state Banking
Department. “This issue coupled with the high volume of non-performing
loans held by Park Avenue meant that the bank could no longer operate
in a safe and sound manner.” The FDIC entered into a loss-share transaction on $379.8 million of Park Avenue Bank’s assets. Park Avenue Bank reported assets of $520.1 million and deposits of $494.5 million, according to the FDIC. The bank’s four branches will reopen as branches of Valley National Bank. Last night, state regulators shut down and sold the assets of LibertyPointe Bank, the struggling lender owned by Brooklyn-based developer Shaya Boymelgreen. Asked whether the collapse of two small New York banks was a start of a new trend, FDIC officials acknowledged that commercial real estate lending is playing a larger role in bank failures. [more]