USA Bank shut down by regulators, brings NYS bank collapses to three

By David Jones | July 12, 2010 04:45PM

Federal and state regulators shut down USA Bank, in Port Chester, N.Y.
on Friday and sold the assets off to New Century Bank of Phoenixville,
Pa., marking the third federal seizure of a New York bank since
February.

The bank had assets of $193.3 million and deposits of $189.9 million,
according to the Federal Deposit Insurance Corp., which arranged the
sale. The bank reopened Saturday as a division of Customers 1st Bank,
the business name of New Century Bank.

The Westchester County bank had been operating under two
cease-and-desist orders from the New York State Department of Banking
for issues dating back to 2008. State and federal examinations raised
concerns about the percentage of commercial real estate loans,
employing qualified managers, charging off bad loans and advancing
credit to delinquent borrowers.

USA Bank Chairman Fred DeCaro could not immediately be reached for comment.

The
community bank originally launched in 2005, mainly focused on
Westchester and Fairfield County, Conn.-based residents and business.

In September 2009, the bank hired London-based Laidlaw & Co. to
help it consider strategic alternatives, including new investors. By
April the bank entered an agreement with a group of local businesses,
called the Westchester Working Group, to provide it $15 million in
additional capital, through the issuance of preferred stock at $100 a
share.

The bank is the third FDIC-insured institution closed in New York State this year. In March, regulators shut down Park Avenue Bank in New York after shutting down developer Shaya Boymelgreen’s LibertyPointe Bank in Manhattan.