Nostrand Bank To Swap Owners, But Same Faces Will Serve Customers
Brooklyn Federal Savings bank has been bought out, and the bank that gobbled it up – Investors Savings Bank – will hang new signs at the 3780 Nostrand Avenue branch in the next few days.
Investors Savings Bank purchased the 114-year-old borough bank in a deal valued at $10.3 million, rescuing it from itself, as it has been operating under a cease-and-desist for several months. A spokesperson from Investors Savings Bank explains:
Investors will offer each employee at the Brooklyn Federal branch on 3780 Nostrand Avenue in Sheepshead Bay the opportunity to stay with the new bank.
Investors acquisition, which is subject to review by banking regulators, will be completed later this year. The new owner will install its signs on the Sheepshead Bay branch and Brooklyn Federal’s main office on Court Street in downtown Brooklyn. The people who assist customers at the branch will remain the same. Investors is currently building a new branch in Boro Hall, which is scheduled to open this fall.
Investors’ acquisition is valued at $10.3 million. Brooklyn Federal’s shareholders will receive .80 cents a share and Investors will pay $2.9 million to public shareholders.
Brooklyn Federal has been operating under a cease-and-desist order because it missed capital targets set for April 30th
. The Bank has been on the hunt for a buyer.
An article from the Star-Ledger explains a little more:
Brooklyn Federal Savings Bank had been ordered in March by federal regulators not to pay dividends without permission, or to make new commercial real estate loans.
Regulators found that the bank engaged in unsafe or unsound banking practices including creating credit without adequate, effective risk management.
Its stock dropped from $10 a share in 2009 and languished below $1 most of this year.
“Everybody knows that Brooklyn Federal’s portfolio was troubled,” said Investors Savings Bank COO Dominick Cama on the conference call. “One of the conditions we went into the deal with was that we would be able to sell most of the commercial real estate portfolio.”
Cama said there was ample demand for the properties, which are mostly in New York City. Investors will keep control of the bank’s $82 million residential loan portfolio, which had a 1.6 percent delinquency rate that Cama characterized as “very, very clean.”
Are you a client at Brooklyn Federal Savings? Let us know what you think of the change!