CHERRY HILL - ISN Bank, Cherry Hill, N.J., a one-office bank which conducted most of its deposit business over the Internet, was closed today by the New Jersey Department of Banking and Insurance, which appointed the Federal Deposit Insurance Corporation (FDIC) as receiver. To protect depositors, the FDIC entered into a purchase and assumption agreement with New Century Bank (doing business as Customers Bank), Phoenixville, Pa., to assume all of the deposits of ISN Bank. Customers of ISN Bank will not experience any interruption in services.
ISN Bank was not a traditional community bank and had a negligible level of “core” deposit relationships with individuals and businesses. A “core” deposit relationship is one in which a depositor has its main banking relationship with one bank.
The sole branch of ISN Bank will reopen on Monday as a branch of Customers Bank and 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 and will receive additional information from Customers Bank. 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 ISN Bank will continue to be processed. Loan customers should continue to make their payments as usual.
“ISN Bank was not a traditional community bank with significant core banking relationships and represents an isolated situation,” said NJDOBI Commissioner Tom Considine. “Unfortunately, the bank’s poor asset quality made today’s action necessary to protect consumers,” he continued. “This action comes only after we attempted well coordinated corrective actions,” Considine concluded.
As of June 30, 2010, ISN Bank had approximately $80 million in total assets and $79 million in total deposits. The majority of deposits were gathered from individuals and companies outside the State of New Jersey via ISN Bank’s Internet platform.
New Jersey Banking Director Garret Komjathy stated, “The Department has been engaged in attempts to remedy the bank’s condition and the purchase of ISN Bank represents a preferred outcome.” “Senior
management of New Century Bank has a proven record of success in the banking industry,” Komjathy said. “Importantly, this transaction will be completely seamless to ISN Bank customers,” he concluded.
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 p.m., Eastern Daylight Time (EDT); on Saturday from 9 a.m. to 6 p.m., EDT; on Sunday from noon to 6 p.m., EDT; and thereafter from 8 a.m. to 8 p.m., EDT.