New York City bank among three U.S. bank failures

The other banks seized on Friday were small institutions in Florida and Louisiana, and brought the total number of failures so far this year to 30.

The Federal Deposit Insurance Corp found buyers for the deposits of all three banks.

Community banks across the nation are continuing to fail at a steady pace.

The FDIC said on Friday that The Park Avenue Bank of New York City; Old Southern Bank of Orlando, Fla.; and Statewide Bank of Covington, Louisiana were closed. The FDIC did not disclose why they failed.

The Park Avenue Bank was the largest of the three, with about $520 million in assets and four branches.

It focused on banking services for small businesses, and commercial and real-estate-based businesses, which are problem areas for many small banks.

The New York City-based bank was the second one in the area to fail in two days. LibertyPointe Bank was closed by regulators on Thursday, a day earlier than banks are usually seized, because a large number of its bank employees are Jewish and typically head home for the Sabbath on Friday evenings, the FDIC said.

Valley National Bank of Wayne, N.J., bought the deposits from both The Park Avenue Bank and LibertyPointe.

Centennial Bank of Conway, Ark., is assuming the deposits of Old Southern Bank, and Home Bank of Lafayette, La., is assuming the deposits of Statewide Bank.

The FDIC has said bank failures related to the recent crisis are expected to peak this year. Last year 140 banks failed, compared with 25 in 2008 and three in 2007.

The pace of bank failures has not reached the levels during the savings and loan crisis, when 534 institutions were seized in 1989 alone.

In the current crisis, the problems dogging the banking industry have migrated from home mortgages to commercial real estate, especially for community banks that tend to have higher concentrations of commercial real estate loans.

Large banks have recovered more quickly than smaller institutions, but institutions of all sizes are still being tight-fisted with credit.

Total loans in the banking industry fell by 7.5 percent during 2009, the largest full-year decline since 1942.

Bank regulators have repeatedly urged banks to extend loans to creditworthy borrowers, but banks are still being cautious in holding on to capital as the industry continues to heal.

(Reporting by Karey Wutkowski; editing by Carol Bishopric)