Alma Bank Assures Depositors Of Failed Fort Lee Savings

(FLFSB) bank used a classical key for its logo and its slogan was “The bank with the key to your financial success”.

But their success was short lived after the Office of the Comptroller of the Currency (OCC) on April 20, and the Federal Deposit Insurance Corporation (FDIC) was named “receiver”.

The OCC shut down FLFSB after finding they had experienced “substantial dissipation of assets and earnings due to unsafe or unsound practices.” The OCC also found that the institution was "critically undercapitalized", and “there is no reasonable prospect that it will become adequately capitalized without federal assistance.”

FLFSB was the first bank in the state of New Jersey and the 17th in the country to fail in 2012.   

The FDIC entered into a purchase and assumption agreement with Alma Bank, based in Astoria, New York, to assume all of the deposits and protect the customers of FLFSB.

The branch, which is located at 817 Abbott Boulevard reopened April 21 as a branch of Alma Bank. Depositors of FLFSB were not notified in advance and automatically become depositors of Alma Bank.

“No one is notified in advance in order not to set off a bank run,” explained Greg Hernandez, a spokesperson for the FDIC in Washington D.C. “Sometimes a bank gets re-capitalize and doesn't fail.”

According to Hernandez, the FDIC begins a 90-100 day process of marketing the bank confidentially “so people can do due diligence on the bank that’s about to be closed, check out the books, and see if it fits in with their [Alma Bank] business models.”

“And then by law, the FDIC has to accept the winning bid that is the least cost to the deposit insurance,” Hernandez added. “And that’s been by statute since the FDIC was created.”  

Hernandez said none of the original depositors of FLFSB lost funds as a result of the bank closing. Due to the whole bank transaction, Alma Bank took in all of the FLFSB deposits including those above the $250,000 insurance limit.

“Even though the bank failed, those folks were protected because Alma Bank acquired everything,” Hernandez explained.

According to the FDIC, as of December 31, 2011, FLFSB had approximately $51.9 million in total assets and $50.7 million in total deposits. Alma Bank will pay the FDIC a premium of 1.85 percent to assume all of the deposits of FLFSB.

In addition to assuming all of the deposits of the failed bank, Alma Bank agreed to purchase approximately $15.7 million of the failed bank's assets. The FDIC will retain the remaining assets for later disposition.

As a result of this transaction, Alma’s assets have increased to almost $816 million with a total of 11 branches. Former FLFSB customers can now be serviced at any Alma branch, which are located in Fort Lee and Tenafly in Bergen County, and Queens, Brooklyn, Manhattan, and The Bronx in New York.

Who is Alma Bank?

Alma Bank came into existence just five years ago, and has experienced non-stop growth ever since. Their focus has been lending to small, mid-sized businesses, professionals, and consumers.

In 2011, Alma was one of just a few banks in the country to qualify for a federal loan assistance program known as the Small Business Lending Fund. The program was one of President Obama’s jobs initiatives to help stimulate the economy and encourage small business lending. Alma bank was in the top five in terms of performance, and number one in loan portfolio growth.

According to their marketing director, Panos Stogioglou, Alma Bank has a specific growth plan, which they have followed from day-one.

“For Alma Bank it [FLFSB] was a business move,” said Stogioglou. “We’re experienced in community banking. And we’re planning to expand further by adding another branch in Fort Lee, Clifton, and other areas in New Jersey.”

Stogioglou said like Alma Bank, Fort Lee is a very diverse and active community based on a similar model as Alma Bank, adding, “We’re active in the community as commercial lenders, so Fort Lee was perfect for us.”    

As for depositors fearful the young bank could fail as them as well, Stogioglou assures depositors that Alma Bank is conservative, yet aggressive in terms of doing business.

“If you go to the FDIC side and see the last reports, we’re very stable, and very well capitalized bank,” Stogioglou explained. “That’s the key. We’re having very good profits, we’ve managed to expand our network, and we’ve increased our market share where we operate.”

Although the former president of FLFSB, Robert Kostakopoulos, is no longer associated with the branch, the new bank did retain most of their tellers and mid-level management staff at Abbott Boulevard.   

Stogioglou said Alma operates with the infrastructure of a much larger institution, and believe they have the right people to do a job well done. 

“Alma is happy to welcome the Fort Lee community,” said Alma President George Katsiaunis in a letter to new customers. “We attribute our success as a community bank to our commitment towards satisfying our client’s needs through personalized service and flexible products.”

"Alma is welcoming the Fort Lee Federal Savings Bank customers and certainly looking forward to serving all of their banking needs,” added Kirk Karabelas, Chairman of the Board. “This progressive expansion is reaffirming our strategic plan for development and growth across the Tri-State area according to our business plan.”

For more information visit: almabank.com or call the Abbott Boulevard branch at: 201-224-9292. Depositors with questions for the FDIC can call: 800-430-8098 or go to: fdic.gov