State Banking Commissioner Howard F. Pitkin on Friday declared that the financial condition of The Community’s Bank, headquartered in Bridgeport, Connecticut, was such that it would be unsafe and unsound for it to continue operations. A petition was filed at the Superior Court for the Judicial District of Hartford County to name the Federal Deposit Insurance Corporation (FDIC) as Receiver. Pitkin noted that each depositor would continue to be insured by the FDIC up to the $250,000 limit.
Beginning on Saturday morning, bank and regulatory personnel will be at the bank office to respond to telephone inquiries regarding how customers may access their deposit accounts.
Pitkin explained that the action taken today was necessary because of continued operating losses which have depleted the institution’s capital. Information filed with the Superior Court indicated the bank had a deficit capital position of $31,000 at June 30, 2013.
“The Banking Department worked diligently to find ways to allow for the continued operation of The Community’s Bank. Unfortunately, despite considerable efforts in seeking an acquirer or viable investor, the bank’s issues could not be resolved and my primary responsibility is to the protection of Connecticut consumers, and in this case, specifically the depositors of this institution,” commented Commissioner Pitkin.
According to Pitkin the bank has been under increased regulatory scrutiny since 2010, and despite efforts to recapitalize the bank, its financial condition continued to erode. This is the first bank failure in Connecticut since 2005.
The Community’s Bank was chartered in 2001 as a Connecticut bank and trust company. The Community’s Bank acquired three branches as a result of the divestiture of branches as part of the Fleet/Bank of Boston merger. The branches were located in Bridgeport, Bloomfield, and Hartford, Connecticut. The Hartford branch was closed in 2003, and the Bloomfield branch was sold in 2004 to Windsor Federal Savings and Loan Association.