Connecticut banking regulators on Friday shut down The Community’s Bank in Bridgeport because it had become insolvent, officials said.
Banking Commissioner Howard Pitkin said in a telephone interview that continued operating losses had depleted the state-chartered bank’s capital.
“They’ve had continuing operational losses and it reached a point where they are in a deficit capital position — they are insolvent,” Pitkin said. “There comes a point where you have to act to protect the deposits.”
It’s the first failure of a depository institution in Connecticut since Stamford’s Connecticut Bank of Commerce was closed in 2002. Pitkin said the closure isn’t representative of the overall Connecticut banking market, which he said has been improving.
“I don’t want anyone to feel there’s going to be a rash of bank failures or that there’s inordinate risk in marketplace,” he said.
Community’s had tried unsuccessfully to find an investor or buyer. Instead, deposits will be paid out in checks up to the Federal Deposit Insurance Corp.-insured cap of $250,000, Pitkin said. Bank and regulatory personnel will be at the bank starting Saturday morning to handle customer inquiries about accessing deposits.
Community’s had been under scrutiny since 2010, when the FDIC ordered it to raise more than $1 million in capital to meet regulatory minimums.
The FDIC will act as the bank’s receiver and work to sell what loans it can to other investors, Pitkin said.
The bank’s assets have fallen steadily in recent years. In the second quarter of 2010, total assets were $41.6 million. That figure had dipped to $26.4 million by the second quarter of this year.
Community’s had negative equity capital of $31,000 as of June 30, which Pitkin said triggered the closure today.
The bank opened in 2001, after a group of investors purchased three former Fleet Bank branches in Hartford County and Bridgeport.
In 2004 the bank sold its Hartford area operations to focus solely on the Greater Bridgeport community.
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