AmTrust Bank, controlled by the Goldberg family since the 1960s, became the seventh-largest bank to fail in the US since the onset of the current economic crisis when it was closed by the Office of Thrift Supervision on Friday.
This followed the announcement earlier last week that the bank's parent company, AmTrust Financial Corporation, had filled for Chapter 11 bankruptcy protection following the downturn in the US housing market.
In the bankruptcy court papers Peter Goldberg, AmTrust's family CEO, said: "In the past two years, the debtors have diligently attempted to survive the downturn in the economy. Deterioration in mortgage quality and availability slowed the pace of transactions and devalued homes."
AMTrust Financial Corporation had debts of $169.5 million on assets of over $100 million according to court papers. AmTrust Bank had $8 billion in deposits and $12 billion in assets in October 2009. New York Community Bank agreed to acquire all the deposits of the failed bank and $9 billion of its assets. The remaining assets will be retained by the Federal Deposit Insurance Corporation.
AMTrust changed its name from the Ohio Savings Bank, the name it had operated under since it was founded in 1889, in 2007 when it expanded into Florida and Arizona. The Goldberg family has headed the bank since the early 1960s and currently owns 77% of its common stock.
Want to get the latest family business/family office news direct to your desktop? Click here to register to receive our weekly newsletter
Are you a member of a multigenerational family business or family office? Click here to subscribe to our magazines