WASHINGTON D.C. (CNN) - The Office of Thrift Supervision closed AmTrust Bank because it "was in an unsafe and unsound condition because of substantial loan losses, deteriorating asset quality, and insufficient capital."
The agency said the failed bank's core capital declined 68% in the 12-month period ending Sept. 30, and a high level of AmTrust's asset problems were due to residential and land acquisition, development, and construction lending in Florida, California, Arizona and Nevada.
AmTrust operated under the agency's approved risk reduction plan since the start of 2009, but the bank was unable to comply with the minimum capital requirements, the OTS said.
The agency said attempts to find an investor to recapitalize the bank, which was first established in 1889 as The Ohio Savings and Loan Company, were unsuccessful.
New York Community Bank in Westbury, N.Y., will assume AmTrust Bank's $8 billion in deposits and purchase $9 billion of the failed bank's $12 billion in assets, according to the FDIC.
The 66 branches of AmTrust Bank located throughout Ohio, Florida and Arizona employ 1,728 workers and will reopen as branches of New York Community Bank.