PE-fund manager J. Christopher Flowers won approval to buy a 2-branch bank in New Jersey;  on 10/14, the Office of Thrift Supervision cleared the purchase of the Saddle River Valley Bank by 7 funds set up for that purpose by Mr. Flowers.  The bank has $83mn of assets. 

Last summer, new rules were put in place:  (i) requiring investment groups looking to buy failed banks to put more capital into them than commercial banks would have to provide;  and, (ii) requiring nonbanks to own the acquired banks for at least 3 years before cashing out.  These rules have dampened interest in failed banks.

To win approval for the Saddle River buyout, the funds had to wall off the stake from other investments. The Saddle River buyout, however, isn't a first for Mr. Flowers, whose firm, J.C. Flowers & Company, teamed up last year with a group of other investors to buy failed CA bank IndyMac.  In that deal, investors are barred from acting in concert to, in effect, take control of the bank - an unwieldy arrangement but one that regulators insist they can enforce.   [NYT Dealbook, 10/27]