Two Banks Closed on Dec. 10
2010 Tally of Failed Institutions: 173
The latest failures:
Paramount Bank, Farmington Hills, Mich.
Paramount Bank, Farmington Hills, Mich., was closed by the Michigan Office of Financial and Insurance Regulation, which appointed the Federal Deposit Insurance Corp. as receiver. To protect the depositors, the FDIC entered into a purchase and assumption agreement with Level One Bank, Farmington Hills, Mich., to assume all of the deposits of Paramount Bank.
The four branches of Paramount Bank will reopen on Monday as branches of Level One Bank. As of Sept, 30, Paramount Bank had approximately $252.7 million in total assets and $213.6 million in total deposits. The FDIC and Level One Bank entered into a loss-share transaction on $233.1 million of Paramount Bank's assets. Level One Bank will share in the losses on the asset pools covered under the loss-share agreement.
The FDIC estimates that the cost to the Deposit Insurance Fund will be $90.2 million.
Earthstar Bank, Southampton, Pa.
Earthstar Bank, Southampton, Pa., was closed by the Secretary of Banking of the Commonwealth of Pennsylvania, which appointed the FDIC as receiver. The FDIC entered into a purchase and assumption agreement with Polonia Bank, Huntingdon Valley, Pa., to assume all of the deposits of Earthstar Bank, except for certain out-of-state certificates of deposit.
As of Sept. 30, Earthstar Bank had approximately $112.6 million in total assets and $104.5 million in total deposits. In addition to assuming all of the deposits of the failed bank, Polonia Bank agreed to purchase approximately $77.1 million of the failed bank's assets. The FDIC will retain most of the assets for later disposition.
The FDIC and Polonia Bank entered into a loss-share transaction on $45.8 million of Earthstar Bank's assets. Polonia Bank will share in the losses on the asset pools covered under the loss-share agreement. The FDIC estimates that the cost to the DIF will be $22.9 million.
