Pennsylvania, Michigan Banks Shut as 2010 Failures Climb to 151
Regulators shuttered banks in Pennsylvania and Michigan holding $365 million in assets as real-estate losses drive the toll of U.S. closures to 151.
Earthstar Bank of Southampton, Pennsylvania, and Farmington Hills, Michigan-based Paramount Bank were closed, the Federal Deposit Insurance Corp. said today in statements on its website. Polonia Bancorp purchased Earthstar, while Level One Bank purchased Paramount. The two closures cost the FDIC’s deposit- insurance fund $113.1 million.
“As a bank that was founded to contribute to the success of our local community, we welcome Paramount Bank customers to the Level One family,” Patrick J. Fehring, chief executive officer of Level One Bank, said in a statement.
The FDIC said last month that its list of “problem” banks -- those at heightened risk of failure -- rose 3.7 percent to 860 in the third quarter, the most in 17 years. Banks on the confidential list had $379.2 billion in assets as of Sept. 30, the FDIC said.
The financial crisis drove down home and commercial property values and pushed the unemployment rate above 10 percent. Michigan’s unemployment rate stood at 12.8 percent at the end of October, while Pennsylvania’s was 8.8 percent, according to data compiled by Bloomberg.
Earthstar Bank’s $104.5 million in deposits went to Huntingdon Valley, Pennsylvania’s Polonia Bancorp, the FDIC said. Polonia assumed about $77.1 million in assets, and the FDIC kept about $36 million for later sale, the agency said.
Level One Bank, of Farmington Hills, added about $213.6 million in deposits, excluding brokered deposits, the agency said. The acquisition gives Level One, formed in 2007, six offices and more than $400 million in assets, according to the bank’s statement.
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