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After a three-week lull, bank closings have returned. State and federal regulators shut down two community-based lenders on Friday, one in Michigan and one in Pennsylvania. There have been 151 ""bank failures so far this year"":http://www.fdic.gov/bank/individual/failed/banklist.html.
The ""FDIC said last month"":http://dsnews.comarticles/fdics-list-of-problem-banks-grows-to-860-2010-11-23 that its list of so-called ""problem banks"" has grown. There are now 860 insured financial institutions under greater scrutiny from the federal agency because capital levels have fallen dangerously low. The number of ""problem"" institutions is the highest since
[IMAGE] [COLUMN_BREAK]March 31, 1993, when there were 928 and the savings and loan crisis was in full swing.
This weekend, regulators stepped in to shut down ""Paramount Bank"":http://www.paramountbank.com/ in Farmington Hills, Michigan. Paramount operated four branch locations, with $213.6 million in deposits and $252.7 million in total assets.
The FDIC brokered a deal with ""Level One Bank"":http://www.levelonebank.com also headquartered in Farmington Hills to assume all of the deposits of Paramount Bank and purchase essentially all of its assets. The FDIC and Level One Bank entered into a loss-share transaction on $233.1 million of the acquired assets. Paramount's failure is expected to cost the FDIC $90.2 million.
""Earthstar Bank"":http://www.earthstarbank.com/ in Southampton, Pennsylvania, was also closed down. It had four branches, deposits of $104.5 million, and total assets worth $112.6 million.
""Polonia Bank"":http://www.poloniabank.com in Huntingdon Valley, Pennsylvania, agreed to take over Earthstar's operations and purchase approximately $77.1 million of the failed bank's assets, of which the FDIC will share in the losses on $45.8 million. The FDIC says it will retain"" most of the assets for later disposition."" The closing will cost the FDIC an estimated $22.9 million.
