JUPITER, Florida (December 13, 2010) — On Friday, regulators closed two banks: Paramount Bank, Farmington Hills, Michigan and Earthstar Bank, Southampton, Pennsylvania. The total number of U.S. bank and thrift failures now stands at 151 for the year.
Paramount Bank of Farmington Hills, Michigan with assets of $269 million at June 30, 2010 had been rated E- (“Very Weak”) for the previous four quarters by Weiss Ratings and was first identified as “Weak” in June 2007 based on the first quarter 2007 data. The bank reported a loss of $4.5 million through June 30, 2010. Paramount Bank also had below-FDIC-mandated Tier 1 (5%) and Risk-Based Capital (6%) ratios of 3.00% and 5.05%, respectively. Nonperforming loans made up 7.7% of its loan portfolio with charge offs at 3.21% of average loans for the quarter ended June 30, 2010.
Earthstar Bank of Southampton, Pennsylvania, north of Philadelphia, with assets of $121 million as of June 30, 2010 had been rated E- (“Very Weak”) for the last six quarters by Weiss Ratings and was first identified as “Weak” in July 2006 based on first quarter 2006 data. The bank reported a loss of $0.7 million through June 30, 2010. Earthstar had weakening capital ratios that were well below FDIC-acceptable levels and well below its peers with Tier 1 Capital at 2.33% and Risk-Based Capital of 4.79% through the second quarter of 2010. Nonperforming loans represented 12% of its loan portfolio.
Weiss Ratings, the nation’s independent provider of bank and insurance company ratings, accepts no payments for its ratings from rated institutions. It also distributes independent ratings on the shares of thousands of publicly traded companies, mutual funds, closed-end funds and ETFs.
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