Federal regulators close Public Savings Bank in Pennsylvania

[News_Editor]

Federal regulators close Public Savings Bank in Pennsylvania

2011-08-19 14:21:46 GMT+7 (ICT)

WASHINGTON, D.C. (BNO NEWS) -- Federal regulators on Thursday closed the Public Savings Bank in Huntingdon Valley, Pennsylvania, raising the total number of bank failures in the United States so far this year to 65.

The bank was closed by the Pennsylvania Department of Banking after its regular closing time on Thursday, an unusual move as banks are normally shut down on Fridays to avoid customer disruption. It was not immediately clear why the bank was closed on a Thursday instead.

After the closing, the Federal Deposit Insurance Corporation (FDIC) said it immediately entered into a purchase and assumption agreement with the Capital Bank in Rockville, Maryland, to assume all of the deposits of Public Savings Bank.

Most customers should see no or little service disruptions despite the closure of the institution as the Public Savings Bank's sole branch will reopen on Friday as a branch of Capital Bank, and all depositors of Public Savings Bank will automatically become depositors of Capital Bank.

All of the services of the failed bank, including checks, ATM and debit cards, will remain active. "Checks drawn on the bank will continue to be processed," the FDIC said in a statement. "Loan customers should continue to make their payments as usual."

As of June 30, Public Savings Bank had approximately $46.8 million in total assets and $45.8 million in total deposits. In addition to assuming all of the deposits of the failed bank, Capital Bank agreed to purchase essentially all of the assets.

The FDIC estimated that the cost to the Deposit Insurance Fund (DIF) will be $11 million, but said it was the least costly resolution for the DIF compared to other alternatives.

The failure bring the total number of U.S. bank failures so far this year to 65. It is the first FDIC-insured institution to be closed in the state since the Earthstar Bank in Southampton was closed on December 10, 2010.

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