Home > exclusive, Lower Moreland, Upper Southampton > Southampton Bank Closed By Government; Regulators On-Scene

Southampton Bank Closed By Government; Regulators On-Scene

December 11, 2010 Leave a comment Go to comments

(Tom Sofield)

Nationwide the Federal Deposit Insurance Corp. (FDIC) has closed 151 banks this year, yesterday Upper Southampton based Earthstar Bank became one of them and by Saturday morning FDIC regulators filled the banks small storefront headquarters.

The FDIC announced that they have reached an agreement to sell the assets of Earthstar Bank to Polonia Bank based about a mile up the road in Lower Moreland.

Earthstar Bank was started by local investors in 2001 in an Upper Southampton storefront and quickly grew to have over $112.6 million in assets and $104.5 million in deposits as of Friday when regulators announced the shut down.

A photo looking inside of the bank's headquarters Saturday morning shows federal regulators looking through bank documents and computers. (Tom Sofield)

“Most accounts will be transferred to Polonia, but a small amount of accounts will be payed out,” said Edith Gray, a senior ombudsman specialist with the FDIC who was at the banks headquarters Saturday morning.

Checks for the accounts that will be payed out will be mailed by the FDIC Monday said Gray.

FDIC regulators filled the banks headquarters early Saturday morning looking through boxes of documents and desktop computers.
Polonia Bank has agreed to purchase nearly $77 million of the failed Earthstar’s $112.6 million in assets.

The FDIC will share the $45.8 million loss with Polonia.

Earthstar which had much of its investments in risky commercial real estate which tanked with the economy. Polonia Bank remained stable because they invested their assets in mortgages and home equity loans.

Former customers of the bank tell BuxMontNews.com that the bank president told them more than a year ago that depositors had pulled out nearly $30 million in assets in a short period of time due to uncertainty of the banks future.

The former depositor also said claimed the Upper Southampton based bank president was living full time in Florida, which is illegal under law.

The president admitted the bank was having some problems to the former customer in a phone conversation held last fall.

When Gray was asked about the accusations she said all questions about criminal activity should be forward to the Pennsylvania Department of Banking.

Polonia Bank located about a mile from the failed Earthstar is buying most of its assests. (Tom Sofield)

Earthstar has three branches in Philadelphia and its headquarters was in the Second Street Pike shopping center that holds the popular Maggio’s Restaurant.

The FDIC said in a press release that the four Earthstar branches are as of this morning Polonia Bank branches, the four new branches are in edition to Polonia’s five existing banking locations.

Customers who have more information can call the FDIC at 1-800-822-1918 or visit the website at http://www.fdic.gov/bank/individual/failed/earthstar.html.

Tom Sofield (tsofield@buxmontnews.com)
Online Editor

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