The Pennsylvania Department of Banking and Securities on May6 seized King of Prussia, Pa.-based First CornerStone Bank and named the FDIC receiver in afailure estimated to cost the federal agency's deposit insurance fund $10.8million.
The FDIC, in turn, entered into a purchase and assumptionagreement with Raleigh, N.C.-based First Citizens BancShares Inc. unit ($32.05 billion) to acquire all of the deposits of the failed bank as well asessentially all of its assets. The six branches of First CornerStone Bank willreopen as branches of First-Citizens Bank & Trust Co. during normalbusiness hours. First-Citizens plans tooperate the former First CornerStone Bank as a division, according to a companystatement. Under the terms of the agreement, First-Citizens Bankhas the option to purchase any owned bank premises or to assume the leases onany or all of the banking offices.
The shuttered bank had about $103.3 million in assets,including $50.4 million in gross loans, and $101.0 million in deposits, as ofMarch 31.
In August 2014, the FDIC amended a 2010 consent order to direct First CornerStone Bank to"have and retain qualified management."
First CornerStone Bank is the third FDIC-insured institutionin the U.S. to fail so far in 2016, and the first in Pennsylvania.
Horsham, Pa.-based Vantage Point Bank was the last failed bank in thestate, and that was in February2014.