Regulators Snatch Keys of KOP’s Failed First CornerStone Bank
State and federal regulators have shut down the distressed King of Prussia-based First CornerStone Bank, writes Jeff Blumenthal of the Philadelphia Business Journal.
First Citizens Bank & Trust Co., a subsidiary of Raleigh, N.C.-based First Citizens BancShares, have assumed all of First CornerStone’s $101 million in deposits and $103 million in assets. First Citizens will reopen the six First CornerStone locations as its own on Monday.
According to Blumenthal, First Citizens has no connection to Citizens Financial Group or subsidiary Citizens Bank. It has $31 billion in assets and 550 branches in 19 states – good enough to be the 44th largest U.S. bank by assets.
“Depositors of First CornerStone will automatically become depositors of First Citizens,” writes Blumenthal. “In a statement, the FDIC said it will continue to insure the deposits so there is no need for customers to change their banking relationship in order to retain their deposit insurance coverage.”
The FDIC said the failure will cost First CornerStone $10.8 million.
The genesis of its troubles were loans made to landlords of residential and commercial properties in Philadelphia and Chester.
When the recession hit, many tenants failed to pay rent, leaving landlords unable to pay mortgages.
Click here to read more about the shuttering of First CornerStone Bank from the Philadelphia Business Journal.
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