July 16, 2010 – Mainstreet Savings Bank, FSB, Hastings, Michigan, was closed by the Office of Thrift Supervision, which appointed the FDIC as receiver.
Mainstreet Savings was acquired by Commercial Bank, Alma, Michigan under a purchase and assumption agreement with the FDIC. Commercial Bank agreed to purchase all the deposits and essentially all of the assets of failed Mainstreet Savings. The FDIC received a premium of 1.13% from Commercial Bank on the purchase of Mainstreet’s deposits.
Mainstreet Savings was a small two branch bank with only $97.4 million in assets and $63.7 million in deposits. The two closed branches of Mainstreet Savings will reopen as branches of Commercial Bank.
The FDIC and Commercial Bank entered into a loss share transaction on $77.1 million of the assets of Mainstreet Savings Bank. The loss-share agreement is expected to maximize returns on assets by keeping them in the private sector and minimize disruptions for loan customers.
Mainstreet Savings Bank became the nation’s 96th banking failure of 2010 and the fourth in Michigan. The estimated cost to the FDIC’s Deposit Insurance Fund to close Mainstreet Savings is $11.4 million.