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News > Local News
Feds order Peoples State Bank to merge or be sold
Monday, October 4, 2010
By GORDON WILCZYNSKI
For The Oakland Press
Peoples State Bank, which lost $741,000 in the first half of 2010, has been ordered by the federal government to either merge or be sold.
Federal regulators informed Henry Thiemann, chief operating officer and president of the Hamtramck-based bank, that it must merge with another bank or be sold because the bank is drastically undercapitalized.
Peoples State Bank has two branches in Sterling Heights, one on Metropolitan Parkway and the other on Ryan Road. The bank also has offices in Warren, Troy and Madison Heights.
Thiemann said the bank can either find an investor or investment group, and that process has already begun, or it’s possible some other banking institution may be interested and they merge. Also, the Federal Deposit Insurance Corp. could force the bank to close.
“And that’s certainly not our intent,” Thiemann said.
Peoples State Bank has already lost $741,000, or 21 cents a share, in 2010. Last year the bank lost $3.2 million, or 93 cents a share.
Peoples has failed to submit a plan to recover the money, the federal government said.
Deposits at all FDIC banks are insured up to $250,000 by the FDIC, Thiemann said.
The holding company for Peoples is the Peoples State Bank Group in Madison Heights. In a filing with the Securities and Exchange Commission, Peoples indicated it hired Capello Capital in Santa Monica, Calif., and has sent out invitations of interest to select bank holding companies, Thiemann said.
Peoples closed its Southfield branch office last week, but that had nothing to do with the current dilemma for the bank, said Thiemann, citing strategic reasons for the closure.
“We’ve had two decades of financial institution problems going back to the 1990s with savings and loan,” Thiemann said. “When a bank changes hands, typically it stays exactly like they are today with its branch offices or they have a different name which is a negative for our customers and the community.”
People’s has 115 employees in 10 offices from Warren to Fenton.