WASHINGTON -- The Federal Reserve Board has approved the application of Meridian Bancorp of Reading, Pa., to acquire Commonwealth Bancshares of Williamsport, Pa.

The deal will make Meridian the fifth-largest bank in Pennsylvania, controlling $10.6 billion in deposits. As part of the acquisition, the company will merge its Reading-based Meridian Bank with Commonwealth Bank, and add several branches.

The Fed also approved Meridian's applications to acquire Phoenix-based Susquehanna Life Insurance Co.

Separately, the Fed approved an application by Continental Bank Corp. of Chicago to engage through a subsidiary in asset management, servicing, and collection activities.

Continental is the second-largest bank in Illinois, with assets of $22 billion. Its subsidiary would provide asset management services to the Resolution Trust Corp. and the Federal Deposit Insurance Corp.

It also would offer these services to third-party investors that buy pools of assets assembled by the RTC or the FDIC from troubled financial institutions.

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