Palermo is a member of the Vesta family (401). Vestian asteroids have a composition akin to cumulate eucrites. They are thought to have originated deep within 4 Vesta's crust - the family's parent body - possibly from the large Rheasilvia crater on its southern hemisphere near the South pole, formed as a result of a subcatastrophic collision. Vesta is also the asteroid belt's second-largest and second-most-massive body after Ceres.