07.04.20 23:00 ET
A sign of problems past appears again this past Friday as the CoronaCrash begins to accelerate. Is this the beginning of this website’s formerly famous “Bank Failure Friday” feature once again?
After this upcoming Good Friday holiday we shall see. But the manner in which the Treasury Department and Federal Reserve is mismanaging our nation’s financial affairs and regulations invites a wave of bank failures unseen since the last time this website was associated with a radio broadcast. Yes, the owner knows, the audience wants it back.
On Friday April 3rd, the FDIC seized The First State Bank of Barboursville, WV. The insurance fund took a hit but this is small potatoes compared to what we could see coming as these pages warned yesterday.
In the mean time, enjoy the memories of weekly panics past and enjoy this FDIC Press Release:
MVB Bank, Inc. of Fairmont, West Virginia, Acquires The First State Bank, Barboursville, West Virginia
FOR IMMEDIATE RELEASE
April 3, 2020
The First State Bank, based in Barboursville, West Virginia, was closed today by the West Virginia Division of Financial Institutions, which appointed the Federal Deposit Insurance Corporation (FDIC) as receiver. To protect depositors, the FDIC entered into a purchase and assumption agreement with MVB Bank, Inc. (MVB Bank) of Fairmont, West Virginia, to assume all of the deposits of The First State Bank.
The First State Bank has experienced longstanding capital and asset quality issues, operating with financial difficulties since 2015. The bank’s December 31, 2019 financial reports indicated capital levels were too low to allow continued operations under federal and state law.
The four branches of The First State Bank will reopen as branches of MVB Bank on Saturday, April 4, during normal banking hours. The FDIC strongly encourages bank customers to follow Centers for Disease Control and Prevention guidance on social distancing and utilize online and electronic banking capabilities. In keeping with West Virginia Governor Jim Justice’s Stay-at-Home Order, customers should visit a bank branch only if an in-person visit is essential and only after making an appointment.
Depositors of The First State Bank will automatically become depositors of MVB Bank. The FDIC will continue to insure deposits so customers do not need to change their banking relationship in order to retain their deposit insurance coverage up to applicable limits.
Customers of The First State Bank should continue to use their existing branches until they receive notice from MVB Bank that it has completed systems changes to allow other MVB Bank branches to process their accounts as well.
This evening and over the weekend, depositors of The First State Bank can access their money by writing checks or using ATM or debit cards. Checks drawn on the bank will continue to be processed. Loan customers should continue to make their payments as usual. Borrowers whose finances are impacted by the coronavirus pandemic should contact their original loan officers or call the contact information provided in their loan statements before addressing requests for modifications to MVB Bank.
As of December 31, 2019, The First State Bank had approximately $152.4 million in total assets and $139.5 million in total deposits. In addition to assuming all of the deposits, MVB Bank agreed to purchase approximately $147.2 million of The First State Bank’s assets. The FDIC will retain the remaining assets for later disposition.
The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) will be $46.8 million. Compared to other alternatives, MVB Bank’s acquisition was the least costly resolution for the Deposit Insurance Fund, which was created by Congress in 1933 and is managed by the FDIC to protect the deposits at the nation’s banks.
Stay tuned, something tells me this is the beginning, not the end.