The second bank failure of the year was reported Friday by the federal insurer of bank deposits, as it announced a purchase and assumption for a West Virginia institution with another from the Mountain State.
The First State Bank of Barboursville, W.Va., was closed, the Federal Deposit Insurance Corp. (FDIC) said, by the West Virginia Division of Financial Institutions. The FDIC, as receiver, entered into the P&A with MVB Bank, Inc. of Fairmont, W.Va., to assume all of the deposits of the closed bank.
The FDIC indicated that the Barboursville bank’s failure was not necessarily related to the current financial downturn resulting from the coronavirus crisis. “The First State Bank has experienced longstanding capital and asset quality issues, operating with financial difficulties since 2015,” the FDIC said in a statement. “The bank’s December 31, 2019 financial reports indicated capital levels were too low to allow continued operations under federal and state law.”
The FDIC reported that The First State Bank had approximately $152.4 million in total assets and $139.5 million in total deposits at year-end. The agency said that, 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 agency said.
Estimated costs to the FDIC’s Deposit Insurance Fund (DIF) of the bank’s failure, according to the agency, will be $46.8 million.
The closing of the West Virginia bank follows that of Ericson State Bank of Ericson, Neb. (in February).