Since the coronavirus started spreading in the U.S., two banks have failed and were shut down by state banking authorities. One was a bank in West Virginia and the other was in the state of Nebraska. The governor of West Virginia has already issued a stay-at-home order due to rising covid-19 cases.
Banks Failing During Pandemic
The latest bank to fail in the U.S. was a small bank in West Virginia called “The First State Bank.” It was closed on Friday by the state’s Division of Financial Institutions, according to the Federal Deposit Insurance Corporation (FDIC), an independent agency of the U.S. government that aims to protect the funds depositors place in banks and savings associations. The agency explained:
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 Federal Deposit Insurance Corporation (FDIC) announced on Friday that a small bank in West Virginia has failed and has been shut down by the state’s banking regulator. Its deposits and customers have been transferred to another bank.
The FDIC subsequently entered into a purchase and assumption agreement with another bank in the state, MVB Bank of Fairmont, to assume all of the deposits of the failed bank. Depositors of The First State Bank automatically became depositors of MVB Bank. As of Dec. 31, 2019, The First State Bank had approximately $152.4 million in total assets and $139.5 million in total deposits.
The four branches of The First State Bank have reopened as branches of MVB Bank.