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W.Va. Bank Fails After Years of Financial Woes


West Virginia’s First State Bank has been closed by state regulators after years of financial difficulties left it unable to keep operating.

Another West Virginia bank, MVB Bank, purchased First State’s deposits and certain assets including three branch locations through an agreement with the Federal Deposit Insurance Corp.

First State “has experienced longstanding capital and asset quality issues, operating with financial difficulties since 2015,” the FDIC said in a news release. “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 also emphasized in a tweet that First State’s failure did not result from the coronavirus pandemic.

The agency estimated the closing would cost the deposit insurance fund about $46.8 million — the largest hit to the fund since late 2017 when the failure of Washington Federal Bank for Savings in Chicago cost the DIF more than $80 million.

First State hadn’t made a profit since 2013, losing about $3.7 million in 2019. “Its core capital leverage ratio hovered around 1.30{f08ff3a0ad7db12f5b424ba38f473ff67b97b420df338baa81683bbacd458fca}, much lower than the 11.68{f08ff3a0ad7db12f5b424ba38f473ff67b97b420df338baa81683bbacd458fca} average for banks with $100 million to $300 million is assets,” American Banker noted.

According to the FDIC, the bank had approximately $152.4 million in total assets and $139.5 million in total deposits as of Dec. 31, 2019.

MVB Bank, a subsidiary of MVB Financial, said it acquired $147.2 million of First State’s assets at a discount to book value of approximately $28.2 million and paid no deposit premium. The FDIC will retain those assets not acquired by MVB for later disposition.

“This acquisition aligns with MVB’s strategy for growth in our core commercial markets in West Virginia and Northern Virginia,” MVB Financial CEO Larry Mazza said.

bank failure, Federal Deposit Insurance Corp, First State Bank, MVB Bank


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