FDIC Announces Receivership of First National Bank of Keystone, Keystone, West Virginia

WASHINGTON, D.C. — The First National Bank of Keystone, Keystone, West Virginia, was closed today by the Office of the Comptroller of the Currency (OCC), and the Federal Deposit Insurance Corporation (FDIC) was named receiver.

The OCC used its receivership authority under the FDIC Improvement Act of 1991 after finding evidence of apparent fraud that resulted in the depletion of the bank's capital. The OCC found $515 million in loans carried on the bank's books that should have been removed after they were securitized and sold.

The FDIC is attempting to arrange a transaction under which the failed bank's insured deposits will be assumed by a healthy bank no later than Tuesday, September 7th. If this effort proves unsuccessful, the FDIC will move immediately to make available depositors' funds up to the statutory insurance limit of $100,000.

The FDIC expects to make an announcement of the outcome of its efforts within the next few days. As of June 30, 1999, Keystone reported approximately $1.1 billion in assets and $880.9 million in deposits.

This is the fourth failure of an institution insured by the Bank Insurance Fund (BIF) this year and the first in West Virginia since The Blueville Bank of Grafton, Grafton, on April 5, 1991.

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