KFB assumes all deposits of closed bank
CATLETTSBURG — Louisa Community Bank in Louisa, Kentucky, was closed last week by the Kentucky Department of Financial Institutions, which appointed the Federal Deposit Insurance Corporation (FDIC) as receiver of the institution.
“To protect depositors, the FDIC entered into a purchase and assumption agreement with Kentucky Farmers Bank Corporation in Catlettsburg, Kentucky, to assume all of the deposits of Louisa Community Bank,” the FDIC said in a press release.
The sole branch of Louisa Community Bank reopened as a branch of Kentucky Farmers Bank Corporation on Saturday, Oct. 26.
“Depositors of Louisa Community Bank will automatically become depositors of Kentucky Farmers Bank Corporation,” the release said. “Deposits will continue to be insured by the FDIC, so customers do not need to change their banking relationship in order to retain their deposit insurance coverage up to applicable limits. Customers of Louisa Community Bank should continue to use their existing branch until they receive notice from Kentucky Farmers Bank Corporation that it has completed systems changes to allow other Kentucky Farmers Bank Corporation branches to process their accounts as well.”
As of June 30, 2019, Louisa Community Bank had approximately $29.7 million in total assets and $26.5 million in total deposits. In addition to assuming all of the deposits of the failed bank, Kentucky Farmers Bank Corporation agreed to purchase essentially all of the assets, the release added.
The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) will be $4.5 million.
“Compared to other alternatives, Kentucky Farmers Bank Corporation’s acquisition was the least costly resolution for the FDIC’s DIF,” the release said.
Louisa Community Bank is the second FDIC-insured institution to fail in the nation this year. The last bank failure was Enloe State Bank in Cooper, Texas, on May 31. The last FDIC-insured institution closed in the state was First Federal Bank, Lexington, Kentucky, on April 19, 2013. On average, roughly five banks go out of business each year, according to FDIC data. There have been only three years since 1933 without a single bank failure.
Customers with questions about the transaction should call the FDIC toll-free at 1-877-755-6665. Additional information can be found on the FDIC’s website at https://www.fdic.gov/bank/individual/failed/louisacomm.html.