Banks will start to collapse soon!
The First State Bank based in Barboursville, WV has become the first bank to fail since the coronavirus pandemic spread across the United States. The Federal Deposit Insurance Corporation (FDIC) made this announcement on Friday.
The FDIC noted “The First State Bank has experienced longstanding capital and asset quality issues, operating with financial difficulties since 2015.” Moreover, the bank’s capital levels as of Dec 31, 2019 were too low for legally staying operational.
Therefore, all four branches of The First State Bank, along with its deposits and certain assets were immediately acquired by MVB Bank Inc., a wholly-owned subsidiary of MVB Financial Corp. MVBF. As of Dec 31, 2019, it had nearly $139.5 million of total deposits and $152.4 million in total assets.
FANNIE, FREDDIE UNLIKELY TO AID MORTGAGE COMPANIES AS PAYMENTS DRY UP, FHFA CHIEF SAYS
— *Walter Bloomberg (@DeItaOne) April 7, 2020
Almost Half Of Small Businesses Will Close If They Cannot Re-Open Soon
In a new survey of small business owners, almost half (43%) say their livelihood is on the line and they are going to be forced to close permanently if they cannot resume normal activities soon. One in 10 (11%) are less than one month away from permanently going out of business thanks to the government’s response to the coronavirus outbreak.
Additionally, about one in four (24%) small businesses have already shut down temporarily in response to the government’s demands to do so during the COVID-19 panic and overreaction. Among those that have not, 40% say they are likely to close at least temporarily within the next two weeks. This means a total of 54% of all small businesses report that they have closed or expect to close temporarily in the next 14 days.
When asked what proposals might offer the most relief, small businesses indicated support for three key provisions included in the recently enacted Coronavirus Aid, Relief, and Economic Security (CARES) Act:
- 56% of small business say direct cash payments to Americans would be the most helpful form of aid from the government,
- followed by loans and financial aid (30%), and
- suspending payroll taxes (21%).
“As the poll results show, small business owners are looking for loans and financial aid to ensure they do not have to shut their doors or go bankrupt because of the coronavirus. American banks are ready to help, but they need clear guidelines from the Administration,” said Neil Bradley, chief policy officer at the U.S Chamber of Commerce.
“American banks will be on the front lines to help businesses survive during this pandemic.”