KEYSTONE, W.Va. (AP) — No one stopped to watch as workers dismantled the only bank in this southern West Virginia coal town, one box at a time. There is no more shock at the collapse of an institution that once boasted the motto, "Time Tried, Panic Tested."
Hour after hour, movers loaded 7,000 boxes of documents onto trucks headed for Dallas. Federal regulators there hope to discover how $515 million vanished from a prosperous bank in an Appalachian county where 37% of the residents live in poverty.
Even before Sept. 1, when the U.S. Office of the Comptroller of the Currency closed the First National Bank of Keystone amid allegations of "apparent fraud," rumors of trouble swirled through this town of 627, prompting a run on the bank.
The 95-year-old community bank, which anchored Main Street and advertised assets of $1.1 billion, still has its supporters along the winding two-lane highway that connects small towns in a rugged valley.
"We thought they were just as solid as anything and still don't know that it's not," said Becky Barker, an employee at the Kimball Light and Water Co. in nearby Kimball.
Federal investigators may disagree.
At the top of a mountain reached by a dirt road rutted by coal trucks, investigators have recovered 370 boxes of bank records that had been buried in a 100-foot-long trench on property belonging to Terry Church, the bank's senior executive vice president.
A federal magistrate ruled last week there is sufficient evidence that Church, 46, and Michael Graham, 49, who performed accounting work at the bank, interfered with a federal investigation by burying three truckloads of bank records.
Prosecutors have 30 days to seek indictments against the two, who have refused to comment.
The federal comptroller's office said it closed the bank after a three-month investigation found that $515 million in loans--nearly half the bank's assets--were sold yet remained on the bank's books as assets.
First National's failure could ultimately cost the Federal Deposit Insurance Corp. even more as the agency tries to cover another $200 million in missing assets and administrative expenses. The recovery may place First National among the 10 costliest bank failures in the nation since the mid-1980s, said David Barr, a spokesman for the FDIC in Washington.
