The failure of First National Bank of Keystone has been a boon to the other community banks in southern West Virginia.

In the weeks since the Office of the Comptroller of the Currency closed First National, depositors have stormed Keystone's former competitors looking for a safe place to keep their money.

"I think it is fair to say we have mixed emotions right now," said Janna G. Runyon, vice president of $130 million-asset McDowell County National Bank, a couple of miles down the road in Welch. "Tears come to my eyes when I think of what happened at Keystone. That said, I can't say we aren't pleased to be getting so many new accounts."

McDowell County National has opened about 500 deposit accounts since Sept. 1, the day the OCC stepped in to close First National. The bank averages about 50 new accounts in a typical month.

Many of the accounts were opened by customers McDowell County and other local banks had lost to First National in recent years. First National built itself from a $100 million-asset bank in 1993 to $1.1 billion of assets in large part by offering staggeringly high interest rates on deposit accounts, its neighbors say.

Jim Sutton, chairman of Ameribank Inc. in Welch, said it was not unusual for First National to set its rates as high as two percentage points above his bank's. That, he said, contributed to Ameribank's shrinking from $90 million of assets earlier this decade to its current $54 million.

"We suffered through years of losing business because we couldn't come close to paying what Keystone was paying," Mr. Sutton said.

But Ameribank got all of those deposits back and then some a week after the failure when it agreed to buy $135 million of First National's local deposits from the Federal Deposit Insurance Corp.

"I know a lot of our new accountholders," Mr. Sutton said. "It is nice to get that business back."

James E. Sizemore, chief executive of $37 million-asset Pioneer Community Bank in Iaeger, said he too recognized many of First National's former customers. A week after Keystone's shuttering, Mr. Sizemore stationed himself at the entry to a middle-school gymnasium where the FDIC was issuing checks to depositors, he said.

"A lot of these customers were people we lost to Keystone's high rates," Mr. Sizemore said. "I am here now to wish them my best and to tell them that Pioneer would love to have their business back."

Apparently, his time was well spent. He said Pioneer, which had $30 million of deposits on June 30, took in $1 million of deposits in one day that week.

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