Farmington Bank funds safe despite bankruptcy

FARMINGTON – Cryptocurrency exchange company FTX has filed for bankruptcy, and its stake in Farmington Bank may be redistributed.

In March of 2022, an FTX entity, Alameda Research, made an $11.5 million equity investment in Farmington Bank, 103 N. First St. FTX has since declared bankruptcy.

But that filing may not have a local impact, Farmington Bank Director of Business Operations Josey Booth said.

“The challenging thing is that FTX is actually about 140 separate entities, one of which made an equity investment in our holding company, FBH Corp,” he said.

When asked about the potential impact of the bankruptcy filing on Farmington’s investors and customers, Booth said: “While the dollar amount seems high for many, that was a very small equity stake compared with our overall value. They did not get a seat at the board or controlling interest or anything.”

Booth said he isn’t exactly sure why Alameda had originally taken an interest in Farmington Bank.

“While I can only speculate, we designed and began implementing an online banking platform, and this may have drawn their attention,” he said.

He noted that banking platform is “essentially a separate branch of our bank. We only have one physical branch, and rather than investing in more brick and mortar locations, we decided to design an online banking platform.

“We call this platform Moonstone Bank. This is really what drew the attention of Alameda Research. I can’t comment on why it was worth investing in, but we are proud of that in any case.”

Booth said local customers won’t likely feel an impact from the bankruptcy filing.

“Their money is safe,” he said. “This company has existed for over 135 years, and we are proud of that history.”

In light of the bankruptcy, Booth said the bank is focusing on shoring up its customer relationships.

“We have every intention of continuing for another 135 years. We want to make sure that our relationship with the local community is maintained,” he said. “FTX made an $11.5 million equity investment in March of 2022, which represents less than 10% of the company valuation.”

Booth further downplayed any effects of the court proceeding.

“For us, there will be no impact, in the short-term. This is completely in the hands of the bankruptcy courts now, but we can assume that their investment will be redistributed,” he said. “We are not a publicly traded company, so the redistribution could take on many forms, but it is unlikely that there will be any financial impact to FBH Corp.”