Sun, Sep 07, 2008 - Page 11 News List

US regulators close 11th bank this year

‘PROBLEM’ LENDERSNevada regulators shut down Silver State Bank, whose offices will reopen tomorrow as branches of the Nevada State and National Bank of Arizona

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Silver State Bank of Henderson, Nevada, was closed by US regulators, the 11th bank to collapse this year amid a surge in soured real-estate loans stemming from the worst housing slump since the Depression.

Silver State, with US$2 billion in assets and US$1.7 billion in deposits, was shut by the Nevada Financial Institutions Division and the Federal Deposit Insurance Corp (FDIC), the FDIC said on Friday in a statement.

Nevada State Bank in Las Vegas will assume the deposits from Silver State, which was run by Silver State Bancorp. The failed bank’s offices will open tomorrow as branches of Nevada State and National Bank of Arizona, the FDIC said.

“Deposits will continue to be insured by the FDIC, so there is no need for customers to change their banking relationship,” it said.

The bank operates 13 branches in Nevada and four in Arizona, according to its Web site.

Banks are being closed at the fastest pace in 14 years and regulators have publicly ordered dozens of institutions to shore up capital or restrict their business. California lender IndyMac Bancorp Inc, which had US$32 billion in assets, was closed on July 11 in the third-largest bank seizure, contributing to a 14 percent drop in the US deposit insurance fund that had US$45.2 billion at the end of the second quarter.

In July, Silver State announced the resignation of Andrew McCain as a director of the bank. McCain, who had served on the audit committee and was a director for five months, is the son of Republican presidential nominee John McCain. A call to the campaign’s press line on Friday night wasn’t immediately returned.

Nevada State will buy insured deposits for a 1.3 percent premium, the FDIC said.

Silver State had about US$20 million in uninsured deposits in 500 accounts, the FDIC said.

The FDIC insures deposits of up to US$100,000 per depositor per bank, and up to US$250,000 for some retirement accounts at 8,451 institutions with US$13.3 trillion in assets.

The FDIC last week said 117 banks were classified as “problem” lenders in the second quarter, a 30 percent jump from the first quarter. The agency doesn’t identify “problem” lenders. Before Friday’s action, the FDIC had closed 37 banks since October 2000, according to a list at fdic.gov. In 1994, the government had closed a dozen institutions by the end of August.

US regulators this year also closed Integrity Bank of Alpharetta, Georgia, Columbian Bank and Trust of Topeka, Kansas, and First Priority Bank of Bradenton, Florida, in August; Reno-based First National Bank of Nevada and Newport Beach, California-based First Heritage Bank in July; Staples, Minnesota-based First Integrity Bank and ANB Financial in Bentonville, Arkansas, in May; Hume Bank in Hume, Missouri, in March; and Douglass National Bank in Kansas City, Missouri, in January.

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