Silver State of Nevada becomes 11th failed bank in 2008

September 5, 2008 by · Leave a Comment
Filed under: Bank Failure, Industry News 

It is becoming commonplace to have our weekly Friday bank failure announced from the FDIC. Silver State is this week’s 11th loser of the year. They had about $2 billion in assets. It will interesting to see how this will actually affect the FDIC’s balance sheet based on their $450-550 million estimate. More to come…

Release:

Regulators closed Silver State Bank on Friday, the 11th U.S. bank to fail this year as the struggling economy and falling home prices take their toll on financial institutions.

An adopted son of Republican presidential candidate John McCain formerly served as a director of the Henderson, Nevada, bank, which was closed by Nevada state officials and taken over by the Federal Deposit Insurance Corp.

Andrew McCain joined Silver State’s board in February and served on the audit committee, bank regulatory filings show.

He resigned in July due to “personal reasons,” the bank said. He previously served as a director of Choice Bank in Scottsdale, Arizona, from 2006 to April 2008 when Choice Bank merged with Silver State.

The FDIC said the Silver State — a subsidiary of Silver State Bancorp — had $2 billion in assets and $1.7 billion in deposits as of June 30. The failure is expected to cost the FDIC deposit insurance fund between $450 million and $550 million.

Nevada State Bank, which is based in Las Vegas, has agreed to assume the insured deposits. The transaction did not include about $700 million in volatile, high-cost insured funds called brokered deposits.

The FDIC said it would pay the brokers directly for their deposits at Silver State, which was closed by Nevada state banking officials. Its branches will reopen as Nevada State Bank in Nevada and National Bank of Arizona in Arizona. The FDIC estimated there were about $20 million in uninsured deposits.

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