Nevada Bank Is 11th to Fail in '08
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Saturday, September 6, 2008; Page D06
Silver State Bank was closed by U.S. regulators yesterday, making it the 11th bank to collapse this year amid a surge in soured real-estate loans stemming from the prolonged housing downturn.
Silver State, based in Henderson, Nev., was shut by the Nevada Financial Institutions Division and the Federal Deposit Insurance Corp. It had $2 billion in assets and $1.7 billion in deposits.
Nevada State Bank in Las Vegas will assume the deposits from Silver State, the FDIC said in a statement. The failed bank's offices will open Monday as branches of Nevada State and National Bank of Arizona.
"Deposits will continue to be insured by the FDIC, so there is no need for customers to change their banking relationship," the FDIC said.
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, which had $32 billion in assets, was closed in July in the third-largest bank seizure in U.S. history.
Silver State operates 13 branches in Nevada and four in Arizona, according to its Web site. In July, the bank announced the resignation of Andrew McCain as a director.
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 wasn't immediately returned.
Nevada will buy Silver State's insured deposits for a 1.3 percent premium, the FDIC said. Silver State had about $20 million in uninsured deposits in 500 accounts, the FDIC said.
The FDIC insures deposits of up to $100,000 per depositor per bank and up to $250,000 for some retirement accounts.
The FDIC last week said 117 banks were classified as "problem" in the second quarter, a 30 percent jump from the first quarter. The agency doesn't identify problem lenders.
The Silver State closure came after the close of financial markets. The company's shares, which have tumbled 97 percent in the past year, were unchanged at 56 cents in regular trading.
