Weekend Seize: FDIC Shuts 11th Bank of 2008

Continuing its “seize on the weekend” campaign, the Federal Deposit Insurance Corp. took control of Silver State Bank of Henderson, Nev. late on Friday, Sept. 5.

Silver State, which had $2 billion of assets and $1.7 billion of deposits on June 30, 2008, was acquired by a unit of Zions Bancorporation, Nevada State Bank, as part of the receivership. Nevada State had $3.3 billion of deposits and $52 million of revenue by the end of 2007.
The FDIC called the transaction “the least costly resolution option” for Silver State. The FDIC estimates that Silver State will cost its Deposit Insurance Fund $450 million to $550 million.

Silver State Bank is the second bank to fail in Nevada in 2008. First National Bank of Nevada, Reno, failed on July 25, 2008. Silver State is nothing compared to IndyMac Bank, which the government seized on July 11. IndyMac had total assets of $32 billion and total deposits of about $19 billion as of March 31, 2008. The FDIC still has yet to dispose of the IndyMac assets it now owns, but the government has estimated its DIF losses on IndyMac at $4 billion to $8 billion.

This year, a total of eleven FDIC-insured institutions have been closed. Just three were shuttered in all of 2007, and prior to that, no bank had failed in the U.S. since 2004, when four tanked.

Interestingly, the Washington Post reported that 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.

Some helpful Silver State links:

* The official release
* The FDIC’s Silver State information page
* Nevada State Bank
* List of failed banks since 2000
* Articles from the AP, Washington Post, Reuters, Wall Street Journal, Las Vegas Review, and BloggingStocks