FDIC Takes Over 2 Western Banks
Federal banking regulators closed 28 branches of 1st National Bank of Nevada and First Heritage Bank, operating in Nevada, Arizona and California.
The banks - owned by Scottsdale, Arizona-based First National Bank Holding Co. - closed Friday and were scheduled to reopen on Monday as Mutual of Omaha Bank branches, the Federal Deposit Insurance Corp. said.
The FDIC said the takeover of the failed banks was the least costly resolution and all depositors - including those with funds in excess of FDIC insurance limits - will switch to Mutual of Omaha with "the full amount of their deposits."
The FDIC also said account holders can access their funds during the weekend by writing checks or using ATM or debit cards.
It was the second major bank failure in recent weeks.
On July 11, federal regulators stepped in and seized the assets of a savings and loan, IndyMac Bank, after the mortgage lender succumbed to problems from the tight credit markets and mortgage foreclosures.
It was the second-largest bank failure in U.S. history, the government said. As of March 31, IndyMac had $19.06 billion in total deposits.
Investment bank Bear Stearns nearly collapsed in March, but was bought out by banking giant JPMorgan Chase & Co. in a deal orchestrated by the Federal Reserve Bank of New York.
The latest banks to fail had total assets of $3.6 billion as of June 30. That was down from $4.1 billion six months earlier.
Calls to 1st National were referred by a receptionist to Joe Martony, an executive vice president in Scottsdale. Martony didn't return repeated calls to his office.
Bill Uffelman of the Nevada Bankers Association said Friday the FDIC action "is a reflection of the times for the banks. It's a poor economy."
Uffelman cautioned against the sort of consumer concern that prompted many customers of IndyMac Bank branches to wait for hours in line to withdraw funds last week. Bank deposits are guaranteed by the FDIC up to $100,000, he noted.
Gov. Jim Gibbons said the bank takeover will be closely monitored in Nevada "to ensure there's minimal disruption to business and that employees' jobs are protected as much as possible."
Arizona Gov. Janet Napolitano spokeswoman Shilo Mitchell said in a statement that the FDIC's takeover of 1st National is not indicative of the overall banking climate in Arizona.
"It's very important that Arizonans know that their deposits are secure," said Felecia Rotellini, superintendent of Arizona Department of Financial Institutions. "They are well-managed and the 1st National Bank of Arizona issues should not cause any panic in Arizona."