Silver State Bank
has been shut down by regulators, making it the 11th U.S. financial institution to fail in 2008.
The Henderson-based bank was closed Friday by the Nevada Financial Institutions Division, and the Federal Deposit Insurance Corporation was named as the receiver. To protect the depositors, the FDIC reached an agreement that will see Las Vegas-based Nevada State Bank take over Silver State's insured deposits.
The branches of Silver State will open on Monday as Nevada State Bank in Nevada and as National Bank of Arizona in Arizona.
Andrew McCain, the adopted son of Republican presidential nominee Sen. John McCain, was on Silver State's board for five months before he stepped down in July.
As of June 30, Silver State had total assets of $2 billion and deposits of $1.7 billion. Nevada State Bank agreed to purchase the insured deposits for a premium of 1.3%. At the time of the bank's closing, there were approximately $20 million in uninsured deposits held in roughly 500 accounts that potentially exceeded the insurance limits.
Silver State also had around $700 million in brokered deposits that weren't included in the takeover. The FDIC will pay the brokers directly for the amount of their insured funds.
In addition to assuming the failed bank's insured deposits, Nevada State Bank will purchase a small amount of assets comprised of cash and securities. The FDIC will retain the remaining assets for later disposition.
Silver State is the second bank to fail in Nevada this year. First National Bank of Nevada, based in Reno, was closed July 25.
This article was written by a staff member of TheStreet.com.