Nevada State Bank takes over failed bank

By Jeremy Twitchell (contact)

Thursday, Sept. 11, 2008 | midnight

As the doors opened on the second business day after Nevada State Bank took over management of the failed Silver State Bank's 13 branches, bank officials and customers were reporting that things were back to business as usual.

The Federal Deposit Insurance Corporation, which regulates banking activities, declared Silver State to be insolvent on Friday and moved in to close the bank. Nevada State Bank came to an agreement with the FDIC to acquire $650 million in customer deposits from Silver State to protect customers and provide for a smooth transition.

Silver State Bank has 13 branches in Nevada and four in Arizona, as well as loan offices in seven states. The Arizona branches were taken over by National Bank of Arizona in Arizona, the FDIC said in a statement.

As of June 30, Silver State Bank had assets of $2 billion and total deposits of $1.7 billion, the statement said. At its closing, the bank held about $20 million in uninsured deposits in about 500 accounts.

The FDIC estimated the cost to its Deposit Insurance Fund would be $450 million to $550 million.

At the former Silver State branch on Green Valley Parkway near Interstate 215 on Sept. 9, Nevada State Bank banners had already been flung over the lettering that had marked the building as a Silver State Bank branch. The lobby was decked out in grand opening fashion, complete with snacks, balloons and an information table explaining how the transfer worked.

Former Silver State customers leaving the bank reported that things were going smoothly.

"I guess they're just trying to work the bugs out of the system, but everything's nice. Everything's peachy," Henderson resident Sandy Stokes said, after saying she had a slight problem that was fixed.

Customer Randy Brumm said he could tell something was wrong at Silver State in the days leading up to its closure. He noticed fewer employees at the various branches.

"I had a real good relationship with Silver State," he said. "They let go some really good people at some branches, and I kind of figured that something was up."

Silver State became the second bank to fail in Nevada in two months. On July 25, regulators closed First National Bank of Nevada, also hit hard by the real estate slowdown. It reopened July 28 as Mutual of Omaha Bank, which had acquired its deposits.

Jeremy Twitchell can be reached at 990-8928 or jeremy.twitchell@hbcpub.com.