FDIC Closes Two More Banks Over Weekend

The Federal Deposit Insurance Corp. (FDIC) shuttered two banks late Friday and sold the depoits to Mutual of Omaha Bank. Both banks, one in California and one in Nevada, were owned by the same parent company.

The FDIC said it was appointed receiver of the assets of First National Bank of Nevada, based in Reno, Nev., and First Heritage Bank of Newport Beach, Calif.  Both of the banks were properties of First National Bank Holding Co., based in Scottsdale, Ariz. The regulator said in a statement that Mutual of Omaha Bank would be acquiring the deposits of First National of Nevada and First Heritage.

First National of Nevada had total assets of $3.4 billion and total deposits of $3.0 billion at the end of the second quarter, according to the FDIC. First Heritage had total assets of $254 million and total deposits of $233 million.

In addition to the deposits, Mutual of Omaha will acquire $200 million in other assets from the banks.

The closures bring to seven the total number of bank failures this year.

The FDIC said that the deposit and asset sale was the "least costly" option for the government in recouping the difference between uninsured deposit losses and the premium paid for all of the deposits.

The FDIC will control most of First National’s loan portfolio after the deal with Mutual of Omaha.

According to The Wall Street Journal, the Office of the Comptroller of the Currency, a division of the Treasury Department, said First National Bank of Nevada "was undercapitalized and had experienced substantial dissipation of assets and earnings due to unsafe and unsound practices.”