Regulators seize 1 Nevada, 2 Arizona banks
PHOENIX — Two Arizona banks were declared failed institutions on Friday and were taken over by federal or state regulators.
The Federal Deposit Insurance Corporation took over control of Gilbert-based Union Bank, National Association. The FDIC agreed to sell its assets to MidFirst Bank of Oklahoma City. The bank’s only branch will reopen on Monday as a MidFirst branch.
Also closed on Friday by state regulators were all four branches of the Community Bank of Arizona. That bank’s assets were also sold to MidFirst Bank.
Nevada regulators also closed Community Bank’s holding company and sister bank, Community Bank of Nevada. That bank will be liquidated.
Account holders at all three banks can continue writing checks, making deposits and using their ATM accounts.
All customers deposits in the Arizona banks — even those above the federal insurance limits of $250,000 — are secured, said Felecia Rotellini, Superintendent of the Arizona Department of Financial Institutions.
Those with deposits in Las Vegas-based Community Bank of Nevada may not be so lucky. That bank will reopened as a new holding company called the Deposit Insurance National Bank of Las Vegas. It will remain open only for about 30 days, long enough to allow customers to move their deposits to other institutions.
The FDIC said in a press release that those with deposits above $250,000 in the Nevada bank will have to inquire about their deposits. Approximately $4.2 million in insured deposits potentially exceeded the insurance limits when the bank was shuttered on Friday.
Both Arizona banks suffered from losses in real estate loans that were unrecoverable, Rotellini said. But the state is still drawing interest from bankers.
“The fact that MidFirst Bank in willing to invest in Arizona and expand their footprint in the state is a testament to the viability of the Arizona market,” Rotellini said. “Businesses still want to do business in this state; banks still want to come in and provide banking services.”
Union Bank had assets of $124 million and deposits of $112 million as of June 12. Community Bank of Arizona had assets of $158.5 million and deposits of approximately $143.8 million as of June 30. MidFirst Bank agreed to assume the deposits and buy about $135 million in assets of the two banks.
Community Bank of Nevada had total assets of $1.52 billion and total deposits of about $1.38 billion as of June 30.
The FDIC estimates the loss to the federal bank insurance fund for Union Bank’s failure at $61 million. Losses related to Community Bank’s closure, estimated at about $55 million, will be shared by the FDIC and MidFirst.
Community Bank of Nevada’s failure is expected to cost the FDIC fund $781.5 million.
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