 Silver State Bank logo | |
| Founded | 1996 in Las Vegas, Nevada, United States |
|---|---|
| Defunct | September 5, 2008 |
| Website | Silver State Bank (Archive) |
Silver State Bank was a failed Nevada commercial bank with 17 branches in the Las Vegas and Phoenix metropolitan areas and loan operations across the western United States. The bank's assets were acquired by Zions Bancorporation, a bank holding corporation with $2 billion in assets.
Silver State Bank was a community bank founded in 1996 operating in the Las Vegas metropolitan area. [1] On September 5, 2006, Silver State Bancorp, the bank's holding company, acquired Choice Bank in the Phoenix/Scottsdale region of Arizona, and merged operations in 2008. [2]
On September 5, 2008, the bank was closed by the Nevada Financial Institutions Division and placed under Federal Deposit Insurance Corporation (FDIC) receivership. [3] Nonbrokered FDIC-insured accounts in Nevada were transferred to Nevada State Bank, while those in Arizona were transferred to National Bank of Arizona, both of which are operating subsidiaries of Zions Bancorporation. The bank was the 11th insured commercial bank to fail in 2008, compared to three in all of 2007. An estimated $450 to $550 million in losses are expected to be covered by the FDIC Deposit Insurance Fund. [4] Some customers, who did not understand FDIC insurance limits, sustained losses of deposits they believed safe. [5] [6] Uninsured deposited amounted to $20 million in 500 accounts. [7]
The underlying cause of failure was overexposure to risky real estate loans, especially mortgages on undeveloped land purchased for home construction that was no longer viable following the collapse of the housing bubble. [8]
The Wall Street Journal reported [9] that Andrew McCain, son of Republican presidential candidate John McCain, sat on the board of Silver State Bank for five months in 2008, resigning on July 26 for "personal reasons," shortly before he would have had to sign off on second-quarter audit statements.
The Federal Deposit Insurance Corporation (FDIC) is a United States government corporation supplying deposit insurance to depositors in American commercial banks and savings banks. The FDIC was created by the Banking Act of 1933, enacted during the Great Depression to restore trust in the American banking system. More than one-third of banks failed in the years before the FDIC's creation, and bank runs were common. The insurance limit was initially US$2,500 per ownership category, and this has been increased several times over the years. Since the enactment of the Dodd–Frank Wall Street Reform and Consumer Protection Act in 2010, the FDIC insures deposits in member banks up to $250,000 per ownership category. FDIC insurance is backed by the full faith and credit of the government of the United States, and according to the FDIC, "since its start in 1933 no depositor has ever lost a penny of FDIC-insured funds".
In the United States, banking had begun by the 1780s, along with the country's founding. It has developed into a highly influential and complex system of banking and financial services. Anchored by New York City and Wall Street, it is centered on various financial services, such as private banking, asset management, and deposit security.
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A bank failure occurs when a bank is unable to meet its obligations to its depositors or other creditors because it has become insolvent or too illiquid to meet its liabilities. A bank usually fails economically when the market value of its assets declines to a value that is less than the market value of its liabilities. The insolvent bank either borrows from other solvent banks or sells its assets at a lower price than its market value to generate liquid money to pay its depositors on demand. The inability of the solvent banks to lend liquid money to the insolvent bank creates a bank panic among the depositors as more depositors try to take out cash deposits from the bank. As such, the bank is unable to fulfill the demands of all of its depositors on time. A bank may be taken over by the regulating government agency if its shareholders' equity are below the regulatory minimum.
Nevada State Bank, a division of Zions Bancorporation, N.A. Member FDIC, is a full-service bank with branches statewide. Founded in 1959, Nevada State Bank serves 20 communities across the state of Nevada. Zions Bancorporation, N.A. operates in nearly 500 local financial centers across 11 Western states: Arizona, California, Colorado, Idaho, Nevada, New Mexico, Oregon, Texas, Utah, Washington and Wyoming. Zions Bancorporation, N.A. is included in the S&P 400 Mid-Cap and NASDAQ Financial 100 indices.
A bridge bank is an institution created by a national regulator or central bank to operate a failed bank until a buyer can be found.
California Bank & Trust (CB&T) is a full-service bank specializing in consumer, commercial and wealth management services headquartered in San Diego, California. With more than 80 branches located throughout California, CB&T is a subsidiary of Zions Bancorporation, one of the nation's top 50 bank holding companies, with assets of approximately $91 billion.
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A deposit insurance national bank is a temporary bank in the United States that is established by the Federal Deposit Insurance Corporation (FDIC) in the wake of a bank failure under the Banking Acts of 1933 and 1935.
