 |
 Silver State Bank logo | |
| Founded | 1996 in Las Vegas, Nevada, United States |
|---|---|
| Defunct | September 5, 2008 |
| Website | http://silverstatebank.com/ (Internet 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".
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Zions Bancorporation is a national bank headquartered in Salt Lake City, Utah. It operates as a national bank rather than as a bank holding company and does business under the following seven brands: Zions Bank, Amegy Bank of Texas, California Bank and Trust, National Bank of Arizona, Nevada State Bank, Vectra Bank Colorado, and The Commerce Bank of Washington. It has 416 branches and over 1 million customers. It was founded by The Church of Jesus Christ of Latter-day Saints in 1873, although the church divested itself of its interest in the bank in 1960.
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