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Reuters US regulators seize two more banks, engineer sale By John Poirier Sat Jul 26, 12:08 AM ET WASHINGTON (Reuters) - US regulators took over two banks on Friday and sold them to Mutual of Omaha Bank, the sixth and seventh bank failures this year as financial institutions struggle with a housing bust and credit crunch.
IDMCPK), the Office of the Comptroller of the Currency said it closed First National Bank of Nevada and First Heritage Bank NA of California. First Heritage, described as critically undercapitalized, had assets of $254 million and $233 million in deposits, regulators said. The FDIC said the 28 offices of the two banks will reopen on Monday as Mutual of Omaha Bank. Over the weekend, customers can access their money by writing checks, using automatic teller machines or debit cards. Mutual of Omaha Bank currently has more than $750 million in assets and operates 14 retail branches in Nebraska and Colorado with commercial lending offices in Dallas and Des Moines, Iowa, the FDIC said. It is a subsidiary of Mutual of Omaha, a 99-year-old insurance and financial services company with more than $19 billion in total assets. Top banking regulators have warned of additional insolvencies this year and next, but for now do not expect failures the size of IndyMac, which had $32 billion in assets and $19 billion in total deposits at the end of March. IndyMac, the third largest US bank failure, was regulated by the Office of Thrift Supervision and is expected to deplete the FDIC's insurance fund by between $4 billion and $8 billion. IndyMac is being run by the FDIC while the agency looks to sell its assets. The FDIC oversees an industry-funded reserve of about $53 billion used to insure up to $100,000 per deposit and $250,000 per individual retirement account at insured banks. The agency also has a running tally of problem banks that its examiners closely monitor. At the end of the first quarter, 90 institutions were on the list that is expected to be updated next month. First Heritage of Newport Beach, California, had three branches with customers comprised mostly of corporations, while First National of Reno, Nevada, had 25 branches. Both were owned by First National Bank Holding Co of Scottsdale, Arizona. In addition to assuming all the deposits, Mutual of Omaha Bank will purchase about $200 million of assets and pay the FDIC a 441 premium to assume the deposits.
A bank employee posts a notice that 1st National Bank of Nevada is in FDIC receivership on Friday, July 25, 2008, after federal regulators closed the bank in Carson City, Nev. Twenty-eight branches of 1st National Bank of Nevada and First Heritage Bank, operating in Nevada, Arizona and California, were closed Friday by federal regulators.
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