Nevada bank shut on bad real estate loans
Washington, September 7, 2008
Regulators shut down Silver State Bank, saying the Nevada bank failed because of losses on soured loans, mainly in commercial real estate and land development.
It was the 11th failure this year of a federally insured bank in the US
Nevada regulators closed Silver State and the Federal Deposit Insurance Corporation was appointed receiver of the bank, based in Henderson, Nevada.
It had $2 billion in assets and $1.7 billion in deposits as of June 30.
Republican presidential nominee John McCain's son Andrew K. McCain sat on the boards of Silver State Bank and of its parent, Silver State Bancorp, starting in February but resigned in July citing "personal reasons," corporate filings with the Securities and Exchange Commission show.
Andrew McCain also was a member of the bank's audit committee, responsible for oversight of the company's accounting.
The younger McCain, who is the chief financial officer of Hensley & Company, of which Cindy McCain is chairwoman, is the Arizona senator's adopted son from his first marriage.
Andrew McCain's position on the Silver State board and departure were first reported on Friday by The Wall Street Journal online.
Silver State Bank ran into difficulty because of a substantial amount of "poor-quality loans primarily related to real estate development" in southern Nevada and other distressed markets, FDIC spokesman David Barr said.
Silver State Bancorp recently reported a net loss for the second quarter of $73.2 million, or $4.84 a share, compared with net profit of $6.2m, or 44 cents a share, in the same period last year.