Two More Banks Fail, Including The Largest Arizona-Based Bank

Yesterday the FDIC shuttered the 28 branches of the First National Bank of Nevada and the First Heritage Bank. Federal regulators will perform a nifty little magic trick over the weekend, and on Monday, the branches will reopen as Mutual of Omaha Bank. Aren’t bank failures fun?!

As of June 30, the closed banks had total assets of $3.6 billion. That’s down from $4.1 billion six months earlier. Most of the assets are in 1st National while First Heritage accounts for $254 million.

Calls to 1st National were referred by a receptionist to Joe Martony, an executive vice president in Scottsdale, Ariz. Martony didn’t return repeated calls to his office.

In Nevada, 1st National has 10 branches and employs about 350 people. Five of its branches are in Las Vegas, three are in the Reno-Sparks area, one is in Carson City and one is in Laughlin. Notices of the closure were being posted late Friday.

Fifteen 1st National branches are in Arizona, while Newport Beach-based First Heritage has three branches in Southern California.

Customers will be able to access their cash over the weekend by writing checks, or through ATMs and debit cards. Because Mutual of Omaha has purchased the banks in their entirely, all former customers, including those who exceeded FDIC insurance limits, will recover the full value of their accounts.

90 banks remain on the FDIC’s problem list, and chairwoman Sheila Bair has warned us to expect more bank failures—but consumers have absolutely nothing to worry about as long as they keep their accounts within the FDIC’s insurance limits.

FDIC takes over 2 more banks, closing 28 branches [AP]
Two More Banks Fail [The Wall Street Journal]
(AP Photo/Nevada Appeal, Brad Horn)

Comments

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  1. ryan_h says:

    Mutual of Omaha has actual bank branches now? because they didnt one year ago when I lived in Omaha.

  2. snoop-blog says:

    I wish Orchard band, and HSBC would fail so I would stop getting those rediculous credit card offers…

    No matter how many times I opt out, or call and laugh at their interest rate, the mail keeps coming.

    BTW- Someone told me if I write “refuse” on junk mail, it gets delivered back to the sender. Is that right?

  3. Kishi says:

    A friend of mine works at a 1st National Bank- he found out about it when he got a call from his manager at 9 pm Friday evening telling him he needed to be in for a meeting on Saturday afternoon.

  4. m4ximusprim3 says:

    @snoop-blog: I just shred the application and stuff the paper pieces in the return envelope. Doesn’t do much, but it gives me a nice warm feeling in my tummy that they’re paying postage to receive confetti.

  5. Batwaffel says:

    @m4ximusprim3: I heard one story about people who would send them pennies, then when the company would call to complain about the charges from weight, the sender would demand the change back. The bank had to then issue a check for the amount of the pennies. hehe

  6. cametall says:

    @m4ximusprim3: That is a genius idea!

  7. Canino says:

    @snoop-blog: If you “refuse” third class/bulk rate mail the post office just trashes it, they don’t send it back. You’ll just be creating more work for the postman.

  8. laserjobs says:

    Why is the FDIC insuring ALL deposits and then taking a $862 million charge?

    “The cost of the transactions to the Deposit Insurance Fund is estimated to be $862 million. The failed banks had combined assets of $3.6 billion, .03 percent of the $13.4 trillion in assets held by the 8,494 institutions insured by the FDIC.”

    “The 28 offices of the two banks will reopen on Monday as branches of Mutual of Omaha Bank. All depositors, including those with deposits in excess of the FDIC’s insurance limits, will automatically become depositors of Mutual of Omaha Bank for the full amount of their deposits. Depositors will continue to be insured with Mutual of Omaha Bank so there is no need for customers to change their banking relationship to retain their deposit insurance.”

  9. kittenfoo says:

    Can someone tell me why all these bank/financial institution failures tend to occur on Fridays? Think about it: Bear Stearns, Freddie/Fannie, IndyMac, now these …

    Anyway, I blogged about that subject today. I won’t be tacky and put the link here, but you can get to it by clicking on my icon or name.

  10. robothouse91 says:

    Meh. Call me when major chain banks start failing.

  11. laserjobs says:

    @kittenfoo: The FDIC does it on Friday evenings so that depositers have access to their money on the Monday in most cases. It gives them a bit of time to do the transition with a minimal amount of disruption.

  12. MitchV says:

    THE SKY IS FALLING!!!!

    What disturbs me is that things like this get reported by the media to throw the national population into a tizzy.

    These are two very small banks that failed in an regions of the country with highly inflated home prices. I wish the media was more responsible and IF this stuff needs to be reported to the nation, how about keeping it in perspective?

  13. There's room to move as a fry cook says:

    Hey, neither of these were on Consumerist’s Top-10 list of “Banks That Could Be Next To Go Under” posted on 7/17/08.

    [consumerist.com]

  14. Derv says:

    @Canino:

    Ahh, not so fast. I work in the post office on campus. Sometimes with 3rd class mail, if it says “Address Service Requested” or something similar, you can still stick it to ‘em.

  15. Trai_Dep says:

    @MitchV: Yup. Banks holding $4,000,000,000,000.00 in deposits fail nearly every day. Why, I have that much in my change jar alone!
    Geez, I wish those damn whiners would quit complaining about the economy so we could enjoy ourselves nearly as much as when Clinton/Gore were in charge of our national government. Gosh!

  16. humphrmi says:

    @cametall: @m4ximusprim3: Careful with this approach, though. I’ve noticed a lot of credit card offers come with return envelopes that have a bar code on the back. This bar code helps them identify who the offer was originally sent to. I don’t think they could take much legal action, but as we’ve already learned, banks will accept ripped up credit card applications and issue a card: [consumerist.com]

  17. Trai_Dep says:

    (Oops: too many “0″s – knock out three.)

  18. RabbitDinner says:

    @snoop-blog: I didn’t think much of it when I first read it, but I find this to be fun and a little satisfying. [www.thebestpageintheuniverse.net]

  19. snoop-blog says:

    @RabbitDinner: Nice!

  20. Fredex says:

    @kittenfoo: A lot of bad news comes out on Friday so that it gets lost. By Monday, Big News has lost interest.

  21. Squeezer99 says:

    the acquiring banks are covering all of the depositor’s money, even the ones with over $100,000 in their accounts, so shouldn’t this be classified as [Above and Beyond]

  22. Tank says:

    @kittenfoo: so they can get a full week of work out of the poor bastards that will end up out of work.

  23. Julia789 says:

    Coming soon, FDIC surcharges on all bank accounts to cover losses?

  24. Cliff_Donner says:

    @m$ximusprim3 @humphrmi: I don’t use the postpaid reply envelopes to send back the shredded advertisement — I write “NOT INTERESTED – PLEASE REMOVE FROM MAILING LIST” in big black Sharpie letters on the reply card, then send that back, postpaid. Very occasionally — Wells-Fargo comes to mind — I get a reply telling me that they have removed me from their mailing list.

    Seems like at one point I was getting solicited by Capitol One almost once a week — and, while it was not immediate, they eventually stopped sending their crap after about 9 months — I can only assume my method was the reason.

  25. @kittenfoo:

    Have no “exact reason”, but I know it has something to do with clearing transactions, both internally and externally, balancing the books, as well as shifting $ and fraud detection.

    For internal transactions, a lot of the daily heavy lifting (so to speak) is done at night. Sometimes those transactions can carryover into the next day. Performing the bank closure on the weekend allows two days of heavy lifting to close out ALL the transactions. A run on the bank would only serve to increase that workload, thus justifying the extra day.

    There is also the weekly closing/balancing of the books. That is usually done on Friday or Saturday Night (at least it was in the old days). Peforming the bank closing over the weekend allows the bank to close out the books as normal and to check for Bank Fraud.

    Then there are the external transactions. The Fed can query their regional clearing houses to insure there are no major transactions coming down the pike so to speak.

    Ah yes, then there is the issue of $. Yep, that raw, folding kind of stuff people tend to want. Much of what a bank has “on deposit” is kept in computer data form. IF a bank is about to have a run, the last thing the FED wants to happen is for the bank to run out of paper $. Transferring $ around, especially a large sum of it can take a couple hours at a minimum. Deferring the announcement until the end of the business day allows the FED to position $ where is might be needed. A weekend closing allows more time for the transfer.

  26. CaptRavis says:

    In addition to the record keeping mentioned above, the regulator also has to move extra people to the areas of the failed bank, and ramp up the call center staff with volunteers (commissioned examiners, not ‘John’ from Mumbai)
    …and these banks aren’t failing overnight, they were shopped to other institutions.
    It is going to be like Texas in the 80′s here real soon.

  27. Retief says:

    @laserjobs: The “assets” of a bank are mainly the loans made and the money paid to the bank as interest on those loans; the “liabilities” is the money of record on deposit with the bank. So if a bank has loaned you $300,000 for a loan on your house, that $300,000 and interest being accrued is the bank’s asset.

    >Excerpt of “bank run” scene from “It’s a Wonderful Life”

  28. Canino says:

    @Derv: I thought address service was because of a move, in which case you would write, “Not at this address, no forwarding address available” or something similar. “Refused” isn’t the same thing is it? I don’t know for sure…probably some old post office reg that nobody uses any more deals with it.

  29. TechnoDestructo says:

    Just like in Mutual of Omaha’s Wild Kingdom, the strong will consume the weak.

  30. ageshin says:

    well it looks like what Regan did for the S and Ls Bush is doing for the banks. Gosh, if Jeb Bush becomes president, whats left, coops?

  31. Petrol42 says:

    The American people need to wake up and really see what’s going on. 99% of the population doesn’t know this but the Federal Reserve is a PRIVATELY owned bank incorporated in Delaware. THEY control what’s going on with our economy and they’re mucking things up and they’re doing it on purpose.

    Before 1913, our government printed it’s own money but a few rich bankers bribed some of our politicians to allow the Federal Reserve to be created. THE FEDERAL RESERVE IS NOT A GOVERNMENT AGENCY. So since 1913, this privately owned bank started to print our American dollars. Now here’s the part that should piss EVERY American citizen off. Every dollar that the Fed makes for our government is charged an interest fee. EVERY DOLLAR MADE. I use to wonder who we owe these trillions of dollars of our national debt to. Then I found out. We owe most of it to the Federal Reserve. Yes, thats right. The Federal Reserve. These clowns control our money supply without anything like gold to back it up so they control inflation and recessions.

    The truth is out there. Here are a few links that everyone needs to check out since it affects everyone.

    . This guy Peter Schiff is intelligent unlike the other clowns on these shows.

    I hope the people who read this will go beyond these links and research a little deeper. We need to do something about this and it has to start with our greedy politicians that are bought by the big corporations. We the people need to wake up and vote out these scumbags and support people like Ron Paul, one of the only few who speaks nothing but the TRUTH.

  32. VeiledThreats says:

    To stop receiving annoying pre-approval offers from HSBC and Capital One, be sure to “Opt Out” here:
    [www.optoutprescreen.com]

    These banks do a soft pull on your credit report to decide if you’re credit worthy and send you the offers. Opting out on that website will not allow them access to your report unless you already have a business relationship with them.

  33. SayAhh says:

    Wow, a bank from McCain’s home state failed? Big shock. *Cough* Phil Gramm *cough*

  34. UTnick says:

    @Petrol42: alright, who let wesley snipes in here.

  35. @Petrol42:
    You know, Lithium is meant to be taken every day, you can’t just skip doses willy-nilly.

  36. RStewie says:

    Where is this FDIC problem list and how can I get ahold of it??

  37. joellevand says:

    @snoop-blog: Hey, for some of us, HSBC was nice enough to extend us credit *cough*me*cough* when life (okay, divorce and Cap One) fucked us in the ass so hard no one else would. W/o them, I wouldn’t even have a credit score, just a big neon sign that said “stay away! stay away!!!!” that popped up when my credit check was run.

  38. @RStewie:
    I’m sure it’s an incredibly secret list. If people knew a bank was on the problem list, there would be a run, so it would definitely fail.