Bank Tied To John McCain's Son Goes Under
Regulators on Friday 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.
Nevada regulators closed Silver State and the Federal Deposit Insurance Corp. was appointed receiver of the bank, based in Henderson, Nev. It had $2 billion in assets and $1.7 billion in deposits as of June 30.
Andrew K. McCain, a son of Republican presidential nominee John 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 & Co., the beer distributorship 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 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.
"When the housing market slowed down, people who bought raw land to build new homes didn't need that land so they couldn't do anything with it and repay their loans. So those loans went bad," 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 $6.2 million, or 44 cents a share, in the same period last year.
Construction and development loans have been the fastest-growing category of troubled loans for U.S. banks, and many banks have heavy concentrations of them in their lending portfolios, according to the FDIC. Some small banks are considered especially vulnerable. Delinquent loan payments and defaults by commercial and residential developers have surged to the highest levels since the early 1990s
the latter part of the savings and loan crisis.
The FDIC said Silver State Bank's insured deposits will be assumed by Nevada State Bank of Las Vegas. Its branches will reopen Monday as offices of Nevada State Bank in Nevada and National Bank of Arizona in Arizona.
The agency said depositors of Silver State Bank will continue to have full access to their deposits.
The 11 failures so far this year compare with three for all of 2007, and federal banking officials have said that more banks are in danger of collapse.
Silver State Bank has operated 13 branches in the greater Las Vegas area and four in the greater Phoenix-Scottsdale area of Arizona as well as loan offices in Nevada, Utah, Colorado, Washington, Oregon, California and Florida.
The FDIC estimated its resolution will cost the deposit insurance fund between $450 million and $550 million.
Regular deposit accounts are insured up to $100,000.
There were about $20 million in uninsured deposits held in roughly 500 accounts at Silver State that potentially exceeded the insurance limit, the FDIC said.
Concern has been growing over the solvency of some banks amid the housing slump and the steep slide in the mortgage market. The pressures of tighter credit, tumbling home prices and rising foreclosures have been battering many banks, large and small, across the nation.
The largest bank failure by far this year has been that of savings and loan IndyMac Bank, which was seized by regulators on July 11 with about $32 billion in assets and deposits of $19 billion.
The seizure of Pasadena, Calif.-based IndyMac, which was the largest regulated thrift to fail in the United States, prompted hundreds of angry customers to line up for hours in Southern California to demand their money. IndyMac also was the second-largest financial institution to close in U.S. history, after Continental Illinois National Bank in 1984.
The FDIC has been operating the bank, now called IndyMac Federal Bank, under a conservatorship.
The FDIC plans to raise insurance premiums paid by banks and thrifts to replenish its reserve fund after paying out billions of dollars to depositors at IndyMac. The fund, currently at $45 billion, is expected to take a hit from IndyMac of $4 billion to $8 billion.
Federal officials expect turbulence in the banking industry to continue well into next year, and more banks to appear on the FDIC's internal list of troubled institutions.
Of the 8,500 or so FDIC-insured banks in the country, 117 were considered to be in trouble in the second quarter - the highest level in about five years and up from 90 in the first quarter. The agency doesn't disclose the banks' names.
© 2009 The Associated Press. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed. It was the 11th failure this year of a federally insured bank.
Nevada regulators closed Silver State and the Federal Deposit Insurance Corp. was appointed receiver of the bank, based in Henderson, Nev. It had $2 billion in assets and $1.7 billion in deposits as of June 30.
Andrew K. McCain, a son of Republican presidential nominee John 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 & Co., the beer distributorship 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 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.
"When the housing market slowed down, people who bought raw land to build new homes didn't need that land so they couldn't do anything with it and repay their loans. So those loans went bad," 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 $6.2 million, or 44 cents a share, in the same period last year.
Construction and development loans have been the fastest-growing category of troubled loans for U.S. banks, and many banks have heavy concentrations of them in their lending portfolios, according to the FDIC. Some small banks are considered especially vulnerable. Delinquent loan payments and defaults by commercial and residential developers have surged to the highest levels since the early 1990s
the latter part of the savings and loan crisis.
The FDIC said Silver State Bank's insured deposits will be assumed by Nevada State Bank of Las Vegas. Its branches will reopen Monday as offices of Nevada State Bank in Nevada and National Bank of Arizona in Arizona.
The agency said depositors of Silver State Bank will continue to have full access to their deposits.
The 11 failures so far this year compare with three for all of 2007, and federal banking officials have said that more banks are in danger of collapse.
Silver State Bank has operated 13 branches in the greater Las Vegas area and four in the greater Phoenix-Scottsdale area of Arizona as well as loan offices in Nevada, Utah, Colorado, Washington, Oregon, California and Florida.
The FDIC estimated its resolution will cost the deposit insurance fund between $450 million and $550 million.
Regular deposit accounts are insured up to $100,000.
There were about $20 million in uninsured deposits held in roughly 500 accounts at Silver State that potentially exceeded the insurance limit, the FDIC said.
Concern has been growing over the solvency of some banks amid the housing slump and the steep slide in the mortgage market. The pressures of tighter credit, tumbling home prices and rising foreclosures have been battering many banks, large and small, across the nation.
The largest bank failure by far this year has been that of savings and loan IndyMac Bank, which was seized by regulators on July 11 with about $32 billion in assets and deposits of $19 billion.
The seizure of Pasadena, Calif.-based IndyMac, which was the largest regulated thrift to fail in the United States, prompted hundreds of angry customers to line up for hours in Southern California to demand their money. IndyMac also was the second-largest financial institution to close in U.S. history, after Continental Illinois National Bank in 1984.
The FDIC has been operating the bank, now called IndyMac Federal Bank, under a conservatorship.
The FDIC plans to raise insurance premiums paid by banks and thrifts to replenish its reserve fund after paying out billions of dollars to depositors at IndyMac. The fund, currently at $45 billion, is expected to take a hit from IndyMac of $4 billion to $8 billion.
Federal officials expect turbulence in the banking industry to continue well into next year, and more banks to appear on the FDIC's internal list of troubled institutions.
Of the 8,500 or so FDIC-insured banks in the country, 117 were considered to be in trouble in the second quarter - the highest level in about five years and up from 90 in the first quarter. The agency doesn't disclose the banks' names.
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laying with dogs gives fleas but these guys haven''t a worry in the world at the end of the month.
capitalism in this form seems like just another form of enslavement - the big boys make the mess, leave the table, and we get the clean-up job!
AND WHY DO YOU ALL SAY THIS. WELL WE CANT LET THEM FALL. BULL ***..THEY ARE LETTING MILLIONS OF GOOD AMERICANS FALL EACH WEEK..THEY ARE NO DIFFERANT THAT US.. THEY MADE BAD DECISIONS ON THE MORAGE MESS. AND IF YOU LOOK AT WHAT AND WHO IS GOING BAD NOW IS ALL THE ONES THIS LIEING GOVERNEMNT SAID WOULD NOT BE INCUDED IN THIS MESS THEY SAID ITS ONLY THE SUB PRIME PEOPLE. WHAT A BUNCH OF GRAP THAT WAS COMMING OUT OF THEIR MOUTHS.
DONT YOU ALL KNOW THAT MR.POTATO-HEAD JUST GOT BACK FROM CHINA( A COMMIST CONTRY) AND I WOULD PUT MY LIFE ON THAT THEY TOLD MR POTATO-HEAD PAULSON THAT HE BETTER DO SOMETHING ABOUT THE FANNIE/FREDDIE GRAP BECAUSE CHINA HOLDS MORE THAN 70% OF THE PAPER!!!!!!!!!!!!!!!!
GO AHEAD AND ASK PAULSON WHO REALLY OWNS THE PAPER OF THEM..ITS NOT AMERICANS!!!
BUT AMERICANS ARE BAILLING OUT CHINASO ASK THEM ALL THIS , WHY SHOULD AMERICANS BAIL OUT CHINA!!!! ISN;T THAT WHAT WE ARE REALLY DOING!!! YES AMERICANS ARE BAILLING OUT CHINA
WE HAVE TO TAKE ALL MEMBERS OUT OF CONGRESS/SENATORS THAT HAVE MORE THAN 6 YEARS IN OFFICE..PUT AMERICANS THAT WANT TO HELP AMERICA..PUT AMERICANS FIRST RATHER THAN THE RICH AND WALL STREET..
SO REAL CHANGE WILL ONLY COME WHEN AMERICANS WAKE UP TO THE FACT THAT THIS IS THE ONLY WAY TO CHANGE ARE GOVERMENT.
DAVID A BELANGER,VETERAN, U.S. ARMY.
for-america@hotmail.com, 978-618-3105
Danny,
Expecting CBS to be fair in an election is like asking Dan Rather about the fairness doctrine. Aint going to happen.
I would like to know what Bidens ideas for the country are, but I''ll bet we never hear it. All we know about Biden is his ability to ask a 12 minute question in a senate hearing and then give you the answer before you have a chance to speak.
Even the bank names are similar. Everything old is new again.
Yea, like embarrassing the family when his name was tied to it!
Didn''t he make enough $$$ as CFO of mommy''s hundred million dollar beer empire? Typical greed.
I found out from sources provided by the internet. If I have been misinformed, please let me know.
Posted by seezero1 at 02:08 AM : Sep 07, 2008
Yes, you HAVE been misinformed (but I have the feeling you know that already, since you''ve been copying and pasting this nonsense all over these boards).
http://money.cnn.com/2008/06/11/news/economy/candidates_taxproposals_tpc/
I''m just glad he isn''t in charge of MY bank...