Sun West Bank is the Latest U.S. Failed Bank

Several U.S. banks continue to fail-evidence of a continuing challenging economy-the latest being a community bank in Las Vegas, Nevada. According to the Federal Deposit Insurance Corporation's (FDIC) website, on May 28, 2010, Sun West Bank, based in Las Vegas, Nevada, was closed by the Nevada Department of Business and Industry, Financial Institutions Division, and the FDIC was named receiver. Sun West Bank is the 78th FDIC-insured institution to fail in the nation this year, the second in Nevada,and the first in Las Vegas. The FDIC did not disclose any specific reasons around the bank failure.

According to the Bank's website, Sun West Bank (SWB) is a small community bank, providing a full range of financial services through five branches in Las Vegas and two in Reno. As of December 31, 2009, Sun West Bank had approximately $9.3 million in equity capital, but lost $4.665 million in the first quarter of 2010. At the end of the quarter, Sun West Bank had loans and other assets of approximately $361 million and deposits of approximately $354 million.

All customer deposit accounts have been transferred to City National Bank, based in Los Angeles, California, and are immediately available to customers. On Tuesday, June 1, 2010, the seven branches of the former Sun West bank will reopen as branches of City National Bank. Monday is a national holiday (Memorial Day), so the bank will be closed.

To protect the depositors of Sun West Bank, the FDIC entered into a purchase and assumption agreement with City National Bank to assume all of the deposits of Sun West Bank. Depositors of Sun West Bank automatically become depositors of City National Bank.

Customer deposits continue to be insured by the FDIC, so there is no need for customers to change their banking relationship to retain their deposit insurance coverage. Customers should also continue to use their existing branch until they receive notice from City National Bank that it has completed systems changes, which will allow other City National Bank branches to process their accounts as well.

The FDIC and City National Bank entered into a loss-share transaction on $280 million of Sun West Bank's assets. City National Bank will share in the losses on the asset pools covered under the loss-share agreement. Under loss sharing, the FDIC agrees to absorb a portion of the loss on a specified pool of assets in order to maximize asset recoveries and minimize FDIC losses. Loss sharing reduces the immediate cash needs of the FDIC, is operationally simpler and more seamless to failed bank customers. This process also moves assets quickly into the private sector.

Customers who have questions about this transaction can call the FDIC directly toll-free at 1-800-523-8089. For a complete list of failed U.S. banks, take a look at the "Failed Banks List" located on the FDIC's website at http://www.fdic.gov/bank/individual/failed/banklist.html.

Sources:

www.FDIC.gov

www.swbnv.com