Two More U.S. Banks Closed

The count of bank failures in the U.S. grew to be 7 on Friday when federal regulators took over two small Western banks and sold them to Mutual of Omaha Bank. First National Bank of Nevada and First Heritage Bank NA of California will transfer their deposits and some assets to Mutual of Omaha.

Owned by Scottsdale, Ariz.-based First National Bank Holding Co., the two banks were undercapitalized, said the Office of the Comptroller of the Currency.

First National, had total assets of $3.4 billion and $3 billion in deposits and First Heritage, had assets of $254 million and $233 million in deposits.

The cost of the transactions to its insurance fund is about $862 million, said the FDIC adding that the two failed banks represent just 0.3 percent of $13.4 trillion in total industry assets at about 8,500 FDIC-insured institutions.

According to the FDIC, this was the least expensive resolution.

28 offices of the two banks will reopen on Monday as Mutual of Omaha Bank. Customers can access their money, over the weekend, by writing checks, using automatic teller machines or debit cards.

"We would first like to reassure all customers of First National Bank of Nevada and First Heritage Bank that all their deposits are safe and accessible," Mutual of Omaha Bank Chief Executive Officer Jeff Schmid said in a statement. "We will be open for business on Monday morning."

Bill Uffelman of the Nevada Bankers Association said the FDIC action signals the tough times for the banks.

Gov. Jim Gibbons said the bank takeover will be closely monitored in Nevada "to ensure there's minimal disruption to business and that employees' jobs are protected as much as possible."

Felecia Rotellini, superintendent of Arizona Department of Financial Institutions said the banking climate in Arizona is still sound. "It's very important that Arizonans know that their deposits are secure," she said. "They are well-managed and the 1st National Bank of Arizona issues should not cause any panic in Arizona."