Regulators close two U.S. banks

Reno, Nev -- Federal regulators have closed two banks in the U.S. West, saying they were undercapitalized due to the poor performance of home mortgage loans.

The U.S. Office of the Comptroller of the Currency, a branch of the U.S. Treasury Department, Friday revoked the charters of First National Bank of Nevada, of Reno, Nev., and First Heritage Bank of Newport Beach, Calif., the Wall Street Journal reported.

The Journal said the Federal Deposit Insurance Corp. was appointed receiver of both banks, and that the FDIC protected customer deposits by arranging their sale to Mutual of Omaha Bank.

First National Bank of Nevada had merged with First National Bank of Arizona, and records show the latter bank made mortgage loans throughout much of the United States during housing boom, continuing the practice even as the housing market was weakening, the newspaper reported.

First National Bank of Nevada had $3.4 billion in assets and $3 billion of deposits, while First Heritage posted a first-quarter net loss of $1.9 million.

Copyright 2008 by United Press International.