June 25, 2010 – High Desert State Bank, Albuquerque, New Mexico became the nation’s 86th banking failure today as the New Mexico Financial Institutions Division closed the bank. The failed bank was acquired by First American Bank, Artesia, New Mexico under an agreement with the FDIC acting as receiver.
High Desert State Bank’s web site describes the bank as a locally owned and operated community bank serving the Albuquerque community. High Desert becomes the second bank to fail in New Mexico this year, after Charter Bank, Santa Fe, which was closed in January 2010.
High Desert was a small bank with only two branches and at March 31, 2010 had $80.3 million in total assets and $81.0 million in deposits. First American Bank will assume all of the deposits and purchase essentially all of the assets of High Desert. First American Bank and the FDIC entered into a loss-share agreement on $67.6 million of High Desert State Bank’s assets. First American did not pay the FDIC a premium for the deposits of High Desert.
Customers will experience no disruption in banking services over the weekend and all two of High Desert’s branches will reopen on Monday as branches of First American Bank. All High Desert depositors will automatically become depositors of First American Bank, with continued FDIC insurance coverage on deposits.
The loss to the Deposit Insurance Fund of the FDIC for closing High Desert is estimated at $20.9 million. The FDIC determined that allowing an acquisition of High Desert, compared to other alternatives, resulted in the “least costly” resolution for the FDIC.