SouthwestUSA Bank of Las Vegas Closed By Regulators

July 23, 2010 – SouthwestUSA Bank – Banking Failure #102

See analysis of this week’s bank closings at – Banking Failures Hit 103 As Regulators Close Seven More Banks

FDIC – SouthwestUSA Bank, Las Vegas, Nevada, was closed today by the Nevada Financial Institutions Division, which appointed the Federal Deposit Insurance Corporation (FDIC) as receiver. To protect the depositors, the FDIC entered into a purchase and assumption agreement with Plaza Bank, Irvine, California, to assume all of the deposits of SouthwestUSA Bank.

The sole branch of SouthwestUSA Bank will reopen on Monday as a branch of Plaza Bank. Depositors of SouthwestUSA Bank will automatically become depositors of Plaza Bank. Deposits will continue to be insured by the FDIC, so there is no need for customers to change their banking relationship in order to retain their deposit insurance coverage.

As of March 31, 2010, SouthwestUSA Bank had approximately $214.0 million in total assets and $186.7 million in total deposits. Plaza Bank did not pay the FDIC a premium for the deposits of SouthwestUSA Bank. In addition to assuming all of the deposits of the failed bank, Plaza Bank agreed to purchase approximately $137.3 million of the failed bank’s assets. The FDIC will retain the remaining assets for later disposition.

The FDIC and Plaza Bank entered into a loss-share transaction on $111.3 million of SouthwestUSA Bank’s assets. Plaza Bank will share in the losses on the asset pools covered under the loss-share agreement. The loss-share transaction is projected to maximize returns on the assets covered by keeping them in the private sector. The transaction also is expected to minimize disruptions for loan customers.

The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) will be $74.1 million. Compared to other alternatives, Plaza Bank’s acquisition was the least costly resolution for the FDIC’s DIF. SouthwestUSA Bank is the 102nd FDIC-insured institution to fail in the nation this year, and the fourth in Nevada. The last FDIC-insured institution closed in the state was Nevada Security Bank, Reno, on June 18, 2010.

Speak Your Mind