US regulators took over two more banks late on Friday and sold them to Mutual of Omaha Bank, the sixth and seventh bank failures this year as financial institutions struggle with a housing bust and credit crunch.
Two weeks after the Federal Deposit Insurance Corp seized IndyMac Bancorp, the Office of the Comptroller of the Currency said it closed First National Bank of Nevada and First Heritage Bank NA of California.
First National, characterised as undercapitalised, had total assets of $3.4 billion (Dh12.4bn) and $3bn in deposits. First Heritage, described as critically undercapitalised, had assets of $254 million and $233m in deposits, regulators said.
The FDIC said the cost of the transactions to its insurance fund is estimated to be $862m, adding that the two failed banks represent just 0.3 per cent of $13.4 trillion in total industry assets at about 8,500 FDIC-insured institutions.
The FDIC said the 28 offices of the two banks will reopen tomorrow as Mutual of Omaha Bank. Over the weekend, customers can access their money by writing checks, using automatic teller machines or debit cards.
Mutual of Omaha Bank currently has more than $750m in assets and operates 14 retail branches in Nebraska and Colorado with commercial lending offices in Dallas and Iowa.