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"The Federal Deposit Insurance Corporation asked us to bid on that bank. If we were a bank that the FDIC was concerned about, they wouldn't be asking us to bid on a failed bank," Zions spokesman Rob Brough said.
Zions' acquisition of the deposits came amid accelerating doubts about the stability of the U.S. banking system and the FDIC's ability to insure deposits of failed banks without tapping tax dollars through a Treasury Department loan.
Silver State was the 11th bank to fail this year, and the FDIC estimated the failure could cost it $450 million to $550 million.
Nevada State Bank, the Las Vegas-based subsidiary of Zions, assumed Silver State's insured deposits totaling $800 million on Sept. 5. Nevada State Bank also took over Silver State's 13 branch offices in southern Nevada. Another four branches in Arizona were folded into National Bank of Arizona, another Zions subsidiary.
The purchase price wasn't disclosed, but Brough said Zions agreed to buy Silver State's insured deposits for a premium of 1.3 percent -- about $824 million.
The Nevada Financial Institutions Division shut down Silver State Sept. 5, saying the bank failed because of losses on bad loans, mainly in commercial real estate and land development. The FDIC was appointed receiver of the bank.
Brough said Silver State had assets of $2 billion and total deposits of $1.7 billion on June 30.
The bank's parent, Silver State Bancorp, reported a second-quarter net loss of $73.2 million, or $4.84 a share, compared with a profit of $6.2 million, or 44 cents a share, a year earlier.
Andrew K. McCain, a son of Republican presidential nominee John McCain, was a member of the boards of Silver State and its parent, Silver State Bancorp, from February to July, when he resigned, citing personal reasons, according to Securities and Commission documents.
pbeebe@sltrib.com
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