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McCain Tied to Failure No. 11

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On Friday, the Federal Deposit Insurance Corporation took control of the 11th bank this year. The son of presidential candidate Sen. John McCain recently resigned from the board of the failed institution.

The Nevada Financial Institutions Division shut down Silver State Bank, an FDIC announcement Friday said. FDIC has been named receiver.

The failure is the 11th this year for FDIC-insured institutions.

The deposits of the Henderson, Nev.-based company has been purchased for a 1.3 percent premium by Las Vegas-based Nevada State Bank. Silver State branches in Nevada will reopen Monday as Nevada State Bank, while Arizona branches will reopen as National Bank of Arizona.

Silver State had total assets of $2.0 billion and total deposits of $1.7 billion as of June 30. Around $20 million in deposits were uninsured at the time of the closure.

“Silver State Bank had a number of avenues for customers to access funds, and each of those avenues had to be set to inquiry only mode so that a final accounting could be completed,” the bank’s Web site says. “Service is expected to resume on Monday, Sept. 8, 2008.”

Silver State announced last month that it restated its second-quarter loss to $73 million from a previously reported $63 million loss. An updated appraisal on commercial land securing a loan held by the company prompted it to increase its loan-loss provision and restate earnings.

On July 26, Andrew K. McCain resigned as a director of Silver State, citing personal reasons, the bank said in an announcement. He is the adopted son of Sen. John McCain from the senator’s first marriage, according to published reports.

In 2006, the younger McCain became a director of Scottsdale, Ariz.-based Choice Bank, which was acquired by Silver State in April 2008. He was appointed to Silver State’s board in February and served on the audit committee.

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