Two Failures This Week

1^st Commerce Bank of North Las Vegas, Nevada, was closed yesterday by regulators. Ranked sixty-eighth on the current list (thirty-fifth on the winter list), the approximately $20.2 million in total assets and $19.6 million in total deposits former bank was acquired Plaza Bank (4942nd) of Irvine, California. The FDIC and Plaza Bank entered into a loss-share transaction on $12.2 million of 1^st Commerce Bank's assets. The FDIC estimates that cost to the Deposit Insurance Fund (DIF) will be $9.4 million. While small in absolute terms, it should be noted that the estimated loss is quite high in percentage terms. This is indicative of a bank with particular problems which may have stemmed from poor accounting or management.


Today, thirty-second ranked Mountain National Bank of Sevierville, Tennessee, was closed by the Office of the Comptroller of the Currency (OCC). First Tennessee Bank, National Association (1213th) of Memphis, Tennessee has agreed to purchase essentially all of the failed bank's approximately $437.3 million in total assets. With this acquisition, the total assets of First Tennessee Bank exceeds $25 billion. In addition, the firm will assume about $373.4 million in total deposits from the former bank. The FDIC estimates that cost to the DIF will be $33.5 million.