UPDATE: Failed Ariz. bank re-opens under new owner

Posted: Updated:

UPDATE: Monday, July 28

Bank reopens with new owner

PHOENIX -- Starting Monday, customers of First National Bank with be doing business with Mutual of Omaha Bank.

The feds shut down all 15 branches of Scottsdale-based First National, Arizona's largest locally owned bank, Friday night.

Those branches, plus another 13 in Nevada and California, will reopen under new ownership Monday morning. Mutual of Omaha Bank. a subsidiary of Mutual of Omaha, has purchased all insured and uninsured deposits. That means customers of First National will not lose their money.

According to the Federal Deposit Insurance Corporation (FDIC), depositors will still have access to their funds, including money above the FDIC insurance limit of $100,000.

Account holders still can write checks and use ATMs and debit cards to get their money.

The takeover of the bank, which fell victim to problematic loans and the ongoing real-estate slump, is least costly resolution to the situation.

First National is the sixth bank to go under this year, and the first in Arizona since 2002.


PHOENIX -- According to the First National Bank of Arizona's web site, the bank has closed its doors as a financial institution.

The notice on their web site says that the Office of the Comptroller of the Currency, a government agency, ordered the closure.

The FDIC was named the receiver, and all deposit accounts have been transferred to Mutual of Omaha Bank, based out of Omaha, Nebraska.

The site also claims that there is no notice given to customers for a financial institution's closing.

First National Bank of Arizona had 15 locations in the state. In the 2007 annual report COB Raymond A. Lamb brought attention to the housing and mortgage industry's downturn as a primary challenge to the bank.

To read the bank's 2007 annual report

To read the full notice on the bank's web site

For information on the agency that closed the bank

The following is information from the FDIC's web site regarding the bank closure:

First National Bank of Nevada, Reno, Nevada, and First Heritage Bank, N.A., Newport Beach, California (owned by First National Bank Holding Company, Scottsdale, Arizona), were closed today by the Office of the Comptroller of the Currency and the Federal Deposit Insurance Corporation (FDIC) was named receiver. The FDIC entered into purchase and assumption agreements with Mutual of Omaha Bank, Omaha, Nebraska, to take over all of the deposits and certain assets of the First National Bank of Nevada, Reno (also operating as First National Bank of Arizona, which recently merged into it), and First Heritage Bank, N.A., Newport Beach, California.

The 28 offices of the two banks will reopen on Monday as branches of Mutual of Omaha Bank. All depositors, including those with deposits in excess of the FDIC's insurance limits, will automatically become depositors of Mutual of Omaha Bank for the full amount of their deposits. Depositors will continue to be insured with Mutual of Omaha Bank so there is no need for customers to change their banking relationship to retain their deposit insurance.

Over the weekend, customers of the banks can access their money by writing checks or using ATM or debit cards. Checks drawn on the banks will be processed normally. Loan customers should continue to make loan payments as usual.

Of the 10 institutions that have failed over the past two years, this is the second time in which another bank acquired all of the failing banks' insured and uninsured deposits. Mutual of Omaha Bank's acquisition of all deposits was the "least costly" resolution for the Deposit Insurance Fund compared to all alternatives because the expected losses to uninsured depositors were fully covered by the premium paid for the banks' franchises.

As of June 30, 2008, First National of Nevada had total assets of $3.4 billion and total deposits of $3.0 billion. First Heritage Bank had total assets of $254 million and total deposits of $233 million.

Customers who would like more information on today's transactions should visit the FDIC's Web site at http://www.fdic.gov/bank/individual/failed/fnbnv.html (for First National Bank of Nevada) and http://www.fdic.gov/bank/individual/failed/heritage.html (for First Heritage Bank, N.A.).

They may also call the FDIC toll free about both institutions at 1-866-674-8944 and 1-800-523-8089 until 9:00 p.m. Pacific time (Friday) evening, and then 8:00 a.m. to 8:00 p.m. daily, thereafter.