Republican red faces as regulators close bank

Financial Times

A bank with ties to the family of John McCain was shut down by federal regulators on Friday, marking the 11th US bank failure this year and threatening to cause ripples across the presidential election campaign.

Andrew McCain, son of the Republican presidential nominee, was a director of Nevada-based Silver State Bank until resigning in July for “personal reasons”.

He was a member of Silver State’s audit committee, which has responsibility for overseeing the bank’s financial accounts.

Silver State was heavily exposed to construction and land development loans that have come under pressure as the housing market slumps.

Much of the bank’s business was concentrated in Las Vegas and other western cities that have suffered some of the sharpest falls in land prices after years of rapid growth and heavy speculation.

Silver State had about $2bn of assets and $1.7bn in deposits at the end of June and reported a second-quarter net loss of $72.3m.

Its failure is expected to cost the Federal Deposit Insurance Corporation, which insures bank deposits up to $100,000, about $450m-$550m.