Scottsdale-Based First National Bank will Cost the FDIC $862 Million - PhoenixCEOCFO.com

Scottsdale-Based First National Bank will Cost the FDIC $862 Million

First National Bank of Arizona was taken over by the Office of the Comptroller of the Currency on July 25, 2008 and sold to the Mutual of Omaha Bank. The Federal Deposit Insurance Corporation has reported that the bank's failure will cost the fund an estimated $862 million which reflects assets and liabilities not assumed by the Mutual of Omaha Bank. First National Bank had 28 branches, including 15 in Arizona. At its peak early last year, First National employed more than 2,200 people, including 1,300 in Arizona. It was privately owned by Raymond Lamb who founded the bank in 1998. The privately-held bank had reported a loss of $140 million for the first quarter 2008 and non-current loans of $347 million.

In a similar bank closure, IndyMac Bank which was closed on July 11, 2008 in Pasadena, CA, was closed by the Office of Thrift Supervision and is expected to cost the Deposit Insurance Fund between $4 and $8 billion. The Deposit Insurance Fund had a balance of $52 billion at the end of March 31, 2008 before IndyMac Bank and First National Bank of Arizona closures.

The Mutual of Omaha Bank is a new bank, just one year old but it is owned by Mutual of Omaha, a 99-year-old insurer. Bob Sarver's bank, Bank of Nevada, had also bid on the assets of First National Bank of Arizona.

John Laub is the Chairman of the Phoenix CEO-CFO Group.

1 "Feds Shut Largest Ariz.-Based Bank. First National to be Taken Over by Mutual of Omaha." Russ Wiles. The Arizona Republic. July 26, 2008.

2. "U.S. Regulators Take Over First National Bank. Branches to Reopen on Monday Under Mutual of Omaha Bank Banners." John G. Edwards. Las Vegas Review Journal. July 26, 2008.

3. "Who is First National Bank of Arizona?" Arizona Central. July 25, 2008.

4. "FDIC Establishes IndyMac Federal Bank, FSB as Successor to IndyMac Bank, F.S.B., Pasadena, California." FDIC Press Release. July 11, 2008.

5. "Mutual of Omaha Bank Acquires All Deposits of First National Bank of Nevada and First Heritage Bank, N.A.. All Insured and Uninsured Deposits Transferred to Acquiring Bank." FDIC Press Release. July 25, 2008.

6. "Mutual of Omaha Banks Open. Firm Glad of First National Takeover Opportunity, Chance to Make its Mark in Southwestern Region." Russ Wiles. The Arizona Republic.
July 29, 2008.