Silver State closes down following rise in bad debts

9 September 2008

All branches of US bank Silver State have closed, due to severe revenue constraints.

A combination of bad real estate and land loans led to the Nevada-based firm being passed in to the hands of the Federal Deposit Insurance Corporation (FDIC), the eleventh such bank to do so in 2008.

Prior to the closures, Silver State retained 17 branches in Nevada and Arizona.

It also had around $2 billion in assets and deposits of $1.7 billion.

Under the terms of the FDIC deal, the Nevada State Bank will take on Silver State's depositors.

"When the housing market slowed down, people who bought raw land to build new homes didn't need that land, so they couldn't do anything with it and repay their loans [to Silver State]," an FDIC spokesman said.

Around nine per cent of US mortgage holders are thought to be currently in arrears.

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