Silver State Bank Shutdown; McCain's Son Was Director

State of Nevada regulators and the FDIC have shutdown Silver State Bank.

John McCain's son, Andrew, sat on Silver State's board and was a member of its three-person audit committee, which was responsible for overseeing the company's financial condition.

Andrew McCain left the Henderson, Nev., bank July 26 after five months on the board, citing "personal reasons." He is McCain's adopted son from his first marriage.

Prominent libertarian writer, Douglas E. French, formerly Executive Vice President of Commercial Real Estate Lending at Silver State Bancorp and top Commercial Loan producer for the bank, resigned from the bank for "personal reasons" in May.

As of June 30, 2008, Silver State Bank had total assets of $2.0 billion and total deposits of $1.7 billion. Nevada State Bank agreed to purchase the insured deposits for a premium of 1.3 percent. At the time of closing, there were approximately $20 million in uninsured deposits held in approximately 500 accounts that potentially exceeded the insurance limits. This amount is an estimate that is likely to change once the FDIC obtains additional information from these customers.

Huge Losses At Silver State Bancorp; McCain's Son and Libertarian Doug French Were Affiliated

Last week Silver State Bancorp reported a loss of $62.7 million in the second quarter and said its capital had eroded significantly. At the same time, Silver State announced the resignations of its chief executive and chairman.

Michael Thorell, 42, former president of an Arizona bank that Silver State acquired, was named acting CEO, replacing Corey Johnson, 50, who resigned.The board named Phillip Peckman, 59, acting board chairman to replace Bryan Norby, 51, of Boise, Idaho.

On Thursday, the bank said in a securities filing that it actually lost $73.2 million in the second quarter. Silver State also said in the filing that its worsening financial condition means there is "uncertainty about the company's ability to continue as a going concern."

John McCain's son Andrew K. McCain, 46, was on the board of Silver State Bancorp for five months before he resigned on July 25 for unspecified "personal reasons".

Prominent libertarian writer and financial supporter, Douglas E. French, formerly Executive Vice President of Commercial Real Estate Lending at Silver State Bancorp, resigned from the bank for "personal reasons" in May.

His role in the problems at Silver State remain unclear and he seems to have attracted both strong supporters and detractors.