OMAHA, Neb., Jul 25, 2008 (BUSINESS WIRE) ----Mutual of Omaha Bank has agreed to acquire from the FDIC the deposits of the failed Reno, Nev.,-based First National Bank of Nevada and its affiliate, First Heritage Bank of Newport Beach, Calif., the company announced.
The transaction includes all deposits, both insured and uninsured. All former branches of First National Bank of Nevada (also operating as First National Bank of Arizona) and First Heritage Bank will open Monday as branches of Mutual of Omaha Bank, and all depositors will automatically become depositors of Mutual of Omaha Bank, said Jeff Schmid, chairman and CEO of Mutual of Omaha Bank.
Federal regulators on Friday declared First National Bank of Nevada and its affiliates insolvent and the FDIC was named receiver. The FDIC Board of Directors approved the assumption of more than $3 billion in deposits by Mutual of Omaha Bank. FDIC will retain most of First National's loan portfolio. . . . .
http://www.foxbusiness.com/story/mutual-omaha-bank-acquire-deposits-failed-national-bank/Can someone please explain to me: 1) Does this mean that we taxpayers are funding the assumption by Mutual of Omaha of the assets of the failed banks while ourselves accepting the liability and risk for the bad loans? 2) How was this deal made? Behind closed doors? Were other offers entertained? Is this like a non-bid contract?
Seems to me that if MOO gets the liquid assets, it should have to take the bad loans. Am I wrong to think the bad loans are being shifted to us taxpayers to make good? That stinks to high heaven if I am right.
Can someone please explain?