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California regulators closed Irvine-based Nano Banc on Friday after its financial condition deteriorated and its shareholder equity fell below a statutory minimum. The FDIC named Sunwest Bank to assume most deposits and some assets; Nano’s branch is scheduled to reopen as a Sunwest location on Monday.
California regulators closed Nano Banc on Friday after the Irvine-based lender’s shareholder equity fell below the state’s statutory minimum, making it the sixth U.S. bank failure of 2026. The FDIC took over as receiver and arranged for Utah-based Sunwest Bank to assume most of Nano’s deposits and purchase some of its assets; Nano’s single branch is scheduled to reopen as a Sunwest location on Monday.
The California Department of Financial Protection and Innovation said the closure followed Nano’s deteriorating financial condition and what it described as a multi-year pattern of executive mismanagement and regulatory violations. The regulator said Nano did not take any of the options set out in a March order: raise its tangible shareholders’ equity ratio to at least 9.5%, voluntarily liquidate, sell itself or merge with another institution. By Friday, the DFPI said, the bank’s shareholder equity had fallen below the statutory minimum of 3%, leaving it in an “unsafe and unsound” condition.
The FDIC said Sunwest agreed to purchase about $476 million in Nano assets. Sunwest said it would assume about $605 million in deposits and $227 million in loans. Nano reported $736 million in assets as of June, according to the FDIC; the DFPI put the figure at roughly $690 million on Friday. The FDIC estimates the failure will cost the Deposit Insurance Fund about $114 million, an estimate it expects to change as retained assets are sold.
Sunwest said the acquisition is the sixth time the FDIC has selected it to acquire assets from a failed bank. Its CEO, Carson Lappetito, said the bank was “excited to welcome Nano Banc’s customers to Sunwest.” Sunwest said Nano’s branch would reopen Monday under its name. The provided reports do not specify whether customers will see changes to account terms or services as the transfer takes effect.
Six Failures Put 2026 Ahead
Nano’s closure makes 2026 the decade’s most active year for U.S. bank failures so far, with six closures, according to the report. That exceeds 2023, when five banks failed. The earlier failures this year were in Illinois, Georgia, Indiana, Kansas and Pennsylvania; Nano is described as the year’s largest failed bank.
The failure also affects customers and the federal deposit insurance system. Sunwest is assuming most of Nano’s deposits, while the FDIC will manage the failed bank’s remaining assets and liabilities as receiver. The agency’s current cost estimate gives a measure of the expected burden on the Deposit Insurance Fund, but it is not final: the FDIC said it may shift as retained assets are sold.
Warnings and Orders Before Closure
The state regulator said it identified significant risk-management weaknesses and legal violations as early as 2020, including what it characterized as unauthorized changes to Nano’s board and senior management, as well as executive self-dealing. In February 2021, the Federal Reserve and DFPI issued enforcement actions. The Fed focused on the bank’s concentration of commercial real estate loans; the state required advance notice before changes to the board or executive management.
The DFPI issued a cease-and-desist order in December 2021 after Nano placed executives on administrative leave, named a new CEO and chair, and replaced directors without the notice required by the earlier action, according to the regulator. The Fed also ordered changes to compliance and governance, including stronger oversight of lending to insiders and a review of insider transactions and corporate expenses. The Fed ended its enforcement action in April 2025.
The report also says the Fed barred former interim CEO Anthony Gressak III and former board member James Chung from the banking industry in 2024. The central bank said they had fraudulently obtained COVID-era loans through the Paycheck Protection Program and other initiatives. Nano later reported a $75.3 million net loss, which the DFPI cited in connection with its March order. The supplied material does not give the period covered by that loss.
““We are excited to welcome Nano Banc’s customers to Sunwest and show them the high-touch service, advanced technology and sophistication we offer to our clients.””
— Carson Lappetito, Sunwest Bank CEO
Final Costs and Customer Terms
The FDIC’s $114 million cost figure is an estimate, and the agency expects it to change as retained assets are sold. The source material gives different asset totals from the FDIC and DFPI, with different reporting dates, and does not reconcile the figures. The precise value and composition of assets left outside Sunwest’s purchase are not stated.
Details about any changes to customer account terms, access to services beyond the branch reopening, and the timing of the asset sales were not provided in the source report. The available information also does not quantify how much of the bank’s financial deterioration was attributable to particular management decisions or regulatory violations.
Sunwest Takes Over Monday
Sunwest’s planned reopening of Nano’s single branch on Monday is the next immediate step for customers. The FDIC, acting as receiver, will handle the failed bank and sell retained assets. That process may change the agency’s current estimate of the Deposit Insurance Fund’s cost. Further information about customer arrangements and the final cost was not included in the report.
Key Questions
Why did Nano Banc fail?
The DFPI cited deteriorating financial condition, mismanagement and regulatory violations. It said Nano did not meet the March order’s equity target or pursue a sale, merger or voluntary liquidation, and that shareholder equity fell below the state’s 3% statutory minimum.
Who is taking over Nano Banc’s deposits?
Sunwest Bank agreed to assume about $605 million in deposits and purchase about $476 million in Nano assets, according to the FDIC and Sunwest. The source report does not detail any changes to customer account terms.
How much could Nano Banc’s failure cost?
The FDIC estimates a cost of about $114 million to the Deposit Insurance Fund. The agency said the figure may change as retained assets are sold.
How many U.S. banks have failed in 2026?
Nano was the sixth U.S. bank failure of 2026, according to the report. That puts the year ahead of 2023, when five banks failed, in the number of failures this decade.
Source: rss
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