California has seized Nano Banc after it failed to meet capital requirements. Sunwest is taking over substantially all deposits, while the FDIC puts the initial cost to its Deposit Insurance Fund at $114 million.
California closed Nano Banc on September 25 after the lender failed to meet capital requirements. The Federal Deposit Insurance Corporation, appointed as receiver, said Sunwest Bank had assumed substantially all deposits. The closure does not mean account holders have lost access to their money: checks, ATM withdrawals and debit-card transactions are set to continue.
In its closure announcement, the FDIC said Nano Banc’s sole branch would reopen as a Sunwest branch during normal business hours on Monday, September 28. Holders of the transferred accounts automatically become Sunwest customers. Borrowers are expected to keep making loan payments as usual.
Capital requirements went unmet
The California Department of Financial Protection and Innovation (DFPI) attributed the seizure to years of management problems and failures to comply with supervisory orders. In its account of the intervention, the regulator said Nano Banc faced tighter capital conditions in March after reporting a $75.3 million net loss.
The bank was required to maintain a tangible equity ratio of at least 9.5%, or pursue voluntary liquidation, a sale or a merger. The DFPI said those conditions were not met and shareholders’ equity fell below the statutory 3% minimum. The closure follows an unresolved capital shortfall, rather than a single day of payment disruption.
The $114 million estimate is not a depositor loss
At June 30, 2026, Nano Banc reported $736 million in assets and $686 million in deposits. Those are not balances measured at closure. Alongside the deposits it is assuming, Sunwest is purchasing approximately $476 million of assets. The FDIC will retain the rest for sale later.
The FDIC initially estimates that the failure will cost its Deposit Insurance Fund about $114 million. It expects that figure to change as the remaining assets are sold. The estimate is therefore neither a final loss figure nor an amount removed from customers’ accounts.
A deposit transfer is not a shareholder bailout: Moving dollar bank balances to another lender does not mean Nano Banc shareholders will recover their investment. The arrangement preserves access to transferred deposits; it does not undo the bank’s capital losses.