Regulators shut down Nano Banc of Irvine, California, on Friday, the sixth US bank failure of 2026. Sunwest Bank of Sandy, Utah, assumed the failed bank's deposits and part of its assets after the lender's capital fell far below required levels.
The California Department of Financial Protection and Innovation closed Nano Banc of Irvine on Friday and appointed the FDIC as receiver. The state agency had ordered the bank in March to raise tangible shareholders' equity to at least 9.5% or find an exit through sale, merger, or liquidation.
That bar went unmet. Instead, its financial condition deteriorated: by September 22nd, tangible equity had fallen to about $5.6 million, or 0.82% of assets, against a 3% statutory floor, according to the state order.
Sunwest Bank takes over deposits and assets
The FDIC entered into a purchase and assumption agreement with Sunwest Bank, which will assume substantially all deposits and acquire certain assets of the failed lender. As of June 30th, 2026, Nano Banc reported about $736 million in assets and roughly $686 million in deposits.
Sunwest agreed to purchase about $476 million of the failed bank's assets, with the FDIC retaining the rest for later sale. Nano Banc's sole branch will reopen as a Sunwest Bank branch on Monday, September 28, and depositors automatically become Sunwest Bank customers, with deposits remaining insured by the FDIC.
The FDIC says customers keep immediate access to their deposits, including by check, ATM, and debit card, and that loan customers should keep making payments as usual. An FDIC FAQ for the closure states that no one lost money on deposits.
Sixth failure of the year
Preliminary estimates show the failure will cost the Deposit Insurance Fund about $114 million, a figure that may change as the FDIC sells the retained assets. Holding company Nano Financial Holdings, Inc. was not included in the closing or receivership.
Nano Banc joins a string of 2026 failures that includes Metropolitan Capital Bank & Trust in Illinois, Community Bank and Trust – West Georgia, Kentland Federal Savings and Loan Association in Indiana, Small Business Bank in Kansas, and Tioga-Franklin Savings Bank in Pennsylvania. With Nano Banc, that makes six bank failures in 2026.
Source: FDIC
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