Weekly Real Estate News
Summary
California regulators closed Irvine-based Nano Banc on Sept. 25 and appointed the FDIC as receiver after years of supervisory problems and financial losses. Sunwest Bank will assume substantially all deposits and purchase about $476 million of assets. The FDIC estimates the failure will cost its Deposit Insurance Fund approximately $114 million.
California regulators closed Irvine-based Nano Banc on Friday after years of supervisory problems and mounting financial losses, handing the institution to the Federal Deposit Insurance Corporation in a failure the FDIC estimates will cost its Deposit Insurance Fund about $114 million.
The California Department of Financial Protection and Innovation seized the bank on Sept. 25 and appointed the FDIC as receiver. The FDIC then entered into a purchase-and-assumption agreement with Sandy, Utah-based Sunwest Bank, which will assume substantially all of Nano Banc’s deposits and purchase approximately $476 million of its assets.
Nano Banc had approximately $736 million in total assets and $686 million in total deposits as of June 30, according to the FDIC’s receivership information. The FDIC will retain the remaining assets for later disposition.
Sunwest said the deposits it is assuming total approximately $605 million and the loans it is acquiring total about $227 million. Those figures describe the assets and liabilities Sunwest is taking over and should not be confused with Nano Banc’s total assets and deposits immediately before failure.
California says problems stretched back years
The closure was not a sudden regulatory response to a single event. In its announcement of the seizure, California’s DFPI said Nano Banc had struggled for years with management, governance and financial problems that ultimately produced significant losses.
The state had already imposed a formal supervisory order on Nano Banc in May 2022. That regulatory order required the bank to address capital, liquidity, management and other deficiencies. Among its provisions, Nano Banc was required to maintain specified capital levels, improve monitoring of liquidity and deposit concentrations, develop contingency funding plans and strengthen board oversight.
DFPI said Friday that despite years of regulatory oversight, the bank’s condition continued to deteriorate. The department concluded Nano Banc could no longer conduct its business safely and soundly and that closing the institution was necessary to protect depositors, creditors and the public.
The bank’s financial deterioration was visible before the seizure. California regulatory data showed Nano Banc with $908.5 million in assets and a year-to-date net loss of approximately $49.5 million as of Sept. 30, 2025.
Sunwest takes over deposits and part of the loan book
Nano Banc customers retain access to their deposits. Checks will continue to be processed, ATM and debit-card access remains available, and borrowers should continue making payments under their existing loan terms, according to the FDIC.
The former Nano Banc office is scheduled to reopen Monday, Sept. 28, as a branch of Sunwest Bank.
Sunwest is a privately held commercial bank headquartered in Sandy, Utah. In its announcement of the acquisition, the bank said the Nano Banc transaction is its sixth FDIC-assisted acquisition.
“We are honored to once again to be selected by the FDIC as the acquiring institution of an FDIC-assisted acquisition,” Sunwest President and CEO Carson Lappetito said.
Why the failure matters to real estate finance
Nano Banc operated as a commercial bank with meaningful exposure to real estate lending, making its failure relevant beyond its depositors. The closure comes as regulators continue to watch commercial real estate credit closely, particularly at banks with concentrated portfolios.
The FDIC’s 2026 Risk Review said commercial real estate conditions showed signs of stabilization during 2025 but remained challenged by elevated borrowing costs, vacancies and refinancing pressure. The agency also emphasized that CRE concentration and delinquency levels vary substantially among banks.
Nano Banc’s failure should not, by itself, be treated as evidence of a broad banking or commercial real estate crisis. The FDIC reported 47 institutions on its problem-bank list at the end of the second quarter, representing 1.1% of insured institutions, a level the agency has described as within the normal range for non-crisis periods.
What is clear in Nano Banc’s case is that the bank’s problems were longstanding. California regulators had been attempting to correct deficiencies for years before concluding the institution could no longer operate safely. The FDIC’s preliminary $114 million loss estimate puts a substantial price on the eventual resolution.
