Sixth bank failure of 2026…
On 9/25/26, Nano Banc in Irvine, CA (FDIC 58590; total assets $736M; total deposits $686M) was closed by the California Department of Financial Protection and Innovation, which appointed the Federal Deposit Insurance Corporation (FDIC) as receiver. Sunwest Bank in Sandy, Utah (FDIC 20164; total assets $4.4B) to assume substantially all deposits and acquire approximately $476M of Nano Banc assets.
Per the CA DFPI press release, “The action comes after Nano Banc’s failure to comply with DFPI’s latest enforcement order related to its deteriorating financial condition, as well as a multi-year pattern of executive mismanagement and regulatory violations.”
- The FDIC preliminarily estimates that the failure will cost the Deposit Insurance Fund approximately $114M
- Sources – https://dfpi.ca.gov/press_release/california-seizes-nano-banc/ and https://www.fdic.gov/news/press-releases/2026/sunwest-bank-assumes-all-deposits-and-certain-assets-nano-banc-irvine.
Additional FedFis insights as of the 6/30/26 call report:
- Nano Banc had a FedFis Rating© of 4.37 as of June 2026 placing them in the lowest possible percentile of all US banks. The bank was plagued by Asset Quality issues, a lack of sufficient loan loss reserves, years of operating losses, and high concentrations in CRE and deposit funding.
- Loan portfolio is heavily concentrated in RE (76% of total loans) with Commercial representing 51% of total loans (Const & Land Dev, Multifam, and Nonfarm Nonres). Brokered deposits of $156M (23% of total deposits).
- While the bank still had tangible equity of $39M, Loan Loss Allowance / Total Nonperforming Loans Plus Restructured Loans was only 16.18% and an Adjusted Texas Ratio of 209.83%.
- Nonaccrual Loans of $123M (approximately 26% of the entire loan portfolio), a loan loss reserve of only $20M, and capital of $39M put the bank in a difficult position to absorb additional losses.
- The FDIC PR states that Sunwest is acquiring $476M of Nano Banc assets (out of $736M). Some additional points on this:
- Cash balance at Nano Banc was $201M as of Jun 2026 call report; and per the Sunwest PR, they are only assuming loans of $227M out of a $479M loan portfolio. (source – https://www.prnewswire.com/news-releases/fdic-appoints-sunwest-bank-as-nano-bancs-acquiring-institution-302890681.html).
The bank also had a history of regulatory issues and legal problems. Most recently:
- 2024 – Nano’s interim CEO and co-founder Anthony R. Gressak III was fined $75K and banned from banking after fraudulently obtaining $15.5M in pandemic relief funds – https://www.federalreserve.gov/newsevents/pressreleases/enforcement20241112a.htm
- 2025 – California Court Orders Nano Banc to Pay $40 Million in Trade Secret Dispute with Axos Bank. This was very detrimental to the bank capital position as the bank recorded $34M in Legal Fees and Expenses in 2025 (cut the banks capital position by over 50%).
- 2026 (Waiver and Consent executed March 6, 2026) – Consent order stipulating minimum capital requirement of 9.5% tangible shareholders’ equity ratio, or a definitive merger agreement, or a voluntary liquidation plan within 120 days. https://dfpi.ca.gov/wp-content/uploads/2024/09/Final-Order.pdf
- As of June 2026, the bank had a tangible shareholders’ equity ratio of only 5.2%.
For more information on FedFis Bank Ratings and market insights, contact the FedFis Sales Team at 512-960-0911 | info@fedfis.com.
Sean Mayo
Sr. VP, US Financial Institutions Group
smayo@fedfis.com
