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California regulators closed Irvine-based Nano Banc on Friday, citing deteriorating finances and a history of management and regulatory problems. Sunwest Bank agreed to assume about $605 million in deposits and purchase about $476 million in assets; the FDIC estimates the failure will cost its Deposit Insurance Fund about $114 million.
California regulators closed Nano Banc on Friday after the Irvine-based lender’s equity fell below a statutory minimum, and the FDIC appointed Sunwest Bank to take over most of its assets and deposits. The failure is the sixth U.S. bank collapse in 2026, a count that already exceeds any other year this decade, according to the source report.
The California Department of Financial Protection and Innovation (DFPI) closed Nano and named the FDIC as receiver. The agency cited the bank’s “deteriorating financial condition” and what it described as a multi-year pattern of executive mismanagement and regulatory violations. The DFPI said Nano’s shareholder equity had fallen below the 3% statutory minimum, prompting an “unsafe and unsound” designation.
Sunwest, based in Sandy, Utah, agreed to purchase about $476 million in Nano assets and assume approximately $605 million in deposits and $227 million in loans, the FDIC figures cited by Banking Dive show. Nano’s only branch is set to reopen Monday under the Sunwest name. The FDIC estimates the failure will cost the Deposit Insurance Fund roughly $114 million, but says the amount could change as assets retained by the receiver are sold.
The reported size of Nano differed by source and date: the bank reported $736 million in assets as of June, according to the FDIC, while the DFPI put the figure at roughly $690 million on Friday. The source report does not specify the year for the June figure. Sunwest said this is the sixth time the FDIC has selected it to acquire assets from a failed bank.
A Sixth Bank Failure This Year
Nano’s closure makes 2026 the decade’s highest year so far for U.S. bank failures. The source report says the six failures have occurred in Illinois, Georgia, Indiana, Kansas, Pennsylvania and California. That surpasses five failures in 2023; the report lists four in 2020, two each in 2024 and 2025, and none in 2021 or 2022.
The deal transfers Nano’s deposits and loans to an operating bank, while the FDIC manages the failed institution’s remaining assets and associated costs. For customers, the immediate reported change is that Nano’s single branch is expected to reopen as a Sunwest location on Monday. The source material does not detail any separate instructions for customers or the timing of further account-related communications.
The estimated $114 million hit to the Deposit Insurance Fund gives an early measure of the public insurance system’s expected cost. The FDIC has cautioned that the estimate may change as assets are sold, so it is not a final accounting of the failure.
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Regulatory Actions Before Closure
The DFPI said its concerns about Nano went back at least to 2020, citing risk-management weaknesses and alleged legal violations, including repeated unauthorized changes to the board and senior management and executive self-dealing. Those are the regulator’s findings as described in the source report. In February 2021, the DFPI and the Federal Reserve issued enforcement actions. The Fed’s order addressed the bank’s concentration of commercial real estate loans; the state’s order required advance notice before changes to the board or executive team.
The DFPI issued a cease-and-desist order in December 2021 after Nano placed executives on administrative leave, appointed a new CEO and chair, and replaced directors without the notice the earlier order required. The Federal Reserve later ordered changes to governance and compliance, including stronger oversight of lending to insiders and corporate expenses. The Fed terminated that enforcement action in April 2025.
In March before the closure, the DFPI ordered Nano to raise its tangible shareholders’ equity ratio to at least 9.5% or voluntarily liquidate, sell or merge. The regulator said Nano had reported a $75.3 million net loss before the order and failed to take any of the available actions. Separately, the source report says the Federal Reserve banned former interim CEO Anthony Gressak III and former board member James Chung from the banking industry in 2024 over fraudulently obtained pandemic-era loans. Those actions concerned individuals and should not be confused with the FDIC’s current receivership process.
““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.””
— Sunwest Bank CEO Carson Lappetito
Final Costs and Asset Sales
The FDIC’s $114 million cost estimate is preliminary; the agency expects it to change as retained assets are sold. The source report does not say how much the FDIC ultimately expects to recover, when those sales will be completed, or what the final cost to the Deposit Insurance Fund will be.
Published asset figures also vary: the FDIC’s cited figure is $736 million as of June, while the DFPI estimated about $690 million on Friday. The source does not explain the difference or specify the year for the June figure. It also does not provide detailed terms for the asset transfer or describe any unresolved customer issues.
Sunwest Branch Reopens Monday
Nano’s single branch is scheduled to reopen Monday as a Sunwest location, following the FDIC-backed transfer. Sunwest said it would welcome Nano customers, while the FDIC will continue as receiver for the failed bank and handle assets not included in the purchase.
The next financial milestone is the sale of retained assets, which will help determine the final cost of the failure to the Deposit Insurance Fund. The source report does not give a timetable for those sales or for a final cost calculation.
Key Questions
Why did Nano Banc fail?
The DFPI cited deteriorating finances, a multi-year pattern of management problems and regulatory violations. It said Nano’s shareholder equity fell below the statutory minimum of 3% and that the bank did not take the actions required by a March order.
Who is taking over Nano Banc’s deposits?
Sunwest Bank agreed to assume approximately $605 million in deposits, according to figures in the source report. Its acquisition agreement also covers about $476 million in assets and $227 million in loans.
When will Nano Banc’s branch reopen?
The bank’s single branch is scheduled to reopen Monday as a Sunwest location, according to the source report.
How much will Nano Banc’s failure cost?
The FDIC estimates a cost of roughly $114 million to the Deposit Insurance Fund. The agency expects the estimate to change as retained assets are sold, so the final cost is not yet known.
How many U.S. banks have failed in 2026?
Nano is the sixth U.S. bank to fail in 2026, according to the source report. That is more than the five failures reported for 2023, the previous high for the decade.
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