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California regulators closed Irvine-based Nano Banc on Friday, citing deteriorating finances, executive mismanagement and regulatory violations. The FDIC appointed as receiver arranged for Sunwest Bank to assume most of Nano’s deposits and reopen its single branch on Monday. The failure is the sixth U.S. bank collapse of 2026, according to the report.
California regulators closed Nano Banc on Friday after the Irvine-based bank’s shareholder equity fell below a statutory minimum, and the FDIC appointed as receiver arranged for Utah-based Sunwest Bank to assume most of its deposits and selected assets. Nano’s single branch is scheduled to reopen as a Sunwest location Monday, according to the report.
The California Department of Financial Protection and Innovation said Nano’s closure followed a deteriorating financial condition and what it described as a multi-year pattern of executive mismanagement and regulatory violations. In March, the regulator ordered the bank to raise its tangible shareholders’ equity ratio to at least 9.5% or voluntarily liquidate, sell or merge. The DFPI said Nano did not take any of those available actions and its shareholder equity fell below the 3% statutory minimum, prompting an “unsafe and unsound” designation.
The March order followed a reported net loss of $75.3 million, according to the DFPI. Sunwest agreed to buy about $476 million in Nano assets, the FDIC said. Sunwest said it would also assume approximately $605 million in deposits and $227 million in loans. Those figures describe different parts of the transaction; the report does not provide a breakdown of which individual accounts or assets will transfer.
The FDIC estimates Nano’s failure will cost the Deposit Insurance Fund about $114 million. The agency said that estimate may change as assets it retains are sold. Nano’s reported asset total also differs by source: the bank reported $736 million as of June, according to the FDIC, while the DFPI put the total at roughly $690 million on Friday. The report does not explain the difference between those estimates.
Sixth Bank Failure of 2026
Nano’s closure brings the reported number of U.S. bank failures in 2026 to six, making it the highest annual total so far this decade in the report’s comparison. The report says that exceeds the five failures recorded in 2023. It also identifies Nano as the year’s largest failed U.S. bank to date, though it does not provide a comparative asset table.
For customers, the immediate development is the planned transfer of most deposits to Sunwest and the branch’s scheduled reopening Monday under new ownership. For the FDIC’s Deposit Insurance Fund, the estimated $114 million cost is a preliminary figure, not a final loss. The agency’s estimate depends in part on the value recovered from assets it retains and sells. The available report does not specify how the resolution affects each customer’s accounts, loans or services.
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Regulatory Orders Before Closure
The DFPI said it identified significant risk management weaknesses and legal violations as early as 2020, including unauthorized board and executive changes and executive self-dealing. In February 2021, the Federal Reserve and the state regulator issued enforcement actions. The Fed’s action addressed concerns about Nano’s concentration of commercial real estate loans; the DFPI required advance notice before changes to the board or executive management.
The DFPI issued a cease-and-desist order in December 2021, saying the bank had placed executives on administrative leave, named a new CEO and chair, and replaced directors without the notice required by the earlier action. The Fed also ordered changes to compliance and governance, including stronger oversight of lending to insiders and reviews of insider transactions and corporate expenses. The Fed terminated its enforcement action in April 2025.
Separately, the report says the Fed banned former interim CEO Anthony Gressak III and former board member James Chung from the banking industry in 2024. The central bank said they had fraudulently obtained COVID-era loans through the Paycheck Protection Program and other initiatives. Those actions concerned the two individuals; they are distinct from the FDIC’s current resolution of Nano Banc.
““This opportunity reflects the financial strength, disciplined management, and stability that have defined Sunwest Bank for more than five decades,””
— Sunwest Bank CEO Carson Lappetito
Final Costs and Transfer Details
The $114 million loss estimate is preliminary, and the FDIC expects it to change as retained assets are sold. The report does not state when a final cost will be known or how much the FDIC expects to recover. The different asset totals attributed to Nano, the FDIC and the DFPI are also not reconciled in the available information.
The report says Sunwest will assume most of Nano’s deposits, but does not detail how the transfer will work for individual customers or identify any accounts or services outside the deal. It also gives no calendar date for the Friday closure or Monday reopening. Additional transaction terms and the regulator’s fuller explanation of the closure are not included.
Branch Reopens Under Sunwest
Nano’s single branch is scheduled to reopen Monday as a Sunwest Bank location. Sunwest is expected to take on the deposits and loans specified in the FDIC transaction, while the FDIC continues its role as receiver and handles the assets it retains. The report does not provide a timetable for completing asset sales or updating the estimated cost to the Deposit Insurance Fund.
Sunwest said this is the sixth time the FDIC has selected it to acquire assets from a failed bank. The next public milestones are the branch reopening and any subsequent FDIC updates on asset recoveries and the final cost of the failure.
Key Questions
Why did Nano Banc fail?
The DFPI cited deteriorating finances, executive mismanagement and regulatory violations. It said Nano’s shareholder equity fell below the statutory minimum of 3% after the bank failed to take actions required by a March order.
Who is taking over Nano Banc’s deposits?
Sunwest Bank agreed to assume about $605 million in deposits and $227 million in loans, according to the bank. The FDIC said Sunwest would purchase about $476 million in Nano assets.
When will Nano’s branch reopen?
The report says Nano’s single branch is scheduled to reopen Monday as a Sunwest location. It does not give calendar dates for the closure or reopening.
How much will Nano’s failure cost the FDIC?
The FDIC estimates a cost of about $114 million to the Deposit Insurance Fund. The agency expects the estimate to change as it sells assets it retains.
How many U.S. banks have failed in 2026?
The report counts six U.S. bank failures in 2026, including Nano Banc. It says that exceeds the five failures reported in 2023, the previous highest annual total this decade in its comparison.
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