September 7, 2008--"Despite the challenges the financial industry is currently facing, the banking system continues to be fundamentally safe and sound." That line was from George Burns. But not, as you might be guessing, that George Burns, not "Say goodnight, Gracie" George Burns.

This Burns is the commissioner of the Nevada Financial Institutions Division. He dropped the line after the FID shut down Silver State Bank last Friday. The Federal Deposit Insurance Corporation has been appointed receiver of the bank, the eleventh in the U.S. to fail this year. The FDIC said Silver State Bank's insured deposits will be assumed by Nevada State Bank of Las Vegas. Its branches will reopen Sept. 8 as offices of Nevada State Bank in Nevada, and National Bank of Arizona in Arizona. It had $2 billion in assets and $1.7 billion in deposits as of June 30. Silver State Bank had operated 13 branches in Nevada and four in Arizona, as well as loan offices in Nevada, Utah, Colorado, Washington, Oregon, California, and Florida.

Andrew K. McCain, a son of Republican presidential nominee John McCain, sat on the boards of Silver State Bank and of its parent, Silver State Bancorp, since February but resigned in July after five months, citing "personal reasons," corporate filings with the Securities and Exchange Commission show. Andrew McCain also was a member of the bank's audit committee, responsible for oversight of the company's accounting.

The younger McCain is the chief financial officer of Hensley & Co., the beer distributorship of which John's current wife, Cindy McCain, is chairwoman. Andy is the Arizona senator's adopted son from his first marriage.

The day after the failure of Silver State was announced, Andy's father said he favored the Tantamount To Treason bailout of Freddie Mac and Fannie Mae.

FDIC spokesman David Barr attributed Silver State's failure to a substantial amount of "poor-quality loans primarily related to real estate development" in southern Nevada and other distressed markets, according to the Associated Press. The FDIC said that bailing out Silver State will cost it between $450 million and $550 million of its remaining $45 billion. That does not take into account the $4 billion to $8 billion hit it will take for the closing of the earlier failed IndyMac Bank. With this fund, FDIC is trying to insure $4.5 trillion in bank deposits against a crash.