California Seizes Nano Banc, Ending Years-Long Struggles Culminating in Significant Financial Loss

Bank Was Subject of Multiple State and Federal Enforcement Orders

What You Need to Know: California closed Nano Banc given its deteriorating financial condition. This follows years of executive mismanagement and failure to comply with California’s orders.

SACRAMENTO – The California Department of Financial Protection and Innovation (DFPI) today seized Irvine-based Nano Banc and appointed the Federal Deposit Insurance Corporation (FDIC) as a receiver. 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. In seizing the bank, California is taking action to protect consumers and preserve confidence in the banking system.

Nano Banc, a state-chartered bank, commenced operations in 2018, when Nano Financial Holdings, Inc. completed the acquisition of Commerce Bank of Temecula Valley. Starting in 2020, DFPI discovered significant risk management weaknesses and violations of law, including repeated unauthorized changes to the board and C-suite and executive self-dealing resulting in financial deterioration.

DFPI has taken numerous enforcement actions relating to Nano Banc to protect Californians. DFPI took action against two former executives and prohibited their future involvement with the Bank. DPFI issued an order requiring Nano Banc to give advance notice before appointing, electing, or adding any new individuals to the Board and executive management. Shortly thereafter, DFPI issued a cease-and-desist order after Nano Banc violated DFPI’s initial order by putting executives on administrative leave, naming a new CEO and chairman, and replacing directors without the legally-required notice — moves that DFPI warned may “weaken the condition of the bank.”

In March 2026, after Nano Banc reported a net loss of roughly $75.3 million, DFPI issued an order requiring the bank to significantly increase and maintain its available capital, including maintaining at least 9.5 percent tangible shareholders’ equity. Alternatively, the bank could have voluntarily liquidated or sold to or merged with another institution — but Nano Banc failed to successfully take any of the available actions. Furthermore, its shareholders’ equity fell below a statutory minimum of 3 percent, meaning Nano Banc was operating with inadequate capital and in an unsafe and unsound manner, leading DFPI to seize the bank and place it into receivership.

Nano Banc holds total assets of roughly $690 million. The FDIC has accepted a bid from Sunwest Bank (Sandy, Utah) to assume all deposits, including all uninsured deposits, and a substantial portion of its assets.

In 2022, the Federal Reserve (Fed) took enforcement action related to concerns over governance, compliance, and insider trading risks at Nano Banc. In April 2025, the Fed terminated its enforcement action.

Today’s seizure underscores California’s commitment to ensuring gross mismanagement does not harm Californians and the state’s economy. Last month, DFPI made a formal submission opposing a federal proposal to weaken oversight over bank management.

DFPI’s top priority is to ensure that depositors and borrowers are protected. DFPI is also considering additional steps to address risks associated with uninsured deposits and to hold accountable executives that grossly mismanage state-chartered banks.

What consumers need to know:

• DFPI remains in close contact with all regulated entities, monitors market trends, and collaborates with federal regulators to protect consumers and preserve the stability of California’s banking system.
• When the FDIC is appointed as a receiver of a bank, it is customary for depositors to have full access to their FDIC-insured deposits. Deposits insured by the FDIC are protected up to the legal limit, generally $250,000 per depositor per insured bank for each ownership category.
• Nano Banc customers will automatically become customers of Sunwest Bank. They will have uninterrupted customer service assistance and access to their funds by ATM debit cards and checks.

Californians can learn more about FDIC insurance at dfpi.ca.gov/why-deposit-insurance-matters. For information about FDIC coverage limits and requirements, visit fdic.gov or call 1877-ASK-FDIC.

About DFPI

The Department of Financial Protection and Innovation protects consumers, regulates financial services, and fosters responsible innovation. DFPI protects consumers by establishing and enforcing financial regulations that promote transparency and accountability. We empower all Californians to access a fair and equitable financial marketplace through education and by helping to prevent potential risks, fraud, and abuse. Learn more at dfpi.ca.gov.

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