Nevada State Bank, a subsidiary of Salt Lake City-based Zions Bancorp ( ), has extended a helping hand to Federal Deposit Insurance Corporation (FDIC) by agreeing to act as a Payout agent for Community Bank of Nevada.

The bank was seized by Nevada Financial Institutions Division on Friday and the FDIC was appointed as beneficiary. The failure of the bank is expected to cost the FDIC an estimated $781.5 million.

The Community Bank of Nevada had total assets of $1.52 billion and total deposits of $1.38 billion at the end of June 2009. The FDIC was unable to immediately find a purchaser for the bank and instead created a new institution known as the Deposit Insurance National Bank of Las Vegas.

The Nevada State Bank will provide operational management of the new bank in providing banking services to the former Community Bank of Nevada customers. The FDIC has also arranged for the Nevada State Bank to assist in managing the deposit accounts.

Congress created the Federal Deposit Insurance Corporation in 1933 to restore public confidence in the nation's banking system. The FDIC insures deposits at the nation's 8,246 banks and savings associations and it promotes the safety and soundness of these institutions by identifying, monitoring and addressing risks to which they are exposed.

Also, the failed institutions declared last Friday were Community Bank of Arizona, Union Bank NA, of Phoenix and Gilbert, AZ and Colonial BancGroup (CNB) respectively.

These five failures put the number of U.S. institutions that have been seized by regulators since the beginning of 2008 at 102 as the credit and broader economic problems continue to plague the financial system.

Neither could Zions escape the effects of this financial fallout. Credit quality continues to deteriorate at the company. It has also been downgraded by S&P and Fitch recently. Ongoing weakness in the southwestern residential real estate markets, where the company has a significant exposure, continues to hurt the results.