On Friday, the Arizona Department of Financial Institutions closed Desert Hills Bank, headquartered in Phoenix, Arizona, and the FDIC was named receiver. As receiver, the FDIC entered into a purchase and assumption agreement with New York Community Bancorp, headquartered in Westbury, NY to assume all of the deposits of Desert Hills Bank.

As of December 31, 2009, Desert Hills Bank had approximately $496.6 million in total assets and $426.5 million in total deposits. New York Community Bank did not pay the FDIC a premium to assume all of the deposits of Desert Hills Bank, but did agree to purchase essentially all of the failed bank's assets. The FDIC and New York Community Bank entered into a loss-share transaction on $325.9 million of Desert Hills Bank's assets.

The FDIC estimates that the cost to the Deposit Insurance Fund will be $106.7 million. Desert Hills Bank is the 40th FDIC-insured institution to fail in the nation this year, and the first in Arizona since the failure of Valley Capital Bank in December 2009.