The Federal Deposit Insurance Corp.'s inspector general gave the regulator poor marks for its oversight of Silver State Bank in Henderson, Nev., which failed in September.

Following a common theme as regulators face scrutiny of their pre-closure supervision, the inspector general said in a report released last week that the FDIC "could have exercised greater supervisory concern" about the $1.9 billion-asset Silver State.

Even though concerns about the bank's high-risk loan strategies were raised as early as 2005, the FDIC gave it a Camels rating of 2 as late as May 2007 and did not lower it until July 2008, the inspector general said in the "material loss review."

The agency's supervision unit could have done significantly more, including setting "a proper tone" in examination reports and ensuring "that proper controls and risk limitation and/or mitigation strategies were established and appropriately implemented," the report said.

In a written response, Sandra Thompson, the FDIC's supervision director, noted the recent steps her agency has taken to improve its oversight of high-risk lending.

She also listed several ways in which it responded specifically to Silver State's troubles, including telling the bank to improve monitoring of commercial real estate loans.

"At the 2006 examination," the bank "had a plan to reduce CRE exposures," she wrote.

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