Federal banking regulators have terminated a consent order issued in September 2010 for First Security Bank of Nevada. At the time, the Las Vegas bank was recovering from losses on real estate loans that collapsed when the recession took hold.
Under the Federal Deposit Insurance Corp.’s consent order, First Security was required to maintain adequate capital levels and formulate plans to reduce its commercial real estate lending.
Regulators did not say why the consent order was terminated, but First Security CEO John Sullivan said, “we are doing very well and our capital stability is in place.”
He said First Security is “making lots of loans and we look forward to a stellar 2014.”
The bank has also been profitable for almost three years. First Security reported second-quarter net income of $403,000, while it posted earnings of $435,000 for the first six months of the year.
The quarterly and six-month net income amounts are the highest in the bank’s history. They’re also a dramatic turnaround from the $3.2 million loss reported in the second quarter of 2010.
“The only small banks that have been consistently profitable for 2011, 2012 and through June are Meadows and First Security,” Sullivan said. “In my opinion, Meadows is a solid bank and very well-managed. First Security is coming into its own after its near-failure in 2011.”
First Security was founded in 2006, and like most small business banks in Southern Nevada, focused on real estate lending. By early 2011, First Security faced the possibility of being seized by the FDIC with more than $15 million in delinquent loans.
Sullivan was hired in May 2011. It took a while, but Sullivan’s bank was recapitalized in August 2011 when Las Vegas lawyer Jason Awad led a group that invested $14 million.
He said the list of Las Vegas banks that are not under a consent order is “very, very short.” That list includes Meadows, First Security and Kirkwood. Sullivan described a consent order as a typical regulatory agency approach to forcing a bank to make certain changes in how it operates.
Town &Country, Bank of Las Vegas, Valley Bank of Nevada, and Bank of George continue to operate under consent orders. Bank of Las Vegas is also subject to an FDIC-issued “prompt corrective action.”
JPMorgan Chase &Co., Bank of America Corp., Citigroup Inc. and Wells Fargo &Co. remain the four largest banks in the United States, a second-quarter ranking of the 50 largest banks and thrifts by Charlottesville, Va.-financial data company SNL Financial shows.
All of the top four banks have a major retail presence in Southern Nevada.
JP Morgan Chase, with 47 local branches, topped the list with $2.43 trillion in assets and $1.2 trillion in deposits. Bank of America, with 53 local branches, reported $2.12 trillion in assets and about $1.1 trillion in deposits, while Citigroup with 17 local branches stood at $1.88 trillion in assets and $938.4 billion in deposits.
Wells Fargo, with 82 local branches, took fourth with $1.44 trillion in assets and $1.02 trillion in deposits. The survey found U.S. Bancorp, which operates 73 outlets, was the sixth-largest bank at $353.42 billion in assets and $244.88 billion in deposits.
Next on the list was Zions Bancorp at No. 33. Salt Lake City-based Zions, with 32 local branches, $54.9 billion in deposits, and $45.02 billion in deposits, is the holding company for Nevada State Bank.
City National Corp., the parent company of City National Bank, was ranked 42nd on the list with $27.38 billion in total assets and $23.65 billion in total deposits. The company operates nine Nevada branches.
Western Alliance Bancorp, the parent of Bank of Nevada, didn’t make the top 50. The Phoenix-based bank holding company reported $8.5 billion in total assets and $87 billion in total deposits in the second quarter.
Bank of Nevada operates 12 branches in Southern Nevada.
Ranked 50th is a new bank to Southern Nevada. East West Bancorp, parent of East West Bank, is set to open an office early next year on Spring Mountain Road and Decatur Boulevard.
East West posted $23.31 billion in assets and $19.28 billion in deposits.
Meanwhile, SNL Financial noted the rate of branch deals this year have declined as would-be sellers consolidate and close locations rather than sell them to a competitor.
Bank of America leads SNL’s sellers list for branch deals, shedding 118 locations in six deals this year.
Washington Federal Inc., the parent of Washington Federal, topped the list of acquisitions. The Seattle-based bank, with four branches in Southern Nevada, acquired 51 branches this year.
None of the deals or financial institutions cited in the SNL report were in Nevada.
However, the number of branches statewide continues to decline, SNL and Federal Deposit Insurance Corp. data show.
The number of branches in Nevada has declined by nine, or 1.65 percent, to 544. So far in 2013, there have been 17 branch openings, but eight branches have been closed.
Silver State Schools Credit Union won a first-place state award in the Louise Herring for Philosophy in Action Award program. Also, the credit union received first-place honors in the state Desjardins Financial Education Awards.
Both awards were for its Piggy Bank Project, a program that judges described as an “excellent demonstration of the credit union mission,” and “ commitment to the community.”
The project is a collaboration between the credit union, Bracken Elementary School and several nonprofits to teach financial literacy in the classroom. It combines an on-campus bank, financial literacy lessons in the classroom, and student homework designed to include parents. In the project’s first year, students saved more than $18,000.
Silver State Schools Credit Union will now compete in the national credit union recognition programs.