Bank of George hopes to raise up to $7 million in secondary stock offering
Bank of George executives don't know how long the economic downturn will continue to wreak havoc in Southern Nevada, but they are taking precautions to prepare for more hard times.
The privately owned community bank is making a secondary stock offering to its existing 187 shareholders and other accredited investors with high incomes.
The bank hopes to raise between $5 million and $7 million through the stock offering.
Chief Executive Diane Fearon said the bank is selling the stock as a defensive measure. Bank of George is already classified as well-capitalized with an estimated 11 percent in risk-based capital, but it would increase its capital level to more than 16 percent if it sells $6 million in new shares.
The depth of the Southern Nevada recession is unprecedented, she said. However, "we're getting the feeling that the decline is lessening or flattening out," Fearon said.
Unemployment in Las Vegas slid to 13.8 percent, one of the highest in the country, in March from 13.9 percent in the prior month. Clark County taxable sales dropped 8.3 percent in January from a year ago. Nevada led the nation in foreclosures with one in 33 houses here receiving a foreclosure-related notice during the first quarter, reported RealtyTrac, an Irvine, Calif.-based real estate information firm.
Bank of George mentioned several potential risks in its first stock offering prospectus in 2007, she said, but executives didn't expect those risks to be realized.
The bank intends to survive and participate in the rebound when prosperity returns.
"We just need to get from here to there," she said.
The directors and executive officers have committed to investing $1.1 million. New investors are being asked to buy a minimum of $10,000 worth of $2 shares. Existing shareholders are being asked to increase their position in Bank of George by 25 percent.
The stock offering closes May 28. Sandler O'Neill, an investment bank focused on the financial industry, advised the bank on the stock offering.
Contact reporter John G. Edwards at
jedwards@reviewjournal.com or 702-383-0420.
