Bank of Nevada reopens seized lender’s branches

Security Savings, the Henderson-based bank in which Texas oilman T. Boone Pickens once had an investment stake is gone, and $3 billion-asset Bank of Nevada took over its operations Monday.

The Nevada Financial Institutions Division on Friday seized the $238 million-asset, two-location bank and appointed the Federal Deposit Insurance Corp. as receiver. The FDIC took over the bank's loan portfolio.

Bank of Nevada, a $3 billion-asset subsidiary of Western Alliance Bancorporation, acquired the failed bank's deposits without paying a premium.

The FDIC is backing the deposits, even those that exceeded the $250,000 maximum insured by the FDIC for customers. But one mystery remains.

The owners of Security Savings at the time of the takeover have not been disclosed. FDIC spokesman David Barr said the federal agency does not generally provide the news media with the names of bank owners or directors.

Most banks list officers and directors on their Web sites. But Security Savings' Web site identified neither on its Web site last week before it closed.

Attempts to reach a spokesman for Pickens failed, but sources said Pickens has since sold or relinquished his stake in the bank.

Former Beal Bank Chief Financial Officer Kelly Jones was among the buyers of Security Savings in 2004, but it's unclear whether he retained his ownership interest.

Jones served as chief executive officer until fall of 2008. Jesse Torres was acting CEO at the time of the bank's closing.

All directors were out-of-state residents.

The bank made acquisition and development loans, residential loans and commercial real estate loans. The bank also invested in mortgage-backed securities and other Wall Street securities.

Philip LaChapelle, the former Security Savings chief executive who founded the bank in 2000, said the previous owner sold the bank at a premium in 2004.

"The bank was in a phenomenal shape when we sold it," he said.

LaChapelle later established Fifth Street Bank. The owners of Fifth Street decided to voluntarily close the bank in April and paid depositors all that was owed to them without federal assistance, he said.

Nevada Financial Institutions Division Commissioner George Burns revoked Security Savings' charter Friday, reporting the bank was "operating in an unsafe and unsound condition" and was either insolvent or in danger of becoming insolvent.

"We want Nevadans to know that their deposits are safe," Burns said in a statement. "We regret having to take these types of actions, but we are committed to making sure that Nevada's banking system continues to be fundamentally safe and sound."

The FDIC covered uninsured deposits at First National Bank of Nevada, which failed in July but did not protect uninsured depositors at Silver State Bank, which was seized in September.

The federal agency estimated that the failure of Security Savings will cost the deposit insurance fund $59.1 million, but it said Bank of Nevada's acquisition of all the deposits of Securities Savings was the least costly resolution.

"Anytime you can resolve a situation without any loss to the depositors, it's obviously a plus to the public and the industry as well," Western Alliance Chief Financial Officer Dale Gibbons said.

Security Savings had 3,500 customers with $132 million in deposits, not counting so-called brokered deposits that were sold through stockbrokers. Bankers consider these clients less valuable than local customers, because most holders of brokered deposits are chasing high interest rates and will move their money to another bank if they can earn more on deposits.

Bank of Nevada is cashing out the brokered depositors but hopes to keep many of the former local clients of the bank, Gibbons said.

"We do offer them convenience and a stronger financial institution," he said.

Bank of Nevada has 15 banking offices in Clark County.

Western Alliance Executive Vice President Linda Mahan said customers generally are happy with the new bank and are keeping their deposits with the branches.

"Everything has been running very smoothly," Mahan said.

Security Savings has 19 employees.

"We think a lot of these (employees) have close relationships with their clients," Gibbons said.

Contact reporter John G. Edwards at jedwards@reviewjournal.com or 702-383-0420.