Banks endure another punishing quarter

Losses at Southern Nevada banks are getting as tiresome as late night-television infomercials, but most local bankers just saw more of the same in the third quarter.

Of 14 locally based banks, only two --Town & Country Bank and Meadows Bank -- posted profits for the third quarter, numbers compiled by SNL Financial show.

On the other hand, all but four of the remaining banks recorded smaller losses in the third quarter than in the second quarter.

However, bankers had plenty of reasons to grumble about the third quarter that ended Sept. 30.

Nonperforming loans and repossessed assets as a percentage of total assets crept up at most banks during the third quarter.

First Security Bank is struggling with nonperforming loans and repossessed real estate equal to one-third of its assets. Nevada Commerce Bank's nonperforming loans and repossessed real estate represents one-quarter of its total assets.

By contrast, Meadows Bank's nonperforming assets edged up but remained less than 1 percent. Kirkwood Bank, the smallest bank in the list, reported zero nonperforming assets. Meadows and Kirkwood were the only two banks that increased their total loans. Meadows increased its total loans outstanding by 12 percent or $15 million to $139 million. Kirkwood boosted its total by $3 million or 22 percent to $17 million.

Regulators look at capital ratios, which measure the net worth of banks, to judge a bank's ability to absorb new losses.

Risk-based capital ratios, a measure of net worth (the higher the better), stood at worrisome single-digit levels for three banks -- 1st Commerce Bank, Bank of Las Vegas and Nevada Commerce Bank.

The Federal Deposit Insurance Corp. on Oct. 29 disclosed that it ordered Nevada Commerce to take "prompt corrective action" and pointed to continued financial deterioration. Bank regulators also reported a consent order that directed First Security Bank to resolve financial problems.

Nevertheless, analysts saw some reason for optimism for the recession-bloodied community bank sector.

Western Liberty Bancorp closed its acquisition of Service1st Bank, adding $25 million to the institution's capital. The holding company calculated that it had more than $100 million in capital altogether to back up the bank.

Jason Awad, a personal injury lawyer and business owner, announced that he agreed to acquire 1st Commerce Bank from Capitol Bancorp. for an undisclosed price, pending regulatory approval.

Nevada Commerce Bank reported that it had signed a letter of intent for an additional infusion of capital from an unidentified investor.

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