Capitalization troubles ease, but problem bank count high

It might surprise some financial industry observers to know the number of undercapitalized banks stands at its lowest level in four years. But the number of problem banks remains well above the levels witnessed through 2008 and most of 2009.

The Federal Deposit Insurance Corp. defines undercapitalized banks as those with a total risk-based capital ratio below 8 percent, a Tier 1 risk-based capital ratio below 4 percent or a Tier 1 leverage capital ratio below 4 percent.

Unless the bank is a CAMELS one-rated institution, it would be considered undercapitalized if its leverage ratio is less than 3 percent. (CAMELS stands for capital adequacy, asset quality, management quality, earnings, liquidity and sensitivity to market risk.)

A survey by SNL Financial, a Charlottesville, Va.-based data services company, found that 41 banks and thrifts were undercapitalized — Tier 1 ratios below 4 percent — as of Dec. 31, compared with 42 institutions at the end of the second quarter and 67 institutions a year ago.

With the decline through the end of 2012, the number of undercapitalized institutions has fallen to the lowest level since the fourth quarter of 2009, when 30 banks were considered undercapitalized.

The decrease in the industry’s undercapitalized banks count has outpaced the decrease in the number of banks on the FDIC’s “problem list” in the past quarters, SNL Financial said.

The problem bank list fell to 651 institutions at the end of the fourth quarter compared with 694 in the third quarter and 813 a year ago, a 6.2 percent quarterly drop and a 19.9 percent decline from a year ago.

Most problem and undercapitalized financial institutions continue to be in areas that suffered from the recession. Nevada lost six banks between 2008 and 2011, far fewer than the 85 that were seized in Georgia or 66 that were seized in Florida.

SNL Financial noted that Capital Bancorp Ltd. has remained on the verge of failing.

The Lansing, Mich.-based company has struggled and has eight of its subsidiaries, including Bank of Las Vegas and 1st Commerce Bank in North Las Vegas, on the list of undercapitalized banks.

Excluding those banks, the number of banks considered undercapitalized was 30.

Capital Bancorp subsidiaries are trying to recapitalize through a bankruptcy plan announced in August. The plan includes a provision to exchange outstanding trust preferred securities for $50 million of common stock. The plan also calls for Capital Bancorp to raise at least $70 million in additional funding.

To raise equity, Capital Bancorp is selling its troubled Sunrise Bank of Albuquerque in New Mexico for an undisclosed amount.

A company spokeswoman said the Sunrise Bank of Albuquerque sale is still pending. She said there were “no pending sales” for the company’s affiliates — Bank of Las Vegas and 1st Commerce Bank — in Southern Nevada.

NEWS AND NOTES

Zions Bancorp., parent company of Las Vegas-based Nevada State Bank, held steady in a ranking of the largest U.S. banks in the fourth quarter.

SNL Financial ranked Zions as the 33rd-largest U.S. bank. Its assets grew 4.6 percent in the quarter to $55.5 billion.

Meanwhile, the Salt Lake City-based bank holding company will have to resubmit its capital plan to the Federal Reserve after making some amendments. The Fed has approved Zion’s term-debt financing and its moves for reducing costs.

These moves include redeeming Series B trust preferred securities, $600 million worth of Series C perpetual preferred stock and $250 million worth of subordinated debt and senior debt.

Zions will also issue $600 million of additional perpetual preferred stock that includes $171 million of Series G preferred shares issued in February.

Last year, the Fed approved Zions’ capital plan, which centered mostly on the company’s effort to repay Troubled Asset Relief Program dues.

• • •

City National Bank has won seven excellence awards for business banking and treasury management from Greenwich Associates, a financial services research and consulting company.

City National, with eight Southern Nevada branches, received awards in three categories: overall satisfaction, financial stability and likelihood to recommend.

“City National Bank has specialized in serving small and midsized companies for nearly 60 years,” City National President Chris Warmuth said, “and we’re gratified to be recognized by Greenwich Associates as one of the nation’s top banks.”

For these annual awards, Greenwich Associates evaluated more than 75 banks; fewer than 5 percent of those eligible received an award.

• • •

The Consumer Financial Protection Bureau recently announced the agency’s four regional directors for its Office of Supervision Examination. Edwin Chow will serve as regional director of the West region, which includes Nevada along with 16 other states.

Chow, one of the bureau’s founding members, spent 26 years with the U.S. Treasury and Federal Home Loan Bank, serving as regional director and deputy director.

Business
Dig This opens new location In Las Vegas
Remember when you were a kid and played with construction toys in the sand box? Dig This Las Vegas has the same idea, except instead of toy bulldozers, you get to play with the real thing. (Mat Luschek/Review-Journal)
Town Square developer Jim Stuart building again in Las Vegas
Las Vegas’ real estate bubble took developers on a wild ride, something Jim Stuart knows all too well. (Las Vegas Review-Journal)
Salon opens at Veterans Village
T.H.E. Salon, owned by Nicole Christie, celebrated their opening at the Veterans Village with a ribbon cutting ceremony.
Southwest Airlines considering Las Vegas-Hawaii flights
Southwest Airlines CEO Gary Kelly says the airline is "very focused" on Hawaii. Hawaiians have a strong presence in Las Vegas.The city’s unofficial status is “Hawaii’s ninth island.” In 2018, at least 2,958 people from Hawaii moved to Nevada. Of those, 88.7 percent moved into Clark County, according to driver license surrender data. According to the Las Vegas Convention and Visitors Authority, 310,249 people came to Las Vegas from Hawaii in 2018.
Fewer Nevadans are celebrating Valentine's Day
Fewer Nevadans are celebrating Valentine's Day. About 1.2 million Nevadans are expected to celebrate this year, a 5 percent drop from 2018. A growing number of people consider Valentine’s Day over-commercialized. Others weren’t interested in the holiday or had nobody to celebrate with. But spending is expected to rise. Those who do celebrate are buying for more people. The average American is expected to spend about $162 this year for Valentine’s Day, a 57 percent jump from a decade prior. Katherine Cullen, director of industry and consumer insights at NRF
Foreclosures of mansions in Las Vegas
Las Vegas was ground zero for America's foreclosure crisis after the housing bubble burst. (Eli Segall/Las Vegas Review-Journal)
Rick Helfenbein talks about the impact of tariffs on the clothing industry
MAGIC fashion convention showcases men's clothing trends
The MAGIC fashion convention has come to Las Vegas at the Mandalay Bay Convention Center to showcase some of the hottest clothing trends for men. (Nathan Asselin/Las Vegas Review-Journal)
Allegiant Air flight attendants learn how to handle a water landing
Field instructor Ashleigh Markel talks about training prospective flight attendants for Allegiant Air getting live training with a raft for a water landing at the Heritage Park Aquatic Complex in Henderson on Monday. (John Hornberg/Las Vegas Review-Journal)
Smith & Wollensky CEO Michael Feighery speaks
Smith & Wollensky CEO Michael Feighery speaks about the new Smith & Wollensky restaurant coming to the Grand Canal Shoppes at The Venetian in Las Vegas.
Smith & Wollensky CEO Michael Feighery speaks
Smith & Wollensky CEO Michael Feighery speaks about the new Smith & Wollensky restaurant coming to the Grand Canal Shoppes at The Venetian in Las Vegas.
Smith & Wollensky CEO Michael Feighery talks about Las Vegas return
Michael Feighery, CEO of Smith & Wollensky Restaurant Group, discusses the restaurant's upcoming return to the Las Vegas Strip.
Apartments to Come to Hughes Center
Developer Eric Cohen discusses his current building project at the Hughes Center office park in Las Vegas, Thursday, Jan. 31, 2019. Caroline Brehman/Las Vegas Review-Journal
Stratosphere to rebrand to The STRAT
The Stratosphere, a 1,150-foot-tall property in Las Vegas will be renamed The STRAT Hotel, Casino and Skypod.
Local designers’ picks for the Las Vegas Market
The trends that local interior designers are noticing at the Las Vegas Market this year. (Rachel Aston/Las Vegas Review-Journal)
Trends in bath products at Las Vegas Market
Camille Herd, the showroom manager for European Bath Kitchen Tile & Stone, talks about the popularity of free-standing bath tubs. (Rachel Aston/Las Vegas Review-Journal) @rookie__rae
Kitchen trends at Las Vegas Winter Market
Las Vegas Winter Market displayed kitchen trends that mirror common dining accessories at Strip eateries. (Rachel Aston/Las Vegas Review-Journal) @rookie__rae
Emerging trends in gifts at Las Vegas Market
Julie Smith Vincenti, curator for the First Look showroom tour on gifts and lifestyle, talks about the emerging trends in those categories for this season. (Rachel Aston/Las Vegas Review-Journal) @rookie__rae
Las Vegas house prices are rising
Southern Nevada home prices were up 12 percent year-over-year in November.
Caesars Republic Scottsdale
Caesars Entertainment Corp. is building its first non-gaming hotel in the United States in Scottsdale, Arizona. (Caesars Entertainment Corp.)
Interior designer Mikel Welch talks about trends for Las Vegas Market
Interior designer Mikel Welch, who also is the on-camera designer for TLC’s Trading Spaces, discusses the trends he sees for the 2019 Las Vegas Winter Market. (Rachel Aston/Las Vegas Review-Journal) @rookie__rae
SHOT Show 2019: MEGGITT Virtual Training
MEGGIT showcases its virtual training system at SHOT Show 2019 in Las Vegas.
MGM delivers 700 meals to TSA workers at McCarran
Chefs at Garde Manger at Mandalay Bay provided 700 meals to federal employees who are affected by the government shutdown. (K.M. Cannon/Las Vegas Review-Journal) @KMCannonPhoto
SHOT Show 2019: A "nonsemi-automatic” weapon
Brandon Dunham of Nevada-based Franklin Armory show off the company’s new rifle prototype it calls a “nonsemi-automatic” weapon. The gun does not use a gas system to fire.
Las Vegas-based concrete repair company knows how to beat the heat
ART Concrete Solutions, a Las Vegas concrete-repair firm, addresses the challenges of construction in the extreme heat and sun of Las Vegas. (K.M. Cannon/Las Vegas Review-Journal) @KMCannonPhoto
Las Vegas based company brings color to concrete in the desert heat
Semco Modern Seamless Surface, a Las Vegas surface engineering company, knows how to put color in concrete construction in the Vegas heat. (K.M. Cannon/Las Vegas Review-Journal) @KMCannonPhoto
Fun photo booth at World of Concrete
World of Concrete show at the Las Vegas Convention Center sponsored by DeWalt gives conventioneers a chance for photos with giant tools. (K.M. Cannon/Las Vegas Review-Journal) @KMCannonPhoto
SHOT Show 2019: Laserstar Technologies
Laerstar Technologies showed off their laser engraving machines, that can be used to personalize anything from guns and knives, to medical tools and household items. (Mick Akers/Las Vegas Review-Journal)
World of Concrete Show has big equipment on display
World of Concrete Show has big equipment on display at the Las Vegas Convention Center including an impact crusher, concrete pump and a self-erecting portable concrete batch plant. (K.M. Cannon/Las Vegas Review-Journal) @KMCannonPhoto
Shot Show 2019: Kalashnikov USA shows off new products
Jonathan Mossberg of Kalashnikov USA talks about new products on display at Shot Show 2019 in Las Vegas.
ad-high_impact_4
TOP NEWS
News Headlines
Home Front Page Footer Listing