CEO says Nevada Commerce Bank has found investor

Nevada Commerce Bank has found a "credible investor" willing to inject more capital into the bank and has appealed a regulatory order by the Federal Deposit Insurance Corp., CEO Kathy Phillips said Tuesday.

The community bank has signed a letter of intent with an investor, but Phillips said she couldn't disclose the investor's name or the amount of the investment.

Phillips made the announcement following the disclosure Friday of regulatory action against the bank by the Federal Deposit Insurance Corp. The FDIC issued a directive on Sept. 14 requiring Nevada Commerce to take "prompt corrective action."

The order said Nevada Commerce was undercapitalized. The report said the bank's condition "continues to deteriorate."

However, Phillips on Tuesday said Nevada Commerce appealed the order, and she disclosed that the bank expects additional capital from the unidentified investor.

The $166.7 million-asset bank lost $600,000 in the third quarter, down from a $2 million loss in the second quarter, according to numbers compiled by SNL Financial. Risk-based capital was 6.6 percent on Sept. 30.

Nonperforming assets, which include delinquent loans and repossessed real estate, climbed during the third quarter to 25 percent of total assets from 21 percent at the end of the second quarter, according to SNL.

Also Friday, the FDIC disclosed that it issued a consent order against First Security Bank on Sept. 1.

The order requires First Security to satisfy requirements for minimum capital levels and adopt a plan for collecting, charging off or improving substandard loans. It also directed First Security to review its allowance for loan losses.

First Security CEO Dave Moody said the bank seeks to raise between $5 million and $15 million in additional capital through a private placement.

"We're just working through our issues," Moody said.

The $105.4 million-asset bank lost $1.2 million in the third quarter, up from a $24,000 loss in the second quarter, according to SNL. Nonperforming assets represented 33 percent of total assets, up from 32 percent at the end of the previous quarter. The reported risk-based assets represented 17.7 percent of assets.

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