Service 1st Bank parent explores options, including sale
Western Liberty Bancorp, the holding company for Las Vegas-based Service1st Bank, on Wednesday said it is considering a possible sale of the bank and other alternatives to maximize shareholder value.
The company said it retained investment bank Sandler O'Neill + Partners as a financial adviser on strategic alternatives.
"We have an abundance of capital at the holding company level and more than adequate liquidity and strong capital at the bank," Western Liberty Chairman Michael Frankel said in a statement.
Chief Executive Officer William Martin in a statement said the bank made progress in the quarter but observed that "problem assets remain a primary focus."
The bank's nonperforming assets, including foreclosed real estate and past-due loans, represented 7.8 percent of total assets at the end of the first quarter, down from 8.7 percent at the end of last year.
Service1st intends to set aside $4 million to $5 million more as a provision for loan losses because a few large loans deteriorated, Martin said.
The company said it has started a share repurchase program as well.
Shares in Western Liberty gained 9 cents, or 3 percent, to close at $3.02 Wednesday on the Nasdaq Global Market, but the company estimated tangible book value of more than $5 a share.
Western Liberty shares have traded in the range of $2.80 to $7.80 over the last 52 weeks; however, it acquired its only business, Service1st Bank, in October 2010.
The community bank, like its peer banks in Nevada, has struggled financially as the local economy stays mired in a recession.
The $176 million-asset bank earned $745,000 in the first quarter, up from $186,000 in profit for the first two months of 2011.
However, the holding company lost $409,000 in its first complete quarter, which ended March 31, down from a loss of $4.8 million in the fourth quarter of last year.
The bank reported a tier 1 capital ratio, a measure of net worth, of 32.5 percent at the end of March.
Contact reporter John G. Edwards at
jedwards@reviewjournal.com or 702-383-0420.
