Western Liberty moving forward with acquisition of Service 1st
Service1st Bank has joined the list of local community banks with regulatory consent orders, but Western Liberty Bancorp, the holding company trying to acquire it, appears poised to solve the problem with a $25 million injection of capital.
In filings Monday with the Securities and Exchange Commission, Western Liberty said it is proceeding with the acquisition of Service1st.
The boards of the bank and Western Liberty are expected to hold shareholder meetings later this month to vote on the merger. That could set the stage for closing the transaction.
Western Liberty, led by former gaming analyst Jason Ader, announced its agreement to acquire Service1st in July 2009. The New York company later dropped plans to buy 1st Commerce Bank of North Las Vegas but continued working to win regulatory approval necessary to take over Service1st.
When the merger is completed, William Martin will continue as chief executive officer and a board member. Other board members will include Ader, Terrence Wright, Blake Sartini and Curtis Anderson, who was named to replace Gerald Hartley.
Service1st reported $231.5 million in assets on June 30. It lost $2 million in the second quarter, up from a loss of $1.8 million in the first quarter. It's risk-based capital ratio was 16.9 percent, which is well capitalized.
Meanwhile, Service1st became the seventh community bank in Southern Nevada to be served with a consent order so far this year. Financial Institution Commissioner George Burns and a regional official of the Federal Deposit Insurance Corp. signed the consent order on Aug. 31.
The consent order requires it to maintain at least 12 percent in risk-based capital.
The bank was ordered to plan for reducing the total dollar amount of adversely classified loans.
In addition, the bank was given 60 days to adopt a plan for reducing loans to borrowers in the commercial real estate category.
It has the same time frame for reducing its reliance on deposits sold by stock brokers.
The order calls for a three-year budget, reduction of overhead and retaining profits. Dividends may not be paid without regulatory approval.
Contact reporter John G. Edwards at jedwards
w@reviewjournal.com or 702-383-0420.
