Las Vegas Sun

March 28, 2024

Regulators shut down local bank operators, credit union

Community Bank

Ulf Buchholz

Community Bank of Nevada was seized Aug. 14 by the state’s Financial Institutions Division. The bank’s 11 Las Vegas-area branches are being run by Nevada State Bank.

Three financial institutions with operations in Las Vegas have been shut down by state and federal regulators.

The latest was Las Vegas-based Community Bank of Nevada, seized Aug. 14 by the state’s Financial Institutions Division and handed over to the Federal Deposit Insurance Corp.

The FDIC did not choose a buyer for the bank, and it’s expected its assets will be sold in pieces.

Community Bank had been struggling for about a year, since Henderson-based Silver State Bank failed in September. Both banks loaned heavily in construction and commercial real estate, markets that dropped significantly during the recession.

Because there is no buyer, the bank is owned by the FDIC, which created the Deposit Insurance National Bank of Las Vegas. Nevada State Bank, already the buyer of two other failed banks in Nevada, was named manager of the FDIC bank.

As manager, Nevada State will run the Community Bank branches until Sept. 14 as customers withdraw insured accounts and safety deposit boxes.

Community Bancorp, the parent of its Nevada subsidiary and Community Bank of Arizona, was established in 1995. Since then Community Bank of Nevada grew to be the eighth largest bank in Las Vegas, according to In Business Las Vegas’ 2009 Book of Business Lists.

Community Bancorp’s CEO was Edward Jamison; Community Bank of Nevada CEO was Larry Scott.

The bank’s troubled asset ratio was 233.3 percent as March, the highest of Las Vegas-area banks, according to BankTracker, a project of the Investigative Reporting Workshop at American University. The bank with the second highest troubled asset ratio is SouthwestUSA Bank, with 128.1 percent, BankTracker said.

BankTracker uses several key variables, including capital, total assets and deposits, loan-loss reserves and loans that are either 90-plus days overdue or are no longer being collected on to compute the ratio.

Many Community Bank’s loans were at least 90 days overdue, accounting for $261 million in potential losses. It also had $112.9 million in foreclosed property as of March 31.

The bank had 233 employees as of March 31, according to the FDIC. The bank had 11 branches in the Las Vegas area and one in Pahrump, and the Arizona operation had four branches, according to the bank’s Web sites.

As of March 31 Community Bank had $1.57 billion in assets, $1.45 billion in deposits, $1.2 billion in loans and $21.96 million in loan-loss allowance. The bank, however, recently announced that it had increased its loan-loss allowance for its first quarter and 2008 annual financial report by $60 million.

At the time, the bank’s chief financial officer, Patrick Hartman, said the bank was preparing to file its first quarter and annual report, both past deadlines.

The bank was also determined to be “no longer adequately capitalized” as defined by federal regulations, a news release at that time said.

• • •

On the same day Nevada bank regulators shut down Community Bank, Alabama bank regulators shut down Colonial Bank, selling all its insured and uninsured deposit accounts to North Carolina-based Branch Banking and Trust Co., known more widely as BB&T.

Colonial had 15 branches in the Las Vegas area.

BB&T has yet to decide whether it will sell the 22 branches in Nevada, as well as the 22 branches it acquired from Colonial’s Texas operation, a news release said.

The bank acquired $22 billion in assets and assumed $20 billion in deposits in the transaction, entering into a loss-sharing agreement with the FDIC for the acquired loans and securities.

• • •

Earlier in the week federal regulators seized Las Vegas-based Community One Federal Credit Union with Utah-based America First Credit Union buying its assets, most liabilities and operations.

Community One, which opened in 1960, had $159 million in assets $162 million in deposits and $143 million in loans, according to its March 31 financial statement.

The credit union’s membership was open to Clark County residents and had 21,500 members.

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