Bank of Nevada absorbs Security Savings Bank

By Nicole Lucht

Friday, March 6, 2009 | 2 a.m.

Last fall the chief executive of Bank of Nevada’s parent company said he would welcome an opportunity to acquire other banks during the financial shake-up.

And, on Feb. 27, Robert Sarver of Western Alliance Bancorp did just that.

Bank of Nevada was named the acquiring bank of Security Savings Bank’s insured and uninsured deposits and won’t be paying an acquisition fee.

Las Vegas-based Security Savings Bank was seized Feb. 27 by the state’s Financial Institutions Division. The state appointed the Federal Deposit Insurance Corp. as receiver.

The acquisition will increase Bank of Nevada’s deposits to about $2 billion, said Dale Gibbons, chief financial officer.

Bank of Nevada assumed the liabilities of the deposits, taking some assets, some cash equivalents and marketable securities at market value.

“All the depositors, even the uninsured are covered here, which we think is a positive for the industry,” Gibbons said. “To the degree that resolutions can take place simply and without any loss to depositors, I think that’s a plus for Nevada banking and the public. We wanted to be part of a situation like that.”

Bank of Nevada is not acquiring any loans.

Security Savings two locations were leased, so Bank of Nevada will evaluate whether to keep those leases. The bank will have 90 days to make a decision, Gibbons said.

Bank of Nevada executives are expected to meet with Security Savings employees soon, but it hasn’t been determined which employees will be kept, he said.

“We want some continuity with the customers,” Gibbons said. “We certainly appreciate that some of the staff has been able to cultivate these customers and that type of relationship in banking is certainly important to us.”

The Financial Institutions Division is the regulator for all Nevada state-chartered depository institutions including banks, credit unions, thrifts and trust companies.

“Because of Security Savings Bank’s condition, it was necessary to take possession of the bank and appoint the FDIC as receiver,” George Burns, financial institution commissioner, said in a statement. “We regret having to take these types of actions, but we are committed to making sure Nevada’s banking system continues to be fundamentally safe and sound.”

Established in April 2000, Security Savings Bank specialized in commercial lending. It had two branches, one in Las Vegas and one in Henderson. It had 16 employees as of Dec. 31. In the prior year, it had 25.

Security Savings had total assets of $238.3 million as of Dec. 31, according to recently released data by the FDIC. In December 2007 it reported assets of $273.3 million.

Of those assets, its total loans, minus its loan loss allowance, was $119.1 million. Nearly half of its total loans ($58.9 million) were in commercial real estate. It reported $32.4 million in construction and land development loans, $24.4 million in family residential loans and $7.1 million in commercial and industrial loans.

In December 2007 the bank reported $180.2 million in loans.

The bank also reported that 19.2 percent of all its loans are 90 days or more overdue. Of those, 63.3 percent were construction and development loans. In the prior year, loans past due 90 days or more represented 7.5 percent of the bank’s loan portfolio.

The bank’s provision for loan losses — how much it took out of income to cover loan losses — was $10.8 million compared with $5.3 million the previous year.

The bank also reported $163,000 in foreclosed real estate in 2008, and none in 2007.

The bank’s liabilities in December were $283.3 million compared with $273.3 million in December 2007. Of those liabilities, its primary deposits were $174.9 million in 2008, slightly down from the previous year’s $179.5 million.

Its capital, which is how banks leverage loans, was $27.2 million.

Stephen Devernis was listed as president of Security Savings Bank until an amendment with the Nevada secretary of state in October changed it to Jesse Torres. Devernis was also previously listed as chief credit officer of the bank on Security Saving's Web site.

Torres was listed as president and chief operating officer since September, according to several online references, including his LinkedIn resume profile. Mark DeBacker was listed as chief financial officer of the bank until December, according to his LinkedIn resume profile.