Community Bancorp sees loan losses take toll on earnings

By Steve Green

Monday, May 4, 2009 | 8:29 a.m.

Loan losses continued to pile up for Las Vegas-based Community Bancorp in the second half of 2008 and the first quarter of 2009, the company reported today.

The company has not yet filed its quarterly earnings report with the Securities and Exchange Commission. But the firm's Community Bank of Nevada filed a report with the Federal Deposit Insurance Corp. showing a first quarter 2009 loss of $24.76 million, largely because of $21.9 million for loan and lease losses. Its sister bank, Community Bank of Arizona, posted a loss of $2 million with some $970,000 in loan losses for the fourth quarter.

The losses for the fourth quarter of 2008 were far worse. Amended reports show the Nevada bank lost $151.9 million after taking a goodwill impairment charge of $103.7 million and wrote off $81.5 million for loan and lease losses. The Arizona bank lost $13.4 million, with goodwill impairment of $9.89 million and $3 million in loan and lease losses.

With the recession hurting its borrowers and real estate values declining, Community Bancorp for months has been working to finalize a study on how much the economic downturn has impaired the value of its loans and other assets.

Today, Community Bank of Nevada said that at the request of a regulator, it increased its allowance for loan losses as of Sept. 30, 2008 by $54.1 million -- including $40 million reported in its fourth quarter filing. Community Bank of Nevada also amended its fourth quarter report to reflect a $17.4 million increase in its provision for loan losses. Community Bank of Arizona amended its fourth quarter report to reflect a $10 million write-down of goodwill.

"We are in the process of completing our 2008 financial statements and will file our (SEC) Form 10-K for 2008 which will reflect the information in the aforementioned (FDIC) Call Reports and our Form 10-Q for the first quarter of 2009 with the SEC as soon as possible. Management expects to discuss these financial statements in a press release within the next few weeks," said Patrick Hartman, Community Bancorp's executive vice president and chief financial officer.