Exec: Traditional banks unfairly labeled as stingy lenders

By Nicole Lucht

Friday, May 8, 2009 | 2 a.m.

Traditional banks are often criticized for pulling back on lending, but the head of City National Bank in Nevada said that criticism is unfair.

During an economic forum and market update attended by a couple of hundred Las Vegas businesspeople April 29 at the Rio, John Guedry, manager of City National Bank’s Nevada region, said that before the credit market froze last year, unconventional lenders were making 70 percent of loans.

“That large of a pool of the market, you’re going to feel the impact,” he said about the credit freeze. “The traditional banks had to step up and fill the void.”

City National has increased its lending 5 percent, Guedry said. The bank is a recipient of the Treasury’s Troubled Asset Relief Program money.

But the economic forecast is still troubling.

Applied Analysis economist Brian Gordon, a guest speaker, said that although the economy is showing an “upside,” there could be an additional 20,000 construction jobs lost — on top of the 80,000 already cut — when Strip projects CityCenter and Fontainebleau are completed.

Those workers don’t have jobs waiting for them, he said.

“That’s going to have significant impacts of what we see going forward,” Gordon said.

Half of the jobs lost during this recession in Las Vegas were in construction and gaming.

“We’re 16 months into this bad boy,” he said of the recession. “I sure hope 2009 doesn’t look like 1929.”

He noted that the Great Depression lasted 43 months.

But Gordon cautioned the businesspeople: “Don’t be an ostrich. Hope is not a strategy. You can’t stick your head in the ground and hope things will get better.”

If your business is doing well, take advantage of the marketplace, he said. If not, be proactive in solving its problems.

Bank rolls

Community Bank of Nevada filed its first-quarter financial report with the Federal Deposit Insurance Corp., despite still not releasing last year’s annual report to investors.

The bank amended financial reports with the FDIC for 2008’s last two quarters.

Community Bancorp, the Las Vegas-based parent of the bank, is the holding company of Community Bank of Arizona, which also filed an amended financial report for the last quarter of 2008.

First-quarter 2009 reports were also filed.

Community Bank of Nevada increased its allowance for loan losses for its Sept. 30 report by $54.1 million, of which $40 million had previously been reported in its Dec. 31 report at the request of regulators.

The bank amended its annual financial report to reflect a $17.4 million increase in its provision for loan losses.

“We are in the process of completing our 2008 financial statements and will file our Form 10-K for 2008, which will reflect the information in the aforementioned call reports and our Form 10-Q for the first quarter of 2009 with the SEC as soon as possible,” Patrick Hartman, Community Bancorp’s chief financial officer, said in a statement. “Management expects to discuss these financial statements in a press release within the next few weeks.”

Sister bank Community Bank of Arizona amended its Dec. 31 report to reflect a $10 million write-down of remaining goodwill.

Substantially all tax benefits associated with these additional expenses were offset by a deferred tax asset valuation allowance.

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Bank of George recently opened an office in Henderson at St. Rose Parkway and Seven Hills Drive. This is the second location for the bank, which opened in late 2007. Its headquarters, and original branch office, is located in the southwest valley.

Noel Thompson will manage the Henderson branch.

“I’m excited to open our new regional office, which was an integral part of our business plan from day one,” Thompson said in a statement. “This location is well positioned to serve the Henderson area. We’re pleased to expand our accessibility to our valued customers.”

Nicole Lucht covers health care, workplace and banking issues for In Business Las Vegas and its sister publication, the Las Vegas Sun. She can be reached at 259-8832 or at [email protected].