1st Commerce Bank target for sale, consolidation

By Steve Green (contact)

Friday, Aug. 27, 2010 | 6:48 p.m.

Changes are likely at 1st Commerce Bank in North Las Vegas after two events Friday.

A sister company, Bank of Las Vegas, revealed it is seeking approval from the Federal Deposit Insurance Corp. to consolidate 1st Commerce Bank into Bank of Las Vegas.

Both Bank of Las Vegas and 1st Commerce are part of Capitol Bancorp Ltd., based in Lansing, Mich., and Phoenix.

Bank of Las Vegas President Pete Atkinson said the proposed consolidation is actually Plan B. Atkinson said it’s his understanding that investors are working to buy 1st Commerce and that the parent corporation prefers that to happen.

This apparently is the second investment group to look at 1st Commerce in about a year. Last year, a group led by New York businessman Jason Ader announced plans to buy it, but those plans fell through.

Should 1st Commerce not be sold, it likely would become part of Bank of Las Vegas and remain open under the Bank of Las Vegas name, Atkinson said.

Bank of Las Vegas itself was created in January when Capitol Bancorp consolidated four of its local banks: Desert Community Bank, Red Rock Community Bank, Black Mountain Community Bank and the original Bank of Las Vegas.

Either way things go, despite its financial challenges, 1st Commerce is an attractive bank with a good location, Atkinson said.

“I believe Capital Bancorp is going to continue to inject capital” into Bank of Las Vegas and 1st Commerce Bank to help them get through the recession, Atkinson said.

A capital injection may be necessary as the FDIC on Friday made public an enforcement order requiring 1st Commerce Bank to improve its balance sheet by lifting its “Tier 1” capital ratio to 9 percent of loans and other assets.

In the first half of the year, 1st Commerce Bank lost $1.1 million on interest income of $874,000. The results included a $776,000 provision for loan and lease losses.

This reduced the bank’s equity capital to $1.65 million by the end of the second quarter, when it had $44.5 million in loans and other assets and capital ratios by various measures ranging from 3.7 percent to 6.93 percent.