Published Friday, Aug. 14, 2009 | 6:17 p.m.
Updated Friday, Aug. 14, 2009 | 6:33 p.m.
Related Story
- Bank Takeovers 101 (6-5-09)
Sun Archives
- FDIC's Bair agrees to trim new bank fees (3-6-2009)
- Nevada records first bank failure of 2009 (2-27-2009)
- Feds explore taking bigger stakes in shaky banks (2-24-2009)
- Meltdown 101: Why government may swap bank stakes (2-23-2009)
- Stimulus plan repeals big tax break for banks (1-17-2009)
- Nevada State Bank takes over failed bank (9-11-2008)
- FDIC takes over Silver State Bank of Henderson (9-5-2008)
- 1st National Bank of Nevada fails (7-27-2008)
Sun Topics
Community Bank of Nevada was seized by the state’s Financial Institutions Division today, and was handed over to the Federal Deposit Insurance Corp. as its receiver.
“We want Nevadans to know that their insured deposits are safe,” division Commissioner George Burns said in a statement announcing the seizure. “Deposits are insured by the FDIC for the maximum under current law.”
The FDIC insures deposits up to $250,000.
"Due to inadequate capital and mounting loan losses, it was necessary to close Community Bank of Nevada and appoint the FDIC as receiver," Burns said. "We are committed to making sure Nevada's banking system continues to be fundamentally safe and sound."
Bank customers will continue to have access to banking services over the weekend and the bank will open Monday as the FDIC's Deposit Insurance National Bank of Las Vegas, which will remain open for about 30 days to allow depositors to open accounts at other banks.
Nevada State Bank has been contracted to manage the banks during this time. Brokered deposits, CDs and IRAs are not part of the federal bank. The FDIC will mail non-brokered deposit customers checks, and pay brokers directly for their insured deposits.
Those with safe deposit boxes can come to the bank and remove their contents.
The FDIC is retaining the assets of Community Bank until they can be sold. Loan customers are expected to continue to make their payments as usual.
"We will continue to work closely with the FDIC and to manage this situation as smoothly as possible," Burns said.
Community Bancorp’s CEO was Edward Jamison; Community Bank of Nevada CEO was Larry Scott.
The bank struggled for the past year as the commercial real estate market fell in Las Vegas. The bank was heavy in commercial real estate and construction loans.
Many of its 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.
Community Bancorp, the parent of its Nevada subsidiary and Community Bank of Arizona, was established in 1995.
The bank had 233 employees, as of March 31, according to the FDIC. 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.
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 site.
As of March 31, the most recent figures available, 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 in a release that the bank was preparing to file its first quarter and annual report, both well past normal deadlines.
The bank was also determined to be “no longer adequately capitalized” as defined by federal regulations, that release said.
Community Bank of Arizona, a sister to the Nevada bank, was seized by Arizona regulators. The Arizona bank will open on Monday as branches of MidFirst Bank of Oklahoma City.
Community Bank was the third bank to close Friday. Earlier in the day, Alabama bank regulators shut down Colonial Bank, transferring its deposit accounts to Branch Banking and Trust Company (known more widely as BB&T).
Colonial had 15 branches in the Las Vegas area.
Federal regulators closed down Dwelling House Savings and Loan Association of Pittsburgh, Penn., and its deposit accounts were transferred to PNC Bank in Pittsburgh.
Earlier in the week, federal regulators seized Las Vegas-based Community One Federal Credit Union with Utah-based America First Credit Union taking over operations.
For more information, go to the FDIC's Web site.
Join the Discussion:
Check this out for a full explanation of our conversion to the LiveFyre commenting system and instructions on how to sign up for an account.
Full comments policy