Jun. 20--First Asian Bank, which began operations two years ago, is trying to start over with a new chief executive officer and four new board members.

William Chu, who served as CEO the first two years, is gone. So are some dissident directors. Philip LaChapelle, former CEO of Fifth Street Bank, succeeds Chu as chief executive at First Asian.

Former Gov. Robert List; Assemblyman Tick Segerblom, D-Las Vegas; Steve Schneider, former owner of the real estate firm now called Prudential Americana Group; and LaChapelle joined the board.

List formerly served on the board of First Interstate Bank of Nevada, a $3 billion-asset bank that later was acquired, and as director of Business Bank, which was acquired by City National Corp. of Los Angeles in 2007.

First Asian is trying to recover from past director in-fighting that led to bad publicity. A confidential cease and desist order from the Federal Deposit Insurance Corp. and Nevada Financial Institutions Division was leaked to the Review-Journal in November. It criticized bank management and board instability.

A year ago, attorney James Whitmire, who represented dissident shareholders in a lawsuit, told a judge the bank was on the verge of failing.

First Asian didn't fail, of course, and appears financially strong in many respects, but LaChapelle needs to tackle some tough problems.

First Asian's risk-based capital remains iron-plated at 26 percent of assets or about $8 million, according to March 31 financial numbers compiled by SNL Financial.

However, First Asian lost $554,000 in the first quarter, after posting a $661,000 loss in the fourth quarter, according to data. The bank has no nonperforming assets, an enviable position in recession-wracked Southern Nevada.

It enjoys a healthy average 6.9 percent yield on loans and has better net interest margin than 93 percent of its peers. Net interest margin, the difference between the average rates paid for deposits and the average rates charged for loans, was 4.4 percent.

List is optimistic that the directors have smoothed over their differences, which appears to be the bank's biggest problem.

"All the shareholders are hopeful that the new management and newly constituted board will ensure harmony and a constructive approach toward building the future of the bank," List said.

The bank's shareholders last week had a "productive shareholder meeting with no conflicts," List said.

First Asian does face a couple of other issues. Its overhead -- including employee wages, rent, fixtures and furniture -- are high. Overhead expenses equal 10.4 percent of average assets -- more than two times the level of its banking peers. Furthermore, the bank has only $35.6 million in total assets, and its growth has slowed.

It's $33.3 million in outstanding loans leaves it with little cash on hand.

LaChapelle said he doesn't plan to offer higher than average interest rates to attract deposits, which would improve bank liquidity.

The new CEO formerly ran Fifth Street Bank, which voluntarily closed in April 2008. LaChapelle said the Las Vegas bank decided to shut down because of bad economic conditions.

LaChapelle said he couldn't confirm a report that the owner of Fifth Street closed the bank in order to transfer Fifth Street's capital to a Louisiana bank.

Before that, LaChapelle was CEO of Security Savings Bank. Regulators shut down Security Savings in February, but LaChapelle said Security Savings was doing well when it was sold and he left management there in 2004.

Contact reporter John G. Edwards at jedwards@reviewjournal.com or 702-383-0420.

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