(Source: Business Wire)
The Bank Holdings (NASDAQ: TBHS), parent holding company of Nevada Security Bank (operating under the name Silverado Bank in California), today announced that its principal subsidiary, Nevada Security Bank (the "Bank"), entered into a joint agreement with the FDIC and the Nevada Financial Institutions Division for an action plan designed to strengthen and improve the Bank's financial condition and operations. The action plan is based on items identified during the Bank's routine regulatory exam completed in February 2009 and largely reflects strategic initiatives already put into action by the Board of Directors and management both prior to and since the exam, which are now reflecting results.
"Nevada Security Bank faces unprecedented challenges with the increasing level of non-performing loans, the steep declines in the underlying value of real estate collateral and the greater loan loss provisions required," said Hal Giomi, Chairman and CEO. "Our priorities and objectives are well-defined as we purposely move forward to address issues, make prudent modifications, and work diligently for the desired results. We are working closely with our regulators to ensure the Bank's financial strength and stability."
Included in the agreement are initiatives management is implementing to improve the Bank's overall performance: increasing regulatory capital; reducing the concentration of commercial real estate and the amount of non-performing loans; adopting changes to internal policies and monitoring procedures; reducing reliance on brokered deposits; and providing regulators with copies of strategic plans for improving profitability and liquidity and reducing the level of classified assets. The Bank's regulators acknowledged in the joint agreement that the Bank's capital levels declined in part due to the government's conservatorship of Fannie Mae and Freddie Mac; the Bank suffered a $15 million capital loss on these government sponsored enterprise investments during the third quarter of 2008. The agreement also provides that the Bank will obtain prior regulatory approval before the payment of any cash dividends or the appointment of any senior executive officers or directors.
"Our executive leadership is experienced and focused on addressing these issues during these stressful economic times," said Giomi.
