Aug. 30--The recent failure of $1.5 billion-asset Community Bank of Nevada was a reminder of just how much damage the unrelenting recession has caused Southern Nevada financial institutions.

It was the fifth time that regulators have seized an insolvent Nevada bank since July 2008.

Of 20 local banks, only one posted a profit for the second quarter. First Security Bank, a $104 million-asset institution, made a $66,000 profit in the second quarter, compared with a $784,000 loss in the first quarter.

"It certainly is a horrendous market right now," said Arvind Menon, chief executive officer of Meadows Bank. "It certainly is getting harder and harder to find good borrowers to lend money to, primarily because of all the financial devastation that's going on in the market. It's very difficult to be able to make loans that we think will be able to weather the storm."

Menon is looking for borrowers who have strong liquidity, low debts in relation to assets and few contingent liabilities in the form of personal guarantees for outstanding loans.

"A lot of borrowers are still feeling the effects of economic conditions," Menon said.

Meadows has no nonperforming loans or foreclosed real estate, data compiled by SNL Financial show, but many of its peers are weighed down with loans that went bad.

No local banks appear to be as weak as Community Bank was. When regulators closed Community Bank, it had 2 cents in capital or net worth for each $100 in assets. However, banks are feeling financial pain in varying degrees.

BauerFinancial Inc. of Coral Gables, Fla., was rating Community Bank zero based on first-quarter data. That's the lowest possible score. The financial analysis firm has none of Southern Nevada's remaining local banks rated that low. Only one, SouthwestUSA Bank, has a one-star rating, the next-to-lowest rating on a scale of zero to five stars.

Bankrate.com, a competing bank analysis service, rated SouthwestUSA one star, its lowest rating, for the first quarter. Also, the Texas ratio, which Gerald Cassidy of RBC Capital Markets developed to measure credit quality, signals problems at SouthwestUSA. The ratio is calculated by dividing nonperforming assets and loans delinquent more than 90 days by the bank's tangible capital plus loan-loss reserves. Anything higher than 100 is considered worrisome; SouthwestUSA's Texas ratio is 154.

SouthwestUSA, which calls itself "Nevada's only private bank," focuses on wealthy customers, who must deposit at least $50,000.

The bank lost $144,000 in the second quarter, down from $3.6 million in the first quarter.