Western Alliance Bancorp acquires Service1st Bank of Nevada
After a short history, Service1st Bank of Nevada has been absorbed by a rival lender.
Bank of Nevada’s parent, Western Alliance Bancorp., on Wednesday completed its acquisition of Service1st’s holding company, Western Liberty Bancorp. Service1st had only one branch and today it became a Bank of Nevada branch, Western Alliance CEO Robert Sarver said.
Bank of Nevada had 11 branches in the valley and $2.4 billion of local deposits as of June 30. Service1st’s branch, on West Sunset Road in Las Vegas, had $107 million of deposits at that time. The bank also had an outpost on South Eastern Avenue with $37 million of deposits on June 30, but Sarver said that branch closed last month.
Phoenix-based Western Alliance, which also owns banks in Arizona and California, announced in August that it signed an agreement to purchase Western Liberty in a deal valued at $55 million.
A month later, Western Liberty shareholder David Raul filed a class-action lawsuit against the companies and Western Liberty’s board of directors in Clark County District Court. He sought to quash the merger, alleging that Western Liberty’s board breached its fiduciary duties by agreeing to sell the company for “grossly inadequate consideration.”
A few weeks later, Western Alliance said the case was settled.
Service1st was founded in January 2007. Global Consumer Acquisition Corp., a company led by New York investment manager and Las Vegas Sands Corp. board member Jason Ader, announced in September 2009 that it would buy the bank. Global Consumer later changed its name to Western Liberty Bancorp.
By the following June, the deal hadn’t closed yet, and Ader announced plans to put $25 million of capital into the bank to improve its finances.
Like many young banks, Service1st was mired in red ink during its first few years. Its only profitable year so far was 2010, when it earned $186,000 of net income. The bank lost $12.4 million last year, $17.4 million in 2009, $5.1 million in 2008 and $4.2 million in 2007, according to Federal Deposit Insurance Corp. data.
As part of its acquisition, Western Alliance also gets Las Vegas Sunset Properties, a subsidiary Western Liberty formed last year to own and manage certain nonperforming assets connected to Service1st.