FDIC closes North Las Vegas bank; will reopen under different ownership
Financial regulators have shut down 1st Commerce Bank in North Las Vegas, marking Southern Nevada’s first bank failure in two years.
The Federal Deposit Insurance Corp. closed the small, single-branch lender Thursday and sold its deposits and almost all of its assets to Plaza Bank, the FDIC announced.
1st Commerce, whose parent company in Michigan is bankrupt, is at 5135 Camino Al Norte, Suite 4. It is slated to reopen Friday as a branch of Plaza.
The failed lender was one of the smallest locally based banks in Clark County. It had $20.2 million in assets, $19.6 million in deposits and the equivalent of only five full-time employees as of March 31. Most of its $13.4 million loan portfolio was tied to real estate deals, according to FDIC data.
The bank, founded in October 2006, posted annual losses each full year it was in business. It eked out a $74,000 profit for the quarter ending March 31.
1st Commerce CEO Jim Howard, who is also chief operating officer of affiliate Bank of Las Vegas, did not immediately return a call seeking comment.
The bank had been skating on thin ice. The FDIC last year issued the lender a strict regulatory order known as a “prompt corrective action.” Among other things, it said that 1st Commerce’s “condition continues to deteriorate” and that its “management has not demonstrated the ability to return the bank to a safe and sound condition.”
The agency required bank executives to raise capital, get bought out, or merge with another lender.
Such orders are viewed as a final warning of sorts before a bank gets shut down.
Meanwhile, parent company Capitol Bancorp Ltd., of Lansing, Mich., remains in bankruptcy court after filing for Chapter 11 protection last August. At the time, the company said it would seek quick approval from the court for a pre-packaged reorganization plan, and that the Chapter 11 filing would not affect its banks’ operations or deposits.
The company has now lost four banks to forced closures in the past month alone. On May 10, government regulators shut down both Sunrise Bank of Valdosta, Ga., and Pisgah Community Bank of Asheville, N.C. Four days later, regulators closed Central Arizona Bank of Scottsdale.
A spokeswoman for Capitol Bancorp did not return a call seeking comment on 1st Commerce.
With Thursday’s closure, Plaza Bank is again growing in the Las Vegas Valley with the acquisition of a shuttered lender.
Plaza, based in Irvine, Calif., initially expanded to the Las Vegas Valley with its July 2010 acquisition of the failed SouthwestUSA Bank.
Until this week, Plaza had only one branch in the region, on West Flamingo Road. That location held about $163.5 million in deposits as of last June, according to FDIC data.
Government regulators, amid a wave of bank failures nationally, shut down six locally based lenders from September 2008 to April 2011.
The last to go was Nevada Commerce Bank, whose deposits and branches were acquired by City National Bank.