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The money-losing First Security Bank of Nevada has been rescued with a $14 million cash infusion by new owners.
Investors led by Jason Awad and including Dr. Toomas Rebane and Eva Garcia-Mendoza today said they received approval from the Federal Deposit Insurance Corp. and the Nevada Financial Institutions Division for their 94 percent stake in the bank, which has one branch at 10501 W. Gowan Road in Las Vegas.
Like many banks serving the Las Vegas area, First Security Bank of Nevada has been hit hard by loan losses during the recession.
The bank, which through June had lost $7.766 million this year, said in its financial report that before the $14 million infusion, its capital had fallen from $9.975 million at the beginning of the year to just $2.3 million at the end of June.
This amount appeared to be inadequate for the bank to absorb continued losses on its portfolio of $90 million in loans and other assets.
The bank said its liabilities at June 30 totaled about $88 million, including nearly $84 million in deposits.
The bank expensed $2.6 million for loan and lease losses through the first half of the year, and lost another $4.2 million on sales of real estate it was holding. These amounts far exceeded its interest income of $1.74 million during that period.
Awad was the former chairman of Business Bank of Nevada, which was acquired by City National Bank in 2007.
In a statement today, he said community banks are a substantial economic engine for Las Vegas.
State regulators today praised the investor group for their deal with First Security Bank of Nevada.
“The fact that local business people are making such a significant investment in a local, community bank -- for the first time since the financial crisis began -- is an encouraging sign,” Financial Institutions Division Commissioner George Burns said in a statement. “These investors are expressing their confidence in the Nevada economy with their wallets.”