Nevada Security Bank cuts loans, deposits, costs

After growing their company rapidly during the middle of this decade, executives of the parent of Nevada Security Bank now are reducing the size of the bank to reflect new realities in the marketplace.

The Bank Holdings, the Reno-based parent of Nevada Security Bank, continues to rein in its lending and is allowing some deposits to run off as it no longer can find profitable ways to lend them.

At the start of this year, the company had $441 million in loans on its books, down from $475 million a year earlier. The bank began 2009 with $459 million in deposits, down from $492 million at the start of 2008.

The company is looking at cost-saving measures such as the possible closure of some branches, said Hal Giomi, chairman and chief executive officer of The Bank Holdings.

Nevada Security Bank has a branch at 3120 Highway 50 East in Carson City.

The company last week reported a fourth-quarter loss of $2.8 million, largely because it set aside $2.58 million in reserves to cover possible bad loans.

In the previous quarter, the company set aside $150,000 for loan losses.

Jack Buchold, the company's chief financial officer, described the environment faced by the bank as "a failing economy, indeterminate government activities and cratering asset values."

While falling values for commercial real estate are a major headache for Nevada Security Bank, Giomi said troubled loans are found throughout the bank's portfolio as the result of the weak economy.

He said loan loss reserves are likely to remain a drain on earnings as the company continues to work with borrowers who struggle to repay their loans.