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parent company of Reno-baseds , announced it is operating under a cease and desist order to improve its capitaol position and cut its realestate losses. The bank operatews as Silverado Bankin Roseville. “Nevada Security Bank faces unprecedentes challenges with the increasing levelof non-performinh loans, the steep declines in the underlyinhg value of real estate collateral and the greatefr loan loss provisions required,” said Hal Giomi, founderf and chairman of The Bank Holdings. He is also chiefr executive.
“Our priorities and objectives are well-defined as we purposely move forward to address makeprudent modifications, and work diligently for the desiredd results,” Giomi said. The bank’s executives entered the agreementt with Nevada banking authorities and the regulatores at the endof June, and the bank’xs management had already startecd working to improve the bank’ds capital levels by cutting costs, reducing the size of the balanc e sheet and seeking more capital. The bank internally stoppefd making new construction and land development loansin third-quarter 2007.
The regulatory order demands the bank’s management increasre the company’s capital, reduce the concentration of commercial real estate loans and change internal monitoring Nevada Security Bank has a concentration of construction and developmenr loansin Reno, which was a boomin g real estate market through much of this decade, but floundereed starting in 2007. Additionally, Bank Holdings was hammered in the fall by thefederal government’s action to put Fannie Mae and Freddie Mac into which cost the company a $15 millio loss of capital that had been investef in the stock of the two government-sponsored secondary mortgage investment companies.
Bank Holdings starterd in 2001 with initia l capitalof $14 million. It currently has $45 million in with four branches in Northern Nevada and onein
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