The costs of acquisitions and loan growth caught up during the first quarter with Reno-based The Bank Holdings, parent company of Nevada Security Bank.
The publicly held company said its income during the quarter totaled $71,000 compared with $177,000 in the same period a year earlier.
The culprit, the company said, were expansion-related expenses including:
* A 90 percent increase in salary and benefits expenses to $1.5 million this year compared with $795,000 a year earlier after it opened a new bank branch and acquired two companies that specialize in "1031" property exchanges.
* The costs of acquiring the property exchange companies, Big Sky Property Exchange of Bozeman, Mont., and Granite Exchange of Roseville, Calif.
* A $473,000 increase in reserves for loan losses as the loans on its books rose to $258 million on March 31 compared with $165 million a year earlier.
Hal Giomi, the company's chief executive officer, said The Bank Holdings has had no loan charge-offs since it opened in late 2001 and has a low delinquency rate.
Still, he said the company thinks it's prudent to continue adding to its reserves in case the economic cycle turns.
He said the company, which recently opened its fifth branch in Sparks and has approval to open a branch in Rancho Cordova, Calif., under the Silverado Bank brand, continues to seek other expansion opportunities.
Giomi said the acquisition of the property-exchange companies will help produce a low-cost source of deposits for the bank.
Like other financial institutions, he said The Bank Holdings is keeping a close eye on the costs it pays for deposits as interest rates continue to rise.
