Nevada Security Bank parent tightens its lending standards

As the northern Nevada economy slows, a Reno-based banking company said last week it's tightening down on its lending.

The Bank Holdings, parent company of Nevada Security Bank, said it classified $3.8 million of the loans on its books as "non-accrual" during the third quarter. That means the borrowers no longer are paying even the interest on the loans.

"With the uncertainties of the current economy, growth has taken a back seat to tighter management controls of our operations and underwriting standards," said Hal Giomi, chairman and chief executive officer.

Even so, he said the company's third-quarter net income of $750,000 was up by 40 percent over year-earlier figures. The company had $490 million in loans on its books on Sept. 30, an increase of 58 percent from a year ago.

The third quarter's income, however, was down by about 7 percent from the $804,000 earned by The Bank Holdings during the second quarter of this year.

"Economic activity has definitely slowed in both our northern Nevada and northern California market," company executives said in a statement.

At the end of the third quarter, The Bank Holdings had $5.7 million in non-performing assets generally, commercial loans that are more than 90 days overdue on its books. That's triple the $1.9 million in non-performing assets its reported 90 days earlier, and it's more than 10 times the $528,000 in non-performing assets on its books a year ago.

"Although we have experienced an increase in delinquencies and problem loans, management remains confident in the underlying quality of the loan portfolio," bank executives said.

Giomi said competition for deposits remains fierce. The Bank Holdings, he said, has launched products such as enhanced on-line banking and remote deposit and opened a branch at Rancho Cordova, Calif., to boost its effort to attract deposits.

Along with its banking operations, The Bank Holdings owns 1031-exchange companies in California and Nevada.