Realty subsidiaries may slow growth of The Bank Holdings

The soft market for real estate may slow earnings growth at Reno-based The Bank Holdings, the parent company of Nevada Security Bank.

The company owns companies in California and Montana that specialize in so-called "1031 exchanges" in which real estate investors defer taxes by swapping properties. Those subsidiaries accounted for 20 percent of the profits of The Bank Holdings in 2006.

But Jack Buchold, the company's chief financial officer, said last week that the company expects only moderate growth from the 1031 subsidiaries this year.

Neverthless, Buchold said the company expects what he called "solid earnings" during 2007, mostly from growth of new branches.

In the fourth quarter, the company earned $904,000 compared with earnings of $579,000 in the comparable quarter a year earlier.

The company said its loans stood at $464 million at the end of the year compared with $245 million a year earlier.

During the year, the company set aside $771,000 to cover probable loan losses. That's down from $1.1 million a year earlier, and executives said they've fine-tuned their systems to identify potentially troubled loans. Two loans totaling $549,000 were more than 60 days past due and had stopped accruing interest as of Dec. 31, but The Bank Holdings had no other past-due loans.