Difficulties in the real estate market led to a fourth-quarter loss for The Bank Holdings Inc., the Reno-based parent company of Nevada Security Bank.
The publicly held company said last week it lost $482,000 during the fourth quarter, which compared with profits of $750,000 in the comparable quarter a year earlier.
The loss came, executives said, after they decided to boost the company's reserves to cover possible loan losses by $1.9 million. The loan-loss reserve stood at $2.2 million at the end of the year.
For the full year, The Bank Holdings reported net income of $1.5 million compared with $2.1 million during 2006.
The company said 80 percent of the loans on its books at the end of 2007 were related to real estate, although it said lending for residential projects accounted for what it called a "very limited" portion of the total. It didn't have any subprime mortgages on its books.
As of the end of the year, borrowers weren't making interest payments on about $5.6 million in loans, the company said, and it owned $800,000 worth of real estate that previously had been pledged by borrowers who didn't pay up.
The bank's loans at year-end totaled $474 million, an increase of 2 percent over year-earlier figures.
Hal Giomi, the company's chief executive officer, said The Bank Holdings expects 2008 to be marked by slow growth, headaches with borrowers unable to repay loans and strong competition for deposits.
Still, Chief Financial Officer Jack Buchold said the company doesn't expect weakening conditions to persist throughout 2008, and he said The Bank Holdings hopes to "substantially exceed our 2007 results in the current year."
John Donovan, chief credit officer, said the company believes the recent increase in its reserves to cover potential loan losses more than adequately covers the risk.
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