Silver State Bank: "company's dismal first quarter results".

[rainbow4321]

http://www.bizjournals.com/phoenix/stories/2008/04/28/daily38.html?ana=from_rss

Wednesday, April 30, 2008

Silver State Bancorp. officials blamed the "deterioration of the Nevada and Arizona economies and real estate markets" for the company's dismal first quarter results.

The Henderson, Nev.-based bank, which finalized its acquisition of Choice Bank and its three Valley locations April 3, reported a net loss of $14.4 million, or 95 cents per share. During the same period last year, the bank recorded net income of $5.6 million, or 41 cents per share.

The report reflected a significant increase in the company's loan loss reserve, specifically on its residential construction and land loans, officials said. First-quarter charge-offs topped $9.7 million, while nonperforming loans hit $78 million, up from $13.1 million a year.

"With many real estate projects requiring an extended time to market, some of our borrowers have exhausted their liquidity which requires us to place the loan into nonaccrual status," said President and CEO Corey L. Johnson in a statement.


http://topics.nytimes.com/top/news/business/companies/silver-state-bancorp/index.html




-----------------
From a link at the NYT article: (under "filings)


UNITED STATES


SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549




FORM 10-Q


Legal filings involving Silver:

Southwest Exchange, a former customer of Silver State Bank, is currently under investigation and reported to be a defendant in a number of lawsuits for the loss of funds belonging to Southwest Exchange’s customers, which loss has been estimated in newspaper articles to exceed $100.0 million. Southwest Exchange maintained certain deposit accounts with Silver State Bank. Although Southwest Exchange did not maintain custody or escrow accounts at Silver State Bank in the name of or for the benefit of customers of Southwest Exchange, Silver State Bank may become involved in protracted litigation as a result of the activities of Southwest Exchange.

We previously were named as a defendant in one such lawsuit and, by agreement of the plaintiff, were dismissed from the lawsuit without prejudice. We were also named in two other complaints (along with several other defendants) alleging conversion, breach of fiduciary duty, negligence, fraud and civil RICO claims. More than a year has elapsed since the filing of those complaints, and they have not been served on Silver State Bank.

Silver State Bank was also recently named, along with 41 other named defendants, as a defendant in a consolidated litigation pending before the Nevada District Court, Clark County (P&D Kelesis, LLC et al. v. Southwest Exchange, et al., Case No. A535439), claiming causes of action for conversion and negligence per se against the Bank. The plaintiffs purported to serve Silver State Bank with this complaint on February 7, 2008. The amount claimed in this consolidated lawsuit is approximately $12.7 million. On April 11, 2008, the plaintiffs served the Bank with an amended complaint, claiming causes of action for breach of fiduciary duty, conversation, negligence per se, unjust enrichment, and Breach of Uniform Fiduciaries Act. On May 2, 2008, some, but not all, additional claimants joined in the Amended Claims (the “Albrittons’ Claims”). The Albrittons’ Claims total $8.0 million, bringing total claims against Silver State Bank related to this matter to approximately $20.7 million. The Bank filed a motion to dismiss the complaint (or in the alternative, for summary judgment) which was denied by the court to allow the plaintiffs additional time for discovery. After the period for discovery, the plaintiffs may amend the complaint and we may file new motions for dismissal or summary judgment.


ITEM 1A. Risk Factors

We experienced a net loss in the first quarter of 2008 and can provide no assurance that additional losses will not be realized in future quarters.

We realized a net loss of $14.4 million in the first quarter of 2008. The net loss in the first quarter was due primarily to an increase compared to March 31, 2007 of $29.7 million to the provision for loan losses, the amount required to maintain the allowance for loan losses at an adequate level to absorb probable loan losses. The increase in the provision for loan losses is primarily attributable to our residential construction and residential land loan portfolio, which continues to experience deterioration in estimated collateral values and repayment abilities of some of our customers. Other reasons for the increase are attributable to an overall increase in nonperforming assets, an increase in our potential problem loans and the continuing general weakening economic conditions and decline in real estate values in the markets served by the Company. At March 31, 2008, our nonaccrual loans were $78.0 million compared to $13.1 million at December 31, 2007 and our potential problem loans were $274.5 million compared to $84.5 million at December 31, 2007. These increases are primarily due to our residential construction and residential land loan portfolio.

The net loss in the first quarter of 2008 has reduced our stockholders’ equity at March 31, 2008. If we experience additional losses in the future, it will restrict our ability to grow our balance sheet as we have in the past. Accordingly, our primary short-term strategy is to manage our credit quality and strengthen, rather than grow, our balance sheet.

To assist us in identifying weaknesses in our construction and land loan portfolios, we ordered updated appraisals on the real estate collateral underlying these loans and in April 2008, we engaged an independent third party to review these portions of our loan portfolio. The results of appraisal updates and the independent loan review were taken into account in establishing our provision for loan losses in the first quarter of 2008. The independent loan review has been completed with respect to our residential construction and residential land loan portfolio and is now focused on our commercial construction portion which we expect will be completed in the second quarter of 2008. In addition, we continue to receive updated appraisals with respect to our residential construction and residential land portfolios, as well as, our commercial construction and land loan portfolios.

[mod mom]

1. Edit: My bad this article is from April 30-they didn't know McCain would resign.

http://www.reuters.com/article/pressRelease/idUS51176+26-Jul-2008+BW20080726

Silver State Bancorp (NASDAQ:SSBX), the holding company for Silver
State Bank, announced today that Andrew K. McCain submitted his
resignation today as a director on the Boards of Directors of Silver
State Bancorp and Silver State Bank, citing personal reasons.

Mr. McCain previously served as a director of Choice Bank in
Scottsdale, Arizona from 2006 to April 1, 2008 when Choice Bank merged
into Silver State Bank. Mr. McCain had been appointed to the Boards of
the Company and Silver State Bank in February, 2008 and had served on
the Audit Committee. Mr. McCain has recently been appointed Chairman
of the Greater Phoenix Chamber of Commerce, effective this month.

A spokesperson for the Company stated that the Company wishes him
the very best in all his present and future endeavors.

About Silver State Bancorp

Silver State Bancorp, through its wholly-owned subsidiary, Silver
State Bank, currently operates thirteen full service branches in
southern Nevada and four full service branches in the
Phoenix/Scottsdale market area. Silver State Bank also operates loan
production offices located in Nevada, California, Washington, Oregon,
Utah, Colorado and Florida. Deposit accounts at Silver State Bank are
FDIC insured to the maximum allowed by law. Please visit
www.silverstatebancorp.com for more information.

[rainbow4321]

2. I posted elsewhere that Silver put an item on it's website that is interesting

It's listed under "What's New"...dated 2 days before his resignation. Telling customers about FDIC insurance and "what's covered". As if that is NEW news.

Hopefully someone connects the dots soon. Though the McLame camp most likely already knows the dots and is probably frantically trying to cover them up or make up some excuse to keep his kid smelling like roses through all of this.

[mod mom]

3. Let's hope the media makes the connection between this and Neil bush's failed S&L

Nothing but a group of robber barons raiding and pillaging this country. I would love to find out his salary and if he gets a compensation package.

[rainbow4321]

4. Another interesting connection: UBS/Southwest Exchange/Silver

Have I seen the letters UBS and Gramm's name floating around here on DU?
See the 10-Q section of my OP for the Southwest/Silver connection


http://www.instituteforlegalreform.com/media/displayarticle.cfm?artid=ILLI348124735

Real estate investors who lost $95 million when Henderson financial intermediary Southwest Exchange failed in January appear poised to get at least some of their money back.


UBS Financial Services has agreed to make a $23 million settlement payment on behalf of real estate investors who lost money to Southwest Exchange, according to a letter on the Web site of Santa Barbara, Calif., law firm Hollister & Brace.

Peter John DeMarigny, a former stock broker for UBS (NYSE:UBS) and other firms, handled financial transactions for Southwest Exchange, according to a federal class action lawsuit. Multiple accounts at UBS were used to launder money from Southwest Exchange, the lawsuit claims.