Silver State Bancorp bucks trend, reports earnings rise

The residential real estate implosion hurt the financial results of two of three publicly traded Southern Nevada bank holding companies, but Silver State Bancorp of Henderson reported improved results on Tuesday.

Silver State reported that third quarter net income jumped 27.8 percent and earnings per share rose 17.5 percent over the same period last year. The bank holding company reported net income increased to $7.2 million from $5.6 million in the third quarter last year. Earnings per share climbed to 47 cents from 40 cents.

“We are seeing weakness in the residential real estate lending market,” Silver State CEO Corey Johnson said in a statement. “However, we are still primarily a commercial real estate lender and do not see a significant downturn in the primary commercial estate markets in which we lend.”

By comparison, Western Alliance Bancorporation, which also makes commercial loans, on Friday said it was having difficulty.

“Our performance again reflected some of the challenges facing our primary markets, particularly the real estate sector,” CEO and chairman Robert Sarver said in a statement. Western Alliance’s nonaccrual loans, which have not paid principal or interest for 90 days, and repossessed real estate increased to 0.33 of a percent of total assets from 0.02 of a percent a year earlier.

Community Bancorp compared nonaccrual loans to total loans in its quarter financial report Monday. Nonaccrual loans represented 0.56 percent of total loans at the end of the third quarter, compared with 0.05 percent at year-end 2006.

Silver State reported nonperforming loans represented 0.06 percent of gross loans, up from 0.02 percent a year ago. “There has been virtually no deterioration in our credit quality,” Johnson said.

Silver State Bank reported its assets increased to $1.67 billion, or 38 percent since the end of 2006. The banking company is actively making loans with 7.6 percent more in outstanding in loans than in deposits. The bank has obtained advances from the Federal Home Loan Bank.

Sandler O’Neill Partners, an underwriter in Silver State’s initial public offering earlier this year, said Silver State’s reported “some of the best quarterly metrics we have seen” for the third quarter this year. The investment banking firm cited 1.8 percent return on assets and 20.1 percent return on equity and “pristine” loan assets.

Shares in Silver State on Tuesday climbed 96 cents or 5.93 percent to close at $17.14 on the Nasdaq National Market.

Contact reporter John G. Edwards at jedwards@reviewjournal.com or (702) 383-0420.