Regulators target Carson River Community Bank | NevadaAppeal.com

Regulators target Carson River Community Bank

John Seelmeyer
Northern Nevada Business Weekly

The chief executive officer of Carson River Community Bank in Douglas County says the bank is taking steps to comply with directives from federal and national regulators.

The bank has signed a consent agreement with the Federal Deposit Insurance Corp. and the Nevada Financial Institutions Division, which issued a cease-and-desist order against the bank.

Regulators said the bank was operating with weak management, had a large volume of poor-quality loans on its books, didn’t have sufficient capital and was operating in an unprofitable manner.

The bank reported an operating loss of $513,000 in the first quarter of this year. Its assets totaled $53.8 million as of March 31.

In signing the agreement, Carson River Community Bank didn’t admit the allegations in the cease-and-desist order.

Specific steps ordered by the regulators include:

– Retain qualified management.

“We are doing so,” said Julie Kidd, who was named acting chief executive officer of Carson River Community Bank this spring after the resignation of founding CEO Dan Dykes. “We have a senior management team in place that is dedicated to making the bank an ongoing enterprise for some time to come.”

– Maintain core capital equal to at least 10 percent of its assets.

“As of year-end, we were well within the specified levels,” said Kidd.

– Step up collection of delinquent loans and reduce exposure to the troubled construction and development sectors.

Kidd said the bank began moving away from development and construction lending in mid-2008 and began watching carefully for other signs of stress in its loan portfolio.

“We have strengthened our collection procedures and are diligently working with borrowers to reach resolutions to delinquency problems,” she said.

Kidd said the bank has trimmed its staff by 30 percent (it currently employs 10) and is working on more cost-cutting measures.

The consent agreement with the FDIC and the state Financial Institutions Division does not affect FDIC insurance of depositors’ accounts, Kidd said.