Silver State Sees Red Ink in 1st Quarter
Silver State Bancorp here reported a net loss for the quarter ended March 31 of $14.4 million, compared to net income of $5.6 million reported for the first quarter of 2007, directly reflecting a significant increase in the company's loan-loss reserve resulting from the impact of the deteriorating economy in the Nevada and Arizona markets on its loan portfolio, most specifically its residential construction and land loans.
"The impact of the deterioration of the Nevada and Arizona economies and real estate markets on certain segments of our loan portfolio began to be realized toward the end of the first quarter of 2008 as project delays mounted and updated appraisals showing significant lower valuations were received," said Corey L. Johnson, president and chief executive officer.
"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 non-accrual status."
As a result, the company has taken actions to work through this tough economic environment. Silver State Bancorp has modified its lending guidelines, and created a new internal loan review department to work in conjunction with its external loan review protocols, increasing the number of professionals in its special-asset department. (c) 2008 Mortgage Servicing News and SourceMedia, Inc. All Rights Reserved. http://www.mortgageservicingnews.com/ http://www.sourcemedia.com/