Regulators have ordered a small struggling North Las Vegas bank to improve its financial position.
The Federal Deposit Insurance Corp. reported Friday that it issued a "Supervisory Prompt Corrective Action Directive" to 1st Commerce Bank on Jan. 23.
The FDIC said 1st Commerce was "significantly undercapitalized" and had failed to correct its problems even after submitting a capital restoration plan in September 2010.
The FDIC said it ordered the bank to either increase its capital level by selling stock or with cash infusions from its owner, or accept a buyout or merger with another bank.
1st Commerce, with $32.2 million in loans and other assets as of Sept. 30, is owned by Capitol Bancorp Ltd. of Lansing, Mich., and Phoenix.
Capitol Bancorp also owns Bank of Las Vegas, with $337 million in assets and which earlier received its own "Prompt Corrective Action Directive."
Capitol Bancorp reported that through the third quarter of 2011, 1st Commerce Bank had $19.9 million in loans. Of those, $4 million were delinquent or nonperforming.
The numbers for Bank of Las Vegas were $259 million in loans, with $71.4 million delinquent or nonperforming.
Through the first nine months of 2011, 1st Commerce lost $3.4 million on revenue of $939,000 while Bank of Las Vegas lost $6.7 million on revenue of $10.5 million.
These numbers indicate both banks have been hit hard by the recession that has left many borrowers unable to make their loan payments — particularly borrowers in real estate loans that have been devastated by falling property values in Southern Nevada.
John Edwards, a Las Vegas banking industry observer, reported on his blog Jan. 31 that Capitol Bancorp had been pumping capital into the two Nevada banks to keep them afloat.