Las Vegas-based bank operator Western Liberty Bancorp Inc. said Monday it lost $2.4 million in the fourth quarter as the recession pushed more loans into default.
"While the national and local economic indicators are starting to improve, we are continuing to see asset quality decline, although at a slower pace than in past quarters," Chief Financial Officer Patricia Ochal said in a statement.
The company, which owns Service1st Bank of Nevada, said the loss amounted to 17 cents per share. Revenue, or net interest income, totaled $1.8 million during the quarter.
The loss came after the bank accumulated $837,000 in legal and professional fees during the quarter and set aside an additional $1.3 million to cover loan losses.
Western Liberty is now carrying some $28.1 million in bad loans and other nonperforming assets, which amounts to 14.2 percent of total assets.
There are no comparable numbers for the fourth quarter of 2010 since Western Liberty acquired the bank during that quarter.
Western Liberty also said that in order to deal with bad loans and properties it foreclosed on, it created a subsidiary to own such troubled assets.
The subsidiary, Las Vegas Sunset Properties, holds $4 million in foreclosed properties and $11.5 million in nonperforming loans.
Western Liberty said the moves left it with "extremely strong capital levels," so it used cash to buy back nearly 935,000 shares at an average cost of $2.34 per share during the quarter.