Western Liberty Bancorp in Las Vegas has established a new nonbank subsidiary to house problem assets of its bank subsidiary in a move it says will help it more quickly dispose of the troubled loans and improve its overall efficiency.
The $205 million-asset company said in a Securities and Exchange Commission filing that the classified loans were transferred to the subsidiary, Las Vegas Sunset Properties, on Jan. 11. The newly created unit paid $15.5 million for the classified loans, which included mix of performing and nonperforming loans as well as foreclosed real estate.
Western Liberty is the holding company for Service 1st Bank of Nevada, a five-year-old institution that has been hammered by losses resulting from the real estate meltdown. At Sept. 30, nearly one-fourth of the bank's loans were either no longer performing or showing signs of weakness, according to Western Liberty's third-quarter earnings announcement.
In Tuesday's SEC filing, Western Liberty said that the transfer of the problem assets to new subsidiary would immediately strengthen Service 1st by reducing its percentage of classified assets. The company added that assembling the classified loans in a separate subsidiary "will promote efficient and cost-effective management and ultimate resolution of the assets."