Western Alliance lays off workers

Bank of Nevada and an affiliated Nevada bank have laid off 28 workers as they deal with the recession and related losses.

The largest locally owned bank in Nevada, Bank of Nevada also is eliminating three branches, leaving it with 12 bank offices. The branches that will close are at 8275 W. Flamingo Road, 8745 W. Warm Springs Road and 950 S. Rampart Blvd.

Last week, the $3 billion-asset bank eliminated 18 jobs, reducing its staff to 460, bank Chief Executive Bruce Hendricks said Monday.

First Independent Bank, an affiliated institution in Reno, cut 10 employees, First Independent CEO Jim DeVolld said. That leaves it with 89 full-time workers and doesn't change the six branches it has in Northern Nevada.

Alliance Bank of Arizona laid off 18 employees last week, according to the Phoenix Business Press.

The three banks are subsidiaries of Las Vegas-based Western Alliance Bancorporation, which also operates institutions in California.

"Really, our challenge is Las Vegas. That's our toughest market," said Dale Gibbons, Western Alliance chief financial officer. "We continue to see value declines on collateral and that leads to loan losses."

If Southern Nevada creates more jobs, the population will increase as Californians move here to buy houses that are priced even lower than they have been in recent years, Gibbons said.

Gibbons hopes that opening of MGM Mirage's CityCenter in December will generate new jobs, although he said that "remains to be seen."

"This is really gut-wrenching because the people who work for us are family to me," DeVolld said about First Independent Bank's job cuts.

The bank has avoided reducing workers who deal with the public, he said.

"We have to take a look at the effect the economy is having on our industry and our market and operate more efficiently," Bank of Nevada's Hendricks said, adding that he appreciated the work done by employees.

Gibbons attributed the cutbacks to the continuing recession, which led to a third-quarter loss.

Western Alliance reported Monday that its third-quarter loss declined 75 percent to $23.9 million in the third quarter, down from $94.7 million in the same period last year.

The third-quarter loss this year includes a $20 million increase in the allowance for loan losses, $7.3 million in net losses from sale of assets and $5 million in net gains from securities.

The two Nevada banks reported a combined net loss of $23.8 million, about the same as the loss for the total company. The Nevada banks lost $90.9 million in the third period last year but that included a $79.2 million charge to goodwill, which represents the premium over accounting book value paid for bank acquisitions.

Loans at the Nevada banks declined $85 million during the third quarter to $2.5 billion. Customer funds for the two banks grew by $239 million to $3 billion.

Shares of Western Alliance fell 47 cents, or 8.6 percent, to close at $4.99 Monday in trading on the New York Stock Exchange.

Contact reporter John G. Edwards at jedwards@reviewjournal.com or 702-383-0420.