• Skip to main content
  • Skip to secondary menu
  • Skip to primary sidebar
  • Skip to footer

Nevada Business Magazine

The Decision Maker's Magazine

Subscribe Now!

  • Subscriptions
    • Print
    • Mobile App
    • Email
    • Nevada News & PR Wire
  • Features
    • New This Month
    • View Issues
    • Cover Stories
    • Feature Stories
    • Industry Focus
    • Building Nevada
    • Special Reports
    • Press Release Wire
    • Nevada Industries
  • Departments
    • A Matter of Opinion
    • Around the State
    • Business Indicators
    • Commentary
    • Commercial RE Report
    • Crossfire
    • Expert Advice
    • Face to Face
    • Free Market Watch
    • Inside Politics
    • Power of Attorney
    • Profit & Loss
    • Speaking for Nevada
    • Tech.knowledge.me
    • The Last Word
    • Vital Signs
  • Planning Calendar
  • Advertising
    • Advertising Info
    • Advertising Staff
    • Submission Requirements
    • Online Advertising
  • Events
    • NBM Events
  • About
    • About the Magazine
    • Contact the Staff
  • Connect
    • Business Directory
    • Press Release Wire
    • Business Calendar
    • Submit Listing
    • Post Press Release
    • Add Your Event
    • Sign Up
    • Log In
You are here: Home / Features / Cover Story / Banking on Nevada: Moving Forward

Banking on Nevada: Moving Forward

May 3, 2012 By Howard Riell Leave a Comment

No one is singing Ding-Dong, the Wicked Witch is Dead just yet, but a great many bankers across Nevada are already hailing the end of the recession – or something that looks a lot like it – and searching for ways to chart a better course through 2012 and beyond.

Many banks statewide have gone by the wayside, and more may still follow. But for those willing and able to innovate – which for some may mean anything from leaning less on the real estate industry to simply going back to the basics of customer service – the months ahead promise to be better ones.

A bump in the road of as-yet-undetermined proportions and consequence is the Dodd-Frank Act, which like so many solutions that come out of Washington solves some problems while creating all new ones, beginning with its whopping cost.

So, how are Nevada’s banks doing?

Jason Awad, no stranger to the banking industry, last year acquired First Security Bank of Nevada and serves as its chairman of the board. Having lost $7.7 million in the first half of 2011, the bank posted a net profit for the last five months of last year. In addition, the bank has loaned $23 million to local businesses in the seven months ending in March 2012. Awad is a staunch believer in the conomic viability of the area.

“Honestly, banks across the country and specifically here have suffered tremendously with the economic recession,” says Awad. “However, I believe the recession is over across the country, and for sure here in Nevada.” Last year and this, he adds, indicated a better direction for the economy. “We have started the recovery; we have concrete signs of recovery, especially locally.”

Indeed, Awad believes Nevada will experience a faster rate of recovery than the rest of the nation. “Our tourism volume is up, our sales volume is up, real occupancy is up, and the belief in the people that a recovery is around the corner is there.” The coming of what Awad calls “foreign investors,” which he defines as “anyone who is not a local” scooping up distressed housing properties for rock bottom prices will serve to speed the recovery.

“To put it in medical terms, here in Nevada, banking in stable,” declares Bill Uffelman, President and CEO of the Nevada Bankers Association in Las Vegas. “If you follow the FDIC reporting for end of year, several of the community banks have actually had net positive earnings. Some others are still losing but not losing as much as they were, so they can see their way out of the woods.” At the national level, he continues, positive earnings have been shown by several of the banks. “So we’re recovering, but we’ll still be in the hospital for some time, I guess. Or in rehab; I’m not sure which.”

Uffelman points out that the government’s definition of recession is two negative quarters in a row, and that two consecutive positive quarters means the recession has ended. “Supposedly, that happened a year and a half ago. The problem here is that we still have the continuing issue that there really isn’t a dramatic turnaround; it’s just that we’ve turned around, and we’re still on this kind of bumpy bottom.” There are, he explains, no big construction projects to help get construction workers back to work. “Housing is a long ways from resolutions here. We’ve still got a lot of foreclosures to be done.”

On the commercial side, he has seen a movement from what many refer to as Class B space to Class A space, so at least the better commercial properties are renting. “But they’re renting at lower rates,” Uffelman says, “so a firm may have moved from a Class B space to a Class A space, but perhaps may have not taken as much square footage and gotten it at another rate so they’ve cut their costs. But that means that there is lots of vacant Class B space.”

On the Mend

Dallas Haun, CEO of Nevada State Bank (NSB), sees the state’s banking industry as being on the mend. “The ones that were not able to survive the severe recession are out of business. The ones that remain have restored and are in the process of restoring their balance sheets and moving forward.” They are doing that by working out problem loans and finding new sources of revenue.

“I think most of the banks here in Southern Nevada rode the real estate cycle, and were primarily real estate lenders,” suggests Haun. “Over the last two or three years we’ve opened half a dozen business centers here in the south, and one in the north to handle our small business clients.” NSB has also spent time and effort in developing different types of consumer products, such as a 100% LTV (Loan to Value) mortgage on homes. “We’ve also run a number of campaigns on 7-, 10- and 15-year mortgages — no cost, no fees, no payments for the first 90 days.”

It’s working. Last year, NSB funded $65 million in small business loans, most of which were deals of no more than $100,000 to $300,000. “I think our average loan was $130,000,” Haun says. “To do $65 million you have to get out a lot of new dollars to small businesses.”

“A lot of the focus over the last few years has been around problem loans,” says Erich Boellinger, Executive Vice President and Chief Banking Officer for Plaza Bank, “bad real estate loans and banks working through their challenges assets. There is still some of that out there, some residual. We’ve still got a few that we’re working through, and many of our competitors do, as well.”

The majority of those problems however have been identified, he feels, and the appropriate structures put in place, “and so that’s all kind of coming to an end.” Boellinger views last year and the first few months of 2012 as having been transitional for banks, and an opportunity to “revisit their core competencies and how they do business and (decide) what they want to do going forward.”

There are, though, still businesses that are on the verge of failure, Boellinger points out, “so there still are a handful of new deals that are challenged.” That aside, he believes banks across the state are going back to taking a look at their core businesses. “Does a bank have the right cost structure in place? The right staffing? You’re seeing that around town, with some of the banks doing some restructuring and some cuts.”

Beyond that, Boellinger continues, banks are taking a look at the model itself. His own, Plaza, is a community business bank, and so is focused on businesses. “Is it the products I have, and how we bundle them together, how we deliver them? Is it still appropriate compared to four years ago? Or do we need to change things up to deliver a better experience?”

Considering Dodd-Frank

Dodd-Frank – officially The Dodd– Frank Wall Street Reform and Consumer Protection Act, signed into law by President Barack Obama on July 21, 2010 – puts forth financial regulatory reform. It was passed as a response to the recession, bringing with it what some have called the most significant changes to financial regulation in the United States since the aftermath of the Great Depression.

One of the most fundamental concerns about Dodd-Frank, Awad suggests, is its cost. “Jamie Dimon (Chairman, President and Chief Executive of JPMorgan Chase) said that the cost for a large bank, on an annual basis, will be between $400 to $600 million just to implement these rules and regulations, so it’s going to be costly. But I believe that we need consumer protection, and I believe that we need good and healthy regulation.”

Awad feels the verdict is not in yet. Though the sweeping legislation came about due to issues relating to large banks, he notes that “small banking situations got affected in the process because of the burdensome regulations and the cost.” He also points out that only a portion of the bill has thus far been enacted. “For a substantial amount of it the regulation has not been written yet.”

Awad cites an article by Robert Lenzer in Forbes that noted, “… only 93 of the 400 rule-making requirements have been finalized. Litigation on the whole mess is beginning as the backroom lobbying of special interests tries to water everything down.”

“A big portion of (Dodd-Frank) was really consumer protection,” Boellinger points out. “We’re not a retail bank, per se, we’re a business bank, so some of the things don’t really apply. Some of the things like swaps and derivatives, mortgage reform, securitization (pooling varieties of contractual debt — residential mortgages, commercial mortgages, auto loans or credit card debt obligations – for sale as bonds, pass-through securities, or collateralized mortgage obligations), things like that really don’t come into play for a community bank.”

Where the legislation will impact Plaza and banks like it, he continues, is in its more stringent capital requirements. “Many of us have raised the capital, or banks have new owners who have the proper capital behind them, so there is a lot more strength behind financial services in the market.”

Dodd-Frank has also emphasized stress tests; specifically, is there enough capital and liquidity, and if interest rates were to move or other factors come into play can the bank survive. Generally, Boellinger feels, this is a good thing. “We don’t want to have to do bailouts again; I think everyone agrees we don’t want to end up going down that path. It is expensive to have the additional capital, and the extra oversight by the regulators is also expensive. There are a lot of resources that go into it.”

The biggest issue with Dodd-Frank, according to Uffelman, is the Durbin Amendment, which deals with what can be charged on interchange fees. The banking industry has seen what Uffelman labels a “dramatic” reduction in the interchange fee income that they receive, leaving bankers to deal with that loss of income.

“When you see stories that say, ‘Well, they’re going to impose fees for checking or do these other things,’ that’s an effort to recover costs,” Uffelman notes. “When a bank gave free checking it was never free. But what they were doing, for example, was this: a small percentage of customers write overdrafts, and so the overdraft fees paid willingly by those small customers who wanted the privilege to overdraft helped cover the expenses of checking for other people. They were subsidizing other customers.” Now that banks can’t charge – when the whole overdraft formula has been changed – they’ve got to recover those costs somewhere.”

Uffelman says he finds it interesting that when Bank of America suggested it was going to charge $5 a month for using a debit card “everybody went berserk. Well guess what: if you’re using a store value card from Walmart you’re paying a monthly fee. People are already paying fees; they just don’t think about it in those terms. If you’ve got a bank that you love to hate you think ‘Those greedy SOBs!’ but the reality is a bank is supposed to be a for-profit entity. A credit union is supposed to make a profit. We all have to earn a living somehow, and when you take away the means to earn the living then at some point those institutions have problems.”

Banking on Hope

What does the future look like for Nevada’s banking industry?

The banks that are able to properly capitalize and find niches to generate revenue, Haun says, are the ones that are going to prosper going forward. “Clearly, what I think has happened with this recession is that banks have been forced in many ways to reinvent themselves, particularly here in Southern Nevada, where so many of the banks relied primarily on real estate loans.”

The banks that have survived have had to work closely with customers. “They do all the things that they need to because they are not trying to put their customer out of business,” Uffelman explains. “He’s been a customer for a long time, so you work with him every way you can, constrained by banking rules as imposed by the regulators.”

“The future is very bright,” Awad concludes. “We are banking on hope. I believe – specifically I’m talking about the local economy in Nevada – you are going to see that the consumers will be demanding personal service. They have experienced substantial letdown during the financial crisis because the large banks, in general, are not lending. And now the only way back is to provide that service and personal relationship, and to provide capital for the small business individual to borrow so he can expand and hire. The only way we’re going to see a reduction in unemployment is if you have an expansion of our business community. The only way that can happen, though, is through lending by community banks. That’s the bottom line.”

Filed Under: Cover Story, Features Tagged With: banking, Bill Uffelman, Dallas Haun, Dodd-Frank Act, Dodd– Frank Wall Street Reform and Consumer Protection Act, Durbin Amendment, Erich Boellinger, First Security Bank of Nevada, Jamie Dimon, Jason Awad, JPMorgan Chase, Las Vegas, Nevada Bankers Association, Nevada banking industry, Nevada State Bank, NSB, Plaza Bank, Southern Nevada

Sponsored Features

Sponsored Features

Sun City Anthem HOACashes in on Water Savings

U.S. Bank’s Good TruckComes to Las Vegas

GC Garcia, Inc. Celebrates 25 YearsAnd Looks Back on Southern Nevada’s Changing Landscape

Las Vegas Valley Water DistrictSupports Local Fire-Fighting Efforts

Advertise With Us

Advertise With Us. more details ►

Primary Sidebar

Education OutlookBig Issues and Hard Work for K-12

Industry FocusBuilders & Developers

Industrial SubmarketDemand Over Pandemic

Cyber SecurityKeeping Your Business Safe

Nevada News & PR Wire

  • Las Vegas-Based Pandmedic Solutions Donates 10,000 Face Masks to Non-Profit Core and Two Opportunity 180 Schools

  • Korin Woods Named Executive Director of Nonprofit UNSHAKEABLE

  • CSN First-Generation Student Named Regents’ Scholar – the Honor Includes a $5,000 Award

  • Cure 4 the Kids Foundation Tees up 9th Annual Golf 4 The Kids

  • Call for Proposals for Two Visit Carson City Murals

  • Northcap Commercial Arranges Sale of Azure Park Apartments for $2,854,000

  • Special Olympics Nevada to Host 2021 South Lake Tahoe Plunge at Round Hill Beach Resort

  • City of Las Vegas Launches Smart Curbside Management Corridor with Cox

  • De Castroverde Law Group Announces Winners of Its Fall 2020 Teacher Appreciation Awards

  • NAIOP Southern Nevada Urges Congress to Pass the Southern Nevada Economic Development and Conservation Act

  • Dueling Axes Announces Spring Specials and Weekly Programming

  • Desert Radiology Receives Renewal as Diagnostic Imaging Center of Excellence From American College of Radiology

  • Junior Achievement of Southern Nevada Announces New Board Member Hilary Nelson of Lexicon Bank

  • Cure 4 the Kids Foundation Recognizes Founder Annette Logan-Parker – Dr. Suess-Themed Patient Examination Room Dedicated During Nevada Reading Week

  • Local Business Owner Accepted Into Goldman Sachs 10,000 Small Business Program

  • James M. Wright Named Chief Marshal for the Nevada Appellate Courts

  • CAMCO Employees Demonstrate Their Giving Hearts in February

  • Nevada Donor Network Applauds AOPO’s “50,000 Organ Transplants by 2026” Campaign that Focuses on Improving System and Saving More Lives

  • Reno Aces and Greater Nevada Credit Union Help Youth Sports Return to Play

  • Diversity in Practice Panel to Explore Middle Eastern/South Asian Representation in Law

  • Founder of “Gracefully Greying”, Family Attorney Henry S. Gornbein Joins Lipson Neilson as Of Counsel

  • La Strega’s Weekend Fish Market Continues, Scheduled for Sun., Mar. 7

  • Prominence Health Plan Advises Nevadans to Protect Themselves from Medical Scammers

  • A Virtual Restaurant and Fast Casual Concept Set to Debut in Henderson

  • Suit up and Help End Childhood Cancer With St. Jude Children’s Research Hospital®

  • Faith Lutheran Middle & High School’s Conservatory of the Fine Arts Presents Filming the Arts – Student Showcase Proceeds Benefit Renowned Fine Arts Program

  • Carson City Named Top Place in America to Travel Right Now and Avoid the Pandemic by Forbes

  • Wolf, Rifkin, Shapiro, Schulman & Rabkin, LLP Relocates its Reno Office

  • De Castroverde Law Group Awarded Las Vegas Latino Bar Association Inspira Award

  • Virtual Poker Tournament with “Poker Brat” Phil Hellmuth Will Benefit Junior Achievement of Southern Nevada Mar. 13-14

  • Future Smiles Receives Unrestricted $25,000 Program Grant From LIBERTY Dental Plan of Nevada

  • Desert Radiology Encourages COVID-19 Vaccination Among Team Members and Community

  • Northcap Commercial Arranges Sale of MCR Apartments for $6,800,000

  • Helix Electric Announces Completion of Meow Wolf’s Omega Mart

  • Brooke Conway-Kleven Leads Cure 4 the Kids Foundation Physical Medicine Department

  • Coral Academy of Science Las Vegas Accepting Enrollment Applications Through Feb. 28

  • JING Las Vegas to Host Wine Tasting Tuesdays, Every Tuesday Beginning Tues., Feb 23

  • Reno Public Market’s Nettie Oliverio Elected as Pioneer Center Board Chair

  • Alaskan-Born Neeser Construction Expands in Reno-Tahoe

  • More Matcha on the Menu: Dunkin’ Debuts Blueberry Matcha Latte and New Matcha Topped Donut

  • Las Vegas Local Businesses Celebrate with February Events Margarita Day, Happy Hour Specials, Wine Pairing and Charitable Fundraisers

  • Wolf, Rifkin, Shapiro, Schulman & Rabkin, LLP Relocates its Las Vegas Office

  • Supreme Court to Consider Creating Commission to Study Water Adjudication

  • WGU Launches Initiative to Remove Barriers for Students With High Financial Need and Those Without Access to Federal Financial Aid

  • Applications Open for Nevada State College’s Newest Summer Bridge Program Designed for Incoming Black Students

  • Silver State Schools Credit Union Announces 2021 Scholarship Program Available To Graduating Nevada High School Seniors

  • Broadbent & Associates, Inc. Names New Director of Engineering

  • Nathan Adelson Hospice Names Cheryl Johnston as Clinical Manager for Pahrump Location

  • Former Las Vegas Police Officer Offers Help To Local Residents

  • Statewide Partners Unite to Facilitate Equal Vaccine Access Through Nevada Vaccine Equity Collaborative

  • Nevada Small Business Development Center Presents The Top 5 PPP Myths, Busted!

  • Jewish Nevada and Jewish Family Services Agency (JFSA) Team up to Launch Hebrew Free Loan Program to Assist Nevada’s Jewish Community

  • Cassie Catania-Hsu Accepted Into NAIOP Research Foundation Visionaries Program

  • Ascent Multifamily Now Offers Corporate Accounting

  • Nevada State Contractors Board to Hold 2nd Annual ‘Hammers & Hope’ Event

  • TMC Financing Helps Eby Iron Designs Secure Future with Building Purchase

  • Economic Impact of COVID Closures White Paper Published

  • ioneer and Caterpillar Complete Autonomous Haul Truck Feasibility Study and Sign Memorandum of Understanding

  • United Pain Urgent Care Launches in Reno

  • Terra Contracting Launches New Service Offering; Public Utilities to Save Millions

  • In Plain Sight Marketing Ditches Brick and Mortar Digs, Goes Virtual

  • Eleven Lipson Neilson Attorneys Receive AV Preeminent® Rating for 2021

  • Nevada Supreme Court Appoints Katherine Stocks as Director of the Administrative Office of the Courts and State Court Administrator

  • Cold Brew With Sweet Cold Foam and Chocolate Stout Cold Brew With Sweet Cold Foam Arrive at Dunkin’ Restaurants Nationwide on February 24

  • Desert Radiology Continues to Hire for Several Available Positions

  • Dr. Phillip Ruiz Joins Nevada Donor Network as Associate Laboratory Medical Director

  • Colliers Las Vegas Represents Sale of Undeveloped Land in North Las Vegas

  • Special Olympics Nevada to Host 2021 Las Vegas Polar Plunge at Cowabunga Bay

  • G.C. Garcia, Inc. to Host ‘Reading to Rescued Dogs’ Books & Pet Supplies Donation Drive to Benefit Spread the Word Nevada & Heaven Can Wait Animal Society

  • Steinberg Diagnostic Medical Imaging and SR Construction Break Ground on New Facility

  • Sandeep R. Pandit, M.D. Brings Hip and Knee Expertise to Crovetti Orthopaedics

  • NV Energy Foundation Provides $550,000 to Support Scholarships, Workforce Readiness & Student Emergency Fund. the Funds Will Provide Scholarships and Aid to Hundreds of CSN Students

  • NAIOP Southern Nevada Presents “Land: Why Our Future Depends on It” at Feb. 18 Virtual Breakfast

  • Concrete Slabs Poured at Latest Brass Cap Development Industrial Project in West Henderson

  • The Discovery Welcomes New Board Members

  • Deryk Engelland Joins the 8 News Now Team

  • Dress for Success Southern Nevada Welcomes Norma Intriago as Executive Director

  • Lutheran Social Services of Nevada to Celebrate Opening of Expanded DigiMart™ Food Pantry – Feb. 16 Ribbon Cutting Will Celebrate Completion of Expansion That Will Serve an Additional 5,000+ Families Annually

  • NAIOP Honors Southern Nevada Chapter With Three National Awards

  • Zero1 Off-Road, LLC Acquires Vegas Off-Road Tours, LLC and Transfers the Existing RZR Off-Road Experience to “Vegas Off-Road Tours”

  • Dermody Properties Promotes Kimberly Rossiter to Director of Property Management, West

  • RSAR Releases January 2021 Existing Home Sales Report

  • PureCare Living’s Newest Skilled Nursing Facility Enters Final Phase of Licensing

  • LPGA Pro Gigi Stoll Joins Reflection Bay Golf Club

  • Northcap Commercial Arranges Sale of 2566 Sherwood Street Apartments for $1,700,000

  • Business Continuity Technologies Protecting Las Vegas Business From Cyberattacks

  • MassMedia Marketing, Advertising and PR Signs Circus Circus Hotel & Casino Las Vegas

  • Colliers Las Vegas Industrial Team Sells Out Six-Unit Industrial Complex Valued at $6.6m During Pandemic

  • Tuscan Highlands Opens Second Round of Nominations for Valley’s Top First Responders

  • The Las Vegas Business Academy Announces Allyson Bunker and Candace Davis-Martin as New Board Members

  • Southern Nevada Housing Market Starts Year With Prices Still Rising

  • Two University of Nevada, Reno Graduates Earn Certificate in Principles of Public Relations

  • Reno Sportsdome Partners With Swift Orthopedic Urgent Clinic

  • Nevada State College Ranks #2 in Nationwide Search for Best Elementary Education Degree

  • College of Southern Nevada & City of Las Vegas Partner to Offer Education, Workforce Training in Historic West Las Vegas

  • Future Smiles Receives $10,000 Gift From Dentaquest – Nonprofit Will Use Funds to Support Local Children in Need of Critical Dental Services

  • Colliers Las Vegas Retail Broker Chris Clifford Promoted to Senior Vice President

  • Silver State Schools Credit Union Increases Share Insurance Coverage Up To $500,000

  • Lamar Advertising of Las Vegas to Honor African American “Firsts” Throughout Black History Month

  • ioneer Welcomes Rose McKinney-James as Non-Executive Director to its Board



 
Submit Your News & PR | Subscribe
Submit Your News & PR

Business Connection

Business Connection Portal

Log In Sign Up

Business Connection Portal

Log In Sign Up

Nevada Business Calendar

  • Ely Film Festival 2021
    March 12, 2021 12:00 pm

    Location: 501 E Aultman St, Ely, NV 89301, USA

    More details...
  • Play 4 JA Virtual Poker Tournament
    March 13, 2021 12:00 am

    More details...
View Full Calendar ►

Nevada Business Directory

Featured Businesses
Find a Nevada-Based Business Submit Your Business Subscribe to the Nevada News & PR Wire

Nevada Industries

Architects & Engineers
Arts & Culture
Banking
Commercial Real Estate
Construction
Credit Unions
Economic Development
Education
Financial Management
Healthcare
Human Resources
Insurance
Law
Manufacturing
Marketing
Media
Mining
Philanthropy
Residential Real Estate
Rural Nevada
Sports
Tax Planning and Accounting
Technology
Telecom
Tourism
Transportation
Utilities

Footer

Subscriptions

  • Print Subscription
  • Mobile App
  • E-mail Subscription

Editorial

  • Features
  • Departments
  • Events

Advertising

  • Advertise
  • Submission Requirements

Connect

  • Contact
  • LinkedIn
  • Facebook
  • Twitter

Copyright © 2020, Business Link LLC dba Nevada Business Magazine and Nevada Business Journal. Privacy Policy | Terms & Conditions
Nevada Web Design services by Nevada Central Media using Genesis Framework by StudioPress