Stan Wilmoth, president of Heritage
Bank of Nevada, underscores the value of
community banks such as his with an
anecdote about the quick, personalized
service small independent banks can offer.
"A customer came to me four months
ago and said her application for a homeequity
line had sat at a larger bank for over
a month. 'How long will it take you to
make a decision?' she asked. I said if she
had all her information in order, we would
get her a decision that afternoon."
Wilmoth and Brad Cannon, Heritage's
chief credit officer, moved the application
forward to the appraisal step, and the
woman's credit line was funded 14 days
later,Wilmoth says.
Community banks those with state
charters, and which aren't branches of outof-
market banks are on the upswing in
Washoe County, battling for a share of the
$3.7 billion pie of deposits.
Since 1999, three community banks
have started up in the Reno area, joining
Heritage Bank, formed in 1995.
First Independent Bank of Nevada opened
in 1999, followed by Northern Nevada
Bank in 2000 and Nevada Security Bank
in 2001. This boomlet signifies a rebound
of the local market share of deposits held
by independent banks after a recent surge
of acquisitions.
In 1999, independent banks, with a
combined 14 offices, boasted about 24
percent of the market among institutions
insured by the Federal Deposit Insurance
Corporation. But that percentage dropped
to about 4 percent after three independent
banks sold to three larger banks. Colonial
Bank bought Interwest Bank, First
Security Bank bought Comstock Bank
(which Wells Fargo later bought) and
Nevada State Bank bought Pioneer
Citizens Bank.
Community banks still have less 6 percent
of the overall market in the Reno
area, says Robert Hemsath, president and
CEO of Northern Nevada Bank. "Over
the past year, all of the community banks
have continued to grow and have gained
some market share."
The most recent statistics from the
FDIC, through June 30, 2001, showed
that First Independent Bank had 2.14 percent
($78,961,000) of FDIC institutions'
deposits in Washoe County; Heritage
Bank had 1.66 percent ($61,156,000) and
Northern Nevada Bank had 0.45 percent
($16,678,000). Nevada Security Bank,
which opened later that year, did not have
figures reported.
The big boys dominated Washoe's market
of $3,689,798,000 in deposits, led by
Wells Fargo Bank Nevada, whose 27
offices had 34.82 percent
($1,284,850,000) of the market. Bank of
America's 14 offices had 21.55 percent
($795,093,000); Nevada State Bank's six
offices had 10.72 percent ($395,587,000);
and U.S. Bank's 10 offices had 8.53 percent
($314,874,000). California Federal
Bank, Farm Bureau Bank, Bank of the
West, Colonial Bank, other Wells Fargo
units, First National Bank of Nevada and
Sun West Bank had a combined 20.13
percent of the market.
Banks in Washoe County have about
17 percent of the $21.3 billion market
share of deposits among FDIC-insured
institutions in Nevada, according to
FDIC statistics.
A resurgence in independent banks was
inevitable, says Grant Markham, president
of First Independent Bank. "The bank
acquisitions that have occurred in the
recent past definitely created a community-
banking void in the market and opportunity
for new bank startups."
In addition to Interwest, Comstock and
Pioneer Citizens, two other local indies
Sierra West Bank and Nevada Banking
Company also were acquired by regional
or national banking companies in the
past few years.
"Typically, when banks are acquired
and some of their executive officers are
eliminated in the process, you will see new
start-ups as a result," Markham says,
adding, "The opportunities in this market
were so strong with the elimination of five
community banks that it was inevitable we
would see the numbers grow again."
While smaller banks offer essentially
the same interest rates as larger banks, the
indies promise more personalized service
than larger banks, and close commitment
to the local economy.
"The northern Nevada market has historically
shown strong support for its community
banks," Markham says. "The larger
banks may argue the point, but we compete
first of all with personal service, i.e.,
personal contact with the customers, direct
access to the bank employees no 1-800
numbers local decision-makers and
people who identify with and are a part of
the local community.
"With today's technology, there isn't
much difference in products that can be
offered by community banks versus the
larger banks. At First Independent, we
also try to be innovative and make it convenient
for our customers through things
such as courier service, Internet banking
and a large, free ATM network."
First Independent Bank opened in
September 1999. Nevadans, mostly from
the north, hold more than 90 percent of
First Independent's stock, Markham says.
"We have become the fasting growing
community bank in northern Nevada,
already reaching about $140 million in
total assets, and added our second branch
in Sparks in February of this year.We have
recently purchased a parcel of land on
Kietzke Lane in Reno and will hopefully
begin the construction of a new head
office for our bank in March or April of
next year."
Investors mostly from the local area
chartered Northern Nevada Bank in October
2000. "We have grown steadily over the past
two years and now have approximately $55
million in total assets," Hemsath says.
Their respective banks are committed to
long-term goals in the local market, rather
than eventually selling to a larger banking
company, Hemsath and Markham say.
"Acquisitions are the result of a larger
regional or national bank looking for an
opportunity to quickly enter a market with
an established infrastructure and immediate
market presence," Markham says.
"Acquisitions can also, however, be
prompted by an acquiree who sees an
opportunity for a big payday for its shareholders,
or by the shareholders themselves
who see an opportunity for a substantial
return on their investment."
Northern Nevada Bank is bullish on
northern Nevada, Hemsath says. "There are
great opportunities for all types of businesses.
Community banks play an important role in
the growth and stability of the economy by
providing the necessary capital for businesses
to grow and prosper."
Heritage, which specializes in meeting
loans from $100,000 to $2 million for small
businesses, has $96 million in assets, an office
each in Reno and Carson City, a third office
to open Sept. 30 on Damonte Parkway in the
south Truckee Meadows, and a fourth slated
to open in March 2003 on West Seventh
Street near Keystone Avenue.
Heritage was formed by a group of
business people in northern Nevada determined
to provide banking services the
local market lacked,Wilmoth says. "We're
owned by 360, primarily northern Nevada,
families," he says.
"We have a niche here. A lot of community
banks are formed for the sole purpose
of making a quick sell. Our plan is to
continue growing our bank in the northern
Nevada market and continuing to give
great customer service. We really don't
have plans to sell our bank."
