Twelve months ago, banks in northern Nevada like banks elsewhere were finishing up the big task of matching their assets and liabilities.
After interest rates had fallen to historic- low levels, bankers needed to get interest rates paid to depositors down to the new low rates paid by borrowers.
With that job completed and the regional economy continuing to hum along, bankers see nothing but blue skies and smooth sailing in 2004.
"No worries," summarizes Dave Funk, president of Reno-based Nevada Security Bank.
As bankers look toward 2004, they take the business down to its basics:
* Deposit growth is strong.
In mid- 2003, the Federal Deposit Insurance Corp.
says, commercial bank deposits in Washoe County stood $4.6 billion.
And the interest rates banks need to pay to attract deposits appears to be stable.
"I don't see much movement in interest rates during an election year," says Ted Wehking, executive vice president of the Nevada Bankers Association.
* Loan demand remains healthy in a growing regional economy, allowing banks to put those deposits to work.
That demand comes across the board, says Stan Wilmoth, president of Reno-based Heritage Bank of Nevada.
Along with construction lending, banks' commercial loan officers are busy with other real-estate deals, equipment purchases and loans for business expansion.
* The strength of the economy notably, unemployment rates that stay well below national figures mean that borrowers are able to repay their loans.
"Credit quality is very strong.
Northern Nevada has been pretty resilient," says Chad Osorno, senior vice president and managing officer with the business banking group of Wells Fargo in Reno.
That economic strength is likely to continue.
"The economy is stable and improving," says Robert Hemsath, president of Northern Nevada Bank.
"As usual, northern Nevada is faring very well."
The growth means, however, that banks focused on individual consumers need to consider new branches to stay close to their customers.
Nevada Security Bank, for instance, plans to open a branch in northwest Reno next year.Wells Fargo, Osorno says, expects to open two or three branches in the market adding to its current network of 22 branch locations in Washoe County.
All the good news for banks in 2004, Wilmoth says, may set in a motion a series of events that will bring significant change to the region's banking scene.
As investors see the recovery in the banking industry,Wilmoth says, the shares of publicly traded financial companies will be bid up.
That will give those publicly held companies a more valuable currency their common stock which they could use to acquire one or more of the independent banks that have sprung up in northern Nevada in recent years.
