Andrew Ryback
For most of us, it’s a good thing to have excess cash in our wallets.
For banks, however, too much idle cash is a problem. Our business relies on getting money out into the community in the form of loans and generating the interest income that we share with our depositors.
Since the early days of the COVID-19 pandemic, Northern Nevada banks have faced the challenge of making enough loans, so we could put to work all the dollars that flowed our way as the result of federal pandemic assistance.
Fortunately, demand for loans has been strong in the vibrant economy of Northern Nevada. Lending financed the industrial buildings that house our new companies and the apartment buildings that workers call home. Small businesses took advantage of record-low interest rates to expand and homeowners borrowed for remodeling projects.
Now we’re starting to see a transition; interest rates are climbing higher, even though they’re likely to remain below historic norms, at least through the rest of this year. Concern is rising about the possibility of a recession sooner or later — I think it will be sooner — and the ability of the Federal Reserve to navigate a soft landing for the economy.
Banks in our region are on solid ground to weather this transition. They don’t have a lot of troubled loans on their books. They’ve benefitted from the remarkable diversification of the northern Nevada economy in the past decade, and they don’t have all their eggs in one basket.
Financial institutions have taken steps, too, to streamline their operations. Plumas Bank, for instance, is making significant investments to dramatically reduce the turnaround time for business loans. Our lending professionals will spend less time on routine paperwork and more time working creatively with their clients to address their unique business needs.
While banks are well-positioned for the transition from the low interest rate environment of the past decade, the banking sector in northern Nevada is likely to be affected by the consolidation of the major national — even international — banks that have operations here.
Canada’s Bank of Montreal, for instance, is working to buy Bank of the West. Umpqua Bank is merging into Tacoma’s Columbia Banking System. Zions’ Nevada State Bank is purchasing the three City National Bank branch locations in northern Nevada.
The consolidation is likely to maintain the healthy competition that’s long been a hallmark of our region’s banking sector.
But as major banks get even larger and pursue their national corporate strategies, opportunities are created for smaller, community-oriented institutions such as Plumas Bank. We’ve been making a lot of loans to local companies in partnership with the Small Business Administration. We’re also meeting the lending needs of Nevada family farmers.
The consolidation of major financial corporations means that community banks have renewed focus on their responsibilities as good citizens, too. Plumas Bank certainly is profitable for its shareholders; we have been consistently recognized as one of the nation’s top-performing community banks, but our bank is equally committed to reinvesting in our communities. We support nonprofits and civic organizations throughout northern Nevada, and we strongly support the work of the Economic Development Authority of Western Nevada, as it strengthens and diversifies our region’s economy.
Like all of us, bankers in Northern Nevada are sorting out the meaning of all the turmoil in our world — inflation, military conflict, looming economic downturns, and elections that might bring political change. But no matter what changes lie ahead, strong financial institutions and banking professionals who are firmly committed to the well-being of our community and its people will continue to provide a solid foundation for Northern Nevada.
For more information, go to https://www.plumasbank.com/..
