In Business Las Vegas, November 16th, 2007
Deposits are down for roughly a dozen banks doing business in Clark County this year.
Last year's top-ranked banks (based on deposits) experienced a setback this year, including Washington Mutual Bank (No. 2), Bank of America (No. 3) and Wells Fargo Bank (No. 4).
Collectively, these three banks' deposits are down Washington Mutual accounting for the lion's share.$10.22 billion,
Bank of Nevada
President
Bruce
Hendricks
said the dips in deposits could be attributed to a strong stock market, and increased competition. Bank of Nevada, listed at No. 6, saw its deposits drop $230 million this year.
When the stock market is strong, people will put their money there, but as it weakens, he expects they'll return their money to banks,
Hendricks
said.
Service1st Bank of Nevada
President
Stuart
Olson
, formerly of the Federal Deposit Insurance Corp. also attributed part of the declining deposits to the stock market, which has weakened in the past couple weeks, and the real estate slump, he said.
There's not as much title money, 1031 exchanges and other real estate transactions with the real estate market slowdown,
Olson
said.
"Developers' money is tied up," he said. Money usually placed in banks is tied up in land and properties, he said.
"I don't expect the situation to get much better next year. We've got a challenging environment. Banks make their money on interest income."
Deposits are becoming so competitive, he said, that for instance, banks are making 4.5 percent on deposits when a year ago, they were making 5 percent.
Service1st (No. 30) is part of that increased competition, having entered the market earlier this year with starting capital of $50 million.
Other newcomers to the market include First Security Bank of Nevada, First Asian Bank and — not on this year's list yet — Paramount Bank and Bank of George.
Hendricks
said the growing community will continue to invite new banking opportunities. "You can only slice the pie so thin," he said. "How many is enough? I guess the market will tell us that."
Bank of Nevada didn't dabble in subprime loans, another factor in declining deposits.
"We also have to attribute a little bit of it to real estate and the real estate crunch,"
Hendricks
said. "If their business is off, their deposits are off."
Wells Fargo was one of those banks that did issue subprime mortgages, and is already rewriting them, the bank's
regional president, Kirk
Clausen
, said during a banker's panel on the topic in October. Of the loans issued by the bank, 5 percent to 10 percent have been unconventional, adjustable rate mortgages, he said..
However,
Hendricks
remains "very, very optimistic on
Las Vegas
. Count the (numerous construction) cranes on Las Vegas Boulevard."
"While 2008 may be a difficult year also, a lot of bright things are on the horizon,"
Hendricks
said.
Hendricks
pointed as an example to MGM Mirage's CityCenter, expected to employ 16,000 workers once complete in 2009.
Wachovia Bank (No. 9) replaced World Savings Bank on this year's list, after it acquired the bank in late 2006.
While Citibank West is listed as having the most deposits, the bank only provides overall deposit figures, instead of deposits specifically for Clark County.
