Banking on It - August 2004

U.S. Bank of Nevada

Exploring Future Growth Possibilities

by Howard Stutz

U.S. Bank operates in 24 states and is ranked in the top two in 17 of those locations. The Minnesota-based financial institution, however, views Nevada as one of its top potential growth markets.

With healthy competition from Bank of America and Wells Fargo as well as the numerous community banks, U.S. Bank believes it can fill an important customer service function in addition to increasing its commercial lending presence within the Silver State.

"We like competition, and there is room for healthy growth in Nevada, both in Las Vegas and Reno," said Ken Ladd, president of U.S. Bank’s Nevada operations. "We have advisory boards in both the north and south that have individuals who understand their particular market and offer management important counsel and direction. We believe that has been very helpful in our growth."

U.S. Bank entered Nevada in 1992 during a decade that saw a multitude of bank mergers. Ladd, who started his career with Nevada National Bank in 1983, survived all the combinations and changes that eventually led to the make-up of what is now U.S. Bank of Nevada. He even jokes that he has occupied the same office and phone number in the bank’s recognizable Las Vegas headquarters at the intersection of West Sahara Boulevard and Rancho Drive going on 15 years.

The bank is part of U.S. Bancorp, a company traded on the New York Stock Exchange. With assets of $189 billion, it is ranked as the nation’s eighth-largest financial services holding company. In Nevada, U.S. Bank has deposits of $1.752 billion and employs 465 people at 27 traditional branches and 19 branches in supermarkets. The bank also operates 48 automated teller machines.

The growth possibilities, said Ladd, are plentiful in both the northern and southern regions. "We have an aggressive sales staff who are actively out there developing new relationships on the retail and commercial side," Ladd said. "We are active in business development and we see a bright future with tremendous potential."

Ladd said the bank isn’t concerned about the newly-enacted business tax in which U.S. Bank and other financial institutions pay a 2 percent payroll tax plus a $1,750 fee on each branch per quarter. Some banking lobbyists said the fees would curtail development of new branches, especially in the rural communities. Ladd said the fees haven’t stopped U.S. Bank from adding new locations inside supermarkets.

"We know government must supply services, and those services cost money," Ladd said. "We like the low-tax environment in Nevada and we understand that it’s not going to be a no-tax environment. It hasn’t stopped us from expanding our presence. We’ll let our actions speak for themselves."

The main growth vehicle for U.S. Bank is the establishment of in-store branches by the company inside Safeway and Vons supermarkets in Nevada, California and Arizona. In Southern Nevada, the bank opened seven in-store branches this year inside Vons stores in all parts of the Las Vegas Valley and the company is exploring possibilities for other locations.

Ladd said the in-store branches are more cost-effective for U.S. Bank – it costs roughly $280,000 to refurbish a location inside a Vons, as opposed to $2.5 million to $3 million to build a stand-alone branch. However, Ladd said the bank treats the in-store locations like full-time branches, staffing each with up to eight employees who can handle loan processing, mortgage loan applications and business lending, in addition to other transactions.

"We want our in-store locations to offer the same type of full-service banking that a customer would find at any of our traditional branches, along with convenient hours," Ladd said.