Smart Money: Northern NV’s financial landscape primed for a vibrant future | nnbw.com

Smart Money: Northern NV’s financial landscape primed for a vibrant future

RENO, Nev. — Nevada as a whole — the Reno metro area in particular — is one of the brightest success stories in the post-recession era.

In the first half of 2017, the state gained the title of the fastest growing private sector in the United States. That's a robust improvement from the inertia of the recession when Nevada had the lowest employment growth in the nation.

"Driven by a dynamic small business community, Nevada's economy exceeded all expectations in 2017," Gov. Brian Sandoval said in a written statement.

The Silver State's economic engine is barreling ahead at full steam, and some of the best indicators of that are happening in our own backyard.

Throughout Northern Nevada, new construction is rising from the ground. Existing buildings are getting facelifts and remodels. Help wanted signs can be seen on store windows, lawn flags and even billboards. New companies are moving in, bringing high-paying jobs. Homegrown businesses are linking the region to the rest of the world in manufacturing, technology, agriculture and more.

Stan Wilmoth, president and CEO of Heritage Bank, expressed the excitement within the financial community.

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"We're out looking for good customers. We're excited about it, about the growth," Wilmoth told the Northern Nevada Business Weekly. "There's plenty of money out there, plenty of lenders to do the job. There's good demand and the pipeline is full."

Growth by the numbers

In Washoe County between 2015 and 2016, according to the Governor's Office of Economic Development, the population grew 2.2 percent; taxable retail sales grew 7.7 percent; and personal income was up 6 percent.

Meanwhile, between 2016 and 2017, passengers arriving at the Reno-Tahoe International Airport increased by 8.1 percent; and the number of new commercial building permits in Washoe County increased an astonishing 82.6 percent.

Farther east, mining profits are rising. In Lyon County, mining net profits increased by 14.5 percent between 2015 and 2016; in Churchill County, by 35.7 percent; Eureka County by 25.3 percent; and in White Pine County, net profits increased by 148 percent.

The Nevada unemployment rate through 2017 averaged 4.9 percent, down from 5.7 percent in 2016. In Washoe County, the unemployment rate in December 2017 was 3.7 percent, according to the DETR report

"Unemployment is low, new companies are coming in, balance sheets are looking stronger. I'm very optimistic," Lori Haney, senior vice president and Northern Nevada market manager for City National Bank based in Carson City, said in a previous interview with the Northern Nevada Business Weekly. "Everything is showing positive nationally, which trickles down to the state and local levels.

The challenge is meeting the needs in a robust economy. There's a lot of demand going on, and the challenge is keeping up with that demand."

Experts can lay the rail

The demand is there and the funds are there, but there's more to fueling a business than walking into a bank. Business owners must still qualify.

It takes extensive research and pre-planning to prove to potential investors that a business is headed the right direction.

Northern Nevada's financial professionals can help prepare a business for the financial application process, and how to manage those finances.

"With the many different methods available and nuances involved in financing a startup, it is important to understand the pros and cons of each form of investment and have legal counsel involved in the preparation and review of all financing documentation," say Craig Etem and David Lewandowski, of the Reno-based law firm Fennemore Craig.

The big question: Is there danger ahead?

Most local financial professionals don't see the same dangers in the current economic growth as the boom that preceded the Great Recession.

The region and the state have a move diverse economy. Gaming, tourism and mining are still important, but manufacturing, distribution and technology provide a much larger economic base.

"Because of our consistent and diversified growth, Nevada businesses have helped place our state on solid financial footing, and more Nevadans have long-term employment than ever before," Sandoval said.

Fraud may be the chief danger siphoning profits, driven by old-fashioned theft — and new tech e-fraud.

Globally, fraud is projected to exceed $25 billion in 2018, according to a report by HSN Consultants, Inc.'s The Nilson Report, released in October 2017.

Increases in interest rates will also increase expenses, but the increase is slow and a long way from being worrisome.

"In the '70s-'80s, it was in double digits," Wilmoth remembered. "Compared to those high interest rates, 6 percent, in my mind, is really good. For inexperienced investors, that rate will be a shock for them. That could be a bit of a problem."

But the good news dominates Northern Nevada's financial landscape.

"We've never seen a recovery like this," Wilmoth said. "We're radically successful now (at Heritage Bank) because our customers are so successful. We've had huge growth in deposits."

"I don't have concerns. Things really are good," added Terry Shirey, Nevada State Bank president and CEO based in Las Vegas. "There's always concerns around Northern Nevada's reliance on California. We're still very much impacted by them. But there are really good fundamentals now."

Editor’s note

This article is among those included in the inaugural edition of Northern Nevada Smart Money, a special publication produced by the staff of the Northern Nevada Business Weekly.

The 32-page magazine was inserted in the March 19, 2018, print edition of the NNBW. Don’t have a print copy? No worries — click here to access the digital e-edition of the magazine, as well as archived e-editions of the Northern Nevada Business Weekly.