Nye County will not be affected by the recent announcement of Nevada State Bank branch closures in Nevada.
Three Nevada branches are planned for closure in the southern part of the state in early 2020: two in Las Vegas and one in Boulder City. A branch in Sparks is also pegged for closure in the same time period.
“In response to the challenging interest rate environment, Nevada State Bank identified ways to reduce operating expenses,” said Sandi Milton, senior vice president of marketing and communications at Nevada State Bank, in an email. “We are committed to maintaining a robust branch network to serve our clients.”
Milton said that the closures were “based on transaction levels and the trend toward online and mobile banking …”
“Nevada State Bank will experience a limited staffing impact …” Milton said.
That impact, however, will be less than the overall planned reductions of Nevada State’s parent company, Zions Bancorp.
Zions announced a 5% reduction in staff across its portfolio of companies that includes Nevada State Bank, the Commerce Bank of Oregon, the Commerce Bank of Washington, Amegy Bank, California Bank & Trust, National Bank of Arizona, Vectra Bank of Colorado and Zions Bank during an earnings call in October.
Zions has about 10,000 employees in its footprint that reaches across 11 western states, including Nevada. The company plans to cut about 500 jobs company-wide, executives said during the call.
The Nevada layoffs will be less than the company-wide rate of 5% by Zions.
Nevada State’s footprint in Nevada includes over 600 employees across its 50 branches.
During Zions’ third-quarter earnings call, Scott McLean, president and chief operating officer, stated that 30% of the planned staff reductions would be from the “customer-facing” side with the remainder coming from “enterprise activities and back-office activities.”
“As lower interest rates across the yield curve have materialized over the past several months, we have sharpened our focus on non-interest expenses,” said Harris Simmons, chairman and chief executive officer during the earning call. “Today, we are announcing an acceleration of our drive toward improving operating efficiency, which will result in a near-term workforce reduction of about 5% along with other operating expense reductions.”
Simmons said, “We believe this will enable us to achieve our previously stated outlook for non-interest expense for next year, which is to hold expenses flat to down when compared to this year,” during the call.
According to material provided for the earnings call, non-interest expense declined 1% to $415 million in the third quarter of 2019, down from $420 million in the third quarter of 2018. A temporary increase in non-expense is set to occur in the fourth quarter due to severance and other charges, Simmons noted during the call.
Paul Burdiss, chief financial officer for Zions, estimated that Zions’ non-interest expenses will be “elevated by severance charges of about $25 million and other restructuring related items” in the fourth quarter.
During the call, Simmons said, “For our financial goals, we have long been committed to achieving stronger revenue growth and expense growth also referred to as positive operating leverage. In a period of falling interest rates, our ability to achieve positive operating leverage becomes more difficult. Over the long term, we will remain focused on delivering positive operating leverage although we recognize that this challenge will increase as our operating efficiency improves.”
Zions had net earnings of $214 million for the third quarter of 2019, period ending Sept. 30. This was down from $215 million during the same period a year earlier.
Contact reporter Jeffrey Meehan at jmeehan@pvtimes.com, on Twitter @MeehanLv