Nevada’s Silver State Schools Credit Union may be long in the financial pits but it found some close by friends this week.
“It is in everyone’s best interest that Silver State recovers and starts growing again,” declared Brad Beal, the president/CEO of the $684 million One Nevada CU of Las Vegas.
Suggesting that the negative publicity on a troubled rival continues to damage the CU brand, Beal said his CU has had no discussion about a consolidation with $667 million Silver State, which this week announced plans to close three more branches in January as part of its ongoing cost cutting.
“We have our hands full and we are totally occupied with keeping our heads above water in our own shop,” Beal said of One Nevada, which like Silver State has experienced large loan losses, shrunk assets and reported $2.7 million net loss for the first nine months. It lost $4.2 million in 2010 but has recently replaced Silver State Schools' place as the largest credit union in the state by assets.
Running a financial institution in Nevada “is an endurance contest” to see who can finally last “in what I’d call stagcession,” a combination of stagnation and recession, he said.
While the Las Vegas Chamber of Commerce has been issuing cheery reports about big jumps in convention trades and taxi bookings, the fact is, said Beal, “the tourists coming here are not spending like they used to. They come but don’t gamble any longer.”
The high rollers “who spent $400 for a night at the Bellagio” are missing adding “I’ve seen some hotel specials there at $129 a night.” Las Vegas is quickly converting to a home “for the middle income market,” he said.
Beal said also he was not surprised to learn that Silver State would be closing three more branches based on a look at its financial condition. The branch closures “seems like a prudent move,” he said.
Silver State, which lost $5.5 million for the first three quarters, maintains 3.85% net worth and has long been on a regulatory watch list. One Nevada's net worth remains at 9.57%.
For his part, Andrew Hunter, president/CEO of the $667 million Silver State Schools, said his CU welcomes Beal’s support “and we’ve had similar” expressions by other Nevada CUs.
In the meantime, Hunter stressed again that the Silver State business model and its member support remains intact and that the CU has gone to great lengths to re-adjust its loan portfolio. “It is not a bottomless pit,” since corrections have been made to halt the slide, he said.
“Could I ask a favor?” he queried a reporter. Would Credit Union Times “publish as many positive stories” about Silver State once the negative ones disappear, he asked.