Bank markets itself with new Nevada business index

Steve Humm

Thursday, June 11, 1998 | 11:26 a.m.

Nevada State Bank is now computing and publicizing a small business index for Nevada. The monthly report provides both valuable information to the public and treasured publicity for the bank.

The new Nevada State Bank Small Business Index for Nevada is similar to First Security Bank's monthly cost of living report for the Las Vegas area in that both are generated with the help of Salt Lake City-based economists for the Utah-based banks. Another local business index is calculated monthly by UNLV's Center for Business and Economic Research.

The Small Business Index for Nevada was developed for Nevada State Bank by economist and consultant Jeff Thredgold, President of Thredgold Economic Associates, who calls it a "barometer or thermometer of business conditions."

Thredgold's index uses 14 weighted factors like employment levels, retail sales, personal income levels and bankruptcies. Unlike the UNLV index, Nevada's gaming win is not a specific factor in Thredgold's calculation.

Thredgold said gaming is mainly big business, but affects small business by competing in the same labor pool.

The factor with the highest weighting for Thredgold is unemployment. Thredgold said the biggest problem facing small businesses in Nevada and neighboring states such as Utah is finding and retaining employees.

Eight years of historical data were used as a basis of comparison for the data. 1997 was used as a base year and assigned a value of 100. A higher number will indicate more opportunity for small business success.

The index for May 1998 was 95.8, up from 94.1 for April 1998 due in part to a rise in unemployment -- leaving more workers available -- and stronger job growth.

The bank said the index "is a monthly numerical estimate of the challenges and opportunities facing small businesses in the state of Nevada. A higher number reflects a greater chance for small business success."

Nevada State Bank Chief Executive George Hofmann said many of his clients felt the index reflected numerically the conditions they experienced in the past.

Nevada is the third state for which this type of index has been developed. Thredgold, in conjunction with Zions Bancorporation, Nevada State Bank's parent company, developed similar indices for Utah and Idaho within the past month. Plans are in the works for similar indices for Colorado, Arizona and California.

Besides the Las Vegas report, First Security Bank calculates local cost of living changes for Salt Lake City, Boise and Albuquerque.

First Security economist Kelly Matthews said the service is "another arrow in the quiver" of knowledge.

The cost of living report was started in order to provide the bank itself with information that it could use in its decision-making, said First Security spokesman Mike Kelly. The reception it received upon publishing the information was an added benefit.

The indices created by Thredgold for Nevada State Bank and the other Zions affiliates are currently the only figures of their kind, according to Thredgold.

Neither Nevada State Bank officials nor Matthews would disclose the cost of generating the indices they provide. Matthews did say "a significant expense is allocated each month."

Although these indices do provide a service to the community, from a public relations and marketing perspective they benefit the banks as well.

Jack Schibrowsky, associate professor of marketing at UNLV, said the reports get the banks' names in front of consumers and establish their links to the community.

Schibrowsky said the competition among banks in Las Vegas is between community, regional and national banks. Community banks must emphasize their local ownership and management in order to compete -- regional banks like Nevada State and First Security can use the economic reports to demonstrate sensitivity to the community's needs.

Hofmann emphasized Nevada State Bank's community commitment at a Wednesday news conference unveiling the new index.

"A company is a function of what it puts into an economy as much as what it takes out," he said.

Cindy Goussak, assistant vice president and marketing director for Nevada State Bank, said that due to its ties with Zions the bank has fallen somewhere in between a regional and a local bank.

She said Nevada State, which has been in operation since 1959, has "always tried to position ourselves as the bank that can meet the needs of local businesses as well as providing all of the services of a larger bank."

Hofmann said that with all of the consolidation going on in the banking industry it will become increasingly important for local banks to fill the void left by national banks.