Thursday, April 20, 2000 | 10:26 a.m.
Bill Martin wasn't supposed to be speculating on the future of Nevada's banking industry and strategizing how to grow Nevada State Bank.
Martin, recently appointed as Nevada State's chief executive officer, was supposed to be enjoying his retirement and worrying more about bogeys than bonds.
However, following the aborted merger between Nevada State parent Zions Bancorporation and Salt Lake City rival First Security Corp., Martin was called in to replace George Hofmann as Nevada State's CEO.
After five years as Nevada State CEO, Hofmann relocated to Utah to assume another position with Zions.
"(First Security Nevada President) Dave Smith was supposed to be sitting in this chair," Martin said with a smile.
"Dave's a good friend of mine, but I guess he's stuck in his old office for now."
As the former chief executive officer of Pioneer Citizens Bank, Martin is a longtime veteran of Nevada's banking wars.
Last year, Zions purchased Pioneer Citizens for about $340 million and merged the two Nevada operations. Following that merger, Martin became Nevada State Bank chairman, a position he describes as "ceremonial."
In his unexpected role as Nevada State CEO, Martin says his No. 1 priority is to ensure his bank puts the recent tumult of the aborted First Security merger behind it.
He says his work is cut out for him.
"In all honesty, we're not where we want to be on the operating side of things because of all the energy we put into that (merger)," he said.
Martin said it was too early to quantify what the failed merger cost his bank in lost personnel and customers. However, he expressed confidence in the bank's ability to quickly rebound.
"Both Pioneer and Nevada State have long histories in this state and have built up very good reputations as Nevada banks," he said.
"But after all the stress this merger placed on our people, both personally and professionally, we have some work to do."
That task became even more daunting with last week's acquisition announcement of First Security by San Francisco banking giant Wells Fargo & Co. The purchase means Wells could surpass rival Bank of America to become Nevada's largest bank, depending on the number of branches it's required to divest because of the merger.
Nevada State will continue -- at least for now -- as the state's third-largest financial institution with 59 branches, $2.3 billion in assets and about 800 employees.
The bank's retail success is largely dependent on its in-store locations; Nevada State currently has 27 branches in Smith's Food & Drug stores.
Ironically, it was the old Wells Fargo that helped Nevada State Bank grow in rural Nevada with a deal a few years ago.
After it purchased First Interstate Bank, but prior to its merger with Norwest Bank, Wells Fargo sold five Nevada branches with $75 million in deposits in mostly rural areas to Nevada State. This was part of a larger deal in which NSB parent Zions bought 32 Wells branches in four states.
Martin said his willingness to assume the role of Nevada State's CEO was contingent on his ability to make decisions locally.
"When I met (Zions' chairman) Harris Simmons and he asked me if I would take this position, I asked him 'do I have the authority to run a decentralized operation here?"' he said.
"He assured me I could, and so you'll see us compete with Wells and B of A on the retail side, but with local decision-making authority."
Martin said Zions' strategy of running a decentralized bank stands in stark contrast to that of First Security.
"They (First Security) run things differently, and are a far more centralized bank," he said.
"Still, because of their strength as a business bank, I believe it could have been a good merger for us. But we will now move forward and focus on building our company."
Martin bases a good deal of his optimism on the results of a recent survey of 400 bank customers conducted by Nevada State.
The survey found that 51 percent of customers say convenience is their most important banking issue; that's an arena Martin is convinced his bank can successfully compete in.
"Pioneer (Citizens Bank) didn't have a shot at pleasing all those 51 percent (of customers seeking convenience) because of our size," he said.
"But with our strong retail presence and a commitment to customer service, we can provide customers the quantity -- and quality -- of service they demand.
"We know we're running with the big dogs now, but we've always done well competing against big national banks like Wells and B of A."
Martin said Nevada State would be interested in looking at the Nevada banks Wells may be required to divest as a result of the First Security merger.
However, in the wake of recent events, Martin said First Security officials may be unwilling to consider selling assets to his bank.
"There's certainly no animosity between the people here in Nevada, but in all honesty, we (Zions) could be the last people they want to sell branches to," Martin said.
He also predicted that, in keeping with past practices, Wells will likely want to divest overlapping Nevada branches in one bunch.
"I think Wells will want to dispose of those branches as a block," he said. "That could cause a problem for us, or for some other potential buyers."
He predicted that several of Southern Nevada's burgeoning community banks may also look to purchase one or more of the available Wells or First Security branches.
Despite the flurry of recent activity, Martin said Nevadans weary of bank consolidation and disappearing financial institutions shouldn't expect relief any time soon.
"There are certainly other banks that could be acquired in this market," he said. "We have seen about 15 new community banks start up in recent years, and they are growing rapidly; then there's also U.S. Bank.
"And its not inconceivable that Zions could be purchased as well. It's not likely, but it is possible. However, my focus, and that of this bank, will remain on getting us back to where we know we can be."
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