For this dynamic young entrepreneur, even the sky has no limits IF YOU DON'T ~NT TOKNO THE TRUTH, TURN THE PAGE.

Truth is, you can offer a quality health care plan, without sacrificing the individual needs of your employees. And the truth is, it isn't magic. It's hard work on our part. But the results are worth it - and you don't need to receive big rate increases. For the truth about health care insurance costs, call your broker or a Nevada Sierra Health & Life representative. Southern Nevada 702-646-8350 Northern Nevada 1-800-477-4542

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March/ April 1992 • Nevada Business Journal 3 March/April 1992 IC0 NTENTS Volume 7- No. 2 Banking in Nevada D Valley Bank- in the company of giants "As a result of consolidation, the banking industry will become more efficient and offer more sophisticated products," says Valley Capital Corporation President Richard Etter.

Continental National Bank Mega-mergers notwithstanding, at Continental, its business as usual: serving the business community- a niche market in which the bank has become firmly established. m Bigger is better- or is it? A case for smaller banks m First Interstate Bank- continued growth and change If there's one certainty for banking in the new year, according to officials at FIB, it's change. Smokey Schein man, president ofLas m A Tale of Two Banks Vegas-based Smokey's Sportscards, Pioneer Citizens Bank and Citibank- two very different organizations - have less than five Inc. and Ultimate Trading Card, Inc. percent state market share between them. Nevertheless, each successfully serves a specific See page 20. Photo by Wes Isbutt. segment ofNe vada's banking customers. Cover Feature m Smokey's Ultimate Challenge It was just five years ago that Smokey Scheinman , then21, came to Las Vegas to open his first sports card shop. Since then, his thriving empire has grown to encompass retail, wholesale, mail order and manufacturing- all despite the recessionary economy. Homes of m Designing Every Detail When general contractor Herman R. Eminger and his wife, designer Sharon Eminger, built Distinction their own custom home, they left no detail to chance. m Milgard's Recipe for Success Fares Well in Vegas Although their new facility has only been in operation a short six months, Milgard Window's bright red window stickers are popping up in developments all over Southern Nevada.

Departments m Stock Picks 1992- Blue Chip Nevada Stocks Even with the recession, stock brokers and analysts have a bright outlook on several local­ interest stocks they were asked about. m Speaking for Nevada Lyle Knight, president of the Nevada Bankers Association, reveals the industry reform agenda the association is working to accomplish. m Executive Profile: Tom Masterson- Ne vada Copy Systems' new general manager m Business in the '90s: Advertising your advantage How can small business owners create effective, targeted advertising? m Tax Tips: Requirements more stringent for estimated tax payments If you make estimated tax payments, you' II want to consider the new rules in effect this year.

Nevada Briefs: HSST-Nevada reorganizes • FIB offers alternative investments • Sierra m Health and Admar Group plan joint venture • NFCU reports 1991 record reserves • Sun State Bank reports record earnings Page 24 Eil Business Indicators & Analysis: The figures recorded through the last quarter of 1991 gave stark evidence of the recessionary climate. ESTATE

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Your energies are important management, investments, trust Corporate Banking Division today. to your company. Too important to financial services, corporate real In Reno call 784-3311. In Las Vegas, spend in dealing with several banks estate, international banking, call 791-6277. or bankers. and more. That's why First Interstate And because our bankers are Bank of Nevada offers easy access knowledgeable about your business, to a wide range of business services they can make quick credit decisions r,j First through a single relationship banker. and deliver precisely what you need Your banker can draw on the when you need it. f'J®Interstate resources of an experienced corpo­ Streamline your company's bank­ rate banking team for financing and ing and spend more time on your Bank investment flexibility- credit, cash own business. Call First Interstate's Nobody makes banking easier.

Member FDIC healthy rate every year and doing a good VALLEY BANK job serving Nevada. Selling was not a part of our strategic plan. However, Bank­ America wanted to become a dominant player in the western states and saw our IN THE COMPANY OF GIANTS position in Nevada as something they would like to be associated with." BY D AVID HoFSTEDE BankAmerica Corporation first entered the Nevada market in December of 1989 when it completed its purchase of Nevada Change is generally considered healthy, revitalizing, a sign of a new First Development Corporation, the par­ ent company ofNevada First Bank. At the time, Nevada First was the state's fifth era. But when changes occur in financial institutions - the places in largest bank, with 14 branches and $203 million in assets. It resumed operations under the name Bank of America Nevada, charge of your money- reactions are sometimes less than enthusiastic. as would all subsequent acquisitions. In December of 1990, BankAmerica ESPECIALLY since one of the principal consolidation is the best thing to happen acquired the retail branch system and cer­ conversions in the last few years has been to banking since automatic tellers. tain assets and liabilities of Frontier Sav­ that of savings and loans changing from "Compare banking to other industries, ings Association. Bank of America Ne­ solvency to insolvency. where these things have happened for vada gained four more branches and ap­ It took more than a scorecard to keep years." Etter said. Because of the anti­ proximately $250 million in deposits. Last track of the activity in the banking indus­ quated banking laws we ended up having year, BankAmerica began talking to both try over the past two years, with proper­ 14,000 banks in the United States- too Valley Bank and Security Pacific Corpo­ ties being bought and sold at the rate of red many. Too many chairmans of the board, ration. In August of 1991, an agreement to plastic hotels in a Monopoly tournament; too many presidents. We became an inef­ merge was announced, creating a banking thel,'e were 41 bank mergers in the first ficient industry, which resulted in costs institution with $190 billion in assets, a half of 1991 alone, and the pace hasn't let being too high for the consumer. As a commanding position in the western U.S. up yet. It's gotten to the point where one result [of consolidation), the industry will and extensive international operations. bank, Great Western, is promoting its be more efficient and offer more sophisti­ Under the agreement, BankAmerica will services with the simple promise (deliv­ cated products." acquire all outstanding shares of Valley ered with homespun sincerity by Dennis New legislation allowing mergers across Capital Corporation, pending approval of Weaver) that they won't be going any­ state lines has much to do with the con­ the Securities and Exchange Commis­ where in the future. solidation wave, though for many institu­ sion, the Federal Reserve, the Justice Such a claim would infer that change is tions it was the only path to survival. The Department, the State ofNevadaBanking not desirable, but don 'ttell thatto Richard motivation behind Valley Bank's acqui­ Commission and Valley shareholders. Etter, president of Valley Capital Corpo­ sition, however, was an offer they just Valley Bank, the second largest banking ration. Valley Bank of Nevada is cur­ couldn't refuse. firm in Nevada, had assets totaling $3 .1 rently in the closing stages of being ac­ "In our case, we never pictured our­ billion, deposits of $2.9 billion and 68 quired by BankAmerica Corporation, and selves as being for sale," said Etter. "We branches as of December, 1991. Valley­ Etter couldn't be happier. In fact, he be­ had a very dynamic young management owned Caliber Bank had $233 million in lieves the nationwide movement toward team, gaining market share at a pretty assets and nine branches in Arizona.

6 Nevada Business journal • March/ April 1992 . VALLEY BANK

In a press release, BankAmerica Chair­ used to dealing with may no longer be "Having said that, there will also be man and Chief Executive Officer Richard with the bank. We'd like to acquire a some changes," Etter continued. "They Rosenberg said "We're delighted that number of new depositor relationships." are going to introduce some synergy to Valley Capital Corporation and its cus­ PriMerit has avoided any merger activ­ help get their investment back, but we're tomers will be joining the BankAmerica ity, although they did acquire a fmancial going to go overboard to make those family. Valley Capital has established an institution in Arizona in 1988, which changes transparent to the customer." excellent presence, reputation and record prompted their name change from Ne­ One of those changes may involve lay­ for profitability in the Nevada market­ vada Savings. "Since then we have not offs. According to banking industry ana­ place. Its major business lines are ones we acquired anyone, or had any discussions lysts, 13,000 workers will lose their jobs know well and, we believe, will benefit concerning acquisitions. As a wholly­ at duplicate operations in the Security from BankAmerica' s increasingly strong owned subsidiary of Southwest Gas Cor­ Pacific merger. At Valley Bank, Etter position in the western United States, its poration, that insulates us to some de­ admits "there might be some layoffs; to global network and its fmancial strength." gree," Cheever said. the extent that we gain some of the afore­ Founded in 1904, BankAmerica is the After the BankAmerica merger, mentioned synergy because of the combi­ second largest bank holding company in PriMerit will become the largest Nevada­ nation of size. Hopefully they will be the nation, and a major international bank based fmancial institution. "There's a cer­ achieved by normal attrition." Bank­ with operations in 36 countries. Its net tain loyalty that the people of Nevada America declined to comment on the pos­ earnings were in excess of $1 billion in have to businesses that are founded and sibility, or on any aspect of the merger. each of the past two years. On February 6 based here," said Cheever. "We feel we However, a primary inducement be­ of this year, 97 percent of Valley Capital can respond much quicker than other in­ hind the consolidation wave is to trim the Corp.'s shareholders voted in favor of the stitutions that have their corporate head ~ fat. "There is a cost savings in back office merger. "With this merger and the deal quarters out of state, and we hope to operations and the melding of various with Security Pacific, Bank of America is capitalize on that attribute." departments, which can eliminate jobs, 75 times bigger than we are," said Richard "Those are just the kinds of rumors that overhead and expenses," said Cheever. Etter. "That's 7 5 times the career paths for our competitors would love to foster, but And Cheever believes there are more our employees and 75 times the capital to we're not going to let them get away with changes to come. "The President has pro­ lend to Nevada business. In the long term it," responds Richard Etter. "We'll prove posed numerous banking bills that would it will be very beneficial to the state." it with our actions. provide fmancial institutions with more But if Valley Bank sees this merger as "Our goal from day one is for this opportunities. Additional deregulation a new opportunity, so does its competi­ merger to cause an improvement in cus­ could lead to more interstate mergers and tion. Dan Cheever is president and chief tomer service. BankAmerica paid a very acquisitions. Currently there are about operating officer of Las Vegas-based rich price to our shareholders, so they 2,000 savings and loan institutions left, PriMerit Bank, which has 32 branches in aren't going to do anything that will im­ and that will continue to decline to prob­ Nevada and Arizona. "Anytime you have pede that investment. They have asked us ably 1,000 by the turn of the century. The a new fmancial institution coming in, to do business in the same aggressive number of banks should be cut in half in you'll have new players, new philoso­ style that we've always had. It would be the next ten years." phies and a new credit discipline, so we'll foolhardy for them to spend $400 million And what will less banks mean for the see some change in the type of lending and then change everything. They know consumer? "The institutions that emerge and the amount of lending the new Bank we know how to do business in Nevada. from this consolidation will be more fi­ of America makes vs. Security Pacific In fact, BankAmerica plans no changes nancially stable and have stronger earn­ and Valley Bank," Cheever said. in leadership of Valley Bank's operation. ing power," predicts Dan Cheever. "At PriMerit, we feel we can service a "We will stay a Nevada-chartered bank, Richard Etter also sees the trend as lot of the customers who may have some and a member of the federal reserve regu­ positive. "There will be an incentive for dissatisfaction [with the acquisition]. lated by the state. BankAmerica will be banks to carve out a niche of their own, Anytime there's a merger, there is typi­ the shareholder of our company, but we and offer innovative products and ser­ cally some problems with customer ac­ won't be just a branch operation of Cali­ vices. I think there's more opportunity in counts, and people that customers are fornia, or a franchise like McDonald's." banking today than there ever was." •

Mardl/April 1992 • Nevada Business journal 7 YOUQ TICKET to ~UCCE&£> CONTINENTAL

N A T I 0 N A L • B A N K

BY DAVID HoFSTEDE

Mega-mergers notwithstanding, at Continental National Bank,

it's business as usual: serving the business community - a

niche market in which the bank has become firmly established.

Like PriMerit, Continental National America. Our mission is to deliver good Bank has not been involved in merger service to the business community." activity. "Our philosophy is to stay within Smith believes that Las Vegas has al­ our niche, which is the business commu­ ready seen the bulk of its banking acqui­ nity and professionals, and try to meet the sition activity occur, but nationally there needs of that market," said Continental may be more changes to come. "Mergers President and Chief Operating Officer will continue across the country, because David Smith. there are still a lot of attractive markets Smith looks upon BankAmerica's ar­ out there, but in this state we're nearing rival as a win-win situation. "The con­ the saturation point. How many banks can sumer who needs the products of a larger properly serve and survive here, and make bank will benefit. We're smaller [four the kind of money they need to provide for branches in Southern Nevada], so we may their shareholders' investment? We have be able to provide a level of service in the four large banks and several independents middle market area that they cannot." now, so I don't see another major player Continental also believes its locally­ coming here in the near future." owned status will appeal to some consum­ Continental, however, plans to continue ers, but that is only the beginning. "Bank­ to grow with its hometown. "We're very ing is a service industry. We all offer the bullish on Southern Nevada, and hope to same product- it's how you deliver that open one or two new branches in the next product that separates us," Smith said. few years," said Smith. "Every year seems "We can't be all things to all people. We to be our best. We know we can't keep that can't - and don't want - to be Bank- up forever, but we can certainly try."

8 Nevada Business Journal • March/Aprlll992 emakeitour to know yours.

If a bank wants to earn your business, it must first learn your business. Knowing your needs, your flexibility and your goals is something we at Valley Bank believe in. It can mean the difference between a simple, necessary financial arrange­ ment and a personal banking relationship. We don't expect this advertisement to cause you to bank with us. At least not inlmediately. Rather, we expect that it will cause you to consider what makes one bank different from another. And in the course of it all, see Valley Bank for what we really are. Interested in you. Valley Bank of Nevada MEMBER FDIC We're there when you need us.~

In all other areas, please call l-800-388-BANK

· Nevada's largest state-chartered bank. ®LENDER come from a Wall Street rather than a BIGGER Main Street-based background." Despite the fact that the leveraged buyouts of the 1980s have led to financial • crises in the '90s, and despite the fact that IS better the largest banks and S&Ls are the ones that are troubled, proposed legislation from • ? the Treasury continues to foster mergers 0 r s t • and consolidations, and threatens to dis­ rupt the remaining segment of the bank­ ing system that is healthy - the small, community banks. Without ·the loans of A CAsE FoR SMALLER BANKS the community banks to small business in America, our economic structure is likely to change dramatically. PART 1: NORTHERN NEVADA In today's banking environment where mergers are causing branch closures rather than new branch openings, the small com­ BY DEBRA LYNN DEMING munity banks are thriving and expand­ ing. While First Interstate Bank recently THROUGHOUT the 1980s, "bigger is communities or local markets. As larger closed three branches in the Reno/Sparks better" was the prevailing philosophy. banks consolidate, the credit available to area, the Comstock has a new branch Here in Northern Nevada, however, with smaller communities tends to dry up. under construction in the Caughlin Ranch the recent banking mergers consolidating There are several reasons for this: First, area of Reno. "The little Comstock Bank money power in the hands of a few, it is the larger banks centralize their deposits. is very healthy," according to Bob Barone. becoming evident that many Northern Second, decisions concerning lending are "In 1990 and 1991 , our bank returned Nevadans are looking for something a generally made in the central location. more than 25 percent on its capital and little less large and a lot more homey - Thus, banks controlled from outside are more than 1.8 percent on its assets. These their local community bank. less likely to return the deposits taken ratios would have been excellent even in The Comstock Bank and Sierra Bank from the state than are banks whose man­ the best of banking times." are two of the relatively small locally agement consists oflocal business people. Sierra Bank, who just opened its doors owned and operated banks in Northern A committee in Los Angeles, consisting a little over two years ago, has experi­ Nevada that appear to be benefitting from of Los Angeles bankers, is less likely to enced growth in excess of $30 million in the recent mergers. Local residents and know and understand Nevada's mining­ assets. Sierra Bank was started by a group business owners are starting to think twice and gaming-based economy than busi­ of local business people who were re­ about what these mergers mean. ness folks living in the state. sponding to a perceived need in the com­ In Nevada, First Interstate Bank and N ationallegislation over the past 10 to munity. "We didn't like seeing the credit Bank of America- who is now merging 12 years has supported the big bank merg­ decisions moving out ofReno," says Dave with Valley and Security Pacific- will ers and consolidations or the "bigger is Clark, chairman of the board of Sierra create a two-bank empire controlling al­ better" attitude because, as Bob Barone, Bank and principal with Clark and Sulli­ most 90 percent of the banking assets in chairman of the board and CEO of van Constructors. "We've been elated with the state. Large banks have never had Comstock Bank states, "Those appointed the bank's success," Clark continues. sterling reputations for servicing smaller to powerful positions in Congress have all "Today, people are beginning to realize

I 0 Nevada Business Journal • March/ April 1992 BIGGER BEnER?

that all banks are not the same." Ac­ loans are made by senior managers who Despite the trend toward bank mergers, cording to Bob Barone, "The concept of are local business people and know and the smaller local banks such as Sun State, 'community' banking has taken on an understand the needs of the local eco­ American Bank of Commerce and Ne­ entirely new meaning. In community nomy. "You will never find loans to Third vada State Bank aren't worried about their banks, like Comstock, senior manage­ World countries, to Texas oil magnates, future. These banks have specialized in ment is only one level higher than the or to a shopping mall in New England on servicing small- to medium-sized busi­ branch manager. If you have a problem, the books of a community bank in North­ nesses, which may not get attention from it can be quickly resolved." ern Nevada," says Barone. the larger banks, Dedolph said. For purposes of accessibility, Sierra Both banks have found that the recent "This is going to help us out for the most Bank designed its bank to be virtually mergers have been increasing their busi­ part by diminishing the competition and office-less. "There are no private offices ness. "As a result of the mergers," says service for most of our customers," by design," says Dave Clark. "We strive Clark, "we are seeing an ever-increasing Dedolph said. to get to know all of our clients. All of number of established Reno businesses Banks such as Sun State and American Sierra Bank's board of directors are lo­ and families using our bank. Because of Bank of Commerce don't focus on the cals. We all take an extremely active role our concern for the financial well-being consumer services such as personal check­ in the bank. That is part of our feel in the of the state, our success over the past two ing accounts and car loans. That would community. We receive immediate feed­ years has been very rewarding." take too much away from the business back if a customer is having a problem." At times like these, people want stabil­ niche they fill, Dedolph said. Product pricing at these smaller, com­ ity especially when it comes to their "We have limited resources," he said. munity banks appear to be as competitive money. When you walk into your com­ "We spend where we can work most prof­ as, or better than, pricing offered at the munity bank and the branch manager itably. We don't chase consumers out, but large banks. Of possibly more signifi­ waves at you from across the room and we don't encourage them either." cance, however, is the use that the com­ says, "Hi, how are you today?" you get Jim Bradham, president of American munity bank makes of the community's this feeling inside that tells you bigger is Bank of Commerce, said his bank has a deposits. For the most part, those funds definitely not better. similar philosophy. "We know we can't are reinvested in our local economy thus be all things to all people," Bradham said. creating local jobs, income and growth. Because of that, American Bank of "In I991, Comstock's assets of about Commerce and Sun State don't try to cater $40 million originated in excess of $83 PART II: to the consumer by extending business million of loans." According to Barone, hours to weekends. Sun State's two of­ "This means the Comstock Bank was SOUTHERN NEVADA fices are open 9 a.m. to 4 p.m. Monday directly responsible for economic activity through Friday. The bank isn't open on in our local economy equal to more than BY LYNN WAD DELL weekends and does not have drive-thru twice its size. Normally, a bank can be tellers, Dedolph said. "We work more expected to originate loans of about one­ LOCAL business banks say they aren't in the manner of a brokerage firm," he third to one-half of its asset size." disappearing into the shadows of bigger said. "We deal with relatively small- and Because it sells the loans it makes to Nevada banks which are merging. Quite medium-sized businesses." investors from out of state, the commu­ the contrary, they are profiting from the American Bank of Commerce has only nity bank actually imports and dissemi­ corporate unions. four branches and is open to 4 p.m. except nates capital into the local economy. Com­ "We anticipate the Bank of America on Fridays when it stays open until5 p.m. pare this concept to the big bank which mergers will give us the opportunity to On the other hand, Nevada State Bank takes deposits out of the local economy make more loans, said John Dedolph, has emerged into a customer service bank, and lends them in California, Texas, New president and chief operating officer of as well as a business bank. It now has II England, or to the Third World. Sun State Bank. "We will fill a niche branches within Smith's Food King gro­ At the community bank, decisions on widened by the mergers of bigger banks. ceries which are open seven days a week.

March/April 1992 • Nevada Business journal II IS BIGGER BEnER?

It also has six stand-alone branches and ing industry because gaming properties merce also has higher loan standards. "We many other ATM locations. Sun State and usually need larger amounts. Most of the mind the store pretty well," Bradham said. American Bank of Commerce do not have loans made by the three banks are general Plus, banking regulations are getting ATM locations. business loans. stricter. "Our industry is changing very "We acquired 16,000 new customers For instance, Sun State only had out­ rapidly, and regulations are tougher than when we entered Smith's, said Richard standing about $1 million in consumer ever," he said. "We feel we have to be Carlson, president of Nevada State Bank. loans last year, Dedolph said. "Sun State very quick on our feet." All three banks have recently acquired Bank has approximately $39 million in Fearing failing loans, bankers are un­ new customers partly because big bank loans, 95 percent of which are to busi­ comfortable loaning to riskier start-up customers fear the upcoming mergers, nesses. We recorded our first profit in businesses, Dedolph said. About 85 per­ executives said. 1985," he continued. "Since then, we cent of new businesses fail within the first "I think it's the uncertainty of what's have been doing fairly well." five years. "If you are starting your own going to happen, especially with business Nevada State Bank is concentrating business, you better have some of your people," Carlson said. "People are taking more on car and home loans. However, it own money," Dedolph said. a long look at where they are banking and is also important to note that it is owned But that's not to say the smaller banks some are leaving banks they have done by a larger out-of-state banking institu­ aren't interested in new businesses mov­ business with for five or 10 years." tion, Zions Bancorporation of Utah. ing to Nevada. More and more California Bradham said he is witnessing similar According to Carlson, Nevada State businesses migrate to the Silver State to occurrences at his bank. "People don't tries to keep a mix ofloans with a concen­ escape California regulations and taxes. like change that much. They react nega­ tration on business loans. "We want to be Many have gone to the boutique banks in tively," he said. "We are now getting the a more personal bank for the consumer, Nevada for loans to make their move. opportunity to talk to people who have but continue to work with small busi­ "There are a number of businesses just been with other banks 20 to 25 years." nesses," Carlson said. "After all that's getting out of California, plus a number Smaller and medium-sized businesses what made us a bank." who are expanding here," Dedolph said. fear they will fall between the cracks of Bradham said his business slacked off Bradham said business banks have bigger banks' target markets, Dedolph in 1991 because of the Persian Gulf War, proven more profitable than their larger said. "The operations at the larger banks but picked up late in the year. "Things counterparts within the past year. will become more like chain groceries," picked up considerably during January of Carlson confers, "The fmancial perfor­ Dedolph said. "All their lending moves to this year," Bradham said. "Our loan of­ mance has been better and just about all centralized areas." fices have been very busy again." the business banks showed record earn­ On the other hand, although, the three Even though the banks aren't directly ings in 1991," he said. For instance, Sun business banks have fewer locations than lending to the gaming industry, they pre­ State posted total assets of $54 million in larger counterparts, they are able to ap­ dict they will benefit from the construc­ 1991 compared to $48 million in 1990. prove loans at all main branches. tion of three new mega-resorts opening in Officials at all three banks are optimis­ Loan portfolios for all three banks, how­ Las Vegas during the next two years. The tic about 1992 demonstrated by expan­ ever, are much smaller by comparison to smaller service businesses needed to sup­ sion plans currently on the drawing boards. Valley and First Interstate banks. The I 0- port the additional 11 ,000 hotel rooms Nevada State Bank has plans to open year-old Sun State Bank carries about $41 may tum to business banks for financing. two branches in new Las Vegas Smith's million in loans, while the American Bank However, the smaller banks are tough groceries. It also will open two new of Commerce has a loan portfolio of about on loan qualifications. "If you are not very branches in Northern Nevada where it $70 million, and Nevada State Bank has concerned and conservative you won't be recently debuted three locations. about $176 million. Each bank offers loans doing this too long," Dedolph said. Sun American Bank of Commerce plans to up to $1 million to $1.5 million. State is requiring more information from add anew branch in Southern Nevada this The low maximum loan amount keeps the borrower and more money up front. year, but has not decided on a location, the banks from lending to the local gam- Bradham said American Bank of Com- Bradham said. •

12 Nevada Business journal • March/Aprill992 Who Is Lending The below public data (as of 09/30/91) on banks operating To Nevada Businesses? in our state shows which banks are supporting businesses credit Who Is Not! needs and which are NOT.

% Inc. (Dec.) BANK 12-89 12-90 09-91 during period

Sun State Bank s 15,801 s 19,495 s 25,736 63% Other Bank Operating in Las Vegas 51 048 378 51,140,505 51,077,186 3% ' ' I California Owned Banks Cut Business Loans . CA Owned NV Subsidiaries

Bank of America (SF) s 30,605 s 17,963 s 10,154 (67%) First Interstate (LA) 966 ,570 785 ,140 442,879 (54%) Security Pacific (LA) 213,667 203,496 142,489 (33%) All CA Banks 51 210 842 51,006,599 s (51%) ' ' 595 ,552 $M (Thousands of Dollars) You can count on Sun State Bank assisting Nevada Businesses with their borrowi ng needs from $25 ,000 . to $1,000,000. (or more) "~u4 8tltf~ 8~/ Call: Marsh Pippin 364-2440 Somer Hollingsworth 364-9660 10 years of Service to our Community

~un ~tate Bank G:r 3500 W. Sahara, Las Vegas , NV 89102 • 364-2440 :~.;ron Member FDIC Source : Commercial , Industrial & Construction Real Estate Loans as reported in Sheshunoff Information , Inc. Interstate is working to provide each of its customers with a designated banker. FIRST INTERSTATE BANK "These are professionals, qualified spe­ cialists, people who know our customers and their business and can handle all their CoNTINUED GROWTH AND CHANGE banking needs."

BY GRAHAM McKENNEY MORE CHANGE AHEAD Tuntland and Studdert predict Nevada will continue to experience the type of If there is one certainty for banking in the new year, ac- merger and acquisition activity initiated in the mid-1980s when Citibank entered the state by purchasing the failed All­ cording to senior officials at First Interstate, it's change. State Thrift. Since that time, name changes and mergers have occurred at a dizzying pace. "You 'II see more change in the next work to develop much closer relation­ Few banks in the state have emerged from two years than you saw in the last ten," ships with their customers." the past decade without a change in own­ predicts Andrew Studdert, Southern Ne­ For one thing, lenders will require ership or in senior management. Two vada president for First Interstate Bank. greater equity and greater participation banks - Nevada National and Security But conversations with the bank's se­ on the part of the borrower. Bankers will Bank - have disappeared entirely, and nior management reveal First Interstate is be more interested in the borrower's fi­ four more have new owners. Soon Valley better positioned than ever to handle the nancial condition, his business plans and Bank and Security Pacific Bank will merge tremendous changes ahead. goals, and will work with him to monitor with Bank of America, and industry ana­ "Clearly, 1991 held some challenges the success of his business. lysts expect parts of the remaining bank for the banking industry and for our bank," "This type of disciplined approach to to be sold or downsized significantly. says Larry Tuntland, the bank's Northern lending is better for the banks, better for "We already have the strategies and Nevada area president. customers and better for the economy," structure in place to leverage this period "A soft economy revealed weaknesses Studdertsays. "Working together, we can of inward focus among our major com­ in bank credit portfolios across the coun­ grow at a steady rate while building a petitors," Studdert says. "While it was try, hurting the industry's performance," stronger, more stable community." difficult being the fust, we now have an Tuntland adds. "Here in Nevada, First In addition, Tuntland says, "Relation­ opportunity to leverage our growing Interstate acted aggressively to reduce ship building will be the cornerstone of strength as our competitors follow us in lesser-performing loans and to cut costs banking in the 1990s. Bankers will need down-sizing and addressing their loan by consolidating support functions. Now to do a better job understanding the finan­ portfolios. As in the past, customer satis­ we are focusing on enhancing the quality cial needs of customers, and then work to faction will provide the impetus as we of our credit portfolio and strengthening do a better job meeting those needs." strive to enhance market share." our performance." Tuntland points to a growing array of What does this mean for customers? banking product<>, including mutual funds, CUSTOMER SATISFACTION "You 'll be working more closely with annuities, cash management and other The good news that arises from all this your banker than ever before," says non-traditional investment products as the change is two-fold, according to Tuntland Studdert. "Going forward, credit will be wave of the future. and Studdert: First, surviving banks will much more disciplined and bankers will At the same time, Tuntland says, First be stronger and more competitive both at

14 Nevada Business journal • March/ April 1992 FIRST INTERSTATE BANK

LOCAL MARKET FOCUS This year First Interstate celebrates 90 years of service to Nevadans. It is the state's oldest bank, beginning as the Farm­ ers and Merchants Bank in 1902, growing by leaps and bounds to become First Na­ tional Bank in 1929 and later First Inter­ state in 1981. The bank is known state­ wide for its support of local community activities and organizations. Late in 1991, First Interstate changed its organizational structure to put more emphasis on the local markets. Larry Lany Tunt/and Tuntland, a 32-year veteran with First In­ Andrew Studdert terstate in Nevada, was named area pres­ the local level and on a global scale; and ident in Northern Nevada. Tuntland is board of directors for the Nevada Bankers secondly, banks will be more service- and responsible for all banking activities in Association, the Nevada Taxpayers As­ relationship-oriented than ever before. the area and serves as the bank's senior sociation and the YMCA He is also a "I expect other banks in Nevada will go executive in Northern Nevada. member of the executive committee for through the same process of consolidat­ He previously served as senior banking the Nevada Development Authority. ing support areas that First Interstate has," executive in Southern Nevada and as head Prior to coming to Nevada, Studdert says Tuntland. "While the branches will of the Corporate Banking Group. He has was senior vice president of consumer remain relatively unaffected, some of the served on both the retail and corporate banking, operations and information ser­ behind-the-scenes areas will be reduced sides of the bank. vices of First Interstate Bancorp in Los or eliminated to improve efficiency." Tuntland is active in community af­ Angeles, which he joined in 1984. He This back-office consolidation accom­ fairs, currently serving as a member of the currently serves as vice chairman on the plishes several things, Tuntland says. "By boards of trustees for the University of board of directors of CIRRUS and has enhancing their performance, banks will Nevada, Reno Foundation and the Eco­ served as chairman and chief executive become better capitalized and stronger. nomic Development Authority for West­ officer of First Interstate Mortgage Com­ The strongest banks will be able to offer em Nevada (EDA WN). He also serves as pany ( 1988) and vice president and direc­ much more aggressive pricing, which board member for the Boy ScoutsinNorth­ tor of Electronic Banking (1985). enhances their ability to compete." em Nevada. He has served as chairman of "Our involvement in the community is In addition, says Studdert, many of the the Nevada Development Authority and what makes us a Nevada bank," says changes occurring now will enable banks as president of the Boy Scouts in South­ Tuntland. "We know the people in Ne­ to spend more time with their customers. em Nevada. He is a board member of the vada, we know the businesses and we "At First Interstate, customer satisfaction Pacific Coast Banking School, from which know how to service them. Now, more and convenience have remained our num­ he graduated in 1979. than ever before, we'll be focusing on ber-one priorities," he said. "By remov­ Andrew Studdert, former manager of building relationships." ing or consolidating some of the support the Retail Banking Group in Nevada, was "First Interstate has a long history of areas, we are now able to focus l 00 per­ named area president for Southern Ne­ involvement in the growth and prosperity cent of our attention and resources on the vada. Studdert is responsible for all bank­ of Nevada," adds Studdert. "We look for­ customer," Studdertsays. "Going forward, ing activities in the area and serves as the ward to playing an even more prominent we'll devote our energy to enhancing our bank's senior executive in the southern role in nurturing the growth of the state already high levels of customer service." part of the state. Studdert serves on the going forward." •

March/Aprill992 • Nevada Business Journal 15 tin of Pioneer Citizens. Skonicki said A TALE OF Citibank considered its move to Nevada as a natural expansion. The two institutions have looked to different markets for varying reasons. Martin said Pioneer Citizens from the first T""O BANKS emphasized business customers, includ­ ing firms seeking funding for construc­ BY ToM MARTIN tion and development. "We don't want to knock heads directly with Valley or FIB (First Interstate)," he said of his market Let's take some time out from the heady world of mega-mergers m the niche. Citibank, which purchased a thrift institution four years ago to enter Nevada's banking market, has offered a variety of Nevada banking world and tell a tale of two banks. Together they have less retail products, according to Skonicki. "We want consumer accounts and have stayed away from business, construction than a five percent market share, but they are doing very nicely, thank you. and real estate clients," he said. Martin describes the perfect client for whom Pioneer Citizens' services are best Pioneer Citizens Bank, not to be con­ Both attribute their expansion - in the tailored: A business which does all of its fused with another financial institution of face of difficulties for some larger institu­ banking at Pioneer Citizens that has pur­ a similar name, is home-grown and its tions in Nevada- to their business focus chased property and built an office build­ board of directors filled with names that and this state's growth. "We still have a ing in which it is a major tenant - all have roots in Nevada history. dramatic growth pattern here and have financed by Pioneer Citizens. Although Citibank has less of an iden­ avoided the effects of a recession seen in Even though Skonicki said that many tity problem, its four branches and credit other markets," said Skonicki ofCitibank's newcomers to Nevada come to Citibank card center have brought some fresh ideas progress. "Nevada has not reflected the because of its name recognition, he said in community involvement to the state. economy of the rest of the country," said that most of his bank's depositors and Even though their origins in Nevada Pioneer Citizen's President Bill Martin, customers are locals who have dealt with and business emphasis differs, as banking "and even though casinos and real estate other banks in the past. "We like to be all operations, the pair have some similari­ are down, there is still growth," he said. things to all people," he said of Citibank. ties. Pioneer Citizens has seven branches The two banks' business paths in this Although the two banking executives in Southern and Northern Nevada while market reveal a contrast in historical roots did not compare their operations, there is Citibank has four branches in the Las and response to the Nevada market. Pio­ a big difference in economic impact. Vegas area. Pioneer Citizens reported neer Citizens was founded 25 years ago Citibank's credit card center, which han­ more than $17 5 million in assets for 1991 , by a group ofleading Reno business men, dles loans and credit card transactions for a 14 percent growth over the previous while Citibank entered Nevada in 1984 to the western United States, employs nearly year. Although Citibank has not released build its western region credit card center, 1,400 persons, provides 20 percent of the a report for 1991, CitibankNevada Presi­ with no declared intention at that time to annual volume for the U.S. Postal Service dent Ed Skonicki said that 1991 assets enter this state's banking market. in Nevada ($30 million), and has spent were estimated at "near $200 million," an "We're really proud to be Nevada's more than $100 million in capital invest­ increase of"about 25 percent." only locally-owned true bank," said Mar- ment. Pioneer Citizens' Martin said that

16 Nevada Business journal • March/April 1992 OUTDOOR ADVERTISING

Contractor's License # 10581 TWO BANKS

his bank's impact can be seen in the per­ "We could not be happier with Martin said that the new "over-regula­ sonal service available to his customers. tion" in this state is a direct result of "People can call me on the telephone and our decision to build our credit problems in the savings-and-loan indus­ I answer whenever I am in the office," try in other regions. "There is a regulatory he said. Members of the board include: card center here. The state has problem when considering troubled in­ Chairman Louis J. Capurro and son stitutions versus stable institutions. Con­ Randall, part of a Reno pioneer family; gained and Citibank has gained gress has over-reacted. When banks ev­ Howard Wells (the "Wells" of Wells erywhere are generally stable, the regula­ Cargo); as well as Las Vegans Ward W. tions will moderate. But you won't have Wengert and John E. Y oxen, both highly by doing business in Nevada." big problems with regulators if you run a respected businessmen from long-time good institution," he said. Southern Nevada families. -Ed Skonicki, Both men also presented perspectives The two bankers also had different views president, Citibank Nevada unique to their business outlook. Skonicki on long-term growth of their institutions. praised the business atmosphere in Neva­ "We have considered expansion in Ne­ da and also cited Citibank's community vada, but we look at it as we do other cial and residential developers who de­ involvement. Pioneer Citizen's Martin operations," said Skonicki, noting that pended on out-of-state funding in the past analyzed the changing commercial mar­ Citibank has operations in Phoenix and are now seeking a series of smaller loans ket in Nevada and the role of banking as California, but backed out in Utah. from several local institutions. international economic factors change in Skonicki said that Citibank is not plan­ Although both executives recognize that the last decade of this century. · ning to merge with other Nevada banks, the Bank of America-Security Pacific­ "We could not be happier with our and at this time, plans to grow in South­ Valley Bank mega-merger will mark an decision to build our credit card center em Nevada rather than open branches in important turning point in Nevada bank­ here," said Skonicki, who is now a board Reno. "Right now we don't have an an ing, they offer different points of view. member of the Nevada Development appetite in that direction," Skonicki said. Citibank's Skonicki: "It will have little Authority, which courted the Citibank Pioneer Citizen's Martin said that to do with us. I think that the competition move in the early 1980s. "The state has growth is necessary for his bank to sur­ will make us stronger, but I don't see us gained and Citibank has gained by doing vive. "Our goal is $300 million in assets going head-to-head with BankAmerica, business in Nevada." Since 1984 Citibank within the next three years, while our either. I think competition with the larger has contributed more than $1.1 million to numberofbranches will remain the same," banks will make us work all the harder." 54 non-profit organizations in Nevada. he said. And a big part of this growth Pioneer Citizens' Martin: "The merger Among the contributions: a computer cen­ could be through more retail programs. will happen, but there may be a new bank ter for the Boys and Girls Clubs; New He said that a new advertising campaign, as a result of spinoff," he said, referring to Horizons Academy for hearing disabled emphasizing television spots with a hu­ the necessary divestiture ofsome branches children; a black history exhibit for the morous vein poking fun at larger institu­ as a result of the merger. 'There will be a evada Institute for Contemporary Art; tions, will target consumers currently with larger gap between banks like ours and the the "Small Change" program for Nevada other banks. "In this decade we need to get mega-institutions. We will need to grow schools; United Way of Southern Nevada to $500-$700 million in assets, although as a result, so we can compete." and the Business Partnership Program of our market share won't be that much Martin and Skonicki are confident that the CJark County SchooJ District. He also larger," Martin said. Nevada will avoid problems that have said that Citibank responded directly to Both have seen some subtle changes in lead to record bank losses - including employee's needs with an on-site child their customers as well. Skonicki said that Citibank - and closings in recent years. care center that provides employees with most new depositors recently have been "We have the talent here to avoid errors in services at 30 percent less than elsewhere. from California, a reflection that 30 to 40 judgment [seen elsewhere]," said the "In addition, they can see their children percent of new Southern Nevada resi­ Citibank CEO. "We don't see anybody in during the day and it has reduced parent dents in recent years have been from our a weak position and we have a tremen­ concerns about their children during the large neighbor. Martin said that commer- dous corps of management in evada_' workday," Skonicki said.

18 Nevada Business Journal • March/April 1992 TWO BANKS

University Medical Center

Affiliated with the University of Nevada School of Medicine 383-2000 1800 West Charleston* Las Vegas, Nevada 89102 * Nevada's only *Renal Dialysis * Cardiac Care Burn Care Unit *Oncology * Pediatrics * Pain Rehabilitation * General Medical/ * Obstetrics Center Surgical * Lithotripsy * Neurological Unit * Outpatient Surgical * Traumatic Brain *Critical and Intensive Center Injury Unit Care Units Bill Martin NEVADA'S MAJOR CLINICAL CAMPUS Martin said that market conditions and UNIVERSITY OF NEVADA SCHQOL OF MEDICINE the new regulatory climate has changed UNIVERSITY MEDICAL CENTER the way Pioneer Citizens bank is doing tiiiHCJ'CCARE' business. "We have restructured the way C e n t e 1-r_,s;:....__,~--~~~-=------::~ to do loans for businesses. It takes more '\ CHAII ; HJI. ./ ~ equity and stronger appraisals for all kinds UNIVERSITY MEDICAL CENTER AT THE LAKES 1800 Weet Chuleeton 2760 Lake Sahara Or . ' of loans. I just don't see banks dealing in Open 24 Hour• 254-4900 . raw land any more, and lower occupancy 383-2074 \\". CII AHI.1fS iliN rates will devalue existing properties. As 4333 NORTH RANCHO 4333 LAS VEGAS BLVD N a bank, we want to do the whole package (N Rancho at Crelg Rd) (lee Vega• Blvd N at Craig Rd) for a business, not just the construction 658-4507 644-8701 loan," he said of changes that his custom­ ers have already seen. "But on the other hand, I am seeing customers I did not know existed three years ago." LOW BASIC CHARGE Martin also pointed out that the current ALL MAJOR CREDIT CARDS & INSURANCE ACCEPfED regulatory climate may threaten the com­ petitive position ofU.S. banks in an inter­ national perspective. "There is a threat that (U.S.) banks will be unable to com­ For More Than 11 Million American Households, pete. The U.S. is now part of a world This Is ATypical Family Portrait. economy. I think the European Economic Being the sole parent is a heavy Community (EEC) is going to be tough, responsibility. Whether you're a man or and then look at Eastern Europe and the a woman, you owe it to yourself to learn former Soviet Union," he said. what you're entitled to in Social Security But Martin does not want to be known retirement, survivor, and disability benefits. just as a regulation basher. "Let's face it, . It's easy. Just gp,c&-HnhS banks are not totally private," he said, wnte to Dept. 37, ~ Th . C'nJ;...~-< , s "Banks remain important instruments of ere·s>.JO..l t.ov Ill public monetary policy." • ~~g~~ · Colorado mIn Our Numre'i's. =

Department of Health and Human Services 20 Nevada Business journal • March/ April 1992 Challenge

by David Hofstede

PHOTOS BY WES ISBUTT It was just five years ago that

Smokey Scheinman, then 21 , came to Las Vegas to open his first sports card shop. His timing could not have been better. The explosion in popularity and escalating prices in progress on the

East Coast were beginning to make their way west, and Schein- man arrived not just to wait for the boom, but to help if along.

Smokey's success can be attributed to he claims. And that is just the tip of the far more than good luck and good timing. proverbial iceberg. There are now three At the time of his Vegas opening Schein­ Smokey's shops in Las Vegas, the largest man already had years of experience be­ of which is a collector's Disneyland. Lo­ hind him-as both a collector and a dealer. cated on the Las Vegas Strip, the 5,000- He bought his first trading cards at age square-foot Smokey's Sportscard Stadium five, and by age 11, he incorporated him­ features sports clothing, comic books and self as Baseball Cards, Inc. in his native an inventory of sportscards and memora­ New York. By 1987, when Smokey's bilia dating from 1888 to the present. opened in Las Vegas, Scheinman had "Over half a billion" is as close as Schein­ amassed a 45-million-card inventory, man can come to estimating the number priced from three cents to $10,000. of cards in his stores and his 44,000- Scheinman never planned to operate a square-foot distribution warehouse. simple mom-and-pop hobby shop. "I Smokey's now distributes to stores as wanted to become the number one sports far flung as Paris, London, Australia and card dealer in the world as far as inventory Guam. A card store in Japan is currently in and variety, and that is what we are now," the works. The finn has also helped over

March/ April 1992 • Nevada Business journal 21 duce "a collectible, not a commodity." He believes he knows what the consumer wants, having been a collector himself for 16 years. "There is always room for a high quality, limited edition series, and that's what we've created'" The fust Ultimate card featured UNLV star basketball player Larry Johnson, now a member of the Charlotte Hornets. The company printed 49,500 numbered sets. "Every one of Ultimate Trading Card Company's releases will be numbered, so the customer will know there aren't seven million of one card on the mar­ ket," Scheinman said. But Ultimate's fust sport of choice is hockey. The company's "Original6" se­ ries- officially licensed by the National Hockey League-consists ofplayers from the original six teams in the NHL. The Armed with the latest information on prices and trends, Smokey's specially trained stafffields series was slated for release to coincide requests for a wide variety of trading card products from a customer base in excess o/60,000. with the NHL's 75th anniversary. Vin­ tage photography of hockey's greatest 350 enterprising entrepreneurs open their ing cards, which have just hit the market. names from the 1950s and '60s were used own retail sportscard endeavors with a It's not an original idea; around the time - hockey aficionados will recognize hall system likened to a franchise operation Michael Jordan's rookie basketball card of fame skaters such as Bobby Hull, Red sans franchise fees. In addition, Smokey's began commanding prices of $900 and Kelly, Allan Stanley and Boom Boom Sportscards distributes wholesale prod­ up, everyone with a camera and a printing Geoffrion. In addition, these legends ucts to a North American dealer network press starting turning out their own prod­ were persuaded to lace up the skates and numbering in excess of 5,000. uct. Suddenly, the old familiar Topps brand hit the ice for new photos. Special subsets There are over 55,000 collectors on sports cards were joined on the racks by -a must for any trading card line-feature Smokey's mailing list, and in a recession­ Upper Deck, Fleer, Donruss, Score, Leaf great moments in the NHL's history and tinged economy, when people were hesi­ and Bowman. There are golf cards, tennis the NHL's greatest referees. To further tant to buy stocks and bonds, Scheinman cards, bowling cards, auto racing and more. sweeten the pot, a limited number ofBobby discovered that there was still an eager Look for the stars of lacrosse and luge to Hull hologram cards will be randomly market for hot rookies and hall of famers; be immortalized any day now. inserted in foil packs. Smokey's grossed $100,000 in 1989, $1 "I'll be the first to tell you there are Scheinrnan has hired Sports Illustrated million in 1990 and a jaw-dropping $22 way too many cards on the market right photographer Peter Read Miller to photo­ million in 1991. now," said Scheinman. "The problem is graph Russian and Czechoslovakian "We've always anticipated this kind of not the smaller manufacturers and pro­ hockey stars for an international hockey major growth in the hobby," said Schein­ ducers [many of whom he feels will not be set scheduled for release this fall. Ulti­ man, pointing to industry estimates of 25 around much longer], but the larger com­ mate will also cover World League Foot­ million card collectors nationwide - an panies that are over-producing. If one ball. Designated as the World League's all-time high that continues to grow. The company issues 13 different series of "official trading card", the 200-card se­ industry itself grossed about $2.6 billion hockey cards, it devalues every other ries should reach stores this spring. The last year, up from $600 million in 1989. manufacturer's cards." company plans to promote a $1 million What to do for an encore? Scheinman Scheinman says his creation, the Ulti­ cash giveaway associated with the World decided to launch his own series of trad- mate Trading Card Company, will pro- League series.

22 Nevada Business journal • March/April 1992 More sets will follow. "Manufactur­ ing is mushrooming," Scheinman said. "Right now we have more ideas than we have time to produce them." For instance, the Ultimate Trading Card Company has obtained the rights to 1930s cartoon char­ acters Betty Boop and Popeye, and plans to devote card sets to each. In addition to new stories featuring the characters, the cards will depict sports figures such as Don Mattingly promoting messages on timely issues such as drinking and driv­ ing, and safe sex. "It hasn't been easy, coming up with original ideas that will spark interest in the collector," Scheinman admits, but he has high hopes for all of Ultimate's debut releases. "All of our sets are licensed with the appropriate organizations-approvals for which are difficult to obtain. The li­ censing, though, makes a difference." Smokey' s44,000-square-foot distribution warehouse facility ships orders to collectors Scheinman reports that other manufac­ throughout North America and such far flung destinations as Paris, London and Australia. turers have "voiced concern" over Ultimate's cards, which he interprets as a sports appreciating at an average annual store on every comer, but then Block­ good sign. "The greatest flattery we've rate of 40 percent. "As long as sports are buster began moving many of them out. had is to be considered a major competitor played, the cards will be popular," The same thing will happen here." even though we are a new entrant into the Scheinman said. Scheinman attributes the success of his field. However, we don't want to be an­ So, now's the time to dump those IBM card shops to the ten years of experience other mega-producer. "The objective, said shares, dig out your shoe boxes of cards in buying and selling he gathered before Scheinman, is to be the "biggest little card and open your own shop, right? Probably opening his first store. "My philosophy is company in the world," and to "put not. The problem is, about a zillion people to give the people what they want. I wanted collectibility back into cards." have beat you to it, and while the number to have a store in which a collector could Smokey's Sportscards, Inc. will not be of card collectors may be increasing, find any card he wanted, which is why I distributing Ultimate Cards, which Scheinman predicts the number of retail­ reinvested every penny I made early on. Scheinman feels is a necessary step to ers is on its way down. It's been hard over the past few years with avoid any conflict of interest. Smokey's "We believe there is going to be a major all the cards that are out there, but I think stores will receive the same amount of ·shakeout in the industry. The boom in we have the most complete selection in cards as other card shops and the Ultimate cards has attracted a lot of marginal play­ the country. If you need an 1888 tobacco line will also be carried by Woolworth, ers-hobbyists who become retailers and card, Wayne Gretzky's rookie, a Mickey K-Mart, Wal-Mart, Sav-on, Eby-Brown undercapitalized small store owners who Mantle autographed baseball or a set of and other national retailers. may not know the industry very well." bowling cards, we have it." Scheinman predicts the number ofsports Who will survive? "Those with knowl­ And even with his enormous inventory, card collectors will double in the next five edge, fmancial strength and a wide vari­ Scheinman still maintains his personal years. "Card collecting is a 100-year tra- ety of merchandise. You have to have coUect10n ot caras, ana tmas tne noooy dition, not a fad. It's a way to relive the money to afford that kind of inventory." enjoyable, which is after all what a hobby past and invest in the future." In fact, Scheinman draws a comparison between should be. "Sure, it's still a rush to open a prices continue to soar on many items, card shops now and video stores five to 10 new wax pack of cards -but these days, with rookie cards of players in major years ago. "There used to be a small video it's even more fun to design them." •

March/April 1992 • Nevada Business journal 23 OPULENCE STUDIOS Designing Every Detail by Linn Thome

Nestled quietly among the lavish ado­ and fiber optics to achieve special effects. The large, well-planned kitchen ensures bes of Las Vegas' tony Spanish Trail With this house, I have created custom meal preparation is efficient as well as development, the newly completed 6,300 lighting using glass block and color." enjoyable. Boasting beautifully crafted square-foot Mediterranean-style home of Clearly the home has a woman's touch. cabinetry, the kitchen features two sepa­ Sharon and Herman R. Eminger com­ and it is this fact which, according to local rate cooking surfaces with two double bines studied practicality with elegant ar­ realtor Susie Perrine, makes it so out­ ovens, microwave, two dishwashers, trash chitectural detail. What makes the con­ standing. Working with Jim Nalley of compactor, a food center, three appliance struction of the home particularly unique, Camidan Construction, Ron Globus of garages, a full-size Sub-Zero refrigerator perhaps, is the fact that the Emingers Orion Construction, and Trisha 's Design, and freezer, wine rack and an impressive acted as the general contractors, with Sha­ Sharon has created a custom environment meal planning center. ron adding her skills as designer. that utilizes a dramatic view overlooking Sharon explains that many families want Certainly such an undertaking is not the golf course and surrounding moun­ their kitchen to be highly functional, as new to the Emingers. Herman, a real es­ tains to create an airy sophisticated resi­ well as elegant. "After all, a considerable tate developer with John H. Midby & dence. But it is the thoughtful design amount of informal entertaining takes Associates Development Company, and extras-a fireplace in the master bedroom, place in this area." The use of granite and Sharon a custom designer, had consider­ as well as in the living room and family ceramic tile, surrounded by light oak floor­ able experience from which to draw. room, large walk-in closets, utilization of ing, is as functional as it is beautiful. "Actually I have been involved in gen­ normally lost or dead space as storage, Gracing the home's entry and bath­ eral contracting for three years, and pop-up television in the master bedroom, rooms is exquisite stained and etched freelance designing for 25 years," Sharon built-in humidifiers- these are but a few glasswork. A 24-foot living room ceiling says. "I also have been doing a great deal of the items that work collectively to is graced by a circular staircase to of electrical designing using star tubes make the home liveable and inviting. the second floor. The master suite has

24 Nevada Business journal • March/April1992 and her separate bath and walk-in closets and a dramatic elevated tub-spa with its own private balcony. It is, as realtor Perrine says, a home that could sell itself. The fun and challenge of her work, Sharon states, is having the opportunity to interpret the ideas and dreams of her cli­ ents and turn them into reality and she further offers some advice to those who are considering building a custom home. "Ifmy client is building a custom home, as we did, I believe it is most important to OPULENCE STUDIOS have a pretty clear idea of what they want. It is very important to establish a good I have to add that I think this is where obtain the best results. Of course, there is relationship with the designer. "One of having a woman's viewpoint is very help­ always the budget to be considered. It is my pet peeves is the fact that most homes ful. Regardless, it's vital for the home very easy to go 30 to 50 p~rcent over have so much wasted space. You see this owners to express what their particular budget. Sometimes more. And most im­ even in many very expensive custom needs are and their life style. Being able to portant-try not to be in a rush. Designing homes. To me, this demonstrates a lack of communicate with a designer is critical. and buildmg a home and should be an thought and planning on everyone's part. You must have that rapport in order to exciting and gratifying experience." • Take a Look Into Milgard Wmdows.

While we may be new in town, we're sure not new Our bright red logo also stands for something else. to the window business. In fact, we're the largest A promise that your Milgard window order will be window manufacturer in the West. delivered on time and in full . And now, we're building windows right here in Every day counts when you're building homes. So Las Vegas. we won't slow you down. For over 30 years builders and homeowners alike If you'd like to learn more about our extensive have demanded quality Milgard windows. And they selection of Aluminum, Vinyl and Wood window keep coming back, confident that if anything ever products, give us a call. We're just around the comer. goes wrong with a Milgard product we'll fix it for free. For as long as the original Milgard Wmdows homeowner owns it. Guaranteed. Call Randy Dodd, General Manager You can't make a guarantee like 453-1234 that without the window to back it up. 40 N. Mojave Rd. , Las Vegas, Nevada 89116

March/April 1992 • Nevada Business journal 25 H9M~S

of our market area," Dodd explained, "be­ cause we don't believe in servicing a customer that's out of reach." It didn't take long for locals like Whittier Development, DiLoreto Construction, Coleman Homes, Christopher Homes and the Helmer Company to catch on, accord­ ing to Dodd. They're just a sampling of Dodd's local costumer base. According to Dennis Stein of the Ne­ vada Development Authority, Milgard is

-I the kind of company Las Vegas needs to p draw to the area. "Milgard is a growing ~ JJ company that plans to stick around," Stein ::X: m said. "Their work ethic is strong and their JJ goal is clear- to build the best windows Milgard General Manager Randy Dodd available in Nevada." (left) and President GGJy Milgard FROM AWARD-WINNING PR O· Milgard's customer base extends be­ yond builders and architects. Their line of DUCT ION HOMES TO SPECTACULAR Milgard's Recipe replacemen! windows answer a consumer CUSTOM ESTATE HOM ES , CH RI ST- need as well. "We offer an alternative to less efficient single-paned windows," OPHER HOMES IS BUI LDING For Success Fares Dodd explained. "With our replacement QUITE A REP UTATION AS ON E OF windows, an installer can outfit an entire Well in Vegas home in one day with new dual-paned, THE TOP BU ILDERS IN SO UTHERN cost-efficient windows that look great­ NEVA DA. Randy Dodd, general manager for and all without damaging stucco." Dodd said many homeowners are opt­ T HAT' S WHY B UI LDER M AG- Milgard Windows' Las Vegas operation, is seeing red. ing for replacement windows and remod­ AZ IN E SELECTED C HRI STO PHER And he's loving every minute of it. eling rather than moving during a ques­

HOMES TO BUILD ITS NEW A MER· Milgard's bright red window stickers tionable national economy. are popping up all over Southern Nevada Still, looking at Milgard's operation, ICAN HOME, THE PRE MI ER SH OW on everything from high-end custom resi­ one would have to ask, "What economy?" HOME OF TH E 1992 NATIONAL dences to light commercial projects to Each morning atMilgard's facility, trucks affordable homes-all at a surprising rate. loaded with windows head for job sites all HOME B UI LDERS C ONVENTI ON But it's not surprising to Dodd. over Southern Nevada. Phones are ring­ IN LAS VEGAS . "We build our own windows with local ing. Salespeople are in the field answer­

A ND THAT ' S WHY YOU talent," Dodd explained. "We deliver what ing technical questions and measuring we build. We service what we sell. And window openings. SHOULD CO NTACT C HRISTO PH ER we back our products with the best guar­ So what's next for Milgard? By this

HOMES FI RST I F YOU ARE THINK- antee in the business." time next year, Dodd plans to employ 100 Milgard's guarantee, Dodd says, is or more people. He predicts an upswing in lNG OF BUI LDING A NEW HOME. simple. "If anything ever goes wrong with the housing market with a continued fo­ FOR MORE IN FORMATION CA L L our window -for as long as you own the cus on quality and value by homebuilders home- we'll take care of it. No charge." and homeowners alike. (702) 366-0294. Apparently, Milgard's unique approach Dodd has planned a grand opening for is working. Until Milgard came to town in the Milgard operation this spring at their September, they were virtually unknown facility located on North Mojave Road in in local homebuilding circles- ironically Las Vegas. Milgard's Las Vegas facility because of their unusual business ap­ brings their total to eleven manufacturing proach. "We won 't sell a window outside facilities in the Western U.S. •

26 Nevada Business journal • March/April 1992 STOCK PICKS 1992

Blue Chip Nevada Stocks by Lynn Waddell all-time high in revenues and earnings. Even with the recession, stock brokers and analysts have a bright Henry Gluck, Caesars World president and chief operating officer, said the sharp! y improved quarter was mainly caused by outlook on several local-interest stocks they were asked about. an increase in casino revenues. Caesars has two casinos in Nevada, one MARCOR RESORTS INC. Mirage Resorts' Treasure Island, the in Atlantic City and a gambling cruise MarCor has undergone some dramatic MGM Grand Hotel & Theme Park and liner in the Pacific. It is also exploring changes within the later part of 1991 that Circus Circus Enterprises' "Project X': gaming operations on Tinian, a small is­ should keep revenues on track for 1992, "It's important the Rio continue to play land near Japan. local brokers say. From selling its real to locals, as well as tourists, and continue In February, after battling increased estate, which has been a burden to the to highlight its unique features such as competition from the Mirage in 1990 and company's financial statement, to mar­ being an all-suites hotel," Moody said. tough times in Atlantic City, Caesars keting and operational changes, MarCor World announced earnings per share of has improved its future. EG&G 92 cents up from 17 cents the same quarter "Their outlook is real good because Despite the thawing of the Cold War, of the previous year. "I didn't expect this they have been bucking the trend," said EG&G, which is headquartered in South­ at all," Moody said. "Caesars has always Tom Hantges, gaming analyst for USA ern Nevada, continues to do well because done well, but I'm surprised to see it do as Capital. "They are expanding and doing of diversification, said Kevin Palmer, a well as it did.'' better in the recessionary environment, so broker with PaineWebber. Palmer and Moody said the increase obviously they are doing something right "In light of the slow economy and de­ also had much to do with improvements to pull that off." fense cutbacks, EG&G posted a fourth in New Jersey. For instance, a new park­ Continuing with transition, MarCor is quarter better than last, which is encour­ ing garage was added this year, because changing its name to Rio Hotel & Casino aging," Palmer said. "I think it is because fmding parking spaces is difficult in At­ Inc. to more truly reflect the operations of they have begun focusing on increasing lantic City. the fum. The off-Strip 420-room resort on revenues outside the defense industry and In Las Vegas, Caesars has the opening Flamingo Road opened in the spring of going after non-U.S. customers." of its Forum Shops to look forward to this 1990. However, its beginning was slow The company which provides radiation spring. The 240,000 square feet of shops with the first year showing a loss. detection for the federal government at and restaurants was built adjacent to the Increased marketing, lower pricing of the Nevada Test Site, also has offices in casino, but with the money of outside improved food, and changing the casino's California, New Mexico, Massachusetts investors. Thus the resort will gain foot slot mix, however, had a positive effect in and Maryland. traffic through its casino without having 1991. The loss of 1990 changed to an More than $2 billion ofEG&G's $2.7 to spend its own money. increase in 1991. The improved earnings billion revenue in 1991 was derived from Many of the businesses inside are mak­ helped MarCor's stock to nearly double in defense-related work. However, the firm ing their Las Vegas debut such as trendy price the past three months, said Hantges. has used its high-tech skills to work on Spago, a popular Hollywood restaurant. Mike Moody, with Union Equity Part­ NASA projects such as a space crystal Plus, within the public areas, the Forum ners, said for MarCor to continue its up­ recently testes on the shuttle. The technol­ will have entertainment in the form of 15- ward trend, it needs to add another room ogy could lead to finding oil and mineral foot robotic replicas of Roman gods. tower to the Rio. The company is attempt­ deposits or viewing radiation emissions. "I think it will be good for Caesars, but ing to obtain financing for a new tower, Its stock has been selling for about $50 whether it will be a stand-alone success and continued good earnings reports a share - near its 52-week high. depends on what the economy looks like should help it accomplish that, he said. "It when it opens," said Harold Vogel, chief could do well or it could do phenomenally CAESARS WORLD INC. casino analyst for Merrill Lynch invest­ well," Moody said. The gaming company is coming off a ment firm. "But it definitely makes sense One challenge the hotel will face is good year despite the recession, and bro­ for Caesars, because it didn't push them competing with the three new mega-re­ kers say more is expected. In its second deeper in debt." sorts being built in the next two years: quarter ending January 31, 1991, it had an Caesars stock may already reflect an

March/ April 1992 • Nevada Business journal 27 STOCK PICKS 1992

anticipated success of the Forum, Moody machine and gaming equipment manu­ Manitoba Lotteries Foundation with a said. The stock price has risen as high as facturer based in Reno. The company, computerized electronic video lottery sys­ 391/4. "One reason the stockmarket does which has seen phenomenal success, can tem- including 800 lottery terminals. what it does is because it tells people expect it to continue as gambling be­ Because state lottery revenues are where we are going," Moody said. "There comes increasingly legalized around the weaker, more may legalize video poker has been a rush to buy Caesars stock world, Hantges said. for another source of tax revenue, said because people are expecting big things." "They have already established them­ Eugene Christiansen, president of Hantges said the Forum will help selves as tops in Nevada," Hantges said. Christiansen/Cummings, a New York­ Caesars further establish itself in Las "More and more places are legalizing based gaming consulting firm. IGT ma­ Vegas as more mega properties are built. gambling within the United States, and chines are a likely choice. The flfTil's It will also help the entire city distinguish are using their machines." equipment is already used in South Da­ itself from other gambling destinations. IGT manufactures 60 to 70 percent of kota and Colorado casinos. Plus, more "As gaming proliferates around the the slot machines used in Nevada.lt intro­ Native Americans are turning to casino nation and world, things like the Forum duced video poker machines and progres­ gambling as a source of revenue. Tribes set Las Vegas apart," Hantges said. sive slot systems such as Megabucks, that have legal casino gambling have video Quartermania and Nevada Nickels. poker and slot machines. INTERNATIONAL GAME "IGT has been a gang-buster all year The worldwide gamblin~ boom could TECHNOLOGY long," Palmer said. "They have been pull­ push IGT's stock to $100 a share as it did Also bucking the recession, is Inter-na­ ing in contract after contract." last year according to Moody. "It's going · tional Game Technology (IGT), a slot In 1991, IGTwon the contract to supply to continue to do well," he said. • •

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Nevada Bankers Association: Working for change by Lyle Knight environmental clean-up on foreclosed President, Nevada Bankers Association property -regardless of whether their actions contributed to the environmental Banks and banking activities have problem- has led a majority of banks to received more attention in the Nevada simply reject loan applications if there media this year than any year in recent is any possibility of environmental memory. While the information shared liability. The consequences ofthis has been both of a positive and negative problem are already apparent. Major nature, the upcoming year promises to trade groups, including the National be one more heavily slanted to the Federation of Independent Business and positive side. the Associated Builders and Contrac­ Normally, banks are a reflection of tors, have testified before Congress on the economic strength of the areas they several occasions about the devastating serve. Consequently, of the events that impact current interpreta~ions of envi­ Nevada bankers look forward to in ronmentallender liability are having on 1992, a solid economic recovery ranks credit availability to their industries. at the very top of the list. The nation, as well as the state, eased into the current LENIENT BANKRUPTCY economic recession, and we expect to Lyle Knight RULINGS ease out of the recession also. This Consumer bankruptcies are exploding means that we do not look for a robust which serve a number of different and are having a chilling effect on break out of the recession, instead slow economies, localized recessions do not lending due to large loan losses and the but steady growth during 1992. The severally impact the their ability to increased risk of future losses. More second event that most bankers look provide credit as well as other non­ than 900,000 personal bankruptcy forward to is the acquisition of Valley credit and deposit services. Diversifica­ filings were made in 1991, nearly three Bank by Bank of America which tion is the foundation for a healthy times the level recorded in the 1981- precedes the merger of Security Pacific financial institution. 1982 recession. The recession and weak Corporation with Bank of America. While Nevada bankers have enjoyed recovery are partly responsible, but the First and foremost, the acquisition the positive business climate created by trend has been steadily upward for the and merger brings to Nevada one of the Nevada lawmakers, many of Nevada's past seven years. largest and strongest fmancial institu­ banking activities are controlled or tions in the nation. This institution's regulated by federal statutes. The TAX LAW REFORM strength is centered not only in its size banking industry faced grave disap­ It is clear that tax policy had a and profitability, but also its economic pointment in 1991 when the U.S. significant influence on economic diversification. This is good news for Congress failed to pass any positive performance in certain business sectors Nevadans, for history has proven in banking legislation. Banks remain at a in the 1980s. In light of that experience, states such as Texas and Arizona that competitive disadvantage when the ABA recommends that Congress banks that only do business within a measured against other providers of use a carefully structured approach in small geographic area are totally financial services. crafting any economic growth tax dependent upon the economic health of Nevada bankers have identified six provisions in 1992. that area and should a localized reces­ major areas of concern upon which to sion occur, the bank is weakened which focus their energies: Tax reforms necessary to spur further aggravates the recession. economic growth: On the other hand, with banks like ENVIRONMENTAL LENDER • Restoring broad-based individual Bank of America that have a strong LIABILITY retirement accounts (IRAs) with up­ presence in a number of states and The risk that lenders will be liable for front deduction and tax referral on the

March/April1992 • Nevada Business journal 29 SPEAKING FOR NEVADA

interest earned. ABA supports the reserves from their financial statements. take action now to absorb these ex­ proposals to expand the availability of This would make bank balance sheets pected new costs. IRAs (or similar savings accounts). stronger, enabling banks to expand their With the short-term funding needs of There is a consensus that the U.S. lending activities. the Bank Insurance Fund addressed and savings rate is too low to provide the • Reforming tax laws relating to real with recently enacted reforms that capital for investment that is necessary estate. Congress should adopt passive should lower the cost of resolving bank to ensure robust economic growth. loss rules for real estate professionals, failures, a long-term approach to setting As part of any IRA program, it is make changes in the tax treatment of premiums is needed. Unless economic important to provide "safety-net" foreclosed property, and encourage conditions deteriorate further, the Bank exemptions for early withdrawals from pension fund investment in real estate. Insurance Fund should reach a reserve IRAs for education, major medical These provisions will help the sale of balance of between $35 and $40 billion expenses, and first home purchases. real estate, help establish and stabilize in 15 years at current premium rates of Safety-net exemptions will break the real estate property values, and help 23 cents per $100. This would be psychological barrier to IRA participa­ ease the burden of holding large sufficient to meet the legislatively tion and will encourage more Ameri­ volumes of foreclosed property in required 15-year recapitalization of the cans to put their funds in long-term currently depressed real estate markets. insurance fund without putting further savings accounts. stresses on banks and the communities • Permitting tax-free conversion of INTERSTATE BRANCHING that they serve. Indeed, another major common trust funds into mutua/funds. While many states, including Nevada, premium increase in 1992 could be very Tax-free conversions will permit banks currently enjoy the benefits of interstate counterproductive- particularly in to diversify customer assets- including banking which allows large multi-state those regions of the country hit hardest making mutual funds available to their banks, such as Security Pacific Corpo­ by the recession - since the result will customers - and make IRAs more ration, First Interstate Bank, Citicorp, be less credit for consumers and attractive. This small change would be and Bank of America, to provide businesses and additional bank failures. tremendously important for encouraging banking services to Nevadans, we have savings and enhancing the competitive­ not allowed those large multi-state THE REGULATORY BURDEN ness of the banking industry. banks to enjoy the efficiencies associ­ In the last five years alone, over 40 • Providing that banks do not have to ated with belonging to a larger com­ major changes or additions to bank accrue income for tax purposes on pany. Current banking laws require regulation have been made, many of loans put in non-accrual status by bank each of the local subsidiaries of the which are unrelated to bank safety and regulators. The current IRS practice multi-state bank to be separately soundness. This large and growing forces banks to prepay tax on interest chartered, separately governed, sepa­ burden is seriously affecting the ability income that they will likely never rately regulated, separately managed, of banks to meet the credit needs of receive. Banks should be permitted to and separately directed within each their local communities. As regulatory rely on regulatory classifications of state. The potential cost savings of an expenses mount, less money can be loans and stop accruing interest income interstate branching system translates plowed back into capital, resulting in a on non-performing assets. This will into stronger banks and more competi­ dramatic reduction in available credit. help free up more resources to be used tively priced products and services. For every dollar absorbed by the to support additional lending. mountain of regulations, $8 to $12 of • Clarifying tax amortization of SPIRALING INSURANCE new loans to the community are lost. purchased intangible assets such as PREMIUMS bank core deposits. ABA strongly Sharp increases in bank premiums The Nevada Bankers Association will supports Chairman Rostenkowski' s have eroded bank earnings and capital­ continue to work for positive changes to proposal to resolve tax controversies on resulting in restricted credit flows, ensure a healthy competitive environ­ amortization of purchased intangible particularly in economically distressed ment for the industry so it will remain assets. Banks which have acquired core areas. The anticipation of higher strong and sound and where Nevadans deposits or other intangibles would be premiums at mid-year is causing a will be assured of competitively-priced, able to release their tax contingency further credit-tightening effect as banks state-of-the-art services. •

30 Nevada Business journal • March/April 1992 EXECUTIVE PROFILE

vada area make him carefully optimistic. TOM MASTERSON "From what I've seen, growth has slowed somewhat, but it's defmitely not Nevada Copy Systems' stagnant," he says. "Understandably the national economic situation has made people here more cautious. This doesn't new general manager mean that they are not growth oriented, however. But it does provide Nevada Copy by Linn Thome Systems with the challenge of addressing their current needs by providing programs that offer more cost effective alternatives From all outward appearances Nevada Copy Systems looks and acts to help them minimize their cash flow while at the same time accommodate varying needs and plans." like the conservative, but aggressive copier dealer it's always been. Masterson points out Nevada Copy Systems, whose headquarters is located across from the UNL V campus, has a But looks can be deceiving because change, in the form of a dynamic large warehouse and service center on Arville and serves the entire state with branch offices in Reno and Lake Tahoe. new general manager, has indeed taken place. He says the advantage NCS has over its competitors is the strong fmancial back­ ing of A leo .Standard and its commitment Founded in 1979 by Gary Martin, Ne­ Nevada Copy Systems is a strong and to serving the business community. vada Copy Systems was, ten years later, viable force in the business place. Lastly "I can best illustrate what I mean by acquired by Alco Standard Corporation, a the strength of the product line sold [Sharp describing a personal situation. After ac­ holding company of considerable size and and Cannon copiers and facsimile ma­ cepting this position, Alco Standard was impact. Listed on the New York Stock chines], plus the recognition in the com­ very accommodating, very sensitive in Exchange, the company has impressive munity were factors in my coming." making this transition comfortable not annual revenues which exceed $4.5 bil­ But for Masterson, who formerly lived only for me, but for my wife and baby. lion. Among its interests are Paper Com­ and worked in Sacramento, the economic You don't often see that type of response pany of America and one of the largest strength of Southern Nevada also figured from large companies." networks of office dealerships in the U.S., prominently. "In my short time here, I see Masterson explains that although he of which Nevada Copy Systems is one. Las Vegas as a dynamic business commu­ does not anticipate making any immedi­ Following Martin's resignation in No­ nity,"he continues. "And it's an excellent ate changes as the new GM, Nevada Copy vember 1991, Alco Standard recruited place to raise a family. The cost of living Systems will be expanding the Cannon Tom Masterson to take over the NCS and the fact there is no state income tax are line into its own facility soon. helm. Although he's only been in Las certainly significant considerations. Fur­ "We're also looking at short- and long­ Vegas a short time, the new general man­ thermore, there's a favorable climate here term changes in physical location and ager is already as enthusiastic about the for businesses to grow and develop. More we'll be consolidating administration city as he is about his new job. and more people are realizing this fact." and warehouse activities," he says. "This "The thing that led me to accept this Masterson should know. An Idaho na­ will probably take place within a year. position was the fact that Nevada Copy tive who graduated from Boise State U ni­ One of the things we might consider is Systems, as an organization, is committed versity with a bachelor of science degree doing a 'build to rent' or possibly buy an to the community," he says. "Also, as part in marketing, his various career moves existing facility. So, change is part of the of the Alco Standard Corporation team, have taken him to other Sunbelt states. scenario now, but it's based on our desire with over 100 employees in the state and His experiences there and his careful pre­ to better serve our clients. That part, of more than 60,000 employees worldwide, move assessment of the Southern Ne- course, is a constant." •

March/April 1992 • Nevada Busi ness journal 31 by Ehert Kowalk

Deciding on the right ADVERTISING combination of advertising YOUR ADVANTAGE messages and the media in which to run them is a difficult quest for even the largest of An effective advertising campaign You also need to develop a profile of starts with common sense. According to your potential customers. Shelley Safian, president of Safian Com­ "Defme your customer base geographi- • companies. How then, can munications Services - a Winter Park, cally and demographically to help deter­ Fla. advertising agency - you need to mine the media in which to advertise," begin with a plan that clearly defmes your says Donna Millenson, an executive with small business owners create customer base and the media that spurs the Newspaper Advertising Bureau, a them to action. trade association based in New York City. "This may seem obvious, but I've "Identify everything you can about effective, targeted advertising found that not developing a plan is a your targets- including age, gender, edu­ common mistake small business owners cation and income level," echoes Stan make when developing their advertis­ Geiser, Midwest regional coordinator for that turns potential buyers ing," Safian says. "Without a plan, a busi­ the Service Corps of Retired Executives ness will tend to overspend in one area (SCORE), which provides free, confiden­ and underspend in another. You also risk tial counseling to small businesses. into repeat customers? throwing your money away in totally in­ Geiser volunteers that there are some appropriate advertising vehicles." inexpensive sources for capturing this Therefore, Safian, who counts many type of data. Major corporations often use small businesses among her clients, rec­ focus groups and customer surveys to ommends establishing a road map leading uncover this kind of information. to clearly defined and measurable goals "While small businesses typically do for a specified expenditure. not have the funds required for this kind of "Determine things like the number of exercise, the company can do some infor­ customers you want to get in the door or mal research by calling potential custom­ on the phone, or how many widgets you ers and asking them how their wants and want to sell," she says. "Keep in mind that needs relate to the products," Safian says. the amount of money you have to spend At this stage it's also useful to examine directly affects whether you can realisti­ what the competition is doing. "Study cally meet your objectives. The general what your competitors are doing - how rule of thumb is that four to five percent of they merchandise, the level of service gross revenue should be spent on adver­ they provide, their business hours," says tising," Safian notes. Max Fallek, president of the Mirmeapo-

32 Nevada Business ]oumal • March/Apri ll992 "The key is how the media relates to the target market. You need to ask, 'Will communicating in this medium You can stay in constant touch with your office, your clients, your suppliers. And your competitor can't. That's an advantage. bring the customers I want?' Only then It's the advantage Centel Cellular can provide for you and your business. can you feel confident you're getting Here are some others: • Rates that are up to 25%lower than any others in Southern Nevada the most bang for your buck." • No charge for ring time, busy signals or no answer • Service to the state line, Moapa Valley and Laughlin • Interest-free financing for up to 12 months (with approved credit) lis-based American Institute of Small • Free installation at your home or office (with new phone purchase) Business (AISB). "If you can go one step Gain the upper hand. Call or visit today for more information beyond what they offer, it will help you create a more unique message." on putting the Centel Cellular advantage to work for you. Once you've identified your customers and tailored your product and message to CENTEL them, the final step is to select the medium CELLULAR in which to deliver this message. "No single medium - newspapers or 893-8100 magazines, radio or television, direct mail or billboards - is inherently better than Administration Sales- 4022 S. Industrial Rd.- Las Vegas, Nevada 89103 any other," says Bill Greenwald, a partner Sales- 3420 W Spring Mountain Rd.- Las Vegas, Nevada 89102 in Quality Centers, a shopping-center de­ Centel Cellular Sales also located inside Union Premiums. veloper based in Orlando, Fla. Centel Cellular Authorized Agents: Each has very specific audience pro­ Las Saturn of West Sahara 252-89()() es. and very specific strengths and All Vegas Bizmarts All Las Vegas Radio Shacks Southwest Car Stereo 384-1331 ~:..kn~!S depending on the nature of American Cellular 870-7808 Stereo Plus 876-4434 · ence and the message to be de­ Best Telephone 382-4668 In Boulder City: Greenwald advises. CEI 873-5()()0 Foxhouse Boutique 294-4 120 e.' is how the media relates to the Executive Car Audio 368-6411 et," Greenwald says. "You Frontier Radio 871-6166 In Bullhead City: a.sk, Will communicating in this Herda's Appliance 737-1045 Sound Chamber 758-8555 - 'urn bring the customers I want?' Onl then can you feel confident you're getting the most bang for your buck."• SI'HSS &LIEF Relieve tension, back and neck pain, arthritis pain with Ehert Kowalk is an IBM marketing man­ ager who focuses on small and growing ACCUPRESSURE HEAUNG THERAPY businesses in the Las Vegas area. Excellent for nerve disorders, poor circulation & sports injuries - WE ALSO OFFER CLASSES IN SELF DEFENSE- This monthly column is sponsored by alCorn Computer Center, 4305 S .Indus­ 3025 E. Desert Inn A f\Lf\Ut:lVI y UJ­ Men • Women uialRd., Suite 1 JO ,LasVegas,NV89103 . · comments or requests for additional • Suite 7 • KENPO KARATE • Children • -~rmation , call (702) 795-1010. Las Vegas, NV 733-7788 Family Rates

March/April l992 • Nevada Business journal 33 by K. Michael Spuhler

For certain high-income Requirements More Stringent individuals, recent changes in for Estimated Tax Payments the law will have the effect of

accelerating future estimated THE BASIC RULES without regard to, increases in taxable income from the sale of a primary resi­ For the most part, individuals must still dence, an involuntary conversion, or an S tax payments. If you make make four installment payments for each corporation or partnership in which yo taxable year, and generally, each install­ own less than a 10 percent interest (and in ment must equal 25 percent of the "re­ which you are not a general partner). estimated tax payments, you'll quired annual amount." This year, what has changed is the definition of"required NEW RULES EFFECTIVE FOR 1992 annual amount" - the base amount for want to consider the new rules calculating your installment payments. For many higher-income taxpayers Until now, estimated taxes needed to will be advisable to make quarterly "an­ equal the lesser of 90 percent of your nualization" calculations. This will hel before the second quarter current year's tax liability, or I 00 percent determine the minimum payments re­ of your preceding year's tax liability. An quired to avoid a penalty. When an ann - alternative calculation method satisfied alization method is used for a quarter, the payment deadline of June 15. the 90 percent payment requirement for estimated payment must be increased b. each period based on an annualization of any shortfall that resulted in prior quarte taxable income through the end of the from the method used in those quarters. month before a payment was due. The new rules apply to estimated Under the new rule, you no longer have payments for taxable years beginning af­ the option of calculating your current year ter 1991 and before 1997, except for the estimated tax payments on the basis of fust installment for any taxable year. For your preceding year's tax liability if: the fust installment only-Aprill5, if y -Your modified adjusted gross in­ are a calendar-year taxpayer - you come (AGI) increases by more than stillmakeapaymentbasedon lOOper $40,000 ($20,000 if married filing of your preceding year's tax. separately) over your actual AGI for If you underpay estimated taxes for ac_ the preceding year; quarter, you will need to pay a penalty - Your current year's actual AGI is the IRS-a nondeductible interest cha.r:ge more than $75,000 ($37,500 if mar­ -for the period of underpayment. ried filing separately); The new rules may affect you. If so, y - You have made an estimated pay­ should contact your tax adviser to dis ment (or been assessed an estimated your situation. tax penalty) for any of the three pre­ ceding years. K. Michael Spuhler is a tax partner K •• Basically, modified AGI is computed the firm KPMG Peat MaJwick.

34 Nevada Business Journal • March/April 1992 October, 1990 requiring HSST to meet counties, cities, school districts and other certain pre-certificate requirements prior public agencies to finance long-term to granting any certificate of public con­ projects such as schools, hospitals, urban venience and necessity. renewal, bridges and roads. This type of certificate is needed before Alternative investment products in the Clark County's board of commissioners First Interstate promotion are not prod­ will issue fmal permits for the train to ucts or obligations of First Interstate Bank operate as a source of public transporta­ and are not FDIC insured. tion in the Las Vegas Valley. Sierra Health and FIB offers alter­ Admar Group plan Nevada native Investment lolnt venture products riefs Sierra Heath Services, Inc. (AMEX: First Interstate Bank in Nevada is con­ SE) and the Admar Group, Inc. ducting a two-month statewide promo­ (NASDAQ: ADMR) announced they tion of alternative investment products, have signed a letter of intent to jointly including the introduction of mutual market their products in California, funds. The bank also is promoting other Texas, Arizona, Colorado, New Mexico, investment products, including U.S. gov­ Missouri and Kansas. Sierra will provide HSST-Nevada ernment securities and municipal bonds. the fully insured and partially self-funded reorganizes The "Investment Choices, Choice In­ managed care group health insurance vestments" promotion was scheduled to products, and Admar will supply the pre­ HSST-Nevada has asked the Public run from February 18 through April15. ferred provider organizations, utilization Service Commission for an extension of "Now is the ideal time for consumers management and case management ser­ time on complying with the conditions the to consider tax-free, tax-deferred and vices. The products will be sold through PSC established before it will grant the other investments," according to Andrew local marketing organizations and third high-tech train company a certificate of Studdert, First Interstate's Southern Ne­ party administrators in the targeted states. public convenience. vada area president. Sierra Health Services, Inc. is a grow­ HSST-Nevada filed the petition with First Interstate now makes available a ing health care company headquartered in the PSC in Carson City stating it "will wide range of nationally known mutual Las Vegas, comprised of eight subsidiar­ need until January 4, 1993 to comply with funds and the Westcore family of mutual ies, including a health maintenance orga­ PSC requirements as a result of a corpo­ funds. The bank or one of its affiliates acts nization, a life and health insurance com­ rate reorganization it is undergoing." as fmancial adviser to each fund. Each of pany and a managed care administrative HSST -Nevada spokesman, Dick the W estcore funds is sponsored and dis­ services company. It will be those subsid­ Campbell said, "HSST-Nevada is a sub­ tributed by ALPS Securities, Inc., an in­ iaries' products that will be sold using the sidiary ofHSST Corporation. Our parent dependent broker-dealer. Admar network. Sierra, which currently company is now being reorganized to Money market, fixed-income, equity insures more than 160,000 members, has increase its invested capital and facilitate and tax-exempt mutual funds are made ongoing operations in Nevada, Arizona, the continued development of magneti­ available. The minimum investment is Colorado and New Mexico. cally levitated technology in the United $1 ,000 and interest is paid monthly, quar­ TheAdmarGroup,Inc., headquartered States and other countries. terly or semiannually. in Santa Ana, Calif., contracts with insur­ HSST-Nevada has been operating in The bank also is making available a ance carriers which agree to market Ad­ state since March of 1987 and has wide array of government securities such mar's services and products as an adjunct d $12 million in pursuit of the as Treasury bills, notes and bonds with to their health care benefit plans to em­ ..._._,., ,t'C' and licensing needed for the cor­ varying terms and minimum investments. ployers and their insured employees . ,;:a::!!i

March/April 1992 • Nevada Business Journal 35 the continued growth of the credit unio - said Bradley W. Beal, NFCU presid · and chief executive officer. 'The c Hughes Airport Center union concept is based on cooperafu e principles and we continue to operate WELCOMES way. The growth we have experien during 1991 , both in deposits and in loans. is indicative of the confidence of members. Further, that same mem ~AWC confidence is encouraging because it ·g­ oals continued strength and stability A Lockheed Company the credit union." Apple Nevada Federal Credit Union is an -­ Foam & Plastics for-profit cooperative which provides full line of consumer-oriented fman · services to selected employer and as.s~r A ciational groups in Nevada. It operar.es ~Valley Bank branches in Las Vegas and Reno, and · •of Nevada automated teller machines· are a part of MEMBER FDIC We're there when you need us. several regional and worldwide ATM CAP[TOL networks giving members account access SPORTSCARDS,- Inc. at over 50,000 machines worldwide. INDUSTRIAL PLASTICS A new full service branch was opened in Reno last July providing Northern Ne­ MANUFACTURING COMPANY, INC. vada members increased convenience and accessibility. Projections for 1992 call for a new full-service branch to be a development of opened on the west side of Las Vegas in ------the latter part of the year. ~ Sun State reports record earnings

Sun State Bank reported record earn­ ings of $777,759 for 1991, announced President John Dedolph. This represents 1.53 percent return on assets and 19.74 Anthony M. Marlon, M.D., chairman, percent return on equity. Assets at year­ president and chief executive officer of NFCU reports 1 99 1 end totalled $53,941,771, an increase of Sierra Health Services, Inc. and Richard record reserves 11.20 percent from 1990. Toral, chairman and chief executive offi­ This is the fourth ·consecutive year of cer of the Admar Group, Inc. stated: "We Nevada Federal Credit Union's total excellent profits, said Dedolph. Also believe that this new venture is an excel­ reserves were increased by 20 percent in loans increased 22.98 percent during the lent opportunity for both organizations. 1991 to a record high of $20.2 million. year, contrary to the trend experienced by This relationship significantly expands Year-end assets were over $296 million. most other banks. Sierra's geographic area of operation and The state's largest credit union reported Sun State Bank is a 10-year-old locally improves the potential for both compa­ over $13.2 million in dividends paid in owned, locally managed "niche" bank nies to increase their membership under a 1991 and $207.2 million in outstanding which concentrates its efforts on lending managed health care approach to health loans to its 64,000-plus member/owners. to small and medium-sized businesses, care financing." "We are gratified and encouraged by professionals and upscale consumers. •

36 Nevada Business Journal • March/April 1992 Coordinated Care.

The way health care should work.

An the parts should work together to make it work better for you. + Health care should be easy to use. It should have convenient locations and service hours. + At the same time, your medical records should be readily available no matter which location you use. Laboratories and radiology facilities should work around the clock, so your physician can have your test and x-ray results when they need them. Those physicians should provide the quality of care you require. And deserve. + It should be coordinated care. Coordination of all parts of the health care system, so it works smoothly, efficiently, thoroughly. + And it should all be affordable.

+ Health Plan of Nevada. It works the way health care should work. ~ HEALTH PLAN OF NEVADA sM A member of Sie rra Healt h Se rv ices business indicators & anaiY.,sis

he nation's recession continued through the last quarter of NEVADA TAXABLE SALES 1991. Unemploymentratesin 1991 remainabovehistori­ 1011 5·1001 cal average levels. The U.S. unemployment rate was 6.8 I percent on a seasonally adjusted basis in November, 1991. Nevada's rate is 1.1 percent lower. On the other hand, the northeastern states, having faced a three-year decline, have unem­ ployment rates noticeably above the national rate. Conditions in Nevada have been better than most other states. Nevertheless, Nevada's unemployment rate (5.7 percent) remains above year-ago levels. Although likely to be a short-term improve­ ment, Reno's unemployment rate declined from last year. On the other hand, Las Vegas, which enjoyed rapid growth in recent years, is now experiencing a larger unemployment rate than Reno. The announcement of the largest one-time decline in gaming revenue from year ago levels for October, 1991 sent a shock wave through the gaming community statewide. But, this one-month decline reflected a host of special situations, making the compari­ son questionable. Furthermore, visitor volume continues to grow,

albeit by a small percentage. Also, the passenger volume at both NEVADA GROSS GAMING REVENUE McCarran and Cannon is up. And more important, 1991 annual 1811 5 • \ IUI I total gaming revenue is likely to be above the 1990 level. Increasing imports and establishing foreign manufacturing in the U.S. have prompted some U.S. plant closings. As a result, prospects for future U.S. growth remain uncertain. And when many expected an economic recovery to get under way, an uneasi­ ness about future employment opportunities swept the nation. Last fall, major American corporations announced plans to further reduce workforces in the months ahead. Among those making announcements was General Motors, a recognized symbol of American manufacturing. Since 1986, when the U.S. automo­ tive industry saw a jump in its excess capacity to 19 percent, many U.S. plant closings have occurred. Now, in the face of a national recession another round of structural shifts are occurring. Again, displaced workers will bear the brunt. Furthermore, others are also likely to be adversely influenced. Many are uncertain about the future and are spending less. As a result, this uncertainty will slow

the economic recovery. AIR PASSENGERS To stimulate the nation's economy, the Federal Reserve has 191!15 - HIO I worked to lower interest rates. Persons and businesses who depend on interest income will now be earning less, for example, senior households. But for many, the lowering of interest rates is a welcome event. With a lower cost ofborrowing, the Fed hopes that more businesses and households will start spending. Interest rates have dropped to levels that have not been seen for some time. Indicative of the changes that have been underway is the decline in the three-month treasury bill. As of December 1991, the rate was at 4.12 percent. Other longer-term interest rates will follow short­ term interest rates downward. Thus, as we enter 1992, attention focuses on the effectiveness of monetary policies to generate economic expansion and trade policies to generate a more com­ petitive business environment.

R. Keith Schwer, UNLV Centerfor Business & Economic Research

38 Nevada Business journal • March/ April 1992 LATEST PREVIOUS YEAR CHANGE DATE UNITS PERIOD PERIOD AGO YRAGO UNEMPLOYMENT Nevada Nov, 1991 seasonally adj. 5.7 5.6 5.4 3.70% las Vegas Nov, 1991 seasonally adj. 6 .0 5 .9 5.5 7 .27% Rena Nov, 1991 seasonally adj . 5.0 5.0 5 . 1 -1.96% u.s. Nov, 1991 seasonally adj. 6.8 6.8 5.9 15.25% RET AIL ACTIVITY Nevada Taxable Sales Nov, 1991 $ thousand 1, 176,614 1, 156,451 1 '1 68,224 0.72% Clark County Nov, 1991 $ thousand 690,476 678,561 687,933 0 .37% Washoe County Nov, 1991 $ thousand 218,816 211,984 219,702 -0.40% U.S. Retail Sales Nov, 1991 $million 153,109 152,687 152,538 0.37% GROSS GAMING REVENUE Nevada Nov, 1991 $thousand 457,972 475,910 461,813 -0.83% Clark County Nov, 1991 $ thousand 349,146 356,286 351,336 -0.62% Washoe County Nov, 1991 $thousand 68,569 75,082 69,049 -0.70% CONSTRUCTION ACTIVITY Las Vegas Area New Residences 4th qtr 1991 #permits 3,925 2,424 2,461 59.49% New Commercial Permits 4th qtr 1991 #permits 150 227 125 20.00% Reno Area New Residences 2nd qtr 1991 #permits 484 231 589 -17.83% New Commercial Permits 2nd qtr 1991 #permits 53 43 39 35.90% u.s. Housing Starts Nov, 1991 thousand 1,066 1,089 1,130 -5.66% Total Construction Nov, 1991 $bill ion 406.3 409.4 431.4 -5.82% HOUSING SALES Las Vegas Area Average Sales Price 111 3rd qtr 1991 $ 112,216 142,814 131,242 -14.50% Average Cost/Square Foot 3rd qtr 1991 $per sq . ft. 67.45 76.38 76.66 -12.01% Average Mortgage Rate 121 3rd qtr 1991 % 9.68 10.16 9.45 2.43% Washoe County Average Sales Price Ill 2nd qtr 1991 $ 167,666 144,078 149,403 12.22% Average Cost/Square Foot 2nd qtr 1991 $ per sq. ft. 88.14 76. 12 77.82 13.26% Average Mortgage Rate 121 2nd qtr 1991 % 9.40 9.80 10.50 -10.48% U.S . Home Sales Nov, 1991 thousand 520 520 480 8.33% TRANSPORTATION

Total Passengers 131 McCarron Airport, LV 4th qtr 1991 passengers 4,950,982 5,155,456 4 ,840,877 2.27% Cannon Airport, Reno 4th qtr 1991 passengers 817, 194 912,420 738,331 10.68% State Taxable Gasoline Sales Oct, 1991 thousand gal. 58,058 54,789 53,384 8.76% POPULATION ESTIMATES Nevada July 1, 91 people 1,296,360 1,236,990 4 .80% Clark County July 1, 91 people 817,450 770,280 6.12% Washoe County July 1, 91 people 262,900 257,120 2.25% NATIONAL ECONOMY Consumer Price Index 1•1 Nov, 1991 1982-84= 100 137.8 137.2 133.8 2.99% Money Supply - M 1 Nov, 1991 $billion 890.3 879.0 823.3 8.14% Prime Rate Nov, 1991 % 7.5 8.0 10.0 -25.00% Three-Month U.S. T-Bill Nov, 1991 % 4.12 4.6 6.81 -39.50% Gross National Product 3rd qtr 1991 $billion 5,709.2 5,652.6 5,570.5 2.49%

NOTES: (1) houses, condos, townhouses; (2) 30 yr. FHA; (3) enplaned/deplaned passengers; (4) all urban consumers SOURCES: Nevada Dept. of Taxation; Nevada Employment Security Dept.; UNLV, Center for Business and Economic Research; UNR, Bureau of Business and Economic Research; US Dept. of Commerce; US Federal Reserve. COMPILED BY: UNLV, Center for Business and Economic Research

March/April 1992 • Nevada Business journal 39 We Speak Your Language. Because We Listen. business and your banking needs. services. We'll listen and we'll speak That's why our professionals can your language. At PriMerit Bank, we know it takes develop and customize a business The Bank That Listens. banking relationship that is right for you. Give us a call and talk to us about your business banking needs from credit products, business checking and an array of cash management PluMEKIT. BANK

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