An industrial bank recently approved to operate in Utah will open an office in Draper that will serve as its headquarters for its banking operation.
Nelnet Inc. will create up to 52 jobs over the next five years, with the positions paying an average of $129,000 per year.
The company made the announcement after being approved for a tax credit incentive of up to $134,699 by the Governor’s Office of Economic Development (GOED) board.
Founded in 1978 and based in Lincoln, Nebraska, Nelnet is a publicly traded, diversified services company with roots in the administration and servicing of student loans. Its business segments include payment technology, school administration software, and community management solutions for K-12 schools, higher education institutions, churches and businesses; fiber Internet, TV and phone services for homes and businesses in Nebraska and Colorado; customer service for student loan borrowers, technology related to student loan customer service, and outsourcing services for guaranty agencies; and private student loans, student loan refinancing, and life and disability insurance for students and families.
The company also makes investments in real estate and early-stage and emerging growth companies. It has more than 6,500 employees worldwide.
Its Nelnet Bank operation recently received approved from both the Federal Deposit Insurance Corp. (FDIC) and the Utah Department of Financial Institutions (UDFI) to establish a chartered industrial bank in Utah. It will operate as an Internet bank and will function primarily in the educational finance arena.
Nelnet Bank will be funded with an initial capital commitment of $100 million from Nelnet and will operate as a Nelnet subsidiary. Nelnet Bank will be governed by a board of directors that is independent of the parent company, consistent with the requirements of the Utah industrial bank charter.
In addition to the banking operations, the new Utah operation will expand Netnet Inc.’s technology resources.
“This new location is an important expansion for Nelnet,” Andrea Moss, CEO of Nelnet Bank, said in a prepared statement. “Our physical presence will give us access to the region’s incredible technology and financial services talent, who we are eager to put to work across our various business units.”
Moss is a member of the GOED board. She recused herself from the discussion and vote on the incentive.
The project is expected to result in new wages of $23.3 million over five years and new state tax revenue of $897,991 during that time.
“We’re very excited to come and join the family of financial institutions in Utah and, I think, utilize the talent that exists from the Silicon Slopes to enhance the IT framework and infrastructure from a resource perspective that Utah can bring to us for Nelnet to be able to evolve,” Cindy Fulton-Serrano, chief financial officer of Nelnet Bank, told the GOED board.
“We’re just happy to have a company like Nelnet decide to locate in Draper,” said David Dobbins, Draper’s administrative director. “We think it’s a great addition to all the other companies that are located in this area, so we’re happy to see it happen.”
Thomas Wadsworth, GOED associate managing director, said the bank’s new charter “is a recruitment tool for us to work with similar companies around the country that are looking at this, and this can be a real anchor for the state of Utah.”
In a prepared statement, Val Hale, GOED executive director, said Nelnet will provide value to Utah students, families and the state’s financial services industry. “Nelnet is an impressive company with diverse business interests,” Hale said. “We welcome them to the state and are grateful for the high-paying, high-quality jobs they’ll provide.”
“We congratulate Nelnet for successfully navigating a rigorous state and federal application process,” said Theresa Foxley, president and CEO of the Economic Development Corporation of Utah. “As one of the first industrial bank charters approved in a decade, it’s evidence of a more open approach by the FDIC, which is great news for Utah’s financial services industry.”