Bank of Utah Shows Financials Remain Strong

Bank of Utah was founded and organized by Frank M. Browning, an Ogden business executive. The Bank officially opened for business on December 1, 1952 with 16 employees, and has grown to 300 employees and $740 million in assets. Photo courtesy www.BankofUtah.com.

OGDEN  – In spite of the challenges that 2009 brought for the financial sector and the business world in general, BOU Bancorp, Inc., the holding company for Bank of Utah, finished the year with good results. A newly-published 2009 Earnings and Results Report showed the locally- owned and operated community bank reported a 2009 net income of $9.3 million with a return on average assets (ROA) of 1.3% or .9% (when adjusted for Sub S status) and return on average equity (ROE) of 12.5 % or 8.8% (when adjusted for Sub S status).

In this environment where many banks are over leveraged, Bank of Utah reported that its 2009 Tier 1 Capital of 9.35% and Total Capital of 13.72% exceeded 2008 year-end figures, and are higher than its peer group of similar sized community banks across the country. Total capital at 2009 year end was at an all-time high of $75.6 million. At no time did Bank of Utah participate in government TARP assistance.

“Our financial results and earnings for 2009 didn’t meet the levels of 2008, but they were still very respectable as we compare ourselves to our peer group,” said Scott Parkinson, Bank of Utah’s senior vice president of retail banking.

BOU Bancorp, Inc.’s 2009 net income, which was 17.0% lower than 2008, resulted in a return on average assets (ROA) of 1.3% or .9% (when adjusted for Sub S status). The peer group’s Sub S adjusted ratio was .3%. In 2009, the bank’s assets grew at 3.4%.

Last year, at a time when the industry’s loan standards were tightened, Bank of Utah continued to actively lend, and ended the year with an average loan growth of 1.2% to its loan portfolio. Deposits also grew in 2009. Parkinson reported that the bank will continue to actively lend and seek ways to support and provide for the loan needs of businesses and families in the communities along the Wasatch Front.

“We have been very pleased with the performance of residential mortgage lending and our personal and corporate trust services,” adds Parkinson. “Both greatly contributed to our fee-based income. With all of our business lines performing well, we continue to weather this storm quite well.”

Bank of Utah management attributes the positive financial outcomes to the extraordinary efforts of the bank’s dedicated officers and employees who live and work in Utah. They have a vested interest in making Bank of Utah successful as they are as a group, the second largest shareholder of BOU Bancorp, Inc., as members of the ESOP with 401(k) provisions.

“Successful community banks have learned to go above and beyond what’s expected,” said Parkinson, “and our people have really worked to know and understand their customers and serve as trusted advisors. Sometimes they have to make tough decisions like declining a loan, which means that we may earn less income than some of our competitors, but it ensures bank stability, which benefits the community in the long run. Bank of Utah was able to donate more than $117,000 to community organizations in 2009.

“We look forward to 2010 with optimism and are encouraged by early signs of an influx of small business activity,” added Parkinson. “Interest rates continue to be very low, providing advantaged borrowing for small business and home buyers, and we will do our best to meet the ongoing challenges in maintaining credit quality. We look forward to providing premier community banking to Utahns in the year ahead, as we have for the past 57 years.”