Bank Balance

Banks are Ready to Lend
Utah’s commercial banks have also struggled, with five failures since the recession began. “As people defaulted on loans, banks had to take losses, which hurt their capital position,” explains Tom Bay, supervisor of commercial banks at DFI.

However, as the state’s housing market has improved, so has its commercial banking industry. “We’re starting to see inventory tighten up a bit, asking prices are going up and price-per-square-foot is increasing,” Bay says. “This improvement in the housing industry is helping banks.” He adds, “Capital has improved and the foreclosed assets that banks were holding are dwindling.”

While some Utah banks simply tried to hold on during the crisis, others managed to grow. During the recession, Bank of Utah was able to improve its asset quality and increase its capital to the highest level of its 60-year history. Bank president Doug DeFries says the key to success was sticking to the fundamentals.

“Our team addressed impaired loans quickly. We continued our efforts to make loans to qualified borrowers with whom we have a relationship and to understand their business,” De Fries says. “The banking business is not about the Hail Mary pass—it’s about basic blocking and tackling. Too many banks leading up to the recession were making risky decisions.”

For many banks, the risky decisions resulted in the need to tighten up lending. “Banks were just trying to survive, and they couldn’t go out and lend because all of their money was tied up in foreclosed assets,” Bay says. “But that’s starting to change now.”

“Banks are doing well,” he adds. “The financials are improving. The banks in Utah have survived and are ready to move forward. They’re ready to lend and support their communities.” 

Top 10 States by Average Size of Banking Institutions
(State-chartered Banks Only)                                      
            State                   Average Size    Number of Banks         Total Assets Under Supervision
1          Puerto Rico      $10.3 billion                    7                          $72.2 billion
2          Delaware          $7.1 billion                    14                          $99.4 billion
3          New York          $6.7 billion                     97                         $654.3 billion
4          Hawaii               $5.8 billion                      6                          $34.9 billion
5          Utah                   $4.7 billion                    47                          $222.6 billion
6          North Carolina $3 billion                        77                         $233.1 billion
7          Massachusetts $2.3 billion                  130                        $293.3 billion
8          Alabama           $1.9 billion                    115                        $216.8 billion
9          Nevada              $1.8 billion                     17                         $30.6 billion
10        California          $1.5 billion                     183                       $278 billion