Almost 70 most interesting years have elapsed since the inauguration of Bank of Utah...

It seems fitting to introduce this annual report using the same phrasing that our first president Frank Milton Browning used to present Bank of Utah’s earliest annual report in 1953 — a year after the Bank opened its doors. It’s also fitting that, just as the Bank announced a remarkable $6 million in assets that first year (a feat in the 1950s, when $2 million was considered a lofty aspiration), we can announce that we’re still exceeding goals as we enter 2022, our milestone, 70th-anniversary year.

On behalf of BOU Bancorp, Inc., the holding company of Bank of Utah and Utah Risk Management, Inc. (collectively, the Bank), we are pleased to report a story of incredible growth in 2021. Our total assets grew to $2.2 billion, a 14.6 percent increase from 2020, and consolidated net income increased to $31.7 million from $31.6 million the previous year. The Bank now ranks in the top 11 percent of banks in the nation for total assets and the top 10 percent for net income. The success experienced in 2021 allowed the Bank to pay $6 million in dividends to stockholders, representing $0.36 per share.

This year’s record-breaking figures were achieved through the collective efforts of employees who have shown heart, adaptability and a commitment to carry on the Bank’s initial vision of a “friendly, innovative, available-to-all bank.” Today Bank of Utah is energized to do even more of what we’ve done for 70 years — help local businesses and fellow Utahns grow stronger financially. As we highlight our most recent year, we’ve kept our founding values in mind, starting off each section with quotes from Frank M. Browning on how a community bank should do business.

“We should have a focused understanding of our customers’, and our communities’, needs.”

What matters to Utahns, matters to us. That’s why, in 2021, we focused on restoring local jobs, creating economic opportunity and investing in our great state. Throughout the early part of the year this meant concentrating on the forgiveness of Paycheck Protection Program (PPP) loans for businesses. Without these loans, many businesses would not have survived the upheaval caused by the COVID-19 pandemic, and a larger number of our community members would have lost their livelihoods.

As the PPP program began to slow, our commercial lending team turned their time and energy to another issue facing Utah: the housing shortage. Population growth has created a strong demand for homes in the Beehive State, but the supply is low — approximately 45,000 units short of equilibrium, according to the University of Utah’s Kem C. Gardner Policy Institute.

Fueled by housing needs, our commercial lenders worked with business customers to fund projects creating much-needed housing, from new subdivisions to apartments to townhomes. In addition to helping customers secure loans to purchase equipment and raw materials to construct housing units, the commercial lending team also provided loans to customers to build office buildings, warehouses and other commercial projects. These types of projects present opportunities for job growth and boost Utah’s industrial and retail economies. What is most impressive is that even with the PPP forgiveness and the time our commercial lenders spent helping PPP customers early in 2021, our commercial lending team managed to grow our loan portfolio by 17.6 percent, making the loan portfolio exceed $1.5 billion.

This impressive loan production, and subsequent loan fee income generation, more than made up for a decline in net interest margin (a year-over-year decrease from 3.9 to 3.4 percent) that occurred due to continued low loan interest rates. As a result, the Bank experienced a year-over-year increase in net interest income on a taxable equivalent basis, from $62.4 million in 2020 to $67.1 million in 2021.

“We should ensure there is a fine-tuned balance between technological advances and customer service.”

Not only do our loan customers entrust us to provide “friendly, sound banking aid,” as Frank M. Browning would say, our deposit customers do, too. They also expect a safe, seamless financial experience, with modern tools to make their lives easier. Our physical branch, digital branch and treasury management teams offer unparalleled service — a time-honored practice at the Bank — and digital products that rival large financial institutions. In the 1950s, that meant bringing drive-thru service to customers. Now, that means being able to access your finances, and even open accounts, anywhere, anytime.

Because of their commitment to customers and to product innovation, our business and personal customers know they can count on us to keep their money safe and accessible. In turn, they feel comfortable referring their friends and family members to Bank of Utah — which is one of the most powerful, satisfying ways to grow. Speaking of growing, we also expanded even more into Southern Utah in 2021, opening a new full-service branch in St. George — a great addition to our award-winning home loans office in that area. This allowed us to connect even more with our business and personal customers there.

Through dedication, relationship building and expansion, Bank of Utah’s average deposits increased by 25.6 percent from 2020 to 2021, totaling $1.8 billion.

“We should enjoy helping and watching people make their lives and businesses become successful.”

Over the years, our diverse lines of business have also empowered customers to achieve their financial aspirations, whether that’s owning a home, protecting an estate or planning for retirement. We remain deeply committed to our customers’ goals, offering solutions that support their long-term prosperity.

As prices for homes soar in Utah, the American dream of owning a home, and building equity in that home, is still very much alive. Bank of Utah is there for those customers. While the Bank saw a slight decline in mortgage lending in 2021 (due to the housing shortage and supply chain issues hindering new construction), our mortgage lenders managed to produce over 2,000 loans for customers, totaling $625.8 million.

Our personal trust and corporate trust teams also worked diligently to build relationships, and both added to their assets under management. Personal trust recorded a 44.7 percent increase in assets under management, from $504.8 million in 2020 to $730.4 million in 2021. Corporate trust had a 12.3 percent increase in the number of accounts from 2020, now totaling 2,826, with financial assets under management totaling $261.6 million. Bank of Utah is trustee to nearly 2,700 aircraft on the FAA registry — more than any other trustee.

“We should always have a strong commitment to community.”

Utah communities mean the world to us — they always have, and they always will. Throughout its history, Bank of Utah has expressed this commitment through numerous events and Bank sponsorships, from flower and coin shows and 4H events in the early years to coat and food drives, service projects and summer concert series today.

In 2021, Bank of Utah is proud to have supported our neighbors, with more than 50 employees volunteering over 800 hours to community organizations. For example, members of our senior management team spent several evenings volunteering as Family Promise hosts for local families in need of shelter. The Bank also hosted a Spring Into Service project, donating money to a charity for every service project reported to the Bank. In addition, we teamed up with United Way of Northern Utah to create a Born Learning Trail at Browning Park, and with Catholic Community Services to ensure children have food over the weekend, when they aren’t in school.

We enriched communities through service-oriented events, as well. For example, our Warm Bodies, Warm Souls clothing drive had extraordinary results in 2021. Thanks to our partners, customers and employees, we distributed 637 large bags of clothing — that’s the most we’ve ever collected in our nine years of hosting the event — and over $5,000 in cash donations to 13 Utah charities. Our 2021 Scouting for Food drive was a success, as well, with over 400 bags of food donated to local food banks.

“We should measure our success by how well we’ve served our customers.”

We go into our 70th year strong. We have remarkable capital, liquidity and diverse lines of business, but above all, our tremendous staff members put all of those to work to benefit our customers. We believe the words Frank M. Browning used to conclude the 1953 annual report are fitting today, too: “We offer deep appreciation, and hope that this year may be good to you and yours.”

We would simply like to add that we believe the best is yet to come for Bank of Utah, as we seek opportunities to grow while always putting service above all else. It’s a combination that has served us well, from the beginning, to now, and into the future. Thank you for putting your trust in us and for your support.

Here’s to another successful 70 years,

Douglas L. DeFries
President & CEO, Bank of Utah

Frank W. Browning
Chairman, BOU Bancorp, Inc.