Adapting. Innovating. Overcoming.

The importance of our results this quarter have taken a backseat to our responsibility to help our friends, neighbors and community during this COVID-19 pandemic. At this time of uncertainty, I am proud to be a part of a community bank that is well positioned to support our customers with payroll protection loans, payment deferrals and loan modification. As the means to conduct business changes almost daily, we have adapted our processes to continue to serve our customers. Our employees have been flexible, nimble and worked around the clock to deliver quality customer service, while navigating the challenges of trying to stay healthy and safe themselves.

It seems surreal to think that within the span of the first quarter of 2020, we would experience a health crisis and a financial crisis; stock market volatility and seismic activity. But, we have prepared for such events. The Bank maintains a strong capital and liquidity position and is here for our communities as a source of financial stability.

  • Shareholder Dividend of $0.05 per share was paid on March 30, 2020 for Q1 2020 compared to a $0.14 per share dividend paid in Q1 2019 and $0.07 paid in Q4 2019.

  • Consolidated Net Income for Q1 2020 was $6.4 million as compared to $7.9 million for Q4 2019 and $9.0 million for Q1 2019, a decrease of 18.6 percent and 28.8 percent, respectively. Our Q1 2019 results were elevated by one time gains on the sale of a branch building and our insurance portfolio, while our Q1 2020 results include additional provisions for loan loss.

  • Return on Average Equity (ROAE) for Q1 2020 was 12.5 percent. This is down from 15.8 percent for the previous quarter and 20.5 percent in Q1 2019. This still reflects a strong performance for the first quarter, which is typically lower than year-end results.

  • Net Interest Income (NII) and Net Interest Margin (NIM) on a fully taxable equivalent basis (FTE) for Q1 2020 was $14.7 million and 4.28 percent, respectively, compared to $15.2 million NII and 4.37 percent NIM for Q4 2019 and $16.0 million NII and 4.93 percent NIM for Q1 2019. This represents a decline of 2.1 percent NIM from the previous quarter and an 13.2 percent NIM decline from Q1 2019. The decline is due, in large part, to a lower intereset rate environment. Interest rates on loans and other interest bearing assets have dropped at a more precipitous rate than the deposit rates, thus narrowing the margin of return.

  • Noninterest Income and Expense remained stable. The gain on sale of mortgage loans was $2.0 million in Q1 2020 as compared to $1.8 million in Q1 2019. Personal and corporate trust also experienced a modest increase in fee income. On the expense side, salaries and employee benefits held steady in comparison to Q1 2019 and declined by $0.3 million from the previous quarter.

The toll of the pandemic remains to be seen. As we navigate these difficult times, Bank of Utah will continue to do what is necessary and prudent to overcome these challenges and support our customers and communities that have relied upon us since 1952.

Douglas L. DeFries
President and CEO