Helping Utah Grow and Thrive
One of Bank of Utah’s greatest purposes is to help create financially healthy communities and economies. This spring, as I listened to Gov. Spencer Cox announce that U.S. News & World Report had rated our economy No. 1 and named Utah the third best state overall, I thought of the role our Bank has played in that success. The rankings tracked employment, migration into the state and new businesses — all categories that Bank of Utah supports financially through deposit-gathering, lending, mortgage products and business solutions. Whatever the means, we fuel the development of our communities.
In turn, we grow. Even while experiencing challenges beyond our control, such as a historically low interest rate environment, Bank of Utah recorded quarter-over-quarter increases in a number of areas for Q2 2021, including deposits, commercial lending and corporate trust. Long-term prospects for loans and deposits are good. Net interest margin will vary over time, but as long as we continue with positive asset growth, Bank of Utah will remain a stronghold in the financial industry.
Consolidated Net Income for the second quarter was $7.3 million compared to $9.5 million for the first quarter of 2021 and $7.3 million for the second quarter of 2020. Increased commercial loan production partially offset the net interest margin shrinking by 59 basis points in the past year. In addition, the Bank set aside $2.5 million in loan loss reserve in the second quarter of 2020 due to COVID-related concerns. The Bank has not needed to add to the loan loss reserve in 2021 due to quality performance of the loan portfolio.
Average Deposits grew to $1.7 billion at the end of Q2 2021, representing a quarter-over-quarter and year-over-year increase. We anticipate continued success in deposits as we work to provide personal and business customers with exceptional accounts, technology, solutions and customer service.
I continue to be proud of the superior products and services that Bank of Utah offers, not to mention our customer service, which is second to none. Our employees demonstrate their dedication every day and are deeply rooted in our local communities, from the north to the south. Our recent Best of Northern Utah and Best of Southern Utah awards are evidence of their commitment. To ensure we continue to meet our customers’ banking needs, we recently developed a survey to gather customers’ thoughts on our accounts and services. The survey will officially launch early in the third quarter.
We are also happy to announce that we are adding a new full-service branch in St. George, where we already have a highly respected home loans presence. We have hired staff for the branch, which is set to open in August. This gives us even more opportunities to connect with personal and business customers in an already strong market.
Moving forward into the next half of 2021, we will work continuously to ensure that Utah is economically secure and a great place to live, and that Bank of Utah continues to earn its customers’ trust and confidence.
Douglas L. DeFries
President and CEO