Pub. 2 2014 Issue 1

winter 2014 19 Experts recognize that people and the relationships make community banks valu- able. A merger allows community banks to consolidate back-office costs while keeping all of their key players. In order to ensure a continuation of these essential qualities and relationships, two Utah community banks are uniting under the first bank merger in Utah to take place since before the 2008 recession. People’s Utah Bancorp and Lewiston Bancorp have merged their holding companies—uniting their assets and resources to become the community banking leader in Utah. The merger closed on October 18, following approval by regulatory agencies, share- holders of Lewiston and both boards of directors. “The People’s Utah Bancorp and Lewis- ton Bancorp merger is the first unassisted merger in Utah since Far West Bank was acquired by American West Bancorp in 2007,” said Tom Bay, supervisor of banks, Utah Department of Financial Institu- tions. “Smaller banks are seeing their bur- den increase. They feel like they survived the downturn just to be hit in the gut with what they feel is an increasing regulatory environment. Mergers can be a way of using economies of scale to help with the increased fixed costs of doing business. Utah is not like California or other states with many banks and a lot of merger ac- tivity going on, so it’s harder to see a trend here, but I would not be surprised to see more mergers in Utah going forward.” “The purpose of this merger is to ensure that both banks are able to continue the highly personal service that each has provided for a hundred years or more in an economic and regulatory environment that makes it hard for community banks to compete,” said Beard. “We wanted to figure out a way to help community banks come together and preserve what is good about the system. This merger combines years of community banking commitment and experience under one roof.” In June, the companies jointly announced an agree- ment to merge their holding companies and operate their bank subsidiaries, Bank of American Fork and Lewiston State Bank, under People’s Utah Bancorp. The individual banks will continue to operate under their respective bank names. “We have created a system where com- munity banks can come together and preserve the community-bank culture and service that our customers desire,” said Anthony J. Hall, president and CEO of Lewiston State Bank and chairman of the Utah Bankers Association. “This merger allows us to offer our customers the latest technologies and services due to the com- bination of assets and resources, but we are able to offer them at the local branches from the employees with which they are familiar. It allows us to become stronger while remaining independent.” As of September 30, 2013, People’s Utah Bancorp had approximately 320 employees, $1 billion in assets, loans of $643 million, deposits of $900 million and equity of $120 million. Lewiston had approximately 90 employees, $257 million in assets, loans of $180 million, deposits of $223 million and equity of $28 million. The combined holding company now operates under the name People’s Utah Bancorp and has approximately $1.2 billion in assets. Bank of American Fork, with 14 locations in Utah, and Lewiston State Bank, with four locations in Utah and Idaho, will continue to operate under their respective names. Customers of both banks will continue to receive the person- al, friendly service from bank staff they have come to know and trust. “Between our two banks there are more than 200 years of combined banking experience,” Beard said. “The commu- nity values and traditions that both banks share makes this partnership work for the organizations, employees, customers and communities we serve. Blending the tal- ented management and staff of both banks helps put People’s Utah Bancorp in a clear position as Utah’s community bank leader in service, asset size and deposit size. This combination will help grow and foster the local community banking system that is vital to the economy, small businesses and Utah communities.” “I am pleased with the working relation- ships between the two banks and the en- hanced ability both will have to serve our respective customers,” said Hall. “We are merging two strong, independent banks who share the same commitment to our respective communities. We will main- tain our name and local presence going forward. We look forward to the benefits from developing a statewide community banking group. The merger offers many benefits for our shareholders, our employ- ees, and most importantly, our customers.” Lewiston State Bank and Bank of Amer- ican Fork followed the national trend of consolidation in the banking community with their recent merger. They realized what many other community banks are beginning to realize—that they need to somehow increase their asset size in order to remain a competitive and vibrant part of their economies. Economists see the writing on the wall and expect to see an upswing in merger activity in the coming years in Utah. Just as no one wants to see an end to community celebrations, fire- works, and ice cream cones, no one wants to see the end of community banks either. Lewiston State Bank and Bank of Ameri- can Fork have solidified their presence and emerged as a community-bank leader in Utah. n “We are merging two strong, independent banks who share the same commitment to our respective communities. We will maintain our name and local presence going forward. We look forward to the benefits from developing a statewide community banking group. The merger offers many benefits for our shareholders, our employees, and most importantly, our customers.”