2019 Journal of Community Bank Case Studies

Utah Valley University

THIRD PLACE:

Referenced earlier, a large hotel loan in St. George, Utah was sold by the bank at par value in 2018 (Williams). This sale occurred because of high geographical concentration of the bank’s hospitality segment, and bank officers wanted to internally reduce exposure in that specific sector. This sale did not come as a result of outside guidance or HVCRE regulation change (Jones). Prudent monitoring, as well as controls put in place, justifies People’s Intermountain Bank to sit in the 99th percentile for both HVCRE as a percent of capital and CRE as a percent of capital in peer group four (FFIEC). Many see this as high-risk, but because the bank prepares well and manages its assets in a conservative way, the risk is offset. The bank is more concerned with its internal evaluations of CRE lending than the regulators. three-day waiting period on a mortgage to be waived if the consumer received an amended disclosure that included a lower interest rate than was offered in the previous disclosure (ABA Supports S.2155 2). Dunkley stated that even with the new change, “S.2155 did not affect the mortgage department at Bank of American Fork. The mortgage department was not affected because, even previous to the bill, People’s Intermountain Bank was not delaying closings when there was an improvement like this to the consumer” (Dunkley). Short Form Call Reports People’s Intermountain Bank is a publicly traded entity. As such, management consistently provides in-depth and well-detailed quarterly Waiting Period on Credit Offers The enactment of S.2155 allowed for the

reports to their investors. While short form call reports for two out of the four quarters may provide compliance relief for private community banks who are only reporting to regulators (Perkins 18), People’s Intermountain Bank is unaffected by this relief because each quarter it is required to present its financial information and standing to the public (Bule). Quarterly reporting at the bank not only boosts investor confidence, but it also results in bank management having a firm handle on their operations and financials. Qualified Mortgage For banks under the $10 billion asset threshold, EGRRCPA’s qualified mortgage provision allows certain mortgages to be automatically categorized as “qualified mortgages.” Only mortgages that banks originate and hold in their portfolio can obtain this categorization (Perkins 5). This relief does not apply to People’s Intermountain Bank because its mortgage department sells all qualified mortgages (Dunkley).

The bank is more concerned with its internal evaluations of CRE lending than the regulators.

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