2019 Journal of Community Bank Case Studies

Executive Summary

Utah Valley University

I n the heart of Utah stands the headquarters of the state’s largest community bank. Bank of American Fork was founded in 1913 and has grown into a $2.2 billion publicly traded bank titled People’s Utah Bancorp. People’s Utah Bancorp is the holding company for People’s Intermountain Bank which is comprised of three divisions: Bank of American Fork, Lewiston State Bank, and People’s Town and Country Bank. 2018 was a record-breaking year financially for People’s Intermountain Bank. Net income increased 105% to $40.6 million over 2017, return on average assets increased 81.7% to 1.9% over 2017, and return on average equity, EPS, and interest margins are at historic highs. In 2017, the bank announced acquisitions of seven branches of Banner Bank in the State of Utah as well as a merger with Town and Country Bank in southern Utah. This strategic move coupled with a robust economy is largely responsible for the increase in financial performance.

Congress passed the “Dodd–Frank Wall Street Reform and Consumer Protection Act” in July of 2010. This piece of legislature tightened new regulations of all federal, financial regulatory agencies. The intent of this law was to protect banks from the reckless practices preceding the Great Recession. Many community banks found these regulations overbearing. In May of 2018, S. 2155, “Economic Growth, Regulatory Relief, and Consumer Protection Act” (EGRRCPA), was passed. EGRRCPA was intended to offer some regulatory relief for federally regulated financial institutions through amending past acts and creating new legislation. This study finds that S. 2155 had minimal effect on People’s Intermountain Bank with the exception of the change in exam cycle from 12 to 18 months. Due to strong capital structure and following prudent lending and portfolio management practices, People’s Intermountain Bank is not affected by legislative changes in EGRRCPA.

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