Banking & Finance.

• Position: Industry Outlook - Utah's local infrastructure, financial recovery

DESPITE AN ANEMIC ECONOMY, Utah's preeminent financiers gathered in the boardroom of Grant Thornton and found some industry strengths worth discussing, including Utah's viable local infrastructure and relatively healthy position for financial recovery.

Participants included John D'Arcy, Zions Bank; Bruce Ashcroft, Washington Mutual; Douglas Black, KeyBank; Roger Bennett, Wells Fargo; David Brown, First Utah Bank; Mike Fosmark, Bank of Utah; Curtis Harris, Barnes Banking Company; Reese Howell, Celtic Bank; Becky Kearns, Zions Bank Park City; George Redd, KeyBank; Clair Sorensen, Wells Fargo; and Nephi Voge, First National Bank.

Special thanks to Jeff Thredgold, a veteran Utah economist and frequently cited source in Utah Business magazine, for moderating this month's Executive Roundtable.

Describe the health of the Utah banking industry.

VOGE: If you look at the basics as far as profitability, capital adequacy, Utah banks are strong. There are more loan problems, but the fundamentals are there.

REDD: To keep revenue stream going, our challenge is to operate in this tight margin in the environment, and we know there's margin squeeze. You look at fee income generation as a greater opportunity and inevitably that turns and gets focused on then. Then other companies come in and squeeze the fee portion of our income. To keep the revenue generating is a challenge every day.

KEARNS: If you look at the community, specifically the Park City area, there's a lot of interest from the real estate perspective. Out-of-state people are looking (at) projects and development. The Olympics had a fabulous effect, not just on Salt Lake and Park City but on the state in general. It is not only a friendly state, but it is also an economic friendly state.

ASHCROFT: The banks are still pretty aggressive. What that means to the customer is that they benefit, because there are multiple choices where they can bank. Each bank has to differentiate itself themselves through service.

What changes do you anticipate over the next three to 10 years?

FOSMARK: This period of economic downturn really slowed the amount of business. In this environment of shrinking margins, we are going to be really pressed to keep production and revenue streams up.

BLACK: We've seen more competitors. For the banks to be competitive, they're going to have to offer a broader array than just the traditional bank products for the consumer.

How important is it to offer insurance products or investment products to customers?

KEARNS: We need to provide that service. As people are in need and are looking at sophisticated trusts and other things, insurance needs become more important. If we offer those, it's a great revenue-generating base. If you can provide that service, and other services to tie your client closer to the company, you won't regret it.

REDD: For an individual to be able to go and have a person in a bank that can handle their insurance, that can do their first mortgage, that can handle their investments, that can do an annuity, it a great time saver. People don't want to run all over. That's going to become increasingly important, the opportunity to deliver a wide array of services at one location.

BROWN: That's where you'll see the difference between large banks and community banks. We have no intention of going into the insurance or investment arena. We partner with people who provide those products. We focus on a higher level of service and higher technology for their core banking needs. We don't have the large infrastructure for all kinds of products and don't have the overhead. We don't need to be completely competitive with the large bank format.

VOGE: Our bank decided to get into the business on a limited basis. We saw that we were sending business away to competitors. We are teaming up with broker-dealers who have the expertise.

SORENSEN: Regardless of the size of the bank, the customer is always dealing with a person. When you have this array of products, you have to have confidence in the people in each one of those areas.

BENNETT: If we can't provide the business products...