Not big enough? What Bank of American Fork’s first merger will mean for the community
Bank of American Fork parent company, People’s Utah Bancorp, announced Tuesday it will merge with Lewiston, Utah-based Lewiston Bancorp, the latest sign of the banking system’s renewed health, as the housing crisis stands in the rearview mirror and economic conditions are slowly improving.
The banks said in a joint press release they will retain their respective names, and customers will continue to receive “the personal, friendly service from bank staff they have come to know and trust.”
Bank of American Fork, which has recently celebrated its 100-year anniversary, has been looking for ways to increase market share through organic growth and acquisition. It opened its 13th branch last November and announced two months ago a new mortgage office in St. George, a bet on a turn around of the mortgage industry.
The merger is Bank of American Fork’s first, a radical step given its history of painstaking growth. But as hundreds of banks were shutting down in the last six years, Bank of American Fork never stopped making money. Indeed, the company’s annual profit between 2010 and 2011 increased by a staggering 93% — from $3.4 million to $6.6 million — while last year’s profit topped $9 million. Now with cash in hands, the bank is looking for ways to continue to grow and bring value to its shareholders.
The merger will allow the company headquartered here to take advantage of economies of scale, such as a reduction in the transactions cost of ATM withdrawals. It also means more stability for the community as larger portfolios tend to reduce investment risks.
“We are pleased to announce this strategic combination of both banking organizations’ 100-plus years,” said Richard T. Beard, president and CEO of People’s Utah Bancorp. “This combination will help grow and foster the local community banking system that is vital to the economy, small businesses and Utah communities.”
The terms of the merger have not been announced. The transaction is expected to be completed during fourth quarter 2013.
Danny Crivello can be reached at crivello@citizen.af or via cell at 801-477-6397.