Four groups of prospective buyers are asking regulators for permission to acquire four Utah banks.
The move underscores the stormy condition of the lending industry three years after the start of the U.S. financial crisis.
Three of the banks -- Liberty Bank, Salt Lake City; Utah Community Bank, Sandy; and Western Community Bank, Orem -- have been under orders from the Federal Deposit Insurance Corp. to increase their capital reserves, which had been depleted by overdue and defaulted loans. Even so, none were as weak as several other banks; four have failed since early 2009.
The fourth bank, Bonneville Bank, Provo, probably has the strongest balance sheet of the group. It avoided the financial problems of other Utah lenders by not making large numbers of real estate loans.
It is the first time in recent memory that these applications would upend present ownerships and install new proprietors at so many banks at once.
"We see a lot of applications, and they are not always for a complete revamp of the shareholder roster. These four are not small shareholder changes. They are more substantive," Shaun Berrett, supervisor of bank holding companies at the Utah Department of Financial Institutions.
The petitions suggest Utah's bank sector, pressed hard by the recession and falling real estate prices, may be coming back to life.
"What you are seeing in each of these cases is people coming in and investing capital into a bank that will then be leveraged into deposits and will be turned into credit opportunities in our [state]. It's a very positive signal for Utah's economy," said Howard Headlee, executive director of the Utah Bankers Association.
The proposals:
Liberty Bank » According to the Federal Reserve, New York-based One Main Street wants to buy 100 percent of the voting shares of Liberty Bank.
Formed late last year, One Main Street is led by several veteran bankers, including Richard Uhlig, former chairman and CEO of Morgan Stanley Bank, and Scott Bowen, former chief financial officer of Deutsche Bank's Americas and Asia Pacific unit.
Details of the company's proposal are hazy. In a news statement, One Main Street said it has raised most of a $300 million capitalization goal that will be used to acquire failed and distressed banks in the Intermountain West from the FDIC. The banks will be used to build a regional banking network.
Bowen declined to provide more information.
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Utah Community Bank » BW Acquisition LLC and Teach and Save LLC, both of Fountain Green, plan to acquire 58 percent of Utah Community Bank, according to the Fed.
BW was established to acquire Utah Community, according to its application. Brandon Jacobson, of Saratoga Springs, who owns Teach and Save, is listed as a principal of BW.
Jacobson was unavailable. Geri Allison, a lawyer with Callister, Nebeker and McCullough in Salt Lake City, said BW representatives did not want to comment.
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Western Community Bank » A Utah County group, calling itself Rock Canyon Bank in Organization, reached a deal earlier this month to acquire 51 percent of the shares of Western Community Bank, said Tod Monsen, one of the group's principals.
"A lot of people think now is a strange time to get into [community banking]. Our feeling is now is a wonderful time to be investing," Monsen said.
Western Community has focused mostly on real estate and construction lending. The investors plan to expand into retail, manufacturing and agricultural lending.
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Bonneville Bank » The bank's name would be changed to Green Dot Bank, if regulators approve Monrovia, Calif.-based Green Dot's application. Green Dot, a provider of prepaid debit cards that consumers can buy at Walgreens and other retailers, would change Bonneville's business plan to focus on Green Dot-branded debit cards.
Steven Streit, Green Dot's chief executive officer, was unavailable for comment.
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In One Main Street's news release, Uhlig, the chief executive officer, acknowledged that bailouts, frozen credit and excessive bonuses have made consumers distrustful of banks.
"We see that many banks, large and small have lost their way and remain singularly focused on short-term profits. It's no mystery why Americans have such little faith in their financial institutions," Uhlig said.
In contrast, One Main Street said it will to stick to the basics of traditional community banking.
"We will be the trusted storehouse of value for wage-earners and businesses, and we will prudently lend into our communities to build economic vitality," Uhlig said.
