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2009
Utah Industrial Banks
Industry Profile
www.EDCUtah.org
Utah Industrial Banks
INDUSTRY OVERVIEW
Industrial Banks (IB’s) 1 are financial institutions that have experienced rapid growth in the U.S. over the
past decade. The state of Utah has proven to be a particularly attractive place to operate IB’s and now
hosts the most IB’s in the country. IB’s chartered in Utah currently hold the bulk of IB industry assets.
The flexibility of an IB charter has made it an attractive vehicle for many large and well-known
corporations.
INDUSTRIAL BANKS – EXPLANATION
IB’s are financial institutions authorized to make consumer and commercial loans and to accept federally
insured deposits. IB’s cannot “demand” deposits if the IB has total assets greater than $100 million. IB’s
are subject to the same regulatory and supervisory oversight as commercial banks.
IB’s are authorized to engage in the “banking business” under the statutory framework of “Title 7.” With
the exception of demand deposits, IB’s may offer the same banking services as commercial banks. FDIC
rules and regulations that generally apply to commercial banks also apply to IB’s, and the institutions are
supervised and examined by both the FDIC and the Utah Department of Financial Institutions.
UTAH INDUSTRIAL BANKS INDUSTRY STRENGTHS
Strong & Balanced Regulatory Environment
ƒ
Utah IB’s have increased the diversity of the products offered from auto lending to residential
mortgage lending to small business lending.
Highest Concentration of IB’s in the Nation
ƒ
With 30 chartered IB’s in the state, Utah has the highest concentration of IB’s in the nation. 2
Top 8 Out of 10 IB’s in the Nation
ƒ
Utah is home to 8 of the 10 largest IB’s by asset size in the nation. 3
1
IB’s are also known under federal law as “industrial loan banks” or “industrial loan corporations.”
Source: FDIC
3
Source: FDIC, Assets as of March 31, 2008
2
THE ECONOMIC DEVELOPMENT CORPORATION OF UTAH
07/31/08
1
UTAH INDUSTRIAL BANKS INDUSTRY MAP
Source: Decision Data Resources, FDIC, Utah Department of Financial Institutions, EDCUtah
WHY UTAH?
Industrial loan companies and industrial banks have existed since the early 1900s. As of April 2003,
states with existing insured IB’s include California, Colorado, Indiana, Hawaii, Minnesota, Nevada and
Utah. The charters are unique in that the owners of these banks are not required to be regulated by the
Federal Reserve as bank holding companies. Instead, the Utah Department of Financial Institutions
supervises owners of these banks chartered under Utah law and the FDIC under a special program
developed principally for the IB industry. The parent companies of IB’s include a diverse group of
financial and commercial firms. 4
4
“The Future of Banking: The Structure and Role of Commercial Affiliations,” Open letter from Donald E. Powell to the
Honorable Robert F. Bennett, April 30, 2003.
2
07/31/08
UTAH INDUSTRIAL BANKS PROFILE
Most IB’s operating in Utah market specialized products or services nationwide, using the authority
afforded national banks and federally insured state-chartered financial institutions to offer services
nationwide under a uniform regulatory standard. Historically, an IB mainstay has been the issuance of
credit cards to consumers and businesses nationally. However, as the number of IB’s has increased so has
the diversity in offered products. IB’s now offer auto lending, commercial mortgage lending, escrow
management, receivable factoring, residential mortgage lending and small business lending.
Utah has established a reputation for a strong, yet balanced, regulatory environment. The process of
obtaining an IB charter starts with an application to the Department of Financial Institutions and an
application for insurance of deposits with the FDIC. Because the information requested in the FDIC
application is similar to that requested in the State application, the FDIC application could be filed in lieu
of the State application. 5
INDUSTRIAL BANKS BUSINESS MODELS 6
Existing IB’s can generally be grouped according to one of four broadly defined business models:
1) Institutions that are operated as community-focused institutions, including stand-alone
institutions and those serving a community niche within a larger organization.
These institutions often provide credit to consumers and small- to medium-sized businesses. Funding
sources may include commercial and wholesale deposits, as well as borrowings. Institutions that
operate within a larger corporate organization may also obtain funding through the parent
organization.
2) Independent institutions that focus on specialty lending programs, including leasing, factoring
and real estate activities.
Funding sources for this relatively small number of institutions may include retail and commercial
deposits, wholesale deposits and borrowings.
3) Institutions that are embedded in organizations whose activities are predominantly financial in
nature, or within the financial services units of larger corporate organizations.
These institutions may serve a particular lending, funding or processing function within the
organization. Lending strategies are often focused on a limited range of products such as credit cards,
real estate mortgages or commercial loans. Corporate strategies play a larger role in determining
funding strategies in these cases, with some institutions periodically selling some or all outstanding
loans to the parent organization. Parent assessments of funding options across all business units
frequently determine the specific tactics at the IB level. A few institutions restrict themselves to
facilitating corporate access to the payment system or supporting cash management functions, such as
administering escrowed funds.
4) Institutions that directly support the parent organizations’ distinctly commercial activities.
These institutions largely finance retail purchases of parent company products, ranging from general
merchandise to automobiles, truck stop activities, fuel for rental car operations and heating and air
conditioning installations. Loan products might include credit cards, lines of credit and term loans.
Funding is generally limited to wholesale or money center operations, borrowings or other options
from within the parent organization.
5
6
Source: Utah Department of Financial Institutions, “What is a Utah Industrial Loan Corporation?”
Source: FDIC Division of Supervision and Consumer Protection.
THE ECONOMIC DEVELOPMENT CORPORATION OF UTAH
07/31/08
3
UTAH’S LARGEST DEPOSIT MARKETS
Rank
Institutions in Market
Deposits
Asset Distribution
1
Largest Deposit Markets
Salt Lake City
63
$157,188,000
Less than $250 million
2
Ogden/Clearfield
19
$15,916,000
$250 million to $1 billion
3
Provo/Orem
18
$3,370,000
$1 billion to $10 billion
4
St. George
10
$1,567,000
Greater than $10 billion
5
Logan
11
Source: FDIC, Q1 2008, 2007 Summary of Deposits
$1,006,000
Greater than $10 billion
UTAH INDUSTRIAL BANKS
Rank
4
Industrial Bank Name and Address
Contact Information
1
Merrill Lynch Bank USA
15 West South Temple, Suite 300
Salt Lake City, Utah 84111
Preston Jackson
President
(801) 526-8300
$63,002,659,000
2
Morgan Stanley Bank
201 South Main Street, 5th Floor
Salt Lake City, Utah 84111
Danny Wall
President
(801) 236-3600
$38,472,000,000
3
GMAC Bank
6985 Union Park Center, Suite 435
Midvale, Utah 84047
Mark Hales
President
(801) 790-5000
$30,329,334,000
4
UBS Bank USA
299 South Main Street, Suite 2275
Salt Lake City, Utah 84111
Raymond Dardano
President
(801) 741-0310
$27,989,074,000
5
Goldman Sachs Bank USA
295 Chipeta Way, 4th Floor
Salt Lake City, Utah 84107
Michael Civitella
President
(801) 884-1500
$25,573,236,000
6
American Express Centurion Bank
4315 South 2700 West
Salt Lake City, Utah 84184
Andrea Moss
CEO
(801) 945-3000
$24,310,302,000
7
Capmark Bank
6955 Union Park Center, Suite 330
Midvale, Utah 84047
Steven Nielsen
President
(801) 567-2680
$7,744,994,000
8
Lehman Brother Commercial Bank
4001 South 700 East, Suite 410
Salt Lake City, Utah 84107
Julie Boyle
President
(801) 264-6900
$6,481,586,000
9
CIT Bank
2180 South 1300 East, Suite 250
Salt Lake City, Utah 84106
Richard Lake
President
(801) 412-6800
$3,096,706,000
10
GE Capital Financial
4246 South Riverboat Road
Salt Lake City, Utah 84123
Tim Carfi
President
(801) 517-5000
$2,733,979,000
11
BMW Bank of North America, Inc.
2735 East Parley’s Way, Suite 301
Salt Lake City, Utah 84109
William Donnelly
President
(801) 461-6500
$2,678,628,000
12
Advanta Bank Corporation
11850 South Election Road
Draper, Utah 84020
John Moore
President
(801) 523-0858
$2,587,476,000
13
Sallie Mae Bank
5217 South State Street, Suite 201
Murray, Utah 84107
Mark Howard
President
(801) 263-7360
$1,331,697,000
07/31/08
Total Assets as of 2005
UTAH INDUSTRIAL BANKS PROFILE
14
Wright Express Financial Services
3955 South 700 East, Suite 450
Salt Lake City, Utah 84107
Kirk Weiler
President
(801) 270-2660
$1,195,118,000
15
Merrick Bank Corporation
10705 South Jordan Gateway, Suite 200
South Jordan, Utah 84095
Richard Urritia
President
(801) 545-6600
$1,181,376,000
16
OptumHealth Bank, Inc.
2525 Lake Park Boulevard
West Valley City, Utah 84120
Kelvin Anderson
President
(801) 963-6040
$736,192,000
17
Pitney Bowes Bank, Inc.
1245 Brickyard Road, Suite 450
Salt Lake City, Utah 84106
Sheldon Woods
President
(801) 832-4440
$687,050,000
18
Transportation Alliance Bank, Inc.
4185 Harrison Boulevard, Suite 200
Ogden, Utah 84403
J.J. Singh
President
(801) 624-4800
$552,646,000
19
Republic Bank, Inc.
801 North 500 West, Suite 103
West Bountiful, Utah 84087
Boyd Lindquist
President
(801) 397-0613
$508,519,000
20
Magnet Bank
2825 East Cottonwood Parkway, Suite 180
Salt Lake City, Utah 84121
Christopher Worel
President
(801) 733-2626
$442,953,000
21
Medallion Bank
1100 East 6600 South, Suite 510
Salt Lake City, Utah 84121
John Taggart
President
(801) 284-7065
$364,955,000
22
World Financial Capital Bank
2855 East Cottonwood Parkway, Suite 100
Salt Lake City, Utah 84121
Marvin Corne
President
(801) 527-2272
$178,777,000
23
EnerBank USA
1245 Brickyard Road, Suite 100
Salt Lake City, Utah 84106
Louise Kelly
President
(801) 832-0700
$175,336,000
24
Celtic Bank
340 East 400 South
Salt Lake City, Utah 8111
Phillip Ware
President
(801) 363-6500
$145,770,000
25
Allegiance Direct Bank
136 West Center Street, Suite 200
Cedar City, Utah 84720
Adriaan Van Zyl
President
(435) 865-7935
$51,344,000
26
ADB Bank
136 West Center Street, Suite 200
Cedar City, Utah 84720
Adriaan Van Zyl
President
(435) 865-7935
$51,000,000
27
Escrow Bank USA
6955 Union Park Center, Suite 300
Midvale, Utah 84047
Steven Nielsen
President
(801) 304-2900
$42,274,000
28
WebBank
6440 Wasatch Boulevard, Suite 300
Salt Lake City, Utah 84121
Gerry Smith
President
(801) 993-5025
$34,490,000
29
LCA Bank Corporation
1375 Deer Valley Drive, Suite 218
Park City, Utah 84068
Timothy Talbert
President
(435) 658-4824
$33,060,000
30
First Electronic Bank
11781 South Lone Peak Parkway, Suite 135
Draper, Utah 84020
James McLaughin
President
(801) 572-4004
$17,439,000
31
Target Bank
299 South Main Street, Suite 2050
Salt Lake City, Utah 84111
Shawn Gensch
President
(801) 297-5000
$14,405,000
THE ECONOMIC DEVELOPMENT CORPORATION OF UTAH
07/31/08
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32
Marlin Business Bank
2795 East Cottonwood Parkway, Suite 120
Salt Lake City, Utah 84107
Robert Majka
President
33
Franklin Templeton Credit Corporation
2301 Presidential Drive, Suite F
Salt Lake City, Utah 84120
Shelly Dueri
Executive Assistant
(801) 952-3300
Presently Inactive
34
Union Financial Services Corporation
181 East 5600 South, Suite 240
Salt Lake City, Utah 84107
Wallace Jensen
President
(801) 949-9540
Presently Inactive
35
Valley Loan Corporation
2105 West 4700 South
Murray, Utah 84118
Roxanne Emery
President
(801) 968-9093
Presently Inactive
$12,012,000
Total Chartered Institutions – 35
Total Assets - $242,766,387,000
Source: FDIC, Utah Department of Financial Institutions, data as of March 31, 2008
ECONOMIC DEVELOPMENT CORPORATION OF UTAH (EDCUtah)
The Economic Development Corporation of Utah (EDCUtah) is a private, statewide, non-profit
organization formed in 1987 to provide a unified and professionally managed economic development
program promoting the state of Utah.
EDCUtah is an investor-based organization with more than 230 private sector businesses, organizations,
chambers of commerce, municipalities and counties. Through these partnerships, EDCUtah facilitates an
ongoing effort to develop and nurture a thriving business climate throughout Utah.
EDCUtah specializes in assisting companies considering Utah for a business relocation or expansion. The
corporate recruitment team of EDCUtah coordinates all of the information key decision makers and
economic development/site consultants need as they evaluate Utah as a site location.
FOR ADDITIONAL INFORMATION
Economic Development Corporation of Utah
201 South Main Street, Suite 2010
Salt Lake City, Utah 84111
Phone (801) 328-8824
Fax (801) 531-1460
www.edcUTAH.org
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07/31/08
UTAH INDUSTRIAL BANKS PROFILE
201 South Main Street, Suite 2150
Salt Lake City, Utah 84111
Phone 801-328-8824
Fax 801-531-1460
www.EDCUtah.org