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Show V cci-2- 4 c-- TRIALS J OF U er CRLCR . ) :5 DEFT LIBRARIES L'T SLO Lf i, 4 a-m- s CP.DLR DEF. THE aNational Volume 6 Number 39 NOW Accounts Could Cut SL Building First f Profits, Boost Competition in U.S. to Apply for Historic Status un i i " - r U--J U-- J Although the initial impact of NOW accounts on Utah's commercial banking system could be severe, the long term effect would be beneficial, according to a recently published study commissioned by the Utah Bankers Association. The study investigated the possible impact of federal legislation that would allow banks to pay interest on checking accounts, or, put another way, allow individuals to write checks on savings account deposits. Called NOW accounts, the system has been operating in New England for three years. This year Congress is expected to consider legislation that would spread NOW accounts to all financial institutions in the nation. According to the study, conducted by Golembe Associates, Inc. of Washington, D.C., such legislation would make competition among Utah's banks and thrift institutions particularly intense. The competition at first would inhibit growth potential for new banks, and would significantly erode the earning potential of middle-size- d banks already experiencing earnings problems. The study pointed to eight veteran banks as particularly vulnerable to the impact of NOW accounts. The authors wrote that one of five of the state's banks 1970 had, on established prior to year-en- d the average, relatively weak earnings between 1973 and 1975. (Pretax earnings for these banks averaged .93 percent of assets.) The authors predicted that, if 10 percent of these banks customers converted their checking accounts to NOW accounts, their key income ratios would "fall signifiIf 25 percent of their customers cantly. converted their accounts, the average of these would deteriorbanks performance ate seriously. The authors estimated Utah bankers could expect at least ten percent of their customers to convert their accounts to the NOW method over a period of three years. It is this three-yea- r transition period which, they wrote, would be the particularly dangerous period for vulnerable banks. Margin Profitability A Salt Lake City com- pany is the first group in the nation to apply for tax benefits applicable to owners of historic buildings. Miller, Noble & Co. has applied for special tax status on behalf of owners of the McIntyre Building, (68 South Main St.) which is being placed on the national register of historic places. The position of a building on that register gives its owner the Stop! Of the 26 new banks established in Utah between 1971 and 1975, the authors w'rote, ten aie operating at rates of profitability well below' the average for established banks. Such performance, they added, is not uncommon for new banks, still trying to establish deposit bases and establish tomer relations. (See NOW ACCOUNTS, page 5) Read this section first. (Notice our new format.) First Womens Womens Bank will commence operations either on the Auerbach's mezzanine or in temporary facilities on the approved site. Sevy said pursuant to an earnest money agreement with Auerbach Company, the entire sum is due by July 1, 1977. Well use either conventional financing or sell the property to a local developer to accomplish the ac partment of Interior for approval before becoming eligible for the tax benefit. And, according to Donn Miller, partner, companies are eagerly purchasing space in anticipation of the potential financial relief. "We began selling space about four weeks ago. and we have already sold four of the eight floors. Miller stated. He said each floor has 5500 square feet .arid sells for S36 a foot. He Miller added he thought the McIntyre was the first downtown office building in Salt Lake to be sold as a (See BUILDING, page 11) UP & L Yield Lower Bank was granted a charter from the Department of Financial Institutions in January 1977 to establish a new unit state bank at that location. According to the company's offering circular, the First preciation on capital expenditures over five years instead of the usual 20 or 25 years. Miller, Noble is presently marketing the building for sale as office condominiums. Buyers of each floor must submit their remodeling plans to the U.S. De- and $14 a foot. Plans to build a 7,000 square foot bank facility and an adjoining 93,000 square foot office tower at State Street and Broadway were unveiled this week by the First Womens Bancorpora-tion- . Additionally, a firm offer to buy the southeast corner of that intersection for $390,000 has been accepted by the Auerbach Company, owners of the property, according to Marge Sevy, a director of the bank holding company and president of The de- estimated a remodeling project would cost between $12 cus- Womens Bank Plans Unveiled Sevy Realty. opportunity to accelerate Auerbach Company has accepted an offer from the First Women's Bank for $390,000 for the southeast corner of State Street and quisition and construction, she said. The agreement is for little over a half acre, which the bank will occupy, and negotiations are underway to acquire additional property to accommodate the y office tower, she said. While she said she was unable to reveal at this time ten-stor- Broadway. Pictured is an artist's rendition of the proposed bank, with whom the company is negotiating for construction, Sevy said bids are being n gathered from several well-know- contractors. The bank and office tower were designed by another of the bank holding company's directors, Ogden architect Helen S. McEntire, president of Helen S. McEntire Associates. She expects the bank will occupy about y trihalf of the angular steel and concrete structure, leaving about 3,000-3,50- 0 sq. ft. available for lease to other tenants. The bank and office (See BANK, page 4) five-stor- Utah Power & Light took a $3 million beating on a 1.1 million common stock offering recently. to Grant According Pendleton, company spokesman, the companys stock price has been falling recently, probably in response to the company's depressed earnings. Two wrecks ago UP&L common traded on the NYSE at $44 a share, but last week when the company offered the common shares for sale, the price languished near $44.32 per share. Selling at the lower price, the company took a loss of $3 million. We cannot put off financing, like other com- panies, Pendleton said, exWe plaining the sale. cannot wait for a higher price. Under our franchise, we must provide power to our customers, even when market conditions are bad. |