ONE OF UTAH'S OLDEST and healthiest community banks, $78 million-asset Community First Bank, Clearfield, is likely to vanish next year in a takeover by First Security Bank of Utah.

Community First chief executive Richard A. Hill said in an interview that the merger, as he termed it, was initiated by $4.7 billion-asset First Security, Ogden.

"From our stand int we felt good about the acquisition when we compared First Security's offer with what other banks could have offered," he said. "It offered good opportunities for both our customers and employees."

Stock Transfer

The purchase will be structured as a stock transfer, but no details of the financial terms were disclosed. Community First has a book value of $320 a share. Three Utah banks of comparable size to Community First have sold at 144% to 274% of book value, says Abby Smith of Montgomery Securities, San Francisco.

Community's Mr. Hill says, "It's the end of an era. We have been an independent bank for over 76 years, but the merger was proposed at a time that was proper for the shareholders, customers, and employees.

"There will always be a need for the special services that community banks offer. But from a competitive standpoint, the regulatory burden has increased annually, making it more and more difficult to operate in the set parameters."

Once,the merger is completed, the five branches of Community First, will, for the first time, offer retail, commercial, trust, insurance, and investment products and services to the northern Davis County community.

Salt Lake City-based First Security lists 113 offices in Utah and 100 more spread across Idaho, Oregon, Nevada, and Wyoming, describing itself as the largest financial services organization based in the Intermountain West.

In addition to the Community First merger, First Security is in the process of acquiring banks in Nevada and New Mexico. First Security has bought about 19 community banks in Utah over the past couple of years.

On the |Safest' List

For its part, Community First Bank, which has a Tier 1 risk-based capital ratio of 39.77%, proudly notes its inclusion in Money magazine's list of the 100 safest banks in the United States in 1989.

Community First earned $1.5 million last year for a return on assets of 2.05%. This year, Mr. Hill said he expects to have returns of 1.9% to 1.95%, with a return on equity of 10% to 12%.

Ms. de Guzman writes for the Medill News Service.

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