Utah considered acting as backstop to Zions Bank emergency loans after SVB collapse

Mar 16, 2023, 11:04 AM | Updated: 2:39 pm
Utah Gov. Spencer Cox and state leaders were apparently preparing to be the backstop for short-term...
Zion’s Bank branch at 7015 South Highland Dr. Cottonwood Heights on Tuesday, March 14, 2023. Zions Bank and other regional banking institutions have suffered stock losses amid the fallout from the closures of Silicon Vally and Signature banks. While Zions and some other institutions that have drawn scrutiny and a wave of social media commentary saw big drops in their stock values early this week, all appeared to be recovering on Tuesday as wider fears about the U.S. banking sector ebbed. Scott G. Winterton/Deseret News

SALT LAKE CITY — Utah Gov. Spencer Cox and state leaders were considering being the backstop for short-term, emergency loans from Zions Bank to help Utah’s tech sector pay their employees in the wake of the Silicon Valley Bank  (SVB) collapse.

It’s similar to what the federal government did with PPP loans during the COVID-19 pandemic. A bank administers the loan, and the state makes sure that the bank doesn’t lose any money if loans aren’t paid back.

“That was never agreed to, we talked about what that would look like but never got to the point,” Governor Spencer Cox told KSL NewsRadio. He was asked whether the state was assuring the bank that they would be protected if loan money didn’t come back to them. “That was one of the requests, but that was never approved.” 

One member of his Office of Economic Opportunity said the state “would backstop up to a certain amount” of these potential loans in an interview with KSL NewsRadio.

This past Saturday, an emergency task force convened at the governor’s request. The state’s entrepreneur-in-residence with the Office of Economic Opportunity, Brad Bonham, told KSL at Night that the 10 p.m. call included roughly 15 people, each with different government, business, and banking interests.


Bonham said ultimately, it was Zions Bank who offered to help as the SVB crisis deepened.

“[They were] so gracious in offering to administer some sort of a program where we would backstop up to a certain amount that they would put together in kind of a short-term lending package for these businesses,” said Bonham. “It was all centered on payroll though, we just didn’t want people — all these different employees across the entire state not getting paid. The businesses had the money they just had no access to the money.”

A safe bet

State leaders believed the move would be a safe bet, something Cox signaled in his comments Thursday.

“We assumed that the assets of SVB would be purchased by another bank, but we knew it would take time,” Cox said.

The potential loan program was being created just days before Zions Bank would face public worries over a potential credit rating downgrade when Moody’s Investor Service put it and several other banks on potential a watch list. Chairman and CEO of Zions Bancorporation, Harris Simmons, later said that wasn’t worrying him.

In a statement to KSL NewsRadio, Zions Bank said it was “offering to help support the tech community however we could assist.”

“At the time there was a concern for the local Utah companies who may not be able to make payroll and other short-term obligations without access to their deposits at SVB. We were ready to step in to help with special assistance if needed,” the bank said. 

Bonham also said the goal of that lending plan was to quickly get money to companies that needed to make payroll. 

“Saturday night to Monday we had to figure out how cash into these businesses pockets and do it quickly and in a way where we can track it and be accountable,” Bonham said. “And that part isn’t necessarily I think what government really excels at. And so [we needed to find] a partner in the private sector.”

Ultimately, this loan program wasn’t needed. Sunday night, the federal government announced SVB depositors would be made whole.

We want to hear from you.

Have a story idea or tip? Send it to the KSL NewsRadio team here.

Today’s Top Stories


Body Found...
Ben McGonnell

Body found at 600N, I-15 Southbound

At 7:45 AM on March 25th, Utah Highway Patrol Dispatch received several reports of a body lying on the road at 600N, I-15 Southbound. Multiple citizens had gathered around the person, checking on the individual and calling for medical assistance. Trooper Wright said, “Medical Arrived and pronounced the person deceased. It does not appear any […]
1 day ago
An artist's rendering of the Feather River California Temple. Photo credit: The Church of Jesus Chr...
Mark Jones

Open house and dedication of Feather River Temple will be later this year

The Church of Jesus Christ of Latter-day Saints announced this week the open house and dedication dates for the Feather River California Temple.
2 days ago
Salt Lake City Police Lt. Jenn Diederich graduated from the FBI National Academy on March 16 in Vir...
Mark Jones

SLCPD officer graduates from FBI National Academy

A lieutenant with the Salt Lake City Police Department graduated from the FBI National Academy on March 16 in Virigina.
2 days ago
the new utah state flag design is pictured...
Waverly Golden

Not everyone is a fan of Utah’s new state flag

A group is working to repeal Utah's new state flag, saying they already have 502 signatures approved towards getting the issue on the ballot. 
2 days ago
buy-back guns...
Adam Small

Got unwanted guns? Salt Lake Police say bring them to buy-back event

For the second year in a row, the Salt Lake City Police Department will host a guns buy-back event at the Public Safety Building located at 475 South 300 East.
2 days ago
Utah's unemployment rate remains one of the lowest nationally, according to the Salt Lake Chamber's...
Waverly Golden

Utah’s unemployment rate remains one of the lowest nationally

Utah's unemployment rate remains one of the lowest nationally, according to the Salt Lake Chamber's Roadmap to Prosperity Dashboard.
2 days ago

Sponsored Articles

Cheerful young woman writing an assignment while sitting at desk between two classmates during clas...
BYU EMBA at the Marriott School of Business

Hear it Firsthand: 6 Students Share Their Executive MBA Experience at BYU’s Marriott School of Business

The Executive MBA program at BYU offers great opportunities. Hear experiences straight from students enrolled in the program.
Skier being towed by a rider on a horse. Skijoring....
Bear Lake Convention and Visitors Bureau

Looking for a new winter activity? Try skijoring in Bear Lake

Skijoring is when someone on skis is pulled by a horse, dog, animal, or motor vehicle. The driver leads the skiers through an obstacle course over jumps, hoops, and gates.
Banner with Cervical Cancer Awareness Realistic Ribbon...
Intermountain Health

Five common causes of Cervical Cancer – and what you can do to lower your risk

January is National Cervical Cancer Awareness month and cancer experts at Intermountain Health are working to educate women about cervical cancer.
Kid holding a cisco fish at winterfest...
Bear Lake Convention and Visitors Bureau

Get ready for fun at the 2023 Bear Lake Monster Winterfest

The Bear Lake Monster Winterfest is an annual weekend event jam-packed full of fun activities the whole family can enjoy.
happy friends with sparklers at christmas dinner...

15 easy Christmas dinner ideas

We’ve scoured the web for you and narrowed down a few of our favorite Christmas dinner ideas to make your planning easy.
Spicy Homemade Loaded Taters Tots...

5 Game Day Snacks for the Whole Family (with recipes!)

Try these game day snacks to make watching football at home with your family feel like a special occasion. 
Utah considered acting as backstop to Zions Bank emergency loans after SVB collapse