With a settlement looming between the state and five failed thrift and loan associations, Gov. Norm Bangerter has decided to stay in Utah this week rather than join his peers at the National Association of Governors meeting.

Bangerter's aides said Tuesday they expect a response to the latest settlement offer by the end of this week.Officials are trying to settle the suit brought by depositors of five thrift institutions that failed in 1986. In the suit, depositors claim state officials were negligent in regulating the thrifts.

If a settlement is reached, Bangerter will likely call the Legislature back for a special session to approve spending state funds. It would be the third special session this summer.

Even though he has never missed an annual meeting of the nation's governors during his term, Bangerter decided he had better not travel to Cincinnati this week.

"He doesn't have time," said Bangerter's chief of staff, Reed Searle, noting the governor will travel to New Orleans next week to attend the Republican National Convention. Bangerter will be the chairman of Utah's delegation.

Searle said the governors' meeting was not nearly as important as the thrift issue. "There just aren't a lot of issues (at the governors' meeting) that are that important for Utah.

"We're very close (to a thrift settlement). We just can't do it without the governor."

Bangerter spent the first part of this week campaigning in Southern Utah. He was in Washington County on Monday and was scheduled to be in Kane and Iron counties Tuesday.

He sent an aide, Mark Jones, to Cincinnati to represent the state. Jones was sent with instructions to make sure the state supports a westerner to become the new president of the governors' association.

Jones will also record a speech by President Reagan to the group so Bangerter can listen to it later.