Utah banks have not entirely overcome their financial woes, but the industry overall is strong and will become stronger as the economy slowly improves, a state regulator said.

"There are problems out there but not a crisis," G. Edward Leary, chief examiner in Utah's Department of Financial Institutions, told the annual Consumer Credit Conference Wednesday at the Marriott Hotel.He said while Utah's banking industry has undergone many changes, it hasn't undergone the consolidation regulators anticipated. But the number of state-chartered banks has dropped in the past eight years.

In 1980, Utah had 66 state-chartered banks, Leary said, and today there are 36. He attributed the shrinking numbers to a consolidation trend as financial institutions seek economies of scale.

However, nine of those missing banks are failures as the 1980s have turned out to be the most turbulent decade for Utah financial institutions since the Great Depression.

The economy is partly to blame for bank closures, Leary said. He noted that experts have labeled Utah's economy as having the slowest growth of any other state in the Mountain West since 1982, and slow-paced growth is expected to continue.

Most bank failures, however, can be blamed on incompetent management, Leary said, citing a study by the U.S. Comptroller of the Currency that found 89 percent of the nation's bank failures are due to poor business management.

Leary said all of Utah's financial institutions have faced the same economic climate, and for those that have gone under the only thing regulators could put their finger on is managerial problems.

He said regulators nationally are considering imposing stiff fines on managers found responsible for an institution's failure.

Although regulators believe the worst has passed, the local banking industry is still suffering. Figures compiled by the national industry observer Alex Sheshunoff showed the 1987 dollar amount of non-performing loans in Utah banks dropping 4.6 percent since 1986, but charge-offs - the writing off of bad debts - leaped 38.6 percent and income plummeted 84.7 percent from 1986 to 1987.

Leary told the Deseret News that the increase in charge-offs indicates bankers are facing their problems and doing something about it.

Despite the struggles, he said Utah's banking industry is gaining strength and all deposits are federally insured up to $100,000 per depositor.

"And we are glad we made that hurdle of having all institutions in Utah federally insured," Leary told the conference.

He said possible regulatory changes that are under consideration nationally and that bankers should be aware of include: risk-based insurance premiums for banks posing high risk to deposit insurance funds; raising capital requirements to 8 percent; limiting withdrawals from uninsured accounts; loosening public disclosure requirements on a bank's financial condition; and tougher auditing procedures.