Bank of the West 2006 Annual Report Download - page 4

Letter from the
C H A I R M A N
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Relationship banking is the focus of our report this year,
and it has been at the core of our successful growth since
our founding as a community bank over 130 years ago.
In 2006, we completed the migration of our relationship
model into the 200-plus branches of the former
Commercial Federal Bank acquired in December, 2005.
That successful integration, and customer growth across
our network, served to increase earnings 9% over 2005,
despite narrowing interest rate margins and intense
competition for deposits. Bank of the West had net income
of $572.0 million for the year, up from the 2005 net of
$525.7 million. Our deposits at December 31, 2006 were
$37.4 billion, and loans and leases totaled $39.5 billion.
Year end assets for the bank were $55.6 billion.
Now among the largest commercial banks in the U.S., Bank
of the West faces complexities of scale that could present
an obstacle to our highly successful customer-focused
strategy. We offer high-touch, community-bank service
with the full product set customers expect from a large
financial institution. But we don’t want to risk becoming
yet another huge, impersonal organization. To keep our
strategy viable, we began last year to make structural and
organizational changes, to make relationship banking
truly scalable across a footprint of 19 states and more than
700 branch and commercial locations.
A N E W A P P R O A C H
Our challenge is to leverage the value of a much larger
franchise and more comprehensive product line, while
ensuring that size and scope don’t disrupt our personalized
style of customer service. To do this, we launched a new
bank-wide operating model last June that enables us to
offer a uniform set of products to our entire customer base.
We call it, not too surprisingly, the B.E.A.R. Plan, an
acronym for Business Empowerment to Achieve Results.
The B.E.A.R. model brings decision-making closer to our
customers through decentralization, with geographic
division executives exercising a substantial degree of
local operational and credit autonomy in eight regional
centers: Albuquerque, Denver, Fargo, Los Angeles, Omaha,
Portland, Sacramento, and San Francisco. We have also
located representatives of our major product lines in
each regional center, working closely with relationship
managers to provide SBA credit, cash management,
equipment financing, foreign exchange, trade finance and
other services.
Our larger scale allows us to be a more effective
commercial competitor. By deploying commercial banking
employees regionally, segmented in accord with the size
and scope of our 164,000 business clients, we can provide
faster, better-tailored decisions and counsel. A newly-
created National Banking Division is opening new offices to