Annual Report (Form 10-K), fiscal year 1993

ITEM 1 - BUSINESS West One Bancorp, (the Registrant) is an Idaho corporation formed in 1981 as a bank holding company subject to regulation under the Bank Holding Company Act of 1956, as amended, and is registered with the Board of Governors of the Federal Reserve System (Federal Reserve Board).
The Registrant's principal subsidiary is West One Bank, Idaho in Boise, Idaho. Other subsidiaries include West One Bank, Washington in Seattle, Washington; West One Bank, Utah in Salt Lake City, Utah; West One Bank, Oregon in Portland, Oregon; West One Bank, Oregon, S.B. in Hillsboro, Oregon; Idaho First Bank in Boise, Idaho; West One Financial Services, Inc. in Boise, Idaho; West One Trust Company in Salt Lake City, Utah; West One Trust Company, Washington in Bellevue, Washington; and West One Life Insurance Company in Boise, Idaho.
The Registrant, through its subsidiaries, provides a wide variety of financial services to corporate and institutional customers, governments, individuals, and other financial institutions. Such services include domestic commercial banking, investment and funds management, personal banking, trust operations, corporate services, mortgage banking and credit life insurance. As of December 31, 1993, the Registrant and its subsidiaries employed approximately 4,477 full-time equivalent employees.
WEST ONE BANK, IDAHO West One Bank, Idaho (West One, Idaho) was founded in 1867 in Boise, Idaho, and was the second national bank to be established west of the Rocky Mountains. When branch banking was authorized in 1933, West One, Idaho acquired three affiliated banks, thus beginning the development of its present statewide banking organization in Idaho.
West One, Idaho is an Idaho-chartered bank supervised and regulated at the state level by the Director of the Idaho Department of Finance and at the federal level by the Federal Reserve Board. West One, Idaho is insured by the Bank Insurance Fund (BIF) and is therefore also subject to regulations issued by the FDIC. (See "Supervision and Regulation - Other Regulations.")
On January 21, 1994, West One, Idaho acquired Idaho State Bank with assets of $48 million in exchange for 133,332 shares of the Registrant's common stock. The transaction is a pooling of interests in 1994. Idaho State Bank's financial position and results of operations are not material to West One's financial position and results of operations.
Idaho is the primary market area of West One, Idaho. West One, Idaho offers a full range of commercial and personal banking and trust services. Its corporate banking department provides a broad range of customized credit products and services to middle market and large corporate borrowers. The principal industries in Idaho include agriculture, forest products, services, tourism, mining and manufacturing.
The banking business in Idaho is highly competitive. West One, Idaho competes for deposits, loans, and trust accounts with other banks and financial institutions. At December 31, 1993, West One had $3.9 billion in assets and 79 branches. Based on assets of $3.8 billion at September 30, 1993, West One, Idaho is the largest bank in Idaho. In 1993, approximately 20 banks with approximately 306 branches were actively engaged in banking in Idaho.
WEST ONE BANK, WASHINGTON West One Bank, Washington, (West One, Washington), a full-service commercial bank, has 53 branches principally in the Puget Sound region, Yakima, Spokane and the Tri-Cities, with assets of $1.9 billion at December 31, 1993. West One, Washington is regulated by the State of Washington, and deposits are insured by the FDIC.
On December 31, 1993, West One, Washington and West One Bank, Eastern Washington (formerly Yakima Valley Bank and Ben Franklin National Bank) merged under the name West One, Washington. West One, Washington now includes the operations of the former Community Bank of Renton, First Security Bank of Tacoma, Bank of Tacoma, First Western Bank, West One Bank, Spokane, Yakima Valley Bank and Ben Franklin National Bank.
At September 30, 1993, West One, Washington and West One Bank, Eastern Washington had combined assets of $1.9 billion making it the sixth largest bank in Washington. In 1993, approximately 103 banks with approximately 1,052 branches were actively engaged in banking in Washington.
In May 1993, Ben Franklin National Bank with assets of $37 million was acquired in exchange for 206,254 shares of the Registrant's common stock. The transaction was accounted for as a pooling of interests. Ben Franklin National Bank's financial position and results of operations were not material to the Registrant's financial position and results of operations, and prior year financial statements have not been restated.
WEST ONE BANCORP, WASHINGTON West One Bancorp, Washington, a bank holding company purchased in 1988, was merged into the Registrant on April 30, 1993.
WEST ONE BANK, UTAH West One Bank, Utah, (West One, Utah), chartered in 1909 and acquired in November 1985, is a state-chartered, full-service commercial bank based in Salt Lake City, Utah. As of December 31, 1993, West One, Utah had 23 branches and $703 million in total assets. West One, Utah is regulated by the Federal Reserve Board, and deposits are insured by the FDIC.
At September 30, 1993, West One, Utah had $689 million in total assets making it the sixth largest bank in Utah. In 1993, approximately 50 banks with approximately 424 offices were actively engaged in banking in Utah.
WEST ONE BANK, OREGON West One Bank, Oregon, (West One, Oregon), acquired in 1983, operates as a state-chartered, full-service commercial bank with operations concentrated in the western Oregon market area. As of December 31, 1993, West One, Oregon had 21 branches and $602 million in total assets. West One, Oregon is regulated by the State of Oregon, and deposits are insured by the FDIC.
WEST ONE BANK, OREGON, S.B. West One Bank, Oregon, S.B., acquired in 1991, is a state-chartered, full-service savings bank based in Hillsboro, Oregon. As of December 31, 1993, West One Bank, Oregon, S.B. had 14 branches and $428 million in total assets. West One Bank, Oregon, S.B. is regulated by the State of Oregon, and deposits are insured by the FDIC.
West One, Oregon and West One Bank, Oregon, S.B. combined had total assets of $1.0 billion as of September 30, 1993, making it the fifth largest bank in Oregon.
IDAHO FIRST BANK Idaho First Bank was formed by the Registrant in 1989. Idaho First Bank is an Idaho-chartered bank supervised and regulated at the state level by the Director of the Idaho Department of Finance and at the federal level by the Federal Reserve Board. Idaho First Bank, which is insured by the BIF, offers electronic banking services to the Registrant's cardholders through the affiliates' automated teller machine (ATM) network (AWARD); Cirrus/Mastercard, STAR System, and Exchange NW (Oregon and Washington) ATM; and ACCEL and Explore on-line debit point-of-sale networks; VISA and Mastercard credit cards; merchant bankcard and VISA Check Card Services. As of December 31, 1993, Idaho First Bank had $216 million in total assets.
As of December 31, 1993, the ATM network totaled 189 branch and retail ATMs, including 74 in Idaho, 58 in Washington, 29 in Oregon, and 5 in Nevada.
WEST ONE FINANCIAL SERVICES, INC. West One Financial Services, Inc. services residential and commercial mortgage portfolios for long-term investors. Total loans serviced, including loans serviced for the Registrant's affiliates, were $2.2 billion as of December 31, 1993.
WEST ONE TRUST COMPANY West One Trust Company, acquired by the Registrant in 1982, operates offices in Salt Lake City, Utah and Portland, Oregon. West One Trust Company provides fiduciary, investment management and related services for corporate, institutional and individual clients.
WEST ONE TRUST COMPANY, WASHINGTON West One Trust Company, Washington, formed by the Registrant in 1991, is a state-chartered trust company based in Bellevue, Washington. West One Trust Company, Washington provides fiduciary, investment management and related services for corporate, institutional and individual clients.
WEST ONE LIFE INSURANCE COMPANY West One Life Insurance Company underwrites credit life and credit disability policies for borrowers of West One Bancorp affiliates.
WEST ONE BANCORP, THE PARENT COMPANY The Parent Company provides a variety of services to affiliates. Through its Data Processing Center in Boise, the Registrant processes demand deposit accounts, savings accounts, installment credit loans, commercial loans and real estate loans for a majority of its subsidiaries. Most branches have on-line teller terminals which provide direct access to the centralized computer system and permit faster processing of customer transactions.
SUPERVISION AND REGULATION The Registrant's banking subsidiaries are affected by the policies of regulatory authorities, including the monetary policy of the Federal Reserve Board. In order to mitigate recessionary and inflationary pressures, the Federal Reserve Board uses a variety of money supply management techniques, including engaging in open market operations in United States Government securities, changing the discount rate on member bank borrowings, and changing reserve requirements against member bank deposits. The impact of current economic conditions on the policies of the Federal Reserve Board and other
regulatory authorities and their effect on the future business and earnins of the Registrant cannnot be predicted with assurance.
The Registrant is subject to regulation under the Bank Holding Company Act of 1956, as amended. Under that Act, the Registrant is required to obtain the approval of the Federal Reserve Board before it may acquire all or substantially all of the assets of any bank or ownership or control of any voting securities of any bank not already majority owned if, after giving effect to the acquisition, the Registrant would own or control more than five percent of the voting shares of such bank.
The Bank Holding Company Act of 1956 generally does not permit the Federal Reserve Board to approve an acquisition by a bank holding company of voting shares or assets of a bank located outside the state in which the operations of its banking subsidiaries are principally conducted unless the acquisition is specifically authorized by the statutes of the states in which the banks are located. Each of the states in the Registrant's marketing area have adopted legislation that permits bank acquisition by out-of-state bank holding companies, with certain restrictions.
The Bank Holding Company Act of 1956 also prohibits, with certain exceptions, the Registrant from engaging in or acquiring direct or indirect control of more than five percent of the voting shares of any company engaged in nonbanking activities. One of the principal exceptions to this prohibition applies to activities found by the Federal Reserve Board to be so closely related to banking as to be a proper incident thereto. Some of the activities which the Federal Reserve Board has determined by regulation to be closely related to banking are: mortgage banking, certain data processing operations, personal property leasing on a full payout basis and operation of a consumer finance business. The Registrant is not subject to territorial restrictions on the operations of nonbank subsidiaries.
The Registrant and its subsidiaries are prohibited from engaging in certain "tie-in" arrangements in connection with extensions of credit or provision of any property or service. Also, the Registrant's banking subsidiaries are subject to restrictions on loans to the Registrant or its subsidiaries, investments in stock or other securities of the Registrant or its subsidiaries, or advances to any borrower collateralized by such stock or other securities.
In December 1991, Congress enacted the Federal Deposit Insurance Corporation Improvement Act of 1991 ("FDICIA"), which substantially revises the bank regulatory and funding provisions of the Federal Deposit Insurance Act and makes revisions to several other federal banking statutes.
In addition to establishing minimum capital requirements, FDICIA directs that each federal banking agency prescribe standards for depository institutions and depository institution holding companies relating to internal controls, information systems, internal audit systems, loan documentation, credit underwriting, interest rate exposure, asset growth, compensation, a maximum ratio of classified assets to capital and such other standards as the agency deems appropriate.
FDICIA also contains a variety of other provisions that may affect the operations of the Registrant including new reporting requirements, revised regulatory standards for real estate lending, "truth in savings" provisions, and the requirement that a depository institution give 90 days' notice to customers and regulatory authorities before closing any branch.
III. LOAN PORTFOLIO
Loans outstanding at December 31, 1993, (other than consumer and mortgage loans, and leases which are ordinarily on a term basis with installment repayment requirements) segregated by maturity ranges follow:
A loan or lease is placed on nonaccrual status when timely collection of interest becomes doubtful. Interest payments received on nonaccrual loans and leases are applied to principal if collection of principal is doubtful or reflected as interest income on a cash basis. Loans and leases are removed from nonaccrual status when they are current and collectibility of principal and interest is no longer doubtful.
Income foregone on nonaccrual and restructured loans, net of tax, was $1,086,000, $1,650,000 and $3,662,000 for the years ended December 31, 1993, 1992 and 1991, respectively.
United States dollar denominated, interest bearing short-term investments located in foreign banks including United States branches of foreign banks, exceeding .75% of total assets follows:
IV. SUMMARY OF LOAN LOSS EXPERIENCE
V. DEPOSITS
Time certificates of deposits $100,000 and over as of December 31, 1993, segregated by maturity ranges follow:
ITEM 2



ITEM 2 - PROPERTIES The Registrant's main office, owned by West One, Idaho, is located in a 19-story building in downtown Boise, Idaho. The building, completed in 1978, contains approximately 285,000 square feet of which approximately 172,000 square feet are utilized by the Registrant and the remainder is leased or available for lease to others. In addition, the Registrant owns 73 of 77 branch buildings in Idaho, 16 of 22 branch buildings in Utah, 16 of 33 branch buildings in Oregon, 35 of 51 branch buildings in Washington, and 8 of 28 support service buildings. Remaining facilities are leased from others for terms expiring between 1994 and 2017.
ITEM 3

ITEM 3 - LEGAL PROCEEDINGS Various legal proceedings arising in the normal course of business are pending against subsidiaries of the Registrant. In the opinion of management, the resulting liability, if any, from these proceedings will not have a material impact on the Registrant's financial position or results of operations.
ITEM 4

ITEM 4 - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS No matters were submitted to a vote of security holders of the Registrant during the quarter ended December 31, 1993.
EXECUTIVE OFFICERS OF THE REGISTRANT The names, positions, ages and background of the executive officers of the Registrant, as of January 1, 1994, are set forth below:
Mr. Nelson joined the Registrant in 1984. He was named an Executive Vice President of the Registrant in 1984 and elected President and Chief Operating Officer of the Registrant in 1985. In August, 1986, he was elected Chairman and Chief Executive Officer of West One, Idaho. In January, 1987, Mr. Nelson was elected Chairman of the Board and Chief Executive Officer of the Registrant. Mr. Nelson serves as a Chairman of the Board of West One, Idaho and a Director of the Registrant; West One, Idaho; and West One, Washington; and also as an officer of the Registrant and West One, Idaho.
Mr. Jones joined the Registrant in 1987. He was elected President of the Registrant in 1987. Mr. Jones serves as Chairman of the Board of West One, Washington and a Director of the Registrant; West One, Utah; West One, Oregon; and West One, Washington.
Mr. Lane joined West One, Idaho in 1983 as Vice President and Senior Credit Officer. In 1985, he was elected President of West One Financial Services. Later that same year, he was elected President and Chief Operating Officer of West One, Idaho and also became a Director of West One, Idaho. In 1987, he was named President and Chief Executive Officer of West One, Idaho. Mr. Lane was elected Executive Vice President of the Registrant in January 1991.
Mr. Hayes joined West One, Idaho in 1981 as Vice President of Money Desk operations. In 1985, he was elected Vice President of the Registrant, and in 1986 he was elected a Senior Vice President of the Registrant. In 1987, he was named Executive Vice President and Chief Financial Officer of the Registrant.
Mr. Dobson joined the Registrant in 1990 as Executive Vice President of the Capital Management Group. From 1987 through 1990, Mr. Dobson was with U.S. Bancorp as Senior Vice President of Corporate Development and then Executive Vice President of the Investment Services Group.
Mr. Board joined West One, Idaho in 1971 as Legal Counsel. In 1981, he was elected Vice President, Secretary and General Counsel of the Registrant. He was elected Senior Vice President of the Registrant in 1990.
Mr. Peterson joined the Registrant in 1982. In January, 1987, he was elected Vice President of the Registrant. In 1990, he was elected Vice President and Controller. He was elected Senior Vice President and Controller in January 1993, and serves as principal accounting officer of the Registrant.
The executive officers of the Registrant also serve as officers and/or Directors of several other affiliated companies.
PART II
ITEM 5

ITEM 5 - MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS Items relating to market price for the Registrant's common equity and related stockholder matters included in the 1993 Annual Report to Shareholders at the pages indicated, are herein incorporated by reference.
Page of 1993 Annual Report to Shareholders
Shareholders' Equity and Capital Adequacy 15
Quarterly Common Stock Statistics 16
Shareholders' Equity, Note 9 43
Regulatory Requirements and Restrictions, Note 14 50
ITEM 6

ITEM 6 - SELECTED FINANCIAL DATA Selected Financial Data of the Registrant on page 12 of the 1993 Annual Report to Shareholders is incorporated herein by reference.
ITEM 7

ITEM 7 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Management's Discussion and Analysis of Financial Condition and Results of Operations set forth on pages 13-26 of the 1993 Annual Report to Shareholders is incorporated herein by reference.
ITEM 8


ITEM 8 - FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA The consolidated financial statements and Report of Independent Public Accountants listed in the Index to Financial Statements and Schedules on page 15 of this Annual Report on Form 10-K and included in the 1993 Annual Report to Shareholders are incorporated herein by reference. Quarterly Financial Data on page 27 of the 1993 Annual Report to Shareholders is incorporated herein by reference.
ITEM 9

ITEM 9 - CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE There were no changes in accountants within the last 24 months, nor were there reportable disagreements with the Registrant's independent public accountants on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedure.
PART III
ITEM 10



ITEM 10 - DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT The information on pages 2-4 in the March 8, 1994 Proxy Statement is incorporated herein by reference. Reference is made to "Executive Officers of the Registrant" in Part I of this Annual Report on Form 10-K for additional information regarding the executive and management officers of the Registrant. There are no family relationships among the directors or the executive and management officers.
ITEM 11

ITEM 11 - EXECUTIVE COMPENSATION The information on pages 6-10 in the March 8, 1994 Proxy Statement is incorporated herein by reference.
ITEM 12

ITEM 12 - SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT The information regarding security ownership of certain beneficial owners and management included in the March 8, 1994 Proxy Statement on pages 4-5 is incorporated herein by reference.
ITEM 13

ITEM 13 - CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS The information in the sixth paragraph on page 5 in the March 8, 1994, Proxy Statement is incorporated herein by reference.
PART IV
ITEM 14

ITEM 14 - EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K
(a)(1) Financial Statements: The consolidated financial statements incorporated by reference in this Annual Report on Form 10-K are listed in the Index to Financial Statements and Schedules on page 18 herein.
(2) Financial Statement Schedules: See the Index to Financial Statements and Schedules on page 18.
(3) The exhibits filed herewith are listed in the Exhibit Index on pages 19 and 20 herein.
(b) There were no current reports on Form 8-K filed by the Registrant during the last quarter of the year ended December 31, 1993.
(c) Each management contract compensation plan and arrangement required to be filed is an exhibit to this report as listed in item 10, Executive Compensation Plans and Arrangements and Other Management Contracts, in the Exhibit Index on page 19 herein.
SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
Date: 3/24/94 WEST ONE BANCORP Registrant
By /s/ Scott M. Hayes Scott M. Hayes Executive Vice President and Chief Financial Officer
By /s/ Jim A. Peterson Jim A. Peterson Senior Vice President and Controller
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities on the dates indicated.
Manually signed Power of Attorney authorizing Dwight V. Board to sign the Annual Report on Form 10-K for the fiscal year ended December 31, 1993, as Attorney-in-fact for certain directors and officers of the Registrant is included herein as Exhibit 24.
INDEX TO FINANCIAL STATEMENTS AND SCHEDULES
FINANCIAL STATEMENTS The following consolidated financial statements and Report of Independent Public Accountants included in the 1993 Annual Report to Shareholders at the pages indicated, are incorporated herein by reference.
Financial Statement Schedules
All schedules have been omitted because the information is either not required, not applicable, not present in amounts sufficient to require submission of the schedule, or is included in the financial statements or notes thereto.
EXHIBIT INDEX
Exhibit Number Description
3-A Amended Articles of Incorporation of the Registrant
3-B Bylaw Amendment and Amended Bylaws of the Registrant Incorporated by reference to Exhibit 3-B to the Registrant's Annual Report on Form 10-K for the fiscal year ended December 31, 1991.
4 Shareholder Rights Plan. Incorporated by reference to Exhibit 4-B to the Registrant's Quarterly Report on Form 10-Q for the quarter ended September 30, 1989 as amended by Form 8-A dated October 15, 1992.
Registrant agrees to furnish copies of instruments relating to its long-term notes payable, the total amount of which does not exceed 10% of the total Consolidated Assets of the Registrant and its subsidiaries, to the Commission upon request.
10 Executive Compensation Plans and Arrangements and Other Management Contracts:
10-A Executive Compensation Program
10-B The Executive Incentive Program of the Registrant, as amended. Incorporated by reference to Exhibit 10-B to the Registrant's Annual Report on Form 10-K for the fiscal year ended December 31, 1990.
10-C Registrant's Executive Deferred Compensation Plan, as amended. Incorporated by reference to Exhibit 10-C to the Registrant's Annual Report on Form 10-K for the fiscal year ended December 31, 1990.
10-D Form of Employment Agreements between Registrant and certain key employees. Incorporated by reference to Exhibit 10-E to the Registrant's Annual Report on Form 10-K for the fiscal year ended December 31, 1987.
10-E Form of Indemnification Agreement dated June 16, 1988, entered into by the Registrant with each of its Directors. Incorporated by reference to Exhibit 19 to the Registrant's Quarterly Report on Form 10-Q for the quarter ended September 30, 1988.
10-F The 1991 Performance and Equity Incentive Plan of the Registrant. Incorporated by reference to Exhibit 10-F to the Registrant's Annual Report on Form 10-K for the fiscal year ended December 31, 1990.
10-G Deferred Compensation Plan for Outside Directors of the Registrant. Incorporated by reference to Exhibit 10-G to the Registrant's Annual Report on Form 10-K for the fiscal year ended December 31, 1990.
EXHIBIT INDEX (continued)
Exhibit Number Description
11 Statement regarding computation of per share earnings.
13 Portions of the Registrant's 1993 Annual Report to Shareholders.
21 List of subsidiaries of the Registrant.
23 Consent of independent public accountants.
24 Power of Attorney of Certain Officers and Directors of Registrant.