2008 Annual Report In 2 008, Bank of the West r ec eived several industry awards t hat demonstrate our c ommitment to cu stomer s atisfaction. We t hank our l oyal customers for t he honor to se rve t hem and our em ployees for t heir hardw orking e fforts t hat made t hese recognitions possible. J. D. Po wer a nd As soci ates Bank of the West was ran ked t he “Hig hest in Cu stomer Satisfaction among Retail Banks in t he West” by J. D. Power and As soci ates. Bank of the West was ran ked hig hest in t he West regi on encom passing Calif ornia, Oregon and Washing to n, which re present nea rly half of t he bank’s c onsumer and business house holds. Gree nwich As soci ates Bank of the West was awar ded eight n at ional and reg io nal awards of excellence by financial consulting and re se arch firm Greenw ich Ass oci ates f or overall s atisfact io n in rel at io nship manager performance, cash management and online se rvices. FI NANCIA L HIGHL IGHTS (dollar amounts in thousands) 2008 2007 2006 Net interest income $ 1,749,346 $ 1,568,127 $ 1,601,285 Total noninterest income 279,016 404,045 541,715 Total noninterest expense 1,273,298 1,189,680 1,170,941 Net income 92,143 417,254 572,032 Return on average assets .15% .72% 1.04% Total assets 66,890,239 61,829,845 55,642,936 Total loans and leases 47,194,511 43,735,307 39,603,402 1 Total deposits 37,261,171 38,055,451 37,436,420 Stockholder’s equity 8,719,496 9,028,897 8,810,493 Total risk based capital ratio 10.44% 10.57% 11.27% TOTAL ASSETS NET INCOME (dollars in millions) (dollars in thousands) 06 $55,643 06 $572,032 07 $61,830 07 $417,254 08 $66,890 08 $92,143 TOTAL DEPOSITS TOTAL LOANS AND LEASES (dollars in millions) (dollars in millions) 06 $37,436 06 $39,603 07 $38,055 07 $43,735 08 $37,261 08 $47,195 MES SAGE F ROM THE C HAIRMAN AND T HE PRESI DENT & CEO The year 2008 was one of extraordinary turbulence, Our core financial strength, stability and commitment including in our markets in the Western United States. to customer service excellence served us well in 2008. The removal of undue and unsustainable leverage from We also benefited from the financial strength and the economy resulted in rapid and substantial declines support of our global parent, BNP Paribas, one of the in the value of many assets, putting pressure on six highest rated banks in the world. companies and individuals and their banks. In these In addition to our sustained financial strength, we difficult times, we are pleased to report that the solid find that customers come to Bank of the West and stay performance of our operating businesses allowed us to with us because they appreciate our commitment to record earnings of $92.1 million in 2008. Of course, service. Especially in these times, corporate clients our earnings were considerably reduced from prior and individuals place great value on our customer years as we recorded impairments in our investment service orientation, our full range of financial products securities portfolio and substantially strengthened our and services offered through a relationship banking reserves against future credit losses. model, and our faithful commitment to them and to Strong revenue growth allowed us to absorb the impact our communities. 2 of the economic crisis. Through current earnings in In 2008, we were pleased to be recognized for customer 2008, we increased our net reserves for loan and lease satisfaction by J.D. Power and Associates for ranking losses by $311.3 million to $742.8 million, or 1.58% “Highest in Customer Satisfaction among Retail of total loans and leases at December 31, 2008. Banks” in California, Oregon and Washington. Bank of Prudent management, sound underwriting standards the West was also honored in 2008 with eight separate and a balanced loan portfolio lessened our exposure to top awards in middle-market business banking by credit losses. Greenwich Associates, a highly respected financial services consultancy. Our c ore financial st rength, stability a nd c ommit ment to cus tomer ser vi ce e xcellen ce served us we ll in 200 8 To position us more effectively in the marketplace, and sustained our charitable giving across our 19-state we realigned several business units in 2008. First, we footprint. created a Wealth Management Group to capture The global economy experienced a difficult year in synergies in our trust, investment management, retail 2008, and projections are for more of the same in 2009 investment sales (BancWest Investment Services, Inc.) as recession continues to impact growth, credit and insurance (BW Insurance Agency, Inc.) organiza - availability and consumer spending. We have continued tions. We anticipate growth in this important segment. to lend, build business relationships, support our Second, to focus on the needs of small and medium- customers and communities, and position the bank for sized businesses, we aligned our SBA lending efforts renewed growth as the region’s economy improves. with our other credit and ancillary offerings to We are grateful to our customers and proud to serve build more and deeper relationships in this important them. The bank’s 10,500 employees are committed and segment. focused, and we are thankful to have such a fine team. In addition, through an initiative we call FutureBank , March 20, 2009 we modernized our technology infrastructure to 3 upgrade customer information management, allowing us to now better understand, anticipate and meet our customers’ financial service needs. Bank of the West continued to invest in low- and moderate-income housing, provided more credit to businesses and individuals in underserved communities, Don J. McGrath, J. Michael Shepherd, Chairman President and CEO OVE RVI EW For more than 130 years, Bank of the West has helped Missouri, Nebraska, Nevada, New Mexico, North customers achieve their financial dreams. We begin Dakota, Oklahoma, Oregon, South Dakota, Utah, by listening to understand our customers’ needs and Washington, Wisconsin and Wyoming. Representative objectives. We analyze and prioritize their goals for the offices in New York, Taipei and Tokyo provide support present and the future. We provide customers with for our international customers. the right financial solutions to safeguard and grow their assets. Our value proposition – to deliver a full Serving Our Cu sto mers range of banking products and services along with Our retail banking network offers personal banking for exceptional customer service – creates mutual benefits consumers and small business owners, services that and long-term banking relationships. It also has include checking and savings accounts, credit cards, reinforced a simple truth: at Bank of the West, direct consumer loans and lines of credit, mortgages, relationship banking is a best practice, affirmed in construction loans, online banking and private banking 2008 by industry observers. services. Specialized loan products for small business – With assets of $66.9 billion and nearly four million BusinessLink and AgLink – are available at our branch 4 business and household accounts, Bank of the West network to support the needs of growing small and is among the 25 largest commercial banks in the medium enterprises. United States. Bank of the West provides wealth management services We operate more than 700 branch, commercial and including asset management, insurance, investments specialty business locations in 19 states – Arizona, and trusts. California, Colorado, Idaho, Iowa, Kansas, Minnesota, Middle market companies have access to a full range of commercial banking products: capital markets, cash management, credit cards, equipment finance, foreign exchange, loan syndication, SBA loans, trade finance and wealth management. Our commercial Our Regions • Pacific Northwest • Southwest • Northern California • Rocky Mountains • Central California • Midwest • Southern California • Great Plains relationship bankers offer specialized expertise in Our s tre ngth a nd stab il ity are me asur ed b y: agribusiness, commercial real estate, construction, financial institutions, healthcare, municipalities and Strong C redit R atings religious institutions. Credit ratings* are a key measure of capital strength and financial stability. They are also a recognition from rating agencies of a strong balance sheet and Supporting Our Commun ities consistent financial performance. Throughout our footprint, Bank of the West actively supports the economic health of our communities. From Moody’s Aa3 college athletic programs and events sponsorships to Standard & Poor’s AA- financial literacy seminars and corporate philanthropy, Fitch AA we focus on building vibrant communities where we and our neighbors can thrive. * long-term deposit ratings Our dedicated employees are the lifeblood of Bank Strong Capital Pos ition of the West’s service culture. They are customer Bank of the West is one of the 25 largest commercial 5 service representatives, relationship managers, home banks in the United States. Our capital position exceeds regulatory requirements. mortgage consultants, financial advisors, branch tellers, loan officers, private bankers and wealth management Bank of the West Well-Capitalized advisors. Q4, 2008 Requirement Tier 1 Leverage Along with the thousands of employees who support 7.65% 5.00% Ratio the bank’s operations, our bankers and their commit - Tier 1 Risk-Based ment to serving our customers make relationship 9.15% 6.00% Capital Ratio banking the key to our success. Total Risk-Based 10.44% 10.00% Capital Ratio As of December 31, 2008 200 8 Highligh ts • “Highest in Customer Satisfaction among Retail • Total assets up 8% at $66.9 billion Banks in the West” J.D.