Bank of the West: Overview of the bank
The Bank of the West was established in 1874 and is one of a select number of banks in the country that have existed for over a century. Its main office is located in the state of California in the city of San Francisco. California is home to 141 banks that collectively have $1,197,936 million of assets outstanding. The Federal Deposit Insurance Corporation has provided insurance to the bank since 1934. The FDIC is one of two governmental agencies that provides deposit insurance to American depositary institutions – the other is the National Credit Union Administration (NCUA). The FDIC’s mandate is mainly to insure deposits, but the agency also examines and supervises financial institutions and manages receiverships. In addition, the FDIC is the primary federal regulator for the bank and is focused on supervising and examining the bank for operational safety and soundness. As a result of its size and presence, the bank is considered a national bank. Based on our estimates, we believe its asset base of $105,412 million ranks it in the 90th percentile of banks in the United States. The Bank of the West is an international bank, with offices in the U.S. and other geographies. In the United States, the bank currently has 536 offices, while internationally its office count stands at 1 In terms of headcount, the bank currently has 8,900 employees.
Discussion of the key components of the Bank’s Balance Sheet
Some of the key components of the bank’s balance sheet are total assets of $105,412 million, total loans extended to customers of $56,116 million and customer deposits of $89,340 million. Approximately 8% of the bank’s deposits outstanding were transactional deposits, while domestic depositors made up 100% of the bank’s total deposit base. 43% of the domestic deposits outstanding are insured. As we look at the composition of the banks assets, as noted earlier the bank is primarily engaged in providing commercial & industrial loans and 1-4 family residential loans (mortgages) to its customers. Overall, customer loans currently make up 54% of the bank’s total assets. The Bank of the West has $9,860 million of outstanding 1-4 family residential loans (mortgages), which in total represents 17% of its loans outstanding. Loans to individuals and loans to commercial and industrial interests represent 24% and 22% of loans outstanding, respectively. Loans to farmland and farms represents 5% of loans outstanding.
Contact Information and Other Facts For The Bank of the West
- Main Office Address: 180 Montgomery St., San Francisco, CA 94104
- Website: www.bankofthewest.com
- Total Number of Branches: 537
- Total Number of International Branches: 1
- Number of Employees: 8,900
- FDIC Certificate Number: 3514
- FDIC Community Bank: No
- FDIC Field Office: San Francisco
- Independent or Subsidiary Bank: Independent
- Federal Reserve ID Number: 804963
- Bank Charter Class: NM
- Primary Regulator: FDIC
The bank had total assets of $105,412 million based on the latest available information. Its total assets have increased substantially over the past year, with an increase of 9.5%. Moving to the other side of the balance sheet, we see net loans of $56,116 million which compares with $60,884 million in the prior year. Therefore its clear that over the past year the bank’s net loans outstanding has reported a decrease of 7.8%. Taking a closer look at the bank’s loan portfolio, we see that residential mortgages comprise 17% of the bank’s loan book. The bank has $9,860 million of residential mortgages outstanding, which compares with $10,967 million in the prior year. This implies a decrease of 10.1% over the past year. In addition, the bank provides loans to commercial and industrial businesses, which represents 22.1% of its total lending and stood at $12,583 million based on the latest available information. The bank also provides loans for farm-related activities, which currently amounts to 5.0% of its total loan portfolio. Credit card-related lending represents 0.5% of the banks total lending. This represents the outstanding balance of credit cards that the bank has issued to its customers. Finally, the bank also engages in the provision of auto loans. These are loans provided to customers to help finance vehicle purchases. Auto loans represent 2.3% of the bank’s total lending.
Bank Liquidity and Funding
How a bank funds its activities is an important area to assess and monitor. As a depositor you want to make sure the bank is conservatively funded, and the same goes for customers. A large and growing deposit base is usually a good sign for a bank’s liquidity and funding. This is because customer deposits are often a cheap source of financing as many of those accounts do not pay interest or much interest. Looking at the Bank of the West, they have total customer deposits of $89,340 million which over the past year has registered an increase of 13.6%. The average bank in the country has a loan to deposit ratio of approximately 82%. In comparison, the Bank of the West has a loan to deposit ratio of 63% which is well below the average. A lower ratio is generally better as it indicates that the lending activities of a bank are more comfortably covered by its deposit base. Deposits, as noted earlier, are usually a cost effective source of financing. The entirety of the bank’s deposit base stems from domestic depositors.
Bank Performance and Capital Metrics
Moving on to the performance and capital metrics for the bank, in the above we have a chart that shows key performance metrics for the Bank of the West compared with the average U.S. bank. When it comes to the bank’s return on assets, over the past year it has improved. Importantly, on this metric we can also see that the bank is below the average bank. Return on assets tells us how productive a bank is being with its asset base. Moving on to the bank’s return on equity, which tells us how much of a return the bank has generated for its owners, over the past year it has improved. In addition, we can also see that the bank is below the average bank on this metric. The bank’s total leverage ratio has been relatively stable over the past year and is currently below the national average. Finally, the Bank of the West’s Tier 1 capital ratio has improved over the past year. On this metric the bank is below the national average.
Concluding Comments on the Bank of the West
In conclusion, when we look at all the various factors and data we give the Bank of the West a 2.9 out of 5.0 rating, which we consider to be above average. There are many factors that go into the calculation of our rating and almost all banks will have both positive and negative contributors. As an example, the Bank of the West scores well on its cost of funds, which is above the national average. However when we consider the bank’s net interest margin, the bank does not have a good score mainly because it is below the national average which impacts its rating. Importantly, please be aware that none of the information presented is meant to be investment advice or advice of any form. All of the information and views expressed in this note and on this site are purely for informational purposes.