Agenda - Council - 11/13/2012 - Laserfiche WebLink

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1. Organization and Summary of Significant Accounting Policies Bank of the West ("BOW") is a State of California chartered bank. BOW has 659 retail branch banking locations (645 full service retail branches and 14limited service retail offices) and other commercial banking offices located in Arizona, California, Colorado, Idaho, Iowa, Kansas, Minnesota, Missouri, Nebraska, Nevada, New Mexico, North Dakota, Oklahoma, Oregon, South Dakota, Utah, Washington, Wisconsin and Wyoming providing a wide range of financial services to both consumers and businesses. BOW also has branches serving Pacific Rim customers, specializing in domestic and international products and services in predominantly Asian American communities. In addition, the Bank has a commercial banking office in New York and an offshore office in the Cayman Islands. Lending and other services focus on corporate, consumer and smaller middle market businesses. Bank of the West's principal subsidiaries include Essex Credit Corporation ("Essex"), BW Insurance ("BWI") and BancWest Investment Services, Inc. (`BWIS"). The terns "the Bank," "we," "our," "us" and similar terrns as used in this report refer to Bank of the West and its subsidiaries. BancWest Corporation ("BancWest"), a financial holding company, as of December 31, 2011 and 2010, owned 100% and 83.22% of the outstanding common stock of the Bank, respectively. The balance of the Bank's common stock at December 31, 2010 was held by BNP Paribas ("BNPP"). During 2011, BancWest repaid the outstanding debt owed to BNPP that was collateralized by these common shares of the Bank's stock. The Bank issued 509,165 shares of common stock to BancWest in 2010, which received the related funding from BNPP. The Bank also had authorized 1,000,000 shares of preferred stock, none of which were issued or outstanding at December 31, 2011 and 2010. BancWest is a wholly owned subsidiary of BNPP, a financial institution based in France. BancWest's other bank subsidiary (wholly owned) is First Hawaiian Bank. Regulation The Bank's primary regulators are the Federal Deposit Insurance Corporation ("FDIC") and the California Department of Financial Institutions. The Bank is a member of the Federal Home Loan Bank System and is required to maintain an investment in the capital stock of the Federal Home Loan Bank ("FHLB"). The Bank maintains insurance on its customer deposit accounts with the FDIC, which requires quarterly assessments of deposit insurance premiums. Basis of Presentation The accounting and reporting policies of the Bank and its subsidiaries conform to accounting principles generally accepted in the United States ("GAAP"). The accompanying consolidated financial statements include the accounts of the Bank and all of its wholly -owned, majority -owned or controlled subsidiaries and variable interest entities ("VIEs") if the Bank detennines it is the primary beneficiary. All material intercompany transactions among the Bank and its consolidated entities have been eliminated. For consolidated entities where it holds less than a 100% interest, the Bank reports income or loss attributable to noncontrolling shareholders in the consolidated statements of income, and the equity interest attributable to noncontrolling shareholders in the equity section of the consolidated balance sheets. Use of Estimates in the Preparation of Financial Statements The preparation of financial statements in accordance with GAAP requires management to make judgments using estimates and assumptions. Actual results could differ from these estimates and assumptions. Reclassifications Certain amounts in the financial statements and notes thereto for the prior year have been reclassified to conform to the current financial statement presentation. -6- 2011 Bank of the West Annual Report