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Disclosure of fair values is not required for certain items such as lease financing, investments
<br />accounted for under the equity method of accounting, obligations for pension and other postretirement
<br />benefits, premises and equipment, other real estate owned, prepaid expenses, core deposit intangibles and
<br />other customer relationships, other intangible assets and income tax assets and liabilities. Accordingly, the
<br />aggregate fair value amounts presented do not purport to represent, and should not be considered
<br />representative of, the underlying "market" or franchise value of the Bank.
<br />Reasonable comparisons of our fair value information to other financial institutions cannot necessarily
<br />be made as the fair value disclosure standard permits many alternative calculation techniques which require
<br />numerous assumptions used to estimate fair values.
<br />This table is a summary of financial instruments, requiring fair value of financial instruments
<br />disclosure under GAAP, excluding certain short -tern financial assets and liabilities, for which carrying
<br />amounts approximate fair value, trading assets, which are carried at fair value, securities available for sale
<br />(Note 2) and derivative financial instruments (Note 15).
<br />2011 2010
<br />(dollars in thousands) Book Value Fair Value Book Value Fair Value
<br />Financial Assets
<br />Loans held for sale
<br />Loans, nettnn
<br />Financial Liabilities
<br />Deposits $43,995,196 $44,093,985 $39,547,244 $39,578,059
<br />Short-term borrowings(' 353,620 353,620 739,637 739,637
<br />Long-term debt(3) 5,661,128 5,812,918 5,796,001 5,965,192
<br />(1) Excludes net leases of $2,719 million and $2,490 million at December 31, 2011 and 2010, respectively.
<br />Includes federal funds purchased and securities sold under agreements to repurchase and short-term borrowings.
<br />(') Excludes capital leases of $15.7 million and $16.5 million at December 31, 2011 and 2010, respectively.
<br />$ 244,509 $ 244,509 $ 107,440 $ 107,440
<br />39,837,768 40,542,926 39,458,611 40,516,706
<br />17. Cash and Dividend Restrictions
<br />Federal Reserve Board regulations require the Bank to maintain reserve balances against certain
<br />deposit liabilities with the Federal Reserve Bank. The average required reserve balance was $160 million
<br />and $135 million for the years ended December 31, 2011 and 2010, respectively.
<br />California statutes limit the amount of dividends the Bank may declare or pay to the lesser of the
<br />Bank's retained earnings or the net income of the Bank for the prior three years less any dividends paid
<br />during those three years. Due to our net loss in 2009, the Bank could not declare or pay cash dividends in
<br />2010 or 2011.
<br />-46-
<br />2011 Bank of the West Annual Report
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