Bank of the West Pledges $75 Billion for Community Support; Loan, Investment and Contribution Goals Will Increase in 19 States

SAN FRANCISCO -- Bank of the West today announced it would boost its community support to offer $75 billion in loans, investments, contributions and services to individuals, small businesses, companies and community-based organizations throughout the bank's markets. The new goal extends through 2015 and increases by 150% an earlier $30 billion goal announced in 2002.

"The expanded plan is a direct result of the bank's growth," said Don J. McGrath, Bank of the West chairman and CEO, growth that includes Bank of the West's ongoing acquisition of Commercial Federal Bank, a $10.4 billion asset federal savings bank based in Omaha, Nebraska. The bank's Board of Directors set the new goal because Bank of the West will have doubled in size since 2002 and will play a larger role in community development in its 19-state service area.

"We want to help improve the quality of life and the economic health of the communities we serve," McGrath said. "As we grow, we want to expand the scope of our community responsibility program to incorporate the communities served by Commercial Federal and other merger partners. We also anticipate further growth in upcoming years.

"Specific goals were developed recognizing our expanded presence in the Western and Midwestern states," McGrath added. "Our bank has a long history of community service and we will expand upon that tradition. This is a large goal for a bank of our size, and one that says we will now become an even larger participant in the region's economy." The goal represents approximately 140% of the bank's projected assets at year's end 2005.

As a result of the current acquisition, Bank of the West will become a $54 billion-asset bank with more than 675 branches in Arizona, California, Colorado, Idaho, Iowa, Kansas, Minnesota, Missouri, Nebraska, Nevada, New Mexico, North Dakota, Oklahoma, Oregon, South Dakota, Utah, Washington, Wisconsin and Wyoming. This acquisition marks Bank of the West's entry to the retail banking market in Kansas, Missouri and Oklahoma. The transaction is expected to conclude in the last quarter of 2005, pending regulatory and shareholder approval.

As part of its objective to serve inner cities and low- to moderate-income individuals, Bank of the West will operate 162 branches in low- to moderate-income communities following the acquisition. The bank also participates in the electronic benefits transfer program in California and other states that offer this service.

McGrath said specific objectives within the 13-year goal could change in response to future circumstances or credit conditions. He added that components of the plan may also change after further consultation with community groups and nonprofit service providers in the markets served by the bank.

Components of the program are:

Residential Mortgage Loans -- The bank originates and purchases one-to-four family residential mortgages for low- and moderate-income borrowers, minorities, and residents of low- to moderate-income census tracts. Bank of the West often purchases mortgages made in low- and moderate-income census tracts from other lenders. Revised goal: $10.3 billion

Small Business/Farm Loans - The bank originates small business loans ($1 million and under), SBA loans and small farm loans ($500,000 and less). The bank's SBA credit and business development staff will reach out increasingly to minority- and women-owned businesses to achieve this. Micro-loans of less than $30,000 each will be a significant part of this category. Revised goal: $25 billion

Commercial Loans - The bank makes commercial loans for construction, real estate, working capital and long-term financing to larger businesses, many to companies and nonprofit organizations in lower-income areas. To assist in stabilizing employment and services in these areas, the bank lends in amounts exceeding $1 million to larger businesses in low- to moderate-income census tracts. Revised goal: $20 billion

Community Development Loans - The bank plans to grow further in the community development market, increasing its lending as sole lender or in partnerships for affordable housing including multi-family rentals. This will include loans for organizations serving primarily low- to moderate-income individuals, promoting community economic development and revitalizing low- to moderate-income areas. Revised goal: $5 billion

Consumer Loans - Bank of the West offers consumer products including vehicle loans and leases, home equity loans and lines of credit, personal loans and overdraft protection. The bank will increase availability of consumer loans and related products to low- and moderate-income individuals and in low- and moderate-income census tracts. Revised goal: $10 billion

Faith-Based Loans - The bank is the nation's leading specialized bank lender to churches and other religious institutions. In the belief that faith-based organizations enhance the social and moral environment of communities and provide critical social services, the bank will increase faith-based lending. Revised goal: $4 billion

Community Development Investments - The bank has expanded its goal for bank investments, grants and deposits in financial intermediaries and other organizations that primarily lend to or in other ways support low- to moderate-income communities. These include organizations rehabilitating or building affordable housing, financing small businesses, and developing projects eligible for low-income housing tax credits. Revised goal: $250 million

Community Contributions - The bank makes grants and contributions specifically targeted for organizations promoting economic development, financial literacy, affordable housing, environmental preservation and health and human services for low-to moderate-income residents of communities the bank serves. The bank also sponsors a wide range of community events. Contributions by the bank's 10,000+ employees (post-merger) are a significant additional factor. Revised goal: $100 million

Minority Vendor Contracts - To remain a leader in enabling the success of businesses owned by minorities, women, and people with disabilities, the bank has increased its goal for vendor contracts to these businesses. Revised goal: $350 million

About Bank of the West: Founded in 1874 in San Jose, CA as Farmers National Gold Bank, $42 billion-asset Bank of the West is one of the four largest Western-based commercial banks. Bank of the West offers a full range of personal and business banking products and services. It currently operates nearly 480 banking locations in 16 Western and Midwestern states.

What are people saying about mortgages today:

Rates on 30-year mortgages edged down last week to a seven-month low. Mortgage-giant Freddie Mac reported Thursday that 30-year, fixed-rate mortgages fell to 6.3 percent, down slightly from 6.31 percent two weeks ago. It put rates at the lowest level since they were at 6.24 percent the first week of March.

Bank of Hawaii, Central Pacific Bank, Territorial Savings Bank and Wells Fargo Home Mortgages all cut their 30-year mortgage rates to 5.75 percent this week.

Most people think of a mortgage as a means to an end. After all, you buy a house, not a home loan. But a mortgage is much more than the path to homeownership. It is a financial instrument that must be managed, just like any other financial investment.