West One's Diet Of Nonpotatoes Boosts Muscle

The potatoes did not grow in 1985.

Moore Financial Group of Boise, Idaho, was the seventh biggest agricultural lender in the country back then, recalled Daniel R. Nelson, chairman and CEO of what has since been renamed West One Bancorp. But the Idaho spud bust of 1985 showed the bank that it was too rooted in local financial soil.

So, it set a strategy of expanding to neighboring geographic areas with nonpotato economies, at the same time looking for banks in its own image - healthy community banks in rural or bedroom towns.

Since it was buying healthy banks, it seemed only natural to leave local boards and management in place, Mr. Nelson explained. "If we're real good, they won't even recognize the backroom operations have changed," he said.

Assets have grown to just over $5 billion from $3.5 billion seven years ago, and bank offices to 145 from 80. West One has expanded into Washington, Oregon, and Utah as well as its home state of Idaho. Earnings for 1990 were $42.6 million, and return on assets was 0.97%.

West One consolidates its backroom operations, credit card issuance, purchasing, and mortgage servicing. Products, loan decisions, and pricing are left up to local banks, but loan grading is uniform.

Double Teaming

Marketing campaigns are usually run separately, although that did cause problems once.

Turns out the Salt Lake City banks decided to run a special promotion on its certificates of deposits, called "Jazz CDs," to tie in with the Utah Jazz professional basketball team. The more the team wins, the higher the fluctuating CD rate goes.

The problem?

"It drove our East Idaho managers crazy because people saw the ads on TV, came in, and asked for it," explained Mr. Nelson. "But they didn't have it."

The upshot: the East Idaho banks now offer "Jazz CDs" too.

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