West One Bancorp
West One Bancorp
Incorporated: 1867 as First National Bank of Idaho
Total Assets: $8.1 billion
Stock Exchanges: NASDAQ
SICs: 6712 Bank Holding Companies; 6021 National Commercial Banks; 6022 State Commercial Banks
West One Bancorp is Idaho’s oldest and largest banking concern; with more than 200 offices in Idaho, Washington, Oregon, and Utah, West One is also the eighth largest agricultural lender in the United States. Founded in 1867 to serve the area’s early miners, the company has since played an important role in Idaho’s economic development, particularly in agriculture. Its original name was First National Bank of Idaho, and, by 1941, it was known as Idaho First National Bank. In 1981, the bank was placed administratively under a holding company—Moore Financial Group Inc.—which provided the legal means for it to expand, largely through acquiring existing banks, into the states of Washington, Oregon, and Utah. The holding company, along with its banks, was renamed West One in 1989.
Idaho in the 1800s was a rough, largely undeveloped area. Trappers and fur traders had arrived early in the century and were followed by missionaries and small numbers of farmers. In 1860, gold was discovered in northern Idaho, bringing a rush of hopeful settlers. Among these gold seekers were the bank’s founders, Chistopher W. Moore and Benjamin M. DuRell. Previously, Moore had farmed with his family in Oregon and had worked as a cattle dealer on the Pacific Coast, but, in 1862, at the age of 27, he followed his dreams of gold and moved to Idaho. DuRell, meanwhile, had undertaken a number of businesses in Oregon, most of which ended in disaster. Near Portland, for example, he built a flour mill and a sawmill, which burned down in 1857. Next, he went to Salem, where he constructed a pork-packing plant, shipped produce to California, and built another sawmill. When this sawmill also burned down, he rebuilt the mill, only to watch it be washed away in a flood during the winter of 1861-62.
Moore and DuRell became acquainted while both were working as gold prospectors in Idaho. Realizing he was unlikely to make a fortune in gold, DuRell soon decided that there were great opportunities in hauling supplies to the mines, and he was able to convince Moore to help him. Their first and only shipment in 1862 was from Walla Walla, Washington, to Auburn, a town in eastern Oregon, after which they traveled to the coast for the winter. The next spring, hearing rumors of large gold finds in southwestern Idaho, they set out with supplies to Boise Basin, arriving around July 1. They began by selling goods from their wagons, and within a year they had set up general stores both in Boise, a city that DuRell helped found, and in nearby Ruby City. By 1865, one of their services was safekeeping “deposits” of gold dust and nuggets, as well as analyzing the gold itself. They also extended credit to miners for supplies, and for this they relied only on their judgment of character.
During this time, gold dust and then gold bars were the main forms of currency in mining towns. That would change after Congress passed the National Bank Act (1863), which authorized a national currency and provided guidelines for establishing a network of federally supervised national banks. Among other things, the Act required that a national bank be incorporated by no fewer than five people and with no less than $100,000 in capital. DuRell and Moore, eager to jump on the bandwagon, found three other investors and set up an organizational meeting to be held in November 1866. DuRell, with 550 shares, was named president of the new enterprise, and Moore, with 315 shares, was elected cashier. The other investors were William Roberts (75 shares); David W. Ballard (50 shares), the governor of the Idaho territory; and Joel Fithian (10 shares). Their application, however, was initially denied by the U.S. government, as the entire $300 million in bank notes had already been assigned to other banks. A tenacious man, DuRell responded by traveling to New England, where he found a bank to sell him $65,000 of its notes, and then approached the government again. On March 11, 1867, DuRell finally received a charter for his new business, First National Bank of Idaho. It was, in fact, the first national bank to be established in the Idaho territory and the second west of the Rocky Mountains.
Opened on June 6, 1867, the bank operated out of a back room of the Boise general store, B.M. DuRell & Co. It contained a 4,200-pound safe; bank notes in denominations of $1, $2, and $5; and scales to weigh gold. By July 1, the bank had loans of $43,369 and deposits of $24,866—by modern standards a poor ratio of loans to deposits—and not until the 1873 or 1874 did total deposits match total loans. Still, DuRell and Moore proved to be good judges of character, and the bank, by helping to introduce bank notes as the main form of currency, played an important role in stabilizing Idaho’s economy and in facilitating its trade with other regions.
The bank soon showed outward signs of growth. Not long after it opened, it moved into its own building at 633 Main Street. A banking “agency,” or branch, was then established in Idaho City, and for a number of years another was maintained in Silver City. Despite this growth, DuRell decided in 1872 to sell his shares to Moore and two other stockholders, and, afterward, the board elected one of these two, B. F. Channell, the new president. The office of presidency, however, was demoted to a part-time position, and Moore continued to run the day-to-day operations. DuRell, who later attempted new ventures in Salt Lake City and elsewhere, would never again find lasting business success.
Over the next two decades Idaho, which became a state in 1890, and the bank experienced a period of growth tempered by instability. The so-called Panic of 1873, set off by financial crises in Vienna, led to an economic slowdown across the globe and was felt even in Idaho. Construction of railroads, for example, which had boosted the territory’s economy, was cut back, and some businesses, including banks, were forced to close. During this time, the board of First National Bank of Idaho also underwent many changes. Possibly the result of a disagreement with John Huntoon, one of the shareholders, Moore resigned his position in 1876 and sold his shares. After March 15 of that year, the bank was controlled by Huntoon and eight new board members, with Huntoon acting as cashier. Moore, however, continued to have allies on the new board, and, a year later, he again purchased shares of First National. On January 8, 1889, he was elected president by the board, which had also reinstated that office as a full-time position with authority over the cashier. Moore would remain the head of the bank until his death in 1916.
Although the country’s economy was badly shaken by financial panics in 1893 and 1907, Idaho was relatively unscathed. While some Idaho banks failed, First National had little trouble remaining solvent, though not without having to reduce earnings and salary increases. First National had already outgrown its old facilities by 1890—when it moved to the Post & Bilderback Building on the corner of 8th and Main—and, in 1903, the completion of an elegant three-story structure, built on the same site, provided the bank’s customers with visible evidence of its financial stability. During this period, mining remained a focus of the bank’s services, but Idaho’s growing agricultural industry was also seeking loans for development. First National would greatly benefit from an increasing state population, which jumped from 161,772 in 1900 to 325,594 in 1910, pushing deposits beyond the $1 million mark in 1906. A separate savings department was established in 1912, when deposits hit $1.7 million.
Amid this great expansion was the nagging problem of government regulation. As a national bank, First National operated under the jurisdiction of the U.S. comptroller of the currency and was required to disclose its finances. Moore—as well as his son Crawford, who became president in 1916—resented this interference and generally dragged their feet in complying with federal regulations, resulting in regular confrontations between the bank and the comptroller. The comptroller, for example, was displeased by the high number of past due loans, reaching 40 percent in 1913. To circumvent the problem, the bank’s directors formed The Western Loan and Investment Company, which was charged with various responsibilities, including buying and selling mortgages, stocks, and notes. As it was not a national bank and thus not supervised by the comptroller, The Western Loan and Investment Company was also where the directors could make loans that the government would find questionable. The feud with the comptroller would eventually become a major liability for the bank.
Nevertheless, First National experienced profitable years during World War I. In 1915, the completion of the Arrowrock Dam, located near Boise, helped boost the state’s agricultural industry, as did the war itself. First National responded by investing more heavily in farming and livestock, including in irrigation projects. When the postwar economy took a downturn in 1920, the bank was in excellent financial shape, which could not be said of many other Idaho banks, 27 of which failed between 1920 and 1922. Under the guise of The Western Loan and Investment Company, First National’s directors were able to purchase numerous failed banks, which they recapitalized and reopened as state banks.
Again becoming too large for its facilities, First National moved in 1928 to the Empire Building, an impressive, six-story structure (to which the bank attached another building) located outside the center of town at 10th and Idaho streets. The move, accomplished in October 1928, was done under intense security. Even so, the plan broke down at a critical juncture, and in the old bank as much as $600,000 was left unguarded in an open safe. Fortunately, the money was discovered by Crawford Moore, who had a janitor help him stuff the bills into garbage cans, cover the money with wastepaper, and place the cans in his car. With no protection, Moore then drove off to the bank’s new location.
The completion of the Empire Building seemed to presage another era of growth, but, in 1929, when the stock market crashed, the economy began a steady downward spiral. Hit particularly hard was Idaho, where farm income dropped 57 percent between 1929 and 1932. The state’s other two major industries, mining and lumber, did not fare much better. Depositors, who had experienced a financial crisis less than a decade earlier, became frightened and began to pull their money out of banks, thereby guaranteeing the disaster they hoped to avoid. The number of banks in Idaho fell from 106 in 1929 to 68 in 1933. In Boise, one of the three largest banks, Boise City National, failed in July 1932 after its depositors began draining its funds. First Security Bank, another of the top three, managed to survive, though only with the help of the Reconstruction Finance Corporation (RFC), a U.S. government agency established that year to help financially troubled banks, railroads, and other businesses. First National, the last of the big three, was still stubbornly independent and initially showed no interest in federal assistance. Its independence, however, did not stop depositors from withdrawing their money, and when deposits reached a dangerously low level, First National had little choice but to approach the RFC and the Federal Reserve Bank for help. Moore, however, had only a small amount of time in which to maneuver, and he was unable to strike an agreement he found acceptable. So on August 31, 1931, First National, the state’s oldest bank, simply shut its doors.
First National would remain closed for two months, during which time the bank was reorganized under the direction of Harry W. Morrison, a friend of Moore’s and owner of the worldwide construction firm Morrison-Knudsen Company, Inc. Morrison was asked to head the Reorganization Committee by Moore and the RFC. The eventual restructuring would force the Moore family to surrender half of its stocks, allow bank customers to purchase stock with frozen assets, free up accounts with less than $200, and permit all other depositors to withdraw one-fourth of their money at the bank’s opening and an additional one-fourth at six-month intervals. The RFC, moreover, loaned the bank $1.86 million. Moore remained president, but active management of the bank was handed over to Homer Pitner—formerly an officer at Pacific National Bank of San Francisco—who was named executive vice-president.
After the bank reopened on October 31, 1932, it followed a conservative strategy, keeping much of its assets “liquid”—that is, not tied up in loans and available for withdrawal. As a result, profits fell. However, by 1934, deposits rebounded to $9,945,000, with only $1,501,000 in outstanding loans. The bank was even able to free up accounts more quickly than planned. The Banking Act of 1933, which provided for deposit insurance and branch banking, would be a boon for First National. First National was then legally allowed to purchase the seven Idaho banks owned by The Western Loan and Investment Company and convert them into branch outlets. In 1934, however, as the bank was just recovering, Pitner was drowned in an accident, leaving the bank temporarily without a leader. He was replaced by John A. Schoonover, president of the Regional Agricultural Credit Corporation in Spokane, Washington. After Moore resigned as president on December 31, 1938, Schoonover was also elevated to that post, which he held until 1960.
During the 1930s, the state’s economy was given a boost by federal grants and loans, such as for rural electrification projects, which together totaled $321 million between 1933 and 1939. As the state’s health improved, First National also began to flourish. Deposits ballooned to $24 million by 1939, and that year loans reached $7.5 million. Unlike past leaders of the bank, Schoonover was eager to take advantage of new government programs. For example, he gained approval for the bank to participate in the Federal Housing Authority Title II program, which allowed First National to greatly increase its involvement in real estate loans. Under Schoonover, the bank would also expand to 15 branches by 1940, mostly through acquisitions of existing banks. One acquisition was Lewiston National Bank, located in the northern Idaho town of Lewiston. Because there was a competing institution in that town called the First National Bank of Lewiston, First National decided in 1936 to rename itself Idaho First National Bank of Boise, shortened in 1941 to Idaho First National Bank.
During World War II, Idaho First’s deposits, aided by government funds and a booming economy, soared from $32 million in 1942 to more than $100 million in 1945. Loans, however, lagged behind, in part because farmers, benefiting from higher prices for their crops, earned greater profits and became less dependent on credit. Such losses were partially offset by the bank’s holdings in government bonds, and the bank was able to make its final repayment to the RFC on December 28, 1944.
Idaho First thus entered the postwar years with great strength. The country’s wartime production had been immediately shifted to consumer goods, and demand suddenly increased for loans on houses, cars, furnishings, and other goods. Farmers also sought credit for new and more advanced machinery, and Idaho First was well positioned to serve them with its many branches, which had jumped to 33 by 1957. As a result, Idaho First’s loans, just $10 million in 1942, jumped to $44 million in 1950 and $112 million in 1960, when deposits reached some $233 million. In 1955, the bank opened its first drive-in facility, built next to the home office in Boise.
Although these were profitable years, administratively the bank experienced turmoil. Schoonover, long the bank’s leader, was increasingly attacked for his independent style of management, which he conducted largely at the expense of the board. Laurence Bettis, a director and a member of the Moore family, was his chief opponent, and, in 1960, Bettis and his board allies were able to elect William E. Irvin as president. Though Schoonover was then given the title chairman of the board, his power was much reduced, and he resigned in 1962. Irvin, who did much to improve the bank’s public relations, would hold the post of chairperson from 1962 to 1971, when he retired and was replaced by Thomas C. Frye. Frye, in turn, would be replaced by Fred C. Humphreys in 1977.
Throughout the 1960s and 1970s, Idaho First remained actively involved in the state’s agricultural industry, which did well during most of these years. In contrast, the timber and mining industries began to show weaknesses that would worsen into the 1980s. Taking up some of the slack would be the state’s expanding manufacturing base and its tourism and recreation industries. Idaho First was involved in the development of many new businesses, such as food processors, fertilizer plants, and manufacturers of irrigation and agricultural equipment. In recreation it was involved, for example, in funding the first ski lift at the Bogus Basin resort. During this period, the bank began to rely more heavily on automated machinery, especially in data processing, and was able to greatly increase its number of branches, spurred by reduced government regulation. Growth would finally cause the bank to move once more, this time to a newly constructed, 19-story building called Idaho First Plaza. Opened in 1978 and dominating the Boise skyline, the new building was located at 101 South Capital Boulevard, just a block from the bank’s original 1867 location.
Changes in government regulations in the 1960s, 1970s, and 1980s, both at the state and national levels, would help reshape Idaho First. In particular, Idaho’s state government in the early 1980s began to allow bank holding companies (that is, corporations owning at least two banks) to purchase banks in other states. To take advantage of this change, the directors of Idaho First decided to create their own holding company, Moore Financial Group Inc., established in 1981. The following year, the new company began to acquire banks in Utah, and soon thereafter it expanded into Oregon (beginning in 1983) and Washington (1988), both in the Seattle and Spokane areas. Much of this expansion was done under the direction of Daniel R. Nelson, who came to Moore Financial in 1984 to coordinate the subsidiaries in Utah and Oregon. Nelson was named president and chief operating officer in 1985, becoming chairperson and chief executive officer the following year. In 1989, both the company and its banks took on a new name, West One Bancorp.
By 1994, West One had become a regional power, with more than 200 offices in Idaho, Washington, Oregon, and Utah. Strongest in Idaho, where its share of the commercial banking market was around 40 percent, West One was, however, thriving in all four states, where economic growth was considerably higher than the national average. Agriculture and mining continued to be important to West One’s lending strategy in Idaho, as was the defense industry, American Express’s processing center, and the Delta Airlines hub in Utah; forest products, agriculture, and electronics in Oregon; and Boeing Company in Washington. Moreover, tourism was important in all four states.
Still, West One’s primary borrowers were consumers and midsized businesses, and, in the early 1990s, its average commercial loan was less than $100,000. To capitalize on this, West One began taking extraordinary steps to improve its customer relations. In 1987, in Idaho, for example, it conducted the “Idaho Wants You” campaign, in which the bank agreed to donate a portion of every new deposit or loan until the total reached $500,000, which was then given to economic development projects. Moreover, during the campaign bank employees were sent out to visit every home and business in the state. Also notable was West One’s willingness to carry higher salary expenses to fully staff its branch banks. Because of such heavy investments in customer service, West One was not always able to offer the lowest rates. “We probably wouldn’t win a bidding war,” admitted Nelson, but that seemed to matter little, as the bank continued to report strong growth and earnings. Its success, however, has made it one of the most attractive takeover targets in the western United States.
West One Bank, Idaho; West One Bank, Washington; West One Bank, Oregon; West One Bank, Oregon, S.B.; West One Bank, Utah; Idaho First Bank; West One Trust Company, Washington; West One Financial Services; West One Life Insurance Company.
Anderson, Eloise H., Frontier Bankers, Caldwell, Idaho: The Caxton Printers, Ltd., 1981.
Byrne, Harlan S., “West One Bancorp: Acquisitions, Northwest’s Economy Spur a Rebound,” Barren’s, August 24, 1992, pp. 35–36.
Moser, Michael J., “Bankers Go Door-to-Door to Reap Idaho Goodwill,” Bank Marketing, November 1989, pp. 16–17.
Neurath, Peter, “West One Bank Chief Builds on Old Rainier Ties,” Puget Sound Business Journal, December 11–17, 1992, pp. 1, 36–37.
Tanja, Lian, “Putting Together the Pieces of Service Quality,” Bank Marketing, April 1994, pp. 28, 30.
Taylor, John H., “No More White Telephones,” Forbes, January 18, 1993, p. 43.
Zuckerman, Sam, “West One Bancorp’s Chief Rides High in the Saddle,” American Banker, February 23, 1993, p. 1.