Bank of the West Aims to Stimulate Small Business Growth in the West; Data Show Small Business Borrowing Momentum -- Bank Pursuing New Relationships.

Business Editors

SAN FRANCISCO--(BUSINESS WIRE)--Sept. 17, 2003

Amid encouraging signs of growth in small business borrowing, Bank of the West is launching a small business banking promotion aimed at forging new business relationships and increasing the bank's share of the region's small business lending market.

Conventional small business (BusinessLink) loan applications at Bank of the West were up 14% in the second quarter over the first quarter 2003. Lenders at the $27 billion asset bank are trying to further stimulate small business growth by offering discounted business banking solutions at all of the bank's nearly 300 offices in six Western states.

"We are seeing steady growth in small business borrowing at Bank of the West," said Bob Dalrymple, Senior Vice President of Business Banking. "The West has the most new business startups and the most small businesses in the U.S. As the economy slowly strengthens and the business climate improves, small business customers are showing more interest in capital investment.

"Some small and midsize businesses might also be anticipating future interest rate hikes and are securing credit in today's favorable rate environment," Dalrymple added.

Business loan application activity has also increased in the bank's SBA lending department according to Bryan Borders, Senior Vice President and SBA Department Manager. "We've seen a 16% increase in SBA loan applications in the second quarter over the first," Borders said. "This comes on the heels of our SBA loan portfolio reaching $1 billion in loans outstanding earlier this year."

Some recent data appear to bear out this growth in small business lending. In its most recent Beige Book report, the Federal Reserve Board noted improvements in commercial loan originations in the region, particularly among small businesses.

Data from the National Federation of Independent Business (NFIB) -- the nation's largest small business trade group -- support what Bank of the West is experiencing. Results from its May poll show steady reinvestment by small business owners over the previous 12 months. Among the survey's highlights it found that 47% of small-business owners made the largest share of their business investments over the last 12 months for "replacement and maintenance."

Twenty-three percent made their business investments primarily to expand into another business area while 21% made theirs primarily to extend existing products or services. From a lending perspective, a 45% plurality believes borrowing is appropriate only to expand, diversify, or make the business more productive. Some 30% consider it appropriate to borrow for any cost-effective investment including replacement(a).

Bank of the West's business campaign will run through November 7 and will be promoted in various advertising and marketing efforts in all six states where it has a presence. During the campaign the bank is offering business loans at "prime plus zero" and has waived or discounted fees on other business products and services.

About Bank of the West:

With $27 billion in assets, Bank of the West (www.bankofthewest.com) currently operates nearly 300 branches in California, Oregon, Washington, Idaho, Nevada and New Mexico and is the third largest commercial bank headquartered in California. Bank of the West serves 1.5 million retail and commercial customers including national specialty business lines such as equipment leasing, religious institution lending, agribusiness lending and SBA lending.

(a) NFIB, National Small Business Poll, Reinvesting in the Business, Volume 3, Issue 3, 8/14/2003