At a time when many banks across the country are fighting for their survival - and losing - West One Bancorp enjoyed record earnings of $42.6 million or $3.34 per share for 1990, up 25 percent from the $34 million earned in 1989. Assets topped $4.5 billion.

That performance, outlined in West One's annual report published this week, allowed the Boise-based financial services company to increase annual dividends 7 percent to 88 cents per share while the company's capital base increased 12 percent.An additional 9 percent increase in the quarterly cash dividend to 24 cents per share will be paid to shareholders on April 1, according to the report.

Chairman Daniel R. Nelson attributes at least a portion of the bank's solid performance in 1990 to the strength of the states in which West One operates.

"The economy of our four-state market area, Idaho, Utah, Oregon and Washington, was relatively strong during 1990," he said. "Personal income growth in these states should rank among the top 10 nationally."

Looking ahead, Nelson said he expects the economy of the region to slow somewhat this year but still outperform the nation overall.

Commenting on the current crisis in the U.S. financial services industry, particularly on the East Coast, Nelson noted that the fund which guarantees deposits in federally insured banks is rapidly shrinking.

The result, he said, could mean increases of as much as 63 percent in deposit insurance premiums for FDIC-insured banks in 1991. And, depending on the severity and length of the recession, even further increases could occur.

"It is unfortunate that those increases will be unilaterally assessed to all financial institutions with no rate differential between responsibly managed commercial banks and those that have assumed inordinate and inappropriate risks," said Nelson.

He said regulatory agencies have become "increasingly vigorous in their examination process, an emphasis we applaud." Agency expenditures have risen correspondingly, however, he pointed out, and are also assessed on a pro rata basis without regard for the strength of individual institutions.

"We believe it is time for a complete overhaul of the regulations governing the financial services industry in order to provide for an adequate deposit insurance fund and to ensure appropriate and consistent regulation of the industry."

Nelson said consolidation of the regulatory functions into a single federal agency, could help, along with easing of the laws that restrict geographic and product expansion by commercial banks.

"The industry has substantial overcapacity and further consolidation will be necessary to ensure an efficient and effective banking system."

Commenting on West One's strong performance in 1990, Nelson pointed to two key measurements:

"Return on average assets rose to .97 percent in 1990 from .84 percent last year. Return on average equity was 14.68 percent in 1990, an increase from 13.03 percent in 1989. The higher returns were attributable to earnings derived from our core businesses."

Nelson said net interest income was up last year as a result of loan growth and long-term balance sheet restructuring and repricing. Gains in non-interest income were due to growth in deposit accounts, pricing adjustments and expanded trust activities.

Non-interest expense increases for the year were managed to levels "only slightly in excess of the inflation rate," while average loans increased 17 percent and average deposits were up 7 percent.