By Frank Cho
Advertiser Staff Writer
BancWest Corp., the states biggest financial services company in terms of assets, yesterday said fourth-quarter profits surged 15.8 percent, helped by solid growth in its Mainland consumer banking business and an improving Hawaii economy.
The Honolulu-based bank holding companys fourth-quarter 2000 results, which included a pre-tax $1.3 million charge related to the acquisition of 30 branches in New Mexico and Nevada from First Security Corp., rose to $56.2 million, or 45 cents a share, up from $48.5 million, or 39 cents, in the same period a year earlier.
Excluding the one-time charge, profits from operations were a record $56.9 million, up 17.4 percent from $48.5 million a year ago. The results met Wall Street estimates.
"Both our subsidiary banks, Bank of the West and First Hawaiian, increased earnings at double-digit levels for the year," Walter Dods, BancWests chairman and chief executive, said in a statement yesterday.
Wall Street had expected BancWest to earn 45 to 46 cents a share, according to Zacks, which tracks analysts estimates. Before the earnings were released, the companys stock rose more than 12 cents to close yesterday at $26 a share.
BancWest is among several financial services companies on Wall Street that have benefited from lower interest rates, posting higher profits despite worries of an economic slowdown on the Mainland.
Citigroup, the nations No. 1 financial services company, said profits rose 11 percent, while the Bank of New York reported its profits jumped 14 percent.
Overall, BancWests net interest income increased to $191.1 million for the quarter ended Dec. 31, up 8.4 percent from $176.2 million a year earlier. Non-interest income rose 9.1 percent to $54.3 million when a one-time $5 million gain in the same 1999 quarter is excluded.
Despite a slumping stock market last year, fees from investment products jumped 29.9 percent during the fourth quarter. Bank of the West and First Hawaiian said they sold $137.7 worth of investment products to consumers and $583.3 million over the course of the year.
For all of 2000, the company, formerly First Hawaiian Inc., reported a profit of $217.1, its best year ever when restructuring and merger-related costs are excluded in 2000 and 1999.
When those costs are included, BancWest still had a profit of $216.4 million, a 25.5 percent increase over 1999.
At the end of 2000, total assets were $18.5 billion, up 10.6 percent. Deposits were $14.1 billion, an increase of 9.7 percent. And loans totaled $14.4 billion, a jump of 11.6 percent.
Despite the growth, the ratio of nonperforming loans continued to improve in 2000 to 0.86 percent of all loans, down from 1.01 percent a year earlier.
Provision for credit losses stood at $16.4 million for the quarter compared to $19.9 million in the same 1999 quarter. The provision exceeded charge-offs by $1.1 million, the company said. For the year, net charge-offs were $49.4 million, $11 million less than had been provisioned.
BancWests deal to acquire 30 First Security branches this year could add $1.2 billion in deposits and $300 million in loans to the companys portfolio. Seven branches in Nevada converted to Bank of the West branches Jan. 12, the company said. The other 23, primarily in New Mexico, are expected to convert in mid-February.
BancWest said it was expecting to take a pre-tax $2.7 million charge related to the acquisition again in the first quarter.