BancWest net income rises 6.6% for quarter
By Deborah Adamson
Advertiser Staff Writer
BancWest Corp. reported a 6.6 percent increase in net income for the second quarter as all aspects of its business strengthened, the company said.
The Honolulu-based parent of First Hawaiian Bank and Bank of the West earned $114.8 million in the quarter. Revenue, which comprises net interest income and noninterest income, rose by 2.5 percent to $432.3 million from a year ago.
Total assets reached an all-time record of $40.3 billion as of June 30, up 10.5 percent from last year. Loans and leases rose by 8.7 percent to $27.2 billion while deposits climbed by 11.7 percent to $28 billion.
Nonperforming assets at the bank fell to 0.52 percent of loans and foreclosures, down from 0.59 percent on Dec. 31 and 0.75 percent a year ago.
"The quarter was really strong on both the Mainland and in Hawai'i," said Don McGrath, president and chief operating officer of BancWest.
Loans, deposits and consumer finance experienced "good" growth throughout BancWest, he said. Commercial lines, agricultural banking and Small Business Administration activity also increased. Credit quality of loans has improved, resulting in lower bad debt expense.
While the net interest margin — the spread between interest the bank pays on deposits and interest earned from loans — fell in the quarter, it is expected to improve as interest rates rise.
A breakout of First Hawaiian Bank's financial performance will be available in August as part of BancWest's quarterly filing with the Securities and Exchange Commission.
BancWest is poised to become the seventh largest bank holding company in the Western United States once its acquisition of Community First Bankshares and USDB Bancorp closes in the third quarter.
The Honolulu bank is purchasing Fargo, N.D.-based Community First Bankshares for $1.2 billion in cash. Community First operates 155 branches in 12 states in the Southwest, Rocky Mountains and Great Plains, as well as Minnesota, Iowa and Wisconsin. The bank had total assets of $5.5 billion at the end of 2003. Shareholders of Community First approved the deal but regulatory approval is still pending.
The Community First acquisition will put BancWest in 10 new states.
USDB Bancorp, the parent of Union Safe Deposit Bank, was purchased for $245 million cash. Headquartered in Stockton, Calif., the bank has 19 branches in that state's Central Valley. USDB had total assets of $1.2 billion as of Dec. 31.
"What we have defined is sort of a very deliberate strategy of growing both through aggressive marketing inside the places where we're present ... and being opportunistic where we see a chance to acquire additional branches and customers where it makes sense," McGrath said.
BancWest is a subsidiary of Paris-based BNP Paribas.
Reach Deborah Adamson at dadamson@honoluluadvertiser.com or 525-8088.
