Posted on: Friday, May 14, 2004

First Hawaiian Bank earnings climb 1%

By Deborah Adamson
Advertiser Staff Writer

First Hawaiian Bank said it earned $35.5 million in the first quarter, up 1 percent from $35.1 million in the like period a year ago.

Revenue — defined as net interest income plus noninterest income — fell 3 percent to $117.4 million, compared with $121.2 million in 2003. Last year included an extraordinary gain related to lease termination. Total assets came to $9.86 billion as of March 31.

"We're very pleased with out first-quarter performance, and we're very confident about the second quarter," said Don Horner, First Hawaiian's president and chief operating officer. "We see a very robust economy."

Last month, First Hawaiian's parent, BancWest Corp., reported that it earned $113.1 million in the quarter, up 11 percent from a year ago. Revenue rose by 3 percent to $422.5 million.

Earnings growth at the parent company was propelled by its Bank of the West subsidiary, which reported an 11 percent increase in first-quarter profits to $99.1 million. Revenue rose as well, by 5 percent to $339.5 million. Bank of the West operates mainly in California, Oregon, Washington, Idaho, New Mexico and Nevada.

First Hawaiian Bank said profits in retail banking fell by 8.7 percent to $16.7 million in the quarter because of lower interest rates, which hurt the net interest margin, and moderately higher corporate expenses. Retail banking comprises the bank's branch operations.

But average assets in the group rose by almost 10 percent to $3.6 billion because of an increase in residential and commercial loans as well as the purchase of the First Hawaiian Center building in downtown Honolulu.

Consumer finance profits fell by 3 percent to $9.3 million, hurt by lower gains on the sale of mortgages. Average assets in this group rose by 3 percent to $1.47 billion. This group handles such products as auto, personal and home-equity loans.

Commercial banking, which lends to small and mid-size businesses, performed well, with quarterly earnings up 9 percent to $6 million. Higher fees from loans paid off this year boosted net interest income by 3.6 percent, while higher loan servicing fees propelled noninterest income by 19 percent. But average assets fell by almost 6 percent to $1.11 billion as the volume of loans declined.

Financial management, which handles trust and investment services, reported a net income of $700,000, unchanged from a year ago. Average assets rose by 71 percent to $24 million.

Starting in the third quarter, Bank of the West's operations will expand as it merges with Stockton, Calif.-based USDB Bancorp and Community First Bankshares of Fargo, N.D.

BancWest announced the purchase of USDB, parent of 19-branch Union Safe Deposit Bank in Central California, for $245 million in cash last month.

In March, BancWest bought the parent of Community First National Bank for $1.2 billion in cash. Community First has 155 branches in 12 states.

Reach Deborah Adamson at dadamson@honoluluadvertiser.com or 525-8088.