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The Honolulu Advertiser
Posted on: Thursday, October 21, 2004

BancWest posts 4.5% rise in net income

By Deborah Adamson
Advertiser Staff Writer

BancWest Corp., the parent of First Hawaiian Bank, yesterday reported a 4.5 percent increase in net income for the third quarter from a year earlier as restructuring expenses cut into earnings.

BancWest earned $117.2 million in the quarter compared with $112.2 million in the same quarter a year ago. The results, which encompass the operations of First Hawaiian and San Francisco-based Bank of the West, include $3.4 million in restructuring expenses.

Without the after-tax restructuring expense, net income in the third quarter would have risen by 7.5 percent, the company said.

Restructuring costs include travel, systems integration and other expenses related to the acquisition of Community First Bankshares of Fargo, N.D., and USDB Bancorp of Stockton, Calif. The purchase of the two banks will close on Nov. 1.

Revenue — noninterest income and interest income — rose by 1 percent to $435.4 million in the quarter from a year ago.

Earnings for First Hawaiian Bank will be disclosed in a BancWest filing next month with the Securities and Exchange Commission.

"We held expenses relatively flat. Noninterest income also increased and we had a pretty dramatic decrease in the cost of risk. Credit quality continued to improve," said Doug Grigsby, chief financial officer of BancWest Corp.

Total assets rose to $41.4 billion, up 10.6 percent from the last year. Loans and leases rose by 10.2 percent to $27.8 billion while deposits jumped 9.6 percent to $28.4 billion. Nonperforming assets were 0.44 percent of loans and foreclosed properties versus 0.71 percent a year ago.

In December, Community First will be merged into Bank of the West while Union Safe Deposit Bank will be consolidated in January.

The acquisition will make BancWest the seventh largest bank holding company in the western United States, with $49 billion in assets and over 530 branches in 17 states, Guam and Saipan.

In April, BancWest said it was buying USDB Bancorp for $245 million in cash. With total assets of $1.1 billion, the bank operates 19 branches in San Joaquin and Stanislaus counties in the Central Valley of California.

In March, BancWest said it would acquire Community First Bankshares for $1.2 billion in cash. Community First operates 156 branches in 12 states. It has total assets of $5.6 billion.

BancWest Corp. is owned by French banking giant BNP Paribas.

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