BancWest earnings rise
First Hawaiian Bank's
Honolulu-based parent company
is buying a Midwest bank for $1.2 billion
The parent of First Hawaiian Bank, which broadened its reach last month to the Midwest with an agreement to purchase a Fargo, N.D.-based bank, said yesterday that earnings grew 10.7 percent in the first quarter compared with a year ago.
BancWest Corp., also parent of San Francisco-based Bank of the West posted net income of $113.1 million compared with $102.1 million a year ago. No earnings per share were reported since BancWest is a subsidiary of French banking giant BNP Paribas SA.
"BancWest continues to generate organic growth (excluding acquisition-generated growth) at a double-digit percentage rate and we reduced our ratio of nonperforming assets for the sixth consecutive quarter," said Walter A. Dods Jr., chairman and chief executive officer of BancWest.
Nonperforming assets were 0.58 percent of loans and foreclosed properties at the end of March. That showed improvement from the 0.59 percent rate at the end of December and 0.98 percent of a year ago.
BancWest's definitive agreement to acquire publicly traded Community First Bankshares Inc. is expected to close during the third quarter of this year. The $1.2 billion deal, in which the Honolulu-based bank will pay $32.35 in cash for each Community Bank share, still requires approval from Community First shareholders and federal and state banking regulators.
"Our pending acquisition of Community First Bankshares will make BancWest the seventh largest bank holding company in the western United States," said Don J. McGrath, president and chief operating officer of Bank of the West. "Community First operates in growing states that complement Bank of the West's existing footprint."
Community First, which will become part of Bank of the West, will offer BancWest new exposure in 10 states -- Arizona, Colorado, Iowa, Minnesota, Nebraska, North Dakota, South Dakota, Utah, Wisconsin and Wyoming. Community First also has branches in California and New Mexico, where Bank of the West already operates.
At the end of March, BancWest had total assets of $38.9 billion, up 11.5 percent from $34.9 billion a year ago. Loans and leases grew 9 percent to $26.2 billion from $24.2 billion. And deposits rose 9.9 percent to $26.7 billion from $24.3 billion.
When the deal is finalized, BancWest will have $44 billion in assets and serve 3.4 million accounts through more than 510 branches in 17 states, Guam and Saipan.
BancWest's allowance for credit losses improved last quarter to 1.51 percent of total loans and leases from 1.65 percent a year earlier and 1.52 percent at the end of December.
Net interest margin, which reflects the difference of what a bank pays depositors and what it brings in from loans, slipped to 3.98 percent from 4.49 percent a year ago. Net interest income, however, rose 1.8 percent to $321 million as loans and lease rose 13.8 percent.
Noninterest income, which includes revenue from service charges and fees, rose 7 percent to $101.4 million from a year ago while noninterest expense fell 0.8 percent to $218.9 million.