Acquisitions, growth boost BancWest
First Hawaiian Bank's parent, bolstered by double-digit percentage growth in its assets, loans and deposits, said yesterday that third-quarter net income rose 26.7 percent over the year-earlier period.
BancWest Corp., which also owns San Francisco-based Bank of the West, had earnings of $148.6 million compared with $117.2 million in the third quarter of 2004.
The fast-growing bank, which closed deals for Community First Bankshares Inc. and USDB Bancorp last November, expects its $1.36 billion acquisition of Omaha, Neb.-based Commercial Federal Corp. to close in December. The deal has all the necessary regulatory approvals and only needs the go-ahead from Commercial Federal shareholders, who will vote on the merger Nov. 1.
"(Commercial Federal's) branch network and presence in major Midwestern markets will deepen our position in Colorado, Nebraska, Arizona and Iowa, while introducing our brand for the first time in many Kansas, Oklahoma and Missouri communities," said BancWest's president and chief executive, Don McGrath.
After the acquisition is completed, Commercial Federal will fold into Bank of the West, which will become the third-largest commercial bank west of the Mississippi River. BancWest will have about $64 billion in assets and serve more than 4 million customer accounts through 737 locations in 20 states.
In the last quarter, BancWest's assets grew 32 percent to $54.6 million from a year earlier. Loans and leases increased 26.2 percent to $35.1 billion. And deposits gained 25.3 percent to $35.6 billion.
"Despite the negative effect a flattening yield curve has had on the company's net interest margin, (internal) growth, plus the contribution of last year's bank acquisitions in California, the Rockies and the Midwest, continue to drive strong year-over-year earnings growth," McGrath said.
BancWest's net interest income, which reflects the difference of what it pays depositors and what it brings in from loans, jumped 22.1 percent to $403.7 million. However, BancWest's net interest margin slipped to 3.61 percent from 3.83 percent a year ago.
McGrath, the longtime president and CEO of Bank of the West, took over as CEO of BancWest in January following the retirement of Walter Dods Jr., who has remained with BancWest as chairman.
BancWest's credit quality improved last quarter, when nonperforming assets were 0.41 percent of loans and foreclosed properties, compared with 0.44 percent a year earlier.
Noninterest income, which includes revenue from service charges and fees, rose 30.5 percent to $136.8 million while noninterest expense gained 24 percent to $290.7 million.
