Acquisition helps boost profits 21.6% for BancWest
BancWest Corp., the rapidly expanding parent of First Hawaiian Bank, posted a 21.6 percent increase in fourth-quarter earnings that was helped by the completion of its $1.3 billion acquisition of Omaha, Neb.-based Commercial Federal Corp.
The Honolulu-based bank, which also owns San Francisco-headquartered Bank of the West, had net income of $156.1 million, up from $128.3 million a year earlier.
BancWest's acquisition, which closed in December, gave it 204 more banking locations, allowing it to broaden operations into three new states as well as expand its presence in four other states. BancWest now has assets of $66.3 billion and 742 branches in 20 Western and Midwestern states, Guam and Saipan.
Excluding after-tax restructuring and integration expenses related to acquisitions, BancWest's earnings would have risen 23.5 percent in the fourth quarter over a year earlier. Those expenses came to $8 million last quarter and $4.5 million in the year-earlier period.
The bank closed deals to buy Community First Bankshares Inc. and USDB Bancorp in November 2004.
"The improvement is a result of our successful acquisition strategy and solid internal growth in both our Bank of the West and First Hawaiian Bank subsidiaries," said Don McGrath, president and chief executive of BancWest.
McGrath singled out Don Horner, president and CEO of First Hawaiian Bank, and said that Horner and his team "performed extraordinarily well in both the fourth quarter and for the year overall."
In all of 2005, BancWest's net income was up 24.7 percent to $590.4 million from 2004.
The bank saw its assets jump 32.5 percent last quarter, loans and leases rise 33.7 percent to $43.7 billion and deposits gain 26.1 percent to $42.4 billion. The gains were due both to the Commercial Federal acquisition and internal growth.
BancWest's net interest income, which reflects the difference between what it pays depositors and what it brings in from loans, rose 14.2 percent to $432.1 million. However, BancWest's net interest margin slipped to 3.51 percent from 3.84 percent a year ago.
BancWest's credit quality worsened last quarter, when nonperforming assets were 0.51 percent of loans and foreclosed properties, compared with 0.45 percent a year earlier.
Noninterest income, which includes revenue from service charges and fees, grew 21.3 percent to $140.9 million while noninterest expenses, largely due to acquisitions, increased 14.4 percent to $317.9 million.