There’s a new
No. 1, size-wise,
in isle banks

By a narrow margin, the
parent of First Hawaiian is
larger than the parent
of Bank of Hawaii

By Rob Perez
Star-Bulletin

By a smidgen, the parent of First Hawaiian Bank can now lay claim to being Hawaii's largest financial services company.

BancWest Corp. yesterday reported its assets as of Dec. 31 totaled $15,049,895,000, topping by a mere $33 million the longtime leader of the industry, Pacific Century Financial Corp.

Pacific Century on Wednesday said its year-end assets amounted to $15,016,563,000. Pacific Century is parent of Bank of Hawaii, First Hawaiian's chief rival.

When dealing with multibillion-dollar amounts, the $33 million difference between the two banking behemoths is minuscule -- not even half of 1 percent. But First Hawaiian now gets in-your-face bragging rights as the largest locally based financial services company.

It also is Hawaii's largest company based on stock market value: about $2.7 billion.

"It's very gratifying," said Walter A. Dods Jr., BancWest's chairman and chief executive officer. "We're very proud of it."

A Bank of Hawaii spokeswoman did not respond to a request for comment.

First Hawaiian moved to the top of the asset heap after merging with California-based Bank of the West in November. Before that deal, First Hawaiian was a distant second to Pacific Century, reporting assets of $8.2 billion as of Sept. 30, 1998.

The merger catapulted BancWest over Pacific Century not just in asset size.

BancWest reported having more deposits -- $11.3 billion vs. $9.6 billion for Pacific Century -- at year's end. It also had a higher volume of loans -- $11.3 billion, compared with Pacific Century's $9.4 billion. BancWest said half its deposits and nearly two-thirds of its loans and earnings now come from the mainland.

On a market capitalization basis (the price of its stock multiplied by shares outstanding), BancWest also leads Pacific Century by a wide margin: $2.7 billion vs. $1.8 billion as of yesterday's prices.

The last time First Hawaiian could boast of being bigger than Bank of Hawaii was in 1958 -- the year before statehood.

At the time, First Hawaiian, then called Bishop National Bank, had assets of $284 million, compared with Bank of Hawaii's $270 million.

The latest numbers were included yesterday in BancWest's posting of its fourth-quarter and 1998 financial results.

It was the first financial report since the Nov. 1 merger and included two months of the combined entity.

For the three months ended Dec. 31, the company reported a 44.5 percent drop in earnings, largely because of costs associated with the merger.

BancWest's net income fell to $11.2 million, or 6 cents a share, from $20.1 million, or 63 cents a share, in the year-earlier period.

On an operating basis (excluding restructuring, merger-related and other one-time costs totaling $21.9 million), the company's earnings were $33 million, up 64.2 percent.

As a result of the merger and the issuance of 26.2 million additional shares, the operating earnings amounted to 67 cents a share, up 6.3 percent.

For the year, the company earned $76.6 million, down 9.1 percent from 1997. It had operating earnings of $98.5 million, or $2.76 a share, a 16.9 percent increase.

Its assets jumped 86 percent from a year before, deposits rose 84.9 percent and loans were up 81.8 percent, primarily because of the merger.

Pacific Century on Wednesday reported fourth-quarter net income of $35 million, up 5.6 percent from $33.1 million in the same period of 1997.

For all of 1998, Bank of Hawaii's parent had net income of $107 million, down 23 percent from $139.5 million in 1997.