BancWest records
strong quarter

Acquisitions helped First
Hawaiian's parent company

By Russ Lynch
Star-Bulletin

BancWest Corp., the Honolulu-based company that has been on a bank-buying binge over the past year, saw its per-share earnings rise 5.8 percent in the second quarter as its mainland acquisitions helped boost the bottom line.

The company, the parent of First Hawaiian Bank in Hawaii and Bank of the West and SierraWest Bank in California, said second-quarter per-share earnings equaled 73 cents a share, compared with 69 cents a share a year earlier. BancWest emphasized per-share earnings in the financial report issued late yesterday because its big expansion since the 1998 quarter distorted the overall picture.

For example, net profit for the three months through June 30 was up 93.9 percent at $42 million, from $21.7 million in the year-earlier quarter. The near doubling of profits was because the company nearly doubled in size through the acquisition of Bank of the West in November.

The earnings-per-share figure was in line with estimates by Wall Street analysts that follow the company. BancWest shares closed down 19 cents at $39.81 in trading on the New York Stock Exchange today.

BancWest's assets as of June 30, $15.4 billion, were up 88 percent from assets of $8.2 billion at the same time last year. The acquisition of Bank of the West's parent company and the subsequent merger into BancWest was done through the issuance of new stock, increasing the number of shares outstanding. On June 30, BancWest had 57.5 million shares outstanding, up 84.9 percent from 31.1 million shares a year ago. BancWest's deposits on June 30 totaled $11.6 billion, up 87.1 percent from $6.2 billion at the end of the 1998 quarter. Loans of $11.7 billion were up 85.7 percent from $6.3 billion a year earlier.

On the income side, Walter A. Dods Jr., BancWest chairman and CEO, said that because of new merger accounting rules, the cash earnings per share figure is becoming recognized as the best measure of a company's performance.

That figure for BancWest was 86 cents in the latest quarter, up 16.2 percent from 74 cents a year ago.

Income grew at the First Hawaiian subsidiary by bringing in more money from fees and by cost cutting to deal with Hawaii's sluggish economy, said Dods said.

First Hawaiian has trimmed 600 positions over the past three years, about 20 percent of the payroll before the cuts started, Dods said adding that almost all of the cuts were through attrition such as retirement and leaving vacated jobs unfilled.

After nine flat years, the Hawaii economy is beginning to show signs of a slight rebound, Dods said. If Japan and the rest of Asia continue their recovery, BancWest's major markets of Hawaii and California will benefit, he said.

BancWest's acquisition of California's SierraWest Bancorp, which came after the end of the latest quarter and therefore doesn't show in the quarterly figures, was for $180 million worth of BancWest stock. That merger increased BancWest's assets to $16.3 billion.

In the third quarter, BancWest expects to report one-time merger restructuring charges of about $6.5 million but that expense will be countered to some extent by the increased income that will come from SierraWest, the company said.