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Bankoh parent
sells 9 branches
in Arizona

The move boosts
Pacific Century stock

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By Tim Ruel

Star-Bulletin

Zions Bancorp., a Salt Lake City-based bank holding company with $22 billion in assets, is buying all nine of Bank of Hawaii's affiliate branches in Arizona.

Pacific Century Financial Corp., parent of Bank of Hawaii, announced yesterday that Zions has agreed to buy the Arizona branch network for an undisclosed price. Pacific Century said it expects to record a pre-tax gain from $20 million to $23 million because of the transaction.

Pacific Century's stock gained 31 cents to close at $18.38 today on the New York Stock Exchange. The stock, which hit a nearly 10-year closing low of $11.25 on Oct. 27, is now down less than 2 percent for the year.

The purchase is expected to close in the second quarter of next year, pending regulatory approval, a Pacific Century spokesman said yesterday.

The branches, owned by Bankoh affiliate Pacific Century Bank N.A., are in Phoenix, Scottsdale, Tucson, Green Valley, Mesa, Prescott and Yuma. The branches service about $225 million in loans and $400 million in deposits, and employ 75 people.

Following the change of ownership, Zions will merge the nine branches into its subsidiary, National Bank of Arizona, the state's fourth-largest bank with $1.9 billion in assets and 41 branches.

"Pacific Century's focus, in terms of customers, is very similar to ours," John Gisi, president and chief executive of National Bank of Arizona, said in a statement.

The company's parent, Zions, specializes in serving small- to mid-size businesses. The company operates banks in California, Colorado, Idaho, Nevada, New Mexico, Utah and Washington state. Zions has market capitalization of $5.4 billion, more than three times that of Pacific Century.

Zions' stock, traded on the Nasdaq market, rose 44 cents to close at $62.06. The stock is up 6.5 percent for the year.

Pacific Century hired a new CEO, Michael O'Neill, last month to help it restore investor confidence and improve its financial performance.

The company late last month said it had retained the investment banking company Credit Suisse First Boston to find a buyer for the Arizona branches. The company entered the Arizona market in 1987 with the purchase five First National Bank of Arizona branches.

It later bought four other branches.

Bank of Hawaii also announced last week that it was selling its credit card portfolio to a unit of American Express Co.