Bankoh, long rumored
as takeover target,
stays on own

---

By Rick Daysog
Star-Bulletin

The tale of Hawaii's two banks doesn't lack irony.

First Hawaiian, long known for its local ties, will cease to be a publicly traded company and will become a wholly owned unit of French banking giant BNP Paribas SA.

But Bank of Hawaii, considered a takeover target during the late 1990s, will remain independent due to its financial woes.

Walter Dods, chairman and chief executive officer of First Hawaiian Bank and its parent BancWest Corp., said that all of First Hawaiian Bank's decisions will continue to be made at the local level and that customers will see no difference.

When First Hawaiian first merged with BancWest back in 1998, the two companies signed a stand-still agreement in which local management -- Dods, First Hawaiian President Jack Tsui, Chief Financial Officer Howard Karr and other senior managers -- remained on board.

Dods noted that he and the bank's senior team will be retained under a three-year contract and for the past five years, he, Tsui and Karr have been grooming the next generation of local management to take the helm.

"Do we think that the bank and the holding company will be run the same? The answer is yes," Dods said. "Why mess with a good thing?"

O'Neill, meanwhile, believes that many of the recent steps taken by Bank of Hawaii will improve its chance of remaining independent while increasing shareholder value.

With the bank's stock price doubling during the past five months from to $24 a share from $11 a share in late October, Pacific Century becomes much more expensive to buy, O'Neill said.

"As our stock price continues to increase, our chances of remaining independent are very good," he said.

In many ways, the fate of the two banks should be viewed in the context of Hawaii's kamaaina corporations.

While companies like Alexander & Baldwin Inc. have adjusted to the new economic order, other former Big Five corporations like C. Brewer & Co. and Amfac are holding on for dear life. Others, like Dole Food Co,. are no longer based here.

Whether Pacific Century and BancWest fit into the former or latter categories is a part of a script that is still being written.

"For the past 100 years, Hawaii's two banks were owned by the local community," said analyst Richard Dole, chief executive officer of Dole Capital. "First Hawaiian will no longer be a Hawaii bank and Bank of Hawaii may not be far behind."