Hawaii bank
mergers far from
uncommon

Combinations usually involved
eliminating some bank branches

Regulators to weigh in
April 25 deadline set
CPB earnings up 14%

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By Russ Lynch
rlynch@starbulletin.com

Hawaii bank mergers, such as Central Pacific Bank's proposed acquisition of City Bank, are not unusual. There have been many over the years and in the process some venerated names have been lost.

Branches have closed, too, when a buyer had outlets close to those of the institution it bought. Hawaii residents are accustomed to seeing new names and logos posted on the buildings that housed their favorite financial institutions.

In the end, however, Hawaii's financial institutions remain strong.

The biggest bank merger series on record in Hawaii was First Hawaiian Bank's 1998 merger, worth about $1 billion, with San Francisco-based Bank of the West to create BancWest Corp., and the French bank BNP Paribas' $2.5 billion purchase in late 2001 of the 55 percent of BancWest it didn't already own.

But there have been many smaller deals, some of them because of the failure or near-failure of an institution.

Giant Bank of America entered Hawaii in 1992 with the $165 million purchase of HonFed Bank. The Bank of America Hawaii assets were in turn acquired by American Savings Bank, a subsidiary of Hawaiian Electric Industries Inc., in late 1997 for $96 million.

Ten of the 39 Bank of America branches were closed, as were seven of the 47 American Savings branches.

San Francisco-based Bank of the Orient paid the Federal Deposit Insurance Corp. about $2 million in late 2000 for the assets and deposits of Bank of Honolulu, which had been closed by the FDIC because it was insolvent.

First Hawaiian Bank, long before its merger with the French bank, had several times been an instrument of change.

The bank that started early last century as Bishop Bank and later became First National Bank and then First Hawaiian, acquired 11-branch Hawaii Thrift & Loan in mid-1975, turning it into First Hawaiian Creditcorp.

In 1991, First Hawaiian acquired the local business of an immigrant from the mainland, First Interstate Bank. In 1993, First Hawaiian acquired century-old Pioneer Federal Savings & Loan and in 1997 merged Pioneer directly into First Hawaiian.

City Bank's parent CB Bancshares Inc., now being wooed by Central Pacific, did a major acquisition itself in 1993, when it bought International Savings & Loan.

In mid-2000, CBBI merged International into City Bank and the International Savings name disappeared.

In 1998, Pacific Century Financial Corp., parent of Bank of Hawaii, bought First Federal Savings and later closed two dozen branches, some of them Bank of Hawaii's and some First Federal's. The remaining First Federal branches became Bank of Hawaii branches and the First Federal name also vanished.

Last year, Pacific Century shed most of its overseas operations and changed its name back to Bank of Hawaii.

Central Pacific parent CPB Inc. has said that if it succeeds in its takeover of City Bank, the City Bank branches will be renamed Central Pacific Bank.

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Central Pacific Bank
City Bank