First Hawaiian parent
lifts earnings 15.6%
BancWest Corp., parent of First Hawaiian Bank in Hawaii and Bank of the West in California, showed a 15.6 percent increase in third-quarter earnings, reporting a net profit of $112.2 million compared to $97.1 million in the third quarter of last year.
This time the boost was not from acquisitions, an earnings expander for the bank holding company in recent quarters, but from day-to-day performance.
Conservative lending practices and a strategy of diversifying the company's activities have brought good results, said Walter A. Dods Jr., chairman and chief executive officer.
"The diversification strategy has really paid off," Dods said, because the banks didn't have any significant percentage of their loans in any one market, such as Silicon Valley.
The recovering economy in the islands is also helping. "Hawaii is starting to come back very strong," Dods said.
The three months through Sept. 30 made the second quarter in which performance was directly comparable with the previous year. BancWest's acquisition of United California Bank no longer skews the results because it was in March 2002. There have been no acquisitions since.
"Both Bank of the West and First Hawaiian Bank have achieved double-digit earnings increases for 2003, relative to the same period last year," Dods said. "Our ratio of nonperforming assets to total loans and leases and foreclosed properties has improved for the fourth straight quarter," he said.
Assets of $37.4 billion on Sept. 30 were up more than 9 percent from $34.3 billion a year ago. Loans and leases of $25.3 billion were up 5 percent from $24.1 billion and deposits of $25.9 billion were up 6.1 percent from $24.4 billion at the end of the 2002 third quarter.
BancWest, whose chairman Dods is based in Honolulu while Don McGrath, president and chief operating officer, is based in San Francisco, said it has improved its credit quality.
Nonperforming assets as of Sept. 30 were equal to 0.71 percent of loans and foreclosed properties, a substantial improvement from the 1.12 percent reported a year earlier and an improvement from the 0.75 percent level of June 30.
Subsidiary Bank of the West, headquartered in San Francisco, has 295 branches in California, Oregon, New Mexico and Nevada. First Hawaiian Bank has 61 branches in Hawaii, Guam and Saipan.
As a wholly owned subsidiary of French banking giant BNP Paribas, BancWest no longer has shares of its own so does not report per-share earnings, but continues to publish its quarterly financials.
