Acquisitions bolster profits
for First Hawaiian’s parent

First Hawaiian Bank's parent, reaping the benefits of a full quarter of earnings from two recently acquired banks, increased net income 20.8 percent in the first three months of the year to a record $136.6 million.

BancWest Corp., which also owns San Francisco-based Bank of the West, bought Community First Bankshares Inc. and USDB Bancorp on Nov. 1. The acquisitions that made BancWest the seventh-largest bank holding company in the western United States also allowed it to increase its assets, loans and deposits in the first quarter by 26 percent or greater from a year earlier.

The company had earnings of $113.1 million in the first quarter of 2004.

"Continued organic (internal) growth, plus our first full quarter following the acquisitions of Community First and Union Safe Deposit, produced yet another earnings record," said Don McGrath, president and chief executive of BancWest.

McGrath, the longtime president and CEO of Bank of the West, took over as CEO of BancWest on Jan. 1 following the retirement of Walter Dods Jr., who has remained with BancWest as nonexecutive chairman.

BancWest, a subsidiary of French banking giant BNP Paribas SA, had after-tax restructuring expenses of $3.2 million in the first quarter related to the two acquisitions. Excluding those expenses, BancWest's net income would have increased 23.6 percent from a year earlier.

Total assets soared 32.1 percent to $51.4 billion from $38.9 billion a year ago. Loans and leases rose 26.3 percent to $33.1 billion. And deposits increased 30.7 percent to $35 billion from $26.7 billion.

BancWest, which now has 541 branches in 17 Western and Midwestern states, Guam and Saipan, rebranded Community First into Bank of the West on Dec. 3, 2004, and merged the branches of Union Safe Deposit Bank into Bank of the West on Jan. 21, 2005.

Community First, which operated 156 branches in 12 states, was purchased for $1.2 billion and USDB, which had 19 branches in San Joaquin and Stanislaus counties in California, was bought for $245 million.

BancWest's credit quality improved last quarter as nonperforming assets were 0.45 percent of loans and foreclosed properties, compared with 0.58 percent a year earlier. BancWest's allowance for credit losses dropped to 1.31 percent of total loans and leases from 1.51 percent in the first quarter of 2004.

BancWest's net interest margin, which reflects the difference of what the bank pays depositors and what it brings in from loans, slipped to 3.80 percent from 3.96 percent a year ago. But net interest income jumped 23.3 percent to $394.4 million as the acquisitions of Community First and USDB helped boost growth in average loans and leases.

Noninterest income, which includes revenue from service charges and fees, rose 19.8 percent to $122.8 million while noninterest expense, which included merger-related expenses of $5.3 million, jumped 33.4 percent to $292.1 million.

BancWest reduced its provision for loan and lease losses in the quarter to $11.1 million from $18.9 million.