First Hawaiian’s
parent buys thrift

BancWest agrees to buy Commercial
Federal Corp. for $1.36 billion,
expanding its Midwest presence

SAN FRANCISCO » Honolulu-based BancWest Corp. said it is buying Midwestern thrift Commercial Federal Corp. for $1.36 billion, continuing a shopping spree that has built it into one of the nation's largest banks west of the Mississippi.

Marking its 16th acquisition in the past 15 years, the parent of First Hawaiian Bank is paying $34 per share -- a 31 percent premium above Commercial Federal's closing price yesterday of $25.94 on the New York Stock Exchange. Commercial Federal's stockholders also will receive a one-time dividend of 50 cents per share after the all-cash deal closes, something expected to occur late this year.

Omaha, Neb.-based Commercial Federal, the nation's 12th largest thrift with assets of $10.4 billion, will become part of Bank of the West, an obscure Northern California bank until it began an aggressive expansion in the early 1990s with the backing of its current owner, Paris-based BNP Paribas.

Commercial Federal's heritage dates back to 1887 while Bank of the West opened in 1874 as the Farmers National Gold Bank. It became the Bank of the West 26 years ago.

With the Commercial Federal acquisition, Bank of the West will pick up another 198 branches, including 59 offices in three states -- Missouri, Oklahoma and Kansas -- where it previously didn't operate. Commercial Federal's other branches are in Colorado, Nebraska, Iowa and Arizona.

No branch closures are planned after the takeover, Bank of the West spokesman Gerry Keir said. Bank of the West also expected to retain almost all of Commercial Federal's 2,800 employees. The bank's parent company already employs 10,000 workers, including the payroll of First Hawaiian Bank.

"Although the sign on the door will change, Commercial Federal customers will find the same familiar faces in their branches," said Don McGrath, BancWest's chief executive. McGrath also plans to explore other possible acquisitions in the markets served by Commercial Federal branches.

Commercial Federal's profits have shrank in each of the past two years. The bank earned $76.4 million last year, a 14 percent decrease from 2003. BancWest posted a 2004 profit of $473.4 million, an 8 percent increase from the previous year.

Bank of the West established a toehold in the Midwest last year with the $1.2 billion acquisition of Fargo, N.D.-based Community Bankshares Inc., which had 184 branches in 10 states.

After its latest takeover is done, Bank of the West expects to have $64 billion in assets, more than 4 million customers and 739 branches in 20 states. San Francisco-based Wells Fargo & Co. and Minneapolis-based U.S. Bancorp. are the only larger banking companies with headquarters in the West.