FHB parent firm reports $128.3M earnings

HONOLULU and SAN FRANCISCO—BancWest Corp., parent company of First Hawaiian Bank and Bank of the West reported Friday a net income of $128.3 million for the fourth quarter of 2004, up 12.0 percent from the same quarter of 2003.

For the full year of 2004, BancWest’s net income was $473.4 million, up 8.4 percent from the same period of 2003.

On Nov. 1, 2004, BancWest completed its acquisitions of Community First Bankshares Inc. and USDB Bancorp. Branches of Community First National Bank were rebranded on Dec. 3, 2004, with the merger of Community First into Bank of the West. Branches of Union Safe Deposit Bank, a USDB Bancorp subsidiary, was merged into Bank of the West on Jan. 21.

This made BancWest the seventh largest bank holding company in the western United States, with $50.1 billion in assets and 543 branches in 17 Western and Midwestern states, Guam and Saipan.

“These acquisitions have significantly enlarged BancWest’s branch network, expanding our company into the Intermountain and Midwestern regions of the nation. At the same time, we continue to see strong internal growth from our existing Bank of the West and First Hawaiian Bank operations,” said Don J. McGrath, president and chief executive officer of BancWest.

Net income for the quarter included after-tax restructuring expenses of $4.5 million related to the two acquisitions. Excluding these expenses, net income would have increased 15.9% for the fourth quarter from the same period in 2003. Net income for the full year of 2004 included after-tax restructuring expenses of $9.5 million. Excluding these expenses, net income would have increased 10.6% for the year.

BANCWEST’S 4Q RESULTS

BancWest had total assets of $50.1 billion at Dec. 31, 2004, up 30.5 percent from a year earlier. Loans and leases totaled $32.7 billion, up 27.1 percent. Deposits were $33.6 billion, up 27.3 percent. The increases were due both to internal organic growth and to the acquisitions completed in the fourth quarter.

BancWest’s nonperforming assets were 0.45 percent of loans and foreclosed properties at Dec. 31, 2004, an improvement from 0.59 percent a year earlier.

Consistent with the improvement in credit quality, BancWest’s allowance for credit losses was 1.33 percent of total loans and leases at Dec. 31, 2004, a reduction from 1.52 percent a year earlier.

Net interest income for the quarter was $378.4 million, up 14.8 percent from the fourth quarter of 2003, with the November acquisitions of Community First and Union Safe Deposit contributing to 25.3 percent growth in average earning assets.

Net interest margin was 3.84 percent compared with 4.17 percent for the same quarter a year ago.

Noninterest income, at $116.1 million, increased 24.6 percent from the fourth quarter of 2003.

Noninterest expense was $277.9 million for the quarter, up 26.6 percent from the same quarter a year ago, due largely to the acquisitions. Excluding $7.6 million of merger-related expenses, noninterest expense increased 23.2 percent.

FOURTH-QUARTER ACQUISITIONS

During the quarter, BancWest completed two acquisitions that expanded its operations into 10 additional states and increased its presence in California’s Central Valley. BancWest acquired:

* Community First Bankshares, Inc., parent company of Community First National Bank and Community First Insurance, Inc.; and

* USDB Bancorp, parent company of Union Safe Deposit Bank.

The Community First acquisition introduced the Bank of the West “Bear” brand into Arizona, Colorado, Iowa, Minnesota, Nebraska, North Dakota, South Dakota, Utah, Wisconsin and Wyoming. The USDB acquisition added to BancWest’s presence in San Joaquin and Stanislaus Counties in California’s Central Valley. BancWest now has 243 branches in California.

BancWest acquired Community First Bankshares by paying $32.25 in cash for each share of its common stock. As of September 30, 2004, Community First Bankshares had total assets of $5.5 billion, deposits of $4.4 billion and loans of $3.5 billion. Its Community First National Bank subsidiary operated 156 branches in 12 states in the Southwest, Rocky Mountains, Great Plains and east to the Great Lakes.

USDB, which had been headquartered in Stockton, California, operated 19 Union Safe Deposit Bank branches in San Joaquin and Stanislaus Counties. As of September 30, 2004, USDB had total assets of $1.2 billion, deposits of $0.9 billion and loans of $0.7 billion.

CEO TRANSITION COMPLETED

On Dec. 31, 2004, Walter A. Dods, Jr. retired as BancWest’s chief executive officer. He was succeeded in that position by Don J. McGrath, who had been president and chief operating officer. Dods will remain with BancWest as nonexecutive chair.

BancWest Corp. (www.bancwestcorp.com) is a financial holding company with assets of $50.1 billion. It is a wholly owned subsidiary of BNP Paribas (www.bnpparibas.com), an international financial services group. BancWest is headquartered in Honolulu, Hawaii, with an administrative headquarters in San Francisco, California.