Magazine article American Banker

Hawaii's Biggest Bank, Straying from Mainland Strategy, to Buy Thrift

Magazine article American Banker

Hawaii's Biggest Bank, Straying from Mainland Strategy, to Buy Thrift

Article excerpt

BancWest Corp. of Honolulu has agreed to buy Standard Financial Corp., a small Hawaiian thrift, for an undisclosed amount.

The deal, which was announced late Thursday, would give BancWest deposits valued at roughly $18 million and about $16 million of loans. BancWest, the $16.7 billion-asset parent of First Hawaiian Bank, did not reveal terms of the sale, but analysts estimated the price to be roughly 10% of deposits, or $1.8 million.

The deal, which is expected to close this spring, surprised observers. BancWest, the product of a 1998 merger between First Hawaiian Inc. and Banque Nationale de Paris' California subsidiary, Bank of the West, had adopted a strategy of diversifying its assets away from the sluggish island economy. Since the merger, BancWest has derived about 72% of earnings from high-growth, West Coast markets.

Acquiring Standard Financial "seems like a diversion from the stated plan," said Erika L. Hill, an analyst at Pacific Crest Securities in Seattle.

David H. Winton, an analyst at Keefe, Bruyette & Woods Inc. in New York, said the reportedly low price and easy absorption of the loans and deposits made the deal hard to pass up.

"I'm sure they looked at this as a one-off deal where they could get some loans that are in decent shape, pay a financially compelling price, and see the cost saves go to the bottom line," he said. "The premium they're paying amounts to a rounding error."

BancWest chief financial officer Howard H. Karr said Standard Financial is owned by the Totoki family, whose members are long-time First Hawaiian private banking customers. …

Search by... Author
Show... All Results Primary Sources Peer-reviewed

Oops!

An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.