##### Table of Contents



UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D. C. 20549
 
 FORM 10-Q
 þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THESECURITIES EXCHANGE ACT OF 1934
 For the quarterly period ended March 31, 2005
 OR o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THESECURITIES EXCHANGE ACT OF 1934
 Commission file number 0-7949 
 BANCWEST CORPORATION  
 Delaware
(State of incorporation)
    
    99-0156159
(I.R.S. Employer Identification No.)
 999 Bishop Street, Honolulu, Hawaii
(Address of principal executive offices)
    
    96813
(Zip Code)
 Registrants telephone number, including area code: (808) 525-7000 
 Securities registered pursuant to Section 12(b) of the Act:
    Securities registered pursuant to Section 12(g) of the Act: None   (Title of class) Indicate by check mark whether the registrant (1) has filed all reports required to be filed by
Section 13 or l5(d) of the Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter period that the registrant was required to file such reports), and
(2) has been subject to such filing requirements for the past 90 days. Yes     No Indicate by check mark whether the registrant is an accelerated filer (as defined in
Rule 12b-2 of the Exchange Act). Yes     No P As of May 5, 2005, the number of outstanding shares of each of the issuers classes of
common stock (all of which were beneficially owned by BNP Paribas) was: Class
    
    OutstandingClass A Common Stock, $0.01 Par Value
    
    106,859,123 Shares




---



BANCWEST CORPORATION AND SUBSIDIARIES FORM 10-Q
March 31, 2005  
 INDEX PagePART I. FINANCIAL INFORMATIONItem 1.
    
    Financial Statements(Unaudited)
    
    21Consolidated Statements of Income
    
    21Consolidated Balance Sheets
    
    22Consolidated Statements of Changes in Stockholder's Equity and Comprehensive Income
    
    23Consolidated Statements of Cash Flows
    
    24Notes to Consolidated Financial Statements
    
    25Item 2.
    
    Management's Discussion and Analysis of Financial Condition and Results of Operations
    
    2Consolidated Financial Highlights
    
    2Forward-Looking Statements
    
    3Overview
    
    4Critical Accounting Estimates
    
    4Financial Overview
    
    5Results of Operations
    
    5Net Interest Income
    
    5Noninterest Income
    
    8Noninterest Expense
    
    9Income Taxes
    
    9Operating Segments
    
    10Securities Available For Sale
    
    12Loans and Leases
    
    12Nonperforming Assets and Restructured Loans
    
    13Provision and Allowance for Loan and Lease Losses
    
    14Deposits
    
    15Capital
    
    15Liquidity Management
    
    15Recent Accounting Standards
    
    17Item 3.
    
    Quantitative and Qualitative Disclosures About Market Risk
    
    18Item 4.
    
    Controls and Procedures
    
    20PART II. OTHER INFORMATIONItem 5.
    
    Other Information
    
    41Item 6.
    
    Exhibits and Reports on Form 8-K
    
    41SIGNATURE
    
    
    
    41EXHIBIT 12EXHIBIT 31EXHIBIT 32
  The information furnished in these interim statements reflects all adjustments that are, in
the opinion of management, necessary for a fair statement of the results for such periods. Such
adjustments are of a normal recurring nature, unless otherwise disclosed in this Form 10-Q. The
results of operations in the interim statements are not necessarily indicative of the results
that may be expected for the full year. The interim financial information should be read in
conjunction with the Companys 2004 Annual Report on Form 10-K. 1




---



##### Table of Contents



BancWest Corporation and Subsidiaries
MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS 
 PART I. FINANCIAL INFORMATION 
 Item 2.
Managements Discussion and Analysis of Financial Condition and Results of Operations 
 CONSOLIDATED FINANCIAL HIGHLIGHTS Three Months Ended March 31,2005
    
    
    2004Earnings:(Dollars in thousands)Interest income
    
    
    $558,228
    
    
    
    $416,087Interest expense
    
    
    163,805
    
    
    
    96,126Net interest income
    
    
    394,423
    
    
    
    319,961Provision for loan and lease losses
    
    
    11,100
    
    
    
    18,865Noninterest income
    
    
    122,796
    
    
    
    102,503Noninterest expense
    
    
    292,092
    
    
    
    218,882Income before income taxes
    
    
    214,027
    
    
    
    184,717Provision for income taxes
    
    
    77,423
    
    
    
    71,665Net income
    
    
    $136,604
    
    
    
    $113,052Balance Sheet Data Averages:(Dollars in millions)Average assets
    
    
    $  50,341
    
    
    
    $  38,336Average securities available for sale at cost
    
    
    8,339
    
    
    
    5,835Average loans and leases (1)
    
    
    32,748
    
    
    
    25,942Average deposits
    
    
    34,004
    
    
    
    26,432Average long-term debt
    
    
    6,231
    
    
    
    4,323Average stockholders equity
    
    
    5,800
    
    
    
    4,327Balance Sheet Data At Period End:(Dollars in millions)Assets
    
    
    51,416
    
    
    
    38,914Securities available for sale
    
    
    8,606
    
    
    
    5,873Loans and leases (1)
    
    
    33,218
    
    
    
    26,292Deposits
    
    
    34,958
    
    
    
    26,743Long-term debt
    
    
    6,501
    
    
    
    4,283Stockholders equity
    
    
    5,817
    
    
    
    4,398Selected Financial Ratios For the Period Ended:Return on average total assets (ROA)(2)
    
    
    1.10
    %
    
    
    1.19
    %Return on average stockholders equity (ROE)(2)
    
    
    9.55
    
    
    
    10.51Net interest margin (taxable-equivalent basis)(2)
    
    
    3.80
    
    
    
    3.96Net loans and leases charged off to average loans and leases (2)
    
    
    0.18
    
    
    
    0.22Efficiency ratio (3)
    
    
    56.47
    
    
    
    51.81Average equity to average total assets
    
    
    11.52
    
    
    
    11.29At Period End:Allowance for loan and lease losses to total loans and leases
    
    
    1.31
    
    
    
    1.51Nonperforming assets to total loans and leases and other real estate owned and repossessed personal property
    
    
    0.45
    
    
    
    0.58Allowance for loan and lease losses to nonaccruing loans and leases
    
    
    3.31
    x
    
    
    2.88
    xRegulatory Capital Ratios:Leverage Ratio (4):Bank of the West
    
    
    9.22
    %
    
    
    9.58
    %First Hawaiian Bank
    
    
    10.41
    
    
    
    10.19Tier 1 capital (risk-based):Bank of the West
    
    
    10.88
    
    
    
    10.92First Hawaiian Bank
    
    
    13.88
    
    
    
    13.28Total capital (risk-based):Bank of the West
    
    
    12.66
    
    
    
    13.13First Hawaiian Bank
    
    
    16.09
    
    
    
    15.64
 (1)
    
    Includes loans held for sale.(2)
    
    Annualized.(3)
    
    The efficiency ratio is noninterest expense as a percentage of net
interest income plus noninterest income.(4)
    
    The capital leverage ratios are based on quarterly averages.
 2




---



##### Table of Contents



BancWest Corporation and Subsidiaries
MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS 
 FORWARD-LOOKING STATEMENTS Certain matters contained in this report are forward-looking statements within the meaning
of the Private Securities Litigation Reform Act of 1995. Our forward-looking statements (such as
those concerning our plans, expectations, estimates, strategies, projections and goals) involve
risks and uncertainties that could cause actual results to differ materially from those discussed
in this report. Readers should carefully consider those risks and uncertainties in reading this
report. Factors that could cause or contribute to such differences include, but are not limited to:  (1)
    global, national and local economic and market conditions, specifically with respect to
changes in the United States economy and geopolitical uncertainty;(2)
    the level and volatility of interest rates and currency values;(3)
    government fiscal and monetary policies;(4)
    credit risks inherent in the lending process;(5)
    loan and deposit demand in the geographic regions where we conduct business;(6)
    the impact of intense competition in the rapidly evolving banking and financial services
business;(7)
    extensive federal and state regulation of our business, including the effects of current and
pending legislation and regulations;(8)
    whether expected revenue enhancements and cost savings are realized within expected time
frames;(9)
    matters relating to the integration of our business with that of past and future merger
partners, including the impact of combining these businesses on revenues, expenses, deposit
attrition, customer retention and financial performance;(10)
    our reliance on third parties to provide certain critical services, including data
processing;(11)
    the proposal or adoption of changes in accounting standards by the Financial Accounting
Standards Board (FASB), the Securities and Exchange Commission (SEC) or other standard setting
bodies;(12)
    technological changes;(13)
    other risks and uncertainties discussed in this document or detailed from time to time in
other SEC filings that we make; and(14)
    managements ability to manage risks that result from these and other factors. Our forward-looking statements are based on managements current views about future events.
Those statements speak only as of the date on which they are made. We do not intend to update
forward-looking statements, and, except as required by law, we disclaim any obligation or
undertaking to update or revise any such statements to reflect any change in our expectations or
any change in events, conditions, circumstances or assumptions on which forward-looking statements
are based. The following discussion should be read in conjunction with the consolidated financial
statements and the related notes included elsewhere in this Form 10-Q. 3




---



##### Table of Contents



BancWest Corporation and Subsidiaries
MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS 
 OVERVIEW BancWest Corporation (www.bancwestcorp.com) is a financial holding company with assets
of $51.4 billion. It is a wholly owned subsidiary of Paris-based BNP Paribas. The Company is
headquartered in Honolulu, Hawaii, with an administrative headquarters in San Francisco,
California. As of March 31, 2005, its principal subsidiaries were Bank of the West (BOW) (465 full
service retail branches and 13 limited service retail offices in Arizona, California, Colorado,
Idaho, Iowa, Minnesota, Nebraska, Nevada, New Mexico, North Dakota, Oregon, South Dakota, Utah,
Washington, Wisconsin and Wyoming) and First Hawaiian Bank (FHB) (61 branches in Hawaii, Guam and
Saipan). In this report, BancWest Corporation and Subsidiaries is referred to as the Company,
we or our. BancWest Corporation alone is referred to as the Parent. Strategic Initiatives The Company has continued to implement a series of initiatives that are designed to improve
customer service and expand our physical footprint through branch expansion and acquisitions. The
focus of the Company is to promote long-lasting customer service relationships through advanced
technology and implementing new training vehicles. The Company strives for a high touch
personalized marketing position, promoting brand recognition through logos and community outreach.
The Company is expanding its line of financial services to its customers through internal
initiatives as well as acquisitions. This includes insurance services, where the company continues
to explore acquisitions of independent insurance agencies within the companys footprint. Bank of
the West currently operates 57 insurance agencies in eight states and is planning to expand the
insurance operations through acquisitions. Bank of the Wests Commercial Banking Group is expanding geographically and has increased its
product offering for the Commercial Banking Division, the Agribusiness Banking Division and the
Real Estate Industries Division. The Commercial Banking Group will have two new offices in Denver,
Colorado and Minneapolis, Minnesota and is considering other states to take advantage of the new
footprint resulting from the merger with Community First Bankshares, Inc. (Community First). Bank of the Wests Consumer Finance Group will continue its expansion plans for auto loan
products throughout the Midwest, including those states within BOWs new footprint resulting from
the merger with Community First. Additional expansion of the auto loan products in adjacent
markets is also being considered. First Hawaiian Banks focus is on its core markets of Hawaii, Guam and Saipan. Its primary
focus is on deepening relationships with existing customers. Objectives include emphasis on
effective client segmentation and cross-selling, largely through development and sale of segment
targeted packaged products and services. In addition, due to improving economic conditions in Hawaii, Guam and Saipan, First Hawaiian
Bank seeks to increase loan and deposit volumes by developing relationships with new customers.
Also, as part of the focus on our core markets, First Hawaiian Bank has nearly completed its
planned reduction in Media Finance and Corporate National credits. First Hawaiian Bank is growing its commercial card business, offering
sophisticated credit card products to serve the needs of our business customers at both First
Hawaiian Bank and Bank of the West. Investments are being made in this business line to enhance
customer service and improve staff efficiencies.New initiatives planned for 2005 include a
co-branded debit card in Guam, a Web Cash Manager product for our business customers, expanded use
of new computerized cross-selling tools, and new real estate loan products to meet the needs of our
customers. Key among the elements of the Companys profitability has been the interest rate environment,
from both a deposit and loan pricing standpoint. As an industry, banks and other financial
intermediaries have seen net interest margins decline over the past year principally as a result of
the absolute level and shape of the yield curve. We manage the interest rate and market risks
inherent in our asset and liability balances, while ensuring ample liquidity and diverse funding. 
 CRITICAL ACCOUNTING ESTIMATES Our significant accounting policies are fundamental to understanding our financial position
and results of operations and are discussed in detail in Note 1 (Summary of Significant Accounting
Policies) to the Consolidated Financial Statements in our 2004 Annual Report on Form 10-K. Various
elements of our accounting policies, by their nature, are inherently subject to estimation
techniques, valuation assumptions and other subjective assessments. We have identified two
accounting estimates that we believe are critical due to the levels of subjectivity and judgment
necessary and because it is likely that materially different results would be 4




---



##### Table of Contents



BancWest Corporation and Subsidiaries
MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS reported if different judgments, assumptions and estimates were used. These estimates relate to
the allowance for loan and lease losses and goodwill and are described in more detail in our 2004
Annual Report on Form 10-K in the Critical Accounting Estimates section of Managements
Discussion and Analysis. 
 FINANCIAL OVERVIEW Income Statement Analysis First quarter 2005 compared with first quarter 2004 The Company reported net income of $136.6 million, compared with $113.1 million, an increase
of 20.8%. Net interest income was $394.4 million, compared with $320.0 million. A significant
portion of the increase was due to growth in average earning assets, offset by a lower net interest
margin for the quarter. Average loans and leases increased by $6.8 billion and average securities
available for sale increased by $2.5 billion. The net interest margin decreased 16 basis points (1%
equals 100 basis points) as a result of the effects of a flattening yield curve in which short-term
rates have risen more quickly than long-term rates. Noninterest income was $122.8 million compared
with $102.5 million, an increase of 19.8%, mostly due to increases in trust and investment services
income, vehicle and equipment operating lease income, service charges on deposit accounts and other
service charges and fees. Noninterest expense was $292.1 million compared with $218.9 million, an
increase of 33.4%, mostly due to increases in salaries, wages and employee benefits, occupancy,
intangible amortization, depreciation on vehicle and equipment operating leases and restructuring
and integration costs. Balance Sheet Analysis The Company had total assets of $51.4 billion at March 31, 2005, an increase of 2.7% from
December 31, 2004 and 32.1% from March 31, 2004. Securities available for sale totaled $8.6
billion, an increase of 8.2% from December 31, 2004 and 46.5% from March 31, 2004. Loans and
leases totaled $33.1 billion, up 1.4% from December 31, 2004 and 26.3% from a year ago. Deposits
were $35.0 billion, up 4.0% from December 31, 2004 and 30.7% from a year ago. The Companys nonperforming assets were 0.45% of loans, leases and foreclosed properties at
March 31, 2005 and December 31, 2004 and 0.58% at March 31, 2004. The allowance for loan and lease
losses totaled $432.8 million, a decrease of 0.8% from December 31, 2004 and an increase of 9.1%
from March 31, 2004. The provision for loan and lease losses for the quarter was $11.1 million,
compared with $18.9 million in the first quarter of 2004. The reduction was due to the improvement
in the quality of the loan and lease portfolio. 
 RESULTS OF OPERATIONS 
 Net Interest Income First quarter 2005 compared with first quarter 2004 Net interest income increased to $394 million from $320 million. The increase in net interest income was primarily the result of a $9.7 billion, or 29.9%
increase in average earning assets. The increase in our average earning assets was predominately
the result of increases in loans and leases and securities available for sale as a result of our
acquisitions of Community First and USDB Bancorp (USDB) in the fourth quarter of 2004 and internal
growth. Net Interest Margin First quarter 2005 compared with first quarter 2004 The net interest margin decreased by 16 basis points due primarily to short-term interest
rates increasing faster than long-term interest rates. Our yield on earning assets increased by 23
basis points to 5.38% from 5.15%, while our rates paid on sources of funds increased by 45 basis
points to 1.98% from 1.53%. 5




---



##### Table of Contents



BancWest Corporation and Subsidiaries
MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS Average Earning Assets First quarter 2005 compared with first quarter 2004 The increase in average earning assets was predominately due to increases in the average loan
and lease portfolio and higher average securities available for sale, as a result of the
acquisitions of Community First and USDB and internal growth. The $6.8 billion, or 26.2%, increase
in average total loans and leases was primarily due to increases in consumer lending, purchased
residential mortgages and loans and leases acquired from Community First and USDB. Consumer loans
continue to grow due to the strength in the consumer market and the relatively low interest rates
on consumer loans. Average total securities available for sale were $8.3 billion, up $2.5 billion,
or 42.9%, due to the two acquisitions and purchases of securities. Average Loans and Leases First quarter 2005 compared with first quarter 2004 The increase in loans and leases was primarily due to loans and leases acquired from Community
First and USDB and internal growth. Average consumer loans increased $1.7 billion, or 22.8%,
primarily due to growth in financing for autos, recreational vehicles and pleasure boats, while
loan purchases increased the average residential mortgage portfolio. Average residential real
estate loans increased by $1.6 billion, or 30.8%, average commercial real estate increased by $1.7
billion, or 41.7%, and commercial, financial and agricultural loans increased $1.6 billion, or 31.3%. Average Interest-Bearing Deposits and Liabilities First quarter 2005 compared with first quarter 2004 The $8.2 billion, or 32.4%, increase in average interest-bearing deposits and liabilities was
primarily due to interest-bearing deposits and liabilities acquired from Community First and USDB,
growth in our customer deposit base and increases in average long-term debt and short-term
borrowings. Average deposits increased significantly within regular savings, time deposits,
foreign, and demand deposit portfolios. Borrowings from the Federal Home Loan Bank and structured
repurchase agreements increased average long-term debt, while the increase in short-term borrowings
is primarily due to a short-term borrowing with BNP Paribas, which was issued to finance the
acquisitions of Community First and USDB. 6




---



##### Table of Contents



BancWest Corporation and Subsidiaries
MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS Table 1: Average Balances, Interest Income and Expense, and Yields and Rates
(Taxable-Equivalent Basis) The following table presents consolidated average balances, an analysis of interest
income/expense and yield/rate for each major category of earning assets and interest-bearing
deposits and liabilities for the periods indicated. The taxable-equivalent adjustment is made for
items exempt from Federal income taxes (assuming a 35% tax rate for March 31, 2005 and 2004) to
make them comparable with taxable items before any income taxes are applied. Three Months Ended March 31,2005
    
    
    2004Interest
    
    
    
    
    
    
    
    
    
    
    InterestAverage
    
    
    Income/
    
    
    Yield/
    
    
    Average
    
    
    Income/
    
    
    Yield/Balance
    
    
    Expense
    
    
    Rate(1)
    
    
    Balance
    
    
    Expense
    
    
    Rate(1)(Dollars in thousands)ASSETSEarning assets:Interest-bearing deposits in other banks:Domestic
    
    $
    5,853
    
    
    $
    15
    
    
    
    1.04
    %
    
    $
    7,194
    
    
    $
    8
    
    
    
    0.45
    %Foreign
    
    
    345,527
    
    
    
    2,338
    
    
    
    2.74
    
    
    
    295,879
    
    
    
    807
    
    
    
    1.10Total interest-bearing deposits in other banks
    
    
    351,380
    
    
    
    2,353
    
    
    
    2.72
    
    
    
    303,073
    
    
    
    815
    
    
    
    1.08Federal funds sold and securities purchased under
agreements to resell
    
    
    530,900
    
    
    
    3,218
    
    
    
    2.46
    
    
    
    233,895
    
    
    
    602
    
    
    
    1.04Trading assets
    
    
    4,916
    
    
    
    14
    
    
    
    1.15
    
    
    
    15,018
    
    
    
    14
    
    
    
    0.37Securities available for sale (2):Taxable
    
    
    8,284,802
    
    
    
    74,600
    
    
    
    3.65
    
    
    
    5,827,328
    
    
    
    50,597
    
    
    
    3.49Exempt from Federal income taxes
    
    
    54,638
    
    
    
    726
    
    
    
    5.39
    
    
    
    7,427
    
    
    
    135
    
    
    
    7.31Total securities available for sale
    
    
    8,339,440
    
    
    
    75,326
    
    
    
    3.66
    
    
    
    5,834,755
    
    
    
    50,732
    
    
    
    3.50Loans and leases (3)(4):Domestic
    
    
    32,362,249
    
    
    
    470,452
    
    
    
    5.90
    
    
    
    25,593,879
    
    
    
    357,121
    
    
    
    5.61Foreign
    
    
    385,768
    
    
    
    6,298
    
    
    
    6.62
    
    
    
    347,744
    
    
    
    5,787
    
    
    
    6.69Total loans and leases
    
    
    32,748,017
    
    
    
    476,750
    
    
    
    5.90
    
    
    
    25,941,623
    
    
    
    362,908
    
    
    
    5.63Other interest earning assets
    
    
    219,031
    
    
    
    1,832
    
    
    
    3.39
    
    
    
    156,218
    
    
    
    1,274
    
    
    
    3.28Total earning assets
    
    
    42,193,684
    
    
    
    559,493
    
    
    
    5.38
    
    
    
    32,484,582
    
    
    
    416,345
    
    
    
    5.15Noninterest-bearing assets:Cash and due from banks
    
    
    1,722,785
    
    
    
    
    
    
    
    
    
    
    
    1,374,349Premises and equipment
    
    
    684,382
    
    
    
    
    
    
    
    
    
    
    
    541,319Other intangibles
    
    
    263,753
    
    
    
    
    
    
    
    
    
    
    
    184,359Goodwill
    
    
    4,315,580
    
    
    
    
    
    
    
    
    
    
    
    3,228,346Other assets
    
    
    1,160,542
    
    
    
    
    
    
    
    
    
    
    
    523,518Total noninterest-bearing assets
    
    
    8,147,042
    
    
    
    
    
    
    
    
    
    
    
    5,851,891Total assets
    
    $
    50,340,726
    
    
    
    
    
    
    
    
    
    
    $
    38,336,473LIABILITIES AND STOCKHOLDERS EQUITYInterest-bearing deposits and liabilities:Deposits:Domestic:Interest-bearing demand
    
    $
    369,494
    
    
    $
    484
    
    
    
    0.53
    %
    
    $
    314,032
    
    
    $
    69
    
    
    
    0.09
    %Savings
    
    
    12,822,163
    
    
    
    22,289
    
    
    
    0.70
    
    
    
    10,820,570
    
    
    
    15,741
    
    
    
    0.59Time
    
    
    9,392,121
    
    
    
    51,242
    
    
    
    2.21
    
    
    
    6,717,222
    
    
    
    25,482
    
    
    
    1.53Foreign
    
    
    1,438,080
    
    
    
    6,926
    
    
    
    1.95
    
    
    
    997,080
    
    
    
    2,144
    
    
    
    0.86Total interest-bearing deposits
    
    
    24,021,858
    
    
    
    80,941
    
    
    
    1.37
    
    
    
    18,848,904
    
    
    
    43,436
    
    
    
    0.93Short-term borrowings
    
    
    3,249,884
    
    
    
    19,726
    
    
    
    2.46
    
    
    
    2,130,573
    
    
    
    5,413
    
    
    
    1.02Long-term debt
    
    
    6,230,930
    
    
    
    63,138
    
    
    
    4.11
    
    
    
    4,323,264
    
    
    
    47,277
    
    
    
    4.40Total interest-bearing deposits and liabilities
    
    
    33,502,672
    
    
    
    163,805
    
    
    
    1.98
    
    
    
    25,302,741
    
    
    
    96,126
    
    
    
    1.53Interest rate spread
    
    
    
    
    
    
    
    
    
    
    3.40
    %
    
    
    
    
    
    
    
    
    
    
    3.62
    %Noninterest-bearing deposits
    
    
    9,981,890
    
    
    
    
    
    
    
    
    
    
    
    7,583,455Other liabilities
    
    
    1,056,500
    
    
    
    
    
    
    
    
    
    
    
    1,123,351Total liabilities
    
    
    44,541,062
    
    
    
    
    
    
    
    
    
    
    
    34,009,547Stockholders equity
    
    
    5,799,664
    
    
    
    
    
    
    
    
    
    
    
    4,326,926Total liabilities and stockholders equity
    
    $
    50,340,726
    
    
    
    
    
    
    
    
    
    
    $
    38,336,473Impact of noninterest-bearing sources
    
    
    
    
    
    
    
    
    
    
    0.40
    
    
    
    
    
    
    
    
    
    
    
    0.34Net interest income and margin on total earning assets
    
    
    
    
    
    
    395,688
    
    
    
    3.80
    %
    
    
    
    
    
    
    320,219
    
    
    
    3.96
    %Tax equivalent adjustment
    
    
    
    
    
    
    1,265
    
    
    
    
    
    
    
    
    
    
    
    258Net interest income
    
    
    
    
    
    $
    394,423
    
    
    
    
    
    
    
    
    
    
    $
    319,961
   (1)
    
    Annualized.(2)
    
    Average debt securities available for sale were computed based on amortized costs,
excluding the effects of SFAS No. 115 adjustments.(3)
    
    Nonaccruing loans and leases, and loans held for sale have been included in the
computations of average loan and lease balances.(4)
    
    Interest income for loans and leases included loan fees of $7.0 million and $10.5
million for the three months ended March 31, 2005 and 2004, respectively. 7




---



##### Table of Contents



BancWest Corporation and Subsidiaries
MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS 
 Noninterest Income Three Months Ended March 31,
    
    
    Change2005
    
    
    2004
    
    
    $
    
    
    %(Dollars in thousands)Service charges on deposit accounts
    
    
    $  43,586
    
    
    
    $  40,829
    
    
    
    $  2,757
    
    
    
    6.8
    %Trust and investment services income
    
    
    13,064
    
    
    
    10,302
    
    
    
    2,762
    
    
    
    26.8Other service charges and fees
    
    
    46,031
    
    
    
    38,237
    
    
    
    7,794
    
    
    
    20.4Net gains on sales of securities available for sale
    
    
    418
    
    
    
    367
    
    
    
    51
    
    
    
    13.9Vehicle and equipment operating lease income
    
    
    5,780
    
    
    
    854
    
    
    
    4,926
    
    
    
    576.8Other
    
    
    13,917
    
    
    
    11,914
    
    
    
    2,003
    
    
    
    16.8Total noninterest income
    
    
    $122,796
    
    
    
    $102,503
    
    
    
    $20,293
    
    
    
    19.8
    %
 First quarter 2005 compared with first quarter 2004 The increase in trust and investment services income was primarily due to additional fees from
trust accounts acquired from the acquisition of Community First and higher income resulting from
new business. The increase in other service charges and fees was primarily the result of an increase in
insurance revenue. The additional insurance revenue was the result of the acquisition of Community
First, and its associated insurance business. The increase in vehicle and equipment operating lease income was due to accounting for auto
leases originated from February through July 2004 as operating leases rather than direct finance
leases. 8




---



##### Table of Contents



BancWest Corporation and Subsidiaries
MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS 
 Noninterest Expense Three Months Ended March 31,
    
    
    Change2005
    
    
    2004
    
    
    $
    
    
    %(Dollars in thousands)Personnel:Salaries and wages
    
    
    $104,939
    
    
    
    $  83,455
    
    
    
    $21,484
    
    
    
    25.7
    %Employee benefits
    
    
    48,351
    
    
    
    36,237
    
    
    
    12,114
    
    
    
    33.4Total personnel expense
    
    
    153,290
    
    
    
    119,692
    
    
    
    33,598
    
    
    
    28.1Occupancy
    
    
    28,392
    
    
    
    21,615
    
    
    
    6,777
    
    
    
    31.4Outside services
    
    
    24,442
    
    
    
    20,445
    
    
    
    3,997
    
    
    
    19.6Intangible amortization
    
    
    9,980
    
    
    
    5,763
    
    
    
    4,217
    
    
    
    73.2Equipment
    
    
    14,497
    
    
    
    11,447
    
    
    
    3,050
    
    
    
    26.6Depreciation  vehicle and equipment operating leases
    
    
    5,021
    
    
    
    686
    
    
    
    4,335
    
    
    
    631.9Stationery and supplies
    
    
    8,471
    
    
    
    6,164
    
    
    
    2,307
    
    
    
    37.4Advertising and promotions
    
    
    7,148
    
    
    
    6,327
    
    
    
    821
    
    
    
    13.0Restructuring and integration costs
    
    
    5,350
    
    
    
    --
    
    
    
    5,350
    
    
    
    --Other
    
    
    35,501
    
    
    
    26,743
    
    
    
    8,758
    
    
    
    32.7Total noninterest expense
    
    
    $292,092
    
    
    
    $218,882
    
    
    
    $73,210
    
    
    
    33.4
    %
 First quarter 2005 compared with first quarter 2004 The increase in salaries and wages and employee benefits expense was predominately due to a
higher full-time equivalent employee count as a result of the acquisitions of Community First and
USDB in November 2004. The increase in occupancy expense was primarily due to the acquisitions of Community First and
USDB. The increase in amortization of intangible assets was predominately a result of the
amortization of core deposit and insurance intangibles resulting from the Community First and USDB
acquisitions. The increase in depreciation on vehicle and equipment operating leases was the result of
vehicle depreciation incurred from the change in accounting for auto leases originated from
February through July 2004 as operating leases rather than direct finance leases. The $5.4 million in restructuring and integration costs were related to the acquisitions of
Community First and USDB. The increase in Other was primarily due to data and telecommunications, travel and
entertainment and a reserve for the exposure for merchant services related to an airline that filed
for Chapter 11 reorganization in December 2004. 
 INCOME TAXES Our effective income tax rates (exclusive of the tax equivalent adjustment) for the three
months ended March 31, 2005 and 2004 were 36.2% and 38.8%, respectively. The decrease in the
effective tax rate was due to the reversal of $9.9 million in
reserves for Unitary State Tax liabilities, partly offset by an
increase of $5.6 million in tax reserves for foreign leveraged
leases. The $9.9 million Unitary State Tax amount was comprised
of $6.4 million pertaining to the tax year 2002 and $3.5 million pertaining to the tax 2003. Lease-in/lease-out (LILO) transactions have recently been subject to review on a nationwide
basis by the Internal Revenue Service (IRS) to determine whether the tax deductions connected with
such transactions are allowable for U.S. federal income tax purposes. The Company has entered into
several LILO transactions, which have been the subject of an audit by the IRS. In April 2004, the
Company received a Revenue Agents Report (RAR) which disallowed all deductions associated with the
LILO transactions. In order to avoid potential future interest and penalties, the Company has
paid, under protest, the amounts claimed by the IRS and other tax authorities in the RAR. The
Company continues to believe that it properly reported its LILO transactions has contested the
results of the IRSs audit and is in discussions with the IRS related to those results. Recently the IRS has identified certain sale-leaseback transactions as
listed transactions and is in the process of reviewing them to determine whether the deductions are
allowable for tax purposes. The Company has entered into several such sale, leaseback
transactions, which are currently being audited by the IRS. At the present time, the Company
cannot predict the outcome of these issues. 9




---



##### Table of Contents



BancWest Corporation and Subsidiaries
MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS 
 OPERATING SEGMENTS Our reportable segments are the operating segments that we use in our internal reporting at
Bank of the West and First Hawaiian Bank. Bank of the Wests segments operate primarily in
Arizona, California, Colorado, Idaho, Iowa, Minnesota, Nebraska, Nevada, New Mexico, North Dakota,
Oregon, South Dakota, Utah, Washington, Wisconsin and Wyoming. Certain Bank of the West segments
conduct business nationwide. Although First Hawaiian Banks segments operate primarily in Hawaii,
it also has significant operations outside the state, such as leveraged leases, international
banking and branches in Guam and Saipan. It also has significant operations extending to California
through its automobile dealer flooring and financing activities. Bank of the West Regional Banking First quarter 2005 compared with first quarter 2004 The Regional Banking segments net income increased $9.3 million, or 26.3% from $35.4 million
to $44.7 million. Net interest income increased $53.1 million or 43.0% from last year. The
increase is primarily related to the acquisitions of Community First and USDB in the fourth quarter
of 2004. Noninterest income increased $14.7 million or 33.7%. The increase is primarily due to
the acquisitions, including the insurance agency business, an increase in debit card interchange
revenue, and investment sales fees, offset by a decline in charges for nonsufficient funds and
overdrafts. Noninterest expense increased $54.1 million or 50.2%. The increase is primarily due
to the acquisitions, including the insurance agency business, the inclusion of BancWest Investment Services (BWIS) in the
operating segment and compensation expense. Average loans and leases increased $4.0 billion, or 68.4%. The increase is primarily due to
the acquisitions and large purchases of residential loans since the first quarter of 2004. Average deposits increased $5.6 billion, or 39.1%. The increase is primarily due to the
Community First acquisition in 2004. Commercial Banking First quarter 2005 compared with first quarter 2004 The Commercial Banking segments net income increased to $41.0 million, up $3.0 million, or
7.9%, from $38.0 million. Net interest income increased $4.4 million, or 5.7%. Noninterest income
increased $0.4 million, or 2.2%. The increase is primarily related to increased trust fees due to
accounts acquired from the acquisitions in the fourth quarter of 2004 and loan syndication fees.
Offsetting this increase was a decrease in asset management fees, service charges on deposits and
loan prepayment fees. Noninterest expense increased $2.8 million, or 8.6%. The increase is
primarily due to higher compensation and employee healthcare benefits from the increased full-time
equivalent employees from the acquisitions. Provision for credit losses decreased $0.5 million in
2005, primarily related to a decrease in charge-offs in the Agribusiness Division and increased net
recoveries in the Indirect Leasing unit in 2005. Average loans and leases increased 19.5% to $8.8 billion. The increase was primarily due to
increases in commercial, SBA and construction loans and from the acquisitions. The interest margin
on loans and leases decreased 14 basis points to 2.65% during 2005 due to declining margins in all
product categories. Average deposits increased 14.2% to $3.9 billion. The growth in deposits was largely from an
increase in shorter-term negotiable CDs. The deposit margin was relatively unchanged from 1.73%
at 2004 to 1.72% at 2005. Consumer Finance First quarter 2005 compared with first quarter 2004 The Consumer Finance segments net income increased $7.5 million, 52.4% to $21.8 million
compared to $14.3 million for the same period in 2004. Net interest income was $56.1 million,
compared to $53.0 million in 2004, an increase of 5.8%. Noninterest income increased $4.8 million,
or 177.8% to $7.5 million. The increase is due to recording lease payments as noninterest income
for 10




---



##### Table of Contents



BancWest Corporation and Subsidiaries
MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS all auto leases booked under the operating method of accounting from February through July
2004. This increase was partially offset by lower gains on sales of loans through our Essex
subsidiary. In February 2004 Essex began retaining certain types of loans in its own portfolio.
Noninterest expense increased $5.1 million to $22.1 million in 2005. The increase is primarily due
to higher vehicle depreciation costs incurred as a result of the accounting for certain vehicle
leases as operating leases, higher employee healthcare benefits, and a decrease in deferred loan
origination costs. The provision for credit losses decreased $8.4 million from $14.9 million to
$6.5 million, due to an improvement in credit quality. Average assets as of March 31, 2005 were $9.4 billion compared to $8.1 billion at March 31,
2004, an increase of $1.3 billion, or 15.9%. This increase is due to indirect loan production and
the addition of assets from the acquisition of Community First in the fourth quarter of 2004. First Hawaiian Bank Retail Banking First quarter 2005 compared with first quarter 2004 The Retail Banking Segments net income increased to $24.4 million, up $7.6 million, or 45.2%.
Net interest income increased $11.7 million, or 20.7% primarily due to higher transfer pricing
credits on deposits of $8.5 million resulting from increases in balances and margins of $4.3
million and $4.2 million, respectively. Noninterest income decreased $0.6 million, or 4.1%.
Noninterest expense increased $0.6 million, or 1.4%. The provision for credit losses decreased
$1.5 million. The decrease in the provision for credit losses was a result of improved credit
quality which has led to a decrease in nonperforming assets and lower net charge offs. Average assets increased 13.5% to $4.1 billion, primarily due to increases in loans of $471
million. The increase in loans was primarily in residential and commercial real estate due to the
improved economy and favorable interest rates. Average deposits increased 11.3% to $7.6 billion,
primarily due to an increase in core deposits. Consumer Finance First quarter 2005 compared with first quarter 2004 Consumer Finances net income decreased to $8.4 million, down $0.9 million, or 9.7%. Net
interest income of $18.9 million was flat as income from higher loan balances was offset by lower
margins. Noninterest income decreased $0.5 million or 6.0% primarily due to lower gains on sale of
mortgages in 2005. Noninterest expense increased $1.1 million, or 11.2%, primarily due to an
increase in credit card mileage program costs in 2005. Average assets increased 6.7% to $1.6 billion, partly due to increases in consumer and dealer
flooring loans. Commercial Banking First quarter 2005 compared with first quarter 2004 Commercial Bankings net income decreased to $4.9 million, down $1.8 million, or 26.9%. Net
interest income decreased $2.6 million, or 25.7%, partially due to lower transfer pricing credits
for deferred tax balances related to lease financing activities and lower earning assets.
Noninterest income of $1.4 million during the quarter was flat. Noninterest expense decreased $0.3
million, or 17.6%. The provision for credit losses of $0.2 million was flat. Average assets decreased 4.1% to $1.2 billion primarily resulting from a reduction in loans
related to the planned exit of Syndicated and Media credit exposure. 11




---



##### Table of Contents



BancWest Corporation and Subsidiaries
MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS Financial Management First quarter 2005 compared with first quarter 2004 The Financial Management Segments net income was $0.9 million up 50.0% or $0.3 million. Net
interest income remained relatively flat. Noninterest income increased by $0.5 million, or 6.5%.
Noninterest expense increased $0.2 million, or 3.1%. 
 SECURITIES AVAILABLE FOR SALE The $2.7 billion, or 46.5% increase in securities available for sale from March 31, 2004 to
March 31, 2005 was due to the acquisitions of Community First and USDB and purchases of securities.
The $652 million, or 8.2% increase from December 31, 2004 was primarily due to purchases of
securities. The Company focuses on the following four objectives for its available-for-sale portfolio:  
    Support its need for liquidity to fund loans or to meet unexpected deposit runoff.
Liquidity can be met by having investments with relatively short maturities and/or a high
degree of marketability.
    Act as a vehicle to make meaningful shifts in the Companys overall interest rate risk profile.
    Provide collateral to secure the Companys public funds-taking activities.
    Provide the maximum level of after-tax earnings consistent with the safety factors of
quality, maturity, marketability and risk diversification. 
 LOANS AND LEASES We continue our efforts to diversify our loan and lease portfolio, both geographically and by
industry. Our overall growth in loan and lease volume came primarily from internal growth and the
acquisitions of Community First and USDB in the fourth quarter of 2004. See Note 5(Loans and
Leases) to the Consolidated Financial Statements for additional information. The loan and lease portfolio is the largest component of total earning assets and accounts for
the greatest portion of total interest income. At March 31, 2005, total loans and leases to total
assets was 64.4% compared with 65.3% at December 31, 2004 and 67.4% at March 31, 2004. As a
percentage of total interest earning assets, total loans and leases were 76.6% at March 31, 2005,
78.0% at December 31, 2004 and 79.2% at March 31, 2004. At March 31, 2005, total loans and leases
were 94.8% of total deposits compared with 97.2% at December 31, 2004 and 98.1% at March 31, 2004. Total loans and leases increased by 26.3% from March 31, 2004 to March 31, 2005. Consumer
loans increased $1.5 billion, or 19.2%, substantially due to customers taking advantage of the low
interest rate environment, and from the acquisitions in the fourth quarter of 2004. Residential
real estate loans increased $2.1 billion, or 39.3%, primarily due to the acquisitions and purchases of loans since the first quarter of 2004. Commercial, financial and agricultural loans
increased 27.7% compared with the same period in the prior year. The increase in total loans and
leases from December 31, 2004 to March 31, 2005 was due to an increase in residential real estate
loans of $0.7 billion, as a result of purchases during the quarter, primarily offset by a decrease
of $0.4 billion in commerical, financial and agricultural loans. In the context of interest rate
trends and the broader economy, we continuously monitor the mix in our loan portfolio. 12




---



##### Table of Contents



BancWest Corporation and Subsidiaries
MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS 
 NONPERFORMING ASSETS AND RESTRUCTURED LOANS Nonperforming assets for the periods indicated were as follows: March 31, 2005
    
    
    December 31, 2004
    
    
    March 31, 2004(Dollars in thousands)Nonperforming Assets:Nonaccrual:Commercial, financial and agricultural
    
    
    $  49,892
    
    
    
    $  51,793
    
    
    
    $  66,060Real estate:Commercial
    
    
    54,484
    
    
    
    47,385
    
    
    
    47,897Construction
    
    
    4,780
    
    
    
    2,386
    
    
    
    --Residential
    
    
    7,361
    
    
    
    6,862
    
    
    
    8,093Total real estate loans
    
    
    66,625
    
    
    
    56,633
    
    
    
    55,990Consumer
    
    
    5,010
    
    
    
    4,477
    
    
    
    2,457Lease financing
    
    
    7,201
    
    
    
    8,138
    
    
    
    7,550Foreign
    
    
    1,978
    
    
    
    4,138
    
    
    
    5,607Total nonaccrual loans and leases
    
    
    130,706
    
    
    
    125,179
    
    
    
    137,664Other real estate owned and repossessed personal property
    
    
    19,934
    
    
    
    21,653
    
    
    
    15,571Total nonperforming assets
    
    
    $150,640
    
    
    
    $146,832
    
    
    
    $153,235Past due loans and leases(1):Commercial, financial and agricultural
    
    
    $  14,352
    
    
    
    $    6,140
    
    
    
    $  18,520Real estate:Commercial
    
    
    6,768
    
    
    
    2,119
    
    
    
    6,363Construction
    
    
    1,518
    
    
    
    506
    
    
    
    --Residential
    
    
    2,009
    
    
    
    1,112
    
    
    
    1,190Total real estate loans
    
    
    10,295
    
    
    
    3,737
    
    
    
    7,553Consumer
    
    
    1,685
    
    
    
    2,243
    
    
    
    2,602Lease financing
    
    
    14
    
    
    
    79
    
    
    
    16Foreign
    
    
    1,428
    
    
    
    216
    
    
    
    303Total past due loans and leases
    
    
    $  27,774
    
    
    
    $  12,415
    
    
    
    $  28,994Accruing Restructured Loans and leases:Commercial, financial and agricultural
    
    
    30
    
    
    
    36
    
    
    
    55Commercial real estate
    
    
    400
    
    
    
    429
    
    
    
    1,596Total accruing restructured loans and leases
    
    
    $       430
    
    
    
    $       465
    
    
    
    $    1,651Nonperforming assets to total loans and leases and other real estate owned and
repossessed personal property (end of period):Excluding past due loans and leases
    
    
    0.45
    %
    
    
    0.45
    %
    
    
    0.58
    %Including past due loans and leases
    
    
    0.54
    
    
    
    0.49
    
    
    
    0.69Nonperforming assets to total assets (end of period):Excluding past due loans and leases
    
    
    0.29
    
    
    
    0.29
    
    
    
    0.39Including past due loans and leases
    
    
    0.35
    
    
    
    0.32
    
    
    
    0.47
   (1)
    
    Represents loans and leases which are past due 90 days or more as to principal
or interest, are still accruing interest, are adequately collateralized and in the process of
collection. The increase in nonaccrual loans from December 31, 2004 was due to an increase in real
estate nonaccrual loans as a result of a few large loans being moved to nonaccrual status during
the first quarter of 2005. This increase was primarily offset by decreases in commercial,
financial and agricultural and foreign nonaccrual loans. The decrease from March 31, 2004 was due
to a decrease in commercial, financial and agricultural nonaccrual loans primarily offset by an
increase in real estate nonaccrual loans. The increase in real estate nonaccrual loans was mostly
due to the acquisition of nonaccrual loans from Community First and a few large loans that were
moved to nonaccrual status in the first quarter of 2005. We generally place a loan or lease on nonaccrual status when we believe that collection of
principal or interest has become doubtful or when loans or leases are 90 days past due as to
principal or interest, unless they are well secured and in the process of collection. We may make
an exception to the general 90-day-past-due rule when the fair value of the collateral exceeds our
recorded investment in the loan. Consumer loans and leases are subject to our general policies regarding nonaccrual loans and
substantially all past-due consumer loans and leases are charged off upon reaching a predetermined
delinquency status varying from 120 to 180 days, depending on product type. 13




---



##### Table of Contents



BancWest Corporation and Subsidiaries
MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS When we place a loan or lease on nonaccrual status, previously accrued and uncollected
interest is reversed against interest income of the current period. When we receive a cash payment
on a nonaccrual loan, we apply it as a reduction of the principal balance when we have doubts about
the ultimate collection of the principal. Otherwise, we record such payments as income. Nonaccrual loans and leases are generally returned to accrual status when they: (1) become
current as to principal and interest and have demonstrated a sustained period of payment
performance or (2) become both well secured and in the process of collection. 
 PROVISION AND ALLOWANCE FOR LOAN AND LEASE LOSSES The provision for loan and lease losses is based upon our judgment as to the adequacy of the
allowance for loan and lease losses (the Allowance) to absorb probable losses inherent in the
portfolio as of the balance sheet date. The Company uses a systematic methodology to determine the
adequacy of the Allowance and related provision for loan and lease losses to be reported for
financial statement purposes. The determination of the adequacy of the Allowance is ultimately one
of judgment, which includes consideration of many factors, including, among other things, the
amount of problem and potential problem loans and leases, net charge-off experience, changes in the
composition of the loan and lease portfolio by type and location of loans and leases, change in the
overall loan and lease risk profile, general economic factors and the fair value of collateral.
The analysis of the changes in the allowance for loan and lease losses, including charge-offs and
recoveries, is presented in Note 6 (Allowance for Loans and Leases) to the Consolidated Financial
Statements. Our approach to managing exposure to credit risk involves an integrated program of setting
appropriate standards for credit underwriting and diversification, monitoring trends that may
affect the risk profile of the credit portfolio and making appropriate adjustments to reflect
changes in economic and financial conditions that could affect the quality of the portfolio and
loss probability. The components of this integrated program include:  
    Setting Underwriting and Grading Standards.Our loan grading system uses ten different
principal risk categories where 1 is no risk and 10 is loss. We continue efforts to
decrease our exposure to customers in the weaker credit categories. The cost of credit risk
is an integral part of the pricing and evaluation of credit decisions and the setting of
portfolio targets.
    Diversification.We actively manage our credit portfolio to avoid excessive concentration
by obligor, risk grade, industry, product and geographic location. In addition, we seek to
reduce our exposure to concentrations by actively participating portions of our commercial
and commercial real estate loans to other banks.
    Risk Mitigation.We manage our exposure to higher risk areas through application of
prudent underwriting policies.
    Emphasis on Consumer Lending.Consumer loans represent our single largest category of
loans and leases. We use formula-based approaches to calculate appropriate reserve levels
that reflect historical loss experience. We generally do not participate in subprime lending
activities. We also seek to reduce our credit exposures where feasible by obtaining
third-party insurance or similar protections. For example, in our vehicle lease portfolio
(which represents approximately 36.7% of our lease financing portfolio and 6.9% of our
combined lease financing and consumer loans at March 31, 2005), we obtain third-party
insurance for the estimated residual value of the leased vehicle, and set aside reserves to
cover the uninsured portion. The allowance for loan and lease losses was 1.31% of total loans and leases at March 31, 2005,
compared with 1.33% of total loans and leases at December 31, 2004 and 1.51% at March 31, 2004.
Compared with the same period a year ago, net charge-offs were $0.7 million higher in the three
months ended March 31, 2005. This was driven by an increase in installment loan charge offs (Auto
and RVs), significantly offset by a large loan recovery in Guam. In our judgment, the Allowance was adequate to absorb losses inherent in the loan and lease
portfolio at March 31, 2005. However, changes in prevailing economic conditions in our markets
could result in changes in the level of nonperforming assets and charge-offs in the future and,
accordingly, changes in the Allowance. We will continue to closely monitor economic developments
and make necessary adjustments to the Allowance accordingly. 14




---



##### Table of Contents



BancWest Corporation and Subsidiaries
MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS 
 DEPOSITS Deposits are the largest component of our total liabilities and account for 49.4% of total
interest expense during the quarter ended March 31, 2005. At March 31, 2005, total deposits were
$35 billion, an increase of 4.0% over December 31, 2004 and an increase of 30.7% over March 31,
2004. The increase from March 2004 was primarily due to growth in our customer deposit base and
the acquisitions of Community First and USDB. The increase from December 2004 was primarily due to
growth in our time deposits over $100 thousand. Rates paid on deposits have increased based on
current market conditions. Additional information on our average deposit balances and rates paid
is provided in Table 1: Average Balances, Interest Income and Expense, and Yields and Rates
(Taxable-Equivalent Basis). 
 CAPITAL Stockholders equity totaled $5.8 billion at March 31, 2005, an increase of $87 million, or
1.5%, from December 31, 2004 and $1.4 billion, or 32.3%, from March 31, 2004. The increase from
December 2004 was primarily due to net income earned by the Company during the first three months
of 2005, partially offset by net unrealized losses on securities available for sale and cash flow
hedges. The increase from March 2004 was largely due to an issuance of common stock of the Company
for the acquisitions of Community First and USDB and net income for the last 12 months. 
 LIQUIDITY MANAGEMENT Liquidity refers to our ability to provide sufficient short and long-term cash flows to fund
operations and to meet obligations and commitments, including depositor withdrawals and debt
service, on a timely basis at reasonable cost. We achieve our liquidity objectives with both assets
and liabilities. Further, while liquidity positions are managed separately by the Company and its
two subsidiary Banks, both short-term and long-term activities are coordinated between the two
subsidiary Banks. We obtain short-term asset-based liquidity through our investment securities portfolio, principally
short-term securities and other liquid assets, which can be readily converted to cash. These assets consist of cash
and due from banks, interest-bearing deposits in other banks, federal funds sold, trading assets,
securities purchased under agreements to resell, securities available for sale and loans held for
sale. Such assets represented 22.5%, 21.3% and 20.7% of total assets at March 31, 2005, December
31, 2004 and March 31, 2004, respectively. Intermediate and longer-term asset liquidity is primarily provided by regularly scheduled
maturities and cash flows from loans and securities. Additional liquidity is available from certain
assets that can be sold, securitized or used as collateral for borrowings from the Federal Home
Loan Bank such as consumer and mortgage loans. We obtain short-term, liability-based liquidity primarily from deposits. Average total
deposits increased 28.6% from March 31, 2004 to $34 billion at March 31, 2005, primarily due to the
acquisitions of Community First and USDB in November 2004, and continued expansion of our customer
base in the Western United States. Average total deposits funded 67.5% and 68.9% of average total
assets for the quarter ended March 31, 2005 and the year ended December 31, 2004, respectively. We also obtain short-term and long-term liquidity from ready access to regional and national
wholesale funding sources, including purchasing Federal funds, selling securities under agreements
to repurchase, lines of credit from other banks and credit facilities from the Federal Home Loan
Banks. The following table reflects immediately available borrowing capacity at the Federal
Reserve Discount Window and the Federal Home Loan Banks and securities available for sale under
repurchase agreements: March 31,(Dollars in millions)
    
    2005
    
    
    2004Federal Reserve Discount Window
    
    $
    662
    
    
    $
    626Federal Home Loan Bank
    
    
    841
    
    
    
    1,851Securities Available for Repurchase Agreements
    
    
    4,381
    
    
    
    3,172Total
    
    $
    5,884
    
    
    $
    5,649
 Further information on short-term borrowings is provided in Note 13 (Short-term Borrowings)
to the Consolidated Financial Statements included in the Companys 2004 Annual Report on Form
10-K. Offshore deposits in the international market provide another available source of funds. 15




---



##### Table of Contents



BancWest Corporation and Subsidiaries
MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS Funds raised in the intermediate and longer-term markets are structured to avoid concentration
of maturities and to reduce refinancing risk. We also attempt to diversify the types of instruments
issued to avoid undue reliance on any one market or funding source. Liquidity for the parent company is primarily provided by dividend and interest income from
its subsidiaries. Short-term cash requirements are met through liquidation of short-term
investments. Longer-term liquidity is provided by access to the capital markets or from
transactions with BancWests parent company, BNP Paribas. The Parents ability to pay dividends to BNP Paribas depends primarily upon dividends and
other payments from its subsidiaries, which are subject to certain limitations as described in Note
17 (Limitation on Payments of Dividends) to the Consolidated Financial Statements included in the
Companys 2004 Annual Report on Form 10-K. Our borrowing costs and ability to raise funds are a function of our credit ratings and any
change in those ratings. The following table reflects the ratings of Bank of the West and First
Hawaiian Bank: Bank of the West/First Hawaiian BankShort-Term Deposit
    
    Long-Term DepositMoodys
    
    P-1
    
    Aa3S & P
    
    A-1
    
    A+Fitch, Inc.
    
    F1+
    
    AA-
 16




---



##### Table of Contents



BancWest Corporation and Subsidiaries
MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS 
 RECENT ACCOUNTING STANDARDS We have adopted numerous new or modifications to existing standards, rules or regulations
promulgated by various standard setting and regulatory bodies. Chief among these are the federal
financial institutions regulators, the SEC and the FASB. The following section highlights important
developments in the area of accounting and disclosure requirements. This discussion is not intended
to be a comprehensive listing of the impact of all standards and rules adopted. In December 2004, the Financial Accounting Standards Board (FASB) issued FASB Statement No.
153, Exchanges of Nonmonetary Assets, an Amendment of APB Opinion No. 29, Accounting for
Nonmonetary Transactions,(FASB 153). This statement is based upon the principle that
transactions involving nonmonetary assets should be measured based upon their fair market value.
This statement is effective for fiscal years beginning after June 15, 2005. We do not believe this
statement will have a material impact on our financial statements, as we do not frequently enter
into nonmonetary transactions. In December 2004, the FASB issued Statement of Financial Accounting Standards No. 123 (revised
2004) Accounting for Share-Based Payment.This statement requires stock options awarded to
employees to be expensed over the vesting period of the option, at the fair value at the grant date
using an option-pricing model. This statement is effective at the beginning of the next fiscal
year that begins after June 15, 2005. The Company currently accounts for stock based compensation
under Accounting Principles Board Opinion No. 25 (APB 25) Accounting for Stock Issued to Employees
and related Interpretations, as allowed under FASB Statement 123, Accounting for Stock-Based
Compensation. This pronouncement will increase the amount of compensation expense per period,
however, we believe this statement will not have a significant impact to our financial statements. In June 2004, the Emerging Issues Task Force (EITF) published EITF 03-1, The Meaning of
Other-Than-Temporary Impairment and Its Application to Certain Investments(EITF 03-1). EITF 03-1
clarifies the impairment methodology used to determine when an investment is considered impaired,
whether that impairment is other than temporary, and the measurement of an impairment loss. The
guidance includes accounting considerations subsequent to the recognition of an
other-than-temporary impairment and requires certain disclosures about unrealized losses that have
not been recognized as other-than-temporary impairments. EITF 03-1 applies to all investments
accounted for in accordance with the provisions of FAS 115, certain debt and equity securities
within the scope of Statement 124, and equity securities that are not subject to the scope of
Statement 115 and not accounted for under the equity method of accounting. On September 30, 2004,
the FASB staff published FASB Staff Position (FSP) EITF 03-1-1. FSP EITF 03-1-1 delays the
effective date for the measurement and recognition guidance contained in Paragraphs 1020 of EITF
Issue No. 03-1, The Meaning of Other-Than-Temporary Impairment and Its Application to Certain
Investments,while the FASB considers application guidance. We will evaluate any new guidance on
the above mentioned paragraphs upon final issuance. 17




---



##### Table of Contents



BancWest Corporation and Subsidiaries
QUANTATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK 
 Item 3. Quantitative and Qualitative Disclosures About Market Risk Interest Rate Risk Measurement and Management Interest rate risk, one of the leading risks in terms of potential earnings impact, is an
essential element of being a financial intermediary. The Companys net interest income is
subject to interest rate risk to the extent our interest-bearing liabilities (primarily deposits
and borrowings) mature or reprice on a different basis than our interest-earning assets
(primarily loans, leases and investment securities). When interest-bearing liabilities mature or
reprice more quickly than interest-earning assets during a given period, an increase in interest
rates could reduce net interest income. Similarly, when interest-earning assets mature or reprice
more quickly than interest-bearing liabilities, a decrease in interest rates could have a
negative impact on net interest income. In addition, the impact of interest rate swings may be
exacerbated by factors such as our customers propensity to manage their demand deposit balances
more or less aggressively or to refinance loans. Short and long-term market rates may change
independent of each other resulting in changes to the slope and absolute level of the yield
curve. The Asset/Liability Committees of BancWest and its major subsidiaries are responsible for
managing interest rate risk. The Asset/Liability Committees generally meet monthly or quarterly.
The committees may recommend changes to a particular subsidiarys interest rate profile to their
respective Board of Directors, should changes be necessary and depart significantly from
established policies. Our exposure to interest rate risk is managed primarily by taking actions that impact
certain balance sheet accounts (e.g., lengthening or shortening maturities in the investment
portfolio, changing asset and/or liability mix - including increasing or decreasing the amount of
fixed and/or variable instruments held by the Company - to adjust sensitivity to interest rate
changes) and/or utilizing instruments such as interest rate swaps, caps, floors, options or
forwards. Derivatives entered into for trading purposes include commitments to purchase and sell
foreign currencies and certain interest rate swaps and options. We also enter into customer
accommodation interest rate swaps and foreign exchange spot and forward contracts as well as
contracts to offset either the customers counter-position or our foreign currency denominated
deposits. These contracts basically offset each other and they do not expose us to material
losses resulting from interest rate or foreign currency fluctuations. The Company and its subsidiaries use computer simulation models to evaluate net interest
income in order to quantify exposure to changes in interest rates. Generally, the size of the
balance sheet is held relatively constant and then subjected to interest rate shocks up in
100-basis-point increments and down in 100 basis-point increments. Each account-level item is
repriced according to its respective contractual characteristics, including any embedded options
which might exist (e.g., periodic interest rate caps or floors or loans and leases which permit
the borrower to prepay the principal balance of the loan or lease prior to maturity without
penalty). Derivative financial instruments such as interest rate swaps, caps or floors are
included as part of the modeling process. For each interest rate shock scenario, net interest
income over a 12-month horizon is compared against the results of a scenario in which no interest
rate change occurs (flat rate scenario) to determine the level of interest rate risk at that
time. The projected impact of incremental increases and decreases in interest rates on the projected
Companys consolidated net interest income over the 12 months beginning April 1, 2005 is shown
below. +3%
    
    
    +2%
    
    
    +1%
    
    
    Flat
    
    
    -1%
    
    
    -2%(Dollars in millions)Net interest income
    
    $
    1,651.2
    
    
    $
    1,663.9
    
    
    $
    1,663.2
    
    
    $
    1,643.7
    
    
    $
    1,614.3
    
    
    $
    1,568.0Difference from flat
    
    
    7.5
    
    
    
    20.2
    
    
    
    19.5
    
    
    
    --
    
    
    
    (29.4
    )
    
    
    (75.7
    )% variance
    
    
    0.5
    %
    
    
    1.2
    %
    
    
    1.2
    %
    
    
    --
    %
    
    
    (1.8
    )%
    
    
    (4.6
    )%
 Because of the relatively low level of interest rates in the first three months of 2005,
modeling below a 200-basis-point decrease was deemed not meaningful. The changes in the models are
due to differences in interest rate environments which include the absolute level of interest
rates, the shape of the yield curve, and spreads between various benchmark rates. 18




---



##### Table of Contents



BancWest Corporation and Subsidiaries
QUANTATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK Significant Assumptions Utilized and Inherent Limitations The net interest income changes for each interest rate scenario presented above include
assumptions based on accelerating or decelerating mortgage and non-mortgage consumer loan
prepayments in declining or rising scenarios, respectively, and adjusting deposit levels and mix in
the different interest rate scenarios. The magnitude of changes to both areas in turn are based
upon analyses of customers behavior in differing rate environments. However, these analyses may
differ from actual future customer behavior. For example, actual prepayments may differ from
current assumptions as prepayments are affected by many variables which cannot be predicted with
certainty (e.g., prepayments of mortgages may differ on fixed and adjustable loans depending upon
current interest rates, expectations of future interest rates, availability of refinancing,
economic benefit to borrower, financial viability of borrower, etc.). As with any model for analyzing interest rate risk, certain limitations are inherent in the
method of analysis presented above. For example, the actual impact on net interest income due to
certain interest rate shocks may differ from those projections presented should market conditions
vary from assumptions used in the analysis. Furthermore, the analysis does not consider the effects
of a changed level of overall economic activity that could exist in certain interest rate
environments. Moreover, the method of analysis used does not take into account the actions that
management might take to respond to changes in interest rates because of inherent difficulties in
determining the likelihood or impact of any such response. The following estimated net fair value amounts of interest rate derivatives held for trading
purposes have been determined by the Company using available market information and appropriate
valuation methodologies: March 31, 2005Gross
    
    
    
    
    
    
    Expected Maturity(Dollars in thousands)
    
    Net Fair
    
    
    Positive
    
    
    Notional
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    AfterInterest Rate Contracts
    
    Value
    
    
    Value
    
    
    Amount
    
    
    2005
    
    
    2006
    
    
    2007
    
    
    2008
    
    
    2009
    
    
    2009Pay-Fixed Swaps:Contractual Maturities
    
    $
    (6,082
    )
    
    $
    10,573
    
    
    $
    705,704
    
    
    $
    78,440
    
    
    $
    24,957
    
    
    $
    39,127
    
    
    $
    97,333
    
    
    $
    104,445
    
    
    $
    361,402Weighted Avg. Pay Rates
    
    
    
    
    
    
    
    
    
    
    4.50
    %
    
    
    2.91
    %
    
    
    4.22
    %
    
    
    5.14
    %
    
    
    5.34
    %
    
    
    4.37
    %
    
    
    4.60
    %Weighted Avg. Receive Rates
    
    
    
    
    
    
    
    
    
    
    3.13
    %
    
    
    2.72
    %
    
    
    2.93
    %
    
    
    3.09
    %
    
    
    4.98
    %
    
    
    2.86
    %
    
    
    2.83
    %Receive-Fixed Swaps:Contractual Maturities
    
    
    13,303
    
    
    
    8,173
    
    
    $
    705,704
    
    
    $
    79,023
    
    
    $
    24,374
    
    
    $
    39,127
    
    
    $
    97,333
    
    
    $
    104,445
    
    
    $
    361,402Weighted Avg. Pay Rates
    
    
    
    
    
    
    
    
    
    
    3.13
    %
    
    
    2.72
    %
    
    
    2.95
    %
    
    
    3.05
    %
    
    
    4.98
    %
    
    
    2.86
    %
    
    
    2.83
    %Weighted Avg. Receive Rates
    
    
    
    
    
    
    
    
    
    
    4.74
    %
    
    
    3.14
    %
    
    
    4.42
    %
    
    
    5.43
    %
    
    
    5.39
    %
    
    
    4.65
    %
    
    
    4.88
    %Pay-Fixed Swaps(Forward Value Dated):Contractual Maturities
    
    
    (1,458
    )
    
    
    --
    
    
    $
    35,992
    
    
    
    --
    
    
    
    --
    
    
    
    --
    
    
    $
    3,000
    
    
    
    --
    
    
    $
    32,992Weighted Avg. Pay Rates
    
    
    
    
    
    
    
    
    
    
    5.40
    %
    
    
    --
    
    
    
    --
    
    
    
    --
    
    
    
    4.42
    %
    
    
    --
    
    
    
    5.49
    %Weighted Avg. Receive Rates
    
    
    
    
    
    
    
    
    
    
    3.00
    %
    
    
    --
    
    
    
    --
    
    
    
    --
    
    
    
    2.87
    %
    
    
    --
    
    
    
    3.01
    %Receive-Fixed Swaps(Forward Value Dated):Contractual Maturities
    
    
    2,269
    
    
    
    2,269
    
    
    $
    35,992
    
    
    
    --
    
    
    
    --
    
    
    
    --
    
    
    $
    3,000
    
    
    
    --
    
    
    $
    32,992Weighted Avg. Pay Rates
    
    
    
    
    
    
    
    
    
    
    3.00
    %
    
    
    --
    
    
    
    --
    
    
    
    --
    
    
    
    2.87
    %
    
    
    --
    
    
    
    3.01
    %Weighted Avg. Receive Rates
    
    
    
    
    
    
    
    
    
    
    5.87
    %
    
    
    --
    
    
    
    --
    
    
    
    --
    
    
    
    4.75
    %
    
    
    --
    
    
    
    5.97
    %Caps/Collars:Contractual Maturities
    
    
    --
    
    
    
    35
    
    
    $
    302,479
    
    
    $
    230,496
    
    
    
    --
    
    
    $
    64,625
    
    
    $
    3,835
    
    
    $
    1,530
    
    
    $
    1,993Weighted Avg. Strike Rates
    
    
    
    
    
    
    
    
    
    
    4.40
    %
    
    
    4.24
    %
    
    
    --
    
    
    
    4.85
    %
    
    
    5.18
    %
    
    
    4.50
    %
    
    
    6.83
    %Weighted Floor Rates
    
    
    
    
    
    
    
    
    
    
    4.77
    %
    
    
    --
    
    
    
    --
    
    
    
    --
    
    
    
    --
    
    
    
    --
    
    
    
    4.77
    %Total interest rate contracts
held for trading purposes
    
    $
    8,032
    
    
    $
    21,050
    
    
    $
    1,785,871
 19




---



##### Table of Contents



BancWest Corporation and Subsidiaries
CONTROLS AND PROCEDURES 
 Item 4. Controls and Procedures As of the end of the period covered by this report, the Company carried out an evaluation,
under the supervision and with the participation of the Companys management, including the
Companys chief executive officer and its chief financial officer, of the effectiveness of the
design and operation of the Companys disclosure controls and procedures (as defined in Exchange
Act Rule 13a-15(e)). Based upon that evaluation, its chief executive officer and its chief
financial officer concluded that the Companys disclosure controls and procedures are effective in
timely alerting them to material information relating to the Company (including its consolidated
subsidiaries) required to be included in the Companys periodic SEC filings. No change in the Companys internal control over financial reporting was identified in
connection with the evaluation required by Exchange Act Rule 13a-15(d) or Rule 15d-15(d) during the
Companys last fiscal quarter that has materially affected, or is reasonably likely to materially
affect, the Companys internal control over financial reporting. 20




---



##### Table of Contents



CONSOLIDATED STATEMENT OF INCOME BancWest Corporation and Subsidiaries
CONSOLIDATED STATEMENT OF INCOME(Unaudited) 
 Item 1. Financial Statements Three Months Ended March 31,2005
    
    
    2004(Dollars in thousands)Interest incomeLoans
    
    
    $447,888
    
    
    
    $331,511Lease financing
    
    
    27,817
    
    
    
    31,180Securities available for sale
    
    
    75,106
    
    
    
    50,691Other
    
    
    7,417
    
    
    
    2,705Total interest income
    
    
    558,228
    
    
    
    416,087Interest expenseDeposits
    
    
    80,941
    
    
    
    43,436Short-term borrowings
    
    
    19,726
    
    
    
    5,413Long-term debt
    
    
    63,138
    
    
    
    47,277Total interest expense
    
    
    163,805
    
    
    
    96,126Net interest income
    
    
    394,423
    
    
    
    319,961Provision for loan and lease losses
    
    
    11,100
    
    
    
    18,865Net interest income after provision for
loan and lease losses
    
    
    383,323
    
    
    
    301,096Noninterest incomeService charges on deposit accounts
    
    
    43,586
    
    
    
    40,829Trust and investment services income
    
    
    13,064
    
    
    
    10,302Other service charges and fees
    
    
    46,031
    
    
    
    38,237Net gains on securities available for sale
    
    
    418
    
    
    
    367Vehicle and equipment operating lease income
    
    
    5,780
    
    
    
    854Other
    
    
    13,917
    
    
    
    11,914Total noninterest income
    
    
    122,796
    
    
    
    102,503Noninterest expenseSalaries and wages
    
    
    104,939
    
    
    
    83,455Employee benefits
    
    
    48,351
    
    
    
    36,237Occupancy
    
    
    28,392
    
    
    
    21,615Outside services
    
    
    24,442
    
    
    
    20,445Intangible amortization
    
    
    9,980
    
    
    
    5,763Equipment
    
    
    14,497
    
    
    
    11,447Depreciation-vehicle and equipment
operating leases
    
    
    5,021
    
    
    
    686Restructuring and integration costs
    
    
    5,350
    
    
    
    --Stationery and supplies
    
    
    8,471
    
    
    
    6,164Advertising and promotions
    
    
    7,148
    
    
    
    6,327Other
    
    
    35,501
    
    
    
    26,743Total noninterest expense
    
    
    292,092
    
    
    
    218,882Income before income taxes
    
    
    214,027
    
    
    
    184,717Provision for income taxes
    
    
    77,423
    
    
    
    71,665Net income
    
    
    $136,604
    
    
    
    $113,052
 The accompanying notes are an integral part of these consolidated financial statements 21




---



##### Table of Contents



CONSOLIDATED BALANCE SHEETS BancWest Corporation and Subsidiaries
CONSOLIDATED BALANCE SHEETS(Unaudited) March 31, 2005
    
    
    December 31, 2004
    
    
    March 31, 2004(Dollars in thousands, except share data)AssetsCash and due from banks
    
    
    $  1,719,033
    
    
    
    $  1,676,056
    
    
    
    $  1,328,783Interest-bearing deposits in other banks
    
    
    535,202
    
    
    
    16,531
    
    
    
    309,198Federal funds sold and securities purchased under
agreements to resell
    
    
    647,580
    
    
    
    937,875
    
    
    
    469,998Trading assets
    
    
    4,893
    
    
    
    4,685
    
    
    
    10,043Securities available for sale
    
    
    8,606,276
    
    
    
    7,954,563
    
    
    
    5,872,828Loans held for sale
    
    
    80,454
    
    
    
    71,402
    
    
    
    62,646Loans and leases:Loans and leases
    
    
    33,137,318
    
    
    
    32,688,843
    
    
    
    26,229,432Less allowance for loan and lease losses
    
    
    432,762
    
    
    
    436,391
    
    
    
    396,487Net loans and leases
    
    
    32,704,556
    
    
    
    32,252,452
    
    
    
    25,832,945Vehicle and equipment operating leases, net
    
    
    123,394
    
    
    
    132,539
    
    
    
    43,515Premises and equipment, net
    
    
    680,927
    
    
    
    684,783
    
    
    
    528,652Customers acceptance liability
    
    
    14,730
    
    
    
    12,841
    
    
    
    21,001Other intangibles, net
    
    
    261,794
    
    
    
    272,490
    
    
    
    181,593Goodwill
    
    
    4,315,119
    
    
    
    4,312,800
    
    
    
    3,228,371Other real estate owned and repossessed personal property
    
    
    19,934
    
    
    
    21,653
    
    
    
    15,571Other assets
    
    
    1,702,094
    
    
    
    1,703,356
    
    
    
    1,008,949Total assets
    
    
    $51,415,986
    
    
    
    $50,054,026
    
    
    
    $38,914,093Liabilities and Stockholders EquityDeposits:Interest-bearing
    
    
    $24,652,525
    
    
    
    $23,553,861
    
    
    
    $18,984,665Noninterest-bearing
    
    
    10,305,454
    
    
    
    10,059,918
    
    
    
    7,758,532Total deposits
    
    
    34,957,979
    
    
    
    33,613,779
    
    
    
    26,743,197Federal funds purchased and securities sold under
agreements to repurchase
    
    
    1,437,670
    
    
    
    2,050,344
    
    
    
    1,344,471Short-term borrowings
    
    
    1,625,840
    
    
    
    1,454,845
    
    
    
    970,000Acceptances outstanding
    
    
    14,730
    
    
    
    12,841
    
    
    
    21,001Long-term debt
    
    
    6,500,842
    
    
    
    6,181,040
    
    
    
    4,282,717Other liabilities
    
    
    1,062,149
    
    
    
    1,011,142
    
    
    
    1,154,885Total liabilities
    
    
    $45,599,210
    
    
    
    $44,323,991
    
    
    
    $34,516,271Stockholders equity:Class A common stock, par value $0.01 per shareAuthorized  150,000,000 sharesIssued and outstanding  106,859,123 shares at
March 31, 2005 and December 31, 2004 and
85,759,123 shares at March 31, 2004
    
    
    $         1,069
    
    
    

$         1,069
    
    
    
    $            858Additional paid-in capital
    
    
    4,475,041
    
    
    
    4,475,006
    
    
    
    3,419,927Retained earnings
    
    
    1,416,179
    
    
    
    1,279,575
    
    
    
    919,250Accumulated other comprehensive income (loss), net
    
    
    (75,513
    )
    
    
    (25,615
    )
    
    
    57,787Total stockholders equity
    
    
    5,816,776
    
    
    
    5,730,035
    
    
    
    4,397,822Total liabilities and stockholders equity
    
    
    $51,415,986
    
    
    
    $50,054,026
    
    
    
    $38,914,093
 The accompanying notes are an integral part of these consolidated financial statements 22




---



##### Table of Contents



CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS EQUITY AND COMPREHENSIVE INCOME BancWest Corporation and Subsidiaries
CONSOLIDATED STATEMENTS OF CHANGES IN
STOCKHOLDERS EQUITY AND COMPREHENSIVE INCOME(Unaudited) AccumulatedClass A
    
    
    Additional
    
    
    
    
    
    
    OtherCommon Stock
    
    
    Paid-in
    
    
    Retained
    
    
    ComprehensiveShares
    
    
    Amount
    
    
    Capital
    
    
    Earnings
    
    
    Income, net
    
    
    Total(Dollars in thousands)Balance, December 31, 2004
    
    
    106,859,123
    
    
    $
    1,069
    
    
    $
    4,475,006
    
    
    $
    1,279,575
    
    
    
    $(25,615
    )
    
    $
    5,730,035Comprehensive income:Net income
    
    
    --
    
    
    
    --
    
    
    
    --
    
    
    
    136,604
    
    
    
    --
    
    
    
    136,604Unrealized net losses on securities
available for sale arising during the
period
    
    
    --
    
    
    
    --
    
    
    
    --
    
    
    
    --
    
    
    
    (46,698
    )
    
    
    (46,698
    )Reclassification of net realized gains on
securities available for sale included in
net income
    
    
    --
    
    
    
    --
    
    
    
    --
    
    
    
    --
    
    
    
    (247
    )
    
    
    (247
    )Unrealized net losses on cash flow
derivative hedges arising during the
period
    
    
    --
    
    
    
    --
    
    
    
    --
    
    
    
    --
    
    
    
    (823
    )
    
    
    (823
    )Reclassification of net realized gains on
cash flow derivative hedges included in
net income
    
    
    --
    
    
    
    --
    
    
    
    --
    
    
    
    --
    
    
    
    (2,130
    )
    
    
    (2,130
    )Comprehensive income
    
    
    --
    
    
    
    --
    
    
    
    --
    
    
    
    136,604
    
    
    
    (49,898
    )
    
    
    86,706Other
    
    
    --
    
    
    
    --
    
    
    
    35
    
    
    
    --
    
    
    
    --
    
    
    
    35Balance, March 31, 2005
    
    
    106,859,123
    
    
    $
    1,069
    
    
    $
    4,475,041
    
    
    $
    1,416,179
    
    
    
    $(75,513
    )
    
    $
    5,816,776Balance, December 31, 2003
    
    
    85,759,123
    
    
    $
    858
    
    
    $
    3,419,927
    
    
    $
    806,198
    
    
    
    $ 35,889
    
    
    $
    4,262,872Comprehensive income:Net income
    
    
    --
    
    
    
    --
    
    
    
    --
    
    
    
    113,052
    
    
    
    --
    
    
    
    113,052Unrealized net gains on securities
available for sale arising during the
period
    
    
    --
    
    
    
    --
    
    
    
    --
    
    
    
    --
    
    
    
    24,602
    
    
    
    24,602Reclassification of net realized gains on
securities available for sale included in
net income
    
    
    --
    
    
    
    --
    
    
    
    --
    
    
    
    --
    
    
    
    (217
    )
    
    
    (217
    )Unrealized net gains on cash flow
derivative
hedges arising during the period
    
    
    --
    
    
    
    --
    
    
    
    --
    
    
    
    --
    
    
    
    646
    
    
    
    646Reclassification of net realized gains on
cash flow derivative hedges included in
net income
    
    
    --
    
    
    
    --
    
    
    
    --
    
    
    
    --
    
    
    
    (3,133
    )
    
    
    (3,133
    )Comprehensive income
    
    
    --
    
    
    
    --
    
    
    
    --
    
    
    
    113,052
    
    
    
    21,898
    
    
    
    134,950Balance, March 31, 2004
    
    
    85,759,123
    
    
    $
    858
    
    
    $
    3,419,927
    
    
    $
    919,250
    
    
    
    $ 57,787
    
    
    $
    4,397,822
 The accompanying notes are an integral part of these consolidated financial statements 23




---



##### Table of Contents



CONSOLIDATED STATEMENTS OF CASH FLOWS BancWest Corporation and Subsidiaries
CONSOLIDATED STATEMENTS OF CASH FLOWS(Unaudited) Three Months Ended March 31,2005
    
    
    2004(Dollars in thousands)Cash flows from operating activities:Net income
    
    $
    136,604
    
    
    $
    113,052Adjustments to reconcile net income to net cash provided by operating activities:Depreciation and amortization
    
    
    29,152
    
    
    
    16,504Provision for loan and lease losses
    
    
    11,100
    
    
    
    18,865Net increase in deferred income taxes
    
    
    36,087
    
    
    
    1,205Net decrease (increase) in trading assets
    
    
    (208
    )
    
    
    9,066Net increase in loans held for sale
    
    
    (9,052
    )
    
    
    (11,639
    )Net gains on sales of securities available for sale
    
    
    (418
    )
    
    
    (367
    )Net gains on sales of loans
    
    
    (1,274
    )
    
    
    --Net decrease (increase) in interest receivable
    
    
    (11,225
    )
    
    
    3,242Net increase in interest payable
    
    
    29,938
    
    
    
    44,470Net decrease (increase) in prepaid expense
    
    
    4,238
    
    
    
    (4,442
    )Other
    
    
    47,960
    
    
    
    36,723Net cash provided by operating activities
    
    
    272,902
    
    
    
    226,679Cash flows from investing activities:Securities available for sale:Proceeds from prepayments and maturities
    
    
    351,812
    
    
    
    453,616Proceeds from the sales
    
    
    270,468
    
    
    
    56,372Purchases
    
    
    (1,359,439
    )
    
    
    (570,754
    )Proceeds from sales of loans
    
    
    65,883
    
    
    
    83,026Purchases of loans
    
    
    (975,150
    )
    
    
    (439,608
    )Net decrease (increase) in loans and leases resulting from originations and collections
    
    
    460,693
    
    
    
    (149,101
    )Net decrease (increase) in vehicle and equipment operating leases resulting from
originations and collections
    
    
    4,124
    
    
    
    (43,515
    )Purchases of premises and equipment
    
    
    (14,949
    )
    
    
    (5,463
    )Other
    
    
    (32,800
    )
    
    
    (15,695
    )Net cash used in investing activities
    
    
    (1,229,358
    )
    
    
    (631,122
    )Cash flows from financing activities:Net increase in deposits
    
    
    1,344,200
    
    
    
    340,080Net increase (decrease) in Federal funds purchased and securities sold
under agreements to repurchase
    
    
    (612,674
    )
    
    
    169,594Net increase (decrease) in short-term borrowings
    
    
    170,995
    
    
    
    (227,809
    )Proceeds from issuance of long-term debt
    
    
    403,036
    
    
    
    200,000Repayments of long-term debt
    
    
    (77,748
    )
    
    
    (141,234
    )Net cash provided by financing activities
    
    
    1,227,809
    
    
    
    340,631Net increase (decrease) in cash and cash equivalents
    
    
    271,353
    
    
    
    (63,812
    )Cash and cash equivalents at beginning of period
    
    
    2,630,462
    
    
    
    2,171,791Cash and cash equivalents at end of period
    
    $
    2,901,815
    
    
    $
    2,107,979Supplemental disclosures:Interest paid
    
    $
    133,867
    
    
    $
    51,656Income taxes paid
    
    $
    2,122
    
    
    $
    2,653Supplemental schedule of noncash investing and financing activities:Loans transferred to other real estate owned and repossessed personal property
    
    $
    1,299
    
    
    $
    177Loans made to facilitate the sale of other real estate owned
    
    $
    650
    
    
    $
    33
 The accompanying notes are an integral part of these consolidated financial statements 24




---



##### Table of Contents



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS BancWest Corporation and Subsidiaries
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Unaudited) 1. Summary of Significant Accounting Policies Descriptions of Operations BancWest Corporation is a financial holding company headquartered in Honolulu, Hawaii and
incorporated under the laws of the State of Delaware. Through our principal subsidiaries, Bank of
the West (BOW) and First Hawaiian Bank (FHB), we provide commercial and consumer banking services,
engage in commercial, equipment and vehicle leasing and offer trust and insurance products. As of
March 31, 2005, BancWest Corporations subsidiaries operated 539 banking location (526 full service
retail branches and 13 limited service retail offices) in the states of Arizona, California,
Colorado, Hawaii, Idaho, Iowa, Minnesota, Nebraska, Nevada, New Mexico, North Dakota, Oregon, South
Dakota, Utah, Washington, Wisconsin and Wyoming and in Guam and Saipan. In this report BancWest
Corporation and Subsidiaries is referred to as the Company, we or our. BancWest Corporation
alone is referred to as the Parent or BancWest. BancWest Corporation is a wholly owned
subsidiary of Paris-based BNP Paribas (BNPP). Basis of Presentation We have prepared the accompanying financial data for the three months ended March 31, 2005 and
2004 in accordance with accounting principles generally accepted in the United States. The preparation of financial statements in accordance with accounting principles generally
accepted in the United States requires management to make estimates and assumptions that affect the
amounts reported in our consolidated financial statements and accompanying notes. Management bases
its estimates on historical experience and various other assumptions believed to be reasonable.
Although these estimates are based on managements best knowledge of current events and actions
that may impact the Company in the future, actual results may be different from the estimates. Our
critical accounting policies are those that affect our financial statements materially and involve
difficult, subjective or complex judgments by management. In the opinion of management, the accompanying consolidated financial statements contain all
normal and recurring adjustments necessary to present fairly our consolidated financial position as
of March 31, 2005, December 31, 2004 and March 31, 2004, consolidated results of operations for the
three months ended March 31, 2005 and 2004, and cash flows for the three months ended March 31,
2005 and 2004. Descriptions of the significant accounting policies of the Company are included in Note 1
(Summary of Significant Accounting Policies) to the consolidated financial statements included in
the Companys 2004 Annual Report on Form 10-K. There have been no significant changes to these
policies. Reclassifications Certain amounts in the financial statements for prior periods have been reclassified to
conform with the current financial statement presentation. Stock-Based Compensation As allowed under the provisions of FAS No. 123, Accounting for Stock-Based Compensation, as
amended, the Company has chosen to recognize compensation expense using the intrinsic value-based
method of valuing stock options prescribed in Accounting Principles Board Opinion No. 25,
Accounting for Stock Issued to Employeesand related interpretations. Under the intrinsic
value-based method, compensation cost is measured as the amount by which the quoted market price at
the date of grant exceeds the stock option exercise price. Certain members of BancWests senior management team received stock option awards from BNPP on
March 25, 2005, March 24, 2004 and March 21, 2003. The options do not vest until after the fourth
year, at which time they are exercisable from the fourth anniversary through the tenth anniversary
date. Stock option awards of the 2005 and 2003 plans have been reflected in compensation expense.
No compensation expense was recognized for the 2004 plan, as the grant price was greater than the
market price. 25




---



##### Table of Contents



BancWest Corporation and Subsidiaries
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Unaudited) The following table is a summary of our stock option activity. Number
    
    

Weightedaverageexerciseprice
    
    

Weightedaverageremainingcontractual
life(in years)Options outstanding as of December 31, 2003
    
    
    275,000
    
    
    
    $39.07
    
    
    
    9.22Granted
    
    
    80,000
    
    
    
    60.45Forfeited
    
    
    (972
    )
    
    
    39.07Options outstanding as of March 31, 2004
    
    
    354,028
    
    
    
    $43.90
    
    
    
    9.20Options outstanding as of December 31, 2004
    
    
    343,028
    
    
    
    $43.93
    
    
    
    8.45Granted
    
    
    193,000
    
    
    
    71.42Forfeited
    
    
    --
    
    
    
    --Options outstanding as of March 31, 2005
    
    
    536,028
    
    
    
    $53.83
    
    
    
    8.84
 The following table illustrates the effect on net income if the Company had applied the
fair value recognition provisions of
FAS No. 123 to stock-based employee compensation. Three Months Ended March 31,2005
    
    
    2004(Dollars in thousand)Net Income (as reported)
    
    
    $136,604
    
    
    
    $113,052Add: Stock-based
compensation expense
recognized during period,
net of tax effects
    
    
    21
    
    
    
    24Less: Stock-based employee
compensation expense
determined under fair
value-based method, net of
taxes
    
    
    (240
    )
    
    
    (222
    )Pro Forma Net Income
    
    
    $136,385
    
    
    
    $112,854
 26




---



##### Table of Contents



BancWest Corporation and Subsidiaries
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Unaudited) 2. Mergers and Acquisitions Community First Bankshares Acquisition During the fourth quarter of 2004, the Company acquired Community First Bankshares, Inc.
(Community First). The acquisition was accounted for in accordance with Statement of Financial
Accounting Standard No. 141 Business Combinations (FAS 141). Accordingly, the purchase price was
preliminarily allocated to the assets acquired and the liabilities assumed based on their estimated
fair values at the acquisition date. The following table summarizes the Community First Balance Sheet on November 1, 2004,
including the effects of purchase accounting adjustments: (Dollars in thousands)AssetsCash and cash equivalents
    
    $
    228,233Securities available for sale
    
    
    1,458,677Net loans and leases
    
    
    3,394,490Intangibles
    
    
    1,010,142Other assets
    
    
    312,743Total Assets
    
    $
    6,404,285Liabilities and Stockholders EquityDeposits
    
    
    4,511,754Debt
    
    
    603,318Other liabilities
    
    
    94,307Total Liabilities
    
    
    5,209,379Stockholders equity
    
    
    1,194,906Total Liabilities and Stockholders Equity
    
    $
    6,404,285
 The following table summarizes the purchase price allocation of the Community First
acquisition. (Dollars in thousands)Total purchase price of Community First, including transaction costs
    
    $
    1,199,341Equity of Community First prior to acquisition by BancWest
    
    
    352,693Excess of pushed down equity over the carrying value of net assets acquired
    
    
    846,648Estimated adjustments to reflect assets acquired and liabilities assumed at fair value:Sublease loss reserve
    
    
    1,196Loans and leases
    
    
    27,104Premises and equipment
    
    
    (4,096
    )Other assets
    
    
    3,988Severance and employee relocation
    
    
    7,679Contract terminations
    
    
    6,096Identifiable intangibles
    
    
    (3,218
    )Deposits
    
    
    8,985Debt
    
    
    15,093Other liabilities and taxes
    
    
    4,646Estimated fair value adjustments related to net assets acquired
    
    
    67,473Estimated goodwill resulting from the merger with Community First
    
    $
    914,121
 27




---



##### Table of Contents



BancWest Corporation and Subsidiaries
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Unaudited) The following unaudited proforma condensed financial information presents the results of
operations of the Company had the Community First acquisition occurred as of January 1, 2004, after
giving effect to certain adjustments. The pro forma results have been prepared for comparative
purposes only and are not necessarily indicative of the results of operations which may occur in
the future or which would have occurred had the Community First acquisition been consummated as of
January 1, 2004. (Unaudited)Quarter Ended(Dollars in thousands)
    
    March 31, 2004Net interest income
    
    
    $381,014Provision for loan and lease losses
    
    
    21,230Noninterest income
    
    
    124,053Noninterest expense
    
    
    271,307Income before income taxes
    
    
    212,530Provision for income taxes
    
    
    82,456Net Income
    
    
    $130,074
 Exit costs related to Community First activities were recorded as purchase accounting
adjustments resulting in an increase to Goodwill. We anticipate that cash outlays for exit and
restructuring costs should be substantially completed by the end of 2005. Below is a summarization
of the exit cost activity related to the Community First acquisition. (Dollars in thousands)
    
    SeveranceandRelocation
    
    
    ContractTerminations
    
    
    SubleaselossReserves
    
    
    FixedAssets
    
    
    PrepaidExpenses
    
    
    Other
    
    
    TotalBalance, December 31, 2004
    
    
    $  7,557
    
    
    
    $  5,810
    
    
    
    $1,196
    
    
    
    $10,431
    
    
    
    $   383
    
    
    
    $     --
    
    
    
    $25,377Adjustments, net
    
    
    122
    
    
    
    286
    
    
    
    --
    
    
    
    401
    
    
    
    630
    
    
    
    165
    
    
    
    1,604Cash Payments
    
    
    (3,532
    )
    
    
    (4,351
    )
    
    
    (88
    )
    
    
    --
    
    
    
    --
    
    
    
    (165
    )
    
    
    (8,136
    )Balance, March 31, 2005
    
    
    $  4,147
    
    
    
    $  1,745
    
    
    
    $1,108
    
    
    
    $10,832
    
    
    
    $1,013
    
    
    
    $     --
    
    
    
    $18,845
 3. Derivative Financial Instruments Any portion of the changes in the fair value of a derivative designated as a hedge that is
deemed ineffective is recorded in current period earnings; this amount was not material in the
three months ended March 31, 2005 and 2004. Fair Value Hedges The Company has various derivative instruments that hedge the fair values of recognized assets
or liabilities or of unrecognized firm commitments. At March 31, 2005, the Company carried an
interest rate swap of $2.6 million with a fair value loss of $0.5 million that was a hedge for a
commercial loan. The Company receives 1-month LIBOR and pays a fixed rate of 8.32%. At March 31,
2004, the Company carried $2.7 million of such swaps with a fair value loss of $0.7 million. In
addition, at March 31, 2005, the Company carried interest rate swaps totaling $77.0 million with
fair value gains of $0.5 million and fair value losses of $2.4 million that were categorized as
fair value hedges for commercial and commercial real estate loans. The Company receives 6-month
LIBOR and pays fixed rates ranging from 3.79% to 7.99%. At March 31, 2004, the Company carried
$77.9 million of such swaps with fair value losses of $6.7 million. On November 20, 2002, the Parent executed a $150 million interest rate swap agreement with BNP
Paribas to hedge the fair value of the 9.5% BancWest Capital I Quarterly Income Preferred
Securities (the BWE Capital Securities) issued by BancWest Capital I. Following the adoption of
FIN 46, BancWest Capital I was deconsolidated, resulting in recognition of $150 million of
subordinated debt instead of the BWE Capital Securities. The terms of the subordinated debt mirror
those of the BWE Capital Securities. Concurrent with the deconsolidation of BancWest Capital I,
the Bank redesignated the interest rate swap to hedge the subordinated debt. The derivative
instrument is highly effective and all changes in the fair value of the hedge were recorded in
current-period earnings together with the offsetting change in fair value of the hedged item
attributable to the risk being hedged. We pay 3-month LIBOR plus 3.69% and receive fixed payments
at 9.5%. The fair value loss of the swap was $3.5 million at March 31, 2005 while the fair value
loss was $0.5 million at March 31, 2004. 28




---



##### Table of Contents



BancWest Corporation and Subsidiaries
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Unaudited) At March 31, 2005, the Company carried interest rate swaps totaling $8.6 million with fair
value gains of $0.2 million that were categorized as hedges for repurchase agreements. The Company
pays 3-month LIBOR and receives fixed rates ranging from 8.29% to 8.37%. At March 31, 2004, the
Company carried $8.6 million of such swaps with fair value gains of $0.6 million. Cash Flow Hedges At March 31, 2005, the Company carried interest rate swaps of $600 million with fair value
gains of $12.4 million which hedge LIBOR-based commercial loans. The hedges had fair value gains of
$48.3 million at March 31, 2004. The interest rate swaps were entered into during 2001 and mature
in 2006. We pay 3-month LIBOR and receive fixed rates ranging from 5.64% to 5.87%. The net
settlement on the $600 million swaps has increased commercial loan interest income by $4.0 million
for the three months ended March 31, 2005 and by $6.1 million for the three months ended March 31,
2004. The Company estimates net settlement gains, recorded as commercial loan interest income, of
$9.0 million over the next twelve months resulting from these hedges. At March 31, 2005, the Company carried multiple interest rate swaps totaling $100 million with
fair value gains of $5.9 million, in order to reduce exposure to interest rate increases associated
with short-term fixed rate liabilities. These swaps had fair value gains of $2.5 million and fair
value losses of $1.2 million at March 31, 2004. The swaps mature as follows: $70 million in 2013,
$20 million in 2018 and $10 million in 2023. We pay fixed rates ranging from 3.65% to 4.58% and
receive 3-month LIBOR. The effect on pretax income from these swaps for the three months ended
March 31, 2005 was a loss of $0.4 million compared with a $0.8 million loss at March 31, 2004. The
Company estimates a net increase to interest expense of $1.3 million over the next twelve months
resulting from these hedges. Free-standing derivative instruments include derivative transactions entered into for risk
management purposes that do not otherwise qualify for hedge accounting. Interest rate lock
commitments issued on residential mortgage loans intended to be held for resale are considered
free-standing derivative instruments. Such commitments are stratified by rates and terms and are
valued based on market quotes for similar loans. Adjustments, including discounting the historical
fallout rate, are then applied to the estimated fair value. Trading activities primarily involve
providing various free-standing interest rate and foreign exchange derivative products to
customers. Interest rate derivative instruments utilized by the Company in its trading operations
include interest rate swaps, caps, floors and collars. The following table summarizes derivatives held by the Company as of March 31, 2005, December
31, 2004 and March 31, 2004: March 31, 2005
    
    

December 31, 2004
    
    

March 31, 2004Credit
    
    
    
    
    
    
    
    
    
    
    Credit
    
    
    
    
    
    
    
    
    
    
    CreditNotional
    
    
    Risk
    
    
    Net Fair
    
    
    Notional
    
    
    Risk
    
    
    Net Fair
    
    
    Notional
    
    
    Risk
    
    
    Net Fair(Dollars in thousands)
    
    Amount
    
    
    Amount
    
    
    Value
    
    
    Amount
    
    
    Amount
    
    
    Value
    
    
    Amount
    
    
    Amount
    
    
    ValueHeld for hedge purposes:Interest rate swaps
    
    $
    938,216
    
    
    $
    18,975
    
    
    $
    12,554
    
    
    $
    938,534
    
    
    $
    24,790
    
    
    $
    17,327
    
    
    $
    939,217
    
    
    $
    51,389
    
    
    $
    42,289Held for trading or free-standing:Interest rate swaps
    
    
    1,483,392
    
    
    
    21,015
    
    
    
    8,032
    
    
    
    1,502,706
    
    
    
    19,558
    
    
    
    7,856
    
    
    
    1,427,642
    
    
    
    31,511
    
    
    
    6,517Purchased interest rate options
    
    
    161,546
    
    
    
    35
    
    
    
    35
    
    
    
    143,251
    
    
    
    203
    
    
    
    203
    
    
    
    71,923
    
    
    
    117
    
    
    
    117Written interest rate options
    
    
    165,433
    
    
    
    --
    
    
    
    (35
    )
    
    
    152,645
    
    
    
    --
    
    
    
    (203
    )
    
    
    131,942
    
    
    
    --
    
    
    
    (218
    )Forward interest rate options
    
    
    19,500
    
    
    
    --
    
    
    
    (48
    )
    
    
    22,000
    
    
    
    --
    
    
    
    (20
    )
    
    
    30,000
    
    
    
    41
    
    
    
    41Commitments to purchase and sell foreign currencies
    
    
    406,923
    
    
    
    3,419
    
    
    
    676
    
    
    
    401,057
    
    
    
    9,533
    
    
    
    1,046
    
    
    
    523,037
    
    
    
    6,691
    
    
    
    476Purchased foreign exchange options
    
    
    4,489
    
    
    
    63
    
    
    
    63
    
    
    
    4,876
    
    
    
    217
    
    
    
    217
    
    
    
    41,234
    
    
    
    422
    
    
    
    422Written foreign exchange options
    
    
    4,489
    
    
    
    --
    
    
    
    (63
    )
    
    
    4,876
    
    
    
    --
    
    
    
    (217
    )
    
    
    41,234
    
    
    
    --
    
    
    
    (422
    )
 29




---



##### Table of Contents



BancWest Corporation and Subsidiaries
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Unaudited) 4. Securities Available for Sale Amortized cost and fair value of securities available for sale were as follows: March 31, 2005
    
    
    December 31, 2004
    
    
    March 31, 2004Amortized
    
    
    Unrealized
    
    
    Unrealized
    
    
    
    
    
    
    Amortized
    
    
    Unrealized
    
    
    Unrealized
    
    
    
    
    
    
    Amortized
    
    
    Unrealized
    
    
    Unrealized(Dollars in thousands)
    
    Cost
    
    
    Gains
    
    
    Losses
    
    
    Fair Value
    
    
    Cost
    
    
    Gains
    
    
    Losses
    
    
    Fair Value
    
    
    Cost
    
    
    Gains
    
    
    Losses (1)
    
    
    Fair ValueU.S. Treasury and other U.S. Government
agencies and corporations
    
    
    $   278,135
    
    
    
    $     216
    
    
    
    $    (1,738
    )
    
    
    $   276,613
    
    
    
    $   266,174
    
    
    
    $     263
    
    
    
    $  (1,745
    )
    
    
    $   264,692
    
    
    
    $   180,341
    
    
    
    $     891
    
    
    
    $     (226
    )
    
    
    $   181,006Government-sponsored agencies
    
    
    3,097,424
    
    
    
    5,916
    
    
    
    (42,073
    )
    
    
    3,061,267
    
    
    
    2,372,319
    
    
    
    1,374
    
    
    
    (14,868
    )
    
    
    2,358,825
    
    
    
    1,376,952
    
    
    
    16,935
    
    
    
    (353
    )
    
    
    1,393,534Mortgage and asset-backed securities:Government agencies
    
    
    213,220
    
    
    
    1,334
    
    
    
    (552
    )
    
    
    214,002
    
    
    
    229,827
    
    
    
    1,741
    
    
    
    (450
    )
    
    
    231,118
    
    
    
    116,042
    
    
    
    2,109
    
    
    
    (2
    )
    
    
    118,149Government-sponsored agencies
    
    
    3,104,608
    
    
    
    5,161
    
    
    
    (73,970
    )
    
    
    3,035,799
    
    
    
    3,185,857
    
    
    
    10,733
    
    
    
    (37,208
    )
    
    
    3,159,382
    
    
    
    2,331,849
    
    
    
    32,253
    
    
    
    (12,340
    )
    
    
    2,351,762Other
    
    
    513,915
    
    
    
    2,900
    
    
    
    (4,279
    )
    
    
    512,536
    
    
    
    487,250
    
    
    
    3,177
    
    
    
    (2,512
    )
    
    
    487,915
    
    
    
    666,555
    
    
    
    10,049
    
    
    
    (354
    )
    
    
    676,250Collateralized mortgage obligations:Government agencies
    
    
    170,069
    
    
    
    --
    
    
    
    (4,142
    )
    
    
    165,927
    
    
    
    181,502
    
    
    
    --
    
    
    
    (2,311
    )
    
    
    179,191
    
    
    
    204,481
    
    
    
    1,361
    
    
    
    (800
    )
    
    
    205,042Government-sponsored agencies
    
    
    628,403
    
    
    
    222
    
    
    
    (11,547
    )
    
    
    617,078
    
    
    
    603,173
    
    
    
    420
    
    
    
    (6,907
    )
    
    
    596,686
    
    
    
    624,626
    
    
    
    3,304
    
    
    
    (1,225
    )
    
    
    626,705Other
    
    
    624,825
    
    
    
    7
    
    
    
    (10,124
    )
    
    
    614,708
    
    
    
    568,724
    
    
    
    154
    
    
    
    (5,565
    )
    
    
    563,313
    
    
    
    259,726
    
    
    
    1,234
    
    
    
    (58
    )
    
    
    260,902State and political subdivisions
    
    
    53,125
    
    
    
    307
    
    
    
    (1,072
    )
    
    
    52,360
    
    
    
    56,081
    
    
    
    627
    
    
    
    (297
    )
    
    
    56,411
    
    
    
    7,794
    
    
    
    524
    
    
    
    (12
    )
    
    
    8,306Other
    
    
    57,508
    
    
    
    151
    
    
    
    (1,673
    )
    
    
    55,986
    
    
    
    59,311
    
    
    
    103
    
    
    
    (2,384
    )
    
    
    57,030
    
    
    
    50,695
    
    
    
    598
    
    
    
    (121
    )
    
    
    51,172Total securities available for sale
    
    
    $8,741,232
    
    
    
    $16,214
    
    
    
    $(151,170
    )
    
    
    $8,606,276
    
    
    
    $8,010,218
    
    
    
    $18,592
    
    
    
    $(74,247
    )
    
    
    $7,954,563
    
    
    
    $5,819,061
    
    
    
    $69,258
    
    
    
    $(15,491
    )
    
    
    $5,872,828
   (1) At March 31, 2004, the Company held no securities that had been in a continuous
unrealized loss position for 12 months or more. 30




---



##### Table of Contents



BancWest Corporation and Subsidiaries
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Unaudited) The following table presents the unrealized gross losses and fair value of securities in
the securities available for sale portfolio at March 31, 2005, by length of time that individual
securities in each category have been in a continuous loss position. Because the declines in fair
value were a result of changes in market interest rates and the Company has both the ability and
the intent to hold the securities until maturity or the fair value at least equals the recorded
cost, no other-than-temporary impairment was recorded at March 31, 2005. March 31, 2005Less Than 12 Months
    
    
    12 Months or More
    
    
    TotalUnrealized
    
    
    
    
    
    
    Unrealized
    
    
    
    
    
    
    Unrealized(Dollars in thousands)
    
    Losses
    
    
    Fair Value
    
    
    Losses
    
    
    Fair Value
    
    
    Losses
    
    
    Fair ValueU.S. Treasury and other U.S.
Government
agencies and corporations
    
    
    $     (955
    )
    
    
    $   202,954
    
    
    
    $     (783
    )
    
    
    $       7,422
    
    
    
    $    (1,738
    )
    
    
    $   210,376Government-sponsored agencies
    
    
    (37,544
    )
    
    
    2,588,341
    
    
    
    (4,529
    )
    
    
    203,633
    
    
    
    (42,073
    )
    
    
    2,791,974Mortgage and asset-backed securities:Government agencies
    
    
    (552
    )
    
    
    82,256
    
    
    
    --
    
    
    
    --
    
    
    
    (552
    )
    
    
    82,256Government-sponsored agencies
    
    
    (30,903
    )
    
    
    2,025,136
    
    
    
    (43,067
    )
    
    
    811,181
    
    
    
    (73,970
    )
    
    
    2,836,317Other
    
    
    (3,035
    )
    
    
    320,911
    
    
    
    (1,244
    )
    
    
    118,379
    
    
    
    (4,279
    )
    
    
    439,290Collateralized mortgage obligations:Government agencies
    
    
    (2,894
    )
    
    
    122,000
    
    
    
    (1,248
    )
    
    
    43,927
    
    
    
    (4,142
    )
    
    
    165,927Government-sponsored agencies
    
    
    (4,763
    )
    
    
    319,257
    
    
    
    (6,784
    )
    
    
    283,678
    
    
    
    (11,547
    )
    
    
    602,935Other
    
    
    (7,987
    )
    
    
    475,661
    
    
    
    (2,137
    )
    
    
    91,899
    
    
    
    (10,124
    )
    
    
    567,560States and political subdivisions
    
    
    (1,057
    )
    
    
    39,407
    
    
    
    (15
    )
    
    
    360
    
    
    
    (1,072
    )
    
    
    39,767Other
    
    
    (129
    )
    
    
    14,910
    
    
    
    (1,544
    )
    
    
    14,456
    
    
    
    (1,673
    )
    
    
    29,366Total securities available for sale
    
    
    $(89,819
    )
    
    
    $6,190,833
    
    
    
    $(61,351
    )
    
    
    $1,574,935
    
    
    
    $(151,170
    )
    
    
    $7,765,768
 Gross realized gains and losses on securities available for sale for the periods
indicated were as follows: Three Months Ended March 31,2005
    
    
    2004(Dollars in thousands)Realized gains
    
    
    $419
    
    
    
    $368Realized losses
    
    
    (1
    )
    
    
    (1
    )Realized net gains
    
    
    $418
    
    
    
    $367
 31




---



##### Table of Contents



BancWest Corporation and Subsidiaries
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Unaudited) 5. Loans and Leases The following table sets forth the loan and lease portfolio by major categories: March 31, 2005
    
    
    December 31, 2004
    
    
    March 31, 2004Amount
    
    
    %
    
    
    Amount
    
    
    %
    
    
    Amount
    
    
    %(Dollars in thousands)Commercial, financial and agricultural
    
    $
    5,671,629
    
    
    
    17.1
    %
    
    $
    6,027,376
    
    
    
    18.4
    %
    
    $
    4,441,484
    
    
    
    16.9
    %Real estate:Commercial
    
    
    6,812,028
    
    
    
    20.6
    
    
    
    6,706,882
    
    
    
    20.5
    
    
    
    5,162,614
    
    
    
    19.7Construction
    
    
    1,598,233
    
    
    
    4.8
    
    
    
    1,493,723
    
    
    
    4.6
    
    
    
    957,806
    
    
    
    3.7Residential
    
    
    7,434,123
    
    
    
    22.4
    
    
    
    6,700,462
    
    
    
    20.5
    
    
    
    5,338,082
    
    
    
    20.4Total real estate loans
    
    
    15,844,384
    
    
    
    47.8
    
    
    
    14,901,067
    
    
    
    45.6
    
    
    
    11,458,502
    
    
    
    43.8Consumer
    
    
    9,129,750
    
    
    
    27.5
    
    
    
    9,243,731
    
    
    
    28.3
    
    
    
    7,658,692
    
    
    
    29.2Lease financing
    
    
    2,106,752
    
    
    
    6.4
    
    
    
    2,132,578
    
    
    
    6.5
    
    
    
    2,321,078
    
    
    
    8.8Foreign loans
    
    
    384,803
    
    
    
    1.2
    
    
    
    384,091
    
    
    
    1.2
    
    
    
    349,676
    
    
    
    1.3Total loans and leases
    
    $
    33,137,318
    
    
    
    100.0
    %
    
    $
    32,688,843
    
    
    
    100.0
    %
    
    $
    26,229,432
    
    
    
    100.0
    %
 Outstanding loan balances at March 31, 2005, December 31, 2004 and March 31, 2004 are net of
unearned income, including net deferred loan fees, of $275.2 million, $283.0 million and $351.0
million, respectively. 6. Allowance for Loan and Lease Losses The following table sets forth the activity in the allowance for loan and lease losses for the
periods indicated: Three Months Ended March 31,2005
    
    
    2004(Dollars in thousands)Balance at beginning of period
    
    
    $436,391
    
    
    
    $391,699Provision for loans and lease losses
    
    
    11,100
    
    
    
    18,865Loans and leases charged off:Commercial, financial and agricultural
    
    
    2,091
    
    
    
    2,136Real estate:Commercial
    
    
    308
    
    
    
    293Residential
    
    
    167
    
    
    
    20Consumer
    
    
    17,198
    
    
    
    13,514Lease financing
    
    
    4,071
    
    
    
    5,444Foreign
    
    
    347
    
    
    
    731Total loans and leases charged off
    
    
    24,182
    
    
    
    22,138Recoveries on loans and leases previously charged off:Commercial, financial and agricultural
    
    
    1,848
    
    
    
    2,454Real estate:Commercial
    
    
    406
    
    
    
    126Construction
    
    
    --
    
    
    
    34Residential
    
    
    197
    
    
    
    199Consumer
    
    
    4,089
    
    
    
    3,239Lease financing
    
    
    1,878
    
    
    
    1,765Foreign
    
    
    1,035
    
    
    
    244Total recoveries on loans and leases previously charged off
    
    
    9,453
    
    
    
    8,061Net charge-offs
    
    
    (14,729
    )
    
    
    (14,077
    )Balance at end of period
    
    
    $432,762
    
    
    
    $396,487
 32




---



##### Table of Contents



BancWest Corporation and Subsidiaries
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Unaudited) 7. Goodwill and Intangible Assets We perform the impairment testing of goodwill required under FAS No. 142 annually in the
fourth quarter. The impairment analysis is performed using a discounted cash flows model. The
table below provides the breakdown of goodwill by reportable segment and the change during the
year. Bank of the West
    
    
    First Hawaiian BankRegional
    
    
    Commercial
    
    
    Consumer
    
    
    Retail
    
    
    Consumer
    
    
    Commercial
    
    
    Financial
    
    
    
    
    
    
    Consolidated(Dollars in millions)
    
    Banking
    
    
    Banking
    
    
    Finance
    
    
    Banking
    
    
    Finance
    
    
    Banking
    
    
    Management
    
    
    BancWest
    
    
    TotalsBalance as of December 31, 2004:
    
    
    $2,127
    
    
    
    $708
    
    
    
    $308
    
    
    
    $650
    
    
    
    $216
    
    
    
    $118
    
    
    
    $11
    
    
    
    $  175
    
    
    
    $4,313Purchase accounting adjustment:Trinity Capital
    
    
    --
    
    
    
    1
    
    
    
    --
    
    
    
    --
    
    
    
    --
    
    
    
    --
    
    
    
    --
    
    
    
    --
    
    
    
    1Community First
    
    
    1
    
    
    
    --
    
    
    
    --
    
    
    
    --
    
    
    
    --
    
    
    
    --
    
    
    
    --
    
    
    
    --
    
    
    
    1USDB
    
    
    170
    
    
    
    --
    
    
    
    --
    
    
    
    --
    
    
    
    --
    
    
    
    --
    
    
    
    --
    
    
    
    (170
    )
    
    
    --Balance as of March 31, 2005:
    
    
    $2,298
    
    
    
    $709
    
    
    
    $308
    
    
    
    $650
    
    
    
    $216
    
    
    
    $118
    
    
    
    $11
    
    
    
    $      5
    
    
    
    $4,315
 Amortization of finite-lived intangible assets was $10.0 million and $5.8 million for the
three-month periods ended March 31, 2005 and 2004, respectively. The estimated annual amortization
expense for finite-lived intangible assets, primarily core deposit intangibles is: (Dollars in thousands)Estimate for the nine months ending
December 31, 2005
    
    $
    31,169Estimate for years ending December 31,2006
    
    $
    38,4742007
    
    
    35,7562008
    
    
    33,5322009
    
    
    31,7092010
    
    
    30,213
 The details of our finite-lived intangible assets are presented below: Gross Carrying
    
    
    Accumulated
    
    
    Net Book(Dollars in thousands)
    
    Amount
    
    
    Amortization
    
    
    ValueBalance as of March 31, 2005:Core Deposits
    
    
    $330,232
    
    
    
    $78,882
    
    
    
    $251,350Other Intangible Assets
    
    
    11,258
    
    
    
    814
    
    
    
    10,444Total
    
    
    $341,490
    
    
    
    $79,696
    
    
    
    $261,794Balance as of December 31, 2004:Core Deposits
    
    
    $330,206
    
    
    
    $69,141
    
    
    
    $261,065Other Intangible Assets
    
    
    12,000
    
    
    
    575
    
    
    
    11,425Total
    
    
    $342,206
    
    
    
    $69,716
    
    
    
    $272,490Balance as of March 31, 2004:Core Deposits
    
    
    $230,538
    
    
    
    $48,945
    
    
    
    $181,593Total
    
    
    $230,538
    
    
    
    $48,945
    
    
    
    $181,593
 33




---



##### Table of Contents



BancWest Corporation and Subsidiaries
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Unaudited) 8. Regulatory Capital Requirements Quantitative measures established by regulation to ensure capital adequacy require the
Companys depository institution subsidiaries to maintain minimum amounts and ratios of Tier 1 and
Total capital to risk-weighted assets, and Tier 1 capital to average assets. The table below sets
forth those ratios at March 31, 2005. To Be WellCapitalizedUnder PromptFor Required
    
    
    Corrective ActionActual
    
    
    Minimum Capital
    
    
    Provisions(Dollars in thousands)
    
    Amount
    
    
    Ratio
    
    
    Amount
    
    
    Ratio
    
    
    Amount
    
    
    RatioTier 1 Capital to Risk-Weighted
Assets:Bank of the West
    
    $
    3,396,593
    
    
    
    10.88
    %
    
    $
    1,248,917
    
    
    
    4.00
    %
    
    $
    1,873,375
    
    
    
    6.00
    %First Hawaiian Bank
    
    
    1,003,374
    
    
    
    13.88
    
    
    
    289,094
    
    
    
    4.00
    
    
    
    433,640
    
    
    
    6.00Total Capital to Risk-Weighted
Assets:Bank of the West
    
    $
    3,953,760
    
    
    
    12.66
    %
    
    $
    2,497,833
    
    
    
    8.00
    %
    
    $
    3,122,292
    
    
    
    10.00
    %First Hawaiian Bank
    
    
    1,162,773
    
    
    
    16.09
    
    
    
    578,187
    
    
    
    8.00
    
    
    
    722,734
    
    
    
    10.00Tier 1 Capital to Average
Assets (leverage ratio) (1):Bank of the West
    
    $
    3,396,593
    
    
    
    9.22
    %
    
    $
    1,473,876
    
    
    
    4.00
    %
    
    $
    1,842,345
    
    
    
    5.00
    %First Hawaiian Bank
    
    
    1,003,374
    
    
    
    10.41
    
    
    
    385,638
    
    
    
    4.00
    
    
    
    482,047
    
    
    
    5.00
   (1)
    The leverage ratio consists of a ratio of Tier 1 capital to average assets excluding
goodwill and certain other items. The minimum leverage ratio guideline is three percent for
banking organizations that do not anticipate or are not experiencing significant growth, and
that have well-diversified risk, excellent asset quality, high liquidity, good earnings, a
strong banking organization, and rated a composite 1 under the Uniform Financial Institution
Rating System established by the Federal Financial Institution Examination Council. For all
others, the minimum ratio is 4%. Because we are a financial holding company, only our depository institution subsidiaries
are subject to various regulatory capital requirements administered by the Federal banking
agencies. If these subsidiaries fail to meet minimum capital requirements, the Federal agencies can
initiate certain mandatory actions. Such regulatory actions could have a material effect on the
Companys financial statements. Under capital adequacy guidelines and the regulatory framework for prompt corrective action,
our depository institution subsidiaries must each meet specific capital guidelines that involve
quantitative measures of their assets, liabilities and certain off-balance-sheet items as
calculated under regulatory accounting practices. These capital amounts and classifications are
also subject to qualitative judgments by the regulators about components, risk weightings and other
factors. 34




---



##### Table of Contents



BancWest Corporation and Subsidiaries
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Unaudited) 9. Pension and Other Postretirement Benefit Plans The Company sponsors two noncontributory defined benefit pension plans, a cash balance plan
and an unfunded excess benefit pension plan. Prior to June 30, 2004, the Company sponsored three postretirement benefit plans.
Subsequently, two of the plans were amended for eligible employees who retire after such date. The
amendment places a cap on the funding plans and combined the two plans into one single plan. The
amendment does not change the benefit options available to the retirees. The following table sets forth the components of the net periodic benefit cost for the three
months ending March 31, 2005 and 2004: Pension Benefits
    
    
    Other Benefits2005
    
    
    2004
    
    
    2005
    
    
    2004(Dollars in thousands)Service cost
    
    $
    2,956
    
    
    $
    2,260
    
    
    $
    378
    
    
    $
    552Interest cost
    
    
    6,868
    
    
    
    6,568
    
    
    
    582
    
    
    
    654Expected return on plan assets
    
    
    (8,833
    )
    
    
    (8,159
    )
    
    
    --
    
    
    
    --Amortization of prior service cost
    
    
    --
    
    
    
    --
    
    
    
    (281
    )
    
    
    --Recognized net actuarial loss
    
    
    3,546
    
    
    
    1,515
    
    
    
    166
    
    
    
    117Total benefit cost
    
    $
    4,537
    
    
    $
    2,184
    
    
    $
    845
    
    
    $
    1,323
 The following table sets forth the components of the net periodic benefit cost for our funded
plans at March 31,: Funded Pension Benefits2005
    
    
    2004(Dollars in thousands)Service cost
    
    $
    2,475
    
    
    $
    1,760Interest cost
    
    
    5,672
    
    
    
    5,531Expected return on plan assets
    
    
    (8,833
    )
    
    
    (8,159
    )Recognized net actuarial loss
    
    
    2,918
    
    
    
    1,275Net periodic benefit cost
    
    $
    2,232
    
    
    $
    407
 Contributions The Company expects to contribute $4.2 million to its defined benefit pension plans and $3.4
million to its other postretirement benefit plans in 2005. These contributions are estimated
needs for the unfunded plans and may vary depending on retirements during 2005. Of these amounts,
the Company has contributed to its defined benefit pension and other postretirement benefit plans
$0.9 million and $0.9 million, respectively, as of March 31, 2005. No contributions to the pension
trust for funded plans are expected to be made during 2005. 35




---



##### Table of Contents



BancWest Corporation and Subsidiaries
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Unaudited) 10. Operating Segments Our reportable segments are the operating segments that we use in our internal reporting at
BOW and FHB. BOWs segments operate primarily in Arizona, California, Colorado, Idaho, Iowa,
Minnesota, Nebraska, Nevada, New Mexico, North Dakota, Oregon, South Dakota, Utah, Washington,
Wisconsin and Wyoming. As discussed below, certain BOW segments conduct business nationwide.
Although FHBs segments operate primarily in Hawaii, it also has operations outside the state, such
as leveraged leases, international banking and branches in Guam and Saipan. The results of each segment are determined by our management accounting process, which assigns
balance sheet and income statement items to each reporting segment. The net interest income of each
segment includes the results of the respective banks transfer pricing process, which assesses an
internal funds charge on all segment assets and a funds credit on all segment liabilities. The
internal charges and credits assigned to each asset and liability are intended to match the
maturity, repayment and interest rate characteristics of that asset or liability. With the
exception of goodwill, assets are allocated to each business segment on the basis of assumed
benefit to their business operations. Goodwill is assigned on the basis of projected future
earnings of the segments. The process of management accounting is dynamic and subjective. There is
no comprehensive or authoritative guidance which can be followed. Changes in management structure
and/or the allocation process may result in changes in allocations and transfers. In that case,
results for prior periods would be (and have been) reclassified for comparability. Results for
2004 have been reclassified to reflect changes in the organizational hierarchy and tax provision
allocation methodology applied in 2005. Bank of the West BOW manages its operations through three operating segments: Regional Banking, Commercial
Banking and Consumer Finance. Regional Banking Regional Banking seeks to serve a broad customer base by offering a wide range of retail and
commercial banking products. Deposit products offered by this segment include checking accounts,
savings deposits, market rate accounts, individual retirement accounts and time deposits. Regional
Banking utilizes its branch network in sixteen states as its principal funding source. BOWs
telephone banking service, a network of automated teller machines and the online eTimeBanker
service provide retail customers with other means of accessing and managing their accounts. Through its branch network, this business segment originates a variety of consumer loans,
including real estate secured installment loans and lines of credit and, to a lesser extent, other
collateralized and non-collateralized installment loans. In addition, Regional Banking originates
and holds a portfolio of first mortgage loans on 1-4 family residences. Through commercial banking
operations conducted from its branch network, Regional Banking offers a wide range of commercial
banking products intended to serve the needs of smaller community-based businesses. These include
originations of standardized loan and deposit products for businesses with relatively simple
banking and financing needs. Regional Banking also provides a number of fee-based products and
private banking services including trust, insurance and investment services. More complex and customized commercial banking services are offered through the segments
Business Banking Centers which serve clusters of branches and provide lending, deposit and cash
management services to companies operating in the respective market areas. Business Banking
Centers support commercial lending activities for middle market business customers in locations
throughout California, as well as Portland, Oregon, Reno and Las Vegas, Nevada and Albuquerque and
Las Cruces, New Mexico, and Salt Lake City, Utah. Through its insurance subsidiary, BW Insurance Agency, Regional Banking offers a wide variety
of insurance services for both individuals and small businesses. The BW Insurance Agency product
set includes auto, home and life, as well as numerous commercial insurance options. The company
operates 57 insurance agencies in eight states: Colorado, Iowa, Minnesota, Nebraska, North Dakota,
South Dakota, Utah and Wyoming. BancWest Investment Services Inc., (BWIS), another subsidiary, offers individuals a wide array
of mutual funds, annuities, IRA accounts, other tax-advantaged accounts and education savings
plans. BWIS operates its own broker/dealer and employs licensed investment specialists to meet
with clients in branches or at their clients place of business. Currently, Community First
Investment 36




---



##### Table of Contents



BancWest Corporation and Subsidiaries
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Unaudited) Services continues to serve states in the former Community First Bank footprint. Conversion
of these relationships to BWIS will occur in the second half of 2005. The Regional Banking Segment also includes a Pacific Rim Division which offers multilingual
services through a branch network in predominately Asian American communities in California, with
specialized domestic and international products and services for both individuals and companies. Commercial Banking The Commercial Banking Segment is comprised of several divisions: Commercial Banking Division,
Agribusiness Banking Division, Real Estate Industries Division, Leasing Division and Specialty
areas. The Commercial Banking Division supports business clients with revenues between $25 million
and $500 million, focusing on relationship banking including deposit generation as well as lending
activities. The Agribusiness Banking Division serves all agribusiness and rural commercial
clients. The Real Estate Industries Division provides construction financing to large regional and
national real estate developers for residential and commercial projects. Interim and permanent
financing is available on these commercial real estate projects. Equipment leasing is available
through the Companys commercial offices, branches and brokers across the nation. Our subsidiary,
Trinity Capital, specializes in nationwide vendor leasing and servicing programs for manufacturers
in specific markets. The Commercial Banking Segment also includes specialty areas: Church Lending, Small
Business Administration (SBA), Health Care, Credit Union, Government, Correspondent Banking and
Cash Management Services. The Commercial Banking Segment also provides trade finance and functions as an agent in
commercial, agribusiness and real estate syndication transactions, as well as providing fixed income
investment opportunities, foreign exchange and derivative transactions through its Capital Markets
unit. In addition, during the quarter, the Wealth Management Division was added to the Commercial
Banking Segment. Wealth Management provides trust and asset management services to a broad
spectrum of clientele throughout the Companys footprint. Consumer Finance The Consumer Finance Segment targets the origination of auto loans and leases in the western
and mid-western United States, and recreational vehicle and marine loans nationwide, with emphasis
on originating credits at the high end of the credit spectrum. These loans and leases are
originated through a network of auto dealers and recreational vehicle and marine dealers serviced
by sales representatives located throughout the country. This segment also includes BOWs wholly
owned subsidiary, Essex Credit Corporation, which focuses on the origination of marine and
recreational vehicle loans directly with customers. In February 2004, Essex began retaining
certain types of loans in its own portfolio. In previous years, Essex sold substantially all of
its loans to investors on a servicing released basis. First Hawaiian Bank FHB manages its operations through the following business segments: Retail Banking, Consumer
Finance, Commercial Banking and Financial Management. Retail Banking FHBs Retail Banking Segment operates through 56 banking offices located throughout Hawaii.
FHB also operates three branches in Guam and two branches in Saipan. The focus of FHBs retail/community banking strategy is primarily in Hawaii. Thanks to its significant market share in Hawaii FHB already has product or service relationships with a majority of the households in the state. Therefore, a key goal of its retail community banking
strategy is to build those relationships by cross-selling additional products and services to
existing individual and business customers. In pursuing the community banking markets in Hawaii, Guam and Saipan, FHB seeks to serve a
broad customer base by furnishing a full range of retail and commercial banking products. Through
its branch network, FHB generates first-mortgage loans on residences and a variety of consumer
loans, consumer lines of credit and second mortgages. To complement its branch network and serve
these 37




---



##### Table of Contents



BancWest Corporation and Subsidiaries
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Unaudited) customers, FHB operates a system of automated teller machines, a 24-hour phone center in
Honolulu and a full-service internet banking system. Through commercial banking operations
conducted from its branch network, FHB offers a wide range of banking products intended to serve
the needs of smaller, community-based businesses. FHB also provides a number of fee-based products
and services such as annuities and mutual funds, insurance and securities brokerage. The First
Investment Center of FHB makes available annuities, mutual funds and other securities through BWIS,
Inc., a registered broker-dealer, member NASD/SIPC. The private banking department within FHBs Retail Banking Segment provides a wide range of
private banking services and products to high-net-worth individuals. Consumer Finance Consumer Finance offers many types of loans to consumers, including lines of credit
(uncollateralized or collateralized) and various types of personal and automobile loans. FHB also
provides indirect consumer automobile financing on new and used autos by purchasing finance
contracts from dealers. Consumer Finance also makes residential real estate loans, including home-equity loans, to
enable borrowers to purchase, refinance, improve or construct residential real property. The loans
are collateralized by mortgage liens on the related property, substantially all located in Hawaii.
FHB also originates residential real estate loans for sale on the secondary market. Commercial Banking Commercial Banking is a major lender to small and medium-sized businesses in Hawaii, Guam and
Saipan. Lending services include receivable and inventory financing, term loans for equipment
acquisition and facilities expansion and trade finance letters of credit. To support the funds
management needs of both commercial banking customers and large private and public deposit
relationships maintained with the Company, FHB operates a Cash Management Department which provides
a full range of innovative and relationship-focused cash management services. Real Estate Lending-Commercial provides interim construction, residential development and
permanent financing for commercial real estate projects, including retail facilities, warehouses
and office buildings. FHB also does lease-to-fee conversion financing for condominium associations
and cooperatives. International Banking Services provides international banking products and services through
FHBs branch system, its Japan Business Development Department in Honolulu, a Grand Cayman branch,
three Guam branches, two branches in Saipan and a representative office in Tokyo, Japan. FHB
maintains a network of correspondent banking relationships throughout the world. FHBs
trade-related international banking activities are concentrated in the Asia-Pacific area. Leasing provides leasing services for businesses from heavy equipment to office computer and
communication systems. Financial Management The Financial Management Segment consists of the FHB Trust Division and a wholly owned FHB
subsidiary, Bishop Street Capital Management (BSCM). Financial Management offers asset management,
advisory and administrative services for estates, trusts and individuals. It also acts as trustee
and custodian of retirement and other employee benefit plans. At March 31, 2005, Financial
Management actively managed $3.4 billion in assets. Total assets actively managed and/or held in
custody were valued at $9.6 billion. 38




---



##### Table of Contents



BancWest Corporation and Subsidiaries
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Unaudited) The tables below present information about the Companys operating segments as of or for the
periods indicated: Bank of the West
    
    
    First Hawaiian BankRegional
    
    
    Commercial
    
    
    Consumer
    
    
    
    
    
    
    Retail
    
    
    Consumer
    
    
    Commercial
    
    
    Financial
    
    
    
    
    
    
    Other
    
    
    Reconciling
    
    
    Consolidated(Dollars in millions)
    
    Banking
    
    
    Banking
    
    
    Finance
    
    
    Other(1)
    
    
    Banking
    
    
    Finance
    
    
    Banking
    
    
    Management
    
    
    Other(2)
    
    
    BancWest(3)
    
    
    Items(4)
    
    
    TotalsThree Months Ended March 31, 2005:Net interest income
    
    
    $  176.5
    
    
    
    $    81.9
    
    
    
    $  56.1
    
    
    
    $  29.4
    
    
    
    $  68.3
    
    
    
    $  18.9
    
    
    
    $    7.5
    
    
    
    $      --
    
    
    
    $   (5.7
    )
    
    
    $  (38.5
    )
    
    
    $       --
    
    
    
    $  394.4Noninterest income
    
    
    58.3
    
    
    
    18.3
    
    
    
    7.5
    
    
    
    3.3
    
    
    
    14.1
    
    
    
    7.9
    
    
    
    1.4
    
    
    
    8.2
    
    
    
    4.3
    
    
    
    (0.5
    )
    
    
    --
    
    
    
    122.8Noninterest expense
    
    
    161.9
    
    
    
    35.3
    
    
    
    22.1
    
    
    
    11.4
    
    
    
    42.5
    
    
    
    10.9
    
    
    
    1.4
    
    
    
    6.7
    
    
    
    (2.1
    )
    
    
    2.0
    
    
    
    --
    
    
    
    292.1Provision for loan and lease losses
    
    
    1.6
    
    
    
    (0.1
    )
    
    
    6.5
    
    
    
    --
    
    
    
    (0.2
    )
    
    
    2.1
    
    
    
    0.2
    
    
    
    --
    
    
    
    0.9
    
    
    
    0.1
    
    
    
    --
    
    
    
    11.1Tax provision (benefit)
    
    
    26.6
    
    
    
    24.0
    
    
    
    13.2
    
    
    
    6.4
    
    
    
    15.7
    
    
    
    5.4
    
    
    
    2.4
    
    
    
    0.6
    
    
    
    (0.1
    )
    
    
    (16.8
    )
    
    
    --
    
    
    
    77.4Net income (loss)
    
    
    $    44.7
    
    
    
    $    41.0
    
    
    
    $  21.8
    
    
    
    $  14.9
    
    
    
    $  24.4
    
    
    
    $   8.4
    
    
    
    $    4.9
    
    
    
    $   0.9
    
    
    
    $   (0.1
    )
    
    
    $  (24.3
    )
    
    
    --
    
    
    
    $  136.6Assets at March 31
    
    
    13,179
    
    
    
    10,655
    
    
    
    9,324
    
    
    
    7,798
    
    
    
    4,072
    
    
    
    1,576
    
    
    
    1,242
    
    
    
    21
    
    
    
    3,851
    
    
    
    9,106
    
    
    
    (9,408
    )
    
    
    51,416Goodwill at March 31
    
    
    2,298
    
    
    
    709
    
    
    
    308
    
    
    
    --
    
    
    
    650
    
    
    
    216
    
    
    
    118
    
    
    
    11
    
    
    
    --
    
    
    
    5
    
    
    
    --
    
    
    
    4,315Average assets
    
    
    12,830
    
    
    
    10,533
    
    
    
    9,395
    
    
    
    7,500
    
    
    
    4,051
    
    
    
    1,571
    
    
    
    1,225
    
    
    
    20
    
    
    
    3,767
    
    
    
    9,060
    
    
    
    (9,611
    )
    
    
    50,341Average loans and leases
    
    
    9,757
    
    
    
    8,757
    
    
    
    8,738
    
    
    
    --
    
    
    
    3,053
    
    
    
    1,389
    
    
    
    1,027
    
    
    
    --
    
    
    
    29
    
    
    
    32
    
    
    
    (34
    )
    
    
    32,748Average deposits
    
    
    20,015
    
    
    
    3,860
    
    
    
    14
    
    
    
    2,274
    
    
    
    7,609
    
    
    
    10
    
    
    
    47
    
    
    
    35
    
    
    
    214
    
    
    
    --
    
    
    
    (74
    )
    
    
    34,004Three Months Ended March 31, 2004:Net interest income
    
    
    $  123.4
    
    
    
    $    77.5
    
    
    
    $  53.0
    
    
    
    $  20.7
    
    
    
    $  56.6
    
    
    
    $  18.9
    
    
    
    $  10.1
    
    
    
    $  (0.1
    )
    
    
    $   (6.2
    )
    
    
    $  (33.9
    )
    
    
    $       --
    
    
    
    $  320.0Noninterest income
    
    
    43.6
    
    
    
    17.9
    
    
    
    2.7
    
    
    
    1.4
    
    
    
    14.7
    
    
    
    8.4
    
    
    
    1.4
    
    
    
    7.7
    
    
    
    3.9
    
    
    
    0.8
    
    
    
    --
    
    
    
    102.5Noninterest expense
    
    
    107.8
    
    
    
    32.5
    
    
    
    17.0
    
    
    
    3.5
    
    
    
    41.9
    
    
    
    9.8
    
    
    
    1.7
    
    
    
    6.5
    
    
    
    (5.2
    )
    
    
    3.3
    
    
    
    --
    
    
    
    218.8Provision for loan and lease losses
    
    
    0.5
    
    
    
    0.4
    
    
    
    14.9
    
    
    
    --
    
    
    
    1.3
    
    
    
    2.0
    
    
    
    0.2
    
    
    
    --
    
    
    
    (0.5
    )
    
    
    0.1
    
    
    
    --
    
    
    
    18.9Tax provision (benefit)
    
    
    23.3
    
    
    
    24.5
    
    
    
    9.5
    
    
    
    7.1
    
    
    
    11.3
    
    
    
    6.2
    
    
    
    2.9
    
    
    
    0.5
    
    
    
    1.4
    
    
    
    (15.0
    )
    
    
    --
    
    
    
    71.7Net income (loss)
    
    
    $    35.4
    
    
    
    $    38.0
    
    
    
    $  14.3
    
    
    
    $  11.5
    
    
    
    $  16.8
    
    
    
    $    9.3
    
    
    
    $    6.7
    
    
    
    $   0.6
    
    
    
    $    2.0
    
    
    
    $  (21.5
    )
    
    
    $       --
    
    
    
    $  113.1Assets at March 31
    
    
    7,891
    
    
    
    8,774
    
    
    
    8,274
    
    
    
    4,629
    
    
    
    3,606
    
    
    
    1,515
    
    
    
    1,213
    
    
    
    24
    
    
    
    3,498
    
    
    
    7,080
    
    
    
    (7,590
    )
    
    
    $38,914Goodwill at March 31
    
    
    1,214
    
    
    
    707
    
    
    
    308
    
    
    
    --
    
    
    
    650
    
    
    
    216
    
    
    
    118
    
    
    
    10
    
    
    
    --
    
    
    
    5
    
    
    
    --
    
    
    
    3,228Average assets
    
    
    7,817
    
    
    
    8,646
    
    
    
    8,104
    
    
    
    4,627
    
    
    
    3,570
    
    
    
    1,472
    
    
    
    1,277
    
    
    
    24
    
    
    
    3,266
    
    
    
    7,016
    
    
    
    (7,483
    )
    
    
    38,336Average loans and leases
    
    
    5,795
    
    
    
    7,327
    
    
    
    7,760
    
    
    
    --
    
    
    
    2,582
    
    
    
    1,282
    
    
    
    1,137
    
    
    
    9
    
    
    
    38
    
    
    
    50
    
    
    
    (38
    )
    
    
    25,942Average deposits
    
    
    14,390
    
    
    
    3,379
    
    
    
    6
    
    
    
    1,625
    
    
    
    6,838
    
    
    
    7
    
    
    
    19
    
    
    
    30
    
    
    
    200
    
    
    
    --
    
    
    
    (62
    )
    
    
    26,432
   (1)
    
    The net interest income and noninterest income items in the Other column are
related to Treasury activities and unallocated other income for all periods presented. The
noninterest expense items in the Other column are related to Treasury activities and
unallocated administrative items for all periods presented. The material average asset items
in the Other column relate to unallocated Treasury securities for the periods presented. The
material average deposit items in the Other column relate to unallocated Treasury balances for
the periods presented.(2)
    
    The net interest income and noninterest income items in the Other column are related
to Treasury activities and unallocated other income and transfer pricing charges for all
periods presented. The noninterest expense items in the Other column are unallocated
administrative items for March 31, 2005. The noninterest expense items in the Other column
are primarily from Treasury activities and unallocated administrative items for March 31,
2004. The material average asset items in the Other column are related to unallocated
Treasury securities for the periods presented. The material average deposit items in the
Other column are related to unallocated Treasury balances for the periods presented.(3)
    
    The Other BancWest column consists primarily of BancWest Corporation (Parent
Company) and FHL Lease Holding Company, Inc.(4)
    
    The reconciling items are intercompany eliminations. 39




---



##### Table of Contents



BancWest Corporation and Subsidiaries
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Unaudited) 11. Subsequent Events On April 28, 2005, BancWest entered into a Stock Purchase Agreement and an Amended and
Restated Stockholders Agreement with BNP Paribas S.A., concerning Bank of the West common stock.
Under the terms of the Stock Purchase agreement, BancWest sold BNP Paribas S.A. 254,132 shares of
the outstanding common stock of Bank of the West for $590 million. BancWest used the proceeds to
repay short-term debt of $590 million owed to BNP Paribas S.A. This debt was incurred in conjunction with the acquisitions of Community First and USDB in the fourth quarter of 2004. The Amended and Restated Stockholders Agreement governs certain call and put options relating
to the 254,132 shares of Bank of the West common stock sold by BancWest to BNP Paribas S.A. The
call option relating to the 254,132 shares of Bank of the West common stock gives BancWest the
right on specified dates or events to repurchase all or a portion of the stock at a price equal to
$590 million, plus accrued interest at a rate of 4.95%, plus $5 million, or a portion thereof based
on the percentage of shares called. If BancWest does not exercise its call option by May 28, 2014
or within 90 days after certain specified events or agreements, BNP Paribas S.A. can require
BancWest to repurchase the shares of Bank of the West common stock at a price equal to $590
million, plus accrued interest at a rate of 4.95%, plus $50 million, or a portion thereof based on
the percentage of shares required to be purchased. Due to the put and call arrangement, the $590
million repurchase agreement is considered a redeemable security and accordingly classified as
debt. 40




---



##### Table of Contents



BancWest Corporation and Subsidiaries
EXHIBITS 
 PART II. OTHER INFORMATION 
 Item 5. Other Information None 
 Item 6. Exhibits The Exhibits listed below are filed or incorporated by reference as part of this Report. (a) Exhibits 12
    
    Statement regarding computation of ratios31
    
    Section 302 Certifications32
    
    Section 1350 Certifications
 
 SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly
caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. BANCWEST CORPORATIONDate: May 13, 2005
    By:
    /s/ Douglas C. GrigsbyDouglas C. GrigsbyExecutive Vice President, Chief
Financial Officer and Treasurer
(principal financial officer) 41