<PAGE>   1
================================================================================

                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D. C. 20549

                             ----------------------

                                    FORM 10-Q


       (Mark One)


         [x]   QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
               SECURITIES EXCHANGE ACT OF 1934

               For the quarterly period ended September 30, 1998

                                       OR

         [ ]   TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
               SECURITIES EXCHANGE ACT OF 1934

               For the transition period from ____________ to ____________

                          Commission file number 0-7949

                             ----------------------

                              BANCWEST CORPORATION
             (Exact name of registrant as specified in its charter)

                             ----------------------


                DELAWARE                               99-0156159
        (State of incorporation)                    (I.R.S. Employer
                                                   Identification No.)

   999 BISHOP STREET, HONOLULU, HAWAII                    96813
 (Address of principal executive offices)              (Zip Code)

                                 (808) 525-7000
              (Registrant's telephone number, including area code)

                             ----------------------

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 [X] No [ ]


       The number of shares outstanding of each of the issuer's classes of
                    common stock as of October 30, 1998 was:

                 Class                                 Outstanding
      -----------------------------                 -----------------
      Common Stock, $5.00 Par Value                 31,140,334 Shares

================================================================================

<PAGE>   2
<TABLE>
<CAPTION>
PART I.  FINANCIAL INFORMATION

Item 1.  Financial Statements (Unaudited)                                                Page
                                                                                         ----
<S>                                                                                     <C>
         Consolidated Balance Sheets at September 30, 1998, December 31, 1997
               and September 30, 1997                                                      2

         Consolidated Statements of Income for the quarter and nine months ended
               September 30, 1998 and 1997                                                 3

         Consolidated Statements of Cash Flows for the nine months ended
               September 30, 1998 and 1997                                                 4

         Consolidated Statements of Changes in Stockholders' Equity for the nine
               months ended September 30, 1998 and 1997                                    5

         Notes to Consolidated Financial Statements                                      5 - 8

Item 2.  Management's Discussion and Analysis of Financial Condition
               and Results of Operations                                                 8 - 24

Item 3.  Quantitative and Qualitative Disclosures About Market Risk                     24 - 25

PART II.       OTHER INFORMATION

Item 2.  Changes in Securities and Use of Proceeds                                        26

Item 4.  Submission of Matters to a Vote of Security Holders                              27

Item 6.  Exhibits and Reports on Form 8-K                                                 27

SIGNATURES                                                                                28

EXHIBIT INDEX
</TABLE>


                                        1

<PAGE>   3
                                 PART I.  FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS (NOTE: AS OF NOVEMBER 1, 1998, FIRST HAWAIIAN, 
         INC. HAS BEEN RENAMED "BANCWEST CORPORATION")

CONSOLIDATED BALANCE SHEETS (Unaudited)
First Hawaiian, Inc. and Subsidiaries

<TABLE>
<CAPTION>
                                                     SEPTEMBER 30,         December 31,        September 30,
                                                         1998                 1997                  1997
                                                     -----------           -----------           -----------
                                                                         (in thousands)
<S>                                                  <C>                   <C>                   <C>
ASSETS
Interest-bearing deposits in other banks             $   219,721           $   137,930           $   183,730
Federal funds sold and securities purchased
    under agreements to resell                           195,000               134,274               156,962
Available-for-sale investment securities                 663,663               778,124               700,464
Loans:
    Loans                                              6,322,346             6,238,681             6,022,244
    Less allowance for loan losses                        86,249                82,596                83,575
                                                     -----------           -----------           -----------
Net loans                                              6,236,097             6,156,085             5,938,669
                                                     -----------           -----------           -----------
Total earning assets                                   7,314,481             7,206,413             6,979,825
Cash and due from banks                                  270,150               282,905               329,552
Premises and equipment                                   239,036               245,999               245,178
Customers' acceptance liability                              528                   867                   531
Core deposit premium                                      22,463                25,347                26,309
Goodwill                                                  93,074                96,030                97,234
Other assets                                             244,542               235,531               216,419
                                                     -----------           -----------           -----------
TOTAL ASSETS                                         $ 8,184,274           $ 8,093,092           $ 7,895,048
                                                     ===========           ===========           ===========

LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits:
    Noninterest-bearing demand                       $   796,707           $   823,302           $   797,255
    Interest-bearing demand                            1,533,563             1,494,379             1,356,431
    Savings                                            1,006,411               986,895             1,065,937
    Time                                               2,591,583             2,490,915             2,442,574
    Foreign                                              267,588               293,709               295,092
                                                     -----------           -----------           -----------
Total deposits                                         6,195,852             6,089,200             5,957,289
                                                     -----------           -----------           -----------
Short-term borrowings                                    624,637               721,865               644,241
Acceptances outstanding                                      528                   867                   531
Other liabilities                                        281,190               230,723               222,965
Long-term debt                                           213,485               218,736               228,742
Guaranteed preferred beneficial interests
    in Company's junior subordinated
    debentures                                           100,000               100,000               100,000
                                                     -----------           -----------           -----------
TOTAL LIABILITIES                                      7,415,692             7,361,391             7,153,768
                                                     -----------           -----------           -----------
Stockholders' equity:
    Preferred stock                                           --                    --                    --
    Common stock                                         165,952               165,952               165,952
    Surplus                                              148,151               148,165               148,198
    Retained earnings                                    510,122               473,659               463,247
    Accumulated other comprehensive income                 7,394                  (241)                1,142
    Treasury stock                                       (63,037)              (55,834)              (37,259)
                                                     -----------           -----------           -----------
TOTAL STOCKHOLDERS' EQUITY                               768,582               731,701               741,280
                                                     -----------           -----------           -----------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY           $ 8,184,274           $ 8,093,092           $ 7,895,048
                                                     ===========           ===========           ===========
</TABLE>

The accompanying notes are an integral part of these consolidated financial
statements.


                                        2
<PAGE>   4
CONSOLIDATED STATEMENTS OF INCOME (Unaudited)
First Hawaiian, Inc. and Subsidiaries


<TABLE>
<CAPTION>
                                                     QUARTER ENDED SEPTEMBER 30,         NINE MONTHS ENDED SEPTEMBER 30,
                                                   ------------------------------        ------------------------------
                                                       1998              1997               1998                1997  
                                                   -----------        -----------        -----------        -----------
                                                          (in thousands, except number of shares and per share data)
<S>                                                <C>                <C>                <C>                <C>        
INTEREST INCOME
Interest and fees on loans                         $   134,140        $   126,770        $   395,519        $   375,023
Lease financing income                                   4,435              5,234             13,609             12,931
Interest on investment securities:
    Taxable interest income                             11,167             13,369             35,516             46,775
    Exempt from Federal income taxes                        18                132                 68                554
Other interest income                                    5,213              3,927             14,178              8,997
                                                   -----------        -----------        -----------        -----------
    Total interest income                              154,973            149,432            458,890            444,280
                                                   -----------        -----------        -----------        -----------
INTEREST EXPENSE
Deposits                                                52,779             50,292            155,610            146,105
Short-term borrowings                                    7,826              9,118             25,689             32,522
Long-term debt                                           5,687              5,440             16,883             12,900
                                                   -----------        -----------        -----------        -----------
    Total interest expense                              66,292             64,850            198,182            191,527
                                                   -----------        -----------        -----------        -----------
    Net interest income                                 88,681             84,582            260,708            252,753
Provision for loan losses                                6,279              3,817             18,191             11,830
                                                   -----------        -----------        -----------        -----------
    Net interest income after provision for
       loan losses                                      82,402             80,765            242,517            240,923
                                                   -----------        -----------        -----------        -----------
NONINTEREST INCOME
Trust and investment services income                     6,510              6,294             19,937             19,192
Service charges on deposit accounts                      7,804              7,348             22,495             21,366
Other service charges and fees                           9,262              7,739             25,560             21,741
Securities gains, net                                      145                 68                140                287
Other                                                    2,448              2,042             14,864             10,280
                                                   -----------        -----------        -----------        -----------
    Total noninterest income                            26,169             23,491             82,996             72,866
                                                   -----------        -----------        -----------        -----------
NONINTEREST EXPENSE
Salaries and wages                                      27,882             28,246             83,253             85,481
Employee benefits                                        7,990              8,723             23,291             26,454
Occupancy expense                                        9,706              9,141             29,237             29,282
Equipment expense                                        6,090              5,898             19,211             18,468
Other                                                   21,536             19,696             68,071             59,054
                                                   -----------        -----------        -----------        -----------
    Total noninterest expense                           73,204             71,704            223,063            218,739
                                                   -----------        -----------        -----------        -----------
    Income before income taxes                          35,367             32,552            102,450             95,050
Income taxes                                            12,837             11,201             37,024             30,918
                                                   -----------        -----------        -----------        -----------
NET INCOME                                         $    22,530        $    21,351        $    65,426        $    64,132
                                                   ===========        ===========        ===========        ===========

PER SHARE DATA:
  BASIC EARNINGS                                   $       .72        $       .67        $      2.10        $      2.02
                                                   ===========        ===========        ===========        ===========
  DILUTED EARNINGS                                 $       .72        $       .67        $      2.09        $      2.01
                                                   ===========        ===========        ===========        ===========
  CASH DIVIDENDS                                   $       .31        $       .31        $       .93        $       .93
                                                   ===========        ===========        ===========        ===========

AVERAGE SHARES OUTSTANDING                          31,143,768         31,826,803         31,154,496         31,797,540
                                                   ===========        ===========        ===========        ===========
</TABLE>

The accompanying notes are an integral part of these consolidated financial
statements.


                                        3

<PAGE>   5
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
First Hawaiian, Inc. and Subsidiaries

<TABLE>
<CAPTION>
                                                                                 NINE MONTHS ENDED 
                                                                                    SEPTEMBER 30,
                                                                            ---------------------------
                                                                               1998              1997
                                                                            ---------         ---------
                                                                                  (in thousands)
<S>                                                                         <C>               <C>      
CASH AND DUE FROM BANKS AT BEGINNING OF PERIOD                              $ 282,905         $ 333,511
                                                                            ---------         ---------
Cash flows from operating activities:
  Net income                                                                   65,426            64,132
  Adjustments to reconcile net income to net cash
    provided by operating activities:
      Provision for loan losses                                                18,191            11,830
      Net gain on sale of assets                                               (6,022)           (2,500)
      Depreciation and amortization                                            24,473            23,269
      Income taxes                                                             32,107            12,867
      Decrease (increase) in interest receivable                               (3,019)            4,779
      Increase (decrease) in interest payable                                  (7,355)            3,818
      Decrease (increase) in prepaid expenses                                  (5,882)            1,685
      Other                                                                    22,984            21,564
                                                                            ---------         ---------
Net cash provided by operating activities                                     140,903           141,444
                                                                            ---------         ---------
Cash flows from investing activities:
  Net increase in interest-bearing deposits
    in other banks                                                            (81,791)         (113,600)
  Net increase in Federal funds sold and
    securities purchased under agreements to resell                           (60,726)           (8,592)
  Purchase of available-for-sale investment securities                       (187,074)         (137,008)
  Proceeds from sale of available-for-sale
    investment securities                                                      31,500           280,416
  Proceeds from maturity of available-for-sale
    investment securities                                                     282,711           295,672
  Net increase in loans to customers                                         (120,224)         (243,523)
  Proceeds from sale of assets                                                 11,402             2,500
  Capital expenditures                                                        (11,987)          (14,593)
  Other                                                                        14,538           (36,908)
                                                                            ---------         ---------
Net cash provided by (used in) investing activities                          (121,651)           24,364
                                                                            ---------         ---------
Cash flows from financing activities:
  Net increase in deposits                                                    106,652            20,581
  Net decrease in short-term borrowings                                      (102,228)         (295,319)
  Proceeds from (payments on) long-term debt, net                                (251)          132,999
  Cash dividends paid                                                         (28,963)          (29,578)
  Issuance (repurchase) of treasury stock, net                                 (7,217)            1,550
                                                                            ---------         ---------
Net cash used in financing activities                                         (32,007)         (169,767)
                                                                            ---------         ---------
CASH AND DUE FROM BANKS AT END OF PERIOD                                    $ 270,150         $ 329,552
                                                                            =========         =========

Supplemental disclosures:
  Interest paid                                                             $ 205,537         $ 187,709
                                                                            =========         =========
  Income taxes paid                                                         $   4,917         $  18,051
                                                                            =========         =========
Supplemental schedule of noncash investing
 and financing activities:
  Loans converted into other real estate owned                              $   8,441         $   9,515
                                                                            =========         =========
  Loans made to facilitate the sale of other real estate owned              $     958         $     861
                                                                            =========         =========
</TABLE>

The accompanying notes are an integral part of these consolidated financial
statements.


                                        4

<PAGE>   6
CONSOLIDATED STATEMENTS OF
CHANGES IN STOCKHOLDERS' EQUITY (Unaudited)
First Hawaiian, Inc. and Subsidiaries

<TABLE>
<CAPTION>
                                                                                    Accumulated
                                                                                       Other
                                              Common                    Retained    Comprehensive    Treasury
                                               Stock       Surplus      Earnings       Income          Stock         Total
                                             ---------    ---------     ---------   -------------    ---------     ---------
                                                                 (in thousands, except per share data)
<S>                                          <C>          <C>           <C>            <C>           <C>           <C>      
Balance, December 31, 1997                   $ 165,952    $ 148,165     $ 473,659      $    (241)    $ (55,834)    $ 731,701
Comprehensive income:
    Net income                                      --           --        65,426             --            --        65,426
    Unrealized valuation adjustment,
      net of tax and reclassification
      adjustment                                    --           --            --          7,635            --         7,635
                                             ---------    ---------     ---------      ---------     ---------     ---------
    Comprehensive income                            --           --        65,426          7,635            --        73,061
                                             ---------    ---------     ---------      ---------     ---------     ---------
Purchase of treasury stock                          --           --            --             --        (7,342)       (7,342)
Cash dividends ($.93 per share)                     --           --       (28,963)            --            --       (28,963)
Incentive Plan for Key Executives                   --          (14)           --             --           139           125
                                             ---------    ---------     ---------      ---------     ---------     ---------
BALANCE, SEPTEMBER 30, 1998                  $ 165,952    $ 148,151     $ 510,122      $   7,394     $ (63,037)    $ 768,582
                                             =========    =========     =========      =========     =========     =========

Balance, December 31, 1996                   $ 165,952    $ 148,196     $ 428,693      $   1,850     $ (38,807)    $ 705,884
Comprehensive income:
    Net income                                      --           --        64,132             --            --        64,132
    Unrealized valuation adjustment,
      net of tax and reclassification
      adjustment                                    --           --            --           (708)           --          (708)
                                             ---------    ---------     ---------      ---------     ---------     ---------
    Comprehensive income                            --           --        64,132           (708)           --        63,424
                                             ---------    ---------     ---------      ---------     ---------     ---------
Cash dividends ($.93 per share)                     --           --       (29,578)            --            --       (29,578)
Incentive Plan for Key Executives                   --            2            --             --         1,548         1,550
                                             ---------    ---------     ---------      ---------     ---------     ---------
Balance, September 30, 1997                  $ 165,952    $ 148,198     $ 463,247      $   1,142     $ (37,259)    $ 741,280
                                             =========    =========     =========      =========     =========     =========
</TABLE>

The accompanying notes are an integral part of these consolidated financial
statements.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
First Hawaiian, Inc. and Subsidiaries

1.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

    The accounting and reporting policies of First Hawaiian, Inc. and
Subsidiaries (collectively, the "Company") conform with generally accepted
accounting principles and practices within the banking industry. The following
is a summary of significant accounting policies:

    CONSOLIDATION

    The consolidated financial statements of the Company include the accounts of
First Hawaiian, Inc. ("FHI") and its wholly-owned subsidiaries: First Hawaiian
Bank and its wholly-owned subsidiaries ("FHB"); Pacific One Bank ("Pacific
One"); FHL Lease Holding Company, Inc. and its wholly-owned subsidiary
("Leasing"); First Hawaiian Capital I (of which FHI owns all the common
securities); and FHI International, Inc. All significant intercompany balances
and transactions have been eliminated in consolidation. In the opinion of
management, all adjustments (which included only normal recurring adjustments)
necessary for a fair presentation are reflected in the consolidated financial
statements.

    RECLASSIFICATIONS

    Certain amounts in the consolidated financial statements for 1997 have been
reclassified to conform with the 1998 presentation. Such reclassifications had
no effect on the consolidated net income as previously reported.

2.  NEW PRONOUNCEMENTS

    The provisions of Statement of Financial Accounting Standards ("SFAS") No.
125, "Accounting for Transfers and Servicing of Financial Assets and
Extinguishments of Liabilities," that were deferred by SFAS No. 127, "Deferral
of the Effective Date of Certain Provisions of FASB Statement No. 125 - An
Amendment of FASB Statement No. 125," became effective as to repurchase
agreements, dollar rolls, securities lending and certain other transactions
after December 31, 1997. The Company requires delivery of collateral or other
security as a condition to entering into repurchase or reverse-repurchase
transactions. With respect to reverse-repurchase transactions, the Company does
not take control of the related collateral. Accordingly, the Company does not
record the collateral or the related obligation to return such collateral in its
Consolidated Balance Sheets. The Company has not relinquished control of any
securities in respect of repurchase transactions for the nine-month period ended
September 30, 1998, and the Company has not recorded a collateral transfer from
the applicable counterparties.


                                        5

<PAGE>   7
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
First Hawaiian, Inc. and Subsidiaries


    Effective January 1, 1998, the Company adopted SFAS No. 130, "Reporting
Comprehensive Income," which established standards for reporting comprehensive
income (defined to include net income, unrealized gains and losses on
available-for-sale investment securities, foreign currency adjustments, as well
as certain other items not included in the income statement). The Company's
Consolidated Statements of Changes in Stockholders' Equity have been reformatted
and restated for the prior periods in compliance with SFAS No. 130.

    In February 1998, the Financial Accounting Standards Board ("FASB") issued
SFAS No. 132, "Employers' Disclosures about Pensions and Other Postretirement
Benefits," which standardized disclosure requirements for pensions and other
post-retirement benefits. The Company plans to implement SFAS No. 132 (which
does not change existing measurement or recognition standards) in its
consolidated financial statements for the year ending December 31, 1998. The
adoption of SFAS No. 132 is not expected to have a material effect on the
Company's consolidated financial statements.

    In June 1998, the FASB issued SFAS No. 133, "Accounting for Derivative
Instruments and Hedging Activities." SFAS No. 133 establishes accounting and
reporting standards for derivative instruments and hedging activities. SFAS No.
133 requires the recognition of all derivative instruments in the statement of
financial position as either assets or liabilities and the measurement of
derivative instruments at fair value. SFAS No. 133 is effective for all fiscal
quarters of fiscal years beginning after June 15, 1999. Management has not yet
determined the impact the adoption of SFAS No. 133 will have on the Company's
consolidated financial statements.

    In October 1998, the FASB issued SFAS No. 134, "Accounting for
Mortgage-Backed Securities Retained after the Securitization of Mortgage Loans
Held for Sale by a Mortgage Banking Enterprise, an amendment of SFAS No. 65."
SFAS No. 134 requires mortgage banking enterprises to classify loans held for
sale that they have securitized, based on their intent to sell or hold these
investments. SFAS No. 134 is effective for the first fiscal quarter beginning
after December 31, 1998. The adoption of SFAS No. 134 is not expected to have a
material effect on the Company's consolidated financial statements.

    In June 1997, the FASB issued SFAS No. 131, "Disclosures about Segments of
an Enterprise and Related Information." SFAS No. 131 establishes standards for
reporting operating segments and requires certain other disclosures about
products and services, geographic areas and major customers. The disclosure
requirements are effective for the year ended December 31, 1998. SFAS No. 131
requires interim financial statements to include selected information about
operating segments beginning in 1999. The adoption of SFAS No. 131 is not
expected to have a material effect on the Company's consolidated financial
statements.

3.  EARNINGS PER SHARE

    As of December 31, 1997, the Company adopted SFAS No. 128, "Earnings Per
Share," which specifies the computation, presentation and disclosure
requirements for earnings per share. By adopting SFAS No. 128, the Company was
required to restate and expand its presentation for prior period earnings per
share data. The basic and diluted earnings per share data of the Company
reported under SFAS No. 128 did not differ materially from the primary and fully
diluted earnings per share data previously reported by the Company under
Accounting Principles Board Opinion No. 15, "Earnings Per Share."

    The following is a reconciliation of the numerators and denominators of the
Company's basic and diluted earnings per share for the periods indicated:

<TABLE>
<CAPTION>
                                                                         Quarter Ended September 30,
                                      -----------------------------------------------------------------------------------------
                                                           1998                                           1997
                                      -----------------------------------------     -------------------------------------------
                                         Income          Shares       Per Share       Income            Shares        Per Share
                                      (Numerator)     (Denominator)     Amount      (Numerator)      (Denominator)      Amount
                                      -----------     -------------   ---------     -----------      -------------    ---------
                                                          (in thousands, except number of shares and per share data)
<S>                                   <C>             <C>             <C>           <C>              <C>              <C>
Basic:
    Net income                        $    22,530       31,143,768      $   .72     $    21,351       31,826,803        $   .67
Effect of dilutive securities -
    Stock incentive
      plan options                             --           46,684           --              --          183,548             --
                                      -----------       ----------      -------     -----------       ----------        -------
Diluted:
    Net income and
      assumed conversions             $    22,530       31,190,452      $   .72     $    21,351       32,010,351        $   .67
                                      ===========       ==========      =======     ===========       ==========        =======
</TABLE>


                                        6

<PAGE>   8
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
First Hawaiian, Inc. and Subsidiaries

<TABLE>
<CAPTION>
                                                                Nine Months Ended September 30,
                                     -----------------------------------------------------------------------------------  
                                                         1998                                     1997
                                     ----------------------------------------   ----------------------------------------  
                                        Income          Shares      Per Share     Income         Shares        Per Share
                                     (Numerator)    (Denominator)     Amount    (Numerator)   (Denominator)      Amount  
                                     -----------    -------------   ---------   -----------   -------------    --------- 
                                                   (in thousands, except number of shares and per share data)
<S>                                  <C>            <C>             <C>         <C>           <C>               <C>
Basic:
    Net income                       $   65,426      31,154,496      $   2.10   $   64,132      31,797,540      $   2.02
Effect of dilutive securities -
    Stock incentive
      plan options                           --         144,073            --           --         126,103            --
                                     ----------      ----------      --------   ----------      ----------      --------
Diluted:
    Net income and
      assumed conversions            $   65,426      31,298,569      $   2.09   $   64,132      31,923,643      $   2.01
                                     ==========      ==========      ========   ==========      ==========      ========
</TABLE>

4.  IMPAIRED LOANS

    The following table summarizes impaired loan information as of and for the
nine months ended September 30, 1998 and 1997 and as of and for the year ended
December 31, 1997:

<TABLE>
<CAPTION>
                                                   SEPTEMBER 30, 1998   December 31, 1997    September 30, 1997
                                                   ------------------   -----------------    ------------------
                                                                          (in thousands)
<S>                                                <C>                  <C>                  <C>
Impaired loans                                          $80,740               $74,751               $89,544
Impaired loans with related allowance for loan
   losses calculated under SFAS No. 114                 $60,157               $38,278               $55,195
Total allowance for impaired loans                      $16,997               $ 9,257               $10,613
Average impaired loans                                  $77,847               $90,901               $96,084
Interest income recorded during the period              $ 1,074               $   835               $   874
</TABLE>

    Impaired loans without a related allowance for loan losses are generally
collateralized by assets with fair values in excess of the recorded investment
in the loans. Interest payments on impaired loans are generally applied to
reduce the outstanding principal amounts of such loans.

5.  MERGER AGREEMENT WITH BANCWEST CORPORATION

    On November 1, 1998, the merger of BancWest Corporation ("BancWest"), parent
company of Bank of the West, with and into FHI was consummated (the "Merger").
Bank of the West, headquartered in San Francisco, is California's fifth largest
bank with approximately $6.1 billion in assets and 104 branches in 21 counties
in Northern and Central California.

    Prior to the consummation of the Merger, BancWest was wholly-owned by Banque
Nationale de Paris ("BNP"), France's second largest banking group, which
received approximately 25.8 million shares of the surviving corporation's newly
authorized Class A Common Stock (representing approximately 45% of the
outstanding voting stock). The transaction was accounted for using the purchase
method of accounting. The excess of cost over fair value of net assets acquired
amounted to approximately $576.6 million. In connection with the Merger, the
Company increased the number of authorized shares of common stock from
100,000,000 shares, par value $5.00 per share, to 200,000,000 shares, par value
$1.00 per share. FHI, the surviving corporation of the Merger, changed its name
to "BancWest Corporation." The new combined BancWest Corporation has more than
200 branches in the states of Hawaii, California, Oregon, Washington and Idaho,
and Saipan and the territory of Guam.

    The following unaudited pro forma financial information for the nine months
ended September 30, 1998 and 1997 assumes that the Merger occurred as of January
1, 1997, after giving effect to certain adjustments, including but not limited
to the amortization of intangible assets. 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 that would have occurred
had the Merger been consummated on the date indicated.

<TABLE>
<CAPTION>
                               Pro Forma Financial Information for the
                                   Nine Months Ended September 30,  
                               ---------------------------------------
                                            (Unaudited)
                                      1998              1997  
                                    --------          --------
                                (in thousands, except per share data)
<S>                            <C>                    <C>     
Interest income                     $785,752          $744,286
Interest expense                    $328,895          $311,937
Noninterest income                  $125,661          $117,809
Noninterest expense                 $375,959          $370,329
Net income                          $ 98,549          $ 89,926
Basic earnings per share            $   1.72          $   1.55
Diluted earnings per share          $   1.71          $   1.55
</TABLE>


                                        7
<PAGE>   9
6. SUBSIDIARY MERGERS

    On June 19, 1998, First Hawaiian Creditcorp, Inc. ("Creditcorp"), a
wholly-owned subsidiary of FHI, was merged with and into FHB. All 13 Creditcorp
branches were closed in connection with the merger.

   On November 1, 1998, Pacific One, a wholly-owned subsidiary of FHI, was
merged with and into Bank of the West.

   On April 18, 1997, Pioneer Federal Savings Bank ("Pioneer"), a wholly-owned
subsidiary of FHI, was merged with and into FHB. Five Pioneer branches became
branches of FHB and 14 branches were closed in connection with the merger.

   On December 31, 1997, Pacific One Bank, National Association ("Pacific One,
N.A."), a wholly-owned subsidiary of FHI, was merged with and into Pacific One.
The eight branches of Pacific One, N.A. became branches of Pacific One.

7. FIRST HAWAIIAN CAPITAL I

   First Hawaiian Capital I is a Delaware business trust (the "Trust") which was
formed in 1997. The Trust issued $100,000,000 of its capital securities (the
"Capital Securities") in 1997, and used the proceeds therefrom to purchase
junior subordinated deferrable interest debentures (the "Debentures") of FHI. In
addition, the Trust also purchased $3,093,000 of Debentures in connection with
the acquisition by FHI of common securities of the Trust. The Debentures
(aggregate principal amount of $103,093,000) are the sole assets of the Trust.
The Capital Securities qualify as Tier 1 capital of FHI and are fully and
unconditionally guaranteed by FHI.

   The Capital Securities accrue and pay interest (which payment may be deferred
pursuant to the terms of the Capital Securities) semi-annually at an annual
interest rate of 8.343%. The Capital Securities are mandatorily redeemable upon
maturity of the Debentures on July 1, 2027, or upon earlier redemption in whole
or in part as provided for in the governing indenture.

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
        OF OPERATIONS

Certain matters contained herein are forward-looking statements that involve
certain risks and uncertainties that could cause the Company's actual results to
differ materially from those discussed in the forward-looking statements.
Readers should carefully consider these 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; (2) the level and volatility of interest rates and currency values;
(3) fiscal and monetary policies of government agencies; (4) credit risks
inherent in the lending processes; (5) loan and deposit demand in the geographic
regions in which the Company conducts business; (6) the impact of intense
competition in the rapidly evolving banking and financial services business; (7)
the effect of current and pending government legislation and regulations; (8)
the extensive regulation of the Company's business at both the federal and state
levels; (9) whether expected cost savings from the merger with BancWest are
realized within expected time frames; (10) matters relating to the integration
of the business of the Company and BancWest, including the impact of combining
these businesses on revenues, expenses, deposit attrition, customer retention
and financial performance; (11) unforeseen costs and/or complications relating
to year 2000 compliance efforts of the Company, BancWest and third parties with
whom the Company has business relationships; (12) other risks discussed below;
and (13) management's ability to manage these risks.

The Company expressly disclaims any obligation or undertaking to update or
revise any forward-looking statement contained herein to reflect any change in
the Company's expectations with regard thereto or any change in events,
conditions or circumstances on which any statement is based.

MERGER

On November 1, 1998, the merger of BancWest Corporation ("BancWest"), parent
company of Bank of the West, with and into FHI was consummated (the "Merger").
Prior to the consummation of the Merger, BancWest was wholly-owned by Banque
Nationale de Paris ("BNP"), France's second largest banking group, which
received approximately 25.8 million shares of the surviving corporation's newly
authorized Class A Common Stock (representing approximately 45% of the
outstanding voting stock). The transaction was accounted for using the purchase
method of accounting. The excess of cost over fair value of net assets acquired
amounted to approximately $576.6 million. In connection with the Merger, the
Company increased the number of authorized shares of common stock from
100,000,000 shares, par value $5.00 per share, to 200,000,000 shares, par value
$1.00 per share. FHI, the surviving corporation of the Merger, changed its name
to "BancWest Corporation."


                                        8
<PAGE>   10
Although no assurance can be given either that any specific level of cost
savings will be achieved or as to the timing thereof, FHI currently expects the
surviving corporation to achieve approximately $23.2 million and $41.0 million
in pre-tax annual cost savings in 1999 and 2000, respectively, as a result of
the Merger. These cost savings are expected to be derived principally by the
merger of Pacific One with Bank of the West (which occurred as of November 1,
1998), integrating data processing and back-office operations, eliminating
duplicative operations and consolidating certain retail and wholesale
operations.

It is also estimated that a one-time pre-tax restructuring charge of
approximately $80.9 million will be incurred in connection with the Merger
principally as a result of employee separations, exit costs, employee
relocations, and losses on asset impairments and dispositions of assets. A
portion of this restructuring charge relates to exiting certain activities of
Bank of the West which will be accounted for using the purchase method of
accounting.

The Company expects that the surviving corporation will be able to generate
increased revenues as a result of the Merger. The Company expects that pre-tax
revenue enhancements will be approximately $6.3 million in 1999 and
approximately $9.8 million in 2000. The Company expects to achieve these
results, in part, from cross-selling products and services to the commercial and
consumer customer bases of the combined company. Whether these anticipated
benefits are ultimately achieved will depend on a number of factors, including
the ability of the surviving corporation to successfully integrate the
businesses of the Company and BancWest.

The following unaudited pro forma financial information for the nine months
ended September 30, 1998 and 1997 assumes that the Merger occurred as of January
1, 1997, after giving effect to certain adjustments, including but not limited
to the amortization of intangible assets. 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 that would have occurred
had the Merger been consummated on the date indicated.

<TABLE>
<CAPTION>
                               Pro Forma Financial Information for the
                                   Nine Months Ended September 30,  
                               ---------------------------------------
                                           (Unaudited)
                                      1998              1997
                                    --------          --------
                                (in thousands, except per share data)
<S>                            <C>                    <C>
Interest income                     $785,752          $744,286
Interest expense                    $328,895          $311,937
Noninterest income                  $125,661          $117,809
Noninterest expense                 $375,959          $370,329
Net income                          $ 98,549          $ 89,926
Basic earnings per share            $   1.72          $   1.55
Diluted earnings per share          $   1.71          $   1.55
</TABLE>

The finalization and execution of the integration plans discussed herein could
result in material changes to the estimates relating thereto. For further
information on the Merger, see the Company's Current Reports on Form 8-K dated
as of May 28, 1998 (filed under the name "First Hawaiian, Inc.") and November 1,
1998 (filed under the name "BancWest Corporation").


                                        9
<PAGE>   11
The remaining discussion and analyses of the financial condition and results of
operations contained in this Item 2 do not reflect the impact of the Merger.

NET INCOME

The Company recorded consolidated net income for the first nine months of 1998
of $65,426,000, an increase of $1,294,000, or 2.0%, over the first nine months
of 1997. For the third quarter of 1998, the consolidated net income of
$22,530,000 represented a $1,179,000, or 5.5%, increase over the same quarter in
1997.

Basic and diluted earnings per share for the first nine months of 1998 were
$2.10 and $2.09, respectively, representing increases of 4.0% over the same
period in 1997. Basic and diluted earnings per share for the third quarter of
1998 increased to $.72 from $.67, or 7.5%, as compared to the same period in
1997. The percentage increases in consolidated net income on a per share basis
were greater than the percentage changes in consolidated net income because the
acquisition of shares under the Company's stock repurchase program, pursuant to
which the Company is authorized to repurchase up to 3.1 million shares of the
Company's common stock (of which 1.8 million shares were repurchased through
September 30, 1998), resulted in a lower average number of outstanding shares in
1998 as compared to 1997.

Basic and diluted cash earnings per share (defined as earnings per share in
accordance with generally accepted accounting principles plus after-tax
amortization of intangibles that are deducted from regulatory capital for risk-
based purposes) for the first nine months of 1998 were $2.26 and $2.25,
respectively, representing increases of 4.6% and 4.7%, respectively, over the
same period in 1997. Basic and diluted cash earnings per share for the third
quarter of 1998 increased to $.78 from $.72 for the same period in 1997.

On an annualized basis, the Company's return on average total assets for the
first nine months of 1998 and 1997 was 1.08%, and its return on average
stockholders' equity for the first nine months of 1998 was 11.73%, a decrease of
1.3%, compared to the same period in 1997.

NET INTEREST INCOME

Net interest income, on a fully taxable equivalent basis, increased $7,496,000,
or 3.0%, to $260,812,000 for the first nine months of 1998 from $253,316,000 for
the same period in 1997. The increase in net interest income for the first nine
months of 1998 over the same period in 1997 was primarily due to an increase in
average earning assets of $194,072,000, or 2.7%, and an increase of one basis
point (1% equals 100 basis points) in the net interest margin from 4.76% in 1997
to 4.77% in 1998. The increase in the net interest margin was primarily
attributable to an increase of four basis points in the yield on average earning
assets for the first nine months of 1998 over the same period in 1997,
principally as a result of the partial liquidation of lower-yielding investment
securities held by the Company. The Company used the proceeds from the partial
liquidation to reduce its short-term borrowings and to fund higher-yielding
loans. The increase in the yield on average earning assets was partially offset
by an increase of three basis points in the rate paid on funding sources for the
first nine months of 1998 over the same period in 1997. The increase in the rate
paid on funding sources reflects, among other things, the issuance by First
Hawaiian Capital I of $100,000,000 aggregate liquidation amount of its capital
securities (the "Capital Securities") in June 1997 and a decrease in average
noninterest-bearing demand deposits of $4,501,000, or .5%.

Net interest income, on a fully taxable equivalent basis, increased $3,979,000,
or 4.7%, to $88,710,000 for the third quarter of 1998 from $84,731,000 for the
same period in 1997. The increase in net interest income for the third quarter
of 1998 over the same period in 1997 was primarily due to an increase in average
earning assets of $329,001,000, or 4.7%, and a decrease of eight basis points on
the rate paid on funding sources compared to the same period in 1997. The net
interest income was negatively impacted by a decrease of nine basis points on
the yield on average earning assets for the third quarter of 1998 compared to
the same period in 1997.


                                       10
<PAGE>   12
Average earning assets increased by $194,072,000, or 2.7%, and $329,001,000 or
4.7%, for the first nine months and third quarter of 1998, respectively, over
the same periods in 1997, primarily due to an increase in average loans during
such periods. The increase was partially offset by the partial liquidation of
investment securities in connection with the merger of FHB and Creditcorp in
June 1998 and a change in the collateral requirements for state and local
government funds.

Average loans for the first nine months and third quarter of 1998 increased by
$325,114,000, or 5.5%, and $348,758,000, or 5.8%, respectively, over the same
periods in 1997. The mix of loans continues to change as the Company diversifies
its loan portfolio, both geographically and by industry. These efforts have
resulted in growth in the Company's banking operations in the Pacific Northwest,
automobile financing in California and Oregon and credit extensions to companies
in the media and telecommunications industry located on the mainland United
States. In addition, the Merger will further enhance this loan diversification
strategy. Finally, the mix of average earning assets continues to change, with
average loans representing 85.7% and 85.8% of average earning assets for the
first nine months and third quarter of 1998, respectively, as compared to 83.4%
and 84.8%, respectively, for the same periods in 1997.

Average interest-bearing deposits and liabilities increased by $142,033,000, or
2.3%, and $200,636,000, or 3.3%, for the first nine months and third quarter of
1998, respectively, over the same periods in 1997. The increase was primarily
due to the issuance of the Capital Securities and an increase in deposits of
$256,031,000, or 5.1%, and $260,858,000, or 5.1%, for the first nine months and
third quarter of 1998, respectively, over the same periods in 1997, primarily
from a shifting of state and local government funds from repurchase agreements
to deposits. The increase was partially offset by a decrease in short-term
borrowings that were repaid using proceeds received from the partial liquidation
of the investment securities portfolio described above.


                                       11
<PAGE>   13
The following table sets forth consolidated average balance sheets, an analysis
of interest income/expense, and average yield/rate for each major category of
interest-earning assets and interest-bearing liabilities for the periods
indicated on a taxable equivalent basis. The tax equivalent adjustment is made
for items exempt from Federal income taxes (assuming a 35% tax rate for 1998 and
1997) to make them comparable with taxable items before any income taxes are
applied.


<TABLE>
<CAPTION>
                                               QUARTER ENDED SEPTEMBER 30,                 
                             --------------------------------------------------------------
                                          1998                              1997           
                             -----------------------------    -----------------------------
                                        INTEREST                         INTEREST          
                             AVERAGE    INCOME/    YIELD/     AVERAGE    INCOME/    YIELD/ 
         ASSETS              BALANCE    EXPENSE    RATE(1)    BALANCE    EXPENSE    RATE(1)
                             -------    -------    -------    -------    -------    -------
                                                    (dollars in thousands)
<S>                        <C>         <C>          <C>      <C>         <C>        <C>    
Earning assets:            
  Interest-bearing         
     deposits in other     
     banks                 $  199,255  $  2,915     5.80%    $ 128,025   $ 2,024     6.27% 
  Federal funds sold and                             
     securities purchased                            
     under agreements to                             
     resell                   162,515     2,297     5.61       141,780     1,903     5.33  
  Available-for-sale                                 
     investment                                      
     securities(2)            686,850    11,195     6.47       798,572    13,567     6.74  
  Loans(3)(4)               6,322,620   138,595     8.70     5,973,862   132,087     8.77  
                           ----------   -------             ----------   -------           
     Total earning assets   7,371,240   155,002     8.34     7,042,239   149,581     8.43  
                                        -------                          -------           
Nonearning assets             765,298                          776,307
                           ----------                       ----------
     Total assets          $8,136,538                       $7,818,546
                           ==========                       ==========
</TABLE>



<TABLE>
<CAPTION>
                                          NINE MONTHS ENDED SEPTEMBER 30,
                            -----------------------------------------------------------
                                          1998                         1997
                            -----------------------------  ----------------------------
                                        INTEREST                      INTEREST
                             AVERAGE    INCOME/   YIELD/   AVERAGE    INCOME/   YIELD/
         ASSETS              BALANCE    EXPENSE   RATE(1)  BALANCE    EXPENSE   RATE(1)
                             -------    -------   -------  -------    -------   -------
                                               (dollars in thousands)
<S>                         <C>         <C>       <C>     <C>         <C>        <C>  
Earning assets:            
  Interest-bearing         
     deposits in other     
     banks                  $  171,063  $ 7,639    5.97%   $   72,568   $ 3,274    6.03%
  Federal funds sold and   
     securities purchased  
     under agreements to   
     resell                    159,969     6,538    5.46      143,106     5,723    5.35
  Available-for-sale       
     investment            
     securities(2)             715,779    35,622    6.65      962,179    47,607    6.62
  Loans(3)(4)                6,262,026   409,195    8.74    5,936,912   388,239    8.74
                            ----------   -------           ----------   -------        
     Total earning assets    7,308,837   458,994    8.40    7,114,765   444,843    8.36
                                         -------                        -------
Nonearning assets              783,338                        795,545
                            ----------                     ----------
     Total assets           $8,092,175                     $7,910,310
                            ==========                     ==========
</TABLE>

----------

(1) Annualized.

(2) Average balances exclude the effects of fair value adjustments.

(3) Nonaccruing loans have been included in the computations of average loan
    balances.

(4) Interest income for loans included loan fees of $8,465 and $22,007 for the
    quarter and nine months ended September 30, 1998, respectively, and $6,180
    and $18,161 for the quarter and nine months ended September 30, 1997,
    respectively.



                                       12
<PAGE>   14
<TABLE>
<CAPTION>
                                                    QUARTER ENDED SEPTEMBER 30,               
                                ------------------------------------------------------------- 
                                              1998                            1997            
                                ------------------------------   ---------------------------- 
                                             INTEREST                       INTEREST          
      LIABILITIES AND           AVERAGE      INCOME/   YIELD/    AVERAGE    INCOME/   YIELD/  
STOCKHOLDERS' EQUITY            BALANCE      EXPENSE   RATE(1)   BALANCE    EXPENSE   RATE(1) 
                                -------      -------   -------   -------    --------  ------- 
                                                      (dollars in thousands)
<S>                           <C>            <C>        <C>    <C>          <C>        <C>    
Interest-bearing deposits
  and liabilities:

  Deposits                     $5,356,562    $52,779    3.91%  $5,095,704   $50,292    3.92%  
  Short-term borrowings           605,311      7,826    5.13      685,811     9,118    5.28   
  Long-term debt and
     capital securities           314,036      5,687    7.19      293,758     5,440    7.35   
                               ----------    -------           ----------   -------           

     Total interest-bearing
        deposits and
        liabilities             6,275,909     66,292    4.19    6,075,273    64,850    4.23   
                                             -------    ----                -------    ----   

     Interest rate spread                               4.15%                          4.20%  
                                                        ====                           ====   

Noninterest-bearing demand
  deposits                        837,227                         806,653
Other liabilities                 262,246                         201,854
                               ----------                      ----------

     Total liabilities          7,375,382                       7,083,780

Stockholders' equity              761,156                         734,766
                               ----------                      ----------

     Total liabilities and
        stockholders' equity   $8,136,538                      $7,818,546
                               ==========                      ==========

     Net interest income
        and margin on
        earning assets                        88,710    4.77%                84,731    4.77%  
                                                        ====                           ====   

Tax equivalent adjustment                         29                            149
                                             -------                       --------

     Net interest income                     $88,681                       $ 84,582
                                             =======                       ========
</TABLE>




<TABLE>
<CAPTION>
                                                  NINE MONTHS ENDED SEPTEMBER 30,
                                -------------------------------------------------------------
                                              1998                         1997                 
                                -----------------------------   -----------------------------
                                            INTEREST                       INTEREST
      LIABILITIES AND           AVERAGE     INCOME/   YIELD/    AVERAGE    INCOME/    YIELD/
STOCKHOLDERS' EQUITY            BALANCE     EXPENSE   RATE(1)   BALANCE    EXPENSE    RATE(1)
                                -------     --------  -------   -------    --------   -------
                                                      (dollars in thousands)
<S>                            <C>          <C>        <C>    <C>         <C>         <C>  
Interest-bearing deposits
  and liabilities:

  Deposits                     $5,304,440   $155,610   3.92%  $5,048,409  $146,105    3.87%
  Short-term borrowings           654,403     25,689   5.25      834,889    32,522    5.21
  Long-term debt and
     capital securities           316,291     16,883   7.14      249,803    12,900    6.90
                               ----------   --------          ----------  --------

     Total interest-bearing
        deposits and
        liabilities             6,275,134    198,182   4.22    6,133,101   191,527    4.18
                                            --------   ----               --------    ----

     Interest rate spread                              4.18%                          4.18%
                                                       ====                           ====

Noninterest-bearing demand
  deposits                        825,561                        830,062
Other liabilities                 245,855                        225,162
                               ----------                     ----------

     Total liabilities          7,346,550                      7,188,325

Stockholders' equity              745,625                        721,985
                               ----------                    ----------

     Total liabilities and
        stockholders' equity   $8,092,175                     $7,910,310
                               ==========                     ==========

     Net interest income
        and margin on
        earning assets                       260,812   4.77%               253,316    4.76%
                                                       ====                           ====

Tax equivalent adjustment                        104                           563
                                            --------                      --------

     Net interest income                    $260,708                      $252,753
                                            ========                      ========
</TABLE>

----------

(1) Annualized.


                                       13
<PAGE>   15
AVAILABLE-FOR-SALE INVESTMENT SECURITIES

The following table presents the amortized cost and fair values of
available-for-sale investment securities as of the dates indicated:

<TABLE>
<CAPTION>
                              SEPTEMBER 30,      December 31,       September 30,
                                  1998               1997               1997    
                              -------------      ------------       -------------
                                                (in thousands)
        <S>                    <C>                 <C>                <C>       
        Amortized cost         $  651,340          $  778,528         $  698,560

        Unrealized gains           12,400               1,021              2,131

        Unrealized losses             (77)             (1,425)              (227)
                               ----------          ----------         ----------
        Fair value             $  663,663          $  778,124         $  700,464
                               ==========          ==========         ==========
</TABLE>


Gross realized gains and losses for the nine months ended September 30, 1998 and
1997 were as follows:

<TABLE>
<CAPTION>
                                         1998               1997
                                       --------           --------
                                             (in thousands)
        <S>                            <C>                <C>     
        Realized gains                 $    145           $  1,060

        Realized losses                      (5)              (773)
                                       --------           --------

        Securities gains, net          $    140           $    287
                                       ========           ========
</TABLE>

Gains and losses realized on the sales of available-for-sale investment
securities are determined using the specific identification method.


                                       14
<PAGE>   16
LOANS

The following table sets forth the loan portfolio by major categories and loan
mix at September 30, 1998, December 31, 1997 and September 30, 1997:

<TABLE>
<CAPTION>
                                              SEPTEMBER 30, 1998             December 31, 1997             September 30, 1997
                                           -----------------------        -----------------------        -----------------------
                                             AMOUNT            %            Amount            %            Amount            %
                                           ----------       ------        ----------       ------        ----------       ------
                                                                           (dollars in thousands)
<S>                                        <C>              <C>           <C>              <C>           <C>              <C>
Commercial, financial and
  agricultural                             $1,706,287         27.0%       $1,582,698         25.4%       $1,463,948         24.3%

Real estate:
        Commercial                          1,162,181         18.4         1,193,538         19.1         1,201,825         20.0
        Construction                          125,272          2.0           166,482          2.7           169,166          2.8
        Residential:
            Insured, guaranteed or
              conventional                  1,396,377         22.1         1,486,887         23.8         1,482,876         24.6
            Home equity credit lines          411,316          6.5           457,724          7.4           458,347          7.6
                                           ----------       ------        ----------       ------        ----------       ------
            Total real estate loans         3,095,146         49.0         3,304,631         53.0         3,312,214         55.0
                                           ----------       ------        ----------       ------        ----------       ------

Consumer                                      757,513         12.0           678,984         10.9           624,303         10.4
Lease financing                               362,859          5.7           333,270          5.3           296,181          4.9
Foreign                                       400,541          6.3           339,098          5.4           325,598          5.4
                                           ----------       ------        ----------       ------        ----------       ------
            Total loans                     6,322,346        100.0%        6,238,681        100.0%        6,022,244        100.0%
                                           ==========       ======        ==========       ======        ==========       ======

Less allowance for loan losses                 86,249                         82,596                         83,575
                                           ----------                     ----------                     ----------

            Total net loans                $6,236,097                     $6,156,085                     $5,938,669
                                           ==========                     ==========                     ==========

Total loans to:
        Total assets                                          77.2%                          77.1%                          76.3%
        Total earning assets                                  86.4%                          86.6%                          86.3%
        Total deposits                                       102.0%                         102.5%                         101.1%
</TABLE>

The loan portfolio is the largest component of total earning assets and accounts
for the greatest portion of total interest income. At September 30, 1998, total
loans were $6,322,346,000, representing increases of 1.3% and 5.0% over 
December 31, 1997 and September 30, 1997, respectively.

Commercial, financial and agricultural loans as of September 30, 1998 increased
$123,589,000, or 7.8%, over December 31, 1997, and $242,339,000, or 16.6%, over
September 30, 1997. Although the Company continues its efforts to diversify the
loan portfolio, both geographically and by industry, overall loan volume in the
State of Hawaii continues to decline as a result of the sluggish economy. Credit
extensions in the Pacific Northwest and the media and telecommunications
industry located on the mainland United States account for the majority of the
increase in loan balances and geographic and industry diversification.

Consumer loans as of September 30, 1998 increased $78,529,000, or 11.6%, over
December 31, 1997, and $133,210,000, or 21.3%, over September 30, 1997. The
increase was primarily due to an increase in direct and indirect automobile
financing in California and Oregon. Consumer loans consist primarily of direct
and indirect automobile, credit card and unsecured financing.

Lease financing as of September 30, 1998 increased $29,589,000, or 8.9%, over
December 31, 1997, and $66,678,000, or 22.5%, over September 30, 1997. The
increase was primarily due to an increase in leveraged leases on equipment
located on the mainland United States.

The Company's international operations, principally in Guam and Grand Cayman,
British West Indies, involve foreign banking and international financing
activities, including short-term investments, loans, acceptances, letters of
credit financing and international funds transfers. International activities are
identified on the basis of the domicile of the applicable customer. Foreign
loans as of September 30, 1998, increased $61,443,000, or 18.1%, over December
31, 1997, and $74,943,000, or 23.0%, over September 30, 1997. The increase in
foreign loans was primarily due to an increase in loan balances in Guam.

Loan concentrations are considered to exist when there are amounts loaned to
multiple borrowers engaged in similar activities which would cause them to be
similarly impacted by economic or other conditions. At September 30, 1998, the
Company did not have a concentration of loans greater than 10% of total loans
which is not otherwise disclosed as a category of loans as shown in the above
table.


                                       15
<PAGE>   17
NONPERFORMING ASSETS

A summary of nonperforming assets at September 30, 1998, December 31, 1997 and
September 30, 1997 follows:

<TABLE>
<CAPTION>
                                                                SEPTEMBER 30,      December 31,     September 30,
                                                                     1998              1997              1997 
                                                                -------------      ------------     -------------
                                                                              (dollars in thousands)
<S>                                                             <C>                <C>              <C>
Nonperforming loans:
     Nonaccrual:
         Commercial, financial and agricultural                    $ 18,523          $  9,038          $ 12,876
         Real estate:
             Commercial                                               4,368             4,590             8,970
             Residential:
                Insured, guaranteed, or conventional                  7,562             6,353             6,695
                Home equity credit lines                                 40                50                --
                                                                   --------          --------          --------
                  Total real estate loans                            11,970            10,993            15,665
                                                                   --------          --------          --------

         Lease financing                                                 18                10                34
         Foreign                                                      1,256                --                --
                                                                   --------          --------          --------
                  Total nonaccrual loans                             31,767            20,041            28,575
                                                                   --------          --------          --------

     Restructured:
         Commercial, financial and agricultural                         579             1,532             1,879
         Real estate:
             Commercial                                              29,022            30,843            39,142
             Residential:
                Insured, guaranteed, or conventional                  1,115             2,626             2,812
                Home equity credit lines                                 --               559               559
                                                                   --------          --------          --------
                  Total real estate loans                            30,137            34,028            42,513
                                                                   --------          --------          --------
                  Total restructured loans                           30,716            35,560            44,392
                                                                   --------          --------          --------
                  Total nonperforming loans                          62,483            55,601            72,967

Other real estate owned                                              27,320            30,760            18,527
                                                                   --------          --------          --------
                  Total nonperforming assets                       $ 89,803          $ 86,361          $ 91,494
                                                                   ========          ========          ========

Past due loans:
     Commercial, financial and agricultural                        $  1,075          $  2,521          $  5,535
     Real estate:
         Commercial                                                   3,443               567             1,373
         Residential:
             Insured, guaranteed, or conventional                    23,444            25,002            15,912
             Home equity credit lines                                 2,568             2,077             2,402
                                                                   --------          --------          --------
                  Total real estate loans                            29,455            27,646            19,687
                                                                   --------          --------          --------

     Consumer                                                         3,137             3,589             3,204
     Lease financing                                                     --                11                26
     Foreign                                                          1,419                --                --
                                                                   --------          --------          --------
                  Total past due loans(1)                          $ 35,086          $ 33,767          $ 28,452
                                                                   ========          ========          ========

Nonperforming assets to total loans and
 other real estate owned (end of period):
     Excluding 90 days past due accruing loans                         1.41%             1.38%             1.51%
     Including 90 days past due accruing loans                         1.97%             1.92%             1.99%

Nonperforming assets to total assets
  (end of period):
     Excluding 90 days past due accruing loans                         1.10%             1.07%             1.16%
     Including 90 days past due accruing loans                         1.53%             1.48%             1.52%
</TABLE>

----------

(1)  Represents loans which are past due 90 days or more as to principal and/or
     interest, are still accruing interest and are in the process of collection.


                                       16
<PAGE>   18
NONPERFORMING ASSETS, CONTINUED

Nonperforming assets decreased from $91,494,000, or 1.51% of total loans and
other real estate owned ("OREO"), at September 30, 1997, to $89,803,000, or
1.41% of total loans and OREO, at September 30, 1998. The percentage of
nonperforming assets to total assets decreased from 1.16% at September 30, 1997
to 1.10% at September 30, 1998.

The decrease in nonperforming assets of $1,691,000, or 1.8%, from September 30,
1997 to September 30, 1998 was primarily due to decreases in real estate -
commercial restructured loans of $10,120,000, or 25.9%, partially offset by an
increase in OREO of $8,793,000, or 47.5%. The decrease in real estate -
commercial restructured loans was primarily due to the transfer of $8,300,000 to
OREO and a loan payoff of $2,500,000. Transfers to OREO were partially offset by
the sales of commercial and residential real estate properties totalling
$2,834,000 and write-downs of OREO properties of $1,530,000. A commercial,
financial and agricultural loan of $7,525,000, which was identified as a
potential problem loan at June 30, 1998, was placed on nonaccrual status during
the third quarter of 1998. Nonperforming foreign loans consist primarily of
loans secured by real estate in the territory of Guam.

At September 30, 1998, the Company was not aware of any significant potential
problem loans (not otherwise classified as nonperforming or past due in the
table on page 16) where possible credit problems of the borrower caused
management to have serious concerns as to the ability of such borrower to comply
with the present loan repayment terms.

Loans past due 90 days or more and still accruing interest totalled $35,086,000
at September 30, 1998, an increase of $6,634,000, or 23.3%, over September 30,
1997. The increase was primarily due to certain real estate - residential loans
sold with recourse that were repurchased in the fourth quarter of 1997 and the
first nine months of 1998 and foreign loans (primarily loans secured by real
estate in the territory of Guam), which increase was partially offset by a
decrease in commercial, financial and agricultural loans that are 90 days past
due. All of the loans which are past due 90 days or more and still accruing
interest are, in management's judgment, adequately collateralized and in the
process of collection.

In recent years, the level of the Company's nonperforming assets and charge-offs
has been affected by the impact of adverse economic conditions and trends in
Hawaii. The most important of these adverse economic trends is the prolonged
economic downturn over the last eight years. Hawaii's recovery from its 1991
recession continues to be slow and protracted. In addition, Hawaii continues to
show weaknesses in its local real estate market, including declining real estate
values. In contrast, the mainland (including the Pacific Northwest), continues
to experience economic expansion.

Recently, a number of countries in the Asia Pacific region, including Japan,
have experienced significant weaknesses in their economies. The economic
downturn in Asia may adversely impact the volume and spending level of Asian
visitors to Hawaii, which in turn may adversely affect the Hawaiian economy. At
September 30, 1998, outstanding commitments and loans to debtors in Asian
countries of $13,192,000, excluding Japan, represented approximately .16% of
total assets and 1.7% of total stockholders' equity. Including Japan, such
outstanding commitments totalled $99,152,000, and represented approximately
1.21% of total assets and 12.9% of total stockholders' equity, in each case at
September 30, 1998. These commitments and loans are primarily collateralized by
certificates of deposit, Hawaii real estate, standby letters of credit issued by
Asian banks and/or guarantees by credit-worthy Asian individuals and
corporations.

The Company does not foresee a major improvement in Hawaii's economic conditions
in the near term and believes that these trends may continue to affect the level
of nonperforming assets and related charge-offs in future periods.


                                       17
<PAGE>   19
DEPOSITS

The following table sets forth the average balances and the average rates paid
on deposits for the periods indicated:

<TABLE>
<CAPTION>
                                       QUARTER ENDED SEPTEMBER 30,                     NINE MONTHS ENDED SEPTEMBER 30,
                               ---------------------------------------------     ----------------------------------------------
                                       1998                     1997                     1998                     1997
                               --------------------     --------------------     --------------------     ---------------------
                                AVERAGE     AVERAGE      Average     Average      AVERAGE     AVERAGE      Average      Average
                                BALANCE     RATE(1)      Balance     Rate(1)      BALANCE     RATE(1)      Balance      Rate(1)
                               ----------   -------     ----------   -------     ----------   -------     ----------    -------
                                                                   (dollars in thousands)
<S>                            <C>          <C>         <C>          <C>         <C>          <C>         <C>           <C>  
Interest-bearing demand        $1,796,888     2.59%     $1,750,450     2.46%     $1,798,057     2.60%     $1,694,346     2.49%
Savings                           840,864     2.53         800,585     2.54         832,328     2.48         840,416     2.43
Time                            2,718,810     5.21       2,544,669     5.35       2,674,055     5.26       2,513,647     5.28
                               ----------               ----------               ----------               ----------
  Total interest-bearing
      deposits                  5,356,562     3.91       5,095,704     3.92       5,304,440     3.92       5,048,409     3.87

Noninterest-bearing demand        837,227       --         806,653       --         825,561       --         830,062       --
                               ----------     ----      ----------     ----      ----------     ----      ----------     ----
    Total deposits             $6,193,789     3.38%     $5,902,357     3.38%     $6,130,001     3.39%     $5,878,471     3.32%
                               ==========               ==========               ==========               ==========
</TABLE>

Average interest-bearing deposits increased $256,031,000, or 5.1%, and
$260,858,000, or 5.1%, for the first nine months and third quarter of 1998,
respectively, over the same periods in 1997. The increase in average
interest-bearing deposits was primarily due to a higher level of public funds
and various deposit product programs initiated by the Company.

----------

(1)  Annualized.


                                       18

<PAGE>   20



PROVISION AND ALLOWANCE FOR LOAN LOSSES

The following table sets forth the activity in the allowance for loan losses for
the periods indicated:

<TABLE>
<CAPTION>
                                                          QUARTER ENDED                         NINE MONTHS ENDED
                                                          SEPTEMBER 30,                           SEPTEMBER 30,
                                                 -------------------------------         -------------------------------
                                                    1998                1997                1998                1997 
                                                 -----------         -----------         -----------         -----------
                                                                         (dollars in thousands)
<S>                                              <C>                 <C>                 <C>                 <C>        
Loans outstanding (end of period)                $ 6,322,346         $ 6,022,244         $ 6,322,346         $ 6,022,244
                                                 ===========         ===========         ===========         ===========
Average loans outstanding                        $ 6,322,620         $ 5,973,862         $ 6,262,026         $ 5,936,912
                                                 ===========         ===========         ===========         ===========
Allowance for loan losses summary:
   Balance at beginning of period                $    85,749         $    84,189         $    82,596         $    85,248
                                                 -----------         -----------         -----------         -----------
   Loans charged off:
      Commercial, financial and agricultural           2,831                 967               4,291               4,320
      Real estate:
         Commercial                                      152                  10                 572                 353
         Construction                                     --                  --                  --                  61
         Residential                                   1,270                 615               2,887               2,650
      Consumer                                         3,602               3,688              11,284              10,199
      Lease financing                                     90                  --                  95                  16
      Foreign                                            120                  16                 336                  36
                                                 -----------         -----------         -----------         -----------
         Total loans charged off                       8,065               5,296              19,465              17,635
                                                 -----------         -----------         -----------         -----------
   Recoveries on loans charged off:
      Commercial, financial and agricultural              53                 130                 715               1,449
      Real estate:
         Commercial                                      260                  76                 775                 140
         Construction                                  1,224                  --               1,224                  --
         Residential                                     111                 122                 184                 784
      Consumer                                           602                 532               1,925               1,730
      Lease financing                                      8                  --                   8                  11
      Foreign                                             28                   5                  96                  18
                                                 -----------         -----------         -----------         -----------
         Total recoveries on loans previously
           charged off                                 2,286                 865               4,927               4,132
                                                 -----------         -----------         -----------         -----------
         Net charge-offs                              (5,779)             (4,431)            (14,538)            (13,503)
   Provision charged to expense                        6,279               3,817              18,191              11,830
                                                 -----------         -----------         -----------         -----------
   Balance at end of period                      $    86,249         $    83,575         $    86,249         $    83,575
                                                 ===========         ===========         ===========         ===========

Net loans charged off to average loans                   .36%(1)             .29%(1)             .31%(1)             .30%(1)
Net loans charged off to allowance for
   loan losses                                         26.58%(1)           21.03%(1)           22.54%(1)           21.60%(1)
Allowance for loan losses to total
   loans (end of period)                                1.36%               1.39%               1.36%               1.39%
Allowance for loan losses to nonperforming
   loans (end of period):
      Excluding 90 days past due
         accruing loans                                1.38X               1.15x               1.38X               1.15x
      Including 90 days past due
         accruing loans                                 .88X                .82x                .88X                .82x
</TABLE>

----------

(1)   Annualized.


                                       19
<PAGE>   21
PROVISION AND ALLOWANCE FOR LOAN LOSSES, CONTINUED

For the first nine months of 1998, the provision for loan losses was
$18,191,000, an increase of $6,361,000, or 53.8%, over the same period in 1997.
The provision for loan losses was $6,279,000 for the third quarter of 1998, an
increase of $2,462,000, or 64.5%, over the same period in 1997. The increase in
the provision for loan losses for the first nine months and third quarter of
1998 over the same periods in 1997 reflects the prolonged economic downturn in
Hawaii and a $2,769,000, or 52.3%, increase in loan charge-offs in the third
quarter of 1998 compared to the same period in 1997.

The provision for loan losses is based upon management's judgment as to the
adequacy of the allowance for loan losses (the "Allowance") to absorb future
losses. The Company uses a systematic methodology to determine the adequacy of
the Allowance and related provision for loan losses to be reported for financial
statement purposes. The determination of the adequacy of the Allowance is
ultimately one of management judgment, which includes consideration of many
factors, including, among other things, the amount of problem and potential
problem loans, net charge-off experience, changes in the composition of the loan
portfolio by type and location of loans and in overall loan risk profile and
quality, general economic factors and the fair value of collateral.

Charge-offs were $19,465,000 for the first nine months of 1998, an increase of
$1,830,000, or 10.4%, over the same period in 1997. Charge-offs for the third
quarter of 1998 were $8,065,000 compared to $5,296,000 for the same period a
year ago, an increase of $2,769,000, or 52.3%. The increase in charge-offs in
the third quarter of 1998 was primarily due to a $2,500,000 commercial,
financial and agricultural loan charge-off. For the first nine months of 1998,
consumer loan charge-offs increased $1,085,000, or 10.6%, over the same period
in 1997. Consumer loan charge-offs were negatively impacted by the ongoing
sluggish Hawaii economy and a continued increase in personal bankruptcies.
Smaller balance homogeneous credit card and consumer loans are charged off at a
predetermined delinquency status or earlier if the Company determines that the
loan is uncollectible.

Excluding a $1,224,000 recovery on a real estate-construction loan in September
1998, recoveries decreased $429,000, or 10.4%, for the first nine months of
1998, compared to the same period in 1997. The decrease in recoveries reflects
the ongoing sluggish Hawaii economy and continued increase in personal
bankruptcies.

The allowance for loan losses increased to 1.38 times nonperforming loans
(excluding 90 days past due accruing loans) at September 30, 1998 from 1.15
times at September 30, 1997 primarily due to a 14.4% decrease in nonperforming
loans.

In management's judgment, the Allowance was adequate to absorb potential losses
currently inherent in the loan portfolio at September 30, 1998. However, changes
in prevailing economic conditions in the Company's markets could result in
changes in the level of nonperforming assets and charge-offs in the future and,
accordingly, changes in the Allowance.

NONINTEREST INCOME

Noninterest income totalled $82,996,000 and $26,169,000, for the first nine
months and third quarter of 1998, respectively, an increase of $10,130,000 and
$2,678,000, or 13.9% and 11.4%, respectively, over the same periods in 1997.

Trust and investment services income increased $745,000 and $216,000, or 3.9%
and 3.4%, for the first nine months and third quarter of 1998, respectively,
over the same periods in 1997.

Service charges on deposit accounts increased $1,129,000 and $456,000, or 5.3%
and 6.2%, for the first nine months and third quarter of 1998, respectively,
over the same periods in 1997. The increase was primarily due to higher service
charges and volume on checks paid and returned.

Other service charges and fees increased $3,819,000 and $1,523,000, or 17.6% and
19.7%, for the first nine months and third quarter of 1998, respectively, over
the same periods in 1997. The increase was primarily due to higher: (1) income
earned from annuity and mutual fund sales; and (2) mortgage servicing fees for
mortgage loans that were originated and sold with servicing retained.


                                       20
<PAGE>   22
Other noninterest income increased $4,584,000 and $406,000, or 44.6% and 19.9%,
for the first nine months and third quarter of 1998, respectively, over the same
periods in 1997. The increase was primarily due to: (1) gains on sales of a
corporate aircraft and the Maui regional manager's residence of $3,907,000 and
$2,115,000, respectively; and (2) income earned on bank-owned life insurance on
certain officers. The increase was partially offset by gains on sale of OREO
totalling $3,029,000 in the second quarter of 1997.

NONINTEREST EXPENSE

Noninterest expense totalled $223,063,000 for the first nine months of 1998, an
increase of 2.0% over the same period in 1997. Noninterest expense totalled
$73,204,000 for the third quarter of 1998, an increase of 2.1% over the same
period a year ago.

Total personnel expense (salaries and wages and employee benefits) decreased
$5,391,000 and $1,097,000, or 4.8% and 3.0%, for the first nine months and third
quarter of 1998, respectively, compared to the same periods in 1997. The
decrease was primarily due to: (1) lower salaries and wages expense as a result
of the Company's re-engineering and consolidation efforts; and (2) higher
pension credits.

Occupancy expense for the first nine months of 1998 decreased $45,000, or .2%,
compared to the same period in 1997. The occupancy expense for the third quarter
of 1998 increased $565,000, or 6.2%, over the same period in 1997.

Equipment expense increased $743,000 and $192,000, or 4.0% and 3.3%,
respectively, for the first nine months and third quarter of 1998, over the same
periods in 1997. The increase was a result of: (1) higher data processing
equipment rental expense; and (2) higher depreciation expense on furniture and
equipment.

Other noninterest expense increased $9,017,000 and $1,840,000, respectively, for
the first nine months and third quarter of 1998, an increase of 15.3% and 9.3%,
respectively, over the same periods in 1997. The increase was the result of
write-downs of certain OREO, higher outside service expenses primarily related
to the Year 2000 project (see Year 2000 disclosure on pages 22 to 24) and higher
foreclosed property expenses. In addition, the cash surrender value of certain
executive life insurance policies increased (recorded as a credit to insurance
expense) in March 1997. This increase was partially offset by a loss on the
sales of a loan in June 1997 and certain OREO in March 1997.

INCOME TAXES

The Company's effective income tax rate (exclusive of the tax equivalent
adjustment) for the first nine months and third quarter of 1998 was 36.1% and
36.3%, respectively, as compared to 32.5% and 34.4%, respectively, for the same
periods in 1997. The effective tax rates in 1998 were comparatively higher
because the effective tax rate for the first nine months and third quarter of
1997 was positively impacted by: (1) the recognition of certain previously
unrecognized tax credits; (2) the partial reversal of an overaccrual of State of
Hawaii income taxes; and (3) the donation of real property to a non-profit
organization.


                                       21
<PAGE>   23
LIQUIDITY AND CAPITAL

Stockholders' equity was $768,582,000 at September 30, 1998, an increase of 5.0%
over $731,701,000 at December 31, 1997. The ratio of average stockholders'
equity to average total assets was 9.35% for the third quarter of 1998 compared
to 9.40% for the third quarter of 1997.

The primary source of funds for the dividends paid by the Company to its
stockholders is dividends received from its subsidiaries. FHB and Pacific One
are subject to regulatory limitations on the amount of dividends they may
declare or pay. At September 30, 1998, the aggregate amount available for
payment of dividends by such subsidiaries without prior regulatory approval was
$292,077,000.

The Company is subject to various regulatory capital requirements administered
by the Federal banking agencies. Failure to meet minimum capital requirements
can initiate certain discretionary (and, in the case of the Company's depository
institution subsidiaries, mandatory) actions by regulators that, if undertaken,
could have a material effect on the Company's consolidated financial statements.
Under capital adequacy guidelines and the regulatory framework for prompt
corrective action, the Company and its 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.

Quantitative measures established by regulation to ensure capital adequacy
require the Company to maintain minimum amounts and ratios (set forth in the
table below, at September 30, 1998) of Tier 1 and Total capital to risk-weighted
assets, and of Tier 1 capital to average assets.

<TABLE>
<CAPTION>
                                                          Minimum
                                                         For Capital                   To Be
                               Actual                 Adequacy Purposes           Well-Capitalized
                        --------------------        --------------------        --------------------
                         Amount        Ratio         Amount        Ratio         Amount        Ratio
                        --------       -----        --------       -----        --------       -----
                                                      (dollars in thousands)
<S>                     <C>            <C>          <C>            <C>          <C>            <C>
Tier 1 Capital to
   Risk-Weighted
   Assets               $749,413        9.60%       $312,194        4.00%       $468,291        6.00%
Total Capital to
   Risk-Weighted
   Assets               $905,662       11.60%       $624,388        8.00%       $780,485       10.00%
Tier 1 Capital to
   Average Assets       $749,413        9.34%       $240,743        3.00%            N/A         N/A
</TABLE>

As of September 30, 1998, the Company and its depository institution
subsidiaries were categorized as well-capitalized under the applicable Federal
regulations. To be categorized as well-capitalized, the Company must maintain
Tier 1 risk-based and total risk-based capital ratios of 6% and 10%,
respectively (as set forth in the table above). Management is not aware of any
conditions or events subsequent to September 30, 1998, that would cause a change
in the Company's category.

YEAR 2000 ISSUES

Background

Many computer programs were written, and many computer chips were programmed, to
use only two digits to identify the year. Thus, a computer program could read
the digits "00" as the year 2000 or as the year 1900. If not corrected, software
and computer systems may fail or create erroneous results in the year 2000.
Also, computer chips embedded in many operating facilities -- such as elevators
and communication systems -- may cause equipment malfunctions because of the
year 2000 date change. These potential software and systems problems may affect
the Company, the outside companies and agencies that the Company relies upon to
conduct its business and to service its customers ("External Parties"), and the
Company's borrowers. Failure by the Company or these third parties to
successfully address year 2000 issues could have a material and adverse effect
on the Company's business, results of operations or financial condition.


                                       22
<PAGE>   24

In 1995, management of the Company responded to these issues by commencing a
comprehensive year 2000 program focused on ensuring that the Company's
information management and processing software and hardware and other date-
sensitive facilities will continue to function properly in the year 2000 and
thereafter. The Board of Directors of the Company assigned to the Joint Audit
Committee the special responsibility to monitor progress on year 2000 compliance
efforts and to inform the Board of Directors accordingly.

The Company's year 2000 program is designed to comply with guidelines issued by
the Federal Financial Institutions Examination Council (the "FFIEC"). The
Federal Deposit Insurance Corporation (the "FDIC") and Federal Reserve, which
are members of the FFIEC, will conduct year 2000 compliance examinations of the
Company, FHB, Pacific One and Bank of the West. These examinations will result
in one of three ratings: "satisfactory," "needs improvement," or
"unsatisfactory," and institutions that receive a rating of unsatisfactory may
be subject to formal enforcement action, supervisory agreements, cease and
desist orders, civil money penalties, or the appointment of a conservator.
Disclosure of these ratings is not permitted by federal regulations.

The Company's program includes five major phases -- inventory, assessment,
strategies, solution (remediation or replacement of noncompliant items) and
testing and certification (which includes stand-alone and integration testing).
In the inventory and assessment phases, the Company classified items to be
addressed as "mission critical" or "non-mission critical". Mission critical
items are those applications or systems that are vital to the successful
continuance of a core business activity of the Company.

Status of Implementation Program

The Company has completed the inventory, assessment and strategy phases of the
program. The Company has also completed the solution phase for over 75% of both
mission critical and non-mission critical items, and stand-alone testing and
certification for approximately 50% of mission critical items and 60% of
non-mission critical items. Stand-alone testing and certification for internal
mission critical systems is scheduled to be substantially completed by the end
of 1998, with stand-alone and integration testing for all systems, both mission
critical and non-mission critical, to be completed by June 30, 1999.

External Parties

The Company is also assessing the year 2000 compliance efforts of External
Parties. The Company has categorized External Parties as follows: (i) external
processors -- vendors who provide core business processing services, such as
credit card processing, and vendors who provide information access for the
Company's customers (such as business and home P.C. banking); (ii) external
interfaces -- companies and agencies with whom the Company exchanges information
by electronic or nonelectronic media, -- such as automated clearing house
transactions; and (iii) external alliances -- vendors, suppliers, providers,
business partners, customers and other third parties that are not covered by any
other category, such as credit bureaus and stock quotation services. Contacts
with External Parties in the three categories above that have "mission critical"
relationships with the Company have been started and are scheduled for
completion by December 1998. Testing of available data is expected to be
completed by the second quarter of 1999.

Borrowers

The Company also has commenced an assessment program with respect to year 2000
compliance by borrowers. Credit officers completed the first stage of a credit
risk survey and assessment process in August 1998. Borrowers were selected for
review based on certain commitment levels. The commitment levels were based on
FFIEC guidelines and management judgement. The selected borrowers were
classified as "high risk," "medium risk" or "low risk" depending on their year
2000 status. High risk credits will be reassessed quarterly and medium-risk and
low-risk credits will be reassessed semi-annually. These credit assessments are
taken into account by the Company in the assessment of its allowance for loan
losses. All applicants for new credits at each bank are being evaluated for year
2000 risk among other underwriting factors, if applicable.


                                       23
<PAGE>   25
Budget

The Company currently estimates that it will incur costs relating solely to the
year 2000 program of approximately $9 million through June 30, 2000. It also
estimates that an additional $3 million will be required for purchases and
installations of new or replacement systems or equipment that were accelerated
to address year 2000 issues. The source of these funds will be the operating
cash flow of the Company. Through September 30, 1998, an estimated total of $2.9
million has been expended on year 2000 compliance efforts.

Merger

As previously discussed, on November 1, 1998, BancWest, parent company of Bank
of the West, merged with and into FHI (the surviving corporation referred to
herein as "New BancWest"). The year 2000 compliance program of Bank of the West
will be reviewed by New BancWest.

Bank of the West currently estimates that it will incur costs of approximately
$3.1 million related to its year 2000 program, and additional costs of
approximately $2.2 million on projects that were accelerated to resolve year
2000 problems. Through September 30, 1998, approximately $1.2 million has been
expended on year 2000 projects. In addition, approximately $1.2 million has been
expended on the planning and installation of accelerated systems and
applications as described above.

Contingency Plans

The Company is also preparing contingency plans to minimize disruption to bank
operations due to year 2000 issues. These plans will address, among other
things, the Company's exposure to year 2000 resulting from noncompliance by
critical External Parties. The development of contingency plans is underway and
it is the Company's goal to complete and test these plans for mission critical
products and services in 1999.

Even though it is expected that the Company's program will adequately address
year 2000 issues, there can be no assurance that unforeseen difficulties will
not arise and impact the Company's business, results of operations or financial
condition. In addition, there is no assurance that the failure of any External
Party or borrower to resolve its year 2000 issues would not have a material and
adverse effect on the Company's business, financial condition or results of
operations.

Readers are cautioned that forward-looking statements in this discussion of year
2000 issues should be read in conjunction with the Company's disclaimers on page
8 as to the risks and uncertainties relating to such forward-looking statements.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Certain disclosures in this Item 3 are forward-looking statements about matters
that involve certain risks and uncertainties that could cause the Company's
actual results to differ materially from those discussed in such forward-looking
statements. See Item 2 above for a discussion of factors that could cause or
contribute to such differences. The discussions included in this Item 3 do not 
reflect the expected impact of the Merger.

INTEREST RATE RISK MEASUREMENT AND MANAGEMENT

The net interest income of the Company is subject to interest rate risk to the
extent the Company's interest-bearing liabilities (primarily deposits and
borrowings) mature or reprice on a different basis than its interest-earning
assets (primarily loans 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 also reduce 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 mortgage loans based
on the interest rate environment.


                                       24
<PAGE>   26
The Asset/Liability Committees of each of the Company's subsidiary companies are
responsible for managing interest rate risk. Oversight for the Company as a
whole and individual subsidiary companies is also provided by the Treasury &
Investment Division and the Asset/Liability Committee of FHB. The frequency of
the various Asset/Liability Committee meetings range from weekly to monthly.
Recommendations for changes to a particular subsidiary's interest rate profile
or policies are made to its Board of Directors. Other than loans that are
originated and held for sale, the Company does not purchase derivative products
or other financial instruments for trading purposes or enter into agreements
with respect thereto.

The Company's 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 the asset and/or
liability mix to adjust for sensitivity to interest rate changes -- including by
increasing or decreasing the amounts of fixed and/or variable instruments held
by the Company) and/or utilizing off-balance sheet instruments such as interest
rate swaps, caps or floors.

The Company models its net interest income in order to quantify its exposure to
changes in interest rates. Generally, the size of the balance sheet is held
constant and then subjected to interest rate shocks of 100 and 200 basis points
(both increases and decreases). Each account-level item is repriced according to
its respective contractual characteristics, including any imbedded options which
might exist (e.g., loans which permit the borrower to prepay the principal
balance of the loan prior to maturity without penalty). Off-balance sheet
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 (a "flat rate scenario") to determine the level
of interest rate risk at that time.

The Company continues to monitor the projected impact of increases and decreases
in interest rates on the Company's net interest income. Exposure remains well
within board-approved limits.

SIGNIFICANT ASSUMPTIONS UTILIZED AND INHERENT LIMITATIONS

The significant net interest income changes for each interest rate scenario
include assumptions based on accelerating or decelerating mortgage 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
because prepayments are affected by many variables that 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 projected 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.

At September 30, 1998, there was no significant change in the Company's market
risk from the information provided with respect to "Quantitative and Qualitative
Disclosures About Market Risk" in the Company's Annual Report on Form 10-K for
the fiscal year ended December 31, 1997. Quantitative and qualitative
disclosures regarding the Company's market risk are also included in
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" (page 36) and "Notes to Financial Statements" (page 47) in the
Financial Review section of the Company's Annual Report 1997.


                                       25

<PAGE>   27

ITEM 2.  CHANGES IN SECURITIES AND USE OF PROCEEDS

         (a)   In connection with the merger (the "Merger") of BancWest
               Corporation (" Old BancWest") with and into First Hawaiian, Inc.
               (the "Company"), certain amendments were made to the certificate
               of incorporation and bylaws of the Company that modify or
               otherwise affect the rights of holders of the Company's common
               stock (the "Common Stock"). These amendments primarily relate to
               the issuance to the shareholders of Old BancWest of shares of
               newly authorized class A common stock of the Company (the "Class
               A Common Stock") in an amount equal to approximately 45% of the
               total number of shares of the Class A Common Stock and the Common
               Stock that were outstanding immediately after the Merger. In
               addition, in connection with the closing of the Merger on
               November 1, 1998; the Company entered into a Standstill and
               Governance Agreement and Registration Rights Agreement with
               Banque Nationale de Paris ("BNP"), which owned directly and
               through a subsidiary, all of the voting stock of Old BancWest
               immediately prior to the Merger. These agreements govern most
               aspects of the relationship between the Company and BNP after the
               Merger.

               The above-referenced amendments to the Company's certificate and
               bylaws and the agreements that the Company entered into with BNP
               in connection with the Merger and the issuance of the Class A
               Common Stock are described in the Company's proxy statement filed
               with the Securities and Exchange Commission (the "SEC") on July
               17, 1998, and Company's Form 8-A filed with the SEC on October
               30, 1998, which are hereby incorporated herein by reference.
               Copies of such amendments and agreements are included as exhibits
               to this Form 10-Q.

         (b)   See Item 2(a) above.

         (c)   On November 1, 1998, the Company issued 25,814,768 shares of its
               Class A Common Stock (the "Class A Shares") to BNP in exchange
               for all of the outstanding shares of common stock of Old BancWest
               in connection with the Merger, as set forth in Item 2(a) above.

               The Class A Shares were issued pursuant to the exemption from
               registration set forth in Section 4(2) of the Securities Act of
               1933, as amended, in a transaction by the issuer not involving a
               public offering.

               Shares of Class A Common Stock may in certain circumstances
               convert into shares of Common Stock as described in the
               agreements and amendments referred to in Item 2(a) above.

               In connection with the Merger, the surviving corporation in the
               Merger ("New BancWest") issued, pursuant to the exemption from
               registration set forth in Section 4(2) of the Securities Act of
               1933, as amended, an aggregate of 131,236 options to acquire
               shares of common stock, par value $1.00 per share, of New
               BancWest ("New BancWest Common Stock") and 411,049 shares of
               restricted New BancWest Common Stock, to certain employees of Old
               BancWest in exchange for the termination of certain Old BancWest
               stock appreciation rights that were held by such employees.

         (d)   Not applicable.


                                       26
<PAGE>   28

ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

               On August 28, 1998, FHI held a special meeting of its
               stockholders to consider and vote upon the adoption of the
               Agreement and Plan of Merger, dated as of May 28, 1998 (the
               "Merger Agreement"), between FHI and BancWest Corporation
               ("BancWest"), pursuant to which, among other things, (i) BancWest
               would be merged with and into FHI (the "Merger"), (ii) the
               outstanding shares of common stock, without par value, of
               BancWest ("BancWest Common Stock"), all of which were then owned
               by Banque Nationale de Paris ("BNP"), would be exchanged for a
               number of shares of FHI's Class A Common Stock, par value $1.00
               per share (the "Class A Common Stock"), equal to 45% of the
               aggregate outstanding voting power of the surviving corporation
               after the Merger, and (iii) certain amendments that would be made
               to FHI's certificate of incorporation, in each case as more fully
               described in FHI's proxy statement which was filed with the
               Securities and Exchange Commission on July 17, 1998. The
               following are voting results with respect to the adoption and
               approval of the Merger, dated as of May 28, 1998: for -
               25,707,804 (97.8%), against - 498,329 (1.9%), abstained - 80,316
               (.3%) and unvoted - 10 (less than .1%).

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

         (a)   Exhibits

               3(i)       Certificate of Incorporation of BancWest Corporation
                          (formerly First Hawaiian, Inc.) (incorporated by
                          reference to Exhibit 3(i) of the BancWest Corporation
                          Current Report on Form 8-K dated as of November 1,
                          1998, File No. 0-7949).

               3(ii)      Amended and Restated By-Laws of BancWest Corporation
                          (formerly First Hawaiian, Inc.) (incorporated by
                          reference to Exhibit 3(ii) of the BancWest Corporation
                          Current Report on Form 8-K dated as of November 1,
                          1998, File No. 0-7949).

               4(i)       Standstill and Governance Agreement between First
                          Hawaiian, Inc. and Banque Nationale de Paris, dated
                          November 1, 1998 (incorporated by reference to Exhibit
                          4(i) of the BancWest Corporation Current Report on
                          Form 8-K dated as of November 1, 1998, File No.
                          0-7949).

               4(ii)      Registration Rights Agreement between First Hawaiian,
                          Inc. and Banque Nationale de Paris, dated November 1,
                          1998 (incorporated by reference to Exhibit 4(ii) of
                          the BancWest Corporation Current Report on Form 8-K
                          dated as of November 1, 1998, File No. 0-7949).

               Exhibit 12 Statement regarding computation of ratios.

               Exhibit 27 Financial data schedule.

         (b)   Reports on Form 8-K

               Current report, dated as of September 21, 1998, discussing the
               approval by the Board of Governors of Federal Reserve System of
               the merger of First Hawaiian, Inc. with BancWest Corporation (the
               "Merger") and certain other Merger-related matters.

               Current report, dated as of November 1, 1998, announcing the
               consummation of the Merger and amendments to the certificate and
               by-laws of the Company to: (i) create the Class A Common Stock
               and a related class of directors, (ii) change the name of the
               corporation to "BancWest Corporation" and (iii) provide for
               various corporate governance and other related matters.


                                       27
<PAGE>   29

                                   SIGNATURES

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 CORPORATION
                                        (REGISTRANT)

Date November 13, 1998                  By          /s/ HOWARD H. KARR
     -------------------                   -------------------------------------
                                                        HOWARD H. KARR
                                                 EXECUTIVE VICE PRESIDENT AND
                                                   CHIEF FINANCIAL OFFICER
                                                (PRINCIPAL FINANCIAL OFFICER)


                                       28
<PAGE>   30
                                  EXHIBIT INDEX


<TABLE>
<CAPTION>
EXHIBIT
 NUMBER     DESCRIPTION
-------     -----------
<S>         <C>
 3(i)       Certificate of Incorporation of BancWest Corporation (formerly First
            Hawaiian, Inc.) (incorporated by reference to Exhibit 3(i) of the
            BancWest Corporation Current Report on Form 8-K dated as of 
            November 1, 1998, File No. 0-7949).

 3(ii)      Amended and Restated By-Laws of BancWest Corporation (formerly First
            Hawaiian, Inc.) (incorporated by reference to Exhibit 3(ii) of the
            BancWest Corporation Current Report on Form 8-K dated as of 
            November 1, 1998, File No. 0-7949).

 4(i)       Standstill and Governance Agreement between First Hawaiian, Inc. and
            Banque Nationale de Paris, dated November 1, 1998 (incorporated by
            reference to Exhibit 4(i) of the BancWest Corporation Current Report
            on Form 8-K dated as of November 1, 1998, File No. 0-7949).

 4(ii)      Registration Rights Agreement between First Hawaiian, Inc. and
            Banque Nationale de Paris, dated November 1, 1998 (incorporated by
            reference to Exhibit 4(ii) of the BancWest Corporation Current
            Report on Form 8-K dated as of November 1, 1998, File No. 0-7949).

 12         Statement regarding computation of ratios.

 27         Financial data schedule.
</TABLE>