SEC Filing - First Hawaiian, Inc.

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BANCWEST CORP

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 [FEE REQUIRED]
		For the quarterly period ended March 31, 2002


o		TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
		For the transition period from_______________to_______________.

Commission file number 0-7949

BANCWEST CORPORATION

(Exact name of registrant as specified in its charter)


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

999 Bishop Street, Honolulu, Hawaii (Address of principal executive offices)		96813 (Zip Code)

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

Securities registered pursuant to Section 12(b) of the Act:
9.50% Quarterly Income Preferred Securities

Securities registered pursuant to Section 12(g) of the Act:
None

(Title of class)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by
Section 13 or l5(d) of the Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter period that the registrant was required to file such reports), and
(2) has been subject to such filing requirements for the past 90 days.

Yes [X] No [ ]

The number of shares outstanding of each of the issuer’s classes of common stock
as of April 30, 2002 was:


Title of Class		Number of Shares Outstanding

Class A Common Stock, $0.01 Par Value		85,759,123 Shares

TABLE OF CONTENTS


PART I. FINANCIAL INFORMATION
	Item 1. Financial Statements
		CONSOLIDATED BALANCE SHEETS (Unaudited)
		CONSOLIDATED STATEMENTS OF INCOME (Unaudited)
		CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDER’S EQUITY (Unaudited)
		CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
		NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
	Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
	Item 3. Quantitative and Qualitative Disclosures About Market Risk
PART II. OTHER INFORMATION
	Item 2. Changes in Securities and Use of Proceeds
	Item 6. Exhibits and Reports on Form 8-K
SIGNATURES
EXHIBIT INDEX
EXHIBIT 12.1

PART I. FINANCIAL INFORMATION


		Page

Item 1.	Financial Statements (Unaudited)
	Consolidated Balance Sheets at March 31, 2002, December 31, 2001 and March 31, 2001	2 - 3
	Consolidated Statements of Income for the three months ended March 31, 2002 and 2001	4
	Consolidated Statements of Changes in Stockholder’s Equity for the three months ended March 31, 2002 and 2001	5
	Consolidated Statements of Cash Flows for the three months ended March 31, 2002 and 2001	6
	Notes to Consolidated Financial Statements	7 - - 10
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	11 - 29
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	29 - - 30
PART II.	OTHER INFORMATION
Item 2.	Changes in Securities and Use of Proceeds	31
Item 6.	Exhibits and Reports on Form 8-K	31
SIGNATURES		32
EXHIBIT INDEX

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

BancWest Corporation and Subsidiaries
CONSOLIDATED BALANCE SHEETS (Unaudited)


			March 31,		December 31,		March 31,
			2002		2001		2001

			(in thousands, except per share data)
Assets
Cash and due from banks			$	1,338,866	$	737,262	$	834,003
Interest-bearing deposits in other banks				182,930		109,935		365,261
Federal funds sold and securities purchased under agreements to resell				149,500		233,000		373,000
Investment securities:
	Held-to-maturity			—		—		86,764
	Available-for-sale			3,163,807		2,542,173		2,103,515
Loans and leases:
	Loans and leases			24,123,589		15,223,732		14,202,523
	Less allowance for credit losses			383,003		194,654		186,246

Net loans and leases				23,740,586		15,029,078		14,016,277

Premises and equipment, net				410,429		273,035		288,989
Customers’ acceptance liability				11,292		1,498		2,369
Core deposit intangible, net				231,925		110,239		77,365
Goodwill, net				3,380,392		2,061,805		679,107
Other real estate owned and repossessed personal property				24,393		22,321		20,549
Other assets				690,373		526,168		572,253

Total assets			$	33,324,493	$	21,646,514	$	19,419,452

Liabilities and Stockholder’s Equity
Deposits:
	Domestic:
		Interest-bearing	$	17,146,357	$	11,453,882	$	11,280,102
		Noninterest-bearing		6,200,071		3,407,209		3,167,903
	Foreign			737,492		472,960		262,168

Total deposits				24,083,920		15,334,051		14,710,173

Federal funds purchased and securities sold under agreements to repurchase				810,192		713,384		648,008
Other short-term borrowings				1,330,673		240,936		114,526
Acceptances outstanding				11,292		1,498		2,369
Other liabilities				1,041,529		891,641		868,346
Long-term debt				2,118,040		2,197,954		781,039
Guaranteed preferred beneficial interests in Company’s junior subordinated debentures				264,214		265,130		250,000

Total liabilities			$	29,659,860	$	19,644,594	$	17,374,461

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

BancWest Corporation and Subsidiaries
CONSOLIDATED BALANCE SHEETS, Continued (Unaudited)


			March 31,		December 31,		March 31,
			2002		2001		2001

			(in thousands, except per share data)
Stockholder’s equity:
	Class A common stock, par value $.01 per share at March 31, 2002 and December 31, 2001 and $1 per share at March 31, 2001 Authorized - 150,000,000 shares at March 31, 2002 and December 31, 2001 and 75,000,000 shares at March 31, 2001 Issued - 85,759,123 shares at March 31, 2002 and 56,074,874 shares at December 31, 2001 and March 31, 2001		$	858	$	561	$	56,075
	Common stock, par value $1 per share
		Authorized - - 200,000,000 shares at March 31, 2001 Issued - 71,053,762 shares at March 31, 2001		—		—		71,054
	Surplus			3,584,978		1,985,275		1,126,103
	Retained earnings			73,719		8,302		808,410
	Accumulated other comprehensive income, net			5,078		7,782		22,308
	Treasury stock, at cost - 2,423,466 shares at March 31, 2001			—		—		(38,959	)

Total stockholder’s equity				3,664,633		2,001,920		2,044,991

Total liabilities and stockholder’s equity			$	33,324,493	$	21,646,514	$	19,419,452

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

BancWest Corporation and Subsidiaries
CONSOLIDATED STATEMENTS OF INCOME (Unaudited)


		Three Months Ended March 31,

		2002		2001

		(in thousands)
Interest income
Interest and fees on loans		$	256,229	$	262,442
Lease financing income			36,726		35,595
Interest on investment securities:
	Taxable interest income		34,262		33,193
	Exempt from Federal income taxes		44		118
Other interest income			2,023		7,503

	Total interest income		329,284		338,851

Interest expense
Deposits			63,629		120,421
Short-term borrowings			5,793		10,218
Long-term debt			35,382		18,839

	Total interest expense		104,804		149,478

	Net interest income		224,480		189,373
Provision for credit losses			20,007		35,200

	Net interest income after provision for credit losses		204,473		154,173

Noninterest income
Service charges on deposit accounts			25,974		20,436
Trust and investment services income			8,140		9,127
Other service charges and fees			23,498		18,374
Securities gains, net			228		41,300
Other			4,784		9,262

	Total noninterest income		62,624		98,499

Noninterest expense
Salaries and wages			60,094		49,377
Employee benefits			23,482		17,973
Occupancy expense			15,614		16,235
Outside services			13,252		11,503
Intangible amortization			2,757		10,284
Equipment expense			7,729		7,532
Restructuring and integration costs			6,015		3,935
Other			30,155		33,249

	Total noninterest expense		159,098		150,088

Income before income taxes			107,999		102,584
Provision for income taxes			42,582		40,837

Net income		$	65,417	$	61,747

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

BancWest Corporation and Subsidiaries
CONSOLIDATED STATEMENTS OF
CHANGES IN STOCKHOLDER’S EQUITY (Unaudited)


											Accumulated
		Class A									Other
		Common		Common				Retained			Comprehensive			Treasury
		Stock		Stock		Surplus		Earnings			Income, net			Stock			Total

		(in thousands, except per share data)
Balance, December 31, 2001		$	561	$	—	$	1,985,275	$	8,302		$	7,782		$	—		$	2,001,920
Comprehensive income:
	Net income		—		—		—		65,417			—			—			65,417
	Unrealized valuation adjustment, net of tax and reclassification adjustment		—		—		—		—			(2,704	)		—			(2,704	)

	Comprehensive income		—		—		—		65,417			(2,704	)		—			62,713

Issuance of Class A common stock			297		—		1,599,703		—			—			—			1,600,000

Balance, March 31, 2002		$	858	$	—	$	3,584,978	$	73,719		$	5,078		$	—		$	3,664,633

Balance, December 31, 2000		$	56,075	$	71,041	$	1,125,652	$	770,350		$	7,601		$	(41,226	)	$	1,989,493
Comprehensive income:
	Net income		—		—		—		61,747			—			—			61,747
	Unrealized valuation adjustment, net of tax and reclassification adjustment		—		—		—		—			14,707			—			14,707

	Comprehensive income		—		—		—		61,747			14,707			—			76,454

Issuance of common stock			—		13		5		—			—			—			18
Incentive Plan for Key Executives			—		—		30		—			—			—			30
Issuance of treasury stock under Stock Incentive Plan			—		—		416		—			—			2,267			2,683
Cash dividends ($.19 per share)			—		—		—		(23,687	)		—			—			(23,687	)

Balance, March 31, 2001		$	56,075	$	71,054	$	1,126,103	$	808,410		$	22,308		$	(38,959	)	$	2,044,991

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

BancWest Corporation and Subsidiaries
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)


				Three Months Ended March 31,

				2002			2001

				(in thousands)
Cash flows from operating activities:
	Net income			$	65,417		$	61,747
	Adjustments to reconcile net income to net cash provided by operating activities:
			Provision for credit losses		20,007			35,200
			Net gain on disposition of assets		—			18,621
			Depreciation and amortization		11,511			61,624
			Income taxes		4,941			6,851
			Increase in interest receivable		(75,333	)		(2,035	)
			Increase (decrease) in interest payable		49,285			(21,399	)
			Increase in prepaid expenses		(27,844	)		(2,035	)
			Securities gains, net		(228	)		(41,300	)
			Accrued donation		—			5,000
			Restructuring and integration costs		6,015			3,935
			Other		59,767			23,442

Net cash provided by operating activities					113,538			149,651

Cash flows from investing activities:
	Net increase in interest-bearing deposits in other banks				(72,995	)		(359,289	)
	Net decrease in Federal funds sold and securities purchased under agreements to resell				130,662			159,100
	Proceeds from maturity of held-to-maturity investment securities				—			6,176
	Proceeds from maturity of available-for-sale investment securities				202,887			577,267
	Purchase of available-for-sale investment securities				(306,995	)		(654,284	)
	Purchase of bank owned life insurance				—			(101,082	)
	Net increase in loans and leases to customers				(213,411	)		(22,686	)
	Net cash provided by (paid for) acquisitions				(1,793,000	)		632,965
	Purchase of premises and equipment				(4,308	)		(5,121	)
	Other				(311	)		(949	)

Net cash used in investing activities					(2,057,471	)		232,097

Cash flows from financing activities:
	Net increase (decrease) in deposits				401,822			(644,505	)
	Net increase (decrease) in Federal funds purchased and securities sold under agreements to repurchase				(212,902	)		69,723
	Net increase in other short-term borrowings				937,447			23,743
	(Payments on) proceeds from long-term debt, net				(180,830	)		148,616
	Cash dividends paid				—			(23,687	)
	Proceeds from issuance of Class A common stock				1,600,000			—
	Proceeds from issuance of common stock options				—			18
	Proceeds from issuance of treasury stock				—			2,713

Net cash provided by (used in) financing activities					2,545,537			(423,379	)

Net increase (decrease) in cash and due from banks					601,604			(41,631	)
Cash and due from banks at beginning of period					737,262			873,599

Cash and due from banks at end of period				$	1,338,866		$	831,968

Supplemental disclosures:
	Interest paid			$	55,159		$	164,341

	Income taxes paid (refund received)			$	3,503		$	(20,788	)

Supplemental schedule of noncash investing and financing activities:
	Loans converted into other real estate owned and repossessed personal property			$	4,161		$	2,098

	Loans made to facilitate the sale of other real estate owned			$	57		$	3,563

In connection with acquisitions, the following liabilities were assumed:
		Fair value of assets acquired		$	10,959,000		$	14,682
		Cash (paid) received			(1,793,000	)		632,965

Liabilities assumed				$	9,166,000		$	647,647

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

BancWest Corporation and Subsidiaries
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

1. Summary of Significant Accounting Policies

The accounting and reporting policies of BancWest Corporation and Subsidiaries (“BancWest,” the “Company” or “we/our”) 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 BancWest Corporation (“BWE”) and its wholly-owned subsidiaries: Bank of the West and its wholly-owned subsidiaries (“Bank of the West”); United California Bank and its wholly-owned subsidiaries (“UCB”); First Hawaiian Bank and its wholly-owned subsidiaries (“First Hawaiian”); FHL Lease Holding Company, Inc. and its wholly-owned subsidiary; First Hawaiian Capital I; BancWest Capital I; 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

The 2001 Consolidated Financial Statements were reclassified in certain respects to conform to the 2002 presentation. Such reclassifications did not have a material effect on the Consolidated Financial Statements.

2. New Pronouncements

On January 1, 2001, the Company adopted Statement of Financial Accounting Standards (“SFAS”) No. 133, “Accounting for Derivative Instruments and Hedging Activities,” as amended by SFAS No. 137, “Accounting for Derivative Instruments and Hedging Activities-Deferral of the Effective Date of FASB Statement No. 133” and SFAS No. 138, “Accounting for Certain Derivative Instruments and Certain Hedging Activities-An Amendment of FASB Statement No. 133.” At the time of adoption, we designated certain derivative instruments used for risk management into hedging relationships in accordance with the requirements of the new standard. The transition adjustment resulting from the adoption of SFAS No. 133, as amended by SFAS Nos. 137 and 138, associated with establishing the fair values of derivatives and hedged items on the Company’s Consolidated Balance Sheet was not material because the Company does not engage in significant transactions using derivative financial instruments.

In July 2001, the Financial Accounting Standards Board (“FASB”) issued SFAS No. 141, “Business Combinations.” SFAS No. 141, which supersedes Accounting Principles Board (“APB”) Opinion No. 16, “Business Combinations,” addresses financial accounting and reporting for business combinations. All business combinations in the scope of SFAS No. 141 are to be accounted for using the purchase method of accounting. Also included in the provisions of SFAS No. 141 are new criteria for identifying and recognizing intangible assets apart from goodwill and additional disclosure requirements concerning the primary reasons for a business combination and the allocation of the purchase price for the assets acquired and liabilities assumed. The provisions of SFAS No. 141 apply to all business combinations initiated after June 30, 2001, as well as to all business combinations accounted for using the purchase method of accounting for which the date of acquisition is July 1, 2001 or later. The Company adopted the provisions of SFAS No. 141 concurrent with the acquisition of BancWest by BNP Paribas (“BNP Paribas Merger”). See further discussion in Note 3.

In July 2001, the FASB also issued SFAS No. 142, “Goodwill and Other Intangible Assets.” SFAS No. 142, which supersedes APB Opinion No. 17, “Intangible Assets,” addresses the accounting and reporting for goodwill and other intangible assets acquired individually or with a group of other assets (but not those acquired in a business combination) at and subsequent to acquisition. Under the provisions of SFAS No. 142, goodwill and certain other intangible assets which do not possess finite lives will no longer be amortized into net income over an estimated life but rather will be tested at least annually for impairment based on specific guidance provided in the new standard. Intangible assets determined to have finite lives will continue to be amortized over their estimated useful lives and also continue to be subject to impairment testing. Application of the non-amortization provisions of this statement was effective with the BNP Paribas Merger. The remaining provisions of SFAS No. 142 were adopted by the Company effective January 1, 2002. Goodwill and other indefinite lived intangible assets were subjected to a transitional impairment test during the quarter ended March 31, 2002. As of March 31, 2002, we had no impairment on our goodwill. Had we amortized the goodwill arising from the BNP Paribas Merger, pre-tax amortization of goodwill of approximately $25.8 million (assuming an amortization period of 20 years) would have been recorded on the Company’s consolidated financial statements in the first three months of 2002. In addition, the pre-tax amortization of goodwill related to the acquisition of UCB from March 15, 2002 amounting to $2.7 million was not recorded.

BancWest Corporation and Subsidiaries
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

The following table reflects consolidated net income adjusted as though the adoption of SFAS Nos. 141 and 142 occurred as of the beginning of the three month period ended March 31, 2001:


		Three months ended March 31,

(in thousands)		2002		2001

Net Income:
	As reported	$	65,417	$	61,747
	Goodwill amortization		—		7,329

	As adjusted	$	65,417	$	69,076

The estimated annual amortization expense for definite life intangible assets, primarily core deposit intangibles arising from the BNP Paribas Merger and the acquisition of UCB, is $27.3 million (pre-tax) for each of the years from 2003 to 2007.

Goodwill increased in the three-month period ended March 31, 2002 due to the acquisition of United California Bank on March 15, 2002. The additional $1.3 billion of goodwill is reported in the Bank of the West operating segment.

In October 2001, the FASB issued SFAS No. 144, “Accounting for the Impairment or Disposal of Long-Lived Assets.” SFAS No. 144 supersedes SFAS No. 121, “Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of.” However, SFAS No. 144 retains the fundamental provisions of SFAS No. 121 for the recognition and measurement of the impairment of long-lived assets to be held and used and the measurement of long-lived assets to be disposed of by sale. The scope of SFAS No. 144 excludes goodwill and other non-amortizable intangible assets to be held and used as well as goodwill associated with a reporting unit to be disposed of. The provisions of SFAS No. 144 are effective for fiscal years beginning after December 15, 2001. The adoption of SFAS No. 144 did not have a material effect on the Company’s Consolidated Financial Statements.

3. Mergers and Acquisitions

United California Bank Acquisition

On March 15, 2002, BancWest, a wholly-owned subsidiary of BNP Paribas, completed its acquisition of all of the outstanding stock of UCB from UFJ Bank Ltd. of Japan. On March 15, 2002, UCB had total assets of $10.1 billion, net loans of $8.5 billion, total deposits of $8.3 billion and a total of 115 branches. The preceding amounts do not include final purchase price accounting adjustments. The purchase price of approximately $2.4 billion was paid in cash and accounted for as a purchase. BNP Paribas funded BancWest’s acquisition of UCB by providing $1.6 billion of additional capital to BancWest and by lending it $800 million. UCB was merged with and into Bank of the West on April 1, 2002. UCB has a strong presence in Southern California, which complements Bank of the West’s existing network in Northern California, the Pacific Northwest, New Mexico and Nevada. We expect to achieve cost savings for the combined company of approximately $75 million per year beginning in 2003. These cost savings are primarily in compensation and occupancy related expenses. Branches of UCB are expected to be fully integrated into the Bank of the West branch network system in the third quarter of 2002. Results of operations of UCB are included in our Consolidated Financial Statements beginning on March 15, 2002.

In connection with the UCB acquisition, we recorded the following restructuring and integration reserves: $40.5 million for severance, $34.2 million for losses on subleases, $8.5 million for contract cancellations, $1.5 million for relocation and other. These reserves were established as a result of the $6.0 million pre-tax charge we recorded in the first three months of 2002 and also through purchase accounting adjustments. In the first three months of 2002, $1.1 million for severance was paid.

The following unaudited pro forma financial information for the three months ended March 31, 2002 and 2001 assumes that the UCB acquisition occurred as of January 1, 2001, after giving effect to certain adjustments. The pro forma results have been prepared for comparative purposes only and are not necessarily indicative of the results of operations which may occur in the future or that would have occurred had the UCB acquisition been consummated on the date indicated.


	Pro Forma Financial
	Information for the
	three months ended March 31,

(Unaudited)	2002		2001

	(in thousands)
Net Interest Income	$	320,761	$	312,421
Noninterest Income		82,550		134,459
Noninterest Expense		226,809		227,648
Net Income		86,427		112,108

BNP Paribas Merger

On December 20, 2001, Chauchat L.L.C., a Delaware limited liability company (“Merger Sub”), merged with and into BancWest pursuant to an Agreement and Plan of Merger, dated as of May 8, 2001, as amended and restated as of July 19, 2001, by and among BancWest, BNP Paribas, and Merger Sub (the “Merger Agreement”). The Merger Sub was a wholly-owned subsidiary of BNP Paribas. At the effective time of the BNP Paribas Merger, all outstanding shares of common stock, par value $1 per share (“Company Common Stock”), of BancWest were cancelled and converted solely into the right to receive $35 per share in cash. Pursuant to the Merger Agreement, each share of Class A common stock, par value $1 per share, owned by BNP Paribas and French American Banking Corporation, a wholly-owned subsidiary of BNP Paribas, remained outstanding as one share of Class A Common Stock and all of the units of the Merger Sub were cancelled without any consideration becoming payable therefor. Concurrent with the BNP Paribas Merger, the par value of the Class A common stock was changed to $.01. As a result of the BNP Paribas Merger, BancWest became a wholly-owned subsidiary of BNP Paribas.

The BNP Paribas Merger significantly affected our financial statements. “Push-down” accounting was required for this business combination. Essentially, this resulted in three major changes to our balance sheet:

•		Purchase price adjustments and new intangibles: As part of purchase accounting, our assets and liabilities were adjusted to fair value. Among the items adjusted were identifiable intangible assets related to our deposits, loans and leases, property and equipment, pension assets and liabilities and other items.

•		New debt: As part of the BNP Paribas Merger, we assumed $1.55 billion in new debt from the Merger Sub. This debt is between BancWest and another subsidiary of BNP Paribas.

•		New equity basis: Due to the use of “push-down” accounting in the BNP Paribas Merger, the equity balances at December 31, 2001 reflect BNP Paribas’ basis in the Company.

4. Impaired Loans

The following table summarizes impaired loan information as of and for the three months ended March 31, 2002 and 2001 and as of and for the year ended December 31, 2001:


	March 31, 2002		December 31, 2001		March 31, 2001

	(in thousands)
Impaired loans with related allowance for credit losses calculated under SFAS No. 114	$	143,091	$	89,273	$	110,933
Impaired loans with no related allowance for credit losses calculated under SFAS No. 114		7,925		8,253		35,601

Impaired loans	$	151,016	$	97,526	$	146,534

Total allowance for credit losses on impaired loans	$	35,914	$	24,745	$	17,881
Average impaired loans		104,965		118,497		129,706
Interest income recognized on impaired loans		624		2,462		634

We consider loans to be impaired when it is probable that we will be unable to collect all amounts due according to the contractual terms of the loan agreement, including scheduled interest payments. For a loan that has been restructured, the contractual terms of the loan agreement refer to the terms of the original loan agreement. Not all impaired loans are necessarily placed on nonaccrual status; for example, restructured loans performing under restructured terms beyond a specific period may be classified as accruing, but may still be deemed impaired. Impaired loans without a related allowance for credit losses are generally collateralized by assets with fair values in excess of the recorded investment in the loans. We generally apply interest payments on impaired loans to reduce the outstanding principal amount of such loans.

5. Operating Segments

As of March 31, 2002, we had two reportable operating segments: Bank of the West and First Hawaiian. The Bank of the West segment includes United California Bank from March 15, 2002 and operates primarily on the mainland United States. The First Hawaiian segment operates primarily in the State of Hawaii.

The financial results of our operating segments are presented on an accrual basis. There are no significant differences between the accounting policies of the segments as compared to the Company’s consolidated financial statements. We evaluate the performance of these segments and allocate resources to them based on net interest income and net income. There are no material intersegment revenues.

The tables below present information about our operating segments as of or for the three months ended March 31, 2002 and 2001, respectively:


	Three Months Ended March 31,

	Bank of		First					Reconciling			Consolidated
	the West		Hawaiian		Other			Items			Totals

	(in millions)
2002
Net interest income	$	169	$	83	$	(28	)	$	—		$	224
Net income		51		31		(17	)		—			65
Segment assets		25,123		8,590		7,179			(7,568	)		33,324
Goodwill		2,214		994		172			—			3,380
2001
Net interest income	$	112	$	81	$	(4	)	$	—		$	189
Net income		34		31		(3	)		—			62
Segment assets		11,982		7,517		3,339			(3,419	)		19,419
Goodwill		609		70		—			—			679

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

FORWARD-LOOKING STATEMENTS

Certain matters contained in this filing are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Our forward-looking statements (such as those concerning our plans, expectations, estimates, strategies, projections and goals) involve risks and uncertainties that could cause actual results to differ materially from those discussed in the statements. Readers should carefully consider those risks and uncertainties in reading this report. Factors that could cause or contribute to such differences include, but are not limited to: (1) global, national and local economic and market conditions, specifically with respect to changes in the United States economy; (2) the level and volatility of interest rates and currency values; (3) government fiscal and monetary policies; (4) credit risks inherent in the lending process; (5) loan and deposit demand in the geographic regions where we conduct business; (6) the impact of intense competition in the rapidly evolving banking and financial services business; (7) extensive federal and state regulation of our business, including the effect of current and pending legislation and regulations; (8) whether expected revenue enhancements and cost savings are realized within expected time frames; (9) risk and uncertainties regarding the purchase of UCB, including: a) the possibility of customer or employee attrition following the UCB transaction; b) lower than expected revenues following the transaction; and c) problems or delays in bringing together UCB with BancWest/Bank of the West; (10) matters relating to the integration of our business with that of past and future merger partners, including the impact of combining these businesses on revenues, expenses, deposit attrition, customer retention and financial performance; (11) our reliance on third parties to provide certain critical services, including data processing; (12) the proposal or adoption of changes in accounting standards by the Financial Accounting Standards Board (“FASB”), the Securities and Exchange Commission (“SEC”) or other standard setting bodies; (13) technological changes; (14) other risks and uncertainties discussed in this document or detailed from time to time in other SEC filings that we make; and (15) management’s ability to manage risks that result from these and other factors. Our forward-looking statements are based on management’s current views about future events. Those statements speak only as of the date on which they are made. We do not intend to update forward-looking statements, and, except as required by law, we disclaim any obligation or undertaking to update or revise any such statements to reflect any change in our expectations or any change in events, conditions, circumstances or assumptions on which forward-looking statements are based.

GAAP, OPERATING AND CASH EARNINGS

We analyze our performance on a net income basis determined in accordance with generally accepted accounting principles (“GAAP”), as well as on an operating basis before merger-related, integration and other nonrecurring costs and/or the effects of the amortization of intangible assets. We refer to the results as “operating” and “cash” earnings, respectively. Operating earnings, cash earnings and operating cash earnings (the combination of the effect of adjustments for both cash and operating results), as well as information calculated from them and related discussions, are presented as supplementary information in this analysis to enhance the readers’ understanding of, and highlight trends in, our core financial results excluding the effects of discrete business acquisitions and other transactions. We include these additional disclosures because this information is both relevant and useful in understanding the performance of the Company as management views it. Operating earnings and cash earnings should not be viewed as a substitute for net income and earnings per share, among other gauges of performance, as determined in accordance with GAAP. Merger-related and integration costs, amortization of intangible assets and other items excluded from net income to derive operating and cash earnings may be significant and may not be comparable to those of other companies.

BancWest Corporation and Subsidiaries
CONSOLIDATED FINANCIAL HIGHLIGHTS (Unaudited)

Three Months Ended March 31,

(dollars in thousands)

2002

2001

Earnings and Dividends:

Net income

65,417

61,747

Selected Financial Ratios:

Return on average total assets (ROA)

1.12

1.33

Return on average stockholder’s equity (ROE)

11.51

12.26

Net interest margin (taxable-equivalent basis)

4.57

4.58

Allowance for credit losses to total loans and leases (at March 31)

1.59

1.31

Nonperforming assets to total assets (at March 31)

.77

.66

Allowance for credit losses to nonperforming loans and leases (at March 31)

1.65x

1.72x

Non-GAAP Information⁽¹⁾

Operating earnings⁽²⁾

69,015

64,089

Cash earnings⁽³⁾

67,061

70,303

Operating cash earnings^{(2), (3)}

70,659

72,645

Selected Financial Ratios:

Operating return on average total assets (ROA)⁽²⁾

1.18

1.38

Return on average tangible assets⁽⁴⁾

1.34

1.62

Operating return on average stockholder’s equity (ROE)⁽²⁾

12.14

12.73

(1)		Information presented was not calculated under generally accepted accounting principles (“GAAP”). Information is disclosed to improve readers’ understanding of how management views the results of our operation.

(2)		Excluding after-tax restructuring and integration costs of $3,598,000 and $2,342,000 in the first quarter of 2002 and 2001, respectively.

(3)		Excluding amortization of goodwill and core deposit intangible.

(4)		Defined as operating cash earnings as a percentage of average total assets minus average goodwill and core deposit intangible.

NET INCOME

The following table compares net income, operating earnings, cash earnings and operating cash earnings for the three months ended March 31, 2002 to the same period in 2001:


		2002		2001⁽¹⁾		% Change

		(in thousands)
Three months ended March 31,
	Net income	$	65,417	$	61,747		5.9	%

Non-GAAP income:
	Operating earnings ^{(2), (3)}	$	69,015	$	64,089		7.7	%
	Cash earnings⁽⁴⁾		67,061		70,303		(4.6	)
	Operating cash earnings^(2),(3),(4)		70,659		72,645		(2.7	)

(1)		Includes $7.6 million after-tax net effect of the Concord Security Gain, additional provision for credit losses and other nonrecurring items. Excluding the after-tax net effect of the gain, additional provision and other nonrecurring items, net income and cash earnings for the three months ended March 31, 2001 were $54.2 million and $62.7 million, respectively. Operating earnings and operating cash earnings, excluding the net after-tax effect of the aforementioned items, were $56.5 million and $65.1 million, respectively.

(2)		Excluding after-tax integration costs of $2.3 million related to Nevada and New Mexico branch acquisitions in the first quarter of 2001.

(3)		Excluding after-tax restructuring, and integration costs of $3.6 million related to United California Bank acquisition in March 2002.

(4)		Excluding after-tax amortization of goodwill and core deposit intangibles.

Net income and operating earnings increased for the three months ended March 31, 2002 compared to the same period in 2001, primarily due to higher net interest income, resulting from higher average earning assets and a lower rate paid on funding sources. Also contributing to the increase in our net income and operating earnings in the first quarter of 2002 over the same period in 2001 was increased contribution from our Bank of the West operating segment, including the operations of UCB from March 15, 2002. The increase over the same three-month period of 2001 would have been greater if not for the $7.6 million net after-tax effect in the first three months of 2001 of the sale of the Company’s approximate 5% interest in Star Systems, Inc. (“Concord Security Gain”), additional provisions for credit losses, donation to a private charitable foundation and other non-recurring items. The cessation of the amortization of goodwill in 2002 due to changes to GAAP (see Note 2 to our Consolidated Financial Statements on pages 7 and 8) also contributed to the increase in net income and operating earnings.

On a cash basis, excluding after-tax amortization of intangible assets, cash earnings and cash operating earnings in the first three months of 2002 decreased compared to the same period in 2001, primarily due to the $7.6 million increase in net income due to the net after-tax effect of the Concord Security Gain, additional provisions for credit losses, donation to a private charitable foundation and other non-recurring items in the first three months of 2001.

NET INCOME, Continued

The table below shows the return on average total assets, the return on average tangible assets and the return on average stockholder’s equity for the first three months of 2002 compared to the same period in 2001. The return on average tangible assets is defined as operating cash earnings as a percentage of average total tangible assets.


	2002			2001			% Change

Return on average total assets		1.12	%		1.33	%		(15.8	)%
Return on average stockholder’s equity		11.51			12.26			(6.1	)
Non-GAAP returns:
Operating return on average total assets⁽¹⁾		1.18			1.38			(14.5	)
Return on average tangible assets⁽¹⁾		1.34			1.62			(17.3	)
Operating return on average stockholder’s equity⁽¹⁾		12.14			12.73			(4.6	)

(1)

Ratios are computed excluding after-tax restructuring, integration and other nonrecurring costs related to the United California Bank acquisition in March 2002 and the Nevada and New Mexico branch acquisitions in the first quarter of 2001, respectively.

NET INTEREST INCOME

The following table compares net interest income on a taxable-equivalent basis for the three months ended March 31, 2002 to the same period in 2001:


		2002		2001		% Change

		(in thousands)
Three months ended March 31,
	Net interest income	$	224,557	$	189,448		18.5	%

The increase in net interest income for the three months ended March 31, 2002 over the same period in 2001 was primarily due to an increase in average earning assets of 18.7%, or $3.1 billion, and a 147-basis-point decrease (1% equals 100 basis points) in the rate paid on funding sources, partially offset by a 148-basis-point decline in the yield on average earning assets. In addition, the lower cost of funds resulted from higher average noninterest-bearing deposits, which increased by $840.8 million, or 28.2%, in the first quarter of 2002 over the same period in 2001.

NET INTEREST INCOME, Continued

The following table compares the net interest margin for the three months ended March 31, 2002 to the same period in 2001:


								Change
		2002			2001			(Basis Points)

Three months ended March 31,
	Yield on average earning assets		6.71	%		8.19	%		(148	)
	Rate paid on funding sources		2.14			3.61			(147	)

	Net interest margin		4.57			4.58			(1	)

In the three-month period ended March 31, 2002, as compared to the same period in 2001, the net interest margin decreased by 1 basis point due to a decline in the rate paid on funding sources of 147 basis points and a decrease in the yield on average earning assets of 148 basis points. The effects of the continuing reduction of key interest rates by the Federal Reserve are primarily responsible for the declines in yields and rates.

For further discussions of the impact that the changing interest environment has had on the rate paid on deposits, see page 20.

Our cost of funds was lowered by an increase in average noninterest-bearing deposits in the three months ended March 31, 2002 as compared to the same period in 2001. The percentage of average noninterest-bearing deposits to total average deposits increased to 22.6% for the three months ended March 31, 2002, compared to 20.9% for the same period in 2001.

The following table compares average earning assets, average loans and leases and average interest-bearing deposits and liabilities for the three months ended March 31, 2002 to the same period in 2001:


		2002		2001		% Change

		(in thousands)
Three months ended March 31,
	Average earning assets	$	19,915,795	$	16,774,604		18.7	%
	Average loans and leases		16,861,211		14,145,518		19.2
	Average interest-bearing deposits and liabilities		16,822,980		13,031,723		29.1

The increase in average earning assets was primarily due to increases in average loans and leases. The increase in average loans and leases was primarily due to the growth of our Bank of the West operating segment’s loan and lease portfolio, including the UCB acquisition in the first quarter of 2002. Also contributing to the increase in average loans and leases were the branch acquisitions in Guam and Saipan in the fourth quarter of 2001.

The increase in average interest-bearing deposits and liabilities was primarily due to an increase in interest-bearing deposits and long-term debt. Expansion of our customer deposit base, primarily from our Bank of the West operating segment and the UCB acquisition, contributed to the increase.

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 2002 and 2001) to make them comparable with taxable items before any income taxes are applied.


				Three Months Ended March 31,

				2002							2001

						Interest							Interest
				Average		Income/		Yield/			Average		Income/		Yield/
				Balance		Expense		Rate⁽¹⁾			Balance		Expense		Rate⁽¹⁾

								(dollars in thousands)
ASSETS
Earning assets:
	Interest-bearing deposits in other banks			$	152,079	$	742		1.98	%	$	250,727	$	3,610		5.84	%
	Federal funds sold and securities purchased under agreements to resell				205,067		866		1.71			278,488		3,893		5.67
	Investment securities⁽²⁾				2,697,438		34,787		5.23			2,099,871		33,385		6.45
	Loans and leases^(3),(4)				16,861,211		292,966		7.05			14,145,518		298,038		8.54

			Total earning assets		19,915,795		329,361		6.71			16,774,604		338,926		8.19

	Nonearning assets				3,877,041							2,098,985

			Total assets	$	23,792,836						$	18,873,589

LIABILITIES AND STOCKHOLDER’S EQUITY
Interest-bearing deposits and liabilities:
	Deposits:
		Domestic:
			Interest-bearing demand	$	336,207	$	219		0.26	%	$	313,906	$	644		0.83	%
			Savings		5,742,800		16,231		1.15			4,328,651		25,230		2.36
			Time		6,664,839		45,250		2.75			6,428,909		92,469		5.83
		Foreign			370,124		1,929		2.11			203,398		2,078		4.14

			Total interest-bearing deposits		13,113,970		63,629		1.97			11,274,864		120,421		4.33
	Short-term borrowings				1,330,766		5,793		1.77			743,738		10,218		5.57
	Long-term debt and capital securities				2,378,244		35,382		6.03			1,013,121		18,839		7.54

			Total interest-bearing deposits and liabilities		16,822,980		104,804		2.53			13,031,723		149,478		4.65

		Interest rate spread							4.18	%						3.54	%

	Noninterest-bearing deposits				3,818,881							2,978,114
	Other liabilities				845,278							821,133

			Total liabilities		21,487,139							16,831,170
	Stockholder’s equity				2,305,697							2,042,419

			Total liabilities and stockholder’s equity	$	23,792,836						$	18,873,589

			Net interest income and margin on total earning assets				224,557		4.57	%				189,448		4.58	%

	Tax equivalent adjustment						77							75

			Net interest income			$	224,480						$	189,373

⁽¹⁾		Annualized.




⁽²⁾		Average debt investment securities were computed based on historical amortized cost, excluding the effects of SFAS No. 115 adjustments.




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




⁽⁴⁾		Interest income for loans and leases included loan fees of $11,138 and $8,729 for 2002 and 2001, respectively.

INVESTMENT SECURITIES

Held-to-Maturity

There were no held-to-maturity investment securities at March 31, 2002 and December 31, 2001. The following table presents the amortized cost, unrealized gains and losses, and fair values of held-to-maturity investment securities as of March 31, 2001:


	March 31,
	2001

	(in thousands)
Amortized cost	$	86,764
Unrealized gains		76
Unrealized losses		(430	)

Fair value	$	86,410

Available-for-Sale

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


	March 31,			December 31,			March 31,
	2002			2001			2001

	(in thousands)
Amortized cost	$	3,154,799		$	2,529,133		$	2,066,255
Unrealized gains		20,834			23,672			38,310
Unrealized losses		(11,826	)		(10,632	)		(1,050	)

Fair value	$	3,163,807		$	2,542,173		$	2,103,515

Gross realized gains and losses on available-for-sale investment securities for the three months ended March 31, 2002 were as follows:


	2002

	(in thousands)
Realized gains	$	241
Realized losses		(13	)

Securities gains (losses), net	$	228

Gains and losses realized on the sales of available-for-sale investment securities are determined using the specific identification method. There were no realized gains and losses for the three months ended March 31, 2001.

LOANS AND LEASES

The following table sets forth the loan and lease portfolio by major categories and loan and lease mix at March 31, 2002, December 31, 2001 and March 31, 2001:


			March 31, 2002					December 31, 2001					March 31, 2001

			Amount		%			Amount		%			Amount		%

			(dollars in thousands)
Commercial, financial and agricultural			$	5,088,168		21.1	%	$	2,387,605		15.7	%	$	2,562,244		18.0	%
Real estate:
	Commercial			4,846,071		20.1			2,957,194		19.4			2,758,034		19.4
	Construction			1,161,303		4.8			464,462		3.1			406,059		2.9
	Residential:
		Insured, guaranteed or conventional		3,800,936		15.8			1,831,824		12.0			1,802,486		12.7
		Home equity credit lines		1,046,134		4.3			432,003		2.9			453,886		3.2

		Total real estate loans		10,854,444		45.0			5,685,483		37.4			5,420,465		38.2

Consumer				5,468,894		22.7			4,471,897		29.3			3,775,198		26.6
Lease financing				2,326,056		9.6			2,293,199		15.1			2,106,486		14.8
Foreign				386,027		1.6			385,548		2.5			338,130		2.4

		Total loans and leases		24,123,589		100.0	%		15,223,732		100.0	%		14,202,523		100.0	%

Less allowance for credit losses				383,003					194,654					186,246

		Total net loans and leases	$	23,740,586				$	15,029,078				$	14,016,277

Total loans and leases to:
		Total assets		33,324,493		72.4	%		21,646,514		70.3	%		19,419,452		73.1	%
		Total earning assets		27,236,823		88.6	%		17,914,186		85.0	%		16,944,817		83.8	%
		Total deposits		24,083,920		100.2	%		15,334,051		99.3	%		14,710,173		96.5	%

The loan and lease portfolio is the largest component of total earning assets and accounts for the greatest portion of total interest income. The increase in loans and leases as of March 31, 2002, as compared to December 31, 2001, was primarily due to the acquisition of UCB on March 15, 2002 and growth in our Bank of the West operating segment. Our net loans and leases increased by 58.0% to $23.7 billion over December 31, 2001 and 69.4% over March 31, 2001. Excluding UCB loans at March 31, 2002, the increase in loans and leases were 1.5% over December 31, 2001 and 8.8% over March 31, 2001.

Total commercial, financial, and agricultural loans at March 31, 2002 increased by 113.1%, or $2.7 billion, over December 31, 2001 and 98.6%, or $2.5 billion, over March 31, 2001. Excluding UCB commercial, financial and agricultural loans at March 31, 2002, commercial, financial and agricultural loans decreased $23.2 million, or 1.0%, compared to December 31, 2001, and decreased $197.8 million, or 7.7%, compared to March 31, 2001. The decrease in this category was primarily in our First Hawaiian Bank operating segment, due mainly to planned reductions in shared national credits.

Total real estate commercial loans at March 31, 2002 increased by 63.9%, or $1.9 billion, over December 31, 2001 and 75.7%, or $2.1 billion, over March 31, 2001, primarily due to the UCB acquisition. Real estate-commercial loans excluding UCB loans increased $36.6 million, or 1.2%, from December 31, 2001, and increased $235.8 million, or 8.5%, from March 31, 2001. The increase over the past year was primarily due to the growth in our Bank of the West operating segment.

Total real estate-construction loans at March 31, 2002 increased by 150%, or $696.8 million, over December 31, 2001 and 186%, or $755.2 million, over March 31, 2001, primarily due to the UCB acquisition. Excluding UCB, real estate-construction loans decreased by 2.6%, or $11.9 million, compared to December 31, 2001 and increased 11.5%, or $46.5 million, over March 31, 2001.

LOANS AND LEASES, continued

Total real estate-residential loans at March 31, 2002 increased by 114.1%, or $2.6 billion, over December 31, 2001 and 114.8% over March 31, 2001, primarily due to the UCB acquisition. Excluding UCB, real estate-residential loans increased .9%, or $19.7 million, over December 31, 2001 and 1.2%, or $27.2 million, over March 31, 2001.

Total consumer loans at March 31, 2001 increased 22.3%, or $997.0 million, over December 31, 2001 and increased 44.9%, or $1.7 billion, over March 31, 2001. Consumer loans excluding UCB consumer loans at March 31, 2001 increased $210.5 million, or 4.7%, over December 31, 2001, and $907.2 million, or 24.0%, over March 31, 2001, primarily due to growth in our Bank of the West operating segment. Consumer loans consist primarily of direct and indirect automobile, recreational vehicle, marine, credit card and unsecured financing.

The lease financing portfolio increased by 1.4%, or $32.9 million, over December 31, 2001 and increased 10.4%, or $219.6 million, over March 31, 2001. Excluding UCB, leases increased $735,000 over December 31, 2001 and 8.9%, or $187.4 million, over March 31, 2001.

Our foreign loans are principally in Guam and Saipan. Foreign loans as of March 31, 2002 increased $479,000, or .1%, over December 31, 2001 and increased $47.9 million, or 14.2%, over March 31, 2001. The increase over March 31, 2001 was primarily due to our branch acquisition in November 2001.

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 March 31, 2002, we 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.

DEPOSITS

Deposits are the largest component of our total liabilities and account for the greatest portion of total interest expense. At March 31, 2002, total deposits were $24.1 billion, an increase of 63.7% over March 31, 2001. The increase was primarily due to the growth in our customer deposit base, primarily in the Bank of the West operating segment, including the UCB acquisition, and various deposit product programs that we initiated. Contributing to the increase were the First Hawaiian branch acquisitions in Guam and Saipan from the Union Bank of California.

The decrease in all of the rates paid on deposits reflects falling rates in 2001, caused primarily by actions of the Federal Reserve’s Open Market Committee. During the 12-month period from April 1, 2001 to March 31, 2002, the benchmark federal funds rate decreased eight times totaling 325 basis points. The rates paid on deposits reflect this rapidly changing interest rate environment at different speeds, due to the repricing characteristics of each type of deposit. Time deposits, which generally reprice more slowly than other deposits, do not yet fully reflect the sharp decreases in interest rates implemented in 2001, while money market and savings deposits, which can be repriced more rapidly, are more reflective of the current decrease in the interest rate environment. The deposits in the foreign category are a mixture of time, savings and other interest-bearing deposits; therefore, its rate reflects both types of repricing characteristics. Additional information on our average deposit balances and rates paid is provided in the table on page 16.

NONPERFORMING ASSETS

Nonperforming assets at March 31, 2002, December 31, 2001 and March 31, 2001 are as follows:


					March 31,			December 31,			March 31,
					2002			2001			2001

					(dollars in thousands)
Nonperforming Assets:
	Nonaccrual:
		Commercial, financial and agricultural			$	151,028		$	35,908		$	56,165
		Real estate:
			Commercial			45,043			27,568			15,086
			Construction			3,000			—			119
			Residential:
				Insured, guaranteed, or conventional		12,094			9,003			10,642

				Total real estate loans		60,137			36,571			25,847

		Consumer				3,919			6,144			4,671
		Lease financing				9,900			9,570			8,769
		Foreign				3,968			4,074			5,474

				Total nonaccrual loans and leases		228,952			92,267			100,926

	Restructured:
		Commercial, financial and agricultural				1,502			1,569			957
		Real estate:
			Commercial			1,094			3,019			5,312
			Residential:
				Insured, guaranteed, or conventional		—			257			938

				Total real estate loans		1,094			3,276			6,250

				Total restructured loans and leases		2,596			4,845			7,207

				Total nonperforming loans and leases		231,548			97,112			108,133
	Other real estate owned and repossessed personal property					24,393			22,321			20,549

				Total nonperforming assets	$	255,941		$	119,433		$	128,682

Past due loans and leases⁽¹⁾:
	Commercial, financial and agricultural				$	17,432		$	11,134		$	10,803
	Real estate:
		Commercial				1,192			385			411
		Construction				2,217			—			—
		Residential:
			Insured, guaranteed, or conventional			2,347			3,303			3,274
			Home equity credit lines			160			467			332

				Total real estate loans		5,916			4,155			4,017

	Consumer					2,603			3,323			2,376
	Lease financing					84			146			177
	Foreign					4,291			2,023			1,237

				Total past due loans and leases	$	30,326		$	20,781		$	18,610

Nonperforming assets to total loans and leases and other real estate owned and repossessed personal property (end of period):
	Excluding past due loans and leases					1.06	%		.78	%		.90	%
	Including past due loans and leases					1.19	%		.92	%		1.04	%
Nonperforming assets to total assets (end of period):
	Excluding past due loans and leases					.77	%		.55	%		.66	%
	Including past due loans and leases					.86	%		.65	%		.76	%

(1)

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

NONPERFORMING ASSETS, Continued

Nonperforming assets at March 31, 2002 were $255.9 million, or 1.06%, of total loans and leases and other real estate owned and repossessed personal property (“OREO”), compared to .90% at March 31, 2001. Nonperforming assets at March 31, 2002 were .77% of total assets, compared to .66% at March 31, 2001.

Nonperforming assets at March 31, 2002 increased by $136.5 million, or 114.3%, from December 31, 2001. The increase in nonaccrual loans was primarily due to commercial, financial and agricultural loans, real estate-commercial loans and construction loans in our Bank of the West operating segment. The increase in nonperforming assets in the Bank of the West operating segment was primarily due to the acquisition of UCB. The increase in nonperforming assets in the Bank of the West operating segment was partially offset by lower nonperforming loans in the First Hawaiian Bank operating segment. Excluding the UCB nonperforming assets at March 31, 2002, the nonperforming assets decreased $39.7 million or 33.2%, compared to December 31, 2001.

Nonperforming assets at March 31, 2002 increased by $127.3 million, or 98.9%, from March 31, 2001. The increase was primarily attributable to increases in nonaccrual commercial, financial and agricultural loans and real estate-commercial loans, which were partially offset by decreases in nonaccrual consumer and foreign loans. Excluding the UCB nonperforming assets at March 31, 2002, the nonperforming assets decreased $48.9 million, or 38.0% compared to March 31, 2001.

We generally place a loan or lease on nonaccrual status when we believe that collection of principal or income has become doubtful or when loans and leases are 90 days past due as to principal or income, unless they are well secured and in the process of collection. We may make an exception to the general 90-day-past-due rule when the fair value of the collateral exceeds our recorded investment in the loan or when other factors indicate that the borrower will shortly bring the loan current.

While the majority of consumer loans and leases are subject to our general policies regarding nonaccrual loans, certain past-due consumer loans and leases are not placed on nonaccrual status, because they are charged off upon reaching a predetermined delinquency status varying from 120 to 180 days, depending on product type.

When we place a loan or lease on nonaccrual status, previously accrued and uncollected interest is reversed against interest income of the current period. When we receive a cash interest payment on a nonaccrual loan, we apply it as a reduction of the principal balance when we have doubts about the ultimate collection of the principal. Otherwise, we record such payments as income.

Nonaccrual loans and leases are generally returned to accrual status when they: (1) become current as to principal and interest or (2) become both well secured and in the process of collection.

Other than the loans listed, we were not aware of any significant potential problem loans where possible credit problems of the borrower caused us to seriously question the borrower’s ability to repay the loan under existing terms.

Loans past due 90 days or more and still accruing interest totaled $30.3 million at March 31, 2002, an increase of $11.7 million, or 63.0%, from March 31, 2001. Loans past due 90 days or more and still accruing interest increased by $9.5 million, or 45.9%, from December 31, 2001 to March 31, 2002. The increase was primarily due to higher commercial, financial and agricultural loan and foreign loan delinquencies, which were partially offset by a decrease in real estate-residential loans. All of the loans that are past due 90 days or more and still accruing interest are, in our judgment, adequately collateralized and in the process of collection. Excluding the UCB loans past due 90 days or more and still accruing interest at March 31, 2002, the loans past due 90 days or more and still accruing increased $4.2 million, or 20.2%, from December 31, 2001 to March 31, 2002.

PROVISION AND ALLOWANCE FOR CREDIT LOSSES

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


				Three Months Ended
				March 31,

				2002			2001

				(dollars in thousands)
Loans and leases outstanding (end of period)				$	24,123,589		$	14,202,523

Average loans and leases outstanding				$	16,861,211		$	14,145,518

Allowance for credit losses:
	Balance at beginning of period			$	194,654		$	172,443

	Allowance of subsidiaries purchased				210,000			—
	Loans and leases charged off:
		Commercial, financial and agricultural			28,685			10,656
		Real estate:
			Commercial		66			399
			Residential		394			1,067
		Consumer			12,875			8,664
		Lease financing			6,033			2,998
		Foreign			475			602

			Total loans and leases charged off		48,528			24,386

	Recoveries on loans and leases previously charged off:
		Commercial, financial and agricultural			2,724			147
		Real estate:
			Commercial		130			50
			Construction		220			131
			Residential		202			200
		Consumer			2,191			1,699
		Lease financing			1,252			502
		Foreign			151			260

			Total recoveries on loans and leases previously charged off		6,870			2,989

			Net charge-offs		(41,658	)		(21,397	)

	Provision for credit losses				20,007			35,200

	Balance at end of period			$	383,003		$	186,246

Net loans and leases charged off to average loans and leases					1.00	%⁽¹⁾		.61	%⁽¹⁾
Net loans and leases charged off to allowance for credit losses					44.11	%⁽¹⁾		46.59	%⁽¹⁾
Allowance for credit losses to total loans and leases (end of period)					1.59	%		1.31	%
Allowance for credit losses to nonperforming loans and leases (end of period):
		Excluding 90 days past due accruing loans and leases			1.65x			1.72x
		Including 90 days past due accruing loans and leases			1.46x			1.47x

(1)

Annualized.

PROVISION AND ALLOWANCE FOR CREDIT LOSSES, Continued

The provision for credit losses for the first three months of 2002 was $20.0 million, a decrease of $15.2 million, or 43.2%, over the same period in 2001. The decrease in the provision for credit losses for the first three months of 2002 compared to the same period in 2001 primarily reflects the $23.0 million in additional provision for credit losses that we recorded in the first three months of 2001 in response to certain macroeconomic events.

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

Our approach to managing exposure to credit risk involves an integrated program of setting appropriate standards for credit underwriting and diversification, monitoring trends that may affect the risk profile of the credit portfolio and making appropriate adjustments to reflect changes in economic and financial conditions that could affect the quality of the portfolio and loss probability. The components of this integrated program include:

	•		Setting Underwriting and Grading Standards. Our loan grading system utilizes ten different principal risk categories where “1” is “no risk” and “10” is “loss.” Risk parameters are established so that the cost of credit risk is an integral part of the pricing and evaluation of credit decisions and the setting of portfolio targets.

	•		Diversification. We actively manage our credit portfolio to avoid excessive concentration by obligor, risk grade, industry, product and geographic location. As part of this process, we also monitor changes in risk correlation among concentration categories. In addition, we seek to reduce our exposure to concentrations by actively participating portions of our commercial and commercial real estate loans to other banks.

	•		Risk Mitigation. Over the past few years, we have reduced our exposure to higher-risk areas such as real estate construction (which accounted for only 4.8% of total loans and leases at March 31, 2002) and Hawaii commercial real estate.

	•		Restricted Participation in Syndicated National Credits. In addition to providing backup commercial paper facilities primarily to investment-grade companies, we participate in media finance credits in the national market, one of our traditional niches where we have developed a special expertise over a long period of time and with experienced personnel. Recently, we began a program to reduce our outstanding commitments and balances in these types of credits. At March 31, 2002, the ratio of nonperforming shared national credits and media finance loans to total shared national credits and media finance loans outstanding was 2%.

	•		Emphasis on Consumer Lending. Consumer loans represent our single largest category of loans and leases. We focus our consumer lending activities on loan grades with what we believe are predictable loss rates. As a result, we are able to use formula-based approaches to calculate appropriate reserve levels that reflect historical experience. We generally do not participate in subprime lending activities. We also seek to reduce our exposures where feasible by obtaining third-party insurance or similar protections. For example, in our vehicle lease portfolio (which represents approximately 66% of our lease financing portfolio and 20% of our combined lease financing and consumer loans at March 31, 2002), we obtain third-party insurance for the estimated residual value of the leased vehicle. To the extent that these policies include deductible values, we set aside reserves to fully cover the uninsured portion.

PROVISION AND ALLOWANCE FOR CREDIT LOSSES, Continued

Charge-offs were $48.5 million for the first three months of 2002, an increase of $24.1 million, or 99.0%, over the same period in 2001. The increase was primarily due to charge-offs in commercial, financial and agricultural loans, consumer loans and lease financing in the first three months of 2002. The higher charge-offs resulted from the large loan portfolio in the Bank of the West operating segment including our newest acquisition, UCB.

For the first three months of 2002, recoveries increased by $3.9 million, or 129.8%, over the same period in 2001. The increase in recoveries was primarily in commercial, financial and agricultural loans.

The Allowance decreased to 1.65 times nonperforming loans and leases (excluding 90 days or more past due accruing loans and leases) at March 31, 2002 from 1.72 times at March 31, 2001. The decrease in the ratio is principally due to an increase in nonperforming loans and leases, primarily in our Bank of the West operating segment.

In our judgment, the Allowance was adequate to absorb losses inherent in the loan and lease portfolio at March 31, 2002. However, changes in prevailing economic conditions in our markets could result in changes in the level of nonperforming assets and charge-offs in the future and, accordingly, changes in the Allowance. We will continue to closely monitor economic developments and those specific items mentioned above in particular and make necessary adjustments to the Allowance accordingly.

NONINTEREST INCOME

The following table reflects the key components of the change in noninterest income for the three months ended March 31, 2002, as compared to the same period in 2001:


			2002		2001		% Change

			(in thousands)
Three months ended March 31,
	Service charges on deposit accounts		$	25,974	$	20,436		27.1	%
	Trust and investment services income			8,140		9,127		(10.8	)
	Other service charges and fees			23,498		18,374		27.9
	Securities gains, net			228		41,300		N/M
	Other			4,784		9,262		(48.3	)

		Total noninterest income	$	62,624	$	98,499		(36.4	)%

N/M — Not Meaningful.

As the table above shows in more detail, noninterest income decreased by 36.4% for the three months ended March 31, 2002, compared to the same period in 2001. Significant items include the following:

•		The Concord Stock Gain of $41.3 million in 2001 was primarily responsible for the decrease in securities gains for the three months ended March 31, 2002 as compared to the same period in 2001.

•		The increases in service charges on deposit accounts for the three months ended March 31, 2002, compared to the same period in 2001, were primarily due to higher levels of deposits resulting from the expansion of our customer deposit base predominately in our Bank of the West operating segment, including the deposits from UCB.

•		The decrease in trust and investment services income for the three months ended March 31, 2002, compared to the same period in 2001, resulted primarily from decreased investment management fee income.

•		The increases in other service charges and fees for the three months ended March 31, 2002, compared to the same period in 2001, were primarily due to: (1) higher merchant services fees, due to higher fee charges, increased volume and more merchant outlets; (2) higher bank card and ATM convenience fee income; and (3) higher miscellaneous service fees.

•		The decrease in other noninterest income for the three months ended March 31, 2002, as compared to the same period in 2001, was primarily due to lower gains on the sale of OREO property in the first three months of 2002 and a gain on the sale of securitized loans in 2001.

NONINTEREST EXPENSE

The following table reflects the key components of the change in noninterest expense for the three months ended March 31, 2002 as compared to the same period in 2001:


			2002		2001		% Change

			(in thousands)
Three months ended March 31,
	Salaries and wages		$	60,094	$	49,377		21.7	%
	Employee benefits			23,482		17,973		30.7
	Occupancy expense			15,614		16,235		(3.8	)
	Outside services			13,252		11,503		15.2
	Intangible amortization			2,757		10,284		(73.2	)
	Equipment expense			7,729		7,532		2.6
	Stationery and supplies			5,685		4,400		29.2
	Advertising and promotion			4,657		4,333		7.5
	Restructuring and integration costs			6,015		3,935		52.9
	Other			19,813		24,516		(19.2	)

		Total noninterest expense	$	159,098	$	150,088		6.0	%

N/M — Not Meaningful.

As the table above shows in more detail, noninterest expense increased by 6.0% for the three months ended March 31, 2002, compared to the same period in 2001. Significant factors causing the increase include the following:

•		The increase in salaries and wages and employee benefits reflect increased employees, primarily due to the UCB acquisition. Also, the first three months of 2002 reflect an entire quarter of employee related expenses for the Nevada and New Mexico branch acquisition. In addition, total salaries and wages in the first three months of 2002 increased compared to the same period in 2001, due to lower net periodic pension benefit credits in 2002.

•		The decrease in intangible amortization reflects the adoption of new accounting standards in 2002 that ceased the amortization of goodwill.

•		Integration costs relate to our acquisition of UCB in 2002 and the Nevada and New Mexico branches in 2001.

•		The decrease in other expense the first three months in 2002 from the same period in 2001 was primarily due to a $5 million charitable contribution to the First Hawaiian Foundation, a charitable arm of First Hawaiian that supports nonprofit and community organizations in the market where it operates.

INCOME TAXES

Our effective income tax rate (exclusive of the tax equivalent adjustment) for the three months ended March 31, 2002 were 39.4% as compared to 39.8% for the same period in 2001.

LIQUIDITY MANAGEMENT

Liquidity refers to our ability to provide sufficient short- and long-term cash flows to fund operations and to meet obligations and commitments, including depositor withdrawals and debt service, on a timely basis at reasonable costs. We achieve our liquidity objectives with both assets and liabilities.

We obtain short-term asset-based liquidity through our investment securities portfolio and short-term investments which can be readily converted to cash. These liquid assets consist of cash and due from banks, interest-bearing deposits in other banks, federal funds sold, securities purchased under agreements to resell and investment securities. Such assets represented 14.5% of total assets at March 31, 2002 compared to 16.7% at December 31, 2001.

Intermediate- and longer-term asset liquidity is primarily provided by regularly scheduled maturities and cash flows from our loans and investment securities. Additional liquidity is available from certain assets that can be sold or securitized, such as consumer and mortgage loans.

We obtain short-term liability-based liquidity primarily from deposits. Average total deposits for the three months ended March 31, 2002 increased 16.4% to $16.9 billion, over the year ended December 31, 2001, primarily due to continued expansion of our customer base in the Western United States and acquisition of UCB. Average total deposits funded 71% of average total assets for the three months ended March 31, 2002 and 75% for the year ended December 31, 2001.

We also obtain short-term liquidity from ready access to regional and national wholesale funding sources, including issuing our own commercial paper, purchasing federal funds, selling securities under agreements to repurchase, arranging lines of credit from other banks and obtaining credit facilities from the Federal Home Loan Banks. Additional information on short-term borrowings is provided in Note 10 to the Consolidated Financial Statements on pages 57 and 58 of our 2001 Annual Report on Form 10-K. Offshore deposits in the international market provide another available source of funds.

Funds taken in the intermediate- and longer-term markets are structured to avoid concentration of maturities and to reduce refinancing risk. We also attempt to diversify the types of instruments issued to avoid undue reliance on any one market.

Liquidity for the parent company is primarily provided by dividend and interest income from its subsidiaries. Short-term cash requirements are met through liquidation of short-term investments. Longer-term liquidity is provided by access to the capital markets.

CAPITAL

Stockholder’s equity was $3.665 billion at March 31, 2002, an increase of 83.1%, over $2.002 billion at December 31, 2001. Compared to March 31, 2001, stockholder’s equity at March 31, 2002 increased by $1.620 billion, or 79.2%. The increase was primarily due to the issuance of additional Class A common shares in connection with the UCB acquisition.

Capital adequacy regulations require the Company to maintain minimum amounts of Tier 1 and Total Capital and minimum ratios of Tier 1 Capital and Total Capital to risk-weighted assets, respectively, and of Tier 1 Capital to average assets (leverage). These amounts and ratios as of March 31, 2002 are set forth below:


												To Be Well
												Capitalized
												Under Prompt
							For Capital					Corrective Action
		Actual					Adequacy Purposes					Provisions

(dollars in thousands)		Amount		Ratio			Amount		Ratio			Amount		Ratio

Tier 1 Capital to
	Risk-Weighted Assets:
	Bank of the West	$	925,566		8.11	%	$	456,730		4.00	%	$	685,096		6.00	%
	United California Bank		1,012,326		10.83			373,943		4.00			560,915		6.00
	First Hawaiian		653,137		9.95			262,588		4.00			393,881		6.00

Total Capital to
	Risk-Weighted Assets:
	Bank of the West	$	1,268,625		11.11	%	$	913,461		8.00	%	$	1,141,826		10.00	%
	United California Bank		1,130,031		12.09			747,887		8.00			934,858		10.00
	First Hawaiian		806,530		12.29			525,175		8.00			656,469		10.00

Tier 1 Capital to
	Average Assets:
	Bank of the West	$	925,566		7.37	%	$	502,665		4.00	%	$	628,331		5.00	%
	United California Bank		1,012,326		10.08			401,746		4.00			502,182		5.00
	First Hawaiian		653,137		8.64			302,883		4.00			377,978		5.00

Due to the election to become a financial holding company done concurrent with the BNP Paribas Merger, only the Company’s depository institution subsidiaries are subject to various regulatory capital requirements administered by the Federal banking agencies. If they fail to meet minimum capital requirements, these agencies can initiate certain mandatory actions. Such regulatory actions could have a material effect on the Company’s financial statements.

Under capital adequacy guidelines and the regulatory framework for prompt corrective action, the Company’s 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.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

INTEREST RATE RISK MEASUREMENT AND MANAGEMENT

The Company’s net interest income is subject to interest rate risk to the extent our interest-bearing liabilities (primarily deposits and borrowings) mature or reprice on a different basis than our interest-earning assets (primarily loans and leases and investment securities). When interest-bearing liabilities mature or reprice more quickly than interest-earning assets during a given period, an increase in interest rates could reduce net interest income. Similarly, when interest-earning assets mature or reprice more

INTEREST RATE RISK MEASUREMENT AND MANAGEMENT, Continued

quickly than interest-bearing liabilities, a decrease in interest rates could have a negative impact on net interest income. In addition, the impact of interest rate swings may be exacerbated by factors such as our customers’ propensity to manage their demand deposit balances more or less aggressively or to refinance mortgage and other consumer loans depending on the interest rate environment.

The Asset/Liability Committees of the Company and its major subsidiaries are responsible for managing interest rate risk. The Asset/Liability Committees generally meet monthly or quarterly. The committees may recommend changes to a particular subsidiary’s interest rate profile to their respective Board of Directors, should changes be necessary and depart significantly from established policies. Other than loans and leases that are originated and held for sale, commitments to purchase and sell foreign currencies and mortgage-backed securities and certain interest rate swaps and options, the Company’s interest rate derivatives and other financial instruments are not entered into for trading purposes.

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 relatively constant and then subjected to interest rate shocks up and down of 100 and 200 basis points each. Each account-level item is repriced according to its respective contractual characteristics, including any imbedded options which might exist (e.g. periodic interest rate caps or floors or loans and leases which permit the borrower to prepay the principal balance of the loan or lease prior to maturity without penalty). Off-balance-sheet instruments such as interest rate swaps, swaptions, caps or floors are included as part of the modeling process. For each interest rate shock scenario, net interest income over a 12-month horizon is compared against the results of a scenario in which no interest rate change occurs (“flat rate scenario”) to determine the level of interest rate risk at that time.

The projected impact of 100 basis-point incremental increases and decreases in interest rates on the Company’s consolidated net interest income over the 12 months beginning April 1, and January 1, 2002 is shown below:


(dollars in millions)	+ 3%			+2%			+1%			Flat			-1%

April 1, 2002
Net Interest Income	$	1,295.2		$	1,293.5		$	1,291.1		$	1,281.1		$	1,260.3
Difference from flat	$	14.1		$	12.4		$	10.0		$	—		$	(20.8	)
% variance		1.1	%		1.0	%		0.8	%		—	%		(1.6	)%

January 1, 2002
Net Interest Income	$	850.5		$	855.5		$	859.0		$	857.9		$	855.4
Difference from flat	$	(7.4	)	$	(2.4	)	$	1.1		$	—		$	(2.5	)
% variance		(0.9	)%		0.3	%		0.1	%		—	%		(0.3	)%

The changes in the models are due to differences in interest rate environments which include the absolute level of interest rates, the shape of the yield curve and spreads between benchmark rates.

SIGNIFICANT ASSUMPTIONS UTILIZED AND INHERENT LIMITATIONS

The significant net interest income changes for each interest rate scenario presented above 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 as prepayments are affected by many variables which cannot be predicted with certainty (e.g. prepayments of mortgages may differ on fixed and adjustable loans depending upon current interest rates, expectations of future interest rates, availability of refinancing, economic benefit to borrower, financial viability of borrower, etc.).

As with any model for analyzing interest rate risk, certain limitations are inherent in the method of analysis presented above. For example, the actual impact on net interest income due to certain interest rate shocks may differ from those projections presented should market conditions vary from assumptions used in the analysis. Furthermore, the analysis does not consider the effects of a changed level of overall economic activity that could exist in certain interest rate environments. Moreover, the method of analysis used does not take into account the actions that management might take to respond to changes in interest rates because of inherent difficulties in determining the likelihood or impact of any such response.

PART II. OTHER INFORMATION

Item 2. Changes in Securities and Use of Proceeds

Effective March 15, 2002, the registrant sold 29,684,249 newly issued shares of its Class A Common Stock, par value $0.01 per share, to its parent, BNP Paribas, in a Section 4(2) private placement. The registrant received $1.6 billion in cash for the stock, and used the proceeds as part of the consideration paid to acquire United California Bank.

Item 6. Exhibits and Reports on Form 8-K

Exhibits


Exhibit 2.1		Agreement and Plan of Merger, among BancWest Corporation, BNP Paribas and Chauchat L.L.C. is incorporated by reference to Annex A to the Corporation’s Proxy Statement filed on Schedule 14A with the SEC on August 20, 2001.

Exhibit 12		Statement regarding computation of ratios.

(b) Reports on Form 8-K		A Report on Form 8-K filed March 15, 2002 reported, under Item 2, the acquisition of all of the outstanding stock of United California Bank.

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 May 14, 2002	By	/s/ Howard H. Karr

		Howard H. Karr Executive Vice President and Chief Financial Officer (principal financial officer)

EXHIBIT INDEX


Exhibit
Number		Description

2.1		Agreement and Plan of Merger, among BancWest Corporation, BNP Paribas and Chauchat L.L.C. is incorporated by reference to Annex A to the Corporation’s Proxy Statement filed on Schedule 14A with the SEC on August 20, 2001.

12		Statement regarding computation of ratios.

Statement regarding computation of ratios.

Exhibit 12. Statement re: Computation of Ratios

BancWest Corporation and Subsidiaries
Computation of Consolidated Ratios of Earnings to Fixed Charges


		Three Months Ended
		March 31,

		2002		2001

		(dollars in thousands)
Income before income taxes		$	107,999	$	102,584

Fixed charges⁽¹⁾ :
	Interest expense		104,804		149,478
	Rental expense		4,718		3,715

			109,522		153,193
Less interest on deposits			63,629		120,421

	Net fixed charges		45,893		32,772

	Earnings, excluding interest on deposits	$	153,892	$	135,356

	Earnings, including interest on deposits	$	217,521	$	255,777

Ratio of earnings to fixed charges:
	Excluding interest on deposits		3.35x		4.13x
	Including interest on deposits		1.99x		1.67x

(1)

For purposes of computing the consolidated ratios of earnings to fixed charges, earnings represent income before income taxes plus fixed charges. Fixed charges, excluding interest on deposits, include interest (other than on deposits), whether expensed or capitalized, and that portion of rental expense (generally one third) deemed representative of the interest factor. Fixed charges, including interest on deposits, consists of the foregoing items plus interest on deposits.

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