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BancWest Makes Another Purchase in Midwest

June 15, 2005|From Associated Press

BancWest Corp. said Tuesday that it was buying Midwestern thrift Commercial Federal Corp. for $1.36 billion, continuing a shopping spree that has built it into one of the nation's largest banks west of the Mississippi.

Making its 16th acquisition in the last 15 years, Honolulu-based BancWest is paying $34 a share, a 31% premium above Commercial Federal's closing price Monday. Commercial Federal's stockholders also would receive a one-time dividend of 50 cents a share after the all-cash deal closes, probably late this year.

Commercial Federal's shares surged $8.01 to $33.95.

Omaha-based Commercial Federal, the nation's 12th-largest thrift, with assets of $10.4 billion, would become part of BancWest's San Francisco-based Bank of the West, an obscure Northern California bank until it began an aggressive expansion in the early 1990s with the backing of BancWest's current owner, Paris-based BNP Paribas.

Commercial Federal's heritage dates to 1887. Bank of West first opened in 1874 as the Farmers National Gold Bank. It became the Bank of the West 26 years ago.

With the Commercial Federal acquisition, Bank of the West would pick up 198 additional branches, including 59 offices in three states -- Kansas, Missouri and Oklahoma -- where it previously didn't operate. Commercial Federal's other branches are in Arizona, Colorado, Iowa and Nebraska.

No branch closures are planned after the takeover, Bank of the West spokesman Gerry Keir said. Bank of the West also expected to retain almost all of Commercial Federal's 2,800 employees. The bank's parent company already employs 10,000 workers, including those of another subsidiary, First Hawaiian Bank.

Commercial Federal's profit has shrunk in each of the last two years. The bank earned $76.4 million last year, a 14% decrease from 2003. BancWest posted a 2004 profit of $473.4 million, an 8% increase from the previous year.

Bank of the West established a toehold in the Midwest last year with the $1.2-billion acquisition of Fargo, N.D.-based Community Bankshares Inc., which had 184 branches in 10 states.

After its latest takeover is completed, Bank of the West expects to have $64 billion in assets, more than 4 million customers and 739 branches in 20 states.

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