Preparing for their merger with First Hawaiian Inc., people at Bank of the West use the Hawaiian phrase "ohana hou," meaning "new family."

"It's our formal moniker for the transition process," said Don J. McGrath, chief executive officer of Bank of the West in San Francisco.

"We thought giving it a name and talking about it a lot would help alleviate some of the uncertainty that scares employees so much in mergers."

The atmosphere should not be very fraught with fears for survival. Of the 218 branches coming together in the $1 billion deal, announced in May, none overlap.

But for Mr. McGrath and his bank's sole shareholder, Banque Nationale de Paris, the transaction is stirring some uncertainty. They will be taking in a bank that has stagnated in a lackluster Hawaiian economy.

To be sure, there is much in the deal that makes sense. It would give currency to privately held Bank of the West-in the form of First Hawaiian's publicly traded stock-for other acquisitions.

Also, First Hawaiian gets to diversify geographically, using Bank of the West's bigger base on the mainland.

"With close to $8 billion in mainland assets, it will be much easier for the combined company to grow," Mr. McGrath said.

But observers said the new company, named BancWest Corp. and 55%-owned by First Hawaiian, will have to bulk up to gain a significant presence in any of its mainland markets. And it will have to clear some hurdles before hitting the acquisition trail.

Bank of the West's 105 Northern California branches and First Hawaiian's 38 in Oregon, Washington, and Idaho, where it does business as Pacific One Bank, rank below the top five in most markets they operate in, said James R. Bradshaw, an analyst with Pacific Crest Securities in Portland, Ore.

"The combined company will have to grow a whole lot more to become any kind of fierce competitor," Mr. Bradshaw said.

Acquisitions will be tough because of the performance of First Hawaiian's stock, he added. The ratio of the bank's price to estimated 1999 earnings is 13.5, well below the 15.8 average of western banks.

"First Hawaiian has found it difficult to compete in the acquisition game in the Northwest because it hasn't had strong enough currency," Mr. Bradshaw said. "They will have to go out and get that stock price up."

Regardless, most analysts view the merging companies as on the right track.

"Eventually Hawaii will improve, and when that happens, they have a platform that can take them wherever they want to be on the West Coast," said David H. Winton, an analyst with Keefe, Bruyette & Woods Inc. "For the short term, First Hawaiian gets a good diversification of revenue."

First Hawaiian chairman and CEO Walter A. Dods Jr., who will run the new company, "has a strong reputation on Wall Street," Mr. Bradshaw said. Mr. Dods, 57, is past president of the American Bankers Association and a current board member of the Bankers Roundtable.

"Walter has stature in the industry," said Mr. McGrath, who will be president and chief operating officer of the new BancWest and head its mainland operations.

Mr. McGrath said executives at both banks, taking a closer look at how their institutions fit together, have been pleasantly surprised.

Bank of the West, for example, has never been large enough to justify developing its own credit card operation. First Hawaiian has its own card program "but they needed to get more cards out," Mr. McGrath said.

"Combining our customer bases will create an opportunity for us to support a much broader credit card operation," he said.

The merger deal came about after Mr. McGrath and his superiors in France decided early this year that it would be in their best interest to beef up Bank of the West in terms of size and product offerings.

"We looked at the kinds of things we needed to do to remain competitive in this market," Mr. McGrath said. "We determined that if we could find a suitable partner, joining them would be an appropriate strategy."

First Hawaiian had approached Banque Nationale de Paris about a possible deal early last year, but was rebuffed. This year the timing seemed more right.

Mr. McGrath flew to the islands to meet with Mr. Dods, the first of many meetings required to hash out a rather complex deal.

First Hawaiian is billed as the surviving institution, though it will take the name of Bank of the West's holding company. First Hawaiian Bank and Bank of the West will operate as separate subsidiaries, with Bank of the West melding Pacific One into its operations.

The $300 billion-asset Banque Nationale de Paris agreed to restrict its ownership interest to 45% for a "standstill period." After that, the French bank could buy the rest or keep the status quo.

Mr. McGrath declined to speculate on BNP's intentions but said the share distribution protects both the French bank and First Hawaiian's public shareholders.

"There are no winners or losers in the way this agreement was negotiated-it is fair to both sets of shareholders, and there are protections for both sets," he said.

A strong friendship developed out of the long hours spent hammering out the merger agreement, Mr. McGrath said.

So much so that Mr. Dods has become a victim of Bank of the West pranks. The First Hawaiian chief often wears bright Hawaiian shirts in Honolulu, but he usually dons the more traditional suit and tie on the mainland, Mr. McGrath said.

Mr. McGrath instructed all of his senior managers to wear Hawaiian shirts at a recent merger-related meeting in San Francisco. When the dressed-up Mr. Dods walked in, his jaw dropped.

"We just told him it was casual Friday," Mr. McGrath said.

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