The example set by top brass is crucial to making a merger work, says Walter A. Dods Jr., chairman and chief executive officer of BancWest Corp.

Good will between top executives of merging banks tends to trickle down through the company, Mr. Dods said.

He should know. Last November, Mr. Dods' First Hawaiian Inc. combined with San Francisco-based Bank of the West.

"So far, the nonfinancial part of this merger is going far better than expected," he added.

The deal has succeeded to this point, he said, because of the affinity that he and BancWest president and chief operating officer Don J. McGrath have developed. That relationship has made employees of the two former institutions feel confident and secure, Mr. Dods said.

Conversely, the staff of a merged bank can suffer from friction between top executives, Mr. Dods said. NationsBank Corp.'s acquisition of BankAmerica Corp. is a case in point, he added. When the merger was announced last year, NationsBank chief executive Hugh L. McColl Jr. was to run the institution initially, and BankAmerica CEO David A. Coulter would take over after Mr. McColl retired.

But just weeks following the deal's close last fall, Mr. Coulter was forced out.

"If the rank and file know that Hugh McColl and David Coulter are having problems, it filters right through the whole damn organization, and you can't keep it out of there," Mr. Dods said.

Mr. Dods insists that he and Mr. McGrath, who was chief executive of Bank of the West before the merger, have hit it off both professionally and personally.

"The two of us guys have gotten along really well, and if the rank and file know that, you have a chance of making this whole thing work," Mr. Dods said.

Naturally, Mr. Dods would be unlikely to admit any animosity or any problems cropping up in the merger. But outside observers said his story is a believable one.

"Our impression is that the two companies are working well together and that their integration is on track," said Joseph K. Morford, an analyst with First Security Van Kasper. "We are optimistic about the prospects of this merger."

Many challenges still lie ahead, Mr. Dods said. For example, the banks' computer systems will not be integrated until early next year.

But the newly enlarged bank's performance during the most recent quarter-the first time BancWest reported as a combined company-appears to have benefited from the deal.

The Honolulu-based Bank of Hawaii operation, which has been under pressure from a sluggish local economy, has focused on expense cuts. Throughout the corporation, 265 jobs have been axed, including the positions of 60 people who left the company of their own volition. The Hawaiian subsidiary decreased salary and benefit costs by 8.4%.

The company held on to the Bank of the West name for its mainland operations. This part of the business, based in San Francisco, garnered increased revenues from the strong West Coast markets.

"Bank of the West is generating the lion's share of growth right now," Mr. Morford said.

Together, the combination of revenue increases and cost reductions translated into a significant improvement in the bank's first-quarter efficiency ratio. That figure improved to 60.1%, compared with 66.12% in the same period last year, on a pro forma basis.

But Mr. McGrath joked that the real secret behind the merger lies in the time he and Mr. Dods spend together on the links.

"The reason this deal works is because neither of us is a good golfer," Mr. McGrath said. "There is still some supense when we get on the course."

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