1st Security Profits Off 46% After Charge for Merger Flop

SALT LAKE CITY - First Security Corp. took a $36 million charge related to its failed merger with Zions Bancorp, dragging down first-quarter profits by 46%, to $54 million.Anticipating that the merger would take place, First Security repositioned its investment portfolio late in the fourth quarter, the company said. Those and other changes to the balance sheet resulted in a decline in net income of 8.5% in the fourth quarter, to $200.5 million.

First Security ended a merger agreement with hometown competitor Zions on April 1 after Zions shareholders voted against the deal. Wells Fargo & Co. said a week later that it would buy First Security.

Bancwest of Hawaii Sets Up Institutional Money Manager

HONOLULU - Bancwest Corp. has formed an institutional money management group to go after business with governments, foundations, labor unions, and pension funds.The group, named Bishop Street Capital Management Corp., is part of Bancwest's Honolulu-based First Hawaiian Bank and will be an extension of the banking company's asset management business. The unit, with offices in Honolulu and San Francisco, has 25 employees.

Jack Tsui, a Bancwest vice chairman and president of First Hawaiian, is chairman and chief executive of the firm. Robbie Alm, the head of First Hawaiian's trust and investment business, is president. Both are based in Honolulu.

Bancwest said the Bishop Street firm fits into a strategy of increasing revenues from mainland businesses. "We wanted to expand to the mainland," Mr. Tsui said. The company chose to form Bishop Street, because "we didn't think the First Hawaiian name would have as much cache on the mainland" as it does in Hawaii, he said.

First Hawaiian already manages a line of mutual funds named after Bishop Street - Honolulu's financial thoroughfare and the location of First Hawaiian's headquarters. The funds have about $1.4 billion of assets. The bank said it is moving most of its institutional assets to the Bishop Street firm, contributing to a current asset pool of $1.2 billion at the firm.

Bancwest, the $17.5 billion asset holding company for both San Francisco-based Bank of the West and First Hawaiian, announced the creation of Bishop Street Capital with the release of its first-quarter earnings statement late Tuesday.

- Compiled by Laura Mandaro

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