The bank for a changing world

BancWest Corporation has agreed to acquire Community First Bankshares

  • 16.03.2004
BNP Paribas expands its presence in the Western United States.

BancWest Corporation ("BancWest"), a wholly owned subsidiary of BNP Paribas, announced today that it has reached a definitive agreement to acquire Community First Bankshares ("Community First"), a Nasdaq listed company (CFBX). BancWest operates through 357 branches in seven Western states, primarily California and Hawaii. BancWest operates under the brands of Bank of the West on the Western US Mainland and First Hawaiian Bank in Hawaii. Community First operates through 155 branches in 12 states in the West and Midwest of the US.

This transaction is consistent with BNP Paribas' expansion strategy in American retail banking and its disciplined acquisition policy. Following the acquisition, BancWest will have 3.4 million customer accounts and over 500 branches. The company will rank as the seventh largest commercial bank in the Western US, a region covering 18 states, 100 million inhabitants, and with one of the strongest demographic growth trends in the US.

On Monday 15th of March 2004, the Board of Directors of Community First (Fargo, North Dakota) approved an agreement for the sale of 100% of the company to BancWest. The USD 1.2 billion purchase price is equivalent to 16,2 times reported earnings for 2003. It represents a 14% premium to the average closing stock price of Community First over the past three months. Subsequent to the transaction, all Community First activities will continue under the Bank of the West brand.

In 2003, Community First reported total revenues of USD 331 million, net income of USD 75 million, and a RoE of 20.5%. The bank had USD 5,465 million of assets as of December 31st, 2003. Traditionally focused on smaller communities, Community First has grown through a series of acquisitions over the past 15 years. Community First has a strong presence in Colorado, Wyoming, Minnesota and North Dakota. The bank also has retail operations in Arizona, New Mexico, Utah, South Dakota, Iowa, Wisconsin, Nebraska and California. Community First enjoys an average 17% market share in the counties where it operates.

The merger will generate significant synergies and thus will create shareholder value beginning in the very first year. Given Community First's similar business model and strategic approach, as well as BancWest's proven track record in acquisition targets, execution risk related to the transaction is low.

In a statement following the agreement, Baudouin Prot, CEO of BNP Paribas said: "This transaction is in line with our strategy of 'disciplined' acquisitions, i.e. value-creating transactions of manageable size, in businesses and geographies of strong growth potential. This transaction is a great example of our efficient use of capital to strike deals with high synergies potential and low integration risks".

In addition, Don McGrath, President and COO of BancWest said: "Community First is a profitable bank, that has built strong relationships with its clients. Community First is a perfect match for Bank of the West. It operates in growing states that complement our existing footprint. This is a union of two complementary and compatible banks that makes sense both strategically and financially. It also creates new opportunities for further organic growth in the Western US."

The transaction is currently subject to approval by Community First's shareholders and by various regulatory agencies in the US. The transaction is expected to close in the third quarter of 2004. BNP Paribas and BancWest were advised by Lehman Brothers and BNP Paribas Corporate Finance.

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About BNP Paribas and BancWest

BNP Paribas ( is a European leader in banking and financial services, with leading positions in Asia and an active presence in the United States. It is the first bank in terms of net income and market capitalisation in the Euro zone. The group has one of the largest international banking networks with a presence in 85 countries and 89,400 employees, including 67,700 in Europe. BNP Paribas enjoys key positions in Corporate and Investment Banking, Private Banking & Asset Management, Insurance, Securities Services and Retail Banking.
BancWest Corporation is a wholly-owned subsidiary of BNP Paribas with assets of USD 38.4 billion. It is headquartered in Honolulu, Hawaii, with administrative headquarters in San Francisco, California. Its subsidiaries Bank of the West and First Hawaiian Bank, are respectively the 5th largest retail bank in California and the 1st in Hawaii.
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