The following is a press release from Moody's Investors Service: New York, June 15, 2011 --
Moody's Investors Service placed the B- stand-alone bank financial strength rating (BFSR) of First Hawaiian Bank on review for possible downgrade.
First Hawaiian Bank (B- BFSR, baseline credit assessment (BCA) A1, deposits A1) and Bank of the West (C+ BFSR, BCA A2, deposits A1) are owned by the intermediate holding company BancWest Corporation, which is a wholly owned subsidiary of BNP Paribas (BFSR B-, BCA A1, deposits Aa2). This review follows the related actions of June 15, 2011, in which the BFSR and long-term debt and deposit ratings of BNP Paribas and the long-term debt and deposit ratings of the BancWest subsidiaries - First Hawaiian and Bank of the West - were placed on review for possible downgrade.
Currently, Bank of the West's A1 long-term ratings benefit from one-notch of lift above its A2 stand-alone BCA from the implied support of the higher rated BNP Paribas. First Hawaiian's A1 long-term ratings incorporate no lift because its stand-alone BFSR of B- and BCA of A1 are equal to those of BNP Paribas.
The review for downgrade of both subsidiaries' A1 long-term ratings is based on two issues. First, the lower value that would be ascribed to BNP Paribas' support should its stand-alone financial strength rating be downgraded. Second, Moody's view that within a US banking family, their deposit ratings should be equalized because of regulatory powers afforded by the FDIC cross-guarantee provisions. Based on the FDIC cross-guarantee provisions, all depository institutions owned by the same company are financially responsible for the failure or resolution costs of any affiliated insured institution.
Similarly, the review of First Hawaiian's stand-alone BFSR was prompted by the rating agency's view that if Bank of the West's ratings no longer benefit from the support of BNP Paribas, First Hawaiian could then be more likely to be called upon to support Bank of the West. Moody's does not believe that BNP Paribas's willingness to provide support to these two entities has changed -- it remains very high. However, Moody's assessment of the parent's ability to provide that support would decline if the stand-alone BFSR of BNP Paribas is downgraded.
The principal methodologies used in rating this issuer were Moody's "Bank Financial Strength Ratings: Global Methodology", published in February 2007, "Incorporation of Joint-Default Analysis into Moody's Bank Ratings: A Refined Methodology", published in March 2007, and "Moody's Guidelines for Rating Bank Hybrid Securities and Subordinated Debt", published in November 2009. These methodologies are available on www.moodys.com in the Rating Methodologies sub-directory under the Research & Ratings tab. Other methodologies and factors that may have been considered in the process of rating this issuer can also be found in the Rating Methodologies sub-directory on Moody's website.
BancWest Corporation, headquartered in San Francisco, California, reported assets of $73 billion at March 31, 2011.
First Hawaiian Bank and Bank of the West had assets of $15 billion and $58 billion, respectively.
Moody's Investors Service 250 Greenwich Street New York, NY 10007 U.S.A. JOURNALISTS: 212-553-0376 SUBSCRIBERS: 212-553-1653 © 2011 Moody's Investors Service, Inc. and/or its licensors and affiliates (collectively, "MOODY'S"). All rights reserved
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