BancWest Will Consolidate Data Facilities, Signs Facilities Management Contract With ALLTEL - Company Business and Marketing

Cambridge Telcom Report, August 2, 1999

BancWest Corporation (NYSE: BWE) announced has that it will consolidate its Mainland and Hawaii data processing operations at its Honolulu operations center. BancWest has signed a contract for ALLTEL Corporation (NYSE: AT) to manage the combined data facility here.

The Hawaii operations center presently handles back-office data processing for First Hawaiian Bank, BancWest's Hawaii subsidiary. Beginning next year, it will also become the data center for Bank of the West, the company's West Coast subsidiary. The two banks will continue to operate separately.

ALLTEL Information Services, a subsidiary of ALLTEL Corporation, will take over data functions at the First Hawaiian facility on August 1.

Because of application write-offs and other conversion expenses, BancWest will take a one-time restructuring charge of $6.9 million (pre-tax) against third quarter earnings, said Chairman and Chief Executive Officer Walter A. Dods, Jr. The facilities management contract is expected to save BancWest $2.8 million (exclusive of this charge) in 1999 and more than $60 million over the life of the six-year contract, Dods said.

"We want to consolidate all of BancWest's data operations in one place, with a uniform environment that will accommodate future growth quickly and seamlessly. Because of our investment in First Hawaiian Bank's operations center, we decided to bring Bank of the West data processing to Honolulu," said Dods. First Hawaiian centralized data processing operations at its present location in Kalihi in 1992.

"ALLTEL will help us move to a common data processing platform and save us money in the process. As a specialized service provider, they must keep up with technological advances, and they'll put that technology to work for BancWest," Dods said.

ALLTEL Information Services works with 800 banks, including 10 of the top 25 U.S. banks. Bank of the West now outsources its data processing to ALLTEL. First Hawaiian Bank will convert to the same ALLTEL software next year.

All 127 First Hawaiian employees who presently perform this work are being offered immediate employment by ALLTEL at the same salary, with benefits comparable to First Hawaiian's. The goal is to have data processing for both BancWest banks running on an ALLTEL platform from Honolulu by mid-2000.

"Next year, once this conversion is completed, ALLTEL plans to reduce our Honolulu staff somewhat," said John Amatangelo, senior vice president and managing director of banking operations for ALLTEL Information Services. "Wherever possible, we're committed to doing this by attrition over a period of months -- just as First Hawaiian has done in the past."

Dods said BancWest expects to create more jobs in other areas at the Honolulu data center over the next 12-18 months as additional operational facilities serving both the Hawaii and Mainland banks are concentrated in Hawaii.

"BancWest has been an active integrator of business, and with that activity has come the need to consolidate multiple data centers," Amatangelo said. "The leadership at BancWest hopes to continue to grow through mergers and acquisition. With our expertise in converting disparate systems to a common platform, we feel we can address any of BancWest's needs that might arise.

"With our 30-year history of providing information technology outsourcing services to the financial services industry, we were able to demonstrate to BancWest management that we had undertaken projects like this in the past, and delivered measurable cost savings in those instances."

BancWest Corporation is a bank holding company with assets of $16.3 billion. It is headquartered in Honolulu, Hawaii, with an administrative headquarters in San Francisco, California. Its principal subsidiaries are First Hawaiian Bank (56 branches in Hawaii, two in Guam and one in Saipan) and Bank of the West (166 branches in Northern and Central California, Oregon, Washington state, Idaho and Nevada.)

ALLTEL Corporation, based in Little Rock, Arkansas, is a customer-focused, information technology company that provides wireline and wireless communications and information services. ALLTEL Information Services, with customers in 53 countries and territories, provides information processing management, outsourcing services and application software to the financial, mortgage and telecommunications industries.