FIRST HAWAIIAN BANK WINS GUAM COURT RULING

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HAGATNA, Guam (Pacific Daily News, May 14) - First Hawaiian Bank
yesterday welcomed a Guam Supreme Court ruling that allows the bank to continue
operating its Tamuning branch and clears the question whether First Hawaiian can
open additional branches on Guam.

The Guam Supreme Court ruling adds another chapter to a legal
wrangling that began more than a year ago when Bank of Guam led a lawsuit that
tried to stop First Hawaiian from opening a Tamuning branch.

At the center of the dispute:

· Bank of Guam's argument that the opening of additional
branches by an out-of-state bank is prohibited under local law -- unless the
out-of-state bank merges with a Guam-chartered bank.

· First Hawaiian contends that the local prohibition is
pre-empted by a federal law called the ''Riegle-Neal Act,'' which promotes
fairness. Under the federal law, banks chartered elsewhere have the same
branching rights as a locally chartered Guam bank, First Hawaiian contends.

The Guam Banking Board, the Federal Deposit Insurance Corp. and
the Guam Superior Court have sided with First Hawaiian.

In a May 12 ruling, the Guam Supreme Court agreed with the lower
court, finding that the local prohibition is ''preempted by federal law.''

That local prohibition also does not apply to an out-of-state
bank such as First Hawaiian, which already has existing branches on Guam,
according to the high court opinion.

The plain language of the federal law, according to the Supreme
Court, ''reflects Congress' desire to take out of a state's hands, not the power
to regulate, but the power to discriminate.''

''This reading is not a finding that the state power to regulate
intrastate branching has been rescinded, only that it has been restricted,''
according to the high court.

''Thus, we find that Congress did intend to prohibit Guam from
continuing to prevent out-of-state state banks with existing branches from
establishing additional branches, if out-of-state national banks were not also
prevented from doing so,'' the ruling states.

It's unclear whether Bank of Guam will elevate its appeal to the
9th Circuit Court of Appeals.

Bank of Guam management declined to comment yesterday.

First Hawaiian issued a press release yesterday characterizing
the high court ruling as ''pro-consumer.''

''We're gratified that the Supreme Court agreed with the FDIC,
the Guam Banking Board and (Superior Court Judge Michael) Bordallo that the law
favors open competition,'' First Hawaiian President Don Horner is quoted as
saying in the press release.

''More competition and convenience means an end to protectionism
and more choices for the people of Guam,'' he added.

Honolulu-based First Hawaiian has operated on Guam since 1970.

It is a subsidiary of BancWest Corporation, a Hawaii-based bank
holding company with assets of $34.9 billion, according to the First Hawaiian
press release.

May 14, 2003

Pacific Daily News: www.guampdn.com 

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