<PAGE> 1
================================================================================
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
-------------
FORM 10-Q
(Mark One)
[x] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1995
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from . . . . . . . . . . . .
to . . . . . . . . . . . .
Commission file number 0-7949
FIRST HAWAIIAN, INC.
(Exact name of registrant as specified in its charter)
-------------
<TABLE>
<S> <C>
DELAWARE 99-0156159
(State of incorporation) (I.R.S. Employer
Identification No.)
1132 BISHOP STREET, HONOLULU, HAWAII 96813
(Address of principal executive offices) (Zip Code)
</TABLE>
(808) 525-7000
(Registrant's telephone number, including area code)
-------------
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or l5(d) of the Securities
Exchange Act of 1934 during the preceding 12 months (or for
such shorter period that the registrant was required to
file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes X No
----- -----
The number of shares outstanding of each of the issuer's classes
of common stock as of July 25, 1995 was:
<TABLE>
<S> <C>
Class Outstanding
-------------------------- -----------------
Common Stock, $5 Par Value 31,879,436 Shares
</TABLE>
================================================================================
<PAGE> 2
PART I. FINANCIAL INFORMATION
<TABLE>
<CAPTION>
Item 1. Financial Statements (Unaudited) Page
----
<S> <C>
Consolidated Balance Sheets at June 30, 1995, December 31, 1994
and June 30, 1994 2
Consolidated Statements of Income for the quarter and six months ended
June 30, 1995 and 1994 3
Consolidated Statements of Cash Flows for the six months ended
June 30, 1995 and 1994 4
Consolidated Statements of Changes in Stockholders' Equity for the
quarter and six months ended June 30, 1995 and 1994 5
Notes to Consolidated Financial Statements 6
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations 7 - 17
PART II. OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security Holders 18
Item 6. Exhibits and Reports on Form 8-K 18
SIGNATURES 19
EXHIBIT INDEX
</TABLE>
1
<PAGE> 3
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
CONSOLIDATED BALANCE SHEETS (Unaudited)
First Hawaiian, Inc. and Subsidiaries
<TABLE>
<CAPTION>
JUNE 30, December 31, June 30,
---------- ------------ ----------
1995 1994 1994
---------- ---------- ----------
(in thousands)
<S> <C> <C> <C>
ASSETS
Interest-bearing deposits in other banks $ 11,770 $ 11,670 $ 50,695
Federal funds sold and securities purchased
under agreements to resell 180,000 180,000 80,000
Investment securities:
Held-to-maturity (fair value of $1,186,636,
$981,651 and $1,096,079, respectively) 1,186,214 995,887 1,103,895
Available-for-sale 156,560 151,992 129,517
Loans and leases:
Loans and leases 5,253,682 5,533,565 5,132,096
Less allowance for loan and lease losses 61,200 61,250 61,873
---------- ---------- ----------
Net loans and leases 5,192,482 5,472,315 5,070,223
---------- ---------- ----------
Total earning assets 6,727,026 6,811,864 6,434,330
Cash and due from banks 264,456 262,894 175,626
Premises and equipment 242,439 245,338 253,289
Customers' acceptance liability 1,701 732 1,432
Core deposit premium 12,902 13,722 14,545
Goodwill 77,106 78,896 79,549
Other assets 145,071 121,698 88,958
---------- ---------- ----------
TOTAL ASSETS $7,470,701 $7,535,144 $7,047,729
========== ========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits:
Noninterest-bearing demand $ 825,597 $ 861,869 $ 849,610
Interest-bearing demand 1,107,981 1,160,219 1,113,356
Savings 1,119,705 1,226,877 1,359,738
Time 1,714,216 1,503,347 1,385,308
Foreign 413,559 399,901 263,088
---------- ---------- ----------
Total deposits 5,181,058 5,152,213 4,971,100
Short-term borrowings 1,174,543 1,329,816 1,078,655
Acceptances outstanding 1,701 732 1,432
Other liabilities 224,014 205,108 165,317
Long-term debt 243,771 219,331 210,894
---------- ---------- ----------
TOTAL LIABILITIES 6,825,087 6,907,200 6,427,398
---------- ---------- ----------
Stockholders' equity:
Common stock 162,713 162,713 162,713
Surplus 133,927 133,820 133,821
Retained earnings 365,119 346,339 330,504
Unrealized valuation adjustment 329 (1,033) (202)
Treasury stock (16,474) (13,895) (6,505)
---------- ---------- ----------
TOTAL STOCKHOLDERS' EQUITY 645,614 627,944 620,331
---------- ---------- ----------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $7,470,701 $7,535,144 $7,047,729
========== ========== ==========
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
2
<PAGE> 4
CONSOLIDATED STATEMENTS OF INCOME (Unaudited)
First Hawaiian, Inc. and Subsidiaries
<TABLE>
<CAPTION>
QUARTER ENDED JUNE 30, SIX MONTHS ENDED JUNE 30,
------------------------- -------------------------
1995 1994 1995 1994
----------- ----------- ----------- -----------
(in thousands, except shares and per share data)
<S> <C> <C> <C> <C>
INTEREST INCOME
Interest and fees on loans $ 122,322 $ 96,469 $ 240,978 $ 190,456
Lease financing income 2,408 2,702 6,000 5,620
Interest on investment securities:
Taxable interest income 10,440 11,167 21,800 21,793
Exempt from Federal income taxes 1,509 2,051 3,163 2,430
Other interest income 4,966 2,171 8,298 4,305
----------- ----------- ----------- -----------
Total interest income 141,645 114,560 280,239 224,604
----------- ----------- ----------- -----------
INTEREST EXPENSE
Deposits 45,956 28,061 88,105 54,773
Short-term borrowings 20,875 10,482 41,388 19,814
Long-term debt 3,397 3,017 6,576 5,934
----------- ----------- ----------- -----------
Total interest expense 70,228 41,560 136,069 80,521
----------- ----------- ----------- -----------
Net interest income 71,417 73,000 144,170 144,083
Provision for loan and lease losses 3,341 3,288 6,681 7,131
----------- ----------- ----------- -----------
Net interest income after provision for
loan and lease losses 68,076 69,712 137,489 136,952
----------- ----------- ----------- -----------
NONINTEREST INCOME
Trust income 5,624 6,001 11,978 12,463
Service charges on deposit accounts 5,874 5,930 12,180 11,814
Other service charges and fees 8,510 7,467 16,764 15,620
Securities gains, net - 1 1 142
Other 1,692 1,700 3,760 4,129
----------- ----------- ----------- -----------
Total noninterest income 21,700 21,099 44,683 44,168
----------- ----------- ----------- -----------
NONINTEREST EXPENSES
Salaries and wages 22,857 23,057 46,084 46,284
Employee benefits 5,612 6,623 12,846 14,005
Occupancy expense 6,499 5,812 12,925 11,534
Equipment expense 5,823 6,191 12,209 12,064
Other 19,544 19,895 39,616 39,095
----------- ----------- ----------- -----------
Total noninterest expenses 60,335 61,578 123,680 122,982
----------- ----------- ----------- -----------
Income before income taxes 29,441 29,233 58,492 58,138
Income taxes 10,573 10,233 20,854 20,401
----------- ----------- ----------- -----------
NET INCOME $ 18,868 $ 19,000 $ 37,638 $ 37,737
=========== =========== =========== ===========
PER SHARE DATA
NET INCOME $ .59 $ .59 $ 1.18 $ 1.17
=========== =========== =========== ===========
CASH DIVIDENDS $ .295 $ .295 $ .59 $ .59
=========== =========== =========== ===========
AVERAGE SHARES OUTSTANDING 31,988,345 32,322,730 32,004,804 32,361,130
=========== =========== =========== ===========
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
3
<PAGE> 5
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
First Hawaiian, Inc. and Subsidiaries
<TABLE>
SIX MONTHS ENDED JUNE 30,
--------------------------------
1995 1994
--------- ---------
(in thousands)
<S> <C> <C>
CASH AND DUE FROM BANKS AT BEGINNING OF PERIOD $ 262,894 $ 436,129
--------- ---------
Cash flows from operating activities:
Net income 37,638 37,737
Provision for loan and lease losses 6,681 7,131
Depreciation and amortization 13,328 11,931
Income taxes 8,850 1,832
Decrease (increase) in interest receivable (3,207) 1,338
Increase (decrease) in interest payable 8,217 (1,471)
Decrease (increase) in prepaid expenses 446 (273)
--------- ---------
Net cash provided by operating activities 71,953 58,225
--------- ---------
Cash flows from investing activities:
Net decrease (increase) in interest-bearing deposits
in other banks (100) 66,041
Net increase in Federal funds sold and securities
purchased under agreements to resell -- (45,000)
Purchase of held-to-maturity investment securities (51,831) (220,415)
Proceeds from maturity of held-to-maturity
investment securities 348,129 248,545
Purchase of available-for-sale investment securities (11,743) (61,530)
Proceeds from sale of available-for-sale
investment securities 5,000 --
Proceeds from maturity of available-for-sale
investment securities 2,175 30,466
Net increase in loans and leases
to customers (213,473) (72,798)
Capital expenditures (6,094) (12,547)
Other (19,136) 25,011
--------- ---------
Net cash provided by (used in) investing activities 52,927 (42,227)
--------- ---------
Cash flows from financing activities:
Net increase (decrease) in deposits 28,845 (249,028)
Net increase (decrease) in short-term borrowings (155,273) 8,973
Proceeds from long-term debt 24,447 --
Payments on long-term debt (7) (10,873)
Cash dividends paid (18,864) (19,068)
Purchases of common stock for issuance under
Incentive Plan for Key Executives and
Stock Incentive Plan (2,466) (6,505)
--------- ---------
Net cash used in financing activities (123,318) (276,501)
--------- ---------
CASH AND DUE FROM BANKS AT END OF PERIOD $ 264,456 $ 175,626
========= =========
Supplemental disclosures:
Interest paid $ 127,852 $ 84,312
========= =========
Net income taxes paid $ 12,004 $ 18,569
========= =========
Supplemental schedule of noncash investing activities:
Loans exchanged for mortgage-backed securities $ 486,625 $ --
========= =========
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
4
<PAGE> 6
CONSOLIDATED STATEMENTS OF
CHANGES IN STOCKHOLDERS' EQUITY (Unaudited)
First Hawaiian, Inc. and Subsidiaries
<TABLE>
<CAPTION>
QUARTER ENDED JUNE 30, SIX MONTHS ENDED JUNE 30,
---------------------- -------------------------
1995 1994 1995 1994
-------- -------- -------- --------
(in thousands)
<S> <C> <C> <C> <C>
BALANCE, BEGINNING OF PERIOD $637,961 $613,032 $627,944 $608,369
Net income 18,868 19,000 37,638 37,737
Purchases of common stock for issuance under
Incentive Plan for Key Executives and
Stock Incentive Plan (2,311) (2,016) (2,466) (6,505)
Unrealized valuation adjustment 526 (161) 1,362 (202)
Cash dividends (9,430) (9,524) (18,864) (19,068)
-------- -------- -------- --------
BALANCE, END OF PERIOD $645,614 $620,331 $645,614 $620,331
======== ======== ======== ========
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
5
<PAGE> 7
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
First Hawaiian, Inc. and Subsidiaries
1. BASIS OF PRESENTATION
The consolidated financial statements of the Company include the accounts of
First Hawaiian, Inc. and its wholly-owned subsidiaries-First Hawaiian Bank and
its wholly-owned subsidiaries; Pioneer Federal Savings Bank and its
wholly-owned subsidiary; First Hawaiian Creditcorp, Inc.; First Hawaiian
Leasing, Inc.; and FHI International, Inc. All significant intercompany
balances and transactions have been eliminated in consolidation.
Certain amounts in the consolidated financial statements for 1994 have
been reclassified to conform with the 1995 presentation. Such
reclassifications had no effect on the consolidated net income as previously
reported.
In the opinion of management, all adjustments (which included only
normal recurring adjustments) necessary for a fair presentation are reflected
in the consolidated financial statements.
2. ACCOUNTING CHANGES
Effective January 1, 1995, the Company adopted Statement of Financial
Accounting Standards ("SFAS") No. 114, "Accounting by Creditors for Impairment
of a Loan," and SFAS No. 118, "Accounting by Creditors for Impairment of a Loan
- - Income Recognition and Disclosures." SFAS No. 114 requires that impaired
loans be measured based on the present value of expected future cash flows
discounted at the loan's effective interest rate, or at the loan's observable
market price, or at the fair value of the collateral if the loan is collateral
dependent. The adoption of SFAS No. 114 did not result in additional
provisions for loan and lease losses primarily because the majority of impaired
loan valuations continue to be based on the fair value of the collateral.
The provision for loan and lease losses charged to expense is based
upon the Company's historical loss experience and estimates of future loan and
lease losses in the current loan and lease portfolio, including the evaluation
of impaired loans in accordance with SFAS No. 114. A loan is considered to be
impaired when, based upon current information and events, it is probable that
the Company will be unable to collect all amounts due according to the
contractual terms of the loan. Impairment is primarily measured based on the
fair value of the collateral. Impairment losses are included in the provision
for loan and lease losses. SFAS No. 114 does not apply to large groups of
smaller balance homogeneous loans that are collectively evaluated for
impairment, except for those loans restructured under a troubled debt
structuring. Loans collectively evaluated for impairment include certain
smaller balance commercial loans, consumer loans and residential real estate
loans, and are not included in the data that follows.
The following table summarizes impaired loan information as of June
30, 1995:
<TABLE>
<CAPTION>
(in thousands)
<S> <C>
Impaired loans $72,900
Impaired loans with related reserve for
loan losses calculated under
SFAS No. 114 72,900
</TABLE>
Interest payments on impaired loans are applied to principal.
Effective January 1, 1994, the Company adopted SFAS No. 112,
"Employer's Accounting for Postretirement Benefits," which requires that the
estimated cost of benefits to be provided by an employer to former or inactive
employees after employment, but before retirement, be accounted for on an
accrual basis. The adoption of SFAS No. 112 did not have a material effect on
the consolidated financial statements of the Company.
6
<PAGE> 8
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
NET INCOME
The Company recorded consolidated net income for the first six months of 1995
of $37,638,000 compared to $37,737,000 for the first six months of 1994, a
decrease of .3%. For the second quarter of 1995, the consolidated net income
of $18,868,000 represented a decrease of .7% from the same quarter in 1994.
On a per share basis, consolidated net income for the six months and quarter
ended June 30, 1995 were $1.18 and $.59, respectively, an increase of .9% and
flat, respectively, as compared to the same periods in 1994. The flat earnings
per share is attributable to the fewer number of shares outstanding for the
1995 periods as result of the stock buyback program authorized in October 1994
and May 1995 for the total repurchase of up to 1.6 million shares, or five
percent of the Company's approximately 32 million shares outstanding.
On an annualized basis, the Company's return on average total assets for the
first six months of 1995 was .99% compared to 1.06% for the same period in 1994
and return on average stockholders' equity was 11.89% compared to 12.39% for
the same period in 1994. The decreases in return on average total assets and
return on average stockholders' equity were primarily attributable to increases
in average total assets and average stockholders' equity in 1995.
NET INTEREST INCOME
Net interest income, on a fully taxable equivalent basis, decreased $567,000,
or .4%, to $147,204,000 for the first six months of 1995 from $147,771,000 for
the same period in 1994. Net interest income decreased $2,023,000, or 2.7%, to
$72,863,000 for the second quarter of 1995 from $74,886,000 for the same period
in 1994. The decreases in net interest income for the first six months and
second quarter of 1995 as compared to the amounts reported for the same periods
in 1994 were primarily due to decreases in the net interest margin, offset by
increases in average earning assets, reflecting significant growth in new loans
and leases.
The net interest margin was 4.25% and 4.17% for the first six months and second
quarter of 1995, respectively, down 33 basis points (1% equals 100 basis
points) and 44 basis points, respectively, from the same periods in 1994. Both
the cost of funds and yield on average earning assets increased during the
first six months and second quarter of 1995 as compared with the same periods
in 1994 due to a higher interest rate environment and the continuing shift of
the Company's assets into loans and leases. However, the increase in the cost
of funds (reflecting among other things recently initiated deposit programs to
fund loan growth) outpaced the increase in the yield on average earning assets,
resulting in an unfavorable impact on the net interest margin. In addition,
during the second quarter of 1995, the yield on average earning assets was
adversely impacted by the: (1) reversal of $1,166,000 in previously recognized
interest income on certain loans placed on nonaccrual status; and (2) write-off
of $743,000 in lease finance interest income for the remaining net investment
in certain leveraged leases, exclusive of the residual values, as a result of
the early termination of these leases.
Average earning assets increased by $468,469,000, or 7.2%, and $491,141,000, or
7.5%, for the first six months and second quarter of 1995, respectively, over
the same periods in 1994. Efforts to diversify the loan portfolio, both
geographically and by industry, resulted in increases of 12.1% and 12.7% in
average loans and leases for the first six months and second quarter of 1995,
respectively. These increases were primarily attributable to credit extensions
to companies in the telecommunications industry located on the mainland United
States. As a result, the mix of average earning assets changed, with
higher-yielding average loans and leases representing 81.3% and 81.7% of
average earning assets for the first six months and second quarter of 1995,
respectively, as compared to 77.8% and 77.9%, respectively, for the same
periods in 1994.
Average interest-bearing deposits and liabilities increased by $478,123,000, or
8.7%, and $506,124,000, or 9.2%, for the first six months and second quarter of
1995, respectively, over the same periods in 1994. As a result of depositors
seeking higher yields, the mix of average interest-bearing deposits and
liabilities changed with higher-yielding average time deposits representing
36.4% and 37.7% of average interest-bearing deposits and liabilities for the
first six months and second quarter of 1995, respectively, as compared to 30.7%
and 35.3%, respectively, for the same periods in 1994.
7
<PAGE> 9
The following table sets forth consolidated average balance sheets, an analysis
of interest income/expense, and average yield/rate for each major category of
interest-earning assets and interest-bearing liabilities for the periods
indicated on a taxable equivalent basis. The tax equivalent adjustment is made
for items exempt from Federal income taxes to make them comparable with taxable
items before any income taxes are applied. The tax equivalent adjustment is
based on the prevailing federal income tax rate of 35% for 1995 and 1994.
<TABLE>
<CAPTION>
QUARTER ENDED JUNE 30,
-------------------------------------------------------------------
1995 1994
------------------------------- -------------------------------
INTEREST Interest
AVERAGE INCOME/ YIELD/ Average Income/ Yield/
ASSETS BALANCE EXPENSE RATE(1) Balance Expense Rate(1)
---------- -------- ------- ---------- -------- -------
(dollars in thousands)
<S> <C> <C> <C> <C> <C> <C>
Earning assets:
Interest-bearing deposits
in other banks $ 17,686 $ 264 5.97% $ 95,028 $ 884 3.73%
Federal funds sold and
securities purchased
under agreements to
resell 312,632 4,701 6.03 122,559 1,198 3.92
Investment securities 792,849 10,590 5.36 1,090,724 14,894 5.48
Available-for-sale securities 160,419 2,644 6.61 129,880 1,494 4.61
Loans and leases (2),(3) 5,727,519 124,892 8.77 5,081,773 99,814 7.88
---------- -------- ---------- --------
Total earning assets 7,011,105 143,091 8.19 6,519,964 118,284 7.28
-------- --------
Nonearning assets 671,145 616,933
---------- ----------
Total assets $7,682,250 $7,136,897
========== ==========
</TABLE>
<TABLE>
<CAPTION>
SIX MONTHS ENDED JUNE 30,
-------------------------------------------------------------------
1995 1994
------------------------------- -------------------------------
INTEREST Interest
AVERAGE INCOME/ YIELD/ Average Income/ Yield/
ASSETS BALANCE EXPENSE RATE(1) Balance Expense Rate(1)
---------- -------- ------- ---------- -------- -------
(dollars in thousands)
<S> <C> <C> <C> <C> <C> <C>
Earning assets:
Interest-bearing deposits
in other banks $ 14,093 $ 418 5.97% $ 111,856 $ 1,897 3.42%
Federal funds sold and
securities purchased
under agreements to
resell 272,244 7,881 5.84 133,091 2,319 3.51
Investment securities 857,424 22,440 5.28 1,083,488 29,493 5.49
Available-for-sale securities 159,324 5,235 6.63 119,717 2,544 4.28
Loans and leases (2),(3) 5,677,280 247,299 8.78 5,063,744 197,301 7.86
---------- -------- ---------- --------
Total earning assets 6,980,365 283,273 8.18 6,511,896 233,554 7.23
-------- --------
Nonearning assets 660,625 651,438
---------- ----------
Total assets $7,640,990 $7,163,334
========== ==========
</TABLE>
(1) Annualized.
(2) Nonaccruing loans and leases have been included in the computations of
average loan and lease balances.
(3) Interest income for loans and leases included loan fees of $6,091 and
$12,006 for the quarter and six months ended June 30, 1995; and $5,890
and $13,895 for the quarter and six months ended June 30, 1994.
8
<PAGE> 10
<TABLE>
<CAPTION>
QUARTER ENDED JUNE 30,
-------------------------------------------------------------------
1995 1994
------------------------------- -------------------------------
INTEREST Interest
LIABILITIES AND AVERAGE INCOME/ YIELD/ Average Income/ Yield/
STOCKHOLDERS' EQUITY BALANCE EXPENSE RATE(1) Balance Expense Rate(1)
---------- -------- ------- ---------- -------- -------
(dollars in thousands)
<S> <C> <C> <C> <C> <C> <C>
Interest-bearing deposits
and liabilities:
Deposits $4,417,971 $45,956 4.17% $4,202,087 $29,899 2.85%
Short-term borrowings 1,341,108 20,875 6.24 1,078,076 10,482 3.90
Long-term debt 237,440 3,397 5.74 210,232 3,017 5.75
---------- ------- ---------- -------
Total interest-bearing
deposits and liabilities 5,996,519 70,228 4.70 5,490,395 43,398 3.17
------- ---- ------- ----
Interest rate spread 3.49% 4.11%
==== ====
Noninterest-bearing demand
deposits 825,875 885,748
Other liabilities 213,468 141,447
---------- ----------
Total liabilities 7,035,862 6,517,590
Stockholders' equity 646,388 619,307
---------- ----------
Total liabilities and
stockholders' equity $7,682,250 $7,136,897
========== ==========
Net interest income and
margin on earning assets 72,863 4.17% 74,886 4.61%
==== ====
Tax equivalent adjustment 1,446 1,886
------- -------
Net interest income $71,417 $73,000
======= =======
</TABLE>
(1) Annualized.
<TABLE>
<CAPTION>
SIX MONTHS ENDED JUNE 30,
-------------------------------------------------------------------
1995 1994
------------------------------- -------------------------------
INTEREST Interest
LIABILITIES AND AVERAGE INCOME/ YIELD/ Average Income/ Yield/
STOCKHOLDERS' EQUITY BALANCE EXPENSE RATE(1) Balance Expense Rate(1)
---------- -------- ------- ---------- -------- -------
(dollars in thousands)
<S> <C> <C> <C> <C> <C> <C>
Interest-bearing deposits
and liabilities:
Deposits $4,372,078 $ 88,105 4.06% $4,184,553 $ 60,035 2.89%
Short-term borrowings 1,370,252 41,388 6.09 1,098,751 19,814 3.64
Long-term debt 230,668 6,576 5.75 211,571 5,934 5.66
---------- -------- ---------- --------
Total interest-bearing
deposits and liabilities 5,972,998 136,069 4.59 5,494,875 85,783 3.15
-------- ---- -------- ----
Interest rate spread 3.59% 4.08%
==== ====
Noninterest-bearing demand
deposits 827,255 903,029
Other liabilities 202,242 151,063
---------- ----------
Total liabilities 7,002,495 6,548,967
Stockholders' equity 638,495 614,367
---------- ----------
Total liabilities and
stockholders' equity $7,640,990 $7,163,334
========== ==========
Net interest income and
margin on earning assets 147,204 4.25% 147,771 4.58%
==== ====
Tax equivalent adjustment 3,031 3,688
-------- --------
Net interest income $144,170 $144,083
======== ========
</TABLE>
(1) Annualized.
9
<PAGE> 11
INVESTMENT SECURITIES
Comparative book and fair values of held-to-maturity investment securities at
June 30, 1995, December 31, 1994, and June 30, 1994 were as follows:
<TABLE>
<CAPTION>
JUNE 30, December 31, June 30,
1995 1994 1994
---------- ------------ ----------
(in thousands)
<S> <C> <C> <C>
Book value $1,186,214 $995,887 $1,103,895
Unrealized gains 3,630 3,600 6,827
Unrealized losses (3,208) (17,836) (14,643)
---------- -------- ----------
Fair value $1,186,636 $981,651 $1,096,079
========== ======== ==========
</TABLE>
The increase in the held-to-maturity portfolio from December 31, 1994 to June
30, 1995 reflects the conversion of approximately $490,000,000 of adjustable
rate mortgage loans to Federal National Mortgage Association ("FNMA") agency
securities that could also be pledged to public deposits. At the same time,
holdings of repurchase agreements were decreased as the FNMA securities
satisfied our need for public funds collateral.
The decrease in unrealized losses from December 31, 1994 to June 30, 1995, was
primarily attributable to the declining interest rate environment in the first
six months of 1995 as compared to the rise in the overall level of interest
rates during 1994 resulting from monetary actions of the Federal Reserve Board.
At June 30, 1995, unrealized gains and losses on available-for-sale securities
were $696,000 and $151,000, respectively. At December 31, 1994, there were no
unrealized gains and unrealized losses on available-for-sale securities were
$1,716,000.
Realized gains and losses for the six months ended June 30, 1995 and 1994 were
as follows:
<TABLE>
<CAPTION>
1995 1994
---- ----
(in thousands)
<S> <C> <C>
Realized gains $4 $143
Realized losses 3 1
-- ----
Securities gains, net $1 $142
== ====
</TABLE>
Gains and losses realized on the sales of investment securities are determined
using the specific identification method.
10
<PAGE> 12
LOANS
The following table sets forth the loan portfolio by major categories and loan
mix at June 30, 1995, December 31, 1994 and June 30, 1994:
<TABLE>
<CAPTION>
JUNE 30, 1995 December 31, 1994 June 30, 1994
---------------------- --------------------- ----------------------
AMOUNT % Amount % Amount %
---------- ----- ---------- ----- ---------- -----
(dollars in thousands)
<S> <C> <C> <C> <C> <C> <C>
Commercial, financial and agricultural $1,439,730 27.4% $1,307,145 23.6% $1,216,608 23.7%
Real estate:
Commercial 952,797 18.1 964,758 17.4 941,716 18.3
Construction 283,310 5.4 320,783 5.8 270,420 5.3
Residential:
Insured, guaranteed or
conventional 1,286,529 24.5 1,615,306 29.2 1,488,430 29.0
Home equity credit lines 393,080 7.5 391,195 7.1 356,015 6.9
---------- ----- ---------- ----- ---------- -----
Total real estate loans 2,915,716 55.5 3,292,042 59.5 3,056,581 59.5
---------- ----- ---------- ----- ---------- -----
Consumer 475,367 9.0 467,827 8.4 449,721 8.8
Lease financing 225,836 4.3 230,587 4.2 193,837 3.8
Foreign 197,033 3.8 235,964 4.3 215,349 4.2
---------- ----- ---------- ----- ---------- -----
Total loans and leases 5,253,682 100.0% 5,533,565 100.0% 5,132,096 100.0%
===== ===== =====
Less allowance for loan and
lease losses 61,200 61,250 61,873
---------- ---------- ----------
Total net loans and leases $5,192,482 $5,472,315 $5,070,223
========== ========== ==========
</TABLE>
The loan and lease portfolio is the largest component of earning assets and
accounts for the greatest portion of total interest income. At June 30, 1995,
total loans and leases were $5,253,682,000, a decrease of 5.1% from December
31, 1994. During the second quarter of 1995, the Company securitized
approximately $490,000,000 in adjustable rate mortgage loans in an effort to
increase its funding capacity and improve its liquidity. These securitized
loans were reclassified into the investment securities portfolio at June 30,
1995. If these securitized loans were included within the loans category at
June 30, 1995, the loan growth over December 31, 1994 would have been 3.8%.
Total loans and leases at June 30, 1995, represented 70.3% of total assets,
78.1% of total earning assets and 101.4% of total deposits compared to 73.4% of
total assets, 81.2% of total earning assets and 107.4% of total deposits at
December 31, 1994. The decrease in percentages compared to December 31, 1994
are due to the aforementioned loan securitization. Governmental and certain
other time deposits were shifted into security repurchase agreements at June
30, 1995, December 31, 1994 and June 30, 1994 to reduce the Company's deposit
insurance premiums. If these repurchase agreements were included in the
deposit base, total loans and leases as a percentage of total deposits would
represent 88.0%, 92.6% and 88.4%, respectively, at such dates.
At June 30, 1995, commercial, financial and agricultural loans increased
$132,585,000, or 10.1%, over December 31, 1994. Credit extensions to companies
in the telecommunications industry primarily accounted for this increase.
Loan concentrations are considered to exist when there are amounts loaned to
multiple borrowers engaged in similar activities which would cause them to be
similarly impacted by economic or other conditions. At June 30, 1995,
commercial real estate loans totalled $952,797,000, or 18.1%, of total loans
and leases. The Company has selectively participated as a lender on commercial
properties on the mainland United States, principally on the west coast. Such
loans totalled $50,596,000 at June 30, 1995, a decrease of 13.4% from December
31, 1994. At June 30, 1995, the largest concentration of commercial real
estate loans to a single borrower was $32,393,000.
11
<PAGE> 13
NONPERFORMING ASSETS
A summary of nonperforming assets at June 30, 1995, December 31, 1994 and June
30, 1994 follows:
<TABLE>
<CAPTION>
JUNE 30, December 31, June 30,
1995 1994 1994
-------- ------------ --------
(dollars in thousands)
<S> <C> <C> <C>
Nonperforming loans and leases:
Nonaccrual:
Commercial, financial and agricultural $19,581 $ 7,972 $ 3,713
Real estate:
Construction 2,260 7,038 22,675
Commercial 39,249 35,290 11,835
Residential:
Insured, guaranteed, or conventional 7,716 4,649 8,389
Home equity credit lines 470 520 229
------- ------- -------
Total real estate loans 49,695 47,497 43,128
------- ------- -------
Consumer 893 143 --
Lease financing 318 212 --
------- ------- -------
Total nonaccrual loans and leases 70,487 55,824 46,841
Renegotiated:
Commercial real estate 2,500 3,128 --
Commercial, financial and agricultural -- -- 14,784
------- ------- -------
Total nonperforming loans and leases 72,987 58,952 61,625
Other real estate owned 9,711 4,160 2,264
------- ------- -------
Total nonperforming assets $82,698 $63,112 $63,889
======= ======= =======
Loans and leases past due 90 days or more
and still accruing interest $34,929 $33,367 $38,076
======= ======= =======
Nonperforming assets to total loans and leases
and other real estate owned (end of period):
Excluding 90 days past due accruing loans
and leases 1.57% 1.14% 1.24%
Including 90 days past due accruing loans
and leases 2.23% 1.74% 1.99%
Nonperforming assets to total assets
(end of period):
Excluding 90 days past due accruing loans
and leases 1.11% .84% .91%
Including 90 days past due accruing loans
and leases 1.57% 1.28% 1.45%
</TABLE>
12
<PAGE> 14
NONPERFORMING ASSETS, Continued
Nonperforming assets increased from $63,112,000 at December 31, 1994 to
$82,698,000 at June 30, 1995. The increase was primarily attributable to a
specific borrower involved in three different commercial loans (collateralized
by real estate) and one real estate loan totalling $10.1 million which were
placed on nonaccrual status during the second quarter of 1995. The remaining
increase was due to various commercial and real estate-residential loans being
placed on nonaccrual status during the first six months of 1995.
The increase in other real estate owned from $4,160,000 at December 31, 1994 to
$9,711,000 at June 30, 1995 was primarily attributable to the foreclosure on a
real estate-construction loan with a carrying value of $4,433,000 in March
1995.
Loans and leases past due 90 days or more and still accruing interest totalled
$34,929,000 at June 30, 1995, an increase of 4.7% from December 31, 1994. The
increase was primarily due to the addition of four commercial loans totalling
$9.3 million, offset by three commercial loans totalling $8.8 million which
were placed on nonaccrual status at June 30, 1995. All of the loans which are
past due 90 days or more and still accruing interest are in management's
judgment adequately secured and in the process of collection.
In recent years, the level of the Company's nonperforming assets and
charge-offs has been adversely affected by the unusually long recession
experienced by the Hawaii economy and weaknesses in both the local and
California real estate markets. Although the Company believes that the Hawaii
economy has begun to show signs of improvement, and certain local real estate
markets evidence signs of having stabilized, the effects of the recession may
continue to affect the levels of nonperforming assets and related charge-offs
in future periods.
13
<PAGE> 15
DEPOSITS
The following table sets forth the average balances and the average rates paid
on deposits for the periods indicated:
<TABLE>
<CAPTION>
QUARTER ENDED JUNE 30, SIX MONTHS ENDED JUNE 30,
-------------------------------------------- ------------------------------------------
1995 1994 1995 1994
-------------------- -------------------- -------------------- ------------------
AVERAGE AVERAGE Average Average AVERAGE AVERAGE Average Average
BALANCE RATE(1) Balance Rate(1) BALANCE RATE(1) Balance Rate(1)
---------- ------- ---------- ------- ---------- ------- ---------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Interest-bearing demand $1,068,204 2.78% $1,144,291 1.95% $1,088,486 2.77% $1,194,993 1.93%
Savings 1,088,223 3.12 1,120,150 2.15 1,108,409 3.18 1,303,261 2.08
Time 2,261,544 5.34 1,937,646 3.79 2,175,182 5.16 1,686,299 4.20
---------- ---------- ---------- ----------
Total interest-bearing
deposits 4,417,971 4.17 4,202,087 2.85 4,372,077 4.06 4,184,553 2.89
Noninterest-bearing demand 825,875 - 885,748 - 827,255 - 903,029 -
---------- ---------- ---------- ----------
Total deposits $5,243,846 3.32% $5,087,835 2.36% $5,199,332 3.42% $5,087,582 2.38%
========== ========== ========== ==========
</TABLE>
(1) Annualized.
Average deposits for the six months ended June 30, 1995 increased $111.8
million, or 2.2%, over the same period in 1994. For the current quarter,
average deposits increased $156.0 million, or 3.1%, as compared to the second
quarter of 1994. Various deposit product programs initiated by the Company in
1995 which increased the overall interest rates paid on time certificates of
deposits, contributed to the increases in average deposits.
14
<PAGE> 16
PROVISION AND ALLOWANCE FOR LOAN AND LEASE LOSSES
The following table sets forth the activity in the allowance for loan and lease
losses for the periods indicated:
<TABLE>
<CAPTION>
QUARTER ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
------------------------ ------------------------
1995 1994 1995 1994
---------- ---------- ---------- ----------
(dollars in thousands)
<S> <C> <C> <C> <C>
Loans and leases outstanding (end of period) $5,253,682 $5,132,096 $5,253,682 $5,132,096
========== ========== ========== ==========
Average loans and leases outstanding $5,727,519 $5,081,773 $5,677,280 $5,063,744
========== ========== ========== ==========
Allowance for loan and lease losses summary:
Balance at beginning of period $ 61,236 $ 61,929 $ 61,250 $ 62,253
---------- ---------- ---------- ----------
Loans and leases charged off:
Commercial, financial and agricultural 922 557 1,755 3,108
Real estate:
Construction 1 1,401 828 2,205
Commercial 460 250 1,056 625
Residential 398 275 515 527
Consumer 2,048 1,516 3,530 3,004
Lease financing -- 1 -- 1
---------- ---------- ---------- ----------
Total loans and leases charged off 3,829 4,000 7,684 9,470
---------- ---------- ---------- ----------
Recoveries on loans and leases charged off:
Commercial, financial and agricultural 43 15 69 886
Real Estate:
Construction 1 201 6 205
Commercial 1 2 2 2
Residential -- 29 17 43
Consumer 405 407 855 819
Lease financing 2 2 4 4
---------- ---------- ---------- ----------
Total recoveries on loans and leases
charged off 452 656 953 1,959
---------- ---------- ---------- ----------
Net charge-offs (3,377) (3,344) (6,731) (7,511)
Provision charged to expense 3,341 3,288 6,681 7,131
---------- ---------- ---------- ----------
Balance at end of period $ 61,200 $ 61,873 $ 61,200 $ 61,873
========== ========== ========== ==========
Net loans and leases charged off to
average loans and leases .24%(1) .26%(1) .24%(1) .29%(1)
Net loans and leases charged off to
allowance for loan and lease losses 22.13%(1) 21.68%(1) 22.18%(1) 24.48%(1)
Allowance for loan and lease losses to
total loans and leases (end of period) 1.16% 1.21% 1.16% 1.21%
Allowance for loan and lease losses to
nonperforming loans and leases (end of period):
Excluding 90 days past due
accruing loans and leases .84X 1.00x .84X 1.00x
Including 90 days past due
accruing loans and leases .57X .62x .57X .62x
</TABLE>
(1) Annualized.
15
<PAGE> 17
PROVISION AND ALLOWANCE FOR LOAN AND LEASE LOSSES, Continued
For the first six months of 1995, the provision for loan and lease losses was
$6,681,000, a decrease of $450,000, or 6.3%, as compared to the same period in
1994. The provision for loan and lease losses was $3,341,000 for the second
quarter of 1995, an increase of $53,000, or 1.6%, over the same period in 1994.
The decrease in the provision for loan and lease losses for the first six
months of 1995 is consistent with the decrease in net charge-offs for the same
period.
Net charge-offs for the first six months of 1995 were $6,731,000, a decrease of
$780,000, or 10.4%, as compared to the same period in 1994. Net charge-offs
for the second quarter of 1995 were $3,377,000 compared to $3,344,000 for the
same period a year ago.
The allowance for loan and lease losses decreased to 83.9% of nonperforming
assets at June 30, 1995 (excluding 90 days past due accruing loans and leases)
from 100.4% at June 30, 1994, reflecting the increase in nonperforming assets
in the first six months of 1995 as compared to the first six months of the
prior year. However, in management's judgement, the allowance for loan and
lease losses is adequate to absorb potential losses currently inherent in the
portfolio. Changes in prevailing economic conditions in the Company's markets
could result in changes in the level of nonperforming assets and charge-offs in
future periods and, accordingly, changes in the allowance for loan and lease
losses.
NONINTEREST INCOME
Exclusive of securities transactions, noninterest income totalled $44,682,000
and $21,700,000 for the first six months and second quarter of 1995,
respectively, an increase of 1.5% and 2.9%, respectively, over the same periods
in 1994.
Trust fees decreased $485,000, or 3.9%, for the first six months of 1995
compared to the same period in 1994. Similarly, trust fees decreased $377,000,
or 6.3% for the second quarter of 1995 as compared to 1994. These decreases
were attributed to a decline in the market value of managed assets and
withdrawals from nonmanaged accounts.
Service charges on deposit accounts increased $366,000, or 3.1%, for the first
six months of 1995 over the same period in 1994. This increase was partly
attributable to increases in fees on checking accounts and on checks returned
and paid. Service charges on deposit accounts remained relatively constant in
the second quarter of 1995 compared to the same period a year ago.
Other service charges and fees increased $1,144,000, or 7.3% and $1,043,000, or
14.0%, for the first six months and second quarter of 1995, respectively, over
the same periods in 1994. These increases were primarily the result of
increases in merchant discount fees and commissions from annuity sales.
Other noninterest income decreased $369,000, or 8.9%, and $8,000 or .5%, for
the first six months and second quarter of 1995, respectively, compared to the
same periods in 1994. This decrease for the first six months of 1995 was
partly attributable to an advisory fee recognized in 1994.
NONINTEREST EXPENSES
Noninterest expenses totalled $123,680,000 for the first six months of 1995, an
increase of .6% over the first six months of 1994. Noninterest expenses
totalled $60,335,000 for the second quarter of 1995, a decrease of $1,243,000,
or 2.0%, compared to the same period a year ago.
Total salaries and wages decreased $200,000 for the first six months and second
quarter of 1995, or .4% and .9%, respectively, as compared to the same periods
in 1994.
Employee benefits decreased $1,159,000, or 8.3%, and $1,011,000, or 15.3%, for
the first six months and second quarter of 1995, respectively, compared to the
same periods a year ago. The decreases are due to lower expenses related to
various employee benefit and incentive accounts.
Occupancy expense for the first six months and second quarter of 1995 increased
$1,391,000, or 12.1%, and $687,000, or 11.8%, respectively, over the same
periods in 1994. The increases primarily result from higher depreciation,
insurance and rental expenses. The increases in depreciation and insurance
expenses were primarily attributable to the construction of a new five-story,
75,000 square foot office building, including a branch, on property owned in
fee simple in Maite, Guam in late 1994.
Equipment expense increased $145,000, or 1.2%, for the first six months of 1995
over the same period in 1994, primarily as a result of higher depreciation and
rental expense and maintenance service contracts in connection with the
migration from a Unisys to IBM information technology platform and improvements
in the delivery and processing
16
<PAGE> 18
NONINTEREST EXPENSES, Continued
systems. For the second quarter of 1995, equipment expense decreased $368,000,
or 5.9%, compared to the same period in the prior year as a result of the
completion of the aforementioned migration.
Exclusive of the write-off of the residual values of $620,000 related to the
early termination of certain leveraged leases in June 1995 and the loss on
disposition of certain other real estate owned of $1,409,000 in June 1994,
other noninterest expenses for the first six months of 1995 increased
$1,310,000, or 3.5%, over the same period in 1994. The increases were
primarily a result of higher software depreciation expense in connection with
the above migration from Unisys to IBM and interchange fees. Other noninterest
expenses for the second quarter of 1995, calculated on a comparable basis,
increased $438,000, or 2.4%, over the same quarter in 1994.
INCOME TAXES
The Company's effective income tax rate (exclusive of the tax equivalent
adjustment) for the first six months and second quarter of 1995 was 35.7% and
35.9%, respectively, as compared to 35.1% and 35.0%, respectively, for the same
periods in 1994.
LIQUIDITY AND CAPITAL
Stockholders' equity was $645,614,000 at June 30, 1995, a 2.8% increase over
$627,944,000 at December 31, 1994. Average stockholders' equity represented
8.4% of average total assets for the second quarter of 1995 compared to 8.7% in
the same quarter last year. There was no significant change in the Company's
liquidity position during the second quarter of 1995.
The following tables present the Company's regulatory capital position at June
30, 1995:
RISK-BASED CAPITAL RATIOS
<TABLE>
<CAPTION>
AMOUNT RATIO
---------- ----- ----------
(dollars in thousands)
<S> <C> <C>
Tier 1 Capital $ 564,586 9.24%
Tier 1 Capital minimum requirement (1) 244,488 4.00
---------- -----
Excess $ 320,098 5.24%
========== =====
Total Capital $ 725,786 11.87%
Total Capital minimum requirement (1) 488,976 8.00
---------- -----
Excess $ 236,810 3.87%
========== =====
Risk-weighted assets $6,112,200
==========
</TABLE>
LEVERAGE RATIO
<TABLE>
<CAPTION>
AMOUNT RATIO
---------- ----- ----------
(dollars in thousands)
<S> <C> <C>
Tier 1 Capital to average quarterly total
assets (net of certain intangibles)
Tier 1 Leverage Ratio $ 564,586 7.43%
Minimum leverage requirement (2) 228,047 3.00
---------- ----
Excess $ 336,539 4.43%
========== ====
Average quarterly total assets (net of
certain intangibles) $7,601,551
==========
</TABLE>
(1) Risk-based capital guidelines as established by the Federal Reserve
Board for bank holding companies require minimum Tier 1 and Total
capital ratios of 4% and 8%, respectively.
(2) The Leverage Ratio of 3% is the minimum requirement for the most
highly rated banking organizations which are not experiencing or
anticipating significant growth. According to the Federal Reserve
Board, other banking organizations are expected to maintain leverage
ratios of at least one to two percent higher.
The Board of Directors authorized the total repurchase of up to 1.6 million
shares, or five percent of the Company's approximately 32 million shares
outstanding, for issuance from time to time under the Company's Incentive Plan
for Key Executives and Stock Incentive Plan. During the first six months of
1995, the Company acquired 98,247 shares at an average price of $26.83 under
these authorizations. These purchases are not expected to have a material
effect on the Company's liquidity, financial position or results of operations.
17
<PAGE> 19
PART II. OTHER INFORMATION
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
At the annual meeting of stockholders held on April 20, 1995, the
stockholders voted on the following matters:
(a) Fix the total number of Directors at fifteen: for -
29,412,077 (98.9%), against - 246,003 (.8%), abstained -
89,456 (.3%) and unvoted - 13 (-%).
(b) Election of five directors for a term of three years expiring
in 1998, or until their successors are elected and qualified:
<TABLE>
<CAPTION>
Votes
-----------------------------------------------
Name For Withheld
---- --- --------
<S> <C> <C> <C> <C>
Dr. Julia Ann Frohlich 29,654,746 (99.7%) 92,800 (.3%)
John A. Hoag 29,685,458 (99.8%) 62,089 (.2%)
Bert T. Kobayashi, Jr. 29,657,235 (99.7%) 90,311 (.3%)
Fred C. Weyand 29,680,063 (99.8%) 67,483 (.2%)
Robert C. Wo 29,658,087 (99.7%) 89,459 (.3%)
</TABLE>
There were no abstentions or unvoted shares.
(c) Election of Coopers & Lybrand as the Auditor of the Company to
serve for the ensuing year: for -29,571,990 (99.4%), against
- 46,977 (.2%), abstained - 128,575 (.4%) and unvoted - 7
(-%).
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
Exhibit 12 Statement regarding computation of ratios.
Exhibit 27 Financial data schedule
(b) Reports on Form 8-K - No reports on Form 8-K were filed during
the quarter ended June 30, 1995.
18
<PAGE> 20
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
FIRST HAWAIIAN, INC.
(Registrant)
Date August 11, 1995 By /s/ HOWARD H. KARR
--------------------------- ---------------------------------
HOWARD H. KARR
EXECUTIVE VICE PRESIDENT
AND TREASURER
(PRINCIPAL FINANCIAL OFFICER)
19
<PAGE> 21
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT PAGE NUMBER IN
NUMBER DESCRIPTION QUARTERLY REPORT ON FORM 10-Q
------ ----------- -----------------------------
<S> <C> <C>
12 Statement regarding computation of ratios. 21
27 Financial data schedule 22
</TABLE>
<PAGE> 22
EXHIBIT 12. STATEMENT RE: COMPUTATION OF RATIOS
<TABLE>
<CAPTION>
First Hawaiian, Inc. and Subsidiaries
Computation of Consolidated Ratios of Earnings to Fixed Charges
QUARTER ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
---------------------- ----------------------
1995 1994 1995 1994
-------- ------- -------- --------
(dollars in thousands)
<S> <C> <C> <C> <C>
Income before income taxes $ 29,441 $29,233 $ 58,492 $ 58,138
-------- ------- -------- --------
Fixed charges:(1)
Interest expense 70,228 41,560 136,069 80,521
Rental expense 1,295 3,015 2,506 5,988
-------- ------- -------- --------
71,523 44,575 138,575 86,509
Less interest on deposits 45,956 28,061 88,105 54,773
-------- ------- -------- --------
Net fixed charges 25,567 16,514 50,470 31,736
-------- ------- -------- --------
Earnings, excluding
interest on deposits $ 55,008 $45,747 $108,962 $ 89,874
======== ======= ======== ========
Earnings, including
interest on deposits $100,964 $73,808 $197,067 $144,647
======== ======= ======== ========
Ratio of earnings to fixed charges:
Excluding interest on deposits 2.15x 2.77x 2.16x 2.83x
Including interest on deposits 1.41x 1.66x 1.42x 1.67x
</TABLE>
(1) For purposes of computing the above ratios, earnings represent income
before income taxes plus fixed charges. Fixed charges, excluding
interest on deposits, include interest (other than on deposits),
whether expensed or capitalized, and that portion of rental expense
(generally one third) deemed representative of the interest factor.
Fixed charges, including interest on deposits, include all interest,
whether expensed or capitalized, and that portion of rental expense
(generally one third) deemed representative of the interest factor.
<TABLE> <S> <C>
<ARTICLE> 9
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> JUN-30-1995
<CASH> 264,456
<INT-BEARING-DEPOSITS> 11,770
<FED-FUNDS-SOLD> 180,000
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 156,560
<INVESTMENTS-CARRYING> 1,186,214
<INVESTMENTS-MARKET> 1,186,636
<LOANS> 5,253,682
<ALLOWANCE> 61,200
<TOTAL-ASSETS> 7,470,701
<DEPOSITS> 5,181,058
<SHORT-TERM> 1,174,543
<LIABILITIES-OTHER> 224,014
<LONG-TERM> 243,771
<COMMON> 162,713
0
0
<OTHER-SE> 482,901
<TOTAL-LIABILITIES-AND-EQUITY> 7,470,701
<INTEREST-LOAN> 246,978
<INTEREST-INVEST> 24,963
<INTEREST-OTHER> 8,298
<INTEREST-TOTAL> 280,239
<INTEREST-DEPOSIT> 88,105
<INTEREST-EXPENSE> 136,069
<INTEREST-INCOME-NET> 144,170
<LOAN-LOSSES> 6,681
<SECURITIES-GAINS> 1
<EXPENSE-OTHER> 123,680
<INCOME-PRETAX> 58,492
<INCOME-PRE-EXTRAORDINARY> 37,638
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 37,638
<EPS-PRIMARY> 1.18
<EPS-DILUTED> 1.18
<YIELD-ACTUAL> 8.18
<LOANS-NON> 70,487
<LOANS-PAST> 34,929
<LOANS-TROUBLED> 2,500
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 61,250
<CHARGE-OFFS> 7,684
<RECOVERIES> 953
<ALLOWANCE-CLOSE> 61,200
<ALLOWANCE-DOMESTIC> 44,320
<ALLOWANCE-FOREIGN> 1,020
<ALLOWANCE-UNALLOCATED> 15,860
</TABLE>
