U N I T E D S T A T E S
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 September 30, 1994
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 1-6887
B A N C O R P H A W A I I, I N C.
------------------------------------------------------
(Exact name of registrant as specified in its charter)
Hawaii 99-0148992
------------------------ ---------------------------------
(State of incorporation) (IRS Employer Identification No.)
130 Merchant Street, Honolulu, Hawaii 96813
- ---------------------------------------- ----------
(Address of principal executive offices) (Zip Code)
(808) 537-8111
----------------------------------------------------
(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 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months,
and (2) has been subject to such filing requirements for the past
90 days.
Yes X No
Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the latest practicable date.
Common Stock, $2 Par Value; outstanding at September 30, 1994 -
42,223,990 shares<PAGE>
BANCORP HAWAII, INC. and subsidiaries
September 30, 1994
PART I. - Financial Information
Item 1. Financial Statements
The consolidated statements of condition as of September 30,
1994 and 1993, and December 31, 1993 and related statements of
income, shareholders' equity, and cash flows are included herein.
The unaudited financial statements listed above have been
prepared in accordance with the instructions to Form 10-Q and
therefore do not include all information and footnotes necessary
for a fair presentation of financial position, results of
operations, and changes in financial position in conformity with
generally accepted accounting principles.
The financial statements reflect all adjustments of a normal
and recurring nature which are, in the opinion of management,
necessary to a fair statement of the results for the interim
periods.<PAGE>
<TABLE>
Consolidated Statements of Condition (Unaudited) Bancorp Hawaii, Inc. and subsidiaries
- ------------------------------------------------------------------------------------------------------------------
<CAPTION>
September 30 December 31 September 30
(in thousands of dollars) 1994 1993 1993
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Assets
Interest-Bearing Deposits $792,196 $837,704 $1,028,378
Investment Securities - Held to Maturity
(Market Value of $2,221,072, $2,791,328, $3,658,639, respectively) 2,253,645 2,753,590 3,595,098
Investment Securities - Available for Sale 1,159,218 893,453 28,983
Funds Sold 61,250 57,699 72,598
Loans 7,639,021 7,258,368 7,209,695
Unearned Income (145,015) (149,949) (151,768)
Reserve for Possible Loan Losses (143,061) (125,284) (119,726)
Net Loans 7,350,945 6,983,135 6,938,201
- ------------------------------------------------------------------------------------------------------------------
Total Earning Assets 11,617,254 11,525,581 11,663,258
Cash and Non-Interest Bearing Deposits 442,695 395,315 424,014
Premises and Equipment 197,342 167,260 161,229
Customers' Acceptance Liability 13,553 8,475 15,090
Accrued Interest Receivable 80,543 82,023 82,172
Other Real Estate 1,878 4,123 2,495
Intangibles, including Goodwill 94,643 102,929 95,117
Trading Securities 13,805 74,351 14,300
Other Assets 100,285 102,070 82,787
- ------------------------------------------------------------------------------------------------------------------
Total Assets $12,561,998 $12,462,127 $12,540,462
==================================================================================================================
Liabilities
Domestic Deposits
Demand - Non-Interest Bearing $1,322,843 $1,405,540 $1,324,627
- Interest-Bearing 1,734,449 1,931,807 1,902,241
Savings 1,196,409 1,251,876 1,277,245
Time 1,562,432 1,581,534 1,630,201
Foreign Deposits 1,144,642 834,218 938,137
- ------------------------------------------------------------------------------------------------------------------
Total Deposits 6,960,775 7,004,975 7,072,451
Securities Sold Under Agreements to Repurchase 2,362,487 2,509,550 2,717,056
Funds Purchased 557,550 743,915 663,920
Short-Term Borrowings 625,400 600,266 621,054
Bank's Acceptances Outstanding 13,553 8,475 15,090
Accrued Pension Costs 23,763 24,367 23,520
Accrued Interest Payable 56,797 34,347 41,544
Accrued Taxes Payable 141,384 154,291 140,112
Other Liabilities 96,960 85,967 82,668
Long-Term Debt 745,680 357,870 253,500
- ------------------------------------------------------------------------------------------------------------------
Total Liabilities 11,584,349 11,524,023 11,630,915
Shareholders' Equity
Common Stock ($2 par value), authorized 100,000,000 shares;
issued/outstanding, September 1994 - 42,190,534;
December 1993 - 28,425,038; September 1993 - 28,396,983; 84,381 56,850 56,794
Surplus 269,447 284,886 284,411
Unrealized Valuation Adjustments (11,097) 537 (1,626)
Retained Earnings 634,918 595,831 569,968
- ------------------------------------------------------------------------------------------------------------------
Total Shareholders' Equity 977,649 938,104 909,547
- ------------------------------------------------------------------------------------------------------------------
Total Liabilities and Shareholders' Equity $12,561,998 $12,462,127 $12,540,462
==================================================================================================================
</TABLE>
<TABLE>
Consolidated Statements of Income (Unaudited) Bancorp Hawaii, Inc. and subsidiaries
- ------------------------------------------------------------------------------------------------------------------
<CAPTION>
3 Months 3 Months 9 Months 9 Months
Ended Ended Ended Ended
September 30 September 30 September 30 September 30
(in thousands of dollars except per share amounts) 1994 1993 1994 1993
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Interest Income
Interest on Loans $137,950 $125,455 $397,920 $370,401
Loan Fees 7,462 10,070 24,498 28,021
Income on Lease Financing 3,276 4,590 10,558 12,786
Interest and Dividends on Investment Securities
Taxable 33,111 51,144 106,921 153,118
Non-taxable 427 544 1,272 1,850
Income on Investment Securities Available for Sale 14,685 308 36,395 5,466
Interest on Deposits 8,921 10,595 25,768 33,367
Interest on Security Resale Agreements -- 8 -- 2,934
Interest on Funds Sold 438 639 1,230 1,744
- ------------------------------------------------------------------------------------------------------------------
Total Interest Income 206,270 203,353 604,562 609,687
Interest Expense
Interest on Deposits 48,492 47,122 134,938 153,468
Interest on Security Repurchase Agreements 25,101 21,772 70,337 66,972
Interest on Funds Purchased 7,685 6,103 18,521 17,574
Interest on Short-Term Borrowings 3,805 3,242 11,742 10,332
Interest on Long-Term Debt 9,456 3,852 22,044 7,403
- ------------------------------------------------------------------------------------------------------------------
Total Interest Expense 94,539 82,091 257,582 255,749
Net Interest Income 111,731 121,262 346,980 353,938
Provision for Possible Loan Losses 3,031 23,889 17,253 45,105
- ------------------------------------------------------------------------------------------------------------------
Net Interest Income After Provision for Possible Loan Losses 108,700 97,373 329,727 308,833
Non-Interest Income
Trust Income 13,170 11,118 36,355 29,497
Service Charges on Deposit Accounts 6,922 6,969 21,137 19,761
Fees, Exchange, and Other Service Charges 8,969 8,188 25,753 23,757
Other Operating Income 5,463 5,401 20,086 14,565
Investment Securities Gains (Losses) (671) 6,669 (2,269) 9,638
- ------------------------------------------------------------------------------------------------------------------
Total Non-Interest Income 33,853 38,345 101,062 97,218
Non-Interest Expense
Salaries 34,492 33,806 103,058 100,911
Pensions and Other Employee Benefits 10,344 10,305 34,061 32,367
Net Occupancy Expense of Premises 9,325 10,016 27,505 27,707
Net Equipment Expense 7,598 6,604 22,503 19,950
Other Operating Expense 27,085 24,313 79,710 69,355
- ------------------------------------------------------------------------------------------------------------------
Total Non-Interest Expense 88,844 85,044 266,837 250,290
- ------------------------------------------------------------------------------------------------------------------
Income Before Income Taxes 53,709 50,674 163,952 155,761
Provision for Income Taxes 21,749 20,532 63,438 58,886
- ------------------------------------------------------------------------------------------------------------------
Net Income $31,960 $30,142 $100,514 $96,875
==================================================================================================================
Earnings Per Common Share and Common Share Equivalents $0.75 $0.70 $2.34 $2.25
- ------------------------------------------------------------------------------------------------------------------
Average Common Shares and Common Share Equivalents Outstanding 42,845,626 42,979,704 42,943,828 43,080,657
- ------------------------------------------------------------------------------------------------------------------
/TABLE
<PAGE>
<TABLE>
Consolidated Statements of Shareholders' Equity (Unaudited) Bancorp Hawaii, Inc. and subsidiaries
- ----------------------------------------------------------------------------------------------------------------
<CAPTION>
Common Unrealized Retained
(in thousands of dollars except per share amounts) Total Stock Surplus Valuation Adj. Earnings
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Balance at December 31, 1993 $938,104 $56,850 $284,886 $537 $595,831
Net Income 100,514 - - - 100,514
Sale of Common Stock
182,640 Profit Sharing Plan 5,909 365 5,544 - -
126,813 Stock Option Plan 2,018 254 1,764 - -
163,421 Dividend Reinvestment Plan 5,420 327 5,093 - -
Stock Repurchased (29,543) (1,703) (27,840) - -
Unrealized Valuation Adjustments
Investment Securities (14,699) - - (14,699) -
Foreign Exchange Translation Adjustment 3,065 - - 3,065 -
50 Percent Stock Dividend (59) 28,288 - - (28,347)
Cash Dividends Paid of $.78 Per Share (33,080) - - - (33,080)
- ----------------------------------------------------------------------------------------------------------------
Balance at September 30, 1994 $977,649 $84,381 $269,447 ($11,097) $634,918
================================================================================================================
Balance at December 31, 1992 $828,328 $56,112 $272,810 ($2,271) $501,677
Net Income 96,875 - - - 96,875
Sale of Common Stock
75,139 Profit Sharing Plan 3,429 150 3,279 - -
124,937 Stock Option Plan 2,786 250 2,536 - -
140,717 Dividend Reinvestment Plan 6,068 282 5,786 - -
Unrealized Valuation Adjustments
Investment Securities (19) - - (19) -
Foreign Exchange Translation Adjustment 664 - - 664 -
Cash Dividends Paid of $.67 Per Share (28,584) - - - (28,584)
- ----------------------------------------------------------------------------------------------------------------
Balance at September 30, 1993 $909,547 $56,794 $284,411 ($1,626) $569,968
================================================================================================================
/TABLE
<PAGE>
<TABLE>
Consolidated Statements of Cash Flows (Unaudited) Bancorp Hawaii, Inc. and subsidiaries
- --------------------------------------------------------------------------------------------------------------
<CAPTION>
Nine Months Ended September 30
(in thousands of dollars) 1994 1993
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Operating Activities
Net Income $100,514 $96,875
Adjustments to reconcile net income to net cash provided by operating activities:
Provision for loan losses, depreciation, and amortization of income and expense 48,837 30,778
Deferred income taxes 10,739 4,612
Realized and unrealized investment security gains (1,720) (8,688)
Net (increase) decrease in trading securities 454 (2,523)
Other assets and liabilities, net 26,649 53,636
------------ ------------
Net cash provided by operating activities 185,473 174,690
- --------------------------------------------------------------------------------------------------------------
Investing Activities
Proceeds from redemptions of investment securities held to maturity 977,956 418,114
Purchases of investment securities held to maturity (478,011) (977,168)
Proceeds from sales of investment securities available for sale 269,605 694,761
Purchases of investment securities available for sale (498,148) (614,651)
Net decrease in interest-bearing deposits placed in other banks 45,508 404,120
Net (increase) decrease in funds sold (3,551) 531,876
Net increase in loans and lease financing (395,261) (256,911)
Premises and equipment, net (45,237) (17,683)
Purchase of American Financial Services of Hawaii, Inc., net of cash acquired -- (48,990)
------------ ------------
Net cash provided (used) by investing activities (127,139) 133,468
- --------------------------------------------------------------------------------------------------------------
Financing Activities
Net decrease in demand, savings, and time deposits (44,200) (818,040)
Proceeds from lines of credit and long-term debt 387,810 190,012
Principal payments on lines of credit and long-term debt -- (20,612)
Net increase (decrease) in short-term borrowings (308,294) 386,578
Proceeds from sale of stock (16,196) 12,283
Cash dividends (33,139) (28,584)
------------ ------------
Net cash used by financing activities (14,019) (278,363)
Effect of exchange rate changes on cash 3,065 664
------------ ------------
Increase in cash and non-interest bearing deposits 47,380 30,459
------------ ------------
Cash and non-interest bearing deposits at beginning of year 395,315 393,555
------------ ------------
Cash and non-interest bearing deposits at end of period $442,695 $424,014
- --------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations
Financial Review
Performance Highlights
Bancorp Hawaii, Inc. (Bancorp) reported earnings for the third
quarter of 1994 of $32.0 million, 6.0% above earnings for the third
quarter of 1993. On a per share basis, earnings were $0.75 for the
third quarter of 1994, 7.1% above the third quarter of 1993. Year-to-
date net income totaled $100.5 million through September 30, 1994, an
increase of 3.8% over the same period in 1993. Earnings per share
were $2.34 and $2.25 for the nine months ended September 30, 1994 and
1993, respectively. Per share figures have been adjusted for the 50%
stock dividend declared in the first quarter of 1994. Tepid loan
demand in Hawaii, Bancorp's main market, along with significant
increases in interest rates during 1994 have resulted in slowed
earnings growth.
Total assets were $12.6 billion as of September 30, 1994, up 0.8%
from the $12.5 billion reported at year-end 1993. Net loans
outstanding increased to $7.4 billion at September 30, 1994 from $7.0
billion at year-end 1993, an increase of 5.3%. Total investment
securities stood at $3.4 billion at September 30, 1994 representing a
6.4% decline from year-end 1993. The overall decrease in total
investments reflects the maturing of investment securities and
reduction of the securities sold under agreement to repurchase.
Total deposits remained level at $7.0 billion, compared with
year-end 1993 and decreased from the $7.1 billion reported on
September 30, 1993. Securities sold under agreements to repurchase
(repos) as of September 30, 1994 totaled $2.4 billion, a decline of
5.9% from year-end 1993 and a 13.0% decline from September 30, 1993.
The changes in repo balances, which are mainly comprised of government
funds are discussed later in the liquidity section of this report.
Non-performing assets (NPAs) increased to $56.1 million at
September 30, 1994 compared to $53.3 million at the end of the second
quarter of 1994. This favorably compares with NPAs of $68.8 million at
year-end 1993. A further discussion on NPAs and Reserve for Loan
Losses follows.
Trust income for the third quarter of 1994 which includes both
American Financial Services (AFS) and Hawaiian Trust Company totaled
$13.2 million, an 18.5% increase over the $11.1 million reported for
the same quarter in 1993. The substantial increase in trust income
was partially due to synergies gained by consolidating the operations
of AFS. Synergies gained from the consolidation are expected to
continue for the rest of the year.
<PAGE>
Risk Elements in Lending Activities
At September 30, 1994, total loans were $7.6 billion, a 5.2%
increase over year-end 1993 and 6.0% above total loans on September
30, 1993. The focus of the loan growth has been in the residential
mortgage and installment loan categories with the weak commercial loan
growth reflecting Hawaii's sluggish economy. In spite of this slower
loan growth, Bancorp's lending policies remain unchanged and
conservative. The following table presents Bancorp's total loan
portfolio balances for the periods indicated.
<TABLE>
Loan Portfolio Balances Bancorp Hawaii, Inc., and subsidiaries
- ----------------------------------------------------------------------------------
<CAPTION>
September 30 December 31 September 30
(in millions of dollars) 1994 1993 1993
- ----------------------------------------------------------------------------------
<S> <C> <C> <C>
Domestic Loans
Commercial and Industrial $1,653.1 $1,709.2 $1,712.4
Real Estate
Construction -- Commercial 125.4 136.2 137.4
-- Residential 18.1 35.1 35.0
Mortgage -- Commercial 1,269.8 1,230.6 1,191.2
-- Residential 2,771.4 2,476.0 2,371.9
Installment 713.3 676.2 657.6
Lease Financing 380.0 401.6 406.5
- ----------------------------------------------------------------------------------
Total Domestic 6,931.1 6,664.9 6,512.0
- ----------------------------------------------------------------------------------
Foreign Loans 707.9 593.5 697.7
- ----------------------------------------------------------------------------------
Total Loans $7,639.0 $7,258.4 $7,209.7
==================================================================================
</TABLE>
<PAGE>
Commercial and Industrial Loans
Commercial and Industrial loans outstanding were $1.7 billion as
of September 30, 1994, reflecting a decrease of 3.3% from year-end
1993. There was also a decline in loan balances as compared to the
same time last year. The decline in this loan category reflects the
lack of loan demand due to the tepid business climate in Hawaii.
Real Estate Loans
Total real estate loans at September 30, 1994 were $4.2 billion,
up 7.9% over year-end 1993. The real estate sector continues to show
growth reflecting the residuals of the refinancing surge and to a
certain extent the tight housing market in Hawaii. Both commercial
and residential real estate balances showed growth in 1994.
Commercial real estate balances (excluding construction) of $1.3
billion on September 30, 1994 rose 3.2% from year-end 1993 and 6.6%
from September 30, 1993. Residential mortgage loans (excluding
construction loans) totaled $2.8 billion as of September 30, 1994, up
11.9% from year-end 1993 and up 16.8% from the same date last year.
Construction loan balances have declined to $143.5 million at
September 30, 1994. These balances compare with $171.3 million at
year-end 1993 and $172.4 million on September 30, 1993. Although
there is an overall slowdown in the construction sector in Hawaii, the
residential housing market continues to show good growth.
Other Lending
Installment loans as of September 30, 1994 increased by 5.5% to
$713.3 million from the $676.2 million reported on December 31, 1993.
The September 30, 1994 balance was 8.5% above the $657.6 million on
September 30, 1993. The increase reflects Bancorp's efforts to
increase its installment loan base through special programs for VISA
cards and other consumer loans. Lease financing of $380.0 million on
September 30, 1994 decreased 5.4% from $401.7 million reported at
year-end 1993 and 6.5% from $406.5 million reported at September 30,
1993. The decline in leasing activity reflects the competitiveness in
the market between loans and leases for equipment financing.
Foreign loan balances have increased to $707.9 million as of
September 30, 1994, up 19.3% from a year-end 1993 and up 1.5% from a
year ago September 30. The rise in foreign loans over year-end 1993
reflect the increased valuation of Japanese loans due to the yen-U.S.
dollar relationship. The foreign loan total includes outstanding
credits to Less Developed Countries (LDC). LDC exposure remains very
limited at $1.0 million in outstanding credits and $98.1 million in
confirmed letters of credit and banker's acceptances at September 30,
1994. All LDC exposure is in the Philippines.
<PAGE>
Non-Performing Assets and Past Due Loans
Bancorp's non-performing assets include non-accrual loans,
restructured loans and foreclosed real estate. NPAs totaled $56.1
million, representing 0.73% of total loans outstanding at September
30, 1994. This ratio compares with 0.95% at year-end 1993 and 1.26%
at the end of the third quarter 1993. The improvement of this ratio
reflects Bancorp's effort to aggressively manage these loans and
charge off balances when appropriate.
Non-accrual loans increased during the third quarter of 1994 to
$54.2 million from $42.6 million at June 30, 1994, but remained lower
than the $58.4 million reported at year-end 1993. The increase from
the second quarter of 1994 was mainly due to the addition of a
commercial real estate property loan of $10.8 million. Of the non-
accrual loans, only eight loans exceed $1 million and represent in
total $41.8 million of the balance at September 30, 1994.
At the end of the third quarter of 1994, there were no
restructured loans reported compared with $7.3 million reported at
June 30, 1994 and $6.3 million at year-end 1993. Total foreclosed
real estate declined to $1.9 million compared to the $3.4 million
reported at June 30, 1994 and $4.1 million reported at year-end 1993.
The decrease reflects the sale of a hotel property on the island of
Kauai at no additional loss. There remains only seven properties in
foreclosed real estate, of the seven properties, two represent $1.2
million or 67% of foreclosed real estate.
Accruing loans past due 90 days or more decreased to $9.2 million
from the $9.9 million reported at June 30, 1994 and also lower than
the $10.0 million reported at year-end 1993. Total NPAs and loans 90
days past due totaled $65.3 million, a 17.1% decrease from the $78.8
million reported at year-end 1993. Total NPAs and loans 90 days past
due as a percent of total loans outstanding was .85%, 24 basis points
below the 1.09% reported at year-end 1993.
The following table presents NPAs and past due loans for the
periods indicated.
<TABLE>
Bancorp Hawaii, Inc.
Consolidated Non-Performing Assets and Accruing Loans Past Due 90 Days or More
- -------------------------------------------------------------------------------
<CAPTION>
September 30 December 31 September
(in millions of dollars) 1994 1993 1993
- -------------------------------------------------------------------------------
<S> <C> <C> <C>
Non-Accrual Loans
Commercial $20.8 $15.7 $35.6
Real Estate
Construction 1.8 17.7 18.2
Commercial 15.5 7.8 9.1
Residential 15.0 16.4 17.0
Installment 0.3 0.5 0.6
Leases 0.8 0.3 0.4
Other -- -- --
Foreign -- -- 1.3
----------------------------------------
Subtotal 54.2 58.4 82.2
Restructured Loans
Commercial -- 1.0 1.0
Real Estate
Construction -- -- --
Commercial -- 5.3 5.3
Residential -- -- --
Installment -- -- --
Leases -- -- --
Other -- -- --
Foreign -- -- --
----------------------------------------
Subtotal -- 6.3 6.3
Foreclosed Real Estate
Domestic 1.9 4.1 2.5
Foreign -- -- --
----------------------------------------
Subtotal 1.9 4.1 2.5
----------------------------------------
Total Non-Performing Assets 56.1 68.8 91.0
========================================
Accruing Loans Past Due 90 Days or More
Commercial 0.9 0.3 1.1
Real Estate
Construction -- -- 1.5
Commercial 1.4 1.9 1.5
Residential 2.4 4.1 3.9
Installment 4.5 3.5 4.2
Leases -- 0.1 0.1
Other -- 0.1 --
Foreign -- -- --
----------------------------------------
Subtotal 9.2 10.0 12.3
----------------------------------------
Total $65.3 $78.8 $103.3
========================================
- -------------------------------------------------------------------------------
Ratio of Non-Performing Assets
to Total Loans 0.73% 0.95% 1.26%
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
Ratio of Non-Performing Assets
and Accruing Loans Past Due
90 Days or More to Total Loans 0.85% 1.09% 1.43%
- -------------------------------------------------------------------------------
</TABLE>
<PAGE>
Summary of Loan Loss Experience
The reserve for loan losses stood at $143.1 million at September
30, 1994, representing 1.91% of loans outstanding. This compares with
1.91% as of June 30, 1994, 1.76% at year-end 1993 and 1.70% on
September 30, 1993.
Loan loss provisions were $3.1 million for the third quarter of
1994, about half the $5.9 million reported for the second quarter of
1994. The reduced level of provisions reflecting the strong
recoveries and the lower level of charge-offs so far this year. As
indicated in the table following, charge-offs totaled $8.0 million for
the third quarter of 1994, compared with $4.8 million for the second
quarter of 1994 and $37.0 million during the third quarter of 1993.
The large amount charged-off in the third quarter of 1993 was mainly
due to the additional charge-off of loans to a single borrower secured
by commercial leasehold property. Partial charge-offs were also
recognized in late 1992. The strong level of recoveries for 1994 have
been largely realized from those loans.
Net charge-offs for the third quarter of 1994 were $1.2 million,
compared to the net recovery figure of $5.2 million reported for the
second quarter of 1994. For the year-to-date, Bancorp reported a net
recovery of $0.5 million compared to net charge-offs of $54.0 million
for the same period in 1993. The annualized ratio of net charge-offs
to average loans outstanding for the third quarter 1994 of 0.06%,
compares with the ratio of net recoveries to average loans of 0.29%
for the second quarter of 1994 and well below the net charge-off ratio
of 2.00% reported for the third quarter of 1993.
A detailed breakdown of charge-offs and recoveries by loan
category is presented in the following table.
<TABLE>
Summary of Loss Experience Bancorp Hawaii, Inc., and subsidiaries
- --------------------------------------------------------------------------------------------------------------------
<CAPTION>
Third Third First Nine First Nine
Quarter Quarter Months Months
(in millions of dollars) 1994 1993 1994 1993
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Average Loans Outstanding $7,468.3 $7,076.7 $7,310.9 $6,973.4
Balance of Reserve for Possible Loan Losses
at Beginning of Period $141.2 $131.2 $125.3 $128.6
Loans Charged Off
Commercial and Industrial 4.1 31.0 9.8 42.0
Real Estate - Construction 0.1 -- 0.1 0.2
Real Estate - Mortgage
Commercial 0.8 -- 1.8 2.6
Residential 0.5 0.2 0.6 0.2
Installment 2.5 2.3 6.8 6.2
Foreign -- 1.5 0.7 6.4
Leases -- 2.0 0.1 2.0
- --------------------------------------------------------------------------------------------------------------------
Total Charged Off 8.0 37.0 19.9 59.6
Recoveries on Loans Previously Charged Off
Commercial and Industrial 5.2 0.7 16.3 2.7
Real Estate - Construction -- -- -- --
Real Estate - Mortgage
Commercial 0.2 -- 0.9 --
Residential -- 0.1 0.2 0.2
Installment 0.8 0.8 2.4 2.4
Foreign -- -- -- 0.2
Leases 0.6 -- 0.6 0.1
- --------------------------------------------------------------------------------------------------------------------
Total Recoveries 6.8 1.6 20.4 5.6
- --------------------------------------------------------------------------------------------------------------------
Net (Charge Offs) Recoveries (1.2) (35.4) 0.5 (54.0)
Provision Charged to Operating Expenses 3.1 23.9 17.3 45.1
- --------------------------------------------------------------------------------------------------------------------
Balance at End of Period $143.1 $119.7 $143.1 $119.7
====================================================================================================================
Ratio of Net (Charge Offs) Recoveries to
Average Loans Outstanding (annualized) (0.06)% (2.00)% 0.01% (1.03)%
- --------------------------------------------------------------------------------------------------------------------
Ratio of Reserve to Loans Outstanding 1.91% 1.70% 1.91% 1.70%
- --------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
Capital
The level of Bancorp's capital is managed through the target
ratios outlined in Bancorp's 1993 Annual Report. Bancorp's 6% minimum
target of average equity to average assets keeps both objectives of a
return on assets of 1% and return on equity of 16% in reasonable
balance. The average equity to average assets ratio for the year
through September 1994 was 7.69%, compared with the 7.09% reported for
1993.
As announced earlier in 1994, Bancorp began a program to
repurchase shares of its common stock. So far in 1994, Bancorp has
repurchased more than 850,000 shares, more than offsetting the new
shares issued for its Profit Sharing Plan, Stock Option Plan and
Dividend Reinvestment Plan.
Regulatory risk-based capital remained well above minimum
guidelines. Bancorp's Total Capital and Tier 1 Capital ratios were
13.79% and 11.05%, respectively, compared to 13.59% and 10.84%,
respectively, at June 30, 1994. Regulatory guidelines prescribe a
minimum Total Capital ratio of 10.00% and a Tier 1 Capital ratio of
6.00% for an institution to qualify as well capitalized. Bancorp's
strategy is to maintain its capital ratios at levels to meet this
qualification to benefit from the financial and regulatory incentives
provided to well capitalized companies.
In addition, the leverage ratio, which is Tier 1 Capital to Total
Average Assets, was 7.46% at September 30, 1994, compared to 7.21% at
June 30, 1994 and 6.84% at September 30, 1993. The required minimum
ratio is 5.00% to qualify an institution as well capitalized.
Spread Management
The average net interest margin or spread on earning assets for
the third quarter of 1994 was 3.79%, a decrease from the 4.01%
reported in the second quarter of 1994 and a decrease from the 4.07%
reported for the same period in 1993. Year-to-date spread for 1994
was 3.95% compared to 4.00% for the same period in 1993. The rise in
interest rates in 1994, combined with the modest loan growth, has
continued to place pressure on Bancorp's ability to maintain current
spread levels. The impact is seen by the substantial decrease in
spread when comparing the third quarter 1994 with second quarter 1994.
Over the next two quarters, Bancorp will have an opportunity to reduce
its liability sensitive position as a significant amount of fixed rate
investments are scheduled to mature.
The cost of funds rate for the third quarter of 1994 was 3.77%,
which was above the 3.25% reported for the third quarter of 1993. The
rise in the cost of funds reflects the impact of higher interest rates
and increased competition for deposits.
The earning asset yield was 6.98% for the third quarter of 1994,
an increase over the third quarter 1993 of 6.81%. This increase has
not kept up with the increased cost of funds and results in the
squeeze on Bancorp's spread.
<TABLE>
Consolidated Average Balances and Interest Rates Taxable Equivalent Bancorp Hawaii, Inc. and subsidiaries
- ----------------------------------------------------------------------------------------------------------
<CAPTION>
Three Months Ended Three Months Ended
September 30, 1994 September 30, 1993
Average Income/Yield/ Average Income/Yield/
(in millions of dollars) Balance Expense Rate Balance Expense Rate
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Earning Assets
Interest Bearing Deposits $747.0 $8.9 4.74% $1,127.3 $10.6 3.73%
Investment Securities
-Taxable 2,445.2 33.1 5.37 3,586.7 51.2 5.66
-Tax-Exempt 18.3 0.7 14.22 26.9 0.8 12.18
1,039.6 14.7 5.60 21.2 0.3 5.78
Funds Sold 31.6 0.4 5.50 46.2 0.6 5.55
Net Loans
-Domestic 6,820.2 134.6 7.83 6,376.7 122.4 7.61
-Foreign 648.1 6.8 4.18 700.0 7.9 4.50
Loan Fees 7.5 10.1
Total Earning Assets 11,750.0 206.7 6.98 11,885.0 203.9 6.81
Cash and Due From Banks 373.2 309.5
Other Assets 329.3 246.0
Total Assets $12,452.5 $12,440.5
Interest Bearing Liabilities
Domestic Deposits - Demand $1,864.4 11.1 2.36 $2,016.8 10.5 2.07
- Savings 1,219.6 6.4 2.10 1,251.6 8.0 2.54
- Time 1,516.8 16.1 4.20 1,650.6 18.5 4.45
Total Domestic 4,600.8 33.6 2.90 4,919.0 37.0 2.99
Total Foreign 1,240.4 14.9 4.75 1,163.1 10.1 3.43
Total Deposits 5,841.2 48.5 3.29 6,082.1 47.1 3.07
Short-Term Borrowings 3,429.6 36.6 4.23 3,703.0 31.1 3.33
Long-Term Debt 682.0 9.4 5.50 251.1 3.9 6.09
Total Interest Bearing Liabilities 9,952.8 94.5 3.77 10,036.2 82.1 3.25
------------------------ ------------------------
Net Interest Income 112.2 3.21 121.8 3.56
Average Spread on Earning Assets 3.79% 4.07%
Demand Deposits 1,329.2 1,346.5
Other Liabilities 193.1 151.3
Shareholders' Equity 977.4 906.5
Total Liabilities and Shareholders' Equity $12,452.5 $12,440.5
Provision for Possible Losses 3.0 23.9
Net Overhead 55.0 46.7
Income Before Income Taxes 54.2 51.2
Provision for Income Taxes 21.8 20.6
Tax-Equivalent Adjustment 0.4 0.5
------- -------
Net Income $34.4 $33.0
======= =======
</TABLE>
<TABLE>
Consolidated Average Balances and Interest Rates Taxable Equivalent Bancorp Hawaii, Inc. and subsidiaries
- ----------------------------------------------------------------------------------------------------------
<CAPTION>
Nine Months Ended Nine Months Ended
September 30, 1994 September 30, 1993
Average Income/Yield/ Average Income/Yield/
(in millions of dollars) Balance Expense Rate Balance Expense Rate
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Earning Assets
Interest Bearing Deposits $839.5 $25.8 4.10% $1,179.7 $33.4 3.78%
Investment Securities
-Taxable 2,618.3 106.9 5.46 3,467.1 153.1 5.90
-Tax-Exempt 19.0 2.0 13.78 31.2 2.8 12.01
969.8 36.4 5.02 70.1 5.5 10.42
Funds Sold 36.7 1.2 4.48 178.7 4.7 3.50
Net Loans
-Domestic 6,665.8 385.4 7.73 6,295.4 361.1 7.67
-Foreign 645.1 23.7 4.90 678.0 22.8 4.50
Loan Fees 24.5 28.0
Total Earning Assets 11,794.2 605.9 6.87 11,900.2 611.4 6.87
Cash and Due From Banks 429.3 411.4
Other Assets 338.6 275.8
Total Assets $12,562.1 $12,587.4
Interest Bearing Liabilities
Domestic Deposits - Demand $1,903.4 29.8 2.10 $2,046.0 35.3 2.31
- Savings 1,249.4 20.7 2.21 1,231.2 25.5 2.77
- Time 1,529.3 47.7 4.17 1,756.3 60.4 4.60
Total Domestic 4,682.1 98.2 2.81 5,033.5 121.2 3.22
Total Foreign 1,213.8 36.7 4.04 1,197.8 32.3 3.61
Total Deposits 5,895.9 134.9 3.06 6,231.3 153.5 3.29
Short-Term Borrowings 3,576.9 100.6 3.76 3,803.7 94.8 3.33
Long-Term Debt 560.2 22.1 5.26 168.7 7.4 5.87
Total Interest Bearing Liabilities 10,033.0 257.6 3.43 10,203.7 255.7 3.35
------------------------ ------------------------
Net Interest Income 348.3 3.44 355.7 3.52
Average Spread on Earning Assets 3.95% 4.00%
Demand Deposits 1,371.3 1,306.3
Other Liabilities 192.0 198.3
Shareholders' Equity 965.8 879.1
Total Liabilities and Shareholders' Equity $12,562.1 $12,587.4
Provision for Possible Losses 17.3 45.1
Net Overhead 165.8 153.1
Income Before Income Taxes 165.2 157.5
Provision for Income Taxes 63.4 58.9
Tax-Equivalent Adjustment 1.3 1.7
------- -------
Net Income $34.4 $33.0
======= =======
</TABLE>
<PAGE>
Liquidity
Bancorp's liquidity or the ability to meet day-to-day financial
needs of its customers is important. The strategy to meet these
liquidity needs was outlined in the 1993 Annual Report and currently
remains in place.
The investment portfolio totaled $3.4 billion at September 30,
1994 reflecting a change from the $3.6 billion reported at year-end
1994. There has been a change in the mix of the portfolio with the
held to maturity portfolio decreasing from $2.8 billion at year-end
1993 to $2.3 billion at September 30, 1994. Over the same period,
securities classified as available for sale have increased from $893.5
million to $1.6 billion to improve Bancorp's liquidity.
At September 30, 1994, deposits were $7.0 billion, compared to
$7.0 billion and $7.1 billion reported at year-end 1993 and September
30, 1993, respectively. The level of deposits reflect increased
competition for deposits, not only by banks and savings and loan
companies, but also by securities brokerage firms. These deposit
totals do not include repos, which are offered to governmental
entities as an alternative to deposits. Repos offered to state and
municipal governments require the same level of collateralization as
government deposits, but provide a marginally higher rate of interest,
as these funds are not FDIC insured. Repos totaled $2.4 billion as of
September 30, 1994, compared to $2.5 billion at year-end 1993 and $2.7
billion as of September 30, 1993. The lower level of repo balances
reflects expected variations in governmental cash flows.
During the quarter, Bank of Hawaii issued an additional $150
million in bank notes. The notes were issued under the established
bank note facility allowing the issuance of up to $750 million in
notes. The notes bear floating and fixed interest rates and mature in
1 to 2 years. As of September 30, 1994, $450 million have been issued
under this facility. As a result, long term debt increased to $745.7
million at September 30, 1994.
Net Overhead
The net overhead ratio is a tool used to manage Bancorp's net
overhead. As stated in Bancorp's 1993 Annual Report, the net overhead
ratio is defined as the ratio of non-interest expense to non-interest
income. Bancorp's long term goal is to have a ratio of 2 to 1, where
fee income offsets at least half of the cost of operations. The ratio
for the third quarter of 1994 was 2.57, compared to the 2.71 for the
second quarter of 1994 and 2.68 reported last year for the same
period. The net overhead ratio for full year 1993 was 2.82. These
ratios are calculated before investment securities gains and losses.
Another productivity measure used at Bancorp is the amount of net
income per full-time equivalent staff (FTE). The objective is to
improve net income with existing or lesser staff levels. Year-to-date
1994 net income per FTE was just over $23,300 or $31,000 on an
annualized basis, compared to the $31,000 and $31,100 reported for the
full years of 1993 and 1992, respectively.
Non-interest income for the third quarter was $34.5 million
(excluding investment securities gains/losses), a 9.0% increase over
the same quarter in 1993. Trust income was $13.2 million, up 18.5%
from the same period last year. The substantial increase was
partially due to synergies gained from the consolidation of the
subsidiaries of AFS as sales forces and operating units have been
combined. Service charges on deposit accounts for the third quarter
of 1994 were $6.9 million, compared to $7.0 million reported for the
same quarter last year. Fees, exchange and other service charges for
the third quarter were $9.0 million, an increase of 9.5% over the same
period last year. The increase was largely fueled by increased ATM
usage fees. Other operating income totaled $5.4 million for the third
quarter of 1994; just slightly above the number reported for the
third quarter of 1993.
Expense control continues to be a high priority at Bancorp. Non-
interest expense for the third quarter of 1994 was $88.8 million
compared to $85.0 million reported for the third quarter of 1993, an
increase of 4.5%. Control over salary and benefits has been an
emphasis for Bancorp as it is the largest single expense category
after interest expense. Salary and benefit expenses increased to
$44.8 million for the third quarter of 1994, up 1.6% from $44.1
million reported for the same period last year. For the year-to-date,
salary and benefits totaled $137.1 million, compared to $133.3 million
for the same period in 1993, an increase of 2.9%. The increase
largely results from the acquisition of AFS in May of 1993.
Occupancy and premises costs declined 6.9% to $9.3 million for
the third quarter 1994 from $10.0 million for the third quarter 1993.
This decline largely reflecting the elimination of the premises
expenses incurred by AFS in 1993. For the year-to-date, net premises
is virtually level with the comparable period in 1993. Equipment
expenses increased to $7.6 million, 15.1% above third quarter 1993
expenses of $6.6 million. For the year-to-date, net equipment expense
is up 12.8% to $22.5 million from the $20.0 million for the same
period in 1993. The rise in equipment expenses reflect increased
costs to maintain computer equipment, the conversion of a deposit
system and the continuing effort to invest in technology.
Other operating expenses rose to $79.7 million for the nine
months ended September 30, 1994, compared with $69.4 million reported
for the same period in 1993. The substantial increase in this
category reflects two large items. The first was the increase in the
amortization of intangibles for acquisitions made in 1993 of $2.0
million. The second item was an increase in professional service fees
of $3.9 million, this increase is partly due to the recovery of $2.5
million in legal fees in 1993.
<PAGE>
PART II. - Other Information
Items 1 to 5 omitted pursuant to instructions.
Item 6 - Exhibits and Reports on Form 8-K
(a) The following exhibits are filed herewith:
Exhibit #11 - Statement regarding computation
of per share earnings.
Exhibit #20 - Report furnished to
shareholders for the quarter ended June 30,
1994.
(b) No Form 8-K filings were made in the third
quarter.
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.
Date November 10, 1994 BANCORP HAWAII, INC.
RICHARD J. DAHL
(Signature)
Richard J. Dahl
President
DENIS K. ISONO
(Signature)
Denis K. Isono
Vice President and
Chief Accounting
Officer
<PAGE>
<TABLE>
Bancorp Hawaii, Inc.
Exhibit 11 - Statement Regarding Computation of Per Share Earnings
Nine Months Ended September 30
<CAPTION>
Fully
Primary Diluted
------------ ------------
<S> <C> <C>
1994
----------
Net Income $100,514,000 $100,514,000
============ ============
Daily Average Shares Outstanding 42,425,784 42,425,784
Shares Assumed Issued for Stock Options 518,044 518,044
------------ ------------
42,943,828 42,943,828
============ ============
Earnings Per Common Share and
Common Share Equivalents $2.34 $2.34
============ ============
1993
----------
Net Income $96,875,000 $96,875,000
============ ============
Daily Average Shares Outstanding 42,490,926 42,490,926
Shares Assumed Issued for Stock Options 589,731 589,731
------------ ------------
43,080,657 43,080,657
============ ============
Earnings Per Common Share and
Common Share Equivalents $2.25 $2.25
============ ============
</TABLE>
<PAGE>
To Our Shareholders:
For the second quarter of 1994, Bancorp Hawaii,
Inc. reported earnings of $34.2 million, a 1.2%
increase from second quarter 1993. Earnings per share
for the second quarter were $0.79, which matched that
of second quarter 1993.
For the first half of 1994, Bancorp Hawaii's
earnings were $68.6 million, which reflects a 2.7%
increase from the first six months of 1993. Return on
average assets was 1.10% and return on average equity
was 14.40% for the six-month period.
Your company's total assets on June 30, 1994 were
$12.6 billion, just slightly lower than assets at the
same time last year. Deposits and security repurchase
agreements were $9.4 billion, down 6.1% from June 30,
1993. Net loans increased 5.2% over the same period to
$7.2 billion, from $6.9 billion.
Asset quality throughout the year has continued to
improve. Total non-performing assets (NPAs) declined
to $53.3 million from $66.8 million at first quarter
1994, representing a decline of 20.2%. NPAs dropped
22.5% from the $68.8 million reported on December 31,
1993. NPAs at June 30, 1994 represented 0.71% of total
loans. Loan loss reserves at the end of the second
quarter were 1.91% of loans outstanding, up from 1.80%
reported on March 31, 1994.
Bancorp Hawaii's performance for the second
quarter, as well as for the first half of 1994 is
encouraging and consistent with management's focus on
improving asset quality and non-interest income.
Hawaii's slow economy, rising interest rates and slow
loan demand each had an impact on second quarter
earnings. We remain confident that our strength lies
in our cautious posture, our commitment to quality and
our long-term approach, all of which have contributed
to your company's steady financial performance.
In the second quarter, Bank of Hawaii, Bancorp's
principal subsidiary, opened the first of several in-
store banks at Safeway supermarkets in Hawaii. Also,
the bank launched a first-
time home buyers loan program. These additions to our
consumer banking area demonstrate our commitment to
offering quality and convenience to our customers.
The acquisition of trust holding company American
Financial Services, Inc. in 1993 has been a positive
one and we are pleased with its ahead-of-schedule
blending with Bank of Hawaii trust subsidiary, Hawaiian
Trust Company. In the June 30, 1994 issue of American
Banker, Bancorp Hawaii ranked 52nd among the nation's
top 100 bank holding companies based on discretionary
trust assets of $6.4 billion.
On July 27, 1994, the Board of Directors declared
a quarterly dividend of 26 cents payable on September
15, 1994 to shareholders of record on August 18, 1994.
It has been a distinct pleasure to serve as your
Chairman and Chief Executive Officer for the past five
years. During the 35 years of my career with the
company, I have had the honor of working with a
management group and staff of the highest caliber who
have been totally committed to furthering the
reputation of Bancorp Hawaii as the leading financial
institution in our markets. Now, as I retire from
Bancorp Hawaii, I have every confidence that your new
Chairman and Chief Executive Officer Lawrence M.
Johnson and President Richard J. Dahl will continue
your company along a path of solid financial
performance. The managing committee, along with the
executive and senior management team, is well-equipped
to guide Bancorp Hawaii successfully through a
continually changing financial services industry. I
look forward to my continuing role as a member of
Bancorp Hawaii's Board of Directors.
I thank everyone at Bancorp Hawaii, from our
tellers to our Board members, for their many
contributions to the company. And to you, our
shareholders, all of us at Bancorp Hawaii appreciate
your continuing support.
Aloha,
H. HOWARD STEPHENSON
H. Howard Stephenson
Chairman and Chief Executive Officer
July 31, 1994
Corporate Offices:
Financial Plaza of the Pacific
130 Merchant Street
Honolulu, Hawaii 96813
Investor or Analyst Inquiries:
David A. Houle
Senior Vice President, Treasurer and Chief Financial
Officer
(808) 537-8288
or
Dale L.I. Suezaki
Assistant Vice President and Investor Relations Officer
(808) 537-8037
or
Ruth E. Miyashiro
Corporate Secretary
(808) 537-8272
<PAGE>
<TABLE>
Highlights (Unaudited) Bancorp Hawaii, Inc., and subsidiaries
- --------------------------------------------------------------------------------------------------------------------
<CAPTION>
June 30 June 30
1994 1993
<S> <C> <C> <C>
Return on Average Assets* 1.10% 1.06%
- --------------------------------------------------------------------------------------------------------------------
Return on Average Equity* 14.40% 15.55%
- --------------------------------------------------------------------------------------------------------------------
Average Spread on Earning Assets* 4.03% 3.96%
- --------------------------------------------------------------------------------------------------------------------
Book Value Per Common Share $22.63 $20.87
- --------------------------------------------------------------------------------------------------------------------
Loss Reserve/Loans and Leases Outstanding 1.91% 1.87%
- --------------------------------------------------------------------------------------------------------------------
Average Equity/Average Assets* 7.61% 6.83%
- --------------------------------------------------------------------------------------------------------------------
Common Stock Price Range High Low Dividend
1993.......................... $35.92 $26.67 $0.90
1994 First Quarter............ $31.88 $26.92 $0.26
1994 Second Quarter........... $34.75 $29.38 $0.26
* year-to-date ratio
</TABLE>
<TABLE>
Consolidated Statements of Income (Unaudited)
- --------------------------------------------------------------------------------------------------------------------
<CAPTION>
3 Months 3 Months 6 Months 6 Months
Ended Ended Ended Ended
June 30 June 30 June 30 June 30
(in thousands of dollars except per share amounts) 1994 1993 1994 1993
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Total Interest Income $202,868 $202,180 $398,292 $406,334
Total Interest Expense 85,254 85,155 163,043 173,658
- --------------------------------------------------------------------------------------------------------------------
Net Interest Income 117,614 117,025 235,249 232,676
Provision for Possible Loan Losses 5,964 12,204 14,222 21,216
- --------------------------------------------------------------------------------------------------------------------
Net Interest Income After Provision for Possible Loan Losses 111,650 104,821 221,027 211,460
Total Non-Interest Income 33,063 31,034 67,209 58,873
Total Non-Interest Expense 89,749 82,736 177,993 165,246
- --------------------------------------------------------------------------------------------------------------------
Income Before Income Taxes 54,964 53,119 110,243 105,087
Provision for Income Taxes 20,802 19,361 41,689 38,354
- --------------------------------------------------------------------------------------------------------------------
Net Income $34,162 $33,758 $68,554 $66,733
====================================================================================================================
Earnings Per Common Share and Common Share Equivalents $0.79 $0.79 $1.59 $1.56
- --------------------------------------------------------------------------------------------------------------------
Average Common Shares and Common Share Equivalents Outstanding 43,056,348 42,958,796 43,006,653 42,913,356
- --------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
Consolidated Statements of Condition (Unaudited)
- --------------------------------------------------------------------------------------------------------------------
<CAPTION>
June 30 December 31 June 30
(in thousands of dollars) 1994 1993 1993
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Assets
Interest-Bearing Deposits $842,255 $837,704 $1,204,563
Investment Securities 3,532,916 3,647,043 3,709,392
(Market Value of $3,491,979, $3,684,781, $3,782,658, respectively)
Funds Sold 80,470 57,699 75,572
Loans 7,523,003 7,258,368 7,151,381
Unearned Income (146,163) (149,949) (141,574)
Reserve for Possible Loan Losses (141,210) (125,284) (131,249)
Net Loans 7,235,630 6,983,135 6,878,558
- --------------------------------------------------------------------------------------------------------------------
Total Earning Assets 11,691,271 11,525,581 11,868,085
Cash and Non-Interest Bearing Deposits 460,935 395,315 398,203
Premises and Equipment 187,710 167,260 159,309
Other Assets 307,384 373,971 320,655
- --------------------------------------------------------------------------------------------------------------------
Total Assets $12,647,300 $12,462,127 $12,746,252
====================================================================================================================
Liabilities
Deposits $7,082,778 $7,004,975 $7,202,427
Securities Sold Under Agreements to Repurchase 2,316,161 2,509,550 2,804,563
Funds Purchased 575,220 743,915 842,100
Short-Term Borrowings 718,228 600,266 426,168
Other Liabilities 399,617 307,447 336,975
Long-Term Debt 595,931 357,870 248,500
- --------------------------------------------------------------------------------------------------------------------
Total Liabilities 11,687,935 11,524,023 11,860,733
Shareholders' Equity
Common Stock ($2 par value), authorized 100,000,000 shares;
issued/outstanding, June 1994 - 42,396,059;
December 1993 - 28,425,038; June 1993 - 28,288,988; 84,792 56,850 56,578
Surplus 276,379 284,886 280,698
Unrealized Valuation Adjustments (15,758) 537 (1,353)
Retained Earnings 613,952 595,831 549,596
- --------------------------------------------------------------------------------------------------------------------
Total Shareholders' Equity 959,365 938,104 885,519
- --------------------------------------------------------------------------------------------------------------------
Total Liabilities and Shareholders' Equity $12,647,300 $12,462,127 $12,746,252
====================================================================================================================
</TABLE>
Starting in 1995, Bancorp Hawaii will stop mailing quarterly reports
to shareholders whose stock is held in "street name," for example
through brokerage houses. Bancorp can more quickly communicate the
company's performance through direct mail to these shareholders. If
your Bancorp stock is held in "street name" and you wish to continue
receiving Bancorp's quarterly reports, please complete the address
form and return it to Bancorp. Bancorp shareholders with stock held
in their own name are not affected and will continue to receive
quarterly reports as usual. Annual reports and proxy materials will
continue to be sent to all shareholders.
- ----------------------------------------------------------------------
My Bancorp Hawaii stock is held in "street name." Please continue to
send me Bancorp Hawaii, Inc., quarterly reports during 1995 at the
following address.
Please print or type
NAME__________________________________________________________________
ADDRESS_______________________________________________________________
CITY___________________________________STATE_____________ZIP__________
TELEPHONE_____________________________________________________________
Clip and mail this form to: Bancorp Hawaii, Inc.
Corporate Secretary
P. O. Box 2900
Honolulu, Hawaii 96846
<TABLE> <S> <C>
<ARTICLE> 9
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-END> SEP-30-1994
<CASH> 442695
<INT-BEARING-DEPOSITS> 792196
<FED-FUNDS-SOLD> 61250
<TRADING-ASSETS> 13805
<INVESTMENTS-HELD-FOR-SALE> 1159218
<INVESTMENTS-CARRYING> 2253645
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<LOANS> 7639021
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<TOTAL-ASSETS> 12561998
<DEPOSITS> 6960775
<SHORT-TERM> 3545437
<LIABILITIES-OTHER> 332457
<LONG-TERM> 745680
<COMMON> 84381
0
0
<OTHER-SE> 893268
<TOTAL-LIABILITIES-AND-EQUITY> 12561998
<INTEREST-LOAN> 422418
<INTEREST-INVEST> 108193
<INTEREST-OTHER> 73951
<INTEREST-TOTAL> 604562
<INTEREST-DEPOSIT> 134938
<INTEREST-EXPENSE> 122644
<INTEREST-INCOME-NET> 346980
<LOAN-LOSSES> 17253
<SECURITIES-GAINS> (2269)
<EXPENSE-OTHER> 266837
<INCOME-PRETAX> 163952
<INCOME-PRE-EXTRAORDINARY> 163952
<EXTRAORDINARY> 0
<CHANGES> 0
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<EPS-PRIMARY> 2.34
<EPS-DILUTED> 2.34
<YIELD-ACTUAL> 3.95
<LOANS-NON> 54212
<LOANS-PAST> 9165
<LOANS-TROUBLED> 0
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<ALLOWANCE-OPEN> 125284
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</TABLE>
