Pacific Century Financial Corporation Reports Fourth Quarter Net Income of $32.6 Million and Earnings Per Share of 41 Cents
HONOLULU--(BUSINESS WIRE)--Jan. 25, 2001--
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Non-Performing Assets Decline 17 percent from September 30, 2000 Level
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Board of Directors Declares Quarterly Dividend of 18 Cents Per Share
Pacific Century Financial Corporation (NYSE:BOH) reported fourth quarter net income of $32.6 million, down 13.3 percent compared to $37.6 million for the fourth quarter of 1999. Diluted earnings per share were $0.41, down 12.8 percent relative to $0.47 reported for the fourth quarter of 1999.
For the fourth quarter of 2000, return on average assets was 0.94 percent and on a tangible basis was 1.07 percent. Return on average equity was 10.24 percent and on a tangible basis was 13.60 percent. The efficiency ratio was 60.5 percent and 58.2 percent on a tangible basis.
For the full-year 2000, Pacific Century Financial Corporation (PCFC) reported earnings of $113.7 million relative to $133.0 million posted for the full-year 1999. Diluted earnings per share were $1.42 compared to $1.64 for 1999. Tangible or "cash" diluted earnings per share totaled $1.63 versus $1.85 for the full-year 1999.
Key events in the fourth quarter:
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PCFC's Board of Directors named Michael E. O'Neill, Chairman & Chief Executive Officer.
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American Express Company and PCFC signed a definitive agreement for American Express Centurion Bank to acquire the credit card portfolio of Bank of Hawaii Credit Card, N.A., Bank of Hawaii's subsidiary.
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PCFC's U.S. Mainland subsidiary Pacific Century Bank, N.A. (PCB) signed a definitive agreement with Zions Bancorporation, whereby Zions will acquire PCB's nine-branch Arizona franchise.
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Bank of Hawaii sold its shareholding interests in the Bank of Tonga and Pacific Commercial Bank, Ltd. of Samoa to Australia-based Westpac Banking Corporation.
"In the fourth quarter, we took a number of steps that will enable us to improve our future operating performance," said PCFC Chairman & Chief Executive Officer Michael E. O'Neill. "We are committed to developing and executing strategies that will create long-term sustainable value for our shareholders."
Key events since the end of the fourth quarter 2000:
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Two key executives joined PCFC's risk and asset recovery areas. William Nelson joined PCFC as Vice Chairman, Chief Risk Officer and a member of the company's Managing Committee. PCFC also hired Scott Miller as Executive Vice President and Director of Asset Recovery.
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PCFC sold a $65 million problem loan first mentioned in the second quarter of 2000.
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PCFC's Board of Directors declared a quarterly cash dividend of 18 cents per share on the company's outstanding shares. The dividend will be payable on March 14, 2001 to shareholders of record at the close of business on February 27, 2001.
"We are pleased with the significant progress made in addressing credit issues and will continue to give asset quality improvement our highest priority," said O'Neill.
Asset Quality Improvement
Non-performing assets (NPAs), exclusive of loans past due 90+ days were materially reduced by 16.7 percent during the quarter, dropping from $219.6 million at September 30, 2000 to $183.0 million at year-end 2000. NPAs totaled $149.9 million at December 31, 1999.
During the quarter, two commercial real estate non-accrual loans totaling approximately $29 million were repaid in full. In commercial and industrial (C&I), one syndicated non-accrual loan of $11.2 million returned to accrual status and two syndicated loans totaling $22.7 million were placed on non-accrual status. Charge-offs of four Asia loans totaling approximately $7.5 million and South Pacific loans, primarily in the French Territories totaling approximately $10.0 million also contributed to the reduction in NPAs.
Subsequent to year-end, PCFC took additional steps to improve asset quality by selling at a discount the $65 million problem loan first referenced in 2000's second quarter. As a result, the company will charge off the amount of the discount in the first quarter, which will be largely offset by reserves previously allocated for this credit. At year-end, this credit was carried as a performing loan.
Net charge-offs for the quarter totaled $25.6 million relative to $19.6 million in the third quarter of 2000 and $36.8 million in the fourth quarter of 1999. Domestic charge-offs during the quarter totaled $12.4 million, the largest components of which were $4.4 million (C&I) and $5.6 million (installment loans). Foreign loans charged off totaled $19.2 million with approximately $7.5 million contributed by Asia and the balance from the South Pacific as discussed earlier. Recoveries during the quarter totaled $6.0 million of which $2.4 million were on domestic loans and $3.6 million were foreign loans.
Provisioning for the quarter totaled $25.8 million, up from $20.2 million on a linked quarter basis and up from $20.9 million for last year's fourth quarter.
Year-over-year, the ratio of net charge-offs to average loans grew from 0.78 percent in 1999 to 0.94 percent for the year 2000. Over that same period the company grew its ratio of reserves to outstanding loans from 2.05 percent to 2.62 percent. The ratio of reserves to non-performing assets (exclusive of loans past due 90+ days) increased to 135 percent, from 130 percent at December 31, 1999.
Other Financial Highlights
Total assets at year-end 2000 fell by 3.0 percent to $14.0 billion, from $14.4 billion at December 31, 1999, but rose one-half percent from September 30, 2000. Correspondingly, loans at year-end 2000 totaled $9.7 billion, down less than one percent from both year-end 1999 and September 30, 2000.
On a linked quarter basis, PCFC managed its syndicated loan exposure lower by approximately $425 million, of which approximately $116 million were loans outstanding, with the balance being undrawn commitments. The company also reduced its Asia exposure by approximately $120 million in the fourth quarter. Both trends were inline with prior guidance.
The company experienced solid loan growth in its residential real estate portfolio which grew by 4.4 percent relative to the third quarter of 2000 and by 15.1 percent compared to year-end 1999.
Deposits ended 2000 at $9.1 billion, down 3.3 percent from year-end 1999, but up 2.9 percent relative to September 30, 2000. On a year-over-year basis, domestic deposits were unchanged at $7.2 billion, while foreign deposits fell by 14.5 percent. As discussed in prior quarters, the decline in foreign deposits is attributable to foreign currency translation adjustments and a reduced need for non-relationship funding. On a linked quarter basis, domestic deposits grew by 1.1 percent, while foreign deposits grew by 10.8 percent due to foreign currency movements and temporary customer deposit flows over year-end.
Net interest margin for the quarter rose to 4.29 percent from 4.25 percent in 2000's third quarter. The margin in 1999's fourth quarter was 4.31 percent. The margin has been stable, in spite of the volatility in interest rates over the last year.
Net interest income for the quarter on a fully taxable equivalent basis totaled $138.9 million, down from $139.6 million in 2000's third quarter, and down from $143.2 million in 1999's fourth quarter, reflecting a relatively stable margin and the continued downsizing of the balance sheet.
Non-interest income for the quarter, exclusive of securities transactions, totaled $65.9 million, up from $61.3 million in 2000's third quarter and up from $64.1 million in 1999's fourth quarter. Non-recurring items included $3.2 million in other operating income related to the sale of PCFC's minority interests in the Bank of Tonga and Pacific Commercial Bank. The fourth quarter of 1999 included $4.3 million in non-recurring income. Adjusting for these special items, non-interest income in the fourth quarter of 2000 grew 4.9 percent compared to the same period in 1999.
Non-interest expense for the quarter totaled $123.9 million, down one percent from 2000's third quarter and down 5.5 percent from 1999's fourth quarter. Non-interest expense for the full year 2000 reflects the significant positive impact of New Era. Exclusive of 1999's restructuring charge, non-interest expense for the year 2000 was $34.4 million lower than for 1999.
Positive Outlook for Hawaii's Economy
Another positive trend is the continuing strength of Hawaii's economy which grew at an estimated 3 percent in 2000, the highest growth rate since the current expansion began in 1997. Growth in 2000 was fueled by tourism which saw an increase in visitor arrivals and visitor days of 3.1 percent through November. All key construction industry measures experienced double-digit growth during the year and economists forecast that construction will replace tourism as the growth engine in 2001.
The consensus outlook for 2001 is for continued expansion with growth in real gross state product forecast to be 3.0 to 3.5 percent. Growth in visitor arrivals is expected to moderate to 3 percent because of a deceleration in U.S. economic growth. Economists noted that Hawaii's 2001 expansion would be sustained by 10 to 15 percent construction growth, which will support an unemployment rate below 4 percent and inflation of 2.5 percent.
While Hawaii economists expect continued growth in 2001, they recognize that Hawaii is not immune to an economic slowdown on the U.S. Mainland, particularly in California.
Guidance
Performance for 2001 will largely be dependent on the results of the Company's ongoing strategic assessment process previously announced by PCFC Chairman & CEO Michael O'Neill. PCFC's intent is to disclose those results together with the first quarter 2001 earnings release.
The credit card sale is anticipated to close in 2001's first quarter, while the Arizona branch franchise sale is scheduled to close in second quarter 2001. Additional gains may occur in the first quarter from the anticipated sale of PCFC's 2.5 percent ownership stake in Star Systems, Inc. to Concord EFS Inc. (Nasdaq:CEFT).
Pacific Century Financial Corporation is a $14 billion regional financial services company with locations throughout the Pacific region. Pacific Century and its subsidiaries provide varied financial services to businesses, governments and consumers in four principal markets: Hawaii and the West Pacific, South Pacific, Asia and selected markets on the U.S. Mainland. Pacific Century's principal subsidiary, Bank of Hawaii, is the largest commercial bank in the state of Hawaii.
Highlights Pacific Century Financial Corporation and subsidiaries ---------------------------------------------------------------------- (in thousands of dollars except per share amounts) Earnings Highlights Percentage and Performance Ratios 2000 1999 Change ---------------------------------------------------------------------- Three Months Ended December 31 Net Income $32,586 $37,599 -13.3% Basic Earnings Per Share 0.41 0.47 -12.8% Diluted Earnings Per Share 0.41 0.47 -12.8% Cash Dividends 14,324 13,649 Return on Average Assets 0.94% 1.04% Return on Average Equity 10.24% 12.29% Net Interest Margin 4.29% 4.31% Efficiency Ratio 60.52% 63.32% Twelve Months Ended December 31 Net Income $113,661 $132,957 -14.5% Basic Earnings Per Share 1.43 1.66 -13.9% Diluted Earnings Per Share 1.42 1.64 -13.4% Cash Dividends 56,471 54,640 Return on Average Assets 0.81% 0.91% Return on Average Equity 9.21% 10.99% Net Interest Margin 4.27% 4.28% Efficiency Ratio 60.50% 67.01% Summary of Results Excluding the Effect of Intangibles (a) ---------------------------------------------------------------------- Three Months Ended December 31 Net Income $36,711 $42,317 -13.2% Basic Earnings per Share $0.46 $0.53 -13.2% Diluted Earnings per Share $0.46 $0.52 -11.5% Return on Average Assets 1.07% 1.19% Return on Average Equity 13.60% 16.69% Efficiency Ratio 58.19% 60.59% Twelve Months Ended December 31 Net Income $130,401 $149,747 -12.9% Basic Earnings per Share $1.64 $1.86 -11.8% Diluted Earnings per Share $1.63 $1.85 -11.9% Return on Average Assets 0.94% 1.04% Return on Average Equity 12.59% 15.02% Efficiency Ratio 58.14% 64.66% (a) Intangibles include goodwill, core deposit and trust intangibles, and other intangibles. Statement of Condition Highlights and Performance Ratios December 31 December 31 Percentage 2000 1999 Change ---------------------------------------------------------------------- Total Assets $14,013,816 $14,440,315 -3.0% Net Loans 9,168,140 9,280,848 -1.2% Total Deposits 9,080,581 9,394,218 -3.3% Total Shareholders' Equity 1,301,356 1,212,330 7.3% Book Value Per Common Share $16.35 $15.15 Loss Reserve / Loans Outstanding 2.62% 2.05% Average Equity / Average Assets 8.78% 8.30% Common Stock Price Range High Low 1999 .................. $24.94 $17.38 2000 First Quarter..... $20.38 $14.35 Second Quarter......... $23.19 $14.63 Third Quarter.......... $17.50 $13.13 Fourth Quarter......... $18.75 $11.06 ---------------------------------------------------------------------- Corporate Offices: Financial Plaza of the Pacific 130 Merchant Street Honolulu, Hawaii 96813 Inquiries: David A. Houle Executive Vice President, Treasurer and Chief Financial Officer (808) 537-8288 Consolidated Statements of Income (Unaudited) Pacific Century Financial Corporation and subsidiaries ---------------------------------------------------------------------- (in thousands 3 Months 3 Months 12 Months 12 Months of dollars Ended Ended Ended Ended except per Dec 31 Dec 31 Dec 31 Dec 31 share amounts) 2000 1999 2000 1999 ---------------------------------------------------------------------- Interest Income Interest on Loans $191,406 $178,889 $750,141 $699,939 Loan Fees 8,718 9,809 33,620 39,899 Income on Lease Financing 9,696 7,640 37,357 29,391 Interest and Dividends on Investment Securities Taxable 12,509 14,561 53,009 57,809 Non-taxable 139 274 902 1,094 Income on Investment Securities Available for Sale 41,145 41,841 165,111 168,349 Interest on Deposits 3,746 4,569 14,663 24,960 Interest on Security Resale Agreements 87 6 158 244 Interest on Funds Sold 997 460 2,532 4,834 ---------------------------------------------------------------------- Total Interest Income 268,443 258,049 1,057,493 1,026,519 Interest Expense Interest on Deposits 73,595 67,481 286,035 261,184 Interest on Security Repurchase Agreements 28,621 21,554 104,536 92,175 Interest on Funds Purchased 7,315 10,191 32,636 41,677 Interest on Short-Term Borrowings 3,174 3,631 18,959 12,414 Interest on Long-Term Debt 16,925 12,146 59,096 44,326 ---------------------------------------------------------------------- Total Interest Expense 129,630 115,003 501,262 451,776 ---------------------------------------------------------------------- Net Interest Income 138,813 143,046 556,231 574,743 Provision for Loan Losses 25,779 20,877 142,853 60,915 ---------------------------------------------------------------------- Net Interest Income After Provision for Loan Losses 113,034 122,169 413,378 513,828 Non-Interest Income Trust Income 16,999 16,047 66,077 60,700 Service Charges on Deposit Accounts 10,252 8,559 40,063 34,267 Fees, Exchange, and Other Service Charges 21,574 22,266 88,500 88,838 Other Operating Income 17,115 17,210 58,463 67,720 Gain on Settlement of Pension Obligation -- -- 11,900 -- Investment Securities Gains (Losses) (1,259) 5,314 (1,574) 14,056 ---------------------------------------------------------------------- Total Non-Interest Income 64,681 69,396 263,429 265,581 Non-Interest Expense Salaries 44,442 46,650 181,669 198,743 Pensions and Other Employee Benefits 10,204 11,956 47,925 55,343 Net Occupancy Expense 11,916 12,255 48,789 47,893 Net Equipment Expense 13,109 12,482 50,607 48,674 Other Operating Expense 44,139 47,718 167,440 180,107 Restructuring Charge -- -- -- 22,478 Minority Interest 101 101 387 485 ---------------------------------------------------------------------- Total Non-Interest Expense 123,911 131,162 496,817 553,723 ---------------------------------------------------------------------- Income Before Income Taxes 53,804 60,403 179,990 225,686 Provision for Income Taxes 21,218 22,804 66,329 92,729 ---------------------------------------------------------------------- Net Income $32,586 $37,599 $113,661 $132,957 ====================================================================== Basic Earnings Per Share $0.41 $0.47 $1.43 $1.66 Diluted Earnings Per Share $0.41 $0.47 $1.42 $1.64 Dividends Declared Per Share $0.18 $0.17 $0.71 $0.68 Basic Weighted Average Shares 79,534,105 80,199,539 79,551,296 80,298,725 Diluted Weighted Average Shares 79,747,220 80,826,976 79,813,443 81,044,558 ====================================================================== Consolidated Statements of Condition (Unaudited) Pacific Century Financial Corporation and subsidiaries ---------------------------------------------------------------------- December 31 December 31 (in thousands of dollars) 2000 1999 ---------------------------------------------------------------------- Assets Interest-Bearing Deposits $188,649 $278,473 Investment Securities -- Held to Maturity (Market Value of $676,621 and $787,720, respectively) 670,038 796,322 Investment Securities -- Available for Sale 2,507,076 2,542,232 Securities Purchased Under Agreements to Resell 3,969 - Funds Sold 134,644 52,740 Loans 9,668,290 9,717,556 Unearned Income (253,903) (242,503) Reserve for Loan Losses (246,247) (194,205) ---------------------------------------------------------------------- Net Loans 9,168,140 9,280,848 ---------------------------------------------------------------------- Total Earning Assets 12,672,516 12,950,615 Cash and Non-Interest Bearing Deposits 523,969 639,895 Premises and Equipment 254,621 271,728 Customers' Acceptance Liability 14,690 7,236 Accrued Interest Receivable 68,585 78,974 Other Real Estate 4,526 4,576 Intangibles, including Goodwill 192,264 205,904 Other Assets 282,645 281,387 ---------------------------------------------------------------------- Total Assets $14,013,816 $14,440,315 ====================================================================== Liabilities Domestic Deposits Demand -- Non-Interest Bearing $1,707,724 $1,676,425 -- Interest Bearing 2,008,730 2,076,358 Savings 665,239 700,720 Time 2,836,083 2,761,650 Foreign Deposits Demand -- Non-Interest Bearing 385,366 401,613 Time Due to Banks 535,126 597,675 Other Savings and Time 942,313 1,179,777 ---------------------------------------------------------------------- Total Deposits 9,080,581 9,394,218 Securities Sold Under Agreements to Repurchase 1,655,173 1,490,655 Funds Purchased 413,241 839,962 Short-Term Borrowings 211,481 458,962 Bank's Acceptances Outstanding 14,690 7,236 Accrued Retirement Expense 37,868 40,360 Accrued Interest Payable 72,460 64,588 Accrued Taxes Payable 130,766 85,022 Minority Interest 4,536 4,435 Other Liabilities 94,512 114,890 Long-Term Debt 997,152 727,657 ---------------------------------------------------------------------- Total Liabilities 12,712,460 13,227,985 Shareholders' Equity Common Stock ($.01 par value), authorized 500,000,000 shares; issued/outstanding; December 2000 -- 80,558,811 / 79,612,178; December 1999 -- 80,550,728 / 80,036,417 806 806 Capital Surplus 346,045 345,851 Accumulated Other Comprehensive Income (25,079) (66,106) Retained Earnings 996,791 942,177 Treasury Stock, at Cost -- (December 2000 -- 946,633; December 1999 -- 514,311) (17,207) (10,398) ---------------------------------------------------------------------- Total Shareholders' Equity 1,301,356 1,212,330 ---------------------------------------------------------------------- Total Liabilities and Shareholders' Equity $14,013,816 $14,440,315 ====================================================================== Pacific Century Financial Corporation and subsidiaries Consolidated Statements of Shareholders' Equity (Unaudited) ---------------------------------------------------------------------- Common Capital (in thousands of dollars) Total Stock Surplus ---------------------------------------------------------------------- Balance at December 31, 1999 $1,212,330 $806 $345,851 Comprehensive Income Net Income 113,661 - - Other Comprehensive Income, Net of Tax Investment Securities, Net of Reclassification Adjustment 45,300 - - Foreign Currency Translation Adjustment (4,273) - - Total Comprehensive Income Common Stock Issued 86,670 Profit Sharing Plan 1,470 - 18 228,438 Stock Option Plan 2,948 - 3 193,689 Dividend Reinvestment Plan 3,261 - 51 6,901 Directors' Restricted Shares and Deferred Compensation Plan 122 - 122 Treasury Stock Purchased (16,992) - - Cash Dividends Paid (56,471) - - ---------------------------------------------------------------------- Balance at December 31, 2000 $1,301,356 $806 $346,045 ====================================================================== Balance at December 31, 1998 $1,185,594 $805 $342,932 Comprehensive Income Net Income 132,957 - - Other Comprehensive Income, Net of Tax Investment Securities, Net of Reclassification Adjustment (44,803) - - Foreign Currency Translation Adjustment 1,154 - - Pension Liability Adjustments 19 - - Total Comprehensive Income Common Stock Issued 57,249 Profit Sharing Plan 1,096 - 4 501,929 Stock Option Plan 8,616 - 2,620 198,851 Dividend Reinvestment Plan 4,032 - 142 7,199 Directors' Restricted Shares and Deferred Compensation Plan 154 1 153 Treasury Stock Purchased (21,849) - - Cash Dividends Paid (54,640) - - ---------------------------------------------------------------------- Balance at December 31, 1999 $1,212,330 $806 $345,851 ====================================================================== Accumulated Other Comprehensive Retained Treasury Comprehensive Income Earnings Stock Income ---------------------------------------------------------------------- Balance at December 31, 1999 ($66,106) $942,177 ($10,398) Comprehensive Income Net Income - 113,661 - $113,661 Other Comprehensive Income, Net of Tax Investment Securities, Net of Reclassification Adjustment 45,300 - - 45,300 Foreign Currency Translation Adjustment (4,273) - - (4,273) ------------- Total Comprehensive Income $154,688 ============= Common Stock Issued 86,670 Profit Sharing Plan - (230) 1,682 228,438 Stock Option Plan - (1,763) 4,708 193,689 Dividend Reinvestment Plan - (583) 3,793 6,901 Directors' Restricted Shares and Deferred Compensation Plan - - - Treasury Stock Purchased - - (16,992) Cash Dividends Paid - (56,471) - ---------------------------------------------------------------------- Balance at December 31, 2000 ($25,079) $996,791 ($17,207) ====================================================================== Balance at December 31, 1998 ($22,476) $867,852 ($3,519) Comprehensive Income Net Income - 132,957 - $132,957 Other Comprehensive Income, Net of Tax Investment Securities, Net of Reclassification Adjustment (44,803) - - (44,803) Foreign Currency Translation Adjustment 1,154 - - 1,154 Pension Liability Adjustments 19 - - 19 ------------- Total Comprehensive Income $89,327 ============= Common Stock Issued 57,249 Profit Sharing Plan - (71) 1,163 501,929 Stock Option Plan - (3,651) 9,647 198,851 Dividend Reinvestment Plan - (270) 4,160 7,199 Directors' Restricted Shares and Deferred Compensation Plan - - - Treasury Stock Purchased - - (21,849) Cash Dividends Paid - (54,640) - ---------------------------------------------------------------------- Balance at December 31, 1999 ($66,106) $942,177 ($10,398) ====================================================================== Consolidated Average Balances and Interest Rates Taxable Equivalent (Unaudited) Pacific Century Financial Corporation and subsidiaries ---------------------------------------------------------------------- (in millions of dollars) Three Months Ended Three Months Ended December 31, 2000 December 31, 1999 Average Income/ Yield/ Average Income/ Yield/ Balance Expense Rate Balance Expense Rate ---------------------------------------------------------------------- Earning Assets Interest Bearing Deposits $ 215.7 $ 3.7 6.91% $ 268.4 $ 4.6 6.75% Investment Securities Held to Maturity -- Taxable 687.0 12.5 7.24 794.4 14.6 7.27 -- Tax-Exempt 3.8 0.2 22.24 11.6 0.4 14.34 Investment Securities Available for sale 2,478.4 41.2 6.60 2,590.0 41.8 6.40 Funds Sold 66.8 1.1 6.46 33.2 0.5 6.53 Net Loans -- Domestic 8,108.3 178.7 8.76 7,803.0 161.4 8.20 -- Foreign 1,319.9 22.5 6.78 1,688.6 25.1 5.91 Loan Fees 8.7 9.8 Total Earning Assets 12,879.9 268.6 8.30 13,189.2 258.2 7.77 Cash and Due From Banks 404.6 519.3 Other Assets 503.3 650.8 ---------- -------- Total Assets $ 13,787.8 $14,359.3 ========== ======== Twelve Months Ended Twelve Months Ended December 31, 2000 December 31, 1999 Average Income/ Yield/ Average Income/ Yield/ Balance Expense Rate Balance Expense Rate Earning Assets Interest Bearing Deposits $ 216.2 $14.7 6.78% $ 385.0 $ 24.9 6.48% Investment Securities Held to Maturity -- Taxable 724.3 53.0 7.32 805.2 57.8 7.18 -- Tax-Exempt 7.6 1.4 18.24 11.7 1.7 14.41 Investment Securities Available for sale 2,502.5 165.1 6.60 2,698.8 168.0 6.23 Funds Sold 43.2 2.7 6.22 102.0 5.4 5.31 Net Loans -- Domestic 8,076.4 690.1 8.55 7,742.3 623.0 8.05 -- Foreign 1,467.9 97.7 6.65 1,702.2 106.4 6.25 Loan Fees 33.6 39.9 Total Earning Assets 13,038.1 1,058.3 8.12 13,447.2 1,027.1 7.64 Cash and Due From Banks 443.2 486.6 Other Assets 574.0 649.1 -------- -------- Total Assets $14,055.3 14,582.9 ======== ======== Pacific Century Financial Corporation and subsidiaries Consolidated Average Balances and Interest Rates Taxable Equivalent (Unaudited) ---------------------------------------------------------------------- Three Months Ended Three Months Ended December 31, 2000 December 31, 1999 (in millions Average Income/ Yield/ Average Income/ Yield/ of dollars) Balance Expense Rate Balance Expense Rate ---------------------------------------------------------------------- Interest Bearing Liabilities Domestic Deposit - Demand $1,991.6 12.1 2.41 $2,110.5 12.1 2.28 - Savings 667.5 3.4 2.03 711.9 3.7 2.03 - Time 2,815.6 42.3 5.98 2,634.8 32.4 4.88 -------------------------- --------------------------- Total Domestic 5,474.7 57.8 4.20 5,457.2 48.2 3.50 Foreign Deposits - Time Due to Banks 557.9 8.7 6.23 625.6 8.7 5.50 - Other Time and Savings 768.9 7.1 3.65 1,171.7 10.6 3.60 -------------------------- --------------------------- Total Foreign 1,326.8 15.8 4.73 1,797.3 19.3 4.26 -------------------------- --------------------------- Total Interest Bearing Deposits 6,801.5 73.6 4.30 7,254.5 67.5 3.69 Short-Term Borrowings 2,437.1 39.1 6.38 2,707.6 35.4 5.18 Long-Term Debt 1,001.6 17.0 6.72 747.4 12.1 6.45 -------------------------- --------------------------- Total Interest Bearing Liabilities 10,240.2 129.7 5.04 10,709.5 115.0 4.26 -------------------------- --------------------------- Net Interest Income 138.9 143.2 Interest Rate Spread 3.26% 3.51% Net Interest Margin 4.29% 4.31% Demand Deposits - Domestic 1,610.8 1,662.8 - Foreign 354.7 457.5 ---------- ----------- Total Demand Deposits 1,965.5 2,120.3 Other Liabilities 315.6 315.3 Shareholders' Equity 1,266.5 1,214.2 ---------- ----------- Total Liabilities and Shareholders' Equity $13,787.8 $14,359.3 ========== =========== Provision for Loan Losses 25.8 20.9 Net Overhead 59.2 61.7 -------- ----- Income Before Income Taxes 53.9 60.6 Provision for Income Taxes 21.2 22.8 Tax-Equivalent Adjustment 0.1 0.2 -------- ----- Net Income $32.6 $37.6 ======== ===== Twelve Months Ended Twelve Months Ended December 31, 2000 December 31, 1999 Average Income/ Yield/ Average Income/ Yield/ Balance Expense Rate Balance Expense Rate Interest Bearing Liabilities Domestic Deposit - Demand $2,061.9 48.7 2.36 $2,137.1 48.5 2.27 - Savings 684.8 13.9 2.03 723.9 14.7 2.03 - Time 2,781.1 154.1 5.54 2,559.4 123.3 4.82 -------------------------- --------------------------- Total Domestic 5,527.8 216.7 3.92 5,420.4 186.5 3.44 Foreign Deposits - Time Due to Banks 505.4 30.4 6.03 641.4 33.7 5.25 - Other Time and Savings 960.5 38.9 4.05 1,165.7 41.0 3.52 -------------------------- --------------------------- Total Foreign 1,465.9 69.3 4.73 1,807.1 74.7 4.13 -------------------------- --------------------------- Total Interest Bearing Deposits 6,993.7 286.0 4.09 7,227.5 261.2 3.61 Short-Term Borrowings 2,597.4 156.1 6.01 3,014.8 146.2 4.85 Long-Term Debt 886.9 59.1 6.66 685.9 44.3 6.46 -------------------------- --------------------------- Total Interest Bearing Liabilities 10,478.0 501.2 4.78 10,928.2 451.7 4.13 -------------------------- --------------------------- Net Interest Income 557.1 575.4 Interest Rate Spread 3.34% 3.51% Net Interest Margin 4.27% 4.28% Demand Deposits - Domestic 1,640.0 1,652.6 - Foreign 371.4 435.2 --------- --------- Total Demand Deposits 2,011.4 2,087.8 Other Liabilities 331.3 356.9 Shareholders' Equity 1,234.6 1,210.0 --------- --------- Total Liabilities and Shareholders' Equity $14,055.3 $14,582.9 ========= ========= Provision for Loan Losses 142.9 60.9 Net Overhead 233.4 288.2 ------- ------ Income Before Income Taxes 180.8 226.3 Provision for Income Taxes 66.3 92.7 Tax-Equivalent Adjustment 0.8 0.6 ------- ------ Net Income $113.7 $133.0 ======= ====== Pacific Century Financial Corporation and subsidiaries Consolidated Non-Performing Assets and Accruing Loans Past Due 90 Days or More (Unaudited) ---------------------------------------------------------------------- Dec 31 Sep 30 Jun 30 Mar 31 Dec 31 Sep 30 (in millions of 2000 2000 2000 2000 1999 1999 dollars) ---------------------------------------------------------------------- Non-Accrual Loans Commercial and Industrial $55.4 $49.0 $52.7 $20.1 $23.7 $31.7 Real Estate Construction 6.4 8.1 8.0 0.9 1.1 2.1 Commercial 60.1 86.8 62.2 18.2 19.0 20.8 Residential 22.7 22.0 23.2 23.2 29.7 33.1 Installment -- 0.1 0.1 0.5 0.5 0.7 Leases 0.4 0.2 0.3 3.7 3.9 4.8 Total Domestic 145.0 166.2 146.5 66.6 77.9 93.2 Foreign 33.5 48.3 59.2 65.2 67.4 55.7 Subtotal 178.5 214.5 205.7 131.8 145.3 148.9 Foreclosed Real Estate Domestic 4.2 4.9 4.6 4.3 4.3 5.6 Foreign 0.3 0.2 0.3 0.3 0.3 0.3 Subtotal 4.5 5.1 4.9 4.6 4.6 5.9 Total Non- Performing Assets 183.0 219.6 210.6 136.4 149.9 154.8 Accruing Loans Past Due 90 Days or More Commercial and Industrial 5.0 2.2 4.7 6.7 5.9 6.2 Real Estate Construction -- 0.1 -- -- -- 0.5 Commercial 1.3 4.9 2.0 2.1 1.9 2.4 Residential 3.3 7.2 3.5 5.0 4.0 2.8 Installment 5.6 4.6 4.0 4.7 4.5 4.5 Leases 0.4 0.1 1.5 1.4 1.2 0.2 Total Domestic 15.6 19.1 15.7 19.9 17.5 16.6 Foreign 3.2 1.5 1.3 3.2 1.0 5.0 Subtotal 18.8 20.6 17.0 23.1 18.5 21.6 Total $201.8 $240.2 $227.6 $159.5 $168.4 $176.4 Ratio of Non- Performing Assets to Total Loans 1.89% 2.25% 2.09% 1.39% 1.54% 1.59% Ratio of Non- Performing Assets and Accruing Loans Past Due 90 Days or More to Total Loans 2.09% 2.46% 2.26% 1.63% 1.73% 1.81% Pacific Century Financial Corporation and subsidiaries Consolidated Non-Performing Assets and Accruing Loans Past Due 90 Days or More (Unaudited) ---------------------------------------------------------------------- Jun 30 Mar 31 Dec 31 (in millions of 1999 1999 1998 dollars) ---------------------------------------------------------------------- Non-Accrual Loans Commercial and Industrial $37.5 $39.1 $28.2 Real Estate Construction 0.8 3.1 2.9 Commercial 17.2 18.7 5.4 Residential 35.2 37.6 36.4 Installment 0.8 0.5 0.8 Leases 4.4 4.5 0.7 Total Domestic 95.9 103.5 74.4 Foreign 47.5 53.6 57.5 Subtotal 143.4 157.1 131.9 Foreclosed Real Estate Domestic 5.8 6.1 5.5 Foreign 0.2 0.1 0.1 Subtotal 6.0 6.2 5.6 Total Non- Performing Assets 149.4 163.3 137.5 Accruing Loans Past Due 90 Days or More Commercial and Industrial 3.9 4.3 0.4 Real Estate Construction 0.2 0.2 0.4 Commercial 0.2 0.4 -- Residential 3.7 3.5 4.5 Installment 5.2 6.9 7.3 Leases -- 0.1 0.3 Total Domestic 13.2 15.4 12.9 Foreign 8.2 6.3 7.9 Subtotal 21.4 21.7 20.8 Total $170.8 $185.0 $158.3 Ratio of Non- Performing Assets to Total Loans 1.55% 1.69% 1.40% Ratio of Non- Performing Assets and Accruing Loans Past Due 90 Days or More to Total Loans 1.78% 1.92% 1.61% Pacific Century Financial Corporation and subsidiaries Summary of Loan Loss Experience ---------------------------------------------------------------------- Fourth Third Second Quarter Quarter Quarter (in millions of 2000 2000 2000 dollars) ---------------------------------------------------------------------- Average Amount of Loans Outstanding $9,428.2 $9,628.6 $9,636.9 Balance of Reserve for Loan Losses at Beginning of Period $245.0 $246.6 $195.4 Loans Charged-Off Commercial and Industrial 4.4 8.0 8.3 Real Estate Construction 0.1 -- 0.5 Commercial 0.9 2.8 7.6 Residential 1.3 1.5 1.3 Installment 5.6 4.6 5.2 Leases 0.1 0.2 0.2 Total Domestic 12.4 17.1 23.1 Foreign 19.2 9.5 13.4 Total Charged-Off 31.6 26.6 36.5 Recoveries on Loans Previously Charged-Off Commercial and Industrial 0.4 2.2 1.2 Real Estate Construction -- -- -- Commercial 0.3 0.1 0.1 Residential 0.1 0.3 0.2 Installment 1.6 1.7 1.9 Total Domestic 2.4 4.3 3.4 Foreign 3.6 2.7 0.2 Total Recoveries 6.0 7.0 3.6 Net Charge-Offs (25.6) (19.6) (32.9) Provision Charged to Operating Expenses 25.8 20.2 83.4 Other Net Additions (Reductions)(1) 1.0 (2.2) 0.7 Balance at End of Period $246.2 $245.0 $246.6 Ratio of Net Charge-Offs to Average Loans Outstanding (annualized) 1.09% 0.81% 1.37% Ratio of Reserve to Loans Outstanding 2.62% 2.58% 2.53% (1) Includes balance transfers, reserves acquired, and foreign currency translation adjustments. Pacific Century Financial Corporation and subsidiaries Summary of Loan Loss Experience ---------------------------------------------------------------------- First Twelve Twelve Quarter Months Months (in millions of 2000 2000 1999 dollars) ---------------------------------------------------------------------- Average Amount of Loans Outstanding $9,484.1 $9,544.3 $9,444.5 Balance of Reserve for Loan Losses at Beginning of Period $194.2 $194.2 $211.3 Loans Charged-Off Commercial and Industrial 1.4 22.1 18.5 Real Estate Construction -- 0.6 1.4 Commercial 3.9 15.2 4.5 Residential 2.4 6.5 7.8 Installment 4.7 20.1 25.1 Leases -- 0.5 0.2 Total Domestic 12.4 65.0 57.5 Foreign 3.7 45.8 45.8 Total Charged-Off 16.1 110.8 103.3 Recoveries on Loans Previously Charged-Off Commercial and Industrial 1.7 5.5 14.0 Real Estate Construction -- -- 0.1 Commercial 0.1 0.6 1.6 Residential 0.5 1.1 0.6 Installment 1.7 6.9 7.6 Total Domestic 4.0 14.1 23.9 Foreign 0.8 7.3 5.6 Total Recoveries 4.8 21.4 29.5 Net Charge-Offs (11.3) (89.4) (73.8) Provision Charged to Operating Expenses 13.5 142.9 60.9 Other Net Additions (Reductions)(1) (1.0) (1.5) (4.2) Balance at End of Period $195.4 $246.2 $194.2 Ratio of Net Charge-Offs to Average Loans Outstanding (annualized) 0.48% 0.94% 0.78% Ratio of Reserve to Loans Outstanding 2.05% 2.62% 2.05% (1) Includes balance transfers, reserves acquired, and foreign currency translation adjustments. Pacific Century Financial Corporation and subsidiaries Quarterly Summary of Selected Consolidated Financial Data ---------------------------------------------------------------------- (in millions of dollars except per share amounts) Dec. 31 Sep. 30 Jun. 30 Mar. 31 2000 2000 2000 2000 ---------------------------------------------------------------------- Balance Sheet Totals Total Assets $14,013.8 $13,939.9 $14,294.6 $14,250.4 Net Loans 9,168.1 9,233.5 9,497.4 9,346.5 Deposits 9,080.6 8,820.7 9,109.1 9,143.1 Long-Term Debt 997.2 999.7 902.2 805.7 Shareholders' Equity 1,301.4 1,250.1 1,209.4 1,225.9 Quarterly Operating Results Net Interest Income $138.8 $139.3 $138.6 $139.5 Provision for Loan Losses 25.8 20.1 83.4 13.5 Non-Interest Income 64.7 61.3 73.6 63.9 Non-Interest Expense 123.9 124.9 121.9 126.1 Net Income 32.6 34.6 6.7 39.8 Basic Earnings Per Share $0.41 $0.44 $0.08 $0.50 Diluted Earnings Per Share $0.41 $0.44 $0.08 $0.50 Return on Average Assets 0.94% 0.98% 0.19% 1.13% Return on Average Equity 10.24% 11.20% 2.19% 13.19% Efficiency Ratio 60.52% 62.26% 57.31% 62.06% Normalized Efficiency Ratio (1) -- -- -- -- Excluding the Effects of Intangibles (2) Net Income $36.7 $38.8 $11.0 $43.9 Basic Earnings Per Share $0.46 $0.49 $0.14 $0.55 Diluted Earnings Per Share $0.46 $0.49 $0.14 $0.55 Return on Average Assets 1.07% 1.12% 0.32% 1.26% Return on Average Equity 13.60% 14.94% 4.30% 17.54% Efficiency Ratio 58.19% 59.83% 54.96% 59.73% Normalized Efficiency Ratio (1) -- -- -- -- (1) Excludes impact of $22.5 million restructuring charge in 1999's Third Quarter. (2) Intangibles include goodwill, core deposit and trust intangibles, and other intangibles. Pacific Century Financial Corporation and subsidiaries Quarterly Summary of Selected Consolidated Financial Data ---------------------------------------------------------------------- (in millions of dollars except per share amounts) Dec. 31 Sept. 30 Jun. 30 Mar. 31 1999 1999 1999 1999 ---------------------------------------------------------------------- Balance Sheet Totals Total Assets $14,440.3 $14,505.4 $14,551.5 $14,928.3 Net Loans 9,280.8 9,321.5 9,181.7 9,208.1 Deposits 9,394.2 9,290.4 9,286.2 9,434.4 Long-Term Debt 727.7 794.8 654.8 675.6 Shareholders' Equity 1,212.3 1,208.5 1,214.2 1,207.6 Quarterly Operating Results Net Interest Income $143.0 $143.5 $144.4 $143.8 Provision for Loan Losses 20.9 13.5 13.9 12.6 Non-Interest Income 69.4 71.4 63.6 61.2 Non-Interest Expense 131.2 155.6 132.1 134.8 Net Income 37.6 21.5 38.5 35.4 Basic Earnings Per Share $0.47 $0.27 $0.48 $0.44 Diluted Earnings Per Share $0.47 $0.27 $0.47 $0.44 Return on Average Assets 1.04% 0.59% 1.05% 0.96% Return on Average Equity 12.29% 7.01% 12.72% 12.00% Efficiency Ratio 63.32% 72.44% 65.67% 66.37% Normalized Efficiency Ratio (1) -- 61.98% -- -- Excluding the Effects of Intangibles (2) Net Income $42.3 $25.9 $42.3 $39.3 Basic Earnings Per Share $0.53 $0.32 $0.53 $0.49 Diluted Earnings Per Share $0.52 $0.32 $0.52 $0.48 Return on Average Assets 1.19% 0.72% 1.18% 1.08% Return on Average Equity 16.69% 10.25% 17.01% 16.21% Efficiency Ratio 60.59% 70.04% 63.53% 64.25% Normalized Efficiency Ratio (1) -- 59.57% -- -- (1) Excludes impact of $22.5 million restructuring charge in 1999's Third Quarter. (2) Intangibles include goodwill, core deposit and trust intangibles, and other intangibles.
CONTACT: | Bank of Hawaii, Honolulu |
---|---|
Stafford Kiguchi, 808/537-8580 (Media) | |
skiguchi@boh.com | |
Sharlene Bliss, 808/537-8037 (Investor/Analyst) | |
sbliss@boh.com | |