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Bank of Hawaii Corporation 2006 Financial Results

Click here for a printable version of the Fourth Quarter 2006 Financial Results.

  • Diluted Earnings Per Share Increases to $3.52

  • Board of Directors Declares Dividend of $0.41 Per Share
  • Company Releases Future Business Plan

HONOLULU--(BUSINESS WIRE)--Jan. 22, 2007--Bank of Hawaii Corporation (NYSE:BOH) today reported diluted earnings per share for 2006 of $3.52 up $0.11 from diluted earnings per share of $3.41 in 2005. Net income for the year was $180.4 million, down $1.2 million from net income of $181.6 million in the previous year. The return on average assets in 2006 was 1.76 percent, down from 1.81 percent in 2005. The return on average equity for the year was 25.90 percent, up from 24.83 percent in 2005.

Diluted earnings per share for the fourth quarter of 2006 was $1.01, up $0.15 or 17.4 percent from $0.86 per diluted share for the same quarter last year and up $0.09 or 9.8 percent from the previous quarter. Net income in the fourth quarter of 2006 was $50.9 million, up $6.1 million or 13.7 percent from net income of $44.8 million in the fourth quarter last year and up $4.0 million or 8.5 percent from net income of $46.9 million in the third quarter of 2006. The return on average assets for the fourth quarter of 2006 was 1.94 percent, up from 1.76 percent in the fourth quarter of 2005 and up from 1.81 percent in the previous quarter. The return on average equity was 28.56 percent during the fourth quarter of 2006, up from 25.19 percent in the same quarter last year and up from 27.09 percent in the third quarter of 2006.

"Bank of Hawaii Corporation had good financial performance during the fourth quarter of 2006," said Allan R. Landon, Chairman and CEO. "Loan growth and asset quality continued to be strong, our net interest margin held up rather well in spite of the challenging interest rate environment. During 2006, we increased the number of our deposit accounts, and balances were up at year-end. These results represent the completion of our 2004 - 2006 Strategic Plan. We are pleased that Bank of Hawaii met its key goals. As we enter 2007 and begin to execute our next plan, the Hawaii economy appears strong and we believe our company is well positioned to continue building on its many successes."

Financial Highlights

Net interest income, on a taxable equivalent basis, for the fourth quarter of 2006 was $100.4 million, down $3.2 million from net interest income of $103.6 million in the fourth quarter of 2005 and down $0.1 million from net interest income of $100.5 million in the third quarter of 2006. Net interest income, on a taxable equivalent basis, for the full year of 2006 was $403.3 million, down $4.2 million from $407.5 million in 2005. Analyses of changes in net interest income for the full year are included in Table 6.

The net interest margin was 4.15 percent for the fourth quarter of 2006, a 28 basis point decrease from 4.43 percent in the fourth quarter of 2005 and a 5 basis point decrease from 4.20 percent in the third quarter of 2006. The net interest margin for the full year of 2006 was 4.25 percent, a 13 basis point decrease from 4.38 percent in 2005. The decrease was primarily due to the effect of the inverted yield curve in the second half of 2006 and shifts in the funding mix.

Results for the fourth quarter of 2006 included a provision for credit losses of $3.1 million compared to $1.6 million in the fourth quarter of 2005 and $2.8 million in the third quarter of 2006. The provision for credit losses for the full year of 2006 was $10.8 million compared to $4.6 million in 2005.

Noninterest income was $53.5 million for the fourth quarter of 2006, an increase of $2.7 million or 5.3 percent compared to noninterest income of $50.8 million in the fourth quarter of 2005 and down $3.4 million or 5.9 percent compared to noninterest income of $56.9 million in the third quarter of 2006. The decrease compared to the previous quarter was largely due to a seasonal reduction in insurance commissions. Noninterest income for the full year of 2006 was $216.2 million, up $6.9 million or 3.3 percent from noninterest income of $209.3 million in 2005.

Noninterest expense was $81.6 million in the fourth quarter of 2006, down $1.6 million or 1.9 percent from noninterest expense of $83.2 million in the same quarter last year and up $1.8 million or 2.2 percent from $79.8 million in the previous quarter. Results for the fourth quarter of 2006 included contributions of $1.5 million to the Bank of Hawaii Charitable Foundation. Fourth quarter noninterest expense also includes an accrual of $1.5 million for bonuses to some employees not participating in other incentive programs due to the successful completion of the 2004 - 2006 Strategic Plan. An analysis of salary and benefit expenses is included in Table 7. Noninterest expense for the full year of 2006 was $321.0 million, down $6.7 million or 2.0 percent from noninterest expense of $327.6 million in 2005.

The efficiency ratio for the fourth quarter of 2006 was 53.08 percent, down from 53.92 percent in the same quarter last year and up from 50.75 percent in the previous quarter. The efficiency ratio for the full year of 2006 was 51.87 percent, an improvement from 53.15 percent during the full year of 2005.

The effective tax rate for the fourth quarter of 2006 was 26.19 percent compared to 35.57 percent during the same quarter last year and 37.14 percent in the previous quarter. The lower rate in the fourth quarter of 2006 was primarily due to accrual adjustments for tax matters that were resolved in the fourth quarter. The effective tax rate for the full year of 2006 was 37.17 percent compared to 36.11 percent during 2005. The increase from prior year was due to the second quarter 2006 tax charge related to a change in tax legislation.

The Company's business segments are defined as Retail Banking, Commercial Banking, Investment Services Group, and Treasury and Other Corporate. Results are determined based on the Company's internal financial management reporting process and organizational structure. Selected financial information for the business segments is included in Tables 11a and 11b.

Asset Quality

Asset quality remained strong throughout 2006. Non-performing assets were $6.4 million at the end of the fourth quarter of 2006, down $0.1 million, compared to $6.5 million at the end of the same quarter last year and up $1.0 million, compared to $5.4 million at the end of the previous quarter. The ratio of non-performing assets to total loans, foreclosed real estate, and other investments at December 31, 2006 was 0.10 percent, down from 0.11 percent at December 31, 2005 and up from 0.08 percent at September 30, 2006.

Non-accrual loans and leases were $5.9 million at December 31, 2006, up $0.1 million from $5.8 million at December 31, 2005 and up $1.0 million from $5.0 million at September 30, 2006. Non-accrual loans and leases as a percentage of total loans and leases at December 31, 2006 were 0.09 percent, unchanged from December 31, 2005 and up slightly from 0.08 percent at September 30, 2006. Additional information on non-performing assets is included in Table 9.

Net charge-offs during the fourth quarter of 2006 were $3.1 million or 0.19 percent annualized of total average loans and leases compared to $1.6 million or 0.10 percent annualized of total average loans and leases in the fourth quarter last year and $2.8 million or 0.17 percent annualized of total average loans and leases in the previous quarter. Net charge-offs for the full year of 2006 were $10.8 million, or 0.17 percent of total average loans, a decrease of $11.3 million, or 51.1 percent from net charge-offs of $22.0 million, or 0.36 percent of total average loans in 2005. Net charge-offs in 2005 included a $10.0 million write-off of a fully reserved aircraft lease.

The allowance for loan and lease losses was $91.0 million at December 31, 2006, down $0.1 million from $91.1 million at December 31, 2005 and up $0.2 million from $90.8 million at September 30, 2006. The ratio of the allowance for loan and lease losses to total loans was 1.37 percent at December 31, 2006, down from 1.48 percent at December 31, 2005 and down from 1.40 percent at September 30, 2006. The reserve for unfunded commitments at December 31, 2006 was $5.2 million, up from $5.1 million at December 31, 2005 and down from $5.4 million at September 30, 2006. Details of charge-offs, recoveries and the components of the total reserve for credit losses are summarized in Table 10.

Loan and lease portfolio balances, including credit exposure to the air transportation industry are summarized in Table 8.

Other Financial Highlights

Total assets were $10.57 billion at December 31, 2006, up $385 million from $10.19 billion at December 31, 2005 and up $201 million from $10.37 billion at September 30, 2006. Total loans and leases were $6.62 billion at December 31, 2006, up $455 million from $6.17 billion at December 31, 2005 and up $134 million from $6.49 billion at September 30, 2006.

Total commercial loans were $2.46 billion at December 31, 2006, up $362 million from $2.10 billion at December 31, 2005 and up $105 million from $2.36 billion at September 30, 2006. Total consumer loans were $4.16 billion at December 31, 2006, up $93 million from $4.07 billion at December 31, 2005 and up $29 million from $4.13 billion at September 30, 2006.

Total deposits at December 31, 2006 were $8.02 billion, up $116 million from $7.91 billion at December 31, 2005 and up $336 million from $7.69 billion at September 30, 2006. Average total deposits were $7.72 billion during the fourth quarter of 2006, down $74 million from the fourth quarter last year and down $10 million from $7.73 billion during the previous quarter.

During the fourth quarter of 2006, the Company repurchased 337.5 thousand shares of common stock at a total cost of $17.1 million under its share repurchase program. The average cost was $50.71 per share repurchased. From the beginning of the share repurchase program in July 2001 through December 31, 2006, the Company repurchased a total of 42.5 million shares and returned nearly $1.5 billion to shareholders at an average cost of $34.35 per share. From January 1, 2006 through January 19, 2007, the Company repurchased an additional 75.0 thousand shares of common stock at an average cost of $53.17 per share. Remaining buyback authority under the share repurchase program was $87.4 million at January 19, 2007.

At December 31, 2006 the Tier 1 leverage ratio was 7.13 percent compared to 7.14 percent at December 31, 2005 and 6.90 percent at September 30, 2006.

The Company's Board of Directors has declared a quarterly cash dividend of $0.41 per share on the Company's outstanding shares. The dividend will be payable on March 14, 2007 to shareholders of record at the close of business on February 28, 2007.

Economic Update

At the end of 2006, the Hawaii economy was generally in strong condition. Inflation moderated in the second half of 2006 due to lower energy prices and stable home prices. Looking forward to 2007, most economic indicators will show modest improvements as capacity constraints affecting tourism and the workforce will limit economic growth. Personal income growth should improve slightly, although inflation is expected to exceed national levels. Housing prices are expected to remain stable as new home building slows. Commercial real estate demand is expected to remain strong.

Business Outlook

In 2001, the Company announced a three-year plan designed to refocus on maximizing shareholder value over time, which continues to be our governing objective. That plan was successfully completed in 2003. A new three-year plan for 2004 - 2006 was announced in 2004 which continued to build on the winning strategy of the previous plan. The key elements were to accelerate revenue growth, better integrate business segments, develop the management team, improve efficiency, and maintain a discipline of dependable risk and capital management. The 2004 - 2006 Plan was successfully completed in 2006.

The Company's Plan for 2007 and beyond builds on the themes that were prominent in the 2004 - 2006 Plan. The 2007+ Plan emphasizes growth in revenues, integration of service delivery and business units, development of people, enhancement of the Bank of Hawaii brand, and discipline in managing risk and financial performance. The 2007+ Plan does not contemplate expansion beyond the Company's current footprint.

"Given the solid performance of Bank of Hawaii in the last two years, we anticipate that our shareholders expect a plan that emphasizes consistency," said Mr. Landon. "Our 2007+ Plan was prepared by a team of fifteen of the Company's best leaders. Our planning team evaluated a full range of strategic alternatives and developed a solid plan."

The 2007+ Plan is based on moderate growth in revenue and consistent positive operating leverage. The 2007+ Plan is based on forecasts of a "flat" yield curve continuing well into 2007. Anticipated operating results include an annual return on assets above 1.7 percent, a return on equity above 25 percent, and an efficiency ratio approaching 50 percent, based on a stable economy and a return to a more traditional interest rate environment. The 2007+ Plan contemplates some increase in loan losses. The Company does not expect to provide specific earnings expectations in the future. The 2007+ Plan will be reevaluated periodically and updated as market events dictate.

Conference Call Information

The Company will review its 2006 financial results today at 8:00 a.m. Hawaii Time (1:00 p.m. Eastern Time). The call will be accessible via teleconference and via the Investor Relations link of Bank of Hawaii Corporation's web site, www.boh.com. The conference call number for participants in the United States is 866-713-8307. International participants should call 617-597-5307. No passcode is required. A replay of the conference call will be available for one week beginning Monday, January 22, 2007 by calling 888-286-8010 in the United States or 617-801-6888 internationally and entering the number 46131311 when prompted. A replay will also be available via the Investor Relations link of the Company's web site.

Forward-Looking Statements

This news release contains, and other statements made by the Company in connection with this earnings release may contain, forward-looking statements concerning, among other things, the Company's business outlook, the economic and business environment in our service areas and elsewhere, credit quality and other financial and business matters in future periods. Our forward-looking statements are based on numerous assumptions, any of which could prove to be inaccurate and actual results may differ materially from those projected for a variety of reasons, including, but not limited to: 1) general economic conditions are less favorable than expected; 2) competitive pressure among financial services and products; 3) the impact of legislation and the regulatory environment; 4) fiscal and monetary policies of the markets in which the Company serves; 5) changes in accounting standards; 6) changes in tax laws or regulations or the interpretation of such laws and regulations; 7) changes in the Company's credit quality or risk profile that may increase or decrease the required level of reserve for credit losses; 8) changes in market interest rates that may affect the Company's credit markets and ability to maintain its net interest margin; 9) unpredictable costs and other consequences of legal or regulatory matters; 10) changes to the amount and timing of proposed equity repurchases; and 11) geopolitical risk, military or terrorist activity, natural disaster, adverse weather, public health and other conditions impacting the Company and its customers' operations.

For further discussion of these and other risks and uncertainties that could cause actual results to differ materially from such forward-looking statements, please refer to the risk factors discussed in our Annual Report on Form 10-K for the year ended December 31, 2005, and subsequent periodic and current reports, filed with the U.S. Securities and Exchange Commission. Words such as "believes," "anticipates," "expects," "intends," "targeted" and similar expressions are intended to identify forward-looking statements but are not exclusive means of identifying such statements. The Company does not undertake an obligation to update forward-looking statements to reflect later events or circumstances.

Bank of Hawaii Corporation is a regional financial services company serving businesses, consumers and governments in Hawaii, American Samoa and the West Pacific. The Company's principal subsidiary, Bank of Hawaii, was founded in 1897 and is the largest independent financial institution in Hawaii. For more information about Bank of Hawaii Corporation, see the Company's web site, www.boh.com.

Bank of Hawaii Corporation and Subsidiaries
Highlights (Unaudited)                                        Table 1
---------------------------------------------------------------------

                                         Three Months Ended
                               --------------------------------------
                               December 31, September 30,December 31,
(dollars in thousands, except
 per share amounts)                2006      2006 (1, 2)     2005 (1)
----------------------------------------------------------------------
For the Period:
Interest Income                $   149,540  $   146,960  $   132,945
Net Interest Income                100,205      100,350      103,456
Net Income                          50,913       46,920       44,781
Basic Earnings Per Share              1.03         0.94         0.88
Diluted Earnings Per Share            1.01         0.92         0.86
Dividends Declared Per Share          0.41         0.37         0.37

Net Income to Average Total
 Assets (ROA)                         1.94 %       1.81 %       1.76 %
Net Income to Average
 Shareholders' Equity (ROE)          28.56        27.09        25.19
Net Interest Margin (3)               4.15         4.20         4.43
Operating Leverage (prior year)
Efficiency Ratio (4)                 53.08        50.75        53.92

Average Assets                 $10,391,402  $10,309,314  $10,079,483
Average Loans and Leases         6,501,868    6,470,883    6,153,802
Average Deposits                 7,721,584    7,731,993    7,795,381
Average Shareholders' Equity       707,149      687,172      705,428
Average Shareholders' Equity to
 Average Assets                       6.81 %       6.67 %       7.00 %

Market Price Per Share of
 Common Stock:
                        Closing$     53.95  $     48.16  $     51.54
                           High      54.59        50.75        53.19
                            Low      47.54        47.00        47.21


                                                   Year Ended
                                            -------------------------
                                                  December 31,
(dollars in thousands, except per share
 amounts)                                       2006       2005 (1)
---------------------------------------------------------------------
For the Period:
Interest Income                             $   572,672  $   506,442
Net Interest Income                             402,613      407,113
Net Income                                      180,359      181,561
Basic Earnings Per Share                           3.59         3.50
Diluted Earnings Per Share                         3.52         3.41
Dividends Declared Per Share                       1.52         1.36

Net Income to Average Total Assets (ROA)           1.76 %       1.81 %
Net Income to Average Shareholders' Equity
 (ROE)                                            25.90        24.83
Net Interest Margin (3)                            4.25         4.38
Operating Leverage (prior year)                    3.13        10.54
Efficiency Ratio (4)                              51.87        53.15

Average Assets                              $10,241,442  $10,023,750
Average Loans and Leases                      6,369,200    6,104,356
Average Deposits                              7,731,051    7,766,516
Average Shareholders' Equity                    696,299      731,077
Average Shareholders' Equity to Average
 Assets                                            6.80 %       7.29 %

Market Price Per Share of Common Stock:
                                    Closing $     53.95  $     51.54
                                       High       55.15        54.44
                                        Low       47.00        43.82


                              December 31,  September 30,December 31,
                                  2006          2006 (1)    2005 (1)
---------------------------------------------------------------------
At Period End:
Net Loans and Leases          $ 6,532,169   $ 6,398,262   $6,077,446
Total Assets                   10,571,815    10,371,215    10,187,038
Deposits                        8,023,394     7,687,123    7,907,468
Long-Term Debt                    260,288       265,268      242,703
Shareholders' Equity              719,420       683,472      693,352

Ratio of Allowance for Loan
 and Lease Losses to Loans
 and Leases Outstanding              1.37 %        1.40 %       1.48 %
Dividend Payout Ratio (5)           42.11         43.02        38.86
Leverage Capital Ratio               7.13          6.90         7.14

Book Value Per Common
 Share                        $     14.45   $     13.72   $    13.52

Full-Time Equivalent
 Employees                          2,586         2,589        2,585
Branches and Offices                   86            86           85



(1 )Certain prior period information has been reclassified to conform
 to current presentation.
(2 )Third quarter 2006 basic and diluted EPS was corrected from $0.95
 and $0.93, respectively.
(3) The net interest margin is defined as net interest income, on a
 fully-taxable equivalent basis, as a percentage of average earning
 assets.
(4) The efficiency ratio is defined as noninterest expense divided by
 total revenue (net interest income and noninterest income).
(5) Dividend payout ratio is defined as dividends declared per share
 divided by basic earnings per share.
Bank of Hawaii Corporation and Subsidiaries
Consolidated Statements of Income (Unaudited)                  Table 2
----------------------------------------------------------------------

                                            Three Months Ended
                                      December  September   December
                                         31,        30,        31,
(dollars in thousands, except per
 share amounts)                         2006      2006(1)     2005
----------------------------------------------------------------------
Interest Income
   Interest and Fees on Loans and
    Leases                            $ 111,649  $ 110,065   $ 97,697
   Income on Investment Securities -
    Available-for-Sale                   32,807     31,949     29,820
   Income on Investment Securities -
    Held-to-Maturity                      4,282      4,558      4,899
   Deposits                                  63         50        103
   Funds Sold                               406         66        154
   Other                                    333        272        272
----------------------------------------------------------------------
Total Interest Income                   149,540    146,960    132,945
----------------------------------------------------------------------
Interest Expense
   Deposits                              30,924     28,464     17,479
   Securities Sold Under Agreements
    to Repurchase                        12,538     11,959      6,504
   Funds Purchased                        1,689      2,270      1,730
   Short-Term Borrowings                    106         82         61
   Long-Term Debt                         4,078      3,835      3,715
----------------------------------------------------------------------
Total Interest Expense                   49,335     46,610     29,489
----------------------------------------------------------------------
Net Interest Income                     100,205    100,350    103,456
Provision for Credit Losses               3,143      2,785      1,588
----------------------------------------------------------------------
Net Interest Income After Provision
 for Credit Losses                       97,062     97,565    101,868
----------------------------------------------------------------------
Noninterest Income
   Trust and Asset Management            14,949     14,406     14,098
   Mortgage Banking                       2,612      2,394      2,597
   Service Charges on Deposit
    Accounts                             11,206     10,723     10,151
   Fees, Exchange, and Other Service
    Charges                              15,775     16,266     15,147
   Investment Securities Gains
    (Losses), Net                           153         19         (4)
   Insurance                              3,965      6,713      4,201
   Other                                  4,856      6,366      4,619
----------------------------------------------------------------------
Total Noninterest Income                 53,516     56,887     50,809
----------------------------------------------------------------------
Noninterest Expense
   Salaries and Benefits                 42,727     43,133     43,319
   Net Occupancy                          9,959      9,998      9,643
   Net Equipment                          5,012      5,285      5,358
   Professional Fees                      1,189      2,638      4,057
   Other                                 22,710     18,751     20,802
----------------------------------------------------------------------
Total Noninterest Expense                81,597     79,805     83,179
----------------------------------------------------------------------
Income Before Provision for Income
 Taxes                                   68,981     74,647     69,498
Provision for Income Taxes               18,068     27,727     24,717
----------------------------------------------------------------------
Net Income                             $ 50,913   $ 46,920   $ 44,781
======================================================================
Basic Earnings Per Share                  $1.03      $0.94      $0.88
Diluted Earnings Per Share                $1.01      $0.92      $0.86
Dividends Declared Per Share              $0.41      $0.37      $0.37
Basic Weighted Average Shares        49,493,213 49,960,617 50,743,172
Diluted Weighted Average Shares      50,378,519 50,879,937 52,042,845
======================================================================


                                                      Year Ended
                                                     December 31,
(dollars in thousands, except per share amounts)   2006       2005
----------------------------------------------------------------------
Interest Income
   Interest and Fees on Loans and Leases         $ 425,473  $ 368,664
   Income on Investment Securities - Available-
    for-Sale                                       126,817    113,608
   Income on Investment Securities - Held-to-
    Maturity                                        18,255     21,360
   Deposits                                            211        219
   Funds Sold                                          767      1,329
   Other                                             1,149      1,262
----------------------------------------------------------------------
Total Interest Income                              572,672    506,442
----------------------------------------------------------------------
Interest Expense
   Deposits                                        103,677     58,426
   Securities Sold Under Agreements to
    Repurchase                                      42,189     21,187
   Funds Purchased                                   8,504      4,515
   Short-Term Borrowings                               318        188
   Long-Term Debt                                   15,371     15,013
----------------------------------------------------------------------
Total Interest Expense                             170,059     99,329
----------------------------------------------------------------------
Net Interest Income                                402,613    407,113
Provision for Credit Losses                         10,758      4,588
----------------------------------------------------------------------
Net Interest Income After Provision for Credit
 Losses                                            391,855    402,525
----------------------------------------------------------------------
Noninterest Income
   Trust and Asset Management                       58,740     56,830
   Mortgage Banking                                 10,562     10,399
   Service Charges on Deposit Accounts              41,756     39,945
   Fees, Exchange, and Other Service Charges        62,441     59,588
   Investment Securities Gains (Losses), Net           172        341
   Insurance                                        20,388     19,643
   Other                                            22,117     22,568
----------------------------------------------------------------------
Total Noninterest Income                           216,176    209,314
----------------------------------------------------------------------
Noninterest Expense
   Salaries and Benefits                           176,457    176,310
   Net Occupancy                                    38,976     38,273
   Net Equipment                                    20,127     21,541
   Professional Fees                                 6,854     15,702
   Other                                            78,548     75,816
----------------------------------------------------------------------
Total Noninterest Expense                          320,962    327,642
----------------------------------------------------------------------
Income Before Provision for Income Taxes           287,069    284,197
Provision for Income Taxes                         106,710    102,636
----------------------------------------------------------------------
Net Income                                       $ 180,359  $ 181,561
======================================================================
Basic Earnings Per Share                             $3.59      $3.50
Diluted Earnings Per Share                           $3.52      $3.41
Dividends Declared Per Share                         $1.52      $1.36
Basic Weighted Average Shares                   50,176,685 51,848,765
Diluted Weighted Average Shares                 51,178,943 53,310,816
======================================================================



(1)Third quarter 2006 basic and diluted EPS was corrected from $0.95
 and $0.93, respectively. In addition, basic and diluted weighted
 average shares was corrected from 49,586,947 and 50,506,267,
 respectively.
Bank of Hawaii Corporation and Subsidiaries
Consolidated Statements of Condition (Unaudited)               Table 3
----------------------------------------------------------------------
                               December 31, September 30, December 31,
(dollars in thousands)             2006         2006         2005
----------------------------------------------------------------------
Assets
Interest-Bearing Deposits      $      4,990 $      5,238 $      4,893
Funds Sold                           50,000            -            -
Investment Securities -
 Available-for-Sale
   Held in Portfolio              1,846,742    1,973,719    2,333,417
   Pledged as Collateral            751,135      678,914      204,798
Investment Securities - Held-
 to-Maturity
   (Fair Value of $360,719;
    $385,891; and $442,989)         371,344      397,520      454,240
Loans Held for Sale                  11,942       15,336       17,915
Loans and Leases                  6,623,167    6,489,057    6,168,536
   Allowance for Loan and Lease
    Losses                          (90,998)     (90,795)     (91,090)
----------------------------------------------------------------------
     Net Loans and Leases         6,532,169    6,398,262    6,077,446
----------------------------------------------------------------------
Total Earning Assets              9,568,322    9,468,989    9,092,709
----------------------------------------------------------------------
Cash and Noninterest-Bearing
 Deposits                           398,342      283,621      493,825
Premises and Equipment              125,925      127,521      133,913
Customers' Acceptances                1,230          673        1,056
Accrued Interest Receivable          49,284       49,339       43,033
Foreclosed Real Estate                  407          409          358
Mortgage Servicing Rights            19,437       18,995       18,010
Goodwill                             34,959       34,959       34,959
Other Assets                        373,909      386,709      369,175
----------------------------------------------------------------------
Total Assets                   $ 10,571,815 $ 10,371,215 $ 10,187,038
======================================================================
Liabilities
Deposits
   Noninterest-Bearing Demand  $  1,993,794 $  1,879,644 $  2,134,916
   Interest-Bearing Demand        1,642,375    1,608,774    1,678,454
   Savings                        2,690,846    2,596,940    2,819,258
   Time                           1,696,379    1,601,765    1,274,840
----------------------------------------------------------------------
Total Deposits                    8,023,394    7,687,123    7,907,468
----------------------------------------------------------------------
Funds Purchased                      60,140      160,600      268,110
Short-Term Borrowings                11,058       11,290        9,447
Securities Sold Under
 Agreements to Repurchase         1,047,824    1,099,260      609,380
Long-Term Debt                      260,288      265,268      242,703
Banker's Acceptances                  1,230          673        1,056
Retirement Benefits Payable          48,309       72,651       71,116
Accrued Interest Payable             22,718       18,659       10,910
Taxes Payable and Deferred
 Taxes                              277,202      280,611      269,094
Other Liabilities                   100,232       91,608      104,402
----------------------------------------------------------------------
Total Liabilities                 9,852,395    9,687,743    9,493,686
----------------------------------------------------------------------
Shareholders' Equity
Common Stock ($.01 par value);
 authorized 500,000,000 shares;
 issued / outstanding: December
 2006 - 56,848,609 /
 49,777,654; September 2006 -
 56,848,799 / 49,809,709; and
 December 2005 - 56,827,483 /
 51,276,286                             566          566          565
Capital Surplus                     475,178      471,908      473,338
Accumulated Other Comprehensive
 Loss                               (39,084)     (49,422)     (47,818)
Retained Earnings                   630,660      605,976      546,591
Deferred Stock Grants                     -            -      (11,080)

Treasury Stock, at Cost
 (Shares: December 2006 -
 7,070,955; September 2006 -
 7,039,090; and December 2005 -
 5,551,197)                        (347,900)    (345,556)    (268,244)
----------------------------------------------------------------------
Total Shareholders' Equity          719,420      683,472      693,352
----------------------------------------------------------------------
Total Liabilities and
 Shareholders' Equity          $ 10,571,815 $ 10,371,215 $ 10,187,038
======================================================================
Bank of Hawaii Corporation and Subsidiaries
Consolidated Statements of Shareholders' Equity (Unaudited)    Table 4
----------------------------------------------------------------------

                                                                Accum.
                                                                 Other
                                                               Compre-
                                              Common  Capital  hensive
(dollars in thousands)                Total    Stock  Surplus     Loss
----------------------------------------------------------------------
Balance at December 31, 2005        $ 693,352 $ 565 $473,338 $(47,818)
Comprehensive Income:
 Net Income                           180,359     -        -        -
 Other Comprehensive Income, Net of
  Tax:
   Change in Unrealized Gains and
    Losses on Investment Securities
    - Available-for-Sale                 (196)    -        -     (196)
   Change in Minimum Pension
    Liability Adjustments               1,972     -        -    1,972
 Total Comprehensive Income

Adjustment to Initially Apply FASB
 Statement No. 158, Net of Tax          6,958     -        -    6,958
Common Stock Issued under Share-
 Based Compensation
  Plans and Related Tax Benefits
   (1,044,951 shares)                  43,449     1    1,840        -
Common Stock Repurchased (2,540,130
 shares)                             (129,727)    -        -        -
Cash Dividends Paid                   (76,747)    -        -        -
----------------------------------------------------------------------
Balance at December 31, 2006        $ 719,420 $ 566 $475,178 $(39,084)
======================================================================

Balance at December 31, 2004        $ 814,834 $ 813 $450,998 $(12,917)
Comprehensive Income:
 Net Income                           181,561     -        -        -
 Other Comprehensive Income, Net of
  Tax:
   Change in Unrealized Gains and
    Losses on Investment Securities
    - Available-for-Sale              (32,547)    -        -  (32,547)
   Change in Minimum Pension
    Liability Adjustments              (2,354)    -        -   (2,354)
 Total Comprehensive Income

Common Stock Issued under Share-
 Based Compensation
  Plans and Related Tax Benefits
   (1,430,416 shares)                  50,067     2   22,090        -
Common Stock Repurchased (5,111,281
 shares)                             (247,376)    -        -        -
Retirement of Treasury Stock Shares
 (25,000,000 shares)                        -  (250)     250        -
Cash Dividends Paid                   (70,833)    -        -        -
----------------------------------------------------------------------
Balance at December 31, 2005        $ 693,352 $ 565 $473,338 $(47,818)
======================================================================



                                          Deferred             Compre-
                                 Retained    Stock   Treasury  hensive
(dollars in thousands)           Earnings   Grants      Stock   Income
----------------------------------------------------------------------
Balance at December 31, 2005  $  546,591 $(11,080)$ (268,244)
Comprehensive Income:
 Net Income                      180,359        -          - $180,359
 Other Comprehensive Income,
  Net of Tax:
   Change in Unrealized Gains
    and Losses on Investment
    Securities - Available-
    for-Sale                           -        -          -     (196)
   Change in Minimum Pension
    Liability Adjustments              -        -          -    1,972
                                                             ---------
 Total Comprehensive Income                                  $182,135
                                                             =========

Adjustment to Initially Apply
 FASB Statement No. 158, Net
 of Tax                                -        -          -
Common Stock Issued under
 Share-Based Compensation
  Plans and Related Tax
   Benefits (1,044,951 shares)   (19,543)  11,080     50,071
Common Stock Repurchased
 (2,540,130 shares)                    -        -   (129,727)
Cash Dividends Paid              (76,747)       -          -
-------------------------------------------------------------
Balance at December 31, 2006  $  630,660 $      - $ (347,900)
=============================================================

Balance at December 31, 2004  $1,282,425 $ (8,433)$ (898,052)
Comprehensive Income:
 Net Income                      181,561        -          - $181,561
 Other Comprehensive Income,
  Net of Tax:
   Change in Unrealized Gains
    and Losses on Investment
    Securities - Available-
    for-Sale                           -        -          -  (32,547)
   Change in Minimum Pension
    Liability Adjustments              -        -          -   (2,354)
                                                             ---------
 Total Comprehensive Income                                  $146,660
                                                             =========

Common Stock Issued under
 Share-Based Compensation
  Plans and Related Tax
   Benefits (1,430,416 shares)    (4,138)  (2,647)    34,760
Common Stock Repurchased
 (5,111,281 shares)                    -        -   (247,376)
Retirement of Treasury Stock
 Shares (25,000,000 shares)     (842,424)       -    842,424
Cash Dividends Paid              (70,833)       -          -
-------------------------------------------------------------
Balance at December 31, 2005  $  546,591 $(11,080)$ (268,244)
=============================================================
Bank of Hawaii Corporation and Subsidiaries
Consolidated Average Balances and Interest Rates - Taxable
 Equivalent Basis (Unaudited)                                 Table 5a
----------------------------------------------------------------------

                                              Three Months Ended
                                               December 31, 2006
                                             Average  Income/  Yield/
(dollars in millions)                        Balance  Expense    Rate
----------------------------------------------------------------------
Earning Assets
Interest-Bearing Deposits                      $5.7     $0.1    4.42 %
Funds Sold                                     30.5      0.4    5.28
Investment Securities
 Available-for-Sale                         2,657.8     33.0    4.96
 Held-to-Maturity                             384.7      4.3    4.45
Loans Held for Sale                            10.0      0.2    6.79
Loans and Leases (2)
 Commercial and Industrial                  1,025.8     19.6    7.59
 Construction                                 236.4      4.9    8.24
 Commercial Mortgage                          608.9     10.7    6.97
 Residential Mortgage                       2,474.6     37.6    6.08
 Other Revolving Credit and Installment       697.3     16.1    9.18
 Home Equity                                  943.8     18.2    7.66
 Lease Financing                              515.1      4.3    3.31
----------------------------------------------------------------------
Total Loans and Leases                      6,501.9    111.4    6.82
----------------------------------------------------------------------
Other                                          79.4      0.3    1.68
----------------------------------------------------------------------
Total Earning Assets (3)                    9,670.0    149.7    6.17
----------------------------------------------------------------------
Cash and Noninterest-Bearing Deposits         272.9
Other Assets                                  448.5
                                         -----------
Total Assets                              $10,391.4
                                         ===========

Interest-Bearing Liabilities
Interest-Bearing Deposits
 Demand                                    $1,577.6      4.2    1.06
 Savings                                    2,626.4     11.1    1.68
 Time                                       1,650.0     15.6    3.74
----------------------------------------------------------------------
Total Interest-Bearing Deposits             5,854.0     30.9    2.10
----------------------------------------------------------------------
Short-Term Borrowings                         135.0      1.8    5.28
Securities Sold Under Agreements to
 Repurchase                                 1,091.6     12.5    4.52
Long-Term Debt                                264.7      4.1    6.15
----------------------------------------------------------------------
Total Interest-Bearing Liabilities          7,345.3     49.3    2.66
----------------------------------------------------------------------
Net Interest Income                                   $100.4
                                                    =========
 Interest Rate Spread                                           3.51 %
 Net Interest Margin                                            4.15 %
Noninterest-Bearing Demand Deposits         1,867.6
Other Liabilities                             471.4
Shareholders' Equity                          707.1
                                         -----------
Total Liabilities and Shareholders'
 Equity                                   $10,391.4
                                         ===========



                       Three Months Ended       Three Months Ended
                     September 30, 2006 (1)    December 31, 2005 (1)
                     Average  Income/ Yield/  Average  Income/ Yield/
(dollars in          Balance  Expense  Rate   Balance  Expense   Rate
 millions)
---------------------------------------------------------------------
Earning Assets
Interest-Bearing
 Deposits                $4.9    $0.1  4.12 %    $11.2   $0.1   3.64 %
Funds Sold                5.1     0.1  5.16       15.1    0.1   4.05
Investment
 Securities
 Available-for-Sale   2,583.0    32.1  4.97    2,573.2   30.0   4.65
 Held-to-Maturity       413.3     4.5  4.41      469.9    4.9   4.17
Loans Held for Sale       8.1     0.1  6.45       36.4    0.2   1.99
Loans and Leases (2)
 Commercial and
  Industrial          1,024.3    19.3  7.46      944.1   16.0   6.74
 Construction           232.2     4.9  8.30      161.3    2.9   7.22
 Commercial Mortgage    614.0    10.5  6.77      565.7    9.0   6.33
 Residential
  Mortgage            2,454.6    36.8  6.01    2,369.6   34.5   5.82
 Other Revolving
  Credit and
  Installment           705.6    16.4  9.21      738.8   16.2   8.70
 Home Equity            937.2    17.9  7.59      880.8   14.5   6.53
 Lease Financing        503.0     4.1  3.27      493.5    4.4   3.53
---------------------------------------------------------------------
Total Loans and
 Leases               6,470.9   109.9  6.76    6,153.8   97.5   6.31
---------------------------------------------------------------------
Other                    79.4     0.3  1.37       79.4    0.3   1.37
---------------------------------------------------------------------
Total Earning Assets
 (3)                  9,564.7   147.1  6.13    9,339.0  133.1   5.68
---------------------------------------------------------------------
Cash and
 Noninterest-Bearing
 Deposits               296.5                    314.7
Other Assets            448.1                    425.8
                    ----------               ----------
Total Assets        $10,309.3                $10,079.5
                    ==========               ==========

Interest-Bearing
 Liabilities
Interest-Bearing
 Deposits
 Demand              $1,618.9     4.1  1.01   $1,650.9    3.1   0.75
 Savings              2,641.4    10.6  1.59    2,882.4    6.1   0.83
 Time                 1,542.7    13.8  3.53    1,273.6    8.3   2.59
---------------------------------------------------------------------
Total Interest-
 Bearing Deposits     5,803.0    28.5  1.95    5,806.9   17.5   1.19
---------------------------------------------------------------------
Short-Term
 Borrowings             179.1     2.4  5.21      178.1    1.8   3.99
Securities Sold
 Under Agreements to
 Repurchase           1,005.8    11.9  4.69      710.5    6.5   3.62
Long-Term Debt          248.7     3.8  6.16      242.7    3.7   6.11
---------------------------------------------------------------------
Total Interest-
 Bearing Liabilities  7,236.6    46.6  2.55    6,938.2   29.5   1.69
---------------------------------------------------------------------
Net Interest Income            $100.5                  $103.6
                              ========                 =======
 Interest Rate
  Spread                               3.58 %                   3.99 %
 Net Interest Margin                   4.20 %                   4.43 %
Noninterest-Bearing
 Demand Deposits      1,929.0                  1,988.5
Other Liabilities       456.5                    447.4
Shareholders' Equity    687.2                    705.4
                    ----------               ----------
Total Liabilities
 and Shareholders'
 Equity             $10,309.3                $10,079.5
                    ==========               ==========



(1) Certain prior period information has been reclassified to conform
 to current presentation.
(2) Non-performing loans and leases are included in the respective
 average loan and lease balances. Income, if any, on such loans and
 leases is recognized on a cash basis.
(3) Interest income includes a taxable-equivalent basis adjustment
 based upon a statutory tax rate of 35%.
Bank of Hawaii Corporation and Subsidiaries
Consolidated Average Balances and Interest Rates -
 Taxable Equivalent Basis (Unaudited)                         Table 5b
----------------------------------------------------------------------
                            Year Ended               Year Ended
                         December 31, 2006     December 31, 2005 (1)
                       Average  Income/ Yield/ Average  Income/ Yield/
(dollars in millions)  Balance  Expense   Rate Balance  Expense   Rate
----------------------------------------------------------------------
Earning Assets
Interest-Bearing
 Deposits             $     5.4 $  0.2  3.92 %$     7.1 $  0.2  3.07 %
Funds Sold                 15.2    0.8  5.06       39.3    1.3  3.38
Investment Securities
 Available-for-Sale     2,598.8  127.5  4.91    2,545.6  114.0  4.48
 Held-to-Maturity         417.6   18.3  4.37      523.7   21.4  4.08
Loans Held for Sale         9.7    0.6  6.38       20.4    0.8  4.03
Loans and Leases (2)
 Commercial and
  Industrial              987.8   72.7  7.36      953.8   59.8  6.27
 Construction             197.3   16.2  8.19      138.6    8.8  6.35
 Commercial Mortgage      598.5   40.3  6.73      582.6   34.8  5.97
 Residential Mortgage   2,450.4  146.3  5.97    2,346.8  133.6  5.70
 Other Revolving
  Credit and
  Installment             711.6   64.7  9.09      740.4   62.7  8.46
 Home Equity              922.2   68.4  7.42      844.2   49.8  5.91
 Lease Financing          501.4   16.3  3.25      498.0   18.3  3.67
---------------------------------------------------------------------
Total Loans and Leases  6,369.2  424.9  6.67    6,104.4  367.8  6.03
---------------------------------------------------------------------
Other                      79.4    1.1  1.45       69.8    1.3  1.81
---------------------------------------------------------------------
Total Earning Assets
 (3)                    9,495.3  573.4  6.04    9,310.3  506.8  5.44
---------------------------------------------------------------------
Cash and Noninterest-
 Bearing Deposits         301.2                   313.0
Other Assets              444.9                   400.4
                      ----------              ----------
Total Assets          $10,241.4               $10,023.7
                      ==========              ==========

Interest-Bearing
 Liabilities
Interest-Bearing
 Deposits
 Demand               $ 1,615.5   15.6  0.96  $ 1,667.0   10.1  0.60
 Savings                2,680.3   38.3  1.43    2,928.6   20.5  0.70
 Time                   1,484.8   49.8  3.35    1,197.8   27.8  2.32
---------------------------------------------------------------------
Total Interest-Bearing
 Deposits               5,780.6  103.7  1.79    5,793.4   58.4  1.01
---------------------------------------------------------------------
Short-Term Borrowings     177.7    8.8  4.97      144.5    4.7  3.25
Securities Sold Under
 Agreements to
 Repurchase               932.4   42.2  4.52      699.0   21.2  3.03
Long-Term Debt            249.8   15.4  6.15      244.2   15.0  6.15
---------------------------------------------------------------------
Total Interest-Bearing
 Liabilities            7,140.5  170.1  2.38    6,881.1   99.3  1.44
---------------------------------------------------------------------
Net Interest Income             $403.3                  $407.5
                                =======                 =======
 Interest Rate Spread                   3.66 %                  4.00 %
 Net Interest Margin                    4.25           %        4.38 %
Noninterest-Bearing
 Demand Deposits        1,950.4                 1,973.1
Other Liabilities         454.2                   438.4
Shareholders' Equity      696.3                   731.1
                      ----------              ----------
Total Liabilities and
 Shareholders' Equity $10,241.4               $10,023.7
                      ==========              ==========


(1) Certain prior period information has been reclassified to conform
 to current presentation.
(2) Non-performing loans and leases are included in the respective
 average loan and lease balances. Income, if any, on such loans and
 leases is recognized on a cash basis.
(3) Interest income includes a taxable-equivalent basis adjustment
 based upon a statutory tax rate of 35%.
Bank of Hawaii Corporation and Subsidiaries
Analysis of Change in Net Interest Income - Taxable
 Equivalent Basis (Unaudited)                                  Table 6
----------------------------------------------------------------------
                                        Year Ended December 31, 2006
                                        compared to December 31, 2005
(dollars in millions)                    Volume (1)  Rate (1)    Total
----------------------------------------------------------------------
Change in Interest Income:
Funds Sold                                $   (1.0) $    0.5 $   (0.5)
Investment Securities
   Available-for-Sale                          2.4      11.1     13.5
   Held-to-Maturity                           (4.5)      1.4     (3.1)
Loans Held for Sale                           (0.5)      0.3     (0.2)
Loans and Leases
   Commercial and Industrial                   2.2      10.7     12.9
   Construction                                4.4       3.0      7.4
   Commercial Mortgage                         0.9       4.6      5.5
   Residential Mortgage                        6.1       6.6     12.7
   Other Revolving Credit and
    Installment                               (2.5)      4.5      2.0
   Home Equity                                 4.9      13.7     18.6
   Lease Financing                             0.1      (2.1)    (2.0)
----------------------------------------------------------------------
Total Loans and Leases                        16.1      41.0     57.1
----------------------------------------------------------------------
Other                                          0.1      (0.3)    (0.2)
----------------------------------------------------------------------
Total Change in Interest Income               12.6      54.0     66.6
----------------------------------------------------------------------

Change in Interest Expense:
Interest-Bearing Deposits
   Demand                                     (0.3)      5.8      5.5
   Savings                                    (1.9)     19.7     17.8
   Time                                        7.7      14.3     22.0
----------------------------------------------------------------------
Total Interest-Bearing Deposits                5.5      39.8     45.3
----------------------------------------------------------------------
Short-Term Borrowings                          1.2       2.9      4.1
Securities Sold Under Agreements to
 Repurchase                                    8.5      12.5     21.0
Long-Term Debt                                 0.4         -      0.4
----------------------------------------------------------------------
Total Change in Interest Expense              15.6      55.2     70.8
----------------------------------------------------------------------

Change in Net Interest Income             $   (3.0) $   (1.2)$   (4.2)
======================================================================


(1) The changes for each category of interest income and expense are
 allocated between the portion of changes attributable to the variance
 in volume or rate for that category.
Bank of Hawaii Corporation and Subsidiaries
Salaries and Benefits (Unaudited)                              Table 7
----------------------------------------------------------------------
                       Three Months Ended               Year Ended
             December 31, September 30, December 31,   December 31,
(dollars in
 thousands)      2006         2006         2005       2006     2005
----------------------------------------------------------------------
Salaries     $  27,923    $  27,829    $  27,765    $110,203 $108,286
Incentive
 Compensation    5,288        3,697        4,067      17,150   16,145
Share-Based
 Compensation     999         1,211         720        5,322    6,118
Commission
 Expense         1,692        1,721        1,715       7,168    8,112
Retirement
 and Other
 Benefits        2,690        4,454        4,245      17,212   17,962
Payroll Taxes    1,992        2,117        1,999       9,791    9,748
Medical,
 Dental, and
 Life
 Insurance       1,934        1,620        2,168       7,900    8,027
Separation
 Expense          209          484          640        1,711    1,912
----------------------------------------------------------------------
Total
 Salaries and
 Benefits    $  42,727    $  43,133    $  43,319    $176,457 $176,310
======================================================================
Bank of Hawaii Corporation and Subsidiaries
Loan and Lease Portfolio Balances (Unaudited)                  Table 8
----------------------------------------------------------------------

                                December 31, September 30,  June 30,
(dollars in thousands)               2006         2006      2006 (1)
----------------------------------------------------------------------
Commercial
 Commercial and Industrial       $ 1,093,392   $  994,531 $ 1,008,618
 Commercial Mortgage                 611,334      635,552     619,839
 Construction                        249,263      238,995     212,490
 Lease Financing                     508,997      489,183     475,549
----------------------------------------------------------------------
Total Commercial                   2,462,986    2,358,261   2,316,496
----------------------------------------------------------------------
Consumer
 Residential Mortgage              2,493,110    2,464,240   2,457,867
 Home Equity                         944,873      942,743     929,386
 Other Revolving Credit and
  Installment                        700,896      701,759     714,617
 Lease Financing                      21,302       22,054      23,259
----------------------------------------------------------------------
Total Consumer                     4,160,181    4,130,796   4,125,129
----------------------------------------------------------------------
Total Loans and Leases           $ 6,623,167   $6,489,057 $ 6,441,625
======================================================================



                                             March 31,    December 31,
(dollars in thousands)                        2006 (1)       2005 (1)
----------------------------------------------------------------------
Commercial
 Commercial and Industrial                  $   957,893    $  918,842
 Commercial Mortgage                            591,770       558,346
 Construction                                   154,737       153,682
 Lease Financing                                467,688       470,155
----------------------------------------------------------------------
Total Commercial                              2,172,088     2,101,025
----------------------------------------------------------------------
Consumer
 Residential Mortgage                         2,428,733     2,417,523
 Home Equity                                    901,459       888,075
 Other Revolving Credit and Installment         719,553       736,364
 Lease Financing                                 24,292        25,549
----------------------------------------------------------------------
Total Consumer                                4,074,037     4,067,511
----------------------------------------------------------------------
Total Loans and Leases                      $ 6,246,125    $6,168,536
======================================================================



Air Transportation Credit Exposure (2) (Unaudited)
----------------------------------------------------------------------
                           December 31,           Sept. 30,  Dec. 31,
                               2006                  2006       2005
                 -------------------------------- ---------- ---------
                                  Unused    Total      Total     Total
(dollars in      Outstanding Commitments Exposure   Exposure  Exposure
 thousands)
------------------------------------------------------------ ---------
Passenger
 Carriers Based
 In the United
 States           $  68,035  $        - $ 68,035  $ 68,045   $ 68,829
Passenger
 Carriers Based
 Outside the
 United States       19,406           -   19,406    19,475     20,678
Cargo Carriers       13,240           -   13,240    13,240     13,240
------------------------------------------------------------ ---------
Total Air
 Transportation
 Credit Exposure  $ 100,681  $        - $100,681  $100,760   $102,747
============================================================ =========


(1) Certain prior period information has been reclassified to conform
 to current presentation.
(2) Exposure includes loans, leveraged leases and operating leases.
Bank of Hawaii Corporation and Subsidiaries
Consolidated Non-Performing Assets and Accruing Loans and
 Leases Past Due 90 Days or More (Unaudited)                   Table 9
----------------------------------------------------------------------

                                            December 31, September 30,
(dollars in thousands)                          2006         2006
----------------------------------------------------------------------
Non-Performing Assets
Non-Accrual Loans and Leases
 Commercial
  Commercial and Industrial                 $       769 $         400
  Commercial Mortgage                                40            44
  Lease Financing                                    31             -
----------------------------------------------------------------------
 Total Commercial                                   840           444
----------------------------------------------------------------------
 Consumer
  Residential Mortgage                            4,914         4,253
  Home Equity                                       164           254
----------------------------------------------------------------------
 Total Consumer                                   5,078         4,507
----------------------------------------------------------------------
Total Non-Accrual Loans and Leases                5,918         4,951
----------------------------------------------------------------------
Foreclosed Real Estate                              407           409
Other Investments                                    82            82
----------------------------------------------------------------------
Total Non-Performing Assets                 $     6,407 $       5,442
======================================================================

Accruing Loans and Leases Past Due 90 Days
 or More
Residential Mortgage                        $       519 $         882
Home Equity                                         331            62
Other Revolving Credit and Installment            1,954         2,044
Lease Financing                                      10             -
----------------------------------------------------------------------
Total Accruing Loans and Leases Past Due 90
 Days or More                               $     2,814 $       2,988
======================================================================

Total Loans and Leases                      $ 6,623,167 $   6,489,057
======================================================================

Ratio of Non-Accrual Loans and Leases to
 Total Loans and Leases                            0.09%         0.08%
----------------------------------------------------------------------


Ratio of Non-Performing Assets to Total
 Loans and Leases, Foreclosed Real Estate,
 and Other Investments                             0.10%         0.08%
----------------------------------------------------------------------


Ratio of Non-Performing Assets and Accruing
 Loans and Leases Past Due 90 Days or More
 to Total Loans and Leases                         0.14%         0.13%
----------------------------------------------------------------------

Quarter to Quarter Changes in Non-Performing
 Assets
Balance at Beginning of Quarter             $     5,442 $       5,377
 Additions                                        2,427         1,507
 Reductions
  Payments                                         (255)         (848)
  Return to Accrual                                (897)         (382)
  Sales of Foreclosed Assets                       (112)          (20)
  Charge-offs/Write-downs                          (198)         (192)
----------------------------------------------------------------------
 Total Reductions                                (1,462)       (1,442)
----------------------------------------------------------------------
Balance at End of Quarter                   $     6,407 $       5,442
======================================================================



                                    June 30,   March 31, December 31,
(dollars in thousands)                2006       2006       2005 (1)
----------------------------------------------------------------------
Non-Performing Assets
Non-Accrual Loans and Leases
 Commercial
  Commercial and Industrial        $      227 $      236 $        212
  Commercial Mortgage                      48         52           58
  Lease Financing                           -          -            -
----------------------------------------------------------------------
 Total Commercial                         275        288          270
----------------------------------------------------------------------
 Consumer
  Residential Mortgage                  4,628      4,922        5,439
  Home Equity                             204         38          111
----------------------------------------------------------------------
 Total Consumer                         4,832      4,960        5,550
----------------------------------------------------------------------
Total Non-Accrual Loans and Leases      5,107      5,248        5,820
----------------------------------------------------------------------
Foreclosed Real Estate                    188        358          358
Other Investments                          82        300          300
----------------------------------------------------------------------
Total Non-Performing Assets        $    5,377 $    5,906 $      6,478
======================================================================

Accruing Loans and Leases Past Due
 90 Days or More
Residential Mortgage               $    1,157 $      464 $      1,132
Home Equity                                86         85          185
Other Revolving Credit and
 Installment                            1,561      1,390        1,504
Lease Financing                             -         18           29
----------------------------------------------------------------------
Total Accruing Loans and Leases
 Past Due 90 Days or More          $    2,804 $    1,957 $      2,850
======================================================================

Total Loans and Leases             $6,441,625 $6,246,125 $  6,168,536
======================================================================

Ratio of Non-Accrual Loans and
 Leases to Total Loans and Leases        0.08%      0.08%        0.09%
----------------------------------------------------------------------


Ratio of Non-Performing Assets to
 Total Loans and Leases, Foreclosed
 Real Estate, and Other Investments      0.08%      0.09%        0.11%
----------------------------------------------------------------------


Ratio of Non-Performing Assets and
 Accruing Loans and Leases Past Due
 90 Days or More to Total Loans and
 Leases                                  0.13%      0.13%        0.15%
----------------------------------------------------------------------

Quarter to Quarter Changes in Non-
 Performing Assets
Balance at Beginning of Quarter    $    5,906 $    6,478 $      8,250
 Additions                              1,509        907        1,191
 Reductions
  Payments                             (1,347)      (445)      (2,345)
  Return to Accrual                      (260)      (985)        (231)
  Sales of Foreclosed Assets              (99)         -         (122)
  Charge-offs/Write-downs                (332)       (49)        (265)
----------------------------------------------------------------------
 Total Reductions                      (2,038)    (1,479)      (2,963)
----------------------------------------------------------------------
Balance at End of Quarter          $    5,377 $    5,906 $      6,478
======================================================================



(1) Certain prior period information has been reclassified to conform
 to current presentation.
Bank of Hawaii Corporation and Subsidiaries
Consolidated Reserve for Credit Losses (Unaudited)            Table 10
----------------------------------------------------------------------

                                         Three Months Ended
                               December 31, September 30, December 31,
(dollars in thousands)              2006        2006 (1)     2005 (1)
----------------------------------------------------------------------
Balance at Beginning of Period  $    96,167  $     96,167  $   96,167
Loans and Leases Charged-Off
 Commercial
  Commercial and Industrial            (720)         (593)       (732)
  Lease Financing                         -             -           -
 Consumer
  Residential Mortgage                  (93)            -        (134)
  Home Equity                          (195)         (211)       (236)
  Other Revolving Credit and
   Installment                       (4,756)       (3,982)     (5,651)
  Lease Financing                       (30)          (18)        (35)
----------------------------------------------------------------------
Total Loans and Leases Charged-
 Off                                 (5,794)       (4,804)     (6,788)
----------------------------------------------------------------------
Recoveries on Loans and Leases
 Previously Charged-Off
 Commercial
  Commercial and Industrial           1,445           325         470
  Commercial Mortgage                     -            84       3,006
  Lease Financing                         2             1          26
 Consumer
  Residential Mortgage                    -           223         156
  Home Equity                             1           120          97
  Other Revolving Credit and
   Installment                        1,191         1,250       1,440
  Lease Financing                        12            16           5
----------------------------------------------------------------------
Total Recoveries on Loans and
 Leases Previously Charged-Off        2,651         2,019       5,200
----------------------------------------------------------------------
Net Loan and Lease Charge-Offs       (3,143)       (2,785)     (1,588)
Provision for Credit Losses           3,143         2,785       1,588
----------------------------------------------------------------------
Balance at End of Period (2)    $    96,167  $     96,167  $   96,167
======================================================================

Components
 Allowance for Loan and Lease
  Losses                        $    90,998  $     90,795  $   91,090
 Reserve for Unfunded
  Commitments                         5,169         5,372       5,077
----------------------------------------------------------------------
Total Reserve for Credit Losses $    96,167  $     96,167  $   96,167
======================================================================

Average Loans and Leases
 Outstanding                    $ 6,501,868  $  6,470,883  $6,153,802
======================================================================

Ratio of Net Loan and Lease
 Charge-Offs to
 Average Loans and Leases
  Outstanding (annualized)             0.19%         0.17%       0.10%
Ratio of Allowance for Loans
 and Lease Losses to
 Loans and Leases Outstanding          1.37%         1.40%       1.48%



                                                      Year Ended
                                                     December 31,
(dollars in thousands)                             2006      2005 (1)
----------------------------------------------------------------------
Balance at Beginning of Period                  $   96,167 $  113,596
Loans and Leases Charged-Off
 Commercial
  Commercial and Industrial                         (2,373)    (2,507)
  Lease Financing                                        -    (10,049)
 Consumer
  Residential Mortgage                                (132)      (646)
  Home Equity                                         (633)      (959)
  Other Revolving Credit and Installment           (17,459)   (19,268)
  Lease Financing                                      (60)      (104)
----------------------------------------------------------------------
Total Loans and Leases Charged-Off                 (20,657)   (33,533)
----------------------------------------------------------------------
Recoveries on Loans and Leases Previously
 Charged-Off
 Commercial
  Commercial and Industrial                          3,509      1,751
  Commercial Mortgage                                  509      3,246
  Lease Financing                                        3        189
 Consumer
  Residential Mortgage                                 464        641
  Home Equity                                          309        411
  Other Revolving Credit and Installment             5,062      5,215
  Lease Financing                                       43         63
----------------------------------------------------------------------
Total Recoveries on Loans and Leases Previously
 Charged-Off                                         9,899     11,516
----------------------------------------------------------------------
Net Loan and Lease Charge-Offs                     (10,758)   (22,017)
Provision for Credit Losses                         10,758      4,588
----------------------------------------------------------------------
Balance at End of Period (2)                    $   96,167 $   96,167
======================================================================

Components
 Allowance for Loan and Lease Losses            $   90,998 $   91,090
 Reserve for Unfunded Commitments                    5,169      5,077
----------------------------------------------------------------------
Total Reserve for Credit Losses                 $   96,167 $   96,167
======================================================================

Average Loans and Leases Outstanding            $6,369,200 $6,104,356
======================================================================

Ratio of Net Loan and Lease Charge-Offs to
 Average Loans and Leases Outstanding
  (annualized)                                        0.17%      0.36%
Ratio of Allowance for Loans and Lease Losses to
 Loans and Leases Outstanding                         1.37%      1.48%



(1) Certain prior period information has been reclassified to conform
 to current presentation.
(2) Included in this analysis is activity related to the Company's
 reserve for unfunded commitments, which is separately recorded in
 other liabilities in the Consolidated Statements of Condition.
Bank of Hawaii Corporation and Subsidiaries
Business Segment Selected Financial Information
 (Unaudited)                                                 Table 11a
----------------------------------------------------------------------
                                     Investment Treasury
                 Retail   Commercial  Services  and Other Consolidated
(dollars in      Banking    Banking    Group    Corporate    Total
 thousands)
----------------------------------------------------------------------
Three Months
 Ended December
 31, 2006
Net Interest
 Income        $   59,652 $   34,839 $   4,428 $    1,286 $   100,205
Provision for
 Credit Losses      3,525        747    (1,000)      (129)      3,143
----------------------------------------------------------------------
Net Interest
 Income After
 Provision for
 Credit Losses     56,127     34,092     5,428      1,415      97,062
Noninterest
 Income            26,144      7,178    17,763      2,431      53,516
Noninterest
 Expense          (43,853)   (19,733)  (16,265)    (1,746)    (81,597)
----------------------------------------------------------------------
Income Before
 Provision for
 Income Taxes      38,418     21,537     6,926      2,100      68,981
Provision for
 Income Taxes     (14,215)    (7,960)   (2,563)     6,670     (18,068)
----------------------------------------------------------------------
Allocated Net
 Income            24,203     13,577     4,363      8,770      50,913
----------------------------------------------------------------------
Allowance
 Funding Value       (202)      (686)       (9)       897           -
Provision for
 Credit Losses      3,525        747    (1,000)      (129)      3,143
Economic
 Provision         (3,125)    (2,190)     (100)         -      (5,415)
Tax Effect of
 Adjustments          (73)       788       410       (284)        841
----------------------------------------------------------------------
Income Before
 Capital Charge    24,328     12,236     3,664      9,254      49,482
Capital Charge     (5,486)    (3,982)   (1,564)    (8,416)    (19,448)
----------------------------------------------------------------------
Net Income
 After Capital
 Charge (NIACC)$   18,842 $    8,254 $   2,100 $      838 $    30,034
======================================================================

RAROC (ROE for
 the Company)          48%        34%       26%        23%         29%
======================================================================

Total Assets at
 December 31,
 2006          $3,972,124 $2,795,509 $ 213,506 $3,590,676 $10,571,815
======================================================================


Three Months
 Ended December
 31, 2005 (1)
Net Interest
 Income        $   57,495 $   35,018 $   4,621 $    6,322 $   103,456
Provision for
 Credit Losses      4,189     (2,274)        -       (327)      1,588
----------------------------------------------------------------------
Net Interest
 Income After
 Provision for
 Credit Losses     53,306     37,292     4,621      6,649     101,868
Noninterest
 Income            23,943      7,793    16,738      2,335      50,809
Noninterest
 Expense          (43,416)   (19,801)  (17,522)    (2,440)    (83,179)
----------------------------------------------------------------------
Income Before
 Provision for
 Income Taxes      33,833     25,284     3,837      6,544      69,498
Provision for
 Income Taxes     (12,518)    (9,358)   (1,419)    (1,422)    (24,717)
----------------------------------------------------------------------
Allocated Net
 Income            21,315     15,926     2,418      5,122      44,781
----------------------------------------------------------------------
Allowance
 Funding Value       (180)      (544)       (6)       730           -
Provision for
 Credit Losses      4,189     (2,274)        -       (327)      1,588
Economic
 Provision         (3,243)    (2,463)     (108)        (1)     (5,815)
Tax Effect of
 Adjustments         (283)     1,954        42       (149)      1,564
----------------------------------------------------------------------
Income Before
 Capital Charge    21,798     12,599     2,346      5,375      42,118
Capital Charge     (5,511)    (4,546)   (1,668)    (7,675)    (19,400)
----------------------------------------------------------------------
Net Income
 (Loss) After
 Capital Charge
 (NIACC)       $   16,287 $    8,053 $     678 $   (2,300)$    22,718
======================================================================

RAROC (ROE for
 the Company)          43%        30%       15%        19%         25%
======================================================================

Total Assets at
 December 31,
 2005          $3,890,877 $2,443,235 $ 228,903 $3,624,023 $10,187,038
======================================================================


(1) Certain prior period information has been reclassified to conform
 to current presentation.
Bank of Hawaii Corporation and Subsidiaries
Business Segment Selected Financial Information
 (Unaudited)                                                 Table 11b
----------------------------------------------------------------------
                                     Investment Treasury
                 Retail   Commercial  Services  and Other Consolidated
(dollars in      Banking    Banking    Group    Corporate    Total
 thousands)
----------------------------------------------------------------------
Year Ended
 December 31,
 2006
Net Interest
 Income        $  235,440 $  135,564 $  17,603 $   14,006 $   402,613
Provision for
 Credit Losses     10,491      1,965        (1)    (1,697)     10,758
----------------------------------------------------------------------
Net Interest
 Income After
 Provision for
 Credit Losses    224,949    133,599    17,604     15,703     391,855
Noninterest
 Income           100,294     35,421    70,413     10,048     216,176
Noninterest
 Expense         (170,705)   (78,625)  (65,151)    (6,481)   (320,962)
----------------------------------------------------------------------
Income Before
 Provision for
 Income Taxes     154,538     90,395    22,866     19,270     287,069
Provision for
 Income Taxes     (57,179)   (42,222)   (8,452)     1,143    (106,710)
----------------------------------------------------------------------
Allocated Net
 Income            97,359     48,173    14,414     20,413     180,359
----------------------------------------------------------------------
Allowance
 Funding Value       (792)    (2,496)      (34)     3,322           -
Provision for
 Credit Losses     10,491      1,965        (1)    (1,697)     10,758
Economic
 Provision        (12,466)    (8,818)     (386)        (1)    (21,671)
Tax Effect of
 Adjustments        1,024      3,459       156       (601)      4,038
----------------------------------------------------------------------
Income Before
 Capital Charge    95,616     42,283    14,149     21,436     173,484
Capital Charge    (21,742)   (16,264)   (6,291)   (32,309)    (76,606)
----------------------------------------------------------------------
Net Income
 (Loss) After
 Capital Charge
 (NIACC)       $   73,874 $   26,019 $   7,858 $  (10,873)$    96,878
======================================================================

RAROC (ROE for
 the Company)          48%        29%       25%        15%         26%
======================================================================

Total Assets at
 December 31,
 2006          $3,972,124 $2,795,509 $ 213,506 $3,590,676 $10,571,815
======================================================================


Year Ended
 December 31,
 2005 (1)
Net Interest
 Income        $  220,579 $  137,323 $  17,782 $   31,429 $   407,113
Provision for
 Credit Losses     14,151      8,942        (1)   (18,504)      4,588
----------------------------------------------------------------------
Net Interest
 Income After
 Provision for
 Credit Losses    206,428    128,381    17,783     49,933     402,525
Noninterest
 Income            94,684     37,078    68,231      9,321     209,314
Noninterest
 Expense         (170,232)   (78,258)  (70,582)    (8,570)   (327,642)
----------------------------------------------------------------------
Income Before
 Provision for
 Income Taxes     130,880     87,201    15,432     50,684     284,197
Provision for
 Income Taxes     (48,426)   (32,307)   (5,710)   (16,193)   (102,636)
----------------------------------------------------------------------
Allocated Net
 Income            82,454     54,894     9,722     34,491     181,561
----------------------------------------------------------------------
Allowance
 Funding Value       (688)    (2,332)      (23)     3,043           -
Provision for
 Credit Losses     14,151      8,942        (1)   (18,504)      4,588
Economic
 Provision        (13,547)    (9,757)     (412)        (4)    (23,720)
Tax Effect of
 Adjustments           31      1,167       159      5,722       7,079
----------------------------------------------------------------------
Income Before
 Capital Charge    82,401     52,914     9,445     24,748     169,508
Capital Charge    (21,717)   (17,989)   (6,628)   (34,112)    (80,446)
----------------------------------------------------------------------
Net Income
 (Loss) After
 Capital Charge
 (NIACC)       $   60,684 $   34,925 $   2,817 $   (9,364)$    89,062
======================================================================

RAROC (ROE for
 the Company)          42%        32%       16%        17%         25%
======================================================================

Total Assets at
 December 31,
 2005          $3,890,877 $2,443,235 $ 228,903 $3,624,023 $10,187,038
======================================================================


(1) Certain prior period information has been reclassified to conform
 to current presentation.
Bank of Hawaii Corporation and Subsidiaries
Quarterly Summary of Selected Consolidated Financial Data
 (Unaudited)                                                 Table 12
---------------------------------------------------------------------

                                        Three Months Ended
                             December 31,  September 30,     June 30,
(dollars in thousands, except
 per share amounts)              2006         2006 (1)     2006 (1)
----------------------------------------------------------------------
Quarterly Operating Results
Interest Income
   Interest and Fees on Loans
    and Leases               $   111,649   $    110,065  $   104,388
   Income on Investment
    Securities - Available-
    for-Sale                      32,807         31,949       31,226
   Income on Investment
    Securities - Held-to-
    Maturity                       4,282          4,558        4,658
   Deposits                           63             50           55
   Funds Sold                        406             66          170
   Other                             333            272          272
----------------------------------------------------------------------
Total Interest Income            149,540        146,960      140,769
----------------------------------------------------------------------
Interest Expense
   Deposits                       30,924         28,464       24,656
   Securities Sold Under
    Agreements to Repurchase      12,538         11,959        9,802
   Funds Purchased                 1,689          2,270        2,652
   Short-Term Borrowings             106             82           73
   Long-Term Debt                  4,078          3,835        3,730
----------------------------------------------------------------------
Total Interest Expense            49,335         46,610       40,913
----------------------------------------------------------------------
Net Interest Income              100,205        100,350       99,856
Provision for Credit Losses        3,143          2,785        2,069
----------------------------------------------------------------------
Net Interest Income After
 Provision for Credit Losses      97,062         97,565       97,787
----------------------------------------------------------------------
Noninterest Income
   Trust and Asset Management     14,949         14,406       14,537
   Mortgage Banking                2,612          2,394        2,569
   Service Charges on Deposit
    Accounts                      11,206         10,723        9,695
   Fees, Exchange, and Other
    Service Charges               15,775         16,266       15,633
   Investment Securities
    Gains (Losses), Net              153             19            -
   Insurance                       3,965          6,713        4,691
   Other                           4,856          6,366        6,076
----------------------------------------------------------------------
Total Noninterest Income          53,516         56,887       53,201
----------------------------------------------------------------------
Noninterest Expense
   Salaries and Benefits          42,727         43,133       44,811
   Net Occupancy                   9,959          9,998        9,376
   Net Equipment                   5,012          5,285        4,802
   Professional Fees               1,189          2,638        2,589
   Other                          22,710         18,751       17,164
----------------------------------------------------------------------
Total Noninterest Expense         81,597         79,805       78,742
----------------------------------------------------------------------
Income Before Provision for
 Income Taxes                     68,981         74,647       72,246
Provision for Income Taxes        18,068         27,727       35,070
----------------------------------------------------------------------
Net Income                   $    50,913   $     46,920  $    37,176
======================================================================

Basic Earnings Per Share     $      1.03   $       0.94  $      0.74
Diluted Earnings Per Share   $      1.01   $       0.92  $      0.72

Balance Sheet Totals
Total Assets                 $10,571,815   $ 10,371,215  $10,325,190
Net Loans and Leases           6,532,169      6,398,262    6,350,590
Total Deposits                 8,023,394      7,687,123    7,766,033
Total Shareholders' Equity       719,420        683,472      666,728

Performance Ratios
Net Income to Average Total
 Assets (ROA)                       1.94  %        1.81 %       1.47 %
Net Income to Average
 Shareholders' Equity (ROE)        28.56          27.09        21.70
Net Interest Margin (3)             4.15           4.20         4.25
Efficiency Ratio (4)               53.08          50.75        51.45



                                              Three Months Ended
                                            March 31,    December 31,
(dollars in thousands, except per share
 amounts)                                       2006       2005 (2)
---------------------------------------------------------------------
Quarterly Operating Results
Interest Income
   Interest and Fees on Loans and Leases    $    99,371  $    97,697
   Income on Investment Securities -
    Available-for-Sale                           30,835       29,820
   Income on Investment Securities - Held-
    to-Maturity                                   4,757        4,899
   Deposits                                          43          103
   Funds Sold                                       125          154
   Other                                            272          272
---------------------------------------------------------------------
Total Interest Income                           135,403      132,945
---------------------------------------------------------------------
Interest Expense
   Deposits                                      19,633       17,479
   Securities Sold Under Agreements to
    Repurchase                                    7,890        6,504
   Funds Purchased                                1,893        1,730
   Short-Term Borrowings                             57           61
   Long-Term Debt                                 3,728        3,715
---------------------------------------------------------------------
Total Interest Expense                           33,201       29,489
---------------------------------------------------------------------
Net Interest Income                             102,202      103,456
Provision for Credit Losses                       2,761        1,588
---------------------------------------------------------------------
Net Interest Income After Provision for
 Credit Losses                                   99,441      101,868
---------------------------------------------------------------------
Noninterest Income
   Trust and Asset Management                    14,848       14,098
   Mortgage Banking                               2,987        2,597
   Service Charges on Deposit Accounts           10,132       10,151
   Fees, Exchange, and Other Service
    Charges                                      14,767       15,147
   Investment Securities Gains (Losses),
    Net                                               -           (4)
   Insurance                                      5,019        4,201
   Other                                          4,819        4,619
---------------------------------------------------------------------
Total Noninterest Income                         52,572       50,809
---------------------------------------------------------------------
Noninterest Expense
   Salaries and Benefits                         45,786       43,319
   Net Occupancy                                  9,643        9,643
   Net Equipment                                  5,028        5,358
   Professional Fees                                438        4,057
   Other                                         19,923       20,802
---------------------------------------------------------------------
Total Noninterest Expense                        80,818       83,179
---------------------------------------------------------------------
Income Before Provision for Income Taxes         71,195       69,498
Provision for Income Taxes                       25,845       24,717
---------------------------------------------------------------------
Net Income                                  $    45,350  $    44,781
=====================================================================

Basic Earnings Per Share                    $      0.89  $      0.88
Diluted Earnings Per Share                  $      0.87  $      0.86

Balance Sheet Totals
Total Assets                                $10,528,049  $10,187,038
Net Loans and Leases                          6,155,061    6,077,446
Total Deposits                                8,147,101    7,907,468
Total Shareholders' Equity                      681,078      693,352

Performance Ratios
Net Income to Average Total Assets (ROA)           1.82 %       1.76 %
Net Income to Average Shareholders' Equity
 (ROE)                                            26.13        25.19
Net Interest Margin (3)                            4.41         4.43
Efficiency Ratio (4)                              52.22        53.92



(1)Third quarter 2006 basic and diluted EPS was corrected from $0.95
 and $0.93, respectively, and second quarter 2006 diluted EPS was
 corrected from $0.73.
(2)Certain prior period information has been reclassified to conform
 to current presentation.
(3) The net interest margin is defined as net interest income, on a
 fully-taxable equivalent basis, as a percentage of average earning
 assets.
(4) The efficiency ratio is defined as noninterest expense divided by
 total revenue (net interest income and noninterest income).

CONTACT: Bank of Hawaii Corporation
Stafford Kiguchi, 808-537-8580 (Media)
Mobile: 808-265-6367
skiguchi@boh.com
Cindy Wyrick, 808-537-8430 (Investors/Analysts)
cwyrick@boh.com

SOURCE: Bank of Hawaii Corporation