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Bank of Hawaii Corporation Second Quarter 2003 Financial Results

HONOLULU--(BUSINESS WIRE)--July 28, 2003--Bank of Hawaii Corporation (NYSE:BOH)

  • Diluted Earnings Per Share Increases to $0.48

  • Net Income Increases to $30.0 Million for the Quarter

  • Board of Directors Declares Dividend of $0.19 Per Share

  • Company Successfully Completes Systems Conversion

Bank of Hawaii Corporation (NYSE:BOH) today reported diluted earnings per share of $0.48 for the second quarter of 2003, up 2.1 percent from diluted earnings per share of $0.47 in the first quarter of 2003 and up 14.3 percent from $0.42 in the second quarter last year. Net income for the second quarter was $30.0 million, up from $29.8 million in the previous quarter and down from $31.0 million in the same quarter last year. Net income in the second quarter of 2003 included charges of $10.1 million related to the information technology systems replacement project compared to charges of $7.4 million in the first quarter of 2003.

The return on average assets for the second quarter of 2003 was 1.27 percent, down from 1.31 percent in the first quarter of 2003 and up from 1.23 percent in the second quarter of 2002. The return on average equity was 12.93 percent in the second quarter, up 4.1 percent from 12.42 percent in the previous quarter and up 30.1 percent from 9.94 percent in the same quarter last year.

"I am encouraged by the Company's ongoing improvement that is reflected in our second quarter financial results," said Michael E. O'Neill, Chairman, CEO and President. "Our systems conversion was completed earlier this month on time and on budget. Considering the scope and magnitude of this project, we are pleased that it was accomplished without major disruption to customer service. We continue to look forward to the benefits the new system will provide our customers and shareholders."

For six months ended June 30, 2003, net income was $59.8 million, down from net income of $62.1 million for the same period last year largely due to $17.5 million in systems replacement costs. Diluted earnings per share were $0.95 for the first half of 2003, an increase of 14.5 percent from $0.83 per share for the first half of 2002. The year-to-date return on average assets was 1.29 percent, up from 1.22 percent for the same six months in 2002. The year-to-date return on average equity was 12.67 percent, a significant improvement from 9.96 percent for the six months ended June 30, 2002.

Financial Highlights

Net interest income for the second quarter of 2003 on a fully taxable equivalent basis was $90.5 million, down $0.5 million from the first quarter of 2003 and down $2.5 million from net interest income of $93.0 million in the second quarter of 2002. The decrease in net interest income was primarily due to reductions in interest rates. An analysis of the change in net interest income is included in Table 6.

The net interest margin was 4.12 percent for the second quarter of 2003, a 17 basis point decrease from 4.29 percent in the previous quarter and a 15 basis point increase from 3.97 percent in the same quarter last year. The decrease in the net interest margin compared with the previous quarter was largely due to strategic de-leveraging of the balance sheet.

The Company did not recognize a provision for loan and lease losses during the quarter or the previous quarter. The allowance for loan and lease losses was reduced $2.1 million from March 31, 2003, which equaled the amount of net charge-offs for the quarter. Provision for loan and lease losses of $3.3 million in the second quarter of 2002 equaled net charge-offs for that quarter.

Non-interest income was $50.7 million for the quarter, an increase of $6.0 million or 13.4 percent compared to non-interest income of $44.8 million in the first quarter of 2003. The improvement was largely due to increased mortgage banking income, as the Company returned to selling the majority of its mortgage loan production in the second quarter. Non-interest income was up $2.8 million, or 5.9 percent from non-interest income of $47.9 million in the second quarter of 2002.

Non-interest expense was $95.4 million in the second quarter of 2003, including the previously mentioned $10.1 million in system replacement costs. Non-interest expense for the first quarter of 2003 included $7.4 million in system replacement costs as previously discussed. Excluding these items, non-interest expense was $85.3 million in the second quarter of 2003, an increase of $2.5 million, or 3.0 percent, compared to the previous quarter and a decrease of $4.1 million, or 4.6 percent, from the same quarter last year. The increase from the previous quarter was largely due to increased salary expense resulting from vesting of restricted stock, severance accruals and seasonal pay increases.

The efficiency ratio was 67.6 percent for the second quarter of 2003. Excluding systems replacement costs, the efficiency ratio was 60.4 percent in the second quarter, compared to 61.0 percent in the previous quarter and 63.5 percent in the same quarter last year. For the six months ending June 30, 2003, the efficiency ratio, excluding systems replacement and net restructuring costs was 60.7 percent compared to 61.9 percent in the comparable period last year.

The Company's business segments are defined as Retail Banking, Commercial Banking, Investment Services Group, and Treasury and Other Corporate. Business segment results are determined based on the Company's internal financial management reporting process and organizational structure. Business segment performance details are summarized in Tables 11 and 11a.

Asset Quality

Bank of Hawaii Corporation's credit quality continued to improve in the second quarter of 2003 as measured by reductions in non-performing assets and internal classifications, and a continued positive trend in the level of net charge-offs. Non-performing assets were $42.0 million at the end of the quarter, a decrease of $2.2 million, or 5.0 percent, from non-performing assets of $44.2 million at the end of the previous quarter. Improvements in non-performing assets were largely the result of loans returned to accrual or paid-off. These reductions were partially offset by the downgrade of a $7.6 million credit to a local company in Hawaii. Non-performing assets declined $36.8 million, or 46.7 percent compared to $78.8 million at the end of the same quarter last year. At June 30, 2003 the ratio of non-performing assets to total loans plus foreclosed assets and non-performing loans held for sale was 0.77 percent compared with 0.79 percent at March 31, 2003 and 1.45 percent at June 30, 2002.

Non-accrual loans were $32.7 million at June 30, 2003, a reduction of $2.4 million, or 6.8 percent, from $35.1 million at March 31, 2003 and down $28.9 million, or 46.9 percent, from $61.6 million at June 30, 2002. Non-accrual loans as a percentage of total loans were 0.60 percent at June 30, 2003, down from 0.63 percent at the end of the previous quarter and down significantly from 1.14 percent at the end of the comparable quarter last year.

Net charge-offs for the second quarter of 2003 were $2.1 million, or 0.15 percent (annualized) of total average loans, a decrease from $2.8 million, or 0.21 percent (annualized) of total average loans in the first quarter of 2003. Net charge-offs during the second quarter of 2002 were $3.3 million, or 0.24 percent (annualized) of total average loans. Net charge-offs during the second quarter of 2003 were comprised of $5.7 million in charge-offs partially offset by recoveries of $3.6 million. Net charge-offs for the first half of 2003 were $4.9 million, or 0.18 percent (annualized) of total average loans, a decrease from $11.6 million, or 0.42 percent (annualized) of total average loans in the comparable period last year.

The allowance for loan and lease losses was $138.0 million at June 30, 2003. The ratio of the allowance for loan and lease losses to total loans was 2.52 percent at June 30, 2003 unchanged from March 31, 2003 and down from 2.94 percent at June 30, 2002.

Concentrations of credit exposure to selected components of the portfolio are summarized in Table 7.

Other Financial Highlights

Total assets were $9.6 billion at June 30, 2003, up from $9.5 billion at December 31, 2002 and down from $9.8 billion at June 30, 2002. The increase from December 31, 2002 was largely due to growth in loans offset by reductions in non-earning assets. Compared to the previous year, total assets decreased $273 million due to reductions in short-term investments as excess liquidity was utilized for share repurchases and debt reduction that offset loan growth.

Total assets increased $141 million compared to March 31, 2003 largely due to growth in investment securities that offset a net decrease in loans. Commercial loans declined slightly from the previous quarter as managed reductions in syndicated lending and lease financing offset growth in Hawaii commercial lending. The decrease in consumer loans was largely the result of reductions in residential mortgages as the Company returned to selling new loan originations in the secondary market during the second quarter of 2003. Loan portfolio balances are summarized in Table 7.

Total deposits at June 30, 2003 were $7.1 billion, up $221 million from December 31, 2002 and up $685 million from June 30, 2002 as growth in demand and savings deposits continued to offset managed decreases in time and foreign deposits.

During the second quarter of 2003, Bank of Hawaii Corporation repurchased 2.2 million shares of common stock at a total cost of $73.0 million under the share repurchase program. The average cost per share was $33.70 during the quarter. From the beginning of the program through June 30, 2003, the Company had repurchased a total of 25.2 million shares and returned a total of $687.2 million to the shareholders at an average cost of $27.31 per share. Through July 25, 2003, the Company repurchased an additional 0.24 million shares of common stock at a cost of $34.15 per share. Remaining buyback authority was $104.7 million at July 25, 2003.

The Company's capital and liquidity remains exceptionally strong. At June 30, 2003 the Tier 1 leverage ratio was 9.29 percent compared to 10.03 percent at March 31, 2003 and 12.11 percent at June 30, 2002.

The Company's Board of Directors declared a quarterly cash dividend of $0.19 per share on the Company's outstanding shares. The dividend will be payable on September 15, 2003 to shareholders of record at the close of business on August 22, 2003. The Company's dividend level is currently under review and it is anticipated that an increase will be announced in the third quarter earnings release.

Information Technology Systems Replacement Project

Bank of Hawaii Corporation signed a seven-year outsourcing agreement with Metavante Corporation in July of 2002 to serve as the Company's primary technology systems provider. The conversion to Metavante was completed on July 7, 2003. The Company has been successfully operating on the Metavante platform since the conversion. This lower cost platform is expected to provide annual cost savings of over $17 million compared to second quarter 2002 technology expense levels. In connection with this project, the Company estimates that it will recognize transition charges of approximately $35 million over the five-quarter conversion period that ends during the third quarter of 2003. During the second quarter of 2003, $10.1 million in costs were incurred, bringing the total project-to-date cost to $31.1 million. The remaining system conversion cost of approximately $4.4 million is expected to be recognized in the third quarter of 2003. Additional details on this project may be found in Table 10.

Economic Outlook

Economic expansion continued in Hawaii during the second quarter of 2003. Hawaii personal income during the first quarter of 2003 increased 5.5 percent from the prior year period in nominal terms. Adjusted for inflation, Hawaii real personal income grew at a 3.5 percent compound annual rate during the eight quarters ended in the first quarter of 2003, a pace that is expected to continue through 2003. Hawaii seasonally-adjusted unemployment rose from 3.0 percent in February 2003 to 4.1 percent in June 2003, the same unemployment rate as one year earlier in June 2002. A resurgence of payroll employment growth after the Iraq conflict suggested that unemployment rates had only temporarily increased. Domestic travel -- comprising more than 80 percent of passenger volumes -- rose 4.8 percent during the second quarter of 2003 from the same quarter last year. International travel to Hawaii fell to 30.8 percent below second quarter 2002 volumes. The resulting 3.8 percent decline in overall passenger volumes during the second quarter of 2003 from same quarter last year was reversed in July 2003 as Asian arrivals increased. For more economic information, visit the Company's web site http://www.boh.com/econ/.

Earnings Outlook

The Company continues to believe that its previously published earnings guidance of $131 million in net income for the full year of 2003 remains realistic. Based on current conditions, the Company does not expect to record a provision for loan and lease losses in 2003. However, the actual amount of the provision for loan and lease losses depends on determinations of credit risk that are made near the end of each quarter. Earnings per share and return on equity projections continue to be dependent upon the terms and timing of share repurchases.

Conference Call Information

The Company will review its second quarter 2003 financial results today at 8:00 a.m. Hawaii Time (2:00 p.m. Eastern Time). The presentation 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 is (800) 915-4836 in the United States or (973) 317-5319 for international callers. No confirmation code is required to access the call. A replay will be available for one week beginning at 10:00 a.m. Hawaii Time (4:00 p.m. Eastern Time) on Monday, July 28, 2003 by calling (800) 428-6051 in the United States or (973) 709-2089 for international callers and entering the number 273139 when prompted. A replay of the presentation will also be available via the Investor Relations link of the Company's web site.

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.

This news release contains forward-looking statements concerning, among other things, the likelihood of an increase in dividend, the expected level of loan loss provisioning, anticipated costs and annual savings of our technology systems replacement project, and anticipated revenues and expenses in 2003 and beyond. We believe the assumptions underlying our forward-looking statements are reasonable. However, any of the assumptions 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) unanticipated changes in business and economic conditions, the competitive environment, fiscal and monetary policies, or legislation in Hawaii and the other markets we serve; 2) changes in our credit quality or risk profile which may increase or decrease the required level of allowance for loan and lease losses; 3) changes in market interest rates that may deteriorate our credit markets and ability to maintain our net interest margin; 4) changes to the amount and timing of our proposed equity repurchases; 5) inability to achieve expected benefits of our technology outsourcing project and other business process changes due to adverse changes in implementation processes or costs, operational savings, or timing; 6) actions by the United States military and real or threatened terrorist activity affecting business conditions; and 7) adverse weather and other natural conditions impacting our and our customers' operations. We do not undertake any obligation to update any forward-looking statements to reflect later events or circumstances.

Bank of Hawaii Corporation and Subsidiaries
Highlights  (Unaudited)                                        Table 1
----------------------------------------------------------------------
(dollars in thousands except     Three Months          Six Months
 per share amounts)                 Ended                Ended
Earnings Highlights and            June 30,             June 30,
 Performance Ratios              2003   2002(1)      2003     2002(1)
------------------------------ ---------------------------------------

Net Income                     $30,034 $31,016     $59,835    $62,072
Basic Earnings Per Share          0.50    0.43        0.99       0.85
Diluted Earnings Per Share        0.48    0.42        0.95       0.83
Cash Dividends                  11,370  13,068      22,932     26,245
Return on Average Assets          1.27%   1.23%       1.29%      1.22%
Return on Average Equity         12.93%   9.94%      12.67%      9.96%
Net Interest Margin               4.12%   3.97%       4.20%      3.95%
Efficiency Ratio                 67.55%  63.45%      67.01%     62.61%
Efficiency Ratio excluding
 ITSRP and Restructuring Costs   60.39%  63.45%      60.68%     61.92%

----------------------------------------------------------------------

Statement of Condition Highlights and                 June 30,
 Performance Ratios                                2003     2002 (1)
---------------------------------------         ----------------------

Total Assets                                    $9,550,934 $9,824,065
Net Loans                                        5,333,896  5,250,216
Total Deposits                                   7,140,849  6,455,981
Total Shareholders' Equity                         913,010  1,191,072

Book Value Per Common Share                         $15.50     $17.05
Allowance / Loans Outstanding                         2.52%      2.94%
Average Equity / Average
 Assets                                              10.16%     12.27%
Employees (FTE)                                      2,879      2,983
Branches and offices                                    91         97

Market Price Per Share of Common Stock
 for the Quarter Ended:
                                       Closing      $33.15     $28.00
                                       High         $35.90     $29.86
                                       Low          $30.75     $25.45

(1) Certain 2002 information has been reclassified to conform to 2003
presentation.


Bank of Hawaii Corporation and Subsidiaries
Consolidated Statements of Income (Unaudited)                  Table 2
----------------------------------------------------------------------
                            Three Months Ended     Six Months Ended
(dollars in thousands            June 30,              June 30,
 except per share amounts)   2003     2002 (1)     2003     2002 (1)
----------------------------------------------------------------------
Interest Income
   Interest and Fees on
    Loans and Leases         $85,954    $92,441   $171,727   $191,086
   Income on Investment
    Securities - Held to
    Maturity                   3,083      4,544      5,366      9,689
   Income on Investment
    Securities - Available
    for Sale                  19,815     26,805     42,278     53,998
   Deposits                    1,161      6,011      2,468     11,058
   Funds Sold and Security
    Resale Agreements            822        752      1,586      1,755
   Other                       1,016      1,395      2,205      2,727
----------------------------------------------------------------------
Total Interest Income        111,851    131,948    225,630    270,313
Interest Expense
   Deposits                   13,309     22,166     27,756     46,144
   Security Repurchase
    Agreements                 2,391      8,256      4,633     18,549
   Funds Purchased               219        245        424        476
   Short-Term Borrowings          25        289         49        938
   Long-Term Debt              5,422      8,055     11,283     16,374
----------------------------------------------------------------------
Total Interest Expense        21,366     39,011     44,145     82,481
----------------------------------------------------------------------
Net Interest Income           90,485     92,937    181,485    187,832
Provision for Loan and
 Lease Losses                      -      3,324          -     11,616
----------------------------------------------------------------------
Net Interest Income After
 Provision for Loan and
 Lease Losses                 90,485     89,613    181,485    176,216
Non-Interest Income
   Trust and Asset
    Management                12,545     14,175     25,726     28,993
   Mortgage Banking            6,061      2,842      6,344     10,799
   Service Charges on
    Deposit Accounts           8,645      7,956     17,595     16,366
   Fees, Exchange, and
    Other Service Charges     13,473     13,065     26,462     25,517
   Investment Securities
    Gains                        587          3      1,170          3
   Insurance                   2,991      2,563      5,973      5,162
   Other                       6,437      7,314     12,222     14,103
----------------------------------------------------------------------
Total Non-Interest Income     50,739     47,918     95,492    100,943
Non-Interest Expense
   Salaries                   39,232     37,884     75,691     77,071
   Pensions and Other
    Employee Benefits          8,479      9,391     18,449     19,387
   Net Occupancy Expense       9,628      9,321     19,241     18,914
   Net Equipment Expense       9,208      9,997     18,956     20,118
   Restructuring and Other
    Related Costs                  -          -          -      1,979
   Information Technology
    Systems Replacement
    Project                   10,105          -     17,522          -
   Other                      18,742     22,777     35,735     43,324
----------------------------------------------------------------------
Total Non-Interest Expense    95,394     89,370    185,594    180,793
----------------------------------------------------------------------
Income Before Income Taxes    45,830     48,161     91,383     96,366
Provision for Income Taxes    15,796     17,145     31,548     34,294
----------------------------------------------------------------------
Net Income                   $30,034    $31,016    $59,835    $62,072
======================================================================
Basic Earnings Per Share       $0.50      $0.43      $0.99      $0.85
Diluted Earnings Per Share     $0.48      $0.42      $0.95      $0.83
Dividends Per Share            $0.19      $0.18      $0.38      $0.36
Basic Weighted Average
 Shares                   59,566,970 72,299,850 60,425,943 72,803,414
Diluted Weighted Average
 Shares                   62,301,337 74,486,987 62,907,697 74,815,508
======================================================================

(1) Certain 2002 information has been reclassified to conform to 2003
presentation.


Bank of Hawaii Corporation and Subsidiaries
Consolidated Statements of Condition
 (Unaudited)                                                  Table 3
----------------------------------------------------------------------
                                    June 30,  December 31,  June 30,
(dollars in thousands)                2003        2002      2002 (1)
----------------------------------------------------------------------
Assets
Interest-Bearing Deposits            $307,552     $549,978 $1,346,014
Investment Securities - Held to
 Maturity
   (Market Value of $555,878,
    $236,016 and $323,722,
    respectively)                     548,719      229,720    312,467
Investment Securities - Available
 for Sale                           2,140,607    2,287,201  1,806,384
Funds Sold                            250,000      195,000    125,000
Loans Held for Sale                    71,892       40,118     48,416
Loans                               5,471,870    5,359,004  5,409,195
   Allowance for Loan and Lease
    Losses                           (137,974)    (142,853)  (158,979)
----------------------------------------------------------------------
     Net Loans                      5,333,896    5,216,151  5,250,216
----------------------------------------------------------------------
Total Earning Assets                8,652,666    8,518,168  8,888,497
Cash and Non-Interest Bearing
 Deposits                             297,868      374,352    304,595
Premises and Equipment                165,542      176,969    188,128
Customers' Acceptance Liability         1,371        2,680      1,657
Accrued Interest Receivable            35,849       36,722     38,425
Foreclosed Real Estate                  9,285        9,434     17,223
Mortgage Servicing Rights              24,841       28,820     30,244
Goodwill                               36,216       36,216     36,216
Other Assets                          327,296      333,057    319,080
----------------------------------------------------------------------
Total Assets                       $9,550,934   $9,516,418 $9,824,065
======================================================================
Liabilities
Domestic Deposits
   Non-Interest Bearing Demand     $1,843,750   $1,719,633 $1,466,092
   Interest Bearing Demand          1,157,801    1,169,128    986,546
   Savings                          2,754,607    2,535,219  2,292,395
   Time                             1,352,413    1,461,780  1,652,805
Foreign Deposits
   Time Due to Banks                        -        1,130     16,777
   Other Savings and Time              32,278       33,271     41,366
----------------------------------------------------------------------
Total Deposits                      7,140,849    6,920,161  6,455,981
Securities Sold Under Agreements to
 Repurchase                           699,256      735,621  1,257,808
Funds Purchased                        90,200       64,467     60,243
Current Maturities of Long-Term
 Debt                                  14,000      114,781    173,259
Short-Term Borrowings                  22,424       33,420     16,935
Banker's Acceptances Outstanding        1,371        2,680      1,657
Retirement Benefits Payable            62,678       61,385     37,642
Accrued Interest Payable                9,755       13,731     23,427
Taxes Payable                         196,868      196,813    181,826
Other Liabilities                      81,988       82,596     80,158
Long-Term Debt                        318,535      275,004    344,057
----------------------------------------------------------------------
Total Liabilities                   8,637,924    8,500,659  8,632,993
Shareholders' Equity
Common Stock ($.01 par value);
 authorized 500,000,000 shares;
 issued / outstanding: June 2003 -
  81,588,394 / 58,896,230;
 December 2002 - 81,294,730 /
  63,015,442; June 2002 -
  81,329,346 / 69,856,075                 807          806        806
Capital Surplus                       386,565      372,192    370,947
Accumulated Other Comprehensive
 Income                                12,412       11,659     29,931
Retained Earnings                   1,151,623    1,115,910  1,082,421
Deferred Stock Grants                  (8,168)      (1,424)    (4,182)
Treasury Stock, at Cost (Shares:
 June 2003 - 22,692,164; December
 2002 - 18,279,288; June 2002 -
 11,473,271)                         (630,229)    (483,384)  (288,851)
----------------------------------------------------------------------
Total Shareholders' Equity            913,010    1,015,759  1,191,072
----------------------------------------------------------------------
Total Liabilities and Shareholders'
 Equity                            $9,550,934   $9,516,418 $9,824,065
======================================================================

(1) Certain 2002 information has been reclassified to conform to 2003
presentation.


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  Income
----------------------------------------------------------------------

Balance at December 31, 2002        $1,015,759  $806 $372,192 $11,659
Comprehensive Income:
     Net Income                         59,835     -        -       -
     Other Comprehensive Income, Net of Tax:
         Unrealized Gain on
          Investment Securities            753     -        -     753
     Total Comprehensive Income

Common Stock Issued:
   18,147 Retirement Savings Plan          585     -      184       -
  635,660 Stock Option Plan             16,215     -    3,660       -
   45,518 Dividend Reinvestment Plan     1,463     -      459       -
    6,777 Directors' Restricted Shares and
               Deferred Compensation
                Plan                       140     1      224       -
          Employees' Restricted
  286,700  Shares                        3,382     -    9,846       -
Treasury Stock Purchased (5,107,779
 shares)                              (162,190)    -        -       -
Cash Dividends Paid                    (22,932)    -        -       -
----------------------------------------------------------------------
Balance at June 30, 2003              $913,010  $807 $386,565 $12,412
======================================================================

Balance at December 31, 2001        $1,247,012  $806 $367,672 $22,761
Comprehensive Income:
     Net Income                         62,072     -        -       -
     Other Comprehensive Income, Net of Tax:
         Unrealized Gain on
          Investment Securities          7,547     -        -   7,547
         Foreign Currency
          Translation Adjustment          (377)    -        -    (377)
     Total Comprehensive Income

Common Stock Issued:
   22,894 Retirement Savings Plan          632     -      119       -
1,222,308 Stock Option Plan             25,142     -    3,727       -
   53,227 Dividend Reinvestment Plan     1,464     -      264       -
    3,605
          Directors' Restricted
           Shares and Deferred
           Compensation Plan                50     -      103       -
          Employees' Restricted
  (51,500) Shares                        2,469     -     (938)      -
Treasury Stock Purchased (4,610,800
 shares)                              (128,694)    -        -       -
Cash Dividends Paid                    (26,245)    -        -       -
----------------------------------------------------------------------
Balance at June 30, 2002            $1,191,072  $806 $370,947 $29,931
======================================================================


Bank of Hawaii Corporation and Subsidiaries
Consolidated Statements of Shareholders' Equity (Unaudited)    Table 4
----------------------------------------------------------------------

                                            Deferred          Compre-
                                  Retained   Stock   Treasury hensive
(dollars in thousands)            Earnings   Grants   Stock    Income
----------------------------------------------------------------------

Balance at December 31, 2002     $1,115,910 $(1,424)$(483,384)
Comprehensive Income:
     Net Income                      59,835       -         - $59,835
     Other Comprehensive Income, Net of
      Tax:
         Unrealized Gain on
          Investment Securities           -       -         -     753
                                                              --------
     Total Comprehensive Income                               $60,588
                                                              ========

Common Stock Issued:
   18,147 Retirement Savings Plan         -       -       401
  635,660 Stock Option Plan          (1,190)   (280)   14,025
          Dividend Reinvestment
   45,518  Plan                           -       -     1,004
    6,777 Directors' Restricted Shares and
            Deferred Compensation
             Plan                         -       -       (85)
          Employees' Restricted
  286,700  Shares                         -  (6,464)        -
Treasury Stock Purchased
 (5,107,779 shares)                       -       -  (162,190)
Cash Dividends Paid                 (22,932)      -         -
--------------------------------------------------------------
Balance at June 30, 2003         $1,151,623 $(8,168)$(630,229)
==============================================================

Balance at December 31, 2001     $1,055,424 $(7,637)$(192,014)
Comprehensive Income:
     Net Income                      62,072       -         - $62,072
     Other Comprehensive Income, Net of
      Tax:
         Unrealized Gain on
          Investment Securities           -       -         -   7,547
         Foreign Currency
          Translation Adjustment          -       -         -    (377)
                                                              --------
     Total Comprehensive Income                               $69,242
                                                              ========

Common Stock Issued:
   22,894 Retirement Savings Plan         -       -       513
1,222,308 Stock Option Plan          (8,828)     48    30,195
          Dividend Reinvestment
   53,227  Plan                          (2)      -     1,202
    3,605
          Directors' Restricted
           Shares and Deferred
           Compensation Plan              -       -       (53)
          Employees' Restricted
  (51,500) Shares                         -   3,407         -
Treasury Stock Purchased
 (4,610,800 shares)                       -       -  (128,694)
Cash Dividends Paid                 (26,245)      -         -
--------------------------------------------------------------
Balance at June 30, 2002         $1,082,421 $(4,182)$(288,851)
==============================================================


Bank of Hawaii Corporation and Subsidiaries
Consolidated Average Balances and Interest Rates - Taxable Equivalent
 Basis (Unaudited)                                             Table 5
----------------------------------------------------------------------

                          Three Months Ended     Three Months Ended
                            June 30, 2003          March 31, 2003
                         Average Income/Yield/  Average Income/Yield/
(dollars in millions)    Balance Expense Rate   Balance Expense Rate
----------------------------------------------------------------------
Earning Assets
Interest Bearing
 Deposits                 $212.4   $1.2  2.19%   $253.8   $1.3  2.09%
Funds Sold                 267.3    0.9  1.23     250.5    0.8  1.22
Investment Securities
-  Held to Maturity        324.8    3.1  3.85     202.0    2.3  4.61
-  Available for Sale    2,316.9   19.8  3.42   2,268.1   22.5  3.96
Loans Held for Sale         81.6    1.1  5.43      10.1    0.1  5.16
Net Loans and Lease
 Financing
Domestic
 -  Commercial and
     Industrial            819.8   10.0  4.87     871.7   10.5  4.87
 -  Construction            83.0    0.9  4.50     115.4    1.4  5.08
 -  Commercial Mortgage    682.5   10.1  5.93     597.8    9.0  6.14
 -  Residential Mortgage 2,295.1   37.3  6.50   2,249.0   37.7  6.70
 -  Installment            535.6   13.6 10.18     501.9   12.8 10.36
 -  Home Equity            442.7    5.6  5.06     434.5    5.7  5.28
 -  Purchased Home
     Equity                162.3    2.0  4.96     180.2    2.6  5.78
 -  Lease Financing        482.6    5.3  4.42     495.6    5.9  4.81
----------------------------------------------------------------------
Total Domestic Loans     5,503.6   84.8  6.17   5,446.1   85.6  6.33
Foreign                     14.8      -     -      14.7      -     -
----------------------------------------------------------------------
Total Loans              5,518.4   84.8  6.16   5,460.8   85.6  6.32
Other                       75.3    1.0  5.41      74.6    1.2  6.47
----------------------------------------------------------------------
Total Earning Assets     8,796.7  111.9  5.09   8,519.9  113.8  5.38
Cash and Non-interest
 Bearing Deposits          325.6                  331.6
Other Assets               385.9                  391.5
                        ---------              ---------
Total Assets            $9,508.2               $9,243.0
                        =========              =========

Interest Bearing
 Liabilities
Interest Bearing
 Deposits
Domestic Deposits
 -  Demand              $1,164.8    0.7  0.25  $1,149.2    0.7  0.26
 -  Savings              2,744.1    4.5  0.65   2,608.2    4.6  0.71
 -  Time                 1,401.4    8.1  2.31   1,443.3    9.1  2.55
----------------------------------------------------------------------
Total Domestic Deposits  5,310.3   13.3  1.00   5,200.7   14.4  1.12
Foreign Deposits
-  Time Due to Banks           -      -     -       1.0      -     -
-  Other Time and
    Savings                 30.3    0.1  0.91      30.5    0.1  1.23
----------------------------------------------------------------------
Total Foreign Deposits      30.3    0.1  0.91      31.5    0.1  1.11
----------------------------------------------------------------------
Total Interest Bearing
 Deposits                5,340.6   13.4  1.00   5,232.2   14.5  1.12
Short-Term Borrowings      810.2    2.6  1.30     649.8    2.5  1.54
Long-Term Debt             371.5    5.4  5.85     390.4    5.8  6.09
----------------------------------------------------------------------
Total Interest Bearing
 Liabilities             6,522.3   21.4  1.31   6,272.4   22.8  1.47
----------------------------------------------------------------------
Net Interest Income               $90.5                  $91.0
                                 =======                =======
  Interest Rate Spread                   3.78%                  3.91%
  Net Interest Margin                    4.12%                  4.29%
Non-Interest Bearing
 Demand Deposits
 (Domestic)              1,695.3                1,636.8
Other Liabilities          358.7                  360.7
Shareholders' Equity       931.9                  973.1
                        ---------              ---------
Total Liabilities and
 Shareholders' Equity   $9,508.2               $9,243.0
                        =========              =========

(1) Certain 2002 information has been reclassified to conform to 2003
presentation.

Consolidated Average Balances and Interest Rates - Taxable Equivalent
 Basis (Unaudited)                                             Table 5
----------------------------------------------------------------------

                          Three Months Ended (1)    Six Months Ended
                              June 30, 2002           June 30, 2003
                         Average  Income/Yield/  Average Income/Yield/
(dollars in millions)    Balance  Expense Rate   Balance Expense Rate
----------------------------------------------------------------------
Earning Assets
Interest Bearing
 Deposits                $1,310.0   $6.0  1.84%   $233.0   $2.5  2.14%
Funds Sold                  173.3    0.8  1.74     259.0    1.6  1.22
Investment Securities
-  Held to Maturity         328.6    4.7  5.63     263.7    5.4  4.14
-  Available for Sale     1,890.3   26.8  5.67   2,292.6   42.3  3.69
Loans Held for Sale          65.2    1.1  6.88      46.0    1.2  5.38
Net Loans and Lease
 Financing
Domestic
 -  Commercial and
     Industrial           1,061.1   13.4  5.07     845.6   20.4  4.87
 -  Construction            157.5    2.2  5.72      99.1    2.4  4.83
 -  Commercial Mortgage     587.5    9.9  6.73     640.5   19.2  6.03
 -  Residential Mortgage  2,399.0   42.5  7.08   2,272.1   75.0  6.60
 -  Installment             392.0   11.0 11.23     518.8   26.4 10.27
 -  Home Equity             391.1    5.7  5.90     438.6   11.2  5.17
 -  Purchased Home
     Equity                     -      -     -     171.2    4.6  5.39
 -  Lease Financing         502.2    6.6  5.25     489.1   11.2  4.62
----------------------------------------------- ----------------------
Total Domestic Loans      5,490.4   91.3  6.66   5,475.0  170.4  6.25
Foreign                      14.1      -     -      14.8    0.1  1.39
----------------------------------------------- ----------------------
Total Loans               5,504.5   91.3  6.65   5,489.8  170.5  6.24
Other                        99.2    1.3  5.64      74.9    2.2  5.93
----------------------------------------------- ----------------------
Total Earning Assets      9,371.1  132.0  5.64   8,659.0  225.7  5.23
Cash and Non-interest
 Bearing Deposits           343.6                  328.6
Other Assets                365.3                  388.7
                        ----------              ---------
Total Assets            $10,080.0               $9,376.3
                        ==========              =========

Interest Bearing
 Liabilities
Interest Bearing
 Deposits
Domestic Deposits
 -  Demand                 $965.1    1.1  0.45  $1,157.0    1.5  0.25
 -  Savings               2,173.5    7.8  1.44   2,676.5    9.0  0.68
 -  Time                  1,732.0   12.9  2.98   1,422.2   17.1  2.43
----------------------------------------------- ----------------------
Total Domestic Deposits   4,870.6   21.8  1.79   5,255.7   27.6  1.06
Foreign Deposits
-  Time Due to Banks         37.3    0.1  1.47       0.5      -     -
-  Other Time and
    Savings                  59.1    0.3  1.67      30.4    0.1  1.07
----------------------------------------------- ----------------------
Total Foreign Deposits       96.4    0.4  1.59      30.9    0.1  1.01
----------------------------------------------- ----------------------
Total Interest Bearing
 Deposits                 4,967.0   22.2  1.79   5,286.6   27.7  1.06
Short-Term Borrowings     1,475.9    8.8  2.39     730.5    5.1  1.41
Long-Term Debt              507.1    8.0  6.37     380.9   11.3  5.97
----------------------------------------------- ----------------------
Total Interest Bearing
 Liabilities              6,950.0   39.0  2.25   6,398.0   44.1  1.39
----------------------------------------------- ----------------------
Net Interest Income                $93.0                 $181.6
                                  =======                =======
 Interest Rate Spread                     3.39%                  3.84%
 Net Interest Margin                      3.97%                  4.20%
Non-Interest Bearing
 Demand Deposits
 (Domestic)               1,566.7                1,666.2
Other Liabilities           312.3                  359.7
Shareholders' Equity      1,251.0                  952.4
                        ----------              ---------
Total Liabilities and
 Shareholders' Equity   $10,080.0               $9,376.3
                        ==========              =========

(1) Certain 2002 information has been reclassified to conform to 2003
presentation.


Bank of Hawaii Corporation and Subsidiaries
Analysis of Change in Net Interest Income - Taxable Equivalent
 Basis (Unaudited)                                            Table 6
----------------------------------------------------------------------
                                  Three Months Ended June 30, 2003
                                  Compared to March 31, 2003
(dollars in millions)          Volume (1)   Rate (1)  Time (1)   Total
----------------------------------------------------------------------

Change in Interest Income:
Interest Bearing Deposits          $(0.2)      $0.1        $-   $(0.1)
Funds Sold                           0.1          -         -     0.1
Investment Securities
   Held to Maturity                  1.2       (0.4)        -     0.8
   Available for Sale                0.4       (3.1)        -    (2.7)
Loans Held for Sale                  1.0          -         -     1.0
Net Loans and Lease Financing
 (Domestic)
   Commercial and Industrial        (0.6)         -       0.1    (0.5)
   Construction                     (0.3)      (0.2)        -    (0.5)
   Commercial Mortgage               1.3       (0.3)      0.1     1.1
   Residential Mortgage              0.7       (1.1)        -    (0.4)
   Installment                       0.8       (0.2)      0.2     0.8
   Home Equity                       0.1       (0.2)        -    (0.1)
   Purchased Home Equity            (0.2)      (0.4)        -    (0.6)
   Lease Financing                  (0.2)      (0.5)      0.1    (0.6)
----------------------------------------------------------------------
Total Loans                          1.6       (2.9)      0.5    (0.8)
Other                                  -       (0.2)        -    (0.2)
----------------------------------------------------------------------

Total Change in Interest
 Income                              4.1       (6.5)      0.5    (1.9)
----------------------------------------------------------------------

Change in Interest Expense:
Interest Bearing Deposits
 (Domestic)
   Savings                           0.2       (0.4)      0.1    (0.1)
   Time                             (0.2)      (0.9)      0.1    (1.0)
----------------------------------------------------------------------
Total Interest Bearing
 Deposits                              -       (1.3)      0.2    (1.1)
Short-Term Borrowings                0.5       (0.4)        -     0.1
Long-Term Debt                      (0.3)      (0.2)      0.1    (0.4)
----------------------------------------------------------------------

Total Change in Interest
 Expense                             0.2       (1.9)      0.3    (1.4)
----------------------------------------------------------------------

Change in Net Interest Income       $3.9      $(4.6)     $0.2   $(0.5)
======================================================================

(1) The changes for each category of interest income and expense are
allocated between the portion of changes attributable to the variance
in volume, rate or time for that category.


Bank of Hawaii Corporation and Subsidiaries
Loan Portfolio Balances (Unaudited)                            Table 7
----------------------------------------------------------------------

(dollars in                      June 30,  March 31, Dec. 31, June 30,
 millions)                         2003      2003      2002   2002 (1)
----------------------------------------------------------------------
Domestic
 Commercial
    Commercial and
     Industrial                    $808.5   $824.9    $875.0   $993.4
    Commercial
     Mortgage                       689.7    691.7     591.1    562.5
    Construction                     83.6     86.7     127.5    148.6
    Lease
     Financing                      416.9    430.4     427.3    432.7
----------------------------------------------------------------------
 Total Commercial                 1,998.7  2,033.7   2,020.9  2,137.2
 Consumer
    Residential
     Mortgage                     2,222.0  2,305.3   2,131.4  2,361.2
    Home Equity                     450.3    439.1     428.2    404.2
    Purchased Home
     Equity                         145.6    170.9     185.8        -
    Other Consumer                  554.8    518.5     493.3    403.2
    Lease
     Financing                       34.0     33.8      34.5     37.3
----------------------------------------------------------------------
 Total Consumer                   3,406.7  3,467.6   3,273.2  3,205.9
----------------------------------------------------------------------
Total Domestic                    5,405.4  5,501.3   5,294.1  5,343.1
----------------------------------------------------------------------
Foreign                              66.5     64.1      64.9     66.1
----------------------------------------------------------------------
Total Loans                      $5,471.9 $5,565.4  $5,359.0 $5,409.2
======================================================================


Selected Concentrations of Credit Exposure (Unaudited)
----------------------------------------------------------------------
                                June 30,            Dec. 31, June 30,
                                   2003                2002     2002
                                 Unused    Total     Total    Total
(dollars in        Outstanding Commitments Exposure  Exposure Exposure
 millions)
----------------------------------------------------------------------

Air Transportation
 Regional
  Passenger
  Carriers               $45.8      $11.7    $57.5     $57.3    $58.0
 United States
  Based Passenger
  Carriers                39.8          -     39.8      39.6     49.0
 International
  Based Passenger
  Carriers                31.8          -     31.8      32.1     32.0
 Cargo Carriers           14.7          -     14.7      15.0     15.0
----------------------------------------------------------------------
Total Air
 Transportation         $132.1      $11.7   $143.8    $144.0   $154.0
======================================================================

Guam
 Hotel (2)               $42.8         $-    $42.8     $44.4    $43.0
 Other Commercial        148.3       35.5    183.8     166.0    230.2
 Consumer                259.0        6.8    265.8     257.4    283.3
----------------------------------------------------------------------
Total Guam              $450.1      $42.3   $492.4    $467.8   $556.5
======================================================================

Syndicated
 Exposure               $278.3     $606.8   $885.1  $1,002.1 $1,096.2
======================================================================

Exposure includes loans, leveraged leases and operating leases.

(1) Certain 2002 information has been reclassified to conform to 2003
presentation.

(2) A $25.0 million payment-in-full was received in mid-July reducing
Hotel exposure to $17.8 million.


Bank of Hawaii Corporation and Subsidiaries
Consolidated Non-Performing Assets and Accruing Loans Past
 Due 90 Days or More  (Unaudited)                             Table 8
----------------------------------------------------------------------

                        June 30, March 31, Dec. 31, Sept. 30, June 30,
(dollars in millions)     2003     2003     2002     2002(1)   2002(1)
----------------------------------------------------------------------

Non-Performing Assets
Non-Accrual Loans
  Commercial
    Commercial and
     Industrial              $8.8     $2.4     $5.9     $6.4    $14.4
    Commercial Mortgage      11.2     17.9     20.3     18.1     25.3
    Construction                -        -      0.5      0.9      0.7
    Lease Financing           2.5      3.2      4.1      5.7      6.9
----------------------------------------------------------------------
  Total Commercial           22.5     23.5     30.8     31.1     47.3
  Consumer
    Residential Mortgage     10.2     11.5     13.9     14.3     14.2
    Home Equity                 -      0.1      0.3      0.2      0.1
    Other Consumer              -        -        -      0.1        -
----------------------------------------------------------------------
  Total Consumer             10.2     11.6     14.2     14.6     14.3
----------------------------------------------------------------------
Total Non-Accrual Loans      32.7     35.1     45.0     45.7     61.6
----------------------------------------------------------------------

Foreclosed Real Estate        9.3      9.1      9.4     17.6     17.2

----------------------------------------------------------------------
Total Non-Performing
 Assets                     $42.0    $44.2    $54.4    $63.3    $78.8
======================================================================

Accruing Loans Past Due
 90 Days or More
  Commercial
    Commercial and
     Industrial              $0.5       $-     $0.2       $-       $-
    Commercial Mortgage         -      0.4      0.3        -        -
----------------------------------------------------------------------
  Total Commercial            0.5      0.4      0.5        -        -
  Consumer
    Residential Mortgage      1.8      1.6      0.6      1.4      0.9
    Home Equity               0.1        -        -        -        -
    Purchased Home Equity     0.1        -        -        -        -
    Other Consumer            0.4      2.3      0.7      0.3      0.5
    Lease Financing             -        -        -        -      0.1
----------------------------------------------------------------------
  Total Consumer              2.4      3.9      1.3      1.7      1.5
----------------------------------------------------------------------
Total Accruing and Past
 Due                         $2.9     $4.3     $1.8     $1.7     $1.5
======================================================================

Total Loans              $5,471.9 $5,565.4 $5,359.0 $5,259.3 $5,409.2
======================================================================

Ratio of Non-Accrual
 Loans to Total Loans        0.60%    0.63%    0.84%    0.87%    1.14%
----------------------------------------------------------------------

Ratio of Non-Performing Assets to
 Total Loans, Foreclosed
Real Estate and Non-
 Performing Loans Held
 for Sale                    0.77%    0.79%    1.01%    1.20%    1.45%
----------------------------------------------------------------------

Ratio of Non-Performing Assets and
 Accruing Loans
Past Due 90 Days or More
 to Total Loans              0.82%    0.87%    1.05%    1.24%    1.48%
----------------------------------------------------------------------

Quarter to Quarter Changes in Non-
 Performing Assets
Balance at Beginning of
 Quarter                    $44.2    $54.4    $63.3    $78.8    $90.7
  Additions                  11.6      4.8     12.0      7.0     20.5
  Reductions
    Payments and Sales of
     Loans                   (4.3)    (5.6)    (6.9)    (8.5)   (20.6)
    Return to Accrual        (7.5)    (5.6)    (1.9)    (9.1)    (6.2)
    Sales of Foreclosed
     Assets                  (0.7)    (1.1)    (9.4)    (1.4)    (3.5)
    Charge-offs              (1.3)    (2.7)    (2.7)    (3.5)    (2.1)
----------------------------------------------------------------------
  Total Reductions          (13.8)   (15.0)   (20.9)   (22.5)   (32.4)

----------------------------------------------------------------------
Balance at End of Quarter   $42.0    $44.2    $54.4    $63.3    $78.8
======================================================================

(1) Certain 2002 information has been reclassified to conform to 2003
presentation.


Bank of Hawaii Corporation and Subsidiaries
Consolidated Allowance for Loan and Lease Losses (Unaudited)   Table 9
----------------------------------------------------------------------
                            Three Months Ended       Six Months Ended
                        June 30, March 31, June 30,       June 30,
(dollars in millions)     2003     2003    2002 (1)    2003   2002 (1)
----------------------------------------------------------------------

Balance at Beginning of
 Period                   $140.0   $142.9   $159.0    $142.9   $159.0
Loans Charged-Off
  Commercial
    Commercial and
     Industrial             (0.6)    (1.6)    (2.8)     (2.2)   (10.1)
    Commercial Mortgage     (0.4)       -     (0.4)     (0.4)    (0.4)
    Construction               -     (0.5)       -      (0.5)    (0.5)
    Lease Financing         (0.3)       -     (0.1)     (0.3)    (0.1)
  Consumer
   Residential Mortgage     (0.7)    (0.7)    (1.0)     (1.4)    (2.4)
   Home Equity                 -     (0.1)    (0.1)     (0.1)    (0.2)
   Other Consumer           (3.6)    (3.1)    (3.0)     (6.7)    (6.7)
   Lease Financing             -     (0.1)    (0.1)     (0.1)    (0.2)
----------------------------------------------------------------------
Total Charge-Offs           (5.7)    (6.1)    (7.5)    (11.7)   (20.6)
Recoveries on Loans
 Previously Charged-Off
  Commercial
    Commercial and
     Industrial              1.8      0.6      2.1       2.4      2.8
    Commercial Mortgage      0.1        -      0.1       0.1      1.9
    Construction             0.1      0.9        -       1.0        -
  Consumer
   Residential Mortgage      0.3      0.2      0.4       0.5      0.7
   Home Equity                 -      0.1        -       0.1      0.1
   Other Consumer            1.3      1.3      1.5       2.6      3.3
   Lease Financing             -      0.1        -       0.1        -
  Foreign                      -      0.1      0.1       0.1      0.2
----------------------------------------------------------------------
Total Recoveries             3.6      3.3      4.2       6.9      9.0
----------------------------------------------------------------------
Net Loan Charge-Offs        (2.1)    (2.8)    (3.3)     (4.9)   (11.6)
Provision for Loan and
 Lease Losses                  -        -      3.3         -     11.6
----------------------------------------------------------------------
Balance at End of Period  $138.0   $140.0   $159.0    $138.0   $159.0
======================================================================

Average Loans
 Outstanding            $5,518.4 $5,460.8 $5,504.5  $5,489.8 $5,544.7
======================================================================

Ratio of Net Charge-Offs
 to Average Loans
 Outstanding
 (annualized)               0.15%    0.21%    0.24%     0.18%    0.42%
Ratio of Allowance to
 Loans Outstanding          2.52%    2.52%    2.94%     2.52%    2.94%


(1) Certain 2002 information has been reclassified to conform to 2003
presentation.

Totals may not add due to rounding.


Bank of Hawaii Corporation and Subsidiaries
Information Technology Systems Replacement Project
(Unaudited)                                                  Table 10
----------------------------------------------------------------------

                              Employee                   Other
(dollars in   Professional Termination  Accelerated Associated
 millions)            Fees    Benefits Depreciation  Costs (1)   Total
------------- ------------ ----------- ------------ ---------- -------

Costs Incurred:
Three Months
 Ended:
   September
    30, 2002         $1.9        $1.0         $3.2       $0.5    $6.6
   December
    31, 2002          3.2         0.2          2.2        1.4     7.0
------------- ------------ ----------- ------------ ---------- -------
Year Ended
 December 31,
 2002                 5.1         1.2          5.4        1.9    13.6
Three Months
 Ended:
   March 31,
    2003              3.5         0.4          2.0        1.5     7.4
   June 30,
    2003              2.9         2.6          1.8        2.8    10.1
------------- ------------ ----------- ------------ ---------- -------
Six Months
 Ended June
 30, 2003             6.4         3.0          3.8        4.3    17.5
------------- ------------ ----------- ------------ ---------- -------
Total Costs
 Incurred           $11.5        $4.2         $9.2       $6.2   $31.1
============= ============ =========== ============ ========== =======

Total
 Expected
 Project
 Costs              $12.6        $5.3         $9.2       $8.4   $35.5
============= ============ =========== ============ ========== =======

(1) Includes contract termination, equipment, excise tax and other
costs.


Bank of Hawaii Corporation and Subsidiaries
Business Segment Selected Financial Information (Unaudited)   Table 11
----------------------------------------------------------------------

                                      Investment   Treasury  Consoli-
(dollars in          Retail Commercial  Services  and Other    dated
 thousands)         Banking    Banking     Group  Corporate    Total
----------------------------------------------------------------------

Three Months
 Ended June 30,
 2003
Net Interest
 Income            $57,375    $36,382    $3,332    $(6,604)   $90,485
Provision for
 Loan and Lease
 Losses             (1,321)    (1,022)        -      2,343          -
----------------------------------------------------------------------
Net Interest
 Income After
 Provision for
 Loan and Lease
 Losses             56,054     35,360     3,332     (4,261)    90,485
Non-Interest
 Income             23,899      7,944    15,428      3,468     50,739
----------------------------------------------------------------------
                    79,953     43,304    18,760       (793)   141,224
Information
 Technology
 Systems
 Replacement
 Project              (368)         -       (90)    (9,647)   (10,105)
Non-Interest
 Expense           (42,126)   (23,205)  (15,937)    (4,021)   (85,289)
----------------------------------------------------------------------
Income Before
 Income Taxes       37,459     20,099     2,733    (14,461)    45,830
Provision for
 Income Taxes      (13,860)    (7,319)   (1,011)     6,394    (15,796)
----------------------------------------------------------------------
Allocated Net
 Income (Loss)      23,599     12,780     1,722     (8,067)    30,034
----------------------------------------------------------------------
Allowance
 Funding Value        (161)    (1,100)       (7)     1,268          -
GAAP Provision       1,321      1,022         -     (2,343)         -
Economic
 Provision          (2,901)    (3,027)     (112)        (5)    (6,045)
Tax Effect of
 Adjustments           644      1,149        44        400      2,237
----------------------------------------------------------------------
Income Before
 Capital Charge     22,502     10,824     1,647     (8,747)    26,226
Capital Charge      (5,494)    (5,350)   (1,512)   (13,275)   (25,631)
----------------------------------------------------------------------
Net Income
 (Loss) After
 Capital Charge
 (NIACC)           $17,008     $5,474      $135   $(22,022)      $595
======================================================================

RAROC (ROE for
 the Company)           45%        22%       12%       (7)%        13%
======================================================================

Total Assets at
 June 30, 2003  $3,482,754 $2,207,816  $127,894 $3,732,470 $9,550,934
======================================================================

Three Months
 Ended June 30,
 2002
Net Interest
 Income            $48,996    $34,705    $3,140     $6,096    $92,937
Provision for
 Loan and Lease
 Losses               (549)    (3,096)        -        321     (3,324)
----------------------------------------------------------------------
Net Interest
 Income After
 Provision for
 Loan and Lease
 Losses             48,447     31,609     3,140      6,417     89,613
Non-Interest
 Income             18,435      8,752    17,376      3,355     47,918
----------------------------------------------------------------------
                    66,882     40,361    20,516      9,772    137,531
Non-Interest
 Expense           (44,512)   (24,372)  (18,059)    (2,427)   (89,370)
----------------------------------------------------------------------
Income Before
 Income Taxes       22,370     15,989     2,457      7,345     48,161
Provision for
 Income Taxes       (8,277)    (5,834)     (909)    (2,125)   (17,145)
----------------------------------------------------------------------
Allocated Net
 Income             14,093     10,155     1,548      5,220     31,016
----------------------------------------------------------------------
Allowance
 Funding Value        (204)    (1,597)       (4)     1,805          -
GAAP Provision         549      3,096         -       (321)     3,324
Economic
 Provision          (2,905)    (3,667)     (124)         -     (6,696)
Tax Effect of
 Adjustments           947        802        47       (548)     1,248
----------------------------------------------------------------------
Income Before
 Capital Charge     12,480      8,789     1,467      6,156     28,892
Capital Charge      (5,248)    (6,044)   (1,620)   (21,490)   (34,402)
----------------------------------------------------------------------
Net Income
 (Loss) After
 Capital Charge
 (NIACC)            $7,232     $2,745     $(153)  $(15,334)   $(5,510)
======================================================================

RAROC (ROE for
 the Company)           26%        16%       10%        28%        10%
======================================================================

Total Assets at
 June 30, 2002  $3,217,645 $2,392,041  $115,119 $4,099,260 $9,824,065
======================================================================


Bank of Hawaii Corporation and Subsidiaries
Business Segment Selected Financial Information              Table 11a
 (Unaudited)
----------------------------------------------------------------------
                                     Investment   Treasury
(dollars in        Retail  Commercial  Services and Other Consolidated
 thousands)        Banking    Banking     Group  Corporate       Total
----------------------------------------------------------------------

Six Months
 Ended June 30,
 2003
Net Interest
 Income          $112,359    $72,769    $7,302   $(10,945)   $181,485
Provision for
 Loan and Lease
 Losses            (2,169)    (3,173)        -      5,342           -
----------------------------------------------------------------------
Net Interest
 Income After
 Provision for
 Loan and Lease
 Losses           110,190     69,596     7,302     (5,603)    181,485
Non-Interest
 Income            41,285     16,359    31,107      6,741      95,492
----------------------------------------------------------------------
                  151,475     85,955    38,409      1,138     276,977
Information
 Technology
 Systems
 Replacement
 Project             (950)       (23)     (334)   (16,215)    (17,522)
Non-Interest
 Expense          (82,795)   (45,924)  (31,841)    (7,512)   (168,072)
----------------------------------------------------------------------
Income Before
 Income Taxes      67,730     40,008     6,234    (22,589)     91,383
Provision for
 Income Taxes     (25,060)   (14,589)   (2,307)    10,408     (31,548)
----------------------------------------------------------------------
Allocated Net
 Income (Loss)     42,670     25,419     3,927    (12,181)     59,835
----------------------------------------------------------------------
Allowance
 Funding Value       (313)    (2,241)      (17)     2,571           -
GAAP Provision      2,169      3,173         -     (5,342)          -
Economic
 Provision         (5,609)    (6,086)     (244)       (10)    (11,949)
Tax Effect of
 Adjustments        1,389      1,907        97      1,028       4,421
----------------------------------------------------------------------
Income Before
 Capital Charge    40,306     22,172     3,763    (13,934)     52,307
Capital Charge    (10,886)   (10,728)   (3,030)   (27,739)    (52,383)
----------------------------------------------------------------------
Net Income
 (Loss) After
 Capital Charge
 (NIACC)          $29,420    $11,444      $733   $(41,673)       $(76)
======================================================================

RAROC (ROE for
 the Company)          41%        23%       14%       (5)%         13%
======================================================================

Total Assets at
 June 30, 2003 $3,482,754 $2,207,816  $127,894 $3,732,470  $9,550,934
======================================================================

Six Months
 Ended June 30,
 2002
Net Interest
 Income           $98,552    $70,335    $6,140    $12,805    $187,832
Provision for
 Loan and Lease
 Losses            (2,491)    (9,606)        -        481     (11,616)
----------------------------------------------------------------------
Net Interest
 Income After
 Provision for
 Loan and Lease
 Losses            96,061     60,729     6,140     13,286     176,216
Non-Interest
 Income            42,487     17,373    35,200      5,883     100,943
----------------------------------------------------------------------
                  138,548     78,102    41,340     19,169     277,159
Restructuring
 and Other
 Related Costs          -          -         -     (1,979)     (1,979)
Non-Interest
 Expense          (90,826)   (49,327)  (34,119)    (4,542)   (178,814)
----------------------------------------------------------------------
Income Before
 Income Taxes      47,722     28,775     7,221     12,648      96,366
Provision for
 Income Taxes     (17,657)   (10,489)   (2,672)    (3,476)    (34,294)
----------------------------------------------------------------------
Allocated Net
 Income            30,065     18,286     4,549      9,172      62,072
----------------------------------------------------------------------
Allowance
 Funding Value       (471)    (3,149)      (11)     3,631           -
GAAP Provision      2,491      9,606         -       (481)     11,616
Economic
 Provision         (5,409)    (7,905)     (251)        (3)    (13,568)
Tax Effect of
 Adjustments        1,254        536        97     (1,165)        722
----------------------------------------------------------------------
Income Before
 Capital Charge    27,930     17,374     4,384     11,154      60,842
Capital Charge    (10,571)   (12,603)   (3,121)   (42,856)    (69,151)
----------------------------------------------------------------------
Net Income
 (Loss) After
 Capital Charge
 (NIACC)          $17,359     $4,771    $1,263   $(31,702)    $(8,309)
======================================================================

RAROC (ROE for
 the Company)          29%        15%       16%        26%         10%
======================================================================

Total Assets at
 June 30, 2002 $3,217,645 $2,392,041  $115,119 $4,099,260  $9,824,065
======================================================================


Bank of Hawaii Corporation and Subsidiaries
Quarterly Summary of Selected Consolidated Financial Data     Table 12
 (Unaudited)
----------------------------------------------------------------------
                                            Three Months Ended (1)
(dollars in thousands except per share   June 30, March 31, Dec. 31,
 amounts)                                  2003      2003      2002
----------------------------------------------------------------------

Quarterly Operating Results
Interest Income
   Interest and Fees on Loans and Leases  $85,954   $85,773   $85,945
   Income on Investment Securities -
    Held to Maturity                        3,083     2,283     3,122
   Income on Investment Securities -
    Available for Sale                     19,815    22,463    24,088
   Deposits                                 1,161     1,307     3,578
   Funds Sold and Security Resale
    Agreements                                822       764       834
   Other                                    1,016     1,189     1,312
----------------------------------------------------------------------
Total Interest Income                     111,851   113,779   118,879
Interest Expense
   Deposits                                13,309    14,447    17,657
   Security Repurchase Agreements           2,391     2,242     4,585
   Funds Purchased                            219       205       255
   Short-Term Borrowings                       25        24       217
   Long-Term Debt                           5,422     5,861     5,947
----------------------------------------------------------------------
Total Interest Expense                     21,366    22,779    28,661
----------------------------------------------------------------------
Net Interest Income                        90,485    91,000    90,218
Provision for Loan and Lease Losses             -         -         -
----------------------------------------------------------------------
Net Interest Income After Provision for
 Loan and Lease Losses                     90,485    91,000    90,218
Non-Interest Income
   Trust and Asset Management              12,545    13,181    13,085
   Mortgage Banking                         6,061       283     4,398
   Service Charges on Deposit Accounts      8,645     8,950     8,326
   Fees, Exchange, and Other Service
    Charges                                13,473    12,989    12,963
   Investment Securities Gains                587       583       612
   Insurance                                2,991     2,982     3,099
   Other                                    6,437     5,785     7,872
----------------------------------------------------------------------
Total Non-Interest Income                  50,739    44,753    50,355
Non-Interest Expense
   Salaries                                39,232    36,459    38,462
   Pensions and Other Employee Benefits     8,479     9,970     6,272
   Net Occupancy Expense                    9,628     9,613    10,638
   Net Equipment Expense                    9,208     9,748    11,077
   Restructuring and Other Related Costs        -         -       385
   Information Technology Systems
    Replacement Project                    10,105     7,417     7,052
   Other                                   18,742    16,993    22,827
----------------------------------------------------------------------
Total Non-Interest Expense                 95,394    90,200    96,713
----------------------------------------------------------------------
Income Before Income Taxes                 45,830    45,553    43,860
Provision for Income Taxes                 15,796    15,752    14,952
----------------------------------------------------------------------
Net Income                                $30,034   $29,801   $28,908
======================================================================

Basic Earnings Per Share                    $0.50     $0.49     $0.45
Diluted Earnings Per Share                  $0.48     $0.47     $0.44

Balance Sheet Totals
Total Assets                            9,550,934 9,410,210 9,516,418
Net Loans                               5,333,896 5,425,343 5,216,151
Total Deposits                          7,140,849 6,987,331 6,920,161
Total Shareholders' Equity                913,010   952,007 1,015,759

Performance Ratios
Return on Average Assets                     1.27%     1.31%     1.20%
Return on Average Equity                    12.93%    12.42%    10.72%
Efficiency Ratio                            67.55%    66.44%    68.80%
Efficiency Ratio excluding ITSRP and
 Restructuring Costs                        60.39%    60.98%    63.51%


(1) Certain 2002 information has been reclassified to conform to 2003
presentation.

Bank of Hawaii Corporation and Subsidiaries
Quarterly Summary of Selected Consolidated Financial Data     Table 12
 (Unaudited)
----------------------------------------------------------------------
                                         Three Months Ended (1)
(dollars in thousands except per   September 30,  June 30,  March 31,
 share amounts)                        2002        2002       2002
----------------------------------------------------------------------

Quarterly Operating Results
Interest Income
   Interest and Fees on Loans and
    Leases                               $89,335   $92,441    $98,645
   Income on Investment Securities
    - Held to Maturity                     3,963     4,544      5,145
   Income on Investment Securities
    - Available for Sale                  26,175    26,805     27,193
   Deposits                                5,384     6,011      5,047
   Funds Sold and Security Resale
    Agreements                               914       752      1,003
   Other                                   1,575     1,395      1,332
----------------------------------------------------------------------
Total Interest Income                    127,346   131,948    138,365
Interest Expense
   Deposits                               20,547    22,166     23,978
   Security Repurchase Agreements          7,039     8,256     10,293
   Funds Purchased                           299       245        231
   Short-Term Borrowings                     334       289        649
   Long-Term Debt                          6,946     8,055      8,319
----------------------------------------------------------------------
Total Interest Expense                    35,165    39,011     43,470
----------------------------------------------------------------------
Net Interest Income                       92,181    92,937     94,895
Provision for Loan and Lease
 Losses                                        -     3,324      8,292
----------------------------------------------------------------------
Net Interest Income After
 Provision for Loan and Lease
 Losses                                   92,181    89,613     86,603
Non-Interest Income
   Trust and Asset Management             13,655    14,175     14,818
   Mortgage Banking                        3,669     2,842      7,957
   Service Charges on Deposit
    Accounts                               7,925     7,956      8,410
   Fees, Exchange, and Other
    Service Charges                       13,114    13,065     12,452
   Investment Securities Gains                 -         3          -
   Insurance                               2,677     2,563      2,599
   Other                                   5,997     7,314      6,789
----------------------------------------------------------------------
Total Non-Interest Income                 47,037    47,918     53,025
Non-Interest Expense
   Salaries                               37,994    37,884     39,187
   Pensions and Other Employee
    Benefits                               7,377     9,391      9,996
   Net Occupancy Expense                   9,597     9,321      9,593
   Net Equipment Expense                  10,058     9,997     10,121
   Restructuring and Other Related
    Costs                                      -         -      1,979
   Information Technology Systems
    Replacement Project                    6,576         -          -
   Other                                  20,141    22,777     20,547
----------------------------------------------------------------------
Total Non-Interest Expense                91,743    89,370     91,423
----------------------------------------------------------------------
Income Before Income Taxes                47,475    48,161     48,205
Provision for Income Taxes                17,275    17,145     17,149
----------------------------------------------------------------------
Net Income                               $30,200   $31,016    $31,056
======================================================================

Basic Earnings Per Share                   $0.44     $0.43      $0.42
Diluted Earnings Per Share                 $0.43     $0.42      $0.41

Balance Sheet Totals
Total Assets                           9,702,700 9,824,065 10,245,021
Net Loans                              5,104,857 5,250,216  5,442,601
Total Deposits                         6,627,673 6,455,981  6,543,781
Total Shareholders' Equity             1,100,706 1,191,072  1,265,907

Performance Ratios
Return on Average Assets                    1.22%     1.23%      1.21%
Return on Average Equity                   10.40%     9.94%      9.97%
Efficiency Ratio                           65.90%    63.45%     61.81%
Efficiency Ratio excluding ITSRP
 and Restructuring Costs                   61.18%    63.45%     60.47%

(1) Certain 2002 information has been reclassified to conform to 2003
presentation.

Bank of Hawaii Corporation and Subsidiaries Highlights (Unaudited) Table 1 ---------------------------------------------------------------------- (dollars in thousands except Three Months Six Months per share amounts) Ended Ended Earnings Highlights and June 30, June 30, Performance Ratios 2003 2002(1) 2003 2002(1) ------------------------------ --------------------------------------- Net Income $30,034 $31,016 $59,835 $62,072 Basic Earnings Per Share 0.50 0.43 0.99 0.85 Diluted Earnings Per Share 0.48 0.42 0.95 0.83 Cash Dividends 11,370 13,068 22,932 26,245 Return on Average Assets 1.27% 1.23% 1.29% 1.22% Return on Average Equity 12.93% 9.94% 12.67% 9.96% Net Interest Margin 4.12% 3.97% 4.20% 3.95% Efficiency Ratio 67.55% 63.45% 67.01% 62.61% Efficiency Ratio excluding ITSRP and Restructuring Costs 60.39% 63.45% 60.68% 61.92% ---------------------------------------------------------------------- Statement of Condition Highlights and June 30, Performance Ratios 2003 2002 (1) --------------------------------------- ---------------------- Total Assets $9,550,934 $9,824,065 Net Loans 5,333,896 5,250,216 Total Deposits 7,140,849 6,455,981 Total Shareholders' Equity 913,010 1,191,072 Book Value Per Common Share $15.50 $17.05 Allowance / Loans Outstanding 2.52% 2.94% Average Equity / Average Assets 10.16% 12.27% Employees (FTE) 2,879 2,983 Branches and offices 91 97 Market Price Per Share of Common Stock for the Quarter Ended: Closing $33.15 $28.00 High $35.90 $29.86 Low $30.75 $25.45 (1) Certain 2002 information has been reclassified to conform to 2003 presentation. Bank of Hawaii Corporation and Subsidiaries Consolidated Statements of Income (Unaudited) Table 2 ---------------------------------------------------------------------- Three Months Ended Six Months Ended (dollars in thousands June 30, June 30, except per share amounts) 2003 2002 (1) 2003 2002 (1) ---------------------------------------------------------------------- Interest Income Interest and Fees on Loans and Leases $85,954 $92,441 $171,727 $191,086 Income on Investment Securities - Held to Maturity 3,083 4,544 5,366 9,689 Income on Investment Securities - Available for Sale 19,815 26,805 42,278 53,998 Deposits 1,161 6,011 2,468 11,058 Funds Sold and Security Resale Agreements 822 752 1,586 1,755 Other 1,016 1,395 2,205 2,727 ---------------------------------------------------------------------- Total Interest Income 111,851 131,948 225,630 270,313 Interest Expense Deposits 13,309 22,166 27,756 46,144 Security Repurchase Agreements 2,391 8,256 4,633 18,549 Funds Purchased 219 245 424 476 Short-Term Borrowings 25 289 49 938 Long-Term Debt 5,422 8,055 11,283 16,374 ---------------------------------------------------------------------- Total Interest Expense 21,366 39,011 44,145 82,481 ---------------------------------------------------------------------- Net Interest Income 90,485 92,937 181,485 187,832 Provision for Loan and Lease Losses - 3,324 - 11,616 ---------------------------------------------------------------------- Net Interest Income After Provision for Loan and Lease Losses 90,485 89,613 181,485 176,216 Non-Interest Income Trust and Asset Management 12,545 14,175 25,726 28,993 Mortgage Banking 6,061 2,842 6,344 10,799 Service Charges on Deposit Accounts 8,645 7,956 17,595 16,366 Fees, Exchange, and Other Service Charges 13,473 13,065 26,462 25,517 Investment Securities Gains 587 3 1,170 3 Insurance 2,991 2,563 5,973 5,162 Other 6,437 7,314 12,222 14,103 ---------------------------------------------------------------------- Total Non-Interest Income 50,739 47,918 95,492 100,943 Non-Interest Expense Salaries 39,232 37,884 75,691 77,071 Pensions and Other Employee Benefits 8,479 9,391 18,449 19,387 Net Occupancy Expense 9,628 9,321 19,241 18,914 Net Equipment Expense 9,208 9,997 18,956 20,118 Restructuring and Other Related Costs - - - 1,979 Information Technology Systems Replacement Project 10,105 - 17,522 - Other 18,742 22,777 35,735 43,324 ---------------------------------------------------------------------- Total Non-Interest Expense 95,394 89,370 185,594 180,793 ---------------------------------------------------------------------- Income Before Income Taxes 45,830 48,161 91,383 96,366 Provision for Income Taxes 15,796 17,145 31,548 34,294 ---------------------------------------------------------------------- Net Income $30,034 $31,016 $59,835 $62,072 ====================================================================== Basic Earnings Per Share $0.50 $0.43 $0.99 $0.85 Diluted Earnings Per Share $0.48 $0.42 $0.95 $0.83 Dividends Per Share $0.19 $0.18 $0.38 $0.36 Basic Weighted Average Shares 59,566,970 72,299,850 60,425,943 72,803,414 Diluted Weighted Average Shares 62,301,337 74,486,987 62,907,697 74,815,508 ====================================================================== (1) Certain 2002 information has been reclassified to conform to 2003 presentation. Bank of Hawaii Corporation and Subsidiaries Consolidated Statements of Condition (Unaudited) Table 3 ---------------------------------------------------------------------- June 30, December 31, June 30, (dollars in thousands) 2003 2002 2002 (1) ---------------------------------------------------------------------- Assets Interest-Bearing Deposits $307,552 $549,978 $1,346,014 Investment Securities - Held to Maturity (Market Value of $555,878, $236,016 and $323,722, respectively) 548,719 229,720 312,467 Investment Securities - Available for Sale 2,140,607 2,287,201 1,806,384 Funds Sold 250,000 195,000 125,000 Loans Held for Sale 71,892 40,118 48,416 Loans 5,471,870 5,359,004 5,409,195 Allowance for Loan and Lease Losses (137,974) (142,853) (158,979) ---------------------------------------------------------------------- Net Loans 5,333,896 5,216,151 5,250,216 ---------------------------------------------------------------------- Total Earning Assets 8,652,666 8,518,168 8,888,497 Cash and Non-Interest Bearing Deposits 297,868 374,352 304,595 Premises and Equipment 165,542 176,969 188,128 Customers' Acceptance Liability 1,371 2,680 1,657 Accrued Interest Receivable 35,849 36,722 38,425 Foreclosed Real Estate 9,285 9,434 17,223 Mortgage Servicing Rights 24,841 28,820 30,244 Goodwill 36,216 36,216 36,216 Other Assets 327,296 333,057 319,080 ---------------------------------------------------------------------- Total Assets $9,550,934 $9,516,418 $9,824,065 ====================================================================== Liabilities Domestic Deposits Non-Interest Bearing Demand $1,843,750 $1,719,633 $1,466,092 Interest Bearing Demand 1,157,801 1,169,128 986,546 Savings 2,754,607 2,535,219 2,292,395 Time 1,352,413 1,461,780 1,652,805 Foreign Deposits Time Due to Banks - 1,130 16,777 Other Savings and Time 32,278 33,271 41,366 ---------------------------------------------------------------------- Total Deposits 7,140,849 6,920,161 6,455,981 Securities Sold Under Agreements to Repurchase 699,256 735,621 1,257,808 Funds Purchased 90,200 64,467 60,243 Current Maturities of Long-Term Debt 14,000 114,781 173,259 Short-Term Borrowings 22,424 33,420 16,935 Banker's Acceptances Outstanding 1,371 2,680 1,657 Retirement Benefits Payable 62,678 61,385 37,642 Accrued Interest Payable 9,755 13,731 23,427 Taxes Payable 196,868 196,813 181,826 Other Liabilities 81,988 82,596 80,158 Long-Term Debt 318,535 275,004 344,057 ---------------------------------------------------------------------- Total Liabilities 8,637,924 8,500,659 8,632,993 Shareholders' Equity Common Stock ($.01 par value); authorized 500,000,000 shares; issued / outstanding: June 2003 - 81,588,394 / 58,896,230; December 2002 - 81,294,730 / 63,015,442; June 2002 - 81,329,346 / 69,856,075 807 806 806 Capital Surplus 386,565 372,192 370,947 Accumulated Other Comprehensive Income 12,412 11,659 29,931 Retained Earnings 1,151,623 1,115,910 1,082,421 Deferred Stock Grants (8,168) (1,424) (4,182) Treasury Stock, at Cost (Shares: June 2003 - 22,692,164; December 2002 - 18,279,288; June 2002 - 11,473,271) (630,229) (483,384) (288,851) ---------------------------------------------------------------------- Total Shareholders' Equity 913,010 1,015,759 1,191,072 ---------------------------------------------------------------------- Total Liabilities and Shareholders' Equity $9,550,934 $9,516,418 $9,824,065 ====================================================================== (1) Certain 2002 information has been reclassified to conform to 2003 presentation. 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 Income ---------------------------------------------------------------------- Balance at December 31, 2002 $1,015,759 $806 $372,192 $11,659 Comprehensive Income: Net Income 59,835 - - - Other Comprehensive Income, Net of Tax: Unrealized Gain on Investment Securities 753 - - 753 Total Comprehensive Income Common Stock Issued: 18,147 Retirement Savings Plan 585 - 184 - 635,660 Stock Option Plan 16,215 - 3,660 - 45,518 Dividend Reinvestment Plan 1,463 - 459 - 6,777 Directors' Restricted Shares and Deferred Compensation Plan 140 1 224 - Employees' Restricted 286,700 Shares 3,382 - 9,846 - Treasury Stock Purchased (5,107,779 shares) (162,190) - - - Cash Dividends Paid (22,932) - - - ---------------------------------------------------------------------- Balance at June 30, 2003 $913,010 $807 $386,565 $12,412 ====================================================================== Balance at December 31, 2001 $1,247,012 $806 $367,672 $22,761 Comprehensive Income: Net Income 62,072 - - - Other Comprehensive Income, Net of Tax: Unrealized Gain on Investment Securities 7,547 - - 7,547 Foreign Currency Translation Adjustment (377) - - (377) Total Comprehensive Income Common Stock Issued: 22,894 Retirement Savings Plan 632 - 119 - 1,222,308 Stock Option Plan 25,142 - 3,727 - 53,227 Dividend Reinvestment Plan 1,464 - 264 - 3,605 Directors' Restricted Shares and Deferred Compensation Plan 50 - 103 - Employees' Restricted (51,500) Shares 2,469 - (938) - Treasury Stock Purchased (4,610,800 shares) (128,694) - - - Cash Dividends Paid (26,245) - - - ---------------------------------------------------------------------- Balance at June 30, 2002 $1,191,072 $806 $370,947 $29,931 ====================================================================== Bank of Hawaii Corporation and Subsidiaries Consolidated Statements of Shareholders' Equity (Unaudited) Table 4 ---------------------------------------------------------------------- Deferred Compre- Retained Stock Treasury hensive (dollars in thousands) Earnings Grants Stock Income ---------------------------------------------------------------------- Balance at December 31, 2002 $1,115,910 $(1,424)$(483,384) Comprehensive Income: Net Income 59,835 - - $59,835 Other Comprehensive Income, Net of Tax: Unrealized Gain on Investment Securities - - - 753 -------- Total Comprehensive Income $60,588 ======== Common Stock Issued: 18,147 Retirement Savings Plan - - 401 635,660 Stock Option Plan (1,190) (280) 14,025 Dividend Reinvestment 45,518 Plan - - 1,004 6,777 Directors' Restricted Shares and Deferred Compensation Plan - - (85) Employees' Restricted 286,700 Shares - (6,464) - Treasury Stock Purchased (5,107,779 shares) - - (162,190) Cash Dividends Paid (22,932) - - -------------------------------------------------------------- Balance at June 30, 2003 $1,151,623 $(8,168)$(630,229) ============================================================== Balance at December 31, 2001 $1,055,424 $(7,637)$(192,014) Comprehensive Income: Net Income 62,072 - - $62,072 Other Comprehensive Income, Net of Tax: Unrealized Gain on Investment Securities - - - 7,547 Foreign Currency Translation Adjustment - - - (377) -------- Total Comprehensive Income $69,242 ======== Common Stock Issued: 22,894 Retirement Savings Plan - - 513 1,222,308 Stock Option Plan (8,828) 48 30,195 Dividend Reinvestment 53,227 Plan (2) - 1,202 3,605 Directors' Restricted Shares and Deferred Compensation Plan - - (53) Employees' Restricted (51,500) Shares - 3,407 - Treasury Stock Purchased (4,610,800 shares) - - (128,694) Cash Dividends Paid (26,245) - - -------------------------------------------------------------- Balance at June 30, 2002 $1,082,421 $(4,182)$(288,851) ============================================================== Bank of Hawaii Corporation and Subsidiaries Consolidated Average Balances and Interest Rates - Taxable Equivalent Basis (Unaudited) Table 5 ---------------------------------------------------------------------- Three Months Ended Three Months Ended June 30, 2003 March 31, 2003 Average Income/Yield/ Average Income/Yield/ (dollars in millions) Balance Expense Rate Balance Expense Rate ---------------------------------------------------------------------- Earning Assets Interest Bearing Deposits $212.4 $1.2 2.19% $253.8 $1.3 2.09% Funds Sold 267.3 0.9 1.23 250.5 0.8 1.22 Investment Securities - Held to Maturity 324.8 3.1 3.85 202.0 2.3 4.61 - Available for Sale 2,316.9 19.8 3.42 2,268.1 22.5 3.96 Loans Held for Sale 81.6 1.1 5.43 10.1 0.1 5.16 Net Loans and Lease Financing Domestic - Commercial and Industrial 819.8 10.0 4.87 871.7 10.5 4.87 - Construction 83.0 0.9 4.50 115.4 1.4 5.08 - Commercial Mortgage 682.5 10.1 5.93 597.8 9.0 6.14 - Residential Mortgage 2,295.1 37.3 6.50 2,249.0 37.7 6.70 - Installment 535.6 13.6 10.18 501.9 12.8 10.36 - Home Equity 442.7 5.6 5.06 434.5 5.7 5.28 - Purchased Home Equity 162.3 2.0 4.96 180.2 2.6 5.78 - Lease Financing 482.6 5.3 4.42 495.6 5.9 4.81 ---------------------------------------------------------------------- Total Domestic Loans 5,503.6 84.8 6.17 5,446.1 85.6 6.33 Foreign 14.8 - - 14.7 - - ---------------------------------------------------------------------- Total Loans 5,518.4 84.8 6.16 5,460.8 85.6 6.32 Other 75.3 1.0 5.41 74.6 1.2 6.47 ---------------------------------------------------------------------- Total Earning Assets 8,796.7 111.9 5.09 8,519.9 113.8 5.38 Cash and Non-interest Bearing Deposits 325.6 331.6 Other Assets 385.9 391.5 --------- --------- Total Assets $9,508.2 $9,243.0 ========= ========= Interest Bearing Liabilities Interest Bearing Deposits Domestic Deposits - Demand $1,164.8 0.7 0.25 $1,149.2 0.7 0.26 - Savings 2,744.1 4.5 0.65 2,608.2 4.6 0.71 - Time 1,401.4 8.1 2.31 1,443.3 9.1 2.55 ---------------------------------------------------------------------- Total Domestic Deposits 5,310.3 13.3 1.00 5,200.7 14.4 1.12 Foreign Deposits - Time Due to Banks - - - 1.0 - - - Other Time and Savings 30.3 0.1 0.91 30.5 0.1 1.23 ---------------------------------------------------------------------- Total Foreign Deposits 30.3 0.1 0.91 31.5 0.1 1.11 ---------------------------------------------------------------------- Total Interest Bearing Deposits 5,340.6 13.4 1.00 5,232.2 14.5 1.12 Short-Term Borrowings 810.2 2.6 1.30 649.8 2.5 1.54 Long-Term Debt 371.5 5.4 5.85 390.4 5.8 6.09 ---------------------------------------------------------------------- Total Interest Bearing Liabilities 6,522.3 21.4 1.31 6,272.4 22.8 1.47 ---------------------------------------------------------------------- Net Interest Income $90.5 $91.0 ======= ======= Interest Rate Spread 3.78% 3.91% Net Interest Margin 4.12% 4.29% Non-Interest Bearing Demand Deposits (Domestic) 1,695.3 1,636.8 Other Liabilities 358.7 360.7 Shareholders' Equity 931.9 973.1 --------- --------- Total Liabilities and Shareholders' Equity $9,508.2 $9,243.0 ========= ========= (1) Certain 2002 information has been reclassified to conform to 2003 presentation. Consolidated Average Balances and Interest Rates - Taxable Equivalent Basis (Unaudited) Table 5 ---------------------------------------------------------------------- Three Months Ended (1) Six Months Ended June 30, 2002 June 30, 2003 Average Income/Yield/ Average Income/Yield/ (dollars in millions) Balance Expense Rate Balance Expense Rate ---------------------------------------------------------------------- Earning Assets Interest Bearing Deposits $1,310.0 $6.0 1.84% $233.0 $2.5 2.14% Funds Sold 173.3 0.8 1.74 259.0 1.6 1.22 Investment Securities - Held to Maturity 328.6 4.7 5.63 263.7 5.4 4.14 - Available for Sale 1,890.3 26.8 5.67 2,292.6 42.3 3.69 Loans Held for Sale 65.2 1.1 6.88 46.0 1.2 5.38 Net Loans and Lease Financing Domestic - Commercial and Industrial 1,061.1 13.4 5.07 845.6 20.4 4.87 - Construction 157.5 2.2 5.72 99.1 2.4 4.83 - Commercial Mortgage 587.5 9.9 6.73 640.5 19.2 6.03 - Residential Mortgage 2,399.0 42.5 7.08 2,272.1 75.0 6.60 - Installment 392.0 11.0 11.23 518.8 26.4 10.27 - Home Equity 391.1 5.7 5.90 438.6 11.2 5.17 - Purchased Home Equity - - - 171.2 4.6 5.39 - Lease Financing 502.2 6.6 5.25 489.1 11.2 4.62 ----------------------------------------------- ---------------------- Total Domestic Loans 5,490.4 91.3 6.66 5,475.0 170.4 6.25 Foreign 14.1 - - 14.8 0.1 1.39 ----------------------------------------------- ---------------------- Total Loans 5,504.5 91.3 6.65 5,489.8 170.5 6.24 Other 99.2 1.3 5.64 74.9 2.2 5.93 ----------------------------------------------- ---------------------- Total Earning Assets 9,371.1 132.0 5.64 8,659.0 225.7 5.23 Cash and Non-interest Bearing Deposits 343.6 328.6 Other Assets 365.3 388.7 ---------- --------- Total Assets $10,080.0 $9,376.3 ========== ========= Interest Bearing Liabilities Interest Bearing Deposits Domestic Deposits - Demand $965.1 1.1 0.45 $1,157.0 1.5 0.25 - Savings 2,173.5 7.8 1.44 2,676.5 9.0 0.68 - Time 1,732.0 12.9 2.98 1,422.2 17.1 2.43 ----------------------------------------------- ---------------------- Total Domestic Deposits 4,870.6 21.8 1.79 5,255.7 27.6 1.06 Foreign Deposits - Time Due to Banks 37.3 0.1 1.47 0.5 - - - Other Time and Savings 59.1 0.3 1.67 30.4 0.1 1.07 ----------------------------------------------- ---------------------- Total Foreign Deposits 96.4 0.4 1.59 30.9 0.1 1.01 ----------------------------------------------- ---------------------- Total Interest Bearing Deposits 4,967.0 22.2 1.79 5,286.6 27.7 1.06 Short-Term Borrowings 1,475.9 8.8 2.39 730.5 5.1 1.41 Long-Term Debt 507.1 8.0 6.37 380.9 11.3 5.97 ----------------------------------------------- ---------------------- Total Interest Bearing Liabilities 6,950.0 39.0 2.25 6,398.0 44.1 1.39 ----------------------------------------------- ---------------------- Net Interest Income $93.0 $181.6 ======= ======= Interest Rate Spread 3.39% 3.84% Net Interest Margin 3.97% 4.20% Non-Interest Bearing Demand Deposits (Domestic) 1,566.7 1,666.2 Other Liabilities 312.3 359.7 Shareholders' Equity 1,251.0 952.4 ---------- --------- Total Liabilities and Shareholders' Equity $10,080.0 $9,376.3 ========== ========= (1) Certain 2002 information has been reclassified to conform to 2003 presentation. Bank of Hawaii Corporation and Subsidiaries Analysis of Change in Net Interest Income - Taxable Equivalent Basis (Unaudited) Table 6 ---------------------------------------------------------------------- Three Months Ended June 30, 2003 Compared to March 31, 2003 (dollars in millions) Volume (1) Rate (1) Time (1) Total ---------------------------------------------------------------------- Change in Interest Income: Interest Bearing Deposits $(0.2) $0.1 $- $(0.1) Funds Sold 0.1 - - 0.1 Investment Securities Held to Maturity 1.2 (0.4) - 0.8 Available for Sale 0.4 (3.1) - (2.7) Loans Held for Sale 1.0 - - 1.0 Net Loans and Lease Financing (Domestic) Commercial and Industrial (0.6) - 0.1 (0.5) Construction (0.3) (0.2) - (0.5) Commercial Mortgage 1.3 (0.3) 0.1 1.1 Residential Mortgage 0.7 (1.1) - (0.4) Installment 0.8 (0.2) 0.2 0.8 Home Equity 0.1 (0.2) - (0.1) Purchased Home Equity (0.2) (0.4) - (0.6) Lease Financing (0.2) (0.5) 0.1 (0.6) ---------------------------------------------------------------------- Total Loans 1.6 (2.9) 0.5 (0.8) Other - (0.2) - (0.2) ---------------------------------------------------------------------- Total Change in Interest Income 4.1 (6.5) 0.5 (1.9) ---------------------------------------------------------------------- Change in Interest Expense: Interest Bearing Deposits (Domestic) Savings 0.2 (0.4) 0.1 (0.1) Time (0.2) (0.9) 0.1 (1.0) ---------------------------------------------------------------------- Total Interest Bearing Deposits - (1.3) 0.2 (1.1) Short-Term Borrowings 0.5 (0.4) - 0.1 Long-Term Debt (0.3) (0.2) 0.1 (0.4) ---------------------------------------------------------------------- Total Change in Interest Expense 0.2 (1.9) 0.3 (1.4) ---------------------------------------------------------------------- Change in Net Interest Income $3.9 $(4.6) $0.2 $(0.5) ====================================================================== (1) The changes for each category of interest income and expense are allocated between the portion of changes attributable to the variance in volume, rate or time for that category. Bank of Hawaii Corporation and Subsidiaries Loan Portfolio Balances (Unaudited) Table 7 ---------------------------------------------------------------------- (dollars in June 30, March 31, Dec. 31, June 30, millions) 2003 2003 2002 2002 (1) ---------------------------------------------------------------------- Domestic Commercial Commercial and Industrial $808.5 $824.9 $875.0 $993.4 Commercial Mortgage 689.7 691.7 591.1 562.5 Construction 83.6 86.7 127.5 148.6 Lease Financing 416.9 430.4 427.3 432.7 ---------------------------------------------------------------------- Total Commercial 1,998.7 2,033.7 2,020.9 2,137.2 Consumer Residential Mortgage 2,222.0 2,305.3 2,131.4 2,361.2 Home Equity 450.3 439.1 428.2 404.2 Purchased Home Equity 145.6 170.9 185.8 - Other Consumer 554.8 518.5 493.3 403.2 Lease Financing 34.0 33.8 34.5 37.3 ---------------------------------------------------------------------- Total Consumer 3,406.7 3,467.6 3,273.2 3,205.9 ---------------------------------------------------------------------- Total Domestic 5,405.4 5,501.3 5,294.1 5,343.1 ---------------------------------------------------------------------- Foreign 66.5 64.1 64.9 66.1 ---------------------------------------------------------------------- Total Loans $5,471.9 $5,565.4 $5,359.0 $5,409.2 ====================================================================== Selected Concentrations of Credit Exposure (Unaudited) ---------------------------------------------------------------------- June 30, Dec. 31, June 30, 2003 2002 2002 Unused Total Total Total (dollars in Outstanding Commitments Exposure Exposure Exposure millions) ---------------------------------------------------------------------- Air Transportation Regional Passenger Carriers $45.8 $11.7 $57.5 $57.3 $58.0 United States Based Passenger Carriers 39.8 - 39.8 39.6 49.0 International Based Passenger Carriers 31.8 - 31.8 32.1 32.0 Cargo Carriers 14.7 - 14.7 15.0 15.0 ---------------------------------------------------------------------- Total Air Transportation $132.1 $11.7 $143.8 $144.0 $154.0 ====================================================================== Guam Hotel (2) $42.8 $- $42.8 $44.4 $43.0 Other Commercial 148.3 35.5 183.8 166.0 230.2 Consumer 259.0 6.8 265.8 257.4 283.3 ---------------------------------------------------------------------- Total Guam $450.1 $42.3 $492.4 $467.8 $556.5 ====================================================================== Syndicated Exposure $278.3 $606.8 $885.1 $1,002.1 $1,096.2 ====================================================================== Exposure includes loans, leveraged leases and operating leases. (1) Certain 2002 information has been reclassified to conform to 2003 presentation. (2) A $25.0 million payment-in-full was received in mid-July reducing Hotel exposure to $17.8 million. Bank of Hawaii Corporation and Subsidiaries Consolidated Non-Performing Assets and Accruing Loans Past Due 90 Days or More (Unaudited) Table 8 ---------------------------------------------------------------------- June 30, March 31, Dec. 31, Sept. 30, June 30, (dollars in millions) 2003 2003 2002 2002(1) 2002(1) ---------------------------------------------------------------------- Non-Performing Assets Non-Accrual Loans Commercial Commercial and Industrial $8.8 $2.4 $5.9 $6.4 $14.4 Commercial Mortgage 11.2 17.9 20.3 18.1 25.3 Construction - - 0.5 0.9 0.7 Lease Financing 2.5 3.2 4.1 5.7 6.9 ---------------------------------------------------------------------- Total Commercial 22.5 23.5 30.8 31.1 47.3 Consumer Residential Mortgage 10.2 11.5 13.9 14.3 14.2 Home Equity - 0.1 0.3 0.2 0.1 Other Consumer - - - 0.1 - ---------------------------------------------------------------------- Total Consumer 10.2 11.6 14.2 14.6 14.3 ---------------------------------------------------------------------- Total Non-Accrual Loans 32.7 35.1 45.0 45.7 61.6 ---------------------------------------------------------------------- Foreclosed Real Estate 9.3 9.1 9.4 17.6 17.2 ---------------------------------------------------------------------- Total Non-Performing Assets $42.0 $44.2 $54.4 $63.3 $78.8 ====================================================================== Accruing Loans Past Due 90 Days or More Commercial Commercial and Industrial $0.5 $- $0.2 $- $- Commercial Mortgage - 0.4 0.3 - - ---------------------------------------------------------------------- Total Commercial 0.5 0.4 0.5 - - Consumer Residential Mortgage 1.8 1.6 0.6 1.4 0.9 Home Equity 0.1 - - - - Purchased Home Equity 0.1 - - - - Other Consumer 0.4 2.3 0.7 0.3 0.5 Lease Financing - - - - 0.1 ---------------------------------------------------------------------- Total Consumer 2.4 3.9 1.3 1.7 1.5 ---------------------------------------------------------------------- Total Accruing and Past Due $2.9 $4.3 $1.8 $1.7 $1.5 ====================================================================== Total Loans $5,471.9 $5,565.4 $5,359.0 $5,259.3 $5,409.2 ====================================================================== Ratio of Non-Accrual Loans to Total Loans 0.60% 0.63% 0.84% 0.87% 1.14% ---------------------------------------------------------------------- Ratio of Non-Performing Assets to Total Loans, Foreclosed Real Estate and Non- Performing Loans Held for Sale 0.77% 0.79% 1.01% 1.20% 1.45% ---------------------------------------------------------------------- Ratio of Non-Performing Assets and Accruing Loans Past Due 90 Days or More to Total Loans 0.82% 0.87% 1.05% 1.24% 1.48% ---------------------------------------------------------------------- Quarter to Quarter Changes in Non- Performing Assets Balance at Beginning of Quarter $44.2 $54.4 $63.3 $78.8 $90.7 Additions 11.6 4.8 12.0 7.0 20.5 Reductions Payments and Sales of Loans (4.3) (5.6) (6.9) (8.5) (20.6) Return to Accrual (7.5) (5.6) (1.9) (9.1) (6.2) Sales of Foreclosed Assets (0.7) (1.1) (9.4) (1.4) (3.5) Charge-offs (1.3) (2.7) (2.7) (3.5) (2.1) ---------------------------------------------------------------------- Total Reductions (13.8) (15.0) (20.9) (22.5) (32.4) ---------------------------------------------------------------------- Balance at End of Quarter $42.0 $44.2 $54.4 $63.3 $78.8 ====================================================================== (1) Certain 2002 information has been reclassified to conform to 2003 presentation. Bank of Hawaii Corporation and Subsidiaries Consolidated Allowance for Loan and Lease Losses (Unaudited) Table 9 ---------------------------------------------------------------------- Three Months Ended Six Months Ended June 30, March 31, June 30, June 30, (dollars in millions) 2003 2003 2002 (1) 2003 2002 (1) ---------------------------------------------------------------------- Balance at Beginning of Period $140.0 $142.9 $159.0 $142.9 $159.0 Loans Charged-Off Commercial Commercial and Industrial (0.6) (1.6) (2.8) (2.2) (10.1) Commercial Mortgage (0.4) - (0.4) (0.4) (0.4) Construction - (0.5) - (0.5) (0.5) Lease Financing (0.3) - (0.1) (0.3) (0.1) Consumer Residential Mortgage (0.7) (0.7) (1.0) (1.4) (2.4) Home Equity - (0.1) (0.1) (0.1) (0.2) Other Consumer (3.6) (3.1) (3.0) (6.7) (6.7) Lease Financing - (0.1) (0.1) (0.1) (0.2) ---------------------------------------------------------------------- Total Charge-Offs (5.7) (6.1) (7.5) (11.7) (20.6) Recoveries on Loans Previously Charged-Off Commercial Commercial and Industrial 1.8 0.6 2.1 2.4 2.8 Commercial Mortgage 0.1 - 0.1 0.1 1.9 Construction 0.1 0.9 - 1.0 - Consumer Residential Mortgage 0.3 0.2 0.4 0.5 0.7 Home Equity - 0.1 - 0.1 0.1 Other Consumer 1.3 1.3 1.5 2.6 3.3 Lease Financing - 0.1 - 0.1 - Foreign - 0.1 0.1 0.1 0.2 ---------------------------------------------------------------------- Total Recoveries 3.6 3.3 4.2 6.9 9.0 ---------------------------------------------------------------------- Net Loan Charge-Offs (2.1) (2.8) (3.3) (4.9) (11.6) Provision for Loan and Lease Losses - - 3.3 - 11.6 ---------------------------------------------------------------------- Balance at End of Period $138.0 $140.0 $159.0 $138.0 $159.0 ====================================================================== Average Loans Outstanding $5,518.4 $5,460.8 $5,504.5 $5,489.8 $5,544.7 ====================================================================== Ratio of Net Charge-Offs to Average Loans Outstanding (annualized) 0.15% 0.21% 0.24% 0.18% 0.42% Ratio of Allowance to Loans Outstanding 2.52% 2.52% 2.94% 2.52% 2.94% (1) Certain 2002 information has been reclassified to conform to 2003 presentation. Totals may not add due to rounding. Bank of Hawaii Corporation and Subsidiaries Information Technology Systems Replacement Project (Unaudited) Table 10 ---------------------------------------------------------------------- Employee Other (dollars in Professional Termination Accelerated Associated millions) Fees Benefits Depreciation Costs (1) Total ------------- ------------ ----------- ------------ ---------- ------- Costs Incurred: Three Months Ended: September 30, 2002 $1.9 $1.0 $3.2 $0.5 $6.6 December 31, 2002 3.2 0.2 2.2 1.4 7.0 ------------- ------------ ----------- ------------ ---------- ------- Year Ended December 31, 2002 5.1 1.2 5.4 1.9 13.6 Three Months Ended: March 31, 2003 3.5 0.4 2.0 1.5 7.4 June 30, 2003 2.9 2.6 1.8 2.8 10.1 ------------- ------------ ----------- ------------ ---------- ------- Six Months Ended June 30, 2003 6.4 3.0 3.8 4.3 17.5 ------------- ------------ ----------- ------------ ---------- ------- Total Costs Incurred $11.5 $4.2 $9.2 $6.2 $31.1 ============= ============ =========== ============ ========== ======= Total Expected Project Costs $12.6 $5.3 $9.2 $8.4 $35.5 ============= ============ =========== ============ ========== ======= (1) Includes contract termination, equipment, excise tax and other costs. Bank of Hawaii Corporation and Subsidiaries Business Segment Selected Financial Information (Unaudited) Table 11 ---------------------------------------------------------------------- Investment Treasury Consoli- (dollars in Retail Commercial Services and Other dated thousands) Banking Banking Group Corporate Total ---------------------------------------------------------------------- Three Months Ended June 30, 2003 Net Interest Income $57,375 $36,382 $3,332 $(6,604) $90,485 Provision for Loan and Lease Losses (1,321) (1,022) - 2,343 - ---------------------------------------------------------------------- Net Interest Income After Provision for Loan and Lease Losses 56,054 35,360 3,332 (4,261) 90,485 Non-Interest Income 23,899 7,944 15,428 3,468 50,739 ---------------------------------------------------------------------- 79,953 43,304 18,760 (793) 141,224 Information Technology Systems Replacement Project (368) - (90) (9,647) (10,105) Non-Interest Expense (42,126) (23,205) (15,937) (4,021) (85,289) ---------------------------------------------------------------------- Income Before Income Taxes 37,459 20,099 2,733 (14,461) 45,830 Provision for Income Taxes (13,860) (7,319) (1,011) 6,394 (15,796) ---------------------------------------------------------------------- Allocated Net Income (Loss) 23,599 12,780 1,722 (8,067) 30,034 ---------------------------------------------------------------------- Allowance Funding Value (161) (1,100) (7) 1,268 - GAAP Provision 1,321 1,022 - (2,343) - Economic Provision (2,901) (3,027) (112) (5) (6,045) Tax Effect of Adjustments 644 1,149 44 400 2,237 ---------------------------------------------------------------------- Income Before Capital Charge 22,502 10,824 1,647 (8,747) 26,226 Capital Charge (5,494) (5,350) (1,512) (13,275) (25,631) ---------------------------------------------------------------------- Net Income (Loss) After Capital Charge (NIACC) $17,008 $5,474 $135 $(22,022) $595 ====================================================================== RAROC (ROE for the Company) 45% 22% 12% (7)% 13% ====================================================================== Total Assets at June 30, 2003 $3,482,754 $2,207,816 $127,894 $3,732,470 $9,550,934 ====================================================================== Three Months Ended June 30, 2002 Net Interest Income $48,996 $34,705 $3,140 $6,096 $92,937 Provision for Loan and Lease Losses (549) (3,096) - 321 (3,324) ---------------------------------------------------------------------- Net Interest Income After Provision for Loan and Lease Losses 48,447 31,609 3,140 6,417 89,613 Non-Interest Income 18,435 8,752 17,376 3,355 47,918 ---------------------------------------------------------------------- 66,882 40,361 20,516 9,772 137,531 Non-Interest Expense (44,512) (24,372) (18,059) (2,427) (89,370) ---------------------------------------------------------------------- Income Before Income Taxes 22,370 15,989 2,457 7,345 48,161 Provision for Income Taxes (8,277) (5,834) (909) (2,125) (17,145) ---------------------------------------------------------------------- Allocated Net Income 14,093 10,155 1,548 5,220 31,016 ---------------------------------------------------------------------- Allowance Funding Value (204) (1,597) (4) 1,805 - GAAP Provision 549 3,096 - (321) 3,324 Economic Provision (2,905) (3,667) (124) - (6,696) Tax Effect of Adjustments 947 802 47 (548) 1,248 ---------------------------------------------------------------------- Income Before Capital Charge 12,480 8,789 1,467 6,156 28,892 Capital Charge (5,248) (6,044) (1,620) (21,490) (34,402) ---------------------------------------------------------------------- Net Income (Loss) After Capital Charge (NIACC) $7,232 $2,745 $(153) $(15,334) $(5,510) ====================================================================== RAROC (ROE for the Company) 26% 16% 10% 28% 10% ====================================================================== Total Assets at June 30, 2002 $3,217,645 $2,392,041 $115,119 $4,099,260 $9,824,065 ====================================================================== Bank of Hawaii Corporation and Subsidiaries Business Segment Selected Financial Information Table 11a (Unaudited) ---------------------------------------------------------------------- Investment Treasury (dollars in Retail Commercial Services and Other Consolidated thousands) Banking Banking Group Corporate Total ---------------------------------------------------------------------- Six Months Ended June 30, 2003 Net Interest Income $112,359 $72,769 $7,302 $(10,945) $181,485 Provision for Loan and Lease Losses (2,169) (3,173) - 5,342 - ---------------------------------------------------------------------- Net Interest Income After Provision for Loan and Lease Losses 110,190 69,596 7,302 (5,603) 181,485 Non-Interest Income 41,285 16,359 31,107 6,741 95,492 ---------------------------------------------------------------------- 151,475 85,955 38,409 1,138 276,977 Information Technology Systems Replacement Project (950) (23) (334) (16,215) (17,522) Non-Interest Expense (82,795) (45,924) (31,841) (7,512) (168,072) ---------------------------------------------------------------------- Income Before Income Taxes 67,730 40,008 6,234 (22,589) 91,383 Provision for Income Taxes (25,060) (14,589) (2,307) 10,408 (31,548) ---------------------------------------------------------------------- Allocated Net Income (Loss) 42,670 25,419 3,927 (12,181) 59,835 ---------------------------------------------------------------------- Allowance Funding Value (313) (2,241) (17) 2,571 - GAAP Provision 2,169 3,173 - (5,342) - Economic Provision (5,609) (6,086) (244) (10) (11,949) Tax Effect of Adjustments 1,389 1,907 97 1,028 4,421 ---------------------------------------------------------------------- Income Before Capital Charge 40,306 22,172 3,763 (13,934) 52,307 Capital Charge (10,886) (10,728) (3,030) (27,739) (52,383) ---------------------------------------------------------------------- Net Income (Loss) After Capital Charge (NIACC) $29,420 $11,444 $733 $(41,673) $(76) ====================================================================== RAROC (ROE for the Company) 41% 23% 14% (5)% 13% ====================================================================== Total Assets at June 30, 2003 $3,482,754 $2,207,816 $127,894 $3,732,470 $9,550,934 ====================================================================== Six Months Ended June 30, 2002 Net Interest Income $98,552 $70,335 $6,140 $12,805 $187,832 Provision for Loan and Lease Losses (2,491) (9,606) - 481 (11,616) ---------------------------------------------------------------------- Net Interest Income After Provision for Loan and Lease Losses 96,061 60,729 6,140 13,286 176,216 Non-Interest Income 42,487 17,373 35,200 5,883 100,943 ---------------------------------------------------------------------- 138,548 78,102 41,340 19,169 277,159 Restructuring and Other Related Costs - - - (1,979) (1,979) Non-Interest Expense (90,826) (49,327) (34,119) (4,542) (178,814) ---------------------------------------------------------------------- Income Before Income Taxes 47,722 28,775 7,221 12,648 96,366 Provision for Income Taxes (17,657) (10,489) (2,672) (3,476) (34,294) ---------------------------------------------------------------------- Allocated Net Income 30,065 18,286 4,549 9,172 62,072 ---------------------------------------------------------------------- Allowance Funding Value (471) (3,149) (11) 3,631 - GAAP Provision 2,491 9,606 - (481) 11,616 Economic Provision (5,409) (7,905) (251) (3) (13,568) Tax Effect of Adjustments 1,254 536 97 (1,165) 722 ---------------------------------------------------------------------- Income Before Capital Charge 27,930 17,374 4,384 11,154 60,842 Capital Charge (10,571) (12,603) (3,121) (42,856) (69,151) ---------------------------------------------------------------------- Net Income (Loss) After Capital Charge (NIACC) $17,359 $4,771 $1,263 $(31,702) $(8,309) ====================================================================== RAROC (ROE for the Company) 29% 15% 16% 26% 10% ====================================================================== Total Assets at June 30, 2002 $3,217,645 $2,392,041 $115,119 $4,099,260 $9,824,065 ====================================================================== Bank of Hawaii Corporation and Subsidiaries Quarterly Summary of Selected Consolidated Financial Data Table 12 (Unaudited) ---------------------------------------------------------------------- Three Months Ended (1) (dollars in thousands except per share June 30, March 31, Dec. 31, amounts) 2003 2003 2002 ---------------------------------------------------------------------- Quarterly Operating Results Interest Income Interest and Fees on Loans and Leases $85,954 $85,773 $85,945 Income on Investment Securities - Held to Maturity 3,083 2,283 3,122 Income on Investment Securities - Available for Sale 19,815 22,463 24,088 Deposits 1,161 1,307 3,578 Funds Sold and Security Resale Agreements 822 764 834 Other 1,016 1,189 1,312 ---------------------------------------------------------------------- Total Interest Income 111,851 113,779 118,879 Interest Expense Deposits 13,309 14,447 17,657 Security Repurchase Agreements 2,391 2,242 4,585 Funds Purchased 219 205 255 Short-Term Borrowings 25 24 217 Long-Term Debt 5,422 5,861 5,947 ---------------------------------------------------------------------- Total Interest Expense 21,366 22,779 28,661 ---------------------------------------------------------------------- Net Interest Income 90,485 91,000 90,218 Provision for Loan and Lease Losses - - - ---------------------------------------------------------------------- Net Interest Income After Provision for Loan and Lease Losses 90,485 91,000 90,218 Non-Interest Income Trust and Asset Management 12,545 13,181 13,085 Mortgage Banking 6,061 283 4,398 Service Charges on Deposit Accounts 8,645 8,950 8,326 Fees, Exchange, and Other Service Charges 13,473 12,989 12,963 Investment Securities Gains 587 583 612 Insurance 2,991 2,982 3,099 Other 6,437 5,785 7,872 ---------------------------------------------------------------------- Total Non-Interest Income 50,739 44,753 50,355 Non-Interest Expense Salaries 39,232 36,459 38,462 Pensions and Other Employee Benefits 8,479 9,970 6,272 Net Occupancy Expense 9,628 9,613 10,638 Net Equipment Expense 9,208 9,748 11,077 Restructuring and Other Related Costs - - 385 Information Technology Systems Replacement Project 10,105 7,417 7,052 Other 18,742 16,993 22,827 ---------------------------------------------------------------------- Total Non-Interest Expense 95,394 90,200 96,713 ---------------------------------------------------------------------- Income Before Income Taxes 45,830 45,553 43,860 Provision for Income Taxes 15,796 15,752 14,952 ---------------------------------------------------------------------- Net Income $30,034 $29,801 $28,908 ====================================================================== Basic Earnings Per Share $0.50 $0.49 $0.45 Diluted Earnings Per Share $0.48 $0.47 $0.44 Balance Sheet Totals Total Assets 9,550,934 9,410,210 9,516,418 Net Loans 5,333,896 5,425,343 5,216,151 Total Deposits 7,140,849 6,987,331 6,920,161 Total Shareholders' Equity 913,010 952,007 1,015,759 Performance Ratios Return on Average Assets 1.27% 1.31% 1.20% Return on Average Equity 12.93% 12.42% 10.72% Efficiency Ratio 67.55% 66.44% 68.80% Efficiency Ratio excluding ITSRP and Restructuring Costs 60.39% 60.98% 63.51% (1) Certain 2002 information has been reclassified to conform to 2003 presentation. Bank of Hawaii Corporation and Subsidiaries Quarterly Summary of Selected Consolidated Financial Data Table 12 (Unaudited) ---------------------------------------------------------------------- Three Months Ended (1) (dollars in thousands except per September 30, June 30, March 31, share amounts) 2002 2002 2002 ---------------------------------------------------------------------- Quarterly Operating Results Interest Income Interest and Fees on Loans and Leases $89,335 $92,441 $98,645 Income on Investment Securities - Held to Maturity 3,963 4,544 5,145 Income on Investment Securities - Available for Sale 26,175 26,805 27,193 Deposits 5,384 6,011 5,047 Funds Sold and Security Resale Agreements 914 752 1,003 Other 1,575 1,395 1,332 ---------------------------------------------------------------------- Total Interest Income 127,346 131,948 138,365 Interest Expense Deposits 20,547 22,166 23,978 Security Repurchase Agreements 7,039 8,256 10,293 Funds Purchased 299 245 231 Short-Term Borrowings 334 289 649 Long-Term Debt 6,946 8,055 8,319 ---------------------------------------------------------------------- Total Interest Expense 35,165 39,011 43,470 ---------------------------------------------------------------------- Net Interest Income 92,181 92,937 94,895 Provision for Loan and Lease Losses - 3,324 8,292 ---------------------------------------------------------------------- Net Interest Income After Provision for Loan and Lease Losses 92,181 89,613 86,603 Non-Interest Income Trust and Asset Management 13,655 14,175 14,818 Mortgage Banking 3,669 2,842 7,957 Service Charges on Deposit Accounts 7,925 7,956 8,410 Fees, Exchange, and Other Service Charges 13,114 13,065 12,452 Investment Securities Gains - 3 - Insurance 2,677 2,563 2,599 Other 5,997 7,314 6,789 ---------------------------------------------------------------------- Total Non-Interest Income 47,037 47,918 53,025 Non-Interest Expense Salaries 37,994 37,884 39,187 Pensions and Other Employee Benefits 7,377 9,391 9,996 Net Occupancy Expense 9,597 9,321 9,593 Net Equipment Expense 10,058 9,997 10,121 Restructuring and Other Related Costs - - 1,979 Information Technology Systems Replacement Project 6,576 - - Other 20,141 22,777 20,547 ---------------------------------------------------------------------- Total Non-Interest Expense 91,743 89,370 91,423 ---------------------------------------------------------------------- Income Before Income Taxes 47,475 48,161 48,205 Provision for Income Taxes 17,275 17,145 17,149 ---------------------------------------------------------------------- Net Income $30,200 $31,016 $31,056 ====================================================================== Basic Earnings Per Share $0.44 $0.43 $0.42 Diluted Earnings Per Share $0.43 $0.42 $0.41 Balance Sheet Totals Total Assets 9,702,700 9,824,065 10,245,021 Net Loans 5,104,857 5,250,216 5,442,601 Total Deposits 6,627,673 6,455,981 6,543,781 Total Shareholders' Equity 1,100,706 1,191,072 1,265,907 Performance Ratios Return on Average Assets 1.22% 1.23% 1.21% Return on Average Equity 10.40% 9.94% 9.97% Efficiency Ratio 65.90% 63.45% 61.81% Efficiency Ratio excluding ITSRP and Restructuring Costs 61.18% 63.45% 60.47% (1) Certain 2002 information has been reclassified to conform to 2003 presentation. -->

CONTACT: Bank of Hawaii Corporation
Stafford Kiguchi, 808/537-8580 (Media)
pager: 877/849-5423
skiguchi@boh.com Cindy Wyrick, 808/537-8430 (Investor/Analyst)
cwyrick@boh.com

SOURCE: Bank of Hawaii Corporation