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Bank of Hawaii Corporation Second Quarter 2006 Financial Results

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HONOLULU--(BUSINESS WIRE)--July 24, 2006--Bank of Hawaii Corporation (NYSE:BOH)

  • Board of Directors Increases Share Repurchase Authorization $100 Million
  • Board of Directors Declares Dividend of $0.37 Per Share

Bank of Hawaii Corporation (NYSE:BOH) today reported diluted earnings per share of $0.73 for the second quarter of 2006, down from $0.87 in the second quarter of 2005 and down from $0.87 in the first quarter of 2006. Net income for the second quarter of 2006 was $37.2 million, down $9.3 million from $46.4 million in the second quarter of 2005 and down $8.2 million from $45.4 million in the first quarter of 2006.

Results for the second quarter of 2006 included the previously announced charge of approximately $9.0 million, or $0.17 per diluted share, as a result of the recently-enacted Tax Increase Prevention and Reconciliation Act ("TIPRA") which repealed the exclusion from federal income taxation of a portion of the income from foreign sales corporations. The TIPRA adjustment included a reduction of $0.6 million to net interest income and an increase of $8.2 million in the provision for income taxes, which represents the total amount of additional future tax payments.

The return on average assets for the second quarter of 2006 was 1.47 percent, compared to 1.87 percent in the second quarter of 2005 and 1.82 percent in the first quarter of 2006. The return on average equity was 21.70 percent for the second quarter of 2006, down from 25.98 percent in the second quarter last year and down from 26.13 percent in the previous quarter. Excluding the TIPRA adjustment, the return on average assets for the second quarter of 2006 was 1.81 percent and the return on average equity was 26.86 percent.

"Our underlying financial performance continues to be strong despite the disappointing effect of this change in tax legislation," said Allan R. Landon, Chairman and CEO. "We are especially pleased with our commercial and consumer loan growth, asset quality and expense control."

For the six months ended June 30, 2006, net income was $82.5 million, down $9.4 million compared to net income of $92.0 million for the same period last year. Diluted earnings per share were $1.60 for the first half of 2006, down from diluted earnings per share of $1.69 for the first half of 2005. Excluding the TIPRA adjustment, results for the first half of 2006 were $91.4 million, a decrease of $0.6 million compared with the same period last year. Results for the first half of 2006 included a provision for credit losses of $4.8 million. The Company did not record a provision for credit losses during the comparable period in 2005.

The year-to-date return on average assets was 1.64 percent, down from 1.87 percent for the same six months in 2005. The year-to-date return on average equity was 23.93 percent, down from 24.78 percent for the six months ended June 30, 2005. Excluding the TIPRA adjustment, the return on average assets for the first half of 2006 was 1.82 percent and the return on average equity was 26.49 percent.

Financial Highlights

Net interest income, on a taxable equivalent basis, for the second quarter of 2006 was $100.1 million, down $1.0 million from $101.1 million in the second quarter of 2005 and down $2.3 million from $102.4 million in the first quarter of 2006. The decrease in net interest income was due to increased deposit costs and the $0.6 million TIPRA adjustment. An analysis of the change in net interest income from the previous quarter is included in Table 6.

The net interest margin was 4.25 percent for the second quarter of 2006, an 11 basis point decrease from 4.36 percent in the second quarter of 2005 and a 16 basis point decrease from 4.41 percent in the first quarter of 2006. The decrease from the previous quarter was primarily due to the effects of the flattening yield curve, a shift in the funding mix as well as a 3 basis point decrease resulting from the TIPRA adjustment.

Results for the second quarter of 2006 included a provision for credit losses of $2.1 million compared to $2.8 million in the first quarter of 2006. The provision equaled net charge-offs for both quarters. As previously mentioned, the Company did not record a provision for credit losses during the second quarter of 2005.

Non-interest income was $53.2 million for the second quarter of 2006, an increase of $2.5 million or 5.0 percent compared to non-interest income of $50.7 million in the second quarter of 2005 and up $0.6 million or 1.2 percent compared to non-interest income of $52.6 million in the first quarter of 2006.

Non-interest expense was $78.7 million in the second quarter of 2006, down $0.3 million or 0.3 percent from non-interest expense of $79.0 million in the same quarter last year and down $2.1 million or 2.6 percent from $80.8 million in the prior quarter. An analysis of salary and benefit expenses is included in Table 7.

The efficiency ratio for the second quarter of 2006 was 51.45 percent, an improvement from 52.07 percent in the same quarter last year and from 52.22 percent in the previous quarter. For six months ended June 30, 2006, the efficiency ratio was 51.83 percent compared to 52.47 percent for the same period in 2005.

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

Asset Quality

The Company's asset quality remained stable during the second quarter of 2006. Non-performing assets decreased to $5.4 million at the end of the second quarter of 2006, down $5.5 million, or 50.8 percent, compared to $10.9 million at the end of the same quarter last year and down $0.5 million, or 9.0 percent, compared to $5.9 million at the end of the previous quarter. At June 30, 2006 the ratio of non-performing assets to total loans, foreclosed real estate, and other investments was 0.08 percent, down from 0.18 percent at June 30, 2005 and down from 0.09 percent at March 31, 2006.

Non-accrual loans and leases were $5.1 million at June 30, 2006, down $4.8 million or 48.6 percent from $9.9 million at June 30, 2005 and a reduction of $0.1 million, or 2.7 percent from $5.2 million at March 31, 2006. Non-accrual loans and leases as a percentage of total loans and leases at June 30, 2006 were 0.08 percent, down from 0.16 percent at June 30, 2005 and unchanged from March 31, 2006.

Net charge-offs for the second quarter of 2006 were $2.1 million, or 0.13 percent annualized, of total average loans and leases compared to net charge-offs of $3.7 million, or 0.25 percent annualized, of total average loans and leases in the same quarter last year. Net charge-offs in the first quarter of 2006 were $2.8 million, or 0.18 percent annualized, of total average loans and leases. Details of the reserve for credit losses are summarized in Table 10.

The allowance for loan and lease losses was $91.0 million at June 30, 2006, down from $101.6 million at June 30, 2005 and down slightly from $91.1 million at March 31, 2006. The ratio of the allowance for loan and lease losses to total loans was 1.41 percent at June 30, 2006, down from 1.65 percent at June 30, 2005 and down from 1.46 percent at March 31, 2006. The reserve for unfunded commitments at June 30, 2006 was $5.1 million, up from $4.6 at June 30, 2005 and unchanged from $5.1 million at March 31, 2006.

Credit exposure to the air transportation industry is summarized in Table 8.

Other Financial Highlights

Total assets were $10.33 billion at June 30, 2006, up from $10.06 billion at June 30, 2005 and down from $10.53 billion at March 31, 2006. Total loans and leases were $6.44 billion at June 30, 2006, up from $6.15 billion at June 30, 2005 and up from $6.25 billion at March 31, 2006. Commercial loans were $2.32 billion at June 30, 2006, up from $2.19 billion at June 30, 2005 and up from $2.17 billion at March 31, 2006. Consumer loans were $4.13 billion at June 30, 2006, up from $3.96 billion at June 30, 2005 and up from $4.07 billion at March 31, 2006 due to continued growth in home equity lending and a strong Hawaii residential real estate market.

Total deposits at June 30, 2006 were $7.77 billion, up from $7.73 billion at June 30, 2005 and down from $8.15 billion at March 31, 2006. The decrease in deposits compared to March 31, 2006 was primarily due to the drawdown of a large commercial deposit. Although total deposits decreased as customers sought higher yielding products, the total number of deposit accounts increased compared to March 31, 2006 and June 30, 2005.

During the second quarter of 2006, the Company repurchased 0.5 million shares of common stock at a total cost of $28.2 million under its share repurchase program. The average cost was $52.14 per share repurchased. From the beginning of the share repurchase program in July 2001 through June 30, 2006, the Company has repurchased a total of 41.2 million shares and returned nearly $1.4 billion to shareholders at an average cost of $33.88 per share.

The Company's Board of Directors has increased the authorization under the share repurchase program by an additional $100 million. This new authorization, combined with the previously announced authorizations of $1.45 billion, brings the total repurchase authority to $1.55 billion. From July 1, 2006 through July 21, 2006, the Company repurchased an additional 80.0 thousand shares of common stock at an average cost of $48.61 per share. Remaining buyback authority under the share repurchase program was $151.2 million at July 21, 2006.

At June 30, 2006 the Tier 1 leverage ratio was 7.09 percent compared to 7.14 percent at June 30, 2005 and 7.19 percent at March 31, 2006.

The Company's Board of Directors has declared a quarterly cash dividend of $0.37 per share on the Company's outstanding shares. The dividend will be payable on September 15, 2006 to shareholders of record at the close of business on August 31, 2006.

Financial Outlook

The Company's previous earnings estimate of approximately $187 million in net income for the full year of 2006 has been revised to reflect the $9 million TIPRA adjustment. The Company currently expects net income for the full year of 2006 to be approximately $178 million. Good credit quality is expected to allow the provision for loan losses to be lower than previously estimated, however the continued flatness of the yield curve and customers seeking higher return uses of cash is expected to reduce the previous estimate for net interest income during the second half of 2006. An analysis of credit quality is performed quarterly to determine the adequacy of the reserve for credit losses. This analysis determines the timing and amount of the provision for credit losses.

Conference Call Information

The Company will review its second quarter 2006 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 800-706-7749 in the United States or 617-614-3474 for international callers. No passcode is required to access the call. A replay will be available for one week beginning Monday, July 24, 2006 by calling 888-286-8010 in the United States or 617-801-6888 internationally and entering the number 94430073 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.

Forward-Looking Statements

This news release contains, and other statements made by the Company in connection with this earnings release may contain, forward-looking statements concerning, among other things, the economic and business environment in our service area and elsewhere, credit quality, anticipated net income and other financial and business matters in future periods. Our forward-looking statements are based on numerous assumptions, any of which could prove to be inaccurate and actual results may differ materially from those projected for a variety of reasons, including, but not limited to: 1) unanticipated changes in business and economic conditions, the competitive environment, taxing authority interpretations, legislation in Hawaii and the other markets we serve, or the timing and interpretation of proposed accounting standards; 2) changes in our credit quality or risk profile that may increase or decrease the required level of reserve for credit losses; 3) changes in market interest rates that may affect our credit markets and ability to maintain our net interest margin; 4) unpredictable costs and other consequences of legal, tax or regulatory matters involving the Company; 5) changes to the amount and timing of our proposed equity repurchases; 6) real or threatened acts of war or terrorist activity affecting business conditions; and 7) adverse weather, public health and other natural conditions impacting the Company and its customers' operations. For further discussion of these and other risks and uncertainties that could cause actual results to differ materially from such forward-looking statements, please refer to the risk factors discussed in our Annual Report on Form 10-K for the year ended December 31, 2005 filed with the U.S. Securities and Exchange Commission. We do not undertake an obligation to update forward-looking statements to reflect later events or circumstances.

Bank of Hawaii Corporation and Subsidiaries
Highlights (Unaudited)                                         Table 1
----------------------------------------------------------------------
                                      Three Months Ended
                               June 30,      March 31,        June 30,
(dollars in thousands
 except per share
 amounts)                         2006           2006            2005
----------------------------------------------------------------------
For the Period:
Interest Income            $   140,769    $   135,403     $   124,105
Net Interest Income             99,856        102,202         101,039
Net Income                      37,176         45,350          46,429
Basic Earnings Per Share          0.74           0.89            0.90
Diluted Earnings Per
 Share                            0.73           0.87            0.87
Dividends Declared Per
 Share                            0.37           0.37            0.33

Net Income to Average
 Total Assets (ROA)               1.47%          1.82%           1.87%
Net Income to Average
 Shareholders' Equity
 (ROE)                           21.70          26.13           25.98
Net Interest Margin (1)           4.25           4.41            4.36
Efficiency Ratio (2)             51.45          52.22           52.07

Average Assets             $10,169,341    $10,091,665     $ 9,969,243
Average Loans and Leases     6,317,623      6,181,697       6,090,149
Average Deposits             7,728,227      7,742,623       7,747,331
Average Shareholders'
 Equity                        687,083        703,856         716,767
Average Equity to
 Average Assets                   6.76%          6.97%           7.19%

Market Price Per Share
 of Common Stock:
                 Closing   $     49.60    $     53.31     $     50.75
                    High         54.51          55.15           51.30
                     Low         48.33          51.40           43.82

                               Six Months Ended
                                   June 30,
(dollars in thousands
 except per share
 amounts)                     2006           2005
----------------------------------------------------------------------
For the Period:
Interest Income            $   276,172    $   244,263
Net Interest Income            202,058        201,697
Net Income                      82,526         91,951
Basic Earnings Per Share          1.63           1.75
Diluted Earnings Per
 Share                            1.60           1.69
Dividends Declared Per
 Share                            0.74           0.66

Net Income to Average
 Total Assets (ROA)               1.64%          1.87%
Net Income to Average
 Shareholders' Equity
 (ROE)                           23.93          24.78
Net Interest Margin (1)           4.33           4.39
Efficiency Ratio (2)             51.83          52.47

Average Assets             $10,130,718    $ 9,907,845
Average Loans and Leases     6,250,035      6,045,609
Average Deposits             7,735,384      7,717,729
Average Shareholders'
 Equity                        695,424        748,344
Average Equity to
 Average Assets                   6.86%          7.55%

Market Price Per Share
 of Common Stock:
                 Closing   $     49.60    $     50.75
                    High         55.15          51.30
                     Low         48.33          43.82


                               June 30,      March 31,        June 30,
                                  2006           2006         2005(3)
----------------------------------------------------------------------
At Period End:
Net Loans and Leases       $ 6,350,590    $ 6,155,061     $ 6,049,831
Total Assets                10,325,190     10,528,049      10,059,690
Deposits                     7,766,033      8,147,101       7,726,758
Long-Term Debt                 242,749        242,730         242,674
Shareholders' Equity           666,728        681,078         712,169

Ratio of Allowance for
 Loan and Lease Losses
 to Loans and Leases
 Outstanding                      1.41%          1.46%           1.65%
Dividend Payout Ratio (4)        50.00          41.57           36.67
Leverage Capital Ratio            7.09           7.19            7.14

Book Value Per Common
 Share                     $     13.18    $     13.36     $     13.73

Full-Time Equivalent
 Employees                       2,563          2,561           2,561
Branches and Offices                86             85              86

(1) The net interest margin is defined as net interest income, on a
    fully-taxable equivalent basis, as a percentage of average earning
    assets.

(2) The efficiency ratio is defined as non-interest expense divided by
    total revenue (net interest income and non-interest income).

(3) Certain prior period information has been reclassified to conform
    to current presentation.

(4) Dividend payout ratio is defined as dividends declared per share
    divided by basic earnings per share for the quarter.

Bank of Hawaii Corporation and Subsidiaries
Consolidated Statements of Income (Unaudited)                  Table 2
----------------------------------------------------------------------
                                         Three Months Ended
                                  June 30,    March 31,    June 30,
(dollars in thousands except
 per share amounts)                2006         2006        2005
----------------------------------------------------------------------
Interest Income
   Interest and Fees on Loans
    and Leases                  $   104,388 $    99,371  $    90,119
   Income on Investment
    Securities - Available for
    Sale                             31,226      30,835       27,987
   Income on Investment
    Securities - Held to
    Maturity                          4,658       4,757        5,527
   Deposits                              55          43           36
   Funds Sold                           170         125          165
   Other                                272         272          271
----------------------------------------------------------------------
Total Interest Income               140,769     135,403      124,105
----------------------------------------------------------------------
Interest Expense
   Deposits                          24,656      19,633       13,577
   Securities Sold Under
    Agreements to Repurchase          9,802       7,890        4,562
   Funds Purchased                    2,652       1,893        1,151
   Short-Term Borrowings                 73          57           45
   Long-Term Debt                     3,730       3,728        3,731
----------------------------------------------------------------------
Total Interest Expense               40,913      33,201       23,066
----------------------------------------------------------------------
Net Interest Income                  99,856     102,202      101,039
Provision for Credit Losses           2,069       2,761            -
----------------------------------------------------------------------
Net Interest Income After
 Provision for Credit Losses         97,787      99,441      101,039
----------------------------------------------------------------------
Non-Interest Income
   Trust and Asset Management        14,537      14,848       14,058
   Mortgage Banking                   2,569       2,987        2,594
   Service Charges on Deposit
    Accounts                          9,695      10,132        9,569
   Fees, Exchange, and Other
    Service Charges                  15,633      14,767       15,211
   Investment Securities Gains
    (Losses), Net                         -           -          337
   Insurance                          4,691       5,019        4,330
   Other                              6,076       4,819        4,575
----------------------------------------------------------------------
Total Non-Interest Income            53,201      52,572       50,674
----------------------------------------------------------------------
Non-Interest Expense
   Salaries and Benefits             44,811      45,786       43,856
   Net Occupancy                      9,376       9,643        9,189
   Net Equipment                      4,802       5,028        5,377
   Professional Fees                  2,589         438        2,905
   Other                             17,164      19,923       17,677
----------------------------------------------------------------------
Total Non-Interest Expense           78,742      80,818       79,004
----------------------------------------------------------------------
Income Before Income Taxes           72,246      71,195       72,709
Provision for Income Taxes           35,070      25,845       26,280
----------------------------------------------------------------------
Net Income                      $    37,176 $    45,350  $    46,429
======================================================================
Basic Earnings Per Share        $      0.74 $      0.89  $      0.90
Diluted Earnings Per Share      $      0.73 $      0.87  $      0.87
Dividends Declared Per Share    $      0.37 $      0.37  $      0.33
Basic Weighted Average Shares    50,181,817  50,785,244   51,873,772
Diluted Weighted Average Shares  51,217,281  52,106,954   53,403,781
======================================================================

                                    Six Months Ended
                                        June 30,
(dollars in thousands except
 per share amounts)                2006         2005
---------------------------------------------------------------------
Interest Income
   Interest and Fees on Loans
    and Leases                  $   203,759 $   176,586
   Income on Investment
    Securities - Available for
    Sale                             62,061      55,306
   Income on Investment
    Securities - Held to
    Maturity                          9,415      11,352
   Deposits                              98          59
   Funds Sold                           295         240
   Other                                544         720
----------------------------------------------------------------------
Total Interest Income               276,172     244,263
----------------------------------------------------------------------
Interest Expense
   Deposits                          44,289      25,181
   Securities Sold Under
    Agreements to Repurchase         17,692       7,887
   Funds Purchased                    4,545       1,884
   Short-Term Borrowings                130          77
   Long-Term Debt                     7,458       7,537
----------------------------------------------------------------------
Total Interest Expense               74,114      42,566
----------------------------------------------------------------------
Net Interest Income                 202,058     201,697
Provision for Credit Losses           4,830           -
----------------------------------------------------------------------
Net Interest Income After
 Provision for Credit Losses        197,228     201,697
----------------------------------------------------------------------
Non-Interest Income
   Trust and Asset Management        29,385      28,680
   Mortgage Banking                   5,556       5,184
   Service Charges on Deposit
    Accounts                         19,827      19,748
   Fees, Exchange, and Other
    Service Charges                  30,400      29,047
   Investment Securities Gains
    (Losses), Net                         -         337
   Insurance                          9,710      10,118
   Other                             10,895       9,875
----------------------------------------------------------------------
Total Non-Interest Income           105,773     102,989
----------------------------------------------------------------------
Non-Interest Expense
   Salaries and Benefits             90,597      88,625
   Net Occupancy                     19,019      18,734
   Net Equipment                      9,830      10,848
   Professional Fees                  3,027       5,956
   Other                             37,087      35,704
----------------------------------------------------------------------
Total Non-Interest Expense          159,560     159,867
----------------------------------------------------------------------
Income Before Income Taxes          143,441     144,819
Provision for Income Taxes           60,915      52,868
----------------------------------------------------------------------
Net Income                      $    82,526 $    91,951
======================================================================
Basic Earnings Per Share        $      1.63 $      1.75
Diluted Earnings Per Share      $      1.60 $      1.69
Dividends Declared Per Share    $      0.74 $      0.66
Basic Weighted Average Shares    50,481,864  52,646,022
Diluted Weighted Average Shares  51,596,303  54,250,018
======================================================================


Bank of Hawaii Corporation and Subsidiaries
Consolidated Statements of Condition (Unaudited)               Table 3
----------------------------------------------------------------------
                       June 30,    March 31, December 31,     June 30,
(dollars in
 thousands)               2006         2006         2005         2005
----------------------------------------------------------------------
Assets
Interest-Bearing
 Deposits         $      4,145 $      5,171 $      4,893 $      4,825
Funds Sold                   -      328,000            -       50,000
Investment
 Securities -
 Available for
 Sale
   Held in
    Portfolio        2,177,220    2,268,644    2,333,417    2,396,204
   Pledged as
    Collateral         334,947      280,560      204,798      117,947
Investment
 Securities -
 Held to Maturity
 (Fair Value of
 $408,203,
 $417,938,
 $442,989, and
 $522,993)             426,910      433,021      454,240      526,767
Loans Held for
 Sale                   15,506       22,754       17,915       17,435
Loans and Leases     6,441,625    6,246,125    6,168,536    6,151,418
   Allowance for
    Loan and
    Lease Losses       (91,035)     (91,064)     (91,090)    (101,587)
----------------------------------------------------------------------
     Net Loans
      and Leases     6,350,590    6,155,061    6,077,446    6,049,831
----------------------------------------------------------------------
Total Earning
 Assets              9,309,318    9,493,211    9,092,709    9,163,009
----------------------------------------------------------------------
Cash and Non-
 Interest-Bearing
 Deposits              397,061      422,436      493,825      293,115
Premises and
 Equipment             130,435      143,392      133,913      137,907
Customers'
 Acceptance
 Liability                 646          729        1,056        1,598
Accrued Interest
 Receivable             45,343       44,149       43,033       38,540
Foreclosed Real
 Estate                    188          358          358          292
Mortgage
 Servicing Rights       18,750       18,468       18,010       18,239
Goodwill                34,959       34,959       34,959       34,959
Other Assets           388,490      370,347      369,175      372,031
----------------------------------------------------------------------
Total Assets      $ 10,325,190 $ 10,528,049 $ 10,187,038 $ 10,059,690
======================================================================
Liabilities
Deposits
   Non-Interest-
    Bearing
    Demand        $  1,976,051 $  2,377,355 $  2,134,916 $  1,918,749
   Interest-
    Bearing
    Demand           1,602,914    1,674,294    1,678,454    1,641,873
   Savings           2,691,029    2,716,572    2,819,258    2,967,993
   Time              1,496,039    1,378,880    1,274,840    1,198,143
----------------------------------------------------------------------
Total Deposits       7,766,033    8,147,101    7,907,468    7,726,758
----------------------------------------------------------------------
Funds Purchased        353,700       55,930      268,110       63,565
Short-Term
 Borrowings             12,100        2,025        9,447        9,894
Securities Sold
 Under Agreements
 to Repurchase         835,563      957,166      609,380      861,233
Long-Term Debt         242,749      242,730      242,703      242,674
Banker's
 Acceptances
 Outstanding               646          729        1,056        1,598
Retirement
 Benefits Payable       72,192       71,708       71,116       66,638
Accrued Interest
 Payable                13,023       11,882       10,910        8,617
Taxes Payable and
 Deferred Taxes        274,146      273,088      269,094      283,082
Other Liabilities       88,310       84,612      104,402       83,462
----------------------------------------------------------------------
Total Liabilities    9,658,462    9,846,971    9,493,686    9,347,521
----------------------------------------------------------------------
Shareholders'
 Equity
Common Stock
 ($.01 par value);
 authorized
 500,000,000
 shares; issued /
 outstanding:
 June 2006 -
 56,855,346 /
 50,570,697,
 March 2006 -
 56,858,558 /
 50,970,829,
 December 2005 -
 56,827,483 /
 51,276,286, June
 2005 -
 81,721,733 /
 51,853,734                566          566          565          815
Capital Surplus        469,461      467,678      473,338      457,280
Accumulated Other
 Comprehensive
 Loss                  (76,204)     (65,668)     (47,818)     (18,471)
Retained Earnings      581,406      565,702      546,591    1,339,119
Deferred Stock
 Grants                      -            -      (11,080)      (7,166)
Treasury Stock,
 at Cost (Shares:
 June 2006 -
 6,284,649, March
 2006 -
 5,887,729,
 December 2005 -
 5,551,197, June
 2005 -
 29,867,999)          (308,501)    (287,200)    (268,244)  (1,059,408)
----------------------------------------------------------------------
Total
 Shareholders'
 Equity                666,728      681,078      693,352      712,169
----------------------------------------------------------------------
Total Liabilities
 and
 Shareholders'
 Equity           $ 10,325,190 $ 10,528,049 $ 10,187,038 $ 10,059,690
======================================================================


Bank of Hawaii Corporation and Subsidiaries
Consolidated Statements of Shareholders' Equity (Unaudited)    Table 4
----------------------------------------------------------------------
                                                               Accum.
                                                                Other
                                                              Compre-
                                        Common      Capital   hensive
(dollars in thousands)         Total     Stock      Surplus      Loss
----------------------------------------------------------------------
Balance at December 31,
 2005                     $  693,352  $    565  $   473,338 $ (47,818)
Comprehensive Income:
 Net Income                   82,526         -            -         -
 Other Comprehensive
  Income, Net of Tax:
  Change in Unrealized
   Gains and Losses on
   Investment Securities     (28,386)        -            -   (28,386)
 Total Comprehensive
  Income

Common Stock Issued under
 Stock Plans and Related
 Tax Benefits (537,554
 shares)                      22,401         1       (3,877)        -
Treasury Stock Purchased
 (1,241,303 shares)          (65,453)        -            -         -
Cash Dividends Paid          (37,712)        -            -         -
----------------------------------------------------------------------
Balance at June 30, 2006  $  666,728  $    566  $   469,461 $ (76,204)
======================================================================

                                      Deferred                Compre-
                            Retained     Stock     Treasury   hensive
(dollars in thousands)      Earnings    Grants        Stock    Income
----------------------------------------------------------------------
Balance at December 31,
 2005                     $  546,591  $(11,080) $  (268,244)
Comprehensive Income:
 Net Income                   82,526         -            - $  82,526
 Other Comprehensive
  Income, Net of Tax:
  Change in Unrealized
   Gains and Losses on
   Investment Securities           -         -            -   (28,386)
                                                            ----------
 Total Comprehensive
  Income                                                    $  54,140
                                                            ==========

Common Stock Issued under
 Stock Plans and Related
 Tax Benefits (537,554
 shares)                      (9,999)   11,080       25,196
Treasury Stock Purchased
 (1,241,303 shares)                -         -      (65,453)
Cash Dividends Paid          (37,712)        -            -
------------------------------------------------------------
Balance at June 30, 2006  $  581,406  $      -  $  (308,501)
============================================================
                                                               Accum.
                                                                Other
                                                              Compre-
                                        Common      Capital   hensive
(dollars in thousands)         Total     Stock      Surplus      Loss
----------------------------------------------------------------------
Balance at December 31,
 2004                     $  814,834  $    813  $   450,998 $ (12,917)
Comprehensive Income:
 Net Income                   91,951         -            -         -
 Other Comprehensive
  Income, Net of Tax:
  Change in Unrealized
   Gains and Losses on
   Investment Securities      (5,554)        -             -   (5,554)
 Total Comprehensive
  Income

Common Stock Issued under
 Stock Plans and Related
 Tax Benefits (605,364
 shares)                      21,499         2        6,282         -
Treasury Stock Purchased
 (3,710,379 shares)         (175,914)        -            -         -
Cash Dividends Paid          (34,647)        -            -         -
----------------------------------------------------------------------
Balance at June 30, 2005  $  712,169  $    815  $   457,280 $ (18,471)
======================================================================

                                      Deferred                Compre-
                            Retained     Stock     Treasury   hensive
(dollars in thousands)      Earnings    Grants        Stock    Income
----------------------------------------------------------------------
Balance at December 31,
 2004                     $1,282,425  $ (8,433) $  (898,052)
Comprehensive Income:
 Net Income                   91,951         -            - $  91,951
 Other Comprehensive
  Income, Net of Tax:
  Change in Unrealized
   Gains and Losses on
   Investment Securities           -         -            -    (5,554)
                                                            ----------
 Total Comprehensive
  Income                                                    $  86,397
                                                            ==========

Common Stock Issued under
 Stock Plans and
 Related Tax Benefits
 (605,364 shares)               (610)    1,267       14,558
Treasury Stock Purchased
 (3,710,379 shares)                -         -     (175,914)
Cash Dividends Paid          (34,647)        -            -
------------------------------------------------------------
Balance at June 30, 2005  $1,339,119  $ (7,166) $(1,059,408)
============================================================

Bank of Hawaii Corporation and Subsidiaries
Consolidated Average Balances and Interest Rates - Taxable     Table 5
 Equivalent Basis (Unaudited)
----------------------------------------------------------------------
                                              Three Months Ended
                                                June 30, 2006
                                           Average   Income/  Yield/
(dollars in millions)                      Balance   Expense   Rate
----------------------------------------------------------------------
Earning Assets
Interest-Bearing Deposits                $      5.7 $    0.1    3.82 %
Funds Sold                                     13.9      0.2    4.89
Investment Securities
  Available for Sale                        2,564.2     31.4    4.90
  Held to Maturity                            429.5      4.6    4.34
Loans Held for Sale                             8.9      0.1    6.25
Loans and Leases (2)
  Commercial and Industrial                   967.5     17.6    7.29
  Construction                                176.7      3.6    8.08
  Commercial Mortgage                         598.8      9.9    6.66
  Residential Mortgage                      2,461.4     36.6    5.94
  Other Revolving Credit and Installment      718.0     16.3    9.10
  Home Equity                                 900.5     16.6    7.39
  Lease Financing                             494.7      3.7    2.99
----------------------------------------------------------------------
Total Loans and Leases                      6,317.6    104.3    6.61
----------------------------------------------------------------------
Other                                          79.4      0.3    1.37
----------------------------------------------------------------------
Total Earning Assets (3)                    9,419.2    141.0    5.99
----------------------------------------------------------------------
Cash and Non-Interest-Bearing Deposits        304.3
Other Assets                                  445.8
                                         -----------
Total Assets                             $ 10,169.3
                                         ===========

Interest-Bearing Liabilities
Interest-Bearing Deposits
  Demand                                 $  1,611.7      3.9    0.97
  Savings                                   2,699.0      9.4    1.39
  Time                                      1,432.6     11.4    3.20
----------------------------------------------------------------------
Total Interest-Bearing Deposits             5,743.3     24.7    1.72
----------------------------------------------------------------------
Short-Term Borrowings                         219.0      2.7    4.99
Securities Sold Under Agreements to
 Repurchase                                   855.9      9.8    4.57
Long-Term Debt                                242.7      3.7    6.15
----------------------------------------------------------------------
Total Interest-Bearing Liabilities          7,060.9     40.9    2.32
----------------------------------------------------------------------
Net Interest Income                                 $  100.1
                                                    =========
  Interest Rate Spread                                          3.67 %
  Net Interest Margin                                           4.25 %
Non-Interest-Bearing Demand Deposits        1,984.9
Other Liabilities                             436.4
Shareholders' Equity                          687.1
                                         -----------
Total Liabilities and Shareholders'
 Equity                                  $ 10,169.3
                                         ===========

                                              Three Months Ended
                                              March 31, 2006 (1)
                                           Average   Income/  Yield/
(dollars in millions)                      Balance   Expense   Rate
----------------------------------------------------------------------
Earning Assets
Interest-Bearing Deposits                $      5.3 $      -    3.30 %
Funds Sold                                     11.0      0.1    4.61
Investment Securities
  Available for Sale                        2,589.4     31.0    4.80
  Held to Maturity                            443.7      4.8    4.29
Loans Held for Sale                            12.0      0.2    6.02
Loans and Leases (2)
  Commercial and Industrial                   932.3     16.2    7.05
  Construction                                142.6      2.8    8.03
  Commercial Mortgage                         571.9      9.2    6.50
  Residential Mortgage                      2,436.0     35.7    5.85
  Other Revolving Credit and Installment      725.7     15.9    8.89
  Home Equity                                 880.7     15.2    7.01
  Lease Financing                             492.5      4.2    3.42
----------------------------------------------------------------------
Total Loans and Leases                      6,181.7     99.2    6.47
----------------------------------------------------------------------
Other                                          79.4      0.3    1.37
----------------------------------------------------------------------
Total Earning Assets (3)                    9,322.5    135.6    5.85
----------------------------------------------------------------------
Cash and Non-Interest-Bearing Deposits        331.8
Other Assets                                  437.4
                                         -----------
Total Assets                             $ 10,091.7
                                         ===========

Interest-Bearing Liabilities
Interest-Bearing Deposits
  Demand                                 $  1,654.7      3.3    0.82
  Savings                                   2,756.2      7.2    1.06
  Time                                      1,309.7      9.1    2.82
----------------------------------------------------------------------
Total Interest-Bearing Deposits             5,720.6     19.6    1.39
----------------------------------------------------------------------
Short-Term Borrowings                         178.0      2.0    4.44
Securities Sold Under Agreements to
 Repurchase                                   772.0      7.9    4.13
Long-Term Debt                                242.7      3.7    6.16
----------------------------------------------------------------------
Total Interest-Bearing Liabilities          6,913.3     33.2    1.94
----------------------------------------------------------------------
Net Interest Income                                 $  102.4
                                                    =========
  Interest Rate Spread                                          3.91 %
  Net Interest Margin                                           4.41 %
Non-Interest-Bearing Demand Deposits        2,022.0
Other Liabilities                             452.5
Shareholders' Equity                          703.9
                                         -----------
Total Liabilities and Shareholders'
 Equity                                  $ 10,091.7
                                         ===========

                                              Three Months Ended
                                              June 30, 2005 (1)
                                           Average   Income/  Yield/
(dollars in millions)                      Balance   Expense   Rate
----------------------------------------------------------------------
Earning Assets
Interest-Bearing Deposits                $      6.0 $      -    2.36 %
Funds Sold                                     23.1      0.2    2.87
Investment Securities
  Available for Sale                        2,542.5     28.1    4.42
  Held to Maturity                            544.1      5.5    4.06
Loans Held for Sale                            15.1      0.2    5.72
Loans and Leases (2)
  Commercial and Industrial                   958.2     14.5    6.06
  Construction                                121.0      1.8    5.94
  Commercial Mortgage                         599.3      8.8    5.89
  Residential Mortgage                      2,349.3     33.1    5.65
  Other Revolving Credit and Installment      740.9     15.4    8.36
  Home Equity                                 822.3     11.6    5.64
  Lease Financing                             499.2      4.7    3.73
----------------------------------------------------------------------
Total Loans and Leases                      6,090.2     89.9    5.91
----------------------------------------------------------------------
Other                                          66.3      0.3    1.64
----------------------------------------------------------------------
Total Earning Assets (3)                    9,287.3    124.2    5.35
----------------------------------------------------------------------
Cash and Non-Interest-Bearing Deposits        305.8
Other Assets                                  376.1
                                         -----------
Total Assets                             $  9,969.2
                                         ===========

Interest-Bearing Liabilities
Interest-Bearing Deposits
  Demand                                 $  1,667.3      2.4    0.58
  Savings                                   2,970.8      4.8    0.65
  Time                                      1,159.0      6.4    2.20
----------------------------------------------------------------------
Total Interest-Bearing Deposits             5,797.1     13.6    0.94
----------------------------------------------------------------------
Short-Term Borrowings                         164.0      1.2    2.92
Securities Sold Under Agreements to
 Repurchase                                   658.9      4.6    2.78
Long-Term Debt                                242.7      3.7    6.16
----------------------------------------------------------------------
Total Interest-Bearing Liabilities          6,862.7     23.1    1.35
----------------------------------------------------------------------
Net Interest Income                                 $  101.1
                                                    =========
  Interest Rate Spread                                          4.00 %
  Net Interest Margin                                           4.36 %
Non-Interest-Bearing Demand Deposits        1,950.2
Other Liabilities                             439.5
Shareholders' Equity                          716.8
                                         -----------
Total Liabilities and Shareholders'
 Equity                                  $  9,969.2
                                         ===========

                                               Six Months Ended
                                                 June 30, 2006
                                           Average   Income/  Yield/
(dollars in millions)                      Balance   Expense   Rate
---------------------------------------------------------------------
Earning Assets
Interest-Bearing Deposits                $      5.5 $    0.1    3.57 %
Funds Sold                                     12.5      0.3    4.77
Investment Securities
 Available for Sale                         2,576.7     62.4    4.85
 Held to Maturity                             436.6      9.4    4.31
Loans Held for Sale                            10.4      0.3    6.12
Loans and Leases (2)
 Commercial and Industrial                    950.0     33.8    7.17
 Construction                                 159.8      6.4    8.06
 Commercial Mortgage                          585.4     19.1    6.58
 Residential Mortgage                       2,448.8     72.3    5.90
 Other Revolving Credit and Installment       721.8     32.2    9.00
 Home Equity                                  890.6     31.8    7.20
 Lease Financing                              493.6      7.9    3.20
---------------------------------------------------------------------
Total Loans and Leases                      6,250.0    203.5    6.54
---------------------------------------------------------------------
Other                                          79.4      0.5    1.37
---------------------------------------------------------------------
Total Earning Assets (3)                    9,371.1    276.5    5.92
---------------------------------------------------------------------
Cash and Non-Interest-Bearing Deposits        318.0
Other Assets                                  441.6
                                         -----------
Total Assets                             $ 10,130.7
                                         ===========

Interest-Bearing Liabilities
Interest-Bearing Deposits
 Demand                                  $  1,633.1      7.2    0.89
 Savings                                    2,727.4     16.5    1.22
 Time                                       1,371.5     20.6    3.02
---------------------------------------------------------------------
Total Interest-Bearing Deposits             5,732.0     44.3    1.56
---------------------------------------------------------------------
Short-Term Borrowings                         198.6      4.7    4.75
Securities Sold Under Agreements to
 Repurchase                                   814.2     17.7    4.36
Long-Term Debt                                242.7      7.4    6.16
---------------------------------------------------------------------
Total Interest-Bearing Liabilities          6,987.5     74.1    2.14
---------------------------------------------------------------------
Net Interest Income                                 $  202.4
                                                    =========
 Interest Rate Spread                                           3.78 %
 Net Interest Margin                                            4.33 %
Non-Interest-Bearing Demand Deposits        2,003.4
Other Liabilities                             444.4
Shareholders' Equity                          695.4
                                         -----------
Total Liabilities and Shareholders'
 Equity                                  $ 10,130.7
                                         ===========


(1) Certain prior period information has been reclassified to conform
    to current presentation.

(2) Non-performing loans and leases are included in the respective
    average loan and lease balances. Income, if any, on such loans and
    leases is recognized on a cash basis.

(3) Interest income includes taxable-equivalent basis adjustment based
    upon a statutory tax rate of 35%.


Bank of Hawaii Corporation and Subsidiaries
Analysis of Change in Net Interest Income - Taxable            Table 6
Equivalent Basis (Unaudited)
----------------------------------------------------------------------
                                    Three Months Ended June 30, 2006
                                        compared to March 31, 2006
(dollars in millions)               Volume(1)  Rate(1)  Time(1) Total
----------------------------------------------------------------------
Change in Interest Income:
Interest-Bearing Deposits           $       - $    0.1 $      - $ 0.1
Funds Sold                                0.1        -        -   0.1
Investment Securities
   Available for Sale                    (0.3)     0.6      0.1   0.4
   Held to Maturity                      (0.3)     0.1        -  (0.2)
Loans Held for Sale                      (0.1)       -        -  (0.1)
Loans and Leases
   Commercial and Industrial              0.6      0.6      0.2   1.4
   Construction                           0.8        -        -   0.8
   Commercial Mortgage                    0.4      0.2      0.1   0.7
   Residential Mortgage                   0.4      0.5        -   0.9
   Other Revolving Credit and
    Installment                          (0.2)     0.4      0.2   0.4
   Home Equity                            0.4      0.8      0.2   1.4
   Lease Financing                          -     (0.5)       -  (0.5)
----------------------------------------------------------------------
Total Loans and Leases                    2.4      2.0      0.7   5.1
----------------------------------------------------------------------
Total Change in Interest Income           1.8      2.8      0.8   5.4
----------------------------------------------------------------------

Change in Interest Expense:
Interest-Bearing Deposits
   Demand                                (0.1)     0.6      0.1   0.6
   Savings                               (0.2)     2.3      0.1   2.2
   Time                                   1.0      1.3        -   2.3
----------------------------------------------------------------------
Total Interest-Bearing Deposits           0.7      4.2      0.2   5.1
----------------------------------------------------------------------
Short-Term Borrowings                     0.5      0.2        -   0.7
Securities Sold Under Agreements to
 Repurchase                               0.9      0.9      0.1   1.9
----------------------------------------------------------------------
Total Change in Interest Expense          2.1      5.3      0.3   7.7
----------------------------------------------------------------------

Change in Net Interest Income       $    (0.3)$   (2.5)$    0.5 $(2.3)
======================================================================

(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
Salaries and Benefits (Unaudited)                              Table 7
----------------------------------------------------------------------
                                     Three Months Ended
                                June 30,  March 31,   June 30,
(dollars in thousands)             2006       2006   2005 (1)
--------------------------------------------------------------
Salaries                      $  27,727 $   26,724 $   26,758
Incentive Compensation            3,844      4,321      3,725
Share-Based Compensation          1,631      1,481      1,828
Commission Expense                1,833      1,922      2,281
Retirement and Other Benefits     4,833      5,235      4,437
Payroll Taxes                     2,297      3,385      2,205
Medical, Dental, and Life
 Insurance                        2,185      2,161      1,823
Separation Expense                  461        557        799
--------------------------------------------------------------
Total Salaries and Benefits   $  44,811 $   45,786 $   43,856
==============================================================

                                Six Months Ended
                                      June 30,
(dollars in thousands)            2006    2005 (1)
--------------------------------------------------
Salaries                      $  54,451 $   52,869
Incentive Compensation            8,165      7,693
Share-Based Compensation          3,112      3,543
Commission Expense                3,755      4,533
Retirement and Other Benefits    10,068      9,205
Payroll Taxes                     5,682      5,658
Medical, Dental, and Life
 Insurance                        4,346      4,054
Separation Expense                1,018      1,070
--------------------------------------------------
Total Salaries and Benefits   $  90,597 $   88,625
==================================================

(1) Certain prior period information has been reclassified to conform
    to current presentation.


Bank of Hawaii Corporation and Subsidiaries
Loan and Lease Portfolio Balances (Unaudited)                  Table 8
----------------------------------------------------------------------
                          June 30,  March 31, December 31,   June 30,
(dollars in thousands)       2006       2006     2005 (1)   2005 (1)
----------------------------------------------------------------------
Commercial
 Commercial and
  Industrial           $1,008,618 $  957,893 $    918,842 $1,010,597
 Commercial Mortgage      619,839    591,770      558,346    563,581
 Construction             212,490    154,737      153,682    144,840
 Lease Financing          475,549    467,688      470,155    471,600
----------------------------------------------------------------------
Total Commercial        2,316,496  2,172,088    2,101,025  2,190,618
----------------------------------------------------------------------
Consumer
 Residential Mortgage   2,472,937  2,441,664    2,431,198  2,354,636
 Home Equity              914,316    888,528      874,400    832,967
 Other Revolving
  Credit and
  Installment             714,617    719,553      736,364    744,570
 Lease Financing           23,259     24,292       25,549     28,627
----------------------------------------------------------------------
Total Consumer          4,125,129  4,074,037    4,067,511  3,960,800
----------------------------------------------------------------------
Total Loans and Leases $6,441,625 $6,246,125 $  6,168,536 $6,151,418
======================================================================

Air Transportation Credit Exposure (2) (Unaudited)
----------------------------------------------------------------------
                                             June 30, 2006
                                  ------------------------------------
                                                   Unused      Total
(dollars in thousands)            Outstanding Commitments   Exposure
----------------------------------------------------------------------
Passenger Carriers Based In the
 United States                   $     68,213 $         - $   68,213
Passenger Carriers Based Outside
 the United States                     19,542           -     19,542
Cargo Carriers                         13,240           -     13,240
----------------------------------------------------------------------
Total Air Transportation Credit
 Exposure                        $    100,995 $         - $  100,995
======================================================================

                                  Mar. 31, 2006  June 30, 2005
                                 -----------------------------
                                          Total          Total
(dollars in thousands)                 Exposure       Exposure
--------------------------------------------------------------
Passenger Carriers Based In the
 United States                   $       68,609  $      86,385
Passenger Carriers Based Outside
 the United States                       20,613         22,249
Cargo Carriers                           13,240         13,475
--------------------------------------------------------------
Total Air Transportation Credit
 Exposure                        $      102,462  $     122,109
==============================================================

(1) Certain prior period information has been reclassified to conform
    to current presentation.

(2) Exposure includes loans, leveraged leases and operating leases.


Bank of Hawaii Corporation and Subsidiaries
Consolidated Non-Performing Assets and Accruing Loans and      Table 9
Leases Past Due 90 Days or More (Unaudited)
----------------------------------------------------------------------
                                      June 30,   March 31,December 31,
(dollars in thousands)                   2006        2006    2005 (1)
----------------------------------------------------------------------
Non-Performing Assets
Non-Accrual Loans and Leases
 Commercial
  Commercial and Industrial        $      227 $       236 $       212
  Commercial Mortgage                      48          52         130
  Lease Financing                           -           -           -
----------------------------------------------------------------------
 Total Commercial                         275         288         342
----------------------------------------------------------------------
 Consumer
  Residential Mortgage                  4,628       4,922       5,439
  Home Equity                             204          38          39
----------------------------------------------------------------------
 Total Consumer                         4,832       4,960       5,478
----------------------------------------------------------------------
Total Non-Accrual Loans and Leases      5,107       5,248       5,820
----------------------------------------------------------------------
Foreclosed Real Estate                    188         358         358
Other Investments                          82         300         300
----------------------------------------------------------------------
Total Non-Performing Assets        $    5,377 $     5,906 $     6,478
======================================================================

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

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

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

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

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

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



                                    September 30,     June 30,
(dollars in thousands)                  2005 (1)     2005 (1)
-------------------------------------------------------------
Non-Performing Assets
Non-Accrual Loans and Leases
 Commercial
  Commercial and Industrial        $         471 $        430
  Commercial Mortgage                      1,617        1,805
  Lease Financing                              4        1,586
-------------------------------------------------------------
 Total Commercial                          2,092        3,821
-------------------------------------------------------------
 Consumer
  Residential Mortgage                     5,021        5,968
  Home Equity                                 41          156
-------------------------------------------------------------
 Total Consumer                            5,062        6,124
-------------------------------------------------------------
Total Non-Accrual Loans and Leases         7,154        9,945
-------------------------------------------------------------
Foreclosed Real Estate                       413          292
Other Investments                            683          683
-------------------------------------------------------------
Total Non-Performing Assets        $       8,250 $     10,920
=============================================================

Accruing Loans and Leases Past Due
 90 Days or More
 Commercial
  Commercial and Industrial        $           - $          9
  Commercial Mortgage                          -        2,213
-------------------------------------------------------------
 Total Commercial                              -        2,222
-------------------------------------------------------------
 Consumer
  Residential Mortgage                     1,545        1,310
  Home Equity                                 83            -
  Other Revolving Credit and
   Installment                             1,479        1,417
  Lease Financing                             51            -
-------------------------------------------------------------
 Total Consumer                            3,158        2,727
-------------------------------------------------------------
Total Accruing Loans and Leases
 Past Due 90 Days or More          $       3,158 $      4,949
=============================================================

Total Loans and Leases             $   6,202,546 $  6,151,418
=============================================================

Ratio of Non-Accrual Loans and
 Leases to Total Loans and Leases           0.12%        0.16%
-------------------------------------------------------------

Ratio of Non-Performing Assets to
 Total Loans and Leases,
 Foreclosed Real Estate and Other
 Investments                                0.13%        0.18%
-------------------------------------------------------------

Ratio of Non-Performing Assets and
 Accruing Loans and Leases Past
 Due 90 Days or More to Total
 Loans and Leases                           0.18%        0.26%
-------------------------------------------------------------

Quarter to Quarter Changes in Non-
 Performing Assets
Balance at Beginning of Quarter    $      10,920 $     13,365
 Additions                                   919        3,088
 Reductions
  Payments                                (1,326)      (5,097)
  Return to Accrual                       (2,007)        (392)
  Sales of Foreclosed Assets                   -            -
  Charge-offs/Write-downs                   (256)         (44)
-------------------------------------------------------------
 Total Reductions                         (3,589)      (5,533)
-------------------------------------------------------------
Balance at End of Quarter          $       8,250 $     10,920
=============================================================

(1) Certain prior period information has been reclassified to conform
    to current presentation.


Bank of Hawaii Corporation and Subsidiaries
Consolidated Reserve for Credit Losses (Unaudited)            Table 10
----------------------------------------------------------------------
                                          Three Months Ended
                                    June 30,   March 31,    June 30,
(dollars in thousands)                 2006        2006        2005
----------------------------------------------------------------------
Balance at Beginning of Period   $   96,167  $   96,167  $  109,906
Loans and Leases Charged-Off
 Commercial
  Commercial and Industrial            (677)       (382)       (581)
 Consumer
  Residential Mortgage                  (29)        (10)        (67)
  Home Equity                           (86)       (141)       (406)
  Other Revolving Credit and
   Installment                       (4,467)     (4,254)     (4,546)
  Lease Financing                         -         (12)        (29)
----------------------------------------------------------------------
 Total Loans and Leases Charged-
  Off                                (5,259)     (4,799)     (5,629)
----------------------------------------------------------------------
Recoveries on Loans and Leases
 Previously Charged-Off
 Commercial
  Commercial and Industrial           1,445         295         211
  Commercial Mortgage                   335          89          32
  Lease Financing                         -           -         130
 Consumer
  Residential Mortgage                  119         122         189
  Home Equity                           127          61         125
  Other Revolving Credit and
   Installment                        1,158       1,462       1,166
  Lease Financing                         6           9          33
----------------------------------------------------------------------
Total Recoveries on Loans and
 Leases Previously Charged-Off        3,190       2,038       1,886
----------------------------------------------------------------------
Net Loan and Lease Charge-Offs       (2,069)     (2,761)     (3,743)
Provision for Credit Losses           2,069       2,761           -
----------------------------------------------------------------------
Balance at End of Period (1)     $   96,167  $   96,167  $  106,163
======================================================================

Components
 Allowance for Loan and Lease
  Losses                             91,035      91,064     101,587
 Reserve for Unfunded
  Commitments                         5,132       5,103       4,576
----------------------------------------------------------------------
Total Reserve for Credit Losses  $   96,167  $   96,167  $  106,163
======================================================================

Average Loans and Leases
 Outstanding                     $6,317,623  $6,181,697  $6,090,149
======================================================================

Ratio of Net Loan and Lease
 Charge-Offs to Average Loans
 and Leases Outstanding
 (annualized)                          0.13%       0.18%       0.25%
Ratio of Allowance for Loan and
 Lease Losses to Loans and
 Leases Outstanding                    1.41%       1.46%       1.65%


                                     Six Months Ended
                                          June 30,
(dollars in thousands)              2006          2005
------------------------------------------------------------
Balance at Beginning of Period   $   96,167  $  113,596
Loans and Leases Charged-Off
 Commercial
  Commercial and Industrial          (1,060)     (1,155)
 Consumer
  Residential Mortgage                  (39)       (382)
  Home Equity                          (227)       (698)
  Other Revolving Credit and
   Installment                       (8,721)     (9,128)
  Lease Financing                       (12)        (63)
------------------------------------------------------------
 Total Loans and Leases Charged-
  Off                               (10,059)    (11,426)
------------------------------------------------------------
Recoveries on Loans and Leases
 Previously Charged-Off
 Commercial
  Commercial and Industrial           1,740         753
  Commercial Mortgage                   424          94
  Lease Financing                         -         162
 Consumer
  Residential Mortgage                  241         295
  Home Equity                           188         184
  Other Revolving Credit and
   Installment                        2,621       2,453
  Lease Financing                        15          52
------------------------------------------------------------
Total Recoveries on Loans and
 Leases Previously Charged-Off        5,229       3,993
------------------------------------------------------------
Net Loan and Lease Charge-Offs       (4,830)     (7,433)
Provision for Credit Losses           4,830           -
------------------------------------------------------------
Balance at End of Period (1)     $   96,167  $  106,163
============================================================

Components
 Allowance for Loan and Lease
  Losses                             91,035     101,587
 Reserve for Unfunded
  Commitments                         5,132       4,576
------------------------------------------------------------
Total Reserve for Credit Losses  $   96,167  $  106,163
============================================================

Average Loans and Leases
 Outstanding                     $6,250,035  $6,045,609
============================================================

Ratio of Net Loan and Lease
 Charge-Offs to Average Loans
 and Leases Outstanding
 (annualized)                          0.16%       0.25%
Ratio of Allowance for Loan and
 Lease Losses to Loans and
 Leases Outstanding                    1.41%       1.65%


(1) Included in this analysis is activity related to the Company's
    reserve for unfunded commitments, which is separately recorded in
    other liabilities in the Consolidated Statements of Condition.


Bank of Hawaii Corporation and Subsidiaries
Business Segment Selected Financial Information (Unaudited)  Table 11a
----------------------------------------------------------------------
                                     Investment  Treasury
                                                   and
                   Retail Commercial  Services    Other   Consolidated
(dollars in       Banking    Banking     Group  Corporate       Total
 thousands)
----------------------------------------------------------------------
Three Months
 Ended June 30,
 2006
Net Interest
 Income        $   58,667 $   33,020 $   4,477 $    3,692 $    99,856
Provision for
 Credit Losses      1,862        317       999     (1,109)      2,069
----------------------------------------------------------------------
Net Interest
 Income After
 Provision for
 Credit Losses     56,805     32,703     3,478      4,801      97,787
Non-Interest
 Income            23,915      8,783    17,561      2,942      53,201
----------------------------------------------------------------------
                   80,720     41,486    21,039      7,743     150,988
Non-Interest
 Expense          (40,824)   (20,085)  (16,512)    (1,321)    (78,742)
----------------------------------------------------------------------
Income Before
 Income Taxes      39,896     21,401     4,527      6,422      72,246
Provision for
 Income Taxes     (14,761)   (16,585)   (1,666)    (2,058)    (35,070)
----------------------------------------------------------------------
Allocated Net
 Income            25,135      4,816     2,861      4,364      37,176
----------------------------------------------------------------------
Allowance
 Funding Value       (198)      (602)       (8)       808           -
Provision for
 Credit Losses      1,862        317       999     (1,109)      2,069
Economic
 Provision         (3,076)    (2,188)      (85)         -      (5,349)
Tax Effect of
 Adjustments          522        915      (335)       111       1,213
----------------------------------------------------------------------
Income Before
 Capital Charge    24,245      3,258     3,432      4,174      35,109
Capital Charge     (5,311)    (4,126)   (1,588)    (7,868)    (18,893)
----------------------------------------------------------------------
Net Income
 (Loss) After
 Capital Charge
 (NIACC)       $   18,934 $     (868)$   1,844 $   (3,694)$    16,216
======================================================================

RAROC (ROE for
 the Company)          50%         9%       24%        13%         22%
======================================================================

Total Assets at
 June 30, 2006 $3,946,568 $2,676,749 $ 228,584 $3,473,289 $10,325,190
======================================================================


Three Months
 Ended June 30,
 2005 (1)
Net Interest
 Income        $   54,170 $   34,266 $   4,523 $    8,080 $   101,039
Provision for
 Credit Losses      3,531        236         -     (3,767)          -
----------------------------------------------------------------------
Net Interest
 Income After
 Provision for
 Credit Losses     50,639     34,030     4,523     11,847     101,039
Non-Interest
 Income            22,411      8,441    17,192      2,630      50,674
----------------------------------------------------------------------
                   73,050     42,471    21,715     14,477     151,713
Non-Interest
 Expense          (39,848)   (20,188)  (17,243)    (1,725)    (79,004)
----------------------------------------------------------------------
Income Before
 Income Taxes      33,202     22,283     4,472     12,752      72,709
Provision for
 Income Taxes     (12,285)    (8,133)   (1,655)    (4,207)    (26,280)
----------------------------------------------------------------------
Allocated Net
 Income            20,917     14,150     2,817      8,545      46,429
----------------------------------------------------------------------
Allowance
 Funding Value       (168)      (601)       (6)       775           -
Provision for
 Credit Losses      3,531        236         -     (3,767)          -
Economic
 Provision         (3,435)    (2,430)     (105)        (1)     (5,971)
Tax Effect of
 Adjustments           27      1,034        41      1,107       2,209
----------------------------------------------------------------------
Income Before
 Capital Charge    20,872     12,389     2,747      6,659      42,667
Capital Charge     (5,259)    (4,510)   (1,646)    (8,295)    (19,710)
----------------------------------------------------------------------
Net Income
 (Loss) After
 Capital Charge
 (NIACC)       $   15,613 $    7,879 $   1,101 $   (1,636)$    22,957
======================================================================

RAROC (ROE for
 the Company)          44%        30%       18%        14%         26%
======================================================================

Total Assets at
 June 30, 2005 $3,786,308 $2,512,459 $ 216,626 $3,544,297 $10,059,690
======================================================================

(1) Certain prior period information has been reclassified to conform
    to current presentation.

Bank of Hawaii Corporation and Subsidiaries
Business Segment Selected Financial Information (Unaudited)  Table 11b
----------------------------------------------------------------------
                                     Investment Treasury
                                                  and
                   Retail Commercial  Services   Other    Consolidated
(dollars in       Banking    Banking     Group  Corporate       Total
 thousands)
----------------------------------------------------------------------
Six Months
 Ended June 30,
 2006
Net Interest
 Income        $  116,326 $   66,795 $   8,882 $   10,055 $   202,058
Provision for
 Credit Losses      4,357        738       999     (1,264)      4,830
----------------------------------------------------------------------
Net Interest
 Income After
 Provision for
 Credit Losses    111,969     66,057     7,883     11,319     197,228
Non-Interest
 Income            46,952     18,267    35,307      5,247     105,773
----------------------------------------------------------------------
                  158,921     84,324    43,190     16,566     303,001
Non-Interest
 Expense          (81,721)   (41,252)  (33,454)    (3,133)   (159,560)
----------------------------------------------------------------------
Income Before
 Income Taxes      77,200     43,072     9,736     13,433     143,441
Provision for
 Income Taxes     (28,564)   (24,551)   (3,594)    (4,206)    (60,915)
----------------------------------------------------------------------
Allocated Net
 Income            48,636     18,521     6,142      9,227      82,526
----------------------------------------------------------------------
Allowance
 Funding Value       (387)    (1,149)      (16)     1,552           -
Provision for
 Credit Losses      4,357        738       999     (1,264)      4,830
Economic
 Provision         (6,236)    (4,470)     (188)        (1)    (10,895)
Tax Effect of
 Adjustments          839      1,806      (294)      (107)      2,244
----------------------------------------------------------------------
Income Before
 Capital Charge    47,209     15,446     6,643      9,407      78,705
Capital Charge    (10,704)    (8,496)   (3,216)   (15,844)    (38,260)
----------------------------------------------------------------------
Net Income
 (Loss) After
 Capital Charge
 (NIACC)       $   36,505 $    6,950 $   3,427 $   (6,437)$    40,445
======================================================================

RAROC (ROE for
 the Company)          49%        20%       23%        15%         24%
======================================================================

Total Assets at
 June 30, 2006 $3,946,568 $2,676,749 $ 228,584 $3,473,289 $10,325,190
======================================================================


Six Months
 Ended June 30,
 2005 (1)
Net Interest
 Income        $  106,480 $   67,770 $   8,510 $   18,937 $   201,697
Provision for
 Credit Losses      7,016        652        (1)    (7,667)          -
----------------------------------------------------------------------
Net Interest
 Income After
 Provision for
 Credit Losses     99,464     67,118     8,511     26,604     201,697
Non-Interest
 Income            43,939     19,622    34,882      4,546     102,989
----------------------------------------------------------------------
                  143,403     86,740    43,393     31,150     304,686
Non-Interest
 Expense          (80,121)   (41,928)  (34,058)    (3,760)   (159,867)
----------------------------------------------------------------------
Income Before
 Income Taxes      63,282     44,812     9,335     27,390     144,819
Provision for
 Income Taxes     (23,414)   (16,514)   (3,454)    (9,486)    (52,868)
----------------------------------------------------------------------
Allocated Net
 Income            39,868     28,298     5,881     17,904      91,951
----------------------------------------------------------------------
Allowance
 Funding Value       (331)    (1,202)      (12)     1,545           -
Provision for
 Credit Losses      7,016        652        (1)    (7,667)          -
Economic
 Provision         (6,941)    (4,886)     (198)        (1)    (12,026)
Tax Effect of
 Adjustments           94      2,011        78      2,267       4,450
----------------------------------------------------------------------
Income Before
 Capital Charge    39,706     24,873     5,748     14,048      84,375
Capital Charge    (10,546)    (9,092)   (3,208)   (18,325)    (41,171)
----------------------------------------------------------------------
Net Income
 (Loss) After
 Capital Charge
 (NIACC)       $   29,160 $   15,781 $   2,540 $   (4,277)$    43,204
======================================================================

RAROC (ROE for
 the Company)          42%        30%       20%        17%         25%
======================================================================

Total Assets at
 June 30, 2005 $3,786,308 $2,512,459 $ 216,626 $3,544,297 $10,059,690
======================================================================

(1) Certain prior period information has been reclassified to conform
    to current presentation.

Bank of Hawaii Corporation and Subsidiaries
Quarterly Summary of Selected Consolidated Financial Data     Table 12
 (Unaudited)
----------------------------------------------------------------------
                                        Three Months Ended
                                   June 30,    March 31, December 31,
(dollars in thousands except
 per share amounts)                   2006         2006     2005 (1)
----------------------------------------------------------------------
Quarterly Operating Results
Interest Income
   Interest and Fees on Loans
    and Leases                 $   104,388  $    99,371  $    97,697
   Income on Investment
    Securities - Available for
    Sale                            31,226       30,835       29,820
   Income on Investment
    Securities - Held to
    Maturity                         4,658        4,757        4,899
   Deposits                             55           43          103
   Funds Sold                          170          125          154
   Other                               272          272          272
----------------------------------------------------------------------
Total Interest Income              140,769      135,403      132,945
----------------------------------------------------------------------
Interest Expense
   Deposits                         24,656       19,633       17,479
   Securities Sold Under
    Agreements to Repurchase         9,802        7,890        6,504
   Funds Purchased                   2,652        1,893        1,730
   Short-Term Borrowings                73           57           61
   Long-Term Debt                    3,730        3,728        3,715
----------------------------------------------------------------------
Total Interest Expense              40,913       33,201       29,489
----------------------------------------------------------------------
Net Interest Income                 99,856      102,202      103,456
Provision for Credit Losses          2,069        2,761        1,588
----------------------------------------------------------------------
Net Interest Income After
 Provision for Credit Losses        97,787       99,441      101,868
----------------------------------------------------------------------
Non-Interest Income
   Trust and Asset Management       14,537       14,848       14,098
   Mortgage Banking                  2,569        2,987        2,597
   Service Charges on Deposit
    Accounts                         9,695       10,132       10,151
   Fees, Exchange, and Other
    Service Charges                 15,633       14,767       15,147
   Investment Securities Gains
    (Losses), Net                        -            -           (4)
   Insurance                         4,691        5,019        4,201
   Other                             6,076        4,819        4,619
----------------------------------------------------------------------
Total Non-Interest Income           53,201       52,572       50,809
----------------------------------------------------------------------
Non-Interest Expense
   Salaries and Benefits            44,811       45,786       43,319
   Net Occupancy                     9,376        9,643        9,643
   Net Equipment                     4,802        5,028        5,358
   Professional Fees                 2,589          438        4,057
   Other                            17,164       19,923       20,802
----------------------------------------------------------------------
Total Non-Interest Expense          78,742       80,818       83,179
----------------------------------------------------------------------
Income Before Income Taxes          72,246       71,195       69,498
Provision for Income Taxes          35,070       25,845       24,717
----------------------------------------------------------------------
Net Income                     $    37,176  $    45,350  $    44,781
======================================================================

Basic Earnings Per Share       $      0.74  $      0.89  $      0.88
Diluted Earnings Per Share     $      0.73  $      0.87  $      0.86

Balance Sheet Totals
Total Assets                   $10,325,190  $10,528,049  $10,187,038
Net Loans and Leases             6,350,590    6,155,061    6,077,446
Total Deposits                   7,766,033    8,147,101    7,907,468
Total Shareholders' Equity         666,728      681,078      693,352

Performance Ratios
Net Income to Average Total
 Assets (ROA)                         1.47%        1.82%        1.76%
Net Income to Average
 Shareholders' Equity (ROE)          21.70        26.13        25.19
Net Interest Margin (2)               4.25         4.41         4.43
Efficiency Ratio (3)                 51.45        52.22        53.92



                                  Three Months Ended
                               September 30,    June 30,
(dollars in thousands except
 per share amounts)                   2005         2005
--------------------------------------------------------
Quarterly Operating Results
Interest Income
   Interest and Fees on Loans
    and Leases                 $    94,381  $    90,119
   Income on Investment
    Securities - Available for
    Sale                            28,482       27,987
   Income on Investment
    Securities - Held to
    Maturity                         5,109        5,527
   Deposits                             57           36
   Funds Sold                          935          165
   Other                               270          271
--------------------------------------------------------
Total Interest Income              129,234      124,105
--------------------------------------------------------
Interest Expense
   Deposits                         15,766       13,577
   Securities Sold Under
    Agreements to Repurchase         6,796        4,562
   Funds Purchased                     901        1,151
   Short-Term Borrowings                50           45
   Long-Term Debt                    3,761        3,731
--------------------------------------------------------
Total Interest Expense              27,274       23,066
--------------------------------------------------------
Net Interest Income                101,960      101,039
Provision for Credit Losses          3,000            -
--------------------------------------------------------
Net Interest Income After
 Provision for Credit Losses        98,960      101,039
--------------------------------------------------------
Non-Interest Income
   Trust and Asset Management       14,052       14,058
   Mortgage Banking                  2,618        2,594
   Service Charges on Deposit
    Accounts                        10,046        9,569
   Fees, Exchange, and Other
    Service Charges                 15,394       15,211
   Investment Securities Gains
    (Losses), Net                        8          337
   Insurance                         5,324        4,330
   Other                             8,074        4,575
--------------------------------------------------------
Total Non-Interest Income           55,516       50,674
--------------------------------------------------------
Non-Interest Expense
   Salaries and Benefits            44,366       43,856
   Net Occupancy                     9,896        9,189
   Net Equipment                     5,335        5,377
   Professional Fees                 5,689        2,905
   Other                            19,310       17,677
--------------------------------------------------------
Total Non-Interest Expense          84,596       79,004
--------------------------------------------------------
Income Before Income Taxes          69,880       72,709
Provision for Income Taxes          25,051       26,280
--------------------------------------------------------
Net Income                     $    44,829  $    46,429
========================================================

Basic Earnings Per Share       $      0.87  $      0.90
Diluted Earnings Per Share     $      0.85  $      0.87

Balance Sheet Totals
Total Assets                   $10,085,235  $10,059,690
Net Loans and Leases             6,110,892    6,049,831
Total Deposits                   7,756,586    7,726,758
Total Shareholders' Equity         696,311      712,169

Performance Ratios
Net Income to Average Total
 Assets (ROA)                         1.74%        1.87%
Net Income to Average
 Shareholders' Equity (ROE)          24.61        25.98
Net Interest Margin (2)               4.30         4.36
Efficiency Ratio (3)                 53.72        52.07


(1) Certain prior period information has been reclassified to conform
    to current presentation.

(2) The net interest margin is defined as net interest income, on a
    fully-taxable equivalent basis, as a percentage of average earning
    assets.

(3) The efficiency ratio is defined as non-interest expense divided by
    total revenue (net interest income and non-interest income).

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