Pacific Century Financial Corporation First Quarter 2002 Financials
HONOLULU, Apr 22, 2002 (BUSINESS WIRE) -- Pacific Century Financial Corporation (NYSE:BOH)
-- Net Income $31.1 Million, or $0.41 per share
-- Board of Directors Declares Dividend of $0.18 per share
Pacific Century Financial Corporation (NYSE:BOH) today reported diluted earnings per share for first quarter 2002 of $0.41, compared to $0.42 in 2001. Net income for the quarter was $31.1 million, compared to $33.7 million reported in the first quarter of 2001. The return on average assets for first quarter was 1.21 percent, up from 0.99 percent in the same period last year. The return on average equity was 9.97 percent, compared to 10.42 percent in the first quarter of 2001.
"We are generally encouraged by the results in the first quarter of 2002," said Michael E. O'Neill, Chairman, CEO and President. "With the expense of our restructuring behind us, we can see marked improvements in our financial performance. We are increasingly focused on building stronger relationships in our core markets, while continuing to improve our efficiency and reducing our exposure to risk. Returning economic strength of the Hawaii economy is also a positive sign."
During the first quarter of 2002, the Company was able to maintain a stable margin and reduce its credit losses. Mortgage banking income rebounded from the previous quarter and expenses were reduced. Income taxes returned to a more traditional level and the efficiency ratio was improved. The share repurchase program slowed due to low trading volume during the quarter.
Core earnings, expressed on a diluted per share basis for the first quarter of 2002 were $0.43, up $0.05 from the same quarter last year and core net income for the first quarter of 2002 was $32.3 million, up $1.5 million from the first quarter of 2001. Non-core items in the first quarter of 2002 included restructuring expenses of $2.0 million relating primarily to completion of the Company's previously announced divestitures. Earnings for the first quarter of 2001 included non-core gains of $75.4 million from the sale of the Company's credit card portfolio and $20.9 million related to the sale of its ownership interest in Star Systems, Inc. Restructuring and other non-core activity expenses of $44.4 million, a special credit provision of $36.7 million, and impairment losses of $5.7 million partially offset the gains.
The presence of non-core items and the effects of business divestitures have a significant impact on the comparability of results with prior quarters. While comparisons are difficult, supplemental information has been supplied in Table 9, which summarizes the continuing core business results for the last five quarters.
Financial Highlights
Net interest income for the first quarter of 2002 on a fully taxable equivalent basis was $94.9 million, down $30.4 million from $125.3 million in the same quarter of last year and down $11.3 million from the previous quarter. The decrease in net interest income was primarily due to divestitures pertaining to the strategic plan, the wind down of the Asia business, and the managed reduction of loans to improve the Company's credit profile.
The Company's net interest margin of 3.93 percent for the first quarter of 2002 was down slightly from 3.96 percent in the comparable quarter last year and unchanged from 3.93 percent in the fourth quarter of 2001. The decrease from the previous year was primarily due to loan reductions and asset sales as well as lower returns earned on increased liquidity of the Company.
The provision for loan and lease losses was $8.3 million for the first quarter of 2002, down from $52.5 million in the same quarter of last year and down from $14.5 million in the previous quarter. The provision equaled net charge-offs for the quarter.
Non-interest income was $54.0 million for the quarter. The first quarter of 2001 included $93.1 million in previously mentioned significant items. Adjusted for these items, non-interest income decreased $13.4 million from the first quarter of 2001. This decrease was largely due to sales of the Company's credit card portfolio, Pacific Century Bank branch franchise and South Pacific entities, and the intentional downsizing of certain businesses. These reductions were partially offset by an increase in revenue from mortgage banking activities.
Non-interest expense for the first quarter of 2002 was $92.4 million, including $2.0 million in restructuring costs. First quarter 2001 non-interest expense included restructuring and other related costs of $44.4 million. Adjusting for these items, non-interest expense declined $37.4 million reflecting significant progress in the Company's plan to reduce expenses and reductions resulting from the divestitures. The first quarter 2002 efficiency ratio improved to 62.1 percent compared to 75.7 percent in the previous quarter.
The 35.6 percent effective tax rate for the first quarter of 2002 decreased from the prior year as the effective tax rate in the prior year reflected the impact from the divestitures and foreign taxes.
Asset Quality
Non-performing assets, exclusive of loans past due 90+ days, were $90.7 million at the end of the first quarter 2002, up from $79.7 million at the end of the fourth quarter 2001. Compared to the same quarter last year, non-performing assets were down $28.8 million, or 24.1 percent. At March 31, 2002 the ratio of non-performing assets to total loans plus foreclosed assets was 1.61 percent compared to 1.41 percent at December 31, 2001 and 1.41 percent at March 31, 2001. The increase in non-performing assets was largely due to the deterioration of a single, Hawaii-based company that has been a long-term customer. Subsequent to March 31, 2002 the Company sold its interest in a $7.8 million non-accruing loan, net of a $0.5 million loss recognized in first quarter.
Non-accrual loans were $63.7 million at March 31, 2002, up slightly from $60.8 million at December 31, 2001 due to the previously mentioned Hawaii-based credit, which was partially offset by the reclassification of $7.8 million to loans held for sale. Non-accrual loans at March 31, 2002 were down $31.8 million, or 33.3 percent from March 31, 2001. Non-accrual loans as a percentage of total loans were 1.14 percent, up from 1.08 percent in the previous quarter and essentially flat with the same period last year.
Foreclosed assets were $19.2 million at the end of the first quarter of 2002, up $2.0 million from the prior quarter and up from $11.2 million in the first quarter last year. The increase resulted primarily from the foreclosure of several small loans.
Net charge-offs for the first quarter of 2002 were $8.3 million or 0.6 percent of total average loans (annualized). Charge-offs of $13.1 million were partially offset by recoveries of $4.8 million. The allowance for loan and lease losses of $159.0 million at March 31, 2002 was unchanged from December 31, 2001 and down $40.8 million from March 31, 2001.
The allowance for loan and lease losses to total loans was 2.84 percent at the end of the first quarter 2002, up from 2.81 percent at the end of the fourth quarter 2001 and up from 2.37 percent at the end of the same quarter last year. The ratio of the allowance for loan and lease losses to non-accrual loans was 249 percent, down slightly from 262 percent in the previous quarter and up from 209 percent last year.
There was significant first quarter improvement in the asset quality of the Company as measured by its internal credit risk ratings, including its exposure to air transportation and hotel companies.
Air transportation exposure totaled $156 million at March 31, 2002 and consisted of $136 million in equity interests in leveraged leases and $20 million in lending exposure of which $6 million was undrawn. The Company's exposure to national hotel companies totaled $112 million at March 31, 2002 with undrawn commitments of $79 million. Exposure to Hawaii-based hotel companies included loans outstanding of $122 million and undrawn commitments of $20 million. In the West Pacific, loans outstanding to hotel companies totaled $43 million at the end of first quarter 2002. All of the Company's air transportation and hotel companies exposures remain current.
Syndicated loans outstanding decreased to $454 million during the first quarter of 2002. Syndicated exposure, consisting of loans and undrawn commitments, declined $168 million from the prior quarter to $1.4 billion at March 31, 2002.
Other Financial Highlights
Total assets were $10.2 billion at the end of March 31, 2002, down from $10.6 billion at December 31, 2001 and down from $13.7 billion at the end of March 31, 2001. The most significant reduction was in commercial loans and foreign loans resulting from the divestitures.
Deposits at the end of March 31, 2002 were $6.5 billion. The decline from March 31, 2001 was primarily due to sales of the Pacific Century Bank branch franchise and the South Pacific operations, as well as a managed decline in foreign deposits resulting from the Company's decision to exit Asia. During the first quarter of 2002, domestic deposits continued to reflect positive trends with growth in all demand and savings deposit categories. The Company continued to manage down its higher cost funds, including time deposits, purchased funds, short-term borrowings and long-term debt.
During the quarter ended March 31, 2002, the Company repurchased 0.7 million shares at an average cost of $24.46 for a total of $17.1 million. At March 31, 2002 the Company had repurchased for $212.8 million a total of 9.0 million shares under its previously announced share repurchase programs at an average cost of $23.64. Remaining buyback authority under the existing repurchase programs is $357.2 million.
The Company's capital and liquidity remains exceptionally strong. At March 31, 2002 Tier 1 leverage was 12.64 percent compared to 9.46 percent at March 31, 2001.
The Company's Board of Directors declared a quarterly cash dividend of $0.18 per share on the Company's outstanding shares. The dividend will be payable on June 14, 2002 to shareholders of record at the close of business on May 24, 2002.
Economic Outlook
The Hawaii economy continues to show improvement. The recovery in tourism continues on the path toward normal visitor arrivals by mid-2002. Visitor counts from the mainland have recently returned to customary seasonal volumes and international visitor arrivals have returned to more than 90 percent of prior year levels. Hawaii's overall economic growth rate is anticipated to return to 3 percent after inflation as tourism recovers. Hawaii's unemployment rate fell from the post-September 11 spike of 5.7 percent to 4.7 percent during the quarter and is forecast to continue trending downward toward prior rates. Inflation is expected to remain substantially below national norms during 2002.
Earnings Outlook
The Company anticipates that operating earnings for the second quarter of 2002 may be slightly lower than the first quarter as mortgage banking revenue is expected to return to a more customary level. The Company's previously published earnings guidance of $120 million in net income for the full year of 2002 remains unchanged. Earnings per share and return on equity projections are dependent upon the terms and timing of share repurchases.
The Company is currently evaluating proposals from technology service providers in an effort to reduce its operating costs over the long term. The evaluation process is expected to conclude within the next three months.
The Company will review its First Quarter 2002 earnings today at 2:00 p.m. ET. The presentation will be accessible via teleconference and via the investor relations link of Pacific Century Financial Corporation's web site, www.boh.com. The conference call number is (800) 360-9865 in the U.S. or (973) 694-6836 for international callers. A replay will be available for one week beginning at 6:00 p.m. ET on Monday, April 22, 2002 by calling (800) 428-6051 (U.S.) or (973) 709-2089 (International) and entering the number 235299 when prompted. A replay of the presentation will be also available on the Company's web site.
This news release contains forward-looking statements concerning anticipated revenues and expenses in 2002. We believe the assumptions underlying our forward-looking statements are reasonable. However, any of the assumptions could prove to be inaccurate and actual results may differ materially from those projected for a variety of reasons including, but not limited to: the Hawaii economy may not recover at the pace we anticipate; our refocused emphasis on our Hawaii market may not achieve the customer and revenue gains we anticipate; our credit markets may deteriorate and our credit quality may fall short of our goals; we may not achieve the expense reductions we expect; we may not be able to maintain our net interest margin; we may not be able to implement our proposed equity repurchases in the amount or at the times planned; the economics or timing, or both, resulting from our current evaluation of data processing alternatives may not result in benefits sufficiently in excess of costs; the required level of reserves for loan and lease losses may increase or decrease due to changes in our credit quality or risk profile; customer acceptance of our business as restructured may be less than expected; there may be economic volatility in the markets we serve; and there may be changes in business and economic conditions, competition, fiscal and monetary policies or legislation. Except where specified, we do not undertake any obligation to update any forward-looking statements to reflect later events or circumstances.
Pacific Century Financial Corporation is a regional financial services company serving businesses, consumers and governments in Hawaii, American Samoa and the West Pacific. Pacific Century's principal subsidiary, Bank of Hawaii, was founded in 1897 and is the dominant commercial bank in the state of Hawaii.
Pacific Century Financial Corporation and subsidiaries
Highlights (Unaudited) Table 1
----------------------------------------------------------------------
(dollars in thousands
except per share amounts)
Earnings Highlights and
Performance Ratios
Quarter Ended
March 31, 2002 March 31, 2001
----------------------------------------------------------------------
Net Income $ 31,056 $ 33,677
Basic Earnings Per Share 0.42 0.42
Diluted Earnings Per Share 0.41 0.42
Cash Dividends 13,177 14,363
Return on Average Assets 1.21% 0.99%
Return on Average Equity 9.97% 10.42%
Net Interest Margin 3.93% 3.96%
Efficiency Ratio 62.06% 60.33%
----------------------------------------------------------------------
Statement of Condition Highlights
and Performance Ratios
March 31, 2002 March 31, 2001
----------------------------------------------------------------------
Total Assets $ 10,244,773 $ 13,710,494
Net Loans 5,442,354 8,224,604
Total Deposits 6,543,536 8,815,367
Total Shareholders' Equity 1,265,907 1,371,942
Book Value Per Common Share $17.24 $17.18
Allowance / Loans Outstanding 2.84% 2.37%
Average Equity / Average Assets 12.13% 9.47%
Employees (FTE) 3,082 4,249
Branches and offices 104 171
Market Price Per Share of
Common Stock for the
Quarter Ended
Closing $26.06 $19.00
High $27.79 $20.99
Low $23.79 $16.88
----------------------------------------------------------------------
Pacific Century Financial Corporation and subsidiaries
Consolidated Statements of Income (Unaudited) Table 2
----------------------------------------------------------------------
(dollars in thousands
except per share amounts)
Three Months Ended
March 31
2002 2001
----------------------------------------------------------------------
Interest Income
Interest and Fees on Loan and Leases $ 98,645 $ 188,905
Income on Investment Securities
- Held to Maturity 5,198 10,017
Income on Investment Securities
- Available for Sale 27,140 39,842
Deposits 5,047 5,384
Funds Sold and Security
Resale Agreements 1,003 1,097
Other 1,332 1,217
----------------------------------------------------------------------
Total Interest Income 138,365 246,462
Interest Expense
Deposits 23,978 71,981
Security Repurchase Agreements 10,293 24,630
Funds Purchased 231 6,123
Short-Term Borrowings 649 3,230
Long-Term Debt 8,319 15,314
----------------------------------------------------------------------
Total Interest Expense 43,470 121,278
----------------------------------------------------------------------
Net Interest Income 94,895 125,184
Provision for Loan and Lease Losses 8,292 52,466
----------------------------------------------------------------------
Net Interest Income After Provision
for Loan and Lease Losses 86,603 72,718
Non-Interest Income
Trust and Asset Management 14,818 15,796
Mortgage Banking 8,557 5,108
Service Charges on Deposit Accounts 8,410 9,939
Fees, Exchange, and
Other Service Charges 12,078 23,466
Gain on Sales of Banking Operations,
Net of Venture Investment Losses -- 72,114
Investment Securities Gains -- 20,203
Other 10,151 13,836
----------------------------------------------------------------------
Total Non-Interest Income 54,014 160,462
Non-Interest Expense
Salaries 39,950 49,982
Pensions and Other Employee Benefits 9,996 12,918
Net Occupancy Expense 9,593 12,127
Net Equipment Expense 10,121 13,382
Goodwill Amortization -- 3,949
Restructuring and Other Related Costs 1,979 44,439
Other 20,773 35,523
----------------------------------------------------------------------
Total Non-Interest Expense 92,412 172,320
----------------------------------------------------------------------
Income Before Income Taxes 48,205 60,860
Provision for Income Taxes 17,149 27,183
----------------------------------------------------------------------
Net Income $ 31,056 $ 33,677
======================================================================
Basic Earnings Per Share $ 0.42 $ 0.42
Diluted Earnings Per Share $ 0.41 $ 0.42
Dividends Declared Per Share $ 0.18 $ 0.18
Basic Weighted Average Shares 73,312,573 79,720,284
Diluted Weighted Average Shares 75,199,181 81,124,713
======================================================================
Pacific Century Financial Corporation and subsidiaries
Consolidated Statements of Condition (Unaudited) Table 3
----------------------------------------------------------------------
(dollars in thousands)
March 31 December 31 March 31
2002 2001 2001
----------------------------------------------------------------------
Assets
Interest-Bearing Deposits $ 1,347,611 $ 1,101,974 $ 410,912
Investment Securities
- Held to Maturity
(Market Value of $354,187,
$407,838 and $581,471,
respectively) 344,723 396,216 571,923
Investment Securities
- Available for Sale 1,980,378 2,001,420 2,389,086
Securities Purchased Under
Agreements to Resell -- -- 377
Funds Sold 135,000 115,000 84,732
Loans Held for Sale 99,773 456,709 308,605
Loans 5,601,333 5,652,518 8,424,404
Allowance for Loan and
Lease Losses (158,979) (158,979) (199,800)
----------------------------------------------------------------------
Net Loans 5,442,354 5,493,539 8,224,604
----------------------------------------------------------------------
Total Earning Assets 9,349,839 9,564,858 11,990,239
Cash and Non-Interest
Bearing Deposits 257,580 405,981 559,229
Premises and Equipment 192,291 196,171 251,746
Customers' Acceptance
Liability 1,007 593 7,225
Accrued Interest Receivable 40,940 42,687 67,813
Foreclosed Real Estate 19,181 17,174 11,336
Mortgage Service Rights 30,501 27,291 16,656
Goodwill 36,216 36,216 169,657
Other Assets 317,218 336,826 636,593
----------------------------------------------------------------------
Total Assets $10,244,773 $10,627,797 $13,710,494
======================================================================
Liabilities
Domestic Deposits
Demand
- Non-Interest Bearing $ 1,592,709 $ 1,548,322 $ 1,685,149
- Interest Bearing 1,937,023 1,926,018 2,042,129
Savings 1,086,036 967,825 665,643
Time 1,807,015 1,927,778 2,948,232
Foreign Deposits
Demand
- Non-Interest Bearing -- 2 337,854
Time Due to Banks 42,261 230,247 196,495
Other Savings and Time 78,492 73,404 939,865
----------------------------------------------------------------------
Total Deposits 6,543,536 6,673,596 8,815,367
Securities Sold Under
Agreements to Repurchase 1,544,718 1,643,444 1,703,982
Funds Purchased 43,485 55,800 297,613
Current Maturities of
Long-Term Debt 50,000 100,670 317,170
Short-Term Borrowings 35,619 134,222 278,442
Banker's Acceptances
Outstanding 1,007 593 7,225
Retirement Expense Payable 37,055 36,175 34,867
Accrued Interest Payable 27,983 29,762 64,769
Taxes Payable 146,360 138,366 164,212
Other Liabilities 84,871 98,422 88,999
Long-Term Debt 464,232 469,735 565,906
----------------------------------------------------------------------
Total Liabilities 8,978,866 9,380,785 12,338,552
Shareholders' Equity
Common Stock ($.01 par value),
authorized 500,000,000
shares;
issued / outstanding:
March 2002 - 81,346,027 /
73,409,966
Dec. 2001 - 81,377,241 /
73,218,326;
March 2001 - 80,558,704 /
79,863,450 806 806 806
Capital Surplus 369,541 367,672 346,411
Accumulated Other
Comprehensive Income 20,389 22,761 20,982
Retained Earnings 1,065,706 1,055,424 1,015,867
Deferred Stock Grants (4,933) (7,637) 853
Treasury Stock, at Cost
(Shares:
March 2002 - 7,936,061;
December 2001 - 8,136,134;
March 2001 - 695,254) (185,602) (192,014) (12,977)
----------------------------------------------------------------------
Total Shareholders' Equity 1,265,907 1,247,012 1,371,942
----------------------------------------------------------------------
Total Liabilities and
Shareholders' Equity $10,244,773 $10,627,797 $13,710,494
======================================================================
Pacific Century Financial Corporation and subsidiaries
Consolidated Statements of Shareholders' Equity (Unaudited) Table 4
----------------------------------------------------------------------
(dollars in thousands) Accum.
Other
Compre-
Common Capital hensive
Total Stock Surplus Income
----------------------------------------------------------------------
Balance at
December 31, 2001 $ 1,247,012 $ 806 $ 367,672 $ 22,761
Comprehensive Income
Net Income 31,056 -- -- --
Other Comprehensive
Income, Net of Tax
Investment Securities (1,913) -- -- (1,913)
Foreign Currency
Translation
Adjustment (459) -- -- (459)
Total Comprehensive
Income
Common Stock Issued
12,113 Profit
Sharing Plan 325 -- 37 --
884,893 Stock
Option Plan 18,237 -- 2,455 --
27,454 Dividend
Reinvestment Plan 731 -- 77 --
(114) Directors'
Restricted Shares
and Deferred
Compensation Plan (16) -- (1) --
(31,100) Employees'
Restricted Shares 1,259 -- (699) --
Treasury Stock Purchased
701,000 shares (17,148) -- -- --
Cash Dividends Paid (13,177) -- -- --
----------------------------------------------------------------------
Balance at
March 31, 2002 $ 1,265,907 $ 806 $ 369,541 $ 20,389
======================================================================
Balance at
December 31, 2000 $ 1,301,356 $ 806 $ 346,045 $(25,079)
Comprehensive Income
Net Income 33,677 -- -- --
Other Comprehensive
Income, Net of Tax
Investment Securities 19,510 -- -- 19,510
Foreign Currency
Translation
Adjustment 26,710 -- -- 26,710
Pension Liability
Adjustments (159) -- -- (159)
Total Comprehensive
Income
Common Stock Issued
18,317 Profit
Sharing Plan 370 -- 92 --
184,092 Stock
Option Plan 3,853 -- 114 --
34,904 Dividend
Reinvestment Plan 700 -- 163 --
893 Directors'
Restricted Shares
and Deferred
Compensation Plan 288 -- (3) --
Cash Dividends Paid (14,363) -- -- --
----------------------------------------------------------------------
Balance at
March 31, 2001 $ 1,371,942 $ 806 $ 346,411 $ 20,982
======================================================================
Deferred Compre-
Retained Stock Treasury hensive
Earnings Grants Stock Income
----------------------------------------------------------------------
Balance at
December 31, 2001 $ 1,055,424 $(7,637) $(192,014)
Comprehensive Income
Net Income 31,056 -- -- 31,056
Other Comprehensive
Income, Net of Tax
Investment Securities -- -- -- (1,913)
Foreign Currency
Translation
Adjustment -- -- -- (459)
--------
Total Comprehensive
Income 28,684
========
Common Stock Issued
12,113 Profit
Sharing Plan -- -- 288
884,893 Stock
Option Plan (7,595) 746 22,631
27,454 Dividend
Reinvestment Plan (2) -- 656
(114) Directors'
Restricted Shares
and Deferred
Compensation Plan -- -- (15)
(31,100) Employees'
Restricted Shares -- 1,958 --
Treasury Stock Purchased
701,000 shares -- -- (17,148)
Cash Dividends Paid (13,177) -- --
----------------------------------------------------------------------
Balance at
March 31, 2002 $ 1,065,706 $(4,933) $(185,602)
======================================================================
Balance at
December 31, 2000 $ 996,791 $ -- $ (17,207)
Comprehensive Income
Net Income 33,677 -- 33,677
Other Comprehensive
Income, Net of Tax
Investment Securities -- -- -- 19,510
Foreign Currency
Translation
Adjustment -- -- -- 26,710
Pension Liability
Adjustments -- -- -- (159)
--------
Total Comprehensive
Income 79,738
========
Common Stock Issued
18,317 Profit
Sharing Plan -- -- 278
184,092 Stock
Option Plan (238) 853 3,124
34,904 Dividend
Reinvestment Plan -- -- 537
893 Directors'
Restricted Shares
and Deferred
Compensation Plan -- -- 291
Cash Dividends Paid (14,363) -- --
----------------------------------------------------------------------
Balance at
March 31, 2001 $ 1,015,867 $ 853 $ (12,977)
======================================================================
Pacific Century Financial Corporation and subsidiaries
Consolidated Average Balances and Interest Rates Taxable Equivalent
(Unaudited) Table 5
----------------------------------------------------------------------
(dollars in millions)
Three Months Ended Three Months Ended(1)
March 31, 2002 March 31, 2001
Average Income/ Yield/ Average Income/ Yield/
Balance Expense Rate Balance Expense Rate
----------------------------------------------------------------------
Earning Assets
Interest Bearing
Deposits $ 1,154.7 $ 5.1 1.77% $ 332.3 $ 5.4 6.57%
Funds Sold 237.3 1.0 1.69 80.5 1.1 5.53
Investment
Portfolio
- Held-To-
Maturity 368.5 5.3 5.72 580.4 10.1 7.05
- Available
for Sale 1,939.3 27.1 5.60 2,479.9 39.8 6.52
Loans Held
For Sale 340.9 5.7 6.75 201.7 3.6 7.24
Net Loans
- Domestic 5,569.0 92.9 6.72 7,783.9 163.5 8.52
- Foreign 14.3 -- -- 1,277.8 21.8 6.93
------------------------ ------------------------
Total Loans 5,583.3 92.9 6.71 9,061.7 185.3 8.29
Other 88.4 1.3 6.12 76.0 1.2 6.50
------------------------ ------------------------
Total Earning
Assets 9,712.4 138.4 5.74 12,812.5 246.5 7.80
Cash and Due
From Banks 301.9 438.2
Other Assets 400.5 595.1
---------- ----------
Total Assets $10,414.8 $13,845.8
========== ==========
Interest Bearing
Liabilities
Domestic
Deposits
- Demand $ 1,935.0 4.3 0.92 $ 2,008.2 11.7 2.36
- Savings 1,037.0 3.9 1.52 665.7 3.4 2.04
- Time 1,909.4 14.8 3.13 2,902.7 43.1 6.03
------------------------ -------------------------
Total Domestic
Deposits 4,881.4 23.0 1.91 5,576.6 58.2 4.23
Foreign
Deposits
- Time Due
to Banks 80.2 0.6 3.10 489.4 6.6 5.51
- Other Time
and Savings 104.0 0.4 1.37 801.0 7.2 3.65
------------------------ -------------------------
Total Foreign
Deposits 184.2 1.0 2.12 1,290.4 13.8 4.35
------------------------ -------------------------
Total Interest
Bearing
Deposits 5,065.6 24.0 1.92 6,867.0 72.0 4.25
Short-Term
Borrowings 1,738.7 11.2 2.61 2,364.8 34.0 5.83
Long-Term Debt 538.2 8.3 6.27 916.0 15.2 6.78
------------------------ -------------------------
Total Interest
Bearing
Liabilities 7,342.5 43.5 2.40 10,147.8 121.2 4.85
------------------------ -------------------------
Net Interest
Income 94.9 125.3
Interest
Rate
Spread 3.34% 2.95%
Net Interest
Margin 3.93% 3.96%
Non-Interest
Bearing Demand
Deposits
- Domestic 1,506.9 1,636.8
- Foreign -- 377.5
---------- ----------
Total Demand
Deposits 1,506.9 2,014.3
Other Liabilities 301.9 372.4
Shareholders'
Equity 1,263.5 1,311.3
---------- ----------
Total
Liabilities
and
Shareholders
Equity $10,414.8 $13,845.8
========== ==========
Provision for
Loan and Lease
Losses 8.2 52.5
Net Overhead 38.4 11.8
-------- --------
Income Before
Income Taxes 48.3 61.0
Provision for
Income Taxes 17.1 27.2
Tax-Equivalent
Adjustment 0.1 0.1
-------- --------
Net Income $ 31.1 $ 33.7
======== ========
Three Months Ended Twelve Months Ended
December 31, 2001 December 31, 2001
Average Income/ Yield/ Average Income/ Yield/
Balance Expense Rate Balance Expense Rate
----------------------------------------------------------------------
Earning Assets
Interest Bearing
Deposits $ 1,236.2 $ 7.9 2.52% $ 733.4 $ 27.6 3.76%
Funds Sold 150.5 0.8 2.09 136.7 5.1 3.63
Investment
Portfolio
- Held-To-
Maturity 431.5 6.5 5.99 525.6 33.7 6.42
- Available
for Sale 2,037.5 29.3 5.75 2,242.3 137.3 6.12
Loans Held
For Sale 304.9 5.1 6.63 312.7 21.4 6.85
Net Loans
- Domestic 5,752.6 104.0 7.20 6,693.2 525.5 7.85
- Foreign 777.0 14.6 7.48 1,026.4 72.5 7.07
------------------------ -------------------------
Total Loans 6,529.6 118.6 7.23 7,719.6 598.0 7.75
Other 86.3 1.4 6.42 79.6 5.4 6.72
------------------------ -------------------------
Total Earning
Assets 10,776.5 169.6 6.27 11,749.9 828.5 7.05
Cash and Due
From Banks 354.9 376.6
Other Assets 480.7 554.5
---------- ----------
Total Assets $11,612.1 $12,681.0
========== ==========
Interest Bearing
Liabilities
Domestic
Deposits
- Demand $ 1,774.7 5.1 1.15 $ 1,894.5 34.4 1.82
- Savings 958.3 4.6 1.89 780.3 16.2 2.08
- Time 2,048.2 19.7 3.81 2,506.7 129.6 5.17
------------------------ -------------------------
Total Domestic
Deposits 4,781.2 29.4 2.44 5,181.5 180.2 3.48
Foreign
Deposits
- Time Due
to Banks 365.5 2.1 2.26 351.2 14.5 4.13
- Other Time
and Savings 445.9 3.7 3.31 648.2 22.6 3.49
------------------------ -------------------------
Total Foreign
Deposits 811.4 5.8 2.84 999.4 37.1 3.71
------------------------ -------------------------
Total Interest
Bearing
Deposits 5,592.6 35.2 2.49 6,180.9 217.3 3.52
Short-Term
Borrowings 1,942.4 16.6 3.40 2,105.6 97.4 4.63
Long-Term Debt 678.9 11.6 6.79 800.5 53.9 6.73
------------------------ -------------------------
Total Interest
Bearing
Liabilities 8,213.9 63.4 3.06 9,087.0 368.6 4.06
------------------------ -------------------------
Net Interest
Income 106.2 459.9
Interest
Rate
Spread 3.21% 2.99%
Net Interest
Margin 3.93% 3.91%
Non-Interest
Bearing Demand
Deposits
- Domestic 1,397.8 1,527.1
- Foreign 328.0 346.0
---------- ----------
Total Demand
Deposits 1,725.8 1,873.1
Other Liabilities 390.3 376.8
Shareholders'
Equity 1,282.1 1,344.1
---------- ----------
Total
Liabilities
and
Shareholders
Equity $11,612.1 $12,681.0
========== ==========
Provision for
Loan and Lease
Losses 14.5 74.3
Net Overhead 61.4 145.5
-------- --------
Income Before
Income Taxes 30.3 240.1
Provision for
Income Taxes 3.9 122.2
Tax-Equivalent
Adjustment 0.1 0.2
-------- --------
Net Income $ 26.3 $117.7
======== ========
(1) Adjusted to reflect the reclassification of interchange fees,
mortgage banking income and other interest income.
Pacific Century Financial Corporation and subsidiaries
Loan Portfolio Balances (Unaudited) Table 6
----------------------------------------------------------------------
(dollars in millions)
March 31 December 31 March 31
2002 2001 2001
----------------------------------------------------------------------
Domestic Loans
Commercial $ 1,120.5 $ 1,175.5 $ 2,073.7
Real Estate
Construction 161.4 169.6 312.9
Mortgage
- Commercial 617.6 640.7 1,023.8
- Residential 2,409.1 2,419.4 2,574.8
Installment 759.3 729.7 764.1
Lease Financing 504.7 493.4 549.0
----------------------------------------------------------------------
Total Domestic 5,572.6 5,628.3 7,298.3
----------------------------------------------------------------------
Foreign Loans 28.7 24.2 1,126.1
----------------------------------------------------------------------
Total Loans $ 5,601.3 $ 5,652.5 $ 8,424.4
======================================================================
Pacific Century Financial Corporation and subsidiaries
Consolidated Non-Performing Assets and Accruing Loans
Past Due 90 Days or More (Unaudited) Table 7
----------------------------------------------------------------------
(dollars in millions)
March 31 December 31 March 31
2002 2001 2001
----------------------------------------------------------------------
Non-Accrual Loans
Commercial $ 27.4 $ 18.9 $ 23.8
Real Estate
Construction 1.0 9.3 6.3
Mortgage
- Residential 15.7 15.4 18.5
- Commercial 15.1 16.3 29.7
Installment 0.1 0.1 0.1
Lease Financing 4.4 0.8 0.2
Foreign -- -- 16.9
------------------------------------
Total Non-Accrual Loans 63.7 60.8 95.5
Non-Accrual Loans Held For Sale 7.8 1.7 12.8
Foreclosed Real Estate
Domestic 19.2 17.2 10.9
Foreign -- -- 0.3
------------------------------------
Total Foreclosed Real Estate 19.2 17.2 11.2
------------------------------------
Total Non-Performing Assets $ 90.7 $ 79.7 $ 119.5
====================================
Accruing Loans Past Due
90 Days or More
Commercial $ 0.2 $ 0.1 $ 3.9
Real Estate
Construction -- -- --
Mortgage
- Residential 2.1 3.8 3.3
- Commercial 1.2 -- 0.9
Installment 0.7 0.9 2.7
Lease Financing 0.1 0.1 0.1
Foreign -- -- 0.2
------------------------------------
Total Accruing and Past Due $ 4.3 $ 4.9 $ 11.1
====================================
Total Loans $5,601.3 $5,652.5 $8,424.4
----------------------------------------------------------------------
Ratio of Non-Accrual Loans
to Total Loans 1.14% 1.08% 1.13%
----------------------------------------------------------------------
Ratio of Non-Performing Assets
to Total Loans, Foreclosed
Real Estate and Non-Performing
Loans Held for Sale 1.61% 1.41% 1.41%
----------------------------------------------------------------------
Ratio of Non-Performing Assets
and Accruing Loans Past Due
90 Days or More to Total Loans 1.70% 1.50% 1.55%
----------------------------------------------------------------------
Quarter to Quarter Changes in
Non-Performing Assets
Balance at Beginning of Quarter $ 79.7 $ 106.4 $ 183.0
Additions 36.4 43.8 43.1
Reductions
Payments and Sales of Loans (12.9) (40.9) (63.7)
Return to Accrual (6.3) (3.6) (3.0)
Sales of Foreclosed Assets (0.9) (21.9) (3.0)
Charge-offs (5.3) (4.1) (36.9)
------------------------------------
Total Reductions (25.4) (70.5) (106.6)
Balance at End of Quarter $ 90.7 $ 79.7 $ 119.5
====================================
Pacific Century Financial Corporation and subsidiaries
Consolidated Allowance for Loan and Lease Losses (Unaudited) Table 8
----------------------------------------------------------------------
(dollars in millions)
Three Months Three Months
Ended Year Ended Ended
March 31, 2002 December 31, 2001 March 31, 2001
----------------------------------------------------------------------
Balance of Allowance
for Loan and
Lease Losses
Beginning of
Period $ 159.0 $ 246.2 $ 246.2
Loans Charged-Off
Commercial (7.3) (97.5) (75.5)
Real Estate:
Construction (0.5) (0.1) --
Mortgage
- Commercial -- (19.2) (11.9)
- Residential (1.4) (8.9) (2.5)
Installment (3.9) (20.5) (5.4)
Foreign -- (22.0) (10.0)
Lease Financing -- (0.8) (0.1)
-----------------------------------------------
Total Charge-Offs (13.1) (169.0) (105.4)
Recoveries on Loans
Previously Charged-Off
Commercial 0.7 11.1 2.7
Real Estate:
Construction -- -- --
Mortgage
- Commercial 1.8 3.2 0.3
- Residential 0.3 1.0 0.2
Installment 1.9 8.0 1.8
Foreign 0.1 24.1 2.6
Lease Financing -- 0.2 0.1
-----------------------------------------------
Total Recoveries 4.8 47.6 7.7
-----------------------------------------------
Net Loan Charge-Offs (8.3) (121.4) (97.7)
Provision for Loan
and Lease Losses 8.3 74.3 52.5
Allowance Related
to Divestitures -- (40.2) --
Foreign Currency
Translation -- 0.1 (1.2)
-----------------------------------------------
Balance at
End of Period $ 159.0 $ 159.0 $ 199.8
===============================================
Average Loans
Outstanding $5,583.3 $7,719.6 $9,061.7
Ratio of Net
Charge-Offs to
Average Loans
Outstanding
(annualized) 0.60% 1.57% 4.37%
Ratio of Allowance
to Loans and Leases
Outstanding 2.84% 2.81% 2.37%
Pacific Century Financial Corporation and subsidiaries
Quarterly Summary of Selected Consolidated
Financial Data (Unaudited) Table 9
----------------------------------------------------------------------
(dollars in millions
except per share amounts)
March 31 December 31 September 30
2002 2001 2001
----------------------------------------------------------------------
Balance Sheet Totals
Total Assets $ 10,244.8 $ 10,627.8 $ 11,944.2
Net Loans 5,442.4 5,493.5 6,583.5
Deposits 6,543.5 6,673.6 7,399.7
Shareholders' Equity 1,265.9 1,247.0 1,371.1
Quarterly Operating
Results
Net Interest Income $ 94.9 $ 106.1 $ 111.7
Provision for Loan
and Lease Losses 8.3 14.5 0.9
Non-Interest Income 54.0 79.9 113.4
Non-Interest Expense 92.4 140.8 122.6
Net Income 31.1 26.3 31.1
Basic Earnings
Per Share $ 0.42 $ 0.35 $ 0.39
Diluted Earnings
Per Share $ 0.41 $ 0.34 $ 0.37
Return on Average
Assets 1.21% 0.90% 1.00%
Return on Average
Equity 9.97% 8.14% 8.88%
Efficiency Ratio 62.06% 75.73% 54.46%
Continuing Business
Operating Results(1)
Net Interest Income $ 94.9 $ 93.8 $ 91.0
Provision for Loan
and Lease Losses 8.3 16.6 6.4
Non-Interest Income 54.0 44.7 53.7
Non-Interest Expense(2) 90.4 100.2 88.3
Net Income(2) 32.3 21.3 31.4
Diluted Earnings
Per Share(2) $ 0.43 $ 0.28 $ 0.38
Return on Average
Equity(2) 10.37% 6.59% 8.96%
Efficiency Ratio(2) 60.73% 72.36% 61.03%
June 30 March 31
2001 2001
----------------------------------------------------------------------
Balance Sheet Totals
Total Assets $ 12,755.5 $ 13,710.5
Net Loans 7,418.0 8,224.6
Deposits 8,108.5 8,815.4
Shareholders' Equity 1,395.7 1,371.9
Quarterly Operating
Results
Net Interest Income $ 116.7 $ 125.2
Provision for Loan
and Lease Losses 6.4 52.5
Non-Interest Income 98.0 160.5
Non-Interest Expense 161.3 172.3
Net Income 26.7 33.7
Basic Earnings
Per Share $ 0.33 $ 0.42
Diluted Earnings
Per Share $ 0.32 $ 0.42
Return on Average
Assets 0.83% 0.99%
Return on Average
Equity 7.69% 10.42%
Efficiency Ratio 75.15% 60.33%
Continuing Business
Operating Results(1)
Net Interest Income $ 87.8 $ 92.2
Provision for Loan
and Lease Losses 2.6 12.1
Non-Interest Income 54.9 54.6
Non-Interest Expense(2) 89.3 86.4
Net Income(2) 32.6 28.3
Diluted Earnings
Per Share(2) $ 0.39 $ 0.35
Return on Average
Equity(2) 9.37% 8.76%
Efficiency Ratio(2) 62.58% 58.88%
(1) Excludes divested businesses and restructuring and non-core
transactions. 2001 Quarterly information has been reclassified to
conform to December 31, 2001 presentation.
(2) Adjusted to exclude goodwill amortization expense in 2001.
CONTACT:
Pacific Century Financial Corporation
Stafford Kiguchi, 808/537-8580 (Media)
877/849-5423 (pager)
skiguchi@boh.com
Cindy Wyrick, 808/537-8430 (Investors/Analysts)
cwyrick@boh.com
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