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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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