Pacific Century Financial Corporation Reports Fourth Quarter Net Income of $32.6 Million and Earnings Per Share of 41 Cents
HONOLULU--(BUSINESS WIRE)--Jan. 25, 2001--
-
Non-Performing Assets Decline 17 percent from September 30, 2000 Level
-
Board of Directors Declares Quarterly Dividend of 18 Cents Per Share
Pacific Century Financial Corporation (NYSE:BOH) reported fourth quarter net income of $32.6 million, down 13.3 percent compared to $37.6 million for the fourth quarter of 1999. Diluted earnings per share were $0.41, down 12.8 percent relative to $0.47 reported for the fourth quarter of 1999.
For the fourth quarter of 2000, return on average assets was 0.94 percent and on a tangible basis was 1.07 percent. Return on average equity was 10.24 percent and on a tangible basis was 13.60 percent. The efficiency ratio was 60.5 percent and 58.2 percent on a tangible basis.
For the full-year 2000, Pacific Century Financial Corporation (PCFC) reported earnings of $113.7 million relative to $133.0 million posted for the full-year 1999. Diluted earnings per share were $1.42 compared to $1.64 for 1999. Tangible or "cash" diluted earnings per share totaled $1.63 versus $1.85 for the full-year 1999.
Key events in the fourth quarter:
-
PCFC's Board of Directors named Michael E. O'Neill, Chairman & Chief Executive Officer.
-
American Express Company and PCFC signed a definitive agreement for American Express Centurion Bank to acquire the credit card portfolio of Bank of Hawaii Credit Card, N.A., Bank of Hawaii's subsidiary.
-
PCFC's U.S. Mainland subsidiary Pacific Century Bank, N.A. (PCB) signed a definitive agreement with Zions Bancorporation, whereby Zions will acquire PCB's nine-branch Arizona franchise.
-
Bank of Hawaii sold its shareholding interests in the Bank of Tonga and Pacific Commercial Bank, Ltd. of Samoa to Australia-based Westpac Banking Corporation.
"In the fourth quarter, we took a number of steps that will enable us to improve our future operating performance," said PCFC Chairman & Chief Executive Officer Michael E. O'Neill. "We are committed to developing and executing strategies that will create long-term sustainable value for our shareholders."
Key events since the end of the fourth quarter 2000:
-
Two key executives joined PCFC's risk and asset recovery areas. William Nelson joined PCFC as Vice Chairman, Chief Risk Officer and a member of the company's Managing Committee. PCFC also hired Scott Miller as Executive Vice President and Director of Asset Recovery.
-
PCFC sold a $65 million problem loan first mentioned in the second quarter of 2000.
-
PCFC's Board of Directors declared a quarterly cash dividend of 18 cents per share on the company's outstanding shares. The dividend will be payable on March 14, 2001 to shareholders of record at the close of business on February 27, 2001.
"We are pleased with the significant progress made in addressing credit issues and will continue to give asset quality improvement our highest priority," said O'Neill.
Asset Quality Improvement
Non-performing assets (NPAs), exclusive of loans past due 90+ days were materially reduced by 16.7 percent during the quarter, dropping from $219.6 million at September 30, 2000 to $183.0 million at year-end 2000. NPAs totaled $149.9 million at December 31, 1999.
During the quarter, two commercial real estate non-accrual loans totaling approximately $29 million were repaid in full. In commercial and industrial (C&I), one syndicated non-accrual loan of $11.2 million returned to accrual status and two syndicated loans totaling $22.7 million were placed on non-accrual status. Charge-offs of four Asia loans totaling approximately $7.5 million and South Pacific loans, primarily in the French Territories totaling approximately $10.0 million also contributed to the reduction in NPAs.
Subsequent to year-end, PCFC took additional steps to improve asset quality by selling at a discount the $65 million problem loan first referenced in 2000's second quarter. As a result, the company will charge off the amount of the discount in the first quarter, which will be largely offset by reserves previously allocated for this credit. At year-end, this credit was carried as a performing loan.
Net charge-offs for the quarter totaled $25.6 million relative to $19.6 million in the third quarter of 2000 and $36.8 million in the fourth quarter of 1999. Domestic charge-offs during the quarter totaled $12.4 million, the largest components of which were $4.4 million (C&I) and $5.6 million (installment loans). Foreign loans charged off totaled $19.2 million with approximately $7.5 million contributed by Asia and the balance from the South Pacific as discussed earlier. Recoveries during the quarter totaled $6.0 million of which $2.4 million were on domestic loans and $3.6 million were foreign loans.
Provisioning for the quarter totaled $25.8 million, up from $20.2 million on a linked quarter basis and up from $20.9 million for last year's fourth quarter.
Year-over-year, the ratio of net charge-offs to average loans grew from 0.78 percent in 1999 to 0.94 percent for the year 2000. Over that same period the company grew its ratio of reserves to outstanding loans from 2.05 percent to 2.62 percent. The ratio of reserves to non-performing assets (exclusive of loans past due 90+ days) increased to 135 percent, from 130 percent at December 31, 1999.
Other Financial Highlights
Total assets at year-end 2000 fell by 3.0 percent to $14.0 billion, from $14.4 billion at December 31, 1999, but rose one-half percent from September 30, 2000. Correspondingly, loans at year-end 2000 totaled $9.7 billion, down less than one percent from both year-end 1999 and September 30, 2000.
On a linked quarter basis, PCFC managed its syndicated loan exposure lower by approximately $425 million, of which approximately $116 million were loans outstanding, with the balance being undrawn commitments. The company also reduced its Asia exposure by approximately $120 million in the fourth quarter. Both trends were inline with prior guidance.
The company experienced solid loan growth in its residential real estate portfolio which grew by 4.4 percent relative to the third quarter of 2000 and by 15.1 percent compared to year-end 1999.
Deposits ended 2000 at $9.1 billion, down 3.3 percent from year-end 1999, but up 2.9 percent relative to September 30, 2000. On a year-over-year basis, domestic deposits were unchanged at $7.2 billion, while foreign deposits fell by 14.5 percent. As discussed in prior quarters, the decline in foreign deposits is attributable to foreign currency translation adjustments and a reduced need for non-relationship funding. On a linked quarter basis, domestic deposits grew by 1.1 percent, while foreign deposits grew by 10.8 percent due to foreign currency movements and temporary customer deposit flows over year-end.
Net interest margin for the quarter rose to 4.29 percent from 4.25 percent in 2000's third quarter. The margin in 1999's fourth quarter was 4.31 percent. The margin has been stable, in spite of the volatility in interest rates over the last year.
Net interest income for the quarter on a fully taxable equivalent basis totaled $138.9 million, down from $139.6 million in 2000's third quarter, and down from $143.2 million in 1999's fourth quarter, reflecting a relatively stable margin and the continued downsizing of the balance sheet.
Non-interest income for the quarter, exclusive of securities transactions, totaled $65.9 million, up from $61.3 million in 2000's third quarter and up from $64.1 million in 1999's fourth quarter. Non-recurring items included $3.2 million in other operating income related to the sale of PCFC's minority interests in the Bank of Tonga and Pacific Commercial Bank. The fourth quarter of 1999 included $4.3 million in non-recurring income. Adjusting for these special items, non-interest income in the fourth quarter of 2000 grew 4.9 percent compared to the same period in 1999.
Non-interest expense for the quarter totaled $123.9 million, down one percent from 2000's third quarter and down 5.5 percent from 1999's fourth quarter. Non-interest expense for the full year 2000 reflects the significant positive impact of New Era. Exclusive of 1999's restructuring charge, non-interest expense for the year 2000 was $34.4 million lower than for 1999.
Positive Outlook for Hawaii's Economy
Another positive trend is the continuing strength of Hawaii's economy which grew at an estimated 3 percent in 2000, the highest growth rate since the current expansion began in 1997. Growth in 2000 was fueled by tourism which saw an increase in visitor arrivals and visitor days of 3.1 percent through November. All key construction industry measures experienced double-digit growth during the year and economists forecast that construction will replace tourism as the growth engine in 2001.
The consensus outlook for 2001 is for continued expansion with growth in real gross state product forecast to be 3.0 to 3.5 percent. Growth in visitor arrivals is expected to moderate to 3 percent because of a deceleration in U.S. economic growth. Economists noted that Hawaii's 2001 expansion would be sustained by 10 to 15 percent construction growth, which will support an unemployment rate below 4 percent and inflation of 2.5 percent.
While Hawaii economists expect continued growth in 2001, they recognize that Hawaii is not immune to an economic slowdown on the U.S. Mainland, particularly in California.
Guidance
Performance for 2001 will largely be dependent on the results of the Company's ongoing strategic assessment process previously announced by PCFC Chairman & CEO Michael O'Neill. PCFC's intent is to disclose those results together with the first quarter 2001 earnings release.
The credit card sale is anticipated to close in 2001's first quarter, while the Arizona branch franchise sale is scheduled to close in second quarter 2001. Additional gains may occur in the first quarter from the anticipated sale of PCFC's 2.5 percent ownership stake in Star Systems, Inc. to Concord EFS Inc. (Nasdaq:CEFT).
Pacific Century Financial Corporation is a $14 billion regional financial services company with locations throughout the Pacific region. Pacific Century and its subsidiaries provide varied financial services to businesses, governments and consumers in four principal markets: Hawaii and the West Pacific, South Pacific, Asia and selected markets on the U.S. Mainland. Pacific Century's principal subsidiary, Bank of Hawaii, is the largest commercial bank in the state of Hawaii.
Highlights Pacific Century Financial Corporation and subsidiaries
----------------------------------------------------------------------
(in thousands of dollars except per share amounts)
Earnings Highlights Percentage
and Performance Ratios 2000 1999 Change
----------------------------------------------------------------------
Three Months Ended December 31
Net Income $32,586 $37,599 -13.3%
Basic Earnings Per Share 0.41 0.47 -12.8%
Diluted Earnings Per Share 0.41 0.47 -12.8%
Cash Dividends 14,324 13,649
Return on Average Assets 0.94% 1.04%
Return on Average Equity 10.24% 12.29%
Net Interest Margin 4.29% 4.31%
Efficiency Ratio 60.52% 63.32%
Twelve Months Ended December 31
Net Income $113,661 $132,957 -14.5%
Basic Earnings Per Share 1.43 1.66 -13.9%
Diluted Earnings Per Share 1.42 1.64 -13.4%
Cash Dividends 56,471 54,640
Return on Average Assets 0.81% 0.91%
Return on Average Equity 9.21% 10.99%
Net Interest Margin 4.27% 4.28%
Efficiency Ratio 60.50% 67.01%
Summary of Results Excluding the
Effect of Intangibles (a)
----------------------------------------------------------------------
Three Months Ended December 31
Net Income $36,711 $42,317 -13.2%
Basic Earnings per Share $0.46 $0.53 -13.2%
Diluted Earnings per Share $0.46 $0.52 -11.5%
Return on Average Assets 1.07% 1.19%
Return on Average Equity 13.60% 16.69%
Efficiency Ratio 58.19% 60.59%
Twelve Months Ended December 31
Net Income $130,401 $149,747 -12.9%
Basic Earnings per Share $1.64 $1.86 -11.8%
Diluted Earnings per Share $1.63 $1.85 -11.9%
Return on Average Assets 0.94% 1.04%
Return on Average Equity 12.59% 15.02%
Efficiency Ratio 58.14% 64.66%
(a) Intangibles include goodwill, core deposit and trust intangibles,
and other intangibles.
Statement of Condition Highlights
and Performance Ratios
December 31 December 31 Percentage
2000 1999 Change
----------------------------------------------------------------------
Total Assets $14,013,816 $14,440,315 -3.0%
Net Loans 9,168,140 9,280,848 -1.2%
Total Deposits 9,080,581 9,394,218 -3.3%
Total Shareholders' Equity 1,301,356 1,212,330 7.3%
Book Value Per Common Share $16.35 $15.15
Loss Reserve / Loans Outstanding 2.62% 2.05%
Average Equity / Average Assets 8.78% 8.30%
Common Stock Price Range High Low
1999 .................. $24.94 $17.38
2000 First Quarter..... $20.38 $14.35
Second Quarter......... $23.19 $14.63
Third Quarter.......... $17.50 $13.13
Fourth Quarter......... $18.75 $11.06
----------------------------------------------------------------------
Corporate Offices:
Financial Plaza of the Pacific
130 Merchant Street
Honolulu, Hawaii 96813
Inquiries:
David A. Houle
Executive Vice President, Treasurer
and Chief Financial Officer
(808) 537-8288
Consolidated Statements of Income (Unaudited)
Pacific Century Financial Corporation and subsidiaries
----------------------------------------------------------------------
(in thousands 3 Months 3 Months 12 Months 12 Months
of dollars Ended Ended Ended Ended
except per Dec 31 Dec 31 Dec 31 Dec 31
share amounts) 2000 1999 2000 1999
----------------------------------------------------------------------
Interest Income
Interest on Loans $191,406 $178,889 $750,141 $699,939
Loan Fees 8,718 9,809 33,620 39,899
Income on Lease Financing 9,696 7,640 37,357 29,391
Interest and Dividends on
Investment Securities
Taxable 12,509 14,561 53,009 57,809
Non-taxable 139 274 902 1,094
Income on Investment
Securities Available for
Sale 41,145 41,841 165,111 168,349
Interest on Deposits 3,746 4,569 14,663 24,960
Interest on Security
Resale Agreements 87 6 158 244
Interest on Funds Sold 997 460 2,532 4,834
----------------------------------------------------------------------
Total Interest Income 268,443 258,049 1,057,493 1,026,519
Interest Expense
Interest on Deposits 73,595 67,481 286,035 261,184
Interest on Security
Repurchase Agreements 28,621 21,554 104,536 92,175
Interest on Funds
Purchased 7,315 10,191 32,636 41,677
Interest on Short-Term
Borrowings 3,174 3,631 18,959 12,414
Interest on Long-Term Debt 16,925 12,146 59,096 44,326
----------------------------------------------------------------------
Total Interest Expense 129,630 115,003 501,262 451,776
----------------------------------------------------------------------
Net Interest Income 138,813 143,046 556,231 574,743
Provision for Loan Losses 25,779 20,877 142,853 60,915
----------------------------------------------------------------------
Net Interest Income After
Provision for Loan Losses 113,034 122,169 413,378 513,828
Non-Interest Income
Trust Income 16,999 16,047 66,077 60,700
Service Charges on Deposit
Accounts 10,252 8,559 40,063 34,267
Fees, Exchange, and Other
Service Charges 21,574 22,266 88,500 88,838
Other Operating Income 17,115 17,210 58,463 67,720
Gain on Settlement of
Pension Obligation -- -- 11,900 --
Investment Securities
Gains (Losses) (1,259) 5,314 (1,574) 14,056
----------------------------------------------------------------------
Total Non-Interest Income 64,681 69,396 263,429 265,581
Non-Interest Expense
Salaries 44,442 46,650 181,669 198,743
Pensions and Other
Employee Benefits 10,204 11,956 47,925 55,343
Net Occupancy Expense 11,916 12,255 48,789 47,893
Net Equipment Expense 13,109 12,482 50,607 48,674
Other Operating Expense 44,139 47,718 167,440 180,107
Restructuring Charge -- -- -- 22,478
Minority Interest 101 101 387 485
----------------------------------------------------------------------
Total Non-Interest Expense 123,911 131,162 496,817 553,723
----------------------------------------------------------------------
Income Before Income Taxes 53,804 60,403 179,990 225,686
Provision for Income Taxes 21,218 22,804 66,329 92,729
----------------------------------------------------------------------
Net Income $32,586 $37,599 $113,661 $132,957
======================================================================
Basic Earnings Per Share $0.41 $0.47 $1.43 $1.66
Diluted Earnings Per Share $0.41 $0.47 $1.42 $1.64
Dividends Declared Per
Share $0.18 $0.17 $0.71 $0.68
Basic Weighted Average
Shares 79,534,105 80,199,539 79,551,296 80,298,725
Diluted Weighted Average
Shares 79,747,220 80,826,976 79,813,443 81,044,558
======================================================================
Consolidated Statements of Condition (Unaudited)
Pacific Century Financial Corporation and subsidiaries
----------------------------------------------------------------------
December 31 December 31
(in thousands of dollars) 2000 1999
----------------------------------------------------------------------
Assets
Interest-Bearing Deposits $188,649 $278,473
Investment Securities -- Held to Maturity
(Market Value of $676,621 and
$787,720, respectively) 670,038 796,322
Investment Securities --
Available for Sale 2,507,076 2,542,232
Securities Purchased Under
Agreements to Resell 3,969 -
Funds Sold 134,644 52,740
Loans 9,668,290 9,717,556
Unearned Income (253,903) (242,503)
Reserve for Loan Losses (246,247) (194,205)
----------------------------------------------------------------------
Net Loans 9,168,140 9,280,848
----------------------------------------------------------------------
Total Earning Assets 12,672,516 12,950,615
Cash and Non-Interest Bearing Deposits 523,969 639,895
Premises and Equipment 254,621 271,728
Customers' Acceptance Liability 14,690 7,236
Accrued Interest Receivable 68,585 78,974
Other Real Estate 4,526 4,576
Intangibles, including Goodwill 192,264 205,904
Other Assets 282,645 281,387
----------------------------------------------------------------------
Total Assets $14,013,816 $14,440,315
======================================================================
Liabilities
Domestic Deposits
Demand -- Non-Interest Bearing $1,707,724 $1,676,425
-- Interest Bearing 2,008,730 2,076,358
Savings 665,239 700,720
Time 2,836,083 2,761,650
Foreign Deposits
Demand -- Non-Interest Bearing 385,366 401,613
Time Due to Banks 535,126 597,675
Other Savings and Time 942,313 1,179,777
----------------------------------------------------------------------
Total Deposits 9,080,581 9,394,218
Securities Sold Under
Agreements to Repurchase 1,655,173 1,490,655
Funds Purchased 413,241 839,962
Short-Term Borrowings 211,481 458,962
Bank's Acceptances Outstanding 14,690 7,236
Accrued Retirement Expense 37,868 40,360
Accrued Interest Payable 72,460 64,588
Accrued Taxes Payable 130,766 85,022
Minority Interest 4,536 4,435
Other Liabilities 94,512 114,890
Long-Term Debt 997,152 727,657
----------------------------------------------------------------------
Total Liabilities 12,712,460 13,227,985
Shareholders' Equity
Common Stock ($.01 par value), authorized
500,000,000 shares; issued/outstanding;
December 2000 -- 80,558,811 / 79,612,178;
December 1999 -- 80,550,728 / 80,036,417 806 806
Capital Surplus 346,045 345,851
Accumulated Other Comprehensive Income (25,079) (66,106)
Retained Earnings 996,791 942,177
Treasury Stock, at Cost -- (December 2000
-- 946,633; December 1999 -- 514,311) (17,207) (10,398)
----------------------------------------------------------------------
Total Shareholders' Equity 1,301,356 1,212,330
----------------------------------------------------------------------
Total Liabilities and
Shareholders' Equity $14,013,816 $14,440,315
======================================================================
Pacific Century Financial Corporation and subsidiaries
Consolidated Statements of Shareholders' Equity (Unaudited)
----------------------------------------------------------------------
Common Capital
(in thousands of dollars) Total Stock Surplus
----------------------------------------------------------------------
Balance at December 31, 1999 $1,212,330 $806 $345,851
Comprehensive Income
Net Income 113,661 - -
Other Comprehensive Income, Net of Tax
Investment Securities, Net of
Reclassification Adjustment 45,300 - -
Foreign Currency Translation
Adjustment (4,273) - -
Total Comprehensive Income
Common Stock Issued
86,670 Profit Sharing Plan 1,470 - 18
228,438 Stock Option Plan 2,948 - 3
193,689 Dividend Reinvestment Plan 3,261 - 51
6,901 Directors' Restricted Shares
and Deferred Compensation
Plan 122 - 122
Treasury Stock Purchased (16,992) - -
Cash Dividends Paid (56,471) - -
----------------------------------------------------------------------
Balance at December 31, 2000 $1,301,356 $806 $346,045
======================================================================
Balance at December 31, 1998 $1,185,594 $805 $342,932
Comprehensive Income
Net Income 132,957 - -
Other Comprehensive Income, Net of Tax
Investment Securities, Net of
Reclassification Adjustment (44,803) - -
Foreign Currency Translation
Adjustment 1,154 - -
Pension Liability Adjustments 19 - -
Total Comprehensive Income
Common Stock Issued
57,249 Profit Sharing Plan 1,096 - 4
501,929 Stock Option Plan 8,616 - 2,620
198,851 Dividend Reinvestment Plan 4,032 - 142
7,199 Directors' Restricted Shares
and Deferred Compensation
Plan 154 1 153
Treasury Stock Purchased (21,849) - -
Cash Dividends Paid (54,640) - -
----------------------------------------------------------------------
Balance at December 31, 1999 $1,212,330 $806 $345,851
======================================================================
Accumulated
Other
Comprehensive Retained Treasury Comprehensive
Income Earnings Stock Income
----------------------------------------------------------------------
Balance at December 31,
1999 ($66,106) $942,177 ($10,398)
Comprehensive Income
Net Income - 113,661 - $113,661
Other Comprehensive
Income, Net of Tax
Investment Securities,
Net of Reclassification
Adjustment 45,300 - - 45,300
Foreign Currency
Translation Adjustment (4,273) - - (4,273)
-------------
Total Comprehensive Income $154,688
=============
Common Stock Issued
86,670 Profit Sharing
Plan - (230) 1,682
228,438 Stock Option Plan - (1,763) 4,708
193,689 Dividend
Reinvestment Plan - (583) 3,793
6,901 Directors' Restricted
Shares and Deferred
Compensation Plan - - -
Treasury Stock Purchased - - (16,992)
Cash Dividends Paid - (56,471) -
----------------------------------------------------------------------
Balance at December 31,
2000 ($25,079) $996,791 ($17,207)
======================================================================
Balance at December 31,
1998 ($22,476) $867,852 ($3,519)
Comprehensive Income
Net Income - 132,957 - $132,957
Other Comprehensive
Income, Net of Tax
Investment Securities,
Net of Reclassification
Adjustment (44,803) - - (44,803)
Foreign Currency
Translation Adjustment 1,154 - - 1,154
Pension Liability
Adjustments 19 - - 19
-------------
Total Comprehensive Income $89,327
=============
Common Stock Issued
57,249 Profit Sharing Plan - (71) 1,163
501,929 Stock Option Plan - (3,651) 9,647
198,851 Dividend
Reinvestment Plan - (270) 4,160
7,199 Directors' Restricted
Shares and Deferred
Compensation Plan - - -
Treasury Stock Purchased - - (21,849)
Cash Dividends Paid - (54,640) -
----------------------------------------------------------------------
Balance at December 31,
1999 ($66,106) $942,177 ($10,398)
======================================================================
Consolidated Average Balances and
Interest Rates Taxable Equivalent (Unaudited)
Pacific Century Financial Corporation and subsidiaries
----------------------------------------------------------------------
(in millions of dollars)
Three Months Ended Three Months Ended
December 31, 2000 December 31, 1999
Average Income/ Yield/ Average Income/ Yield/
Balance Expense Rate Balance Expense Rate
----------------------------------------------------------------------
Earning Assets
Interest
Bearing
Deposits $ 215.7 $ 3.7 6.91% $ 268.4 $ 4.6 6.75%
Investment
Securities
Held to
Maturity
-- Taxable 687.0 12.5 7.24 794.4 14.6 7.27
-- Tax-Exempt 3.8 0.2 22.24 11.6 0.4 14.34
Investment
Securities
Available
for sale 2,478.4 41.2 6.60 2,590.0 41.8 6.40
Funds Sold 66.8 1.1 6.46 33.2 0.5 6.53
Net Loans
-- Domestic 8,108.3 178.7 8.76 7,803.0 161.4 8.20
-- Foreign 1,319.9 22.5 6.78 1,688.6 25.1 5.91
Loan Fees 8.7 9.8
Total Earning
Assets 12,879.9 268.6 8.30 13,189.2 258.2 7.77
Cash and Due
From Banks 404.6 519.3
Other Assets 503.3 650.8
---------- --------
Total Assets $ 13,787.8 $14,359.3
========== ========
Twelve Months Ended Twelve Months Ended
December 31, 2000 December 31, 1999
Average Income/ Yield/ Average Income/ Yield/
Balance Expense Rate Balance Expense Rate
Earning Assets
Interest
Bearing
Deposits $ 216.2 $14.7 6.78% $ 385.0 $ 24.9 6.48%
Investment
Securities
Held to
Maturity
-- Taxable 724.3 53.0 7.32 805.2 57.8 7.18
-- Tax-Exempt 7.6 1.4 18.24 11.7 1.7 14.41
Investment
Securities
Available
for sale 2,502.5 165.1 6.60 2,698.8 168.0 6.23
Funds Sold 43.2 2.7 6.22 102.0 5.4 5.31
Net Loans
-- Domestic 8,076.4 690.1 8.55 7,742.3 623.0 8.05
-- Foreign 1,467.9 97.7 6.65 1,702.2 106.4 6.25
Loan Fees 33.6 39.9
Total Earning
Assets 13,038.1 1,058.3 8.12 13,447.2 1,027.1 7.64
Cash and Due
From Banks 443.2 486.6
Other Assets 574.0 649.1
-------- --------
Total Assets $14,055.3 14,582.9
======== ========
Pacific Century Financial Corporation and subsidiaries
Consolidated Average Balances and Interest Rates Taxable Equivalent
(Unaudited)
----------------------------------------------------------------------
Three Months Ended Three Months Ended
December 31, 2000 December 31, 1999
(in
millions Average Income/ Yield/ Average Income/ Yield/
of dollars) Balance Expense Rate Balance Expense Rate
----------------------------------------------------------------------
Interest
Bearing
Liabilities
Domestic
Deposit
- Demand $1,991.6 12.1 2.41 $2,110.5 12.1 2.28
- Savings 667.5 3.4 2.03 711.9 3.7 2.03
- Time 2,815.6 42.3 5.98 2,634.8 32.4 4.88
-------------------------- ---------------------------
Total
Domestic 5,474.7 57.8 4.20 5,457.2 48.2 3.50
Foreign
Deposits
- Time Due
to Banks 557.9 8.7 6.23 625.6 8.7 5.50
- Other Time
and
Savings 768.9 7.1 3.65 1,171.7 10.6 3.60
-------------------------- ---------------------------
Total
Foreign 1,326.8 15.8 4.73 1,797.3 19.3 4.26
-------------------------- ---------------------------
Total Interest
Bearing
Deposits 6,801.5 73.6 4.30 7,254.5 67.5 3.69
Short-Term
Borrowings 2,437.1 39.1 6.38 2,707.6 35.4 5.18
Long-Term
Debt 1,001.6 17.0 6.72 747.4 12.1 6.45
-------------------------- ---------------------------
Total Interest
Bearing
Liabilities 10,240.2 129.7 5.04 10,709.5 115.0 4.26
-------------------------- ---------------------------
Net Interest
Income 138.9 143.2
Interest Rate
Spread 3.26% 3.51%
Net Interest
Margin 4.29% 4.31%
Demand
Deposits
- Domestic 1,610.8 1,662.8
- Foreign 354.7 457.5
---------- -----------
Total Demand
Deposits 1,965.5 2,120.3
Other
Liabilities 315.6 315.3
Shareholders'
Equity 1,266.5 1,214.2
---------- -----------
Total
Liabilities
and
Shareholders'
Equity $13,787.8 $14,359.3
========== ===========
Provision for
Loan Losses 25.8 20.9
Net Overhead 59.2 61.7
-------- -----
Income Before
Income Taxes 53.9 60.6
Provision for
Income Taxes 21.2 22.8
Tax-Equivalent
Adjustment 0.1 0.2
-------- -----
Net Income $32.6 $37.6
======== =====
Twelve Months Ended Twelve Months Ended
December 31, 2000 December 31, 1999
Average Income/ Yield/ Average Income/ Yield/
Balance Expense Rate Balance Expense Rate
Interest
Bearing
Liabilities
Domestic
Deposit
- Demand $2,061.9 48.7 2.36 $2,137.1 48.5 2.27
- Savings 684.8 13.9 2.03 723.9 14.7 2.03
- Time 2,781.1 154.1 5.54 2,559.4 123.3 4.82
-------------------------- ---------------------------
Total
Domestic 5,527.8 216.7 3.92 5,420.4 186.5 3.44
Foreign
Deposits
- Time Due
to Banks 505.4 30.4 6.03 641.4 33.7 5.25
- Other Time
and
Savings 960.5 38.9 4.05 1,165.7 41.0 3.52
-------------------------- ---------------------------
Total
Foreign 1,465.9 69.3 4.73 1,807.1 74.7 4.13
-------------------------- ---------------------------
Total Interest
Bearing
Deposits 6,993.7 286.0 4.09 7,227.5 261.2 3.61
Short-Term
Borrowings 2,597.4 156.1 6.01 3,014.8 146.2 4.85
Long-Term
Debt 886.9 59.1 6.66 685.9 44.3 6.46
-------------------------- ---------------------------
Total Interest
Bearing
Liabilities 10,478.0 501.2 4.78 10,928.2 451.7 4.13
-------------------------- ---------------------------
Net Interest
Income 557.1 575.4
Interest Rate
Spread 3.34% 3.51%
Net Interest
Margin 4.27% 4.28%
Demand
Deposits
- Domestic 1,640.0 1,652.6
- Foreign 371.4 435.2
--------- ---------
Total Demand
Deposits 2,011.4 2,087.8
Other
Liabilities 331.3 356.9
Shareholders'
Equity 1,234.6 1,210.0
--------- ---------
Total
Liabilities
and
Shareholders'
Equity $14,055.3 $14,582.9
========= =========
Provision for
Loan Losses 142.9 60.9
Net Overhead 233.4 288.2
------- ------
Income Before
Income Taxes 180.8 226.3
Provision for
Income Taxes 66.3 92.7
Tax-Equivalent
Adjustment 0.8 0.6
------- ------
Net Income $113.7 $133.0
======= ======
Pacific Century Financial Corporation and subsidiaries
Consolidated Non-Performing Assets and Accruing Loans Past
Due 90 Days or More (Unaudited)
----------------------------------------------------------------------
Dec 31 Sep 30 Jun 30 Mar 31 Dec 31 Sep 30
(in millions of 2000 2000 2000 2000 1999 1999
dollars)
----------------------------------------------------------------------
Non-Accrual Loans
Commercial and
Industrial $55.4 $49.0 $52.7 $20.1 $23.7 $31.7
Real Estate
Construction 6.4 8.1 8.0 0.9 1.1 2.1
Commercial 60.1 86.8 62.2 18.2 19.0 20.8
Residential 22.7 22.0 23.2 23.2 29.7 33.1
Installment -- 0.1 0.1 0.5 0.5 0.7
Leases 0.4 0.2 0.3 3.7 3.9 4.8
Total Domestic 145.0 166.2 146.5 66.6 77.9 93.2
Foreign 33.5 48.3 59.2 65.2 67.4 55.7
Subtotal 178.5 214.5 205.7 131.8 145.3 148.9
Foreclosed Real Estate
Domestic 4.2 4.9 4.6 4.3 4.3 5.6
Foreign 0.3 0.2 0.3 0.3 0.3 0.3
Subtotal 4.5 5.1 4.9 4.6 4.6 5.9
Total Non-
Performing Assets 183.0 219.6 210.6 136.4 149.9 154.8
Accruing Loans Past
Due 90 Days or More
Commercial and
Industrial 5.0 2.2 4.7 6.7 5.9 6.2
Real Estate
Construction -- 0.1 -- -- -- 0.5
Commercial 1.3 4.9 2.0 2.1 1.9 2.4
Residential 3.3 7.2 3.5 5.0 4.0 2.8
Installment 5.6 4.6 4.0 4.7 4.5 4.5
Leases 0.4 0.1 1.5 1.4 1.2 0.2
Total Domestic 15.6 19.1 15.7 19.9 17.5 16.6
Foreign 3.2 1.5 1.3 3.2 1.0 5.0
Subtotal 18.8 20.6 17.0 23.1 18.5 21.6
Total $201.8 $240.2 $227.6 $159.5 $168.4 $176.4
Ratio of Non-
Performing Assets
to Total Loans 1.89% 2.25% 2.09% 1.39% 1.54% 1.59%
Ratio of Non-
Performing Assets
and Accruing Loans
Past Due 90 Days
or More to Total
Loans 2.09% 2.46% 2.26% 1.63% 1.73% 1.81%
Pacific Century Financial Corporation and subsidiaries
Consolidated Non-Performing Assets and Accruing Loans Past
Due 90 Days or More (Unaudited)
----------------------------------------------------------------------
Jun 30 Mar 31 Dec 31
(in millions of 1999 1999 1998
dollars)
----------------------------------------------------------------------
Non-Accrual Loans
Commercial and
Industrial $37.5 $39.1 $28.2
Real Estate
Construction 0.8 3.1 2.9
Commercial 17.2 18.7 5.4
Residential 35.2 37.6 36.4
Installment 0.8 0.5 0.8
Leases 4.4 4.5 0.7
Total Domestic 95.9 103.5 74.4
Foreign 47.5 53.6 57.5
Subtotal 143.4 157.1 131.9
Foreclosed Real
Estate
Domestic 5.8 6.1 5.5
Foreign 0.2 0.1 0.1
Subtotal 6.0 6.2 5.6
Total Non-
Performing
Assets 149.4 163.3 137.5
Accruing Loans Past
Due 90 Days or More
Commercial and
Industrial 3.9 4.3 0.4
Real Estate
Construction 0.2 0.2 0.4
Commercial 0.2 0.4 --
Residential 3.7 3.5 4.5
Installment 5.2 6.9 7.3
Leases -- 0.1 0.3
Total Domestic 13.2 15.4 12.9
Foreign 8.2 6.3 7.9
Subtotal 21.4 21.7 20.8
Total $170.8 $185.0 $158.3
Ratio of Non-
Performing Assets
to Total Loans 1.55% 1.69% 1.40%
Ratio of Non-
Performing Assets
and Accruing Loans
Past Due 90 Days
or More to Total
Loans 1.78% 1.92% 1.61%
Pacific Century Financial Corporation and subsidiaries
Summary of Loan Loss Experience
----------------------------------------------------------------------
Fourth Third Second
Quarter Quarter Quarter
(in millions of 2000 2000 2000
dollars)
----------------------------------------------------------------------
Average Amount of
Loans Outstanding $9,428.2 $9,628.6 $9,636.9
Balance of Reserve
for Loan Losses
at Beginning of
Period $245.0 $246.6 $195.4
Loans Charged-Off
Commercial and
Industrial 4.4 8.0 8.3
Real Estate
Construction 0.1 -- 0.5
Commercial 0.9 2.8 7.6
Residential 1.3 1.5 1.3
Installment 5.6 4.6 5.2
Leases 0.1 0.2 0.2
Total Domestic 12.4 17.1 23.1
Foreign 19.2 9.5 13.4
Total Charged-Off 31.6 26.6 36.5
Recoveries on Loans
Previously
Charged-Off
Commercial and Industrial 0.4 2.2 1.2
Real Estate
Construction -- -- --
Commercial 0.3 0.1 0.1
Residential 0.1 0.3 0.2
Installment 1.6 1.7 1.9
Total Domestic 2.4 4.3 3.4
Foreign 3.6 2.7 0.2
Total Recoveries 6.0 7.0 3.6
Net Charge-Offs (25.6) (19.6) (32.9)
Provision Charged
to Operating
Expenses 25.8 20.2 83.4
Other Net Additions
(Reductions)(1) 1.0 (2.2) 0.7
Balance at End of Period $246.2 $245.0 $246.6
Ratio of Net
Charge-Offs to
Average Loans
Outstanding
(annualized) 1.09% 0.81% 1.37%
Ratio of Reserve
to Loans
Outstanding 2.62% 2.58% 2.53%
(1) Includes balance transfers, reserves acquired, and foreign
currency translation adjustments.
Pacific Century Financial Corporation and subsidiaries
Summary of Loan Loss Experience
----------------------------------------------------------------------
First Twelve Twelve
Quarter Months Months
(in millions of 2000 2000 1999
dollars)
----------------------------------------------------------------------
Average Amount of
Loans Outstanding $9,484.1 $9,544.3 $9,444.5
Balance of Reserve
for Loan Losses
at Beginning of
Period $194.2 $194.2 $211.3
Loans Charged-Off
Commercial and
Industrial 1.4 22.1 18.5
Real Estate
Construction -- 0.6 1.4
Commercial 3.9 15.2 4.5
Residential 2.4 6.5 7.8
Installment 4.7 20.1 25.1
Leases -- 0.5 0.2
Total Domestic 12.4 65.0 57.5
Foreign 3.7 45.8 45.8
Total Charged-Off 16.1 110.8 103.3
Recoveries on Loans
Previously
Charged-Off
Commercial and Industrial 1.7 5.5 14.0
Real Estate
Construction -- -- 0.1
Commercial 0.1 0.6 1.6
Residential 0.5 1.1 0.6
Installment 1.7 6.9 7.6
Total Domestic 4.0 14.1 23.9
Foreign 0.8 7.3 5.6
Total Recoveries 4.8 21.4 29.5
Net Charge-Offs (11.3) (89.4) (73.8)
Provision Charged
to Operating
Expenses 13.5 142.9 60.9
Other Net Additions
(Reductions)(1) (1.0) (1.5) (4.2)
Balance at End of Period $195.4 $246.2 $194.2
Ratio of Net
Charge-Offs to
Average Loans
Outstanding
(annualized) 0.48% 0.94% 0.78%
Ratio of Reserve
to Loans
Outstanding 2.05% 2.62% 2.05%
(1) Includes balance transfers, reserves acquired, and foreign
currency translation adjustments.
Pacific Century Financial Corporation and subsidiaries
Quarterly Summary of Selected Consolidated Financial Data
----------------------------------------------------------------------
(in millions of dollars except per share amounts)
Dec. 31 Sep. 30 Jun. 30 Mar. 31
2000 2000 2000 2000
----------------------------------------------------------------------
Balance Sheet Totals
Total Assets $14,013.8 $13,939.9 $14,294.6 $14,250.4
Net Loans 9,168.1 9,233.5 9,497.4 9,346.5
Deposits 9,080.6 8,820.7 9,109.1 9,143.1
Long-Term Debt 997.2 999.7 902.2 805.7
Shareholders'
Equity 1,301.4 1,250.1 1,209.4 1,225.9
Quarterly Operating
Results
Net Interest
Income $138.8 $139.3 $138.6 $139.5
Provision for
Loan Losses 25.8 20.1 83.4 13.5
Non-Interest
Income 64.7 61.3 73.6 63.9
Non-Interest
Expense 123.9 124.9 121.9 126.1
Net Income 32.6 34.6 6.7 39.8
Basic Earnings
Per Share $0.41 $0.44 $0.08 $0.50
Diluted Earnings
Per Share $0.41 $0.44 $0.08 $0.50
Return on
Average Assets 0.94% 0.98% 0.19% 1.13%
Return on
Average Equity 10.24% 11.20% 2.19% 13.19%
Efficiency Ratio 60.52% 62.26% 57.31% 62.06%
Normalized
Efficiency
Ratio (1) -- -- -- --
Excluding the
Effects of
Intangibles (2)
Net Income $36.7 $38.8 $11.0 $43.9
Basic Earnings
Per Share $0.46 $0.49 $0.14 $0.55
Diluted Earnings
Per Share $0.46 $0.49 $0.14 $0.55
Return on
Average Assets 1.07% 1.12% 0.32% 1.26%
Return on
Average Equity 13.60% 14.94% 4.30% 17.54%
Efficiency Ratio 58.19% 59.83% 54.96% 59.73%
Normalized
Efficiency
Ratio (1) -- -- -- --
(1) Excludes impact of $22.5 million restructuring charge in 1999's
Third Quarter.
(2) Intangibles include goodwill, core deposit and trust intangibles,
and other intangibles.
Pacific Century Financial Corporation and subsidiaries
Quarterly Summary of Selected Consolidated Financial Data
----------------------------------------------------------------------
(in millions of dollars except per share amounts)
Dec. 31 Sept. 30 Jun. 30 Mar. 31
1999 1999 1999 1999
----------------------------------------------------------------------
Balance Sheet Totals
Total Assets $14,440.3 $14,505.4 $14,551.5 $14,928.3
Net Loans 9,280.8 9,321.5 9,181.7 9,208.1
Deposits 9,394.2 9,290.4 9,286.2 9,434.4
Long-Term Debt 727.7 794.8 654.8 675.6
Shareholders'
Equity 1,212.3 1,208.5 1,214.2 1,207.6
Quarterly Operating
Results
Net Interest
Income $143.0 $143.5 $144.4 $143.8
Provision for
Loan Losses 20.9 13.5 13.9 12.6
Non-Interest
Income 69.4 71.4 63.6 61.2
Non-Interest
Expense 131.2 155.6 132.1 134.8
Net Income 37.6 21.5 38.5 35.4
Basic Earnings
Per Share $0.47 $0.27 $0.48 $0.44
Diluted Earnings
Per Share $0.47 $0.27 $0.47 $0.44
Return on
Average Assets 1.04% 0.59% 1.05% 0.96%
Return on
Average Equity 12.29% 7.01% 12.72% 12.00%
Efficiency Ratio 63.32% 72.44% 65.67% 66.37%
Normalized
Efficiency
Ratio (1) -- 61.98% -- --
Excluding the
Effects of
Intangibles (2)
Net Income $42.3 $25.9 $42.3 $39.3
Basic Earnings
Per Share $0.53 $0.32 $0.53 $0.49
Diluted Earnings
Per Share $0.52 $0.32 $0.52 $0.48
Return on
Average Assets 1.19% 0.72% 1.18% 1.08%
Return on
Average Equity 16.69% 10.25% 17.01% 16.21%
Efficiency Ratio 60.59% 70.04% 63.53% 64.25%
Normalized
Efficiency
Ratio (1) -- 59.57% -- --
(1) Excludes impact of $22.5 million restructuring charge in 1999's
Third Quarter.
(2) Intangibles include goodwill, core deposit and trust intangibles,
and other intangibles.
| CONTACT: | Bank of Hawaii, Honolulu |
|---|---|
| Stafford Kiguchi, 808/537-8580 (Media) | |
| skiguchi@boh.com | |
| Sharlene Bliss, 808/537-8037 (Investor/Analyst) | |
| sbliss@boh.com | |