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Pacific Century Financial Corporation Reports Third Quarter Net Income of $34.6 Million and Earnings Per Share of 44 cents

Board of Directors Declare Quarterly Dividend of 18 Cents Per Share

HONOLULU--(BUSINESS WIRE)--Oct. 18, 2000--Pacific Century Financial Corporation (NYSE:BOH) reported third quarter net income of $34.6 million, up 61.1 percent compared to $21.5 million for the third quarter of 1999, which reflected a pre-tax restructuring charge of $22.5 million related to the company's New Era Redesign program. Diluted earnings per share were $0.44, up 63.0 percent relative to $0.27 reported for the third quarter of 1999.

For the third quarter of 2000, return on average assets was 0.98 percent and on a tangible basis was 1.12 percent. Return on average equity was 11.20 percent and on a tangible basis was 14.94 percent. The efficiency ratio was 62.3 percent and 59.8 percent on a tangible basis.

For the nine-month period, Pacific Century reported earnings of $81.1 million relative to $95.4 million posted for the first nine months of 1999. Diluted earnings per share were $1.02 compared to $1.18 for the first nine months of 1999. Tangible or "cash" diluted earnings per share totaled $1.17 versus $1.32 for the same period last year.

"The third quarter's results reflect the impact of efforts to reduce exposures in syndicated lending and continuing emphasis on asset quality," said Chairman and Chief Executive Officer Lawrence M. Johnson. "We are continuing a rigorous process for reviewing and monitoring asset quality that will strengthen the company over the long-term."

On October 17, 2000, the Board of Directors of Pacific Century Financial Corporation declared a quarterly cash dividend of 18 cents per share on the company's outstanding shares. The dividend will be payable on December 14, 2000 to shareholders of record at the close of business on November 24, 2000.

Key events in the third quarter:

  • Pacific Century successfully completed the implementation of New Era Redesign, with results exceeding original estimates.

  • The company reduced its syndicated loan portfolio by $100 million during the quarter to $1.2 billion. Correspondingly, commitments on syndicated loans inclusive of outstandings dropped to $3.5 billion from $3.7 billion at the end of the second quarter. Pacific Century also reduced Asian exposure to $900 million at quarter-end compared to $1.0 billion at June 30, 2000.

  • The company has entered into an informal agreement or Memorandum of Understanding with its regulator, which requires various analyses, plans and reports regarding the operation and management of the company and requires regulatory consent to pay dividends, incur debt and expand its previously announced stock repurchase program. Consent has been obtained for the fourth quarter dividend and to continue the company's existing commercial paper program.

  • The search for a new CEO for Pacific Century began in August 2000 by the company's independent Board of Directors. Korn/Ferry International has been retained to assist with the search.

New Era Redesign Benefits

During the third quarter, Pacific Century successfully completed its yearlong implementation phase of New Era Redesign and exceeded the program's expectations for reducing costs and enhancing revenues. The New Era Redesign implementation process tracked and monitored 1,200 ideas for implementation. In September 1999, Pacific Century projected that the benefits from New Era would reach an annualized run-rate of $43 million in cost savings and $21 million in revenue enhancements by the end of the fourth quarter 2000. Run-rate benefits at September 30, 2000 from cost savings ideas totaled $43 million and matched the company's projected estimate. Run-rate revenue enhancements of $25 million exceeded the company's expectations.

"We're very pleased with the results of New Era and believe its success reflects the efforts of everyone in the company to deliver on their projected targets and ensure that implementation occurred as planned," said Lawrence M. Johnson, Pacific Century Chairman & CEO. "We gained confidence early in the implementation process that New Era Redesign was producing tangible benefits and making positive contributions."

Update on Hawaii's Economy

The outlook for Hawaii's economy continues to be positive with economists forecasting real gross state product growth between 3.0 and 3.5 percent for 2000 and 2001. The state's visitor industry grew 4.2 percent in visitor arrivals through August and is forecast to grow 4.8 percent in 2000, according to the state's Department of Business Economic Development and Tourism.

Hotel occupancy rates were 80 percent through August 2000, representing a 5 percent increase over 1999. Other indicators of Hawaii's strengthening economy in 2000 are forecasts of job growth of 1.9 percent, unemployment of 4.0 percent and construction growth of 10 percent, all better than expected at the beginning of the year.

Net Interest Income

Third quarter net interest income on a fully taxable equivalent basis totaled $139.6 million compared to $143.8 million for the same period in 1999. The decline in net interest income reflected the company's progress in making its balance sheet more efficient with comparable period average loan growth of $207 million being more than offset by a $435 million reduction in securities and interest bearing deposits.

Meanwhile, net interest margin held firm for the third quarter at 4.25 percent, down only three basis points from 4.28 percent reported for the third quarter of 1999 and versus 4.27 percent for the second quarter of 2000.

Balance Sheet

Total assets at September 30, 2000 were $13.9 billion relative to $14.5 billion at September 30, 1999 and $14.3 billion at June 30, 2000. The decline in assets reflects the company's balance sheet efficiency initiatives as well as actions taken to reduce exposure in the Asia and syndicated loan portfolios. Net loans totaled $9.2 billion compared to $9.3 billion at third quarter-end 1999 and $9.5 billion at June 30, 2000.

Total deposits at the end of the quarter were $8.8 billion relative to $9.3 billion at September 30, 1999 and $9.1 billion at June 30, 2000. Year-over-year domestic deposits grew by 1.6 percent. Foreign deposits declined by 25.7 percent primarily due to a $350 million discretionary reduction in wholesale Eurodollar deposits (short-term borrowed funds) and approximately $200 million in currency translation adjustments. On a linked quarter basis, domestic deposits ended September 30, 2000 down 1.6 percent from June 30, 2000. Also on a linked quarter basis, foreign deposits declined 9.4 percent, again largely represented by discretionary reduction in purchased funds and currency adjustments.

Asset Quality

The quarterly provision for loan losses totaled $20.1 million compared with $13.5 million for the same period in 1999 and $83.4 million for second quarter of 2000. The third quarter provision exceeded net charge-offs of $19.6 million.

Gross charge-offs for the quarter were $26.6 million relative to $36.5 million for the second quarter of 2000 and $20.5 million for the like period in 1999. Commercial & Industrial charge-offs of $8.0 million were largely related to the sale of two syndicated credits totaling $6.4 million. Commercial real estate charge-offs totaled $2.8 million and was related to one Hawaii credit. Foreign charge-offs were $9.5 million with $7.1 million related to Asia, including $4.2 million to one International Trust & Investment Corporation credit in China.

Non-performing assets, exclusive of accruing loans past due 90+ days, totaled $219.6 million, compared to $210.6 million at June 30, 2000 and $154.8 million at September 30, 1999. Non-performing assets as a percent of total loans represented 2.25 percent relative to 2.09 percent at June 30, 2000 and 1.59 percent at September 30, 1999.

Non-accrual loans for the quarter were $214.5 million compared to $205.7 million for the second quarter of 2000 and $148.9 million for the third quarter of 1999. The increase in non-accruals was reflected in commercial real estate which totaled $86.8 million and was driven primarily by a single Hawaii credit of $19.2 million. At September 30, 2000, $39.4 million of the commercial real estate non-accruals represented credits where borrowers were current with respect to payments but were placed on non-accrual status. Foreign non-accruals declined $10.9 million, primarily reflecting charge-offs.

The ratio of reserves to loans outstanding was 2.58 percent for the third quarter of 2000, relative to 2.53 percent for the second quarter of 2000 and 2.22 percent for the third quarter of 1999. The ratio of reserves to non-performing assets (exclusive of accruing loans past due 90+ days) was 112 percent, relative to 117 percent at June 30, 2000 and 137 percent at September 30, 1999.

Loan Portfolio Highlights

Syndicated Loans, defined as credits of $20 million or more with three or more institutions (using shared national credit examination criteria), declined during the third quarter.

At September 30, 2000, syndicated loans totaled $1.2 billion out of $3.5 billion in commitments versus June 30, 2000 totals of $1.3 billion in outstandings against $3.7 billion in commitments. The decline in the portfolio was driven primarily by a reduction in non-relationship loans and is consistent with the company's previously stated intention to reduce this portfolio by several hundred million dollars over time. Of the $3.5 billion in remaining commitments, approximately 58 percent represented relationship credits, while approximately 64 percent represented investment grade quality loans.

The $65 million potential problem loan mentioned in the second quarter 2000 continues to be unresolved, but remained current at September 30, 2000.

Commercial Real Estate Loans totaled $1.5 billion at the end of the third quarter, unchanged from June 30, 2000. Hawaii commercial real estate represented approximately $860 million (57 percent) of this segment.

Non-Interest Income

Non-interest income, exclusive of securities transactions and extraordinary one-time items, was $61.3 million for the third quarter, up 7 percent compared to $57.3 million for the third quarter of 1999 and $62.2 million for the second quarter of 2000. The third quarter of 1999 included a $14.0 million one-time gain from the sale of a special purpose leasing company and the second quarter of 2000 included $11.9 million in non-recurring income related to the partial settlement of the company's defined benefit pension plan. The improvement in non-interest income in 2000 primarily reflects the contributions resulting from the implementation of the company's New Era Redesign program.

Non-Interest Expense

Non-interest expense, exclusive of extraordinary one-time items, was $124.9 million, down 6 percent from $133.1 million (adjusted for restructuring charges) for the third quarter of 1999 and down 1.4 percent from $126.7 million for the second quarter of 2000. The third quarter of 1999 included a restructuring charge of $22.5 million and the second quarter of 2000 reflected reductions in incentive and profit sharing accruals of approximately $4.8 million. The improvement in non-interest expense is largely attributable to cost savings from the implementation of New Era Redesign.

Other Items

"We continue to see progress in our asset management group and residential lending in Hawaii," noted Johnson. "The benefits from growth in these segments validates initiatives introduced in the mid-1990s to become more customer-focused and sales oriented in our delivery of products and services."

The company's asset management business totaled $8.0 billion in discretionary assets compared to $7.6 billion at yearend 1999. The growing recognition of the company's asset management capability by the institutional marketplace, such as Corporate, Governmental, Taft Hartley and other accounts coupled with an increasing retail market presence has contributed to earnings. Pacific Century's combined trust and asset management business at September 30, 2000 totaled $13.2 billion in assets under administration.

The company continues to maintain its dominant presence in Hawaii residential lending. Pacific Century's market share of loan originations is approximately 21 percent. The loan servicing portfolio is approximately $5.0 billion, compared to $4.6 billion at yearend 1999.

Guidance for the remainder of 2000 and outlook for 2001

Balance Sheet Guidance

  • As the company discussed in the second quarter of 2000, business methods and risk profile changes in our Asia and syndicated loan markets have resulted in our decision to reduce exposure to each of those segments.

  • Exposure in Asia ended the third quarter at $900 million, relative to $1.0 billion at June 30, 2000 and $1.2 billion at yearend 1999. Current exposure is approximately in line with target levels.

  • Syndicated loan exposure ended the third quarter at $3.5 billion in commitments, down $200 million from $3.7 billion at June 30, 2000 and down approximately $400 million from yearend 1999. Our objective is to continue to lower our syndicated loan outstanding exposure to approximately $1.0 billion in loans outstanding over a reasonable period of time, with most of the reduction expected to be in the non-relationship segment of the portfolio.

Earnings Guidance

  • Currently, analysts' earnings estimates for Pacific Century's fourth quarter 2000 and full year 2001 are significantly higher than the results of the just ended quarter would support. In large measure differences in estimates are reflected in net interest income and loan loss provisioning.

  • The company believes the third quarter 2000 financial statements to be a better proxy for estimating future results than existing analyst earnings models. Actions taken to improve asset quality and reduce our syndicated loan exposure are partially reflected in the third quarter results. Additional reductions in exposure are contemplated, making net growth in earning assets (and net interest income) challenging over the near term.

  • Likewise, the company suggests that analysts use the third quarter results to estimate loan loss provisioning for the fourth quarter. For 2001 our objective will be to limit net charge-offs and provisioning to $50 - $60 million.

Share Repurchase

  • No shares of Pacific Century common stock were repurchased in the third quarter due to asset quality trends evidenced in the second quarter. On October 17, 2000 Pacific Century's board of directors reaffirmed existing repurchase authorizations to offset shares issued under the company's dividend reinvestment and other benefit plans and to repurchase up to 300,000 shares (or up to $6 million) per quarter. Pacific Century expects to repurchase shares under the terms of the authorization.

Pacific Century Financial Corporation is a regional financial services holding 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, the West and 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.

Forward-Looking Statements

This press release contains forward-looking information. The Company cautions readers not to place undue reliance on any forward-looking statements, which speak only as of the date made. Forward-looking statements are subject to significant risk and uncertainties, many of which are beyond the Company's control. Although the Company believes that the assumptions underlying its forward-looking statements are reasonable, any of the assumptions could prove to be inaccurate and actual results may differ from those contained in or implied by such forward-looking statements for a variety of reasons. Factors which might cause such a difference include, but are not limited to, competitor pressures in the banking and financial services industry increase significantly, particularly in connection with product delivery and pricing; business disruption related to implementation of New Era Redesign programs or methodologies; inability to achieve expected customer acceptance of revised pricing structure and strategies; general economic conditions in the geographic areas where the Company operated are weaker than expected; deterioration of credit quality may cause higher level of provisioning; continued increase to interest rates may put additional pressure on those weaker obligors in servicing their debt which in turn may cause further deterioration to the portfolio; continued weakness in the syndicated national credit market creating greater difficulty for companies to create, find or roll over credit facilities; increased volatility in Asia or the Pacific either politically or economically; economic recovery in Hawaii slows because of U. S. Mainland economic slowdown which may restrict our ability to grow our relationship portfolio as originally forecasted; the need to maintain market competitiveness may require much higher levels of capital expenditures than originally forecasted; higher oil prices reducing tourism; loss of confidence by customers/borrowers/depositors erodes funding and asset base; loss of staff confidence creating higher rates of turnover and the consequent ability to attract new staff may cause a higher than expected increase to non-interest expense. The Company does not undertake and specifically disclaims any obligation to update any forward-looking statements to reflect events or circumstance after the date of such statements.

                              Highlights
        Pacific Century Financial Corporation and subsidiaries
          (in thousands of dollars except per share amounts)


Earnings Highlights and                                     Percentage
 Performance Ratios                    2000          1999     Change

Three Months Ended September 30
 Net Income                       $   34,603    $    21,479    61.1%
 Basic Earnings Per Share               0.44           0.27    63.0%
 Diluted Earnings Per Share             0.44           0.27    63.0%
 Cash Dividends                       14,302         13,655

 Return on Average Assets               0.98%          0.59%
 Return on Average Equity              11.20%          7.01%
 Net Interest Margin                    4.25%          4.28%
 Efficiency Ratio                      62.26%         72.44%

Nine Months Ended September 30
 Net Income                       $   81,075    $    95,358   -15.0%
 Basic Earnings Per Share               1.02           1.19   -14.3%
 Diluted Earnings Per Share             1.02           1.18   -13.6%
 Cash Dividends                       42,147         40,991

 Return on Average Assets               0.77%          0.87%
 Return on Average Equity               8.85%         10.55%
 Net Interest Margin                    4.27%          4.27%
 Efficiency Ratio                      60.49%         68.25%


Summary of Results Excluding
 the Effect of Intangibles (a)

Three Months Ended September 30
 Net Income                       $   38,806    $    25,887    49.9%
 Basic Earnings per Share         $     0.49    $      0.32    53.1%
 Diluted Earnings per Share       $     0.49    $      0.32    53.1%
 Return on Average Assets              1.12%          0.72%
 Return on Average Equity             14.94%         10.25%
 Efficiency Ratio                     59.83%         70.04%

Nine Months Ended September 30
 Net Income                       $   93,690    $   107,430   -12.8%
 Basic Earnings per Share         $     1.18    $      1.34   -11.9%
 Diluted Earnings per Share       $     1.17    $      1.32   -11.4%
 Return on Average Assets              0.90%          0.99%
 Return on Average Equity             12.23%         14.45%
 Efficiency Ratio                     58.12%         66.03%

(a) Intangibles include goodwill, core deposit and trust intangibles,
    and other intangibles.

       Statement of Condition Highlights and Performance Ratios

                                  September 30 September 30 Percentage
                                          2000         1999     Change

Total Assets                      $ 13,939,861   $ 14,505,361   -3.9%
Net Loans                            9,233,476      9,321,477   -0.9%
Total Deposits                       8,820,668      9,290,389   -5.1%
Total Shareholders' Equity           1,250,069      1,208,499    3.4%

Book Value Per Common Share       $      15.72   $      15.05
Loss Reserve / Loans Outstanding         2.58%          2.22%
Average Equity / Average Assets          8.65%          8.25%

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

Corporate Offices:                Inquiries:
Financial Plaza of the Pacific    David A. Houle
130 Merchant Street               Executive Vice President, Treasurer
Honolulu, Hawaii  96813           and Chief Financial Officer
(808) 537-8288

            Consolidated Statements of Income (Unaudited)
        Pacific Century Financial Corporation and subsidiaries
          (in thousands of dollars except per share amounts)

                       3 Months    3 Months     9 Months    9 Months
                          Ended       Ended        Ended       Ended
                        Sept 30     Sept 30      Sept 30     Sept 30
                           2000        1999         2000        1999
Interest Income

 Interest on Loans     $192,749     $173,414     $558,735     $521,050
 Loan Fees                7,679        8,792       24,902       30,090
 Income on Lease
  Financing               9,935        7,035       27,661       21,751
 Interest and
  Dividends on
  Investment
  Securities
   Taxable               12,943       14,657       40,500       43,248
   Non-taxable              241          268          763          820
 Income on Investment
  Securities
  Available for Sale     41,772       42,808      123,966      126,508
 Interest on Deposits     3,319        5,700       10,917       20,391
 Interest on Security
  Resale Agreements          55           70           71          238
 Interest on Funds
  Sold                      577          223        1,535        4,374

  Total Interest
   Income               269,270      252,967      789,050      768,470
Interest Expense
 Interest on Deposits    73,162       63,916      212,440      193,703
 Interest on Security
  Repurchase
  Agreements             26,941       21,812       75,915       70,621
 Interest on Funds
  Purchased               8,960        9,975       25,321       31,486
 Interest on Short-
  Term Borrowings         4,739        2,213       15,785        8,783
 Interest on Long-
  Term Debt              16,164       11,598       42,171       32,180

  Total Interest
   Expense              129,966      109,514      371,632      336,773


Net Interest Income     139,304      143,453      417,418      431,697
Provision for Loan
 Losses                  20,145       13,500      117,074       40,038

Net Interest Income
 After Provision for
 Loan Losses            119,159      129,953      300,344      391,659
Non-Interest Income
 Trust Income            15,874       14,670       49,078       44,653
 Service Charges on
  Deposit Accounts       10,074        8,638       29,811       25,708
 Fees, Exchange, and
  Other Service
  Charges                22,714       21,956       66,926       66,572
 Other Operating
  Income                 12,676       26,061       41,348       50,510
 Gain on Settlement
  of Pension
  Obligation               --           --         11,900         --
 Investment
  Securities Gains
  (Losses)                  (82)          77         (315)       8,742

  Total Non-Interest
   Income                61,256       71,402      198,748      196,185
Non-Interest Expense
 Salaries                45,220       50,768      137,227      152,093
 Pensions and Other
  Employee Benefits      12,303       13,437       37,721       43,387
 Net Occupancy
  Expense                12,577       11,560       36,873       35,638
 Net Equipment
  Expense                13,365       12,380       37,498       36,192
 Other Operating
  Expense                41,350       44,889      123,301      132,389
 Restructuring Charge      --         22,478         --         22,478
 Minority Interest          110           81          286          384

  Total Non-Interest
   Expense              124,925      155,593      372,906      422,561

Income Before Income
 Taxes                   55,490       45,762      126,186      165,283
Provision for Income
 Taxes                   20,887       24,283       45,111       69,925


Net Income              $34,603      $21,479      $81,075      $95,358

Basic Earnings Per
 Share                    $0.44        $0.27        $1.02        $1.19
Diluted Earnings Per
 Share                    $0.44        $0.27        $1.02        $1.18
Dividends Declared
 Per Share                $0.18        $0.17        $0.53        $0.51
Basic Weighted
 Average Shares      79,455,040   80,274,350   79,566,807   80,332,150
Diluted Weighted
 Average Shares      79,525,474   80,860,870   79,791,250   81,116,106


           Consolidated Statements of Condition (Unaudited)
        Pacific Century Financial Corporation and subsidiaries

                            September 30   December 31   September 30
(in thousands of dollars)           2000         1999            1999

Assets

Interest-Bearing
 Deposits                $    185,312    $    278,473    $    410,497
Investment Securities
 - Held to Maturity
 (Market Value of
 $714,920, $787,720
 and $815,416,
 respectively)                716,392         796,322         816,728
Investment Securities
 - Available for Sale       2,484,482       2,542,232       2,625,545
Securities Purchased
 Under Agreements to
 Resell                         5,560              --           4,103
Funds Sold                     28,323          52,740          40,726
Loans                       9,750,661       9,717,556       9,746,581
 Unearned Income             (272,219)       (242,503)       (213,798)
 Reserve for Loan
  Losses                     (244,966)       (194,205)       (211,306)

  Net Loans                 9,233,476       9,280,848       9,321,477

  Total Earning
   Assets                  12,653,545      12,950,615      13,219,076
Cash and Non-Interest
 Bearing Deposits             438,312         639,895         417,142
Premises and
 Equipment                    251,240         271,728         281,512
Customers' Acceptance
 Liability                     10,956           7,236          10,797
Accrued Interest
 Receivable                    86,109          78,974          77,915
Other Real Estate               5,128           4,576           5,874
Intangibles,
 including Goodwill           194,418         205,904         211,609
Other Assets                  300,153         281,387         281,436

 Total Assets            $ 13,939,861    $ 14,440,315    $ 14,505,361

Liabilities
Domestic Deposits
 Demand
  - Non-Interest
    Bearing              $  1,626,426    $  1,676,425    $  1,683,210
  - Interest Bearing        2,039,325       2,076,358       2,059,662
 Savings                      671,437         700,720         712,968
 Time                       2,801,947       2,761,650       2,570,112
Foreign Deposits
 Demand
  - Non-Interest
    Bearing                   343,828         401,613         437,110
 Time Due to Banks            571,576         597,675         679,344
 Other Savings and
  Time                        766,129       1,179,777       1,147,983

  Total Deposits            8,820,668       9,394,218       9,290,389

Securities Sold Under
 Agreements to
 Repurchase                 1,791,983       1,490,655       1,916,747
Funds Purchased               377,069         839,962         628,212
Short-Term Borrowings         365,407         458,962         335,416
Bank's Acceptances
 Outstanding                   10,956           7,236          10,797
Accrued Retirement
 Expense                       37,796          40,360          41,494
Accrued Interest
 Payable                       80,792          64,588          60,138
Accrued Taxes Payable          97,597          85,022          90,380
Minority Interest               4,154           4,435           4,587
Other Liabilities             103,634         114,890         123,888
Long-Term Debt                999,736         727,657         794,814

 Total Liabilities         12,689,792      13,227,985      13,296,862


Shareholders' Equity

Common Stock
 ($.01 par value),
 authorized
 500,000,000 shares;
 issued/outstanding;
 September 2000 -
 80,556,883/
 79,503,301; December
 1999 - 80,550,728/
 80,036,417;
 September 1999 -
 80,550,124/80,308,130            806             806             806
Capital Surplus               346,016         345,851         345,477
Accumulated Other
 Comprehensive Income         (56,620)        (66,106)        (52,525)
Retained Earnings             979,007         942,177         919,664
Treasury Stock, at
 Cost - (September
 2000 - 1,053,582;
 December 1999 -
 514,311 and
 September 1999 -
 241,994 shares)              (19,140)        (10,398)         (4,923)

  Total Shareholders'
   Equity                   1,250,069       1,212,330       1,208,499

  Total Liabilities
   and Shareholders'
   Equity                $ 13,939,861    $ 14,440,315    $ 14,505,361


        Pacific Century Financial Corporation and subsidiaries
     Consolidated Statements of Shareholders' Equity (Unaudited)

                                                           Accumulated
                                                                 Other
                                         Common  Capital Comprehensive 
(in thousands of dollars)        Total    Stock  Surplus        Income    

Balance at
 December 31, 1999          $1,212,330    $806   $345,851   ($66,106)
Comprehensive Income

 Net Income                     81,075      --         --         -- 
 Other Comprehensive
  Income, Net of Tax
  Investment Securities,
   Net of
   Reclassification
   Adjustment                    9,960      --         --      9,960 
  Foreign Currency
   Translation Adjustment         (474)     --         --       (474)

 Total Comprehensive
  Income                                                              

Common Stock Issued

 62,102 Profit Sharing
  Plan                            1,096      --         18         -- 
 195,094 Stock Option
  Plan                            2,610      --         --         -- 
 142,421 Dividend
  Reinvestment Plan               2,481      --         52         -- 
 4,973 Directors'
  Restricted Shares and
  Deferred Compensation
  Plan                               95      --         95         -- 
Treasury Stock Purchased        (16,957)     --         --         -- 
Cash Dividends Paid             (42,147)     --         --         -- 

Balance at
 September 30, 2000          $1,250,069    $806   $346,016   ($56,620)

Balance at
 December 31, 1998           $1,185,594    $805   $342,932   ($22,476)
Comprehensive Income

 Net Income                      95,358      --         --         -- 
 Other Comprehensive
  Income, Net of Tax
  Investment Securities,
   Net of
   Reclassification
   Adjustment                   (28,231)     --         --    (28,231)
  Foreign Currency
   Translation Adjustment        (1,818)     --         --     (1,818)

 Total Comprehensive
  Income                                                              


Common Stock Issued

 37,419 Profit Sharing
  Plan                              736      --          3         -- 
 318,672 Stock Option
  Plan                            5,843      --      2,265         -- 
 154,515 Dividend
  Reinvestment Plan               3,204       1        137         -- 
 6,595 Directors'
  Restricted Shares and
  Deferred Compensation
  Plan                              140      --        140         -- 
Treasury Stock Purchased        (11,336)     --         --         -- 
Cash Dividends Paid             (40,991)     --         --         -- 

Balance at
 September 30, 1999          $1,208,499    $806   $345,477   ($52,525)



                              Retained     Treasury    Comprehensive
(in thousands of dollars)     Earnings        Stock           Income

Balance at
 December 31, 1999             $942,177    ($10,398)
Comprehensive Income

 Net Income                      81,075      --               $81,075
 Other Comprehensive
  Income, Net of Tax
  Investment Securities,
   Net of
   Reclassification
   Adjustment                       --       --                 9,960
  Foreign Currency
   Translation Adjustment           --       --                  (474)
                                                              --------
 Total Comprehensive
  Income                                                      $90,561
                                                              ========

Common Stock Issued

 62,102 Profit Sharing
  Plan                             (167)      1,245
 195,094 Stock Option
  Plan                           (1,500)      4,110
 142,421 Dividend
  Reinvestment Plan                (431)      2,860
 4,973 Directors'
  Restricted Shares and
  Deferred Compensation
  Plan                               --          --
Treasury Stock Purchased             --     (16,957)
Cash Dividends Paid             (42,147)         --

Balance at
 September 30, 2000            $979,007    ($19,140)

Balance at
 December 31, 1998             $867,852     ($3,519)
Comprehensive Income

 Net Income                      95,358        --             $95,358
 Other Comprehensive
  Income, Net of Tax
  Investment Securities,
   Net of
   Reclassification
   Adjustment                      --          --             (28,231)
  Foreign Currency
   Translation Adjustment          --          --              (1,818)
                                                              --------
 Total Comprehensive
  Income                                                      $65,309
                                                              ========

Common Stock Issued

 37,419 Profit Sharing
  Plan                             (70)        803
 318,672 Stock Option
  Plan                          (2,288)      5,866
 154,515 Dividend
  Reinvestment Plan               (197)      3,263
 6,595 Directors'
  Restricted Shares and
  Deferred Compensation
  Plan                              --          --
Treasury Stock Purchased            --     (11,336)
Cash Dividends Paid            (40,991)         --

Balance at
 September 30, 1999           $919,664     ($4,923)


 Consolidated Average Balances and Interest Rates Taxable Equivalent
                              (Unaudited)
        Pacific Century Financial Corporation and subsidiaries

                        Three Months Ended        Three Months Ended  
                        September 30, 2000        September 30, 1999  

(in millions         Average Income/ Yield/   Average  Income/  Yield/
of dollars)          Balance Expense  Rate    Balance  Expense   Rate 

Earning Assets

 Interest Bearing
  Deposits            $197.3   $3.3   6.69%    $348.5   $5.7   6.49%  
 Investment
  Securities Held
  to Maturity
  -Taxable             711.7   12.9   7.23      804.8   14.7   7.23   
  -Tax-Exempt            8.3    0.4  17.70       11.7    0.4  14.04   
 Investment
  Securities
  Available for
  Sale               2,490.2   41.8   6.67    2,677.5   42.8   6.31   
 Funds Sold             38.8    0.6   6.48       38.9    0.5   5.57   
 Net Loans
  -Domestic          8,193.4  177.6   8.62    7,692.0  154.6   7.98   
  -Foreign           1,435.2   25.2   7.00    1,729.7   25.8   5.92   
 Loan Fees                      7.7                      8.8 

  Total Earning
   Assets           13,074.9  269.5   8.20   13,303.1  253.3   7.55   
Cash and Due From
 Banks                 418.2                    425.2                 
Other Assets           523.6                    655.2                 

  Total Assets     $14,016.7                $14,383.5                 


Interest Bearing
 Liabilities

 Domestic Deposits
  - Demand          $2,043.7   11.9   2.31   $2,128.8   12.3   2.30   
  - Savings            680.4    3.5   2.03      720.5    3.7   2.03   
  - Time             2,799.4   40.3   5.73    2,492.7   29.4   4.68   

  Total Domestic     5,523.5   55.7   4.01    5,342.0   45.4   3.37   

 Foreign Deposits
  - Time Due to
    Banks              552.6    8.5   6.13      606.7    8.1   5.27   
  - Other Time and
    Savings            821.4    9.0   4.36    1,175.7   10.4   3.52   

  Total Foreign      1,374.0   17.5   5.07    1,782.4   18.5   4.11   

  Total Interest
   Bearing
   Deposits          6,897.5   73.2   4.22    7,124.4   63.9   3.56   
Short-Term
 Borrowings          2,599.4   40.6   6.22    2,837.3   34.0   4.75   
Long-Term Debt         963.4   16.1   6.67      732.3   11.6   6.28   

  Total Interest
   Bearing
   Liabilities      10,460.3  129.9   4.94   10,694.0  109.5   4.06   

Net Interest
 Income                       139.6                    143.8          
Interest Rate
 Spread                               3.26%                    3.49%  
Net Interest
 Margin                               4.25%                    4.28%  
Demand Deposits
 - Domestic          1,619.8                  1,633.7                 
 - Foreign             345.6                    438.6                 

Total Demand
 Deposits            1,965.4                  2,072.3                 
Other Liabilities      361.6                    401.2                 
Shareholders'
 Equity              1,229.4                  1,216.0                 

  Total
   Liabilities and
   Shareholders'
   Equity          $14,016.7                $14,383.5                 

Provision for Loan
 Losses                        20.1                     13.5          
Net Overhead                   63.7                     84.2          

Income Before
 Income Taxes                  55.8                     46.1          
Provision for
 Income Taxes                  20.9                     24.3          
Tax-Equivalent
 Adjustment                     0.3                      0.1          

Net Income                    $34.6                    $21.7          


                       Nine Months Ended       Nine Months Ended
                       September 30, 2000      September 30, 1999

(in millions          Average Income/ Yield/   Average Income/ Yield/
of dollars)           Balance Expense Rate     Balance Expense Rate

Earning Assets

 Interest Bearing
  Deposits            $216.4  $10.9   6.74%    $424.2  $20.4   6.43%
 Investment
  Securities Held
  to Maturity
  -Taxable             736.8   40.5   7.34      808.9   43.2   7.15
  -Tax-Exempt            8.9    1.2  17.67       11.7    1.3  14.44
 Investment
  Securities
  Available for
  Sale               2,510.6  124.0   6.60    2,735.4  126.5   6.18
 Funds Sold             35.3    1.6   6.07      125.2    4.9   5.20
 Net Loans
  -Domestic          8,065.7  511.5   8.47    7,721.9  461.6   7.99
  -Foreign           1,517.6   75.2   6.62    1,706.8   81.2   6.36
 Loan Fees                     24.9                     30.1

  Total Earning
   Assets           13,091.3  789.8   8.06   13,534.1  769.2   7.60
Cash and Due From
 Banks                 456.1                    475.6
Other Assets           597.7                    648.5

  Total Assets     $14,145.1                $14,658.2


Interest Bearing
 Liabilities

 Domestic Deposits
  - Demand          $2,085.6   36.4   2.33   $2,146.0   36.4   2.27
  - Savings            690.6   10.5   2.03      728.0   11.0   2.03
  - Time             2,769.5  111.8   5.39    2,534.0   90.9   4.80

  Total Domestic     5,545.7  158.7   3.82    5,408.0  138.3   3.42
 Foreign Deposits
  - Time Due to
    Banks              487.7   21.7   5.95      646.7   25.0   5.17
  - Other Time and
    Savings          1,024.9   32.0   4.18    1,163.7   30.4   3.49

  Total Foreign      1,512.6   53.7   4.75    1,810.4   55.4   4.09

  Total Interest
   Bearing
   Deposits          7,058.3  212.4   4.02    7,218.4  193.7   3.59
Short-Term
 Borrowings          2,651.2  117.0   5.90    3,118.3  110.9   4.75
Long-Term Debt         848.3   42.2   6.64      665.2   32.2   6.47

  Total Interest
   Bearing
   Liabilities      10,557.8  371.6   4.70   11,001.9  336.8   4.09

Net Interest
 Income                       418.2                    432.4
Interest Rate
 Spread                               3.36%                    3.51%
Net Interest
 Margin                               4.27%                    4.27%
Demand Deposits
 - Domestic          1,649.9                  1,649.2
 - Foreign             376.9                    427.6

Total Demand
 Deposits            2,026.8                  2,076.8
Other Liabilities      336.6                    370.8
Shareholders'
 Equity              1,223.9                  1,208.7

  Total
   Liabilities and
   Shareholders'
   Equity          $14,145.1                $14,658.2

Provision for Loan
 Losses                       117.1                     40.0
Net Overhead                  174.2                    226.4

Income Before
 Income Taxes                 126.9                    166.0
Provision for
 Income Taxes                  45.1                     69.9
Tax-Equivalent
 Adjustment                     0.7                      0.7

Net Income                    $81.1                    $95.4

        Pacific Century Financial Corporation and subsidiaries
Consolidated Non-Performing Assets and Accruing Loans Past Due 90 Days
                         or More (Unaudited)

(in millions     Sep 30     Jun 30     Mar 31     Dec 31     Sep 30   
 of dollars)      2000       2000       2000       1999       1999    

Non-Accrual
 Loans

 Commercial and
  Industrial      $49.0      $52.7      $20.1      $23.7      $31.7   
 Real Estate
  Construction      8.1        8.0        0.9        1.1        2.1   
  Commercial       86.8       62.2       18.2       19.0       20.8   
  Residential      22.0       23.2       23.2       29.7       33.1   
 Installment        0.1        0.1        0.5        0.5        0.7   
 Leases             0.2        0.3        3.7        3.9        4.8   

  Total Domestic  166.2      146.5       66.6       77.9       93.2   
 Foreign           48.3       59.2       65.2       67.4       55.7   

  Subtotal        214.5      205.7      131.8      145.3      148.9   

Foreclosed Real
 Estate
 Domestic           4.9        4.6        4.3        4.3        5.6   
 Foreign            0.2        0.3        0.3        0.3        0.3   
   Subtotal         5.1        4.9        4.6        4.6        5.9   

  Total Non-
   Performing
   Assets         219.6      210.6      136.4      149.9      154.8   

Accruing Loans
 Past Due 90
 Days or More

 Commercial and
  Industrial        2.2        4.7        6.7        5.9        6.2   
 Real Estate
  Construction      0.1       --         --         --          0.5   
  Commercial        4.9        2.0        2.1        1.9        2.4   
  Residential       7.2        3.5        5.0        4.0        2.8   
 Installment        4.6        4.0        4.7        4.5        4.5   
 Leases             0.1        1.5        1.4        1.2        0.2   

  Total Domestic   19.1       15.7       19.9       17.5       16.6   
 Foreign            1.5        1.3        3.2        1.0        5.0   
   Subtotal        20.6       17.0       23.1       18.5       21.6   

  Total          $240.2     $227.6     $159.5     $168.4     $176.4   

Ratio of Non-
 Performing
 Assets to Total
 Loans             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       2.46%      2.26%      1.63%      1.73%      1.81% 


(in millions     Jun 30     Mar 31     Dec 31      Sep 30
 of dollars)      1999       1999       1998        1998

Non-Accrual
 Loans

 Commercial and
  Industrial      $37.5      $39.1      $28.2      $24.0
 Real Estate
  Construction      0.8        3.1        2.9        4.4
  Commercial       17.2       18.7        5.4        6.7
  Residential      35.2       37.6       36.4       35.9
 Installment        0.8        0.5        0.8        0.9
 Leases             4.4        4.5        0.7        0.8

  Total Domestic   95.9      103.5       74.4       72.7
 Foreign           47.5       53.6       57.5       67.9

  Subtotal        143.4      157.1      131.9      140.6

Foreclosed Real
 Estate
 Domestic           5.8        6.1        5.5       10.8
 Foreign            0.2        0.1        0.1        0.1

   Subtotal         6.0        6.2        5.6       10.9

  Total Non-
   Performing
   Assets         149.4      163.3      137.5      151.5

Accruing Loans
 Past Due 90
 Days or More

 Commercial and
  Industrial        3.9        4.3        0.4        7.3
 Real Estate
  Construction      0.2        0.2        0.4        0.6
  Commercial        0.2        0.4       --          0.8
  Residential       3.7        3.5        4.5        4.8
 Installment        5.2        6.9        7.3        6.6
 Leases            --          0.1        0.3        0.1

  Total Domestic   13.2       15.4       12.9       20.2
 Foreign            8.2        6.3        7.9        7.1

   Subtotal        21.4       21.7       20.8       27.3

  Total          $170.8     $185.0     $158.3     $178.8


Ratio of Non-
 Performing
 Assets to Total
 Loans             1.55%      1.69%      1.40%      1.59%

Ratio of Non-
 Performing
 Assets and
 Accruing Loans
 Past Due 90
 Days or More to
 Total Loans       1.78%      1.92%      1.61%      1.87%


        Pacific Century Financial Corporation and subsidiaries
                   Summary of Loan Loss Experience

                     Third     Second      First First Nine First Nine
(in millions       Quarter    Quarter    Quarter     Months     Months
of dollars)           2000       2000       2000       2000       1999

Average Amount 
 of Loans 
 Outstanding     $ 9,628.6  $ 9,636.9  $ 9,484.1  $ 9,583.3  $ 9,428.7

Balance of 
 Reserve for 
 Loan Losses
 at Beginning 
 of Period       $   246.6  $   195.4  $   194.2  $   194.2  $   211.3
Loans 
 Charged-Off
 Commercial 
  and 
  Industrial           8.0        8.3        1.4       17.7       15.7
 Real Estate
  Construction          --        0.5         --        0.5        0.2
  Commercial           2.8        7.6        3.9       14.3        2.3
  Residential          1.5        1.3        2.4        5.2        5.6
 Installment           4.6        5.2        4.7       14.5       19.1
 Leases                0.2        0.2         --        0.4        0.2

  Total Domestic      17.1       23.1       12.4       52.6       43.1
 Foreign               9.5       13.4        3.7       26.6       17.6

Total
 Charged-Off          26.6       36.5       16.1       79.2       60.7
Recoveries on
 Loans
 Previously
 Charged-Off
 Commercial and
  Industrial           2.2        1.2        1.7        5.1       12.9
 Real Estate
  Construction          --         --         --         --         --
  Commercial           0.1        0.1        0.1        0.3        1.0
  Residential          0.3        0.2        0.5        1.0        0.2
 Installment           1.7        1.9        1.7        5.3        5.6

   Total Domestic      4.3        3.4        4.0       11.7       19.7
 Foreign               2.7        0.2        0.8        3.7        4.0

Total Recoveries       7.0        3.6        4.8       15.4       23.7

Net Charge-Offs      (19.6)     (32.9)     (11.3)     (63.8)    (37.0)
Provision Charged
 to Operating
 Expenses             20.2       83.4       13.5      117.1       40.1
Other Net
 Additions
 (Reductions)(a)      (2.2)       0.7       (1.0)      (2.5)     (3.1)

Balance at End of
 Period          $   245.0  $   246.6  $   195.4  $   245.0  $   211.3

Ratio of Net
 Charge-Offs to
  Average Loans
  Outstanding
  (annualized)        0.81%      1.37%      0.48%      0.89%     0.52%


Ratio of Reserve
 to Loans
 Outstanding          2.58%      2.53%      2.05%      2.58%     2.22%


    (a) 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         Sep. 30     Jun. 30     Mar. 31
 except per share amounts)        2000        2000        2000


Balance Sheet Totals

Total Assets                 $ 13,939.9   $ 14,294.6  $ 14,250.4
Net Loans                       9,233.5      9,497.4     9,346.5
Deposits                        8,820.7      9,109.1     9,143.1
Long-Term Debt                    999.7        902.2       805.7
Shareholders' Equity            1,250.1      1,209.4     1,225.9


Quarterly Operating
 Results

Net Interest Income          $    139.3   $    138.6  $    139.5
Provision for Loan
 Losses                            20.1         83.4        13.5
Non-Interest Income                61.3         73.6        63.9
Non-Interest Expense              124.9        121.9       126.1
Net Income                         34.6          6.7        39.8

Basic Earnings Per
 Share                       $     0.44   $     0.08  $     0.50
Diluted Earnings Per
 Share                       $     0.44   $     0.08  $     0.50

Return on Average
 Assets                           0.98%        0.19%       1.13%
Return on Average
 Equity                          11.20%        2.19%      13.19%
Efficiency Ratio                 62.26%       57.31%      62.06%
Normalized Efficiency
 Ratio (1)                           --           --          --

Excluding the Effects of
 Intangibles (2)
    Net Income               $     38.8   $     11.0  $     43.9
    Basic Earnings
     Per Share               $     0.49   $     0.14  $     0.55
    Diluted Earnings
     Per Share               $     0.49   $     0.14  $     0.55
    Return on Average
     Assets                       1.12%        0.32%       1.26%
    Return on Average
     Equity                      14.94%        4.30%      17.54%
    Efficiency Ratio             59.83%       54.96%      59.73%
    Normalized Efficiency
     Ratio (1)                       --           --          --


(in millions of dollars     Dec. 31   Sept. 30     Jun. 30     Mar. 31
 except per share amounts)     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: Pacific Century Financial Corporation
Stafford Kiguchi, 808/537-8580 (Media Inquiries)
Pager: 808/363-5383
skiguchi@boh.com
Sharlene Bliss, 808/537-8037 (Investor/Analyst Inquiries)
sbliss@boh.com