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PART ONE OF FIVE: Pacific Century Financial Corporation Reports Second Quarter Earnings of $0.08 Per Share

HONOLULU--(BUSINESS WIRE)--July 20, 2000--Pacific Century Financial Corporation (NYSE:BOH) reported second quarter earnings of $6.7 million and diluted earnings of $0.08 per share. Comparatively, earnings for the second quarter of 1999 were $38.5 million and $0.47 per share, and $39.8 million and $0.50 per share for the first quarter of 2000.

The decline in net income reflects the impact of the previously announced increased provisioning to the reserve for loan losses. The second quarter's provisioning of $83.4 million exceeded net charge-offs of $32.9 million. Pacific Century increased provisioning in response to weakness in its syndicated loan and Hawaii commercial real estate loan portfolios. The extra provisioning also considers recent political and economic turmoil in Fiji.

"We took prudent and appropriate action to address weaknesses and issues related to asset quality," said Lawrence M. Johnson, Chairman and CEO. "We have bolstered our reserve for loan losses by approximately $50 million to complement our capital base."

Earnings for the first six months of 2000 were $46.5 million compared to $73.9 million for the first half of 1999. Diluted earnings per share totaled $0.58 relative to $0.91 for the six-month period in 1999. Tangible or economic earnings for the first half of 2000 were $54.9 million and tangible diluted earnings per share were $0.69. Year-to-date return on average assets was 0.66 percent and on a tangible basis was 0.79 percent. Year-to-date return on average equity was 7.65 percent and on a tangible basis was 10.84 percent. For the first six months of 2000, the efficiency ratio was 59.6 percent and 57.3 percent on a tangible basis.

At June 30, 2000, net loans totaled $9.5 billion compared to $9.2 billion at second quarter-end 1999 and $9.3 billion at March 31, 2000. Total deposits at the end of the second quarter were $9.1 billion relative to $9.3 billion at June 30, 1999 and relatively unchanged from March 31, 2000. Total assets at June 30, 2000 were $14.3 billion relative to the $14.6 billion at June 30, 1999 and unchanged from March 31, 2000.

Non-performing assets, exclusive of loans past due 90+ days, totaled $199.4 million, compared to $136.4 million at March 31, 2000 and $149.4 million at June 30, 1999. The increase from the end of the first quarter 2000 includes the previously announced expected additions, primarily from syndicated loans and Hawaii commercial real estate loans. At the end of the second quarter, non-performing assets as a percent of total loans represented 1.98 percent compared to 1.39 percent at March 31, 2000 and 1.55 percent at June 30, 1999.

The ratio of reserve to loans outstanding was 2.53 percent for the second quarter of 2000, 2.05 percent for the first quarter of 2000 and 2.23 percent for the second quarter of 1999. The ratio of reserve to non-performing assets (exclusive of loans past due 90+ days) was 124 percent, relative to 143 percent at March 31, 2000 and 140 percent at June 30, 1999.

Johnson noted that during the quarter, Bank of Hawaii engaged in a comprehensive review of the commercial loan portfolio, which involved reviewing loans of $250,000 or more. "We felt the task was warranted given industry concerns about asset quality and a perceived tightening in credit standards for the industry as a whole," said Johnson.

Both non-interest income and non-interest expense in the second quarter demonstrated the positive benefit of New Era Redesign, which completed its third quarter of implementation. Non-interest income in the second quarter also included $11.9 million in non-recurring income related to the partial settlement of the company's defined benefit pension plan.

Johnson noted that the implementation of New Era ideas was on track and contributing to the company's overall efforts to improve efficiency. "We're extremely pleased that our results show tangible improvements in line with our stated performance objectives for New Era. Since the implementation process began in October 1999, everyone in the organization has played a role in our success and bringing about positive changes."

Hawaii's economy continues to strengthen with economists' 2000 forecast for real gross state product growth between 3.0 and 3.5 percent. The visitor industry showed 4.0 percent growth in visitor arrivals for the first five months of 2000. The state's Department of Business Economic Development & Tourism expects visitor arrivals to grow by 3.8 percent in 2000 and 3.5 percent in 2001. Employment and jobs grew in the first quarter and the state's unemployment rate fell to 4.6 percent, approaching the U.S. unemployment rate of 4.1 percent recorded in the first quarter.

Further highlights on Pacific Century's performance are included in the attached "Comments on Second Quarter 2000 Results."

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.

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

Earnings Highlights and Performance Ratios
                                                         Percentage
                                    2000        1999       Change

Three Months Ended June 30
 Net Income                       $6,707     $38,462       -82.6%
 Basic Earnings Per Share           0.08        0.48       -83.3%
 Diluted Earnings Per Share         0.08        0.47       -83.0%
 Cash Dividends                   14,305      13,645

 Return on Average Assets          0.19%       1.05%
 Return on Average Equity          2.19%      12.72%
 Net Interest Margin               4.27%       4.28%
 Efficiency Ratio                 57.31%      65.67%

Six Months Ended June 30
 Net Income                      $46,472     $73,879       -37.1%
 Basic Earnings Per Share           0.58        0.92       -37.0%
 Diluted Earnings Per Share         0.58        0.91       -36.3%
 Cash Dividends                   27,845      27,336

 Return on Average Assets          0.66%       1.01%
 Return on Average Equity          7.65%      12.36%
 Net Interest Margin               4.28%       4.26%
 Efficiency Ratio                 59.63%      66.02%


Summary of Results Excluding the Effect of Intangibles (a)

Three Months Ended June 30
   Net Income                    $10,995     $42,291       -74.0%
   Basic Earnings per Share        $0.14       $0.53       -73.6%
   Diluted Earnings per Share      $0.14       $0.52       -73.1%
   Return on Average Assets         0.32%       1.18%
   Return on Average Equity         4.30%      17.01%
   Efficiency Ratio                54.96%      63.53%

Six Months Ended June 30
   Net Income                    $54,884     $81,543       -32.7%
   Basic Earnings per Share        $0.69       $1.01       -31.7%
   Diluted Earnings per Share      $0.69       $1.00       -31.0%
   Return on Average Assets         0.79%       1.13%
   Return on Average Equity        10.84%      16.62%
   Efficiency Ratio                57.29%      63.89%

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

Statement of Condition Highlights and Performance Ratios

                                      June 30     June 30   Percentage
                                       2000        1999       Change

Total Assets                       $14,294,625 $14,551,458    -1.8%
Net Loans                            9,497,438   9,181,690     3.4%
Total Deposits                       9,109,146   9,286,155    -1.9%
Total Shareholders' Equity           1,209,399   1,214,214    -0.4%

Book Value Per Common Share             $15.23      $15.12
Loss Reserve / Loans Outstanding         2.53%       2.23%
Average Equity / Average Assets          8.59%       8.14%

Common Stock Price Range                  High         Low
     1999                               $24.94      $17.38
     2000 First Quarter                 $20.38      $14.35
          Second Quarter                $23.19      $14.63


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

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

                             3 Months   3 Months   6 Months   6 Months
                                Ended      Ended      Ended      Ended
                              June 30    June 30    June 30    June 30
                                 2000       1999       2000       1999
(in thousands of dollars
 except per share amounts)

Interest Income

 Interest on Loans           $185,584   $171,636   $365,986   $347,636
 Loan Fees                      8,977     11,717     17,223     21,298
 Income on Lease Financing      9,747      6,448     17,726     14,716
 Interest and Dividends on
  Investment Securities
   Taxable                     13,321     14,912     27,557     28,591
   Non-taxable                    243        276        522        552
 Income on Investment
  Securities Available for
  Sale                         41,161     41,918     82,194     83,700
 Interest on Deposits           3,551      6,465      7,315     14,691
 Interest on Security
  Resale Agreements                 6         67         16        168
 Interest on Funds Sold           485      1,598        958      4,151


   Total Interest Income      263,075    255,037    519,497    515,503
Interest Expense

 Interest on Deposits          70,781     63,460    138,995    129,787
 Interest on Security
  Repurchase Agreements        26,021     24,393     48,974     48,809
 Interest on Funds
  Purchased                     7,834      8,743     16,361     21,511
 Interest on Short-Term
  Borrowings                    6,514      3,321     11,046      6,570
 Interest on Long-Term
  Debt                         13,319     10,720     26,007     20,582


    Total Interest Expense    124,469    110,637    241,383    227,259


Net Interest Income           138,606    144,400    278,114    288,244

Provision for Loan Losses      83,407     13,948     96,929     26,538

Net Interest Income After
 Provision for Loan Losses     55,199    130,452    181,185    261,706
Non-Interest Income

 Trust Income                  16,317     14,408     33,204     29,983
 Service Charges on
  Deposit Accounts             10,180      7,675     19,737     17,070
 Fees, Exchange, and Other
  Service Charges              22,586     22,618     44,212     44,616
 Other Operating Income        13,097     12,094     28,672     24,449
 Gain on Settlement of
  Pension Obligation           11,900         --     11,900         --
 Investment Securities
  Gains (Losses)                 (515)     6,818       (233)     8,665

Total Non-Interest Income      73,565     63,613    137,492    124,783
Non-Interest Expense

 Salaries                      44,460     50,483     92,007    101,325
 Pensions and Other
  Employee Benefits            10,788     14,907     25,418     29,950
 Net Occupancy Expense         12,480     11,810     24,296     24,078
 Net Equipment Expense         12,066     11,685     24,133     23,812
 Other Operating Expense       41,998     43,147     81,951     87,500
 Minority Interest                107         96        176        303

Total Non-Interest Expense    121,899    132,128    247,981    266,968

Income Before Income Taxes      6,865     61,937     70,696    119,521
Provision for Income Taxes        158     23,475     24,224     45,642

Net Income                     $6,707    $38,462    $46,472    $73,879

Basic Earnings Per Share        $0.08      $0.48      $0.58      $0.92
Diluted Earnings Per Share      $0.08      $0.47      $0.58      $0.91
Dividends Declared Per
 Share                          $0.18      $0.17      $0.35      $0.34
Basic Weighted Average
 Shares                    79,425,245 80,302,154 79,623,305 80,361,529
Diluted Weighted Average
 Shares                    80,002,989 81,121,840 79,975,904 81,263,475


                         (END OF PART ONE OF FIVE)



    CONTACT: Pacific Century Financial Corporation
             Stafford Kiguchi, 808/537-8580 (Media Inquiries)
             Pager: 808 363-5383
             Sharlene Bliss, 808/537-8037 (Investor/Analyst Inquiries)