U N I T E D S T A T E S
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 11-K
[X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 1999
or
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION
PERIOD FROM
____________ TO ____________
PACIFIC CENTURY FINANCIAL CORPORATION
PROFIT SHARING PLAN
_____________________________________________________
Full title of the plan and the address of the plan,
if different from that of the issuer named below:
Pacific Century Financial Corporation
130 Merchant Street
Honolulu, Hawaii 96813
_____________________________________________________
Name of issuer of the securities held pursuant to the
plan and the address of its principal executive office
Required Information
Listed below are the financial statements and exhibits filed
as part of the annual report.
A) Financial Statements
1) Report of Independent Auditors
2) Statements of Net Assets Available for Benefits
December 31, 1999 and 1998
3) Statements of Changes in Net Assets Available for
Benefits - Years Ended December 31, 1999 and 1998
4) Notes to Financial Statements
5) Schedule of Assets Held for Investment Purposes
December 31, 1999
B) Exhibits
Consent of Independent Certified Public Auditors
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act
of 1934, the trustees (or other persons who administer the Plan)
have duly caused this annual report to be signed on its behalf by
the undersigned thereunto duly authorized.
PACIFIC CENTURY FINANCIAL CORPORATION
PROFIT SHARING PLAN
Date: June 28, 2000 By: /s/ RICHARD J. DAHL
Richard J. Dahl
President and Director of
Pacific Century Financial
Corporation; and member of the
Pacific Century Financial
Corporation Benefit Plans
Committee
AUDITED FINANCIAL STATEMENTS
AND SUPPLEMENTAL SCHEDULE
Pacific Century Financial Corporation
Profit Sharing Plan
Years ended December 31, 1999 and 1998
with Report of Independent Auditors
Pacific Century Financial Corporation
Profit Sharing Plan
Audited Financial Statements
and Supplemental Schedule
Years ended December 31, 1999 and 1998
Contents
Report of Independent Auditors . . . . . . . . . . . . . . . . .1
Audited Financial Statements
Statements of Net Assets Available for Benefits . . . . . . . . 3
Statements of Changes in Net Assets Available for Benefits . . .4
Notes to Financial Statements . . . . . . . . . . . . . . . . . 5
Supplemental Schedule
Schedule H, Line 4i - Schedule of Assets Held for
Investment Purposes at End of Year . . . . . . . . . . 11
Report of Independent Auditors
The Board of Directors
Bank of Hawaii and
The Benefit Plans Committee
Pacific Century Financial Corporation Profit Sharing Plan
We have audited the accompanying statements of net assets
available for benefits of Pacific Century Financial Corporation
Profit Sharing Plan as of December 31, 1999 and 1998, and the
related statements of changes in net assets available for
benefits for the years then ended. These financial statements are
the responsibility of the Benefit Plans Committee. Our
responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with auditing standards
generally accepted in the United States. Those standards require
that we plan and perform the audit to obtain reasonable assurance
about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting
principles used and significant estimates made by the Benefit
Plans Committee, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above
present fairly, in all material respects, the net assets
available for benefits of the Plan at December 31, 1999 and 1998,
and the changes in its net assets available for benefits for the
years then ended, in conformity with accounting principles
generally accepted in the United States.
Our audits were performed for the purpose of forming an opinion
on the financial statements taken as a whole. The accompanying
supplemental schedule of assets held for investment purposes at
end of year as of December 31, 1999 is presented for purposes of
additional analysis and is not a required part of the financial
statements but is supplementary information required by the
Department of Labor's Rules and Regulations for Reporting and
Disclosure under the Employee Retirement Income Security Act of
1974. The supplemental schedule is the responsibility of the
Benefit Plans Committee. The supplemental schedule has been
subjected to the auditing procedures applied in our audits of the
financial statements and, in our opinion, is fairly stated in all
material respects in relation to the financial statements taken
as a whole.
/s/ ERNST & YOUNG LLP
May 15, 2000
Pacific Century Financial Corporation Profit Sharing Plan
Statements of Net Assets Available for Benefits
December 31
1999 1998
-------------------------
(In Thousands)
Assets
Investments, at fair value $213,069 $212,098
Receivables:
Employer contribution 4,507 5,441
Participant contributions 582 632
-------------------------
Total receivables 5,089 6,073
-------------------------
Net assets available for benefits $218,158 $218,171
=========================
See accompanying notes to financial statements.
Pacific Century Financial Corporation Profit Sharing Plan
Statements of Changes in Net Assets Available for Benefits
Year ended December 31
1999 1998
-------------------------
(In Thousands)
Additions
Investment income - interest and dividends $15,034 $12,228
Net appreciation (depreciation) in fair value of
investments (10,685) 463
Contributions:
Participants 8,752 8,558
Employer 7,000 7,910
Other 418 697
-------------------------
Total contributions 16,170 17,165
-------------------------
Total additions 20,519 29,856
Deductions
Distributions to participants (20,532) (13,919)
-------------------------
Net increase (decrease) (13) 15,937
Net assets available for benefits at beginning of year 218,171 202,234
-------------------------
Net assets available for benefits at end of year $218,158 $218,171
=========================
See accompanying notes to financial statements.
Pacific Century Financial Corporation Profit Sharing Plan
Notes to Financial Statements
December 31, 1999
1. Description of the Plan and Summary of Significant Accounting
Policies
Description of the Plan
The following description of the Pacific Century Financial
Corporation Profit Sharing Plan (the Plan) provides only general
information. Participants should refer to the Summary Plan
Description for a more complete description of the Plan's
provisions.
The Plan is a defined contribution plan for employees of Bank of
Hawaii and certain subsidiaries of Pacific Century Financial
Corporation and Bank of Hawaii, collectively (the Bank), who have
fulfilled the Plan's participation requirements. The Plan is
subject to the reporting and disclosure, fiduciary, vesting, and
administration and enforcement provisions of the Employee
Retirement Income Security Act of 1974 (ERISA).
On behalf of the Bank as Plan Administrator, the Plan is
administered by the Benefit Plans Committee. All assets of the
Plan are held in trust by Vanguard Fiduciary Trust Company, as
trustee, and all benefits are provided by such trust fund.
The participating employers make a profit sharing contribution on
behalf of participants for each calendar year in an amount which
is based upon Pacific Century Financial Corporation's profits for
the year. The contribution varies depending on Pacific Century
Financial Corporation's adjusted net income and adjusted return
on equity. The amount of profit sharing contribution for the
years ended December 31, 1999 and 1998 were $3,796,000 and
$4,693,504, respectively.
Participants are allowed to contribute up to 7% of their eligible
compensation to the Plan. However, contributions are limited to
certain maximum annual amounts, including those imposed under the
Internal Revenue Code (25% of a participant's compensation or
$30,000 for 1999 and 1998).
The participating employers contribute matching contributions on
behalf of participants each calendar quarter equal to $1.25 for
each $1.00 contributed by participants up to 2% of the
participant's eligible compensation. Matching contributions are
made to the Plan by the end of the following calendar quarter.
Participants are permitted to select among the following
investment options: Pacific Capital Growth Stock Fund, Pacific
Capital Growth & Income Fund, Pacific Capital New Asia Growth
Fund, Pacific Capital Short-Intermediate U.S Treasury Securities
Unit Fund, Pacific Capital Diversified Fixed Income Unit Fund,
Vanguard Wellington Fund, Vanguard Windsor Fund, 500 Portfolio of
the Vanguard Index Trust, Short-Term Federal Portfolio of the
Vanguard Fixed Income Securities Fund, Vanguard Retirement
Savings Trust, and the Pacific Century Financial Corporation
Stock Fund.
Effective April 1, 1998, the portion of the Plan consisting of
the Pacific Century Financial Corporation Stock Fund converted to
an employee stock ownership plan (ESOP). As an ESOP any cash
dividends on Pacific Century Financial Corporation stock is
passed through to the participants unless the participant elects
against receiving the dividend. The cash dividend on shares of
Pacific Century Financial Corporation stock paid as a dividend
pass through is not treated as a distribution from the Plan,
rather, it is accounted for as if the participant receiving the
dividend was the direct owner of the shares of Pacific Century
Financial Corporation stock. For participants electing not to
receive the dividend pass through, the dividend is allocated to
the participants' account as income and is invested in additional
shares.
Participants are fully vested in the Plan's assets allocated to
their account.
Withdrawals are permitted for participants demonstrating
immediate and heavy financial need. Participants may borrow a
minimum of $1,000 up to a maximum equal to the lesser of $50,000
or 50% of the present value of their account balance. Loan
transactions are treated as a transfer from (to) the investment
fund to (from) the loan fund. Loan terms do not exceed 5 years
unless the loan is used for the purchase of a primary residence.
The loans are secured by the balance in the participant's account
or other security deemed to be sufficient by the Benefit Plans
Committee and are made at a reasonable rate of interest.
Principal and interest is paid ratably through monthly payroll
deductions. No withdrawals or loans are permitted from the
Pacific Century Financial Corporation Stock Fund.
For termination of employment due to retirement (normal and
early), disability, and death, a participant is entitled to
receive an allocation of matching contribution and profit sharing
contribution for the calendar quarter or calendar year,
respectively, in which the participant terminates employment.
Under these conditions, the participant's account is distributed
as soon as practicable after the year-end allocations are made.
However, the participant may make an election to waive this
allocation and receive an immediate distribution. For termination
of employment prior to retirement (normal or early), disability
or death, the participant's account is distributed as soon as
practicable. For all accounts under the Plan that exceed $5,000,
a distribution can only be made if the participant consents in
writing to such a distribution. Generally, all distributions from
the Plan upon a participant's termination are made in a lump sum.
In case of death, beneficiaries may elect to receive
distributions as a lump sum or as an annuity contract.
Participants may elect to defer distributions.
In the event that the Board of Directors terminates the Plan,
each participant's interest in the Plan will remain fully vested
and non-forfeitable. The Board of Directors may require all
participants and beneficiaries to withdraw such amounts in cash,
in kind, in any other form, or any combination thereof, as it may
determine in its sole discretion.
Basis of Accounting
The accounting records of the Plan are maintained on the accrual
basis.
Reclassification
Certain amounts from the prior year have been reclassified to
conform to the current year presentation.
Use of Estimates
The preparation of financial statements in conformity with
accounting principles generally accepted in the United States
requires management to make estimates and assumptions that affect
the amounts reported in the financial statements and accompanying
notes. Actual results may differ from those estimates.
Expenses
Fees paid to the Plan's trustee and other administrative expenses
incurred in connection with the operation of the Plan are paid by
the participating employers. Brokerage commissions and other
expenses incurred in connection with the purchase or sale of
investments are paid by the Plan.
Investments
Investments are stated at fair value. Shares of Pacific Century
Financial Corporation stock are valued at quoted market prices.
Shares of mutual funds are valued at quoted market prices which
represent the net asset value of shares held by the Plan at year
end. Units of the Vanguard Retirement Savings Trust are valued at
net asset value at year end. Participant loans are valued at
their outstanding balances, which approximate fair value.
Purchases and sales of investments are recorded on a trade-date
basis. Interest income is recorded on the accrual basis and
dividends are recorded on the ex-dividend date.
The net realized gain and loss on investments that were sold
during the year and the unrealized gain and loss on investments
held at year end are reflected in the Statements of Changes in
Net Assets Available for Benefits as net appreciation
(depreciation) in fair value of investments. The net realized
gain and loss on investments sold is computed using the average
cost method.
Contributions
Contributions from employer and participants are accrued through
December 31 in the Statements of Changes in Net Assets Available
for Benefits.
Benefits
Benefits are recorded when paid.
2. Investments
The Vanguard Retirement Savings Trust is a collective trust
investing in investment contracts with selected insurance
companies and commercial banks. The contract value of investment
contracts generally approximates fair value and represents
initial deposits, plus contributions and interest, less benefit
payments. The Vanguard Retirement Savings Trust allows for
benefit responsive withdrawals by the Plan at contract value,
subject to certain market value adjustments. The fair value of
the investment contracts held by the Vanguard Retirement Savings
Trust at December 31, 1999 and 1998 were $25,545,000 and
$23,860,000, respectively.
During the years ended December 31, 1999 and 1998, the Plan's
investments, including investments bought, sold, as well as held
during the year, appreciated in fair value as follows:
Year ended December 31
1999 1998
-------------------------
(In Thousands)
Mutual funds $6,085 $1,613
Common stock (16,770) (1,150)
-------------------------
Net appreciation (depreciation) in fair value of
investments $(10,685) $463
=========================
The fair value of individual investments representing 5% or more
of the Plan's net assets at December 31, 1999 and 1998 are as
follows:
December 31
1999 1998
------------------------
(In Thousands)
Vanguard Wellington Fund $32,323 $33,657
Vanguard Windsor Fund 36,460 35,672
500 Portfolio of the Vanguard Index Trust 36,563 24,243
Vanguard Retirement Savings Trust 25,545 23,860
Pacific Century Financial Corporation Stock Fund 52,436 76,983
3. Transactions and Agreements with Parties in Interest
The Pacific Century Financial Corporation Stock Fund invests in
the common stock of Pacific Century Financial Corporation.
The Pacific Capital Growth Stock Fund, Pacific Capital Growth &
Income Fund, Pacific Capital New Asia Growth Fund, Pacific
Capital Short Intermediate U.S Treasury Securities Unit Fund, and
the Pacific Capital Diversified Fixed Income Unit Fund belong to
a family of proprietary mutual funds advised by Pacific Century
Trust, a division of Bank of Hawaii.
The Vanguard Wellington Fund, Vanguard Windsor Fund, 500
Portfolio of the Vanguard Index Trust, and Short-Term Federal
Portfolio of the Vanguard Fixed Income Securities Fund are mutual
funds managed by an affiliate of Vanguard Fiduciary Trust
Company. The Vanguard Retirement Savings Trust is a collective
trust managed by an affiliate of Vanguard Fiduciary Trust
Company. Vanguard Fiduciary Trust Company acts as trustee for the
Plan's investments.
4. Income Tax Status
The Internal Revenue Service has issued a determination letter
dated May 10, 1997, that the Plan qualifies, in form, under
Sections 401(a) and 401(k) of the Internal Revenue Code of 1986,
as amended (the Code), and the underlying trust is, therefore,
exempt from federal income taxes under Section 501(a) of the
Code. The Plan is required to operate in accordance with the Code
to maintain its tax qualification. The Benefit Plans Committee is
not aware of any course of actions or series of events that have
occurred that might adversely affect the Plan's qualified status.
Subsequent amendments are structured to, and are included to,
maintain the Plan's qualified status.
5. Year 2000 (Unaudited)
A significant issue which companies nationwide faced was the
transition to the new millennium. Year 2000 concerns arose
primarily from past date-coding practices in both software and
hardware that used two-digits rather than four-digits to
represent years. If not corrected, systems that used the two-
digit format would have been unable to correctly distinguish
dates after December 31, 1999 which could have caused systems to
fail or produce inaccurate information. The Plan experienced no
significant problems as a result of the Year 2000 issue.
6. Subsequent Event
Effective January 1, 2000, three additional Pacific Capital Funds
became available as investment options.
Supplemental Schedule
Pacific Century Financial Corporation Profit Sharing Plan
Employer ID Number: 99-0033900/ Plan Number: 091203
Schedule H, Line 4i - Schedule of Assets Held for Investment
Purposes At End of Year
December 31, 1999
Number of Current
Description Shares Cost Value
- --------------------------------------------------------------------------------------------
(In thousands of dollars, except for shares)
Mutual Funds
Pacific Capital Growth Stock Fund* 550,902 $9,398 $10,087
Pacific Capital Growth & Income Fund* 347,047 6,264 6,913
Pacific Capital New Asia Growth Fund* 282,146 2,751 4,131
Pacific Capital Short Intermediate U.S Treasury
Securities Unit Fund* 94,589 490 467
Pacific Capital Diversified Fixed Income
Unit Fund* 143,519 749 699
Vanguard Wellington Fund* 1,156,053 28,386 32,323
Vanguard Windsor Fund* 2,403,412 36,933 36,460
500 Portfolio of the Vanguard Index Trust* 270,178 25,669 36,563
Short-Term Federal Portfolio of the Vanguard
Fixed Income Securities Fund* 236,241 2,399 2,339
--------
Total mutual funds 129,982
Collective Trust
Vanguard Retirement Savings Trust* 25,545,034 25,545 25,545
Common Stock
Pacific Century Financial Corporation Stock
Fund* 2,619,184 38,068 52,436
Participant Loans - Interest rates ranging from
7.14% to 8.61% 5,106
--------
$213,069
========
*Indicates an investment with a party-in-interest to the Plan
Consent of Independent Auditors
We consent to the incorporation by reference in the Registration
Statement (Form S-8 No. 33-57267) pertaining to the Pacific
Century Financial Corporation Profit Sharing Plan, of our report
dated May 15, 2000, with respect to the financial statements and
schedules of the Pacific Century Financial Corporation Profit
Sharing Plan included in this Annual Report (Form 11-K) for the
year ended December 31, 1999.
/s/ ERNST & YOUNG, LLP
Honolulu, Hawaii
June 28, 2000