To Our Shareholders:
Bancorp Hawaii, Inc., reported $34.4 million in earnings for
the first quarter of 1994, which reflects a 4.3% increase from
the corresponding period in 1993. Earnings per share were $.80,
compared with $.77 reported in the first quarter last year.
Return on average assets was 1.11% and return on average equity
was 14.63%.
Bancorp Hawaii's total assets at the end of March 1994 were
$12.9 billion compared with $12.7 billion at the same time in
1993. Deposits and Security Repurchase Agreements at March 31,
1994, stood at $9.8 billion, a 6.2% decrease from $10.5 billion
on March 31, 1993. Net loans at the end of the first quarter
were $7.1 billion, up 5.3% from $6.7 billion reported on March
31, 1993.
We are encouraged by Bancorp's steady performance as we
begin 1994, especially in light of the significant increase in
U.S. interest rates so far this year and Hawaii's economic
slowdown. At the same time we are pleased that the markets we
serve in Asia, the West and South Pacific and the U.S. Mainland
are seeing growth in their economies. Our Pacific operations
continue to prosper and in March we added a second branch at
Garapan, in the Commonwealth of the Northern Marianas. The
blending of American Financial Services of Hawaii, Inc. into
Bancorp is progressing ahead of schedule and trust revenues are
57.7% above March 31, 1993. During the second quarter, Bank of
Hawaii, our primary subsidiary, will launch in-store banking at
Safeway supermarkets.
In January, the board of directors declared a 50%
common stock dividend and increased the cash dividend by 13%.
Both the stock and cash dividend were paid in March to
shareholders of record on February 17, 1994.
At the annual shareholders meeting on April 27, 1994,
Bank of Hawaii board members Mary G.F. Bitterman, president and
CEO of KQED, Inc., and Herbert "Monty" Richards, president and
chairman of Kahua Ranch, Ltd., were named to Bancorp Hawaii's
board. They succeeded retired Bancorp Chairman and CEO Frank J.
Manaut and attorney Sydney I. Hashimoto, who reached mandatory
age. At the same time, Bancorp Hawaii directors David A. Heenan,
Stuart T. K. Ho, Lawrence M. Johnson and Fred E. Trotter were re-
elected to a three-year term. Joining Bank of Hawaii's board are
Bank of Hawaii vice chairmen Richard J. Dahl, in charge of
administration and finance; Thomas J. Kappock responsible for
retail banking; and John K. Tsui who directs wholesale banking.
They also serve as executive vice presidents for Bancorp Hawaii.
Shareholders also voted in favor of all other proposals outlined
in the proxy statement.
Also, in April, The Board of Directors declared a quarterly
dividend of 26 cents (adjusted for the 50 percent stock dividend)
payable on June 14, 1994, to shareholders of record on May 20,
1994.
Beginning this year, Bancorp's quarterly reports have been
streamlined in order to provide timely information on your
company's financial performance. We stress quality service in
your company and that extends to our shareholders as well. The
timeliness in the distribution of our previous reports was not up
to our standards. By moving to this new briefer format, we hope
you will get these reports sooner, particularly for those of you
who receive reports through brokerage houses. Thank you for your
continuing support. We look forward to reporting on Bancorp's
continued positive performance throughout 1994.
Aloha,
H. HOWARD STEPHENSON
H. Howard Stephenson
Chairman and Chief Executive Officer
Corporate Offices:
Financial Plaza of the Pacific
130 Merchant Street
Honolulu, Hawaii 96813
Investor or Analyst Inquiries:
David A. Houle
Senior Vice President, Treasurer and Chief Financial Officer
(808) 537-8288
or
Dale L.I. Suezaki
Assistant Vice President and Investor Relations Officer
(808) 537-8037
or
Ruth E. Miyashiro
Corporate Secretary
(808) 537-8272
Highlights (Unaudited) Bancorp Hawaii, Inc., and subsidiaries
- - --------------------------------------------------------------------------------------------------------------------------
March 31 March 31
1994 1993
- - --------------------------------------------------------------------------------------------------------------------------
Return on Average Assets 1.11% 1.06%
- - --------------------------------------------------------------------------------------------------------------------------
Return on Average Equity 14.63% 15.73%
- - --------------------------------------------------------------------------------------------------------------------------
Average Spread on Earning Assets 4.05% 3.96%
- - --------------------------------------------------------------------------------------------------------------------------
Book Value Per Common Share $22.40 $20.27
- - --------------------------------------------------------------------------------------------------------------------------
Loss Reserve/Loans and Leases Outstanding 1.80% 1.96%
- - --------------------------------------------------------------------------------------------------------------------------
Average Equity/Average Assets 7.57% 6.72%
- - --------------------------------------------------------------------------------------------------------------------------
Common Stock Price Range High Low Dividend
- - --------------------------------------------------------------------------------------------------------------------------
1993 ..................................... $35.92 $26.67 $0.90
- - --------------------------------------------------------------------------------------------------------------------------
1994 First Quarter........................ $31.88 $26.92 $0.26
- - --------------------------------------------------------------------------------------------------------------------------
Consolidated Statements of Income (Unaudited)
- - ------------------------------------------------------------------------------------------------------------------
Three Months Ended March 31
(in thousands of dollars except per share amounts) 1994 1993
- - ------------------------------------------------------------------------------------------------------------------
Total Interest Income $195,424 $204,154
Total Interest Expense 77,789 88,503
- - ------------------------------------------------------------------------------------------------------------------
Net Interest Income 117,635 115,651
Provision for Possible Loan Losses 8,258 9,012
- - ------------------------------------------------------------------------------------------------------------------
Net Interest Income After Provision for Possible Losses 109,377 106,639
Total Non-Interest Income 34,146 27,839
Total Non-Interest Expense 88,244 82,510
- - ------------------------------------------------------------------------------------------------------------------
Income Before Income Taxes 55,279 51,968
Provision for Income Taxes 20,887 18,993
- - ------------------------------------------------------------------------------------------------------------------
Net Income $34,392 $32,975
==================================================================================================================
Earnings Per Common Share and Common Share Equivalents $0.80 $0.77
- - ------------------------------------------------------------------------------------------------------------------
Average Common Shares and Common Share Equivalents Outstanding 42,943,711 42,866,856
- - ------------------------------------------------------------------------------------------------------------------
Consolidated Statements of Condition (Unaudited)
- - ------------------------------------------------------------------------------------------------------------------
March 31 December 31 March 31
(in thousands of dollars) 1994 1993 1993
- - ------------------------------------------------------------------------------------------------------------------
Assets
Interest-Bearing Deposits $999,991 $837,704 $1,250,480
Investment Securities
(Market Value of $3,593,559, $3,684,781, $3,733,588, respectively) 3,582,077 3,647,043 3,653,636
Securities Purchased Under Agreements to Resell -- -- 180,000
Funds Sold 115,747 57,699 71,880
Loans 7,366,639 7,258,368 7,008,822
Unearned Income (146,610) (149,949) (143,695)
Reserve for Possible Loan Losses (130,064) (125,284) (134,600)
Net Loans 7,089,965 6,983,135 6,730,527
- - ------------------------------------------------------------------------------------------------------------------
Total Earning Assets 11,787,780 11,525,581 11,886,523
Cash and Non-Interest Bearing Deposits 596,504 395,315 377,634
Premises and Equipment 176,765 167,260 156,322
Other Assets 316,834 373,971 254,102
- - ------------------------------------------------------------------------------------------------------------------
Total Assets $12,877,883 $12,462,127 $12,674,581
==================================================================================================================
Liabilities
Deposits 7,339,933 7,004,975 7,654,842
Securities Sold Under Agreements to Repurchase 2,500,148 2,509,550 2,833,085
Funds Purchased 610,471 743,915 639,702
Short-Term Borrowings 686,564 600,266 295,930
Other Liabilities 318,010 307,447 299,304
Long-Term Debt 469,495 357,870 93,800
- - ------------------------------------------------------------------------------------------------------------------
Total Liabilities 11,924,621 11,524,023 11,816,663
Shareholders' Equity
Common Stock ($2 par value), authorized 50,000,000 shares;
issued/outstanding, March 1994 - 42,564,920;
December 1993 - 28,425,038; March 1993 - 28,220,435; 85,130 56,850 56,441
Surplus 282,280 284,886 278,212
Unrealized Valuation Adjustments (4,995) 537 (2,318)
Retained Earnings 590,847 595,831 525,583
- - ------------------------------------------------------------------------------------------------------------------
Total Shareholders' Equity 953,262 938,104 857,918
- - ------------------------------------------------------------------------------------------------------------------
Total Liabilities and Shareholders' Equity $12,877,883 $12,462,127 $12,674,581
==================================================================================================================
Starting in 1995, Bancorp Hawaii will stop mailing quarterly reports to
shareholders whose stock is held in "street name," for example through
brokerage houses. Bancorp can more quickly communicate the company's
performance through direct mail to these shareholders. If your Bancorp
stock is held in "street name" and you wish to continue receiving Bancorp's
quarterly reports, please complete the address form and return it to
Bancorp. Bancorp shareholders with stock held in their own name are not
affected and will continue to receive quarterly reports as usual. Annual
reports and proxy materials will continue to be sent to all shareholders.
- - ---------------------------------------------------------------------------
My Bancorp Hawaii stock is held in "street name." Please continue to send
me Bancorp Hawaii, Inc., quarterly reports during 1995 at the following
address.
Please print or type
NAME_______________________________________________________________________
ADDRESS____________________________________________________________________
CITY___________________________________STATE_____________ZIP_______________
TELEPHONE__________________________________________________________________
Clip and mail this form to: Bancorp Hawaii, Inc.
Corporate Secretary
P. O. Box 2900
Honolulu, Hawaii 96846