To Our Shareholders:
We are pleased to report that your company's first quarter
earnings were $32.7 million, up 15.8 percent from the same period
last year. Earnings per share for the first quarter were $0.79
compared to $0.67 for the first quarter of 1995, an increase of
17.9 percent. Return on average assets was 1.03 percent and
return on average equity was 12.32 percent.
Bancorp's total assets at the end of March 1996 were $12.9
billion, up 5.8 percent from $12.2 billion at March 31, 1995.
Deposits and repurchase agreements stood at $9.3 billion, up 4.4
percent from the same period last year. Net loans at the end of
the first quarter were $7.9 billion, up 6.5 percent from last
year's first quarter.
Hawaii's recovering economy provided a solid foundation for
Bancorp's strong performance this quarter. Preliminary
estimates from the Department of Business, Economic Development &
Tourism (DBEDT) show real inflation-adjusted growth of gross
state product at 0.8 percent for 1995. Total visitor arrivals
numbered 6.6 million in 1995, up 3.2 percent from 1994's level.
Hawaii's economists expect the improvement in the state's
economy, bolstered by the recovering economies in Japan and
California, to continue and even accelerate in 1996.
Many of the benefits of Bancorp's recent loan growth were
reflected in this quarter's results. Careful management of our
credit standards remains a high priority, and credit quality
continues to be excellent despite the less-than-optimal economic
conditions of the last few years.
Retail initiatives have also helped your company advance its
strategic goals. The Bankoh Contiki Visa card, a co-branded
credit card introduced in February, broke new ground as the
bank's first card targeted to markets on the mainland and, in its
first month, generated more than 19,000 new accounts for the
company.
Bancorp Hawaii's share of mortgage loan originations in the
state grew significantly as a result of a restructuring and
renewed emphasis on the company's residential lending area.
Mortgage lending is a linchpin to building the multi-faceted
customer relationships that we seek to establish in the context
of your company's strategic plans.
Bancorp's growth plans call for an expanding presence in the
emerging Pacific Island markets. In January, Bank of Hawaii
added a branch in Lautoka, Fiji's main port center, bringing the
number of Bankoh branches throughout the West and South Pacific
to 15. It is expected that the company will receive regulatory
approval to conclude the acquisition of majority interest in
Banque de Tahiti and Banque de Nouvelle Caledonie during the
first half of 1996. The branches and affiliates of the South and
West Pacific have all achieved excellent results and offer
promise of further growth opportunities as intra-Asia trade flows
expand.
Your continued confidence and support are invaluable to us
as we implement and build upon the initiatives leading to
Bancorp's long-range objectives. You may be sure that enhancing
the value of your company remains our top priority.
Sincerely,
LAWRENCE M. JOHNSON
Lawrence M. Johnson
Chairman and Chief Executive Officer
April 25, 1996
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
Sharlene K. Bliss
Investor Relations Officer
(808) 537-8037
or
Cori C. Weston
Corporate Secretary
(808) 537-8272
Highlights (Unaudited) Bancorp Hawaii, Inc., and subsidiaries
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March 31 March 31
1996 1995
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Return on Average Assets 1.03% 0.93%
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Return on Average Equity 12.32% 11.61%
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Average Spread on Earning Assets 3.80% 3.62%
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Book Value Per Common Share $25.65 $23.92
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Loss Reserve/Loans and Leases Outstanding 1.88% 1.97%
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Average Equity/Average Assets 8.33% 7.99%
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Common Stock Price Range High Low Dividend
1995.......................... $37.13 $24.88 $1.08
1996 First Quarter............ $36.25 $33.25 $0.28
Consolidated Statements of Income (Unaudited)
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(in thousands of dollars except per share amounts) 1996 1995
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Total Interest Income $231,087 $214,585
Total Interest Expense 118,250 112,264
- ----------------------------------------------------------------------------------------------------------------
Net Interest Income 112,837 102,321
Provision for Possible Loan Losses 4,424 4,453
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Net Interest Income After Provision for Possible Loan Losses 108,413 97,868
Total Non-Interest Income 37,626 39,811
Total Non-Interest Expense 97,578 91,055
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Income Before Income Taxes 48,461 46,624
Provision for Income Taxes 15,751 18,376
- ----------------------------------------------------------------------------------------------------------------
Net Income $32,710 $28,248
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Earnings Per Common Share and Common Share Equivalents $0.79 $0.67
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Average Common Shares and Common Share Equivalents Outstanding 41,546,033 42,137,738
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Consolidated Statements of Condition (Unaudited)
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March 31 December 31 March 31
1996 1995 1995
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Assets
Interest-Bearing Deposits $656,292 $789,050 $532,726
Investment Securities
(Market Value of $3,181,573, $3,366,266 and $3,122,587 respectively) 3,183,588 3,360,153 3,152,518
Funds Sold 64,922 116,173 79,755
Loans 8,247,669 8,152,406 7,756,208
Unearned Income (145,924) (147,404) (141,860)
Reserve for Possible Loan Losses (152,053) (151,979) (150,377)
Net Loans 7,949,692 7,853,023 7,463,971
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Total Earning Assets 11,854,494 12,118,399 11,228,970
Cash and Non-Interest Bearing Deposits 430,859 469,031 387,505
Premises and Equipment 252,600 246,515 227,700
Other Assets 367,180 372,839 353,674
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Total Assets $12,905,133 $13,206,784 $12,197,849
================================================================================================================
Liabilities
Deposits $7,318,197 $7,576,770 $6,776,133
Securities Sold Under Agreements to Repurchase 1,988,960 1,926,540 2,139,973
Funds Purchased 605,980 787,437 489,549
Short-Term Borrowings 462,895 476,867 574,148
Other Liabilities 340,326 321,298 353,219
Long-Term Debt 1,142,111 1,063,436 862,445
- ----------------------------------------------------------------------------------------------------------------
Total Liabilities 11,858,469 12,152,348 11,195,467
Shareholders' Equity
Common Stock ($2 par value), authorized 100,000,000 shares;
outstanding, March 1996 - 40,805,147;
December 1995 - 41,340,817; March 1995 - 41,908,241; 81,610 82,682 83,816
Surplus 222,573 240,080 261,003
Unrealized Valuation Adjustments 3,541 13,902 (977)
Retained Earnings 738,940 717,772 658,540
- ----------------------------------------------------------------------------------------------------------------
Total Shareholders' Equity 1,046,664 1,054,436 1,002,382
- ----------------------------------------------------------------------------------------------------------------
Total Liabilities and Shareholders' Equity $12,905,133 $13,206,784 $12,197,849
================================================================================================================