EXHIBIT 99.1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
PACIFIC CENTURY FINANCIAL CORPORATION
EXHIBIT TO CURRENT REPORT ON
FORM 8-K DATED April 23, 2001
COMMISSION FILE NUMBER 1-6887
[PCFC LETTERHEAD]
PACIFIC CENTURY FINANCIAL CORPORATION REPORTS FIRST QUARTER
NET INCOME OF $33.7 MILLION AND EARNINGS PER SHARE OF 42 CENTS
o NON-PERFORMING ASSETS DECLINE 35 PERCENT FROM DECEMBER 31,
2000 LEVEL
o BOARD OF DIRECTORS DECLARES QUARTERLY DIVIDEND OF 18 CENTS PER
SHARE
FOR IMMEDIATE RELEASE
HONOLULU, HI (April 23, 2001) -- Pacific Century Financial Corporation
(NYSE:BOH) reported first quarter 2001 net income of $33.7 million, up 3.4
percent from $32.6 million in the fourth quarter of 2000 and down 15.3 percent
from 39.8 million reported in the first quarter of 2000. Diluted earnings per
share were $0.42, compared to $0.41 for the fourth quarter of 2000 and $0.50 for
the first quarter of 2000.
Earnings for the first quarter of 2001 included gains of $75.4 million
from the sale of its $209 million credit card portfolio which was completed in
March 2001, and $20.9 million related to the sale of ownership interest in Star
Systems, Inc. which was acquired by Concord EFS (NASDAQ: CEFT).
Pacific Century Financial Corporation's (PCFC) continuing emphasis on
improving asset quality resulted in the significant reduction of credit risk
during the quarter. The company reported $119.5 million in non-performing assets
(NPAs), down 34.7 percent from $183.0 million reported at December 31, 2000.
NPAs at the end of the first quarter represented the lowest level of NPAs since
March 1998.
"The first quarter's results clearly demonstrated that we are
delivering on our intent to resolve credit issues and position the company for
improved performance," said Michael E. O'Neill, PCFC Chairman and Chief
Executive Officer. "The significant improvement in asset quality reflects the
strength of our risk management group and lays a solid foundation for
implementing our strategic focus."
During the quarter, PCFC completed its strategic assessment process
which began in December 2000. The results of that comprehensive process are
highlighted in the company's announcement of its Strategic Plan, which was
released today.
"The next 12 to 18 months will be a transition period for us," said
O'Neill. "The company's size, market franchise and business mix will change and
the company's underlying performance is being positioned for improvement."
Net interest income for the quarter on a fully taxable equivalent basis
totaled $134.1 million, down from $139.8 million in 2000's first quarter, and
down from $138.9 million in 2000's fourth quarter. The decreases resulted from
relatively higher rates paid for borrowings and time deposits, as well as the
recognition of $2.4 million of losses on lease residuals.
-more-
PACIFIC CENTURY FINANCIAL CORPORATION REPORTS FIRST QUARTER 2001
EARNINGS PAGE 2
Net interest margin for the first quarter 2001 was 4.24 percent
compared to 4.29 percent for the fourth quarter of 2000, reflecting the impact
of rate decreases in 2001 and the $2.4 million loss in lease residuals.
The provision for loan losses was $52.5 million, up from $13.5 million
in the first quarter of 2000 and $25.8 million in the fourth quarter of 2000.
The increased provision was due to the recognition of net loan losses totaling
$97.7 million related to exiting several higher risk credit relationships.
Non-interest income of $155.5 million for the quarter reflected the
impact of $75.4 million in gains from the sale of the credit card portfolio and
$20.9 million in investment securities gains related to the sale of ownership
interest in Star Systems, Inc. Non-interest income, adjusted for those special
items and a $3.3 million write down in an equity investment stood at $62.5
million. This compares to $63.9 million for the first quarter of 2000 and $64.7
million for the fourth quarter of 2000, which included $3.2 million from gains
on sales of equity investments in foreign banks. After special items, the
decrease largely was due to reduced earnings from the trust business, where fees
are based partially on asset values.
Non-interest expense for the quarter was $176.2 million versus $126.1
million for the first quarter of 2000 and $123.9 million for the fourth quarter
of 2000. Special expense items recognized during the quarter included $44.4
million of restructuring and related costs. The largest element of those costs
was $28.0 million in foreign currency translation losses that were recognized
because of strategic decisions to exit foreign locations. Also included were
$6.2 million of losses from the anticipated inability to recover an equity
investment in a bank in the Solomon Islands, and $5.3 million of severance and
other restructuring related costs. Excluding the special items, non-interest
expense increased by $5.7 million over the $126.1 million reported in the first
quarter of 2000. The largest component of this increase was $2.3 million in
technology and consulting costs.
PCFC's effective tax rate increased for the first quarter of 2001
largely due to foreign and state income taxes.
Adjusted for the gains on sales, additional loan loss provisioning,
restructuring and related costs, and other costs, net income for the first
quarter of 2001 would be $30.8 million and diluted earnings per share would be
$0.38.
ASSET QUALITY IMPROVEMENT
Asset quality improved for the second consecutive quarter with
non-performing assets, exclusive of loans past due 90+ days, dropping 35 percent
to $119.5 million compared to the fourth quarter of 2000 and down 12.4 percent
compared to $136.4 million at end of the first quarter of 2000.
The areas that saw the sharpest decline in NPAs from the fourth quarter
of 2000 were commercial loans and foreign loans, which dropped by 57 percent
($31.6 million) and 50 percent ($16.6 million), respectively. Improvement in
commercial loans resulted primarily from the sale of substantially all the
non-accrual syndicated loans ($31.5 million) during the quarter. Reduction in
foreign NPAs was driven by four Asia credits totaling approximately $10 million,
of which two credits totaling approximately $7.4 million were sold, with $2.1
million being charged off. Two commercial real estate non-accrual credits of
approximately $9.5 million were transferred to real estate owned.
-more-
PACIFIC CENTURY FINANCIAL CORPORATION REPORTS FIRST QUARTER 2001
EARNINGS PAGE 3
Net charge-offs for the quarter were $97.7 million. During the quarter,
PCFC charged off approximately $66.7 million related to syndicated loans, $10.0
million in commercial real estate and $5.6 million in foreign loans. Of the
$97.7 million in loan losses, approximately $58.3 million was related to loans,
which at the time of charge-off were performing.
At quarter-end, the ratio of NPAs to total loans was 1.33 percent
compared 1.89 percent at year-end 2000 and 1.39 percent at the end of the first
quarter last year. The ratio of allowance for loan losses to non-performing
assets (exclusive of loans past due 90+ days) increased to 167 percent from 135
percent at December 31, 2000 and 143 percent for the first quarter of 2000. The
ratio of allowance for loan losses to outstanding loans stood at 2.29 percent
versus 2.62 percent at year-end 2000 and 2.05 percent at the end of 2000's first
quarter.
OTHER FINANCIAL HIGHLIGHTS
PCFC's success in lowering exposures in syndicated lending and in
Asia and the sale of its credit card portfolio were reflected in the
company's balance sheet. Total assets at the end of the first quarter were
$13.7 billion, down 2.1 percent from $14.0 billion at year-end 2000 and down
3.5 percent from $14.2 billion at March 31, 2000. Correspondingly, loans at
first quarter-end 2001 totaled $8.7 billion, down 8.5 percent from $9.5
billion at year-end 2000 and down 10.3 percent from $9.7 billion at March 31,
2000.
On a linked quarter basis, PCFC managed its syndicated loan exposure
lower by approximately $372 million, of which approximately $304 million were
loans outstanding, with the balance being undrawn commitments. The company also
reduced its Asia exposure by approximately $70 million to $708 million at the
end of the first quarter. At March 31, 2001, outstanding syndicated and Asia
loans were approximately $800 million and $525 million, respectively.
Deposits at the end of the first quarter stood at $8.8 billion, down
3.3 percent from $9.1 billion at year-end 2000 and down 3.3 percent from March
31, 2000. On a linked quarter basis, domestic deposits grew 1.7 percent and
foreign deposits declined 20.9 percent primarily due to a shift in funding
strategy.
OTHER HIGHLIGHTS SINCE THE END OF THE FIRST QUARTER
The company's Board of Directors declared a quarterly cash dividend of
18 cents per share on the company's outstanding shares. The dividend will be
payable on June 14, 2001 to shareholders of record at the close of business on
May 25, 2001.
PCFC's U.S. Mainland subsidiary Pacific Century Bank, N.A. (PCB)
completed the sale of PCB's nine-branch Arizona franchise to Zions
Bancorporation in April 2001. The sale resulted in a gain of approximately $24
million, net of expenses associated with the transaction. The net gain will be
recognized in the second quarter of 2001.
-more-
PACIFIC CENTURY FINANCIAL CORPORATION REPORTS FIRST QUARTER 2001
EARNINGS PAGE 4
2001 OUTLOOK FOR HAWAII'S ECONOMY
Hawaii's economists continue to forecast economic expansion in 2001
with Hawaii real GSP growth estimates between 2.5 percent to 3.0 percent. The
key driver of growth, according to the state's Council on Revenues, will be
construction which experienced 10 percent to 15 percent growth in 2000 and is
expected to have similar growth in 2001. The consensus outlook for tourism in
2001 is 2.5 percent to 3.5 percent growth in visitor arrivals, which factors in
the impact of the U.S. economic slowdown.
The company will review first quarter 2001 earnings and the results of
its strategic assessment process at a presentation in New York today at 8:00
a.m. ET. The presentation will be accessible via teleconference as well as
through the investor relations link of PCFC's web site, WWW.BOH.COM. The
conference call number is (800) 230-1096 or for international locations call
(612) 332-0720. A replay will be available at 12 noon ET on Monday, April 23,
2001 by calling (800) 475-6701 (USA) or (320) 365-3844 (International) and
entering the number 577584 when prompted. A replay of the presentation will be
available at 12 noon ET, Monday, April 23, 2001 on PCFC's web site.
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 and the West
Pacific, 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 PACIFIC CENTURY FINANCIAL CORPORATION AND SUBSIDIARIES
- --------------------------------------------------------------------------------------------------------------------------------
(in thousands of dollars except per share amounts)
Percentage
EARNINGS HIGHLIGHTS AND PERFORMANCE RATIOS 2001 2000 Change
- --------------------------------------------------------------------------------------------------------------------------------
Three Months Ended March 31
Net Income $33,677 $39,765 -15.3%
Basic Earnings Per Share 0.42 0.50 -16.0%
Diluted Earnings Per Share 0.42 0.50 -16.0%
Cash Dividends 14,363 13,541
Return on Average Assets 0.99% 1.13%
Return on Average Equity 10.42% 13.19%
Net Interest Margin 4.24% 4.31%
Efficiency Ratio 65.43% 62.06%
SUMMARY OF RESULTS EXCLUDING THE EFFECT OF INTANGIBLES (a)
- --------------------------------------------------------------------------------------------------------------------------------
Three Months Ended March 31
Net Income $39,283 $43,889 -10.5%
Basic Earnings per Share $0.49 $0.55 -10.9%
Diluted Earnings per Share $0.48 $0.55 -12.7%
Return on Average Assets 1.17% 1.26%
Return on Average Equity 14.21% 17.54%
Efficiency Ratio 63.10% 59.73%
(a) Intangibles include goodwill, core deposit and trust intangibles, and other
intangibles.
MARCH 31 MARCH 31 Percentage
STATEMENT OF CONDITION HIGHLIGHTS AND PERFORMANCE RATIOS 2001 2000 Change
- --------------------------------------------------------------------------------------------------------------------------------
Total Assets $13,710,675 $14,250,386 -3.8%
Net Loans 8,533,776 9,346,460 -8.7%
Total Deposits 8,815,523 9,143,063 -3.6%
Total Shareholders' Equity 1,371,942 1,225,907 11.9%
Book Value Per Common Share $17.18 $15.39
Loss Reserve / Loans Outstanding 2.29% 2.05%
Average Equity / Average Assets 9.47% 8.54%
Common Stock Price Range High Low
2000 .................................... $23.19 $11.06
2001 First Quarter....................... $20.99 $16.88
- --------------------------------------------------------------------------------------------------------------------------------
Corporate Offices: Inquiries:
Financial Plaza of the Pacific Allan R. Landon
130 Merchant Street Vice Chairman and
Honolulu, Hawaii 96813 Chief Financial Officer
(808) 538-4727
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED) PACIFIC CENTURY FINANCIAL CORPORATION AND SUBSIDIARIES
- -------------------------------------------------------------------------------------------------------------------------
3 MONTHS 3 MONTHS
ENDED ENDED
MAR 31 MAR 31
(IN THOUSANDS OF DOLLARS EXCEPT PER SHARE AMOUNTS) 2001 2000
- -------------------------------------------------------------------------------------------------------------------------
INTEREST INCOME
Interest on Loans $180,173 $180,402
Loan Fees 10,903 8,246
Income on Lease Financing 6,857 7,979
Interest and Dividends on Investment Securities
Taxable 11,636 14,236
Non-taxable 140 279
Income on Investment Securities Available for Sale 39,301 41,033
Interest on Deposits 5,214 3,764
Interest on Security Resale Agreements 38 10
Interest on Funds Sold 1,059 473
- -------------------------------------------------------------------------------------------------------------------------
TOTAL INTEREST INCOME 255,321 256,422
INTEREST EXPENSE
Interest on Deposits 72,019 68,214
Interest on Security Repurchase Agreements 24,630 22,953
Interest on Funds Purchased 6,123 8,527
Interest on Short-Term Borrowings 3,230 4,532
Interest on Long-Term Debt 15,314 12,688
- -------------------------------------------------------------------------------------------------------------------------
TOTAL INTEREST EXPENSE 121,316 116,914
- -------------------------------------------------------------------------------------------------------------------------
NET INTEREST INCOME 134,005 139,508
Provision for Loan Losses 52,466 13,522
- -------------------------------------------------------------------------------------------------------------------------
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES 81,539 125,986
NON-INTEREST INCOME
Trust Income 15,795 16,887
Service Charges on Deposit Accounts 9,940 9,557
Fees, Exchange, and Other Service Charges 20,782 21,626
Other Operating Income 13,410 15,575
Gain on Sale of Credit Card Portfolio 75,414 -
Investment Securities Gains (Losses) 20,203 282
- -------------------------------------------------------------------------------------------------------------------------
TOTAL NON-INTEREST INCOME 155,544 63,927
NON-INTEREST EXPENSE
Salaries 47,883 47,547
Pensions and Other Employee Benefits 14,353 14,630
Net Occupancy Expense 12,124 11,816
Net Equipment Expense 13,379 12,067
Other Operating Expense 39,131 35,211
Goodwill Amortization 4,836 4,742
Restructuring and Other Related Charges 44,438 -
Minority Interest 79 69
- -------------------------------------------------------------------------------------------------------------------------
TOTAL NON-INTEREST EXPENSE 176,223 126,082
- -------------------------------------------------------------------------------------------------------------------------
INCOME BEFORE INCOME TAXES 60,860 63,831
Provision for Income Taxes 27,183 24,066
- -------------------------------------------------------------------------------------------------------------------------
NET INCOME $33,677 $39,765
=========================================================================================================================
Basic Earnings Per Share $0.42 $0.50
Diluted Earnings Per Share $0.42 $0.50
Dividends Declared Per Share $0.18 $0.17
Basic Weighted Average Shares 79,720,284 79,821,365
Diluted Weighted Average Shares 81,124,713 80,017,761
=========================================================================================================================
CONSOLIDATED STATEMENTS OF CONDITION (UNAUDITED) PACIFIC CENTURY FINANCIAL CORPORATION AND SUBSIDIARIES
- ----------------------------------------------------------------------------------------------------------------------------------
MARCH 31 DECEMBER 31 MARCH 31
(IN THOUSANDS OF DOLLARS) 2001 2000 2000
- ----------------------------------------------------------------------------------------------------------------------------------
ASSETS
Interest-Bearing Deposits $411,070 $188,649 $225,314
Investment Securities - Held to Maturity
(Market Value of $665,722; $676,621 and $721,620 respectively) 656,174 670,038 732,344
Investment Securities - Available for Sale 2,390,518 2,507,076 2,537,617
Securities Purchased Under Agreements to Resell 377 3,969 902
Funds Sold 84,732 134,644 42,208
Loans Held for Sale 308,605 179,229 115,160
Loans 8,683,416 9,489,061 9,664,473
Unearned Income (258,445) (253,903) (237,764)
Allowance for Loan Losses (199,800) (246,247) (195,409)
- ----------------------------------------------------------------------------------------------------------------------------------
NET LOANS 8,533,776 9,168,140 9,346,460
- ----------------------------------------------------------------------------------------------------------------------------------
TOTAL EARNING ASSETS 12,076,647 12,672,516 12,884,845
Cash and Non-Interest Bearing Deposits 559,227 523,969 491,218
Premises and Equipment 251,746 254,621 267,497
Customers' Acceptance Liability 7,225 14,690 8,262
Accrued Interest Receivable 67,875 68,585 74,597
Other Real Estate 11,336 4,526 4,633
Intangibles, including Goodwill 186,313 192,264 202,832
Other Assets 550,306 282,645 316,502
- ----------------------------------------------------------------------------------------------------------------------------------
TOTAL ASSETS $13,710,675 $14,013,816 $14,250,386
==================================================================================================================================
LIABILITIES
Domestic Deposits
Demand - Non-Interest Bearing $1,685,149 $1,707,724 $1,708,635
- Interest Bearing 2,042,129 2,008,730 2,110,998
Savings 665,643 665,239 693,077
Time 2,948,232 2,836,083 2,759,319
Foreign Deposits
Demand - Non-Interest Bearing 337,854 385,366 380,179
Time Due to Banks 390,395 535,126 398,176
Other Savings and Time 746,121 942,313 1,092,679
- ----------------------------------------------------------------------------------------------------------------------------------
TOTAL DEPOSITS 8,815,523 9,080,581 9,143,063
Securities Sold Under Agreements to Repurchase 1,703,982 1,655,173 1,806,197
Funds Purchased 297,613 413,241 511,440
Short-Term Borrowings 278,786 211,481 424,720
Bank's Acceptances Outstanding 7,225 14,690 8,262
Accrued Retirement Expense 34,820 37,868 40,851
Accrued Interest Payable 64,113 72,460 66,456
Accrued Taxes Payable 164,893 130,766 103,826
Minority Interest 4,295 4,536 4,269
Other Liabilities 84,750 94,512 109,669
Long-Term Debt 882,733 997,152 805,726
- ----------------------------------------------------------------------------------------------------------------------------------
TOTAL LIABILITIES 12,338,733 12,712,460 13,024,479
SHAREHOLDERS' EQUITY
Common Stock ($.01 par value), authorized 500,000,000 shares;
issued / outstanding; March 2001 - 80,558,704 / 79,863,450;
December 2000 - 80,558,811 / 79,612,178; March 2000 - 80,551,253 / 79,661,479; 806 806 806
Capital Surplus 346,411 346,045 345,863
Accumulated Other Comprehensive Income 21,835 (25,079) (72,307)
Retained Earnings 1,015,867 996,791 967,308
Treasury Stock, at Cost - (March 2001 - 695,254; December 2000 - 946,633;
and March 2000 - 889,774) (12,977) (17,207) (15,763)
- ----------------------------------------------------------------------------------------------------------------------------------
TOTAL SHAREHOLDERS' EQUITY 1,371,942 1,301,356 1,225,907
- ----------------------------------------------------------------------------------------------------------------------------------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $13,710,675 $14,013,816 $14,250,386
==================================================================================================================================
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, 2000 $1,301,356 $806 $346,045 ($25,079)
Comprehensive Income
Net Income 33,677 - - -
Other Comprehensive Income, Net of Tax
Investment Securities, Net of
Reclassification Adjustment 19,510 - - 19,510
Foreign Currency Translation Adjustment 26,710 - - 26,710
Pension Liability Adjustments (159) - - (159)
Stock Compensation 853 - - 853
Total Comprehensive Income
Common Stock Issued
18,317 Profit Sharing Plan 370 - 92 -
184,092 Stock Option Plan 3,000 - 114 -
34,904 Dividend Reinvestment Plan 700 - 163 -
893 Directors' Restricted Shares and
Deferred Compensation Plan 288 - (3) -
Treasury Stock Purchased - - - -
Cash Dividends Paid (14,363) - - -
- ----------------------------------------------------------------------------------------------------------------------
BALANCE AT MARCH 31, 2001 $1,371,942 $806 $346,411 $21,835
======================================================================================================================
BALANCE AT DECEMBER 31, 1999 $1,212,330 $806 $345,851 ($66,106)
Comprehensive Income
Net Income 39,765 - - -
Other Comprehensive Income, Net of Tax
Investment Securities, Net of
Reclassification Adjustment (7,630) - - (7,630)
Foreign Currency Translation Adjustment 1,429 - - 1,429
Pension Liability Adjustments - - - -
Total Comprehensive Income
Common Stock Issued
22,377 Profit Sharing Plan 361 - - -
33,932 Stock Option Plan 398 - 3 -
78,723 Dividend Reinvestment Plan 1,123 - - -
525 Directors' Restricted Shares and
Deferred Compensation Plan 9 - 9 -
Treasury Stock Purchased (8,337) - - -
Cash Dividends Paid (13,541) - - -
- ----------------------------------------------------------------------------------------------------------------------
BALANCE AT MARCH 31, 2000 $1,225,907 $806 $345,863 ($72,307)
======================================================================================================================
- -------------------------------------------------------------------------------------------------
RETAINED TREASURY COMPREHENSIVE
(IN THOUSANDS OF DOLLARS) EARNINGS STOCK INCOME
- -------------------------------------------------------------------------------------------------
BALANCE AT DECEMBER 31, 2000 $996,791 ($17,207)
Comprehensive Income
Net Income 33,677 - $33,677
Other Comprehensive Income, Net of Tax
Investment Securities, Net of
Reclassification Adjustment - - 19,510
Foreign Currency Translation Adjustment - - 26,710
Pension Liability Adjustments - - (159)
Stock Compensation - - 853
--------------
Total Comprehensive Income $79,738
==============
Common Stock Issued
18,317 Profit Sharing Plan - 278
184,092 Stock Option Plan (238) 3,124
34,904 Dividend Reinvestment Plan - 537
893 Directors' Restricted Shares and
Deferred Compensation Plan - 291
Treasury Stock Purchased - -
Cash Dividends Paid (14,363) -
- --------------------------------------------------------------------------------
BALANCE AT MARCH 31, 2001 $1,015,867 ($12,977)
================================================================================
BALANCE AT DECEMBER 31, 1999 $942,177 ($10,398)
Comprehensive Income
Net Income 39,765 - $39,765
Other Comprehensive Income, Net of Tax
Investment Securities, Net of
Reclassification Adjustment - - (7,630)
Foreign Currency Translation Adjustment - - 1,429
Pension Liability Adjustments - - -
--------------
Total Comprehensive Income $33,564
==============
Common Stock Issued
22,377 Profit Sharing Plan (128) 489
33,932 Stock Option Plan (362) 757
78,723 Dividend Reinvestment Plan (603) 1,726
525 Directors' Restricted Shares and
Deferred Compensation Plan - -
Treasury Stock Purchased - (8,337)
Cash Dividends Paid (13,541) -
- --------------------------------------------------------------------------------
BALANCE AT MARCH 31, 2000 $967,308 ($15,763)
================================================================================
CONSOLIDATED AVERAGE BALANCES AND INTEREST RATES TAXABLE EQUIVALENT (UNAUDITED)
- -----------------------------------------------------------------------------------------------------------
THREE MONTHS ENDED THREE MONTHS ENDED
MARCH 31, 2001 MARCH 31, 2000
AVERAGE INCOME/ YIELD/ AVERAGE INCOME/ YIELD/
(in millions of dollars) BALANCE EXPENSE RATE BALANCE EXPENSE RATE
- -----------------------------------------------------------------------------------------------------------
Earning Assets
Interest Bearing Deposits $332.3 $5.2 6.36% $232.1 $3.8 6.52%
Investment Securities Held to Maturity
-Taxable 652.6 11.7 7.23 775.5 14.2 7.38
-Tax-Exempt 3.7 0.2 23.28 10.0 0.4 17.32
Investment Securities Available for Sale 2,479.9 39.3 6.43 2,527.0 41.0 6.53
Funds Sold 80.5 1.1 5.53 35.0 0.5 5.56
Net Loans
-Domestic 7,985.7 165.6 8.41 7,897.9 163.6 8.33
-Foreign 1,277.8 21.4 6.80 1,586.1 24.9 6.30
Loan Fees 10.9 8.3
-------------------------- --------------------------
Total Earning Assets 12,812.5 255.4 8.08 13,063.6 256.7 7.90
Cash and Due From Banks 438.2 506.5
Other Assets 595.1 631.4
---------- ----------
Total Assets $13,845.8 $14,201.5
========== ==========
Interest Bearing Liabilities
Domestic Deposits - Demand $2,008.2 11.7 2.36 $2,115.6 12.3 2.33
- Savings 665.7 3.4 2.04 700.1 3.5 2.03
- Time 2,902.7 43.1 6.03 2,764.9 35.1 5.10
-------------------------- --------------------------
Total Domestic 5,576.6 58.2 4.23 5,580.6 50.9 3.67
Foreign Deposits
- Time Due to Banks 489.4 6.6 5.51 487.8 7.0 5.79
- Other Time and Savings 801.0 7.2 3.65 1,121.6 10.3 3.70
-------------------------- --------------------------
Total Foreign 1,290.4 13.8 4.35 1,609.4 17.3 4.33
-------------------------- --------------------------
Total Interest Bearing Deposits 6,867.0 72.0 4.25 7,190.0 68.2 3.82
Short-Term Borrowings 2,364.8 34.0 5.83 2,626.6 36.0 5.51
Long-Term Debt 916.0 15.3 6.78 773.0 12.7 6.60
-------------------------- --------------------------
Total Interest Bearing Liabilities 10,147.8 121.3 4.85 10,589.6 116.9 4.44
-------------------------- --------------------------
Net Interest Income 134.1 139.8
Interest Rate Spread 3.23% 3.46%
Net Interest Margin 4.24% 4.30%
Demand Deposits - Domestic 1,636.8 1,663.6
- Foreign 377.5 419.5
---------- ----------
Total Demand Deposits 2,014.3 2,083.1
Other Liabilities 372.4 316.7
Shareholders' Equity 1,311.3 1,212.1
---------- ----------
Total Liabilities and Shareholders' Equity $13,845.8 $14,201.5
========== ==========
Provision for Loan Losses 52.5 13.5
Net Overhead 20.6 62.2
------ ------
Income Before Income Taxes 61.0 64.1
Provision for Income Taxes 27.2 24.1
Tax-Equivalent Adjustment 0.1 0.2
------ ------
Net Income $33.7 $39.8
====== ======
PACIFIC CENTURY FINANCIAL CORPORATION AND SUBSIDIARIES
- -------------------------------------------------------------------------------------------------------------
THREE MONTHS ENDED TWELVE MONTHS ENDED
DECEMBER 31, 2000 DECEMBER 31, 2000
AVERAGE INCOME/ YIELD/ AVERAGE INCOME/ YIELD/
(in millions of dollars) BALANCE EXPENSE RATE BALANCE EXPENSE RATE
- -------------------------------------------------------------------------------------------------------------
Earning Assets
Interest Bearing Deposits $215.7 $3.7 6.91% $216.2 $14.7 6.78%
Investment Securities Held to Maturity
-Taxable 687.0 12.5 7.24 724.3 53.0 7.32
-Tax-Exempt 3.8 0.2 22.24 7.6 1.4 18.24
Investment Securities Available for Sale 2,478.4 41.2 6.60 2,502.5 165.1 6.60
Funds Sold 66.8 1.1 6.46 43.2 2.7 6.22
Net Loans
-Domestic 8,108.3 178.7 8.76 8,076.4 690.1 8.55
-Foreign 1,319.9 22.5 6.78 1,467.9 97.7 6.65
Loan Fees 8.7 33.6
---------------------------- ---------------------------
Total Earning Assets 12,879.9 268.6 8.30 13,038.1 1,058.3 8.12
Cash and Due From Banks 404.6 443.2
Other Assets 503.3 574.0
---------- ---------
Total Assets $13,787.8 $14,055.3
========== =========
Interest Bearing Liabilities
Domestic Deposits - Demand $1,991.6 12.1 2.41 $2,061.9 48.7 2.36
- Savings 667.5 3.4 2.03 684.8 13.9 2.03
- Time 2,815.6 42.3 5.98 2,781.1 154.1 5.54
---------------------------- ----------------------------
Total Domestic 5,474.7 57.8 4.20 5,527.8 216.7 3.92
Foreign Deposits
- Time Due to Banks 557.9 8.7 6.23 505.4 30.4 6.03
- Other Time and Savings 768.9 7.1 3.65 960.5 38.9 4.05
---------------------------- ----------------------------
Total Foreign 1,326.8 15.8 4.73 1,465.9 69.3 4.73
---------------------------- ----------------------------
Total Interest Bearing Deposits 6,801.5 73.6 4.30 6,993.7 286.0 4.09
Short-Term Borrowings 2,437.1 39.1 6.38 2,597.4 156.1 6.01
Long-Term Debt 1,001.6 17.0 6.72 886.9 59.1 6.66
---------------------------- ----------------------------
Total Interest Bearing Liabilities 10,240.2 129.7 5.04 10,478.0 501.2 4.78
---------------------------- ----------------------------
Net Interest Income 138.9 557.1
Interest Rate Spread 3.26% 3.34%
Net Interest Margin 4.29% 4.27%
Demand Deposits - Domestic 1,610.8 1,640.0
- Foreign 354.7 371.4
---------- ----------
Total Demand Deposits 1,965.5 2,011.4
Other Liabilities 315.6 331.3
Shareholders' Equity 1,266.5 1,234.6
---------- ----------
Total Liabilities and Shareholders' Equity $13,787.8 $14,055.3
========== ==========
Provision for Loan Losses 25.8 142.9
Net Overhead 59.2 233.4
------- --------
Income Before Income Taxes 53.9 180.8
Provision for Income Taxes 21.2 66.3
Tax-Equivalent Adjustment 0.1 0.8
------- --------
Net Income $32.6 $113.7
======= ========
PACIFIC CENTURY FINANCIAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED NON-PERFORMING ASSETS AND ACCRUING LOANS PAST DUE 90 DAYS OR MORE
(UNAUDITED)
- ---------------------------------------------------------------------------------------------------------------------------
MAR 31 DEC 31 SEP 30 JUN 30 MAR 31 DEC 31 SEP 30 JUN 30 MAR 31 DEC 31
(IN MILLIONS OF DOLLARS) 2001 2000 2000 2000 2000 1999 1999 1999 1999 1998
- ---------------------------------------------------------------------------------------------------------------------------
Non-Accrual Loans
Commercial and Industrial $23.8 $55.4 $49.0 $52.7 $20.1 $23.7 $31.7 $37.5 $39.1 $28.2
Real Estate
Construction 6.3 6.4 8.1 8.0 0.9 1.1 2.1 0.8 3.1 2.9
Commercial 42.5 60.1 86.8 62.2 18.2 19.0 20.8 17.2 18.7 5.4
Residential 18.5 22.7 22.0 23.2 23.2 29.7 33.1 35.2 37.6 36.4
Installment 0.1 - 0.1 0.1 0.5 0.5 0.7 0.8 0.5 0.8
Leases 0.2 0.4 0.2 0.3 3.7 3.9 4.8 4.4 4.5 0.7
----------------------------------------------------------------------------------------
Total Domestic 91.4 145.0 166.2 146.5 66.6 77.9 93.2 95.9 103.5 74.4
Foreign 16.9 33.5 48.3 59.2 65.2 67.4 55.7 47.5 53.6 57.5
----------------------------------------------------------------------------------------
Subtotal 108.3 178.5 214.5 205.7 131.8 145.3 148.9 143.4 157.1 131.9
Foreclosed Real Estate
Domestic 10.9 4.2 4.9 4.6 4.3 4.3 5.6 5.8 6.1 5.5
Foreign 0.3 0.3 0.2 0.3 0.3 0.3 0.3 0.2 0.1 0.1
----------------------------------------------------------------------------------------
Subtotal 11.2 4.5 5.1 4.9 4.6 4.6 5.9 6.0 6.2 5.6
----------------------------------------------------------------------------------------
Total Non-Performing Assets 119.5 183.0 219.6 210.6 136.4 149.9 154.8 149.4 163.3 137.5
----------------------------------------------------------------------------------------
Accruing Loans Past Due 90 Days
or More
Commercial and Industrial 3.9 5.0 2.2 4.7 6.7 5.9 6.2 3.9 4.3 0.4
Real Estate
Construction - - 0.1 - - - 0.5 0.2 0.2 0.4
Commercial 0.9 1.3 4.9 2.0 2.1 1.9 2.4 0.2 0.4 -
Residential 3.3 3.3 7.2 3.5 5.0 4.0 2.8 3.7 3.5 4.5
Installment 2.7 5.6 4.6 4.0 4.7 4.5 4.5 5.2 6.9 7.3
Leases 0.1 0.4 0.1 1.5 1.4 1.2 0.2 - 0.1 0.3
----------------------------------------------------------------------------------------
Total Domestic 10.9 15.6 19.1 15.7 19.9 17.5 16.6 13.2 15.4 12.9
Foreign 0.2 3.2 1.5 1.3 3.2 1.0 5.0 8.2 6.3 7.9
----------------------------------------------------------------------------------------
Subtotal 11.1 18.8 20.6 17.0 23.1 18.5 21.6 21.4 21.7 20.8
----------------------------------------------------------------------------------------
Total $130.6 $201.8 $240.2 $227.6 $159.5 $168.4 $176.4 $170.8 $185.0 $158.3
========================================================================================
- --------------------------------------------------------------------------------------------------------------------------
Ratio of Non-Performing Assets
to Total Loans 1.33% 1.89% 2.25% 2.09% 1.39% 1.54% 1.59% 1.55% 1.69% 1.40%
- --------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------
Ratio of Non-Performing Assets
and Accruing Loans Past Due
90 Days or More to Total Loans 1.45% 2.09% 2.46% 2.26% 1.63% 1.73% 1.81% 1.78% 1.92% 1.61%
- --------------------------------------------------------------------------------------------------------------------------
PACIFIC CENTURY FINANCIAL CORPORATION AND SUBSIDIARIES
SUMMARY OF LOAN LOSS EXPERIENCE
- -----------------------------------------------------------------------------------------------------------
First Year First
Quarter Ended Quarter
(in millions of dollars) 2001 12/31/00 2000
- -----------------------------------------------------------------------------------------------------------
Average Amount of Loans Outstanding $9,263.5 $9,544.3 $9,484.1
- -----------------------------------------------------------------------------------------------------------
Balance of Reserve for Loan Losses
at Beginning of Period $246.2 $194.2 $194.2
Loans Charged-Off
Commercial and Industrial 75.5 22.1 1.4
Real Estate
Construction - 0.6 -
Commercial 11.9 15.2 3.9
Residential 2.5 6.5 2.4
Installment 5.4 20.1 4.7
Leases 0.1 0.5 -
- -----------------------------------------------------------------------------------------------------------
Total Domestic 95.4 65.0 12.4
Foreign 10.0 45.8 3.7
- -----------------------------------------------------------------------------------------------------------
Total Charged-Off 105.4 110.8 16.1
Recoveries on Loans Previously Charged-Off
Commercial and Industrial 2.7 5.5 1.7
Real Estate
Construction - - -
Commercial 0.3 0.6 0.1
Residential 0.2 1.1 0.5
Installment 1.8 6.9 1.7
Leases 0.1 - -
- -----------------------------------------------------------------------------------------------------------
Total Domestic 5.1 14.1 4.0
Foreign 2.6 7.3 0.8
- -----------------------------------------------------------------------------------------------------------
Total Recoveries 7.7 21.4 4.8
- -----------------------------------------------------------------------------------------------------------
Net Charge-Offs (97.7) (89.4) (11.3)
Provision Charged to Operating Expenses 52.5 142.9 13.5
Other Net Additions (Reductions)* (1.2) (1.5) (1.0)
- -----------------------------------------------------------------------------------------------------------
Balance at End of Period $199.8 $246.2 $195.4
===========================================================================================================
Ratio of Net Charge-Offs to
Average Loans Outstanding (annualized) 4.22% 0.94% 0.48%
- -----------------------------------------------------------------------------------------------------------
Ratio of Reserve to Loans Outstanding 2.29% 2.62% 2.05%
- -----------------------------------------------------------------------------------------------------------
* 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 except per share amounts)
MAR. 31 DEC. 31 SEPT. 30 JUN. 30 MAR. 31
2001 2000 2000 2000 2000
- -----------------------------------------------------------------------------------------------------
BALANCE SHEET TOTALS
Total Assets $ 13,710.7 $ 14,013.8 $ 13,939.9 $ 14,294.6 $ 14,250.4
Net Loans 8,533.8 9,168.1 9,233.5 9,497.4 9,346.5
Deposits 8,815.5 9,080.6 8,820.7 9,109.1 9,143.1
Long-Term Debt 882.7 997.2 999.7 902.2 805.7
Shareholders' Equity 1,371.9 1,301.4 1,250.1 1,209.4 1,225.9
QUARTERLY OPERATING RESULTS
Net Interest Income $ 134.0 $ 138.8 $ 139.3 $ 138.6 $ 139.5
Provision for Loan Losses 52.5 25.8 20.1 83.4 13.5
Non-Interest Income 155.5 64.7 61.3 73.6 63.9
Non-Interest Expense 176.2 123.9 124.9 121.9 126.1
Net Income 33.7 32.6 34.6 6.7 39.8
Basic Earnings Per Share $0.42 $0.41 $0.44 $0.08 $0.50
Diluted Earnings Per Share $0.42 $0.41 $0.44 $0.08 $0.50
Return on Average Assets 0.99% 0.94% 0.98% 0.19% 1.13%
Return on Average Equity 10.42% 10.24% 11.20% 2.19% 13.19%
Efficiency Ratio 65.43% 60.52% 62.26% 57.31% 62.06%
Excluding the Effects of Intangibles (1)
Net Income $39.3 $36.7 $38.8 $11.0 $43.9
Basic Earnings Per Share $0.49 $0.46 $0.49 $0.14 $0.55
Diluted Earnings Per Share $0.48 $0.46 $0.49 $0.14 $0.55
Return on Average Assets 1.17% 1.07% 1.12% 0.32% 1.26%
Return on Average Equity 14.21% 13.60% 14.94% 4.30% 17.54%
Efficiency Ratio 63.10% 58.19% 59.83% 54.96% 59.73%
(1) Intangibles include goodwill, core deposit and trust intangibles, and other
intangibles.