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Bank of Hawaii Financial Performance Tops "Bank Director Magazine’s" List of 150 Largest U.S. Banks

Thursday, December 08, 2005

Honolulu, Hawaii (December 8, 2005) - Bank of Hawaii has been ranked as the top performing bank among the 150 largest publicly owned banks and thrifts in the U.S., according to the 2005 fourth quarter edition of Bank Director Magazine, which was published in December 2005. BOH topped the list of the magazine’s 2005 Bank Performance Scorecard, which used six performance criteria that measure profitability, balance sheet strength, and asset quality.

The Scorecard, which strives to look beyond single performance metrics to identify institutions that are outstanding in critical areas, placed BOH first based on the strength of solid results in several areas. According to the publication, “BOH scored particularly well in both the profitability and asset quality categories. Its highest finish in the individual metrics was for ROAE (return on average equity), where it ranked third.”

“This is very exciting news for Bank of Hawaii, and much of the credit goes to the hard work and dedication of our employees who helped bring our bank this national recognition,” said Al Landon, Bank of Hawaii Chairman and Chief Executive Officer. “Credit also goes to our customers. The bank’s performance and this ranking confirm that Hawaii and our other principal markets, can be good places to do business.”

How The Scorecard Works:
Each bank’s asset quality was measured by calculating the ratio of nonperforming assets (NPAs) to total loans and Other Real Estate Owned (OREO), and its percentage of loan loss reserves to total loans. Based on the theory that profitability is the most important performance indicator for a public company, return on average assets (ROAA) and return on average equity (ROAE) were given a greater weight in the Scorecard’s final calculation than the other four metrics. The following six performance criteria were utilized in the Scorecard:

  • ROAA, which measures a bank’s profitability relative to its total assets.
  • ROAE, a second measurement of profitability that focuses on shareholder returns.
  • Tier-1 capital ratio, which is comprised of shareholders’ equity, retained earnings and convertible preferred stock divided by total assets.
  • Leverage ratio, which is shareholders’ equity divided by total assets.
  • NPA ratio, which is the ratio of nonaccrual loans and foreclosed assets to total loans and OREO.
  • Reserve coverage, which is loan loss reserves divided by total loans.

Performance measurements were taken from publicly available data over four linked quarters – the third and fourth quarters of 2004 and the first two quarters of 2005. 

With the objective of identifying the top performers among the 150 largest publicly owned banks and thrifts in the U.S., Bank Director Magazine worked with New York-based investment banking firm Sandler O’Neill & Partners to develop the Bank Performance Scorecard.

Bank of Hawaii Corporation is a regional financial services company serving businesses, consumers and governments in Hawaii, American Samoa and the West Pacific.  The Company’s principal subsidiary, Bank of Hawaii, was founded in 1897 and is the largest independent financial institution in Hawaii.  For more information about Bank of Hawaii Corporation, see the Company’s website, https://www.boh.com.