Bank of Hawaii

Bank of Hawaii Corporation

Type	Public
Traded as	NYSE: BOH
Industry	Finance
Founded	Honolulu, Hawaii (1897)
Headquarters	Honolulu, Hawaii
Key people	Peter S. Ho, Chairman & CEO
Products	Banking
Revenue	US$766M (FY 2009)
Net income	US$144M (FY 2009)
Total assets	US$12.4B (FY 2009)
Total equity	US$896M (FY 2009)
Website	www.boh.com

The Bank of Hawaii Corporation (BOH) is a regional commercial bank headquartered in Honolulu, Hawaii. It is Hawaii's second oldest bank and its largest locally owned bank in that majority of the voting stockholders reside within the state. Bank of Hawaii has the most accounts, customers, branches, and ATMs of any financial institution in the state (although BancWest's First Hawaiian Bank holds a greater number of dollars in deposits). The bank consists of four business segments: retail banking, commercial banking, investment services and treasury. The bank is currently headed by Chairman, President and CEO, Peter S. Ho.

History

Beginnings

In 1893, Charles Montague Cooke (1849–1909) with his brother-in-law Joseph Ballard Atherton and business partner Peter Cushman Jones founded Bank of Hawaii. In 1897 it was chartered in the Republic of Hawaii by interior minister James A. King. A decade after its founding, in 1903, the bank opened its first branch on Kauai. In 1922, the bank acquired First Bank of Hilo, which had four branches. In 1930 it amalgamated Bank of Maui.

Bank of Maui

Charles Dexter Lufkin organized First National Bank of Wailuku in 1901. Five years later, he had organized Lahaina National Bank. Then he organized the First National Bank of Paia in 1913. Lastly, in 1917, First National Bank of Paia merged with Lahaina National Bank and First National Bank of Wailuku to form Bank of Maui.

International expansion

It was not until 1959 that BOH made another novel move when it opened its first Pacific Islands branch on Kwajalein. Two years later it opened a branch each on Palau and Guam. Ten years later BOH continued its international expansion by absorbing Bank of American Samoa, which the Navy had established in 1914. That same year it created Banque de Tahiti as a joint venture between it and Crédit Lyonnais. The next year BOH established a branch on Yap. Branches on Ponape and Kosrae followed in subsequent years.

Reorganization

In 1971, BOH reorganized as a bank holding company, Hawaii Bancorporation. It also continued its expansion outside Hawaii with the establishment of a branch on Saipan. Three years later, BOH and Crédit Lyonnais established another joint-venture, Banque de Nouvelle Calédonie in Nouméa. In 1979 Hawaii Bancorporation changed its name to Bancorp Hawaii. The next year, BOH opened branch in Tokyo. In 1985, BOH merged with Hawaiian Trust Company. Four years later BOH finally expanded to the US mainland when bought First National Bank of Arizona. The next year it continued its expansion in Hawaii with the purchase of FirstFed America, which was a holding company for banks in Hawaii and on Guam.BOH acquired Banque Indosuez's operations in Vanuatu to form Banque d’Hawaii (Vanuatu) in 1993, Commonwealth Bank of Australia's shares in National Bank of Solomon Islands in 1994 and most of Crédit Lyonnais' holdings, and attained a 91% ownership in Banque de Nouvelle Calédonie. BoH also opened its first branch in Fiji, in Suva in 1996.

Name change

In 1997 Bancorp Hawaii changed its name to Pacific Century Financial Corporation (PCFC). Banque de Nouvelle Calédonie changed its name to Bank of Hawaii—Nouvelle Calédonie. BoH also purchased Banque Indosuez Nuigini in Papua New Guinea from Banque Indosuez and renamed it Bank of Hawaii (PNG) Ltd. In addition to its main office in Port Moresby, Bank of Hawaii (PNG) also had an office in Lae, PNG's second port city on the north-east coast. Indosuez Nuigini was established in 1983 with 49% Indosuez participation, 41.5% Bank of Papua New Guinea, and the remainder public. PCFC acquired California United Bank. Other Pacific Century subsidiaries included First Federal Savings and Loan Association of America (in Hawaii-later merged into BoH), and Pacific Century Bank and Pacific Century Savings in Arizona.

International acquisitions

In 1998 BoH bought 5.4mn convertible notes of Bank of Queensland as part of a strategic alliance. It also acquired 100% of Banque Paribas Pacifique (est. 1972; 3 branches) and 70% of Banque Paribas Polynésie (est. 1984; 1 branch). BoH integrated the operations in with Bank of Hawaii-Nouvelle Calédonie and Banque de Tahiti, respectively. PCFC merged its two mainland subsidiaries, California United Bank and Pacific Century Bank (in Arizona) into one nationally chartered entity, Pacific Century Bank, headquartered in California. In 1999 BoH bought 5.8mn shares (approx. 10%) in Bank of Queensland and it also bought First Federal Savings and Loan from its own holding company. In 2000 PCFC's subsidiary, Pacific Century Bank, sold its nine branches in Arizona to Zions Bancorporation for merger into Zions' subsidiary, National Bank of Arizona.

Sale of some international holdings

In 2001 BoH sold its 6.2mn shares and 5.4mn convertible notes in Bank of Queensland. The decision reflected PCFC's new Strategic Plan, which mandated a focus on the bank's core markets in Hawaii, the West Pacific, American Samoa and Japan. PCFC sold its Pacific Century Bank (PCB) subsidiary to U.S. Bancorp. The subsidiary had 20 branches in Southern California. BoH sold its shareholding in the Bank of Tonga and Pacific Commercial Bank of Samoa to Westpac. BoH and Westpac both had 30% interests in Bank of Tonga and 42% interests in Pacific Commercial Bank. BoH sold its operations in Papua New Guinea, Vanuatu and Fiji to ANZ. BoH sold its approximately 95% share interest in its French Polynesia and New Caledonia operations to France-based Caisse Nationale des Caisses d'Epargne (CNCE). Its operations in French Polynesia included 17 branches of its subsidiary, Banque de Tahiti, and about 265 employees. Its operations in New Caledonia included eight branches of subsidiary Bank of Hawaii-Nouvelle Caledonie and about 190 employees. Lastly, BoH closed its offices in Hong Kong, Seoul, Singapore, and Taipei.

Closure of several branches

In 2002, unable to find a buyer, BoH closed its Majuro branch in the Republic of the Marshall Islands (RMI) and its three branches in Pohnpei, Yap and Kosrae in the Federated States of Micronesia (FSM). BoH turned over its 51% interest in National Bank of Solomon Islands to the government of the Solomon Islands. Pacific Century Financial reverted to the Bank of Hawaii name.

Governance

Michael O'Neill served as chairman and CEO from November, 2000, to 2004, when Landon assumed both positions. O'Neill did not take a salary or any bonuses during his three years at the helm, but controlled in 2004 about 2.73 million — about 5 percent — of the bank's total shares directly or under option. He later served on the board of Citigroup, appointed in 2009.

External links

• Official website