Bank of Hawaii Annual Report 2011

FY2011 Annual Report · Bank of Hawaii

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a shared vision
shAReholdeRs customeRs employees community

2 0 1 1 A n n u A l R e p o R t

2 0 1 1 f i n A n c i A l s u m m A R y
Bank of Hawaii Corporation and Subsidiaries (dollars in thousands, except per-share amounts)

F o r t h e y e a r e n d e d d ec e m b e r 3 1

Earnings Highlights and Performance Ratios
Net Income
Basic Earnings Per Share
Diluted Earnings Per Share
Dividends Declared Per Share
Net Income to Average Total Assets (ROA)
Net Income to Average Shareholders’ Equity (ROE)
Net Interest Margin1
Efficiency Ratio2
Market Price Per Share of Common Stock:

Closing
High
Low

a s o F d ec e m b e r 3 1

Statement of Condition Highlights and Performance Ratios
Loans and Leases
Total Assets
Total Deposits
Total Shareholders’ Equity
Book Value Per Common Share
Allowance to Loans and Leases Outstanding
Full-Time Equivalent Employees
Branches and Offices

F o r t h e Q ua r t e r e n d e d d ec e m b e r 3 1

Earnings Highlights and Performance Ratios
Net Income
Basic Earnings Per Share
Diluted Earnings Per Share
Net Income to Average Total Assets (ROA)
Net Income to Average Shareholders’ Equity (ROE)
Net Interest Margin1
Efficiency Ratio2

$
$
$

2011

160,043
3.40
3.39
1.80
1.22%
15.69%
3.13%
59.23%

44.49
49.26
34.50

5,538,304
13,846,391
10,592,623
1,002,667
21.82
2.50%
2,370
81

39,229
0.85
0.85
1.17%
15.23%
3.04%
60.42%

2010

$
183,942
3.83
3.80
1.80
1.45%
18.16%
3.41%
52.32%

$
$
$

47.21
54.10
41.60

5,335,792
13,126,787
9,888,995
1,011,133
21.02
2.76%
2,399
82

40,578
0.84
0.84
1.24%
15.08%
3.15%
60.05%

1 Net interest margin is defined as net interest income, on a taxable equivalent basis, as a percentage of average earning assets.
2 Efficiency ratio is defined as noninterest expense divided by total revenue (net interest income and total noninterest income).

2 0 1 1 R e l A t i v e p R i c e p e R f o R m A n c e

$110

$105

$100

$95

$90

$85

$80

$75

$70

M A R C H 3 1

J U N E 3 0

S E P T E M B E R 3 0

Bank of Hawaii

S&P Banks Index

S&P 500 Index

Our Customers:
As a financial services business, our value is based
on providing customers with convenient, effective
and sound banking and investment products
and services. We have measured our customers’
impressions of customer service and overall
customer satisfaction for many years now. In 2011,
we were pleased to see customer service and overall
customer satisfaction levels reach record levels.

The way our customers bank is changing and much
of that change is being driven by the need for
greater convenience and reliance on technology.
Online and mobile banking are growing rapidly in
popularity. We have worked hard to improve our
online experience. Bank of Hawaii was the first bank
in Hawaii to provide a mobile banking offering for
iPhone users. Recently, we expanded our mobile
banking offerings to also include Android and
Blackberry customers.

We recognize that the traditional branch environ-
ment remains a popular alternative for many of our
Bank of Hawaii customers. In 2011, we opened three
new branches. In 2012 we will add additional
branches with a goal of providing greater conven-
ience to meet our customers’ changing needs.
Aligning the convenience needs of our customers
today and into the future with prudent capital
planning is a major imperative for Bank of Hawaii.

Our Employees:
Our employees are our greatest resource at
Bank of Hawaii. They are truly the crown jewel of our
franchise. Our success—past, present and future—
depends on retaining and hiring the finest financial
services professionals in our marketplace. In 2011,
we launched a new employee program called Grow,
Connect and Thrive focused on improving the
employee experience at Bank of Hawaii. The core of
the program centers on the notion that talented
people work for more than just a paycheck.

The workplace, as a center for social connection,
personal development and life skills building, is an
important element of employee satisfaction. Grow,
Connect and Thrive, through 116 separate programs,
focuses on those nonfinancial attributes of working
at Bank of Hawaii.

Much has been written on the needs and complex-
ion of the 21st century workforce. We see this
workforce as one confronted with a world that is
more complex, ever changing and more competitive
than ever. Training and development will be critical
to succeeding in this environment. In response to
this reality, in 2011 we opened our Center For
Excellence training center at our downtown
headquarters.

The Center houses 16,000 square feet of training
and development space for our employees. The
space utilizes the latest in computer and audio-visual
capabilities and also houses our teller training and
support area. We believe this new facility supports
the learning capacity we will need to provide the
requisite resources necessary to keeping our team
on the cutting edge in the coming years.

Our Community:
Our strength as a community bank is directly
linked to the strength of the communities we serve.
Providing leadership and support (financial and
otherwise) is truly a strategic imperative of
Bank of Hawaii.

In 2011, 2,015 of our employees participated in one or
more community support events. That is a staggering
82% of our overall workforce and a number that I
am quite proud of. We held 50 community support
events during the year. We conducted 123 Smart
Money Seminars in 2011 covering topics ranging
from basic budgeting to elder fraud.

In 2011, we were again rated Outstanding for our
Community Reinvestment Act activities by the
Federal Reserve Bank. This is the seventh
consecutive Outstanding ranking for Bank of Hawaii.
Also in 2011, we were named SBA small business
lender of the year. Further highlighting our
commitment to our markets, in 2011 Bank of Hawaii
recorded more mortgages than any other financial
institution in the Hawaii market.

Concluding Thoughts:
As I mentioned earlier, the business and economic
environment remains as challenging as ever.
Despite these challenges, in 2011 Bank of Hawaii
demonstrated the ability to deliver meaningful
results for each of our key stakeholders—our
shareholders, our customers, our employees and
our communities. Our vision lies in creating
exceptional value for each of these key segments
concurrently. In this regard, we feel good about our
performance to date and we have great confidence
in our ability to deliver even greater value to our
constituencies in the years ahead.

With warmest regards,

Sincerely,

PETER S. HO
Chairman, President, and Chief Executive Officer
Bank of Hawaii Corporation and Bank of Hawaii

y e A R i n R e v i e w

B E I N g T H E B A N k “ O f H A w A I I ” I S B O T H A P R I v I l E g E
A N D A R E S P O N S I B I l I T y .

It means sharing the common values
that define us—the importance of family,
a strong sense of community, and our
hopes and aspirations for Hawaii’s future.
It means making sure these values
ensure everything we do delivers the
highest quality, safest, most convenient
and innovative financial services to the
families and businesses we serve.

With roots deeply embedded in Hawaii,
the bank draws on the time-honored ideals
of ‘ohana (family) and malama (service)
in the way we conduct our business. At
the same time, we employ leading edge
technology to manage and deliver our
services more conveniently, efficiently
and economically in a complex, ever-
evolving financial services environment.

Enhancing the Customer Experience
The key feature remains convenience, which we
continue to analyze and adapt based on the changing
preferences of our customers. We’ve made banking
more accessible through expansions to online and
mobile banking; expanded banking hours at our
in-store branches and our 24/7 call center; and at an
improved ATM network. We also bring more
specialized services to customers through our
strategically located banking centers.

Online and Mobile Banking
Reflecting the trend toward doing personal
transactions online and via smartphones, the bank
has seen an upswing in both online banking and
mobile banking, the latter introduced in 2007. As
customers have become accustomed to the ease and
security of electronic banking, the bank has seen a

marked rise in the use of such services as monthly
online bank statements, paying bills online, and
opening checking and savings accounts online. To
support efficient delivery of our full-range of
services, we continue to improve and update our
award-winning website for greater ease of use and
security.

ATMs
Convenience is not just having the largest network
of ATMs throughout the state. It is also found in
the convenience of our multi-language screens so
that ATM users can now select Chinese, Japanese
or English. This is an especially welcome feature
for our Asian residents, visitors and customers.

Responding to Changing Customer Preferences
The increasing popularity of online and mobile
banking provides customers the ability to do more
of their basic transactions at their convenience. At
the same time, transaction volumes have been
decreasing at some of our traditional branches.
Our vision of providing an enhanced customer
experience has been realigned to reflect these
new trends. This includes further investment in our
in-store branch network and banking centers,
while moving away from some of our traditional
branches.

New In-Store Branches
Our in-store branches have become increasingly
popular as they offer customers the convenience
of being able to do their banking where they shop.
In 2011, we opened three new in-store branches.
The new Moiliili Branch, formerly the University
Branch, opened in the new Longs/CVS store,
marking our first co-branded branch partnership
with the company. We also opened two Safeway
in-store branches—one in Hilo’s Makaala Center,
and another in the new Safeway Beretania on
Oahu, bringing the total Safeway in-store branches
to nine.

At the end of 2011, we announced the closure of
three of our traditional branches—Aikahi, Laie and
Kohala—in 2012, and the temporary closure of the
Pearl Harbor branch as we look for a new location.

Three more in-store branches are planned for 2012,
one on Oahu and two on neighbor islands.

Banking Centers
Since the banking center was first introduced at
select branches a few years ago, it has proved to
be so successful that in 2011 three more branches
became banking centers, bringing the total to
seven on Oahu.

The concept of the banking center is making
specialized financial services available in one
designated branch so that customers can have
immediate access to highly skilled experts in a
range of services. Specialists in Mortgage Banking,
Investment Services, Personal Banking, and
Business Banking conduct business from each of
our banking centers. These banking centers are
located in branches serving major metropolitan
markets—Ala Moana, Kailua, Kapolei, Main Branch
in Downtown Honolulu, Pearlridge, Waialae-Kahala
and Waikiki.

The close proximity of business units fosters
increased collaboration. Customers can now have
their needs met in one location by one team—
whether they are planning for retirement,
refinancing a mortgage, applying for a business
loan, or saving for college.

Improving Systems and Processes
Technology and management systems play an
integral part in the bank’s ability to deliver the
full range of financial services to our customers
efficiently and quickly.

Updated Information Technology System
and Management Tools
We are continuously improving the bank’s
Information Technology system. For example,
new systems were implemented that streamline
and increase the speed and convenience of
transactions for customers, whether they are using
an ATM, dealing with our call center, or doing their
banking at a branch. At the same time, additional
functionality was implemented that facilitates the
sharing of information across the entire company
so that bank employees are better able to manage
transaction processes and provide more efficient
service. This includes the use of workflow and
business automation tools that streamline and
automate processes to better serve our customers
and improve the efficiency of our employees.
In our systems environment, we are leveraging
virtualization technologies and cloud-based
services to lower our costs and reduce the time
to deploy new services and capabilities.

Management systems are always being improved
to allow the bank’s business units to assess and
enhance our capabilities to improve the delivery
of service. This includes refining and customizing
tools like “Business Dashboards” that give us
ways to track performance in our respective
departments in real time. The desired result is
always outstanding customer service.

All our newest information technology and
management initiatives are contributing to the
bank’s effort to reduce energy consumption in
its operations statewide. Through automation and
more efficient technologies in our desktop
computer environment, total utility cost savings
are expected to be $250,000 annually.

y e A R i n R e v i e w

Comprehensive wealth Management Services
For more than a century, Bank of Hawaii has
helped generations of families preserve and grow
their wealth. We combine our local, personalized
approach with products and services that deliver
a global perspective to fulfill the financial goals of
our clients.

Investment and Trust Services
As the largest Hawaii-based provider of fiduciary
services in the state, the bank’s Investment
Services Group (ISG) is the premier provider of
comprehensive wealth management services,
including private banking and trust administration;
investment management, and retirement plan
services; succession planning; real estate
management; tax planning and preparation,
financial planning and business valuation; and full
service brokerage.

In 2011, ISG took steps to improve the scope of
our client services with several initiatives. We
completed our conversion to open architecture
investment services, which allows our local
portfolio managers to provide clients
recommendations from leading global investment
managers. We brought services directly to clients
through our presence in the Bank of Hawaii
Banking Centers. We enhanced credit services by
placing a high priority on expediting and
customizing loans for private banking clients.
We also enhanced our holistic approach to serving
clients by rolling out our new dashboard reporting
tool to better integrate all aspects of our
comprehensive wealth management activities.

Meeting Increased Demands for loans
During 2011, we saw an increase in the demand
for both business and consumer loans—an
encouraging sign of growing consumer confidence
in the economy and optimism about the future.

To meet this rising demand, we took steps to
broaden the range of our loan products, providing
loans that were in line with customers’ borrowing
needs—whether it was to purchase new equipment
for a business, buy a new car or a new home, or
pay for a child’s education. We also modified our
home equity lending product to appeal to a
broader range of homeowners.

To take our message to the marketplace, we
revitalized our branch sales efforts, as well as
advertising and direct mail campaigns. We also
increased our sales staffing and resources
dedicated to serving this market.

Mortgage lending
2011 was a banner year for mortgage lending, with
the bank named the state’s number one lender
based on executing the greatest number of loans.
A great deal of credit goes to our team of highly
qualified, experienced lenders in the field, as well
as the presence of mortgage loan specialists in our
banking centers across Oahu. Their success was
reflected in Bank of Hawaii being awarded the
Honolulu Star-Advertiser people’s choice award for
Best Mortgage Company of the year.

Meeting the Needs of Business
Small businesses. Sole proprietorships. Medium-
sized companies. Large corporations. International
businesses. As they grow and change, Bank of
Hawaii takes great pains to understand our
business customers’ needs and provide the
services they need to thrive and succeed.

Business Banking Named SBA
“lender of the year” for Hawaii
In 2011, we saw a marked increase in lending in
the small business sector—an important market
segment, as more than 95 percent of enterprises
in Hawaii are small businesses. The bank continued

its efforts to serve this market through its
dedicated business banking group, and led all
lenders in the state with 80 SBA guaranteed loans.
The effort garnered Bank of Hawaii the U.S. Small
Business Administration’s prestigious “Lender of
the Year” Award for Hawaii.

International Banking
The only local bank with an international division,
Bank of Hawaii was honored to co-host and
organize the APEC China-Aloha Business Leaders’
Night with the China Council for the Promotion of
International Trade (CCPIT). The event drew more
than 200 chairmen and CEOs of top Chinese
companies who were in Hawaii to attend the APEC
CEO Summit. Attendees at the China Night also
included more than 150 chairmen and CEOs of top
Hawaii companies. It was the ideal venue for
Hawaii companies to establish relationships with
their Chinese counterparts and showcase
business opportunities in the state.

The International Banking Division serves clients
from Asian countries such as China, Japan and
Korea who have financial interests in Hawaii and
the Pacific. To facilitate their transactions, all our
client-facing officers are first generation Asians
who are fluent in both their respective languages
and cultures, and knowledgeable in the protocols
of international business. The bank has also taken
steps to make banking easier in Hawaii and the
West Pacific by offering multi-language ATM
screens in Chinese, Japanese and English—a major
convenience for our customers as well as residents
and visitors.

Chinese businesses, visitors and investors have
also been benefiting from a service put in place in
2010, allowing China UnionPay debit and credit
card holders to withdraw cash at any Bank of
Hawaii ATMs and makes purchases at our

merchant terminals. China UnionPay is the sole
bank card association in China and has more than
2.5 billion cards issued under the CUP brand.

Commercial/Corporate Banking
Commercial Banking enjoyed solid growth in
2011. With companies beginning to commit to
strategic expansion, year-over-year lending
activity increased significantly. Growth was
particularly evident in the commercial real estate
loan portfolio as clients took advantage of
attractive conditions in the Hawaii marketplace
both in terms of investor and owner-occupied real
estate. Increased activity was also evident in the
Hawaii and Guam based commercial and industrial
loan books as locally owned businesses made
significant investments into their operations. With
the increase in activity expected to continue and
with a continued desire to provide the very
highest level of service to its commercial clients,
Bank of Hawaii has responded by deploying more
commercial lending officers to serve its markets.

Being the Bank “of Hawaii” is indeed
a privilege and a responsibility, and
we are grateful to our customers for
the trust and confidence they place in
us. We are committed to honoring the
shared values that define us in every
aspect of our customer relationships.

On the following pages, you will hear
from some of our customers about
their experiences in ways we do
business with them—always delivering
the highest quality financial services
tailored to their needs, with the
utmost in service and convenience.

p R o f i l e : commercial banking and Private client services client

H O S P I C E H A w A I I

“Great banking is not just about
banking; it’s about relationships and
partnerships. . . . and we know that
Bank of hawaii is there to partner
with us through whatever happens.”

– K e n n e t h Z e R i

I really appreciate how tied together this
community is, how inter-dependent we are
upon each other. I don’t know how to generate
electricity, so I am dependent upon electricity
companies to do that. I’m not a banker so I depend
upon Bank of Hawaii to be the very best at being
a bank, to be very solid so that I know that our
money, which we have in stewardship from our
donors, is going to be wisely taken care of. Then
I can focus on what I do best—provide hospice care.

I value that when I have a conversation with
Diane Murakami, our banker, that she is going
to do the work that she needs to do, talking to
people within the broader bank to say, ‘What’s
the best way to help Hospice Hawaii?’

Over the years, as is natural for any business of
Hawaii, there have been good times and bad
times. And during the difficult times, Bank of
Hawaii stood by us to help us invest our resources
to achieve the performance that we wanted out
of our reserves. They helped us to understand
the current economy more effectively, to make
better decisions about money; helped us to
envision ourselves so that when opportunities
arise we can be ready to grow as an organization.
And we know that Bank of Hawaii is there to
partner with us through whatever happens.

And it’s face to face. I don’t have to call the
Mainland. I know whom I’m calling when I have
that conversation. Great banking is not just about
banking; it’s about relationships and partnerships.

We are part of this community, we are
supported by the community, and we support
the community in turn. Because we’re a local
company, it’s important that we work with a local
bank. Hospice Hawaii has been here for more
than 32 years and it’s really important to us that
we have those local roots. We know that when

you have those local roots, you understand.
It’s really important to this community and it’s
important to the bank as well since we’re shaping
our community to be the best that it can be.

I like working with Bank of Hawaii because
I know that the bank has the same set of values
that we do: How do we do business, how do
we support our community so that it’s a better
place? We are honored that the employees and
retirees of Bank of Hawaii support the mission
of Hospice Hawaii; that they are engaged in
the community, starting from Peter Ho.

When I ask for a board member, Bank of Hawaii
comes up with a good senior staff person to
join our organization. We’ve had a member of
Bank of Hawaii’s leadership team on our board
of directors for as long as I know. When we
have an event, their staff turn out to participate,
to support and volunteer. Bank of Hawaii staff
sometimes use the services of Hospice Hawaii.
They say, ‘I’m going to trust you to take care
of my dad.’ That’s the real partnership.

On left: Kenneth Zeri, president and chief professional officer,
Hospice Hawaii.

p R o f i l e : commercial banking client

M A U I S O D A & I C E w O R k S , l T D .

“having a local bank is really
comforting to us. in hard times,
we rely on partners and family
to take us through.”

– m i K e n o b R i g A

Mike Nobriga: I’ve been president and general
manager of Maui Soda & Ice Works since
1999. I was born into the company. I’ve been
in the company all my life. I’ve been working
here part-time since the early to late ‘60s.
Then upon graduation from the University of
Hawaii-Manoa in 1975, I began full time since
1976. It’s the nature of our family business.

We place a lot of emphasis on the feeling
of ‘ohana, the feeling of family, the feeling
of partnership. Having a local bank is really
comforting to us. In hard times, we rely on
partners and family to take us through.

The most important part of our relationship
with Bank of Hawaii is professionalism and the
personality of the team assigned to us.
Bryce Thayer is our primary banker, and we
also get a lot of support from Galen Nakamura
at the branch here in Wailuku.

The people that we work with really make us
feel that we’re the most important customer
that Bank of Hawaii has. And that really helps us
strengthen our relationship with the bank and
the people we work with. If there’s a problem, we
have a point of contact we can call and no matter
what department we reach at Bank of Hawaii, we
get the solution quickly and we get corrective
actions immediately and everything’s hunky dory.

We’ve been producing our quality, premium ice
cream called Roselani since 1932. We’ve focused
our niche on Hawaiian tropical flavors, and have
invested heavily in our statewide distribution for
the past seven years. It’s the most challenging
of times right now with the economy; disposable
income being relatively restricted. The rest of
the business has historically been able to support
our investment efforts, but these last two years,

Bank of Hawaii has been very instrumental
in keeping our cash flow up and running.

The bank has been generous with extending lines
of credit, especially for special equipment, to
improve our efficiencies and to ensure that we can
focus on the utmost product quality and appeal to
customers throughout our great Hawaiian Islands.

They have helped us with economic forecasts.
When we think about a major project, they’re
usually the ones we call after a group meeting,
and Bank of Hawaii provides the best course of
action for the company. Whether it’s photovoltaic
or sustainable energy, Bank of Hawaii is always
there and has the necessary knowledge to
help us make sound financial decisions.

Ever since the late 1990s when the company
shifted over to Bank of Hawaii because of the
great service and partnership that Bank of
Hawaii shows, the whole family switched all of
our accounts personally over to the Bank of
Hawaii. We are totally committed as a family to
Bank of Hawaii, and our friends and associates
are always highly complimentary of the service.

In the Roselani production area (from left): Catherine Nobriga-
Kim, vice president frozen division Roselani and corporate
treasurer; David D. Nobriga, fleet maintenance manager; David
“Buddy” Nobriga, chairman of the board; James J. Nobriga,
distribution warehouse manager; Mike A. Nobriga, president and
general manager; and Robert A. Nobriga, director of freight
operations.

p R o f i l e : commercial banking and Private banking client

y U M M y R E S T A U R A N T g R O U P

“i truly value them as my partners,
not just as bank officers.”

– p e t e R K i m

I cherish, respect and am most grateful to Bank of
Hawaii for taking the risk of providing me with my
very first loan, with the help of Curtis Tom. The
Yummy Restaurant Group and our family now have
more than forty restaurants in Hawaii.

On left: Peter Kim, president and founder, Yummy Restaurant
Group, at the counter of Liliha Bakery on Oahu.

I have been a loyal Bank of Hawaii client for more
than 25 years, and we have established a mutual
respect in our banking relationship throughout
these years.

Bank of Hawaii has always provided me with a
deep perception of my business and my changing
needs. I value the communication they encourage
between client and banker, because from better
communication comes better understanding of
each other’s business.

At Yummy’s, we believe in promoting quality first
without stressing about the profit. It is all about
providing the quality and value that satisfies our
customers. With this belief and practice, we have
been most fortunate to serve Hawaii during the
last 25 years.

Having both Tim Chang and Galen Nakamura as
my local bankers who understand and appreciate
my business has been most beneficial to my
business operations. They have direct access to my
in-depth business plans and endeavors, and have
efficiently responded by providing me with sound
advice. I truly value them as my partners, not just
as bank officers.

On the personal side, Cheryl Nakaoka, my private
client banker, has done a marvelous job of tending
to my needs over the years. Our mutual respect
and confidence in each other have enabled me to
resolve many banking matters.

I was proud to recommend my family members to
Bank of Hawaii. They have been provided with the
utmost respect and excellent service to fulfill their
banking needs.

p R o f i l e : International banking and Private client services client

k y O - y A M A N A g E M E N T C O M P A N y

“Kyo-ya cares about being a good
steward in the community and
helping our employees prosper.
Bank of hawaii shares these
convictions, making our relationship
one that is not limited to our
banking or financial needs.”

– g R e g d i c K h e n s

Relationships are very important. Kyo-ya Hotels
& Resorts has been with Bank of Hawaii since our
company was founded in the early 1960s. We are
a local company and a wholly owned subsidiary
of Kokusai Kogyo Kabushiki Kaisha in Japan.
Kyo-ya cares about being a good steward in the
community and helping our employees prosper.
Bank of Hawaii shares these convictions, making
our relationship one that is not limited to our
banking or financial needs.

In addition to the day-to-day banking services
BOH provides, we value the one-on-one
relationship with our banker, Robert Fortuna, of
the International Banking Services Division. He has
worked with us for many years, and he and his team
are very responsive and helpful.

Robert is our point person at Bank of Hawaii and
works together with Cyrus Oda, our chief financial
officer, to ensure our banking needs are met. In
2011, Robert did a tremendous job arranging
complex accounts with BOH for our mezzanine
lenders. Robert handled the negotiation and
facilitated the closing of the transaction in less
than 24 hours. The professionalism and efficiency
Robert displayed are one of the many reasons we
value our relationship.

Bank of Hawaii also provided a retirement plan for
our non-union employees that features enhanced
investment options and unique asset allocation
models at a lower cost than our previous plan.
Additionally, the bank’s Retirement Plan Services
team provided our employees with one-on-one and
group educational sessions to help them make the
best overall use of their retirement plan benefits.

In addition to assisting us with financial services,
the bank helps us by facilitating relationships with
other companies—whether they are in Hawaii, on
the mainland or international.

A perfect example of the bank’s commitment
to Hawaii is the role their Chairman & CEO,
Peter Ho, played as chairman of the APEC 2011
Hawaii Host Committee. I had the opportunity
to serve with Peter on the Host Committee and
saw firsthand how he brought together a diverse
mix of Hawaii executives—from the business
community, government, unions and the military—
and created a bond among these leaders, who
typically don’t engage with one another on a
day-to-day basis. It was an incredible opportunity
for all of us to work together, and it will have a big
impact on the future because it opened positive
dialogue and established strong relationships.

APEC overall was phenomenal for Hawaii. For our
state to be able to host these world leaders was
truly an amazing, once-in-a-lifetime experience.
It was also a privilege and pleasure for Kyo-ya to
host many of the leaders’ meetings at our hotels
in Waikiki.

The bank also supports the community through its
charitable giving and sponsorship of events. With
a similar belief in strengthening the communities
where we do business, we participate in a number
of activities, including the annual Visitor Industry
Charity Walk held in Waikiki. Our employees enjoy
participating in this event, especially in serving
the lunch that greets the thousands of people at
the end of their walk. Each year, Kyo-ya donates
approximately $260,000 to more than 30 nonprofit
organizations and $500,000 in hotel room and
dining certificates to more than 100 nonprofits.

We’re glad to be a part of our island community,
and to do business with a company that shares this
same commitment to Hawaii.

On left: Greg Dickhens, president, Kyo-ya Hotels & Resorts, at
the Royal Hawaiian Hotel in Waikiki.

p R o f i l e : retail client

C A R O N l I N g

“i like working with Bank of hawaii
because they’ve always impressed me
throughout the years as being
professional yet warm, which is a
really hard combination to get.”

– c A R o n l i n g

I haven’t been a client of Bank of Hawaii for very
long. I just started in August of 2011, and something
interesting to note is that I haven’t had a local
bank in 14 years. I had a credit union that is on the
Mainland. However, I saw Bank of Hawaii people all
the time at work-related events through the years.
And when I had to select my bank, I was given
two choices and, of course, I decided on Bank of
Hawaii, because a good friend of mine works there.

I’m a Realtor, so I use Bank of Hawaii a lot for my
loan officers. One of my favorite loan officers
is Kai Yamamoto at the Pearlridge Branch. And
I’ve known Scott Yoshihara for years; he does
a lot of community service with my Dad.

My first experience of opening a bank account
with Bank of Hawaii was with Rachael Shinsato
at the Moiliili Branch. She was amazing. She
took care of me from start to finish. And by the
end of everything, I felt she was my friend.

In the last few years, especially during the
mortgage crisis, I heard that Bank of Hawaii
was the number one bank in the nation.
It was good to know that a bank like that
exists in Hawaii and it could be my bank.

I like working with Bank of Hawaii because
they’ve always impressed me throughout
the years as being professional yet warm,
which is a really hard combination to get.

Every time I visit any Bank of Hawaii branch, I
feel like I’ve made a friend. Each person seems
to look out for my best interests. I’ve had many
good experiences with the tellers. In one of my
latest experiences, at the Beretania Safeway, I
went to deposit a check and they told me what
the options were: That I could open a Bankohana
bank account and it would earn more interest
than in the checking account that I opened

up. They were all so nice and friendly that I
opened up another bank account with them,
and I received a $10 gift card to Safeway.

Online banking is very important to me. I’ve
done my banking online for over a decade
because my credit union doesn’t exist on the
island. I’ve been using Bank of Hawaii’s app on
my iPhone, and that’s how I like to manage my
banking online. The app is just like the website,
and it logs you out for security. They have a way
that you can text where your money is going;
online services make it very easy for you.

I got into a panic a few days ago because I
wasn’t sure how much money I had in my account,
and I didn’t have time to go to the bank.
I needed to have a certain amount for the check
I just wrote, and I didn’t remember how much
money I had transferred from my savings to my
checking when I was last at the bank. I could
see how much was in my checking account,
which was not enough, so I looked online for
my new savings account and it wasn’t featured
in my online account. I called the bank—you
can call them 24/7—and the representative set
it up very easily and made the transfer, and I
felt better. When I looked the very next day, it
had all been set up so I could see everything
online. Each time that I’ve interacted with Bank
of Hawaii, I remember walking away thinking,
‘Wow, Bank of Hawaii really hires great people.’

Bank of Hawaii is in all the grocery stores—they’re
at CVS/Longs, they’re at Safeway; they make
banking very easy. They make it really easy for
their customers and they make them happy as well.

On left: Caron Ling, Realtor and CRS, team builder/recruiter
for Hawaii Life Real Estate Brokers, at the Bank of Hawaii
Moiliili Branch.

s e R v i n g o u R c o m m u n i t i e s

Counterclockwise from top: Bank of Hawaii volunteers prepare to wade into Maunalua Bay on Oahu to
remove alien algae, one of 50 employee volunteer projects in 2011; Paul Hoe, manager of Bank of Hawaii’s
Employee Volunteer Program, was recognized for enhancing volunteerism in our community when he
received the 2011 Outstanding Volunteer Leader of the Year Award; Kaimuki Branch Manager Daniel Yokoo
engages second graders from Palolo Elementary on Oahu; Kalihi Elementary fifth graders received a lesson
on saving from Bank of Hawaii volunteers.

For Bank of Hawaii, taking care of our community
is a core value. It is a notion integral to our past
and vital to our future. We believe investing in the
community is both a responsibility and an oppor-
tunity. Why? Well, first and foremost, it is simply
the right thing to do. In addition, as the state’s
largest independently owned financial institution,
we know that our success is inextricably tied to
the success of our island communities.

We invest in the community in many different
ways. We strive to serve as a model of volunteer-
ism for our marketplace, providing the gift of time,
energy and expertise from our people to the
community. We are also committed to providing
financial support and financial education.

2011 Impact at a glance
• 13,803 volunteer hours donated to the

community

• 2,015 Bank of Hawaii volunteers donating
their time and services. This represents
82 percent of our employee count.

• 50 community service projects
• $2.5+ million donated by Bank of Hawaii,

its Foundation, and its employees and retirees
to support the good work of 431 nonprofit
partners

financial Education
We are especially committed to giving people
the tools and resources to build a better future
by providing financial education. Taught by
bank employee volunteers, our “Smart Money”
seminars are now offered in multiple languages to
communities in Hawaii, Guam, Saipan, and Palau.

Bank of Hawaii employees volunteer with
Junior Achievement of Hawaii to teach financial
education and entrepreneurial classes to students
from low- to moderate-income households,
encourage elementary school children to develop
lifelong savings habits through “Teach Children to
Save,” and help high school students “Get Smart
About Credit.”

• 2,417 volunteer hours donated to financial
education, including at 82 public schools
serving students from low- to moderate-income
households

• 8,200+ students were helped through

these efforts

Although Bank of Hawaii has been recognized
over the past several years as one of America’s
best banks, our heart and soul rests right here in
the islands. We wish a warm mahalo to the many
organizations and individuals who partnered with
us in 2011 to make our community a better place.

U.S. Senator Daniel K. Inouye,
who was instrumental in
bringing APEC to Hawaii, and
Peter Ho, chair of the APEC
2011 Hawai‘i Host Committee.

Spotlighting
Hawaii at APEC 2011
Our state was in the
international spotlight

when leaders of the 21 Asia Pacific Economic
Cooperation (APEC) economies convened in
Hawaii for the 2011 leaders’ meeting. The United
States and Hawaii had the privilege of hosting the
APEC member economies that account for more
than half of the world’s trade.

The APEC 2011 Hawai‘i Host Committee, chaired
by Bank of Hawaii Chairman and CEO Peter Ho,
set a strong foundation to reposition Hawaii as
more than a premier vacation destination, but
also an excellent place to do business. Bank of
Hawaii is honored to have been involved in this
collaborative effort among Hawaii’s leaders from
the business, government, military, education,
and union sectors to prepare for this significant
opportunity for Hawaii.

“Hawaii gets an A-plus,” said Kurt Tong, former
U.S. ambassador for APEC, and current deputy
chief of mission for the U.S. Embassy in Tokyo.
“Hawaii definitely has proven it’s ready for the
big time, ready for the big leagues. This is a
shared home run for Hawaii and for the United
States at large.”

f i n A n c i A l s : consolidated statements of Income

Bank of Hawaii Corporation and Subsidiaries (dollars in thousands, except per-share amounts)

F o r t h e y e a r e n d e d d ec e m b e r 3 1

2011

2010

Interest Income

Interest and Fees on Loans and Leases
Income on Investment Securities
Available-for-Sale
Held-to-Maturity
Deposits
Funds Sold

Other

Total Interest Income

Interest Expense
Deposits
Securities Sold Under Agreements to Repurchase
Funds Purchased
Long-Term Debt
Total Interest Expense

Net Interest Income
Provision for Credit Losses
Net Interest Income After Provision for Credit Losses

Noninterest Income

Trust and Asset Management

Mortgage Banking

Service Charges on Deposit Accounts
Fees, Exchange, and Other Service Charges
Investment Securities Gains, Net
Insurance

Other

Total Noninterest Income

Noninterest Expense

Salaries and Benefits

Net Occupancy
Net Equipment

Professional Fees
FDIC Insurance

Other

Total Noninterest Expense

Income Before Provision for Income Taxes
Provision for Income Taxes

Net Income
Basic Earnings Per Share
Diluted Earnings Per Share
Dividends Declared Per Share
Basic Weighted Average Shares
Diluted Weighted Average Shares

262,239

287,381

103,363
72,138
8
828
1,117
439,693

18,321
29,171
20
1,973
49,485
390,208
12,690
377,518

45,046
14,664
38,733
60,227
6,366
10,957
21,662
197,655

182,816
43,169
18,849
8,623
9,346
85,390
348,193
226,980
66,937

169,151
6,504
28
1,076
1,111
465,251

29,196
25,996
30
3,549
58,771
406,480
55,287
351,193

44,889
18,576
53,039
61,006
42,848
9,961
24,939
255,258

185,713
40,988
19,371
7,104
12,564
80,496
346,236
260,215
76,273

$
$
$
$

160,043
3.40
3.39
1.80
47,064,925
47,224,981

$
$
$
$

183,942
3.83
3.80
1.80
48,055,025
48,355,965

Refer to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2011 for the Consolidated Financial Statements, including
Report of Independent Registered Public Accounting Firm, thereon.

f i n A n c i A l s : consolidated statements of condition

Bank of Hawaii Corporation and Subsidiaries (dollars in thousands)

a s o F d ec e m b e r 3 1

2011

2010

Assets
Interest-Bearing Deposits
Funds Sold
Investment Securities
Available-for-Sale
Held-to-Maturity (Fair Value of $3,754,206 and $134,028)

Loans Held for Sale
Loans and Leases

Allowance for Loan and Lease Losses

Net Loans and Leases
Total Earning Assets
Cash and Noninterest-Bearing Deposits
Premises and Equipment
Customers’ Acceptances
Accrued Interest Receivable
Foreclosed Real Estate
Mortgage Servicing Rights
Goodwill
Other Assets

Total Assets

liabilities
Deposits
Noninterest-Bearing Demand
Interest-Bearing Demand
Savings
Time
Total Deposits
Funds Purchased
Short-Term Borrowings
Securities Sold Under Agreements to Repurchase
Long-Term Debt
Banker’s Acceptances
Retirement Benefits Payable
Accrued Interest Payable
Taxes Payable and Deferred Taxes
Other Liabilities

Total Liabilities

Shareholders’ Equity
Common Stock ($.01 par value; authorized 500,000,000 shares;

issued / outstanding: December 31, 2011 – 57,134,470 / 45,947,116;
and December 31, 2010 – 57,115,287 / 48,097,672)

Capital Surplus
Accumulated Other Comprehensive Income
Retained Earnings
Treasury Stock, at Cost (Shares: December 31, 2011 – 11,187,354;

and December 31, 2010 – 9,017,615)
Total Shareholders’ Equity
Total Liabilities and Shareholders’ Equity

3,036
512,384

3,472
438,327

3,451,885
3,657,796
18,957
5,538,304
(138,606)
5,399,698
13,043,756
154,489
103,550
476
43,510
3,042
24,279
31,517
441,772
13,846,391

2,850,923
2,005,983
4,398,638
1,337,079
10,592,623
10,791
–
1,925,998
30,696
476
46,949
5,330
95,840
135,021
12,843,724

571
507,558
35,263
1,003,938

(544,663)
1,002,667
13,846,391

6,533,874
127,249
17,564
5,335,792
(147,358)
5,188,434
12,308,920
165,748
108,170
437
41,151
1,928
25,379
31,517
443,537
13,126,787

2,447,713
1,871,718
4,526,893
1,042,671
9,888,995
9,478
6,200
1,901,084
32,652
437
30,885
5,007
121,517
119,399
12,115,654

570
500,888
26,965
932,629

(449,919)
1,011,133
13,126,787

m A n A g i n g c o m m i t t e e : bank of hawaii corporation / bank of hawaii

(As of December 31, 2011)

managing committee

(from left, seated) Shelley B.
Thompson, Kent T. Lucien, Mary
E. Sellers, Peter S. Ho, Donna
A. Tanoue, Mark A. Rossi, and
Wayne Y. Hamano

(from left, standing) Thomas J.
Koide, Sharon M. Crofts, Derek
A. Baughman, James C. Polk,
Peter M. Biggs, Alton T. Kuioka,
Derek J. Norris, Vincent E.
Barfield, Dean Y. Shigemura,
and Jill F. S. Higa

Peter s. ho
Chairman, President, and
Chief Executive Officer

mary e. sellers
Vice Chairman
and Chief Risk Officer

Peter m. biggs
Vice Chairman and
Chief Retail Officer

donna a. tanoue
Vice Chairman, Client
and Community Relations

Wayne y. hamano
Vice Chairman and
Chief Commercial Officer

shelley b. thompson
Vice Chairman and Chief
Fiduciary Officer

alton t. Kuioka
Vice Chairman of Board of
Directors of Bank of Hawaii

Kent t. Lucien
Vice Chairman and
Chief Financial Officer

mark a. rossi
Vice Chairman,
Chief Administrative Officer,
General Counsel
& Corporate Secretary

Vincent e. barfield
Senior Executive
Vice President
Investment Services Group

derek a. baughman
Senior Executive Vice
President and Chief
Information Officer

sharon m. crofts
Senior Executive Vice
President and Manager
Operations Group
Administration

Jill F. s. higa
Senior Executive
Vice President and
Manager Consumer
& Mortgage Lending

thomas J. Koide
Senior Executive Vice
President and Manager
Retail Delivery Channels

derek J. norris
Senior Executive Vice
President and Controller

James c. Polk
Senior Executive
Vice President and Chief
Lending Officer

dean y. shigemura
Senior Executive Vice
President and Treasurer

b o A R d o f d i R e c t o R s : bank of hawaii corporation / bank of hawaii

(As of December 31, 2011)

s. haunani
apoliona*
Trustee
Office of
Hawaiian Affairs

mary G. F.
bitterman*
President
and Director
The Bernard Osher
Foundation

mark a. burak*
Retired Executive
Vice President
Bank of America

michael J. chun*
President
and Headmaster
Kamehameha
Schools-Kapalama

clinton r.
churchill*
Trustee
The Estate of
James Campbell

david a. heenan*
Trustee
The Estate of
James Campbell

Peter s. ho*
Chairman, President
and Chief Executive
Officer
Bank of Hawaii
Corporation and
Bank of Hawaii

robert a. huret*
Managing Member
FTV Management
Company, LP

alton t. Kuioka
Vice Chairman
Client Relations
Bank of Hawaii

Kent t. Lucien*
Vice Chairman
and Chief
Financial Officer
Bank of Hawaii
Corporation and
Bank of Hawaii

martin a. stein*
Partner
RSA Ventures

donald m. takaki*
Chairman and CEO
HawkTree
International, Inc.

barbara J. tanabe*
Owner and Partner
Ho‘akea
Communications LLC

donna a. tanoue
Vice Chairman
Client and
Community Relations
Bank of Hawaii

robert W. Wo*
Owner and Director
C.S. Wo & Sons, Ltd.

*Bank of Hawaii Corporation Board of Directors

b A n K o f h A w A i i l o c A t i o n s

Commonwealth of the
Northern Mariana Islands/Saipan

Niihau

Guam

Republic of Palau

Kauai Oahu

Molokai

Maui

Lanai
Kahoolawe

Hawaii

State of Hawaii

facts: Hawaii, guam and American Samoa

hawaii

Hawaii business establishments: 98 percent have
fewer than 100 employees, 95 percent have fewer
than 50, and 52 percent have fewer than five.1

Hawaii gross domestic product by state (GSP) in
2010: $66.7 billion.2

Largest shares of Hawaii gross domestic product:
government (including federal civilian, federal
military, and state and local), 23.8 percent; real
estate, rental and leasing, 18.6 percent; non-
financial professional, technical, administrative,
management and information services, 8.6 percent;
accommodation and food services, 7.4 percent;
retail trade, 6.7 percent; health care and social
assistance, 6.7 percent. Tourism’s direct and
indirect impact on Hawaii gross domestic product
(includes portions of the above): 14.8 percent.3

State of Hawaii resident population as of
July 1, 2010: 1,363,621.4

Guam

• U.S. Territory
• Capital: Hagåtña (Agana)
• Resident population: July 2011 estimate 183,2865
• Main industries: U.S. military, tourism, and
construction.

american samoa

• U.S. Territory
• Capital: Pago Pago
• Resident population: July 2011 estimate 67,2425
• Main industries: tuna canneries (largely supplied
by foreign fishing vessels), and handicrafts.

American
Samoa

PacIFIc ocean

Map not shown
to scale

Bank of Hawaii Branches and ATMs
(As of December 31, 2011)

Branches &
In-Store Branches

ATMs

State of Hawaii
Island of Oahu
Island of Hawaii
Island of Maui
Island of Kauai
Island of Lanai
Island of Molokai

American Samoa

west Pacific
CNMI/Saipan
Guam
Palau

grand Total

70
41
12
11
4
1
1

9
2
6
1

452
331
48
43
28
1
1

47
7
38
2

506

1 Table 15.17, Hawaii DBEDT State of Hawaii Data Book 2011 from
the US Census Bureau County Business Patterns by
Employment Size Class: 2009 Hawaii.

2 Table 13.05, Hawaii DBEDT State of Hawaii Data Book 2010,
http://hawaii.gov/dbedt/info/economic/databook/2010-
individual/13/130510.pdf.

3 Bank of Hawaii calculation based on Tables 13.05 and 7.32,
Hawaii DBEDT State of Hawaii Data Book 2010 (2010 statistics),
http://hawaii.gov/dbedt/info/economic/databook/2010-
individual/13/130510.pdf and http://hawaii.gov/dbedt/info/
economic/databook/2010-individual/07/07/073210.pdf.

4 Table 1.06, Hawaii DBEDT State of Hawaii Data Book 2011,
http://hawaii.gov/dbedt/info/economic/databook/2010-
individual/01/010611.pdf.

5Central Intelligence Agency (CIA), The World Factbook (2011).

s h A R e h o l d e R i n f o R m A t i o n

Corporate Headquarters
Bank of Hawaii Corporation
130 Merchant Street, Honolulu, Hawaii 96813

Annual Meeting
The annual meeting of shareholders will be held on
Friday, April 27, 2012 at 8:30 a.m. at the Bank of Hawaii
Main Office, 5th Floor, 111 South King Street, Honolulu,
Hawaii.

Transfer Agent and Registrar
Computershare Investor Services, LLC
250 Royall Street, Canton, MA 02021

Common Stock listing
NYSE: BOH
The common stock of Bank of Hawaii Corporation is
traded on the New York Stock Exchange under the
ticker symbol BOH and is quoted daily in leading
financial publications as “Bank of Hawaii.”

Dividend Reinvestment
and Stock Purchase Plan (DRP)
Bank of Hawaii Corporation’s Dividend Reinvestment
and Stock Purchase Plan (DRP) allows existing
shareholders to purchase common shares of the
company’s stock by either reinvesting their stock
dividends or by optional cash payments.
•

Individuals must possess at least one share of the
company’s stock to participate in the DRP.

• Shares are purchased on the 10th business day of

each month based on the average of five trading days
ending on the day of purchase.

• Minimum payment for purchase of shares is $25 and

the maximum is $5,000 per calendar quarter.

• There are no fees for purchasing shares or for the

safekeeping of stock certificates. Fees are assessed

on the sale of shares in the DRP.

Detailed information about Bank of Hawaii Corporation’s
DRP can be found online at www.boh.com or by calling
Computershare Investor Services, LLC at 1-888-660-5443.

Inquiries
Shareholders with questions about stock transfer
services, share holdings or dividend reinvestment may
contact Computershare Investor Services, LLC at
1-888-660-5443 between 7:00 a.m. and 5:00 p.m.
Central Standard Time.

Investors and analysts seeking Financial Information

contact:
Cindy Wyrick
Executive Vice President
Investor Relations
Phone: 1-808-694-8430

For General Inquiries:
Phone: 1-888-643-3888
www.boh.com

forward-looking Statements
This report contains forward-looking statements
concerning, among other things, the economic and
business environment in our service area and elsewhere,
credit quality, and other financial and business matters in
future periods. Our forward-looking statements are based
on numerous assumptions, any of which could prove to be
inaccurate and actual results may differ materially from
those projected because of a variety of risks and
uncertainties, including, but not limited to: 1) general
economic conditions either nationally, internationally, or
locally may be different than expected, and particularly,
any event that negatively impacts the tourism industry in
Hawaii; 2) unanticipated changes in the securities markets,
public debt markets, and other capital markets in the U.S.
and internationally; 3) the competitive pressure among
financial services and products; 4) the impact of recent
legislative and regulatory initiatives, particularly the
Dodd-Frank Wall Street Reform and Consumer Protection
Act (the “Dodd-Frank Act”); 5) changes in fiscal and
monetary policies of the markets in which we operate;
6) the increased cost of maintaining or the Company’s
ability to maintain adequate liquidity and capital, based
on the requirements adopted by the Basel Committee
on Banking Supervision and U.S. regulators; 7) actual or
alleged conduct which could harm our reputation;
8) changes in accounting standards; 9) changes in tax laws
or regulations or the interpretation of such laws and
regulations; 10) changes in our credit quality or risk profile
that may increase or decrease the required level of our
reserve for credit losses; 11) changes in market interest
rates that may affect credit markets and our ability to
maintain our net interest margin; 12) the impact of
litigation and regulatory investigations of the Company,
including costs, expenses, settlements, and judgments;
13) any interruption or breach of security of our informa-
tion systems resulting in failures or disruptions in customer
account management, general ledger processing, and loan
or deposit systems; 14) changes to the amount and timing
of proposed common stock repurchases; and 15) natural
disasters, public unrest, adverse weather, public health,
and other conditions impacting us and our customers’
operations. For a detailed discussion of these and other
risks and uncertainties that could cause actual results
and events to differ materially from such forward-looking
statements please refer to the risk factors discussed in
our Annual Report on Form 10-K for the fiscal year ended
December 31, 2011, and any subsequently filed reports
with the U.S. Securities and Exchange Commission. Words
such as “believes,” “anticipates,” “expects,” “intends,”
“targeted,” and similar expressions are intended to identify
forward-looking statements but are not exclusive means
of identifying such statements. We undertake no obliga-
tion to update forward-looking statements to reflect later
events or circumstances.

banK oF haWaII corPoratIon

P.o. box 2900, honoLuLu, hI 96846

Bank of Hawaii Corporation is a
regional financial services company
serving businesses, consumers and
governments in Hawaii, American
Samoa and the West Pacific. Our
subsidiary, Bank of Hawaii, was
founded in 1897 and is the leading
independent financial institution
in Hawaii. For more information
about Bank of Hawaii Corporation,
visit our website, www.boh.com.