Bank of Hawaii Annual Report 2013

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FY2013 Annual Report · Bank of Hawaii

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ACHIEVEMENT IN BALANCE

Bank of Hawaii 2013 Annual Report

C O N T E N T S

1 Chairman’s Message

3 2 0 1 3 Financial Summary

4 Year in Review

8 Client Profiles

16 Nurturing Our Island Communities

18 Investing In Employees

20 2013 Financial Tables

24 Managing Committee and Board of Directors

27 Bank of Hawaii Locations

28 Shareholder Information

AC H I E V E M E N T I N B A L A N C E Always ready for the next new wave on the horizon, Bank of Hawaii

continues to set its own course of delivering superior service and products to its customers while

providing exceptional value to shareholders, employees and the community. This balanced approach

provides sustainable results for generations to come.

C H A I R M A N ’ S M E S S A G E

Dear Fellow Shareholders,
2013 was another solid year for Bank of Hawaii. We continued to manage the
company with an overarching commitment to building long-term and sustainable
value for our shareholders, customers, communities and employees.

Fully diluted earnings per share for the year were $3.38, down from the $3.67
recorded in 2012. The year’s earnings reflect measured loan and deposit
growth, sound expense management, and disciplined management of capital
and risk. Earnings, however, were challenged by substantially lower
mortgage refinance activity in 2013 as compared to 2012. The prevailing rate
environment continued to challenge net interest income again in 2013.

The company remains well capitalized. Credit
cost, as measured by net charge-offs for the year
to average loans and leases, remained low at 0.23%
of average loans and leases. We maintained our
dividend of $1.80 per share annualized and
repurchased 692,000 shares of our stock at an
average price of $51.33 in 2013.

From a broader perspective, 2013 marked the
conclusion of our latest three-year plan. That plan
set goals around five specific strategic initiatives:
further enhance our brand, deepen customer
relationships, further drive efficiency, more actively
engage our employees, and effectively manage
our risk and capital positions. I believe the plan
worked well and I’ll share more detail in the
following paragraphs.

Further enhance our brand
Since our founding in 1897, Bank of Hawaii has
been committed to the well-being and growth
of the communities we serve. The integrity and
consistency of this 117-year legacy gives rise to our
most precious asset, our brand.

Our brand is committed to providing customers
with, above all, a safe and sound institution with
which to bank. We are committed to offering
best-in-market convenience to support the busy
lifestyles of our customers. Finally, we are commit-
ted to not only operating in the communities we
serve but—as importantly—to truly being of the
community, by helping to support community needs
and aspirations.

Throughout the Great Recession our financial
performance helped further define Bank of Hawaii
as a financial institution of exceptional safety
and soundness. Recognition for quality from
publications like Forbes Magazine and U.S. Banker
helped to further enhance this reputation.

Convenience in our core Hawaii market remains
unmatched. We are the market leader in number
of branches, ATMs and in-store supermarket

branches. Online, mobile and social media
channels are increasingly important and we have
made substantive investments in each, resulting
in award-winning recognition for web design,
e-marketing and social media practices.

Finally, our commitment to the community is best
summed up by the more than 57,000 hours of
community service our employees volunteered over
the three-year plan period, during which time Bank
of Hawaii sponsored 207 community events. This
degree of commitment helped Bank of Hawaii earn
the Financial Services Roundtable’s annual award of
community excellence during the plan period.

Deepen customer relationships
Building on our branding efforts and through
investment in eight new branches, 11 remodeled
branches and numerous product and delivery
enhancements, we meaningfully deepened relation-
ships with our customers. State of Hawaii deposit
market share grew substantially over the plan
period. We were the top local residential mortgage
lender in Hawaii in each year of the three-year plan.
During each of those same years, Bank of Hawaii
was named Small Business Administration lender
of the year. After launching our new credit card
product last year, Bank of Hawaii gained more than
13,000 new credit card customers.

Drive efficiency
Through practical and straightforward efficiency
initiatives, we reduced non-interest expense
sequentially from $346 million in 2010 to
$331 million in 2013. During the plan period, we
reduced energy usage by 15% utilizing energy saving
initiatives, including photovoltaic. In addition, we
converted more than 100,000 sq. ft. of underutilized
or vacant areas to tenant-occupied space creating a
net savings in our premises.

And, we installed imaging and other technology
devices that resulted in both back-room efficiency
and front-line effectiveness.

C H A I R M A N ’ S M E S S A G E

More actively engage our employees
Today’s workplace is more challenging than ever,
requiring greater and different skill sets, a more
rigorous pace and greater tolerance of change for
workers in all industries. Our ability to thrive in the
future will, in part, be dependent on our ability to
develop, train, effectively communicate with and
gain true support and buy-in for corporate
objectives from our staff.

In 2011, we christened our new 16,000 sq. ft.
state-of-the-art Center For Excellence training
center allowing us to substantially increase
employee training and development hours.

In 2012 we launched an enhanced version of our
corporate intranet called BlueFlash. The new site
embraces popular social media conventions
providing employees not only a vehicle to obtain
information, but a way to interact and build
relationships through shared videos, photos,
celebrations, and human interest stories. Since the
refresh, “hits” to the site have grown by 112%.

Our Thrive program continues to offer employees
opportunities to interact during non-work periods in
areas like lifestyle tips, health and fitness, and
hobbies and interests. To date the program has held
1,738 sessions.

Actively manage risk and capital
Long a hallmark of the organization, risk and
capital stewardship remained a core strategic
initiative for 2011–2013.

We made substantial investment in our risk
infrastructure, particularly in compliance risk,
enterprise risk and information technology risk, in
addition to standard credit risk. Our net charge-off
ratio for 2013 was 0.23% compared to 0.94% in 2010.
This highlights a successful transition in both the
credit and economic cycle.

We returned substantial capital to shareholders after
taking account for what we need to grow the
business and hold against uncertainty. Through the
plan period, the company earned $476.6 million.
Dividends and buybacks under the share repurchase
program totaled $472.0 million. The average
cost-per-share of stock repurchased during the plan
period was $45.78. Our Tier 1 leverage ratio at
year-end was 7.07% compared to 7.15% in 2010.

Thoughts
We measure success through our ability to drive
value for our shareholders, customers, communities
and employees. Against that canvas, I am pleased
with the outcomes of the plan.

For our shareholders, Bank of Hawaii continues to
maintain an exceptional price-to-book valuation.
Our return on equity compares quite favorably to
our industry and peers.

For our customers, we’ve worked hard to enhance
convenience, products and service levels. While
we’ve seen consistent improvement on customer
satisfaction scores, we recognize this is a constant
endeavor.

For our communities and employees we remain
committed to finding new and even more effective
ways to ensure that our success is shared with all
stakeholders.

Looking forward
We are actively working on a new three-year plan for
2014–2016. It will be similar in strategy to our
existing one, continuing to focus on our core Hawaii
and West Pacific markets. We remain committed to
the concepts of community and relationship banking.
We believe our best growth opportunities occur
organically and largely through creating new
opportunities with existing customers.

We will remain committed to brand, customer
relationships, efficiency, employees, and sound
capital and risk management. Particular attention
will be paid to three key areas: harnessing
technology more fulsomely, ensuring we manage our
business with a more customer-centric view and,
finally, utilizing information more effectively to
create more opportunities to serve customers.

In closing, I want to welcome Ray Vara to our board
of directors. Ray is president and chief executive
officer of Hawaii Pacific Health, the state’s largest
health care provider and parent company of
Kapiolani Medical Center for Women & Children,
Pali Momi Medical Center, Straub Clinic & Hospital
and Wilcox Memorial Hospital (Kauai). Ray is a
highly respected business and community leader and
has a keen awareness of the needs and concerns of
our state. We look forward to his involvement and
the perspective he brings.

I want to full heartedly thank our shareholders for
their confidence in Bank of Hawaii. We remain
grateful to our customers and communities for
supporting us so generously. On a personal note, I
want to thank our staff and our board for all of the
commitment, passion and talent that they bring to
our organization.

With aloha,

Peter S. Ho, Chairman, President, and Chief Executive Officer
Bank of Hawaii Corporation and Bank of Hawaii

B A N K O F H A W A I I 2 0 1 3 A N N U A L R E P O R T

2013 Financial Summary
Bank of Hawaii Corporation and Subsidiaries (dollars in thousands, except per-share amounts)

FOR TH E YE AR EN DED DECEM B ER 3 1

2013

2012

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

AS OF DECEM B ER 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

FOR TH E Q UARTER EN DED DECEM B ER 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

150,502

166,076

3.39

3.38

1.80

1.10 %

14.78 %

2.81 %

60.71 %

3.68

3.67

1.80

1.22 %

16.23 %

2.97 %

57.88 %

59.14

59.92

44.88

44.05

49.99

41.41

$ 6,095,387

$ 5,854,521

14,084,280

1 1 , 914 , 65 6

1 , 0 1 1 , 9 7 6

13,728,372

11,529,482

1,021,665

22.75

22.83

1.89 %

2,196

2.20 %

2,276

39,055

40,287

0.88

1.12 %

15.36 %

2.85 %

59.99 %

0.90

1.19 %

15.47 %

2.87 %

58.24 %

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).

Y E A R I N R E V I E W

Balanced Strategy in Action

Bank of Hawaii has a long history of providing the highest value, service and benefit to

our stakeholders: our shareholders, customers, employees and community. Navigating

new challenges in today’s ever changing banking environment requires the ideal

balance of strategic vision and expertise in action. At Bank of Hawaii we steer a course

that balances delivering strong, short-term results with reaching long-term objectives.

Our strategy and talent allow us to continue to make the most of new opportunities

and to deliver long-term, sustainable results.

One measure of our accomplishments is how
well we are judged against our peers. For the fifth
straight year, Forbes has named Bank of Hawaii
one of the top banks in the country. And for the
third consecutive year, Bank of Hawaii was named
“Hawaii’s Best Bank” in the Honolulu Star-Advertiser
people’s choice awards for 2013.

Enhancements continue to be made to our
traditional branches, and new in-store branches
opened this year. For added convenience,
customers can continue to choose to utilize our
24/7 call center and our ATM network, the most
extensive in the state of Hawaii.

Providing an Exceptional
Customer Experience

We continuously look for ways to improve our
customers’ banking experiences, especially by
creating ways for them to do their banking
whenever and wherever is most convenient.
New this year is a special app developed for
Bank of Hawaii employees that helps them access
information about consumer and business
products and services, plus information on rates
and special promotions. Now, whenever our
employees receive questions about products
or services—whether visiting a client or even
at a social gathering—the information is at their
fingertips on their choice of mobile device.

This year, Bank of Hawaii was recognized for
having “one of the most spectacular banking
websites in the world,” and also received local and
national recognition for its social media activities.

Online and Mobile Banking
Smartphones and computer tablets—everyone
now depends on these new technologies that
touch multiple facets of our lives. Bank of Hawaii
continues to keep pace with this emerging
consumer preference with several initiatives.
To begin with, we upgraded our mobile banking
app to make it easier to conduct secure
transactions from mobile devices. Customers
with an iPhone or Android can view their accounts,
pay bills and transfer funds. Streamlined online
navigation and an improved location search
feature make it faster and easier to find the
nearest ATM or Bank of Hawaii branch.

We also debuted our iPad app this year, and to
date have attracted nearly 9,500 users. We also
launched mobile deposit capabilities. Customers
can now make deposits by simply snapping a photo
of the front and back of a check with their
smartphone. Banking is now literally in customers’
pockets at Bank of Hawaii.

B A N K O F H A W A I I 2 0 1 3 A N N U A L R E P O R T

Social Media
Social media have revolutionized the way we
interact with one another, and Bank of Hawaii
continues to have the largest social media
presence of any local bank. With more than
4,400 followers on Twitter and more than 18,500
Facebook fans, our social media activities continue
to grow as a valuable way to engage customers
and the general public. In addition to promoting
our products and services via these platforms,
we also respond to followers’ queries in real time,
alert fans to job openings, and highlight our
community service activities. This robust and
effective utilization of social media was recognized
with the Best E-Marketing Award from the Hawaii
Chapter of the American Marketing Association,
and a position among the top 30 U.S. banks on the
Financial Brand “Power 100” ranking.

Branches, In-Store Branches
and Banking Centers
More and more customers are choosing to do their
banking online or via mobile devices. At the same
time, customers are doing more banking at
in-store branches, thanks to the convenience of
being able to bank seven days a week and where
they shop. To keep pace with this trend, in 2013 we
opened two new in-store branches. The first is at
Safeway Kapahulu on Oahu and the other is our
third Maui in-store branch at the new Safeway
Maui Lani in Wailuku.

In 2013, our branch in Lihue celebrated 110 years of
serving the Kauai community with a special
birthday celebration. In addition, we relocated our
Ward Plaza branch to new ground floor facilities
at Hokua at 1288 Ala Moana, and we reopened the
newly renovated Manoa branch.

Traditional branches are still an important channel
for developing relationships by helping customers
find solutions to more complex financial needs.
A number of our traditional branches serve as
banking centers, where experts in Mortgage
Banking, Investment Services, Personal Banking,
and Business Banking are on hand to provide
these specialized financial services. These
banking centers are located in branches that serve
major metropolitan markets—Ala Moana, Kailua,
Kapolei, Main Branch in Downtown Honolulu,
Pearlridge, Waialae-Kahala, and Waikiki on Oahu,
and Kona on Hawaii Island. Our new banking
center on Maui is scheduled to open in early 2015.
Our vision is to continue to evolve the banking
centers to serve as financial solutions destinations.

Mortgage Lending
In 2013, Bank of Hawaii was the #1 lender in the
state for number of residential loans recorded and
total dollars loaned. This means that thousands of
families can pursue their dream of homeownership
while taking advantage of the low-interest rate
environment and purchasing a new home or
improving their budget by refinancing.

Our Consumer Lending Department also increased
its volume of home equity credit lines with the
introduction of a new PV loan product, which
makes it easy for homeowners to purchase a
photovoltaic system and take advantage of
attractive tax credits.

Credit Cards
With one of the most generous and flexible reward
redemption programs in existence, more
customers are choosing Bank of Hawaii’s Visa
Signature and American Express MyBankoh
Rewards Credit Cards. Since we launched these
self-issued credit cards in 2012 with their unique
rewards program, more than 13,000 new accounts
have been opened.

These cards complement our popular Bank of
Hawaii Hawaiian Airlines Visa Signature Credit
Cards, which we offer through our partnership
with Hawaiian Airlines.

From left to right: Owen Kano, Rosalinda Flanders,

Michael Libertini, Shieryll Bolibol, and Katherine Medina

at the Ward Branch at Hokua.

Y E A R I N R E V I E W

Comprehensive Wealth
Management Services

Bank of Hawaii understands that the complexities
of wealth management involve much more than
money. They encompass the dreams our clients
have for their future and that of their loved ones.
That’s why we take the time to first understand
our clients’ goals, propose straightforward
personalized solutions and then help them take
action. Our services range from basic banking to
customized lending; investments; financial, estate
and tax planning; charitable giving; and trust and
probate administration. It all starts with a trusted
relationship with the bank you already know…

Investment and Trust Services
The bank’s Investment Services Group (ISG) is the
largest Hawaii-based provider of fiduciary services
in the state, with a team solely dedicated to trust
and estate administration supported by tax,
real-estate and closely-held valuation departments.

Because we set extremely high standards for our
team of wealth management advisors, we invest in
their continuing education. Currently our staff has
more than 50 accreditations that denote the
highest degree of professional skills and technical
expertise.

We regularly provide exclusive seminars alongside
nationally recognized investment managers on
timely topics such as international investing,
alternative fixed income, and upcoming tax law
changes. These seminars provide specialized
information to help clients understand the markets
within the context of their financial objectives.

As part of our holistic approach to wealth
management we recently rolled out our new,
collaborative customer reporting system, which is
enabling us to better partner with colleagues
across the bank to meet client needs. In 2013, we
developed special secured bridge financing that
gives clients the flexibility to fund short-term
needs without liquidating their assets and
allowing them better financial and tax
management. We also implemented an upgrade to
our trust property management system that has
created efficiencies to keep our costs down and
strengthen service delivery.

Meeting the Needs of Business

Small businesses. Sole proprietorships. Medium-
sized companies. Large corporations. International
businesses. As they grow and change, Bank of
Hawaii has the expertise to understand our
business customers’ needs and provide the
services needed to help them reach their goals.

Commercial/Corporate Banking
The lending, depository and cash management
needs of Hawaii’s middle-market and large
corporate businesses continue to benefit from the
expertise of our team of commercial and corporate
bankers. Their experience in providing both
simple and complex financing and treasury
management solutions for the business community
makes them the go-to financial services team for
businesses in Hawaii. From real estate and
equipment financing to strategic capital
investment on the lending front, to streamlining
the collection and payments activities on the
depository side of business, our team works
tirelessly to understand our clients’ needs, and to
develop tailored and timely solutions. The team
also works closely with other business units across
the bank, such as Private Client Services, Business
Banking, and Investment Services to help clients
meet their unique financial needs.

Business Banking
Small businesses, which account for more than
95 percent of companies in Hawaii, remain the
backbone of our economy. We continue to serve
this important market through our dedicated
business banking group. We provide a wide range
of deposit and loan products including government-
guaranteed loans; merchant services; and
convenient phone and online access to accounts.

Once again in 2013, we led all lenders in the state
with 89 SBA guaranteed loans, which earned us
the U.S. Small Business Administration’s Lender of
the Year Award for Hawaii. We are proud to have
received this prestigious award in nine of the past
11 years.

International Banking
As the only local bank with an International
Banking Division (IBD), we serve clients from
Asian countries such as China, Japan and Korea
who have financial interests in Hawaii and the
Pacific. In addition to offering products and
services specifically tailored for our international
clientele, we are in a unique position to connect
business leaders in Asia with their counterparts
in a broad cross-section of Hawaii’s business
community.

In 2013, we hosted a reception for a delegation
of nine representatives from China National Coal,
a state-owned enterprise of the government of
China that produces nearly 300 million tons of
coal each year and annual revenue of nearly
$30 billion. The reception introduced the China
delegation, which was visiting the U.S. to find new
technology and potential partners for clean and
renewable energy projects, with some of Hawaii’s
top business leaders, especially those in the
energy sector.

B A N K O F H A W A I I 2 0 1 3 A N N U A L R E P O R T

by all financial institutions. We also continue to
upgrade and update our systems so that we are
prepared for the growing number of transactions,
services and applications that we provide and
support—online and with mobile apps.

In 2013, we rolled out a new, customized customer
reporting system that allows our staff to better
understand and comprehensively fulfill our
customers’ needs. This new system makes it easier
for our business groups to collaborate in the best
interests of our customers and to develop new
business opportunities.

Energy-Efficient Facilities

Our facilities—not just our branches, but also our
back-office operations—play a role in our ability
to perform well. We updated our facility
maintenance strategy to provide energy savings
while enhancing the customer and employee
experience. Window tinting, efficient air
conditioning units and controls, lighting upgrades
and PV panels are all part of the plan to reduce
energy costs. Utilities are currently the second
highest occupancy expense, and substantial
savings are expected from these initiatives in 2014.

In 2013 we completed a major upgrade of our data
center infrastructure. It required a significant
investment of time and resources, and upgrades to
the electrical and air handling capacity now make
it more resilient and better prepared to meet
customers’ needs in the event of a power
disruption or natural disaster.

Guided by a sustained vision while utilizing
multiple assets and capabilities, Bank of Hawaii
continues to navigate toward success in a
complex marketplace.

On the following pages, some of our customers
talk about the many ways they do business with
us—and how we provide the highest value and
services to meet their needs.

General Manager Wu Guo Zhen (front left) and Chairwoman

Wen Hui Liu (fifth from left) of the Shanxi Chenglian Foreign

Trade & Economic Relations Co., a state-owned enterprise of

Shanxi Province in Northeast China, hosted International Banking

Executive Vice President Betty Brow and Vice President Sonny

Zhang at their Arts and Crafts Museum, which displays products

manufactured by Shanxi companies. Products are exported to

Europe and other Asian countries, but not yet to the U.S. The

company also imports products from other countries for sale

in China, and hopes to import products from Hawaii.

We also co-hosted a business forum with the
Department of Business and Economic
Development and Tourism (DBEDT) to provide
Hawaii business executives the opportunity to
meet and explore potential trade with
representatives from the Vietnamese Consulate
and Trade Office in San Francisco.

Other receptions and events in 2013 included
seminars and briefings for groups of entrepreneurs
coming to Hawaii from China to explore
investment opportunities.

To make banking more convenient for visitors and
residents whose first language is Chinese or
Japanese, Bank of Hawaii offers multi-language
ATM screens. We plan to add the Korean language
in 2014. And we are the only bank to offer ATM
screens that include the Hawaiian language.

Chinese businesses, visitors and investors are also
benefiting from a service put in place in 2010. It
allows China UnionPay (CUP) debit and credit
card holders to withdraw cash at any Bank of
Hawaii ATM and make 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.

Our Technology Systems

Our technology systems are the unseen but
critical side to the bank’s ability to deliver a full
range of products and services efficiently, quickly
and securely.

We continued to strengthen security and data
protection in response to elevated threats faced

Bank of Hawaii’s

104.4 kW photovoltaic

installation atop its

headquarters building is

the largest PV installation

in downtown Honolulu.

C L I E N T P R O F I L E

PURE JOY DAY SPA

B U S I N E S S B A N K I N G C L I E N T

The bank truly believes in the companies they put their
money behind. They want us to succeed. – J A S O N

J O Y N I S H I K A W A : Jason and I are clients
of Bank of Hawaii for our respective businesses.
The bank has been a big part of my company from
the very beginning, and Jason works very closely
with them in his role as vice president of Marcus
& Associates.

At Pure Joy Day Spa, service is at the center of all
we do. I ask my staff to think about how they would
like their mother to be treated, and that’s how we
should take care of our clients. The bank shares a
similar philosophy.

J A S O N N I S H I K A W A : Joy and I have also
been customers of the bank from when we were
teenagers. Like all relationships, it grows from
there. A long time ago, I met Malcolm Lau in
Business Banking through a mutual friend. He was
always a strong supporter of Marcus & Associates,
and I got to know him well. He knew that Joy had a
dream of one day owning a spa and that she had a
passion for helping people feel good about
themselves. He encouraged her to start her own
business and gave her confidence that she could
succeed. So when Joy got the opportunity to buy
the spa business, we contacted him. Malcolm
helped with the financing and in 2002, Joy became
the sole proprietor of a small, one-room spa, just
over 200 square feet.

J O Y : It was a little scary starting my own
company, but Malcolm helped me take “the plunge”
and make my dream a reality.

J A S O N : As Joy’s business grew, she started
thinking about expanding. Three years after
opening, she found a property in need of renovation.
It was a little more than 1,000 square feet, so she
would need a loan that was four to five times larger
than the first one. Once again, Malcolm came
through. That was seven years ago, and Joy now has
13 employees.

J O Y : Support is shown in the way you give it,
not just in the transaction. Malcolm and others at
Bank of Hawaii—like Jon Murakami, Danny Kim,
Lesley Yost, Keene Fujinaka, and Scott Fujii—have
been very supportive.

From day one, Malcolm spread the word among his
colleagues and clients. Many BOH employees
became regular customers and, in turn, referred
their clients. One customer turned into 10 to 20
customers. The bank really goes above and beyond.
They invite us to networking events, and that’s
huge for our business.

J A S O N : I interact with Malcolm weekly, and
he’s constantly promoting Marcus & Associates. He
also tells me about other businesses whose services
we might want to consider. The bank truly believes
in the companies they put their money behind.
They want us to succeed.

J O Y : The bank is like a friend or family member.
It’s a relationship. From the very beginning, they
treated my one-person shop like it was a
multimillion dollar business. I will never forget that.
It gives you the confidence and drive to succeed.

J A S O N : Whether you’re a small business or a
large one, and whether you’re talking to their teller,
branch manager or chairman, the bank’s level of
service is consistent. They have genuine
enthusiasm for you as a person and as a business.
They care about long-term relationships. I know
that has been the case with the bank and my father,
Marcus, who started our company 42 years ago.

J O Y : It’s also great knowing that the bank cares
about our community and gives back. Our family is
reminded of this when we visit the Honolulu
Museum of Art on Bank of Hawaii Family Sundays.
We feel a sense of pride. That’s our bank!

B A N K O F H A W A I I 2 0 1 3 A N N U A L R E P O R T

Joy Nishikawa,

owner of Pure

Joy Day Spa, and

husband Jason with

their children Marcus

and Miya.

1 0

C L I E N T P R O F I L E

Richard Parry,

President & CEO,

Aloha Petroleum, Ltd.

B A N K O F H A W A I I 2 0 1 3 A N N U A L R E P O R T

1 1

ALOHA PETROLEUM, LTD.

C O M M E R C I A L C L I E N T

Over the years, Bank of Hawaii has been an important
partner in our growth. – R I C H A R D

R I C H A R D P A R R Y : Aloha Petroleum is
Hawaii’s largest independently owned gasoline
distributor, and one of the largest convenience
store operators in the state. We have been a Bank
of Hawaii client since 1991. The bank assists us in
four areas: automated teller machines (ATMs) at our
Aloha Island Mart convenience stores on Oahu,
Hawaii Island and Maui; management of our 401(k)
employee retirement savings program; day-to-day
transaction services; and loans.

Over the years, Bank of Hawaii has been an
important partner in our growth. In the mid-1990s,
they provided loans that enabled us to build a larger
fuel terminal on Oahu. We significantly expanded
the terminal capacity from 80,000 to 500,000
barrels, which gave us the capacity to import
refined oil products and source supply much more
competitively. Then, a few years ago, we acquired
all of the Shell fuel assets in the state with the help
of a new set of loans from a consortium of banks
spearheaded by Bank of Hawaii.

The bank has also helped us with our employee
retirement savings program. Recently, we were
honored with the Pensions & Investments Magazine’s
Innovator Award for improvements in our 401(k)
plan. With the bank’s help we achieved a dramatic
increase in employee participation; it grew from
38 percent in 2011 to 68 percent in 2012. The bank
and our human resources team met with our
employees to explain the benefits of the program.
We believe that dedicated employees are our
competitive advantage, and happy employees help
make happy customers.

What we look for in a bank is a company that
understands our business and takes the time to get
to know us. We also look for flexibility, as oil
markets can be very volatile and our bank needs to
be flexible to help us deal with that volatility. We

sell to resellers and wholesalers in addition to our
own retail stations and the flow of money through
the system is very important; Bank of Hawaii has
helped us maximize our cash flow. Lastly, we look
for a bank that is going to be with us for the long
term, not just for the next deal.

We have worked with Donovan Koki in Commercial
Banking for many years and currently work with
John McKenna. Both know us personally and have
taken the time to understand our business. In
addition, the bank takes a kind of joint ownership
approach to their relationship with us, so we have
also gotten to know Jim Polk, Wayne Hamano,
Peter Ho, and others.

As a local company, the bank knows Hawaii and
the way things get done here. They are very
understanding of the unique challenges Hawaii
businesses face. They know how expensive it is to
operate in our state and how difficult issues such as
permitting and government approvals and policies
can be. We appreciate that and consider them as
not just our loan partner, but our thought partner
as well.

The bank is also very involved in the community
and, like us, is intent on being a good corporate
citizen. Over the past year or so, we have been
working on the culture of our company, including
our vision, mission and values. Bank of Hawaii went
through a similar process a few years ago, and they
have shared many helpful insights on how they
approached that effort.

I would describe the bank as very professional.
They are good people who are very interested in
the success of our company as well as their own.
They are knowledgeable in what they do, and they
are a local company with local values. The bank is
a great role model for other businesses in Hawaii.

1 2

C L I E N T P R O F I L E

SINCLAIR DRYWALL, INC.

P R I V A T E C L I E N T S E R V I C E S / C O M M E R C I A L B A N K I N G / R E T I R E M E N T P L A N C L I E N T

The bank is always looking out for our best interests, both
on the business and personal side. – J U L I E

K A R L S I N C L A I R : In business, quality,
relationships and trust are important. That’s true
for our company and in our dealings with Bank of
Hawaii. I started my drywall business in 1980 as a
sole proprietor doing small repairs and individual
residences, and in 1983, I completed my first tract
of single family homes. Clients liked my work and
through word of mouth, I got more contracts. Julie
was there from the beginning, helping me with the
business and eventually gave up her career in
nursing to work with me full time—organizing,
setting up and then managing the office. In the
mid-1990s, I expanded into commercial work and,
later, high rises. Today, Sinclair Drywall, Inc. is
among Hawaii’s top five drywall companies. We
have more than 200 employees, some of whom
have been with us since the ‘80s.

Bank of Hawaii has been our partner throughout.
Both Julie and I had been BOH customers from the
time we were growing up. When I started the
company, I opened a business checking account at
the Aikahi branch.

J U L I E S I N C L A I R : The bank was very
helpful. As we grew, they set us up with payroll
services and assigned a personal banker. Over the
past 10 years, we’ve been working with Edison
Kobayashi in the Private Wealth Division. Any time
we have a question, we call Ed. He is friendly and
accommodating. When we were thinking about
(real estate) investments, he gave us names of
qualified attorneys and specialists. He also
introduced us to various types of tax credits, which
has helped our bottom line. The bank is always
looking out for our best interests, both on the
business and personal side.

K A R L : The bank is there for us with financial
advice and a line of credit when we need it. It’s
good to have them as our “security blanket.”
Bill Carpenter and Wanda Sanchez have also been
helpful with our investments and employee
retirement plan. We meet with them quarterly in
Kailua. We don’t even need to drive to town.

K A R L : The bank takes care of us. We don’t have
to worry. We’re free to enjoy life. It’s a great
partnership. Good for the bank and good for us.

J U L I E : Trust is important. We feel comfortable
with them. It’s like being friends.

K A R L : I like working with the bank because
they’re solid. They have a long history and will
always be here. They’re the number one bank in
the country.

The construction industry is cyclical. You always
have to be prepared for the inevitable downward
trend. Our company has been fortunate, but many
do not make it. Currently, the industry is in an
expansion mode, and the outlook is good.

J U L I E : Recently, the bank helped us with a line
of credit at a critical time. A few projects that had
been on hold suddenly became active. At the same
time, another project that was going to start in 2014
began early.

K A R L : It was the perfect storm: We had plenty
of work and hired a lot more employees, but we
needed a large amount of funds to cover us until we
received our first payment. Thank goodness for our
BOH line of credit. We met all our deadlines, and
the projects are being completed. It’s good to work
with a local company that understands the local
way of doing business.

J U L I E : It’s also great that the bank and their
employees give back to the community.

K A R L : It’s a small island. If you do good, it will
come back to you.

J U L I E : We’re very happy with the bank. They’ve
never disappointed us. We’ve been approached by
others, but we’re not interested.

K A R L : We look forward to many more years of
partnership.

B A N K O F H A W A I I 2 0 1 3 A N N U A L R E P O R T

1 3

Karl and Julie

Sinclair, owners of

Sinclair Drywall, Inc.

1 4

C L I E N T P R O F I L E

Jane Leong (right)

with her daughter

Leslie Kawamoto and

their dog Zoe

B A N K O F H A W A I I 2 0 1 3 A N N U A L R E P O R T

1 5

JANE LEONG & LESLIE KAWAMOTO

P E R S O N A L B A N K I N G C L I E N T S

We trust Bank of Hawaii wholeheartedly. They truly
care about us and put our needs first. They’re also very
accommodating. – J A N E

L E S L I E K A W A M O T O : My mother and I
really appreciate Bank of Hawaii and our personal
banker, Mike Kobashigawa. We first got to know
him when he called me almost five years ago. My
mother had a sizable balance in her checking
account that wasn’t doing anything. He said that it
was not advisable to have very large amounts of
money in checking accounts. Mike introduced her
to Gavin Tanioka, who is a financial consultant at
the bank’s Manoa branch. He helped her with
insurance, annuities, IRAs and investments. His
expertise has helped my mom maximize her assets
and live a comfortable life. Both Mike and Gavin
meet with us regularly about every four to six
months. It’s like a financial checkup—going to the
doctor minus the needles.

J A N E L E O N G : Mike and Gavin are very
genuine, sincere and honest. They’re also
experienced, skilled and competent. The best of
the best. The services they provide have made my
retirement more enjoyable, with peace of mind.

L E S L I E : Before we met Mike, I had always
thought the concept of a personal banker was
something made up for radio and television
commercials. Now I know a personal banker is
someone who is always there to help you with your
financial needs. Whenever we need something, my
mom says, “call Mike,” and Mike always comes
through. He’s truly the best at what he does.

When the time came for my husband and me to
apply for a home equity line of credit and then a
mortgage loan, I knew where to go. I didn’t even
care what the rate was because I knew Mike would
be there to help us if we needed it. He introduced
us to Jennifer Gershman in Residential Lending,

who is beyond excellent as our loan officer. She’s
very knowledgeable and responsive. She even went
to bat for us, unprompted, by speaking with a
seller’s Realtor® about an offer we had made.

J A N E : We trust Bank of Hawaii wholeheartedly.
They truly care about us and put our needs first.
They’re also very accommodating. Mike and Gavin
are willing to meet with us late in the day after
Leslie finishes work.

L E S L I E : We talk story before discussing
business. We love just chatting with them about
what’s going on in life. If I had my way, we’d adopt
both of them into the family. Recently, I emailed
Mike a deposit question, and he surprised me by
responding while he was away on a ski vacation!
What other banker would do that? We think Mike’s
absolutely the best.

J A N E : Bank of Hawaii is also very convenient.
There are branches everywhere, and the staff is
always friendly, professional and efficient.

L E S L I E : We also like the fact that BOH
provides so many ways to bank. We especially like
their supermarket branches. It’s very convenient
when you’re shopping and need to get cash or do
your banking.

J A N E : To me, Bank of Hawaii stands for honesty,
integrity, friendliness, aloha, strength and
permanence. The bank has been here for so long.
That’s comforting in this day and age when the
future is uncertain. The bank will continue to be
here for you.

1 6

N U R T U R I N G O U R I S L A N D C O M M U N I T I E S

B A N K O F H A W A I I 2 0 1 3 A N N U A L R E P O R T

1 7

Partnering for
a Better Tomorrow

We believe deeply in the communities we serve
and are committed to strengthening the
communities we hold dear. Each year Bank of
Hawaii, our employees, our retirees and Bank of
Hawaii Foundation contribute time, expertise and
money to hundreds of not-for-profit organizations
seeking to make positive changes. The bank has an
“Outstanding” rating by the Federal Reserve Bank,
the highest rating possible, for our performance
under the Community Reinvestment Act.

It’s the special commitment to volunteerism and
community service that sets our Bank of Hawaii
‘ohana apart. Whether it’s cleaning up a school
garden, fundraising, teaching the financial basics
that will help families build a better future, or
preparing tax returns for free for low-income
families and individuals, our employees are always
ready to lend a hand.

Our ongoing commitment to volunteerism,
community service and financial education earned
the national Community Service Leadership Award
for the third year in a row from the Financial
Services Roundtable.

To highlight our unique culture of giving, we
branded our employee and retirees’ community
service by adding “Live Kōkua” to these activities.
This means to “live in the spirit of helping others,”
and expresses the dynamism of our generosity. Bank
of Hawaii employees and family members
contributed 7,918 hours of personal time to 79
community service projects as part of the Bank of
Hawaii Live Kōkua Volunteer Program this year.

Our ‘ohana also makes personal contributions to
local nonprofits through our annual Bank of Hawaii
Live Kōkua community walk, which raises funds for
organizations that lack resources to hold a walk
of their own, as well as through our annual Live
Kōkua Giving Campaign. Since the inception of the
walk in 2007 and the giving campaign in 2010,
employees and retirees have raised more than
$3 million for the community.

Bankoh “Blue Crew” volunteers regularly help

out in the community in many ways.

1: More than 2,000 of our employees and their
families turned out for the seventh annual

Bank of Hawaii Live Kōkua community walk.

Employees selected the walk’s beneficiaries,

and then raised a total of $105,636 in

donations that were equally divided among

EPIC ‘Ohana, Lanakila Pacific and YMCA of

Honolulu. 2: Our “Blue Crew” spent a Saturday
in June cleaning up the dusty, debris-riddled

interior of the historic Ford Island Control

Tower. 3: In the pelting rain, 150 “Blue Crew”
volunteers helped to rebuild the ancient walls

of Windward Oahu’s He‘eia Fishpond, which

is managed by nonprofit Paepae o He‘eia.

Sandie Mae Maeda and Lani Macaibay wave
to the camera. 4: Kindergarteners at Pu‘uhale
Elementary learn about saving from Courtney
Hirayasu and June Wong as part of our annual
“Teach Children to Save” initiative. More than

245 Bank of Hawaii volunteers taught nearly

5,638 students at 42 elementary, middle and

high schools this year.

1 8

I N V E S T I N G I N E M P L O Y E E S

Helping Employees Live Their Potential

At Bank of Hawaii we provide our people with the
rewards and training to reach their potential.
That’s because our employees are our competitive
advantage. Their talents, passion and creativity
continue to inspire us to new levels of success.

We invest in our employees’ development,
engagement and well-being over the span of their
careers. All Bank of Hawaii employees are given
access to our robust curriculum of skill and
professional development throughout their careers
at the bank. In addition, we have created special
multifaceted programs geared to three distinct
groups: emerging professionals starting their
careers, employees with a proven track record, and
high-performers with long-range leadership
potential. All three programs provide extensive
training to improve business and people skills
while providing unique opportunities to interact
with all levels of leadership across the bank.

The Bank Associate Program was developed for
young professionals just out of college, and attracts
more than 600 applicants each year. It has set the
precedent for excellence in leadership development
in the state of Hawaii for more than 50 years.
Graduates from the six-month program move on to
take leadership roles at Bank of Hawaii. The
Pathways to Leadership Excellence Program is for
employees who are moving to the next step in their
career, and the Leadership Development Series
brings managers together from across the company
as a learning cohort to sharpen their skills and
explore practical issues of banking and the
challenges of today’s leaders. Both programs take
place in a collaborative learning environment that
provides the knowledge and tools to advance
participants’ personal and professional growth.

From the announcement of the teams, through the
timed tournament rounds to the Final Four playoffs,
employees across the bank are excited to compete
in our annual Bankoh Genius Bowl. The success of
this annual product knowledge competition

inspired the development of a special app this year.
The new mobile app was developed exclusively for
Bank of Hawaii employees, and puts information
about consumer and business products and
services, plus rates and special promotions, on
their favorite mobile device. By accessing this new
tool, employees can quickly get information for
on-the-go customers (even in social settings), and
can use it as a study device for the next Bankoh
Genius Bowl competition.

Bank of Hawaii continues to help employees grow,
connect and thrive by encouraging employees to
take charge of their health and general well-being.
For 12 weeks in 2013, 370 employees teamed up for
Summer Slim Down, a friendly competition that
promotes healthy eating and exercise habits.
Together, employees lost more than a ton of
weight—2,418 pounds.

Employees were also gaining muscles by using their
free gym access at our Kapolei and downtown
Honolulu facilities. We also introduced a new
fitness center at our Central Processing Facility,
which opened at the end of 2013. After-work
sessions are also available for a fee; our employees
may enroll in yoga, Zumba, and boot camp classes
at a deep discount.

One essential element in rewarding our team
members is providing recognition to those who go
above and beyond to provide exceptional service
to customers and colleagues, and who provide
exceptional value to the bank and to the
community. Our Step Up To Excellence Program
recognizes and rewards individuals and teams
each quarter based on nominations submitted by
coworkers. In 2013, 258 nominations were
submitted.

Our commitment to our employees is an
investment in their future and in ours, providing
benefits for Bank of Hawaii and its customers
for years to come.

B A N K O F H A W A I I 2 0 1 3 A N N U A L R E P O R T

1 9

1: Winners of the 2013 Bankoh Genius Bowl, the bank’s
product knowledge competition, are East Oahu/

Neighbor Island Personal Banking team members

Chelcy Reyes, Janet In, Stacey Williams and
Summerset Lovett. 2: Julie Ann Taurua of Transaction
Processing Operations and Storm Lagapa of Service
and Operations pumping iron in the new Central

Processing Facility fitness center. 3 and 6: More than
200 employees were honored at a special luncheon to

thank them for 30+ years of service at Bank of Hawaii.

CEO Peter Ho congratulates the three employees with
the highest years of service. From left: May Lei Barros,
46 years, Insurance Marketing; Alton Kuioka,
44 years, Managing Committee; and Bert Yano, 57 years,
Accounting Services. 4: Patrick Twohy, Bank Associate
in Branch Division at the Waikiki branch 5: In April
2013, eight employees were honored as the 2012 annual

Step Up To Excellence awardees for their outstanding

contributions to Bank of Hawaii’s overall success.

Seated, from left: Linda Ho of Commercial Credit Group,
Joan Martin of Personal Trust-Wealth Management
Group Maui, Natalie Fogle of Corporate Facilities,
Virgie White of In-Store Branch Safeway Beretania, and
Roberta Oshiro of Commercial Banking Service and
Support; standing from left: Francois Masson of Retail
Credit, Davin Nakasato of Main Banking Center and
Eric Masumori of Centralized Administrative Services.

2 0

2 0 1 3 F I N A N C I A L R E P O R T

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 E C E M B E R 3 1

2013

2012

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
Short-Term Borrowings
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 Losses, Net
Insurance
Bank-Owned Life Insurance

Other

Total Noninterest Income

Noninterest Expense

Salaries and Benefits

Net Occupancy
Net Equipment
Data Processing

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

253, 276

257,896

53,570

90,062

415

1 , 1 7 2

398,505

1 0 , 1 4 3

26,837

2, 572

39,598

358,907

–

358,907

47,932

1 9 , 1 8 6

3 7, 1 2 4

50,469

–

9 ,1 9 0

5,892

16,430

186, 223

184, 2 1 1

38,745

18,366

13,840

9,405

7,765

58,637

330,969

2 1 4 , 1 6 1

63,659

150,502

3.39

3.38

1.80

65,972

94,952

533

1 , 1 2 7

420,489

1 2 ,376

28,897

–

1 ,924

4 3 , 2 1 8

3 7 7, 2 7 1

979

376,292

45 ,229

35,644

37, 6 2 1

48,965

(77)

9,553

6,805

16,546

200,286

184,408

42,965

19,723

13,202

9,623

7,873

56,494

334,288

242,290

76 , 2 1 4

166,076

3.68

3.67

1.80

44,380,948

4 4 , 572,725

45,1 1 5 , 4 41

45,249,300

Refer to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2013 for the
Consolidated Financial Statements, including Report of Independent Registered Public Accounting Firm, thereon.

B A N K O F H A W A I I 2 0 1 3 A N N U A L R E P O R T

2 1

Consolidated Statements of Condition
Bank of Hawaii Corporation and Subsidiaries (dollars in thousands)

A S O F D E C E M B E R 3 1

Assets
Interest-Bearing Deposits
Funds Sold
Investment Securities
Available-for-Sale

Held-to-Maturity (Fair Value of $4,697,587 and $3,687,676)

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
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
Securities Sold Under Agreements to Repurchase
Long-Term Debt
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, 2013 - 57,480,846 /
44,490,385; and December 31, 2012 - 57,319,352 / 44,754,835)

Capital Surplus
Accumulated Other Comprehensive Income (Loss)
Retained Earnings
Treasury Stock, at Cost (Shares: December 31, 2013 - 12,990,461;

and December 31, 2012 - 12,564,517)
Total Shareholders’ Equity
Total Liabilities and Shareholders’ Equity

2013

2012

3,617

271,414

3,393

185,682

2,243,697

4,744,519

6,435

6,095,387

(115,454)

5,979,933

13,249,615

188,715

108,636

43,930

3,205

28,123

31,517

430,539

3,367,557

3,595,065

21,374

5,854,521

(128,857)

5,725,664

12,898,735

163,786

105,005

43,077

3,887

25,240

31,517

457,125

$ 14,084,280

$ 13,728,372

3,681,128

$ 3,367,185

2,355,608

4,560,150

1,317,770

11,914,656

9,982

770,049

174,706

34,965

4,871

34,907

128,168

13,072,304

572

522,505

(31,823)

1,151,754

(631,032)

1,011,976

2,163,473

4,399,316

1,599,508

11,529,482

11,296

758,947

128,055

47,658

4,776

88,014

138,479

12,706,707

571

515,619

29,208

1,084,477

(608,210)

1,021,665

$ 14,084,280

$ 13,728,372

2 2

2 0 1 3 F I N A N C I A L S

2 0 1 3 R E L AT I V E P R I C E P E R FO R M A N C E

$140

$135

$130

$125

$120

$115

$110

$105

$100

MARCH 31

JUNE 30

SEPT 30

BOH

S&P BANK INDEX

S&P 500 INDEX

B A N K O F H A W A I I 2 0 1 3 A N N U A L R E P O R T

2 3

U N B R O K E N H I S TO RY O F D I V I D E N D S

R E C E S S I O N

$2.00

$1.75

$1.50

$1.25

$1.00

$0.75

$0.50

$0.25

$0.00

‘85

‘87

‘89

‘91

‘93

‘95

‘97

‘99

‘01

‘03

‘05

‘07

‘09

‘11

‘13

HISTORICAL DIVIDENDS ADJUSTED FOR STOCK SPLITS

2 4

M A N A G I N G C O M M I T T E E

Managing Committee

Bank of Hawaii Corporation / Bank of Hawaii (As of December 31, 2013)

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

Sharon M. Crofts
Vice Chairman
Operations Group
Administration

Wayne Y. Hamano
Vice Chairman and Chief
Commercial 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

Jill F. S. Higa
Senior Executive Vice
President Retail Banking

Derek J. Norris
Senior Executive Vice
President and Controller

James C. Polk
Senior Executive
Vice President
Commercial Banking
Group

Dean Y. Shigemura
Senior Executive Vice
President and Treasurer

B A N K O F H A W A I I 2 0 1 3 A N N U A L R E P O R T

2 5

(First Row) Peter S. Ho,

Donna A. Tanoue, Mark A. Rossi,

Alton T. Kuioka (Second Row)

Sharon M. Crofts, Peter M. Biggs,

Mary E. Sellers, Wayne Y. Hamano,

Kent T. Lucien (Third Row)

Derek J. Norris, James C. Polk,

Dean Y. Shigemura, Jill F. S. Higa,

Vincent E. Barfield

2 6

B O A R D O F D I R E C T O R S

Board of Directors

Bank of Hawaii Corporation / Bank of Hawaii (As of December 31, 2013)

S. Haunani Apoliona*
Trustee
Office of Hawaiian
Affairs

Alton T. Kuioka
Vice Chairman
Client Relations
Bank of Hawaii

Mary G. F. Bitterman*
President and
Director
The Bernard Osher
Foundation

Mark A. Burak*
Retired Executive
Vice President
Bank of America

Michael J. Chun*
Retired President
and Headmaster
Kamehameha
Schools-Kapalama

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.

Clinton R. Churchill*
Trustee
The Estate of James
Campbell

Barbara J. Tanabe*
Owner and Partner
Ho‘akea
Communications LLC

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

Donna A. Tanoue
Vice Chairman
Client and
Community Relations
Bank of Hawaii

Raymond P. Vara*
President and Chief
Executive Officer
Hawai‘i Pacific Health

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

*Bank of Hawaii Corporation Board of Directors

(First Row) S. Haunani Apoliona,

Mary G. F. Bitterman, Mark A. Burak (Second

Row) Michael J. Chun , Clinton R. Churchill,

David A. Heenan (Third Row) Peter S. Ho,

Robert A. Huret, Alton T. Kuioka (Fourth Row)

Kent T. Lucien, Martin A. Stein, Donald M. Takaki

(Fifth Row) Barbara J. Tanabe, Donna A. Tanoue,

Raymond P. Vara (Sixth Row) Robert W. Wo

B A N K O F H A W A I I L O C AT I O N S

Facts: Hawaii, Guam, Saipan, Palau and
American Samoa

H AWA I I
Hawaii business establishments in 2012: 98 percent
have fewer than 100 employees, 95 percent have fewer
than 50 employees, and 52 percent have fewer than
five employees.1

Hawaii gross domestic product in 2012: $72.4 billion.2
- Government (federal civilian & military,
and state and local): 24.3%
- Real estate, Rental and Leasing: 17.7%
- Accommodation and Food services: 8.1%
- Retail trade: 6.6%
- Health care and Social assistance: 6.2%
- Construction: 5.4%
- Professional and Technical services: 4.5%
- Transportation and Warehousing: 4.1%
- Finance and Insurance: 3.8%

Tourism’s direct and indirect impact on Hawaii gross
domestic product in 2012: 17.1%.3

State of Hawaii resident population as of
July 1, 2012: 1,392,313.4

G UA M
- U.S. Territory
- Capital: Hagåtña (Agana)
- Resident population: July 2013 estimate 160,3785
- Main industries: U.S. military and tourism.

A M E R I C A N S A M OA
- U.S. Territory
- Capital: Pago Pago
- Resident population: July 2013 estimate 54,7195
- Main industries: tuna fishing and tuna processing
plants.

C O M M O N W E A LT H O F T H E N O R T H E R N
M A R I A N A I S L A N D S
- Commonwealth in political union with the U.S.
- Capital: Saipan
- Resident population: July 2013 estimate 51,1705
- Main industries: tourism and trade.

PA L A U
- Constitutional government in free association
with the U.S.
- Capital: Melekeok
- Resident population: July 2013 estimate 21,1085
- Main industries: tourism, agriculture and fishing.

B A N K O F H A W A I I 2 0 1 3 A N N U A L R E P O R T

2 7

Kauai

Oahu

Commonwealth of the Northern
Mariana Islands/Saipan

Niihau

Guam

Republic of Palau

Molokai

Maui

Lanai

Kahoolawe

State of Hawaii

Hawaii

P A C I F I C O C E A N

Map not shown to scale

American Samoa

Bank of Hawaii Branches and ATMs
(As of December 31, 2013)

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

West Pacific

CNMI/Saipan
Guam
Palau

American Samoa

38
11
12
4
1
1

2
3
1

416

300
48
40
26
1
1

6
35
2

Grand Total

466

1 Updated table for Table 15.18, Hawaii DBEDT State of Hawaii Data Book 2012
from the U.S. Census Bureau “2011 County Business Patterns: Geographic
Area Series: County Business Patterns by Employment Size Class.”
2 Table 13.05, Hawaii DBEDT State of Hawaii Data Book 2012, http://files.
hawaii.gov/dbedt/economic/databook/db2012/section13.pdf
3 Calculation based on Tables 13.05 and 7.32, Hawaii DBEDT
State of Hawaii Data Book 2012, http://files.hawaii.gov/dbedt/economic/
databook/db2012/section13.pdf and http://files.hawaii.gov/dbedt/economic/
databook/db2012/section07.pdf
4 Table 1.06, Hawaii DBEDT State of Hawaii Data Book 2012, http://files.hawaii.
gov/dbedt/economic/databook/db2012/section01.pdf
5 Central Intelligence Agency (CIA), The World Factbook (2013).

2 8

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

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

Cindy Wyrick, Executive Vice President

Investor Relations

Phone: 1-808-694-8430

For General Inquiries

Phone: 1-888-643-3888

www.boh.com

Annual Meeting
The annual meeting of shareholders will be held
on Friday, April 25, 2014 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.

general ledger processing, and loan or deposit
systems; 15) changes to the amount and timing
of proposed common stock repurchases; and
16) natural disasters, public unrest or 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, 2013,
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 obligation to update forward-looking
statements to reflect later events or circumstances.

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.

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
failure in or breach of our operational systems,
information systems or infrastructure, or those
of our third party vendors and other service
providers; 14) any interruption or breach of security
of our information systems resulting in failures
or disruptions in customer account management,

B A N K O F H A W A I I C O R P O R AT I O N

P.O. Box 2900
Honolulu, Hawaii 96846