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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
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FORM 10-K
(Mark One)
[x] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 [FEE REQUIRED] For the fiscal
year ended December 31, 1993
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED] For the
transition period from . . . . . . . . . . . . . . . . .
to . . . . . . . . . . . . . . . . .
Commission file number 0-7949
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FIRST HAWAIIAN, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 99-0156159
(State of incorporation) (I.R.S. Employer
Identification No.)
1132 BISHOP STREET, HONOLULU, HAWAII 96813
(Address of principal executive offices) (Zip Code)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (808) 525-7000
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SECURITIES REGISTERED PURSUANT TO SECTION 12(B) OF THE ACT:
Name of each exchange on
Title of each class which registered
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None Not Applicable
SECURITIES REGISTERED PURSUANT TO SECTION 12(G) OF THE ACT:
Common Stock, $5.00 Par Value
(Title of class)
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Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes [X] No ___
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to
this Form 10-K. [ ]
The aggregate market value of the voting stock held by nonaffiliates of the
registrant as of February 22, 1994 was $486,635,000.
The number of shares outstanding of each of the registrant's classes of common
stock as of February 22, 1994 was:
Title of Class Number of Shares Outstanding
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Common Stock, $5.00 Par Value 32,411,797 Shares
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the following documents are incorporated
by reference in this Form 10-K:
DOCUMENTS FORM 10-K REFERENCE
First Hawaiian, Inc. Annual Report 1993 Parts I and II
First Hawaiian, Inc. Proxy Statement dated
March 1, 1994 for the Annual Meeting
of Stockholders Part III
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INDEX
PART I
PAGE
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Item 1. Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Item 2. Properties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Item 3. Legal Proceedings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Item 4. Submission of Matters to a Vote of Security Holders . . . . . . . . . . . . . . . 15
PART II
Item 5. Market for Registrant's Common Equity and Related
Stockholder Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Item 6. Selected Financial Data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Item 7. Management's Discussion and Analysis of Financial Condition and
Results of Operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Item 8. Financial Statements and Supplementary Data . . . . . . . . . . . . . . . . . . . 16
Item 9. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
PART III
Item 10. Directors and Executive Officers of the Registrant . . . . . . . . . . . . . . . 17
Item 11. Executive Compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Item 12. Security Ownership of Certain Beneficial Owners and Management . . . . . . . . . 18
Item 13. Certain Relationships and Related Transactions . . . . . . . . . . . . . . . . . 18
PART IV
Item 14. Exhibits, Financial Statement Schedules and Reports
on Form 8-K . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Signatures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Exhibit Index . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
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PART I
ITEM 1. BUSINESS
FIRST HAWAIIAN, INC. -
First Hawaiian, Inc. (the "Corporation"), a Delaware corporation, is a
registered bank holding company under the Bank Holding Company Act of 1956, as
amended, and a registered savings and loan holding company under section 10 of
the Homeowner's Loan Act, as amended. The Corporation, through its
subsidiaries, operates a general commercial banking business and other
businesses related to banking. Its principal assets are its investments in
First Hawaiian Bank (the "Bank"), a State of Hawaii chartered bank; First
Hawaiian Creditcorp, Inc. ("Creditcorp") and First Hawaiian Leasing, Inc.
("FHL"), each a financial services loan company; and Pioneer Federal Savings
Bank ("Pioneer"), a federally chartered savings bank. The Bank, Creditcorp,
FHL and Pioneer are wholly-owned subsidiaries of the Corporation. At December
31, 1993, the Corporation had consolidated total assets of $7.3 billion, total
deposits of $5.2 billion and total stockholders' equity of $608.4 million.
Based on assets as of June 30, 1993, the Corporation was the 76th largest bank
holding company in the United States as reported in the American Banker.
FIRST HAWAIIAN BANK -
The Bank, the oldest financial institution in Hawaii, was established as Bishop
& Co. in 1858 in Honolulu. After several corporate mergers and other changes,
the Bank is now a state-chartered bank. The Bank is not a member of the
Federal Reserve System. The deposits of the Bank are insured by the Federal
Deposit Insurance Corporation (the "FDIC") to the extent and subject to the
limitations set forth in the Federal Deposit Insurance Act, as amended.
The Bank is a full-service bank conducting a general commercial and consumer
banking business and offering trust services. Its banking activities include
receiving transaction, savings and time deposits for personal and commercial
accounts; making commercial, agricultural, real estate and consumer loans;
acting as a United States tax depository facility; providing money transfer and
cash management services; selling traveler's checks, bank money orders, mutual
funds and annuities; issuing letters of credit; handling domestic and foreign
collections; providing safe deposit and night depository facilities; lease
financing; and investing in U.S. Treasury securities and securities of other
U.S. government agencies and corporations and state and municipal securities.
As of December 31, 1993, the Bank had total deposits of $4.5 billion and total
assets of $6.1 billion, making it the second largest bank in Hawaii.
Domestic Services -
The domestic operations of the Bank are carried out through its main banking
office located in Honolulu, Hawaii and 58 other banking offices located
throughout the State of Hawaii. Fifty-one of the offices are equipped with
automatic teller machines which provide 24-hour service to customers wishing to
make withdrawals from and deposits to their personal checking accounts, to
transfer funds between checking and savings accounts, to make balance
inquiries, to obtain interim bank statements, and to make utility and loan
payments. Ten nonbranch locations provide balance inquiry and withdrawal
transaction services only. The Bank is a member of the CIRRUS(R)/MasterCard(R)
and Plus(R)/VISA(R) automatic teller machine networks, providing its customers
with access to their funds nationwide and in selected foreign countries.
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Lending Activities -
The Bank engages in a broad range of lending activities, including making real
estate, commercial and consumer loans and leases. At December 31, 1993, the
Bank's loans totalled $4.0 billion, representing 66.2% of total assets. At
that date, 53.0% of the loans were residential and commercial real estate
loans, 31.1% were commercial loans, 12.2% were consumer loans and 3.7% were
leases.
Real Estate Lending--Residential. The Bank makes residential real estate
loans, including home equity loans, to enable borrowers to purchase, refinance
or improve residential real property. The loans are secured by mortgage liens
on the related property substantially all of which is located in Hawaii. At
December 31, 1993, approximately 56% of the Bank's total real estate loans were
collateralized by single-family and multi-family residences.
Real Estate Lending--Commercial. In the commercial real estate area, the Bank
provides construction and permanent financing for a variety of commercial
developments, such as hotels, warehouses and small retail centers. In order to
diversify its portfolio, the Bank also selectively participates as a lender in
developments on the mainland United States, primarily on the west coast. At
December 31, 1993, approximately 44% of the Bank's total real estate loans were
collateralized by construction and commercial properties.
Commercial Lending. The Bank is a major lender to primarily small- and
medium-sized businesses (including local subsidiaries and operations of foreign
companies) in Hawaii and Hawaii companies doing business overseas with
particular emphasis on those companies in the Asia-Pacific region.
Consumer Lending. The Bank offers many types of loans and credits to
consumers. The Bank provides lines of credit, uncollateralized or
collateralized, and provides various types of personal and automobile loans.
The Bank also provides indirect consumer automobile financing on new and used
autos by purchasing finance contracts from dealers. The Bank's Dealer Center
is the largest commercial bank automobile lender in the State of Hawaii. The
Bank is the largest issuer of MasterCard(R) credit cards and the second largest
issuer of VISA(R) credit cards in Hawaii.
International Banking Services -
The Bank maintains an International Banking Division which provides
international banking products and services through the Bank's branch system,
international banking headquarters in Honolulu, a Grand Cayman branch, two Guam
branches and a representative office in Tokyo, Japan. The Bank maintains a
network of correspondent banking relationships throughout the world.
The Bank's international banking activities are primarily trade-related and are
concentrated in the Asia-Pacific area. The Bank has no loans to lesser
developed countries.
Trust Services -
The Bank's Asset Management Division offers a full range of trust and
investment management services. The Division provides asset management,
advisory and administrative services for estates, trusts and individuals. It
also acts as trustee and custodian of pension and profit sharing plans. As of
December 31, 1993, the Asset Management Division had 5,913 accounts with a
market value of $7.1 billion. Of this total, $4.8 billion represented assets
in non-managed accounts and $2.3 billion were managed trust assets.
The Asset Management Division maintains custodial accounts under which it acts
as agent for customers in rendering a variety of services, including dividend
and interest collection, collection under installment obligations, rent
collection and property management.
The Asset Management Division also acts as corporate trustee or co-trustee for
bond issues totaling $2.2 billion in principal amount.
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FIRST HAWAIIAN CREDITCORP, INC. -
Creditcorp is a financial services loan company with 11 branch offices located
throughout the four major islands of the State (Oahu, Hawaii, Maui and Kauai)
and a branch office in Guam. Creditcorp also has a commercial loan production
office in Honolulu.
The lending activities of Creditcorp are concentrated in consumer and
commercial financing which are primarily collateralized by real estate.
Creditcorp's primary source of funds is time and savings deposits which are
insured by the FDIC to the extent and subject to the limitations set forth in
the Federal Deposit Insurance Act, as amended.
Creditcorp also utilizes borrowings as an additional source of funding for its
loan portfolio. In that regard, Creditcorp is a member of the Federal Home
Loan Bank of Seattle (the "FHLB of Seattle") which provides a central credit
facility for member institutions. As of December 31, 1993, Creditcorp was
required, in accordance with the rules and regulations of the FHLB of Seattle,
to maintain a minimum level of capital stock ownership of $3.5 million in this
regional facility. As of December 31, 1993, Creditcorp's investment in the
capital stock of FHLB of Seattle totalled $6.4 million and advances from the
FHLB of Seattle aggregated $35.7 million.
At December 31, 1993, Creditcorp had total deposits of $350.0 million, total
loans and leases of $415.0 million and total assets of $433.0 million.
FIRST HAWAIIAN LEASING, INC. -
FHL, a financial services loan company, finances and leases personal property
and equipment and acts as an agent, broker or advisor in the leasing or
financing of such property for affiliates as well as third parties.
As of December 31, 1993, FHL's net investment in leases amounted to $49.3
million and total assets were $51.5 million. FHL's primary source of funds is
borrowings from the Corporation and the Bank.
PIONEER FEDERAL SAVINGS BANK -
On August 6, 1993, the Corporation acquired for cash all of the outstanding
stock of Pioneer Fed BanCorp, Inc. ("Pioneer Holdings") at a purchase price of
$87 million through the merger of Pioneer Holdings with and into the
Corporation ("Merger"). As a result of the Merger, Pioneer became a
wholly-owned subsidiary of the Corporation (see "Note 1. Business
Combinations" (page 41) in the Financial Review section of the Corporation's
Annual Report 1993, which is incorporated herein by reference thereto).
Pioneer is a federally chartered savings bank operating in the state of Hawaii.
Pioneer, the oldest savings bank in Hawaii, was chartered in 1890 by King David
Kalakaua. Presently, Pioneer maintains 19 branch offices located on the four
major islands of Hawaii. At December 31, 1993, Pioneer had total assets of
$650.3 million. Based on total assets at December 31, 1993, Pioneer was the
fourth largest of six Savings Association Insurance Fund (the "SAIF") - insured
institutions operating in Hawaii.
Pioneer is primarily engaged in attracting deposits from the general public
through a variety of deposit products. Together with borrowings, principally
from the FHLB of Seattle, and funds from ongoing operations, these resources
are invested in the origination of conventional adjustable and fixed rate,
one-to-four family residential mortgages. Pioneer is also engaged in other
types of mortgage lending, including home equity loans, loans on smaller
multi-family projects and, to a lesser extent, in other consumer lending
activities. Mortgage lending activity, both origination and purchases, has
been limited to loans secured by property in the State of Hawaii. As
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of December 31, 1993, Pioneer was required, in accordance with the rules and
regulations of the FHLB of Seattle, to maintain a minimum level of capital
stock ownership of $7.2 million in this regional facility. As of December 31,
1993, Pioneer's investment in the capital stock of the FHLB of Seattle totalled
$25.2 million and advances from the FHLB of Seattle aggregated $143.0 million.
At December 31, 1993, Pioneer had total deposits of $399.4 million, total loans
of $544.0 million and total assets of $650.3 million.
HAWAII COMMUNITY REINVESTMENT CORPORATION -
In an effort to support affordable housing and as part of the Bank's,
Creditcorp's and Pioneer's community reinvestment program, the Bank, Creditcorp
and Pioneer are members of the Hawaii Community Reinvestment Corporation (the
"HCRC"). The HCRC is a consortium of local financial institutions and provides
$50 million in permanent long-term financing for affordable housing projects
throughout Hawaii for low and moderate income residents.
The $50 million loan pool is funded by the member financial institutions who
also participate pro rata in each HCRC loan. The Bank's, Creditcorp's and
Pioneer's participations in these HCRC loans are included in each of these
companies' loan portfolio.
HURRICANE INIKI -
On September 11, 1992, Hurricane Iniki struck the Island of Kauai and, to a
lesser extent, the west side of the Island of Oahu, causing extensive property
damage. At December 31, 1993, the Bank, Creditcorp and Pioneer held mortgages
collateralizing loans of $92.2 million, $11.8 million and $37.9 million,
respectively, on commercial and residential properties on Kauai that were
damaged by the hurricane. All of the properties were covered by casualty
insurance policies which covered not only the owner of the property, but also
the lender. The Corporation does not anticipate material losses resulting from
damage caused by Hurricane Iniki.
As a result of Hurricane Iniki, several casualty insurers failed or refused to
renew and write new homeowners' casualty insurance in Hawaii. The Bank,
Creditcorp and Pioneer all require and rely upon the existence of adequate
homeowners' casualty insurance on all residential properties which serve as
primary collateral for loans. If homeowners' casualty insurance became
generally unavailable in Hawaii, the subsidiaries of the Corporation would
either be required to discontinue residential real property lending or be
exposed to risk of loss if uninsured collateral were destroyed in the event of
fire or other casualties. In addition, such loans would not be salable in the
secondary market.
However, at this time alternate homeowners' casualty insurance is available to
homeowners in Hawaii, but at greater costs than before the hurricane. The
Legislature of the State of Hawaii has created the Hawaii Hurricane Relief Fund
to offer homeowners' insurance coverage in order to stabilize the casualty
insurance market in Hawaii and to increase the availability of reasonably
priced homeowners' casualty insurance.
As an alternative to customer-provided insurance, the Bank, Creditcorp and
Pioneer have been able to obtain "forced place" homeowners' casualty coverage
through insurance policies obtained by the Bank, Creditcorp or Pioneer at the
borrower's expense to cover the uninsured mortgage loan.
EMPLOYEES -
As of December 31, 1993, the Corporation had 3,116 full-time equivalent
employees. The Bank employed 2,766 persons and nonbank subsidiaries employed
350 persons. None are represented by any collective bargaining agents
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and relations with employees are considered excellent.
MONETARY POLICY AND ECONOMIC CONDITIONS -
The earnings and growth of the Corporation are affected not only by general
economic conditions, but also by the monetary policies of various governmental
regulatory authorities, particularly the Board of Governors of the Federal
Reserve System (the "Federal Reserve Board"). The Federal Reserve Board
implements national monetary policy by its open market operations in United
States Government securities, control of the discount rate, and establishment
of reserve requirements against both member and nonmember financial
institutions' deposits. These actions have a significant effect on the overall
growth and distribution of loans, investments and deposits as well as the rates
earned on loans, or paid on deposits.
It is not possible to predict the effect of future changes in monetary policies
upon the operating results of the Corporation.
COMPETITION -
Although the laws of Hawaii generally prohibit interstate banking, competition
in the financial services industry is intense. Hawaii-based commercial banks,
savings institutions, financial services loan companies and credit unions
compete against one another. Based upon the latest available figures, total
deposits of all financial institutions in Hawaii as of June 30, 1993 amounted
to approximately $21 billion. The two largest bank holding companies, Bancorp
Hawaii, Inc. and the Corporation accounted for 26% and 23% of total deposits,
respectively. The Corporation's share of deposits includes Pioneer which was
acquired on August 6, 1993. The next largest competitors were Bank of America,
F.S.B. and American Savings Bank, F.S.B., with 10% and 7%, respectively, of
total deposits. In addition, out-of-state mutual funds, insurance companies,
brokerage firms and other financial services providers also compete for
consumer and commercial business in Hawaii.
Foreign (non-Hawaii) banks and other financial institutions are able to make
loans in Hawaii through Edge Act facilities, finance and mortgage company
subsidiaries and by loan participations with local banks. United States
domestic banks and other financial institutions may make loans directly in
Hawaii by qualifying as "foreign lenders" in Hawaii. Foreign banks currently
conduct various banking activities in Hawaii, except for retail deposit-taking.
Banks and bank holding companies organized under the laws of Pacific Ocean
jurisdictions with United States dollar-based economies may acquire Hawaii
banks or establish branches in Hawaii, although none has done so to date.
Banks and similar financial institutions of countries other than the United
States may and do have representative offices or agencies in Hawaii. Under the
rules of the Office of Thrift Supervision ("OTS"), federally-chartered savings
associations may open branches in, or merge with another savings association
located in, any state (including Hawaii), subject to certain conditions.
Hawaii has no law permitting interstate bank acquisitions or branching in
Hawaii by foreign (non-Hawaii) banks. The Hawaii Legislature has previously
considered and rejected broad interstate banking legislation. However,
legislation has been enacted which permits the acquisition of failing
state-chartered financial institutions by out-of-state financial institutions
in certain limited circumstances. A bill is presently under consideration in
the 1994 Hawaii State Legislature which would allow out-of-state bank holding
companies to acquire Hawaii banks. Further, both the United States Senate and
House of Representatives are considering proposed legislation which, if
enacted, could permit non-Hawaii bank holding companies to acquire Hawaii banks
or bank holding companies and, if Hawaii law permitted, to operate branches of
a non-Hawaii bank in Hawaii. Whether any of the proposed state or federal
legislation will be enacted, the form which such legislation may take, and its
effect on the Corporation cannot be predicted at this time.
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SUPERVISION AND REGULATION -
As a bank holding company, the Corporation is subject to the Bank Holding
Company Act of 1956 and is subject to supervision by the Federal Reserve Board.
In general, the Bank Holding Company Act of 1956 limits the business of bank
holding companies to owning or controlling banks and engaging in such other
activities as the Federal Reserve Board may determine to be so closely related
to banking or managing or controlling banks as to be a proper incident thereto.
The Corporation is also regulated and supervised by the OTS as a savings and
loan holding company by virtue of its ownership of Pioneer. The various
subsidiaries of the Corporation are subject to regulation and supervision by
the state banking authorities of Hawaii, the Federal Reserve Board, the FDIC,
the OTS and various other regulatory agencies.
Holding Company Structure. The Corporation must obtain the prior approval of
the Federal Reserve Board before acquiring direct or indirect ownership or
control of any voting shares of any bank if after such acquisition it would own
or control, directly or indirectly, more than 5% of the voting shares of such
bank; before merging or consolidating with another bank holding company; and
before acquiring substantially all of the assets of any additional bank. The
Bank Holding Company Act of 1956 also prohibits the acquisition by the
Corporation of any such interest in any bank or bank holding company located in
a state other than Hawaii unless the laws of the state in which such bank is
located expressly authorize such acquisition. With certain exceptions, the
Bank Holding Company Act of 1956 prohibits bank holding companies from
acquiring direct or indirect ownership or control of more than 5% of any class
of voting shares in any company which is not a bank or a bank holding company,
unless the Federal Reserve Board determines that the activities of such company
are so closely related to banking or managing or controlling banks as to be a
proper incident thereto. In making such determinations, the Federal Reserve
Board considers, among other things, whether the performance of such activities
by a bank holding company would offer benefits to the public that outweigh
possible adverse effects. In addition, all acquisitions are reviewed by the
Department of Justice for antitrust considerations.
The Corporation is required by the Bank Holding Company Act of 1956 to file
annual reports and such other reports as may be required from time to time with
the Federal Reserve Board. In addition, the Federal Reserve Board performs
periodic examinations of the Corporation and certain of its subsidiaries.
The principal source of the Corporation's cash revenue has been dividends and
interest received from the Bank and other subsidiaries of the Corporation. The
Bank, Pioneer and Creditcorp are subject to regulatory limitations on the
amount of dividends they may declare or pay. In addition, the payment of
dividends by the Corporation is limited to an amount not greater than 50% of
its consolidated net income as stipulated in the debt covenants of a certain
line of credit. There are also statutory limits on the transfer of funds to
the Corporation and certain of its nonbanking subsidiaries by the Bank, whether
in the form of loans or other extensions of credit, investments or asset
purchases. Such transfers by the Bank to the Corporation or any such
nonbanking subsidiary are limited in amount to 10% of the Bank's capital and
surplus, or 20% in the aggregate. Furthermore, such loans and extensions of
credit are required to be collateralized in specified amounts.
If, in the opinion of the applicable regulatory authority, a bank under its
jurisdiction is engaged in or is about to engage in an unsafe or unsound
practice (which, depending on the financial condition of the bank, could
include the payment of dividends), such authority may require, after notice and
hearing, that such bank cease and desist from such practice. The Federal
Reserve Board and the FDIC have issued policy statements which provide that, as
a general matter, insured banks and bank holding companies may only pay
dividends out of current operating earnings. Under Hawaii law, the Bank is
prohibited from declaring or paying any dividends in excess of its retained
earnings.
Under Federal Reserve Board policy, a bank holding company is expected to act
as a source of financial strength
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to each subsidiary bank and to make capital injections into a troubled
subsidiary bank, and the Federal Reserve Board may charge the bank holding
company with engaging in unsafe and unsound practices for failure to commit
resources to a subsidiary bank. This capital injection may be required at
times when the Corporation may not have the resources to provide it. Any
capital loans by the Corporation to its subsidiary bank would be subordinate in
right of payment to deposits and to certain other indebtedness of such
subsidiary bank. In connection with its application to the Federal Reserve
Board for authority to acquire Pioneer, the Corporation committed that Pioneer
will meet all present and future minimum capital ratios adopted for savings
associations by OTS or the FDIC. In the event of the bankruptcy of the
Corporation, this commitment would be assumed by the bankruptcy trustee and be
entitled to a priority of payment.
In addition, depository institutions insured by the FDIC can be held liable for
any losses incurred by, or reasonably expected to be incurred by, the FDIC
after August 9, 1989 in connection with (i) the default of a commonly
controlled FDIC-insured depository institution or (ii) any assistance provided
by the FDIC to a commonly controlled FDIC-insured depository institution in
danger of default. "Default" is defined generally as the appointment of a
conservator or receiver and "in danger of default" is defined generally as the
existence of certain conditions indicating that a "default" is likely to occur
in the absence of regulatory assistance. Accordingly, in the event that any
insured subsidiary of the Corporation causes a loss to the FDIC, other insured
subsidiaries of the Corporation could be required to compensate the FDIC by
reimbursing it for the amount of such loss. Any such obligation by the
Corporation's insured subsidiaries to reimburse the FDIC would stand senior to
their obligations, if any, to the Corporation.
Federal Deposit Insurance Corporation Improvement Act of 1991. In December,
1991, Congress enacted the Federal Deposit Insurance Corporation Improvement
Act of 1991 ("FDICIA"), which substantially revises the bank regulatory and
funding provisions of the Federal Deposit Insurance Act and makes revisions to
several other federal banking statutes. FDICIA provides for, among other
things, (i) a recapitalization of the Bank Insurance Fund by increasing the
FDIC's borrowing authority; (ii) annual on-site examinations of
federally-insured depository institutions by banking regulators; (iii) publicly
available annual financial condition and management reports for financial
institutions, including audits by independent accountants; (iv) the
establishment of uniform accounting standards by federal banking agencies; (v)
the establishment of "prompt corrective action" standards for depository
institutions based on five levels of capitalization, with more scrutiny and
restrictions placed on institutions with lower levels of capital; (vi)
additional grounds for the appointment of a conservator or receiver for a
failed or failing depository institution; (vii) a requirement that the FDIC use
the least-cost method of resolving cases of troubled institutions in order to
keep the costs to insurance funds at a minimum; (viii) more comprehensive
regulation and examination of foreign banks; (ix) consumer protection
provisions including a Truth-in-Savings Act; (x) a requirement that the FDIC
establish a risk-based deposit insurance assessment system to be in effect no
later than January 1, 1994; (xi) restrictions or prohibitions on accepting
brokered deposits except for institutions which significantly exceed minimum
capital requirements; (xii) general restrictions on the activities as principal
and equity investments of state-chartered banks to those permissible for
national banks unless approved by the FDIC; and (xiii) certain limits on
deposit insurance coverage.
A central feature of FDICIA is the requirement that the federal banking
agencies take "prompt corrective action" with respect to insured depository
institutions that do not meet minimum capital requirements. FDICIA establishes
five capital levels applicable to such institutions (including the Bank):
"well capitalized,' "adequately capitalized," "undercapitalized,"
"significantly undercapitalized" and "critically undercapitalized." Under the
regulations adopted by the federal banking agencies to implement these
provisions of FDICIA, a depository institution is "well capitalized" if it has
(i) a total risk-based capital ratio of 10% or greater, (ii) a Tier 1
risk-based capital ratio of 6% or greater, (iii) a leverage ratio of 5% or
greater and (iv) is not subject to any order or written directive to meet and
maintain a specific capital level for any capital measure. An "adequately
capitalized" institution is defined as one that has (i) a total risk-based
capital ratio of 8% or greater, (ii) a Tier 1 risk-based capital ratio of 4% or
greater and (iii) a leverage ratio of 4% or greater (or 3% or greater in the
case of a bank with a composite CAMEL rating
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of 1). A depository institution is considered (i) "undercapitalized" if it has
(A) a total risk-based capital ratio of less than 8%, (B) a Tier 1 risk-based
capital ratio of less than 4% or (C) a leverage ratio of less than 4% (or 3% in
the case of an institution with a CAMEL rating of 1), (ii) "significantly
undercapitalized" if it has (A) a total risk-based capital ratio of less than
6%, (B) a Tier 1 risk-based capital ratio of less than 3% or (C) a leverage
ratio of less than 3% and (iii) "critically undercapitalized" if it has a ratio
of tangible equity to total assets equal to or less than 2%. An institution
may be deemed by the regulators to be in a capitalization category that is
lower than is indicated by its actual capital position if, among other things,
it receives an unsatisfactory examination rating.
FDICIA generally prohibits a depository institution from making any capital
distribution (including payment of a cash dividend) or paying any management
fees to its holding company if the depository institution is, or would
thereafter be, undercapitalized. Undercapitalized depository institutions are
subject to growth limitations and are required to submit a capital restoration
plan. The federal banking agencies may not accept a capital plan without
determining, among other things, that the plan is based on realistic
assumptions and is likely to succeed in restoring the depository institution's
capital. In addition, for a capital restoration plan to be acceptable, the
depository institution's parent holding company must guarantee that the
institution will comply with such capital restoration plan. The aggregate
liability of the parent holding company under such guarantee is limited to the
lesser of (i) an amount equal to 5% of the depository institution's total
assets at the time it became undercapitalized, or (ii) the amount which is
necessary (or would have been necessary) to bring the institution into
compliance with all capital standards applicable to such institution as of the
time it fails to comply with the plan. If a depository institution fails to
submit an acceptable plan, it is treated as if it is significantly
undercapitalized.
Significantly undercapitalized depository institutions may be subject to a
number of other requirements and restrictions, including orders to sell
sufficient voting stock to become adequately capitalized, requirements to
reduce total assets and cessation of receipt of deposits from correspondent
banks. Critically undercapitalized institutions are subject to the appointment
of a receiver or conservator, generally within 90 days of the date such
institution becomes critically undercapitalized.
FDICIA also provides for increased funding of the FDIC insurance funds. In
addition, the FDIC has implemented a risk-based deposit insurance assessment
system under which the assessment rate for an insured institution may vary
according to the regulatory capital levels of the institution and other factors
(including supervisory evaluations). There is an eight basis point spread
between the highest and lowest assessment rates, so that banks classified as
strongest by the FDIC are subject to a rate of .23%, and banks classified as
weakest by the FDIC are subject to a rate of .31%.
FDICIA also requires the federal banking agencies to prescribe standards for
depository institutions and their holding companies relating to internal
controls, information systems, internal audit systems, loan documentation,
credit underwriting, interest rate exposure, asset growth, executive
compensation, a maximum ratio of classified assets to capital, minimum earnings
sufficient to absorb losses, a minimum ratio of market value to book value for
publicly traded shares and such other standards as the agencies deem
appropriate. In November, 1993 the federal banking agencies published proposed
regulations to implement these provisions of FDICIA. The proposed rules set
forth general standards to be observed but for the most part do not mandate
specific operating standards to be followed. At this time the Corporation
believes that such rules, if adopted in their proposed form, will not have a
material effect on the Corporation's operations or financial results.
Capital Requirements. The Corporation and certain of its subsidiaries are
subject to regulatory capital guidelines issued by the federal banking
agencies. Information with respect to the applicable capital requirements is
included in "Management's Discussion and Analysis of Financial Condition and
Results of Operations" (Page 32) in the Financial Review section of the
Corporation's Annual Report 1993, and is incorporated herein by reference
thereto.
8
11
FDICIA requires each federal banking agency to revise its risk-based capital
standards to ensure that those standards take adequate account of interest rate
risk, concentration of credit risk and the risk of nontraditional activities,
as well as reflect the actual performance and expected risk of loss on
multi-family mortgages. In September, 1993 the federal banking agencies issued
notices of proposed rulemaking soliciting comment on proposed revisions to the
risk-based capital rules to take account of interest rate risk. The notice
proposes alternative approaches for determining the additional amount of
capital, if any, that may be required to compensate for interest rate risk.
The first approach would reduce an institution's risk-based capital ratios by
an amount based on its measured exposure to interest rate risk in excess of a
specified threshold. The second approach would assess the need for additional
capital on a case-by-case basis, considering both the level of measured
exposure and qualitative risk factors. The Corporation cannot assess at this
point the impact that such proposals would have on its capital ratios.
In February, 1994 the federal banking agencies issued proposed rules to revise
the risk-based capital standards to take account of concentration of credit
risk and the risks of nontraditional activities. The proposed rules specify
that concentrations of credit risk will be considered as important factors in
assessing an institution's overall capital adequacy, but did not provide for
any specific adjustments to the risk-based capital standards for such risks or
for the risks of nontraditional activities.
9
12
STATISTICAL DISCLOSURES -
Guide 3 of the "Guides for the Preparation and Filing of Reports and
Registration Statements" under the Securities Act of 1933 sets forth certain
statistical disclosures in the "Description of Business" section of bank
holding company filings with the Securities and Exchange Commission. The
statistical information requested is presented in the following tables and also
in the tables shown below in the Corporation's Annual Report 1993, which tables
are incorporated herein by reference thereto. The tables and information
contained therein have been prepared by the Corporation and have not been
audited or reported upon by the Corporation's independent accountants.
Information in response to the following sections of Guide 3 is included in the
Financial Review section of the Corporation's Annual Report 1993, and is
incorporated herein by reference thereto:
PAGE NUMBERS IN
---------------------------
FIRST HAWAIIAN, INC.
ANNUAL REPORT 1993
DISCLOSURE REQUIREMENTS (EXHIBIT 13)
----------------------- ------------------------------
I. Distribution of Assets, Liabilities and Stockholders' Equity;
Interest Rates and Interest Differential -
A. Average balance sheets 20 - 21
B. Analysis of net interest earnings 20 - 21
C. Dollar amount of change in interest income and interest expense 22
II. Investment Portfolio -
C. Investment securities in excess of 10% of stockholders' equity 43
III. Loan and Lease Portfolio -
A. Types of loans and leases 27
C. Risk elements
1. Nonaccrual, past due and restructured loans and leases 28
4. Loan concentrations 27
IV. Summary of Loan and Lease Loss Experience
A. Analysis of loss experience 24
B. Breakdown of the allowance for loan and lease losses 25
V. Deposits
A. Average amount and average rate paid on deposits 29
D. Maturity distribution of domestic time certificates of deposits
of $100,000 or more 29
E. Time certificates of deposit in denominations of $100,000 or more
issued by foreign offices 44
VI. Return on Equity and Assets 16
VII. Short-Term Borrowings 44
10
13
I. Distribution of Assets, Liabilities and Stockholders' Equity; Interest
Rates and Interest Differential
Table I-C presents the percentages of total assets and total liabilities
attributable to foreign operations. For this purpose, assets attributable to
foreign operations are defined as assets in foreign offices and loans and
leases to and investments in customers domiciled outside the United States.
Deposits received and other liabilities are classified on the basis of domicile
of the creditor.
FIRST HAWAIIAN, INC. AND SUBSIDIARIES
TABLE I-C
PERCENTAGE OF TOTAL ASSETS AND TOTAL LIABILITIES
ATTRIBUTABLE TO FOREIGN OPERATIONS
YEAR ENDED DECEMBER 31,
---------------------------------------
1993 1992 1991
---------------------------------------
Average foreign assets to average total assets 6.19% 6.51% 7.78%
Average foreign liabilities to average total liabilities 2.07% 2.68% 4.47%
II. INVESTMENT SECURITIES PORTFOLIO
Table II-A presents the book value of investment securities by the following
major categories at year-end for the years indicated.
FIRST HAWAIIAN, INC. AND SUBSIDIARIES
TABLE II-A
SCHEDULE OF INVESTMENT SECURITIES BY BOOK VALUE
DECEMBER 31,
---------------------------------------
1993 1992 1991
---------------------------------------
(in millions)
U.S. Treasury and other U.S. Government agencies
and corporations $ 918 $ 685 $ 789
States and political subdivisions 204 196 197
Other 108 70 239
----- ----- -----
Total $1,230 $ 951 $1,225
====== ====== ======
11
14
Table II-B presents the maturities of investment securities, excluding
securities which have no stated maturity at December 31, 1993, and the weighted
average yields (for obligations exempt from Federal income taxes on a taxable
equivalent basis assuming a 35% tax rate) of such securities. The tax
equivalent adjustment is made for items exempt from Federal income taxes to
make them comparable with taxable items before any income taxes are applied.
FIRST HAWAIIAN, INC. AND SUBSIDIARIES
TABLE II-B
SCHEDULE OF INVESTMENT SECURITIES BY
MATURITIES AND AVERAGE YIELDS
DECEMBER 31, 1993
MATURITY
-----------------------------------------------------------------
AFTER ONE AFTER FIVE
WITHIN BUT WITHIN BUT WITHIN
ONE YEAR FIVE YEARS TEN YEARS
------------------- -------------------- -------------------
AMOUNT YIELD AMOUNT YIELD AMOUNT YIELD
------ ------- ------ ------- ------ -------
(dollars in millions)
U.S. Treasury and other U.S. Government
agencies and corporations $340 3.86% $351 4.08% $ 83 4.59%
States and political subdivisions 17 9.49 154 7.98 6 5.55
Other 3 3.35 12 3.82 17 3.54
---- ---- ----
Total $360 4.13% $517 5.24% $106 4.48%
==== ==== ====
MATURITY
-------------------
AFTER
TEN YEARS TOTAL
------------------- -------------------
AMOUNT YIELD AMOUNT YIELD
------ ------- ------ -------
(dollars in millions)
U.S. Treasury and other U.S. Government
agencies and corporations $144 5.18% $918 4.22%
States and political subdivisions 26 7.21 203 7.56
Other 42 3.53 74 3.57
---- ------
Total $212 5.14% $1,195 4.76%
==== ======
Notes:
(1) The weighted average yields were calculated on the basis of the cost and
effective yields weighted for the scheduled maturity of each security.
(2) Includes $98 million of securities in the following maturity categories
with optional tender dates ($10 million within 1 to 5 years; $20 million
within 5 to 10 years; and $68 million after 10 years).
12
15
III. Loan and Lease Portfolio
Table III-B presents maturity and interest rate sensitivity data for all loans
and leases except real estate - residential, real estate - commercial,
consumer, credit cards and lease financing at December 31, 1993.
FIRST HAWAIIAN, INC. AND SUBSIDIARIES
TABLE III-B
LOAN AND LEASE MATURITY AND
INTEREST RATE SENSITIVITY DATA
DECEMBER 31, 1993
AFTER ONE OVER
ONE YEAR YEAR TO FIVE
OR LESS FIVE YEARS YEARS TOTAL
--------- ----------- ------ --------
(in millions)
Commercial, financial and agricultural $1,118 $ 79 $ 12 $ 1,209
Real estate - construction 287 28 2 317
Foreign 116 81 14 211
------ ------ ----- -------
$1,521 $ 188 $ 28 1,737
====== ====== ======
Real estate:
Residential 1,786
Commercial 883
Consumer 312
Credit cards 148
Lease financing 201
--------
Total loans and leases $ 5,067
========
Loans with fixed or predetermined interest rates $ 108 $ 96 $ 13 $ 217
Loans with floating or adjustable interest rates 1,413 92 15 1,520
------ ------ ------ -------
$1,521 $ 188 $ 28 $ 1,737
====== ====== ====== ========
13
16
Table III-C (3) presents a summary of the Corporation's foreign outstandings to
each country which exceeded 1% of total assets for the years indicated.
Foreign outstandings are defined as the balances outstanding of cross-border
loans, acceptances, interest-bearing deposits with other banks, other
interest-bearing investments and any other monetary assets. At December 31,
1993, the Corporation's total foreign outstandings amounted to $256 million.
FIRST HAWAIIAN, INC. AND SUBSIDIARIES
TABLE III-C (3)
FOREIGN OUTSTANDINGS TO EACH COUNTRY WHICH EXCEEDS 1% OF TOTAL ASSETS
BANKS AND COMMERCIAL
OTHER FINANCIAL AND
INSTITUTIONS INDUSTRIAL OTHER TOTAL
--------------- ------------ ---------- ----------
(in thousands)
AT DECEMBER 31, 1993 $ - $ - $ - $ -
========== ========== ========= ==========
At December 31, 1992
$ - $ - $ - $ -
========== ========== ========= ==========
At December 31, 1991 -
Japan $ 121,621 $ - $ - $ 121,621
========== ========== ========= ==========
ITEM 2. PROPERTIES
A subsidiary of the Bank is the sole general partner in a Hawaii limited
partnership which owns all of a city block in downtown Honolulu containing
55,775 square feet. The Bank's interest in the limited partnership is 99.25%.
The administrative headquarters of the Corporation and the main branch of the
Bank were formerly located on a portion of the city block. The buildings were
demolished and the Bank has begun construction of a modern banking center on
this city block. The new headquarters building will include 418,000 square
feet of gross office space, including the Bank's main branch and administrative
headquarters of the Corporation and the Bank. The new building is anticipated
to be completed in 1996. Commencing in March 1993, the Bank leased
approximately 119,000 square feet in another office building for use as an
interim administrative headquarters and main branch until completion of the new
structure. The interim office building is approximately a block and a half
from the old administrative headquarters and main branch.
Seventeen of the Bank's offices in Hawaii are located on land owned in fee
simple by the Bank. The other branches of the Bank, Pioneer and Creditcorp are
situated in leasehold premises or in buildings constructed by the Bank or
Creditcorp on leased land (see "Note 16. Lease Commitments" (page 50) in the
Financial Review section of the Corporation's Annual Report 1993, which is
incorporated herein by reference thereto).
14
17
.
In early 1993, the Bank completed construction of an operations center located
on 125,919 square feet of land owned in fee simple by the Bank in an industrial
area near downtown Honolulu. The Bank occupies all of the four-story building
which is anticipated to enable the Bank to meet its projected technological
requirements into the twenty-first century.
The Bank is also constructing a new five-story, 75,000 square foot office
building, including a branch, on property owned in fee simple in Maite, Guam to
replace its Agana, Guam Branch. Completion of the building is anticipated for
late 1994.
ITEM 3. LEGAL PROCEEDINGS
The legal proceeding brought by MasterCard International, Inc. in the United
States District Court for the Southern District of New York against Dean
Witter, Discover & Co. and others, in which the Bank and others were named as
counterclaim defendants, which was described in the Corporation's Annual Report
on Form 10-K for the fiscal year ended December 31, 1992, was settled and
dismissed without the Corporation or the Bank making any payment or assuming
any other obligation. The date of the dismissal of claims against the Bank was
January 21, 1994.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
No matters were submitted to a vote of security holders during the fourth
quarter of the fiscal year ended December 31, 1993.
15
18
PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
Required information is included in "Common Stock Information" (Page 15) in the
Financial Review section of the Corporation's Annual Report 1993, and is
incorporated herein by reference thereto.
ITEM 6. SELECTED FINANCIAL DATA
Required information is included in "Summary of Selected Consolidated Financial
Data" (Page 16) in the Financial Review section of the Corporation's Annual
Report 1993, and is incorporated herein by reference thereto.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
Required information is included in "Management's Discussion and Analysis of
Financial Condition and Results of Operations" (Pages 17 through 32) in the
Financial Review section of the Corporation's Annual Report 1993, and is
incorporated herein by reference thereto.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The following information is included in the Financial Review section of the
Corporation's Annual Report 1993, which is incorporated herein by reference
thereto as follows:
PAGE NUMBER
---- ------
Report of Independent Accountants 34
First Hawaiian, Inc. and Subsidiaries:
Consolidated Balance Sheets at December 31, 1993 and 1992 35
Consolidated Statements of Income for the years ended
December 31, 1993, 1992 and 1991 36
Consolidated Statements of Changes in Stockholders' Equity
for the years ended December 31, 1993, 1992 and 1991 37
Consolidated Statements of Cash Flows for the years ended
December 31, 1993, 1992 and 1991 38
First Hawaiian, Inc. (Parent Company):
Balance Sheets at December 31, 1993 and 1992 49
Statements of Income for the years ended December 31, 1993,
1992 and 1991 49
Statements of Cash Flows for the years ended December 31, 1993,
1992 and 1991 50
Notes to Financial Statements 39 - 51
Summary of Quarterly Financial Data (Unaudited) 33
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
None.
16
19
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
Required information relating to directors is included in "Election of
Directors" and "Directors Continuing in Office and Executive Officers" (Pages 3
through 9) of the Corporation's Proxy Statement, and is incorporated herein by
reference thereto.
EXECUTIVE OFFICERS OF THE REGISTRANT
Listed below are the executive officers of the Corporation with their
positions, age and business experience during the past five years:
BUSINESS EXPERIENCE DURING LAST 5 YEARS
(ALL WITH THE CORPORATION AND THE BANK
OFFICER AGE EXCEPT AS OTHERWISE INDICATED)
----------------------------- --- ------------------------------------------------------------------
Walter A. Dods, Jr. 52 Chairman of the Board and Chief Executive Officer of the
Chairman, Chief Executive Corporation since 1989; President of the Corporation from 1989
Officer and Director -1991; Executive Vice President of the Corporation from 1982 -
1989; Director of the Corporation since 1983; Chairman of the
Board and Chief Executive Officer of the Bank since 1989;
President of the Bank from 1984 - 1989; Director of the Bank
since 1979. Mr. Dods has been with the Bank since 1968.
John A. Hoag 61 President and Director of the Corporation since 1991;
President and Director Executive Vice President of the Corporation from 1982 - 1991;
Director and President of the Bank since 1989; Executive Vice
President of the Bank from 1979 - 1989. Mr. Hoag has been
with the Bank since 1960.
Philip H. Ching 63 Executive Vice President of the Corporation since 1989; Vice
Executive Vice President President of the Corporation from 1974 - 1989; Vice Chairman
of the Bank since 1991; Executive Vice President of the Bank
from 1989 - 1991; Senior Vice President and Administrative
Assistant to the Chairman and Chief Executive Officer of the
Bank from 1979 - 1989. Mr. Ching has been with the Bank and a
trust company acquired by the Bank since 1957.
Donald G. Horner 43 Executive Vice President of the Corporation since 1989; Vice
Executive Vice President President of the Corporation from 1987 - 1989; Chairman and
Chief Executive Officer of Creditcorp since 1992; President of
Creditcorp from 1985 - 1992; Executive Vice President of the
Bank since 1992; President of FHL since 1985. Mr. Horner has
been with the Bank since 1978.
17
20
BUSINESS EXPERIENCE DURING LAST 5 YEARS
(ALL WITH THE CORPORATION AND THE BANK
OFFICER AGE EXCEPT AS OTHERWISE INDICATED)
------------------------- ----- ---------------------------------------------------------------
Howard H. Karr 51 Executive Vice President and Treasurer of the Corporation
Executive Vice President and since 1989; Vice President and Treasurer of the Corporation
Treasurer from 1978 - 1989; Vice Chairman and Chief Financial Officer of
the Bank since 1991; Executive Vice President and Chief
Financial Officer of the Bank from 1989 - 1991; Senior Vice
President and Controller of the Bank from 1979 - 1989. Mr.
Karr has been with the Bank since 1973.
Herbert E. Wolff 68 Senior Vice President and Secretary of the Corporation since
Senior Vice President and 1993; Vice President and Secretary of the Corporation from
Secretary 1982 - 1993; Senior Vice President and Secretary of the Bank
since 1986. Mr. Wolff joined the Bank in 1981.
There are no family relationships among any of the executive officers of the
Corporation. There is no arrangement or understanding between any such
executive officer and another person pursuant to which he was elected as an
officer. The term of office of each officer is at the pleasure of the Board of
Directors of the Corporation.
ITEM 11. EXECUTIVE COMPENSATION
Required information is included in "Remuneration of Directors" and "Executive
Compensation" (Pages 9 through 20) of the Corporation's Proxy Statement, and is
incorporated herein by reference thereto.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
Required information is included in "Outstanding Shares; Voting Rights,"
"Election of Directors" and "Directors Continuing in Office and Executive
Officers" (Pages 2 through 8) of the Corporation's Proxy Statement, and is
incorporated herein by reference thereto.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Required information is included in "Certain Transactions" (Pages 20 and 21) of
the Corporation's Proxy Statement, and is incorporated herein by reference
thereto.
18
21
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K
PAGE NUMBER IN
--------------------
FIRST HAWAIIAN,
INC. ANNUAL
REPORT 1993
(EXHIBIT 13)
------------------------
(a) 1. Financial Statements
The following financial statements are incorporated by reference in Part II
(Item 8) of this Form 10-K:
Report of Independent Accountants 34
First Hawaiian, Inc. and Subsidiaries:
Consolidated Balance Sheets at December 31, 1993 and 1992 35
Consolidated Statements of Income for the
years ended December 31, 1993, 1992 and 1991 36
Consolidated Statements of Changes in Stockholders' Equity
for the years ended December 31, 1993, 1992 and 1991 37
Consolidated Statements of Cash Flows for the
years ended December 31, 1993, 1992 and 1991 38
First Hawaiian, Inc. (Parent Company):
Balance Sheets at December 31, 1993 and 1992 49
Statements of Income for the years ended
December 31, 1993, 1992 and 1991 49
Statements of Cash Flows for the years ended
December 31, 1993, 1992 and 1991 50
Notes to Financial Statements 39 - 51
2. Financial Statement Schedules
Schedules to the consolidated financial statements required by Article
9 of Regulation S-X are not required under the related instructions, or
the information is included in the consolidated financial statements,
or are inapplicable, and therefore have been omitted.
3. Exhibits
Exhibit 3 (i) Certificate of Incorporation - Incorporated by
reference to Exhibit 3 to the Corporation's Annual
Report on Form 10-K for the fiscal year ended December
31, 1990 as filed with the Securities and Exchange
Commission.
(ii) Bylaws - Incorporated by reference to Exhibit 3 to the
Corporation's Annual Report on Form 10-K for the
fiscal year ended December 31, 1987 as filed with the
Securities and Exchange Commission.
19
22
Exhibit 4 Instruments defining rights of security holders,
including indentures.
(i) Equity - Incorporated by reference to Exhibit 3(i)
hereto.
(ii) Debt - Indenture, dated as of August 9, 1993 between
First Hawaiian, Inc. and The First National Bank of
Chicago, Trustee.
Exhibit 10 Material contracts
(i) Lease dated September 13, 1967, as amended April 21,
1987, between the Trustees under the Will and of the
Estate of Samuel M. Damon, Deceased, and First
National Bank of Hawaii (predecessor of the Bank) is
incorporated by reference to Exhibit 10 to the
Corporation's Annual Report on Form 10-K for the
fiscal year ended December 31, 1987 as filed with the
Securities and Exchange Commission.
(ii) Lease dated May 20, 1982, as amended April 23, 1987,
between the Trustees under the Will and of the Estate
of Samuel M. Damon, Deceased, and First Hawaiian Bank
is incorporated by reference to Exhibit 10 to the
Corporation's Annual Report on Forms 10-K for the
fiscal years ended December 31, 1987, 1985 and 1980 as
filed with the Securities and Exchange Commission.
(iii) Lease Agreement dated as of December 1, 1993 between
REFIRST, Inc. and First Hawaiian Bank.
(iv) Construction Management, Escrow and Development
Agreement dated as of December 1, 1993 among REFIRST,
Inc., First Hawaiian Bank and First Fidelity Bank,
N.A., Pennsylvania.
(v) Ground Lease dated as of December 1, 1993 among First
Hawaiian Center Limited Partnership, FH Center, Inc.
and REFIRST, Inc.
(vi) Stock Incentive Plan of First Hawaiian, Inc. dated
November 22, 1991 is incorporated by reference to
Exhibit 10 to the Corporation's Annual Report on Form
10-K for the fiscal year ended December 31, 1991 as
filed with the Securities and Exchange Commission.
(vii) Long-Term Incentive Plan of First Hawaiian, Inc.
effective January 1, 1992 is incorporated by reference
to Exhibit 10 to the Corporation's Annual Report on
Form 10-K for the fiscal year ended December 31, 1991
as filed with the Securities and Exchange Commission.
20
23
(viii) First Hawaiian, Inc. Supplemental Executive Retirement
Plan, as amended August 18, 1988 is incorporated by
reference to Exhibit 10 to the Corporation's Annual
Report on Form 10-K for the fiscal year ended December
31, 1992 as filed with the Securities and Exchange
Commission.
(ix) Amendment One to First Hawaiian, Inc. Supplemental
Executive Retirement Plan, effective January 1, 1992
is incorporated by reference to Exhibit 10 to the
Corporation's Annual Report on Form 10-K for the
fiscal year ended December 31, 1992 as filed with the
Securities and Exchange Commission.
(x) First Hawaiian, Inc. Incentive Plan for Key
Executives, as amended through December 13, 1989 is
incorporated by reference to Exhibit 10 to the
Corporation's Annual Report on Form 10-K for the
fiscal year ended December 31, 1992 as filed with the
Securities and Exchange Commission.
(xi) Directors' Retirement Plan, effective as of January 1,
1992 is incorporated by reference to Exhibit 10 to the
Corporation's Annual Report on Form 10-K for the
fiscal year ended December 31, 1992 as filed with the
Securities and Exchange Commission.
Exhibit 12 Statement re: computation of ratios.
Exhibit 13 Annual report to security holders - Corporation's
Annual Report 1993.
Exhibit 22 Subsidiaries of the registrant.
Exhibit 23 Consent of independent accountants.
(b) Reports on Form 8-K - No reports on Form 8-K were filed during the last
quarter of the fiscal year ended December 31, 1993.
(c) Response to this item is the same as Item 14(a)3.
(d) Response to this item is the same as Item 14(a)2.
21
24
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.
FIRST HAWAIIAN, INC.
(Registrant)
By /s/ HOWARD H. KARR
-----------------------------------
HOWARD H. KARR
EXECUTIVE VICE PRESIDENT AND TREASURER
Date: March 17, 1994
22
25
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the date indicated.
/s/ WALTER A. DODS, JR. Chairman, March 17, 1994
- --------------------------------------------- Chief Executive Officer -------------------------
Walter A. Dods, Jr. & Director Date
/s/ JOHN C. COUCH Director March 17, 1994
- --------------------------------------------- -------------------------
John C. Couch Date
/s/ JULIA ANN FROHLICH Director March 17, 1994
- --------------------------------------------- -------------------------
Julia Ann Frohlich Date
/s/ PAUL MULLIN GANLEY Director March 17, 1994
- --------------------------------------------- -------------------------
Paul Mullin Ganley Date
/s/ DAVID M. HAIG Director March 17, 1994
- --------------------------------------------- -------------------------
David M. Haig Date
/s/ JOHN A. HOAG President March 17, 1994
- --------------------------------------------- & Director -------------------------
John A. Hoag Date
/s/ BERT T. KOBAYASHI, JR. Director March 17, 1994
- --------------------------------------------- -------------------------
Bert T. Kobayashi, Jr. Date
/s/ RICHARD T. MAMIYA Director March 17, 1994
- --------------------------------------------- -------------------------
Richard T. Mamiya Date
/s/ FUJIO MATSUDA Director March 17, 1994
- --------------------------------------------- -------------------------
Fujio Matsuda Date
/s/ RODERICK F. McPHEE Director March 17, 1994
- --------------------------------------------- -------------------------
Roderick F. McPhee Date
/s/ ROBERT J. PFEIFFER Director March 17, 1994
- --------------------------------------------- -------------------------
Robert J. Pfeiffer Date
/s/ GEORGE P. SHEA, JR. Director March 17, 1994
- --------------------------------------------- -------------------------
George P. Shea, Jr. Date
/s/ FRED C. WEYAND Director March 17, 1994
- --------------------------------------------- -------------------------
Fred C. Weyand Date
/s/ ROBERT C. WO Director March 17, 1994
- --------------------------------------------- -------------------------
Robert C. Wo Date
/s/ HOWARD H. KARR Executive Vice President March 17, 1994
- --------------------------------------------- & Treasurer -------------------------
Howard H. Karr (Principal financial and Date
accounting officer)
23
26
EXHIBIT INDEX
SEQUENTIALLY
EXHIBIT NUMBERED
NUMBER DESCRIPTION PAGE
-------------------------------------------------------------------------------------------------------- ------------
3 (i) Certificate of Incorporation - Incorporated by reference to Exhibit
3 to the Corporation's Annual Report on Form 10-K for the fiscal
year ended December 31, 1990 as filed with the Securities and -
Exchange Commission.
(ii) Bylaws - Incorporated by reference to Exhibit 3 to the
Corporation's Annual Report on Form 10-K for the fiscal year ended
December 31, 1987 as filed with the Securities and Exchange -
Commission.
4 Instruments defining rights of security holders, including
indentures.
(i) Equity - Incorporated by reference to Exhibit 3(i) hereto. -
(ii) Debt - Indenture, dated as of August 9, 1993 between First
Hawaiian, Inc. and The First National Bank of Chicago, Trustee.
10 Material contracts
(i) Lease dated September 13, 1967, as amended April 21, 1987, between
the Trustees under the Will and of the Estate of Samuel M. Damon,
Deceased, and First National Bank of Hawaii (predecessor of the
Bank) is incorporated by reference to Exhibit 10 to the
Corporation's Annual Report on Form 10-K for the fiscal year ended
December 31, 1987 as filed with the Securities and Exchange
Commission. -
(ii) Lease dated May 20, 1982, as amended April 23, 1987, between the
Trustees under the Will and of the Estate of Samuel M. Damon,
Deceased, and First Hawaiian Bank is incorporated by reference to
Exhibit 10 to the Corporation's Annual Report on Forms 10-K for the
fiscal years ended December 31, 1987, 1985 and 1980 as filed with
the Securities and Exchange Commission. -
(iii) Lease Agreement dated as of December 1, 1993 between REFIRST, Inc.
and First Hawaiian Bank.
(iv) Construction Management, Escrow and Development Agreement dated as
of December 1, 1993 among REFIRST, Inc., First Hawaiian Bank and
First Fidelity Bank, N.A., Pennsylvania.
(v) Ground Lease dated as of December 1, 1993 among First Hawaiian
Center Limited Partnership, FH Center, Inc. and REFIRST, Inc.
24
27
(vi) Stock Incentive Plan of First Hawaiian, Inc. dated November 22,
1991 is incorporated by reference to Exhibit 10 to the
Corporation's Annual Report on Form 10-K for the fiscal year ended
December 31, 1991 as filed with the Securities and Exchange -
Commission.
(vii) Long-Term Incentive Plan of First Hawaiian, Inc. effective
January 1, 1992 is incorporated by reference to Exhibit 10 to the
Corporation's Annual Report on Form 10-K for the fiscal year ended
December 31, 1991 as filed with the Securities and Exchange -
Commission.
(viii) First Hawaiian, Inc. Supplemental Executive Retirement Plan, as
amended August 18, 1988 is incorporated by reference to Exhibit 10
to the Corporation's Annual Report on Form 10-K for the fiscal year
ended December 31, 1992 as filed with the Securities and Exchange
Commission. -
(ix) Amendment One to First Hawaiian, Inc. Supplemental Executive
Retirement Plan, effective January 1, 1992 is incorporated by
reference to Exhibit 10 to the Corporation's Annual Report on Form
10-K for the fiscal year ended December 31, 1992 as filed with the
Securities and Exchange Commission. -
(x) First Hawaiian, Inc. Incentive Plan for Key Executives, as amended
through December 13, 1989 is incorporated by reference to Exhibit
10 to the Corporation's Annual Report on Form 10-K for the fiscal
year ended December 31, 1992 as filed with the Securities and
Exchange Commission. -
(xi) Directors' Retirement Plan, effective as of January 1, 1992 is
incorporated by reference to Exhibit 10 to the Corporation's Annual
Report on Form 10-K for the fiscal year ended December 31, 1992 as
filed with the Securities and Exchange Commission. -
12 Statement re: computation of ratios.
13 Annual report to security holders - Corporation's Annual Report
1993.
22 Subsidiaries of the registrant.
23 Consent of independent accountants.
25