Bank of Hawaii Corporation Third Quarter 2008 Financial Results

HONOLULU--(BUSINESS WIRE)--Bank of Hawaii Corporation (NYSE:BOH) today reported diluted earnings per share of $0.99 for the third quarter of 2008, an increase of $0.03 or 3.1 percent from diluted earnings per share of $0.96 in the same quarter last year. Net income for the third quarter of 2008 was $47.4 million, down slightly from net income of $47.8 million in the third quarter of 2007. Financial results for the third quarter of 2008 included an $8.9 million net credit related to the Company’s pending resolution of Sale In/Lease Out (“SILO”) leases with the Internal Revenue Service. The Company also increased the allowance for loan and lease losses by $13.0 million during the quarter.

“Asset quality remained solid and we strengthened our capital ratios and reserves during the quarter. We are preparing for more challenging operating conditions as the Hawaii economy slows and Federal government programs begin to impact our market.”

The return on average assets for the third quarter of 2008 was 1.82 percent, up from 1.79 percent during the same quarter last year. The return on average equity for the third quarter of 2008 was 24.17 percent compared to 26.02 percent for the third quarter of 2007.

"Bank of Hawaii Corporation had another good financial performance during the third quarter of 2008 despite a challenging environment for banks," said Allan R. Landon, Chairman and CEO. “Asset quality remained solid and we strengthened our capital ratios and reserves during the quarter. We are preparing for more challenging operating conditions as the Hawaii economy slows and Federal government programs begin to impact our market."

For the nine months ended September 30, 2008, net income was $152.9 million, up $10.1 million or 7.0 percent compared to $142.8 million for the same period last year. Diluted earnings per share were $3.17 for the nine-month period in 2008, up from $2.86 for the same period in 2007. The year-to-date return on average assets was 1.95 percent, up from 1.82 percent for the same nine months in 2007. The year-to-date return on average equity was 26.26 percent, down slightly from 26.43 percent for the same period in 2007 as the Company further strengthened its capital levels in 2008.

Financial Highlights

Net interest income, on a taxable equivalent basis, for the third quarter of 2008 was $103.8 million, up $5.0 million from net interest income of $98.8 million in the third quarter of 2007 and down $3.6 million from net interest income of $107.4 million in the second quarter of 2008. Net interest income in the third quarter of 2008 included a $4.0 million reduction related to accounting for the pending settlement of income tax issues with the SILO leases. For the nine-month period ended September 30, 2008, net interest income on a taxable equivalent basis was $313.6 million compared to $296.3 million for the same period in 2007. Analyses of the changes in net interest income are included in Tables 7a, 7b and 7c.

The net interest margin was 4.33 percent for the third quarter of 2008, a 30 basis point increase from 4.03 percent in the third quarter of 2007 and an 8 basis point decrease from 4.41 percent in the second quarter of 2008. The decrease in the margin compared with the previous quarter was due to accounting for the proposed settlement of the SILO leases, which reduced the margin by 17 basis points. For the nine months ended September 30, 2008, the net interest margin was 4.30 percent compared to 4.07 percent for the same nine months in 2007. The increase in the net interest margin was primarily due to lower funding costs in 2008.

Results for the third quarter of 2008 included a provision for credit losses of $20.4 million compared with $4.1 million in the third quarter of 2007 and $7.2 million in the second quarter of 2008. The provision for credit losses exceeded net charge-offs of $7.4 million by $13.0 million in the third quarter of 2008. The provision for credit losses equaled net charge-offs in the third quarter of last year and exceeded net charge-offs by $2.5 million in the second quarter of 2008.

Noninterest income was $57.0 million for the third quarter of 2008, a decrease of $4.3 million compared to $61.2 million in the third quarter of 2007 and a decrease of $3.6 million compared to $60.5 million in the second quarter of 2008. The decrease in noninterest income was largely due to accounting volatility in mortgage banking income, the timing of contingent insurance commission income, and lower investment management fees.

Noninterest expense was $86.8 million in the third quarter of 2008, up $5.3 million from noninterest expense of $81.5 million in the same quarter last year and up $2.9 million from $83.9 million in the previous quarter. Noninterest expense in the third quarter of 2008 included an additional accrual of $2.0 million related to employee incentive awards. An analysis of salary and benefit expenses is included in Table 8.

The efficiency ratio for the third quarter of 2008 was 54.05 percent compared to 50.97 percent in the third quarter last year. For the nine months ended September 30, 2008, the efficiency ratio was 51.12 percent compared to 51.16 percent for the same period in 2007.

The 11.24 percent effective tax rate for the third quarter of 2008 includes a net credit of $12.9 million due to the previously mentioned IRS tax settlement. The effective tax rate was 35.68 percent during the same quarter last year and 37.03 percent in the previous quarter. For the nine months ended September 30, 2008, the effective tax rate was 27.37 percent compared to 35.75 percent for the same period in 2007. Adjusted for the SILO tax settlement, the effective tax rate was 32.97 percent for the third quarter of 2008 and 32.89 percent for the nine-month period in 2008.

The Company’s business segments are defined as Retail Banking, Commercial Banking, Investment Services, and Treasury. Results are determined based on the Company’s internal financial management reporting process and organizational structure. Selected financial information for the business segments is included in Tables 12a and 12b.

Asset Quality

The Company’s overall asset quality remained solid during the three-month period ended September 30, 2008 with low levels of non-performing assets and accruing loans and leases past due 90 days or more. However, the Company increased the allowance for loan and lease losses by an additional $13.0 million during the quarter due to heightened risk in three specific loan exposures and to general risk from the weakening Hawaii and U.S. mainland economy.

Non-accrual loans and leases were $5.6 million at September 30, 2008, up from $4.2 million at September 30, 2007 and down from $6.5 million at June 30, 2008. As a percentage of total loans and leases, non-accrual loans at September 30, 2008 of 0.09 percent remain near historic lows.

Total non-performing assets were $5.9 million at the end of the third quarter of 2008, up from $4.3 million at the end of the same quarter last year and down from $6.7 million at the end of the previous quarter. The ratio of non-performing assets to total loans and foreclosed real estate at September 30, 2008 was 0.09 percent, up from 0.06 percent at September 30, 2007 and down from 0.10 percent at June 30, 2008.

Net charge-offs during the third quarter of 2008 were $7.4 million or 0.45 percent annualized of total average loans and leases. Net charge-offs increased $3.3 million compared to $4.1 million, or 0.25 percent annualized of total average loans and leases, during the same quarter last year and were up $2.7 million compared to $4.7 million, or 0.29 percent annualized of total average loans and leases, in the previous quarter. The increase compared to the previous quarter was largely due to higher charge-offs in the unsecured consumer installment portfolio. Net charge-offs for the nine months ended September 30, 2008 were $17.5 million, or 0.36 percent annualized of total average loans and leases compared to $10.1 million, or 0.21 percent annualized of total average loans and leases for the same period last year. Net charge-offs for the first nine months of 2007 included a partial recovery of $2.1 million on an aircraft lease charged off in 2005.

The allowance for loan and lease losses increased to $115.5 million at September 30, 2008, up from $91.0 million at September 30, 2007 and up from $102.5 million at June 30, 2008. The ratio of the allowance for loan and lease losses to total loans was 1.77 percent at September 30, 2008, an increase from 1.38 percent at September 30, 2007 and from 1.57 percent at June 30, 2008. The reserve for unfunded commitments at September 30, 2008 was $5.2 million, unchanged from September 30, 2007 and from June 30, 2008. Details of charge-offs, recoveries and the components of the total reserve for credit losses are summarized in Table 11.

Other Financial Highlights

Total assets were $10.34 billion at September 30, 2008, down $215 million from $10.55 billion at September 30, 2007 and down $36 million from $10.37 billion at June 30, 2008. The decrease in total assets compared with the prior quarters is largely due to a reduction in investment securities.

Total loans and leases were $6.54 billion at September 30, 2008, down $60 million from $6.60 billion at September 30, 2007 and up $21 million from $6.52 billion at June 30, 2008. Average loans and leases were $6.51 billion during the third quarter of 2008, down $58 million from $6.57 billion during the third quarter last year and down $19 million from $6.53 billion during the previous quarter.

Total commercial loans were $2.41 billion at September 30, 2008, down $19 million from $2.43 billion at September 30, 2007 and up $34 million from $2.37 billion at June 30, 2008. The decrease in commercial loans is largely due to the Company’s strategy to reduce construction lending exposure. Construction loans were $153 million at September 30, 2008, down $101 million from $254 million at September 30, 2007 and down $15 million from $169 million at June 30, 2008.

Total consumer loans were $4.13 billion at September 30, 2008, down $42 million from $4.17 billion at September 30, 2007 and down $12 million from $4.14 billion at June 30, 2008. The decrease in consumer loans compared with the previous quarter was largely due to a reduction in residential first mortgages, automobile lending, and unsecured installment loans. The trends in the consumer portfolio are consistent with the slowing Hawaii economy and the Company’s disciplined approach to underwriting and credit. Loan and lease portfolio balances are summarized in Table 9.

Total deposits were $7.66 billion at September 30, 2008, down $217 million from $7.88 billion at September 30, 2007 and down $246 million from $7.90 billion at June 30, 2008. The decrease in total deposits was largely due to a reduction in commercial escrow accounts related to construction projects nearing completion and lower public deposits due to the timing of bond payments. Average total deposits were $7.77 billion during the third quarter of 2008, down $243 million from $8.02 billion during the third quarter last year and down $186 million from $7.96 billion during the previous quarter.

During the third quarter of 2008, the Company repurchased 332.2 thousand shares of common stock at a total cost of $16.2 million under its share repurchase program. The average cost was $48.74 per share repurchased. From the beginning of the share repurchase program in July 2001 through September 30, 2008, the Company has repurchased 45.6 million shares and returned over $1.6 billion to shareholders at an average cost of $35.44 per share. On October 24, 2008 the Company’s Board of Directors increased the authorization under the share repurchase program by an additional $50 million. This new authorization, combined with the previously announced authorizations of $1.65 billion, brings the total repurchase authority to $1.7 billion. Remaining buyback authority under the share repurchase program was $85.4 million at October 24, 2008.

At September 30, 2008, the Tier 1 leverage ratio was 7.27 percent, up from 6.92 percent at September 30, 2007 and up from 7.01 percent at June 30, 2008.

The Company’s Board of Directors declared a quarterly cash dividend of $0.45 per share on the Company’s outstanding shares, up from $0.44 during the previous three quarters. The dividend will be payable on December 12, 2008 to shareholders of record at the close of business on November 28, 2008.

The Federal government and organizations have announced a number of programs to relieve distress in the financial markets, including the Emergency Economic Stabilization Act of 2008. The Company is evaluating the programs to determine its level of participation, if any.

Hawaii Economy

During the third quarter of 2008, Hawaii’s economy continued to slow. Unemployment increased to 4.5 percent in September 2008 compared with 2.6 percent at the end of 2007. Visitor arrivals, which were up in the first quarter of 2008 and down slightly through the first half of 2008, decreased 17.3 percent in August compared with 2007. Oahu single-family median home prices were down slightly compared with home prices last year, and decreased by larger proportions on the neighbor islands. Reductions in residential building during 2008 continue to be partially offset by military construction. Nonresidential construction, which was up significantly in the first half of 2008, declined 30.4 percent in August compared to prior year levels. Inflation in Hawaii was 4.9 percent in the first half of 2008, down slightly from the first half of 2007. Hawaii real personal income growth remained positive during the first half of 2008, up 0.3 percent from 2007.

Conference Call Information

The Company will review its third quarter 2008 financial results today at 8:00 a.m. Hawaii Time (2:00 p.m. Eastern Time). The conference call will be accessible via teleconference and via the Investor Relations link of the Company’s web site, www.boh.com. The conference call number for participants in the United States is 800-901-5217. International participants should call 617-786-2964. No pass code is required. A replay will be available for one week beginning Monday, October 27, 2008 by calling 888-286-8010 in the United States or 617-801-6888 internationally and entering the pass code number 74583826 when prompted. A replay will also be available via the Investor Relations link of the Company’s web site.

Forward-Looking Statements

This news release, and other statements made by the Company in connection with it may contain "forward-looking statements", such as forecasts of our financial results and condition, expectations for our operations and business prospects, and our assumptions used in those forecasts and expectations. Do not unduly rely on forward-looking statements. Actual results might differ significantly from our forecasts and expectations because of a variety of factors. More information about these factors is contained in Bank of Hawaii Corporation's Annual Report on Form 10-K for the year ended December 31, 2007, filed with the U.S. Securities and Exchange Commission. We have not committed 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. The Company’s principal subsidiary, Bank of Hawaii, was founded in 1897 and is the largest independent financial institution in Hawaii. For more information about Bank of Hawaii Corporation, see the Company’s web site, www.boh.com.

Bank of Hawaii Corporation and Subsidiaries
Financial Highlights (Unaudited)													Table 1
(dollars in thousands, except per share amounts)	Three Months Ended									Nine Months Ended
	September 30,			June 30,			September 30,			September 30,
		2008			2008			2007			2008			2007
For the Period:
Net Interest Income	$	103,575		$	107,168		$	98,556		$	312,923		$	295,571
Provision for Credit Losses		20,358			7,172			4,070			41,957			10,064
Total Noninterest Income		56,986			60,539			61,242			203,650			180,230
Total Noninterest Expense		86,790			83,862			81,450			264,084			243,405
Net Income		47,409			48,282			47,779			152,906			142,843
Basic Earnings Per Share		1.00			1.01			0.98			3.20			2.90
Diluted Earnings Per Share		0.99			1.00			0.96			3.17			2.86
Dividends Declared Per Share		0.44			0.44			0.41			1.32			1.23

Net Income to Average Total Assets		1.82	%		1.85	%		1.79	%		1.95	%		1.82	%
Net Income to Average Shareholders' Equity		24.17			24.82			26.02			26.26			26.43
Efficiency Ratio ¹		54.05			50.01			50.97			51.12			51.16
Operating Leverage ²		(12.02	)		(11.62	)		1.65			8.65			2.97
Net Interest Margin ³		4.33			4.41			4.03			4.30			4.07
Dividend Payout Ratio ⁴		44.00			43.56			41.84			41.25			42.41
Effective Tax Rate		11.24			37.03			35.68			27.37			35.75

Average Loans and Leases	$	6,512,453		$	6,531,587		$	6,570,261		$	6,543,871		$	6,554,979
Average Assets		10,339,490			10,504,421			10,576,565			10,495,367			10,480,803
Average Deposits		7,772,535			7,958,171			8,015,594			7,893,972			7,916,061
Average Shareholders' Equity		780,334			782,429			728,372			777,650			722,522
Average Shareholders' Equity to Average Assets		7.55	%		7.45	%		6.89	%		7.41	%		6.89	%

Market Price Per Share of Common Stock:

Closing	$	53.45		$	47.80		$	52.85		$	53.45		$	52.85
High		70.00			57.37			55.84			70.00			55.84
Low		37.46			46.62			46.05			37.46			46.05


				September 30,			June 30,			December 31,			September 30,
				2008			2008			2007			2007
As of Period End:
Loans and Leases				$	6,539,458		$	6,518,128		$	6,580,861		$	6,599,915
Total Assets					10,335,047			10,371,149			10,472,942			10,549,595
Total Deposits					7,658,484			7,903,990			7,942,372			7,875,166
Long-Term Debt					204,616			205,351			235,371			235,350
Total Shareholders' Equity					780,020			767,558			750,255			731,697

Non-Performing Assets				$	5,927		$	6,680		$	5,286		$	4,260

Allowance to Loans and Leases Outstanding					1.77	%		1.57	%		1.38	%		1.38	%
Leverage Ratio ⁵					7.27			7.01			7.02			6.92

Book Value Per Common Share				$	16.35		$	16.01		$	15.44		$	14.91

Full-Time Equivalent Employees					2,573			2,534			2,594			2,572
Branches and Offices					84			84			83			83

¹ Efficiency ratio is defined as noninterest expense divided by total revenue (net interest income and total noninterest income).
² Operating leverage is defined as the percentage change in income before the provision for credit losses and the provision for income taxes. Measures are presented on a linked quarter basis.
³ Net interest margin is defined as net interest income, on a taxable equivalent basis, as a percentage of average earning assets.
⁴ Dividend payout ratio is defined as dividends declared per share divided by basic earnings per share.
⁵ Leverage ratio as of June 30, 2008, December 31, 2007, and September 30, 2007 was corrected from 7.04%, 7.04%, and 6.95%, respectively.

Bank of Hawaii Corporation and Subsidiaries
Net Significant Income (Expense) Items (Unaudited)							Table 2
	Three Months Ended			Nine Months Ended
	September 30,			September 30,
(dollars in thousands)	2008				2008			2007
SILO Leveraged Lease	$	(3,981	)	$	(3,981	)	$	-
LILO Leveraged Lease		-			-			1,098
Gain on Mandatory Redemption of Visa Shares		-			13,737			-
Gain on Disposal of Leased Equipment		-			11,588			2,275
Increase in Allowance for Loan and Lease Losses		(13,000	)		(22,000	)		-
Cash for Stock Grants		-			(4,640	)		-
Employee Incentive Awards		(2,000	)		(6,386	)		-
Legal Contingencies		-			(3,016	)		-
Bank of Hawaii Charitable Foundation and Other Contributions		-			(2,250	)		-
Call Premium on Capital Securities		-			(991	)		-
Separation Expense		-			(615	)		-
Reversal of Visa Legal Costs		-			5,649			-
Significant Income (Expense) Items Before the Provision (Benefit) for Income Taxes		(18,981	)		(12,905	)		3,373
Benefit for Income Taxes Related to SILO/LILO Transactions		(12,920	)		(12,920	)		(377	)
Provision (Benefit) for Income Taxes		(5,250	)		(8,631	)		827
Net Significant Income (Expense) Items	$	(811	)	$	8,646		$	2,923

Bank of Hawaii Corporation and Subsidiaries
Consolidated Statements of Income (Unaudited)									Table 3
(dollars in thousands, except per share amounts)	Three Months Ended						Nine Months Ended
	September 30,		June 30,		September 30,		September 30,
	2008		2008		2007		2008		2007
Interest Income
Interest and Fees on Loans and Leases	$	92,744	$	97,959	$	112,787	$	295,116	$	335,111
Income on Investment Securities
Trading		1,174		1,209		1,114		3,543		4,089
Available-for-Sale		35,152		35,321		33,486		104,724		96,010
Held-to-Maturity		2,870		3,033		3,616		9,142		11,495
Deposits		33		204		1,086		432		1,240
Funds Sold		141		420		1,103		1,553		2,694
Other		490		489		364		1,405		1,061
Total Interest Income		132,604		138,635		153,556		415,915		451,700
Interest Expense
Deposits		17,736		20,238		37,613		65,439		104,689
Securities Sold Under Agreements to Repurchase		7,675		7,488		11,726		25,780		35,277
Funds Purchased		507		270		1,654		1,410		4,029
Short-Term Borrowings		13		12		87		59		265
Long-Term Debt		3,098		3,459		3,920		10,304		11,869
Total Interest Expense		29,029		31,467		55,000		102,992		156,129
Net Interest Income		103,575		107,168		98,556		312,923		295,571
Provision for Credit Losses		20,358		7,172		4,070		41,957		10,064
Net Interest Income After Provision for Credit Losses		83,217		99,996		94,486		270,966		285,507
Noninterest Income
Trust and Asset Management		14,193		15,460		15,146		44,739		47,114
Mortgage Banking		621		2,738		3,848		7,656		9,698
Service Charges on Deposit Accounts		13,045		12,411		11,919		37,539		33,958
Fees, Exchange, and Other Service Charges		16,991		17,176		16,465		50,268		49,082
Investment Securities Gains, Net		159		157		789		446		1,380
Insurance		5,902		5,590		7,446		18,622		18,548
Other		6,075		7,007		5,629		44,380		20,450
Total Noninterest Income		56,986		60,539		61,242		203,650		180,230
Noninterest Expense
Salaries and Benefits		46,764		45,984		44,944		148,221		134,937
Net Occupancy		11,795		11,343		10,267		33,581		29,773
Net Equipment		4,775		4,474		4,871		13,570		14,529
Professional Fees		3,270		2,588		2,369		8,471		7,511
Other		20,186		19,473		18,999		60,241		56,655
Total Noninterest Expense		86,790		83,862		81,450		264,084		243,405
Income Before Provision for Income Taxes		53,413		76,673		74,278		210,532		222,332
Provision for Income Taxes		6,004		28,391		26,499		57,626		79,489
Net Income	$	47,409	$	48,282	$	47,779	$	152,906	$	142,843
Basic Earnings Per Share	$	1.00	$	1.01	$	0.98	$	3.20	$	2.90
Diluted Earnings Per Share	$	0.99	$	1.00	$	0.96	$	3.17	$	2.86
Dividends Declared Per Share	$	0.44	$	0.44	$	0.41	$	1.32	$	1.23
Basic Weighted Average Shares		47,518,078		47,733,278		48,913,293		47,738,245		49,204,295
Diluted Weighted Average Shares		48,057,965		48,300,049		49,663,049		48,295,901		50,001,594

Bank of Hawaii Corporation and Subsidiaries
Consolidated Statements of Condition (Unaudited)										Table 4
	September 30,			June 30,			December 31,			September 30,
(dollars in thousands)		2008			2008			2007			2007
Assets
Interest-Bearing Deposits	$	13,845		$	6,056		$	4,870		$	35,471
Funds Sold		-			-			15,000			-
Investment Securities
Trading		90,993			94,347			67,286			92,831
Available-for-Sale		2,572,111			2,646,506			2,563,190			2,591,982
Held-to-Maturity (Fair value of $245,720; $255,905; $287,644; and $299,191)		249,083			260,592			292,577			307,653
Loans Held for Sale		14,903			11,183			12,341			8,016
Loans and Leases		6,539,458			6,518,128			6,580,861			6,599,915
Allowance for Loan and Lease Losses		(115,498	)		(102,498	)		(90,998	)		(90,998	)
Net Loans and Leases		6,423,960			6,415,630			6,489,863			6,508,917
Total Earning Assets		9,364,895			9,434,314			9,445,127			9,544,870
Cash and Noninterest-Bearing Deposits		285,762			280,635			368,402			344,267
Premises and Equipment		118,333			117,323			117,177			120,318
Customers' Acceptances		1,250			1,856			1,112			1,967
Accrued Interest Receivable		41,061			42,295			45,261			52,652
Foreclosed Real Estate		293			229			184			105
Mortgage Servicing Rights
Measured at Fair Value		27,057			30,272			27,588			28,407
Amortized		650			-			-			-
Goodwill		34,959			34,959			34,959			34,959
Other Assets		460,787			429,266			433,132			422,050
Total Assets	$	10,335,047		$	10,371,149		$	10,472,942		$	10,549,595

Liabilities
Deposits
Noninterest-Bearing Demand	$	1,592,251		$	1,876,782		$	1,935,639		$	1,894,933
Interest-Bearing Demand		1,750,297			1,666,726			1,634,675			1,530,982
Savings		2,738,684			2,781,082			2,630,471			2,711,169
Time		1,577,252			1,579,400			1,741,587			1,738,082
Total Deposits		7,658,484			7,903,990			7,942,372			7,875,166
Funds Purchased		189,700			69,400			75,400			191,900
Short-Term Borrowings		10,621			10,180			10,427			10,749
Securities Sold Under Agreements to Repurchase		1,109,431			1,028,518			1,029,340			1,087,511
Long-Term Debt (includes $120,598 and $121,326 carried at fair value as of September 30, 2008 and June 30, 2008, respectively)		204,616			205,351			235,371			235,350
Banker's Acceptances		1,250			1,856			1,112			1,967
Retirement Benefits Payable		22,438			29,478			29,984			41,125
Accrued Interest Payable		12,702			13,588			20,476			18,526
Taxes Payable and Deferred Taxes		240,795			250,125			278,218			271,089
Other Liabilities		104,990			91,105			99,987			84,515
Total Liabilities		9,555,027			9,603,591			9,722,687			9,817,898
Shareholders' Equity
Common Stock ($.01 par value; authorized 500,000,000 shares; issued / outstanding: September 2008 - 57,022,797 / 47,707,629; June 2008 - 57,016,182 / 47,941,409; December 2007 - 56,995,447 / 48,589,645; and September 2007 - 57,005,602 / 49,068,275)		568			568			567			567
Capital Surplus		491,419			489,335			484,790			482,586
Accumulated Other Comprehensive Loss		(18,643	)		(15,813	)		(5,091	)		(28,359	)
Retained Earnings		770,373			745,244			688,638			671,451
Treasury Stock, at Cost (Shares: September 2008 - 9,315,168; June 2008 - 9,074,773; December 2007 - 8,405,802; and September 2007 - 7,937,327)		(463,697	)		(451,776	)		(418,649	)		(394,548	)
Total Shareholders' Equity		780,020			767,558			750,255			731,697
Total Liabilities and Shareholders' Equity	$	10,335,047		$	10,371,149		$	10,472,942		$	10,549,595

Bank of Hawaii Corporation and Subsidiaries
Consolidated Statements of Shareholders' Equity (Unaudited)																	Table 5
(dollars in thousands)	Total			Common Stock		Capital Surplus		Accum. Other Compre- hensive Loss			Retained Earnings			Treasury Stock			Compre- hensive Income
Balance as of December 31, 2007	$	750,255		$	567	$	484,790	$	(5,091	)	$	688,638		$	(418,649	)
Cumulative-Effect Adjustment of a Change in Accounting Principle, Net of Tax:
SFAS No. 159, "The Fair Value Option for Financial Assets and Financial Liabilities, including an amendment of FASB Statement No. 115"		(2,736	)		-		-		-			(2,736	)		-
Comprehensive Income:
Net Income		152,906			-		-		-			152,906			-		$	152,906
Other Comprehensive Income, Net of Tax:
Change in Unrealized Gains and Losses on Investment Securities Available-for-Sale		(13,699	)		-		-		(13,699	)		-			-			(13,699	)
Amortization of Net Loss for Pension Plans and Postretirement Benefit Plan		147			-		-		147			-			-			147
Total Comprehensive Income																	$	139,354
Share-Based Compensation		4,480			-		4,480		-			-			-
Net Tax Benefits related to Share-Based Compensation		1,728			-		1,728		-			-			-
Common Stock Issued under Purchase and Equity Compensation Plans (378,382 shares)		12,000			1		421		-			(5,075	)		16,653
Common Stock Repurchased (1,260,398 shares)		(61,701	)		-		-		-			-			(61,701	)
Cash Dividends Paid		(63,360	)		-		-		-			(63,360	)		-
Balance as of September 30, 2008	$	780,020		$	568	$	491,419	$	(18,643	)	$	770,373		$	(463,697	)

Balance as of December 31, 2006	$	719,420		$	566	$	475,178	$	(39,084	)	$	630,660		$	(347,900	)
Cumulative-Effect Adjustment of a Change in Accounting Principle, Net of Tax:
SFAS No. 156, "Accounting for Servicing of Financial Assets, an amendment of FASB Statement No. 140"		5,126			-		-		5,279			(153	)		-
FSP No. 13-2, "Accounting for a Change or Projected Change in the Timing of Cash Flows Relating to Income Taxes Generated by a Leveraged Lease Transaction"		(27,106	)		-		-		-			(27,106	)		-
FIN 48, "Accounting for Uncertainty in Income Taxes, an interpretation of FASB Statement No. 109"		(7,247	)		-		-		-			(7,247	)		-
Comprehensive Income:
Net Income		142,843			-		-		-			142,843			-		$	142,843
Other Comprehensive Income, Net of Tax:
Change in Unrealized Gains and Losses on Investment Securities Available-for-Sale		4,809			-		-		4,809			-			-			4,809
Amortization of Net Loss for Pension Plans and Postretirement Benefit Plan		637			-		-		637			-			-			637
Total Comprehensive Income																	$	148,289
Share-Based Compensation		4,464			-		4,464		-			-			-
Net Tax Benefits related to Share-Based Compensation		2,624			-		2,624		-			-			-
Common Stock Issued under Purchase and Equity Compensation Plans (628,252 shares)		16,321			1		320		-			(6,611	)		22,611
Common Stock Repurchased (1,335,305 shares)		(69,259	)		-		-		-			-			(69,259	)
Cash Dividends Paid		(60,935	)		-		-		-			(60,935	)		-
Balance as of September 30, 2007	$	731,697		$	567	$	482,586	$	(28,359	)	$	671,451		$	(394,548	)

Bank of Hawaii Corporation and Subsidiaries
Average Balances and Interest Rates - Taxable Equivalent Basis (Unaudited)																Table 6a
		Three Months Ended						Three Months Ended						Three Months Ended
		September 30, 2008						June 30, 2008						September 30, 2007¹
		Average		Income/		Yield/		Average		Income/		Yield/		Average		Income/		Yield/
(dollars in millions)		Balance		Expense		Rate		Balance		Expense		Rate		Balance		Expense		Rate
Earning Assets
Interest-Bearing Deposits		$	6.4	$	-	2.06	%	$	33.0	$	0.2	2.45	%	$	79.8	$	1.1	5.35	%
Funds Sold			28.4		0.1	1.96			81.9		0.4	2.03			86.2		1.1	5.01
Investment Securities
	Trading		92.6		1.2	5.07			97.6		1.2	4.96			111.3		1.1	4.00
	Available-for-Sale		2,601.2		35.4	5.44			2,649.9		35.6	5.37			2,556.7		33.7	5.28
	Held-to-Maturity		255.4		2.9	4.50			269.6		3.1	4.50			318.0		3.6	4.55
Loans Held for Sale			6.6		0.1	6.34			9.3		0.1	5.78			7.3		0.1	6.78
Loans and Leases ²
	Commercial and Industrial		1,049.7		13.8	5.23			1,060.7		14.3	5.42			1,048.9		19.7	7.45
	Commercial Mortgage		695.3		10.5	6.04			663.0		10.1	6.15			627.8		10.8	6.82
	Construction		161.4		2.3	5.67			177.3		2.5	5.76			262.2		5.3	8.00
	Commercial Lease Financing		472.9		0.2	0.15			470.6		4.1	3.50			479.4		3.6	2.98
	Residential Mortgage		2,500.0		37.8	6.04			2,509.1		38.2	6.09			2,502.2		38.5	6.15
	Home Equity		975.3		14.2	5.79			968.7		14.1	5.86			946.2		18.3	7.67
	Automobile		403.6		8.2	8.09			423.1		8.6	8.16			433.0		9.0	8.23
	Other ³		254.3		5.6	8.80			259.1		5.9	9.11			270.6		7.5	11.05
Total Loans and Leases			6,512.5		92.6	5.67			6,531.6		97.8	6.01			6,570.3		112.7	6.82
Other			79.6		0.5	2.46			79.6		0.5	2.46			79.4		0.4	1.83
Total Earning Assets ⁴			9,582.7		132.8	5.53			9,752.5		138.9	5.71			9,809.0		153.8	6.25
Cash and Noninterest-Bearing Deposits			274.3						272.9						285.3
Other Assets			482.5						479.0						482.3
Total Assets		$	10,339.5					$	10,504.4					$	10,576.6

Interest-Bearing Liabilities
Interest-Bearing Deposits
	Demand	$	1,827.9		1.5	0.32		$	1,617.0		1.2	0.29		$	1,557.7		4.0	1.01
	Savings		2,755.4		6.3	0.91			2,805.5		6.5	0.94			2,837.5		15.9	2.23
	Time		1,594.8		9.9	2.48			1,646.5		12.5	3.07			1,742.0		17.7	4.03
Total Interest-Bearing Deposits			6,178.1		17.7	1.14			6,069.0		20.2	1.34			6,137.2		37.6	2.43
Short-Term Borrowings			116.7		0.5	1.74			61.2		0.3	1.82			138.8		1.8	4.91
Securities Sold Under Agreements to Repurchase			1,077.4		7.7	2.80			1,060.2		7.5	2.81			1,016.5		11.7	4.54
Long-Term Debt			205.1		3.1	6.04			224.3		3.5	6.18			251.9		3.9	6.22
Total Interest-Bearing Liabilities			7,577.3		29.0	1.52			7,414.7		31.5	1.70			7,544.4		55.0	2.89
Net Interest Income				$	103.8					$	107.4					$	98.8
	Interest Rate Spread					4.01	%					4.01	%					3.36	%
	Net Interest Margin					4.33	%					4.41	%					4.03	%
Noninterest-Bearing Demand Deposits			1,594.4						1,889.2						1,878.4
Other Liabilities			387.5						418.1						425.4
Shareholders' Equity			780.3						782.4						728.4
Total Liabilities and Shareholders' Equity		$	10,339.5					$	10,504.4					$	10,576.6


¹Certain prior period information has been reclassified to conform to current presentation.
²Non-performing loans and leases are included in the respective average loan and lease balances. Income, if any, on such loans and leases is recognized on a cash basis.
³ Comprised of other consumer revolving credit, installment, and consumer lease financing.
⁴ Interest income includes taxable equivalent basis adjustments, based upon a federal statutory tax rate of 35%, of $234,000, $239,000, and $237,000 for the three months ended September 30, 2008, June 30, 2008, and September 30, 2007, respectively.

Bank of Hawaii Corporation and Subsidiaries
Average Balances and Interest Rates - Taxable Equivalent Basis (Unaudited)										Table 6b
		Nine Months Ended						Nine Months Ended
		September 30, 2008						September 30, 2007¹
		Average		Income/		Yield/		Average		Income/		Yield/
(dollars in millions)		Balance		Expense		Rate		Balance		Expense		Rate
Earning Assets
Interest-Bearing Deposits		$	22.2	$	0.4	2.56	%	$	31.1	$	1.2	5.29	%
Funds Sold			82.6		1.6	2.47			69.3		2.7	5.12
Investment Securities
	Trading		95.3		3.5	4.96			136.6		4.1	3.99
	Available-for-Sale		2,627.5		105.5	5.35			2,499.3		96.7	5.16
	Held-to-Maturity		270.1		9.1	4.51			339.3		11.5	4.52
Loans Held for Sale			8.8		0.4	5.79			9.4		0.5	6.41
Loans and Leases ²
	Commercial and Industrial		1,058.5		44.6	5.64			1,059.3		59.0	7.45
	Commercial Mortgage		669.2		31.1	6.21			621.5		31.7	6.82
	Construction		179.4		8.2	6.09			253.9		15.1	7.97
	Commercial Lease Financing		473.8		8.3	2.33			467.7		11.0	3.15
	Residential Mortgage		2,509.5		114.5	6.09			2,499.4		114.9	6.13
	Home Equity		971.6		44.3	6.09			943.3		53.9	7.64
	Automobile		421.7		25.7	8.14			427.9		26.1	8.16
	Other ³		260.2		18.0	9.22			282.0		22.9	10.85
Total Loans and Leases			6,543.9		294.7	6.01			6,555.0		334.6	6.82
Other			79.6		1.4	2.35			79.4		1.1	1.78
Total Earning Assets ⁴			9,730.0		416.6	5.71			9,719.4		452.4	6.21
Cash and Noninterest-Bearing Deposits			280.4						290.3
Other Assets			485.0						471.1
Total Assets		$	10,495.4					$	10,480.8

Interest-Bearing Liabilities
Interest-Bearing Deposits
	Demand	$	1,686.9		4.9	0.39		$	1,580.2		12.3	1.04
	Savings		2,750.9		22.1	1.07			2,702.5		41.1	2.03
	Time		1,662.6		38.4	3.09			1,727.3		51.3	3.97
Total Interest-Bearing Deposits			6,100.4		65.4	1.43			6,010.0		104.7	2.33
Short-Term Borrowings			86.0		1.5	2.25			112.0		4.3	5.06
Securities Sold Under Agreements to Repurchase			1,100.5		25.8	3.10			1,042.1		35.2	4.49
Long-Term Debt			223.0		10.3	6.16			257.5		11.9	6.15
Total Interest-Bearing Liabilities			7,509.9		103.0	1.83			7,421.6		156.1	2.81
Net Interest Income				$	313.6					$	296.3
	Interest Rate Spread					3.88	%					3.40	%
	Net Interest Margin					4.30	%					4.07	%
Noninterest-Bearing Demand Deposits			1,793.5						1,906.0
Other Liabilities			414.3						430.7
Shareholders' Equity			777.7						722.5
Total Liabilities and Shareholders' Equity		$	10,495.4					$	10,480.8


¹Certain prior period information has been reclassified to conform to current presentation.
²Non-performing loans and leases are included in the respective average loan and lease balances. Income, if any, on such loans and leases is recognized on a cash basis.
³ Comprised of other consumer revolving credit, installment, and consumer lease financing.
⁴ Interest income includes taxable equivalent basis adjustments, based upon a federal statutory tax rate of 35%, of $711,000 and $686,000 for the nine months ended September 30, 2008 and 2007, respectively.

Bank of Hawaii Corporation and Subsidiaries
Analysis of Change in Net Interest Income - Taxable Equivalent Basis (Unaudited)									Table 7a
	Three Months Ended September 30, 2008
	Compared to June 30, 2008
(dollars in millions)	Volume ¹			Rate ¹			Time ¹		Total
Change in Interest Income:
Interest-Bearing Deposits	$	(0.2	)	$	-		$	-	$	(0.2	)
Funds Sold		(0.3	)		-			-		(0.3	)
Investment Securities
Available-for-Sale		(0.7	)		0.5			-		(0.2	)
Held-to-Maturity		(0.2	)		-			-		(0.2	)
Loans and Leases
Commercial and Industrial		(0.2	)		(0.5	)		0.2		(0.5	)
Commercial Mortgage		0.5			(0.2	)		0.1		0.4
Construction		(0.2	)		-			-		(0.2	)
Commercial Lease Financing		-			(4.0	)		0.1		(3.9	)
Residential Mortgage		(0.1	)		(0.3	)		-		(0.4	)
Home Equity		0.1			(0.2	)		0.2		0.1
Automobile		(0.4	)		(0.1	)		0.1		(0.4	)
Other ²		(0.1	)		(0.2	)		-		(0.3	)
Total Loans and Leases		(0.4	)		(5.5	)		0.7		(5.2	)
Total Change in Interest Income		(1.8	)		(5.0	)		0.7		(6.1	)

Change in Interest Expense:
Interest-Bearing Deposits
Demand		0.2			0.1			-		0.3
Savings		(0.1	)		(0.2	)		0.1		(0.2	)
Time		(0.4	)		(2.3	)		0.1		(2.6	)
Total Interest-Bearing Deposits		(0.3	)		(2.4	)		0.2		(2.5	)
Short-Term Borrowings		0.2			-			-		0.2
Securities Sold Under Agreements to Repurchase		0.1			-			0.1		0.2
Long-Term Debt		(0.3	)		(0.1	)		-		(0.4	)
Total Change in Interest Expense		(0.3	)		(2.5	)		0.3		(2.5	)

Change in Net Interest Income	$	(1.5	)	$	(2.5	)	$	0.4	$	(3.6	)


¹ The changes for each category of interest income and expense are allocated between the portion of changes attributable to the variance in volume, rate, and time for that category.
² Comprised of other consumer revolving credit, installment, and consumer lease financing.

Bank of Hawaii Corporation and Subsidiaries
Analysis of Change in Net Interest Income - Taxable Equivalent Basis (Unaudited)							Table 7b
	Three Months Ended September 30, 2008
	Compared to September 30, 2007
(dollars in millions)	Volume ¹			Rate ¹			Total
Change in Interest Income:
Interest-Bearing Deposits	$	(0.7	)	$	(0.4	)	$	(1.1	)
Funds Sold		(0.5	)		(0.5	)		(1.0	)
Investment Securities
Trading		(0.2	)		0.3			0.1
Available-for-Sale		0.6			1.1			1.7
Held-to-Maturity		(0.7	)		-			(0.7	)
Loans and Leases
Commercial and Industrial		-			(5.9	)		(5.9	)
Commercial Mortgage		1.0			(1.3	)		(0.3	)
Construction		(1.7	)		(1.3	)		(3.0	)
Commercial Lease Financing		-			(3.4	)		(3.4	)
Residential Mortgage		-			(0.7	)		(0.7	)
Home Equity		0.5			(4.6	)		(4.1	)
Automobile		(0.6	)		(0.2	)		(0.8	)
Other ²		(0.4	)		(1.5	)		(1.9	)
Total Loans and Leases		(1.2	)		(18.9	)		(20.1	)
Other		-			0.1			0.1
Total Change in Interest Income		(2.7	)		(18.3	)		(21.0	)

Change in Interest Expense:
Interest-Bearing Deposits
Demand		0.6			(3.1	)		(2.5	)
Savings		(0.4	)		(9.2	)		(9.6	)
Time		(1.5	)		(6.3	)		(7.8	)
Total Interest-Bearing Deposits		(1.3	)		(18.6	)		(19.9	)
Short-Term Borrowings		(0.3	)		(1.0	)		(1.3	)
Securities Sold Under Agreements to Repurchase		0.7			(4.7	)		(4.0	)
Long-Term Debt		(0.7	)		(0.1	)		(0.8	)
Total Change in Interest Expense		(1.6	)		(24.4	)		(26.0	)

Change in Net Interest Income	$	(1.1	)	$	6.1		$	5.0


¹ The changes for each category of interest income and expense are allocated between the portion of changes attributable to the variance in volume and rate for that category.
² Comprised of other consumer revolving credit, installment, and consumer lease financing.

Bank of Hawaii Corporation and Subsidiaries
Analysis of Change in Net Interest Income - Taxable Equivalent Basis (Unaudited)									Table 7c
	Nine Months Ended September 30, 2008
	Compared to September 30, 2007
(dollars in millions)	Volume ¹			Rate ¹			Time ¹		Total
Change in Interest Income:
Interest-Bearing Deposits	$	(0.3	)	$	(0.5	)	$	-	$	(0.8	)
Funds Sold		0.5			(1.6	)		-		(1.1	)
Investment Securities
Trading		(1.4	)		0.8			-		(0.6	)
Available-for-Sale		5.1			3.7			-		8.8
Held-to-Maturity		(2.4	)		-			-		(2.4	)
Loans Held for Sale		-			(0.1	)		-		(0.1	)
Loans and Leases
Commercial and Industrial		(0.1	)		(14.5	)		0.2		(14.4	)
Commercial Mortgage		2.3			(3.0	)		0.1		(0.6	)
Construction		(3.9	)		(3.1	)		0.1		(6.9	)
Commercial Lease Financing		0.1			(2.8	)		-		(2.7	)
Residential Mortgage		0.4			(0.8	)		-		(0.4	)
Home Equity		1.6			(11.4	)		0.2		(9.6	)
Automobile		(0.4	)		(0.1	)		0.1		(0.4	)
Other ²		(1.7	)		(3.3	)		0.1		(4.9	)
Total Loans and Leases		(1.7	)		(39.0	)		0.8		(39.9	)
Other		-			0.3			-		0.3
Total Change in Interest Income		(0.2	)		(36.4	)		0.8		(35.8	)

Change in Interest Expense:
Interest-Bearing Deposits
Demand		0.8			(8.2	)		-		(7.4	)
Savings		0.7			(19.9	)		0.2		(19.0	)
Time		(1.9	)		(11.2	)		0.2		(12.9	)
Total Interest-Bearing Deposits		(0.4	)		(39.3	)		0.4		(39.3	)
Short-Term Borrowings		(0.8	)		(2.0	)		-		(2.8	)
Securities Sold Under Agreements to Repurchase		1.9			(11.4	)		0.1		(9.4	)
Long-Term Debt		(1.6	)		-			-		(1.6	)
Total Change in Interest Expense		(0.9	)		(52.7	)		0.5		(53.1	)

Change in Net Interest Income	$	0.7		$	16.3		$	0.3	$	17.3


¹ The changes for each category of interest income and expense are allocated between the portion of changes attributable to the variance in volume, rate, and time for that category.
² Comprised of other consumer revolving credit, installment, and consumer lease financing.

Bank of Hawaii Corporation and Subsidiaries
Salaries and Benefits (Unaudited)									Table 8
	Three Months Ended						Nine Months Ended
	September 30,		June 30,		September 30,		September 30,
(dollars in thousands)	2008		2008		2007		2008		2007
Salaries	$	30,190	$	30,019	$	28,882	$	89,112	$	86,226
Incentive Compensation		5,969		4,122		4,364		16,358		11,777
Cash for Stock Grants		-		-		-		4,640		-
Share-Based Compensation		1,180		1,124		1,601		3,952		4,161
Commission Expense		1,653		1,992		1,546		5,518		5,700
Retirement and Other Benefits		3,097		3,499		3,865		11,822		10,999
Payroll Taxes		2,162		2,491		2,116		8,067		7,885
Medical, Dental, and Life Insurance		2,452		2,470		2,324		7,421		6,825
Separation Expense		61		267		246		1,331		1,364
Total Salaries and Benefits	$	46,764	$	45,984	$	44,944	$	148,221	$	134,937

Bank of Hawaii Corporation and Subsidiaries
Loan and Lease Portfolio Balances (Unaudited)										Table 9

(dollars in thousands)		September 30, 2008		June 30, 2008		March 31, 2008		December 31, 2007¹		September 30, 2007¹
Commercial
	Commercial and Industrial	$	1,077,314	$	1,052,319	$	1,079,772	$	1,054,355	$	1,065,258
	Commercial Mortgage		708,961		680,784		650,638		634,483		627,329
	Construction		153,364		168,678		190,521		208,670		254,062
	Lease Financing		467,279		471,443		465,945		481,882		478,988
Total Commercial			2,406,918		2,373,224		2,386,876		2,379,390		2,425,637
Consumer
	Residential Mortgage		2,496,983		2,509,133		2,530,207		2,508,261		2,510,313
	Home Equity		986,379		966,108		967,146		972,995		953,713
	Automobile		395,015		413,338		430,920		443,011		440,525
	Other ²		254,163		256,325		264,188		277,204		269,727
Total Consumer			4,132,540		4,144,904		4,192,461		4,201,471		4,174,278
Total Loans and Leases		$	6,539,458	$	6,518,128	$	6,579,337	$	6,580,861	$	6,599,915


Air Transportation Credit Exposure³ (Unaudited)

(dollars in thousands)		September 30, 2008		June 30, 2008		March 31, 2008		December 31, 2007		September 30, 2007
Passenger Carriers Based In the United States		$	60,260	$	60,603	$	61,190	$	64,947	$	64,867
Passenger Carriers Based Outside the United States			5,809		7,161		7,258		19,078		19,162
Cargo Carriers			13,689		13,568		13,472		13,390		13,326
Total Air Transportation Credit Exposure		$	79,758	$	81,332	$	81,920	$	97,415	$	97,355


¹Certain prior period information has been reclassified to conform to current presentation.
² Comprised of other revolving credit, installment, and lease financing.
³ Exposure includes loans, leveraged leases and operating leases.

Bank of Hawaii Corporation and Subsidiaries
Non-Performing Assets and Accruing Loans and Leases Past Due 90 Days or More (Unaudited)															Table 10
			September 30,			June 30,			March 31,			December 31,			September 30,
(dollars in thousands)			2008			2008			2008			2007¹			2007¹
Non-Performing Assets
Non-Accrual Loans and Leases
	Commercial
		Commercial and Industrial	$	574		$	1,119		$	794		$	598		$	359
		Commercial Mortgage		-			-			-			112			123
		Lease Financing		149			329			504			297			-
	Total Commercial			723			1,448			1,298			1,007			482
	Consumer
		Residential Mortgage		3,749			3,784			3,235			2,681			3,237
		Home Equity		1,162			1,189			1,187			1,414			436
		Other ²		-			30			31			-			-
	Total Consumer			4,911			5,003			4,453			4,095			3,673
Total Non-Accrual Loans and Leases				5,634			6,451			5,751			5,102			4,155
Foreclosed Real Estate				293			229			294			184			105
Total Non-Performing Assets			$	5,927		$	6,680		$	6,045		$	5,286		$	4,260

Accruing Loans and Leases Past Due 90 Days or More
Commercial
	Commercial and Industrial		$	-		$	-		$	24		$	-		$	-
Consumer
	Residential Mortgage			3,455			2,601			3,892			4,884			639
	Home Equity			296			201			328			413			115
	Automobile			758			625			865			1,174			734
	Other ²			926			756			725			1,112			944
Total Consumer				5,435			4,183			5,810			7,583			2,432
Total Accruing Loans and Leases Past Due 90 Days or More			$	5,435		$	4,183		$	5,834		$	7,583		$	2,432

Total Loans and Leases			$	6,539,458		$	6,518,128		$	6,579,337		$	6,580,861		$	6,599,915

Ratio of Non-Accrual Loans and Leases to Total Loans and Leases				0.09	%		0.10	%		0.09	%		0.08	%		0.06	%

Ratio of Non-Performing Assets to Total Loans and Leases and Foreclosed Real Estate				0.09	%		0.10	%		0.09	%		0.08	%		0.06	%

Ratio of Commercial Non-Performing Assets to Total Commercial Loans and Leases				0.03	%		0.06	%		0.05	%		0.04	%		0.02	%

Ratio of Consumer Non-Performing Assets to Total Consumer Loans and Leases and Foreclosed Real Estate				0.13	%		0.13	%		0.11	%		0.10	%		0.09	%

Ratio of Non-Performing Assets and Accruing Loans and Leases Past Due 90 Days or More to Total Loans and Leases				0.17	%		0.17	%		0.18	%		0.20	%		0.10	%

Quarter to Quarter Changes in Non-Performing Assets
Balance at Beginning of Quarter			$	6,680		$	6,045		$	5,286		$	4,260		$	6,314
Additions				1,355			2,900			2,614			1,866			662
Reductions
	Payments			(955	)		(630	)		(386	)		(256	)		(1,741	)
	Return to Accrual Status			(756	)		(943	)		(944	)		(214	)		(787	)
	Sales of Foreclosed Real Estate			-			-			-			(161	)		(48	)
	Charge-offs/Write-downs			(397	)		(692	)		(525	)		(209	)		(140	)
Total Reductions				(2,108	)		(2,265	)		(1,855	)		(840	)		(2,716	)
Balance at End of Quarter			$	5,927		$	6,680		$	6,045		$	5,286		$	4,260


¹Certain prior period information has been reclassified to conform to current presentation.
² Comprised of other revolving credit, installment, and lease financing.

Bank of Hawaii Corporation and Subsidiaries
Reserve for Credit Losses (Unaudited)															Table 11
			Three Months Ended									Nine Months Ended
			September 30,			June 30,			September 30,			September 30,
(dollars in thousands)			2008			2008			2007¹			2008			2007¹
Balance at Beginning of Period			$	107,667		$	105,167		$	96,167		$	96,167		$	96,167
Loans and Leases Charged-Off
	Commercial
		Commercial and Industrial		(1,783	)		(1,396	)		(715	)		(4,568	)		(2,258	)
		Lease Financing		(27	)		(142	)		(123	)		(303	)		(145	)
	Consumer
		Residential Mortgage		(398	)		(133	)		-			(531	)		(47	)
		Home Equity		(519	)		(473	)		(422	)		(1,798	)		(764	)
		Automobile		(2,858	)		(2,187	)		(2,215	)		(7,960	)		(7,642	)
		Other ²		(3,444	)		(1,954	)		(2,389	)		(8,202	)		(6,871	)
Total Loans and Leases Charged-Off				(9,029	)		(6,285	)		(5,864	)		(23,362	)		(17,727	)
Recoveries on Loans and Leases Previously Charged-Off
	Commercial
		Commercial and Industrial		220			201			326			1,407			918
		Commercial Mortgage		-			-			35			-			156
		Lease Financing		2			2			2			7			2,089
	Consumer
		Residential Mortgage		67			17			14			162			203
		Home Equity		36			26			69			83			189
		Automobile		699			700			596			2,195			1,980
		Other ²		647			667			752			2,051			2,128
Total Recoveries on Loans and Leases Previously Charged-Off				1,671			1,613			1,794			5,905			7,663
Net Loans and Leases Charged-Off				(7,358	)		(4,672	)		(4,070	)		(17,457	)		(10,064	)
Provision for Credit Losses				20,358			7,172			4,070			41,957			10,064
Balance at End of Period ³			$	120,667		$	107,667		$	96,167		$	120,667		$	96,167

Components
Allowance for Loan and Lease Losses			$	115,498		$	102,498		$	90,998		$	115,498		$	90,998
Reserve for Unfunded Commitments				5,169			5,169			5,169			5,169			5,169
Total Reserve for Credit Losses			$	120,667		$	107,667		$	96,167		$	120,667		$	96,167

Average Loans and Leases Outstanding			$	6,512,453		$	6,531,587		$	6,570,261		$	6,543,871		$	6,554,979

Ratio of Net Loans and Leases Charged-Off to
	Average Loans and Leases Outstanding (annualized)			0.45	%		0.29	%		0.25	%		0.36	%		0.21	%
Ratio of Allowance for Loan and Lease Losses to Loans and Leases Outstanding				1.77	%		1.57	%		1.38	%		1.77	%		1.38	%


¹ Certain prior period information has been reclassified to conform to current presentation.
² Comprised of other revolving credit, installment, and lease financing.
³ Included in this analysis is activity related to the Company's reserve for unfunded commitments, which is separately recorded in other liabilities in the Consolidated Statements of Condition (Unaudited).

Bank of Hawaii Corporation and Subsidiaries
Business Segments Selected Financial Information (Unaudited)																Table 12a

	Retail			Commercial			Investment									Consolidated
(dollars in thousands)	Banking			Banking			Services			Total			Treasury			Total

Three Months Ended September 30, 2008
Net Interest Income	$	58,228		$	36,564		$	3,922		$	98,714		$	4,861		$	103,575
Provision for Credit Losses		5,475			13,826			1,089			20,390			(32	)		20,358
Net Interest Income After Provision for Credit Losses		52,753			22,738			2,833			78,324			4,893			83,217
Noninterest Income		27,380			10,508			17,458			55,346			1,640			56,986
Noninterest Expense		(43,709	)		(24,488	)		(16,800	)		(84,997	)		(1,793	)		(86,790	)
Income Before Provision for Income Taxes		36,424			8,758			3,491			48,673			4,740			53,413
Provision for Income Taxes		(13,478	)		8,234			(1,292	)		(6,536	)		532			(6,004	)
Allocated Net Income		22,946			16,992			2,199			42,137			5,272			47,409
Allowance Funding Value		(229	)		(944	)		(16	)		(1,189	)		1,189			-
Provision for Credit Losses		5,475			13,826			1,089			20,390			(32	)		20,358
Economic Provision		(1,912	)		(3,222	)		(78	)		(5,212	)		(1	)		(5,213	)
Tax Effect of Adjustments		(1,234	)		(3,574	)		(369	)		(5,177	)		(426	)		(5,603	)
Income Before Capital Charge		25,046			23,078			2,825			50,949			6,002			56,951
Capital Charge		(4,780	)		(4,127	)		(1,465	)		(10,372	)		(9,135	)		(19,507	)
Net Income (Loss) After Capital Charge (NIACC)	$	20,266		$	18,951		$	1,360		$	40,577		$	(3,133	)	$	37,444

RAROC (ROE for the Company)		52	%		56	%		19	%		49	%		30	%		24	%

Total Assets as of September 30, 2008	$	3,669,924		$	3,023,242		$	285,497		$	6,978,663		$	3,356,384		$	10,335,047


Three Months Ended September 30, 2007 ¹
Net Interest Income (Loss)	$	56,830		$	40,352		$	3,574		$	100,756		$	(2,200	)	$	98,556
Provision for Credit Losses		1,773			2,486			(1	)		4,258			(188	)		4,070
Net Interest Income (Loss) After Provision for Credit Losses		55,057			37,866			3,575			96,498			(2,012	)		94,486
Noninterest Income		26,346			11,442			18,068			55,856			5,386			61,242
Noninterest Expense		(41,653	)		(22,430	)		(16,074	)		(80,157	)		(1,293	)		(81,450	)
Income Before Provision for Income Taxes		39,750			26,878			5,569			72,197			2,081			74,278
Provision for Income Taxes		(14,707	)		(9,948	)		(2,060	)		(26,715	)		216			(26,499	)
Allocated Net Income		25,043			16,930			3,509			45,482			2,297			47,779
Allowance Funding Value		(166	)		(824	)		(11	)		(1,001	)		1,001			-
Provision for Credit Losses		1,773			2,486			(1	)		4,258			(188	)		4,070
Economic Provision		(1,906	)		(3,190	)		(87	)		(5,183	)		-			(5,183	)
Tax Effect of Adjustments		111			564			37			712			(300	)		412
Income Before Capital Charge		24,855			15,966			3,447			44,268			2,810			47,078
Capital Charge		(5,132	)		(4,380	)		(1,572	)		(11,084	)		(8,948	)		(20,032	)
Net Income (Loss) After Capital Charge (NIACC)	$	19,723		$	11,586		$	1,875		$	33,184		$	(6,138	)	$	27,046

RAROC (ROE for the Company)		53	%		40	%		24	%		44	%		9	%		26	%

Total Assets as of September 30, 2007 ¹	$	3,651,121		$	3,118,106		$	216,795		$	6,986,022		$	3,563,573		$	10,549,595


¹ Certain prior period information has been reclassified to conform to current presentation.

Bank of Hawaii Corporation and Subsidiaries
Business Segments Selected Financial Information (Unaudited)																Table 12b

	Retail			Commercial			Investment									Consolidated
(dollars in thousands)	Banking			Banking			Services			Total			Treasury			Total

Nine Months Ended September 30, 2008
Net Interest Income	$	176,207		$	122,663		$	11,731		$	310,601		$	2,322		$	312,923
Provision for Credit Losses		15,999			25,704			1,089			42,792			(835	)		41,957
Net Interest Income After Provision for Credit Losses		160,208			96,959			10,642			267,809			3,157			270,966
Noninterest Income		83,196			42,753			54,738			180,687			22,963			203,650
Noninterest Expense		(130,813	)		(72,753	)		(50,026	)		(253,592	)		(10,492	)		(264,084	)
Income Before Provision for Income Taxes		112,591			66,959			15,354			194,904			15,628			210,532
Provision for Income Taxes		(41,660	)		(13,352	)		(5,681	)		(60,693	)		3,067			(57,626	)
Allocated Net Income		70,931			53,607			9,673			134,211			18,695			152,906
Allowance Funding Value		(626	)		(2,654	)		(42	)		(3,322	)		3,322			-
Provision for Credit Losses		15,999			25,704			1,089			42,792			(835	)		41,957
Economic Provision		(6,000	)		(9,715	)		(243	)		(15,958	)		(2	)		(15,960	)
Tax Effect of Adjustments		(3,468	)		(4,934	)		(297	)		(8,699	)		(920	)		(9,619	)
Income Before Capital Charge		76,836			62,008			10,180			149,024			20,260			169,284
Capital Charge		(14,308	)		(12,260	)		(4,384	)		(30,952	)		(27,421	)		(58,373	)
Net Income (Loss) After Capital Charge (NIACC)	$	62,528		$	49,748		$	5,796		$	118,072		$	(7,161	)	$	110,911

RAROC (ROE for the Company)		54	%		51	%		23	%		48	%		36	%		26	%

Total Assets as of September 30, 2008	$	3,669,924		$	3,023,242		$	285,497		$	6,978,663		$	3,356,384		$	10,335,047


Nine Months Ended September 30, 2007 ¹
Net Interest Income (Loss)	$	166,855		$	120,050		$	10,565		$	297,470		$	(1,899	)	$	295,571
Provision for Credit Losses		4,576			5,700			(1	)		10,275			(211	)		10,064
Net Interest Income (Loss) After Provision for Credit Losses		162,279			114,350			10,566			287,195			(1,688	)		285,507
Noninterest Income		78,714			31,689			56,669			167,072			13,158			180,230
Noninterest Expense		(124,096	)		(67,667	)		(47,276	)		(239,039	)		(4,366	)		(243,405	)
Income Before Provision for Income Taxes		116,897			78,372			19,959			215,228			7,104			222,332
Provision for Income Taxes		(43,246	)		(28,881	)		(7,385	)		(79,512	)		23			(79,489	)
Allocated Net Income		73,651			49,491			12,574			135,716			7,127			142,843
Allowance Funding Value		(466	)		(2,405	)		(31	)		(2,902	)		2,902			-
Provision for Credit Losses		4,576			5,700			(1	)		10,275			(211	)		10,064
Economic Provision		(5,598	)		(9,629	)		(251	)		(15,478	)		(1	)		(15,479	)
Tax Effect of Adjustments		551			2,344			104			2,999			(995	)		2,004
Income Before Capital Charge		72,714			45,501			12,395			130,610			8,822			139,432
Capital Charge		(15,300	)		(13,215	)		(4,634	)		(33,149	)		(26,453	)		(59,602	)
Net Income (Loss) After Capital Charge (NIACC)	$	57,414		$	32,286		$	7,761		$	97,461		$	(17,631	)	$	79,830

RAROC (ROE for the Company)		52	%		38	%		29	%		43	%		9	%		26	%

Total Assets as of September 30, 2007 ¹	$	3,651,121		$	3,118,106		$	216,795		$	6,986,022		$	3,563,573		$	10,549,595


¹ Certain prior period information has been reclassified to conform to current presentation.

Bank of Hawaii Corporation and Subsidiaries
Selected Quarterly Financial Data (Unaudited)													Table 13
	Three Months Ended
(dollars in thousands, except per share amounts)	September 30, 2008			June 30, 2008			March 31, 2008			December 31, 2007			September 30, 2007
Quarterly Operating Results
Interest Income
Interest and Fees on Loans and Leases	$	92,744		$	97,959		$	104,413		$	111,270		$	112,787
Income on Investment Securities
Trading		1,174			1,209			1,160			814			1,114
Available-for-Sale		35,152			35,321			34,251			33,591			33,486
Held-to-Maturity		2,870			3,033			3,239			3,440			3,616
Deposits		33			204			195			309			1,086
Funds Sold		141			420			992			356			1,103
Other		490			489			426			395			364
Total Interest Income		132,604			138,635			144,676			150,175			153,556
Interest Expense
Deposits		17,736			20,238			27,465			33,158			37,613
Securities Sold Under Agreements to Repurchase		7,675			7,488			10,617			11,754			11,726
Funds Purchased		507			270			633			1,936			1,654
Short-Term Borrowings		13			12			34			91			87
Long-Term Debt		3,098			3,459			3,747			3,789			3,920
Total Interest Expense		29,029			31,467			42,496			50,728			55,000
Net Interest Income		103,575			107,168			102,180			99,447			98,556
Provision for Credit Losses		20,358			7,172			14,427			5,443			4,070
Net Interest Income After Provision for Credit Losses		83,217			99,996			87,753			94,004			94,486
Noninterest Income
Trust and Asset Management		14,193			15,460			15,086			15,812			15,146
Mortgage Banking		621			2,738			4,297			2,027			3,848
Service Charges on Deposit Accounts		13,045			12,411			12,083			12,302			11,919
Fees, Exchange, and Other Service Charges		16,991			17,176			16,101			16,743			16,465
Investment Securities Gains, Net		159			157			130			105			789
Insurance		5,902			5,590			7,130			4,629			7,446
Other		6,075			7,007			31,298			8,639			5,629
Total Noninterest Income		56,986			60,539			86,125			60,257			61,242
Noninterest Expense
Salaries and Benefits		46,764			45,984			55,473			45,928			44,944
Net Occupancy		11,795			11,343			10,443			10,300			10,267
Net Equipment		4,775			4,474			4,321			4,745			4,871
Professional Fees		3,270			2,588			2,613			3,695			2,369
Other		20,186			19,473			20,582			27,334			18,999
Total Noninterest Expense		86,790			83,862			93,432			92,002			81,450
Income Before Provision for Income Taxes		53,413			76,673			80,446			62,259			74,278
Provision for Income Taxes		6,004			28,391			23,231			21,399			26,499
Net Income	$	47,409		$	48,282		$	57,215		$	40,860		$	47,779

Basic Earnings Per Share	$	1.00		$	1.01		$	1.19		$	0.84		$	0.98
Diluted Earnings Per Share	$	0.99		$	1.00		$	1.18		$	0.83		$	0.96

Balance Sheet Totals
Loans and Leases	$	6,539,458		$	6,518,128		$	6,579,337		$	6,580,861		$	6,599,915
Total Assets		10,335,047			10,371,149			10,822,801			10,472,942			10,549,595
Total Deposits		7,658,484			7,903,990			8,102,855			7,942,372			7,875,166
Total Shareholders' Equity		780,020			767,558			766,747			750,255			731,697

Performance Ratios
Net Income to Average Total Assets		1.82	%		1.85	%		2.16	%		1.55	%		1.79	%
Net Income to Average Shareholders' Equity		24.17			24.82			29.88			21.51			26.02
Efficiency Ratio ¹		54.05			50.01			49.62			57.61			50.97
Net Interest Margin ²		4.33			4.41			4.17			4.12			4.03


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