Bank of Hawaii
| File:Bank of Hawaii Logo.svg | |
| Bank of Hawaii | |
| Formerly |
|
| Company type | Public |
| Industry | Finance |
| Founded | December 17, 1897 in Honolulu, Hawaii |
| Founder | |
| Headquarters | Honolulu, Hawaii, U.S. |
Key people |
|
| Products | Banking |
| Revenue | Increase US$ 655.243 million (2016) |
| Increase US$ 299.92 million (2016) | |
| Increase US$ 181.46 million (2016) | |
| Total assets | Increase US$ 16.49 billion (2016) |
| Total equity | Increase US$ 1.16 billion (2016) |
Number of employees | 2,122 (2016) |
| Website | boh |
The Bank of Hawaii Corporation (BOH) is a regional commercial bank based in Honolulu, Hawaii. Established in 1897 by entrepreneurs Charles Montague Cooke, Peter Cushman Jones, and Joseph Ballard Atherton, it ranks as the second oldest bank in the state and is the largest locally owned institution by Hawaiian resident shareholders. While BOH leads in the number of accounts, clients, branches, and ATMs within the local market, First Hawaiian Bank surpasses it in deposit totals.
BOH's operations are divided into four primary sectors: retail banking, commercial banking, investment services, and treasury management. Under the guidance of chairman, president, and CEO Peter S. Ho, the bank prioritizes strong community engagement and regional market presence within the financial sector. In 2016, BOH reported revenues of $655 million, operating income near $300 million, net income of $181.5 million, total assets amounting to $16.5 billion, and equity exceeding $1.16 billion, supported by a workforce of approximately 2,100 employees.
Beginnings
The inception of Bank of Hawaii traces back to 1893 when Charles Montague Cooke (1849–1909), alongside his brother-in-law Joseph Ballard Atherton and associate Peter Cushman Jones, founded the institution. Officially chartered in 1897 by Interior Minister James A. King during the era of the Republic of Hawaii, the bank expanded its footprint by opening its inaugural branch on Kauai in 1903. Subsequent growth included acquiring First Bank of Hilo in 1922 and merging with Bank of Maui in 1930.
Bank of Maui
The Bank of Maui originated from three separate banks established by Charles Dexter Lufkin: First National Bank of Wailuku founded in 1901; Lahaina National Bank launched in 1906; and First National Bank of Paia created in 1913. These three entities consolidated in 1917 to form the Bank of Maui.
Operations in Hawaii since 1971
In 1971, BOH established a holding entity named Hawaii Bancorporation, which was later renamed Bancorp Hawaii in 1979. The company grew through acquisitions, including the purchase of Hawaiian Trust Company for $19 million in 1985 and FirstFed America Inc. for $141 million in 1990, which brought subsidiaries such as First Federal Savings and Loan Association of Hawaii and First Savings of Guam into its portfolio. In 1998, First Federal Savings was merged into Bank of Hawaii.
By 1997, Bancorp Hawaii adopted the name Pacific Century Financial Corporation (PCFC) to highlight its ambitions beyond the Hawaiian market. However, aggressive expansion outside its primary territories—Hawaii, Guam, and American Samoa—resulted in non-performing loans and a stock price drop in 2000, leading to leadership restructuring.
In 2001, PCFC divested its credit card business to American Express. The following year, it reverted to the Bank of Hawaii Corporation name to concentrate again on its foundational Hawaiian market.
Mainland U.S. operations
Operating as Bancorp Hawaii, BOH ventured into the continental United States by acquiring Phoenix-based First National Bancorp of Arizona and its five-branch First National Bank of Arizona in 1987. In 1997, four more Arizona branches were purchased from Home Savings of America and integrated into First National, which was subsequently rebranded as Pacific Century Bank NA.
In 1998, under the Pacific Century Financial Corporation umbrella, BOH bought CU Bancorp from Encino along with its California United Bank subsidiary for $183 million in stock and cash. California United’s 22 branches across Southern California were merged into Pacific Century Bank, which then moved its headquarters to Encino.
After operating on the mainland for fourteen years, BOH withdrew from this market in 2001 by selling nine Arizona branches to Zions Bancorporation—merged into Zions' National Bank of Arizona—and twenty California branches to U.S. Bancorp. These sales signified a strategic withdrawal from mainland banking to refocus on core markets.
International operations
BOH began its international expansion in 1959 by opening a branch on Kwajalein, followed two years later by outlets in Palau and Guam. Ten years afterward, it acquired Bank of American Samoa, originally founded by the Navy in 1914, and launched Banque de Tahiti through a partnership with Crédit Lyonnais. Further growth included branches on Yap, Ponape, and Kosrae.
The bank extended beyond Hawaii with a branch in Saipan and established another joint venture with Crédit Lyonnais called Banque de Nouvelle Calédonie located in Nouméa. In 1980, BOH entered the Asian market by opening a Tokyo branch.
Strengthening its foothold in Asia, BOH acquired Wells Fargo Bank’s Seoul and Singapore operations in 1991. In 1993, it took over Banque Indosuez’s operations in Vanuatu, rebranding them as Banque d’Hawaii (Vanuatu), while also inaugurating branches in Suva, Fiji as well as Nadi and Lautoka. The following year, BOH expanded its Pacific presence by acquiring Commonwealth Bank of Australia's majority stake (51%) in the National Bank of Solomon Islands.
BOH increased its control over Banque de Nouvelle Calédonie by purchasing Crédit Lyonnais' shares to hold a 91% stake; the institution was subsequently renamed Bank of Hawaii—Nouvelle Calédonie. In 1997, BOH acquired Banque Indosuez Nuigini in Papua New Guinea for $5.6 million and rebranded it as Bank of Hawaii (PNG) Ltd., with offices situated in Port Moresby and Lae. This acquisition aligned with BOH’s strategy to grow its Pacific business through focused investments and subsidiaries.
International acquisitions
In 1998, BOH secured 5.4 million convertible notes from Bank of Queensland for $22 million, acquiring a 49% ownership interest. Additionally, it obtained full control of Banque Paribas Pacifique, consisting of three branches, and a 70% stake in Banque Paribas Polynésie, which operated one branch. These entities were merged with BOH’s subsidiaries, Bank of Hawaii-Nouvelle Calédonie and Banque de Tahiti. The following year, BOH increased its presence by purchasing roughly 10% (5.8 million shares) of Bank of Queensland.
Withdrawal from international financial services markets
By 2001, BOH divested its holdings in Bank of Queensland, selling 6.2 million shares and 5.4 million convertible notes for $20 million and $16 million respectively. This move aligned with Pacific Century Financial Corporation’s strategy to concentrate on primary markets in Hawaii, American Samoa, and Guam. BOH also transferred its minority stakes in Bank of Tonga and Pacific Commercial Bank of Samoa to Westpac. Furthermore, its operations in Papua New Guinea, Vanuatu, and Fiji were sold to ANZ for AU$100 million. Approximately 95% of its business in French Polynesia and New Caledonia—including Banque de Tahiti and Bank of Hawaii-Nouvelle Caledonie—was sold to the France-based Caisse Nationale des Caisses d'Epargne (CNCE). Subsequently, BOH shuttered offices located in Hong Kong, Seoul, Singapore, and Taipei.
In 2002, after failing to find buyers for its Central Pacific holdings, BOH closed branches in Majuro (Republic of the Marshall Islands) as well as Pohnpei, Yap, and Kosrae (Federated States of Micronesia). The bank also transferred its majority 51% ownership in National Bank of Solomon Islands to the Solomon Islands government.
Governance
Following subpar results in 2000, chairman and CEO Lawrence M. Johnson resigned, with bank president Richard Dahl departing two years later in 2002. To address management challenges, Michael E. O'Neill was appointed chairman and CEO in November 2000. By 2004, O'Neill held approximately 5% ownership in the bank and successfully halted the downward trend by divesting non-core assets across Hawaii, Guam, and American Samoa before stepping down that year.
Allan R. Landon advanced from CFO to president in December 2003 and was subsequently named chairman and CEO in September 2004. Under his guidance, the bank weathered the financial crisis of 2008 without requiring federal assistance. In the same year, Peter S. Ho was appointed president while Landon continued as chairman and CEO; upon Landon’s retirement in 2010, Ho assumed all three positions.