Pacific Century Financial Corporation to Take Restructuring Charge and Increase Provisioning.HONOLULU--(BUSINESS WIRE)--July 1, 1998--Pacific Century Financial Corporation (NYSE NYSE See: New York Stock Exchange :BOH BOH Bournemouth (UK) Airport Identifier BOH Bank of Hawaii BOH Board of Health BOH Back Of House BOH Board of Housing (Montana Dept of Commerce) BOH Badge of Honor BOH Bridge Of Hope BOH Bag of Holding ) has announced plans to take a $19.4 million restructuring charge restructuring charge The expense of reorganizing a company's operations. A restructuring charge is an infrequent expense that generally results from asset writedowns or facility closings. against second quarter earnings related to previously announced branch closings in the State of Hawaii and the merger of its banks on the U.S. Mainland. In addition, the company will increase the quarterly provisioning to the reserve for loan losses to approximately $42 million, up from $18.3 million in 1998's first quarter. The company anticipates earnings for the second quarter will be a nominal net profit. Dividends will remain at current levels. Earlier this year, Pacific Century announced its intention to merge First Federal Savings & Loan Association into Bank of Hawaii Bank of Hawaii, a subsidiary of Bank of Hawaii Corporation (NYSE: BOH), is a regional commercial bank headquartered in Honolulu, Hawaii. It is Hawaii's second oldest bank and its largest locally owned bank in that majority of the voting stockholders reside within the state. and to close up to 25 branches in the State of Hawaii (approximately 25% of the combined FFSL and BOH total) over the next two years. This is expected to result in cost reductions of approximately $22 million per year. The $19.4 million charge recognizes all anticipated expenses that will be incurred in 1998 and 1999 related to this restructuring, and the mainland bank mergers. The charge is consistent with standard accounting conventions. Provisioning for the quarter is intended to cover net charge-offs of approximately $27.0 million, including Asian charge-offs of $3.0 million in Indonesia and $14.0 million in Thailand, and to further bolster the reserve for loan losses in recognition of the continuing financial volatility in the Asian markets. "We view this as a positive step which will enable us to move ahead focused on our financial objectives as well as our previously announced redesign re·de·sign tr.v. re·de·signed, re·de·sign·ing, re·de·signs To make a revision in the appearance or function of. re initiatives," said Lawrence M. Johnson, Pacific Century's chairman and CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. . "The provisioning is consistent with our traditionally conservative credit philosophy, and it addresses the identified credit quality issues in our Asia portfolio." "We remain staunchly staunch 1 also stanch adj. staunch·er also stanch·er, staunch·est also stanch·est 1. Firm and steadfast; true. See Synonyms at faithful. 2. confident in the long-term potential of our Pacific strategy and in the future of all four of our markets," he added. Pacific Century Financial Corporation is a regional financial services The examples and perspective in this article or section may not represent a worldwide view of the subject. Please [ improve this article] or discuss the issue on the talk page. holding company with locations throughout the Pacific region. Pacific Century and its subsidiaries provide varied financial services to businesses, governments and consumers in four principal markets: Hawaii, the West and South Pacific, Asia and selected markets on the U.S. Mainland. Pacific Century is the largest Hawaii-based financial organization, and its principal subsidiary, Bank of Hawaii, is the state's largest commercial bank. This press release contains forward-looking information. Although the company believes that its expectations are based on reasonable assumptions, it can give no assurances that such assumptions will prove true. Forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. by the company involve significant risk and uncertainties, and actual results could differ materially from those stated or implied by such forward-looking statements. Factors that might cause such differences to occur include economic conditions in markets the company serves and those that impact the Hawaii, U.S. Mainland (especially California) and Asian economies, changes in the currencies of Pacific Basin and Pacific Rim Pacific Rim, term used to describe the nations bordering the Pacific Ocean and the island countries situated in it. In the post–World War II era, the Pacific Rim has become an increasingly important and interconnected economic region. countries relative to the U.S. dollar, changes in interest rates, changes in state or federal income tax laws, changes in applicable federal, state and foreign regulatory and monetary policy, and the nature and level of competition from others.
CONTACT: Pacific Century Financial Corporation
Linda Chinn, 808/537-8658 (Media)
Page: 808/363-5383
Lance Tanaka, 808/537-8351
Sharlene Bliss, 808/537-8037 (Investor/Analyst)
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