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DUFF & PHELPS LOWERS BANCORP HAWAII CREDIT RATINGS

 CHICAGO, March 15 /PRNewswire/ -- Duff & Phelps Credit Rating Co. has lowered the ratings for Bancorp Hawaii and its principal banking subsidiary, Bank of Hawaii. The senior debt rating of Bancorp Hawaii is downgraded to AA-' (double A minus) from AA+' (double A plus). The commercial paper rating is reaffirmed at Duff 1+ (one plus), our highest short-term rating. The long-term deposit rating of Bank of Hawaii is lowered to AA' (double A) from AA+' while the short-term deposit rating is reaffirmed at Duff 1+ (one-plus).
 The downgrades reflect recent deterioration within the loan portfolio which has resulted in an increase in non-performing loans and net charge-off levels. The bulk of the deterioration is due to a single large credit which was negatively impacted by an arbitration decision regarding lease rental payments. Further, given the slowing regional economy some additional increase in non-performing assets is likely. Despite this deterioration, Bancorp Hawaii's operating fundamentals remain strong with above average asset quality measures, solid earnings, and a sturdy capital base.
 Bancorp Hawaii reported 1992 earnings of $127.5 million, which equaled a return on assets of 1.10 percent, compared with $112.7 million, 1.04 percent, in 1991. Excluding a $10.8 million after-tax gain resulting from adoption of FAS 109 - Accounting for Income Taxes, net income would have equaled $116.8 million, 1.00 percent ROA. Balance sheet measures, including loan quality, reserve adequacy, capitalization, and liquidity are also strong. Non-performing assets equaled 1.37 percent of loans and other real estate owned at Dec. 31, 1992, compared with 0.76 percent and 0.63 percent, three months and 12 months earlier, respectively. Loan loss reserves are large at 1.89 percent of loans and 148 percent of non-performing loans. Capital levels are above average with stockholders' equity equaling 6.52 percent of assets at year end 1992.
 The view of the prospective performance of Bancorp Hawaii is positive given the company's strong position in several attractive, growth markets. With total assets of $12.7 billion, it is the largest financial institution in Hawaii and controls approximately 35 percent of the state's deposit share. The corporation operates more than 100 offices throughout Hawaii, Asia and the Pacific, including such fast-growing markets as Guam, Saipan, Singapore, Tokyo, Seoul, and Hong Kong.
 -0- 3/15/93
 /CONTACT: Charles J. Orabutt Jr., CPA of Duff & Phelps Credit Rating Co., 312-368-3153/
 (BOH)


CO: Bancorp Hawaii ST: Hawaii IN: FIN SU: RTG

WB -- NY040 -- 6022 03/15/93 12:22 EST
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Publication:PR Newswire
Date:Mar 15, 1993
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