Bank of Hawaii Corporation Second Quarter 2008 Financial Results

The return on average assets for the second quarter of 2008 was 1.85 percent, up from 1.84 percent during the same quarter last year. The return on average equity for the second quarter of 2008 was 24.82 percent compared to 26.30 percent for the second quarter of 2007. The efficiency ratio for the second quarter of 2008 was 50.01 percent compared to 50.88 percent in the second quarter last year.

"Financial performance for Bank of Hawaii Corporation during the first half of 2008 continued to be strong," said Allan R. Landon, Chairman and CEO. "Our net interest margin expanded, noninterest revenue improved and core expenses remain controlled. Asset quality remained solid and net charge-offs decreased from the previous quarter. We further strengthened our reserves as higher oil prices increase the risk in our legacy air transportation leasing portfolio. We are maintaining our disciplined approach to credit and balance sheet management as the Hawaii economy slows."

For the six months ended June 30, 2008, net income was $105.5 million, up $10.4 million compared to net income of $95.1 million for the same period last year. Diluted earnings per share were $2.18 for the first half of 2008, up from diluted earnings per share of $1.89 for the first half of 2007. Results for 2008 include $25.3 million from the redemption of Visa shares and a lessee's early buy-out of an aircraft lease, which were recorded in the first quarter of 2008. Partially offsetting these gains were expenses for employee incentives, legal contingencies, a call premium on Capital Securities, an increase in the allowance for loan and lease losses, and contributions to the Bank of Hawaii Charitable Foundation. The net effect was an increase in net income for 2008 of $9.5 million or $0.20 per diluted share. Details of these items are included in Table 2. Financial results for the first half of 2007 included a $1.5 million credit related to resolution with the Internal Revenue Service of a Lease In/Lease Out ("LILO") leveraged lease.

The year-to-date return on average assets was 2.01 percent, up from 1.84 percent for the same six months in 2007. The year-to-date return on average equity was 27.33 percent, up from 26.64 percent for the six months ended June 30, 2007. The efficiency ratio for the first half of 2008 was 49.80 percent, down from 51.25 percent in the same period last year. Adjusted for the income and expense items previously discussed, the efficiency ratio for the first half of 2008 was 50.51 percent.

Financial Highlights

Net interest income, on a taxable equivalent basis, for the second quarter of 2008 was $107.4 million, up $8.3 million from net interest income of $99.1 million in the second quarter of 2007 and up $5.0 million from net interest income of $102.4 million in the first quarter of 2008. Net interest income in the second quarter of 2007 included a $1.1 million credit related to the previously mentioned settlement of the LILO leveraged lease. For the six-month period ended June 30, 2008, net interest income, on a taxable equivalent basis, was $209.8 million compared to $197.5 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 4.41 percent for the second quarter of 2008, a 29 basis point increase from 4.12 percent in the second quarter of 2007 and a 24 basis point increase from 4.17 percent in the first quarter of 2008. For the six months ended June 30, 2008, the net interest margin was 4.29 percent compared to 4.09 percent for the same six months in 2007. The increase in the net interest margin was primarily due to lower funding costs in 2008.

Results for the second quarter of 2008 included a provision for credit losses of $7.2 million compared with $3.4 million in the second quarter of 2007 and $14.4 million in the first quarter of 2008. The provision for credit losses exceeded net charge-offs of $4.7 million by $2.5 million in the second quarter of 2008. The provision for credit losses equaled net charge-offs in the second quarter of last year and exceeded net charge-offs by $9.0 million in the first quarter of 2008.

Noninterest income was $60.5 million for the second quarter of 2008, an increase of $2.5 million compared to $58.0 million in the second quarter of 2007 and a decrease of $25.6 million compared to $86.1 million in the first quarter of 2008. Noninterest income in the first quarter of 2008 included the previously mentioned gains of $25.3 million related to the Visa share redemption and the disposition of an aircraft lease.

Noninterest expense was $83.9 million in the second quarter of 2008, up $4.0 million from noninterest expense of $79.8 million in the same quarter last year and down $9.6 million from $93.4 million in the previous quarter. Noninterest expense in the first quarter of 2008 included a reversal of $5.6 million related to Visa litigation, accruals of $9.0 million for employee incentives, $3.0 million for legal contingencies, $2.3 million for charitable contributions, $1.0 million for the call premium, and $0.6 million for separation costs. Adjusted for these items, noninterest expense was $83.2 million in the first quarter of 2008. An analysis of salary and benefit expenses is included in Table 8.

The effective tax rate for the second quarter of 2008 was 37.03 percent compared to 35.25 percent during the same quarter last year and 28.88 percent in the previous quarter. The lower effective tax rate in the first quarter of 2008 was primarily due to the disposition of an aircraft lease. The effective tax rate for the second quarter of 2007 included a $0.4 million net credit due to the previously mentioned IRS tax settlement.

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 months ended June 30, 2008 with low levels of non-performing assets and a reduction in accruing loans and leases past due 90 days or more.

Non-accrual loans and leases were $6.5 million at June 30, 2008, up from $6.3 million at June 30, 2007 and up from $5.8 million at March 31, 2008. As a percentage of total loans and leases, non-accrual loans at June 30, 2008 of 0.10 percent remain near historic lows.

Total non-performing assets were $6.7 million at the end of the second quarter of 2008, up from $6.3 million at the end of the same quarter last year and up from $6.0 million at the end of the previous quarter. The ratio of non-performing assets to total loans and foreclosed real estate at June 30, 2008 was 0.10 percent, unchanged from June 30, 2007 and up from 0.09 percent at March 31, 2008.

Accruing loans and leases past due 90 days or more were $4.2 million at June 30, 2008, up from $1.4 million at June 30, 2007 and down from $5.8 million at March 31, 2008. The ratio of total non-performing assets and loans 90 days or more past due to total loans at June 30, 2008 was 0.17 percent, up from 0.12 percent at June 30, 2007 and down from 0.18 percent at March 31, 2008. Details of non-performing assets and accruing loans and leases past due 90 days or more are summarized in Table 10.

Net charge-offs during the second quarter of 2008 were $4.7 million or 0.29 percent annualized of total average loans and leases. Net charge-offs increased $1.3 million compared to $3.4 million, or 0.21 percent annualized, during the same quarter last year and were down $0.8 million compared to $5.4 million, or 0.33 percent annualized, in the previous quarter. The decrease compared to the previous quarter was largely due to lower charge-offs in the indirect automobile and unsecured consumer installment portfolios. Net charge-offs for the six months ended June 30, 2008 were $10.1 million, or 0.31 percent annualized of total average loans and leases compared to $6.0 million, or 0.18 percent annualized of total average loans and leases for the same period last year. Net charge-offs for the first six months of 2007 included a partial recovery of $2.1 million on an aircraft lease, which was charged off in 2005.

The allowance for loan and lease losses increased to $102.5 million at June 30, 2008, up from $91.0 million at June 30, 2007 and up from $100.0 million at March 31, 2008. The ratio of the allowance for loan and lease losses to total loans was 1.57 percent at June 30, 2008, an increase from 1.39 percent at June 30, 2007 and from 1.52 percent at March 31, 2008. The increase in the allowance for loan and lease losses from March 31, 2008 reflects elevated risk in the Company's air transportation exposure due to the unprecedented rise in oil prices. The reserve for unfunded commitments at June 30, 2008 was $5.2 million, unchanged from June 30, 2007 and from March 31, 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 $10.37 billion at June 30, 2008, down $351 million from $10.72 billion at June 30, 2007 and down $452 million from $10.82 billion at March 31, 2008. The decrease compared with the previous quarters was largely due to a reduction in funds sold.

Total loans and leases were $6.52 billion at June 30, 2008, down $48 million from $6.57 billion at June 30, 2007 and down $61 million from $6.58 billion at March 31, 2008. Average loans and leases were $6.53 billion during the second quarter of 2008, essentially unchanged from the second quarter last year and down $56 million from $6.59 billion during the previous quarter.

Total commercial loans were $2.37 billion at June 30, 2008, down $53 million from $2.43 billion at June 30, 2007 and down $14 million from $2.39 billion at March 31, 2008. The decrease was largely due to a reduction in construction lending. Construction loans were $169 million at June 30, 2008, down $93 million from $261 million at June 30, 2007 and down $22 million from $191 million at March 31, 2008.

Total consumer loans were $4.14 billion at June 30, 2008, essentially unchanged from June 30, 2007 and down $48 million from $4.19 billion at March 31, 2008. The decrease compared with the previous quarter was largely due to a reduction in residential first mortgages, automobile loans and unsecured consumer installment loans. Loan and lease portfolio balances are summarized in Table 9.

Total deposits were $7.90 billion at June 30, 2008, down $410 million from $8.31 billion at June 30, 2007 and down $199 million from $8.10 billion at March 31, 2008. Total deposits decreased near the end of the second quarter largely due to the release of escrow deposits following completion of a large construction project. Average deposits were $7.96 billion during the second quarter of 2008, up $148 million from $7.81 billion during the second quarter last year and up $6 million from $7.95 billion during the previous quarter.

During the second quarter of 2008, the Company repurchased 220.0 thousand shares of common stock at a total cost of $11.4 million under its share repurchase program. The average cost was $51.70 per share repurchased. From the beginning of the share repurchase program in July 2001 through June 30, 2008, the Company had repurchased 45.2 million shares and returned nearly $1.6 billion to shareholders at an average cost of $35.35 per share. From July 1, 2008 through July 25, 2008, the Company repurchased an additional 181.0 thousand shares of common stock at an average cost of $45.19 per share. Remaining buyback authority under the share repurchase program was $43.4 million at July 25, 2008.

On May 15, 2008, the Company exercised its option to call the remaining $26.4 million of Capital Securities, previously qualified as Tier I Capital. At June 30, 2008, the Tier 1 leverage ratio was 7.04 percent, up slightly from 7.02 percent at June 30, 2007 and up from 6.99 percent at March 31, 2008.

The Company's Board of Directors declared a quarterly cash dividend of $0.44 per share on the Company's outstanding shares, consistent with the prior three quarters. The dividend will be payable on September 15, 2008 to shareholders of record at the close of business on August 29, 2008.

Hawaii Economy

During the second quarter of 2008, Hawaii's economic activity slowed. The State's unemployment rate increased to 3.5 percent, still among the lowest in the United States. Visitor arrivals during April and May decreased approximately 7.0 percent, largely due to the shutdown of two airlines and reduced cruise ship activity. Single-family home prices were down slightly on Oahu and showed further decline on Neighbor Islands. Oahu home prices during the quarter averaged 4.4 percent below prices one year ago and were essentially unchanged from the same period in 2006. Residential and commercial construction appears to be softening. Inflation in Hawaii likely increased during the quarter because of rising energy and food costs.

Conference Call Information

The Company will review its second 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 Bank of Hawaii Corporation's web site, www.boh.com. The conference call number for participants in the United States is 866-700-5192. International participants should call 617-213-8833. No pass code is required. A replay of the conference call will be available for one week beginning Monday, July 28, 2008 by calling 888-286-8010 in the United States or 617-801-6888 internationally and entering the pass code number 40631649 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, which was 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 Three Months Ended thousands, ----------------------------------- except per June 30, March 31, June 30, share amounts) 2008 2008 2007 -------------------------------------------------- For the Period: Net Interest Income $ 107,168 $ 102,180 $ 98,878 Total Noninterest Income 60,539 86,125 58,028 Total Noninterest Expense 83,862 93,432 79,832 Net Income 48,282 57,215 47,729 Basic Earnings Per Share 1.01 1.19 0.97 Diluted Earnings Per Share 1.00 1.18 0.95 Dividends Declared Per Share 0.44 0.44 0.41 Net Income to Average Total Assets 1.85% 2.16% 1.84 Net Income to Average Shareholders' Equity 24.82 29.88 26.30 Efficiency Ratio (1) 50.01 49.62 50.88 Operating Leverage (2) (11.62) 40.13 0.13 Net Interest Margin (3) 4.41 4.17 4.12 Dividend Payout Ratio (4) 43.56 36.97 42.27 Average Loans and Leases $ 6,531,587 $ 6,587,918 $ 6,532,736 Average Assets 10,504,421 10,643,904 10,383,030 Average Deposits 7,958,171 7,952,546 7,810,089 Average Shareholders' Equity 782,429 770,157 727,887 Average Shareholders' Equity to Average Assets 7.45% 7.24% 7.01 Market Price Per Share of Common Stock: Closing $ 47.80 $ 49.56 $ 51.64 High 57.37 52.93 55.00 Low 46.62 40.95 50.64 June 30, March 31, 2008 2008 -------------------------------------------------- As of Period End: Loans and Leases $ 6,518,128 $ 6,579,337 Total Assets 10,371,149 10,822,801 Total Deposits 7,903,990 8,102,855 Long-Term Debt 205,351 239,389 Total Shareholders' Equity 767,558 766,747 Non-Performing Assets $ 6,680 $ 6,045 Allowance to Loans and Leases Outstanding 1.57% 1.52 Leverage Ratio 7.04 6.99 Book Value Per Common Share $ 16.01 $ 15.98 Full-Time Equivalent Employees 2,534 2,538 Branches and Offices 84 83 (dollars in Six Months Ended thousands, ------------------------ except per June 30, share amounts) 2008 2007 -------------- ------------------------ For the Period: Net Interest Income $ 209,348 $ 197,015 Total Noninterest Income 146,664 118,988 Total Noninterest Expense 177,294 161,955 Net Income 105,497 95,064 Basic Earnings Per Share 2.20 1.93 Diluted Earnings Per Share 2.18 1.89 Dividends Declared Per Share 0.88 0.82 Net Income to Average Total Assets % 2.01% 1.84% Net Income to Average Shareholders' Equity 27.33 26.64 Efficiency Ratio (1) 49.80 51.25 Operating Leverage (2) 16.01 3.90 Net Interest Margin (3) 4.29 4.09 Dividend Payout Ratio (4) 40.00 42.49 Average Loans and Leases $ 6,559,753 $ 6,547,212 Average Assets 10,574,162 10,432,130 Average Deposits 7,955,360 7,865,469 Average Shareholders' Equity 776,293 719,549 Average Shareholders' Equity to Average Assets % 7.34% 6.90% Market Price Per Share of Common Stock: Closing $ 47.80 $ 51.64 High 57.37 55.00 Low 40.95 50.11 December 31, June 30, 2007 2007 --------------------------------------- As of Period End: Loans and Leases $ 6,580,861 $ 6,566,126 Total Assets 10,472,942 10,722,568 Total Deposits 7,942,372 8,314,404 Long-Term Debt 235,371 260,329 Total Shareholders' Equity 750,255 708,806 Non-Performing Assets $ 5,286 $ 6,314 Allowance to Loans and Leases Outstanding % 1.38% 1.39% Leverage Ratio 7.04 7.02 Book Value Per Common Share $ 15.44 $ 14.34 Full-Time Equivalent Employees 2,594 2,571 Branches and Offices 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.

Bank of Hawaii Corporation and Subsidiaries Net Significant Income Items (Unaudited) Table 2 ---------------------------------------------------------------------- Three Months Ended March 31, (dollars in thousands) 2008 ---------------------------------------------------------------------- Gain on Mandatory Redemption of Visa Shares $ 13,737 Gain on Disposal of Leased Equipment 11,588 Increase in Allowance for Loan and Lease Losses (9,000) Cash for Stock Grants (4,640) Employee Incentive Awards (4,386) 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 Items Before the Benefit for Income Taxes 6,076 Benefit for Income Taxes (3,381) ---------------------------------------------------------------------- Net Significant Income Items $ 9,457 ======================================================================

Bank of Hawaii Corporation and Subsidiaries Consolidated Statements of Income (Unaudited) Table 3 ---------------------------------------------------------------------- Three Months Ended Six Months Ended (dollars in thousands, June 30, March 31, June 30, June 30, except per share amounts) 2008 2008 2007 2008 2007 ---------------------------------------------------------------------- Interest Income Interest and Fees on Loans and Leases $ 97,959 $ 104,413 $ 112,026 $ 202,372 $ 222,324 Income on Invest- ment Secur- ities Trading 1,209 1,160 1,357 2,369 2,975 Avail- able- for-Sale 35,321 34,251 31,563 69,572 62,524 Held-to- Maturity 3,033 3,239 3,827 6,272 7,879 Deposits 204 195 96 399 154 Funds Sold 420 992 533 1,412 1,591 Other 489 426 364 915 697 ---------------------------------------------------------------------- Total Interest Income 138,635 144,676 149,766 283,311 298,144 ---------------------------------------------------------------------- Interest Expense Deposits 20,238 27,465 33,701 47,703 67,076 Securities Sold Under Agree- ments to Re- purchase 7,488 10,617 11,665 18,105 23,551 Funds Purchased 270 633 1,452 903 2,375 Short-Term Borrow- ings 12 34 91 46 178 Long-Term Debt 3,459 3,747 3,979 7,206 7,949 ---------------------------------------------------------------------- Total Interest Expense 31,467 42,496 50,888 73,963 101,129 ---------------------------------------------------------------------- Net Interest Income 107,168 102,180 98,878 209,348 197,015 Provision for Credit Losses 7,172 14,427 3,363 21,599 5,994 ---------------------------------------------------------------------- Net Interest Income After Provision for Credit Losses 99,996 87,753 95,515 187,749 191,021 ---------------------------------------------------------------------- Noninterest Income Trust and Asset Manage- ment 15,460 15,086 16,135 30,546 31,968 Mortgage Banking 2,738 4,297 2,479 7,035 5,850 Service Charges on Deposit Accounts 12,411 12,083 11,072 24,494 22,039 Fees, Exchange, and Other Service Charges 17,176 16,101 16,556 33,277 32,617 Investment Secur- ities Gains, Net 157 130 575 287 591 Insurance 5,590 7,130 4,887 12,720 11,102 Other 7,007 31,298 6,324 38,305 14,821 ---------------------------------------------------------------------- Total Non- interest Income 60,539 86,125 58,028 146,664 118,988 ---------------------------------------------------------------------- Noninterest Expense Salaries and Benefits 45,984 55,473 44,587 101,457 89,993 Net Occupancy 11,343 10,443 9,695 21,786 19,506 Net Equipment 4,474 4,321 4,871 8,795 9,658 Profess- ional Fees 2,588 2,613 2,599 5,201 5,142 Other 19,473 20,582 18,080 40,055 37,656 ---------------------------------------------------------------------- Total Non- interest Expense 83,862 93,432 79,832 177,294 161,955 ---------------------------------------------------------------------- Income Before Provision for Income Taxes 76,673 80,446 73,711 157,119 148,054 Provision for Income Taxes 28,391 23,231 25,982 51,622 52,990 ---------------------------------------------------------------------- Net Income $ 48,282 $ 57,215 $ 47,729 $ 105,497 $ 95,064 ====================================================================== Basic Earnings Per Share $ 1.01 $ 1.19 $ 0.97 $ 2.20 $ 1.93 Diluted Earnings Per Share $ 1.00 $ 1.18 $ 0.95 $ 2.18 $ 1.89 Dividends Declared Per Share $ 0.44 $ 0.44 $ 0.41 $ 0.88 $ 0.82 Basic Weighted Average Shares 47,733,278 47,965,722 49,276,820 47,849,945 49,351,959 Diluted Weighted Average Shares 48,300,049 48,628,427 50,077,219 48,423,619 50,173,856 ======================================================================

Bank of Hawaii Corporation and Subsidiaries Consolidated Statements of Condition (Unaudited) Table 4 ---------------------------------------------------------------------- (dollars in June 30, March 31, December 31, June 30, thousands) 2008 2008 2007 2007 ---------------------------------------------------------------------- Assets Interest-Bearing Deposits $ 6,056 $ 55,916 $ 4,870 $ 130,732 Funds Sold - 240,000 15,000 200,000 Investment Securities Trading 94,347 99,966 67,286 123,591 Available-for- Sale 2,646,506 2,672,286 2,563,190 2,455,668 Held-to- Maturity (Fair Value of $255,905; $277,536; $287,644; and $313,589) 260,592 277,256 292,577 327,118 Loans Held for Sale 11,183 13,096 12,341 13,527 Loans and Leases 6,518,128 6,579,337 6,580,861 6,566,126 Allowance for Loan and Lease Losses (102,498) (99,998) (90,998) (90,998) ---------------------------------------------------------------------- Net Loans and Leases 6,415,630 6,479,339 6,489,863 6,475,128 ---------------------------------------------------------------------- Total Earning Assets 9,434,314 9,837,859 9,445,127 9,725,764 ---------------------------------------------------------------------- Cash and Noninterest- Bearing Deposits 280,635 314,863 368,402 345,226 Premises and Equipment 117,323 116,683 117,177 122,929 Customers' Acceptances 1,856 992 1,112 2,234 Accrued Interest Receivable 42,295 46,316 45,261 49,121 Foreclosed Real Estate 229 294 184 48 Mortgage Servicing Rights 30,272 27,149 27,588 29,112 Goodwill 34,959 34,959 34,959 34,959 Other Assets 429,266 443,686 433,132 413,175 ---------------------------------------------------------------------- Total Assets $10,371,149 $10,822,801 $ 10,472,942 $10,722,568 ====================================================================== Liabilities Deposits Noninterest- Bearing Demand $ 1,876,782 $ 2,000,226 $ 1,935,639 $ 1,896,335 Interest- Bearing Demand 1,666,726 1,649,705 1,634,675 1,755,646 Savings 2,781,082 2,728,873 2,630,471 2,923,168 Time 1,579,400 1,724,051 1,741,587 1,739,255 ---------------------------------------------------------------------- Total Deposits 7,903,990 8,102,855 7,942,372 8,314,404 ---------------------------------------------------------------------- Funds Purchased 69,400 23,800 75,400 90,650 Short-Term Borrowings 10,180 9,726 10,427 15,644 Securities Sold Under Agreements to Repurchase 1,028,518 1,231,962 1,029,340 910,302 Long-Term Debt (includes $121,326 and $128,932 carried at fair value as of June 30, 2008 and March 31, 2008, respectively) 205,351 239,389 235,371 260,329 Banker's Acceptances 1,856 992 1,112 2,234 Retirement Benefits Payable 29,478 29,755 29,984 43,892 Accrued Interest Payable 13,588 18,322 20,476 18,292 Taxes Payable and Deferred Taxes 250,125 300,188 278,218 277,516 Other Liabilities 91,105 99,065 99,987 80,499 ---------------------------------------------------------------------- Total Liabilities 9,603,591 10,056,054 9,722,687 10,013,762 ---------------------------------------------------------------------- Shareholders' Equity Common Stock ($.01 par value; authorized 500,000,000 shares; issued / outstanding: June 2008 - 57,016,182 / 47,941,409; March 2008 - 56,995,352 / 47,990,432; December 2007 - 56,995,447 / 48,589,645; and June 2007 - 56,927,022 / 49,440,204) 568 568 567 566 Capital Surplus 489,335 487,139 484,790 480,389 Accumulated Other Comprehensive Income (Loss) (15,813) 5,553 (5,091) (45,705) Retained Earnings 745,244 720,540 688,638 645,149 Treasury Stock, at Cost (Shares: June 2008 - 9,074,773; March 2008 - 9,004,920; December 2007 - 8,405,802; and June 2007 - 7,486,818) (451,776) (447,053) (418,649) (371,593) ---------------------------------------------------------------------- Total Shareholders' Equity 767,558 766,747 750,255 708,806 ---------------------------------------------------------------------- Total Liabilities and Shareholders' Equity $10,371,149 $10,822,801 $ 10,472,942 $10,722,568 ======================================================================

Bank of Hawaii Corporation and Subsidiaries Consolidated Statements of Shareholders' Equity (Unaudited) Table 5 ---------------------------------------------------------------------- Accum. Other Compre- Common Capital hensive (dollars in thousands) Total Stock Surplus Loss ---------------------------------------------------------------------- Balance as of December 31, 2007 $750,255 $ 567 $484,790 $ (5,091) 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) - - - Comprehensive Income: Net Income 105,497 - - - Other Comprehensive Income, Net of Tax: Change in Unrealized Gains and Losses on Investment Securities Available-for- Sale (10,820) - - (10,820) Amortization of Net Loss for Pension Plans and Postretirement Benefit Plan 98 - - 98 Total Comprehensive Income Share-Based Compensation 3,072 - 3,072 - Net Tax Benefits related to Share-Based Compensation 1,304 - 1,304 - Common Stock Issued under Purchase and Equity Compensation Plans (276,946 shares) 8,478 1 169 - Common Stock Repurchased (923,330 shares) (45,247) - - - Cash Dividends Paid (42,343) - - - ---------------------------------------------------------------------- Balance as of June 30, 2008 $767,558 $ 568 $489,335 $(15,813) ====================================================================== Balance as of December 31, 2006 $719,420 $ 566 $475,178 $(39,084) 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 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) - - - FIN 48, "Accounting for Uncertainty in Income Taxes, an interpretation of FASB Statement No. 109" (7,247) - - - Comprehensive Income: Net Income 95,064 - - - Other Comprehensive Income, Net of Tax: Change in Unrealized Gains and Losses on Investment Securities Available-for- Sale (12,316) - - (12,316) Amortization of Net Loss for Pension Plans and Postretirement Benefit Plan 416 - - 416 Total Comprehensive Income Share-Based Compensation 2,748 - 2,748 - Net Tax Benefits related to Share-Based Compensation 2,208 - 2,208 - Common Stock Issued under Purchase and Equity Compensation Plans (444,008 shares) 12,407 - 255 - Common Stock Repurchased (779,689 shares) (41,157) - - - Cash Dividends Paid (40,757) - - - ---------------------------------------------------------------------- Balance as of June 30, 2007 $708,806 $ 566 $480,389 $(45,705) ====================================================================== Compre- Retained Treasury hensive (dollars in thousands) Earnings Stock Income ---------------------------------------------------------------------- Balance as of December 31, 2007 $ 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) - Comprehensive Income: Net Income 105,497 - $ 105,497 Other Comprehensive Income, Net of Tax: Change in Unrealized Gains and Losses on Investment Securities Available-for- Sale - - (10,820) Amortization of Net Loss for Pension Plans and Postretirement Benefit Plan - - 98 ---------- Total Comprehensive Income $ 94,775 ========== Share-Based Compensation - - Net Tax Benefits related to Share-Based Compensation - - Common Stock Issued under Purchase and Equity Compensation Plans (276,946 shares) (3,812) 12,120 Common Stock Repurchased (923,330 shares) - (45,247) Cash Dividends Paid (42,343) - ----------------------------------------------------------- Balance as of June 30, 2008 $ 745,244 $ (451,776) =========================================================== Balance as of December 31, 2006 $ 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" (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) - FIN 48, "Accounting for Uncertainty in Income Taxes, an interpretation of FASB Statement No. 109" (7,247) - Comprehensive Income: Net Income 95,064 - $ 95,064 Other Comprehensive Income, Net of Tax: Change in Unrealized Gains and Losses on Investment Securities Available-for- Sale - - (12,316) Amortization of Net Loss for Pension Plans and Postretirement Benefit Plan - - 416 ---------- Total Comprehensive Income $ 83,164 ========== Share-Based Compensation - - Net Tax Benefits related to Share-Based Compensation - - Common Stock Issued under Purchase and Equity Compensation Plans (444,008 shares) (5,312) 17,464 Common Stock Repurchased (779,689 shares) - (41,157) Cash Dividends Paid (40,757) - ----------------------------------------------------------- Balance as of June 30, 2007 $ 645,149 $ (371,593) ===========================================================

Bank of Hawaii Corporation and Subsidiaries Average Balances and Interest Rates - Taxable Equivalent Basis (Unaudited) Table 6a ---------------------------------------------------------------------- Three Months Ended Three Months Ended June 30, 2008 March 31, 2008 (dollars in Average Income/ Yield/ Average Income/ Yield/ millions) Balance Expense Rate Balance Expense Rate ------------------------------------------------------------------- Earning Assets Interest- Bearing Deposits $ 33.0 $ 0.2 2.45% $ 27.5 $ 0.2 2.82% Funds Sold 81.9 0.4 2.03 138.2 1.0 2.84 Investment Securities Trading 97.6 1.2 4.96 95.7 1.2 4.85 Available- for-Sale 2,649.9 35.6 5.37 2,631.6 34.5 5.24 Held-to- Maturity 269.6 3.1 4.50 285.6 3.2 4.54 Loans Held for Sale 9.3 0.1 5.78 10.5 0.1 5.43 Loans and Leases (2) Commercial and Industrial 1,060.7 14.3 5.42 1,065.1 16.6 6.26 Commercial Mortgage 663.0 10.1 6.15 649.1 10.4 6.45 Construction 177.3 2.5 5.76 199.5 3.3 6.73 Commercial Lease Financing 470.6 4.1 3.50 477.9 4.0 3.35 Residential Mortgage 2,509.1 38.2 6.09 2,519.3 38.6 6.13 Home Equity 968.7 14.1 5.86 970.8 16.0 6.61 Automobile 423.1 8.6 8.16 438.7 8.9 8.18 Other (3) 259.1 5.9 9.11 267.4 6.5 9.73 ------------------------------------------------------------------- Total Loans and Leases 6,531.6 97.8 6.01 6,587.8 104.3 6.35 ------------------------------------------------------------------- Other 79.6 0.5 2.46 79.5 0.4 2.15 ------------------------------------------------------------------- Total Earning Assets (4) 9,752.5 138.9 5.71 9,856.4 144.9 5.89 ------------------------------------------------------------------- Cash and Noninterest- Bearing Deposits 272.9 294.1 Other Assets 479.0 493.4 --------- --------- Total Assets $10,504.4 $10,643.9 ========= ========= Interest- Bearing Liabilities Interest- Bearing Deposits Demand $ 1,617.0 1.2 0.29 $ 1,614.3 2.3 0.57 Savings 2,805.5 6.5 0.94 2,691.8 9.2 1.38 Time 1,646.5 12.5 3.07 1,747.2 16.0 3.67 ------------------------------------------------------------------- Total Interest- Bearing Deposits 6,069.0 20.2 1.34 6,053.3 27.5 1.82 ------------------------------------------------------------------- Short-Term Borrowings 61.2 0.3 1.82 79.7 0.7 3.31 Securities Sold Under Agreements to Repurchase 1,060.2 7.5 2.81 1,164.2 10.6 3.63 Long-Term Debt 224.3 3.5 6.18 239.8 3.7 6.26 ------------------------------------------------------------------- Total Interest- Bearing Liabilities 7,414.7 31.5 1.70 7,537.0 42.5 2.26 ------------------------------------------------------------------- Net Interest Income $ 107.4 $ 102.4 ======= ======= Interest Rate Spread 4.01% 3.63% Net Interest Margin 4.41% 4.17% Noninterest- Bearing Demand Deposits 1,889.2 1,899.2 Other Liabilities 418.1 437.5 Shareholders' Equity 782.4 770.2 --------- --------- Total Liabilities and Shareholders' Equity $10,504.4 $10,643.9 ========= ========= Three Months Ended June 30, 2007 (1) (dollars in Average Income/ Yield/ millions) Balance Expense Rate ---------------------------------------- Earning Assets Interest- Bearing Deposits $ 8.0 $ 0.1 4.83% Funds Sold 40.6 0.5 5.19 Investment Securities Trading 137.1 1.4 3.96 Available- for-Sale 2,486.9 31.8 5.11 Held-to- Maturity 339.3 3.8 4.51 Loans Held for Sale 13.6 0.2 6.34 Loans and Leases (2) Commercial and Industrial 1,053.3 19.5 7.43 Commercial Mortgage 620.0 10.6 6.85 Construction 253.8 5.0 7.93 Commercial Lease Financing 461.3 4.4 3.77 Residential Mortgage 2,499.5 38.3 6.12 Home Equity 941.4 17.9 7.62 Automobile 424.2 8.6 8.16 Other (3) 279.2 7.5 10.83 ---------------------------------------- Total Loans and Leases 6,532.7 111.8 6.86 ---------------------------------------- Other 79.4 0.4 1.83 ---------------------------------------- Total Earning Assets (4) 9,637.6 150.0 6.23 ---------------------------------------- Cash and Noninterest- Bearing Deposits 275.3 Other Assets 470.1 --------- Total Assets $10,383.0 ========= Interest- Bearing Liabilities Interest- Bearing Deposits Demand $ 1,581.0 4.1 1.03 Savings 2,627.8 12.6 1.93 Time 1,707.9 17.0 3.99 ---------------------------------------- Total Interest- Bearing Deposits 5,916.7 33.7 2.28 ---------------------------------------- Short-Term Borrowings 116.9 1.5 5.23 Securities Sold Under Agreements to Repurchase 1,040.6 11.7 4.46 Long-Term Debt 260.3 4.0 6.12 ---------------------------------------- Total Interest- Bearing Liabilities 7,334.5 50.9 2.78 ---------------------------------------- Net Interest Income $ 99.1 ======= Interest Rate Spread 3.45% Net Interest Margin 4.12% Noninterest- Bearing Demand Deposits 1,893.4 Other Liabilities 427.2 Shareholders' Equity 727.9 --------- Total Liabilities and Shareholders' Equity $10,383.0 ========= (1) Certain prior period information has been reclassified to conform to current presentation. (2) Non-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 $239,000 $238,000, and $236,000 for the three months ended June 30, 2008, March 31, 2008, and June 30, 2007, respectively.

Bank of Hawaii Corporation and Subsidiaries Average Balances and Interest Rates - Taxable Equivalent Basis (Unaudited) Table 6b ---------------------------------------------------------------------- Six Months Ended Six Months Ended June 30, 2008 June 30, 2007(1) (dollars in Average Income/ Yield/ Average Income/ Yield/ millions) Balance Expense Rate Balance Expense Rate ---------------------------------------------------------------------- Earning Assets Interest-Bearing Deposits $ 30.2 $ 0.4 2.62% $ 6.3 $ 0.2 4.89% Funds Sold 110.1 1.4 2.54 60.8 1.6 5.20 Investment Securities Trading 96.7 2.4 4.90 149.5 3.0 3.98 Available-for- Sale 2,640.8 70.0 5.31 2,470.1 62.9 5.10 Held-to- Maturity 277.5 6.3 4.52 350.1 7.9 4.50 Loans Held for Sale 9.9 0.3 5.59 10.5 0.3 6.27 Loans and Leases (2) Commercial and Industrial 1,062.9 30.9 5.84 1,064.6 39.3 7.44 Commercial Mortgage 656.0 20.5 6.30 618.3 20.9 6.82 Construction 188.5 5.9 6.27 249.7 9.8 7.95 Commercial Lease Financing 474.2 8.1 3.43 461.8 7.5 3.23 Residential Mortgage 2,514.2 76.8 6.11 2,497.9 76.5 6.12 Home Equity 969.8 30.1 6.24 941.8 35.6 7.62 Automobile 430.9 17.5 8.17 425.3 17.1 8.12 Other (3) 263.3 12.3 9.43 287.8 15.3 10.75 ---------------------------------------------------------------------- Total Loans and Leases 6,559.8 202.1 6.18 6,547.2 222.0 6.82 ---------------------------------------------------------------------- Other 79.5 0.9 2.30 79.4 0.7 1.76 ---------------------------------------------------------------------- Total Earning Assets (4) 9,804.5 283.8 5.80 9,673.9 298.6 6.20 ---------------------------------------------------------------------- Cash and Noninterest- Bearing Deposits 283.5 292.8 Other Assets 486.2 465.4 --------- --------- Total Assets $10,574.2 $10,432.1 ========= ========= Interest-Bearing Liabilities Interest-Bearing Deposits Demand $ 1,615.7 3.4 0.43 $ 1,591.7 8.3 1.05 Savings 2,748.6 15.8 1.15 2,633.8 25.1 1.92 Time 1,696.9 28.5 3.38 1,719.9 33.7 3.94 ---------------------------------------------------------------------- Total Interest- Bearing Deposits 6,061.2 47.7 1.58 5,945.4 67.1 2.28 ---------------------------------------------------------------------- Short-Term Borrowings 70.4 1.0 2.67 98.4 2.6 5.17 Securities Sold Under Agreements to Repurchase 1,112.2 18.1 3.24 1,055.1 23.5 4.46 Long-Term Debt 232.0 7.2 6.22 260.3 7.9 6.12 ---------------------------------------------------------------------- Total Interest- Bearing Liabilities 7,475.8 74.0 1.98 7,359.2 101.1 2.76 ---------------------------------------------------------------------- Net Interest Income $ 209.8 $ 197.5 ======== ======== Interest Rate Spread 3.82% 3.44% Net Interest Margin 4.29% 4.09% Noninterest- Bearing Demand Deposits 1,894.2 1,920.1 Other Liabilities 427.9 433.3 Shareholders' Equity 776.3 719.5 --------- --------- Total Liabilities and Shareholders' Equity $10,574.2 $10,432.1 ========= ========= (1) Certain prior period information has been reclassified to conform to current presentation. (2) Non-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 $477,000 and $449,000 for the six months ended June 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 June 30, 2008 Compared to March 31, 2008 (dollars in millions) Volume (1) Rate (1) Total ---------------------------------------------------------------------- Change in Interest Income: Funds Sold $ (0.4) $ (0.2) $ (0.6) Investment Securities Available-for-Sale 0.3 0.8 1.1 Held-to-Maturity (0.1) - (0.1) Loans and Leases Commercial and Industrial (0.1) (2.2) (2.3) Commercial Mortgage 0.2 (0.5) (0.3) Construction (0.3) (0.5) (0.8) Commercial Lease Financing (0.1) 0.2 0.1 Residential Mortgage (0.1) (0.3) (0.4) Home Equity (0.1) (1.8) (1.9) Automobile (0.3) - (0.3) Other (2) (0.2) (0.4) (0.6) ---------------------------------------------------------------------- Total Loans and Leases (1.0) (5.5) (6.5) ---------------------------------------------------------------------- Other - 0.1 0.1 ---------------------------------------------------------------------- Total Change in Interest Income (1.2) (4.8) (6.0) ---------------------------------------------------------------------- Change in Interest Expense: Interest-Bearing Deposits Demand - (1.1) (1.1) Savings 0.4 (3.1) (2.7) Time (1.0) (2.5) (3.5) ---------------------------------------------------------------------- Total Interest-Bearing Deposits (0.6) (6.7) (7.3) ---------------------------------------------------------------------- Short-Term Borrowings (0.1) (0.3) (0.4) Securities Sold Under Agreements to Repurchase (0.9) (2.2) (3.1) Long-Term Debt (0.2) - (0.2) ---------------------------------------------------------------------- Total Change in Interest Expense (1.8) (9.2) (11.0) ---------------------------------------------------------------------- Change in Net Interest Income $ 0.6 $ 4.4 $ 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 7b ---------------------------------------------------------------------- Three Months Ended June 30, 2008 Compared to June 30, 2007 (dollars in millions) Volume (1) Rate (1) Total ---------------------------------------------------------------------- Change in Interest Income: Interest-Bearing Deposits $ 0.2 $ (0.1) $ 0.1 Funds Sold 0.3 (0.4) (0.1) Investment Securities Trading (0.5) 0.3 (0.2) Available-for-Sale 2.2 1.6 3.8 Held-to-Maturity (0.7) - (0.7) Loans Held for Sale (0.1) - (0.1) Loans and Leases Commercial and Industrial 0.1 (5.3) (5.2) Commercial Mortgage 0.7 (1.2) (0.5) Construction (1.3) (1.2) (2.5) Commercial Lease Financing - (0.3) (0.3) Residential Mortgage 0.1 (0.2) (0.1) Home Equity 0.5 (4.3) (3.8) Other (2) (0.5) (1.1) (1.6) ---------------------------------------------------------------------- Total Loans and Leases (0.4) (13.6) (14.0) ---------------------------------------------------------------------- Other - 0.1 0.1 ---------------------------------------------------------------------- Total Change in Interest Income 1.0 (12.1) (11.1) ---------------------------------------------------------------------- Change in Interest Expense: Interest-Bearing Deposits Demand 0.1 (3.0) (2.9) Savings 0.8 (6.9) (6.1) Time (0.6) (3.9) (4.5) ---------------------------------------------------------------------- Total Interest-Bearing Deposits 0.3 (13.8) (13.5) ---------------------------------------------------------------------- Short-Term Borrowings (0.5) (0.7) (1.2) Securities Sold Under Agreements to Repurchase 0.2 (4.4) (4.2) Long-Term Debt (0.6) 0.1 (0.5) ---------------------------------------------------------------------- Total Change in Interest Expense (0.6) (18.8) (19.4) ---------------------------------------------------------------------- Change in Net Interest Income $ 1.6 $ 6.7 $ 8.3 ====================================================================== (1) The changes for each category of interest income and expense are allocated between the portion of changes attributable to the variance in volume 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 ---------------------------------------------------------------------- Six Months Ended June 30, 2008 Compared to June 30, 2007 (dollars in millions) Volume (1) Rate (1) Time (1) Total ---------------------------------------------------------------------- Change in Interest Income: Interest-Bearing Deposits $ 0.3 $ (0.1) $ - $ 0.2 Funds Sold 0.9 (1.1) - (0.2) Investment Securities Trading (1.2) 0.6 - (0.6) Available-for-Sale 4.4 2.7 - 7.1 Held-to-Maturity (1.6) - - (1.6) Loans and Leases Commercial and Industrial (0.1) (8.5) 0.2 (8.4) Commercial Mortgage 1.2 (1.7) 0.1 (0.4) Construction (2.1) (1.9) 0.1 (3.9) Commercial Lease Financing 0.2 0.4 - 0.6 Residential Mortgage 0.5 (0.2) - 0.3 Home Equity 1.0 (6.7) 0.2 (5.5) Automobile 0.2 0.1 0.1 0.4 Other (2) (1.3) (1.8) 0.1 (3.0) ---------------------------------------------------------------------- Total Loans and Leases (0.4) (20.3) 0.8 (19.9) ---------------------------------------------------------------------- Other - 0.2 - 0.2 ---------------------------------------------------------------------- Total Change in Interest Income 2.4 (18.0) 0.8 (14.8) ---------------------------------------------------------------------- Change in Interest Expense: Interest-Bearing Deposits Demand 0.1 (5.1) 0.1 (4.9) Savings 1.1 (10.5) 0.1 (9.3) Time (0.4) (5.0) 0.2 (5.2) --------------------------------------------------------------