UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 11-K
[X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2000 & 1999
or
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION
PERIOD FROM
____________ TO ____________
PACIFIC CENTURY FINANCIAL CORPORATION
PROFIT SHARING PLAN
_____________________________________________________
Full title of the plan and the address of the plan,
if different from that of the issuer named below:
Pacific Century Financial Corporation
130 Merchant Street
Honolulu, Hawaii 96813
_____________________________________________________
Name of issuer of the securities held pursuant to the
plan and the address of its principal executive office
Required Information
Listed below are the financial statements and exhibits filed as part of the
annual report.
A) Financial Statements
1) Report of Independent Auditors
2) Statements of Net Assets Available for Benefits December 31, 2000
and 1999
3) Statements of Changes in Net Assets Available for Benefits - Years
Ended December 31, 2000 and 1999
4) Notes to Financial Statements
5) Schedule of Assets Held for Investment Purposes December 31, 2000
B) Exhibits
Consent of Independent Certified Public Auditors
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the trustees (or other persons who administer the Plan) have duly caused this
annual report to be signed on its behalf by the undersigned thereunto duly
authorized.
PACIFIC CENTURY FINANCIAL CORPORATION
PROFIT SHARING PLAN
Date: June 27, 2001 By: /s/ ALLAN R. LANDON
___________________________________________
Allan R. Landon
Vice Chairman and Chief Financial Officer
of Pacific Century Financial Corporation
and member of the Pacific Century Financial
Corporation Benefit Plans Committee
By: /s/ LESLIE F. PASKETT
___________________________________________
Leslie F. Paskett
Senior Vice President & Controller
of Pacific Century Financial Corporation
AUDITED FINANCIAL STATEMENTS
AND SUPPLEMENTAL SCHEDULE
Pacific Century Financial Corporation
Profit Sharing Plan
Years ended December 31, 2000 and 1999
with Report of Independent Auditors
Pacific Century Financial Corporation
Profit Sharing Plan
Audited Financial Statements
and Supplemental Schedule
Years ended December 31, 2000 and 1999
CONTENTS
Report of Independent Auditors.................................................1
Audited Financial Statements
Statements of Net Assets Available for Benefits................................3
Statements of Changes in Net Assets Available for Benefits.....................4
Notes to Financial Statements..................................................5
Supplemental Schedule
Schedule H, Line 4i - Schedule of Assets (Held at End of Year)................11
Report of Independent Auditors
The Board of Directors
Bank of Hawaii and
The Benefit Plans Committee
Pacific Century Financial Corporation Profit Sharing Plan
We have audited the accompanying statements of net assets available for benefits
of Pacific Century Financial Corporation Profit Sharing Plan as of December 31,
2000 and 1999, and the related statements of changes in net assets available for
benefits for the years then ended. These financial statements are the
responsibility of the Benefit Plans Committee. Our responsibility is to express
an opinion on these financial statements based on our audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by the Benefit Plans Committee, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets available for benefits of the Plan at
December 31, 2000 and 1999, and the changes in its net assets available for
benefits for the years then ended, in conformity with accounting principles
generally accepted in the United States.
Our audits were performed for the purpose of forming an opinion on the financial
statements taken as a whole. The accompanying supplemental schedule of assets
(held at end of year) as of December 31, 2000 is presented for purposes of
additional analysis and is not a required part of the financial statements but
is supplementary information required by the Department of Labor's Rules and
Regulations for Reporting and Disclosure under the Employee Retirement Income
Security Act of 1974. This supplemental schedule is the responsibility of the
Benefit Plans Committee. The supplemental schedule has been subjected to the
auditing procedures applied in our audits of the financial statements and, in
our opinion, is fairly stated in all material respects in relation to the
financial statements taken as a whole.
EY
May 11, 2001
Pacific Century Financial Corporation Profit Sharing Plan
Statements of Net Assets Available for Benefits
DECEMBER 31
2000 1999
------------------------
(IN THOUSANDS)
ASSETS
Investments, at fair value $ 205,921 $ 213,069
Receivables:
Employer contribution 3,241 4,507
Participant contributions 280 582
------------------------
Total receivables 3,521 5,089
------------------------
Net assets available for benefits $ 209,442 $ 218,158
========================
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
Pacific Century Financial Corporation Profit Sharing Plan
Statements of Changes in Net Assets Available for Benefits
YEAR ENDED DECEMBER 31
2000 1999
------------------------
(IN THOUSANDS)
ADDITIONS
Investment income - interest and dividends $ 16,941 $ 15,034
Net depreciation in fair value of investments (13,991) (10,685)
Contributions:
Participants 8,834 8,752
Employer 5,746 7,000
Other 14 418
------------------------
Total contributions 14,594 16,170
------------------------
Total additions 17,544 20,519
DEDUCTIONS
Distributions to participants (26,260) (20,532)
------------------------
Net decrease (8,716) (13)
Net assets available for benefits at beginning of year 218,158 218,171
------------------------
Net assets available for benefits at end of year $ 209,442 $ 218,158
========================
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
Pacific Century Financial Corporation Profit Sharing Plan
Notes to Financial Statements
December 31, 2000
1. DESCRIPTION OF THE PLAN AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
DESCRIPTION OF THE PLAN
The following description of the Pacific Century Financial Corporation Profit
Sharing Plan (the Plan) provides only general information. Participants should
refer to the Summary Plan Description for a more complete description of the
Plan's provisions.
The Plan is a defined contribution plan for employees of Bank of Hawaii and
certain subsidiaries of Pacific Century Financial Corporation and Bank of
Hawaii, collectively (the Bank), who have fulfilled the Plan's participation
requirements. The Plan is subject to the reporting and disclosure, fiduciary,
vesting, and administration and enforcement provisions of the Employee
Retirement Income Security Act of 1974 (ERISA).
On behalf of the Bank as Plan Administrator, the Plan is administered by the
Benefit Plans Committee. All assets of the Plan are held in trust by Vanguard
Fiduciary Trust Company, as trustee, and all benefits are provided by such trust
fund.
The participating employers make a profit sharing contribution on behalf of
participants for each calendar year in an amount which is based upon Pacific
Century Financial Corporation's profits for the year. The contribution varies
depending on Pacific Century Financial Corporation's adjusted net income and
adjusted return on equity. The amount of profit sharing contribution for the
years ended December 31, 2000 and 1999 were $2,577,000 and $3,796,000,
respectively.
Participants are allowed to contribute up to 7% of their eligible compensation
to the Plan. However, contributions are limited to certain maximum annual
amounts, including those imposed under the Internal Revenue Code (25% of a
participant's compensation or $30,000 for 2000 and 1999).
The participating employers contribute matching contributions on behalf of
participants each calendar quarter equal to $1.25 for each $1.00 contributed by
participants up to 2% of the participant's eligible compensation. Matching
contributions are made to the Plan by the end of the following calendar quarter.
Participants are permitted to select among the following investment options:
Pacific Capital Growth Stock Fund, Pacific Capital Growth & Income Fund, Pacific
Capital New Asia
Pacific Century Financial Corporation Profit
Sharing Plan
Notes to Financial Statements (continued)
1. DESCRIPTION OF THE PLAN AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(CONTINUED)
Growth Fund, Pacific Capital Short Intermediate U.S Treasury Securities Unit
Fund, Pacific Capital Diversified Fixed Income Unit Fund, Pacific Capital
International Stock Fund, Pacific Capital Small Cap Fund, Pacific Capital Value
Fund, Vanguard Wellington Fund, Vanguard Windsor Fund, 500 Portfolio of the
Vanguard Index Trust, Short-Term Federal Portfolio of the Vanguard Fixed Income
Securities Fund, Vanguard Retirement Savings Trust, and the Pacific Century
Financial Corporation Stock Fund.
Effective April 1, 1998, the portion of the Plan consisting of the Pacific
Century Financial Corporation Stock Fund converted to an employee stock
ownership plan (ESOP). As an ESOP any cash dividends on Pacific Century
Financial Corporation stock is passed through to the participants unless the
participant elects against receiving the dividend. The cash dividend on shares
of Pacific Century Financial Corporation stock paid as a dividend pass through
is not treated as a distribution from the Plan, rather, it is accounted for as
if the participant receiving the dividend was the direct owner of the shares of
Pacific Century Financial Corporation stock. For participants electing not to
receive the dividend pass through, the dividend is allocated to the
participants' account as income and is invested in additional shares.
Participants are fully vested in the Plan's assets allocated to their account.
Withdrawals are permitted for participants demonstrating immediate and heavy
financial need. Participants may borrow a minimum of $1,000 up to a maximum
equal to the lesser of $50,000 or 50% of the present value of their account
balance. Loan transactions are treated as a transfer from (to) the investment
fund to (from) the loan fund. Loan terms do not exceed 5 years unless the loan
is used for the purchase of a primary residence. The loans are secured by the
balance in the participant's account or other security deemed to be sufficient
by the Benefit Plans Committee and are made at a reasonable rate of interest.
Principal and interest is paid ratably through monthly payroll deductions. No
withdrawals or loans are permitted from the Pacific Century Financial
Corporation Stock Fund.
Pacific Century Financial Corporation Profit
Sharing Plan
Notes to Financial Statements (continued)
1. DESCRIPTION OF THE PLAN AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(CONTINUED)
For termination of employment due to retirement (normal and early), disability,
and death, a participant is entitled to receive an allocation of matching
contribution and profit sharing contribution for the calendar quarter or
calendar year, respectively, in which the participant terminates employment.
Under these conditions, the participant's account is distributed as soon as
practicable after the year-end allocations are made. However, the participant
may make an election to waive this allocation and receive an immediate
distribution. For termination of employment prior to retirement (normal or
early), disability or death, the participant's account is distributed as soon as
practicable. For all accounts under the Plan that exceed $5,000, a distribution
can only be made if the participant consents in writing to such a distribution.
Generally, all distributions from the Plan upon a participant's termination are
made in a lump sum. In case of death, beneficiaries may elect to receive
distributions as a lump sum or as an annuity contract. Participants may elect to
defer distributions.
In the event that the Board of Directors terminates the Plan, each participant's
interest in the Plan will remain fully vested and non-forfeitable. The Board of
Directors may require all participants and beneficiaries to withdraw such
amounts in cash, in kind, in any other form, or any combination thereof, as it
may determine in its sole discretion.
BASIS OF ACCOUNTING
The accounting records of the Plan are maintained on the accrual basis.
USE OF ESTIMATES
The preparation of financial statements in conformity with accounting principles
generally accepted in the United States requires management to make estimates
and assumptions that affect the amounts reported in the financial statements and
accompanying notes. Actual results may differ from those estimates.
EXPENSES
Fees paid to the Plan's trustee and other administrative expenses incurred in
connection with the operation of the Plan are paid by the participating
employers. Brokerage commissions and other expenses incurred in connection with
the purchase or sale of investments are paid by the Plan.
Pacific Century Financial Corporation Profit
Sharing Plan
Notes to Financial Statements (continued)
1. DESCRIPTION OF THE PLAN AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(CONTINUED)
INVESTMENTS
Investments are stated at fair value. Shares of Pacific Century Financial
Corporation stock are valued at quoted market prices. Shares of mutual funds are
valued at quoted market prices which represent the net asset value of shares
held by the Plan at year end. Units of the Vanguard Retirement Savings Trust are
valued at net asset value at year end. Participant loans are valued at their
outstanding balances, which approximate fair value.
Purchases and sales of investments are recorded on a trade-date basis. Interest
income is recorded on the accrual basis and dividends are recorded on the
ex-dividend date.
The net realized gain and loss on investments that were sold during the year and
the unrealized gain and loss on investments held at year end are reflected in
the Statements of Changes in Net Assets Available for Benefits as net
appreciation (depreciation) in fair value of investments. The net realized gain
and loss on investments sold is computed using the average cost method.
CONTRIBUTIONS
Contributions from employer and participants are accrued through December 31 in
the Statements of Changes in Net Assets Available for Benefits.
BENEFITS
Benefits are recorded when paid.
Pacific Century Financial Corporation Profit
Sharing Plan
Notes to Financial Statements (continued)
2. INVESTMENTS
The Vanguard Retirement Savings Trust is a collective trust investing in
investment contracts with selected insurance companies and commercial banks. The
contract value of investment contracts generally approximates fair value and
represents initial deposits, plus contributions and interest, less benefit
payments. The Vanguard Retirement Savings Trust allows for benefit responsive
withdrawals by the Plan at contract value, subject to certain market value
adjustments. The fair value of the investment contracts held by the Vanguard
Retirement Savings Trust at December 31, 2000 and 1999 were $21,822,000 and
$25,545,000, respectively.
During the years ended December 31, 2000 and 1999, the Plan's investments,
including investments bought, sold, as well as held during the year, depreciated
in fair value as follows:
YEAR ENDED DECEMBER 31
2000 1999
-----------------------
(IN THOUSANDS)
Mutual funds $ (11,760) $ 6,085
Common stock (2,231) (16,770)
-----------------------
Net depreciation in fair value of investments $ (13,991) $ (10,685)
=======================
The fair value of individual investments representing 5% or more of the Plan's
net assets at December 31, 2000 and 1999 are as follows:
DECEMBER 31
2000 1999
-----------------------
(IN THOUSANDS)
Vanguard Wellington Fund $ 30,861 $ 32,323
Vanguard Windsor Fund 34,984 36,460
500 Portfolio of the Vanguard Index Trust 33,291 36,563
Vanguard Retirement Savings Trust 21,822 25,545
Pacific Century Financial Corporation Stock Fund 47,691 52,436
Pacific Capital Growth Stock Fund 15,925 -*
*Investment balance has less than 5% of the Plan's net assets.
Pacific Century Financial Corporation Profit
Sharing Plan
Notes to Financial Statements (continued)
3. TRANSACTIONS AND AGREEMENTS WITH PARTIES IN INTEREST
The Pacific Century Financial Corporation Stock Fund invests in the common stock
of Pacific Century Financial Corporation.
The Pacific Capital Growth Stock Fund, Pacific Capital Growth & Income Fund,
Pacific Capital New Asia Growth Fund, Pacific Capital Short Intermediate U.S
Treasury Securities Unit Fund, Pacific Capital International Stock Fund, Pacific
Capital Small Cap Fund, Pacific Capital Value Fund, and the Pacific Capital
Diversified Fixed Income Unit Fund belong to a family of proprietary mutual
funds advised by Pacific Century Trust, a division of Bank of Hawaii.
The Vanguard Wellington Fund, Vanguard Windsor Fund, 500 Portfolio of the
Vanguard Index Trust, and Short-Term Federal Portfolio of the Vanguard Fixed
Income Securities Fund are mutual funds managed by an affiliate of Vanguard
Fiduciary Trust Company. The Vanguard Retirement Savings Trust is a collective
trust managed by an affiliate of Vanguard Fiduciary Trust Company. Vanguard
Fiduciary Trust Company acts as trustee for the Plan's investments.
4. INCOME TAX STATUS
The Internal Revenue Service has issued a determination letter dated May 10,
1997, stating that the Plan qualifies, in form, under Sections 401(a) and 401(k)
of the Internal Revenue Code of 1986, as amended (the Code), and the underlying
trust is, therefore, exempt from federal income taxes under Section 501(a) of
the Code. The Plan is required to operate in accordance with the Code to
maintain its tax qualification. The Benefit Plans Committee is not aware of any
course of actions or series of events that have occurred that might adversely
affect the Plan's qualified status. Subsequent amendments are structured to, and
are intended to, maintain the Plan's qualified status.
Supplemental Schedule
Pacific Century Financial Corporation Profit Sharing Plan
Employer ID Number: 99-0033900/ Plan Number: 091203
Schedule H, Line 4i - Schedule of Assets (Held At End of Year)
December 31, 2000
NUMBER OF CURRENT
DESCRIPTION SHARES COST VALUE
- --------------------------------------------------------------------------------------------
(IN THOUSANDS OF DOLLARS, EXCEPT FOR SHARES)
MUTUAL FUNDS
Pacific Capital Diversified Fixed Income Unit
Fund* 63,304 $ 658 $ 681
Pacific Capital Growth & Income Fund* 529,624 9,940 8,734
Pacific Capital New Asia Growth Fund* 287,435 3,189 2,782
Pacific Capital Short Intermediate U.S Treasury
Securities Unit Fund* 51,473 483 497
Pacific Capital Small Cap Fund* 42,759 438 486
Pacific Capital Growth Stock Fund* 1,201,924 20,580 15,925
Pacific Capital International Stock Fund* 110,468 1,649 1,146
Pacific Capital Value Fund* 38,688 398 365
Vanguard Wellington Fund* 1,093,972 27,135 30,861
Vanguard Windsor Fund* 2,287,997 34,632 34,984
500 Portfolio of the Vanguard Index Trust* 273,189 27,875 33,291
Short-Term Federal Portfolio of the Vanguard
Fixed Income Securities Fund* 186,483 1,883 1,897
---------
Total mutual funds 131,649
COLLECTIVE TRUST
Vanguard Retirement Savings Trust* 21,822,199 21,822 21,822
COMMON STOCK
Pacific Century Financial Corporation Stock
Fund* 2,515,362 36,930 47,691
PARTICIPANT LOANS - Interest rates ranging from
6.18% to 8.75% 4,759
---------
$ 205,921
=========
*Indicates an investment with a party-in-interest to the Plan
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in the Registration Statement (Form
S-8 No. 33-57267) pertaining to the Pacific Century Financial Corporation Profit
Sharing Plan, of our report dated May 11, 2001 with respect to the financial
statements and supplemental schedule of the Pacific Century Financial
Corporation Profit Sharing Plan included in this Annual Report (Form 11-K) for
the year ended December 31, 2000.
/s/ ERNST & YOUNG LLP
______________________
Ernst & Young LLP
Honolulu, Hawaii
June 27, 2001