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Filed pursuant to Rule 424(b)(2)
File No. 33-64786
PROSPECTUS SUPPLEMENT TO PROSPECTUS DATED JULY 23, 1993
$50,000,000
LOGO
FIRST HAWAIIAN, INC.
7 3/8% SUBORDINATED NOTES DUE MAY 1, 2006
------------------------
Interest on the Subordinated Notes is payable semiannually on May 1 and
November 1 of each year commencing November 1, 1996. The Subordinated Notes will
be available for purchase in denominations of $1,000 or any integral multiple
thereof. The Subordinated Notes will not be redeemable prior to maturity and do
not provide for any sinking fund. See "Description of Subordinated Notes".
The Subordinated Notes are unsecured and subordinated obligations of the
Corporation as described in the accompanying Prospectus under "Description of
Debt Securities -- Subordination of Debt Securities". Payment of the principal
of the Subordinated Notes may be accelerated only in the case of certain events
involving the bankruptcy, insolvency or reorganization of the Corporation. There
is no right of acceleration in the case of a default in the performance of any
covenant of the Corporation, including the payment of principal or interest. See
"Description of Debt Securities -- Events of Default and Limited Rights of
Acceleration" in the Prospectus.
The Subordinated Notes will be represented by one or more Global Notes
registered in the name of a nominee of The Depository Trust Company, as
depository. Beneficial interests in the Global Notes will be shown on, and
transfers thereof will be effected only through, records maintained by the
Depository and its participants. Except as described under "Description of Debt
Securities -- Global Securities" in the Prospectus, Subordinated Notes in
definitive form will not be issued and owners of beneficial interests in the
Global Notes will not be considered holders of the Subordinated Notes.
------------------------
THE SUBORDINATED NOTES ARE NOT SAVINGS ACCOUNTS, DEPOSITS OR OTHER
OBLIGATIONS OF A BANK OR SAVINGS ASSOCIATION AND ARE NOT INSURED
BY THE FEDERAL DEPOSIT INSURANCE CORPORATION OR
ANY OTHER GOVERNMENTAL AGENCY.
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THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS SUPPLEMENT OR THE PROSPECTUS TO WHICH IT RELATES.
ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
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INITIAL PUBLIC UNDERWRITING PROCEEDS TO
OFFERING PRICE(1) DISCOUNT(2) CORPORATION(1)(3)
---------------------------------------------------------------
Per Subordinated Note............. 100% .65% 99.35%
Total............................. $50,000,000 $325,000 $49,675,000
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(1) Plus accrued interest, if any, from April 29, 1996.
(2) The Corporation has agreed to indemnify the Underwriters against certain
liabilities, including liabilities under the Securities Act of 1933, as
amended. See "Underwriting".
(3) Before deducting expenses payable by the Corporation estimated at $125,000.
------------------------
The Subordinated Notes are offered severally by the Underwriters, as
specified herein, subject to receipt and acceptance by them and subject to their
right to reject any order in whole or in part. It is expected that delivery of
the Subordinated Notes will be made in New York, New York through the facilities
of the Depository on or about April 29, 1996.
GOLDMAN, SACHS & CO. DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
------------------------
The date of this Prospectus Supplement is April 24, 1996
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IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVER-ALLOT OR EFFECT
TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE SUBORDINATED
NOTES AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET.
SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME.
THE CORPORATION
First Hawaiian, Inc. (the "Corporation") is a holding company incorporated
under the laws of the State of Delaware and registered as a banking holding
company under the Bank Holding Company Act of 1956, as amended (the "BHC Act"),
and as a savings and loan holding company under the Home Owners' Loan Act, as
amended. The Corporation, through its subsidiaries, conducts a general
commercial banking business and other businesses related to banking. At December
31, 1995, on a consolidated basis, the Corporation had consolidated total assets
of $7.6 billion, total deposits of $5.4 billion and total stockholders' equity
of $649.5 million.
The Corporation's principal subsidiary is First Hawaiian Bank (the "Bank"),
a full-service bank and the oldest financial institution in Hawaii. The Bank,
which is headquartered in Honolulu, Hawaii, is a Hawaii-chartered bank the
deposits of which are insured by the Bank Insurance Fund of the Federal Deposit
Insurance Corporation ("FDIC"). The Bank operates 58 branches located throughout
the State of Hawaii, two banking offices in Guam, an offshore branch in Grand
Cayman, British West Indies, and a representative office in Tokyo, Japan. As of
December 31, 1995, the Bank was the second largest bank in Hawaii in terms of
total assets.
Pioneer Federal Savings Bank ("Pioneer"), a federally chartered savings
bank headquartered in Honolulu, Hawaii, also is a subsidiary of the Corporation.
Pioneer operates 19 branch offices located throughout the State of Hawaii and
its deposits are insured by the Savings Association Insurance Fund ("SAIF") of
the FDIC. As of December 31, 1995, Pioneer was the fourth largest SAIF-insured
institution in Hawaii in terms of total assets.
The Corporation's other major subsidiaries include First Hawaiian
Creditcorp, Inc., an FDIC-insured financial services loan company, and First
Hawaiian Leasing, Inc., which is primarily engaged in commercial equipment and
vehicle leasing.
PENDING ACQUISITION
In December 1995, the Corporation entered into agreements to acquire 31
branches located in the states of Oregon, Washington and Idaho from certain bank
and thrift subsidiaries of U.S. Bancorp and West One Bancorp (the "Branch
Purchase Transactions"). Pursuant to these agreements, the Corporation will
purchase certain assets, including approximately $426 million in loans, and
assume certain liabilities, consisting principally of approximately $741 million
in deposits. The Corporation will pay a deposit premium of 5.25% (approximately
$39 million) on the deposits assumed. To effect this acquisition, the
Corporation is organizing a new bank subsidiary under Oregon law, to be known as
Pacific One Bank. Pacific One Bank will acquire the 27 branches located in
Oregon and Idaho and Pioneer will acquire the remaining four branches located in
Washington state.
The Branch Purchase Transactions will be accounted for using the purchase
method of accounting, and are subject to various state and federal regulatory
approvals. The Corporation anticipates that this acquisition will be consummated
during the second quarter of 1996.
USE OF PROCEEDS
The Corporation intends to use the entire net proceeds from the sale of the
7 3/8% Subordinated Notes Due May 1, 2006 offered hereby (the "Subordinated
Notes") to finance the Branch Purchase Transactions. If the Branch Purchase
Transactions are not consummated for any reason, such net proceeds will be used
for general corporate purposes, including investments in, or extensions of
credit to, the Corporation's existing and future subsidiaries. The Subordinated
Notes are intended to qualify as Tier 2 or supplementary capital under the
capital guidelines established by the Board of Governors of the Federal Reserve
System.
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CAPITALIZATION
The following table sets forth the consolidated capitalization of the
Corporation as of December 31, 1995, and as adjusted to give effect to the
issuance of the Subordinated Notes offered hereby. This table should be read in
conjunction with the Corporation's consolidated financial statements and the
notes thereto incorporated by reference herein. See "Incorporation of Certain
Documents by Reference" and "Available Information" in the Prospectus.
AS OF DECEMBER 31, 1995
------------------------
ACTUAL AS ADJUSTED
-------- -----------
(IN THOUSANDS)
Long-Term Debt
Note due 1997..................................................... $ 50,000 $ 50,000
Subordinated Notes................................................ 100,000 150,000
Subsidiary obligations(1)......................................... 88,752 88,752
-------- -----------
Total long-term debt...................................... 238,752 288,752
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Stockholders' Equity
Common stock, $5.00 par value; 100,000,000 shares authorized,
32,542,797 shares issued and outstanding(2).................... 162,713 162,713
Surplus........................................................... 133,925 133,925
Retained earnings................................................. 385,976 385,976
Unrealized valuation adjustment................................... 5,489 5,489
Treasury stock, at cost (1,397,957 shares)........................ (38,566) (38,566)
-------- -----------
Total stockholders' equity................................ 649,537 649,537
-------- -----------
Total long-term debt and stockholders' equity............. $888,289 $ 938,289
========= ==========
Capital Ratios
Average stockholders' equity to average total assets.............. 8.50% 8.45%
Tier 1 risk-based capital ratio................................... 9.03% 9.03%
Total risk-based capital ratio.................................... 11.88% 12.68%
Tier 1 leverage ratio............................................. 7.72% 7.66%
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Notes:
(1) Consists primarily of borrowings by First Hawaiian Creditcorp, Inc. and
Pioneer from the Federal Home Loan Bank of Seattle.
(2) Includes 1,397,957 shares of treasury stock repurchased at an aggregate cost
of $38,566,000, to be held by the Corporation or used for corporate
purposes as designated by the Board of Directors.
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SELECTED CONSOLIDATED FINANCIAL INFORMATION
The following information is qualified in its entirety by the detailed
information and financial statements incorporated herein by reference. See
"Incorporation of Certain Documents by Reference" and "Available Information" in
the Prospectus. Income statement and balance sheet data for the five-year period
ended December 31, 1995 are derived from the audited consolidated financial
statements of the Corporation.
AS OF AND FOR THE
YEAR ENDED DECEMBER 31,
------------------------------------------------------------
1995 1994 1993 1992 1991
-------- -------- -------- -------- --------
INCOME STATEMENT DATA:
(in thousands)
Interest income .................................... $559,957 $475,760 $428,931 $475,574 $517,019
Interest expense ................................... 265,297 179,688 150,709 206,783 264,043
Net interest income................................. 294,660 296,072 278,222 268,791 252,976
Provision for loan and lease losses................. 38,107 22,922 13,262 12,812 10,252
Noninterest income.................................. 94,878 86,672 79,587 69,597 61,963
Noninterest expenses................................ 229,293 248,321 225,442 197,696 184,487
Income before income taxes and cumulative effect of
a change in accounting principle.................. 122,138 111,501 119,105 127,880 120,200
Income taxes........................................ 45,133 38,990 40,898 40,980 38,490
Cumulative effect of a change in accounting
principle......................................... -- -- 3,650 -- --
-------- -------- -------- -------- --------
Net income.......................................... $ 77,005 $ 72,511 $ 81,857 $ 86,900 $ 81,710
========= ========= ========= ========= =========
COMMON STOCK DATA:
Per share data:
Net income........................................ $ 2.43 $ 2.25 $ 2.52 $ 2.70 $ 2.55
Cash dividends.................................... 1.18 1.18 1.135 1.06 .95
Average shares outstanding (in thousands)........... 31,735 32,259 32,505 32,225 32,079
BALANCE SHEET DATA:
(in millions)
Average Balances:
Total assets...................................... $ 7,528 $ 7,200 $ 6,755 $ 6,537 $ 6,007
Loans and leases ................................. 5,461 5,172 4,619 4,358 3,837
Deposits.......................................... 5,178 5,082 5,069 5,084 5,159
Stockholders' equity.............................. 640 618 584 526 470
SELECTED RATIOS:
Performance Ratios(1)
Return on average total assets.................... 1.02% 1.01% 1.21% 1.33% 1.36%
Return on average stockholders' equity............ 12.03% 11.73% 14.01% 16.52% 17.38%
Net interest margin............................... 4.36% 4.63% 4.69% 4.62% 4.74%
Capital Ratios
Average stockholders' equity to average total
assets............................................ 8.50% 8.58% 8.65% 8.05% 7.82%
Tier 1 risk-based capital ratio..................... 9.03% 9.31% 9.80% 10.49% 9.03%
Total risk-based capital ratio...................... 11.88% 12.06% 12.84% 11.67% 10.17%
Tier 1 leverage ratio............................... 7.72% 7.51% 7.45% 7.72% 6.80%
Asset Quality Ratios
Allowance for loan and lease losses to total loans
and leases (year end)............................. 1.50% 1.11% 1.23% 1.28% 1.27%
Net loans and leases charged off to average loans
and leases........................................ .38% .46% .27% .27% .13%
Nonperforming loans and leases(1) to total loans and
leases (year end):
Excluding past due accruing loans and leases...... 1.58% 1.07% 1.19% 1.63% .86%
Including past due accruing loans and leases...... 2.12% 1.67% 1.99% 2.89% 1.47%
Nonperforming assets(2) to total loans and leases
and other real estate owned (year end):
Excluding past due accruing loans and leases...... 1.75% 1.14% 1.44% 1.65% .90%
Including past due accruing loans and leases...... 2.30% 1.74% 2.24% 2.92% 1.52%
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AS OF AND FOR THE
YEAR ENDED DECEMBER 31,
------------------------------------------------------------
1995 1994 1993 1992 1991
-------- -------- -------- -------- --------
Allowance for loan and lease losses to nonperforming
loans and leases (including past due accruing
loans and leases)................................. .70x .66x .62x .44x .86x
Ratio of Earnings to Fixed Charges(3)
Excluding interest on deposits...................... 2.30x 2.72x 4.15x 4.48x 7.44x
Including interest on deposits...................... 1.45x 1.60x 1.71x 1.57x 1.44x
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(1) Nonperforming loans and leases are comprised of (i) nonaccrual loans and
leases, (ii) renegotiated loans and (iii) except as otherwise indicated,
loans and leases past due 90 days or more still outstanding and still
accruing ("past due accruing loans and leases").
(2) Nonperforming assets are comprised of nonperforming loans and leases and
other real estate owned.
(3) For purposes of computing the above ratios, earnings represent income before
income taxes and cumulative effect of a change in accounting principle plus
fixed charges. Fixed charges, excluding interest on deposits, include
interest (other than on deposits), whether expensed or capitalized, and that
portion of rental expense (generally one third) deemed representative of the
interest factor. Fixed charges, including interest on deposits, include all
interest, whether expensed or capitalized, and that portion of rental
expense (generally one third) deemed representative of the interest factor.
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RECENT DEVELOPMENTS
NET INCOME
On April 18, 1996, the Corporation reported consolidated net income for the
first quarter of 1996 of $20,203,000 compared to $18,770,000 for the first
quarter of 1995, an increase of 7.6%.
On an annualized basis, the Corporation's return on average total assets
for the first quarter of 1996 was 1.11% compared to 1.00% for the same period in
1995, and return on average stockholders' equity was 12.44% and 12.07%,
respectively, for such periods.
On a per share basis, consolidated net income for the first quarter of 1996
was $.65, an increase of 10.2% over the same period in 1995. The proportionately
greater increase in earnings per share was attributable to the fewer average
number of shares outstanding in 1996 as compared to 1995, as a result of the
Corporation's stock repurchase plan which authorized the total repurchase of up
to 1.6 million shares, or five percent of the Corporation's approximately 31
million shares outstanding.
NET INTEREST INCOME
Net interest income, on a fully taxable equivalent basis, increased
$2,265,000, or 3.0%, to $76,606,000 for the three months ended March 31, 1996,
up from $74,341,000 for the same period in 1995.
The net interest margin was 4.58% for the first quarter of 1996, up 24
basis points over the first quarter of 1995.
LOANS AND LEASES AND DEPOSITS
Total loans and leases at March 31, 1996 totalled $5,206,288,000, a
decrease of 1.0% from December 31, 1995. Total deposits at March 31, 1996
decreased $71,173,000, or 1.3%, to $5,287,140,000 from December 31, 1995.
PROVISION AND ALLOWANCE FOR LOAN AND LEASE LOSSES
For the first quarter of 1996, the provision for loan and lease losses was
$3,322,000, a decrease of $18,000, or .5%, as compared to the same period in
1995.
Net charge-offs for the first quarter of 1996 were $2,470,000, a decrease
of $884,000, or 26.4%, compared to the same period in 1995.
The allowance for loan and lease losses at March 31, 1996 was $79,585,000
and represented 1.52% of outstanding loans and leases. This ratio was 1.50% as
of December 31, 1995.
NONINTEREST INCOME
Exclusive of securities transactions, noninterest income totalled
$23,948,000 for the first quarter of 1996, an increase of 4.2% over the same
period in 1995.
Securities transactions resulted in net pre-tax gains of $20,000 for the
first quarter of 1996 compared to net pre-tax gains of $1,000 for the same
period in 1995.
NONINTEREST EXPENSES
Noninterest expenses totalled $67,406,000 for the first quarter of 1996, an
increase of 6.4% over the first quarter of 1995. The increase was primarily as a
result of a pre-tax loss of $1,925,000 recognized on the sale of a certain
leveraged lease. On an after-tax basis the Corporation recorded a gain of
$399,000 due to a net tax benefit of $2,344,000 resulting from the reversal of
the related
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tax liabilities. Excluding the aforementioned pre-tax loss, noninterest expenses
increased $2,136,000, or 3.4%, over the same period in 1995.
NONPERFORMING ASSETS
Nonperforming loans and leases (excluding 90 days past due accruing loans
and leases) at March 31, 1996 were $77,413,000 compared to $82,915,000 at
December 31, 1995. Total nonperforming assets (including other real estate
owned, but excluding 90 days past due accruing loans and leases) at March 31,
1996 were $90,360,000 compared to $92,227,000 at December 31, 1995. Loans and
leases past due 90 days or more and still accruing interest totalled $22,360,000
at March 31, 1996 compared to $28,790,000 at December 31, 1995.
STOCKHOLDERS' EQUITY
Stockholders' equity was $657,229,000 at March 31, 1996, a 1.2% increase
from $649,537,000 at December 31, 1995. Average stockholders' equity represented
8.89% of average total assets for the first quarter of 1996 compared to 8.30% in
the same quarter last year.
DESCRIPTION OF SUBORDINATED NOTES
The following is a brief description of the terms of the Subordinated
Notes. This description does not purport to be complete, should be read in
conjunction with the statements under "Description of Debt Securities" in the
Prospectus and is subject to and qualified in its entirety by reference to the
Indenture, dated as of August 9, 1993 (the "Indenture"), between the Corporation
and The First National Bank of Chicago, as Trustee (the "Trustee"), pursuant to
which the Subordinated Notes are to be issued. A copy of the form of Indenture
has been filed as an exhibit to the Registration Statement of which the
Prospectus is a part. Capitalized terms not defined herein have the meanings
assigned to such terms in the Prospectus or the Indenture.
GENERAL
The Subordinated Notes will mature on May 1, 2006, bear interest at the
rate of 7 3/8% per annum and are limited to $50,000,000 aggregate principal
amount. Interest on the Subordinated Notes will be payable semi-annually on May
1 and November 1 of each year commencing November 1, 1996 to the Person in whose
name the Subordinated Note is registered at the close of business on the
preceding April 15 or October 15, as the case may be.
Principal of and interest on the Subordinated Notes will be payable, and
the transfer of Subordinated Notes will be registrable, through The Depository
Trust Company, as depository (the "Depository"), as described under "Description
of Debt Securities -- Global Securities" in the Prospectus. The Subordinated
Notes will be sold in denominations of $1,000 and integral multiples thereof.
The Subordinated Notes will not be redeemable by the Corporation, in whole
or in part, prior to their final stated maturity and do not provide for any
sinking fund.
The Subordinated Notes will be unsecured and subordinated obligations of
the Corporation which will be subordinate in right of payment to all Senior
Indebtedness of the Corporation and, in certain circumstances, to all Other
Financial Obligations of the Corporation. See "Description of Debt
Securities -- Subordination of Debt Securities" in the Prospectus. At December
31, 1995, the Corporation had outstanding (excluding accrued interest)
approximately $50,000,000 of Senior Indebtedness. At December 31, 1995, the
Corporation, on a parent company only basis, had outstanding $24.0 million in
aggregate notional principal amount of interest rate swaps (included in Other
Financial Obligations). The Indenture does not limit or prohibit the incurrence
of additional Senior Indebtedness or Other Financial Obligations.
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Payment of the principal of the Subordinated Notes may be accelerated only
in the case of certain events involving the bankruptcy, insolvency or
reorganization of the Corporation. There is no right of acceleration in the case
of a default in the performance of any covenant of the Corporation, including
the payment of principal or interest on the Subordinated Notes. See "Description
of Debt Securities -- Events of Default and Limited Rights of Acceleration" in
the Prospectus.
GLOBAL NOTES
The Subordinated Notes will be issued in the form of one or more fully
registered global notes (the "Global Notes") which will be deposited with, or on
behalf of, the Depository and registered in the name of the Depository or a
nominee of the Depository. Global Notes will not be transferable or exchangeable
for Subordinated Notes in certificated form except under the limited
circumstances described in the Prospectus under "Description of Debt
Securities -- Global Securities".
The Depository has advised the Corporation as follows: it is a
limited-purpose trust company organized under the laws of the State of New York,
a member of the Federal Reserve System, a "clearing corporation" within the
meaning of the New York Uniform Commercial Code and a "clearing agency"
registered pursuant to the provisions of Section 17A of the Securities Exchange
Act of 1934, as amended. The Depository holds securities for its participating
organizations ("Participants") and facilitates the clearance and settlement of
securities transactions between Participants in such securities through
electronic book-entry changes in accounts of Participants. Participants include
securities brokers and dealers (including the Underwriters), banks and trust
companies, clearing corporations and certain other organizations. Access to the
Depository's system is also available to others such as banks, brokers, dealers
and trust companies that clear through or maintain a custodial relationship with
a Participant, either directly or indirectly ("Indirect Participants"). Persons
who are not Participants may beneficially own securities held by the Depository
only through Participants or Indirect Participants.
A further description of the Depository's procedures with respect to the
Global Notes is set forth in the Prospectus under "Description of Debt
Securities -- Global Securities". The Depository has confirmed to the
Corporation that it intends to follow such procedures.
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UNDERWRITING
Subject to the terms and conditions set forth in the Underwriting
Agreement, the Corporation has agreed to sell to each of the Underwriters named
below, and each of the Underwriters has severally agreed to purchase, the
principal amount of the Subordinated Notes set forth opposite its name below:
PRINCIPAL
AMOUNT OF
SUBORDINATED
UNDERWRITER NOTES
---------------------------------------------------------------------- -----------
Goldman, Sachs & Co. ................................................. $30,000,000
Donaldson, Lufkin & Jenrette Securities Corporation................... 20,000,000
-----------
Total....................................................... $50,000,000
============
Under the terms and conditions of the Underwriting Agreement, the
Underwriters are obligated to take and pay for all of the Subordinated Notes, if
any are taken.
The Underwriters propose to offer the Subordinated Notes in part directly
to retail purchasers at the initial public offering price set forth on the cover
page of this Prospectus Supplement and in part to certain securities dealers at
such price, less a concession of .40% of the principal amount of the
Subordinated Notes. The Underwriters may allow, and such dealers may reallow, a
concession not to exceed .25% of the principal amount of the Subordinated Notes
to certain brokers and dealers. After the Subordinated Notes are released for
sale to the public, the offering price and other selling terms may from time to
time be varied by the Underwriters.
The Subordinated Notes are a new issue of securities with no established
trading market. The Corporation has been advised by the Underwriters that they
intend to make a market in the Subordinated Notes but they are not obligated to
do so and may discontinue market making at any time without notice. No assurance
can be given as to the liquidity of the trading market for the Subordinated
Notes.
The Corporation has agreed to indemnify the several Underwriters against
certain liabilities, including liabilities under the Securities Act of 1933, as
amended.
The Underwriters and affiliates of the Underwriters engage in transactions
with and perform services for the Corporation in the ordinary course of business
which may include, among other things, investment banking transactions and
services.
VALIDITY OF SUBORDINATED NOTES
The validity of the Subordinated Notes offered hereby will be passed upon
for the Corporation by Simpson Thacher & Bartlett (a partnership which includes
professional corporations), New York, New York, and for the Underwriters by
Sullivan & Cromwell, Los Angeles, California.
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PROSPECTUS
$150,000,000
First Hawaiian, Inc.
Subordinated Debt Securities
First Hawaiian, Inc. (the "Corporation") may offer from time to time
subordinated debt securities in one or more series (the "Debt Securities") at an
aggregate initial offering price not to exceed $150,000,000 on terms to be
determined at the time of sale. The specific title, aggregate principal amount,
maturity, rate and time of payment of interest (if any), purchase price, any
terms for redemption, and other special terms of a specific series of Debt
Securities being offered ("Offered Debt Securities") will be set forth in a
supplement to this Prospectus ("Prospectus Supplement"). If the depositary
arrangements with respect to a specific series of Offered Debt Securities are
set forth in the applicable Prospectus Supplement relating to such series, the
Offered Debt Securities of such series may be issued in whole or in part in
global form.
The Debt Securities will be subordinated to all existing and future Senior
Indebtedness of the Corporation and, under certain circumstances, to Other
Financial Obligations (as defined herein). Unless otherwise indicated in the
applicable Prospectus Supplement, the maturity of the Debt Securities will be
subject to acceleration only in the case of certain events of bankruptcy,
insolvency or reorganization of the Corporation. See "Description of Debt
Securities."
The Debt Securities may be sold to underwriters for public offering
pursuant to terms of offering described in the applicable Prospectus Supplement.
In addition, the Debt Securities may be sold to purchasers directly by the
Corporation or through agents designated from time to time by the Corporation.
If any underwriters or agents are involved in the sale of the Offered Debt
Securities, their names and any applicable fee, commission or discount
arrangements with them will be set forth in the applicable Prospectus
Supplement. See "Plan of Distribution."
THE DEBT SECURITIES ARE NOT SAVINGS ACCOUNTS, DEPOSITS OR OTHER OBLIGATIONS
OF A BANK OR SAVINGS ASSOCIATION AND ARE NOT INSURED BY THE FEDERAL DEPOSIT
INSURANCE CORPORATION OR ANY OTHER GOVERNMENTAL AGENCY.
---------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED ON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
---------------------
This Prospectus may not be used to consummate sales of Offered Debt
Securities unless accompanied by a Prospectus Supplement.
The date of this Prospectus is July 23, 1993.
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AVAILABLE INFORMATION
The Corporation is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and in
accordance therewith files reports, proxy statements and other information with
the Securities and Exchange Commission (the "Commission"). Such reports, proxy
statements and other information filed by the Corporation can be inspected and
copied at the Commission's public reference room located at 450 Fifth Street,
N.W., Washington, D.C. 20549, and at the public reference facilities located at
the following Regional Offices of the Commission: Northwestern Atrium Center,
500 West Madison Street, Suite 1400, Chicago, Illinois 60661 and 7 World Trade
Center, 13th Floor, New York, New York 10007. Copies of such materials can also
be obtained from the Public Reference Section of the Commission at Room 1024,
450 Fifth Street, N.W., Washington, D.C. 20549 at prescribed rates.
The Corporation has filed with the Commission a registration statement on
Form S-3 (together with all amendments and exhibits thereto, the "Registration
Statement") under the Securities Act of 1933, as amended (the "Securities Act"),
with respect to the Debt Securities. This Prospectus does not contain all of the
information set forth in the Registration Statement, certain parts of which are
omitted in accordance with the rules and regulations of the Commission. Such
additional information may be obtained from the Commission as set forth above.
Statements contained in this Prospectus or in any document incorporated by
reference in this Prospectus as to the contents of any contract or other
document referred to herein or therein are not necessarily complete, and, in
each instance, reference is made to the copy of such contract or other document
filed as an exhibit to the Registration Statement or such other document, each
such statement being qualified in all respects by such reference.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed with the Commission by the Corporation under
the Exchange Act are incorporated in and made a part of this Prospectus by
reference:
(a) the Corporation's Annual Report on Form 10-K for the year ended
December 31, 1992;
(b) the Corporation's Quarterly Report on Form 10-Q for the quarter
ended March 31, 1993; and
(c) the Corporation's Current Report on Form 8-K filed with the
Commission on March 1, 1993.
All documents filed by the Corporation pursuant to Section 13(a), 13(c), 14
or 15(d) of the Exchange Act after the date of this Prospectus and prior to the
termination of the offering of the Debt Securities are hereby incorporated by
reference herein and such documents are deemed to be a part hereof from the date
of filing of such documents. Any statement contained herein or in a document
incorporated or deemed to be incorporated by reference herein shall be modified
or superseded for the purposes of this Prospectus to the extent that a statement
contained herein or in any other subsequently filed document which is or is
deemed to be incorporated by reference herein modifies or supersedes such
statement. Any such statement so modified or superseded shall not, except as so
modified or superseded, be deemed to constitute a part of this Prospectus.
The Corporation will provide without charge to each person, including any
beneficial owner, to whom a copy of this Prospectus has been delivered, on the
written or oral request of such person, a copy of any or all of the documents
referred to above which have been or may be incorporated in this Prospectus by
reference (other than exhibits to such documents, unless such exhibits are
specifically incorporated by reference into such documents). Requests for such
copies should be directed to: Corporate Secretary, First Hawaiian, Inc., P.O.
Box 3200, Honolulu, Hawaii 96847, telephone (808) 525-8144, fax (808) 525-6204.
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THE CORPORATION
The Corporation is a bank holding company registered under the Bank Holding
Company Act of 1956, as amended (the "BHC Act"), and incorporated under the laws
of the State of Delaware in 1973. The Corporation, through its subsidiaries,
conducts a general commercial banking business and other businesses related to
banking. At March 31, 1993, the Corporation had total consolidated assets of
$6.5 billion, deposits of $4.9 billion and stockholders' equity of $574.8
million.
The Corporation's principal subsidiary is First Hawaiian Bank (the "Bank"),
a state-chartered bank which is not a member of the Federal Reserve System and
which is the oldest financial institution in Hawaii. As of March 31, 1993, the
Bank had a main office and 62 branches throughout Hawaii, two branches in Guam,
an offshore branch in Grand Cayman, British West Indies and a representative
office in Tokyo, Japan.
Other major subsidiaries of the Corporation include First Hawaiian
Creditcorp, Inc. ("Creditcorp"), Hawaii's second largest financial services loan
company (based on total assets at December 31, 1992), and First Hawaiian
Leasing, Inc., which is primarily engaged in commercial equipment and vehicle
leasing.
In February 1993, the Corporation entered into a merger agreement (the
"Merger Agreement") with Pioneer Fed BanCorp, Inc. ("Pioneer Holdings"), a
savings and loan holding company with consolidated assets of $598.1 million at
May 31, 1993. Pursuant to the Merger Agreement, Pioneer Holdings will be merged
into the Corporation (the "Pioneer Merger") and the sole direct subsidiary of
Pioneer Holdings, Pioneer Federal Savings Bank ("Pioneer Savings Bank"), a
federal stock savings bank with branches throughout Hawaii, will become a
wholly-owned subsidiary of the Corporation. The proposed Pioneer Merger is
subject to certain conditions, including approval by certain regulatory
authorities and the stockholders of Pioneer Holdings.
The Corporation is a legal entity separate and distinct from its
subsidiaries and other affiliates. The principal source of the Corporation's
income is earnings from its subsidiaries and the principal source of the
Corporation's cash flow is dividends from its subsidiaries. Accordingly, the
right of the Corporation, and thus the right of the Corporation's creditors, to
participate in any distribution of assets or earnings of the Corporation's
subsidiaries is necessarily subject to the prior claims of creditors of such
subsidiaries, except to the extent that any claims of the Corporation in its
capacity as creditor may be recognized. In addition, there are various legal
limitations on the ability of the Bank to finance or otherwise supply funds to
the Corporation or certain of its affiliates. See "Regulatory Matters" below for
a more complete description of these restrictions.
The Corporation's principal executive offices are located at the 1132
Bishop Street, Honolulu, Hawaii 96813 (telephone (808) 525-7000).
CONSOLIDATED RATIOS OF EARNINGS TO FIXED CHARGES
The following table sets forth the consolidated ratios of earnings to fixed
charges for the Corporation for the periods indicated.
THREE MONTHS
ENDED MARCH
31, YEAR ENDED DECEMBER 31,
------------ ------------------------------------
1993 1992 1992 1991 1990 1989 1988
---- ---- ---- ---- ---- ---- ----
Ratio of Earnings to Fixed Charges:
Excluding interest on deposits............ 4.08x 4.59x 4.48x 7.44x 9.16x 8.28x 5.99x
Including interest on deposits............ 1.59 1.50 1.57 1.44 1.37 1.33 1.31
For purposes of computing the above ratios, earnings represent income
before income taxes plus fixed charges. Fixed charges, excluding interest on
deposits, include interest (other than on
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deposits), whether expensed or capitalized, and that portion of rental expense
( 1/3 of rental expense) deemed representative of the interest factor. Fixed
charges, including interest on deposits, include all interest, whether expensed
or capitalized, and that portion of rental expense ( 1/3 of rental expense)
deemed representative of the interest factor.
USE OF PROCEEDS
Except as otherwise specified in an applicable Prospectus Supplement, the
Corporation will use the net proceeds from the sale of Debt Securities for
general corporate purposes, including investments in, or extensions of credit
to, its existing and future subsidiaries and for the acquisition of other
banking and financial institutions.
The precise amounts and timing of the application of proceeds will depend
on various factors existing at the time of offering of the Offered Debt
Securities, including the subsidiaries' funding requirements and the
availability of other funds.
REGULATORY MATTERS
The Corporation is a bank holding company subject to supervision and
regulation by the Board of Governors of the Federal Reserve System (the "Federal
Reserve Board") under the BHC Act. In general, the BHC Act and regulations
promulgated by the Federal Reserve Board limit the business of bank holding
companies to owning or controlling banks and engaging in such other activities
as the Federal Reserve Board may determine to be so closely related to banking
or managing or controlling banks as to be a proper incident thereto. With
certain exceptions, the BHC Act prohibits bank holding companies from acquiring
direct or indirect ownership or control of more than 5% of any class of voting
shares in any company, including any bank, without the prior approval of the
Federal Reserve Board.
The subsidiaries of the Corporation are subject to regulation and
supervision by various regulatory agencies, including the state banking
authorities of Hawaii, the Federal Reserve Board and the Federal Deposit
Insurance Corporation (the "FDIC"). Various consumer laws and regulations also
affect the operations of the Corporation's subsidiaries. Pioneer Savings Bank is
supervised and regulated by the Office of Thrift Supervision (the "OTS") and
upon completion of the pending acquisition, the Corporation would also be
subject to supervision and regulation by the OTS as a savings and loan holding
company.
LIMITS ON DIVIDENDS AND OTHER PAYMENTS
The principal source of the Corporation's cash revenue has been dividends
and interest received from the Bank and other subsidiaries of the Corporation.
Under Hawaii law, the Bank is prohibited from declaring or paying any dividends
in excess of its undivided profits. At March 31, 1993, the Bank could have
declared and paid dividends to the Corporation of approximately $204.6 million
without prior State regulatory approval. In addition, if in the opinion of the
FDIC, a bank under its jurisdiction is engaged in or is about to engage in an
unsafe or unsound practice (which, depending on the financial condition of the
bank, could include the payment of dividends), such authority may require, after
notice and hearing, that such bank cease and desist from such practice. The
Federal Reserve Board and the FDIC have issued policy statements which provide
that, as a general matter, insured banks and bank holding companies may pay
dividends only out of current operating earnings.
There are also statutory limits on the transfer of funds to the Corporation
and certain of its nonbanking subsidiaries by the Bank, whether in the form of
loans or other extensions of credit, investments or asset purchases. Such
transfers by the Bank to the Corporation or any such nonbanking subsidiary are
limited in amount to 10% of the Bank's capital and surplus, or 20% in the
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aggregate. Furthermore, such loans and extensions of credit are required to be
collateralized in specified amounts.
HOLDING COMPANY STRUCTURE
Under Federal Reserve Board policy, a bank holding company is expected to
act as a source of financial strength to its subsidiary banks and to make
capital injections into a troubled subsidiary bank, and the Federal Reserve
Board may charge the bank holding company with engaging in unsafe and unsound
practices for failure to commit resources to a subsidiary bank when required.
Any required capital injection may be called for at a time when the Corporation
may not have the resources to provide it. Any capital loans by the Corporation
to its subsidiary bank would be subordinate in right of payment to deposits and
to certain other indebtedness of such subsidiary bank.
In addition, under the Financial Institutions Reform, Recovery and
Enforcement Act of 1989, depository institutions insured by the FDIC can be held
liable for any losses incurred by, or reasonably expected to be incurred by, the
FDIC after August 9, 1989 in connection with (i) the default of a commonly
controlled FDIC-insured depository institution or (ii) any assistance provided
by the FDIC to a commonly controlled FDIC-insured depository institution in
danger of default. "Default" is defined generally as the appointment of a
conservator or receiver and "in danger of default" is defined generally as the
existence of certain conditions indicating that a "default" is likely to occur
in the absence of regulatory assistance. Accordingly, in the event that any
insured subsidiary of the Corporation causes a loss to the FDIC, other insured
subsidiaries of the Corporation could be required to compensate the FDIC by
reimbursing it for the estimated amount of such loss.
For a description of certain other requirements relating to capital
distributions between depository institutions and bank holding companies and the
potential obligation of a bank holding company to guarantee the capital
restoration plans of any of its undercapitalized depository institution
subsidiaries, see "Federal Deposit Insurance Corporation Improvement Act of
1991."
CAPITAL REQUIREMENTS
Bank holding companies are required to comply with risk-based capital
guidelines established by the Federal Reserve Board. The guidelines, which were
fully phased in at the end of 1992, establish a framework that is intended to
make regulatory capital requirements more sensitive to differences in risk
profiles among banking organizations and take off-balance sheet exposures into
explicit account in assessing capital adequacy. The risk-based ratios are
determined by allocating assets and specified off-balance sheet commitments into
four risk-weight categories, with higher levels of capital being required for
categories perceived as representing greater risk. The Bank is subject to
substantially similar capital requirements adopted by the FDIC.
Generally, under the applicable guidelines, a banking organization's
capital is divided into two tiers. "Tier 1", or core capital, includes common
equity, perpetual preferred stock (excluding auction rate issues) and minority
interests in equity accounts of consolidated subsidiaries, less goodwill and
other intangibles, subject to certain exceptions described below. "Tier 2", or
supplementary capital, includes, among other things, limited-life preferred
stock, hybrid capital instruments, mandatory convertible securities, qualifying
subordinated debt, and the allowance for loan losses, subject to certain
limitations, less required deductions. "Total capital" is the sum of Tier 1 and
Tier 2 capital. The Tier 1 component must comprise at least 50% of qualifying
total capital.
Banking organizations that are subject to the guidelines are required to
maintain a ratio of Tier 1 capital to risk-weighted assets of at least 4% and a
ratio of total capital to risk-weighted assets of at least 8%. The appropriate
regulatory authority may set higher capital requirements when an organization's
particular circumstances warrant.
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The Federal Reserve Board and the FDIC have also adopted leverage capital
guidelines to which the Corporation and the Bank are subject. The guidelines
provide for a minimum leverage ratio (Tier 1 capital to adjusted total assets)
of 3% for financial institutions that have the highest regulatory examination
ratings and are not experiencing or anticipating significant growth. Financial
institutions not meeting these criteria are required to maintain leverage ratios
of at least one to two percentage points higher.
On December 9, 1992, the Federal Reserve Board adopted changes to its
risk-based and leverage ratio requirements that require that all intangibles,
with certain exceptions, be deducted from Tier 1 capital. Under the Federal
Reserve Board's final rules, the only types of identifiable intangible assets
that may be included in capital are readily marketable, purchased mortgage
servicing rights ("PMSRs") and purchased credit card relationships ("PCCRs"),
provided that, in the aggregate, the total amount of PMSRs and PCCRs included in
capital does not exceed 50% of Tier 1 capital. PCCRs are subject to a separate
sublimit of 25% of Tier 1 capital. The amount of PMSRs and PCCRs that may be
included in capital is limited to the lesser of (i) 90% of such assets' fair
market value (as determined under the guidelines) and (ii) 100% of such assets'
book value, each determined quarterly. Identifiable intangible assets other than
PMSRs or PCCRs, including core deposit intangibles, acquired on or before
February 19, 1992 (the date the Federal Reserve Board issued its original
proposal for public comment) generally will not be deducted for supervisory
purposes but will be deducted for purposes of evaluating applications filed by
bank holding companies. These revisions are effective for periods commencing
after December 31, 1992.
On June 9, 1993, the FDIC approved a notice of proposed rulemaking,
soliciting comment on proposed revisions to the risk-based capital rules to take
account of interest rate risk. The notice proposes alternative approaches for
determining the additional amount of capital, if any, that a bank may be
required to have for interest rate risk. The first approach would reduce a
bank's risk-based capital ratios by an amount based on its measured exposure to
interest rate risk in excess of a specified threshold. The second approach would
assess the need for additional capital on a case-by-case basis, considering both
the level of measured exposure and qualitative risk factors. The Federal Reserve
Board has not yet issued its version of such proposed rules, and it is unknown
at this time when the Federal Reserve Board will issue such version and whether
such version will differ from the FDIC version. The Corporation cannot assess at
this point the impact that these proposals would have on its consolidated
capital requirements or those of the Bank.
Failure to meet applicable capital guidelines could subject a banking
organization to a variety of enforcement actions, including limitations on its
ability to pay dividends, the issuance by the applicable regulatory authority of
a capital directive to increase capital and, in the case of depository
institutions, the termination of deposit insurance by the FDIC, as well as to
the measures described under "Federal Deposit Insurance Corporation Improvement
Act of 1991" below, as applicable to undercapitalized institutions.
As of March 31, 1993, the Corporation's ratios of Tier 1 and total capital
to risk-weighted assets were 10.82% and 12.00%, respectively, and its leverage
ratio as of such date was 7.94%. As of March 31, 1993, each of the Bank and
Creditcorp, the only subsidiaries of the Corporation that were subject to
minimum capital requirements imposed by federal bank regulators as of such date,
had capital in excess of all such requirements.
FEDERAL DEPOSIT INSURANCE CORPORATION IMPROVEMENT ACT OF 1991
In December, 1991, Congress enacted the Federal Deposit Insurance
Corporation Improvement Act of 1991 ("FDICIA"), which substantially revised the
bank regulatory and funding provisions of the Federal Deposit Insurance Act and
made significant revisions to several other federal banking statutes. FDICIA
provides for, among other things, (i) a recapitalization of the Bank Insurance
Fund of the FDIC (the "BIF") by increasing the FDIC's borrowing authority; (ii)
annual on-site examinations of federally-insured depository institutions by
banking regulators; (iii) publicly available annual
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financial condition and management reports for financial institutions, including
audits by independent accountants; (iv) the establishment of uniform accounting
standards by federal banking agencies; (v) the establishment of a "prompt
corrective action" system of regulatory supervision and intervention, based on
capitalization levels, with more scrutiny and restrictions placed on depository
institutions with lower levels of capital; (vi) additional grounds for the
appointment of a conservator or receiver; (vii) a requirement that the FDIC use
the least-cost method of resolving cases of troubled institutions in order to
keep the costs to insurance funds at a minimum; (viii) more comprehensive
regulation and examination of foreign banks; (ix) consumer protection provisions
including a Truth-in-Savings Act; (x) a requirement that the FDIC establish a
risk-based deposit insurance assessment system to be in effect no later than
January 1, 1994; (xi) restrictions or prohibitions on accepting brokered
deposits, except for institutions which significantly exceed minimum capital
requirements; and (xii) certain limits on deposit insurance coverage.
A central feature of FDICIA is the requirement that the federal banking
agencies take "prompt corrective action" with respect to depository institutions
that do not meet minimum capital requirements. Pursuant to FDICIA, the federal
bank regulatory authorities have adopted regulations setting forth a five-tiered
system for measuring the capital adequacy of the depository institutions that
they supervise. Under these regulations, a depository institution is classified
in one of the following capital categories: "well capitalized," "adequately
capitalized," "undercapitalized," "significantly undercapitalized" and
"critically under-capitalized." A depository institution is "well capitalized"
if it has (i) a total risk-based capital ratio of 10% or greater, (ii) a Tier 1
risk-based capital ratio of 6% or greater, (iii) a leverage ratio of 5% or
greater and (iv) is not subject to any order or written directive to meet and
maintain a specific capital level for any capital measure. An "adequately
capitalized" institution is defined as one that has (i) a total risk-based
capital ratio of 8% or greater, (ii) a Tier 1 risk-based capital ratio of 4% or
greater and (iii) a leverage ratio of 4% or greater (or 3% or greater in the
case of a bank with a composite CAMEL rating of 1). A depository institution is
considered (i) "undercapitalized" if it has (A) a total risk-based capital ratio
of less than 8%, (B) a Tier 1 risk-based capital ratio of less than 4% or (C) a
leverage ratio of less than 4% (or 3% in the case of an institution with a CAMEL
rating of 1), (ii) "significantly undercapitalized" if it has (A) a total risk-
based capital ratio of less than 6%, (B) a Tier 1 risk-based capital ratio of
less than 3% or (C) a leverage ratio of less than 3% and (iii) "critically
undercapitalized" if it has a ratio of tangible equity to total assets equal to
or less than 2%. An institution may be deemed by the regulators to be in a
capitalization category that is lower than is indicated by its actual capital
position if, among other things, it receives an unsatisfactory examination
rating.
FDICIA generally prohibits a depository institution from making any capital
distribution (including payment of a cash dividend) or paying any management
fees to its holding company if the depository institution would thereafter be
undercapitalized. Undercapitalized depository institutions are subject to growth
limitations and are required to submit capital restoration plans. The federal
banking agencies may not accept a capital plan without determining, among other
things, that the plan is based on realistic assumptions and is likely to succeed
in restoring the depository institution's capital. In addition, for a capital
restoration plan to be acceptable, the depository institution's parent holding
company must guarantee that the institution will comply with such capital
restoration plan. The aggregate liability of the parent holding company in
respect of any capital restoration plan is limited to the lesser of (i) an
amount equal to 5% of the depository institution's total assets at the time it
became undercapitalized and (ii) the amount which is necessary (or would have
been necessary) to bring the institution into compliance with all capital
standards applicable with respect to such institution as of the time it fails to
comply with the plan. If a depository institution fails to submit an acceptable
plan, it is treated as if it is significantly undercapitalized.
Significantly undercapitalized depository institutions may be subject to a
number of other requirements and restrictions, including orders to sell
sufficient voting stock to become adequately capitalized, requirements to reduce
total assets and cessation of receipt of deposits from correspondent banks.
Critically undercapitalized institutions are subject to the appointment of a
receiver
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or conservator, generally within 90 days of the date such institution is
determined to be critically undercapitalized.
FDICIA also provides for increased funding of the FDIC insurance funds.
Under a transitional risk-based insurance assessment system that became
effective January 1, 1993, the assessment rate for insured depository
institutions will vary according to the regulatory capital levels of the
institutions and other factors. The assessment rates under the new system range
from .23% to .31% depending upon the assessment category into which the insured
institution is placed. On December 31, 1992, the FDIC proposed a permanent
risk-based assessment system to become effective no later than January 1, 1994.
The proposed permanent system retains the transitional system without
substantial modification.
FDICIA provides the federal banking agencies with significantly expanded
powers to take enforcement action against institutions which fail to comply with
capital or other standards. Such action may include the termination of deposit
insurance by the FDIC or the appointment of a receiver or conservator for the
institution. FDICIA also limits the circumstances under which the FDIC is
permitted to provide financial assistance to an insured institution before
appointment of a conservator or receiver.
The foregoing is a general description of certain provisions of FDICIA and
does not purport to be complete. The effective dates for the various provisions
of FDICIA range up to three years from December 19, 1991, the date when FDICIA
was signed into law. In the intervening period, the various federal bank
regulatory agencies are required to adopt regulations implementing FDICIA's
various provisions. Until the regulations are adopted, it is not possible to
assess the full impact of FDICIA on the Corporation and its subsidiaries.
However, it is anticipated that, when fully implemented, FDICIA will have a
significant impact on the operations of all insured depository institutions,
including increasing costs of regulatory compliance.
DESCRIPTION OF DEBT SECURITIES
The Debt Securities are to be issued under an indenture (the "Indenture")
between the Corporation and The First National Bank of Chicago, as Trustee (the
"Trustee"). A copy of the form of the Indenture is filed as an exhibit to the
Registration Statement of which this Prospectus is a part. See "Available
Information." The following summaries of certain provisions of the Indenture do
not purport to be complete and are subject to, and are qualified in their
entirety by reference to, all of the provisions of the Indenture, including the
definition therein of certain terms. Wherever particular sections or defined
terms of the Indenture are referred to, it is intended that such sections or
defined terms shall be incorporated herein by reference. The following sets
forth certain general terms and provisions of the Debt Securities. Further terms
of each series of Offered Debt Securities will be set forth in the Prospectus
Supplement relating thereto.
GENERAL
The Indenture does not limit the aggregate principal amount of Debt
Securities which may be issued thereunder and provides that Debt Securities may
be issued from time to time in series. The Debt Securities will be unsecured
subordinated obligations of the Corporation. The Indenture does not limit the
Corporation's ability to incur other indebtedness or contain provisions which
would protect the Holders of, or owners of beneficial interests in, the Debt
Securities against a sudden decline in credit quality resulting from takeovers,
recapitalizations or other similar restructurings.
The Prospectus Supplement will describe the following terms of the Offered
Debt Securities: (1) the title of the Offered Debt Securities; (2) any limit on
the aggregate principal amount of the Offered Debt Securities; (3) the date or
dates on which the Offered Debt Securities will mature; (4) the rate or rates
per annum at which the Offered Debt Securities will bear interest, if any, or
the manner in which such rates will be determined and the date from which such
interest, if any, will
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accrue; (5) the Interest Payment Dates on which such interest (if any) on the
Offered Debt Securities will be payable and the Regular Record Dates for such
Interest Payment Dates; (6) the currency or currency unit, if other than United
States dollars, of payment of principal of, and premium and interest, if any,
on, the Offered Debt Securities; (7) if the Offered Debt Securities are to be
issued in the form of one or more global securities (a "Global Security"), the
identity of the depositary for such Global Security or Securities; (8) any
mandatory or optional sinking fund or analogous provisions; (9) any additions
to, or modifications or deletions of, any Events of Default or covenants and the
remedies with respect thereto provided for with respect to the Offered Debt
Securities; (10) any redemption terms; (11) any provisions permitting defeasance
of the Corporation's obligations with respect to the Offered Debt Securities or
the Indenture; (12) if other than the principal amount thereof, the portion of
the principal amount of the Offered Debt Securities payable upon acceleration of
the maturity thereof; and (13) any other specific terms of the Offered Debt
Securities.
Unless otherwise specified in the Prospectus Supplement, principal of, and
premium and interest, if any, on, the Offered Debt Securities will be payable at
the office or agency of the Corporation maintained for that purpose in the
Borough of Manhattan, the City of New York, and the Offered Debt Securities may
be surrendered for transfer or exchange at said office or agency; provided that
payment of interest, if any, may be made at the option of the Corporation by
check mailed to the address of the person entitled thereto as it appears in the
register for the Offered Debt Securities on the Regular Record Date for such
interest. (Sections 3.1 and 10.2). The office of the Trustee in the Borough of
Manhattan, the City of New York, will initially be designated as such office or
agency.
The Debt Securities will be issued only in fully registered form without
coupons and, unless otherwise indicated in the Prospectus Supplement, if
denominated in United States dollars, will be issued in denominations of $1,000
or any integral multiple thereof. No service charge will be made for any
transfer or exchange of the Debt Securities, but the Corporation may require
payment of a sum sufficient to cover any tax or other governmental charge
payable in connection therewith. The Corporation shall not be required (i) to
issue, register the transfer of or exchange any Debt Securities of any series
during a period beginning at the opening of business 15 days before the date of
the mailing of a notice of redemption of Debt Securities of that series selected
for redemption and ending at the close of business on the date of such mailing
or (ii) to register the transfer of or exchange any Debt Security so selected
for redemption in whole or in part, except the unredeemed portion of Debt
Securities being redeemed in part. (Sections 3.2 and 3.5).
All moneys paid by the Corporation to the Trustee or any Paying Agent for
the payment of principal of and premium and interest on any Debt Security which
remain unclaimed for two years after such principal, premium or interest shall
have become due and payable may be repaid to the Corporation and thereafter the
Holder of such Debt Security shall look only to the Corporation for payment
thereof. (Section 10.3).
If any Offered Debt Securities are payable in a currency or currency unit
other than United States dollars, the special federal income tax and other
considerations applicable to such Debt Securities will be described in the
Prospectus Supplement relating thereto.
The Debt Securities may be issued as Original Issue Discount Securities
(bearing no interest or bearing interest at a rate which at the time of issue is
below market rates) to be sold at a substantial discount below their principal
amount. If any Debt Securities are issued as Original Issue Discount Securities,
the special federal income tax and other considerations applicable to such Debt
Securities will be described in the Prospectus Supplement relating thereto.
GLOBAL SECURITIES
The Offered Debt Securities may be issued in whole or in part in the form
of one or more Global Securities that will be deposited with, or on behalf of, a
depositary (the "Depository") identified in
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the Prospectus Supplement relating to such Offered Debt Securities. Unless and
until it is exchangeable in whole or in part for Offered Debt Securities in
definitive form, a Global Security may not be transferred except as a whole by
the Depository for such Global Security to a nominee of such Depository or by a
nominee of such Depository to such Depository or another nominee of such
Depository or by such Depository or any such nominee to a successor of such
Depository or a nominee of such successor. (Section 2.4).
The specific terms of the depositary arrangement, if any, with respect to a
series of Offered Debt Securities will be described in the Prospectus Supplement
relating to such series. The Corporation anticipates that the following
provisions will apply to all depositary arrangements.
Ownership of beneficial interests in a Global Security will be limited to
persons that have accounts with the Depository for such Global Security or its
nominee ("Participants") or persons that may hold interests through
Participants. Such accounts shall be designated by the underwriters or agents
with respect to the Offered Debt Securities underwritten or solicited by them.
The Corporation expects that upon the issuance of a Global Security, the
Depository for such Global Security will credit, on its book-entry registration
and transfer system, the Participants' accounts with the respective principal
amounts of the Offered Debt Securities represented by such Global Security.
Ownership of beneficial interests in such Global Security will be shown on, and
the transfer of such ownership interests will be effected only through, records
maintained by the Depository (with respect to interests of Participants) and on
the records of Participants (with respect to interests of persons held through
Participants). The laws of some states may require that certain purchasers of
securities take physical delivery of such securities in definitive form. Such
limits and such laws may impair the ability to own, transfer or pledge
beneficial interests in a Global Security.
So long as the Depository for a Global Security, or its nominee, is the
registered owner of such Global Security, such Depository or such nominee, as
the case may be, will be considered the sole owner or Holder of the Offered Debt
Securities represented by such Global Security for all purposes under the
Indenture. (Section 3.8). Except as provided below, owners of beneficial
interests in a Global Security will not be entitled to have the Offered Debt
Securities represented by such Global Security registered in their names, will
not receive or be entitled to receive physical delivery of the Offered Debt
Securities in definitive form and will not be considered the owners or Holders
thereof under the Indenture. Accordingly, each person owning a beneficial
interest in such a Global Security must rely on the procedures of the Depository
and, if such person is not a Participant, on the procedures of the Participant
through which such person owns its interest, to exercise any rights of a Holder
under the Indenture. The Corporation understands that under existing industry
practices, in the event that the Corporation requests any action of Holders or
that an owner of a beneficial interest in such a Global Security desires to take
any action which a Holder is entitled to take under the Indenture, the
Depository would authorize the Participants holding the relevant beneficial
interests to take such action, and such Participants would authorize beneficial
owners owning through such Participants to take such action or would otherwise
act upon the instructions of beneficial owners owning through them.
Payment of principal of, and premium and interest, if any, on, Offered Debt
Securities registered in the name of a Depository or its nominee will be made to
the Depository or its nominee, as the case may be, as the registered owner of
the Global Security representing such Offered Debt Securities. None of the
Corporation, the Trustee, any Paying Agent or any other agent of the Corporation
or the Trustee will have any responsibility or liability for any aspect of the
records relating to or payments made on account of beneficial ownership
interests in the Global Security for such Offered Debt Securities or for
maintaining, supervising or reviewing any records relating to such beneficial
ownership interests.
The Corporation expects that upon receipt of any payment of principal of,
or premium or interest on, a Global Security, the Depository will immediately
credit Participants' accounts with payments in amounts proportionate to their
respective beneficial interests in the principal amount of
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such Global Security as shown on the records of the Depository. Payments by
Participants to owners of beneficial interests in such Global Security held
through such Participants will be the responsibility of such Participants, as is
now the case with securities held for the accounts of customers registered in
"street name."
If the Depository for any Offered Debt Securities represented by a Global
Security notifies the Corporation that it is unwilling or unable to continue as
Depository or ceases to be a clearing agency registered under the Exchange Act
and a successor Depository is not appointed by the Corporation within ninety
days after receiving such notice or becoming aware that the Depository is no
longer so registered, the Corporation will issue such Offered Debt Securities in
definitive form upon registration of transfer of, or in exchange for, such
Global Security. In addition, the Corporation may at any time and in its sole
discretion determine not to have the Offered Debt Securities represented by one
or more Global Securities and, in such event, will issue Offered Debt Securities
in definitive form in exchange for all of the Global Securities representing
such Offered Debt Securities. (Section 3.5).
SUBORDINATION OF DEBT SECURITIES
The Debt Securities are expressly subordinated in right of payment, to the
extent set forth in the Indenture, to all Senior Indebtedness (as defined
below). (Section 13.1). In certain events of insolvency, the Debt Securities
will, to the extent set forth in the Indenture, also be effectively subordinated
in right of payment to the prior payment of all Other Financial Obligations (as
defined below). (Section 13.15)
If the Corporation shall default in the payment of any principal of,
premium, if any, or interest, if any, on any Senior Indebtedness when the same
becomes due and payable, whether at maturity or at a date fixed for prepayment
or by declaration of acceleration or otherwise, or if any event of default with
respect to Senior Indebtedness permitting the holders thereof to accelerate the
maturity thereof shall have occurred and be continuing, or any judicial
proceeding shall be pending with respect to any such default in payment or event
of default then, unless and until such default or event of default shall have
been cured or waived or shall have ceased to exist or such judicial proceeding
shall be no longer pending, no direct or indirect payment (in cash, property,
securities, by set-off, or otherwise) shall be made for principal of or premium
or interest on the Debt Securities, or in respect of any purchase or other
acquisition of any of the Debt Securities. (Section 13.4). "Senior Indebtedness"
of the Corporation means the principal of, premium, if any, and interest on all
indebtedness for money borrowed or purchased by the Corporation, or borrowed by
another and guaranteed by the Corporation (including any deferred obligation for
the payment of the purchase price of property or assets evidenced by a note or
similar agreement), whether now outstanding or subsequently created, assumed or
incurred, and any amendments, deferrals, renewals or extensions of any such
Senior Indebtedness, other than (i) any obligation as to which it is provided
that such obligation is not to be senior in right of payment to the Debt
Securities and (ii) the Debt Securities. (Section 1.1). At March 31, 1993, the
Corporation had approximately $50 million of Senior Indebtedness outstanding
(excluding accrued interest). The Indenture does not limit the amount of
additional Senior Indebtedness which the Corporation may incur.
In the event of any insolvency, bankruptcy, receivership, reorganization,
readjustment of debt, assignment for the benefit of creditors, marshalling of
assets and liabilities, or similar proceedings relating to, or any liquidation,
dissolution, or winding-up of, the Corporation, whether voluntary or
involuntary, all obligations of the Corporation to holders of Senior
Indebtedness shall be entitled to be paid in full (or provision shall be made
for such payment) before any payment shall be made on account of the principal
of or premium or interest on the Debt Securities. In the event of any such
proceeding, if any payment by or distribution of assets of the Corporation of
any kind or character, whether in cash, property, or securities (other than
securities of the Corporation or any other corporation provided for by a plan of
reorganization or readjustment, the payment of which is subordinate, at least to
the extent provided in the subordination provisions with respect to the Debt
Securities, to the payment of all Senior Indebtedness at the time outstanding
and to any securities
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issued in respect thereof under any such plan of reorganization or
readjustment), shall be received by the Trustee or the Holders of the Debt
Securities before all Senior Indebtedness is paid in full, such payment or
distribution shall be held (in trust if received by the Holders of the Debt
Securities) for the benefit of the holders of such Senior Indebtedness and shall
be paid over to the trustee in bankruptcy or other Person making payment or
distribution of the assets of the Corporation for application to the payment of
all Senior Indebtedness remaining unpaid until all such Senior Indebtedness
shall have been paid in full, after giving effect to any concurrent payment or
distribution to the holders of such Senior Indebtedness. (Section 13.2). If,
upon any such payment or distribution of assets to creditors, there remain,
after giving effect to such subordination provisions in favor of the holders of
Senior Indebtedness, any amounts of cash, property or securities available for
payment or distribution in respect of Debt Securities (as defined in the
Indenture, "Excess Proceeds") and if, at such time, any person entitled to
payment pursuant to the terms of Other Financial Obligations has not received
payment in full of all amounts due or to become due on or in respect of such
Other Financial Obligations, then such Excess Proceeds shall first be applied to
pay or provide for the payment in full of such Other Financial Obligations
before any payment or distribution may be made in respect of the Debt
Securities. Unless otherwise specified in the Prospectus Supplement relating to
the particular series of Offered Debt Securities, the term "Other Financial
Obligations" includes all obligations of the Corporation to make payment
pursuant to the terms of financial instruments, such as: (i) securities
contracts and currency and foreign exchange contacts, and (ii) derivative
instruments, such as swap agreements (including interest rate and currency and
foreign exchange rate swap agreements), cap agreements, floor agreements, collar
agreements, interest rate agreements, foreign exchange agreements, options,
commodity futures contracts and commodity options contracts, other than (x)
obligations on account of Senior Indebtedness and (y) obligations on account of
indebtedness for money borrowed ranking pari passu with or subordinate to the
Debt Securities. (Section 1.1).
By reason of such subordination, in the event of the bankruptcy or
insolvency of the Corporation or similar event, whether before or after maturity
of the Debt Securities, holders of Senior Indebtedness or of Other Financial
Obligations may receive more, ratably, and Holders of the Debt Securities having
a claim pursuant to the Debt Securities may receive less, ratably, than
creditors of the Corporation who do not hold Senior Indebtedness, Other
Financial Obligations or Debt Securities.
In addition, in the event of the insolvency, bankruptcy, receivership,
conservatorship or reorganization of the Corporation, the claims of the Holders
of the Debt Securities would be subject as to enforcement to the broad equity
power of a federal bankruptcy court, and to the determination by that court of
the nature of the rights of the Holders.
CONSOLIDATION, MERGER, SALE OR CONVEYANCE
The Corporation may, without the consent of any Holder of the Debt
Securities, merge or consolidate with any other corporation or sell or convey
all or substantially all of its assets to any corporation, provided that the
successor corporation (if other than the Corporation) shall be a corporation
organized and existing under the laws of the United States of America or a State
thereof or the District of Columbia and such corporation shall expressly assume
the Corporation's obligations under the Indenture and on the Debt Securities,
and the Corporation or such successor corporation, as the case may be, shall not
be in default in the performance of any covenant or condition of the Indenture
immediately after such merger, consolidation, sale or conveyance. In addition,
the Corporation may, without the consent of any Holder of the Debt Securities,
convey its assets substantially as an entirety to any Person in connection with
a transfer that is assisted by a federal bank regulatory authority and in such
case the Corporation's obligations under the Indenture need not be assumed by
the entity acquiring such assets. (Section 8.1).
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EVENTS OF DEFAULT AND LIMITED RIGHTS OF ACCELERATION
Unless otherwise provided in the applicable Prospectus Supplement, the
Indenture defines an Event of Default as any one of the following events: (a)
default for 30 days in the payment of any interest upon any Offered Debt
Security when it becomes due and payable; (b) default in the payment of the
principal of (or premium, if any, on) any Offered Debt Security at its maturity;
(c) default in the deposit of any sinking fund payment, when and as due by the
terms of the Offered Debt Security; (d) default in the performance, or breach,
of any covenant or warranty of the Company (other than a covenant or warranty
included in the Indenture solely for the benefit of a series of Debt Securities
other than the Offered Debt Securities) which continues for 60 days after the
holders of at least 25% in principal amount of Outstanding Debt Securities have
given written notice as provided in the Indenture; (e) certain events of
bankruptcy, insolvency or reorganization of the Company; or (f) any other Events
of Default as may be specified in a Prospectus Supplement with respect to the
Offered Debt Securities. (Section 5.1) An Event of Default under one series of
Debt Securities will not necessarily be an Event of Default with respect to any
other series of Debt Securities.
If an Event of Default of a type set forth in clause (e) above with respect
to the Debt Securities of any series at the time Outstanding occurs and is
continuing, either the Trustee or the Holders of at least 25% in aggregate
principal amount of the Outstanding Debt Securities of that series may declare
the principal amount (or, if the Debt Securities of that series are Original
Issue Discount Securities, such portion of that principal amount as may be
specified in the terms of that series) of all the Debt Securities of that series
to be due and payable immediately. At any time after a declaration of
acceleration with respect to Debt Securities of any series has been made, but
before a judgment or decree based on acceleration has been obtained, the Holders
of a majority in aggregate principal amount of the Outstanding Debt Securities
of that series may, under certain circumstances, rescind and annul such
acceleration. (Section 5.2).
The Indenture does not provide for any right of acceleration of the payment
of the principal of a series of Debt Securities upon a default in the payment of
principal, premium, if any, or interest or a default in the performance of any
covenant or agreement in the Debt Securities of that series or in the Indenture.
Accordingly, the Trustee and the Holders will not be entitled to accelerate the
maturity of these Debt Securities upon the occurrence of any of the Events of
Default described above, except for those described in clause (e) above. If a
default in the payment of principal, premium, if any, or interest or in the
performance of any covenant or agreement in the Debt Securities of any series or
in the Indenture occurs, the Trustee may, subject to certain limitations and
conditions, seek to enforce payment of such principal, premium, if any, or
interest on the Debt Securities of that series, or the performance of such
covenant or agreement. (Section 5.3).
The Indenture provides that, subject to the duty of the Trustee during the
continuance of an Event of Default to act with the required standard of care,
the Trustee will be under no obligation to exercise any of its rights or powers
under the Indenture at the request or direction of any of the Holders, unless
such Holders shall have offered to the Trustee reasonable indemnity. (Section
6.3). Subject to certain limitations, the Holders of a majority in aggregate
principal amount of the Outstanding Debt Securities of any series will have the
right to direct the time, method and place of conducting any proceeding for any
remedy available to the Trustee, or exercising any trust or power conferred on
the Trustee, with respect to the Debt Securities of that series. (Section 5.12).
The right of a Holder of any Debt Security to institute a proceeding with
respect to the Indenture is subject to certain conditions precedent, but each
Holder has an absolute right to receive payment of principal, premium and
interest, if any, when due and to institute suit for the enforcement of any such
payment. (Sections 5.7 and 5.8).
The Corporation is required to furnish to the Trustee annually a statement
as to the performance by the Corporation of certain of its obligations under the
Indenture and as to any default in such performance. (Sections 1.2 and 10.4).
The Trustee may withhold notice to Holders of any
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default (except in payment of principal, premium, or interest, if any) if it in
good faith determines that it is in the interests of the Holders to do so.
MODIFICATIONS AND WAIVER
The Indenture provides that the Corporation and the Trustee may enter into
a supplemental indenture to amend the Indenture or the Debt Securities without
the consent of any Holder of any Outstanding Debt Security: (1) to evidence the
succession of another Person to the Corporation and the assumption by such
successor of the Corporation's obligations under the Indenture; (2) to add to
the covenants of the Corporation further covenants, restrictions or conditions
for the protection of the Holders of all or any particular series of Debt
Securities; (3) to add or change any of the provisions of the Indenture
necessary to facilitate the issuance of Debt Securities in bearer form; (4) to
eliminate or change any provision of the Indenture prior to the issuance of the
series that is entitled to the benefit of such provision; (5) to establish the
terms and conditions of Securities of any series; (6) to provide for the
acceptance of appointment by a successor trustee or to add or change any of the
provisions of the Indenture necessary to provide for or facilitate the
administration of the trust by more than one Trustee; (7) to cure any ambiguity,
defect or inconsistency or to make such other provision in regard to matters or
questions arising under the Indenture which do not adversely affect the
interests of the Holders of the Debt Securities; (8) to secure the Debt
Securities; (9) to provide for the conversion or exchange of Debt Securities of
a particular series into or for other securities of the Corporation; or (10) to
add additional Events of Default. (Section 9.1).
In addition to the foregoing, modifications and amendments of the Indenture
may be made by the Corporation and the Trustee with the consent of the Holders
of a majority in aggregate principal amount of the Outstanding Debt Securities
of each series affected by such modification or amendment; provided, however,
that no such modification or amendment may, without the consent of the Holder of
each Outstanding Debt Security affected thereby, (a) change the stated maturity
date of the principal of, or any premium or installment of interest, if any, on
any Debt Security, (b) reduce the principal amount of, or premium or interest,
if any, on, any Debt Security, (c) reduce the amount of principal on an Original
Issue Discount Security payable upon acceleration of the maturity thereof, (d)
change the currency of payment of principal of, or premium or interest, if any,
on, any Debt Security, (e) impair the right to institute suit for the
enforcement of any such payment on or with respect to any Debt Security, (f)
reduce the percentage in principal amount of Outstanding Debt Securities of any
series the consent of whose Holders is required for modification or amendment of
the Indenture or for any waiver. (Section 9.2).
The Holders of a majority in aggregate principal amount of the Outstanding
Debt Securities of each series may, on behalf of all Holders of Debt Securities
of that series, waive, insofar as that series is concerned, compliance by the
Corporation with certain restrictive provisions of the Indenture. (Section 10.8)
The Holders of a majority in aggregate principal amount of the Outstanding Debt
Securities of each series may, on behalf of all Holders of Debt Securities of
that series, waive any past default under the Indenture with respect to Debt
Securities of that series, except a default in the payment of principal, or of
premium or interest, if any, or in respect of a provision which under the
Indenture cannot be modified or amended without the consent of the Holder of
each Outstanding Debt Security of that series. (Section 5.13).
GOVERNING LAW
The Indenture and the Debt Securities will be governed by and construed in
accordance with the laws of the State of New York.
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INFORMATION CONCERNING THE TRUSTEE
The Corporation and its subsidiaries maintain deposit accounts and conduct
other banking transactions with the Trustee in the ordinary course of business.
PLAN OF DISTRIBUTION
The Corporation may sell Debt Securities to one or more underwriters for
public offering and sale by them or may sell Debt Securities to investors either
directly or through agents. Any such underwriter or agent involved in the offer
and sale of the Offered Debt Securities will be named in the Prospectus
Supplement.
Underwriters may offer and sell the Offered Debt Securities at a fixed
price or prices, which may be changed, or from time to time at market prices
prevailing at the time of sale, at prices related to such prevailing market
prices or at negotiated prices. In connection with the sale of the Offered Debt
Securities, underwriters may be deemed to have received compensation from the
Corporation in the form of underwriting discounts or commissions and may also
receive commissions from purchasers of the Offered Debt Securities for whom they
may act as agent. Underwriters may sell the Offered Debt Securities to or
through dealers, and such dealers may receive compensation in the form of
discounts, concessions or commissions from the underwriters and/or commissions
from the purchasers for whom they may act as agent.
Any underwriting compensation paid by the Corporation to underwriters or
agents in connection with the offering of the Offered Debt Securities, and any
discounts, concessions or commissions allowed by underwriters to participating
dealers, will be set forth in the Prospectus Supplement. Underwriters, dealers
and agents participating in the distribution of the Offered Debt Securities may
be deemed to be underwriters, and any discounts and commissions received by them
and any profit realized by them on resale of the Offered Debt Securities may be
deemed to be underwriting discounts and commissions under the Securities Act.
Underwriters, dealers and agents may be entitled, under agreements entered into
with the Corporation, to indemnification against and contribution toward certain
civil liabilities, including liabilities under the Securities Act.
If so indicated in the Prospectus Supplement, the Corporation will
authorize dealers acting as the Corporation's agents to solicit offers by
certain institutions to purchase the Offered Debt Securities from the
Corporation at the public offering price set forth in the Prospectus Supplement
pursuant to delayed delivery contracts ("Contracts") providing for payment and
delivery on the date or dates stated in the Prospectus Supplement. Each Contract
will be for an amount not less than, and the aggregate principal amount of the
Offered Debt Securities sold pursuant to Contracts shall be not less nor more
than, the respective amounts stated in the Prospectus Supplement. Institutions
with whom Contracts, when authorized, may be made include commercial and savings
banks, insurance companies, pension funds, investment companies, educational and
charitable institutions, and other institutions, but will in all cases be
subject to the approval of the Corporation. Contracts will not be subject to any
conditions except (i) the purchase by an institution of the Offered Debt
Securities covered by its Contracts shall not at any time of delivery be
prohibited under the laws of any jurisdiction in the United States to which such
institution is subject, and (ii) if the Offered Debt Securities are being sold
to underwriters, the Corporation shall have sold to such underwriters the total
principal amount of the Offered Debt Securities less the principal amount
thereof covered by Contracts.
Unless otherwise specified in the applicable Prospectus Supplement, each
series of Offered Debt Securities will be a new issue of securities with no
established trading market. Any underwriters to whom Offered Debt Securities are
sold by the Corporation for public offering and sale may make a market in such
Offered Debt Securities, but such underwriters will not be obligated to do so
and may discontinue any market making at any time without notice. No assurance
can be given as to the liquidity of the trading market for any Offered Debt
Securities.
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Certain of the underwriters and their associates may be customers of,
engage in transactions with and perform services for the Corporation or its
subsidiaries in the ordinary course of business.
VALIDITY OF OFFERED DEBT SECURITIES
The validity of the Offered Debt Securities will be passed upon for the
Corporation by Simpson Thacher & Bartlett (a partnership which includes
professional corporations), and for any underwriters or agents by counsel named
in the Prospectus Supplement.
EXPERTS
The consolidated balance sheets of First Hawaiian, Inc. and subsidiaries as
of December 31, 1992 and 1991, and the related consolidated statements of
income, changes in stockholders' equity and cash flows for each of the three
years in the period ended December 31, 1992, incorporated by reference in this
Prospectus, have been incorporated herein in reliance on the report of Coopers &
Lybrand, independent accountants, given on the authority of that firm as experts
in accounting and auditing.
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NO DEALER, SALESMAN OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATION NOT CONTAINED IN THIS PROSPECTUS OR
THE ACCOMPANYING PROSPECTUS SUPPLEMENT, AND, IF GIVEN OR MADE, SUCH INFORMATION
OR REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE
COMPANY OR BY ANY AGENT OR UNDERWRITER. THIS PROSPECTUS AND THE ACCOMPANYING
PROSPECTUS SUPPLEMENT DO NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN
OFFER TO BUY ANY OF THE SECURITIES OFFERED HEREBY IN ANY JURISDICTION TO ANY
PERSON TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER IN SUCH JURISDICTION. NEITHER
THE DELIVERY OF THIS PROSPECTUS AND THE ACCOMPANYING PROSPECTUS SUPPLEMENT NOR
ANY SALE MADE HEREUNDER OR THEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY
IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY SINCE
THE DATE HEREOF.
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TABLE OF CONTENTS
PAGE
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PROSPECTUS SUPPLEMENT
The Corporation.................... S-2
Use of Proceeds.................... S-2
Capitalization..................... S-3
Selected Consolidated Financial
Information...................... S-4
Recent Developments................ S-6
Description of Subordinated
Notes............................ S-7
Underwriting....................... S-9
Validity of Subordinated Notes..... S-9
PROSPECTUS
Available Information.............. 2
Incorporation of Certain Documents
by Reference..................... 2
The Corporation.................... 3
Consolidated Ratios of Earnings to
Fixed Charges.................... 3
Use of Proceeds.................... 4
Regulatory Matters................. 4
Description of Debt Securities..... 8
Plan of Distribution............... 15
Validity of Offered Debt
Securities....................... 16
Experts............................ 16
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$50,000,000
FIRST HAWAIIAN, INC.
7 3/8% SUBORDINATED NOTES
DUE MAY 1, 2006
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LOGO
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GOLDMAN, SACHS & CO.
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
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