1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
----------
FORM 11-K
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934 [FEE REQUIRED]
For the fiscal year ended December 31, 1997
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934 [NO FEE REQUIRED] For the transition period from _________________
to ____________________
Commission file number 0-7949
A. Full title of the plan and the address of the plan, if different from that of
the issuer named below:
FIRST HAWAIIAN, INC. PROFIT SHARING PLAN
B. Name of issuer of the securities held pursuant to the plan and the address of
its principal executive office:
FIRST HAWAIIAN, INC.
999 Bishop Street
Honolulu, Hawaii 96813
Telephone number: (808) 525-7000
2
FIRST HAWAIIAN, INC. PROFIT SHARING PLAN
INDEX OF FINANCIAL STATEMENTS AND SCHEDULES
PAGE
Report of Independent Accountants 2
Financial Statements:
Statements of net assets available for plan benefits
at December 31, 1997 and 1996 3
Statements of changes in net assets available for plan
benefits for the years ended December 31, 1997 and 1996 4
Notes to financial statements 5
Supplemental Schedules:
Item 27a - Schedule of assets held for investment purposes
at December 31, 1997 19
Item 27d - Schedule of reportable transactions
for the year ended December 31, 1997 20
1
3
REPORT OF INDEPENDENT ACCOUNTANTS
To the Profit Sharing Committee
of First Hawaiian, Inc.
We have audited the accompanying statements of net assets available for plan
benefits of the Profit Sharing Plan (the "Plan") of First Hawaiian, Inc. (the
"Company") as of December 31, 1997 and 1996, and the related statements of
changes in net assets available for plan benefits for the years then ended.
These financial statements are the responsibility of the Plan's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets available for plan benefits of the Plan as
of December 31, 1997 and 1996, and the changes in net assets available for plan
benefits for the years then ended, in conformity with generally accepted
accounting principles.
Our audits were performed for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedules of assets held
for investment purposes as of December 31, 1997, and reportable transactions for
the year then ended, are presented for the purpose of additional analysis and
are not a required part of the basic financial statements but are supplementary
information required by the Department of Labor's Rules and Regulations for
Reporting and Disclosure under the Employee Retirement Income Security Act of
1974. The fund information in Note 9 is presented for purposes of additional
analysis rather than to present the changes in net assets available for plan
benefits of each fund. The supplemental schedules and fund information have been
subjected to the auditing procedures applied in the audits of the basic
financial statements and, in our opinion, are fairly stated in all material
respects in relation to the basic financial statements taken as a whole.
/s/ Coopers & Lybrand L.L.P.
Honolulu, Hawaii
May 12, 1998
2
4
FIRST HAWAIIAN, INC. PROFIT SHARING PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR PLAN BENEFITS
DECEMBER 31, 1997 AND 1996
1997 1996
------------ ------------
ASSETS
Investments, at fair value (note 4) $144,542,190 $115,756,084
Cash 109,547 326,097
Contributions receivable from employer 3,082,342 3,102,097
Interest and dividends receivable -- 921,870
------------ ------------
147,734,079 120,106,148
------------ ------------
LIABILITIES
Due to broker for securities purchased -- 36,641
Accrued expenses 13,522 934
------------ ------------
13,522 37,575
------------ ------------
NET ASSETS AVAILABLE FOR PLAN BENEFITS $147,720,557 $120,068,573
============ ============
The accompanying notes are an integral part of the financial statements.
3
5
FIRST HAWAIIAN, INC. PROFIT SHARING PLAN
STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS (NOTE 9)
FOR THE YEARS ENDED DECEMBER 31, 1997 AND 1996
1997 1996
------------ ------------
ADDITIONS
Employer contributions (note 8) $ 11,945,231 $ 11,830,034
Interest and dividend income 11,378,218 3,542,360
Net appreciation of investments (note 4) 11,252,475 9,562,172
Transfer from other retirement plan (note 5) 889,411 --
------------ ------------
35,465,335 24,934,566
------------ ------------
DEDUCTIONS
Payments made to participants 7,744,784 6,362,179
Administrative expenses 68,567 52,463
------------ ------------
7,813,351 6,414,642
------------ ------------
Increase in net assets 27,651,984 18,519,924
NET ASSETS AVAILABLE FOR PLAN BENEFITS
Beginning of year 120,068,573 101,548,649
------------ ------------
End of year $147,720,557 $120,068,573
============ ============
The accompanying notes are an integral part of the financial statements.
4
6
FIRST HAWAIIAN, INC. PROFIT SHARING PLAN
NOTES TO FINANCIAL STATEMENTS
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
USE OF ESTIMATES IN FINANCIAL STATEMENTS -
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
the disclosure of contingent assets and liabilities at the date of the
financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those
estimates.
RISKS AND UNCERTAINTIES -
The Plan provides for various investment options in any combination of
stocks, fixed income securities, mutual funds, and other investment
securities. Investment securities are exposed to various risks, such as
interest rate, market, and credit risks. Due to the level of risk associated
with certain investment securities, it is at least reasonably possible that
changes in the values of investment securities will occur in the near term
and that such changes could materially affect participants' account balances
and the amounts reported in the statement of net assets available for plan
benefits.
VALUATION OF INVESTMENTS AT FAIR VALUE -
Investments in securities (i.e., common stocks and mutual funds) traded on
national securities exchanges are valued at the last reported sales price on
the last business day of the year. Investments in such securities traded in
the over-the-counter market and listed securities for which no sale was
reported on that date are valued at the mean between the last reported bid
and asked prices.
Investments in the First Hawaiian Bank Investment Funds for Employee Benefit
Trusts are valued at the unit share value as determined by the funds. The
investment funds value their investments in securities using the methods
described above. The unit share value is determined by dividing net assets
of the fund by the number of unit shares.
Notes and mortgages are valued at the lower of the unpaid principal balance
or estimated realizable value.
The guaranteed investment contract funds are valued at the unit share value
as reported by the funds.
5
7
FIRST HAWAIIAN, INC. PROFIT SHARING PLAN
NOTES TO FINANCIAL STATEMENTS
PROFIT SHARING PLAN STRUCTURE -
Prior to May 1, 1997, participants in the Plan could direct the investment
of contributions, in such proportions as they desired, to any of the
following trust fund investments: First Hawaiian Bank Equity Fund, First
Hawaiian Bank Fixed Income Fund, Guaranteed Investment Contract Fund, and
First Hawaiian Bank Investment Monitor Account ("IMA") Fund. Participants in
the Company's frozen Thrift Plan maintained balances in the First Hawaiian
Bank Thrift Account Pooled Fixed Income Fund.
On May 1, 1997, the Company appointed Putnam Fiduciary Trust Company
("Putnam") as recordkeeper and Trustee of the Plan. Participants in the Plan
have the option of investing their contributions in any one of the following
funds: Putnam Voyager Fund, Putnam Income Fund, Stable Value Fund, Putnam
Vista Fund, First Hawaiian, Inc. Stock Fund, Putnam International Growth
Fund, Putnam S&P 500 Index Fund, Putnam Asset Allocation - Conservative
Portfolio, Putnam Asset Allocation - Balanced Portfolio, Putnam Asset
Allocation - Growth Portfolio, and Putnam New Opportunities Fund.
The Company also has a 401(k) YesPay Savings Plan in which eligible
employees may elect to defer a portion of their compensation by contributing
to a YesPay Savings Account. Contributions and transactions related to the
YesPay Savings Account are accounted for separately in the funds described
above.
OTHER -
Security transactions are accounted for on a trade-date basis. The cost of
investments sold is determined by the specific identification method.
Dividend income is recorded on the ex-dividend date. Income from other
investments is recorded as earned on an accrual basis.
In accordance with the policy of stating investments at fair value, net
unrealized appreciation or depreciation and net realized gains or losses for
the year are netted and reflected in the statement of changes in net assets
available for plan benefits.
6
8
FIRST HAWAIIAN, INC. PROFIT SHARING PLAN
NOTES TO FINANCIAL STATEMENTS
2. DESCRIPTION OF PLAN
The Plan is a defined contribution plan established to cover the employees of
substantially all subsidiaries of the Company. The following description of the
Plan provides only general information. Participants should refer to the Plan
document for a more complete description of the Plan's provisions.
The significant provisions and benefits under the Plan are as follows:
PARTICIPATION: Employees who receive from the
Company or certain subsidiaries a
regular stated compensation other
than a pension, severance pay,
retainer or fee under contract are
eligible under the Plan. Eligible
employees become members on the
first day of the month coinciding
with or next following the
completion of one year of service in
which the employee worked 1,000
hours.
VESTING OF BENEFITS: 20% for each year of service with
full vesting after five years of
service. Full vesting is provided in
case of a member's death, retirement
or disability regardless of years of
service.
Employees are fully vested in
Employer Matching Contribution after
one year of service in their YesPay
Savings Account balance.
CONTRIBUTIONS - COMPANY: The Company's contribution to the
profit sharing account is based on a
formula that is related to the
percentage increase in the Company's
consolidated net earnings, as
adjusted for business entities that
have been acquired by the Company
during any Plan year, over the
previous year. At a minimum,
however, the Company will contribute
5% of each member's compensation.
The Company pays out one-half (1/2)
of the amount computed as a cash
bonus under the Company's Bonus Plan
for Employees. The other half is
contributed into the Profit Sharing
Plan.
7
9
FIRST HAWAIIAN, INC. PROFIT SHARING PLAN
NOTES TO FINANCIAL STATEMENTS
Each member may elect to defer from
1% to 10% of his pre-tax
compensation. The amount by which
compensation is reduced is treated
as a Company contribution to the
YesPay Savings Account. The Company
matches 150% for the first 1% of
contributions, 100% for the second
1% of contributions and 50% for the
third 1% of contributions. Matching
contributions are made by the
Company on a pay-period basis.
LOANS FROM MEMBER ACCOUNTS: Any member may borrow part of the
net value of his Deferred Profit
Sharing and YesPay Savings Accounts
for the purposes of assisting the
member in meeting any unusual or
unforeseen conditions in his
financial affairs.
ALLOCATION OF COMPANY CONTRIBUTIONS: Company contributions to the Profit
Sharing Plan Account are allocated
to members based upon the
relationship of the member's
compensation for the plan year
divided by the total compensation of
all members entitled to an allocable
share of the Profit Sharing
contributions.
TREATMENT OF FORFEITURES: Forfeitures are applied to reduce
future contributions and
administrative expenses of the
Company. Forfeitures applied to
reduce contributions and
administrative expenses of the
Company amounted to $155,230 and
$231,232 in 1997 and 1996,
respectively.
8
10
FIRST HAWAIIAN, INC. PROFIT SHARING PLAN
NOTES TO FINANCIAL STATEMENTS
BENEFIT PAYMENTS: After the applicable benefit
condition is met, employees may
elect to receive their benefits in a
lump-sum distribution or in monthly
or other periodic equal installments
as nearly equal in amount as may be
practicable over a period not to
exceed life expectancy.
In addition, upon written
application and approval, a member
may obtain a hardship withdrawal not
to exceed his vested interest for
medical expenses, education and
attendant expenses of a child, and
acquisition or improvement of a
member's home.
PLAN TERMINATION: In the event the Plan terminates,
all amounts credited to affected
members' accounts shall become
nonforfeitable and after payment of
all related expenses and adjustment
of affected members' accounts to
reflect such expenses, profits and
losses and forfeitures to date of
termination, each member or the
beneficiary of any member shall be
entitled to receive his entire
interest in the Plan.
GENDER: The masculine pronoun, whenever used
herein, includes the feminine
pronoun.
3. INVESTMENT PROGRAMS
The funds listed below were the investment options available to Plan
participants as of December 31, 1997. Any of these funds may be held in cash
pending investment or distribution.
(a) Putnam Voyager Fund
The objective of this fund is to provide maximum growth through a two-part
strategy. Holdings are generally split between two types of common stocks:
foundation stocks and opportunity stocks. Foundation stocks represent small to
medium-sized companies with the potential for above-average sales and earnings
growth. Opportunity stocks represent larger, well-established companies that
show near-term growth potential generally resulting from some change in the
company's business plan or competitive environment.
9
11
FIRST HAWAIIAN, INC. PROFIT SHARING PLAN
NOTES TO FINANCIAL STATEMENTS
(b) Putnam Income Fund
The objective of this fund is to provide high current income. This fund
primarily invests in debt securities, including both government and corporate
obligations, preferred stocks and dividend-paying common stocks. A portion of
the portfolio may also include lower-rated bonds that may offer a higher yield
in compensation for increased risk.
(c) Stable Value Fund
The objective of this fund is to provide stability of principal while earning a
competitive rate of return. This fund invests in guaranteed investment contracts
("GICs") or similar contracts issued by insurance companies, banks and other
financial institutions. Investments are made only in companies that receive high
credit ratings from the major rating agencies.
This fund is a combination of shares of Putnam Stable Value Fund, shares of the
U.S. Trust Capital Preservation Fund, a Metropolitan Life Insurance Company
investment contract, and money market instruments. Participant contributions
made on or after May 1, 1997 were directed to Putnam Stable Value Fund. All
investments should be in Putnam Stable Value Fund by January 1, 1999.
(d) Putnam Vista Fund
The objective of this fund is to create long-term capital appreciation through
investing primarily in mid-cap growth stocks. This fund invests primarily in
common stocks of medium-sized companies with equity market capitalizations from
$300 million to $5 billion.
(e) First Hawaiian, Inc. Stock Fund
This fund consists of that portion of the assets of the Plan that participants
have elected to have invested, to the extent possible, in shares of common stock
of First Hawaiian, Inc. The portion of this fund not invested in shares will be
held in cash or cash equivalent investments pending the purchase of shares.
10
12
FIRST HAWAIIAN, INC. PROFIT SHARING PLAN
NOTES TO FINANCIAL STATEMENTS
(f) Putnam International Growth Fund
The objective of this fund is to create long-term capital appreciation by
investing in a diversified portfolio of equity securities of companies located
in a country other than the United States. The fund's investments will normally
include common stocks, preferred stocks, securities convertible into common or
preferred stocks, and warrants to purchase common or preferred stocks.
(g) Putnam S&P 500 Index Fund
The objective of this fund is to closely approximate the return of the Standard
& Poor's 500 Composite Stock Price Index. The fund primarily invests in publicly
traded common stocks either directly or through collective investment trusts
having a similar investment objective.
(h) Putnam Asset Allocation Funds
The Putnam Asset Allocation Funds provide different investment objectives based
on asset allocation. Common stocks are normally the main type of the fund's
equity investments. However, the fund may also purchase preferred stocks,
convertible securities, warrants and other equity-type securities. The fund
invests its assets allocated to the fixed income securities in a diversified
portfolio including both U.S. and foreign government obligations and corporate
obligations. The following three investment portfolios are provided:
Conservative Portfolio
The objective of this fund is to provide long-term preservation of capital
by investing 35% of the Plan assets in equity securities and 65% of the Plan
assets in fixed income securities.
Balanced Portfolio
The objective of this fund is to maximize total return by investing 65% of
the Plan assets in equity securities and 35% of the Plan assets in fixed
income securities.
Growth Portfolio
The objective of this fund is to provide long-term capital appreciation by
investing 80% of the Plan assets in equity securities and 20% of the Plan
assets in fixed income securities.
11
13
FIRST HAWAIIAN, INC. PROFIT SHARING PLAN
NOTES TO FINANCIAL STATEMENTS
(i) Putnam New Opportunities Fund
The objective of this fund is to provide long-term capital appreciation by
investing principally in common stocks of companies that possess above-average
long-term growth potential. Current dividend income is only an incidental
consideration. At present, Putnam has identified the following sectors of the
economy as having an above-average growth potential over the next three to five
years: personal communications, media/entertainment, medical
technology/cost-containment, environmental services, applied/advanced
technology, personal financial services, and value-oriented consuming.
12
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FIRST HAWAIIAN, INC. PROFIT SHARING PLAN
NOTES TO FINANCIAL STATEMENTS
4. INVESTMENTS
Plan assets were managed by First Hawaiian Bank under a trust agreement through
April 30, 1997. Beginning May 1, 1997, Plan assets were managed by Putnam. At
December 31, 1997 and 1996, investments of the Plan were as follows:
1997 1996
--------------------------- ---------------------------
COST FAIR VALUE COST FAIR VALUE
------------ ------------ ------------ ------------
INVESTMENTS AT FAIR VALUE AS DETERMINED
BY QUOTED MARKET PRICE:
Common stocks:
First Hawaiian, Inc. $ -- $ -- $ 1,980,589 $ 10,892,210
Other -- -- 36,375 450,000
First Hawaiian Bank Investment
Funds for Employee Benefit Trusts:
Pooled Equity Fund -- -- 13,148,430 22,236,189
Pooled Fixed Income Fund -- -- 5,142,756 9,697,040
Short-term cash investments:
USTPN Federal Government Obligation -- -- 12 12
Bishop Street Money Market Fund, -- -- 1,969,129 1,969,129
managed by First Hawaiian Bank
Fidelity Institutional Cash -- -- 3,712,468 3,712,468
Portfolio
Mutual funds:
Putnam Voyager Fund 25,397,331 29,141,564 -- --
Putnam Income Fund 4,807,869 4,900,621 -- --
Putnam Stable Value Fund 1,091,450 1,091,450 -- --
Putnam Vista Fund 12,830,758 13,212,432 -- --
First Hawaiian, Inc. Stock Fund 7,141,573 8,031,838 -- --
Putnam International Growth Fund 7,672,834 7,220,604 -- --
Putnam S&P 500 Index Fund 11,733,391 12,860,367 -- --
Putnam Asset Allocation - 9,878,333 9,690,370 -- --
Conservative Portfolio
Putnam Asset Allocation - Balanced 15,224,523 14,699,600 -- --
Portfolio
Putnam Asset Allocation - Growth 12,819,551 12,543,034 -- --
Portfolio
Putnam New Opportunities Fund 20,007,482 21,897,027 -- --
Fidelity Adv Equity Portfolio -- -- 14,259,939 17,328,110
Growth Fund
Fidelity Adv Growth Opportunity -- -- 4,331,409 5,221,445
Fund
Fidelity Adv Equity Portfolio -- -- 13,696,980 15,274,142
Income Fund
Fidelity Adv Strategic -- -- 8,688,100 8,650,744
Opportunities Fund
------------ ------------ ----------- ------------
128,605,095 135,288,907 66,966,187 95,431,489
------------ ------------ ----------- ------------
INVESTMENTS AT ESTIMATED FAIR VALUE:
Guaranteed investment contract funds:
USTPN Capital Preservation Fund 6,441,652 6,441,652 12,056,709 13,296,538
Westport Stable Return Fund -- -- 2,991,515 4,093,509
------------ ------------ ----------- ------------
6,441,652 6,441,652 15,048,224 17,390,047
------------ ------------ ----------- ------------
Guaranteed investment contracts
with life insurance companies 327,114 327,114 819,059 819,059
Promissory notes 2,484,517 2,484,517 2,115,489 2,115,489
------------ ------------ ----------- ------------
9,253,283 9,253,283 17,982,772 20,324,595
------------ ------------ ----------- ------------
Total investments $137,858,378 $144,542,190 $84,948,959 $115,756,084
============ ============ =========== ============
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FIRST HAWAIIAN, INC. PROFIT SHARING PLAN
NOTES TO FINANCIAL STATEMENTS
For the years ended December 31, 1997 and 1996, the net appreciation of
investments, which consisted of realized and unrealized gains and losses, was
comprised of the following:
1997 1996
----------- ----------
INVESTMENTS AT FAIR VALUE AS DETERMINED BY QUOTED MARKET PRICE:
U.S. Government securities $ 6,893 $ --
Common stocks:
First Hawaiian, Inc. (1,322,626) 1,556,030
Other 27,000 36,000
First Hawaiian Bank Investments for Employee Benefit Trusts:
Pooled Equity Fund 1,753,425 3,566,497
Pooled Fixed Income Fund 63,096 266,365
Mutual funds 10,460,482 4,137,891
INVESTMENTS AT ESTIMATED FAIR VALUE:
Guaranteed investment contracts with life insurance 264,205 (611)
companies
----------- ----------
Net appreciation of investments $11,252,475 $9,562,172
=========== ==========
Dividend income earned from investments in First Hawaiian, Inc. common stock
amounted to $221,597 and $371,891 in 1997 and 1996, respectively.
The Plan's investment in guaranteed investment contracts and the guaranteed
investment contract mutual funds provide restrictions on access to funds and
penalties for early withdrawal of funds. The guaranteed investment contracts
provided for guaranteed interest rates ranging from 5.80% to 7.25% at December
31, 1997 and from 6.80% to 8.60% at December 31, 1996.
5. TRANSFER FROM OTHER RETIREMENT PLAN
In 1996, First Hawaiian, Inc. acquired ANB Financial Corporation, a bank holding
company, and its subsidiary, American National Bank ("ANB") (subsequently
renamed Pacific One Bank, National Association). As a result, the Plan was
amended to include ANB as a participating employer in the Plan. In January 1997,
assets from the ANB retirement plan were transferred to the Plan.
14
16
FIRST HAWAIIAN, INC. PROFIT SHARING PLAN
NOTES TO FINANCIAL STATEMENTS
6. TAX STATUS
The Plan constitutes a qualified trust under Section 401(a) of the Internal
Revenue Code and is therefore exempt from Federal income taxes under the
provisions of Section 501(a).
The Plan was amended, effective January 1, 1997, to incorporate the Small
Business Protection Act of 1996. The Plan's management received an updated tax
determination letter from the Internal Revenue Service in 1997.
7. PRIOR-YEAR FINANCIAL INFORMATION
The statement of changes in net assets available for plan benefits includes
certain prior-year summarized comparative information in total but not by fund.
Such information does not include sufficient detail to constitute a presentation
in conformity with generally accepted accounting principles. Accordingly, such
information should be read in conjunction with the Plan's financial statements
as of and for the year ended December 31, 1996, from which the summarized
information was derived.
8. EMPLOYER CONTRIBUTIONS
Employer contributions consist of Company profit sharing contributions, 401(k)
matching contributions and 401(k) contributions made on behalf of the
participants through salary deferral.
15
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FIRST HAWAIIAN, INC. PROFIT SHARING PLAN
NOTES TO FINANCIAL STATEMENTS
9. CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS BY FUND
The following summarizes the changes in net assets available for plan benefits
for the year ended December 31, 1997.
FOR THE YEAR ENDED
DECEMBER 31, 1997
--------------------------------
JANUARY 1, MAY 1, 1997
1997 THROUGH
THROUGH DECEMBER 31,
APRIL 30, 1997 1997
(FIRST (PUTNAM
HAWAIIAN FIDUCIARY
BANK) TRUST COMPANY) TOTAL
------------- ------------- ------------
ADDITIONS
------------- ------------ ------------
Employer contributions $ 2,422,789 $ 9,522,442 $ 11,945,231
Interest and dividend income 335,636 11,042,582 11,378,218
Net appreciation (depreciation)
of investments (238,916) 11,491,391 11,252,475
Transfer from other retirement plan 889,411 -- 889,411
------------- ------------ ------------
3,408,920 32,056,415 35,465,335
------------- ------------ ------------
DEDUCTIONS
Payments made to participants 2,456,916 5,287,868 7,744,784
Administrative expenses 18,455 50,112 68,567
------------- ------------ ------------
2,475,371 5,337,980 7,813,351
------------- ------------ ------------
Increase in net assets 933,549 26,718,435 27,651,984
NET ASSETS AVAILABLE FOR PLAN BENEFITS
Beginning of year 120,068,573 -- 120,068,573
One-time transfer to Putnam (121,002,122) 121,002,122 --
------------- ------------ ------------
End of year $ -- $147,720,557 $147,720,557
============= ============ ============
16
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FIRST HAWAIIAN, INC. PROFIT SHARING PLAN
NOTES TO FINANCIAL STATEMENTS
9. CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS BY FUND (CONTINUED)
FIRST HAWAIIAN BANK -
FOR THE PERIOD JANUARY 1, 1997 THROUGH APRIL 30, 1997
------------------------------------------------------------------
GUARANTEED
INVESTMENT
FIXED CONTRACT
EQUITY FUND INCOME FUND FUND IMA FUND
------------- ------------- ------------ -------------
ADDITIONS
Employer contributions $ 731,378 $ 199,165 $ 293,573 $ 1,198,673
Interest and dividend income 133,388 4,129 44,100 111,097
Net appreciation (depreciation) of 457,800 60,549 352,794 (1,112,606)
investments
Transfer from other retirement plan 89,164 80,858 574,629 133,576
------------ ----------- ------------ ------------
1,411,730 344,701 1,265,096 330,740
------------ ----------- ------------ ------------
DEDUCTIONS
Payments made to participants 306,576 249,712 1,223,135 596,412
Administrative expenses 2,303 654 12,086 3,382
------------ ----------- ------------ ------------
308,879 250,366 1,235,221 599,794
------------ ----------- ------------ ------------
Increase (decrease) in net assets 1,102,851 94,335 29,875 (269,054)
NET ASSETS AVAILABLE FOR PLAN BENEFITS
Beginning of period 35,301,095 9,783,563 19,845,972 52,544,439
Transfer (to) from other funds, net (211,500) (77,747) 343,324 (36,626)
One-time transfer to Putnam (36,192,446) (9,800,151) (20,219,171) (52,238,759)
------------ ----------- ------------ ------------
End of period $ -- $ -- $ -- $ --
============ =========== ============ ============
FOR THE PERIOD
JANUARY 1, 1997
THROUGH APRIL 30, 1997
------------------------------
THRIFT
ACCOUNT
LOAN POOLED FIXED
FUND INCOME FUND TOTAL
----------- ------------- -------------
ADDITIONS
Employer contributions $ -- $ -- $ 2,422,789
Interest and dividend income 42,893 29 335,636
Net appreciation (depreciation) of -- 2,547 (238,916)
investments
Transfer from other retirement plan 11,184 -- 889,411
----------- --------- -------------
54,077 2,576 3,408,920
----------- --------- -------------
DEDUCTIONS
Payments made to participants 51,324 29,757 2,456,916
Administrative expenses 10 20 18,455
----------- --------- -------------
51,334 29,777 2,475,371
----------- --------- -------------
Increase (decrease) in net assets 2,743 (27,201) 933,549
NET ASSETS AVAILABLE FOR PLAN BENEFITS
Beginning of period 2,230,579 362,925 120,068,573
Transfer (to) from other funds, net (17,451) -- --
One-time transfer to Putnam (2,215,871) (335,724) (121,002,122)
----------- --------- -------------
End of period $ -- $ -- $ --
=========== ========= =============
17
19
FIRST HAWAIIAN, INC. PROFIT SHARING PLAN
NOTES TO FINANCIAL STATEMENTS
9. CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS BY FUND (CONTINUED)
PUTNAM FIDUCIARY TRUST COMPANY -
FOR THE PERIOD MAY 1, 1997 THROUGH DECEMBER 31, 1997
----------------------------------------------------------------------------
STABLE FIRST
VOYAGER INCOME VALUE VISTA HAWAIIAN, INC.
FUND FUND FUND FUND STOCK FUND
------------ ----------- ------------ ----------- ------------
ADDITIONS
Employer contributions $ 1,739,180 $ 296,365 $ 399,412 $ 889,776 $ 716,439
Interest and dividend income 1,731,531 261,884 424,515 977,581 126,928
Net appreciation (depreciation) of
investments 7,983,613 174,164 -- 429,976 953,114
------------ ----------- ------------ ----------- ----------
11,454,324 732,413 823,927 2,297,333 1,796,481
------------ ----------- ------------ ----------- ----------
DEDUCTIONS
Payments made to participants 381,598 268,807 778,990 240,592 169,145
Administrative expenses 604 185 46,154 245 55
------------ ----------- ------------ ----------- ----------
382,202 268,992 825,144 240,837 169,200
------------ ----------- ------------ ----------- ----------
Increase (decrease) in net assets 11,072,122 463,421 (1,217) 2,056,496 1,627,281
NET ASSETS AVAILABLE FOR PLAN BENEFITS
Beginning of period -- -- -- -- --
Transfer (to) from other funds, net (33,510,297) (5,332,053) (12,368,715) 11,437,432 6,628,265
One-time transfer to Putnam 52,156,047 9,854,971 20,327,894 -- --
------------ ----------- ------------ ----------- ----------
End of period $ 29,717,872 $ 4,986,339 $ 7,957,962 $13,493,928 $8,255,546
============ =========== ============ =========== ==========
FOR THE PERIOD MAY 1, 1997 THROUGH DECEMBER 31, 1997
----------------------------------------------------------------------------
ASSET ASSET ASSET
INTERNATIONAL ALLOCATION - ALLOCATION - ALLOCATION -
GROWTH S&P 500 CONSERVATIVE BALANCED GROWTH
FUND INDEX FUND FUND FUND FUND
------------ ------------ ------------ ------------ ------------
ADDITIONS
Employer contributions $ 655,347 $ 854,457 $ 430,192 $ 677,905 $ 963,560
Interest and dividend income 427,357 2,574 554,015 1,154,749 931,170
Net appreciation (depreciation) of
investments (454,571) 1,203,437 (106,935) (433,876) (239,029)
---------- ----------- ----------- ----------- -----------
628,133 2,060,468 877,272 1,398,778 1,655,701
---------- ----------- ----------- ----------- -----------
DEDUCTIONS
Payments made to participants 110,575 303,282 1,510,887 687,385 334,993
Administrative expenses 217 234 1,104 197 393
---------- ----------- ----------- ----------- -----------
110,792 303,516 1,511,991 687,582 335,386
---------- ----------- ----------- ----------- -----------
Increase (decrease) in net assets 517,341 1,756,952 (634,719) 711,196 1,320,315
NET ASSETS AVAILABLE FOR PLAN BENEFITS
Beginning of period -- -- -- -- --
Transfer (to) from other funds, net 6,898,514 11,384,399 10,534,013 14,207,012 11,534,192
One-time transfer to Putnam -- -- -- -- --
---------- ----------- ----------- ----------- -----------
End of period $7,415,855 $13,141,351 $ 9,899,294 $14,918,208 $12,854,507
========== =========== =========== =========== ===========
FOR THE PERIOD MAY 1, 1997 THROUGH DECEMBER 31, 1997
------------------------------------------------------------------------
NEW MONEY
OPPORTUNITIES MARKET LOAN
FUND FUND FUND CASH TOTAL
------------ ---------- ------------ -------- ------------
ADDITIONS
Employer contributions $ 1,899,809 $ -- $ -- $ -- $ 9,522,442
Interest and dividend income 478,385 3,851,455 120,438 -- 11,042,582
Net appreciation (depreciation) of
investments 1,981,498 -- -- -- 11,491,391
------------ ------------ ------------ -------- ------------
4,359,692 3,851,455 120,438 -- 32,056,415
------------ ------------ ------------ -------- ------------
DEDUCTIONS
Payments made to participants 466,012 8,000 27,602 -- 5,287,868
Administrative expenses 724 -- -- -- 50,112
------------ ------------ ------------ -------- ------------
466,736 8,000 27,602 -- 5,337,980
------------ ------------ ------------ -------- ------------
Increase (decrease) in net assets 3,892,956 3,843,455 92,836 -- 26,718,435
NET ASSETS AVAILABLE FOR PLAN BENEFITS
Beginning of period -- -- -- -- --
Transfer (to) from other funds, net 18,592,678 (40,297,367) 182,383 109,547 --
One-time transfer to Putnam -- 36,453,912 2,209,298 -- 121,002,122
------------ ------------ ------------ -------- ------------
End of period $ 22,485,634 $ -- $ 2,484,517 $109,547 $147,720,557
============ ============ ============ ======== ============
18
20
FIRST HAWAIIAN, INC. PROFIT SHARING PLAN
ITEM 27A - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
DECEMBER 31, 1997
PAR VALUE,
MATURITY
MATURITY INTEREST VALUE, UNITS,
IDENTITY OF ISSUER, BORROWER, LESSOR OR SIMILAR PARTY DATE RATE COLLATERAL OR SHARES COST
-------------------------------------------------------------- ---------- ------- ----------- ----------- --------------
MUTUAL FUNDS:
Putnam Voyager Fund -- -- -- 1,529,741 $ 25,397,331
Putnam Income Fund -- -- -- 689,258 4,807,869
Putnam Stable Value Fund -- -- -- 1,091,450 1,091,450
Putnam Vista Fund -- -- -- 1,113,095 12,830,758
First Hawaiian, Inc. Stock Fund -- -- -- 202,059 7,141,573
Putnam International Growth Fund -- -- -- 433,149 7,672,834
Putnam S&P 500 Index Fund -- -- -- 569,799 11,733,391
Putnam Asset Allocation - Conservative Portfolio -- -- -- 971,953 9,878,333
Putnam Asset Allocation - Balanced Portfolio -- -- -- 1,320,719 15,224,523
Putnam Asset Allocation - Growth Portfolio -- -- -- 1,017,278 12,819,551
Putnam New Opportunities Fund -- -- -- 450,093 20,007,482
-------------
128,605,095
-------------
GUARANTEED INVESTMENT CONTRACT FUNDS:
USTPN Capital Preservation Fund -- -- -- 6,441,652 6,441,652
Variable Account
PROMISSORY NOTES to 2026 Variable Balance 2,484,517 2,484,517
GUARANTEED INVESTMENT CONTRACTS WITH LIFE INSURANCE
COMPANIES:
Metropolitan Life Insurance Company 12/31/98 7.25% -- 327,114 327,114
-------------
Total Assets Held For Investment Purposes $137,858,378
=============
IDENTITY OF ISSUER, BORROWER, LESSOR OR SIMILAR PARTY FAIR VALUE
-------------------------------------------------------------- --------------
MUTUAL FUNDS:
Putnam Voyager Fund $ 29,141,564
Putnam Income Fund 4,900,621
Putnam Stable Value Fund 1,091,450
Putnam Vista Fund 13,212,432
First Hawaiian, Inc. Stock Fund 8,031,838
Putnam International Growth Fund 7,220,604
Putnam S&P 500 Index Fund 12,860,367
Putnam Asset Allocation - Conservative Portfolio 9,690,370
Putnam Asset Allocation - Balanced Portfolio 14,699,600
Putnam Asset Allocation - Growth Portfolio 12,543,034
Putnam New Opportunities Fund 21,897,027
-------------
135,288,907
-------------
GUARANTEED INVESTMENT CONTRACT FUNDS:
USTPN Capital Preservation Fund 6,441,652
PROMISSORY NOTES 2,484,517
GUARANTEED INVESTMENT CONTRACTS WITH LIFE INSURANCE
COMPANIES:
Metropolitan Life Insurance Company 327,114
-------------
Total Assets Held For Investment Purposes $144,542,190
=============
19
21
FIRST HAWAIIAN, INC. PROFIT SHARING PLAN
ITEM 27D - SCHEDULE OF REPORTABLE TRANSACTIONS
YEAR ENDED DECEMBER 31, 1997
IDENTITY OF PARTY INVOLVED RELATIONSHIP DESCRIPTION OF ASSET PURCHASE PRICE SELLING PRICE COST OF ASSET
- -------------------------- ------------ -------------------- -------------- -------------- -----------
Bishop Street Funds (C) Money Market Fund $35,517,727 (A) $ -- $35,517,727
-- 39,349,482 (A) 39,349,482
First Hawaiian Bank (C) Pooled Equity Fund 400,000 (1) -- 400,000
Investment
Fund For Employee (2,808 units)
Benefit
Trusts (party-in-interest) Pooled Fixed Income -- 9,760,136 (5) 5,142,756
Fund (205,203
units)
Money Market -- 77,402 (1) 77,402
Fidelity Advisors Equity Mutual Fund -- 20,807,350 (1) 18,184,380
Portfolio Growth CLI & CLA
Fidelity Advisors Mid Mutual Fund 18,802,975 (2) -- 18,802,975
Capital Fund CLI 17,960,944 (1) 18,802,975
Fidelity Advisors Equity Mutual Fund -- 15,657,207 (2) 14,014,264
Portfolio Income CLI & CLA
Fidelity Institutional Money Market Fund -- 6,727,758 (A) 6,727,758
Cash Portfolio Treasury I
Fidelity Advisors Strategy Mutual Fund -- 9,588,146 (1) 9,561,990
Opportunities Fund CLI
Putnam Income Fund (D) Mutual Fund -- 8,766,274 (A) 8,684,862
Putnam Vista Fund (D) Mutual Fund 13,541,951 (A) -- 13,541,951
Putnam Voyager Fund (D) Mutual Fund 8,235,808 (A) -- 8,235,808
-- 39,235,659 (A) 34,996,279
Putnam New Opportunities
Fund (D) Mutual Fund 21,220,711 (A) -- 21,220,711
Putnam Asset Allocation - (D) Mutual Fund 14,321,228 (A) -- 14,321,228
Growth Portfolio
FAIR VALUE NET GAIN
IDENTITY OF PARTY INVOLVED OF ASSET (B) (LOSS)
- -------------------------- ----------- ----------
Bishop Street Funds $35,517,727 $ --
39,349,482 --
First Hawaiian Bank 400,000 --
Investment
Fund For Employee --
Benefit
Trusts (party-in-interest) 9,760,136 4,617,380
77,402 --
Fidelity Advisors Equity 20,807,350 2,622,970
Portfolio Growth CLI
& CLA
Fidelity Advisors Mid 18,802,975 --
Capital Fund CLI 17,960,944 (842,031)
Fidelity Advisors Equity 15,657,207 1,642,943
Portfolio Income CLI & CLA
Fidelity Institutional 6,727,758 --
Cash Portfolio
Treasury I
Fidelity Advisors Strategy 9,588,146 26,156
Opportunities Fund CLI
Putnam Income Fund 8,766,274 81,412
Putnam Vista Fund 13,541,951 --
Putnam Voyager Fund 8,235,808 --
39,235,659 4,239,380
Putnam New Opportunities
Fund 21,220,711 --
Putnam Asset Allocation - 14,321,228 --
Growth Portfolio
Note:
(A) Includes numerous transactions.
(B) Fair value at date of transaction.
(C) Fund is managed by First Hawaiian Bank, which is a subsidiary of First
Hawaiian, Inc.
(D) Fund is managed by Putnam, trustee of Plan.
(E) Plan sponsor.
(#) Indicates number of transactions.
20
22
FIRST HAWAIIAN, INC. PROFIT SHARING PLAN
ITEM 27D - SCHEDULE OF REPORTABLE TRANSACTIONS (CONTINUED)
YEAR ENDED DECEMBER 31, 1997
IDENTITY OF PARTY INVOLVED RELATIONSHIP DESCRIPTION OF ASSET PURCHASE PRICE SELLING PRICE COST OF ASSET
- -------------------------- ----------- -------------------- -------------- --------------- -----------
Putnam Asset Allocation - (D) Mutual Fund $16,856,510 (A) $ -- $16,856,510
Balanced Portfolio
Putnam Asset Allocation - (D) Mutual Fund 13,180,605 (A) -- 13,180,605
Conservative Portfolio
Putnam S&P 500 Index Fund (D) Mutual Fund 13,371,711 (A) -- 13,371,711
Putnam International (D) Mutual Fund 8,846,902 (A) -- 8,846,902
Growth Fund
First Hawaiian, Inc. (E) Mutual Fund 7,892,684 (A) -- 7,892,684
Stock Fund
Putnam Stable Value Fund (D) Mutual Fund 6,160,487 (A) -- 6,160,487
-- 18,628,165 (A) 18,628,165
Putnam Money Market Fund (D) Money Market -- 40,305,367 (2) 40,305,367
FAIR VALUE NET GAIN
IDENTITY OF PARTY INVOLVED OF ASSET (B) (LOSS)
- -------------------------- ------------- ------------
Putnam Asset Allocation - $16,856,510 $ --
Balanced Portfolio
Putnam Asset Allocation - 13,180,605 --
Conservative Portfolio
Putnam S&P 500 Index Fund 13,371,711 --
Putnam International 8,846,902 --
Growth Fund
First Hawaiian, Inc. 7,892,684 --
Stock Fund
Putnam Stable Value Fund 6,160,487 --
18,628,165 --
Putnam Money Market Fund 40,305,367 --
Note:
(A) Includes numerous transactions.
(B) Fair value at date of transaction.
(C) Fund is managed by First Hawaiian Bank, which is a subsidiary of First
Hawaiian, Inc.
(D) Fund is managed by Putnam, trustee of Plan.
(E) Plan sponsor.
(#) Indicates number of transactions.
21
23
REQUIRED INFORMATION
First Hawaiian, Inc. Profit Sharing Plan ("Plan") is subject to the Employee
Retirement Income Security Act of 1974 ("ERISA"). Therefore, in lieu of the
requirements of Items 1-3 of Form 11-K, the financial statements and schedules
of the Plan for the two fiscal years ended December 31, 1997 and 1996, which
have been prepared in accordance with the financial reporting requirements of
ERISA, are incorporated herein by this reference.
SIGNATURES
The Plan: Pursuant to the requirements of the Securities Exchange Act of 1934,
the trustees (or other persons who administer the employee benefit plan) have
duly caused this annual report to be signed on its behalf by the undersigned
hereunto duly authorized.
FIRST HAWAIIAN, INC. PROFIT SHARING PLAN
Date June 12, 1998 By /s/ SHEILA M. SUMIDA
--------------- -----------------------------------------
Sheila M. Sumida
Plan Administrator
24
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in the registration statement of
First Hawaiian, Inc. and Subsidiaries on Form S-8 (File No. 333-22107) of our
report dated May 12, 1998, on our audits of the financial statements and
schedules of the First Hawaiian, Inc. Profit Sharing Plan as of and for the
years ended December 31, 1997 and 1996, which report is included in this Annual
Report on Form 11-K.
/s/ Coopers & Lybrand L.L.P.
Honolulu, Hawaii
June 11, 1998
