-----BEGIN PRIVACY-ENHANCED MESSAGE-----
Proc-Type: 2001,MIC-CLEAR
Originator-Name: webmaster@www.sec.gov
Originator-Key-Asymmetric:
 MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen
 TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB
MIC-Info: RSA-MD5,RSA,
 A+0pnqlIZuWQZhMRzVEl0rZI/g1EOHijBSJgNse6/v6WU0CJuW5Ko3gfViIVeF8N
 BK/5kmFPxbbqS2r4XCfNbA==

<SEC-DOCUMENT>0001104659-01-500883.txt : 20010521
<SEC-HEADER>0001104659-01-500883.hdr.sgml : 20010521
ACCESSION NUMBER:		0001104659-01-500883
CONFORMED SUBMISSION TYPE:	10-Q/A
PUBLIC DOCUMENT COUNT:		1
CONFORMED PERIOD OF REPORT:	20010331
FILED AS OF DATE:		20010518

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			CPB INC
		CENTRAL INDEX KEY:			0000701347
		STANDARD INDUSTRIAL CLASSIFICATION:	STATE COMMERCIAL BANKS [6022]
		IRS NUMBER:				990212597
		STATE OF INCORPORATION:			HI
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		10-Q/A
		SEC ACT:		
		SEC FILE NUMBER:	000-10777
		FILM NUMBER:		1643472

	BUSINESS ADDRESS:	
		STREET 1:		220 S KING ST
		CITY:			HONOLULU
		STATE:			HI
		ZIP:			96813
		BUSINESS PHONE:		8085440500

	MAIL ADDRESS:	
		STREET 1:		P O BOX 3590
		CITY:			HONOLULU
		STATE:			HI
		ZIP:			96811
</SEC-HEADER>
<DOCUMENT>
<TYPE>10-Q/A
<SEQUENCE>1
<FILENAME>j0774_10qa.htm
<TEXT>

<HTML>

<head>
<TITLE>Prepared by MerrillDirect</TITLE>
</head>

<body link=blue vlink=purple>

<div>




<hr size=2 width="100%" noshade color=black align=right>






<hr size=1 width="100%" noshade color=black align=right>



<p align=center><b><font size=2>UNITED STATES</font></b><b><font size=2><br>
</font></b><b><font size=2>SECURITIES AND EXCHANGE COMMISSION<br>
Washington, D.C. 20549</font></b></p>

<p align=center><b><font size=2>FORM 10-Q</font></b></p>

<div align=center>

<table border=0 cellspacing=0 cellpadding=0 width="100%">
 <tr>
  <td  align=left width="100%" colspan=2 valign=top><b><font size=2>(Mark One)</font></b></td>
 </tr>
 <tr>
  <td  align=center width="9%" valign=top><font size=2 face=Wingdings>x</font></td>
  <td  align=left width="90%" valign=top><font size=2>QUARTERLY REPORT
  PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 </font></td>
 </tr>
 <tr>
  <td  align=center width="9%" valign=top>&nbsp;</td>
  <td  align=left width="90%" valign=top><b><font size=2>For the quarterly period ended March 31, 2001<br><br></font></b></td>
 </tr>
 <tr>
  <td  align=center width="100%" colspan=2 valign=top><b><font size=2>OR<br><br></font></b></td>
 </tr>
 <tr>
  <td  align=center width="9%" valign=top><font size=2 face=Wingdings>o</font></td>
  <td  align=left width="90%" valign=top><font size=2>TRANSITION REPORT
  PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 </font></td>
 </tr>
 <tr>
  <td  align=center width="9%" valign=top>&nbsp;</td>
  <td  align=left width="90%" valign=top><b><font size=2>For the transition period from __________ to _________<br><br></font></b></td>
 </tr>
 <tr>
  <td  align=center width="100%" colspan=2 valign=top><b><font size=2>Commission file number 0-10777</font></b></td>
 </tr>
</TABLE>

</div>

<p align=left><font size=2>&nbsp;</font></p>

<table border=0 cellspacing=0 cellpadding=0 width="100%">
 <tr>
  <td  align=center width="100%" colspan=2 valign=top><b><font size=2>CPB INC.</font></b><div align=center><b><i><font size=2><hr size=1 width="75%" noshade color=black align=center></font></i></b></div></td>
 </tr>
 <tr>
  <td  align=center width="100%" colspan=2 valign=top><font size=2>(Exact
  name of registrant as specified in its charter)</font></td>
 </tr>
 <tr>
  <td  align=center width="100%" colspan=2 valign=top>&nbsp;</td>
 </tr>
 <tr>
  <td  align=center width="50%" valign=top><b><font size=2>Hawaii</font></b><div align=center><b><font size=2><hr size=1 width="95%" noshade color=black align=center></font></b></div></td>
  <td  align=center width="50%" valign=top><b><font size=2>99-0212597</font></b><div align=center><b><font size=2><hr size=1 width="95%" noshade color=black align=center></font></b></div></td>
 </tr>
 <tr>
  <td  align=center width="50%" valign=top><font size=2>(State
  or other jurisdiction of</font></td>
  <td  align=center width="50%" valign=top><font size=2>(I.R.S.
  Employer</font></td>
 </tr>
 <tr>
  <td  align=center width="50%" valign=top><font size=2>incorporation
  or organization)</font></td>
  <td  align=center width="50%" valign=top><font size=2>Identification
  No.)</font></td>
 </tr>
 <tr>
  <td  align=center width="50%" valign=top>&nbsp;</td>
  <td  align=center width="50%" valign=top>&nbsp;</td>
 </tr>
 <tr>
  <td  align=center width="50%" valign=top><b><font size=2>220 South King Street, Honolulu, Hawaii</font></b><div align=center><b><font size=2><hr size=1 width="95%" noshade color=black align=center></font></b></div></td>
  <td  align=center width="50%" valign=top><b><font size=2>96813</font></b><div align=center><b><font size=2><hr size=1 width="95%" noshade color=black align=center></font></b></div></td>
 </tr>
 <tr>
  <td  align=center width="50%" valign=top><font size=2>(Address
  of principal executive offices)</font></td>
  <td  align=center width="50%" valign=top><font size=2>(Zip
  Code)</font></td>
 </tr>
 <tr>
  <td  align=center width="50%" valign=top>&nbsp;</td>
  <td  align=center width="50%" valign=top>&nbsp;</td>
 </tr>
 <tr>
  <td  align=center width="100%" colspan=2 valign=top><b><font size=2>(808)544-0500</font></b><div align=center><b><font size=2><hr size=1 width="75%" noshade color=black align=center></font></b></div></td>
 </tr>
 <tr>
  <td  align=center width="100%" colspan=2 valign=top><font size=2>(Registrant's
  telephone number, including area code)</font></td>
 </tr>
 <tr>
  <td  align=center width="50%" valign=top>&nbsp;</td>
  <td  align=center width="50%" valign=top>&nbsp;</td>
 </tr>
 <tr>
  <td  align=center width="100%" colspan=2 valign=top><b><font size=2>None</font></b><div align=center><b><font size=2><hr size=1 width="75%" noshade color=black align=center></font></b></div></td>
 </tr>
 <tr>
  <td  align=center width="100%" colspan=2 valign=top><font size=2>(Former
  name, former address and former fiscal year, if changed since last report)</font></td>
 </tr>
</TABLE>

<p><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Indicate by check mark whether the
registrant (1) has filed all reports required to be filed by Section 13 or 15
(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or
for such shorter period that the registrant was required to file such reports),
and (2) has been subject to such filing requirements for the past 90 days. Yes </font><font size=2 face=Wingdings>x</font><font size=2> No </font><font size=2 face=Wingdings>o</font></p>

<p><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Indicate the number of shares
outstanding of each of the issuer's classes of common stock, as of the latest
practicable date.</font></p>

<p align=center><font size=2>Common Stock, No Par Value;<br>
Outstanding at May 10, 2001: 8,229,378 shares</font></p>





<hr size=1 width="100%" noshade color=black align=right>






<hr size=2 width="100%" noshade color=black align=right>


<PAGE>


<p align=center><font size=2>PART I. FINANCIAL INFORMATION</font></p>

<p align=left><font size=2>Item 1. Financial Statements</font></p>

<dir>
<p align=left><font size=2>The financial statements listed below are filed as a part
hereof.</font></p>
</dir>

<dir>
<p align=left><font size=2><a href="#CONSOLIDATED_BALANCE_SHEETS" title="Click to goto CONSOLIDATED BALANCE SHEETS">Consolidated Balance Sheets
(Unaudited) - March 31, 2001 and December 31, 2000</a></font></p>
</dir>

<dir>
<p align=left><font size=2><a href="#CONSOLIDATED_STATEMENTS_OF_INCOME" title="Click to goto CONSOLIDATED STATEMENTS OF INCOME">Consolidated Statements
of Income (Unaudited) - Three months ended March 31, 2001 and 2000</a><a
href="#CONSOLIDATED_STATEMENTS_OF_CHANGES_IN_ST" title="Click to goto CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY AND COMPREHENSIVE INCOME"></a></font></p>
</dir>

<dir>
<p align=left><a
href="#CONSOLIDATED_STATEMENTS_OF_CHANGES_IN_ST" title="Click to goto CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY AND COMPREHENSIVE INCOME"><font size=2>Consolidated
Statements of Changes in Stockholders' Equity and Comprehensive Income
(Unaudited) - Three months ended March 31, 2001 and 2000</font></a></p>
</dir>

<dir>
<p align=left><font size=2><a href="#CONSOLIDATED_STATEMENTS_OF_CASH_FLOWS" title="Click to goto CONSOLIDATED STATEMENTS OF CASH FLOWS">Consolidated Statements
of Cash Flows (Unaudited) - Three months ended March 31, 2001 and 2000</a></font></p>
</dir>

<dir>
<p align=left><font size=2><a href="#NOTES_TO_CONSOLIDATED_FINANCIAL_STATEMEN" title="Click to goto NOTES TO CONSOLIDATED FINANCIAL STATEMENTS">Notes to
Consolidated Financial Statements (Unaudited) - March 31, 2001 and 2000</a></font></p>
</dir>

<p align=left><font size=2>Item 2.&nbsp; Management's
Discussion and Analysis of Financial Condition and Results of Operations</font></p>

<p align=left><font size=2>Overview</font></p>

<p align=left><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; CPB
Inc. (the &quot;Company&quot;) posted first quarter 2001 net income of $5.328
million, increasing by 16.2% over the $4.586 million earned in the first
quarter of 2000. The increase in net income was mainly attributed to an
increase in net interest income. As of March 31, 2001, total assets of $1.77
billion decreased by $45 million or 2.5% from year-end 2000. Net loans of $1.22
billion decreased by $54 million or 4.2% due to sale of $54 million in
residential mortgage loans during the quarter. Total deposits of $1.38 billion
increased by $15 million or 1.1% in the first quarter.</font></p>

<p align=left><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; The
following table presents annualized returns on average assets and average
stockholders' equity and basic and diluted earnings per share for the periods
indicated. </font></p>

<table border=0 cellspacing=0 cellpadding=0 width="100%">
 <tr>
  <td width="70%" valign=bottom>&nbsp;</td>
  <td  align=center width="30%" colspan=2 valign=bottom><font size=2>Three
  Months Ended</font><font size=2><br></font><font size=2>March 31,</font></td>
 </tr>
 <tr>
  <td width="70%" valign=bottom>&nbsp;</td>
  <td  align=center width="15%" valign=bottom><font size=2>2000</font></td>
  <td  align=center width="15%" valign=bottom><font size=2>2001</font></td>
 </tr>
 <tr>
  <td width="70%" valign=top bgcolor="#cceeff"><font size=2>Annualized return on average assets</font></td>
  <td width="15%" valign=bottom bgcolor="#cceeff"><font size=2>1.20%</font></td>
  <td width="15%" valign=bottom bgcolor="#cceeff"><font size=2>1.14%</font></td>
 </tr>
 <tr>
  <td width="70%" valign=top><font size=2>Annualized return on average stockholders' equity</font></td>
  <td width="15%" valign=bottom><font size=2>14.60%</font></td>
  <td width="15%" valign=bottom><font size=2>12.55%</font></td>
 </tr>
 <tr>
  <td width="70%" valign=top bgcolor="#cceeff">&nbsp;</td>
  <td width="15%" valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td width="15%" valign=bottom bgcolor="#cceeff">&nbsp;</td>
 </tr>
 <tr>
  <td width="70%" valign=top><font size=2>Basic earnings per share</font></td>
  <td width="15%" valign=bottom><font size=2>$0.63</font></td>
  <td width="15%" valign=bottom><font size=2>$0.50</font></td>
 </tr>
 <tr>
  <td width="70%" valign=top bgcolor="#cceeff"><font size=2>Diluted earnings per share</font></td>
  <td width="15%" valign=bottom bgcolor="#cceeff"><font size=2>$0.62</font></td>
  <td width="15%" valign=bottom bgcolor="#cceeff"><font size=2>$0.49</font></td>
 </tr>
</TABLE>

<p align=left><font size=2>&nbsp;</font></p>

<PAGE>


<p align=left><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </font><font size=2>Hawaii's economy improved during the last year. Measures
reflecting business activity in the state of Hawaii showed gains in January of
2001, the most recent month of available data. The statewide unemployment rate
in March 2001 fell to 4.3%, from 4.5% a year ago. The unemployment rate on the
island of Oahu of 3.5% was lower than the national average of 4.3%.</font></p>

<p align=left><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Hotel
occupancy rates in March 2001 of 80.5% decreased by 2.9% from March of 2000,
reflecting economic conditions on the U. S. mainland. However, occupancy rates
a year ago were at an 11-year high for Hawaii. Visitor arrivals decreased by
1.9% during the same period. The slowing national economy coupled with the
weakening yen exchange rate are reasons associated with the slight decline.
Development of the economic situations in Asia and the U. S. mainland will
influence the results in the local economy for the remainder of the year.</font></p>

<p align=left><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Dollar
volume of residential real estate sales in the state increased by 12.6% in the
first quarter of 2001 over the same period last year. The change in monthly
prices from last year was mixed, however the median price paid for single
family homes declined 0.9% and median condominium price rose 7.5%.</font></p>

<p align=left><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Hawaii's
economic environment has had, and will likely continue to have, a direct effect
on our Company's performance. While the Hawaii economy is expected to grow
modestly in the near future, actual results in tourism, employment and the real
estate market could affect loan demand, deposit growth, provision for loan
losses, noninterest income and noninterest expense. Accordingly, the results of
operations of the Company for the remainder of 2001 may be directly impacted by
the ability of the Hawaii economy to sustain the positive trend experienced
during the last year.</font></p>

<p align=left><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Certain
matters discussed in this report may constitute forward-looking statements
within the meaning of the Private Securities Litigation Reform Act of 1995.
These forward-looking statements relate to, among other things, net interest
income, net interest margin, the levels of nonperforming loans, loan losses and
the allowance for loan losses, noninterest income and noninterest expense.
Important factors that could cause the results to differ from those discussed
in this report include, but are not limited to, changes in market interest
rates, general business conditions in the state of Hawaii, the real estate
market in Hawaii, competitive conditions among financial institutions,
regulatory changes in the financial services industry, and other risks detailed
in the Company's reports filed with the Securities and Exchange Commission,
including the Annual Report on Form 10-K for the year ended December 31, 2000.</font></p>

<PAGE>


<p align=left><font size=2>Results of Operations</font></p>

<p align=left><font size=2>Net Interest Income</font><font size=2><br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </font><font size=2>A comparison of net interest income for the three months
ended March 31, 2001 and 2000 is set forth below on a taxable equivalent basis
using an assumed income tax rate of 35%.</font></p>

<p align=left><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Net
interest income, when expressed as a percentage of average interest earning
assets, is referred to as &quot;net interest margin.&quot;</font></p>

<table border=0 cellspacing=0 cellpadding=0 width="100%">
 <tr>
  <td  align=center width="66%" valign=bottom>&nbsp;</td>
  <td  align=center width="33%" colspan=2 valign=bottom><font   size=2>Three Months Ended March 31,</font></td>
 </tr>
 <tr>
  <td  align=left width="66%" valign=bottom><font   size=2>(Dollars in thousands)</font></td>
  <td  align=center width="16%" valign=bottom><font   size=2>2001</font></td>
  <td  align=center width="16%" valign=bottom><font   size=2>2000</font></td>
 </tr>
 <tr>
  <td  align=left width="66%" valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td  align=center width="16%" valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td  align=center width="16%" valign=bottom bgcolor="#cceeff">&nbsp;</td>
 </tr>
 <tr>
  <td  align=left width="66%" valign=top><font   size=2>Interest income</font></td>
  <td  align=right width="16%" valign=bottom><font   size=2>$34,607</font></td>
  <td  align=right width="16%" valign=bottom><font   size=2>$29,278</font></td>
 </tr>
 <tr>
  <td  align=left width="66%" valign=top bgcolor="#cceeff"><font   size=2>Interest expense</font></td>
  <td  align=right width="16%" valign=bottom bgcolor="#cceeff"><font   size=2>15,344</font></td>
  <td  align=right width="16%" valign=bottom bgcolor="#cceeff"><font   size=2>11,974</font></td>
 </tr>
 <tr>
  <td  align=left width="66%" valign=top><font   size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Net
  interest income</font></td>
  <td  align=right width="16%" valign=bottom><font   size=2>$19,263</font></td>
  <td  align=right width="16%" valign=bottom><font   size=2>$17,304</font></td>
 </tr>
 <tr>
  <td  align=left width="66%" valign=top bgcolor="#cceeff">&nbsp;</td>
  <td  align=right width="16%" valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td  align=right width="16%" valign=bottom bgcolor="#cceeff">&nbsp;</td>
 </tr>
 <tr>
  <td  align=left width="66%" valign=top><font   size=2>Net interest margin</font></td>
  <td  align=right width="16%" valign=bottom><font   size=2>4.61%</font></td>
  <td  align=right width="16%" valign=bottom><font   size=2>4.58%</font></td>
 </tr>
</TABLE>

<p align=left><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Interest
income increased by $5.3 million or 18.2% in the first quarter of 2001 compared
to the same period in 2000, due to a combination of increases in average volume
and yield on interest-earning assets. Average interest earning assets of $1,672
million for the first quarter of 2001 increased by $162 million or 10.7%, due
primarily to increases in loans. Yield on interest earning assets of 8.28% for
the first quarter of 2001 increased from 7.75% for the same period in 2000 due
primarily to the increase in market interest rates during 1999 and 2000.</font></p>

<p align=left><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Interest
and fees on loans increased by $4.2 million or 17.7% in the first quarter of
2001 compared to the previous year's first quarter due to increases in average
loan balances and average yields. Interest and dividends on investment
securities increased by $1.0 million or 18.7% mainly due to average balances
increasing by $58 million or 17.8%.</font></p>

<p align=left><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Interest
expense for the quarter ended March 31, 2001 increased by $3.4 million or 28.1%
compared to the same period in 2000 due to higher average interest-bearing
liabilities and the cumulative impact of higher level of market interest rates
experienced up to 2001. Average interest-bearing liabilities totaled $1,403
million in the first quarter of 2001, increasing by $149 million or 11.8%, due
to increases in large certificates of deposit and in long-term debt. The
average rate on interest-bearing liabilities for the first quarter of 2001
increased to 4.37% from 3.82% in the 2000 comparable quarter.</font></p>

<PAGE>


<p align=left><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </font><font size=2>The resultant net interest income for the first quarter
of 2001 increased by $2.0 million or 11.3% over the same period in 2000. Net
interest margin increased to 4.61%. Strong competition for both loans and core
deposits is expected to continue and may create additional pressure on net
interest margin in the future.</font></p>

<p align=left><font size=2>Provision for Loan Losses</font><font size=2><br>
</font><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Provision for loan losses is determined by Management's
ongoing evaluation of the loan portfolio and assessment of the ability of the
allowance for loan losses to cover inherent losses. The Company, considering
current information and events regarding a borrower's ability to repay its
obligations, treats a loan as impaired when it is probable that the Company
will be unable to collect all amounts due according to the contractual terms of
the loan agreement. When a loan is considered to be impaired, the amount of
impairment is measured based on the present value of expected future cash flows
discounted at the loan's effective interest rate or, if the loan is considered
to be collateral dependent, based on the fair value of the collateral.
Impairment losses are included in the allowance for loan losses through a
charge to the provision for loan losses. For smaller-balance homogeneous loans,
primarily residential real estate and consumer loans, the allowance for loan
losses is based upon Management's evalu ation of the quality, character and
risks inherent in the loan portfolio, current and projected economic
conditions, and historical loan loss experience. The allowance is increased by
provisions charged to operating expense and reduced by loan charge-offs, net of
recoveries.</font></p>

<PAGE>


<p align=left><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </font><font size=2>The following table sets forth certain information with
respect to the Company's allowance for loan losses as of the dates and for the
periods indicated. </font></p>

<table border=0 cellspacing=0 cellpadding=0 width="100%">
 <tr>
  <td  align=center width="70%" valign=bottom>&nbsp;</td>
  <td  align=center width="30%" colspan=2 valign=bottom><font   size=2>Three Months Ended March 31,</font></td>
 </tr>
 <tr>
  <td width="70%" valign=bottom><font size=2>(Dollars in thousands)</font></td>
  <td  align=center width="15%" valign=bottom><font   size=2>2001</font></td>
  <td  align=center width="15%" valign=bottom><font   size=2>2000</font></td>
 </tr>
 <tr>
  <td width="70%" valign=top bgcolor="#cceeff">&nbsp;</td>
  <td  align=right width="15%" valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td  align=right width="15%" valign=bottom bgcolor="#cceeff">&nbsp;</td>
 </tr>
 <tr>
  <td  align=left width="70%" valign=top><font   size=2>Allowance for loan losses:</font></td>
  <td  align=right width="15%" valign=bottom>&nbsp;</td>
  <td  align=right width="15%" valign=bottom>&nbsp;</td>
 </tr>
 <tr>
  <td  align=left width="70%" valign=top bgcolor="#cceeff"><font   size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Balance at
  beginning of period</font></td>
  <td  align=right width="15%" valign=bottom bgcolor="#cceeff"><font   size=2>$22,612</font></td>
  <td  align=right width="15%" valign=bottom bgcolor="#cceeff"><font   size=2>$20,768</font></td>
 </tr>
 <tr>
  <td  align=left width="70%" valign=top>&nbsp;</td>
  <td  align=right width="15%" valign=bottom>&nbsp;</td>
  <td  align=right width="15%" valign=bottom>&nbsp;</td>
 </tr>
 <tr>
  <td width="70%" valign=top bgcolor="#cceeff"><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Provision for loan losses</font></td>
  <td  align=right width="15%" valign=bottom bgcolor="#cceeff"><font   size=2>750</font></td>
  <td  align=right width="15%" valign=bottom bgcolor="#cceeff"><font   size=2>1,000</font></td>
 </tr>
 <tr>
  <td  align=left width="70%" valign=top><font   size=2>&nbsp;&nbsp; Loan
  charge-offs:</font></td>
  <td  align=right width="15%" valign=bottom>&nbsp;</td>
  <td  align=right width="15%" valign=bottom>&nbsp;</td>
 </tr>
 <tr>
  <td  align=left width="70%" valign=top bgcolor="#cceeff"><font   size=2>&nbsp;&nbsp; Real estate:</font></td>
  <td  align=right width="15%" valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td  align=right width="15%" valign=bottom bgcolor="#cceeff">&nbsp;</td>
 </tr>
 <tr>
  <td  align=left width="70%" valign=top><font   size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
  Mortgage-commercial</font></td>
  <td  align=right width="15%" valign=bottom><font   size=2>-</font></td>
  <td  align=right width="15%" valign=bottom><font   size=2>-</font></td>
 </tr>
 <tr>
  <td  align=left width="70%" valign=top bgcolor="#cceeff"><font   size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
  Mortgage-residential</font></td>
  <td  align=right width="15%" valign=bottom bgcolor="#cceeff"><font   size=2>414</font></td>
  <td  align=right width="15%" valign=bottom bgcolor="#cceeff"><font   size=2>350</font></td>
 </tr>
 <tr>
  <td  align=left width="70%" valign=top><font   size=2>&nbsp;&nbsp; Commercial,
  financial and agricultural</font></td>
  <td  align=right width="15%" valign=bottom><font   size=2>-</font></td>
  <td  align=right width="15%" valign=bottom><font   size=2>18</font></td>
 </tr>
 <tr>
  <td  align=left width="70%" valign=top bgcolor="#cceeff"><font   size=2>&nbsp;&nbsp; Consumer:</font></td>
  <td  align=right width="15%" valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td  align=right width="15%" valign=bottom bgcolor="#cceeff">&nbsp;</td>
 </tr>
 <tr>
  <td  align=left width="70%" valign=top><font   size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Credit
  card and other revolving credit plans</font></td>
  <td  align=right width="15%" valign=bottom><font   size=2>93</font></td>
  <td  align=right width="15%" valign=bottom><font   size=2>39</font></td>
 </tr>
 <tr>
  <td  align=left width="70%" valign=top bgcolor="#cceeff"><font   size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Other
  consumer</font></td>
  <td  align=right width="15%" valign=bottom bgcolor="#cceeff"><font   size=2>-</font></td>
  <td  align=right width="15%" valign=bottom bgcolor="#cceeff"><font   size=2>44</font></td>
 </tr>
 <tr>
  <td  align=left width="70%" valign=top><font   size=2>&nbsp;&nbsp; Other</font></td>
  <td  align=right width="15%" valign=bottom><font   size=2>-</font></td>
  <td  align=right width="15%" valign=bottom><font   size=2>12</font></td>
 </tr>
 <tr>
  <td  align=left width="70%" valign=top bgcolor="#cceeff"><font   size=2>&nbsp;&nbsp;&nbsp; &nbsp;&nbsp;Total loan charge-offs<br><br></font></td>
  <td  align=right width="15%" valign=bottom bgcolor="#cceeff"><font   size=2>507<br><br></font></td>
  <td  align=right width="15%" valign=bottom bgcolor="#cceeff"><font   size=2>463<br><br></font></td>
 </tr>
 <tr>
  <td  align=left width="70%" valign=top><font   size=2>&nbsp;&nbsp; Recoveries:</font></td>
  <td  align=right width="15%" valign=bottom>&nbsp;</td>
  <td  align=right width="15%" valign=bottom>&nbsp;</td>
 </tr>
 <tr>
  <td width="70%" valign=top bgcolor="#cceeff"><font size=2>&nbsp;&nbsp; Real estate:</font></td>
  <td  align=right width="15%" valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td  align=right width="15%" valign=bottom bgcolor="#cceeff">&nbsp;</td>
 </tr>
 <tr>
  <td width="70%" valign=top><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Mortgage-commercial</font></td>
  <td  align=right width="15%" valign=bottom><font   size=2>2</font></td>
  <td  align=right width="15%" valign=bottom><font   size=2>513</font></td>
 </tr>
 <tr>
  <td width="70%" valign=top bgcolor="#cceeff"><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Mortgage-residential</font></td>
  <td  align=right width="15%" valign=bottom bgcolor="#cceeff"><font   size=2>48</font></td>
  <td  align=right width="15%" valign=bottom bgcolor="#cceeff"><font   size=2>6</font></td>
 </tr>
 <tr>
  <td width="70%" valign=top><font size=2>&nbsp;&nbsp; Commercial, financial and agricultural</font></td>
  <td  align=right width="15%" valign=bottom><font   size=2>318</font></td>
  <td  align=right width="15%" valign=bottom><font   size=2>12</font></td>
 </tr>
 <tr>
  <td width="70%" valign=top bgcolor="#cceeff"><font size=2>&nbsp;&nbsp; Consumer:</font></td>
  <td  align=right width="15%" valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td  align=right width="15%" valign=bottom bgcolor="#cceeff">&nbsp;</td>
 </tr>
 <tr>
  <td width="70%" valign=top><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Credit card and other revolving credit plans</font></td>
  <td  align=right width="15%" valign=bottom><font   size=2>31</font></td>
  <td  align=right width="15%" valign=bottom><font   size=2>28</font></td>
 </tr>
 <tr>
  <td width="70%" valign=top bgcolor="#cceeff"><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Other consumer</font></td>
  <td  align=right width="15%" valign=bottom bgcolor="#cceeff"><font   size=2>-</font></td>
  <td  align=right width="15%" valign=bottom bgcolor="#cceeff"><font   size=2>22</font></td>
 </tr>
 <tr>
  <td width="70%" valign=top><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total recoveries</font></td>
  <td  align=right width="15%" valign=bottom><font   size=2>399</font></td>
  <td  align=right width="15%" valign=bottom><font   size=2>581</font></td>
 </tr>
 <tr>
  <td width="70%" valign=top bgcolor="#cceeff"><font size=2>&nbsp;&nbsp; Net loan charge-offs (recoveries)</font></td>
  <td  align=right width="15%" valign=bottom bgcolor="#cceeff"><font   size=2>108</font></td>
  <td  align=right width="15%" valign=bottom bgcolor="#cceeff"><font   size=2>(118)</font></td>
 </tr>
 <tr>
  <td width="70%" valign=top>&nbsp;</td>
  <td  align=right width="15%" valign=bottom>&nbsp;</td>
  <td  align=right width="15%" valign=bottom>&nbsp;</td>
 </tr>
 <tr>
  <td width="70%" valign=top bgcolor="#cceeff"><font   size=2>&nbsp;&nbsp; Balance at end of period</font></td>
  <td  align=right width="15%" valign=bottom bgcolor="#cceeff"><font size=2>$23,254</font></td>
  <td  align=right width="15%" valign=bottom bgcolor="#cceeff"><font size=2>$21,886</font></td>
 </tr>
 <tr>
  <td width="70%" valign=top>&nbsp;</td>
  <td  align=right width="15%" valign=bottom>&nbsp;</td>
  <td  align=right width="15%" valign=bottom>&nbsp;</td>
 </tr>
 <tr>
  <td  align=left width="70%" valign=top bgcolor="#cceeff"><font   size=2>Annualized ratio of net loan charge-offs (recoveries)
  to average loans</font></td>
  <td  align=right width="15%" valign=bottom bgcolor="#cceeff"><font   size=2>0.03%</font></td>
  <td  align=right width="15%" valign=bottom bgcolor="#cceeff"><font   size=2>(0.04%)</font></td>
 </tr>
</TABLE>

<p><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; The provision for loan losses of $750,000 for the first
quarter of 2001 decreased by 25.0% from $1.0 million accrued in the same period
in 2000. For the first quarter, net loan charge-offs of $108,000 in 2001 and
recoveries of $118,000 in 2000, when expressed as an annualized percentage of
average total loans, were 0.03% and 0.04%, respectively. Loan charge-offs
during the first quarter of 2001 were comprised primarily of several
residential real estate loans. Loan recoveries in 2001 were primarily from two commercial
loans charged off in prior years.</font></p>

<p><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; The allowance for loan losses expressed as a percentage
of total loans was 1.88% at March 31, 2001, increasing from 1.75% at December
31, 2000. The increase in this ratio was primarily due to the sale of $54 million
in residential mortgage loans. Considering the relatively low level of net loan
charge-offs and decrease in total nonaccrual and delinquent loans during the
year, Management believes that the allowance for loan losses was adequate to
cover the credit risks inherent in the loan portfolio. However, any
deterioration in economic conditions in the state of Hawaii could adversely
affect borrowers' ability to repay, collateral values and, consequently, the
level of nonperforming loans and provision for loan losses.</font></p>

<PAGE>


<p align=left><font size=2>Nonperforming Assets</font><font size=2><br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </font><font size=2>The following table sets forth nonperforming assets and
accruing loans delinquent for 90 days or more at the dates indicated. </font></p>

<table border=0 cellspacing=0 cellpadding=0 width="100%">
 <tr>
  <td  align=center width="54%" valign=bottom>&nbsp;</td>
  <td  align=right width="15%" valign=bottom><font   size=2>March 31,</font></td>
  <td  align=right width="15%" valign=bottom><font   size=2>December 31,</font></td>
  <td  align=right width="15%" valign=bottom><font   size=2>March 31,</font></td>
 </tr>
 <tr>
  <td width="54%" valign=bottom><font   size=2>(Dollars in thousands)</font></td>
  <td  align=right width="15%" valign=bottom><font size=2>2001</font></td>
  <td  align=right width="15%" valign=bottom><font size=2>2000</font></td>
  <td  align=right width="15%" valign=bottom><font size=2>2000</font></td>
 </tr>
 <tr>
  <td width="54%" valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td  align=right width="15%" valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td  align=right width="15%" valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td  align=right width="15%" valign=bottom bgcolor="#cceeff">&nbsp;</td>
 </tr>
 <tr>
  <td  align=left width="54%" valign=top><font   size=2>Nonaccrual loans:</font></td>
  <td  align=right width="15%" valign=bottom>&nbsp;</td>
  <td  align=right width="15%" valign=bottom>&nbsp;</td>
  <td  align=right width="15%" valign=bottom>&nbsp;</td>
 </tr>
 <tr>
  <td  align=left width="54%" valign=top bgcolor="#cceeff"><font   size=2>&nbsp;&nbsp; Real estate:</font></td>
  <td  align=right width="15%" valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td  align=right width="15%" valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td  align=right width="15%" valign=bottom bgcolor="#cceeff">&nbsp;</td>
 </tr>
 <tr>
  <td  align=left width="54%" valign=top><font   size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
  Mortgage-commercial</font></td>
  <td  align=right width="15%" valign=bottom><font   size=2>$984</font></td>
  <td  align=right width="15%" valign=bottom><font   size=2>$5,913</font></td>
  <td  align=right width="15%" valign=bottom><font   size=2>$3,106</font></td>
 </tr>
 <tr>
  <td width="54%" valign=top bgcolor="#cceeff"><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Mortgage-residential</font></td>
  <td  align=right width="15%" valign=bottom bgcolor="#cceeff"><font   size=2>1,878</font></td>
  <td  align=right width="15%" valign=bottom bgcolor="#cceeff"><font   size=2>2,069</font></td>
  <td  align=right width="15%" valign=bottom bgcolor="#cceeff"><font   size=2>5,783</font></td>
 </tr>
 <tr>
  <td width="54%" valign=top><font size=2>&nbsp;&nbsp; Commercial, financial and agricultural</font></td>
  <td  align=right width="15%" valign=bottom><font   size=2>3,540</font></td>
  <td  align=right width="15%" valign=bottom><font   size=2>542</font></td>
  <td  align=right width="15%" valign=bottom><font   size=2>1,624</font></td>
 </tr>
 <tr>
  <td width="54%" valign=top bgcolor="#cceeff"><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total nonaccrual loans</font></td>
  <td  align=right width="15%" valign=bottom bgcolor="#cceeff"><font   size=2>6,402</font></td>
  <td  align=right width="15%" valign=bottom bgcolor="#cceeff"><font   size=2>8,524</font></td>
  <td  align=right width="15%" valign=bottom bgcolor="#cceeff"><font   size=2>10,513</font></td>
 </tr>
 <tr>
  <td width="54%" valign=top>&nbsp;</td>
  <td  align=right width="15%" valign=bottom>&nbsp;</td>
  <td  align=right width="15%" valign=bottom>&nbsp;</td>
  <td  align=right width="15%" valign=bottom>&nbsp;</td>
 </tr>
 <tr>
  <td width="54%" valign=top bgcolor="#cceeff"><font size=2>Other real estate</font></td>
  <td  align=right width="15%" valign=bottom bgcolor="#cceeff"><font   size=2>664</font></td>
  <td  align=right width="15%" valign=bottom bgcolor="#cceeff"><font   size=2>1,792</font></td>
  <td  align=right width="15%" valign=bottom bgcolor="#cceeff"><font   size=2>476</font></td>
 </tr>
 <tr>
  <td width="54%" valign=top><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total nonperforming assets</font></td>
  <td  align=right width="15%" valign=bottom><font   size=2>7,066</font></td>
  <td  align=right width="15%" valign=bottom><font   size=2>10,316</font></td>
  <td  align=right width="15%" valign=bottom><font   size=2>10,989</font></td>
 </tr>
 <tr>
  <td width="54%" valign=top bgcolor="#cceeff">&nbsp;</td>
  <td  align=right width="15%" valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td  align=right width="15%" valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td  align=right width="15%" valign=bottom bgcolor="#cceeff">&nbsp;</td>
 </tr>
 <tr>
  <td  align=left width="54%" valign=top><font   size=2>Loans delinquent for 90 days or more:</font></td>
  <td  align=right width="15%" valign=bottom>&nbsp;</td>
  <td  align=right width="15%" valign=bottom>&nbsp;</td>
  <td  align=right width="15%" valign=bottom>&nbsp;</td>
 </tr>
 <tr>
  <td width="54%" valign=top bgcolor="#cceeff"><font size=2>&nbsp;&nbsp; Real estate:</font></td>
  <td  align=right width="15%" valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td  align=right width="15%" valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td  align=right width="15%" valign=bottom bgcolor="#cceeff">&nbsp;</td>
 </tr>
 <tr>
  <td width="54%" valign=top><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Mortgage-commercial</font></td>
  <td  align=right width="15%" valign=bottom><font   size=2>-</font></td>
  <td  align=right width="15%" valign=bottom><font   size=2>-</font></td>
  <td  align=right width="15%" valign=bottom><font   size=2>12</font></td>
 </tr>
 <tr>
  <td width="54%" valign=top bgcolor="#cceeff"><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Mortgage-residential</font></td>
  <td  align=right width="15%" valign=bottom bgcolor="#cceeff"><font   size=2>317</font></td>
  <td  align=right width="15%" valign=bottom bgcolor="#cceeff"><font   size=2>653</font></td>
  <td  align=right width="15%" valign=bottom bgcolor="#cceeff"><font   size=2>902</font></td>
 </tr>
 <tr>
  <td width="54%" valign=top><font size=2>&nbsp;&nbsp; Commercial, financial and agricultural</font></td>
  <td  align=right width="15%" valign=bottom><font   size=2>286</font></td>
  <td  align=right width="15%" valign=bottom><font   size=2>850</font></td>
  <td  align=right width="15%" valign=bottom><font   size=2>395</font></td>
 </tr>
 <tr>
  <td width="54%" valign=top bgcolor="#cceeff"><font size=2>&nbsp;&nbsp; Consumer</font></td>
  <td  align=right width="15%" valign=bottom bgcolor="#cceeff"><font   size=2>2</font></td>
  <td  align=right width="15%" valign=bottom bgcolor="#cceeff"><font   size=2>24</font></td>
  <td  align=right width="15%" valign=bottom bgcolor="#cceeff"><font   size=2>43</font></td>
 </tr>
 <tr>
  <td width="54%" valign=top><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total loans delinquent for 90 days or more</font></td>
  <td  align=right width="15%" valign=bottom><font   size=2>605</font></td>
  <td  align=right width="15%" valign=bottom><font   size=2>1,527</font></td>
  <td  align=right width="15%" valign=bottom><font   size=2>1,352</font></td>
 </tr>
 <tr>
  <td width="54%" valign=top bgcolor="#cceeff">&nbsp;</td>
  <td  align=right width="15%" valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td  align=right width="15%" valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td  align=right width="15%" valign=bottom bgcolor="#cceeff">&nbsp;</td>
 </tr>
 <tr>
  <td  align=left width="54%" valign=top><font   size=2>Restructured loans still accruing interest:</font></td>
  <td  align=right width="15%" valign=bottom>&nbsp;</td>
  <td  align=right width="15%" valign=bottom>&nbsp;</td>
  <td  align=right width="15%" valign=bottom>&nbsp;</td>
 </tr>
 <tr>
  <td width="54%" valign=top bgcolor="#cceeff"><font size=2>&nbsp;&nbsp; Real estate:</font></td>
  <td  align=right width="15%" valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td  align=right width="15%" valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td  align=right width="15%" valign=bottom bgcolor="#cceeff">&nbsp;</td>
 </tr>
 <tr>
  <td width="54%" valign=top><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Mortgage-commercial</font></td>
  <td  align=right width="15%" valign=bottom><font   size=2>455</font></td>
  <td  align=right width="15%" valign=bottom><font   size=2>466</font></td>
  <td  align=right width="15%" valign=bottom><font   size=2>494</font></td>
 </tr>
 <tr>
  <td width="54%" valign=bottom bgcolor="#cceeff"><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total
  restructured loans still accruing interest</font></td>
  <td  align=right width="15%" valign=bottom bgcolor="#cceeff"><font size=2>455</font></td>
  <td  align=right width="15%" valign=bottom bgcolor="#cceeff"><font size=2>466</font></td>
  <td  align=right width="15%" valign=bottom bgcolor="#cceeff"><font size=2>494</font></td>
 </tr>
 <tr>
  <td width="54%" valign=top><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total nonperforming assets, loans
  delinquent for 90 days or more and restructured loans still accruing interest</font></td>
  <td  align=right width="15%" valign=bottom><font size=2>$8,126</font></td>
  <td  align=right width="15%" valign=bottom><font size=2>$12,309</font></td>
  <td  align=right width="15%" valign=bottom><font size=2>$12,835</font></td>
 </tr>
 <tr>
  <td width="54%" valign=top bgcolor="#cceeff">&nbsp;</td>
  <td  align=right width="15%" valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td  align=right width="15%" valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td  align=right width="15%" valign=bottom bgcolor="#cceeff">&nbsp;</td>
 </tr>
 <tr>
  <td  align=left width="54%" valign=top><font   size=2>Total nonperforming assets as a percentage of loans and
  other real estate</font></td>
  <td  align=right width="15%" valign=bottom><font   size=2>0.57%</font></td>
  <td  align=right width="15%" valign=bottom><font   size=2>0.80%</font></td>
  <td  align=right width="15%" valign=bottom><font   size=2>0.93%</font></td>
 </tr>
 <tr>
  <td  align=left width="54%" valign=top bgcolor="#cceeff">&nbsp;</td>
  <td  align=right width="15%" valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td  align=right width="15%" valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td  align=right width="15%" valign=bottom bgcolor="#cceeff">&nbsp;</td>
 </tr>
 <tr>
  <td  align=left width="54%" valign=top><font   size=2>Total nonperforming assets and loans delinquent for 90
  days or more as a percentage of loans and other real estate</font></td>
  <td  align=right width="15%" valign=bottom><font   size=2>0.62%</font></td>
  <td  align=right width="15%" valign=bottom><font   size=2>0.92%</font></td>
  <td  align=right width="15%" valign=bottom><font   size=2>1.04%</font></td>
 </tr>
 <tr>
  <td  align=left width="54%" valign=top bgcolor="#cceeff">&nbsp;</td>
  <td  align=right width="15%" valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td  align=right width="15%" valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td  align=right width="15%" valign=bottom bgcolor="#cceeff">&nbsp;</td>
 </tr>
 <tr>
  <td  align=left width="54%" valign=top><font   size=2>Total nonperforming assets, loans delinquent for 90
  days or more and restructured loans still accruing interest as a percentage
  of loans and other real estate</font></td>
  <td  align=right width="15%" valign=bottom><font   size=2>0.66%</font></td>
  <td  align=right width="15%" valign=bottom><font   size=2>0.95%</font></td>
  <td  align=right width="15%" valign=bottom><font   size=2>1.08%</font></td>
 </tr>
</TABLE>

<p align=left><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Nonperforming
assets, loans delinquent for 90 days or more and restructured loans still
accruing interest totaled $8.1 million at March 31, 2001, a decrease of $4.2
million or 34.0% from year-end 2000. Nonaccrual loans, loans delinquent for 90
days or more and restructured loans still accruing interest were comprised
primarily of loans secured by commercial or residential real property all of
which are located in the state of Hawaii. Nonaccrual loans at March 31, 2001 of
$6.4 million decreased by 30.4% from year-end 2000 and included a $3.0 million
loan secured by commercial real estate and a $0.9 million loan secured by
multi-family residential property, both located on the island of Oahu. Loans delinquent
for 90 days or more and still accruing interest totaled $605,000 at March 31,
2001, a 60.4% decrease from year-end 2000. Impaired loans, representing one
loan at March 31, 2001, totaled $455,000 and at year-end 2000 totaled $466,000.</font></p>


<p><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Management
continues to closely monitor loan delinquencies and work with borrowers to
resolve loan problems; however, any worsening of current economic conditions in
the state of Hawaii may result in future increases in nonperforming assets,
delinquencies, net loan charge-offs, provision for loan losses and noninterest
expense.</font></p>


<PAGE>


<p align=left><font size=2>Other Operating Income<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total other operating income
of $3.6 million for the first quarter of 2001 decreased by $0.8 million
compared to last year's first quarter. A gain of $601,000 was recognized in the
first quarter of 2001 from the sale of $54 million in residential mortgage
loans. Sale of the Bank's merchant servicing portfolio in the first quarter of
2000 resulted in a $1.85 million gain. Fees related to merchant services were
consequently reduced by $390,000 in 2001 compared to the first quarter of 2000.
Investment securities gains were $180,000 in 2001 compared to losses of
$360,000 in the first quarter of 2000. Excluding the impact of the residential
mortgage loans and merchant portfolio sales and securities transactions, total
other operating income increased by $199,000 or 7.7% in the first quarter of
2001 compared to the same period in 2000.</font></p>

<p align=left><font size=2>Other Operating Expense</font><font size=2><br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </font><font size=2>Total other operating expense of $13.6 million for the
first quarter of 2001 increased by $188,000 or 1.4% over the same period in
2000. The increase was primarily attributed to an increase in salaries and
benefits of $353,000 or 5.4% over last year's first quarter. Other expense of
$4.4 million in the first quarter of 2001 decreased by $192,000 or 4.2% from
the previous year's first quarter. Non-recurring items explained the unusually
high level in this expense category during both periods. In the first quarter
of 2001, an expense of $642,000 was recorded due to an early payoff of $20
million in borrowings from the Federal Home Loan Bank of Seattle. In the first
quarter of 2000, expenses of $358,000 related to merchant servicing fees and
$480,000 related to early termination of a servicing agreement for the sold
merchant services portfolio were recognized.</font></p>

<p align=left><font size=2>Income Taxes<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; The effective tax rate for
the first quarter of 2001 and 2000 was 35.66% and 35.29%, respectively.</font></p>

<p><font size=2>Financial Condition</font></p>

<p><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total assets at March 31, 2001 of
$1.77 billion decreased by $45 million or 2.5% from year-end 2000 due primarily
to the sale of $54 million in residential mortgages. Loans were sold to adjust
the Company's interest rate profile and to enhance liquidity. Proceeds from the
sale were used to reduce short-term borrowings by $40 million and long-term
debt by $20 million. Net loans of $1.22 billion decreased by $54 million or
4.2%, and investment securities of $379 million decreased by $5 million or
1.4%. Total deposits at March 31, 2001 of $1.38 billion increased by $15
million or 1.1%. Noninterest-bearing deposits of $212 million increased by $12
million or 6.0%, accounting for most of the increase in deposits.
Interest-bearing deposits of $1.17 billion increased by $3 million or 0.2%
compared to year-end 2000. Core deposits (noninterest-bearing demand,
interest-bearing demand and savings deposits, and time deposits under $100,000)
at March 31, 2001 of $976 million decreased by $31 million or 3.3% during the
first three months of 2001, while time deposits of $100,000 and over of $402
million decreased by $16 million or 3.8%. Competition for deposits remains
strong and will continue to challenge the Bank's ability to gather low-cost
retail funds.</font></p>

<PAGE>



<p><font size=2>Capital Resources</font></p>



<p><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Stockholders'
equity of $142 million at March 31, 2001 decreased by $1 million or 0.7% from
December 31, 2000. When expressed as a percentage of total assets,
stockholders' equity increased to 8.03% at March 31, 2001, from 7.89% at
year-end 2000. Book value per share at March 31, 2001 was $17.31, compared to
$16.93 at year-end 2000.</font></p>



<p><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; The
decrease in stockholder's equity reflected the repurchase of 250,000 shares of
the Company's common stock for $6.8 million during the first quarter of 2001.
The Company is currently in the fourth segment of its repurchase program, which
began in 1998.</font></p>



<p><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; On
March 19, 2001, the board of directors declared a first quarter cash dividend
of $0.16 per share, a 6.7% increase over the dividend declared in the first
quarter of 2000. Dividends declared in the first quarter of 2001 totaled
$1,316,000 compared with $1,383,000 in the first quarter of 2000, a 4.8%
decrease. This decrease was due to the decrease in outstanding shares at the
end of March 2001 compared to a year ago resulting from the repurchase of the
Company's common stock.</font></p>



<p><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; The
Company's objective with respect to capital resources is to maintain a level of
capital that will support sustained asset growth and anticipated risks.
Furthermore, the Company seeks to ensure that regulatory guidelines and
industry standards for well-capitalized institutions are met.</font></p>


<p align=left><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Regulations
on capital adequacy guidelines adopted by the Federal Reserve Board (the
&quot;FRB&quot;) and the Federal Deposit Insurance Corporation (the
&quot;FDIC&quot;) are as follows. An institution is required to maintain a
minimum ratio of qualifying total capital to risk-adjusted assets of 8% and a
minimum ratio of Tier 1 capital to risk-adjusted assets of 4%. In addition to
the risk-based guidelines, federal banking regulators require banking
organizations to maintain a minimum amount of Tier 1 capital to total assets,
referred to as the leverage ratio. For a banking organization rated in the
highest of the five categories used by regulators to rate banking
organizations, the minimum leverage ratio of Tier 1 capital to total assets
must be 3%. In addition to these uniform risk-based capital guidelines and
leverage ratios that apply across the industry, the regulators have the
discretion to set individual minimum capital requirements for specific
institutions at rates significantly above the minimum guidelines and ratios.</font></p>

<PAGE>


<p align=left><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </font><font size=2>The following table sets forth the Company's capital
ratios and capital adequacy requirements applicable to the Company as of the
dates indicated. </font></p>

<table border=0 cellspacing=0 cellpadding=0 width="100%">
 <tr>
  <td  align=center width="17%" valign=bottom>&nbsp;</td>
  <td  align=center width="12%" valign=bottom>&nbsp;</td>
  <td  align=center width="12%" valign=bottom><font   size=2>Actual</font></td>
  <td  align=center width="12%" colspan=2 valign=bottom><font size=2>Minimum
  required for capital adequacy purposes</font></td>
  <td  align=center width="12%" colspan=2 valign=bottom><font   size=2>Excess</font></td>
 </tr>
 <tr>
  <td width="17%" valign=top><font size=2>(Dollars in thousands)</font></td>
  <td  align=center width="12%" valign=bottom><font   size=2>Amount</font></td>
  <td  align=center width="12%" valign=bottom><font   size=2>Ratio</font></td>
  <td  align=center width="12%" valign=bottom><font   size=2>Amount</font></td>
  <td  align=center width="12%" valign=bottom><font   size=2>Ratio</font></td>
  <td  align=center width="12%" valign=bottom><font   size=2>Amount</font></td>
  <td  align=center width="12%" valign=bottom><font   size=2>Ratio</font></td>
 </tr>
 <tr>
  <td width="17%" valign=top bgcolor="#cceeff">&nbsp;</td>
  <td  align=center width="12%" valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td  align=center width="12%" valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td  align=center width="12%" valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td  align=center width="12%" valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td  align=center width="12%" valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td  align=center width="12%" valign=bottom bgcolor="#cceeff">&nbsp;</td>
 </tr>
 <tr>
  <td width="17%" valign=top><font size=2>At March 31, 2001:</font></td>
  <td  align=right width="12%" valign=bottom>&nbsp;</td>
  <td  align=right width="12%" valign=bottom>&nbsp;</td>
  <td  align=right width="12%" valign=bottom>&nbsp;</td>
  <td  align=right width="12%" valign=bottom>&nbsp;</td>
  <td  align=right width="12%" valign=bottom>&nbsp;</td>
  <td  align=right width="12%" valign=bottom>&nbsp;</td>
 </tr>
 <tr>
  <td width="17%" valign=top bgcolor="#cceeff"><font size=2>&nbsp;&nbsp; Leverage capital</font></td>
  <td  align=right width="12%" valign=bottom bgcolor="#cceeff"><font   size=2>$137,532</font></td>
  <td  align=right width="12%" valign=bottom bgcolor="#cceeff"><font   size=2>7.78%</font></td>
  <td  align=right width="12%" valign=bottom bgcolor="#cceeff"><font   size=2>$70,745</font></td>
  <td  align=right width="12%" valign=bottom bgcolor="#cceeff"><font   size=2>4.00%</font></td>
  <td  align=right width="12%" valign=bottom bgcolor="#cceeff"><font   size=2>$66,787</font></td>
  <td  align=right width="12%" valign=bottom bgcolor="#cceeff"><font   size=2>3.78%</font></td>
 </tr>
 <tr>
  <td width="17%" valign=top><font size=2>&nbsp;&nbsp; Tier 1 risk-based capital</font></td>
  <td  align=right width="12%" valign=bottom><font   size=2>137,532</font></td>
  <td  align=right width="12%" valign=bottom><font   size=2>9.54</font></td>
  <td  align=right width="12%" valign=bottom><font   size=2>57,678</font></td>
  <td  align=right width="12%" valign=bottom><font   size=2>4.00</font></td>
  <td  align=right width="12%" valign=bottom><font   size=2>79,854</font></td>
  <td  align=right width="12%" valign=bottom><font   size=2>5.54</font></td>
 </tr>
 <tr>
  <td  align=left width="17%" valign=top bgcolor="#cceeff"><font size=3 face=Times>&nbsp;&nbsp; </font><font   size=2>Total risk-based capital</font></td>
  <td  align=right width="12%" valign=bottom bgcolor="#cceeff"><font   size=2>155,621</font></td>
  <td  align=right width="12%" valign=bottom bgcolor="#cceeff"><font   size=2>10.79</font></td>
  <td  align=right width="12%" valign=bottom bgcolor="#cceeff"><font   size=2>115,355</font></td>
  <td  align=right width="12%" valign=bottom bgcolor="#cceeff"><font   size=2>8.00</font></td>
  <td  align=right width="12%" valign=bottom bgcolor="#cceeff"><font   size=2>40,266</font></td>
  <td  align=right width="12%" valign=bottom bgcolor="#cceeff"><font   size=2>2.79</font></td>
 </tr>
 <tr>
  <td width="17%" valign=top>&nbsp;</td>
  <td  align=right width="12%" valign=bottom>&nbsp;</td>
  <td  align=right width="12%" valign=bottom>&nbsp;</td>
  <td  align=right width="12%" valign=bottom>&nbsp;</td>
  <td  align=right width="12%" valign=bottom>&nbsp;</td>
  <td  align=right width="12%" valign=bottom>&nbsp;</td>
  <td  align=right width="12%" valign=bottom>&nbsp;</td>
 </tr>
 <tr>
  <td width="17%" valign=top bgcolor="#cceeff"><font size=2>At December 31, 2000:</font></td>
  <td  align=right width="12%" valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td  align=right width="12%" valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td  align=right width="12%" valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td  align=right width="12%" valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td  align=right width="12%" valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td  align=right width="12%" valign=bottom bgcolor="#cceeff">&nbsp;</td>
 </tr>
 <tr>
  <td width="17%" valign=top><font size=2>&nbsp;&nbsp; Leverage capital</font></td>
  <td  align=right width="12%" valign=bottom><font   size=2>$140,222</font></td>
  <td  align=right width="12%" valign=bottom><font   size=2>7.97%</font></td>
  <td  align=right width="12%" valign=bottom><font   size=2>$70,362</font></td>
  <td  align=right width="12%" valign=bottom><font   size=2>4.00%</font></td>
  <td  align=right width="12%" valign=bottom><font   size=2>$69,860</font></td>
  <td  align=right width="12%" valign=bottom><font   size=2>3.97%</font></td>
 </tr>
 <tr>
  <td width="17%" valign=top bgcolor="#cceeff"><font size=2>&nbsp;&nbsp; Tier 1 risk-based capital</font></td>
  <td  align=right width="12%" valign=bottom bgcolor="#cceeff"><font   size=2>140,222</font></td>
  <td  align=right width="12%" valign=bottom bgcolor="#cceeff"><font   size=2>9.63</font></td>
  <td  align=right width="12%" valign=bottom bgcolor="#cceeff"><font   size=2>58,215</font></td>
  <td  align=right width="12%" valign=bottom bgcolor="#cceeff"><font   size=2>4.00</font></td>
  <td  align=right width="12%" valign=bottom bgcolor="#cceeff"><font   size=2>82,007</font></td>
  <td  align=right width="12%" valign=bottom bgcolor="#cceeff"><font   size=2>5.63</font></td>
 </tr>
 <tr>
  <td width="17%" valign=top><font size=2>&nbsp;&nbsp; Total risk-based capital</font></td>
  <td  align=right width="12%" valign=bottom><font   size=2>158,469</font></td>
  <td  align=right width="12%" valign=bottom><font   size=2>10.89</font></td>
  <td  align=right width="12%" valign=bottom><font   size=2>116,431</font></td>
  <td  align=right width="12%" valign=bottom><font   size=2>8.00</font></td>
  <td  align=right width="12%" valign=bottom><font   size=2>42,038</font></td>
  <td  align=right width="12%" valign=bottom><font   size=2>2.89</font></td>
 </tr>
</TABLE>

<p><font size=2>&nbsp;</font></p>


<p><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; In
addition, FDIC-insured institutions such as the Bank must maintain leverage,
Tier 1 and total risk-based capital ratios of at least 5%, 6% and 10%,
respectively, to be considered &quot;well capitalized&quot; under the prompt
corrective action provisions of the FDIC Improvement Act of 1991.</font></p>



<p><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; The
following table sets forth the Bank's capital ratios and capital requirements
for the Bank to be considered &quot;well capitalized&quot; as of the dates
indicated. </font></p>


<table border=0 cellspacing=0 cellpadding=0 width="100%">
 <tr>
  <td  align=center width="25%" valign=bottom>&nbsp;</td>
  <td  align=center width="24%" colspan=2 valign=bottom><font   size=2>Actual</font></td>
  <td  align=center width="25%" colspan=2 valign=bottom><font   size=2>Minimum required to be <br>
  well-capitalized</font></td>
  <td  align=center width="24%" colspan=2 valign=bottom><font   size=2>Excess</font></td>
 </tr>
 <tr>
  <td width="25%" valign=top><font size=2>(Dollars in thousands)</font></td>
  <td  align=center width="12%" valign=bottom><font   size=2>Amount</font></td>
  <td  align=center width="12%" valign=bottom><font   size=2>Ratio</font></td>
  <td  align=center width="12%" valign=bottom><font   size=2>Amount</font></td>
  <td  align=center width="12%" valign=bottom><font   size=2>Ratio</font></td>
  <td  align=center width="12%" valign=bottom><font   size=2>Amount</font></td>
  <td  align=center width="12%" valign=bottom><font   size=2>Ratio</font></td>
 </tr>
 <tr>
  <td width="25%" valign=top bgcolor="#cceeff">&nbsp;</td>
  <td  align=right width="12%" valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td  align=right width="12%" valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td  align=right width="12%" valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td  align=right width="12%" valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td  align=right width="12%" valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td  align=right width="12%" valign=bottom bgcolor="#cceeff">&nbsp;</td>
 </tr>
 <tr>
  <td width="25%" valign=top><font size=2>At March 31, 2001:</font></td>
  <td  align=right width="12%" valign=bottom>&nbsp;</td>
  <td  align=right width="12%" valign=bottom>&nbsp;</td>
  <td  align=right width="12%" valign=bottom>&nbsp;</td>
  <td  align=right width="12%" valign=bottom>&nbsp;</td>
  <td  align=right width="12%" valign=bottom>&nbsp;</td>
  <td  align=right width="12%" valign=bottom>&nbsp;</td>
 </tr>
 <tr>
  <td width="25%" valign=top bgcolor="#cceeff"><font size=2>&nbsp;&nbsp; Leverage capital</font></td>
  <td  align=right width="12%" valign=bottom bgcolor="#cceeff"><font   size=2>$134,519</font></td>
  <td  align=right width="12%" valign=bottom bgcolor="#cceeff"><font   size=2>7.62%</font></td>
  <td  align=right width="12%" valign=bottom bgcolor="#cceeff"><font   size=2>$88,316</font></td>
  <td  align=right width="12%" valign=bottom bgcolor="#cceeff"><font   size=2>5.00%</font></td>
  <td  align=right width="12%" valign=bottom bgcolor="#cceeff"><font   size=2>$46,203</font></td>
  <td  align=right width="12%" valign=bottom bgcolor="#cceeff"><font   size=2>2.62%</font></td>
 </tr>
 <tr>
  <td width="25%" valign=top><font size=2>&nbsp;&nbsp; Tier 1 risk-based capital</font></td>
  <td  align=right width="12%" valign=bottom><font   size=2>134,519</font></td>
  <td  align=right width="12%" valign=bottom><font   size=2>9.32</font></td>
  <td  align=right width="12%" valign=bottom><font   size=2>86,603</font></td>
  <td  align=right width="12%" valign=bottom><font   size=2>6.00</font></td>
  <td  align=right width="12%" valign=bottom><font   size=2>47,916</font></td>
  <td  align=right width="12%" valign=bottom><font   size=2>3.32</font></td>
 </tr>
 <tr>
  <td width="25%" valign=top bgcolor="#cceeff"><font size=2>&nbsp;&nbsp; Total risk-based capital</font></td>
  <td  align=right width="12%" valign=bottom bgcolor="#cceeff"><font   size=2>152,626</font></td>
  <td  align=right width="12%" valign=bottom bgcolor="#cceeff"><font   size=2>10.57</font></td>
  <td  align=right width="12%" valign=bottom bgcolor="#cceeff"><font   size=2>144,338</font></td>
  <td  align=right width="12%" valign=bottom bgcolor="#cceeff"><font   size=2>10.00</font></td>
  <td  align=right width="12%" valign=bottom bgcolor="#cceeff"><font   size=2>8,288</font></td>
  <td  align=right width="12%" valign=bottom bgcolor="#cceeff"><font   size=2>0.57</font></td>
 </tr>
 <tr>
  <td width="25%" valign=top>&nbsp;</td>
  <td  align=right width="12%" valign=bottom>&nbsp;</td>
  <td  align=right width="12%" valign=bottom>&nbsp;</td>
  <td  align=right width="12%" valign=bottom>&nbsp;</td>
  <td  align=right width="12%" valign=bottom>&nbsp;</td>
  <td  align=right width="12%" valign=bottom>&nbsp;</td>
  <td  align=right width="12%" valign=bottom>&nbsp;</td>
 </tr>
 <tr>
  <td width="25%" valign=top bgcolor="#cceeff"><font size=2>At December 31, 2000:</font></td>
  <td  align=right width="12%" valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td  align=right width="12%" valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td  align=right width="12%" valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td  align=right width="12%" valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td  align=right width="12%" valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td  align=right width="12%" valign=bottom bgcolor="#cceeff">&nbsp;</td>
 </tr>
 <tr>
  <td width="25%" valign=top><font size=2>&nbsp;&nbsp; Leverage capital</font></td>
  <td  align=right width="12%" valign=bottom><font   size=2>$136,563</font></td>
  <td  align=right width="12%" valign=bottom><font   size=2>7.77%</font></td>
  <td  align=right width="12%" valign=bottom><font   size=2>$87,837</font></td>
  <td  align=right width="12%" valign=bottom><font   size=2>5.00%</font></td>
  <td  align=right width="12%" valign=bottom><font   size=2>$48,726</font></td>
  <td  align=right width="12%" valign=bottom><font   size=2>2.77%</font></td>
 </tr>
 <tr>
  <td width="25%" valign=top bgcolor="#cceeff"><font size=2>&nbsp;&nbsp; Tier 1 risk-based capital</font></td>
  <td  align=right width="12%" valign=bottom bgcolor="#cceeff"><font   size=2>136,563</font></td>
  <td  align=right width="12%" valign=bottom bgcolor="#cceeff"><font   size=2>9.38</font></td>
  <td  align=right width="12%" valign=bottom bgcolor="#cceeff"><font   size=2>87,356</font></td>
  <td  align=right width="12%" valign=bottom bgcolor="#cceeff"><font   size=2>6.00</font></td>
  <td  align=right width="12%" valign=bottom bgcolor="#cceeff"><font   size=2>49,207</font></td>
  <td  align=right width="12%" valign=bottom bgcolor="#cceeff"><font   size=2>3.38</font></td>
 </tr>
 <tr>
  <td width="25%" valign=top><font size=2>&nbsp;&nbsp; Total risk-based capital</font></td>
  <td  align=right width="12%" valign=bottom><font   size=2>154,817</font></td>
  <td  align=right width="12%" valign=bottom><font   size=2>10.63</font></td>
  <td  align=right width="12%" valign=bottom><font   size=2>145,594</font></td>
  <td  align=right width="12%" valign=bottom><font   size=2>10.00</font></td>
  <td  align=right width="12%" valign=bottom><font   size=2>9,223</font></td>
  <td  align=right width="12%" valign=bottom><font   size=2>0.63</font></td>
 </tr>
</TABLE>

<p><font size=2>&nbsp;</font></p>

<PAGE>


<p>&nbsp;</p>


<p><font size=2>Asset/Liability Management and
Liquidity</font></p>



<p><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; The
Company's asset/liability management policy and liquidity are discussed in the
2000 Annual Report to Shareholders. No significant changes have occurred during
the three months ended March 31, 2001.</font></p>



<p><font size=2>Item 3. Quantitative and
Qualitative Disclosures About Market Risk</font></p>



<p><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; The
Company discussed the nature and extent of market risk exposure in the 2000
Annual Report to Shareholders. No significant changes have occurred during the
three months ended March 31, 2001.</font></p>


<PAGE>



<p align=center><font size=2>PART II. OTHER INFORMATION</font></p>


<p align=left><font size=2>Items 1 to 5.</font></p>

<p align=left><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Items 1
to 3 and Item 5 are omitted pursuant to instructions to Part II.</font></p>

<p align=left><font size=2>Item 4. Submission of Matters to a Vote of Security
Holders</font></p>


<p><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; The
Annual Meeting of Shareholders (the &quot;Meeting&quot;) of the Company was
held on April 24, 2001 for the purpose of considering and voting upon the
following matters:</font></p>


<dir>
<p><font size=2>Election of three persons to
serve on the Board of Directors for a term of three years and to serve until
their successors are elected and qualified;</font></p>
</dir>

<dir>
<p><font size=2>Ratification of the appointment
of KPMG LLP as the Company's independent accountants for the fiscal year ending
December 31, 2001; and</font></p>
</dir>

<dir>
<p><font size=2>Approval of Amendment No. 1 to
the Company's 1997 Stock Option Plan which allows for discretionary grants of
restricted shares of Common Stock of the Company to non-employee directors of
the Company and its subsidiaries;</font></p>
</dir>

<dir>
<p><font size=2>Transaction of such other
business as may properly come before the Meeting and at any and all
adjournments thereof.</font></p>
</dir>

<p align=left><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; The
following table presents the names of directors elected at the Meeting, as well
as the number of votes cast for, votes cast against or withheld, and
abstentions or nonvotes for each of the directors nominated. A total of
6,220,084 shares, or 73.4% of eligible shares, were represented at the Meeting.</font></p>

<table border=0 cellspacing=0 cellpadding=0 width="80%">
 <tr>
  <td  align=left width="50%" valign=bottom><font   size=2>Name</font></td>
  <td  align=right width="9%" valign=bottom><font   size=2>For</font></td>
  <td  align=right width="1%" valign=top>&nbsp;</td>
  <td  align=right width="18%" valign=bottom><font   size=2>Votes Cast<br>
  Against or<br>
  Withheld</font></td>
  <td  align=right width="1%" valign=top>&nbsp;</td>
  <td  align=right width="18%" valign=bottom><font   size=2>Abstentions or Nonvotes</font></td>
 </tr>
 <tr>
  <td  align=left width="50%" valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td  align=right width="9%" valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td  align=right width="1%" valign=top bgcolor="#cceeff">&nbsp;</td>
  <td  align=right width="18%" valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td  align=right width="1%" valign=top bgcolor="#cceeff">&nbsp;</td>
  <td  align=right width="18%" valign=bottom bgcolor="#cceeff">&nbsp;</td>
 </tr>
 <tr>
  <td  align=left width="50%" valign=top><font   size=2>Dennis I. Hirota</font></td>
  <td  align=right width="9%" valign=bottom><font   size=2>6,137,186</font></td>
  <td  align=right width="1%" valign=top>&nbsp;</td>
  <td  align=right width="18%" valign=bottom><font   size=2>82,898</font></td>
  <td  align=right width="1%" valign=top>&nbsp;</td>
  <td  align=right width="18%" valign=bottom><font   size=2>None</font></td>
 </tr>
 <tr>
  <td  align=left width="50%" valign=top bgcolor="#cceeff"><font   size=2>Shunichi Okuyama</font></td>
  <td  align=right width="9%" valign=bottom bgcolor="#cceeff"><font   size=2>6,140,354</font></td>
  <td  align=right width="1%" valign=top bgcolor="#cceeff">&nbsp;</td>
  <td  align=right width="18%" valign=bottom bgcolor="#cceeff"><font   size=2>79,730</font></td>
  <td  align=right width="1%" valign=top bgcolor="#cceeff">&nbsp;</td>
  <td  align=right width="18%" valign=bottom bgcolor="#cceeff"><font   size=2>None</font></td>
 </tr>
 <tr>
  <td  align=left width="50%" valign=top><font   size=2>Joichi Saito</font></td>
  <td  align=right width="9%" valign=bottom><font   size=2>6,139,993</font></td>
  <td  align=right width="1%" valign=top>&nbsp;</td>
  <td  align=right width="18%" valign=bottom><font   size=2>80,091</font></td>
  <td  align=right width="1%" valign=top>&nbsp;</td>
  <td  align=right width="18%" valign=bottom><font   size=2>None</font></td>
 </tr>
</TABLE>

<p align=left><font size=2>&nbsp;</font></p>

<PAGE>



<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <font size=2>In addition to the above directors, the following directors will continue
to serve on the Board of Directors until the expiration of their respective
terms as indicated. </font></p>


<dir>
<table border=0 cellspacing=0 cellpadding=0 width="80%">
 <tr>
  <td width="75%" valign=bottom><font size=2>Name</font></td>
  <td  align=right width="25%" valign=bottom><font size=2>Expiration of Term</font></td>
 </tr>
 <tr>
  <td width="75%" valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td  align=right width="25%" valign=bottom bgcolor="#cceeff">&nbsp;</td>
 </tr>
 <tr>
  <td width="75%" valign=bottom><font size=2>Alice F. Guild</font></td>
  <td  align=right width="25%" valign=bottom><font   size=2>2002</font></td>
 </tr>
 <tr>
  <td width="75%" valign=bottom bgcolor="#cceeff"><font size=2>Daniel M. Nagamine</font></td>
  <td  align=right width="25%" valign=bottom bgcolor="#cceeff"><font   size=2>2002</font></td>
 </tr>
 <tr>
  <td width="75%" valign=bottom><font size=2>Naoaki Shibuya</font></td>
  <td  align=right width="25%" valign=bottom><font   size=2>2002</font></td>
 </tr>
 <tr>
  <td width="75%" valign=top bgcolor="#cceeff"><font size=2>Paul
  Devens</font></td>
  <td  align=right width="25%" valign=bottom bgcolor="#cceeff"><font   size=2>2003</font></td>
 </tr>
 <tr>
  <td width="75%" valign=bottom><font size=2>Clayton
  K. Honbo</font></td>
  <td  align=right width="25%" valign=bottom><font   size=2>2003</font></td>
 </tr>
 <tr>
  <td width="75%" valign=bottom bgcolor="#cceeff"><font   size=2>Stanley W. Hong</font></td>
  <td  align=right width="25%" valign=bottom bgcolor="#cceeff"><font size=2>2003</font></td>
 </tr>
</TABLE>
</dir>


<p><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; The
ratification of the appointment of KPMG LLP as independent accountants for the
fiscal year ending December 31, 2001 was approved with a total of 6,026,142
votes cast for, 163,343 votes against, and 30,599 abstentions or nonvotes.</font></p>


<p align=left><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Amendment
No. 1 to the 1997 Stock Option which allows for discretionary grants of
restricted shares of Common Stock of the Company to non-employee directors of
the Company and its subsidiaries was approved, with a total of 5,110,061 votes
cast for, 1,015,858 votes against, and 94,164 abstentions or nonvotes. The
majority vote of common stock represented at the meeting was required for
approval.</font></p>

<p align=left><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; There
were no other matters brought before the Meeting that required a vote by
shareholders.</font></p>

<table border=0 cellspacing=0 cellpadding=0 width="100%">
 <tr>
  <td  align=left width="12%" valign=top><font size=2>Item 6. </font></td>
  <td  align=left width="87%" colspan=2 valign=top><font size=2>Exhibits and
  Reports on Form 8-K<br><br></font></td>
 </tr>
 <tr>
  <td  align=left width="12%" valign=top>&nbsp;</td>
  <td  align=left width="5%" valign=top><font size=2>(a)</font></td>
  <td  align=left width="81%" valign=top><font size=2>Exhibits<br><br></font></td>
 </tr>
 <tr>
  <td  align=left width="12%" valign=top>&nbsp;</td>
  <td  align=left width="5%" valign=top>&nbsp;</td>
  <td  align=left width="81%" valign=top><font size=2>None<br><br></font></td>
 </tr>
 <tr>
  <td  align=left width="12%" valign=top>&nbsp;</td>
  <td  align=left width="5%" valign=top><font size=2>(b)</font></td>
  <td  align=left width="81%" valign=top><font size=2>Reports on Form
  8-K<br><br></font></td>
 </tr>
 <tr>
  <td  align=left width="12%" valign=top>&nbsp;</td>
  <td  align=left width="5%" valign=top>&nbsp;</td>
  <td  align=left width="81%" valign=top><font size=2>The Company filed
  no reports on Form 8-K during the first quarter of 2001.<br><br></font></td>
 </tr>
</TABLE>

<p align=left><b><i><font size=2>&nbsp;</font></i></b></p>

<PAGE>


<p align=center><font size=2>SIGNATURES</font></p>

<p><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant has
duly caused this report to be signed on its behalf by the undersigned thereunto
duly authorized.</font></p>

<table border=0 cellspacing=0 cellpadding=0 width="100%">
 <tr>
  <td  align=left width="37%" valign=top>&nbsp;</td>
  <td  align=left width="62%" valign=top><font size=2>CPB INC.</font></td>
 </tr>
 <tr>
  <td  align=left width="37%" valign=top>&nbsp;</td>
  <td  align=left width="62%" valign=top><font size=2>(Registrant)<br><br></font></td>
 </tr>
 <tr>
  <td  align=left width="37%" valign=top><font size=2>Date:&nbsp;&nbsp; May 14, 2001</font></td>
  <td  align=left width="62%" valign=top><font size=2>/s/&nbsp;&nbsp; Joichi Saito</font>
<hr size=1 width="75%" noshade color=black align=left></td>
 </tr>
 <tr>
  <td  align=left width="37%" valign=top>&nbsp;</td>
  <td  align=left width="62%" valign=top><font size=2>Joichi Saito</font></td>
 </tr>
 <tr>
  <td  align=left width="37%" valign=top>&nbsp;</td>
  <td  align=left width="62%" valign=top><font size=2>Chairman of the
  Board and Chief Executive Officer<br><br></font></td>
 </tr>
 <tr>
  <td  align=left width="37%" valign=top><font size=2>Date:&nbsp;&nbsp; May 14, 2001</font></td>
  <td  align=left width="62%" valign=top><font size=2>/s/&nbsp;&nbsp; Neal K. Kanda</font>
<hr size=1 width="75%" noshade color=black align=left></td>
 </tr>
 <tr>
  <td  align=left width="37%" valign=top>&nbsp;</td>
  <td  align=left width="62%" valign=top><font size=2>Neal K. Kanda</font></td>
 </tr>
 <tr>
  <td  align=left width="37%" valign=top>&nbsp;</td>
  <td  align=left width="62%" valign=top><font size=2>Vice President and
  Treasurer</font></td>
 </tr>
 <tr>
  <td  align=left width="37%" valign=top>&nbsp;</td>
  <td  align=left width="62%" valign=top><font size=2>(Principal
  Financial and Accounting Officer)</font></td>
 </tr>
</TABLE>

<p align=left><font size=2>&nbsp;</font></p>

<PAGE>


<p align=left>&nbsp;</p>

<p align=center><font size=2>CPB INC. AND SUBSIDIARY</font><font size=2><br>
</font><a name="CONSOLIDATED_BALANCE_SHEETS"><font size=2>CONSOLIDATED BALANCE SHEETS</font></a><font size=2><br>
(Unaudited)</font></p>

<table border=0 cellspacing=0 cellpadding=0 width="100%">
 <tr>
  <td  align=center width="60%" valign=bottom>&nbsp;</td>
  <td  align=right width="20%" valign=bottom><font   size=2>March 31,</font></td>
  <td  align=right width="20%" valign=bottom><font   size=2>December 31,</font></td>
 </tr>
 <tr>
  <td  align=left width="60%" valign=top><font   size=2>(Dollars in thousands, except per share data)</font></td>
  <td  align=right width="20%" valign=bottom><font   size=2>2001</font></td>
  <td  align=right width="20%" valign=bottom><font   size=2>2000</font></td>
 </tr>
 <tr>
  <td  align=left width="60%" valign=top bgcolor="#cceeff"><font   size=2>ASSETS</font></td>
  <td  align=right width="20%" valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td  align=right width="20%" valign=bottom bgcolor="#cceeff">&nbsp;</td>
 </tr>
 <tr>
  <td  align=left width="60%" valign=top><font   size=2>Cash and due from banks</font></td>
  <td  align=right width="20%" valign=bottom><font   size=2>$43,999</font></td>
  <td  align=right width="20%" valign=bottom><font   size=2>$52,207</font></td>
 </tr>
 <tr>
  <td  align=left width="60%" valign=top bgcolor="#cceeff"><font   size=2>Interest-bearing deposits in other banks</font></td>
  <td  align=right width="20%" valign=bottom bgcolor="#cceeff"><font   size=2>50,970</font></td>
  <td  align=right width="20%" valign=bottom bgcolor="#cceeff"><font   size=2>11,506</font></td>
 </tr>
 <tr>
  <td  align=left width="60%" valign=top><font   size=2>Federal funds sold</font></td>
  <td  align=right width="20%" valign=bottom><font   size=2>-</font></td>
  <td  align=right width="20%" valign=bottom><font   size=2>15,000</font></td>
 </tr>
 <tr>
  <td  align=left width="60%" valign=top bgcolor="#cceeff"><font   size=2>Investment securities:</font></td>
  <td  align=right width="20%" valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td  align=right width="20%" valign=bottom bgcolor="#cceeff">&nbsp;</td>
 </tr>
 <tr>
  <td  align=left width="60%" valign=top><font   size=2>&nbsp;&nbsp; Held to
  maturity, at cost (fair value of $86,502 at March 31, 2001 and $86,566 at
  December 31, 2000)</font></td>
  <td  align=right width="20%" valign=bottom><font   size=2>85,040</font></td>
  <td  align=right width="20%" valign=bottom><font   size=2>86,056</font></td>
 </tr>
 <tr>
  <td  align=left width="60%" valign=top bgcolor="#cceeff"><font   size=2>&nbsp;&nbsp; Available for
  sale, at fair value</font></td>
  <td  align=right width="20%" valign=bottom bgcolor="#cceeff"><font   size=2>294,294</font></td>
  <td  align=right width="20%" valign=bottom bgcolor="#cceeff"><font   size=2>279,714</font></td>
 </tr>
 <tr>
  <td  align=left width="60%" valign=top><font   size=2>&nbsp;&nbsp; Available for
  sale securities pledged to creditor, at fair value</font></td>
  <td  align=right width="20%" valign=bottom><font   size=2>-</font></td>
  <td  align=right width="20%" valign=bottom><font   size=2>18,849</font></td>
 </tr>
 <tr>
  <td  align=left width="60%" valign=top bgcolor="#cceeff"><font   size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total
  investment securities</font></td>
  <td  align=right width="20%" valign=bottom bgcolor="#cceeff"><font   size=2>379,334</font></td>
  <td  align=right width="20%" valign=bottom bgcolor="#cceeff"><font   size=2>384,619</font></td>
 </tr>
 <tr>
  <td  align=left width="60%" valign=top>&nbsp;</td>
  <td  align=right width="20%" valign=bottom>&nbsp;</td>
  <td  align=right width="20%" valign=bottom>&nbsp;</td>
 </tr>
 <tr>
  <td  align=left width="60%" valign=top bgcolor="#cceeff"><font   size=2>Loans</font></td>
  <td  align=right width="20%" valign=bottom bgcolor="#cceeff"><font   size=2>1,238,316</font></td>
  <td  align=right width="20%" valign=bottom bgcolor="#cceeff"><font   size=2>1,291,190</font></td>
 </tr>
 <tr>
  <td  align=left width="60%" valign=top><font   size=2>&nbsp;&nbsp; Less
  allowance for loan losses</font></td>
  <td  align=right width="20%" valign=bottom><font   size=2>23,254</font></td>
  <td  align=right width="20%" valign=bottom><font   size=2>22,612</font></td>
 </tr>
 <tr>
  <td  align=left width="60%" valign=top bgcolor="#cceeff"><font   size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Net loans</font></td>
  <td  align=right width="20%" valign=bottom bgcolor="#cceeff"><font   size=2>1,215,062</font></td>
  <td  align=right width="20%" valign=bottom bgcolor="#cceeff"><font   size=2>1,268,578</font></td>
 </tr>
 <tr>
  <td  align=left width="60%" valign=top>&nbsp;</td>
  <td  align=right width="20%" valign=bottom>&nbsp;</td>
  <td  align=right width="20%" valign=bottom>&nbsp;</td>
 </tr>
 <tr>
  <td  align=left width="60%" valign=top bgcolor="#cceeff"><font   size=2>Premises and equipment</font></td>
  <td  align=right width="20%" valign=bottom bgcolor="#cceeff"><font   size=2>22,843</font></td>
  <td  align=right width="20%" valign=bottom bgcolor="#cceeff"><font   size=2>23,319</font></td>
 </tr>
 <tr>
  <td  align=left width="60%" valign=top><font   size=2>Accrued interest receivable</font></td>
  <td  align=right width="20%" valign=bottom><font   size=2>10,216</font></td>
  <td  align=right width="20%" valign=bottom><font   size=2>10,646</font></td>
 </tr>
 <tr>
  <td  align=left width="60%" valign=top bgcolor="#cceeff"><font   size=2>Investment in unconsolidated subsidiaries</font></td>
  <td  align=right width="20%" valign=bottom bgcolor="#cceeff"><font   size=2>9,003</font></td>
  <td  align=right width="20%" valign=bottom bgcolor="#cceeff"><font   size=2>8,924</font></td>
 </tr>
 <tr>
  <td  align=left width="60%" valign=top><font   size=2>Due from customers on acceptances</font></td>
  <td  align=right width="20%" valign=bottom><font   size=2>28</font></td>
  <td  align=right width="20%" valign=bottom><font   size=2>-</font></td>
 </tr>
 <tr>
  <td  align=left width="60%" valign=top bgcolor="#cceeff"><font   size=2>Other real estate</font></td>
  <td  align=right width="20%" valign=bottom bgcolor="#cceeff"><font   size=2>664</font></td>
  <td  align=right width="20%" valign=bottom bgcolor="#cceeff"><font   size=2>1,792</font></td>
 </tr>
 <tr>
  <td  align=left width="60%" valign=top><font   size=2>Other assets</font></td>
  <td  align=right width="20%" valign=bottom><font   size=2>40,181</font></td>
  <td  align=right width="20%" valign=bottom><font   size=2>40,327</font></td>
 </tr>
 <tr>
  <td  align=left width="60%" valign=top bgcolor="#cceeff">&nbsp;</td>
  <td  align=right width="20%" valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td  align=right width="20%" valign=bottom bgcolor="#cceeff">&nbsp;</td>
 </tr>
 <tr>
  <td  align=left width="60%" valign=top><font   size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total
  assets</font></td>
  <td  align=right width="20%" valign=bottom><font   size=2>$1,772,300</font></td>
  <td  align=right width="20%" valign=bottom><font   size=2>$1,816,918</font></td>
 </tr>
 <tr>
  <td  align=left width="60%" valign=top bgcolor="#cceeff">&nbsp;</td>
  <td  align=right width="20%" valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td  align=right width="20%" valign=bottom bgcolor="#cceeff">&nbsp;</td>
 </tr>
 <tr>
  <td  align=left width="60%" valign=top><font   size=2>LIABILITIES AND STOCKHOLDERS' EQUITY</font></td>
  <td  align=right width="20%" valign=bottom>&nbsp;</td>
  <td  align=right width="20%" valign=bottom>&nbsp;</td>
 </tr>
 <tr>
  <td width="60%" valign=top bgcolor="#cceeff"><font size=2>Deposits:</font></td>
  <td  align=right width="20%" valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td  align=right width="20%" valign=bottom bgcolor="#cceeff">&nbsp;</td>
 </tr>
 <tr>
  <td width="60%" valign=top><font size=2>&nbsp;&nbsp; Noninterest-bearing deposits</font></td>
  <td  align=right width="20%" valign=bottom><font   size=2>$211,666</font></td>
  <td  align=right width="20%" valign=bottom><font   size=2>$199,625</font></td>
 </tr>
 <tr>
  <td width="60%" valign=top bgcolor="#cceeff"><font size=2>&nbsp;&nbsp; Interest-bearing deposits</font></td>
  <td  align=right width="20%" valign=bottom bgcolor="#cceeff"><font   size=2>1,166,293</font></td>
  <td  align=right width="20%" valign=bottom bgcolor="#cceeff"><font   size=2>1,163,441</font></td>
 </tr>
 <tr>
  <td width="60%" valign=top><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total deposits</font></td>
  <td  align=right width="20%" valign=bottom><font   size=2>1,377,959</font></td>
  <td  align=right width="20%" valign=bottom><font   size=2>1,363,066</font></td>
 </tr>
 <tr>
  <td width="60%" valign=top bgcolor="#cceeff">&nbsp;</td>
  <td  align=right width="20%" valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td  align=right width="20%" valign=bottom bgcolor="#cceeff">&nbsp;</td>
 </tr>
 <tr>
  <td width="60%" valign=top><font size=2>Short-term borrowings</font></td>
  <td  align=right width="20%" valign=bottom><font   size=2>16,673</font></td>
  <td  align=right width="20%" valign=bottom><font   size=2>56,720</font></td>
 </tr>
 <tr>
  <td width="60%" valign=top bgcolor="#cceeff"><font size=2>Long-term debt</font></td>
  <td  align=right width="20%" valign=bottom bgcolor="#cceeff"><font   size=2>200,349</font></td>
  <td  align=right width="20%" valign=bottom bgcolor="#cceeff"><font   size=2>220,970</font></td>
 </tr>
 <tr>
  <td width="60%" valign=top><font size=2>Bank acceptances outstanding</font></td>
  <td  align=right width="20%" valign=bottom><font   size=2>28</font></td>
  <td  align=right width="20%" valign=bottom><font   size=2>-</font></td>
 </tr>
 <tr>
  <td width="60%" valign=top bgcolor="#cceeff"><font size=2>Other liabilities</font></td>
  <td  align=right width="20%" valign=bottom bgcolor="#cceeff"><font   size=2>34,928</font></td>
  <td  align=right width="20%" valign=bottom bgcolor="#cceeff"><font   size=2>32,850</font></td>
 </tr>
 <tr>
  <td width="60%" valign=top>&nbsp;</td>
  <td  align=right width="20%" valign=bottom>&nbsp;</td>
  <td  align=right width="20%" valign=bottom>&nbsp;</td>
 </tr>
 <tr>
  <td width="60%" valign=top bgcolor="#cceeff"><font   size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total liabilities</font></td>
  <td  align=right width="20%" valign=bottom bgcolor="#cceeff"><font size=2>1,629,937</font></td>
  <td  align=right width="20%" valign=bottom bgcolor="#cceeff"><font size=2>1,673,606</font></td>
 </tr>
 <tr>
  <td width="60%" valign=top>&nbsp;</td>
  <td  align=right width="20%" valign=bottom>&nbsp;</td>
  <td  align=right width="20%" valign=bottom>&nbsp;</td>
 </tr>
 <tr>
  <td  align=left width="60%" valign=top bgcolor="#cceeff"><font   size=2>Stockholders' equity:</font></td>
  <td  align=right width="20%" valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td  align=right width="20%" valign=bottom bgcolor="#cceeff">&nbsp;</td>
 </tr>
 <tr>
  <td width="60%" valign=top><font size=2>&nbsp;&nbsp; Preferred stock,
  no par value, authorized 1,000,000 shares, none issued</font></td>
  <td  align=right width="20%" valign=bottom><font   size=2>-</font></td>
  <td  align=right width="20%" valign=bottom><font   size=2>-</font></td>
 </tr>
 <tr>
  <td width="60%" valign=top bgcolor="#cceeff"><font size=2>&nbsp;&nbsp; Common stock, no par value; authorized 50,000,000 shares;
  issued and outstanding 8,225,508 shares at March 31, 2001, and 8,464,468
  shares at December 31, 2000</font></td>
  <td  align=right width="20%" valign=bottom bgcolor="#cceeff"><font   size=2>6,159</font></td>
  <td  align=right width="20%" valign=bottom bgcolor="#cceeff"><font   size=2>6,172</font></td>
 </tr>
 <tr>
  <td width="60%" valign=top><font size=2>&nbsp;&nbsp; Surplus</font></td>
  <td  align=right width="20%" valign=bottom><font   size=2>45,848</font></td>
  <td  align=right width="20%" valign=bottom><font   size=2>45,848</font></td>
 </tr>
 <tr>
  <td width="60%" valign=top bgcolor="#cceeff"><font size=2>&nbsp;&nbsp; Retained earnings</font></td>
  <td  align=right width="20%" valign=bottom bgcolor="#cceeff"><font   size=2>85,617</font></td>
  <td  align=right width="20%" valign=bottom bgcolor="#cceeff"><font   size=2>88,232</font></td>
 </tr>
 <tr>
  <td width="60%" valign=top><font size=2>&nbsp;&nbsp; Accumulated other comprehensive income, net of taxes</font></td>
  <td  align=right width="20%" valign=bottom><font   size=2>4,739</font></td>
  <td  align=right width="20%" valign=bottom><font   size=2>3,060</font></td>
 </tr>
 <tr>
  <td width="60%" valign=top bgcolor="#cceeff">&nbsp;</td>
  <td  align=right width="20%" valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td  align=right width="20%" valign=bottom bgcolor="#cceeff">&nbsp;</td>
 </tr>
 <tr>
  <td width="60%" valign=top><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total stockholders' equity</font></td>
  <td  align=right width="20%" valign=bottom><font   size=2>142,363</font></td>
  <td  align=right width="20%" valign=bottom><font   size=2>143,312</font></td>
 </tr>
 <tr>
  <td width="60%" valign=top bgcolor="#cceeff">&nbsp;</td>
  <td  align=right width="20%" valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td  align=right width="20%" valign=bottom bgcolor="#cceeff">&nbsp;</td>
 </tr>
 <tr>
  <td width="60%" valign=top><font   size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total liabilities and
  stockholders' equity</font></td>
  <td  align=right width="20%" valign=bottom><font size=2>$1,772,300</font></td>
  <td  align=right width="20%" valign=bottom><font size=2>$1,816,918</font></td>
 </tr>
</TABLE>

<p align=left><font size=2>See accompanying notes to consolidated financial
statements.</font></p>

<PAGE>


<p align=center><font size=2>CPB INC. AND SUBSIDIARY</font><font size=2><br>
</font><a name="CONSOLIDATED_STATEMENTS_OF_INCOME"><font size=2>CONSOLIDATED STATEMENTS OF INCOME</font></a><font size=2><br>
(Unaudited)</font></p>

<table border=0 cellspacing=0 cellpadding=0 width="100%">
 <tr>
  <td  align=center width="60%" valign=bottom>&nbsp;</td>
  <td  align=right width="40%" colspan=2 valign=bottom><font   size=2>Three Months Ended March 31,</font></td>
 </tr>
 <tr>
  <td width="60%" valign=top><font size=2>(In thousands, except per share
  data)</font></td>
  <td  align=right width="20%" valign=bottom><font   size=2>2001</font></td>
  <td  align=right width="20%" valign=bottom><font   size=2>2000</font></td>
 </tr>
 <tr>
  <td width="60%" valign=top bgcolor="#cceeff"><font size=2>Interest income:</font></td>
  <td  align=right width="20%" valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td  align=right width="20%" valign=bottom bgcolor="#cceeff">&nbsp;</td>
 </tr>
 <tr>
  <td width="60%" valign=top><font size=2>&nbsp;&nbsp; Interest and fees on loans</font></td>
  <td  align=right width="20%" valign=bottom><font   size=2>$27,960</font></td>
  <td  align=right width="20%" valign=bottom><font   size=2>$23,755</font></td>
 </tr>
 <tr>
  <td width="60%" valign=top bgcolor="#cceeff"><font size=2>&nbsp;&nbsp; Interestand
  dividends on investment securities:</font></td>
  <td  align=right width="20%" valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td  align=right width="20%" valign=bottom bgcolor="#cceeff">&nbsp;</td>
 </tr>
 <tr>
  <td width="60%" valign=top><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Taxable interest</font></td>
  <td  align=right width="20%" valign=bottom><font   size=2>5,205</font></td>
  <td  align=right width="20%" valign=bottom><font   size=2>4,210</font></td>
 </tr>
 <tr>
  <td width="60%" valign=top bgcolor="#cceeff"><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Tax-exempt interest</font></td>
  <td  align=right width="20%" valign=bottom bgcolor="#cceeff"><font   size=2>589</font></td>
  <td  align=right width="20%" valign=bottom bgcolor="#cceeff"><font   size=2>591</font></td>
 </tr>
 <tr>
  <td width="60%" valign=top><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Dividends</font></td>
  <td  align=right width="20%" valign=bottom><font   size=2>324</font></td>
  <td  align=right width="20%" valign=bottom><font   size=2>302</font></td>
 </tr>
 <tr>
  <td width="60%" valign=top bgcolor="#cceeff"><font size=2>&nbsp;&nbsp; Interest on deposits in other banks</font></td>
  <td  align=right width="20%" valign=bottom bgcolor="#cceeff"><font   size=2>207</font></td>
  <td  align=right width="20%" valign=bottom bgcolor="#cceeff"><font   size=2>99</font></td>
 </tr>
 <tr>
  <td  align=left width="60%" valign=top><font size=2>&nbsp;&nbsp; Interest on Federal funds sold and
  securities purchased under agreements to resell</font></td>
  <td  align=right width="20%" valign=bottom><font   size=2>5</font></td>
  <td  align=right width="20%" valign=bottom><font   size=2>2</font></td>
 </tr>
 <tr>
  <td  align=left width="60%" valign=top bgcolor="#cceeff">&nbsp;</td>
  <td  align=right width="20%" valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td  align=right width="20%" valign=bottom bgcolor="#cceeff">&nbsp;</td>
 </tr>
 <tr>
  <td width="60%" valign=top><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total interest income</font></td>
  <td  align=right width="20%" valign=bottom><font   size=2>34,290</font></td>
  <td  align=right width="20%" valign=bottom><font   size=2>28,959</font></td>
 </tr>
 <tr>
  <td width="60%" valign=top bgcolor="#cceeff">&nbsp;</td>
  <td  align=right width="20%" valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td  align=right width="20%" valign=bottom bgcolor="#cceeff">&nbsp;</td>
 </tr>
 <tr>
  <td width="60%" valign=top><font size=2>Interest expense:</font></td>
  <td  align=right width="20%" valign=bottom>&nbsp;</td>
  <td  align=right width="20%" valign=bottom>&nbsp;</td>
 </tr>
 <tr>
  <td width="60%" valign=top bgcolor="#cceeff"><font size=2>&nbsp;&nbsp; Interest on deposits</font></td>
  <td  align=right width="20%" valign=bottom bgcolor="#cceeff"><font   size=2>11,514</font></td>
  <td  align=right width="20%" valign=bottom bgcolor="#cceeff"><font   size=2>9,720</font></td>
 </tr>
 <tr>
  <td width="60%" valign=top><font size=2>&nbsp;&nbsp; Interest on short-term borrowings</font></td>
  <td  align=right width="20%" valign=bottom><font   size=2>432</font></td>
  <td  align=right width="20%" valign=bottom><font   size=2>681</font></td>
 </tr>
 <tr>
  <td width="60%" valign=top bgcolor="#cceeff"><font size=2>&nbsp;&nbsp; Interest on long-term debt</font></td>
  <td  align=right width="20%" valign=bottom bgcolor="#cceeff"><font   size=2>3,398</font></td>
  <td  align=right width="20%" valign=bottom bgcolor="#cceeff"><font   size=2>1,573</font></td>
 </tr>
 <tr>
  <td width="60%" valign=top>&nbsp;</td>
  <td  align=right width="20%" valign=bottom>&nbsp;</td>
  <td  align=right width="20%" valign=bottom>&nbsp;</td>
 </tr>
 <tr>
  <td width="60%" valign=top bgcolor="#cceeff"><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total interest expense</font></td>
  <td  align=right width="20%" valign=bottom bgcolor="#cceeff"><font   size=2>15,344</font></td>
  <td  align=right width="20%" valign=bottom bgcolor="#cceeff"><font   size=2>11,974</font></td>
 </tr>
 <tr>
  <td width="60%" valign=top>&nbsp;</td>
  <td  align=right width="20%" valign=bottom>&nbsp;</td>
  <td  align=right width="20%" valign=bottom>&nbsp;</td>
 </tr>
 <tr>
  <td width="60%" valign=top bgcolor="#cceeff"><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Net interest income</font></td>
  <td  align=right width="20%" valign=bottom bgcolor="#cceeff"><font   size=2>18,946</font></td>
  <td  align=right width="20%" valign=bottom bgcolor="#cceeff"><font   size=2>16,985</font></td>
 </tr>
 <tr>
  <td width="60%" valign=top><font size=2>Provision for loan losses</font></td>
  <td  align=right width="20%" valign=bottom><font   size=2>750</font></td>
  <td  align=right width="20%" valign=bottom><font   size=2>1,000</font></td>
 </tr>
 <tr>
  <td width="60%" valign=top bgcolor="#cceeff"><font size=2>&nbsp;&nbsp; Net interest
  income after provision for loan losses</font></td>
  <td  align=right width="20%" valign=bottom bgcolor="#cceeff"><font   size=2>18,196</font></td>
  <td  align=right width="20%" valign=bottom bgcolor="#cceeff"><font   size=2>15,985</font></td>
 </tr>
 <tr>
  <td width="60%" valign=top>&nbsp;</td>
  <td  align=right width="20%" valign=bottom>&nbsp;</td>
  <td  align=right width="20%" valign=bottom>&nbsp;</td>
 </tr>
 <tr>
  <td width="60%" valign=top bgcolor="#cceeff"><font size=2>Other operating income:</font></td>
  <td  align=right width="20%" valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td  align=right width="20%" valign=bottom bgcolor="#cceeff">&nbsp;</td>
 </tr>
 <tr>
  <td width="60%" valign=top><font size=2>&nbsp;&nbsp; Income from fiduciary activities</font></td>
  <td  align=right width="20%" valign=bottom><font   size=2>301</font></td>
  <td  align=right width="20%" valign=bottom><font   size=2>236</font></td>
 </tr>
 <tr>
  <td width="60%" valign=top bgcolor="#cceeff"><font size=2>&nbsp;&nbsp; Service charges on deposit accounts</font></td>
  <td  align=right width="20%" valign=bottom bgcolor="#cceeff"><font   size=2>857</font></td>
  <td  align=right width="20%" valign=bottom bgcolor="#cceeff"><font   size=2>781</font></td>
 </tr>
 <tr>
  <td width="60%" valign=top><font size=2>&nbsp;&nbsp; Other service charges and fees</font></td>
  <td  align=right width="20%" valign=bottom><font   size=2>965</font></td>
  <td  align=right width="20%" valign=bottom><font   size=2>1,232</font></td>
 </tr>
 <tr>
  <td width="60%" valign=top bgcolor="#cceeff"><font size=2>&nbsp;&nbsp; Equity in
  earnings of unconsolidated subsidiaries</font></td>
  <td  align=right width="20%" valign=bottom bgcolor="#cceeff"><font   size=2>123</font></td>
  <td  align=right width="20%" valign=bottom bgcolor="#cceeff"><font   size=2>142</font></td>
 </tr>
 <tr>
  <td width="60%" valign=top><font size=2>&nbsp;&nbsp; Fees on foreign exchange</font></td>
  <td  align=right width="20%" valign=bottom><font   size=2>114</font></td>
  <td  align=right width="20%" valign=bottom><font   size=2>153</font></td>
 </tr>
 <tr>
  <td width="60%" valign=top bgcolor="#cceeff"><font size=2>&nbsp;&nbsp; Investment securities gains (losses) </font></td>
  <td  align=right width="20%" valign=bottom bgcolor="#cceeff"><font   size=2>180</font></td>
  <td  align=right width="20%" valign=bottom bgcolor="#cceeff"><font   size=2>(360)</font></td>
 </tr>
 <tr>
  <td width="60%" valign=top><font size=2>&nbsp;&nbsp; Gain on sale of merchant servicing portfolio</font></td>
  <td  align=right width="20%" valign=bottom><font   size=2>-</font></td>
  <td  align=right width="20%" valign=bottom><font   size=2>1,850</font></td>
 </tr>
 <tr>
  <td width="60%" valign=top bgcolor="#cceeff"><font size=2>&nbsp;&nbsp; Other</font></td>
  <td  align=right width="20%" valign=bottom bgcolor="#cceeff"><font   size=2>1,107</font></td>
  <td  align=right width="20%" valign=bottom bgcolor="#cceeff"><font   size=2>442</font></td>
 </tr>
 <tr>
  <td width="60%" valign=top>&nbsp;</td>
  <td  align=right width="20%" valign=bottom>&nbsp;</td>
  <td  align=right width="20%" valign=bottom>&nbsp;</td>
 </tr>
 <tr>
  <td width="60%" valign=top bgcolor="#cceeff"><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total other operating income</font></td>
  <td  align=right width="20%" valign=bottom bgcolor="#cceeff"><font   size=2>3,647</font></td>
  <td  align=right width="20%" valign=bottom bgcolor="#cceeff"><font   size=2>4,476</font></td>
 </tr>
 <tr>
  <td width="60%" valign=top>&nbsp;</td>
  <td  align=right width="20%" valign=bottom>&nbsp;</td>
  <td  align=right width="20%" valign=bottom>&nbsp;</td>
 </tr>
 <tr>
  <td width="60%" valign=top bgcolor="#cceeff"><font size=2>Other operating expense:</font></td>
  <td  align=right width="20%" valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td  align=right width="20%" valign=bottom bgcolor="#cceeff">&nbsp;</td>
 </tr>
 <tr>
  <td width="60%" valign=top><font size=2>&nbsp;&nbsp; Salaries and employee benefits</font></td>
  <td  align=right width="20%" valign=bottom><font   size=2>6,902</font></td>
  <td  align=right width="20%" valign=bottom><font   size=2>6,549</font></td>
 </tr>
 <tr>
  <td width="60%" valign=top bgcolor="#cceeff"><font size=2>&nbsp;&nbsp; Net occupancy</font></td>
  <td  align=right width="20%" valign=bottom bgcolor="#cceeff"><font   size=2>1,576</font></td>
  <td  align=right width="20%" valign=bottom bgcolor="#cceeff"><font   size=2>1,591</font></td>
 </tr>
 <tr>
  <td width="60%" valign=top><font size=2>&nbsp;&nbsp; Equipment</font></td>
  <td  align=right width="20%" valign=bottom><font   size=2>709</font></td>
  <td  align=right width="20%" valign=bottom><font   size=2>667</font></td>
 </tr>
 <tr>
  <td width="60%" valign=top bgcolor="#cceeff"><font size=2>&nbsp; &nbsp;Other</font></td>
  <td  align=right width="20%" valign=bottom bgcolor="#cceeff"><font   size=2>4,375</font></td>
  <td  align=right width="20%" valign=bottom bgcolor="#cceeff"><font   size=2>4,567</font></td>
 </tr>
 <tr>
  <td width="60%" valign=top>&nbsp;</td>
  <td  align=right width="20%" valign=bottom>&nbsp;</td>
  <td  align=right width="20%" valign=bottom>&nbsp;</td>
 </tr>
 <tr>
  <td width="60%" valign=top bgcolor="#cceeff"><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total other operating expense</font></td>
  <td  align=right width="20%" valign=bottom bgcolor="#cceeff"><font   size=2>13,562</font></td>
  <td  align=right width="20%" valign=bottom bgcolor="#cceeff"><font   size=2>13,374</font></td>
 </tr>
 <tr>
  <td width="60%" valign=top>&nbsp;</td>
  <td  align=right width="20%" valign=bottom>&nbsp;</td>
  <td  align=right width="20%" valign=bottom>&nbsp;</td>
 </tr>
 <tr>
  <td width="60%" valign=top bgcolor="#cceeff"><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Income before income taxes</font></td>
  <td  align=right width="20%" valign=bottom bgcolor="#cceeff"><font   size=2>8,281</font></td>
  <td  align=right width="20%" valign=bottom bgcolor="#cceeff"><font   size=2>7,087</font></td>
 </tr>
 <tr>
  <td width="60%" valign=top><font size=2>Income taxes</font></td>
  <td  align=right width="20%" valign=bottom><font   size=2>2,953</font></td>
  <td  align=right width="20%" valign=bottom><font   size=2>2,501</font></td>
 </tr>
 <tr>
  <td width="60%" valign=top bgcolor="#cceeff">&nbsp;</td>
  <td  align=right width="20%" valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td  align=right width="20%" valign=bottom bgcolor="#cceeff">&nbsp;</td>
 </tr>
 <tr>
  <td width="60%" valign=top><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Net income</font></td>
  <td  align=right width="20%" valign=bottom><font   size=2>$5,328</font></td>
  <td  align=right width="20%" valign=bottom><font   size=2>$4,586</font></td>
 </tr>
 <tr>
  <td width="60%" valign=top bgcolor="#cceeff">&nbsp;</td>
  <td  align=right width="20%" valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td  align=right width="20%" valign=bottom bgcolor="#cceeff">&nbsp;</td>
 </tr>
 <tr>
  <td width="60%" valign=top><font size=2>Per share data:</font></td>
  <td  align=right width="20%" valign=bottom>&nbsp;</td>
  <td  align=right width="20%" valign=bottom>&nbsp;</td>
 </tr>
 <tr>
  <td width="60%" valign=top bgcolor="#cceeff"><font size=2>&nbsp;&nbsp; Basic earnings per share</font></td>
  <td  align=right width="20%" valign=bottom bgcolor="#cceeff"><font   size=2>$0.63</font></td>
  <td  align=right width="20%" valign=bottom bgcolor="#cceeff"><font   size=2>$0.50</font></td>
 </tr>
 <tr>
  <td width="60%" valign=top><font size=2>&nbsp;&nbsp; Diluted earnings per share</font></td>
  <td  align=right width="20%" valign=bottom><font   size=2>0.62</font></td>
  <td  align=right width="20%" valign=bottom><font   size=2>0.49</font></td>
 </tr>
 <tr>
  <td width="60%" valign=top bgcolor="#cceeff"><font size=2>&nbsp;&nbsp; Cash dividends declared</font></td>
  <td  align=right width="20%" valign=bottom bgcolor="#cceeff"><font   size=2>0.16</font></td>
  <td  align=right width="20%" valign=bottom bgcolor="#cceeff"><font   size=2>0.15</font></td>
 </tr>
 <tr>
  <td width="60%" valign=top>&nbsp;</td>
  <td  align=right width="20%" valign=bottom>&nbsp;</td>
  <td  align=right width="20%" valign=bottom>&nbsp;</td>
 </tr>
 <tr>
  <td width="60%" valign=top bgcolor="#cceeff"><font size=2>Basic weighted average shares
  outstanding</font></td>
  <td  align=right width="20%" valign=bottom bgcolor="#cceeff"><font   size=2>8,438</font></td>
  <td  align=right width="20%" valign=bottom bgcolor="#cceeff"><font   size=2>9,260</font></td>
 </tr>
 <tr>
  <td width="60%" valign=top><font size=2>Diluted weighted average shares
  outstanding</font></td>
  <td  align=right width="20%" valign=bottom><font   size=2>8,575</font></td>
  <td  align=right width="20%" valign=bottom><font   size=2>9,409</font></td>
 </tr>
</TABLE>

<p align=left><font size=2>See accompanying notes to consolidated financial
statements.</font></p>

<PAGE>


<p align=center><font size=2>CPB INC. AND SUBSIDIARY</font><font size=2><br>
</font><a name="CONSOLIDATED_STATEMENTS_OF_CHANGES_IN_ST"><font size=2>CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS'
EQUITY AND COMPREHENSIVE INCOME</font></a><font size=2> <br>
(Unaudited)</font></p>


<table border=0 cellspacing=0 cellpadding=0 width="100%">
 <tr>
  <td width="49%" valign=bottom><font size=2>(Dollars in thousands, except per share data)</font></td>
  <td  align=center width="9%" valign=bottom><font size=2>Common<br>
  stock</font></td>
  <td  align=center width="9%" valign=bottom><font size=2>Surplus</font></td>
  <td  align=center width="9%" valign=bottom><font size=2>Retained</font><font   size=2><br></font><font size=2>earnings</font></td>
  <td  align=center width="11%" valign=bottom><font size=2>Accumulated</font><font   size=2><br></font><font size=2>other</font><font   size=2><br></font><font size=2>comprehensive</font><font   size=2><br></font><font size=2>income (loss)</font></td>
  <td  align=center width="9%" valign=bottom><font size=2>Total</font></td>
 </tr>
 <tr>
  <td width="49%" valign=bottom bgcolor="#cceeff"><font size=2>Three months ended March 31, 2001:</font></td>
  <td  align=right width="9%" valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td  align=right width="9%" valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td  align=right width="9%" valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td  align=right width="11%" valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td width="9%" valign=bottom bgcolor="#cceeff">&nbsp;</td>
 </tr>
 <tr>
  <td width="49%" valign=top><font size=2>Balance at December 31, 2000</font></td>
  <td  align=right width="9%" valign=bottom><font size=2>$6,172</font></td>
  <td  align=right width="9%" valign=bottom><font size=2>$45,848</font></td>
  <td  align=right width="9%" valign=bottom><font size=2>$88,232</font></td>
  <td  align=right width="11%" valign=bottom><font size=2>$3,060</font></td>
  <td  align=right width="9%" valign=bottom><font size=2>$143,312</font></td>
 </tr>
 <tr>
  <td width="49%" valign=top bgcolor="#cceeff"><font size=2>&nbsp;&nbsp; Net income</font></td>
  <td  align=right width="9%" valign=bottom bgcolor="#cceeff"><font size=2>-</font></td>
  <td  align=right width="9%" valign=bottom bgcolor="#cceeff"><font size=2>-</font></td>
  <td  align=right width="9%" valign=bottom bgcolor="#cceeff"><font size=2>5,328</font></td>
  <td  align=right width="11%" valign=bottom bgcolor="#cceeff"><font size=2>-</font></td>
  <td  align=right width="9%" valign=bottom bgcolor="#cceeff"><font size=2>5,328</font></td>
 </tr>
 <tr>
  <td  align=left width="49%" valign=top><font size=2>&nbsp;&nbsp; Net change in unrealized gain(loss) on
  investment securities, net of taxes of $1,118</font></td>
  <td  align=right width="9%" valign=bottom><font size=2>-</font></td>
  <td  align=right width="9%" valign=bottom><font size=2>-</font></td>
  <td  align=right width="9%" valign=bottom><font size=2>-</font></td>
  <td  align=right width="11%" valign=bottom><font size=2>1,679</font></td>
  <td  align=right width="9%" valign=bottom><font size=2>1,679</font></td>
 </tr>
 <tr>
  <td width="49%" valign=top bgcolor="#cceeff">&nbsp;</td>
  <td  align=right width="9%" valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td  align=right width="9%" valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td width="9%" valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td  align=right width="11%" valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td  align=right width="9%" valign=bottom bgcolor="#cceeff">&nbsp;</td>
 </tr>
 <tr>
  <td width="49%" valign=top><font size=2>Comprehensive income</font></td>
  <td  align=right width="9%" valign=bottom>&nbsp;</td>
  <td  align=right width="9%" valign=bottom>&nbsp;</td>
  <td  align=right width="9%" valign=bottom>&nbsp;</td>
  <td  align=right width="11%" valign=bottom>&nbsp;</td>
  <td  align=right width="9%" valign=bottom><font size=2>7,007</font></td>
 </tr>
 <tr>
  <td width="49%" valign=top bgcolor="#cceeff">&nbsp;</td>
  <td  align=right width="9%" valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td  align=right width="9%" valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td  align=right width="9%" valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td  align=right width="11%" valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td  align=right width="9%" valign=bottom bgcolor="#cceeff">&nbsp;</td>
 </tr>
 <tr>
  <td width="49%" valign=top><font size=2>Cash dividends declared ($0.16 per share)</font></td>
  <td  align=right width="9%" valign=bottom><font size=2>-</font></td>
  <td  align=right width="9%" valign=bottom><font size=2>-</font></td>
  <td  align=right width="9%" valign=bottom><font size=2>(1,316)</font></td>
  <td  align=right width="11%" valign=bottom><font size=2>-</font></td>
  <td  align=right width="9%" valign=bottom><font size=2>(1,316)</font></td>
 </tr>
 <tr>
  <td width="49%" valign=top bgcolor="#cceeff"><font size=2>11,040 shares of common stock issued</font></td>
  <td  align=right width="9%" valign=bottom bgcolor="#cceeff"><font size=2>172</font></td>
  <td  align=right width="9%" valign=bottom bgcolor="#cceeff"><font size=2>-</font></td>
  <td  align=right width="9%" valign=bottom bgcolor="#cceeff"><font size=2>-</font></td>
  <td  align=right width="11%" valign=bottom bgcolor="#cceeff"><font size=2>-</font></td>
  <td  align=right width="9%" valign=bottom bgcolor="#cceeff"><font size=2>172</font></td>
 </tr>
 <tr>
  <td width="49%" valign=top><font size=2>250,000 shares of common stock repurchased</font></td>
  <td  align=right width="9%" valign=bottom><font size=2>(185)</font></td>
  <td  align=right width="9%" valign=bottom><font size=2>-</font></td>
  <td  align=right width="9%" valign=bottom><font size=2>(6,627)</font></td>
  <td  align=right width="11%" valign=bottom><font size=2>-</font></td>
  <td  align=right width="9%" valign=bottom><font size=2>(6,812)</font></td>
 </tr>
 <tr>
  <td width="49%" valign=top bgcolor="#cceeff">&nbsp;</td>
  <td  align=right width="9%" valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td  align=right width="9%" valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td  align=right width="9%" valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td  align=right width="11%" valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td  align=right width="9%" valign=bottom bgcolor="#cceeff">&nbsp;</td>
 </tr>
 <tr>
  <td width="49%" valign=top><font size=2>Balance at March 31, 2001</font></td>
  <td  align=right width="9%" valign=bottom><font size=2>$6,159</font></td>
  <td  align=right width="9%" valign=bottom><font size=2>$45,848</font></td>
  <td  align=right width="9%" valign=bottom><font size=2>$85,617</font></td>
  <td  align=right width="11%" valign=bottom><font size=2>$4,739</font></td>
  <td  align=right width="9%" valign=bottom><font size=2>$142,363</font></td>
 </tr>
 <tr>
  <td width="49%" valign=top bgcolor="#cceeff">&nbsp;</td>
  <td  align=right width="9%" valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td  align=right width="9%" valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td  align=right width="9%" valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td  align=right width="11%" valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td  align=right width="9%" valign=bottom bgcolor="#cceeff">&nbsp;</td>
 </tr>
 <tr>
  <td width="49%" valign=top><font size=2>Disclosure of reclassification amount:</font></td>
  <td  align=right width="9%" valign=bottom>&nbsp;</td>
  <td  align=right width="9%" valign=bottom>&nbsp;</td>
  <td  align=right width="9%" valign=bottom>&nbsp;</td>
  <td  align=right width="11%" valign=bottom>&nbsp;</td>
  <td  align=right width="9%" valign=bottom>&nbsp;</td>
 </tr>
 <tr>
  <td  align=left width="49%" valign=top bgcolor="#cceeff"><font size=2>Unrealized holding
  gain(loss) on investment securities during period, net of taxes of $1,059</font></td>
  <td  align=right width="9%" valign=bottom bgcolor="#cceeff"><font size=2>-</font></td>
  <td  align=right width="9%" valign=bottom bgcolor="#cceeff"><font size=2>-</font></td>
  <td  align=right width="9%" valign=bottom bgcolor="#cceeff"><font size=2>-</font></td>
  <td  align=right width="11%" valign=bottom bgcolor="#cceeff"><font size=2>1,591</font></td>
  <td  align=right width="9%" valign=bottom bgcolor="#cceeff"><font size=2>1,591</font></td>
 </tr>
 <tr>
  <td  align=left width="49%" valign=bottom><font size=2>Less:
  reclassification adjustment for gains (losses) included in net income, net of
  taxes of ($59)</font></td>
  <td  align=right width="9%" valign=bottom><font size=2>-</font></td>
  <td  align=right width="9%" valign=bottom><font size=2>-</font></td>
  <td  align=right width="9%" valign=bottom><font size=2>-</font></td>
  <td  align=right width="11%" valign=bottom><font size=2>(88)</font></td>
  <td  align=right width="9%" valign=bottom><font size=2>(88)</font></td>
 </tr>
 <tr>
  <td  align=left width="49%" valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td  align=right width="9%" valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td  align=right width="9%" valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td  align=right width="9%" valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td  align=right width="11%" valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td  align=right width="9%" valign=bottom bgcolor="#cceeff">&nbsp;</td>
 </tr>
 <tr>
  <td width="49%" valign=top><font size=2>&nbsp;&nbsp; Net change in
  unrealized gain(loss) on investment securities</font></td>
  <td  align=right width="9%" valign=bottom><font size=2>-</font></td>
  <td  align=right width="9%" valign=bottom><font size=2>-</font></td>
  <td  align=right width="9%" valign=bottom><font size=2>-</font></td>
  <td  align=right width="11%" valign=bottom><font size=2>$1,679</font></td>
  <td  align=right width="9%" valign=bottom><font size=2>$1,679</font></td>
 </tr>
 <tr>
  <td width="49%" valign=top bgcolor="#cceeff">&nbsp;</td>
  <td  align=right width="9%" valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td  align=right width="9%" valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td  align=right width="9%" valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td  align=right width="11%" valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td  align=right width="9%" valign=bottom bgcolor="#cceeff">&nbsp;</td>
 </tr>
 <tr>
  <td width="49%" valign=top><font size=2>Three months ended March 31, 2000:</font></td>
  <td  align=right width="9%" valign=bottom>&nbsp;</td>
  <td  align=right width="9%" valign=bottom>&nbsp;</td>
  <td  align=right width="9%" valign=bottom>&nbsp;</td>
  <td  align=right width="11%" valign=bottom>&nbsp;</td>
  <td  align=right width="9%" valign=bottom>&nbsp;</td>
 </tr>
 <tr>
  <td width="49%" valign=top bgcolor="#cceeff"><font size=2>Balance at December 31, 1999</font></td>
  <td  align=right width="9%" valign=bottom bgcolor="#cceeff"><font size=2>$6,540</font></td>
  <td  align=right width="9%" valign=bottom bgcolor="#cceeff"><font size=2>$45,848</font></td>
  <td  align=right width="9%" valign=bottom bgcolor="#cceeff"><font size=2>$94,436</font></td>
  <td  align=right width="11%" valign=bottom bgcolor="#cceeff"><font size=2>$(2,745)</font></td>
  <td  align=right width="9%" valign=bottom bgcolor="#cceeff"><font size=2>$144,079</font></td>
 </tr>
 <tr>
  <td width="49%" valign=top><font size=2>&nbsp;&nbsp; Net income</font></td>
  <td  align=right width="9%" valign=bottom><font size=2>-</font></td>
  <td  align=right width="9%" valign=bottom><font size=2>-</font></td>
  <td  align=right width="9%" valign=bottom><font size=2>4,586</font></td>
  <td  align=right width="11%" valign=bottom><font size=2>-</font></td>
  <td  align=right width="9%" valign=bottom><font size=2>4,586</font></td>
 </tr>
 <tr>
  <td width="49%" valign=top bgcolor="#cceeff"><font size=2>&nbsp;&nbsp; Net change in
  unrealized gain(loss) on investment securities, net of taxes of $(47)</font></td>
  <td  align=right width="9%" valign=bottom bgcolor="#cceeff"><font size=2>-</font></td>
  <td  align=right width="9%" valign=bottom bgcolor="#cceeff"><font size=2>-</font></td>
  <td  align=right width="9%" valign=bottom bgcolor="#cceeff"><font size=2>-</font></td>
  <td  align=right width="11%" valign=bottom bgcolor="#cceeff"><font size=2>(72)</font></td>
  <td  align=right width="9%" valign=bottom bgcolor="#cceeff"><font size=2>(72)</font></td>
 </tr>
 <tr>
  <td width="49%" valign=top>&nbsp;</td>
  <td  align=right width="9%" valign=bottom>&nbsp;</td>
  <td  align=right width="9%" valign=bottom>&nbsp;</td>
  <td  align=right width="9%" valign=bottom>&nbsp;</td>
  <td  align=right width="11%" valign=bottom>&nbsp;</td>
  <td  align=right width="9%" valign=bottom>&nbsp;</td>
 </tr>
 <tr>
  <td width="49%" valign=top bgcolor="#cceeff"><font size=2>Comprehensive income</font></td>
  <td  align=right width="9%" valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td  align=right width="9%" valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td  align=right width="9%" valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td  align=right width="11%" valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td  align=right width="9%" valign=bottom bgcolor="#cceeff"><font size=2>4,514</font></td>
 </tr>
 <tr>
  <td width="49%" valign=top>&nbsp;</td>
  <td  align=right width="9%" valign=bottom>&nbsp;</td>
  <td  align=right width="9%" valign=bottom>&nbsp;</td>
  <td  align=right width="9%" valign=bottom>&nbsp;</td>
  <td  align=right width="11%" valign=bottom>&nbsp;</td>
  <td  align=right width="9%" valign=bottom>&nbsp;</td>
 </tr>
 <tr>
  <td width="49%" valign=top bgcolor="#cceeff"><font size=2>Cash dividends declared ($0.15 per share)</font></td>
  <td  align=right width="9%" valign=bottom bgcolor="#cceeff"><font size=2>-</font></td>
  <td  align=right width="9%" valign=bottom bgcolor="#cceeff"><font size=2>-</font></td>
  <td  align=right width="9%" valign=bottom bgcolor="#cceeff"><font size=2>(1,383)</font></td>
  <td  align=right width="11%" valign=bottom bgcolor="#cceeff"><font size=2>-</font></td>
  <td  align=right width="9%" valign=bottom bgcolor="#cceeff"><font size=2>(1,383)</font></td>
 </tr>
 <tr>
  <td width="49%" valign=top><font size=2>1,550 shares of common stock issued</font></td>
  <td  align=right width="9%" valign=bottom><font size=2>21</font></td>
  <td  align=right width="9%" valign=bottom><font size=2>-</font></td>
  <td  align=right width="9%" valign=bottom><font size=2>-</font></td>
  <td  align=right width="11%" valign=bottom><font size=2>-</font></td>
  <td  align=right width="9%" valign=bottom><font size=2>21</font></td>
 </tr>
 <tr>
  <td width="49%" valign=top bgcolor="#cceeff"><font size=2>69,300 shares of common stock repurchased</font></td>
  <td  align=right width="9%" valign=bottom bgcolor="#cceeff"><font size=2>(49)</font></td>
  <td  align=right width="9%" valign=bottom bgcolor="#cceeff"><font size=2>-</font></td>
  <td  align=right width="9%" valign=bottom bgcolor="#cceeff"><font size=2>(1,728)</font></td>
  <td  align=right width="11%" valign=bottom bgcolor="#cceeff"><font size=2>-</font></td>
  <td  align=right width="9%" valign=bottom bgcolor="#cceeff"><font size=2>(1,777)</font></td>
 </tr>
 <tr>
  <td width="49%" valign=top>&nbsp;</td>
  <td  align=right width="9%" valign=bottom>&nbsp;</td>
  <td  align=right width="9%" valign=bottom>&nbsp;</td>
  <td  align=right width="9%" valign=bottom>&nbsp;</td>
  <td  align=right width="11%" valign=bottom>&nbsp;</td>
  <td  align=right width="9%" valign=bottom>&nbsp;</td>
 </tr>
 <tr>
  <td width="49%" valign=top bgcolor="#cceeff"><font size=2>Balance at March 31, 2000</font></td>
  <td  align=right width="9%" valign=bottom bgcolor="#cceeff"><font size=2>$6,512</font></td>
  <td  align=right width="9%" valign=bottom bgcolor="#cceeff"><font size=2>$45,848</font></td>
  <td  align=right width="9%" valign=bottom bgcolor="#cceeff"><font size=2>$95,911</font></td>
  <td  align=right width="11%" valign=bottom bgcolor="#cceeff"><font size=2>$(2,817)</font></td>
  <td  align=right width="9%" valign=bottom bgcolor="#cceeff"><font size=2>$145,454</font></td>
 </tr>
 <tr>
  <td width="49%" valign=top>&nbsp;</td>
  <td  align=right width="9%" valign=bottom>&nbsp;</td>
  <td  align=right width="9%" valign=bottom>&nbsp;</td>
  <td  align=right width="9%" valign=bottom>&nbsp;</td>
  <td  align=right width="11%" valign=bottom>&nbsp;</td>
  <td  align=right width="9%" valign=bottom>&nbsp;</td>
 </tr>
 <tr>
  <td width="49%" valign=top bgcolor="#cceeff"><font size=2>Disclosure of reclassification amount:</font></td>
  <td  align=right width="9%" valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td  align=right width="9%" valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td  align=right width="9%" valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td  align=right width="11%" valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td  align=right width="9%" valign=bottom bgcolor="#cceeff">&nbsp;</td>
 </tr>
 <tr>
  <td width="49%" valign=top><font size=2>Unrealized holding gain(loss) on investment securities
  during period, net of taxes of $76</font></td>
  <td  align=right width="9%" valign=bottom><font size=2>-</font></td>
  <td  align=right width="9%" valign=bottom><font size=2>-</font></td>
  <td  align=right width="9%" valign=bottom><font size=2>-</font></td>
  <td  align=right width="11%" valign=bottom><font size=2>115</font></td>
  <td  align=right width="9%" valign=bottom><font size=2>115</font></td>
 </tr>
 <tr>
  <td width="49%" valign=top bgcolor="#cceeff"><font size=2>Less: reclassification adjustment for gains included in
  net income, net of taxes of $124</font></td>
  <td  align=right width="9%" valign=bottom bgcolor="#cceeff"><font size=2>-</font></td>
  <td  align=right width="9%" valign=bottom bgcolor="#cceeff"><font size=2>-</font></td>
  <td  align=right width="9%" valign=bottom bgcolor="#cceeff"><font size=2>-</font></td>
  <td  align=right width="11%" valign=bottom bgcolor="#cceeff"><font size=2>187</font></td>
  <td  align=right width="9%" valign=bottom bgcolor="#cceeff"><font size=2>187</font></td>
 </tr>
 <tr>
  <td width="49%" valign=top>&nbsp;</td>
  <td  align=right width="9%" valign=bottom>&nbsp;</td>
  <td  align=right width="9%" valign=bottom>&nbsp;</td>
  <td  align=right width="9%" valign=bottom>&nbsp;</td>
  <td  align=right width="11%" valign=bottom>&nbsp;</td>
  <td  align=right width="9%" valign=bottom>&nbsp;</td>
 </tr>
 <tr>
  <td width="49%" valign=top bgcolor="#cceeff"><font size=2>&nbsp;&nbsp; Net change in
  unrealized gain(loss) on investment securities</font></td>
  <td  align=right width="9%" valign=bottom bgcolor="#cceeff"><font size=2>-</font></td>
  <td  align=right width="9%" valign=bottom bgcolor="#cceeff"><font size=2>-</font></td>
  <td  align=right width="9%" valign=bottom bgcolor="#cceeff"><font size=2>-</font></td>
  <td  align=right width="11%" valign=bottom bgcolor="#cceeff"><font size=2>$(72)</font></td>
  <td  align=right width="9%" valign=bottom bgcolor="#cceeff"><font size=2>$(72)</font></td>
 </tr>
</TABLE>


<p align=left><font size=2>See accompanying notes to consolidated financial
statements.</font></p>

<PAGE>


<p align=center><font size=2>CPB INC. AND SUBSIDIARY</font><font size=2><br>
</font><a name="CONSOLIDATED_STATEMENTS_OF_CASH_FLOWS"><font size=2>CONSOLIDATED STATEMENTS OF CASH FLOWS</font></a><font size=2><br>
(Unaudited)</font></p>

<table border=0 cellspacing=0 cellpadding=0 width="100%">
 <tr>
  <td width="70%" valign=bottom>&nbsp;</td>
  <td  align=center width="30%" colspan=2 valign=bottom><font size=2>Three
  Months Ended March 31,</font></td>
 </tr>
 <tr>
  <td width="70%" valign=bottom><font size=2>(Dollars in thousands) </font></td>
  <td  align=center width="15%" valign=bottom><font size=2>2001</font></td>
  <td  align=center width="15%" valign=bottom><font size=2>2000</font></td>
 </tr>
 <tr>
  <td width="70%" valign=bottom bgcolor="#cceeff"><font size=2>Cash flows from operating activities:</font></td>
  <td width="15%" valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td width="15%" valign=bottom bgcolor="#cceeff">&nbsp;</td>
 </tr>
 <tr>
  <td  align=left width="70%" valign=top><font size=2>&nbsp;&nbsp; Net income</font></td>
  <td  align=right width="15%" valign=bottom><font size=2>$5,328</font></td>
  <td  align=right width="15%" valign=bottom><font size=2>$4,586</font></td>
 </tr>
 <tr>
  <td  align=left width="70%" valign=top bgcolor="#cceeff"><font size=2>&nbsp;&nbsp; Adjustments to reconcile net income to
  net cash provided by operating activities:</font></td>
  <td  align=right width="15%" valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td  align=right width="15%" valign=bottom bgcolor="#cceeff">&nbsp;</td>
 </tr>
 <tr>
  <td  align=left width="70%" valign=top><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Provision for loan losses</font></td>
  <td  align=right width="15%" valign=bottom><font size=2>750</font></td>
  <td  align=right width="15%" valign=bottom><font size=2>1,000</font></td>
 </tr>
 <tr>
  <td  align=left width="70%" valign=top bgcolor="#cceeff"><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Provision for depreciation and
  amortization</font></td>
  <td  align=right width="15%" valign=bottom bgcolor="#cceeff"><font size=2>627</font></td>
  <td  align=right width="15%" valign=bottom bgcolor="#cceeff"><font size=2>686</font></td>
 </tr>
 <tr>
  <td  align=left width="70%" valign=top><font size=2>&nbsp;&nbsp;&nbsp;&nbsp; &nbsp;Net amortization and accretion of investment securities</font></td>
  <td  align=right width="15%" valign=bottom><font size=2>(83)</font></td>
  <td  align=right width="15%" valign=bottom><font size=2>25</font></td>
 </tr>
 <tr>
  <td  align=left width="70%" valign=top bgcolor="#cceeff"><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Net loss (gain) on investment
  securities</font></td>
  <td  align=right width="15%" valign=bottom bgcolor="#cceeff"><font size=2>(180)</font></td>
  <td  align=right width="15%" valign=bottom bgcolor="#cceeff"><font size=2>360</font></td>
 </tr>
 <tr>
  <td  align=left width="70%" valign=top><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Federal Home Loan Bank stock dividends
  received</font></td>
  <td  align=right width="15%" valign=bottom><font size=2>(320)</font></td>
  <td  align=right width="15%" valign=bottom><font size=2>(302)</font></td>
 </tr>
 <tr>
  <td  align=left width="70%" valign=top bgcolor="#cceeff"><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Origination of loans held for sale</font></td>
  <td  align=right width="15%" valign=bottom bgcolor="#cceeff"><font size=2>(56,834)</font></td>
  <td  align=right width="15%" valign=bottom bgcolor="#cceeff"><font size=2>(2,182)</font></td>
 </tr>
 <tr>
  <td  align=left width="70%" valign=top><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Net (gain) loss on sale of loans</font></td>
  <td  align=right width="15%" valign=bottom><font size=2>(601)</font></td>
  <td  align=right width="15%" valign=bottom><font size=2>29</font></td>
 </tr>
 <tr>
  <td  align=left width="70%" valign=top bgcolor="#cceeff"><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Proceeds from sales of loans held for
  sale</font></td>
  <td  align=right width="15%" valign=bottom bgcolor="#cceeff"><font size=2>56,900</font></td>
  <td  align=right width="15%" valign=bottom bgcolor="#cceeff"><font size=2>2,153</font></td>
 </tr>
 <tr>
  <td  align=left width="70%" valign=top><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Deferred income tax (benefit) expense</font></td>
  <td  align=right width="15%" valign=bottom><font size=2>(300)</font></td>
  <td  align=right width="15%" valign=bottom><font size=2>106</font></td>
 </tr>
 <tr>
  <td  align=left width="70%" valign=top bgcolor="#cceeff"><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Equity in earnings of unconsolidated
  subsidiaries</font></td>
  <td  align=right width="15%" valign=bottom bgcolor="#cceeff"><font size=2>(123)</font></td>
  <td  align=right width="15%" valign=bottom bgcolor="#cceeff"><font size=2>(142)</font></td>
 </tr>
 <tr>
  <td  align=left width="70%" valign=top><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Net decrease in other assets</font></td>
  <td  align=right width="15%" valign=bottom><font size=2>1,063</font></td>
  <td  align=right width="15%" valign=bottom><font size=2>3,844</font></td>
 </tr>
 <tr>
  <td  align=left width="70%" valign=top bgcolor="#cceeff"><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Net increase in other liabilities</font></td>
  <td  align=right width="15%" valign=bottom bgcolor="#cceeff"><font size=2>2,396</font></td>
  <td  align=right width="15%" valign=bottom bgcolor="#cceeff"><font size=2>750</font></td>
 </tr>
 <tr>
  <td  align=left width="70%" valign=top>&nbsp;</td>
  <td  align=right width="15%" valign=bottom>&nbsp;</td>
  <td  align=right width="15%" valign=bottom>&nbsp;</td>
 </tr>
 <tr>
  <td  align=left width="70%" valign=top bgcolor="#cceeff"><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Net cash provided by operating
  activities</font></td>
  <td  align=right width="15%" valign=bottom bgcolor="#cceeff"><font size=2>8,623</font></td>
  <td  align=right width="15%" valign=bottom bgcolor="#cceeff"><font size=2>10,913</font></td>
 </tr>
 <tr>
  <td  align=left width="70%" valign=top>&nbsp;</td>
  <td  align=right width="15%" valign=bottom>&nbsp;</td>
  <td  align=right width="15%" valign=bottom>&nbsp;</td>
 </tr>
 <tr>
  <td  align=left width="70%" valign=top bgcolor="#cceeff"><font size=2>Cash flows from
  investing activities:</font></td>
  <td  align=right width="15%" valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td  align=right width="15%" valign=bottom bgcolor="#cceeff">&nbsp;</td>
 </tr>
 <tr>
  <td  align=left width="70%" valign=top><font size=2>&nbsp;&nbsp; Proceeds from maturities of and calls on
  investment securities held to maturity</font></td>
  <td  align=right width="15%" valign=bottom><font size=2>990</font></td>
  <td  align=right width="15%" valign=bottom><font size=2>3,215</font></td>
 </tr>
 <tr>
  <td  align=left width="70%" valign=top bgcolor="#cceeff"><font size=2>&nbsp;&nbsp; Proceeds from sales of investment
  securities available for sale</font></td>
  <td  align=right width="15%" valign=bottom bgcolor="#cceeff"><font size=2>3,422</font></td>
  <td  align=right width="15%" valign=bottom bgcolor="#cceeff"><font size=2>9,649</font></td>
 </tr>
 <tr>
  <td  align=left width="70%" valign=top><font size=2>&nbsp;&nbsp; Proceeds from maturities of and calls on
  investment securities available for sale</font></td>
  <td  align=right width="15%" valign=bottom><font size=2>4,859</font></td>
  <td  align=right width="15%" valign=bottom><font size=2>8,542</font></td>
 </tr>
 <tr>
  <td  align=left width="70%" valign=top bgcolor="#cceeff"><font size=2>&nbsp;&nbsp; Purchases of investment securities
  available for sale</font></td>
  <td  align=right width="15%" valign=bottom bgcolor="#cceeff"><font size=2>(606)</font></td>
  <td  align=right width="15%" valign=bottom bgcolor="#cceeff"><font size=2>(37,825)</font></td>
 </tr>
 <tr>
  <td  align=left width="70%" valign=top><font size=2>&nbsp;&nbsp; Net (increase) decrease in
  interest-bearing deposits in other banks</font></td>
  <td  align=right width="15%" valign=bottom><font size=2>(39,464)</font></td>
  <td  align=right width="15%" valign=bottom><font size=2>8,957</font></td>
 </tr>
 <tr>
  <td  align=left width="70%" valign=top bgcolor="#cceeff"><font size=2>&nbsp;&nbsp; Net decrease in Federal funds sold</font></td>
  <td  align=right width="15%" valign=bottom bgcolor="#cceeff"><font size=2>15,000</font></td>
  <td  align=right width="15%" valign=bottom bgcolor="#cceeff"><font size=2>-</font></td>
 </tr>
 <tr>
  <td  align=left width="70%" valign=top><font size=2>&nbsp;&nbsp; Net loan repayments (originations)</font></td>
  <td  align=right width="15%" valign=bottom><font size=2>52,888</font></td>
  <td  align=right width="15%" valign=bottom><font size=2>(13,805)</font></td>
 </tr>
 <tr>
  <td  align=left width="70%" valign=top bgcolor="#cceeff"><font size=2>&nbsp;&nbsp; Purchases of premises and equipment</font></td>
  <td  align=right width="15%" valign=bottom bgcolor="#cceeff"><font size=2>(151)</font></td>
  <td  align=right width="15%" valign=bottom bgcolor="#cceeff"><font size=2>(535)</font></td>
 </tr>
 <tr>
  <td  align=left width="70%" valign=top>&nbsp;</td>
  <td  align=right width="15%" valign=bottom>&nbsp;</td>
  <td  align=right width="15%" valign=bottom>&nbsp;</td>
 </tr>
 <tr>
  <td  align=left width="70%" valign=top bgcolor="#cceeff"><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Net cash provided by (used in)
  investing activities</font></td>
  <td  align=right width="15%" valign=bottom bgcolor="#cceeff"><font size=2>36,938</font></td>
  <td  align=right width="15%" valign=bottom bgcolor="#cceeff"><font size=2>(21,802)</font></td>
 </tr>
 <tr>
  <td  align=left width="70%" valign=top>&nbsp;</td>
  <td  align=right width="15%" valign=bottom>&nbsp;</td>
  <td  align=right width="15%" valign=bottom>&nbsp;</td>
 </tr>
 <tr>
  <td  align=left width="70%" valign=top bgcolor="#cceeff"><font size=2>Cash flows from
  financing activities:</font></td>
  <td  align=right width="15%" valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td  align=right width="15%" valign=bottom bgcolor="#cceeff">&nbsp;</td>
 </tr>
 <tr>
  <td  align=left width="70%" valign=top><font size=2>&nbsp;&nbsp; Net increase (decrease) in deposits</font></td>
  <td  align=right width="15%" valign=bottom><font size=2>14,893</font></td>
  <td  align=right width="15%" valign=bottom><font size=2>(130)</font></td>
 </tr>
 <tr>
  <td  align=left width="70%" valign=top bgcolor="#cceeff"><font size=2>&nbsp;&nbsp; Proceeds from long-term debt</font></td>
  <td  align=right width="15%" valign=bottom bgcolor="#cceeff"><font size=2>-</font></td>
  <td  align=right width="15%" valign=bottom bgcolor="#cceeff"><font size=2>20,000</font></td>
 </tr>
 <tr>
  <td  align=left width="70%" valign=top><font size=2>&nbsp;&nbsp; Repayments of long-term debt</font></td>
  <td  align=right width="15%" valign=bottom><font size=2>(20,621)</font></td>
  <td  align=right width="15%" valign=bottom><font size=2>(658)</font></td>
 </tr>
 <tr>
  <td  align=left width="70%" valign=top bgcolor="#cceeff"><font size=2>&nbsp;&nbsp; Net decrease in short-term borrowings</font></td>
  <td  align=right width="15%" valign=bottom bgcolor="#cceeff"><font size=2>(40,047)</font></td>
  <td  align=right width="15%" valign=bottom bgcolor="#cceeff"><font size=2>(42,144)</font></td>
 </tr>
 <tr>
  <td  align=left width="70%" valign=top><font size=2>&nbsp;&nbsp; Cash dividends paid</font></td>
  <td  align=right width="15%" valign=bottom><font size=2>(1,354)</font></td>
  <td  align=right width="15%" valign=bottom><font size=2>(1,300)</font></td>
 </tr>
 <tr>
  <td  align=left width="70%" valign=top bgcolor="#cceeff"><font size=2>&nbsp;&nbsp; Proceeds from sale of common stock</font></td>
  <td  align=right width="15%" valign=bottom bgcolor="#cceeff"><font size=2>172</font></td>
  <td  align=right width="15%" valign=bottom bgcolor="#cceeff"><font size=2>21</font></td>
 </tr>
 <tr>
  <td  align=left width="70%" valign=top><font size=2>&nbsp;&nbsp; Repurchases of common stock</font></td>
  <td  align=right width="15%" valign=bottom><font size=2>(6,812)</font></td>
  <td  align=right width="15%" valign=bottom><font size=2>(1,777)</font></td>
 </tr>
 <tr>
  <td  align=left width="70%" valign=top bgcolor="#cceeff">&nbsp;</td>
  <td  align=right width="15%" valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td  align=right width="15%" valign=bottom bgcolor="#cceeff">&nbsp;</td>
 </tr>
 <tr>
  <td  align=left width="70%" valign=top><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Net cash used in financing activities</font></td>
  <td  align=right width="15%" valign=bottom><font size=2>(53,769)</font></td>
  <td  align=right width="15%" valign=bottom><font size=2>(25,988)</font></td>
 </tr>
 <tr>
  <td  align=left width="70%" valign=top bgcolor="#cceeff">&nbsp;</td>
  <td  align=right width="15%" valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td  align=right width="15%" valign=bottom bgcolor="#cceeff">&nbsp;</td>
 </tr>
 <tr>
  <td  align=left width="70%" valign=top><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Net decrease in cash and cash
  equivalents</font></td>
  <td  align=right width="15%" valign=bottom><font size=2>(8,208)</font></td>
  <td  align=right width="15%" valign=bottom><font size=2>(36,877)</font></td>
 </tr>
 <tr>
  <td  align=left width="70%" valign=top bgcolor="#cceeff">&nbsp;</td>
  <td  align=right width="15%" valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td  align=right width="15%" valign=bottom bgcolor="#cceeff">&nbsp;</td>
 </tr>
 <tr>
  <td  align=left width="70%" valign=top><font size=2>Cash and cash
  equivalents:</font></td>
  <td  align=right width="15%" valign=bottom>&nbsp;</td>
  <td  align=right width="15%" valign=bottom>&nbsp;</td>
 </tr>
 <tr>
  <td  align=left width="70%" valign=top bgcolor="#cceeff"><font size=2>&nbsp;&nbsp; At beginning of period</font></td>
  <td  align=right width="15%" valign=bottom bgcolor="#cceeff"><font size=2>52,207</font></td>
  <td  align=right width="15%" valign=bottom bgcolor="#cceeff"><font size=2>83,425</font></td>
 </tr>
 <tr>
  <td  align=left width="70%" valign=top><font size=2>&nbsp;&nbsp; At end of period</font></td>
  <td  align=right width="15%" valign=bottom><font size=2>$43,999</font></td>
  <td  align=right width="15%" valign=bottom><font size=2>$46,548</font></td>
 </tr>
 <tr>
  <td  align=left width="70%" valign=top bgcolor="#cceeff">&nbsp;</td>
  <td  align=right width="15%" valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td  align=right width="15%" valign=bottom bgcolor="#cceeff">&nbsp;</td>
 </tr>
 <tr>
  <td  align=left width="70%" valign=top><font size=2>Supplemental
  disclosure of cash flow information:</font></td>
  <td  align=right width="15%" valign=bottom>&nbsp;</td>
  <td  align=right width="15%" valign=bottom>&nbsp;</td>
 </tr>
 <tr>
  <td  align=left width="70%" valign=top bgcolor="#cceeff"><font size=2>&nbsp;&nbsp; Cash paid during the period for interest</font></td>
  <td  align=right width="15%" valign=bottom bgcolor="#cceeff"><font size=2>$15,293</font></td>
  <td  align=right width="15%" valign=bottom bgcolor="#cceeff"><font size=2>$10,569</font></td>
 </tr>
 <tr>
  <td  align=left width="70%" valign=top>&nbsp;</td>
  <td  align=right width="15%" valign=bottom>&nbsp;</td>
  <td  align=right width="15%" valign=bottom>&nbsp;</td>
 </tr>
 <tr>
  <td  align=left width="70%" valign=top bgcolor="#cceeff"><font size=2>Supplemental
  disclosure of noncash investing and financing activities:</font></td>
  <td  align=right width="15%" valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td  align=right width="15%" valign=bottom bgcolor="#cceeff">&nbsp;</td>
 </tr>
 <tr>
  <td  align=left width="70%" valign=top><font size=2>&nbsp;&nbsp; Transfer of loans to other real estate</font></td>
  <td  align=right width="15%" valign=bottom><font size=2>$413</font></td>
  <td  align=right width="15%" valign=bottom><font size=2>$824</font></td>
 </tr>
</TABLE>

<p align=left><font size=2>See accompanying notes to consolidated financial
statements.</font></p>

<PAGE>


<p align=left><font size=2>CPB INC. AND SUBSIDIARY</font><font size=2><br>
</font><a name="NOTES_TO_CONSOLIDATED_FINANCIAL_STATEMEN"><font size=2>NOTES TO CONSOLIDATED FINANCIAL STATEMENTS</font></a><font size=2><br>
(Unaudited)<br>
March 31, 2001 and 2000</font></p>

<p align=left><font size=2>1.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Basis of
Presentation</font></p>


<p><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; The
financial information included herein is unaudited, except for the consolidated
balance sheet at December 31, 2000. However, such information reflects all
adjustments (consisting solely of normal recurring adjustments) which are, in
the opinion of management, necessary for a fair statement of results for the
interim periods.</font></p>



<p><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; The
results of operations for the three months ended March 31, 2001 are not
necessarily indicative of the results to be expected for the full year.</font></p>


<p align=left><font size=2>2.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Comprehensive
Income</font></p>


<p><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Components
of other comprehensive income (loss) for the three months ended March 31, 2001
and 2000 were comprised solely of unrealized holding gains (losses) on
available-for-sale investment securities. Accumulated other comprehensive
income (loss), net of taxes, is presented below as of the dates indicated:</font></p>


<table border=0 cellspacing=0 cellpadding=0 width="80%">
 <tr>
  <td  align=center width="57%" valign=bottom>&nbsp;</td>
  <td  align=center width="42%" colspan=2 valign=bottom><font   size=2>Three months ended March 31,</font></td>
 </tr>
 <tr>
  <td  align=left width="57%" valign=bottom><font   size=2>(Dollars in thousands)</font></td>
  <td  align=center width="19%" valign=bottom><font   size=2>2001</font></td>
  <td  align=center width="22%" valign=bottom><font   size=2>2000</font></td>
 </tr>
 <tr>
  <td  align=left width="57%" valign=bottom>&nbsp;</td>
  <td  align=center width="19%" valign=bottom>&nbsp;</td>
  <td  align=center width="22%" valign=bottom>&nbsp;</td>
 </tr>
 <tr>
  <td  align=left width="57%" valign=top bgcolor="#cceeff"><font   size=2>Balance at beginning of period</font></td>
  <td  align=right width="19%" valign=bottom bgcolor="#cceeff"><font   size=2>$3,060</font></td>
  <td  align=right width="22%" valign=bottom bgcolor="#cceeff"><font   size=2>$(2,745)</font></td>
 </tr>
 <tr>
  <td width="57%" valign=top><font size=2>Current-period change</font></td>
  <td  align=right width="19%" valign=bottom><font   size=2>1,679</font></td>
  <td  align=right width="22%" valign=bottom><font   size=2>(72)</font></td>
 </tr>
 <tr>
  <td width="57%" valign=top bgcolor="#cceeff"><font   size=2>&nbsp;&nbsp; Balance at end of period</font></td>
  <td  align=right width="19%" valign=bottom bgcolor="#cceeff"><font size=2>$4,739</font></td>
  <td  align=right width="22%" valign=bottom bgcolor="#cceeff"><font size=2>$(2,817)</font></td>
 </tr>
</TABLE>

<p align=left><font size=2>3.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Segment
Information</font></p>

<p align=left><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; The
Company has three reportable segments: retail branches, commercial finance and
treasury. The segments reported are consistent with internal functional
reporting lines. They are managed separately because each unit has different
target markets, technological requirements, marketing strategies and
specialized skills. The retail branch segment includes all retail branch
offices. Products and services offered include a full range of deposit and loan
products, safe deposit boxes and various other bank services. The commercial
finance segment focuses on lending to corporate customers, residential mortgage
lending, construction and real estate development lending and international
banking services. The treasury segment is responsible for managing the
Company's investment securities portfolio and wholesale funding activities.
Other activities include trust, mortgage servicing, indirect lending
activities.</font></p>

<PAGE>


<p align=left><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </font><font size=2>The accounting policies of the segments are consistent
with the Company's accounting policies that are described in note 1 to the
consolidated financial statements in the 2000 Annual Report to Shareholders.
The majority of the Company's net income is derived from net interest income.
Accordingly, Management focuses primarily on net interest income (expense),
rather than gross interest income and expense amounts, in evaluating segment
profitability. Intersegment net interest income (expense) is allocated to each
segment based on the amount of net investable funds provided (used) by that
segment at a rate equal to the Bank's average rate on interest-sensitive assets
and liabilities. All administrative and overhead expenses are allocated to the
segments at cost. Cash, investment securities, loans and their related balances
are allocated to the segment responsible for acquisition and maintenance of
those assets. Segment assets also include all premises and equipment used directly
in segment operations.</font></p>

<p align=left><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Segment
profits and assets are provided in the following table for the periods
indicated.</font></p>

<b><i><PAGE>
</i></b>

<p><font size=2>&nbsp;</font></p>

<table border=0 cellspacing=0 cellpadding=0 width="100%">
 <tr>
  <td width="50%" valign=bottom>&nbsp;</td>
  <td  align=center width="10%" valign=bottom><font   size=2>Retail</font></td>
  <td  align=center width="10%" valign=bottom><font   size=2>Commercial</font></td>
  <td  align=center width="10%" valign=bottom>&nbsp;</td>
  <td  align=center width="10%" valign=bottom><font size=2>All</font></td>
  <td  align=center width="10%" valign=bottom>&nbsp;</td>
 </tr>
 <tr>
  <td width="50%" valign=bottom><font size=2>(Dollars in thousands)&nbsp; </font></td>
  <td  align=center width="10%" valign=bottom><font   size=2>Branch</font></td>
  <td  align=center width="10%" valign=bottom><font   size=2>Finance</font></td>
  <td  align=center width="10%" valign=bottom><font   size=2>Treasury</font></td>
  <td  align=center width="10%" valign=bottom><font   size=2>Others</font></td>
  <td  align=center width="10%" valign=bottom><font   size=2>Total</font></td>
 </tr>
 <tr>
  <td width="50%" valign=bottom bgcolor="#cceeff"><font size=2>Three months ended March 31,
  2001:</font></td>
  <td  align=center width="10%" valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td  align=center width="10%" valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td  align=center width="10%" valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td  align=center width="10%" valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td  align=center width="10%" valign=bottom bgcolor="#cceeff">&nbsp;</td>
 </tr>
 <tr>
  <td width="50%" valign=top><font size=2>&nbsp;&nbsp; Net interest income (expense)</font></td>
  <td  align=right width="10%" valign=bottom><font   size=2>$(3,937)</font></td>
  <td  align=right width="10%" valign=bottom><font   size=2>$17,887</font></td>
  <td  align=right width="10%" valign=bottom><font   size=2>$1,137</font></td>
  <td  align=right width="10%" valign=bottom><font   size=2>$3,859</font></td>
  <td  align=right width="10%" valign=bottom><font   size=2>$18,946</font></td>
 </tr>
 <tr>
  <td width="50%" valign=top bgcolor="#cceeff"><font size=2>&nbsp;&nbsp; Intersegment net interest income (expense)</font></td>
  <td  align=right width="10%" valign=bottom bgcolor="#cceeff"><font   size=2>9,857</font></td>
  <td  align=right width="10%" valign=bottom bgcolor="#cceeff"><font   size=2>(8,392)</font></td>
  <td  align=right width="10%" valign=bottom bgcolor="#cceeff"><font   size=2>829</font></td>
  <td  align=right width="10%" valign=bottom bgcolor="#cceeff"><font   size=2>(2,294)</font></td>
  <td  align=right width="10%" valign=bottom bgcolor="#cceeff"><font   size=2>-</font></td>
 </tr>
 <tr>
  <td width="50%" valign=top><font size=2>&nbsp;&nbsp; Provision for loan losses</font></td>
  <td  align=right width="10%" valign=bottom><font   size=2>111</font></td>
  <td  align=right width="10%" valign=bottom><font   size=2>66</font></td>
  <td  align=right width="10%" valign=bottom><font   size=2>-</font></td>
  <td  align=right width="10%" valign=bottom><font   size=2>573</font></td>
  <td  align=right width="10%" valign=bottom><font   size=2>750</font></td>
 </tr>
 <tr>
  <td width="50%" valign=top bgcolor="#cceeff"><font size=2>&nbsp;&nbsp; Other operating income (expense)</font></td>
  <td  align=right width="10%" valign=bottom bgcolor="#cceeff"><font   size=2>1,330</font></td>
  <td  align=right width="10%" valign=bottom bgcolor="#cceeff"><font   size=2>321</font></td>
  <td  align=right width="10%" valign=bottom bgcolor="#cceeff"><font   size=2>201</font></td>
  <td  align=right width="10%" valign=top bgcolor="#cceeff"><font   size=2>1,795</font></td>
  <td  align=right width="10%" valign=bottom bgcolor="#cceeff"><font   size=2>3,647</font></td>
 </tr>
 <tr>
  <td width="50%" valign=top><font size=2>&nbsp;&nbsp; Other operating expense</font></td>
  <td  align=right width="10%" valign=bottom><font   size=2>3,533</font></td>
  <td  align=right width="10%" valign=bottom><font   size=2>973</font></td>
  <td  align=right width="10%" valign=bottom><font   size=2>731</font></td>
  <td  align=right width="10%" valign=bottom><font   size=2>8,325</font></td>
  <td  align=right width="10%" valign=bottom><font   size=2>13,562</font></td>
 </tr>
 <tr>
  <td width="50%" valign=top bgcolor="#cceeff"><font size=2>&nbsp;&nbsp; Administrative and overhead expense allocation</font></td>
  <td  align=right width="10%" valign=bottom bgcolor="#cceeff"><font   size=2>4,302</font></td>
  <td  align=right width="10%" valign=bottom bgcolor="#cceeff"><font   size=2>1,864</font></td>
  <td  align=right width="10%" valign=bottom bgcolor="#cceeff"><font   size=2>139</font></td>
  <td  align=right width="10%" valign=bottom bgcolor="#cceeff"><font   size=2>(6,305)</font></td>
  <td  align=right width="10%" valign=bottom bgcolor="#cceeff"><font   size=2>-</font></td>
 </tr>
 <tr>
  <td width="50%" valign=top><font size=2>&nbsp;&nbsp; Income tax expense (credit)</font></td>
  <td  align=right width="10%" valign=bottom><font   size=2>(247)</font></td>
  <td  align=right width="10%" valign=bottom><font   size=2>2,453</font></td>
  <td  align=right width="10%" valign=bottom><font   size=2>465</font></td>
  <td  align=right width="10%" valign=bottom><font   size=2>282</font></td>
  <td  align=right width="10%" valign=bottom><font   size=2>2,953</font></td>
 </tr>
 <tr>
  <td width="50%" valign=top bgcolor="#cceeff"><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Net income</font></td>
  <td  align=right width="10%" valign=bottom bgcolor="#cceeff"><font   size=2>$(449)</font></td>
  <td  align=right width="10%" valign=bottom bgcolor="#cceeff"><font   size=2>$4,460</font></td>
  <td  align=right width="10%" valign=bottom bgcolor="#cceeff"><font   size=2>$832</font></td>
  <td  align=right width="10%" valign=bottom bgcolor="#cceeff"><font   size=2>$485</font></td>
  <td  align=right width="10%" valign=bottom bgcolor="#cceeff"><font   size=2>$5,328</font></td>
 </tr>
 <tr>
  <td width="50%" valign=top>&nbsp;</td>
  <td  align=right width="10%" valign=bottom>&nbsp;</td>
  <td  align=right width="10%" valign=bottom>&nbsp;</td>
  <td  align=right width="10%" valign=bottom>&nbsp;</td>
  <td  align=right width="10%" valign=bottom>&nbsp;</td>
  <td  align=right width="10%" valign=bottom>&nbsp;</td>
 </tr>
 <tr>
  <td width="50%" valign=top bgcolor="#cceeff"><font size=2>Three months ended March 31,
  2000:</font></td>
  <td  align=right width="10%" valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td  align=right width="10%" valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td  align=right width="10%" valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td  align=right width="10%" valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td  align=right width="10%" valign=bottom bgcolor="#cceeff">&nbsp;</td>
 </tr>
 <tr>
  <td width="50%" valign=top><font size=2>&nbsp;&nbsp; Net interest income (expense)</font></td>
  <td  align=right width="10%" valign=bottom><font   size=2>$(1,266)</font></td>
  <td  align=right width="10%" valign=bottom><font   size=2>$12,753</font></td>
  <td  align=right width="10%" valign=bottom><font   size=2>$1,614</font></td>
  <td  align=right width="10%" valign=bottom><font   size=2>$3,884</font></td>
  <td  align=right width="10%" valign=bottom><font   size=2>$16,985</font></td>
 </tr>
 <tr>
  <td width="50%" valign=top bgcolor="#cceeff"><font size=2>&nbsp;&nbsp; Intersegment net interest income (expense)</font></td>
  <td  align=right width="10%" valign=bottom bgcolor="#cceeff"><font   size=2>8,283</font></td>
  <td  align=right width="10%" valign=bottom bgcolor="#cceeff"><font   size=2>(6,166)</font></td>
  <td  align=right width="10%" valign=bottom bgcolor="#cceeff"><font   size=2>329</font></td>
  <td  align=right width="10%" valign=bottom bgcolor="#cceeff"><font   size=2>(2,446)</font></td>
  <td  align=right width="10%" valign=bottom bgcolor="#cceeff"><font   size=2>-</font></td>
 </tr>
 <tr>
  <td width="50%" valign=top><font size=2>&nbsp;&nbsp; Provision for loan losses</font></td>
  <td  align=right width="10%" valign=bottom><font   size=2>381</font></td>
  <td  align=right width="10%" valign=bottom><font   size=2>84</font></td>
  <td  align=right width="10%" valign=bottom><font   size=2>-</font></td>
  <td  align=right width="10%" valign=bottom><font   size=2>535</font></td>
  <td  align=right width="10%" valign=bottom><font   size=2>1,000</font></td>
 </tr>
 <tr>
  <td width="50%" valign=top bgcolor="#cceeff"><font size=2>&nbsp;&nbsp; Other operating income</font></td>
  <td  align=right width="10%" valign=bottom bgcolor="#cceeff"><font   size=2>846</font></td>
  <td  align=right width="10%" valign=bottom bgcolor="#cceeff"><font   size=2>316</font></td>
  <td  align=right width="10%" valign=bottom bgcolor="#cceeff"><font   size=2>(341)</font></td>
  <td  align=right width="10%" valign=bottom bgcolor="#cceeff"><font   size=2>3,655</font></td>
  <td  align=right width="10%" valign=bottom bgcolor="#cceeff"><font   size=2>4,476</font></td>
 </tr>
 <tr>
  <td width="50%" valign=top><font size=2>&nbsp;&nbsp; Other operating expense</font></td>
  <td  align=right width="10%" valign=bottom><font   size=2>3,664</font></td>
  <td  align=right width="10%" valign=bottom><font   size=2>1,073</font></td>
  <td  align=right width="10%" valign=bottom><font   size=2>119</font></td>
  <td  align=right width="10%" valign=bottom><font   size=2>8,518</font></td>
  <td  align=right width="10%" valign=bottom><font   size=2>13,374</font></td>
 </tr>
 <tr>
  <td width="50%" valign=top bgcolor="#cceeff"><font size=2>&nbsp;&nbsp; Administrative and overhead expense allocation</font></td>
  <td  align=right width="10%" valign=bottom bgcolor="#cceeff"><font   size=2>4,229</font></td>
  <td  align=right width="10%" valign=bottom bgcolor="#cceeff"><font   size=2>802</font></td>
  <td  align=right width="10%" valign=bottom bgcolor="#cceeff"><font   size=2>93</font></td>
  <td  align=right width="10%" valign=bottom bgcolor="#cceeff"><font   size=2>(5,124)</font></td>
  <td  align=right width="10%" valign=bottom bgcolor="#cceeff"><font   size=2>-</font></td>
 </tr>
 <tr>
  <td width="50%" valign=top><font size=2>&nbsp;&nbsp; Income tax expense (benefit)</font></td>
  <td  align=right width="10%" valign=bottom><font   size=2>(184)</font></td>
  <td  align=right width="10%" valign=bottom><font   size=2>1,725</font></td>
  <td  align=right width="10%" valign=bottom><font   size=2>487</font></td>
  <td  align=right width="10%" valign=bottom><font   size=2>473</font></td>
  <td  align=right width="10%" valign=bottom><font   size=2>2,501</font></td>
 </tr>
 <tr>
  <td width="50%" valign=top bgcolor="#cceeff"><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Net income (loss)</font></td>
  <td  align=right width="10%" valign=bottom bgcolor="#cceeff"><font   size=2>$(227)</font></td>
  <td  align=right width="10%" valign=bottom bgcolor="#cceeff"><font   size=2>$3,219</font></td>
  <td  align=right width="10%" valign=bottom bgcolor="#cceeff"><font   size=2>$903</font></td>
  <td  align=right width="10%" valign=bottom bgcolor="#cceeff"><font   size=2>$691</font></td>
  <td  align=right width="10%" valign=bottom bgcolor="#cceeff"><font   size=2>$4,586</font></td>
 </tr>
 <tr>
  <td width="50%" valign=top>&nbsp;</td>
  <td  align=right width="10%" valign=bottom>&nbsp;</td>
  <td  align=right width="10%" valign=bottom>&nbsp;</td>
  <td  align=right width="10%" valign=bottom>&nbsp;</td>
  <td  align=right width="10%" valign=bottom>&nbsp;</td>
  <td  align=right width="10%" valign=bottom>&nbsp;</td>
 </tr>
 <tr>
  <td width="50%" valign=top bgcolor="#cceeff"><font size=2>At March 31, 2001:</font></td>
  <td  align=right width="10%" valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td  align=right width="10%" valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td  align=right width="10%" valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td  align=right width="10%" valign=bottom bgcolor="#cceeff">&nbsp;</td>
  <td  align=right width="10%" valign=bottom bgcolor="#cceeff">&nbsp;</td>
 </tr>
 <tr>
  <td width="50%" valign=top><font size=2>&nbsp;&nbsp; Investment securities</font></td>
  <td  align=right width="10%" valign=bottom><font   size=2>$-</font></td>
  <td  align=right width="10%" valign=bottom><font   size=2>$-</font></td>
  <td  align=right width="10%" valign=bottom><font   size=2>$379,334</font></td>
  <td  align=right width="10%" valign=bottom><font   size=2>$-</font></td>
  <td  align=right width="10%" valign=bottom><font   size=2>$379,334</font></td>
 </tr>
 <tr>
  <td width="50%" valign=top bgcolor="#cceeff"><font size=2>&nbsp;&nbsp; Loans</font></td>
  <td  align=right width="10%" valign=bottom bgcolor="#cceeff"><font   size=2>167,656</font></td>
  <td  align=right width="10%" valign=bottom bgcolor="#cceeff"><font   size=2>950,949</font></td>
  <td  align=right width="10%" valign=bottom bgcolor="#cceeff"><font   size=2>-</font></td>
  <td  align=right width="10%" valign=bottom bgcolor="#cceeff"><font   size=2>119,711</font></td>
  <td  align=right width="10%" valign=bottom bgcolor="#cceeff"><font   size=2>1,238,316</font></td>
 </tr>
 <tr>
  <td width="50%" valign=top><font size=2>&nbsp;&nbsp; Other</font></td>
  <td  align=right width="10%" valign=bottom><font   size=2>18,313</font></td>
  <td  align=right width="10%" valign=bottom><font   size=2>21,024</font></td>
  <td  align=right width="10%" valign=bottom><font   size=2>95,954</font></td>
  <td  align=right width="10%" valign=bottom><font   size=2>19,359</font></td>
  <td  align=right width="10%" valign=bottom><font   size=2>154,650</font></td>
 </tr>
 <tr>
  <td width="50%" valign=top bgcolor="#cceeff"><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total assets</font></td>
  <td  align=right width="10%" valign=bottom bgcolor="#cceeff"><font   size=2>$185,969</font></td>
  <td  align=right width="10%" valign=bottom bgcolor="#cceeff"><font   size=2>$971,973</font></td>
  <td  align=right width="10%" valign=bottom bgcolor="#cceeff"><font   size=2>$475,288</font></td>
  <td  align=right width="10%" valign=bottom bgcolor="#cceeff"><font   size=2>$139,070</font></td>
  <td  align=right width="10%" valign=bottom bgcolor="#cceeff"><font   size=2>$1,772,300</font></td>
 </tr>
 <tr>
  <td width="50%" valign=top><font size=2>At December 31, 2000:</font></td>
  <td  align=right width="10%" valign=bottom>&nbsp;</td>
  <td  align=right width="10%" valign=bottom>&nbsp;</td>
  <td  align=right width="10%" valign=bottom>&nbsp;</td>
  <td  align=right width="10%" valign=bottom>&nbsp;</td>
  <td  align=right width="10%" valign=bottom>&nbsp;</td>
 </tr>
 <tr>
  <td width="50%" valign=top bgcolor="#cceeff"><font size=2>&nbsp;&nbsp; Investment securities</font></td>
  <td  align=right width="10%" valign=bottom bgcolor="#cceeff"><font   size=2>$-</font></td>
  <td  align=right width="10%" valign=bottom bgcolor="#cceeff"><font   size=2>$-</font></td>
  <td  align=right width="10%" valign=bottom bgcolor="#cceeff"><font   size=2>$384,619</font></td>
  <td  align=right width="10%" valign=bottom bgcolor="#cceeff"><font   size=2>$-</font></td>
  <td  align=right width="10%" valign=bottom bgcolor="#cceeff"><font   size=2>$384,619</font></td>
 </tr>
 <tr>
  <td width="50%" valign=top><font size=2>&nbsp;&nbsp; Loans</font></td>
  <td  align=right width="10%" valign=bottom><font   size=2>169,839</font></td>
  <td  align=right width="10%" valign=bottom><font   size=2>944,436</font></td>
  <td  align=right width="10%" valign=bottom><font   size=2>-</font></td>
  <td  align=right width="10%" valign=bottom><font   size=2>176,915</font></td>
  <td  align=right width="10%" valign=bottom><font   size=2>1,291,190</font></td>
 </tr>
 <tr>
  <td width="50%" valign=top bgcolor="#cceeff"><font size=2>&nbsp;&nbsp; Other</font></td>
  <td  align=right width="10%" valign=bottom bgcolor="#cceeff"><font   size=2>19,906</font></td>
  <td  align=right width="10%" valign=bottom bgcolor="#cceeff"><font   size=2>21,841</font></td>
  <td  align=right width="10%" valign=bottom bgcolor="#cceeff"><font   size=2>73,432</font></td>
  <td  align=right width="10%" valign=bottom bgcolor="#cceeff"><font   size=2>25,930</font></td>
  <td  align=right width="10%" valign=bottom bgcolor="#cceeff"><font   size=2>141,109</font></td>
 </tr>
 <tr>
  <td width="50%" valign=top><font   size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total assets</font></td>
  <td  align=right width="10%" valign=bottom><font size=2>$189,745</font></td>
  <td  align=right width="10%" valign=bottom><font size=2>$966,277</font></td>
  <td  align=right width="10%" valign=bottom><font size=2>$458,051</font></td>
  <td  align=right width="10%" valign=bottom><font size=2>$202,845</font></td>
  <td  align=right width="10%" valign=bottom><font size=2>$1,816,918</font></td>
 </tr>
</TABLE>

<p align=left><b><i><font size=2>&nbsp;</font></i></b></p>

<b><i><PAGE>
</i></b>

<p align=left><font size=2>4.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Accounting
Pronouncements</font></p>


<p><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; In
June 1998, the Financial Accounting Standards Board (&quot;FASB&quot;) issued
Statement of Financial Accounting Standards (&quot;SFAS&quot;) No. 133,
&quot;Accounting for Derivative Instruments and Hedging Activities,&quot; which
establishes accounting and reporting standards for derivative instruments,
including certain derivative instruments embedded in other contracts, and for
hedging activities. In June 1999, the FASB issued SFAS No. 137,
&quot;Accounting for Derivative Instruments and Hedging Activities - Deferral
of the Effective Date of FASB Statement No. 133, an Amendment of SFAS Statement
No. 133,&quot; which deferred the effective date of SFAS No. 133. In June 2000,
the FASB issued SFAS No. 138, &quot;Accounting for Certain Derivative
Instruments and Certain Hedging Activities,&quot; an amendment of FASB
Statement No. 133. SFAS No. 133, as amended, is now effective for all fiscal
quarters of fiscal years beginning after June 15, 2000. Earlier application is
permitted only as of the beginning of a fiscal quarter. The application of SFAS
No. 133, as amended, effective from January 1, 2001, did not have a material
impact on the Company's consolidated financial statements.</font></p>



<p><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; In
September 2000, the FASB issued SFAS No. 140, Accounting for Transfers and
Servicing of Financial Assets and Extinguishments of Liabilities. SFAS No. 140
supersedes and replaces SFAS No. 125 of the same name and provides accounting
and reporting guidance for transfers and servicing of financial assets and
extinguishments of liabilities. The provisions of SFAS No. 140 are to be
applied prospectively to transactions occurring after March 31, 2001. The
application of SFAS No. 140 is not expected to have a material impact on the
Company's consolidated financial statements.</font></p>



<p><font size=2>&nbsp;</font></p>


</div>

</body>

</HTML>
</TEXT>
</DOCUMENT>
</SEC-DOCUMENT>
-----END PRIVACY-ENHANCED MESSAGE-----
