PUBLIC DISCLOSURE OCTOBER 2_ 1995 COMMUNITY REINVESTMENT ACT

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					                      PUBLIC DISCLOSURE


                       OCTOBER 2, 1995


     COMMUNITY REINVESTMENT ACT PERFORMANCE EVALUATION


                 AMERICAN SAVINGS BANK, FSB
                        OTS No. 08384


                     915 Fort Street Mall
                   Honolulu, Hawaii 96813


                Office of Thrift Supervision
                         West Region
                    Post Office Box 7165
              San Francisco, California 94120

  ____________________________________________________________
|                                                              |
| Note:      This evaluation is not, nor should it be          |
|            construed as, an assessment of the financial      |
|            condition of this institution. The rating         |
|            assigned to this institution does not represent |
|            an analysis, conclusion or opinion of the         |
|            federal financial supervisory agency concerning |
|            the safety and soundness of this financial        |
|            institution.                                      |
|____________________________________________________________|
Date:   October 2, 1995                                            OTS No.:   08384




                                GENERAL INFORMATION


This document is an evaluation of the Community Reinvestment Act (CRA) performance
of American Savings Bank, FSB (ASB) prepared by the Office of Thrift Supervision
(OTS), West Region, the institution's supervisory agency.

The evaluation represents the agency's current assessment and rating of the
institution's CRA performance based on an examination conducted as of August 1995.
It does not reflect any CRA-related activities that may have been initiated or
discontinued by the institution after the completion of the examination.

The purpose of the Community Reinvestment Act of 1977 (12 U.S.C. 2901), as amended,
is to encourage each financial institution to help meet the credit needs of the
communities in which it operates. The Act requires that in connection with its
examination of a financial institution, each federal financial supervisory agency
shall (1) assess the institution's record of helping to meet the credit needs of its
entire community, including low- and moderate-income neighborhoods, consistent with
safe and sound operations of the institution, and (2) take that record of performance
into account when deciding whether to approve an application of the institution for
a deposit facility.

The Financial Institutions Reform, Recovery, and Enforcement Act of 1989, Pub. L.
No. 101-73, amended the CRA to require the Agencies to make public certain portions
of their CRA performance assessments of financial institutions.

Basis for the Rating

The assessment of the institution's record takes into account its financial capacity
and size, legal impediments and local economic conditions and demographics, including
the competitive environment in which it operates. Assessing the CRA performance is
a process that does not rely on absolute standards. Institutions are not required
to adopt specific activities, nor to offer specific types or amounts of credit. Each
institution has considerable flexibility in determining how it can best help to meet
the credit needs of its entire community. In that light, evaluations are based on
a review of 12 assessment factors, which are grouped together under 5 performance
categories, as detailed in the following section of this evaluation.




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Date:   October 2, 1995                                              OTS No.:   08384




                                 ASSIGNMENT OF RATING


Identification of Ratings

In connection with the assessment of each insured depository institution's CRA
performance, a rating is assigned from the following groups:

    Outstanding record of meeting community credit needs.

         An institution in this group has an outstanding record of, and is a leader
         in, ascertaining and helping to meet the credit needs of its entire
         delineated community, including low- and moderate-income neighborhoods,
         in a manner consistent with its resources and capabilities.

    Satisfactory record of meeting community credit needs.

         An institution in this group has a satisfactory record of ascertaining
         and helping to meet the credit needs of its entire delineated community,
         including low- and moderate-income neighborhoods, in a manner consistent
         with its resources and capabilities.

    Needs to improve record of meeting community credit needs.

         An institution in this group needs to improve its overall record of
         ascertaining and helping to meet the credit needs of its entire
         delineated community, including low- and moderate-income neighborhoods,
         in a manner consistent with its resources and capabilities.

    Substantial noncompliance in meeting community credit needs.

         An institution in this group has a substantially deficient record of
         ascertaining and helping to meet the credit needs of its entire
         delineated community, including low- and moderate-income neighborhoods,
         in a manner consistent with its resources and capabilities.




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Date:    October 2, 1995                                              OTS No.:   08384




                       DISCUSSION OF INSTITUTION'S PERFORMANCE


Institution rating:

ASB is rated "Outstanding record of meeting community credit needs" based on the
findings presented below.

I.      ASCERTAINMENT OF COMMUNITY CREDIT NEEDS

        Assessment Factor A - Activities conducted by the institution to ascertain the
        credit needs of its community, including the extent of the institution's
        efforts to communicate with members of its community regarding the credit
        services being provided by the institution.

        Primary outreach is performed by branch managers and other employees who
        regularly meet with various realtors, organizations, and community groups to
        speak and make product presentations. An internal award system is in place
        to encourage these activities and contacts by the employees. Surveys are
        typically provided to audience members, and information about the group and
        results from the audience surveys are provided in written form to a CRA Task
        Force. The Task Force, made up of two CRA Officers and various other ASB
        officers, meets monthly and considers this input.         Quarterly reports
        summarizing CRA activity, including outreach activity and results, are
        prepared by the CRA Officers for consideration and discussion by the Board of
        Directors.

        The CRA Officers and other officers of ASB are also involved with various
        professional and housing organizations and maintain contacts with local
        government agencies.    Information about credit needs gleaned from such
        affiliations is then shared informally with the CRA Officers or other members
        of the CRA Task Force.

        The institution's marketing staff maintains very comprehensive demographic
        data about the entire delineated community. A thorough analysis of Home
        Mortgage Disclosure Act information is performed and presented to the CRA Task
        Force and the Board of Directors on at least an annual basis. Moreover, the
        entire loan portfolio for all of the delineated community is also analyzed
        annually, with appropriate demographic comparisons.

        The institution offers an unusually broad range of credit products (discussed
        further under Factors I and J). ASB also offers flexible underwriting to
        qualify first-time buyers and low- to moderate-income applicants.             In
        instances where multiple families share housing, the combined income of the
        families may be used to qualify for the loan. In instances where the appraised
        value of the property will be higher than the costs of the lot and construction,
        ASB has allowed financing of up to




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Date:    October 2, 1995                                             OTS No.:   08384




        100 percent of those costs when the final loan-to-value ratio is still within
        standard guidelines.    Additionally, ASB has allowed higher debt ratios,
        unrelated co-signors, and developer participation in providing downpayment
        funds and co-signing notes in some instances for first-time buyers.

        ASB offers first mortgage loans with loan-to-value ratios of up to 95 percent
        (with PMI). Under the American Dream program, which targets first-time buyers
        with low- to moderate-income levels, a loan-to-value ratio of 95 percent is
        available, but only three percent of the downpayment must come from the
        borrower, with the remaining two percent coming from family members.
        Qualifying ratios under the program are also more liberal, and the loan fee
        is also reduced. During 1994, the institution funded 182 loans aggregating
        $42.9 million under the program, and during the first half of 1995, 104 loans
        aggregating $16.1 million were funded.

        We conclude that the institution is very proactive in ascertaining credit needs
        and that the range of credit products offered and the credit flexibility
        demonstrated in the institution's programs display a commendable level of
        responsiveness to these needs.

        Assessment Factor C - The extent of participation by the institution's board
        of directors in formulating the institution's policies and reviewing its
        performance with respect to the purposes of the Community Reinvestment Act.

        The Board of Directors has adopted a written CRA strategic plan, the stated
        goal of which is to have an outstanding record of ascertaining and helping to
        meet local credit needs.

        The organization has designated two senior officers to act as co-CRA Officers
        in addition to their other duties. In that role, they are responsible for
        providing general guidance and leadership in the institution's overall CRA
        efforts. Both of the CRA Officers serve on the institution's CRA Task Force,
        which is made up of officers from various operational and lending areas of the
        organization. The CRA Task Force is responsible for actually implementing CRA
        programs, and effectively represents the functional link between the Board and
        the rest of the organization. The CRA Officers prepare quarterly reports of
        CRA activity, based on Task Force activity and actual performance by the
        organization as a whole, for Board consideration and action.

        A review of Board minutes does show regular consideration of CRA matters. The
        quarterly reports of CRA activity are reviewed by the Board as are regular
        reports of loan activity with other information that is relevant to the CRA
        process. It is apparent that the Board is supportive of CRA efforts by virtue
        of community development efforts and the broad array of loan products.
        Additionally, the Board has supported CRA training, and all institution
        employees receive regular refresher training.




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Date:    October 2, 1995                                               OTS No.:   08384




        A second look program (discussed further under Factor D) is in place for
        residential and consumer loan products. All potential denials receive this
        additional review. Additionally, the Internal Audit Department is to perform
        an annual assessment of Fair Lending that includes a review of denied loan
        applications for consistency with nondiscrimination lending guidelines.

        Most of the members of the Board are active with numerous professional and
        community service organizations. Many of these affiliations provide business
        referrals to the institution, and some of the organizations are
        housing-related.

        We conclude that the Board takes an active role in the CRA planning and oversight
        process, and that it is committed to a proactive CRA program.

II.     MARKETING AND TYPES OF CREDIT OFFERED AND EXTENDED

        Assessment Factor B - The extent of the institution's marketing and special
        credit-related programs to make members of the community aware of the credit
        services offered by the institution.

        ASB uses television, radio, and printed advertising to promote its image and
        both savings and loan products.       Printed ads are placed in magazines,
        newspapers, and in other special publications. The institution uses a broad
        range of media and publications within the area, and thus the advertising
        reaches throughout the delineated community, including low- to moderate-income
        areas. Marketing is also accomplished by the numerous presentations made by
        branch managers and other employees (discussed further under Factor A). The
        institution also publishes brochures that advertise all of its product lines,
        including specialized loan and savings products.

        An annual marketing budget is established and general categories of advertising
        are determined. With ongoing input from the operational units, the marketing
        department then oversees the production of the ads. Individual offices may
        also request certain advertising, and have some authority to produce their own
        advertising, with some oversight. All advertising is reviewed by the Legal
        Department for compliance issues, and complete records are maintained of
        advertising that is done.       The effectiveness of advertising and other
        marketing is gauged by the responses received from customers and members of
        the public, and by analysis of product success and penetration within the
        community.    Reports are made to the Board of Directors as to marketing
        strategies and results by the Marketing Department.




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Date:    October 2, 1995                                              OTS No.:   08384




        The institution routinely advertises products targeted to special groups, such
        as seniors, students, and first-time home buyers.        These advertisements
        typically reflect a great deal of sensitivity to the specialized needs of these
        groups.   For example, an advertisement for a first-time home buyer loan
        directed to women clarifies that joint ownership of a home before a divorce
        does not disqualify an applicant for the program. There is also a great deal
        of advertising targeted to specific minorities and other groups.           This
        advertising is placed in numerous specialized publications, such as the Chinese
        Yellow Pages, the Fil-Am Courier, and Senior Lifestyles.          Some foreign
        language advertising is included in this targeted advertising.

        Branch managers and other loan officers are typically part of the loan process,
        and they are readily available to assist applicants during the application
        process.

        Assessment Factor I - The institution's origination of residential mortgage
        loans, housing rehabilitation loans, home improvement loans, and small
        business or small farm loans within its community, or the purchase of such loans
        originated in its community.

        The institution offers a wide range of loan products. It offers first mortgage
        loans for the purchase and refinance of 1-4 unit and multi-unit properties.
        Second mortgage loans on residential properties are available. Loans are
        available for the purchase and refinance of commercial properties (other than
        multi-unit residential), and construction loans are available for residential
        and commercial purposes. Land loans are also available for residential and
        commercial purposes.

        The institution also offers business loans to professionals and small
        businesses for general purposes. It does not offer small farm loans.

        The institution offers a range of consumer lending. In addition to second
        mortgage loans, it offers auto loans, personal loans on a secured (by real
        estate) and unsecured basis, and credit lines secured by real estate (Equity
        Powerline) and for overdraft purposes (Preferred CreditLine).            The
        institution also offers VISA credit cards. The institution also offers share
        loans and student loans.




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Date:   October 2, 1995                                                                       OTS No.:                   08384




        The following table shows loan activity for the review period.


                               10/93-12/93                       1994                         1/95-8/95
        Type               #           $amt              #               $amt             #                              $amt

        Purchase:

          1-4 unit        320      $ 54.7 mil           914        $160.3 mil467                  $ 83.9 mil

          Multi-unit           0        $     0              5     $    2.1 mil0          $                   0

          Commercial           1   $   0.6 mil               2     $    0.9 mil1          $           0.2 mil

        Refinance:

          1-4 unit        769      $101.2 mil       1662           $241.1 mil395                  $ 66.1 mil

          Multi-unit           5   $   1.4 mil           13        $    6.7 mil3          $           1.4 mil

          Commercial           7   $ 17.5 mil            13        $ 21.4 mil5            $ 11.7 mil

        Construction:

          Residential     120      $ 25.9 mil           180        $ 41.8 mil88               $ 18.3 mil

          Commercial           3   $   5.9 mil               2     $    2.2 mil0          $                   0

        Land:

          Residential      15      $   1.8 mil           28        $    3.1 mil11             $           1.1 mil

          Commercial           1   $   0.9 mil               0           $      0     0                   $          0

          Business         50      $   4.6 mil          166        $ 16.2 mil91               $ 10.1 mil

          Seconds          17      $   1.3 mil           79        $    4.5 mil46             $           2.5 mil

          Auto             23      $   0.2 mil           73        $    0.8 mil58             $           0.7 mil

          Personal        212      $   0.9 mil          870        $    3.8 mil503                $           2.4 mil

          Secured Per      35      $   0.7 mil          309        $    8.1 mil396                $ 11.0 mil

          Visa            319      $   0.6 mil      1167           $    2.3 mil700                $           1.6 mil

          Pref Line       290      $   0.6 mil      1587           $    2.3 mil1084                   $           1.6 mil

          Equity Line     260      $ 14.4 mil           796        $ 42.5 mil511                  $ 29.1 mil




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Date:    October 2, 1995                                            OTS No.:   08384




        The institution began offering student loans (Federal Stafford Loans and
        Federal PLUS Loans are available) in 1991, and since then has approved 4,974
        such loans aggregating $9.0 million.

        Share loans are a constantly evolving figure due to payoffs and interest
        accruals. However, as an indication of activity, the principal balance of such
        loans outstanding on August 31, 1995 was $16.0 million.

        Virtually all of the institution's loan origination and refinance activity is
        within the delineated community.

        The institution also purchases loans and instruments securitized by loans.
        Such purchases aggregated $629.2 million in 1994 and $351.1 million during the
        first eight months of 1995.

        Given relative demand within the local market, the institution's level of
        lending is very favorable. Mortgage lending reports show that the institution
        is consistently among the top two or three performers in the state in mortgage
        loans.   Moreover, the breadth of loan products is impressive.        Thus, we
        conclude that ASB is doing a commendable job of providing credit within the
        community.

        Assessment    Factor   J    -    The   institution's    participation    in
        governmentally-insured, guaranteed or subsidized loan programs for housing,
        small business, or small farms.

        The institution originates loans insured by the Veterans Administration (VA)
        and the Federal Housing Administration (FHA) through its wholly owned mortgage
        broker subsidiary, Associated Mortgage. These loans also include loans to
        lessees of Hawaiian Homes Lands ("DHHL")--such loans are FHA-insured. All FHA
        and VA loans are then brokered out to other lenders. Volume between October
        1993 through August 1995 is set forth in the table below.


        Type       # Loans         $ Amount

        FHA           56         $9.9 million

        VA            17         $3.0 million

        DHHL           7         $ .7 million


        The institution also offers Small Business Administration (SBA) loans.
        Between October 1993 through August 1995, three such loans totaling $300,000
        were originated.

        The institution recently began offering Hawaii Economic Development
        Corporation LDC loans, which are also guaranteed by the SBA. One loan for
        $50,000 has been approved, but has not yet funded.




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Date:    October 2, 1995                                             OTS No.:   08384




        ASB has been an active participant with the State of Hawaii in its Housing Loan
        and Mortgage Act ("Hula Mae") program since its inception in 1980. The Hula
        Mae program funds are obtained via the sale of tax-exempt revenue bonds, and
        the program provides first-time home buyers at or below 120 percent of area
        median income with the opportunity to become homeowners at below-market rates.
        Between October 1993 through August 1995, the institution funded 13 such loans
        aggregating $1.9 million.

        ASB also participates in the State Employees' Retirement System program,
        whereby a generally below-market loan rate is provided (subsidized via the use
        of State retirement funds) to active and retired State and municipal employees.
        Between October 1993 through August 1995, the institution funded four loans
        under the program totaling $658,000.

        The institution recently began offering loans under the Hawaii Assistive
        Technology Loan Program. Such loans, which are guaranteed by funds from a U.S.
        Department of Education grant, provide low-interest financing for devices that
        assist disabled persons. As of June 30, 1995, two loans totaling $11,819 had
        been funded under the program.

        While the actual loan volume in government-related lending is not a major
        component in the institution's overall lending performance, we conclude that
        ASB's effort in offering such a good range of government-related products is
        commendable.

III.    GEOGRAPHIC DISTRIBUTION AND RECORD OF OPENING AND CLOSING OFFICES

        Reasonableness of Delineated Community

        The institution's delineated community currently includes five major islands
        in the State of Hawaii. Each island is a county, except for Lanai and Molokai,
        which are part of Maui County. The current delineation includes the following:

        City and County of Honolulu--Island of Oahu--Served by 30 offices.

        County of Hawaii--Island of Hawaii--Served by six offices.

        County of Maui--Islands of Maui and Molokai, but excluding the Island of
        Lanai--Served by seven offices.

        County of Kauai--Island of Kauai--Served by four offices.

        Given that entire islands are utilized in defining the delineated community,
        it is apparent that no low- to moderate-income areas have been unreasonably
        excluded from the delineation. Accordingly, we conclude that the delineated
        community is reasonable.




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Date:    October 2, 1995                                              OTS No.:   08384




        Assessment Factor E - The geographic distribution of the institution's credit
        extensions, credit applications, and credit denials.

      ASB geocodes its Home Mortgage Disclosure Act (HMDA) data on a quarterly basis.
      However, this only provides a profile of residential lending activity on the
      Island of Oahu, the only MSA in Hawaii (loans on other islands are included
      in the HMDA data, but no location data is included). Accordingly, on an annual
      basis, the institution also geocodes all of its loan portfolio throughout the
      delineated community. The geocoding is done with overlays of low- to moderate
_income areas, the ethnic composition of the area, and where loans to different ethnic
      groups are located to provide a snapshot of where loans in the current portfolio
      are located. The institution also geocodes a gender analysis, which matches
      loans to males and females against the gender composition of the area.

        The most recent analysis, performed just prior to the start of this examination,
        shows a reasonable distribution of activity on those islands that are part of
        the delineated community. The most common lending on islands other than Oahu
        is residential, and the greatest activity has occurred in the most populous
        areas and in areas where branch offices are located. The residential lending
        shows penetration in most of the low- to moderate-income areas.

        The percentage of low- to moderate-income census tracts represent 28.6 percent
        of total census tracts. However, if census tracts in which residential lending
        is not possible (such as off-shore ships, military installations and housing,
        and other restricted land) are excluded, the percentage of low- to
        moderate-income tracts where lending is possible is only 18.9 percent of total
        lendable tracts. This figure compares closely to the 16.6 percent of the
        institution's residential loan portfolio that was secured by properties
        located in low- to moderate-income areas as of August 1995. This comparison
        indicates good penetration into low- to moderate-income areas.

        Assessment Factor G - The institution's record of opening and closing offices
        and providing services at offices.

        ASB is a $3.2 billion institution operating 47 branch offices on five major
        islands in the State of Hawaii. The islands served are Oahu (with 30 offices),
        Maui (with six offices), Molokai (with one office), Kauai (with four offices),
        and Hawaii (with six offices). Two of the offices have drive-up facilities
        offering limited transactions, and there is a drive-through ATM at one
        location. There are also three loan offices located on Oahu, and customers
        may go directly to these offices for lending purposes.




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Date:    October 2, 1995                                              OTS No.:   08384




        Offices typically maintain regular banking hours Mondays through Thursdays,
        with extended hours on Fridays. Approximately half of the offices, however,
        now offer extended hours Mondays through Fridays. One downtown Honolulu
        office is open at 7:30 a.m. One office is open for part of the day on Saturdays.
        Forty-five of the offices offer ATMs that operate 24 hours a day, and the ATM
        cards are also able to access certain other networks. Additionally, the
        institution offers a bank-by-phone service for customers that provides account
        status and bill paying service seven days a week.

        All branch offices offer a full range of savings products. Loan applications
        are available at these offices, and all offices accept loan applications. All
        but two of the offices have on-site loan officers. Twenty-four of the offices
        offer safe deposit facilities.

        Offices are typically located in areas with greater concentrations of
        population. Eighteen of the offices are located in or in close proximity to
        low- to moderate-income tracts. Moreover, given that these are islands of
        limited size, offices are reasonably accessible to all members of the
        community. Thus, we conclude that ASB is doing a good job of providing service
        throughout the delineated community.

        Two branches were opened during the review period and no offices were closed.
        Two offices were relocated--one relocation was within the same shopping center
        and the other was less than two miles distance.

        ASB has adopted a branch closing policy that provides for appropriate impact
        analysis and advance notification of affected customers.

IV.     DISCRIMINATION AND OTHER ILLEGAL CREDIT PRACTICES

        Assessment Factor D - Any practices intended to discourage applications for
        types of credit set forth in the institution's CRA Statement(s).

        The examination did not disclose any practices that would discourage
        applications for the types of credit offered by ASB.        Applications are
        solicited from all segments of the community, and policies, procedures, and
        training have been developed to ensure that applicants are not discouraged or
        prescreened.

        The institution has established second look procedures for residential and
        consumer applications recommended for denial.          Prior to denial, the
        application must first be reviewed by another officer in the lending unit. For
        residential applications from low- to moderate-income applicants, the second
        look must be performed by certain specified senior loan officers.

        Additionally, the Internal Audit Department is to assess the institution's
        compliance with the Equal Credit Opportunity Act and Fair Housing Act on an
        annual basis, and the scope of the audit typically includes a review of denied
        and approved applications.




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Date:    October 2, 1995                                              OTS No.:       08384




        ASB also analyzes its Home Mortgage Disclosure Act data quarterly and its entire
        loan portfolio annually (discussed further under Factor E) in order to
        highlight any potential problems or adverse trends.

        Assessment Factor F - Evidence of prohibited discriminatory or other illegal
        credit practices.

        The examination disclosed that ASB is in substantial compliance with all of
        the provisions of the antidiscrimination laws and regulations.

        The following table shows residential application activity broken out by
        ethnicity for 1993, 1994, and the first eight months of 1995. This is compared
        with the ethnic breakdown of the population of Hawaii.


                                             1993            1994            1/95-8/95
        Race                   % Pop     #Apps %age      #Apps %age         #Apps %age

        African-American        2.5%        13    0.3%      13    0.4%4     0.4%

        Asian/Pacific Is.      61.8%      2496   67.4%    1821   64.5%640    65.2%

        Hispanic                7.3%        29    0.7%      37    1.3%14     1.4%

        Native American         0.5%         8    0.2%      10    0.5%5     0.5%

        Nonminority            33.4%      1007   27.2%     855   30.2%289    29.4%


        The institution notes that the number of applications from African-Americans
        is relatively low because much of that population group is in the military and
        are either transient or are more inclined to borrow from federal credit unions.
        The low number of Hispanic applications is apparently due to the
        multi-ethnicity of many residents. One of the largest groups of Hispanics
        would be Filipinos, and they would more likely consider themselves as Pacific
        Islanders. Application activity with the largest ethnic group (Asian/Pacific
        Islander) is actually a bit higher than their relative size in the population,
        while application activity with nonminorities is actually a bit lower than
        their relative size.




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Date:    October 2, 1995                                                            OTS No.:      08384




        The following table shows the number of residential application denials and
        the resulting denial rates, by ethnicity, for 1993, 1994, and the first eight
        months of 1995.


                                        1993                      1994            1/95-8/95
        Race                    #              %          #              %    #               %

        African-American            1      7.6%               0          0    0               0

        Asian/Pacific Is.       90         3.6%           72         3.9%    52         8.1%

        Hispanic                    2      6.9%               6     16.2%     0               0

        Native American             3     37.5%               1     10.0%     0               0

        Nonminority             45         4.4%           52         6.0%    33        11.4%


        We can not draw any definitive conclusions about the denial rates for
        African-Americans, Hispanics, or Native Americans because the relative numbers
        of applications are so small. As a result, there are wide variances from year
        to year in the calculated denial rates, but they do not represent significant
        trends. The relative denial rates for the two largest groups, Asian/Pacific
        Islanders and Nonminorities, consistently show a slight disparity in favor of
        Asian/Pacific Islanders. ASB has noted this variance, and has performed a
        validation check annually of a sample of denied applications for Nonminorities
        to ensure that discrimination was not a factor in the higher denial rates. The
        validations have substantiated that the denials were consistent with
        underwriting guidelines, and indicated that the denial rate variance results
        from a larger portion of applications for more expensive properties by
        Nonminorities.

V.      COMMUNITY DEVELOPMENT

        Assessment Factor H - The institution's participation, including investments,
        in local community development and redevelopment projects or programs.

        During the review period, the institution sponsored three successful
        Affordable Housing Program applications with the Federal Home Loan Bank of
        Seattle (FHLB). A $240,000 subsidy was granted to the Kauai County Housing
        Agency to refinance the development costs of 60 units of housing for
        very-low- and low- to moderate-income families. A $500,000 subsidy was
        awarded to the Mutual Housing Association of Hawaii for the acquisition of 179
        units of housing for very-low and low- to moderate-income families. A $390,000
        subsidy was granted to the Pacific Housing Assistance Corporation for the
        acquisition of 39 units of housing for the frail elderly in Honolulu.




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Date:    October 2, 1995                                               OTS No.:   08384




        The institution utilized Community Investment Fund advances from the FHLB for
        two purposes. A $1.3 million advance obtained in December 1993 was used to
        purchase participation loans originated by the Hawaii Community Redevelopment
        Corporation (HCRC). These loans involved six projects that resulted in 310
        affordable rental units on the Islands of Hawaii and Oahu. A $2.7 million
        advance obtained in May 1994 was used to modify the interest rate on a loan
        for a skilled and intermediate nursing facility.

        ASB is a founding member of HCRC, a non-profit organization that includes 20
        Hawaii lenders in a loan consortium.      ASB presently has a 13.06 percent
        interest in a $50 million lending pool.       During the review period, the
        institution has funded $1.3 million for ten affordable housing projects, which
        are listed below.

        --   $53,820 for permanent financing of eight rental units developed in Kula
             (Island of Maui), four of which will be for low- to moderate-income tenants.

        --   $25,875 to upgrade and maintain seven rental units in Kailua (Island of
             Hawaii), four of which will be for low- to moderate-income tenants.

        --   $26,910 for permanent financing of four rental units developed in Wahiawa
             (Island of Oahu), three of which will be for low- to moderate-income
             tenants.

        --   $139,500 to refinance the construction mortgage on 48 rental units in
             Waikoloa (Island of Hawaii), all of which must be rented to families with
             incomes below 60 percent of HUD median income, as required by the Low Income
             Housing Tax Credit Program.

        --   $123,600 to refinance the construction mortgage on 36 rental units in Hilo
             (Island of Hawaii), all of which must be rented to families with incomes
             below 60 percent of HUD median income, as required by the Low Income Housing
             Tax Credit and the State Rental Assistance Programs.

        --   $73,645 for permanent financing of 18 rental units developed in Kihei
             (Island of Maui), all of which must be rented to families with incomes below
             60 percent of HUD median income, as required by the Low Income Housing Tax
             Credit and the State Rental Assistance Programs.

        --   $283,250 to refinance a maturing bridge loan on 59 rental units in Honolulu
             for low- to moderate-income tenants, with 75 percent of the units being
             occupied under the HUD Section 8 program.

        --   $179,735 to refinance units of rental housing in Waianae (Island of Oahu).
             The property is a 10-year old HUD Section 8 project for elderly tenants
             operating under a Housing Assistance Payment contract.




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Date:    October 2, 1995                                              OTS No.:   08384




        --   $206,000 to repay a construction loan on 62 units of rental housing in
             Lahaina (Island of Maui), all of which must be rented to families with
             income below 60 percent of area median income.

        --   $286,000 to partially repay the construction loan on 81 rental units in
             Kailua (Island of Oahu) for elderly tenants. Seventy percent of the
             renting households must have incomes below 80 percent of HUD area median
             income.

        In June 1995, the Hawaii Investors for Affordable Housing Inc. was organized
        for the purpose of increasing the supply of Hawaii's affordable rental housing
        by providing a consistent and dependable source of equity funding for
        affordable rental projects, using low-income housing tax credits among other
        things. At the same time, the Hawaii Investor's Administrative Partners Inc.
        was organized for the purpose of protecting the equity investments of the above
        organization. ASB purchased a 15 percent partnership interest ($3 million)
        in an initial subscription of a Tax Equity Fund of Affordable Housing to support
        the above programs.

        In May 1994 the institution approved a $1.1 million refinance loan for a 17-unit
        apartment building in Waianae (Island of Oahu). Sixty-five percent of the
        units are rented under the State of Hawaii's Housing Authority Housing
        Assistance Program.

        In May 1994, the institution approved a modification of a $1.1 million loan
        on a 100-unit apartment building in Hilo (Island of Hawaii) adjacent to the
        University of Hawaii. The rental of the units, in accordance with a lease
        agreement with the State of Hawaii, is limited to students and faculty members
        (typically low- to moderate-income individuals).

        The institution loaned $350,000 to the Association for Retarded Citizens of
        Hawaii, Inc. to cover working capital and short-term expenses prior to receipt
        of funds from government agencies.

        ASB is actively involved in financing leasehold to fee-simple conversions.
        These are common at this time because one of the large landholders, the Bishop
        Estate, is converting many of its long-term leases to fee-simple status.
        During 1994, the institution funded 182 loans totaling $23.3 million for
        lease-to-fee conversions, and during the first half of 1995, ASB funded 16 such
        loans for $2.5 million.

        ASB is offering 100 percent financing of the purchase price including closing
        costs (not to exceed 80 percent of appraised value) of two projects in Kapolei
        (Island of Oahu).     The two developments (128 units each) of fee simple
        townhome/condominiums are targeted to home buyers with total household income
        not to exceed 80 percent of HUD median income. At mid-year 1995, ASB had funded
        4 loans aggregating $495,000, and had 10 loans aggregating $1.2 million in
        process for approval.




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Date:    October 2, 1995                                              OTS No.:   08384




        The President is a Director of the HCRC, and one of the CRA Officers and another
        officer of ASB serve on committees of the HCRC. The President is also a Board
        member of Honolulu Neighborhood Housing Services.

        It is apparent that ASB is an active investor in community development and
        redevelopment programs and projects. Moreover, the institution is routinely
        in a leadership position in these activities.

        Assessment Factor K - The institution's ability to meet various community
        credit needs based on its financial condition and size, legal impediments,
        local economic conditions and other factors.

        ASB is a $3.2 billion institution operating 47 branches on five major islands
        in the State of Hawaii.      Major components of the economy are tourism,
        agriculture, and government (particularly the military).          Tourism and
        agriculture are very sensitive to the economic trends in the United States and
        other parts of the world, and the local economy is accordingly subject to
        periodic fluctuations. The economy has generally been flat since the Gulf War
        in 1991.

        While the institution offers a range of credit products, its primary focus is
        residential lending. The residential lending situation is somewhat unique due
        to the unusually high cost of housing (due to scarcity of buildable land,
        restrictive zoning and land use laws, and high construction and labor costs).
        Moreover, there are a large number of leasehold properties, and changes in the
        underlying rents have caused many leasehold homeowners to experience
        difficulties in selling or refinancing their properties. Some leaseholds are
        being offered for sale, and the institution does offer financing designed to
        assist lessees in purchasing fee reversions (discussed further under Factor
        H). All of these factor impact the total demand for residential financing
        within the state.

        The institution is profitable and well capitalized, and has the ability to meet
        local credit needs consistent with its size and the economic conditions and
        other factors discussed above.      It is an active investor in community
        development and redevelopment projects (discussed further under Factor H) and
        frequently plays a leadership role in such activity. ASB also provides loans
        for commercial development and businesses (discussed further under Factors I
        and J).

        Assessment Factor L - Any other factors that, in the regulatory authority's
        judgment, reasonably bear upon the extent to which an institution is helping
        to meet the credit needs of its entire community.

        ASB offers an interest-bearing checking account with no minimum balance or
        service fee for seniors, non-profit organizations, and individuals with
        payroll or government direct deposits. The institution also offers a special
        savings account for children under the age of 12 that requires a minimum deposit
        of only $10 to open an account that pays competitive rates with no service
        fee. Basic passbook accounts may be opened with a




                                          -17-
Date:    October 2, 1995                                              OTS No.:   08384




        $10 deposit, and require only a $100 deposit in order to earn interest and avoid
        service fees. The institution also offers a secured VISA program targeted to
        consumers with limited credit, employment, or residency histories.

        The institution offers an Individual Housing Account, as authorized by the
        state legislature. The account is to assist first-time home buyers to save
        funds to purchase a home, and state income tax deductions are allowed up to
        certain limits.

        On Molokai, the branch manager travels monthly to the Hansen's Disease colony
        of Kalaupapa to offer banking services to residents.

        A list of bilingual employees is maintained at each branch office so that
        customers with limited English may be put in contact with a bilingual employee.
        The list of languages available includes most languages spoken in the Pacific
        region and Asia. The institution is presently modifying its phone system to
        ensure that telephones are hearing aid compatible.

        One of the CRA Officers is a director of the Consumer Credit Counseling Service,
        an agency that provides emergency assistance and counseling to financially
        distressed citizens.

        Charitable donations are made by the institution and by Hawaii Electric
        Industries Charitable Foundation on the institution's behalf. Donations by
        the institution in 1994 aggregated close to $26,000, and donations by the
        foundation on ASB's behalf in 1994 totaled $51,000. The institution also
        provides $6,000 annually in scholarships to local high school students.

        ASB actively supports community fundraising efforts by its employees and
        customers. For example, employees are encouraged to support the Aloha United
        Way Campaign, and during 1994, over 100 employees participated in WalkAmerica
        for the March of Dimes and collected $2,300 in pledges. The institution also
        supports certain volunteer efforts by its employees that benefit the community.




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