2012
BankGuam
Holding Company
Annual Report of BankGuam Holding Company
and Bank of Guam®
Corporate
information
Annual Meeting
The 2013 annual meeting of stockholders will be held at
7:00 p.m. on Wednesday, May 1, 2013, in Bank of Guam’s
Hagåtña Branch in the BankGuam Holding Company
Headquarters Building.
BankGuam Holding Company (BGHC) Headquarters
111 Chalan Santo Papa
Hagåtña, Guam 96910
Tel: (671) 472-5271 • Fax: (671) 477-8687
www.bankofguam.com
Independent Accountants
Squar, Milner, Peterson,
Miranda & Williamson LLP
4100 Newport Place Drive, 3rd Floor
Newport Beach, CA 92660
Tel: (949) 222-2999 • Fax: (949) 222-2989
www.squarmilner.com
Tax Consultant
Robert J. Steffy, C.P.A.
210 Archbishop Flores Street • Suite 100
Hagåtña, Guam 96910
Tel: (671) 477-7829 • Fax: (671) 477-7845
General Counsel
Arriola, Cowan & Arriola
259 Martyr Street • Suite 201
Hagåtña, Guam 96910
Tel: (671) 477-9731 • Fax: (671) 477-9734
BankGuam Holding Company Stocks (BKGMF)
Computershare Trust Company, N.A. (“Computershare”)
is the Registrar, Stock Transfer and Dividend Disbursing
Agent for BankGuam Holding Company’s common stock,
with duties that include: stock transfers, dividend payments,
address changes and lost certificate replacements.
Computershare Trust Company, N.A.
for written requests, please write to:
Computershare Shareholder Services
PO Box 43078 • Providence, RI 02940-3078
for written requests, by overnight delivery:
Computershare Shareholder Services
250 Royall Street
Canton, MA 02021
Tel: (888) 835-5678 (U.S., Canada, Puerto Rico & Guam)
Tel: (312) 360-5193 (non U.S.)
www.computershare.com/investor
The shares of the BankGuam Holding Company are traded
privately among individual stockholders, investors, and in the
over-the-counter market. The stock prices of such trades vary
with each transaction.
Financial & Insurance Services
Bank of Guam®
BGHC Headquarters Building
111 Chalan Santo Papa
Hagåtña, Guam 96910
Tel: (671) 472-5300 • Fax (671) 472-5454
Bank of Guam® Trust Services*
BGHC Headquarters Building • 7th Floor
111 Chalan Santo Papa
Hagåtña, Guam 96910
Tel: (671) 472-5743 • Fax: (671) 472-5527
BG Wealth Management Services*/Money Concepts
Capital Corp.
BGHC Headquarters Building • 6th Floor
111 Chalan Santo Papa
Hagåtña, Guam 96910
Tel: (671) 472-5490/5713 • Fax: (671) 472-5701
BankGuam Insurance Underwriters, Ltd.*
BGHC Headquarters Building • 1st Floor
111 Chalan Santo Papa
Hagåtña, Guam 96910
Tel: (671) 479-2262/65/67 • Fax: (671) 479-2266 *Trust, investment and insurance products and services offered by Bank of Guam® are (1) not insured by the Federal Deposit Insurance Corporation, any
government agency, or any other deposit insurance program; (2) not deposits with, obligations of, or guaranteed by Bank of Guam; and (3) subject to investment risk, including possible loss of the principal amount invested.
Message to
Stockholders
Buenas yan Hafa Adai! Thank you for reading the BankGuam Holding Company 2012 Annual Report. This year, this Report will be limited to
a brief narrative of the past year’s financial performance, focusing more on
the events during the year and our accomplishments in the communities we
serve.
I am pleased to report that BankGuam Holding Company was profitable again
during 2012, increasing our net after-tax earnings to $8.6 million, up by 50.3% from 2011, as our assets increased by 6.3% to
$1.2 billion. Our deposit base grew by 6.2% to $1.1 billion and our loan portfolio ended the year at $762.9 million, 3.0% above
its 2011 level. While other banks worldwide were severely affected by the global financial crisis, we have remained profitable
and have grown every year. By the end of 2012, our total stockholders’ equity had increased to $94.4 million, an increase of
$5.4 million from the year before. You will find a detailed description and analysis of our financial condition and performance
in the enclosed Annual Report on Form 10-K, as submitted to the U.S. Securities and Exchange Commission.
One of our greatest accomplishments in 2012 was celebrating our 40th Anniversary as The Peoples Bank. In 1972, our founding year, there was a lot of skepticism in the community about the prospects of a locally-owned and locally-operated bank.
There were many people who would not believe that Bank of Guam® could survive, let alone thrive. I am happy to be able to
say today that those people have been proven wrong. Not only have we survived . . . not only have we thrived . . . we have grown
over the years to a $1.2 billion institution with 24 branches, in four sovereign nations, on ten islands and in San Francisco.
As part of our 40th Anniversary, I hope that you will join me in giving tribute to two gentlemen who have helped to lead Bank
of Guam®
, and now BankGuam Holding Company, since the very beginning. Both Dr. Luis G. Camacho and Dr. Ralph G. Sablan
have served as members of our Board of Directors since our institution was first founded. Please join me in thanking them
for more than four decades of devoted service and inspiring leadership to our institution and for the islands of Micronesia.
BankGuam Holding Company and our subsidiary, Bank of Guam®, continue to be an influential force in our region, and I am
both humbled and gratified by my experiences during 2012. We continue to support economic growth and development, not
only through our lending programs and the array of modern financial services that we offer to our customers, but also through
our corporate activities and the efforts of our officers and staff in participating in the islands’ business and civic affairs. We
believe that this enhances the value of our firm to our stockholders, and I have come to understand that most of you agree.
Early in 2012, we relocated our branch in Mangilao to a new building built specifically for us. As a part of the move, we installed the most advanced branch banking systems and technologies to better serve our many customers in that area and to
gain the experience to expand these services throughout our branch network. If you have not had the opportunity to visit the
new Mangilao Branch, I encourage you to do so. I am confident that you will like what you see there.
Several years ago, we started sponsoring an annual five kilometer (5K) run beginning and ending at our Headquarters building, with a course winding through Guam’s capital city, Hagåtña. We reached a new milestone in 2012 by raising a record $30
thousand in conjunction with the event for a single beneficiary, Guam Cancer Care. Guam Cancer Care helps victims of that
dreaded disease by providing information about available services, helping to make arrangements for medical treatment and
care, and assisting in innumerable other ways during a period of extreme distress for the victims and their loved ones.
We also rolled out Guam’s first interactive, on-line financial literacy program, the award winning Money Island, for school
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children throughout our region. Many studies have shown, as we have observed ourselves, that helping people to learn and
understand the role of money and banking in their lives at an early age serves as a life-long foundation for making better, more
informed decisions about their financial affairs.
At the other end of the education spectrum, we provided $10 thousand in Ifit Scholarships for five outstanding, college-bound
high school seniors throughout our region. In addition to the scholarship funds, each of the recipients is awarded a paid
summer internship with the Bank. We believe that this combination of formal learning and practical experience provides the
encouragement and the know-how for these young people to become the future community leaders of our islands.
Turning to our direct efforts to expand and improve the economies of our market area, Bank of Guam® continued its 40-year
practice of lending to small businesses, the greatest driving force behind job creation in the U.S. For many years, we have
partnered with the U.S. Small Business Administration in helping to finance the formation of small businesses and the expansion of those that have experienced success. In 2012, we took several regional awards, with three SBA Winners of the Year plus
the SBA Lender of the Year and the SBA Banker of the Year. In addition, we were the first State Small Business Credit Initiative
lender in Guam. The SSBCI program was created by the Small Business Jobs Act of 2010, and was initially funded with $1.5
billion. Its goal is to generate up to $15 billion in lending to creditworthy small businesses and small manufacturers throughout the United States that have otherwise been unable to obtain adequate funding. Although we play a small role in a much
larger national program, we are gratified to be able to do our part.
During 2012, we took other actions in our ongoing mission to provide the best possible service to each of our customers. Early
in the year, we implemented a new electronic banking system, replacing the aging Pacific Express® Voice Banking and Pacific
Express® onLine. The new IFIT onLine and IFIT Voice Banking systems provide even greater privacy protection and information security than the retired systems, and offer a wide range of additional services that enhance banking convenience and
customer satisfaction.
During the year, we replaced our legacy Pacific Express® Debit Card with our Pacific Express® VISA® Debit Card. Along with
all of the familiar features of the older cards, the new cards allow each of our cardholders to participate in the international
VISA payments network, making their cards more universally acceptable and expanding their access to their deposit accounts.
We are also excited about one of the newest customer service features that we started in the past year: Since 1984, Bank of
Guam’s Pacific Express® Automated Teller Machines have provided unparalleled service and convenience to our customers,
24 hours a day, seven days a week. Now, our ATMs provide those services in five different languages! With our multi-ethnic
communities and tourism being such an important industry throughout our region, we have finally been able to enhance this
service, too, going above and beyond the capabilities of our competitors.
I hope that, as a BankGuam Holding Company stockholder, you are as excited and pleased with our recent accomplishments
as are the management and staff of our organization. I want to assure you, though, that in all of our activities and all of the
actions that we take to improve our services to our customers, we never lose sight of why we are doing these things and who we
are doing them for: It is you, our stockholders, who have shown the trust and confidence in us that allows us to achieve what
we have, not just in 2012, but throughout the 40-year history of our institution. For that, I extend the gratitude and appreciation of the management and staff of Bank of Guam® and the BankGuam Holding Company. We are all clearly aware that we
could not have done any of these things without you.
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Again, thank you and si yu´os ma´asé,
Lourdes (Lou) A. Leon Guerrero
President, CEO
and
Chair
of the
Board
2012 corporate highlights
Bank of Guam® Pacific Express® VISA® Debit Card
January 17, 2012—Pacific Express® VISA
Debit Card replaces the existing Pacific
Express® Card to extend customers’ purchasing range to the entire VISA network.
Bank of Guam® Mangilao Branch Relocation & Grand Opening
January 30, 2012—Honored guests take part in the ribbon cutting
of the Bank’s newest branch which has served the community of
Mangilao for 21 years. The new branch features LED lighting, solarpowered parking lot lights, a drive-up ATM, walk-up ATM, and a
dedicated professional staff.
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40th Anniversary Ifit 5K Run/Walk
March 10, 2012—The Bank sets a new record for the highest amount raised from any 5K run for a single beneficiary, Guam
Cancer Care, at $30,000.00. A new course record was also set, and the Bank joined forces with i*recycle to recycle or compost
goods collected. Only a single bag of trash remained.
40th Anniversary
Founder’s Day
Employee Dinner
March 13, 2012—Bank employees
from Guam branches unite to celebrate
40 years of service at Bank of Guam’s
Headquarters. The Bank’s current network is comprised of 24 branches with
over 500 employees throughout Guam,
Republic of Palau, Commonwealth of
the Northern Mariana Islands, Federated
States of Micronesia, Republic of the
Marshall Islands, and San Francisco,
California.
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MoneyIsland
March 27, 2012—The Bank launches MoneyIsland, an interactive online game for tweens (children ages 8 to 14) on its
website. At the completion of the program, tweens learn the concepts of saving and spending; earning and investing; and
using credit wisely.
SBCS 7th Graders
Biba!
Santa Barbara Catholic School
for adopting Bank of Guam’s
MoneyIsland in your classrooms.
SBCS 8th Graders
2012 U.S. Small Business Administration Guam Winners of the Year
April 4, 2012—2012 SBA winners nominated by the Bank share in a celebration of small business success within the local community. (SBA Winners in Photo: (seated, from left to right) Joseph Roberto (North Island Tinting/East Island Tinting), 2012 Jeffrey
Butland Family-Owned Business of the Year; Ruth Gurusamy (Health Services of the Pacific), 2012 Women in Business Champion
of the Year; and Benjamin C. Pablo (Vice President/Bank of Guam), 2012 Veteran Small Business Champion of the Year)
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Allyssa Arangorin
Kagman High School • Saipan, CNMI
accepted to
University of San Francisco
Rico Chaco
Southern High School • Guam
accepted to
University of Guam
Sophie Finnen
Pohnpei SDA School • Pohnpei, FSM
accepted to
Aberystwyth University • Wales, United Kingdom
Bank of Guam®
2012 Ifit Scholars...
Ifit Scholarship
May 2012—Bank of Guam® partners with
Fiserv to award a total of $10,000 in grants
to 5 graduating high school seniors to attend
a 4-year accredited university or college.
Recipients also participated in the Bank’s
paid summer internship program.
Ryan R. Galindo
Notre Dame High School • Guam
accepted to Boston University
Vanessa Ochavillo
Academy of Our Lady of Guam • Guam
accepted to Stanford University
Saipan’s Chalan Piao Branch Opening
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June 5, 2012—Lourdes A. Leon Guerrero, President, Chief Executive Officer, and Chair of the Board, along with Bank staff welcome the Saipan community to its Chalan Piao branch which relocated from the San Antonio branch.
IFIT ebanking
July 10, 2012—Customers enjoy the convenient and on-the-go features of our IFIT ebanking products: online banking (i.e.
IFITonline), mobile banking (i.e. IFITmobile), and voice banking (i.e. IFITvoice).
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First Lender Participant of Guam’s State Small Business Credit Initiative
August 3, 2012—The Bank partners with the Guam Economic Development Authority (GEDA) as Guam’s first bank to launch the
new SSBCI. GEDA received $13.1 million from the U.S. Department of the Treasury to generate small business loans taken out at
participating banks.
2012 U.S. Small Business Administration Guam Lender of the Year
November 9, 2012—The Bank of Guam is awarded Lender of the Year for lending the highest number of SBA-backed loans in
a given fiscal year. The Bank lent over $4.45 million to various small businesses for the fiscal year ending September 30, 2012.
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2012
U.S. Small Business Administration
Guam Banker of the Year
November 9, 2012—Alice Gagarin, Assistant Vice President/Credit
Officer, is named SBA Banker of the Year for processing the most
SBA-backed loans of any lending partner on island for the fiscal
year ending September 30, 2012.
Pacific Express® ATMs in 5 Languages
December 2012—7 Bank ATMs scattered throughout Guam and Saipan exhibit a unique
wrapping that showcases Guam’s island spirit. The ATMs are equipped to serve locals
and tourists with language enablement in Chamoru, Cantonese, Mandarin, Korean, and
Japanese.
11
Bank of Guam® 40th Anniversary Dinner Reception
December 11, 2012—The Bank holds a special reception to commemorate customers who have banked with us for 40 years since
our founding in 1972.
12
Bank of Guam® 40th Anniversary Christmas Party
December 15, 2012—Two of the Bank’s founding Board members, Dr. Luis Camacho and Dr. Ralph Sablan, were honored for
their service and dedication to the Bank for 40 years. Bank employees crowd the dance floor at the Bank’s Rock & Roll-themed
Christmas Party with games, contests and great music.
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BankGuam Holding Company Officers and Bank of Guam® Senior
Management, Headquarters & Branch Officials
BankGuam Holding Company
Officers
Lourdes A. Leon Guerrero
president, ceo and chair of the board
William D. Leon Guerrero
executive vice president, chief operating
officer and vice chairman of the board
Francisco M. Atalig
senior vice president/chief financial officer
Danilo M. Rapadas
senior vice president/general counsel and
chief
risk officer
Bank of Guam®
Senior Management
Jessica L.G. Diaz
Katherine R. Lujan
Reanna R. Cruz
Vida B. Ricafrente
Beatrice T. Pereda
Katherine B. Martir
vice president/retail banking group manager
vice president/loan adjustment manager
vice president/assistant central operations
administrator
vice president/loan support manager
Joseph D. Cruz
vice president/business services division manager
Joaquin P.L.G. Cook
officer and vice chairman of the board
Francisco M. Atalig
senior vice president/chief financial officer
board of directors
Vicente S. Agulto
Ernest P. Villaverde
senior vice president/information management
systems administrator
Joseph P. Bradley
senior vice president/chief economist and
business
continuity officer
Josephine L. Blas
senior vice president/policy administrator
J. David Joves
senior vice president/california regional manager
Blaine N. Laney
senior vice president/chief credit officer for
california region
assistant vice president/rota branch manager
vice president/human resources administrator
vice president/trust department
&
bg wealth
management services manager
Maria E. Leon Guerrero
senior vice president/marketing administrator
vice president/director of customer service
assistant vice president/lean six sigma-strategic
planning officer
Bank of Guam® Regional,
Branch & Facility Managers
Christine B. Quichocho
vice president/guam central-southern regional
manager
Daniel F. Anderson
vice president/other real estate owned
Kalistus D. Rengiil
vice president/corporate banking group manager
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Jacqueline Ann Hocog
vice president/mortgage banking group manager
republic of
Christopher A. Cruz
assistant vice president/pohnpei branch manager
Joanne H. Akinaga
assistant vice president/chuuk branch manager
Joan A. Pinerof
assistant vice president/yap branch manager
Mary A. Simmering
assistant vice president/kosrae branch manager
Lisa M. Leon Guerrero
assistant vice president/majuro branch manager
Matthew C. Cruz
Shirley N. Quitugua
assistant vice president/santa cruz branch
vice president/san francisco branch manager
manager
Dina A. San Nicolas
BG Wealth Management Services
Julie A. Gogue
Ann M. Roth
assistant vice president/mangilao branch
vice president/investment adviser
manager
Alexandra L.G. Taitano
Elizabeth G. Rodgers
vice president/credit officer
&
palau regional manager
David R. Sablan
Lori C. Sablan
Mike W. Naholowaa
republic of the marshall islands
vice president/palau branch manager
Gwendolyn E. San Nicolas
vice president/controller
vice president/federated states of micronesia,
vice president/hagåtña branch manager
Keven F. Camacho
vice president/chief lending officer
Janice C. Quichocho
Jennifer B. Sanchez
vice president/tamuning branch manager
Bank of Guam®
Headquarters Officials
facility manager
assistant vice president/tinian facility manager
chief
Jacqueline A. Marati
assistant vice president/saipan chalan piao
manager
Lesley Leon Guerrero
risk officer
Teresa U. Palacios
vice president/electronic data processing
Danilo M. Rapadas
senior vice president/general counsel and
Sayuri M. Hideo
Luke M. Elliott
Amoretta L.P. Carlson
bsa administrator
assistant vice president/saipan branch
Marilyn L. Mendiola
Josephine L. Mariano
operations &
Larry A. Phillip
facility manager
vice president/business development manager
Jocelyn B. Miyashita
senior vice president/branch, central
vice president/cnmi regional manager
assistant vice president/saipan joe-ten in-store
vice president/marketing manager
Theresa C. Obispo
senior vice president/chief credit officer
Merced M. Tomokane
manager
vice president/compliance manager and member,
Patricia B. Salas
executive vice president, chief operating
manager
Bernadine Q. Pereda
William D. Leon Guerrero
president, ceo and chair of the board
assistant vice president/yigo branch manager
assistant vice president/andersen afb branch
vice president/bsa manager
Wayne S.N. Santos
vice president/dededo branch manager
Elaine J. Lizama
Kathrine C. Lujan
Lourdes A. Leon Guerrero
assistant vice president/harmon branch manager
assistant vice president/malesso branch manager
assistant vice president/naval station branch
manager
Richard G. Camacho
vice president/guam northern regional manager
Romeo A. Angel
vice president/upper tumon branch manager
David J. Arriola
vice president/tumon bay branch manager
assistant vice president/investment adviser
Maree C. Pelkey
assistant vice president/investment adviser
Dave B. Guerrero
assistant vice president/bg wealth management
investment adviser/bsa officer, saipan
BankGuam Holding Company and Bank of Guam® Board of Directors
Lourdes A. Leon Guerrero
William D. Leon Guerrero
Martin D. Leon Guerrero
Roger P. Crouthamel
• President, CEO and Chair of the
Board
• Senator, 23rd, 24th, 26th, 27th and
28th Guam Legislatures
• Member, Guam Nurses Association
• Member, Teleguam LLC Board of
Directors
• Vice Chairman of the Board
• Regent, University of Guam
• Board Treasurer and Assistant
Secretary
* Secretary/Treasurer of Adztech
& Public Releations, Inc.
• Board Secretary
• Attorney at Law
• Director, Transpacific Travel dba
Travel Pacificana
• Director, Guam Fast Foods dba
Kentucky Fried Chicken
• Director and Vice President, Sports
Concepts, Inc.
Joe T. San Agustin
Ralph G. Sablan, m.d.
Luis G. Camacho, d.d.s., m.s.
Frances L.G. Borja
• Speaker, 20th, 21st and 22nd Guam
Legislatures
• Senator, 14th - 23rd Guam
Legislatures
• Instructor, University of Guam
• Chairman, Government of Guam
Retirement Fund
• Former Director, Department of
Administration, Bureau of Budget
and Management Research
• U.S. Navy Captain, Retired
• Former President, Guam Medical
Society
• Dermatologist, Retired
• Lifetime Member, American
Academy of Dermatology
• Past President, Guam Dental
Society
• Past Member, Guam Dental Board
• Orthodontist, Retired
• President, Carmen Safeway
Enterprises, Inc.
Joaquin P.L.G. Cook
Joseph “Joey” Crisostomo
Patricia P. Ada
• Bank of Guam Vice President
Compliance Manager
• Partner, Byerly & Cook Company
• Management Committee,
IP&E Holdings, LLC
• President, CarsPlus LLC
• President, CyclesPlus LLC
• Member, Pacific Auto Leasing dba
Thrifty Car Rental
• Immediate Past Chairman, Armed
Forces Committee, Guam
Chamber of Commerce
• General Manager, Board Secretary
and Assistant Treasurer, Ada’s
Trust and Investment, Inc.
• Manager, P and M, LLP
• Manager, P.P. Ada Investment