2014BANKGUAM

HOLDINGCOMPANY

ANNUAL REPORT OFBANKGUAM HOLDING COMPANY

& BANK OF GUAM®

AnnuAl MeetingThe 2015 annual meeting of stockholders will be held at 7:00 p.M. on Monday, May 18, 2015, in Bank of Guam’s Hagåtña Branch in the BankGuam Holding Company Headquarters Building.

BAnkguAM Holding CoMpAny (BgHC) HeAdquArters111 W. Chalan Santo PapaHagåtña, Guam 96910Tel: (671) 472-5271 • Fax: (671) 477-8687www.bankofguam.com

independent ACCountAntsSquar, Milner, Peterson, Miranda & Williamson LLP4100 Newport Place Drive, 3rd FloorNewport Beach, CA 92660Tel: (949) 222-2999 • Fax: (949) 222-2989www.squarmilner.com

tAx ConsultAntRobert J. Steffy, C.P.A.210 Archbishop Flores Street • Suite 100Hagåtña, Guam 96910Tel: (671) 477-7829 • Fax: (671) 477-7845

generAl CounselArriola, Cowan & Arriola259 Martyr Street • Suite 201Hagåtña, Guam 96910Tel: (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 02940-3078for written requests, by overnight delivery:Computershare Shareholder Services 250 Royall Street Canton, MA 02021Tel: (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 serviCesBank of Guam®BGHC Headquarters Building111 W. Chalan Santo PapaHagåtña, Guam 96910Tel: (671) 472-5300 • Fax (671) 472-5454

Bank of Guam® Trust Services*BGHC Headquarters Building • 7th Floor111 W. Chalan Santo PapaHagåtña, Guam 96910Tel: (671) 472-5743 • Fax: (671) 472-5527

BG Wealth Management Services*/Money ConceptsCapital Corp.BGHC Headquarters Building • 6th Floor111 W. Chalan Santo PapaHagåtña, Guam 96910Tel: (671) 472-5713 • Fax: (671) 472-5701

BankGuam Insurance Underwriters, Ltd.* BGHC Headquarters Building • 1st Floor 111 W. Chalan Santo Papa Hagåtña, Guam 96910 Tel: (671) 479-2262/65/67 • Fax: (671) 479-2266                    

Corporate Information

*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) sub-ject to investment risk, including possible loss of the principal amount invested.

Message toStockholders

Buenas yan Hafa Adai! Thank you for your continuing support of BankGuam Holding Company and your local bank, Bank of Guam®. As in recent years, we continue to distribute our Annual Report and ac-companying materials in a way that conserves resources and helps to contain our costs. We are still “going green,” so we have again distributed our Proxy Statement, Annual Report, and Securities and Exchange Commission Report on Form 10-K electronically, saving not only trees, but also what had become high postage expenses. Again, though, as in recent years, all of these materials are available on paper. This printed Annual Report is limited to a brief narrative of the past year’s financial performance, focusing more on some of the differences that were unique to 2014. Extensive details regarding our financial condition and performance are reported in our Form 10-K report.

I am happy to announce that 2014 was again a profitable year for our Company. Despite a couple of setbacks in our loan portfolio, we earned nearly $9.6 million after taxes on total revenues of $77.3 million. Although those revenues represent an increase of $2.0 million from 2013, our net profit actually declined by $308 thousand. We were able to hold the line on total expenses, which increased by just $188 thousand from 2013, to $59.4 million, but we increased our provision for loan losses by $2.4 million to raise our allowance for loan losses to $12.5 million. We experienced an unexpected increase in net charge-offs during the year, and loan growth, coupled with economic conditions, made it prudent for us to build a higher allowance. Despite a surge in total assets by more than 14.2% during 2014, to $1.5 billion, we were able to generate a return on average assets of 0.66%. We also increased your total stockholders’ equity by 8.9%, to $102.2 million, and yielded a return on average equity of 9.8% during 2014.

Every business needs to grow to thrive, and during 2014, our surge in total assets presented us with a difficult challenge, especially as it culminates growth of a total of 48.0% since the end of 2010. Due to a combination of circumstances that would otherwise be quite favor-able, our assets have grown far more rapidly than our stockholders’ equity. Since 2010, our equity has grown by $17.8 million, or 21.1%, far more slowly than the growth in our assets. As a consequence, our capital ratios, a primary focus of our regulators, have dropped signifi-cantly. While our rapid growth is an enviable problem, it is a problem nonetheless. Although

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Again, thank you and si yu ós ma ǻsé,

Lourdes (Lou) A. Leon Guerrero president, Ceo And CHAir oF tHe BoArd

we remain well-capitalized by every regulatory standard, we would be much more comfort-able if we had the extra capital cushion that we always maintained in the past. We have been faced with the hard decision to either slow the growth of our Company or to take measures designed to increase our capital. We have chosen to increase our capital.

As I am sure most of you noticed, we reduced our dividend payout rate last year from 12.5 cents per share in the first and second quarters to 10.0 cents per share in the third and fourth quarters. We did not do that because we were not earning sufficient profits. We did it be-cause we need to accumulate more capital through retained earnings to keep up with the growth in the size of our Company. We also sold $1.0 million in additional stock to accredited investors in December in order to supplement those higher retained earnings and raise our capital ratios.

These decisions were made to help realign the elements of our balance sheet to adjust to the rapid growth that we have experienced. Looking forward, higher capital ratios will prepare us to take advantage of opportunities in our region and in California so that we can continue to maximize the value of our Company for you, our stockholders. As always, we truly appre-ciate your continued support and confidence.

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2014 Corporate Highlights

Bank of Guam® celebrates with its nominees who received the U.S. Small Business Administration 2014 Awards as follows: (seAted leFt to rigHt, witH leis): Elizabeth Rodgers, wife of Victor Rodgers, Winner; Romeo Angel, Bank of Guam® Vice President/Upper Tumon Branch Manager, Minority Small Business Champion; Siska Hutapea, Cornerstone Valuation President, Women in Business Champion; Teresita and Bill Hagen—Hagens, Inc. President and Vice President, Jeffrey Butland Family-owned Business of the Year; stAnding (witH leis): Wayne Santos, Bank of Guam Vice President/Marketing Manager, Financial Services Champion; Victor Rodgers, Guam Community College Assistant Director for Continuing Education and Workforce Development, Veteran Small Business Champion.

42nd Founder’s Day CelebrationMarch 8, 2014: Bank of Guam® IFIT 5K Run/Walk

Bank of Guam® held its 9th Annual IFIT 5K Run/Walk on Saturday, March 8, 2014 at the Bank’s Headquarters in Hagatna to benefit Guam Cancer Care. With over 1,800 runners, total sponsorships and registration amounted to $45,500.00 donat-ed to Guam Cancer Care, shattering the previous year’s contribution. The Run, hailed as one of the “greenest” runs on island resulted in 6 bags of trash.

April 3, 2014: SBA 2014 Small Business Award Winners

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April 4, 2014: Bank of Guam® wins Guam Cancer Care Spirit of Hope Award

Bank of Guam®IFIT Website Redesign

In 2014, Bank of Guam® com-pleted a redesign of its cor-porate website, www.bankof-guam.com, using a unique local flavor while providing an easy-to-use customer expe-rience. The photos and colors are not found on your tradi-tional banking website, and offer a warm perspective of our island culture and hos-pitality.

The Guam Cancer Care “Spirit of Hope” Award is presented to an individual or organization, who, through their commitment to the Fight Against Cancer, has taken direct action to support Guam Cancer Care and its programs. The individual or organization has made a significant impact on not only improving the services and quality of cancer care for fellow island residents, but also on raising cancer awareness here on island. Their efforts genuinely endorse the mission of Guam Cancer Care and encourage our cancer patients and local community to LIVE, FIGHT and SURVIVE the battle against this deadly disease.

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May 23-24, 2014: Relay For Life

Bank of Guam® is a major supporter of cancer research through contributions to the Relay for Life, sponsored annually by the American Cancer Society (Guam). In 2014, Bank of Guam® again garnered the top fundraising spot, rais-ing over $50,000 through its employees’ fund-raising efforts.

Bank of Guam® is a proud supporter of higher educa-tion. Annually, the Bank awards each of 5 outstand-ing high school seniors with a $2,000 college grant to attend a U.S. accredited 4-year college or university of their choice. The applicants come from public and private school backgrounds, have broad community involvement and have earned distinguished scholastic records. In addition to the grant, winners receive a paid summer internship with the Bank of Guam®.

May 2014: Ifit Scholarship

May 20, 2014: Pika’s Café “SO FRESH” Summer Music Series

Bank of Guam® is a proud spon-sor and supporter of the arts and young adults. In collabo-ration with Pika’s Café, Bank of Guam® sponsored their “SO FRESH” music series, featuring young, local entertainers who performed throughout the summer.

October 23, 2014: SBA Lender and Banker of the Year

Bank of Guam® received the U.S. Small Business Association (SBA) Lender and Banker of the Year in fiscal 2014. As Lender of the Year, Bank of Guam® surpassed all other banks in the number of loans extended to local borrowers. Mrs. Renee Wade (rigHt pHoto), Bank of Guam® Vice President/Credit Officer, as Banker of the Year, led all Guam bankers in generating the highest number of SBA loans on Guam for the fiscal year 2014.

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January 26, 2014: 2013 Saipan Chamber of Commerce Business Person of the Year

Bank of Guam® Vice President/CNMI Regional Manager, Merced “Marcie” M. Tomokane, was awarded the Saipan Chamber of Commerce’s coveted 2013 Businessperson of the Year award, which honors businesspersons for their community involve-ment and contributions, business longevity, support for the local workforce, and participation in Chamber activities.

Marcie bested four other nominees for the 2013 Businessperson of the Year award. All the nominees were nominated by the Chamber’s general membership. Past businesspersons of the year select the winner.

(leFt to rigHt): Marcie Tomokane, Bank of Guam® CNMI Regional Vice President & Marcia Ayuyu, 2012 Saipan Chamber of Com-merce Businessperson of the Year and General Manager, McDonald’s Saipan.

November, 2014: Bank of Guam®Delta SkyMiles® VISA® Credit Card 1% Cash Back Cardholder Benefit

Bank of Guam® Delta SkyMiles VISA cardholder purchases can now earn a minimum cash back of $5.00 per account per calendar year with a maximum of $600.00 per account per calendar year*. Cash back shall be credited to account in January for purchases made from January through December of the previous year.

*Cardholders must spend a minimum of $500.00 to earn cash back reward. Card must be in good standing to receive these benefits. Other terms and conditions apply.

BankGuam Holding Company Officers and Bank of Guam® Senior Management, Headquarters & Branch OfficialsBankGuam Holding Company

OfficersLourdes 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

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

Joaquin P.L.G. Cook exeCutive viCe president/CHieF sAles & serviCe oFFiCer

Francisco M. Atalig senior viCe president/CHieF FinAnCiAl oFFiCer

Jocelyn B. Miyashita senior viCe president/CHieF Credit oFFiCer

Josephine L. Mariano senior viCe president/BrAnCH, CentrAl operAtions & AFid AdMinistrAtor

Danilo M. Rapadas senior viCe president/generAl Counsel And CHieF risk oFFiCer

Jacqueline A. Marati senior viCe president/MArketing AdMinistrAtor

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

Theresa C. Obispo senior viCe president/HuMAn resourCes AdMinistrAtor

Bank of Guam® Headquarters Officials

Keven F. Camacho viCe president/CHieF lending oFFiCer

Lori C. Sablan viCe president/Controller

Mike W. Naholowaa viCe president/Credit oFFiCer

Daniel F. Anderson viCe president/otHer reAl estAte owned

Kalistus D. Rengiil viCe president/CorporAte BAnking group MAnAger

Jacqueline Ann Hocog viCe president/MortgAge BAnking group MAnAger

Jessica L.G. Diaz viCe president/retAil BAnking group MAnAger

Reanna R. Cruz viCe president/loAn AdjustMent MAnAger

Patricia B. Salas viCe president/relAtionsHip BAnking group MAnAger

Beatrice T. Pereda viCe president/AssistAnt CentrAl operAtions AdMinistrAtor

Kathrine C. Lujan viCe president/AFid MAnAger

Bernadine Q. Pereda viCe president/loAn support MAnAger

Maria Eugenia Leon Guerrero viCe president/Business serviCes division MAnAger

Teresa P. Catahay-Camacho viCe president/CoMpliAnCe MAnAger

Wayne S.N. Santos viCe president/MArketing MAnAger

Luke M. Elliott viCe president/eleCtroniC dAtA proCessing MAnAger

Carl J.C. Aguon, Jr. AssistAnt viCe president/produCt & inForMAtion MAnAgeMent systeMs (piMs) MAnAger

Amoretta L.P. Carlson viCe president/Bg weAltH MAnAgeMent & trust division MAnAger

Janice Chargualaf-Quichocho viCe president/trust MAnAger

Lesley-Anne Leon Guerrero viCe president/direCtor oF CustoMer serviCe

Yolanda M. Padrones, pHr viCe president/Hr And trAining & developMent MAnAger

Joseph F. Mesa AssistAnt viCe president/seCurity, Building, FACilities & leAses MAnAger

Joseph J.Q. Pereira viCe president/projeCt MAnAgeMent depArtMent MAnAger

Bank of Guam® Regional, Branch & Facility Managers

Jennifer B. Sanchez viCe president/guAM CentrAl-soutHern regionAl MAnAger

Dina A. San Nicolas viCe president/HAgåtñA BrAnCH MAnAger

Mariah B. Mafnas AssistAnt viCe president/sAntA Cruz BrAnCH MAnAger

Edward G. Barcinas AssistAnt viCe president/tAMuning BrAnCH MAnAger

Julie A. Gogue AssistAnt viCe president/MAngilAo BrAnCH MAnAger

Jeffery R. Fejarang AssistAnt viCe president/MAlesso BrAnCH MAnAger

Emily M. Ogo 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

David R. Sablan viCe president/HArMon BrAnCH MAnAger

Melissa A. Toves AssistAnt viCe president/dededo BrAnCH MAnAger

Katherine B. Martir AssistAnt viCe president/yigo BrAnCH MAnAger

Joelle P. Fernandez AssistAnt viCe president/Andersen AFB BrAnCH MAnAger

Merced M. Tomokane viCe president/CnMi regionAl MAnAger

Larry A. Phillip AssistAnt viCe president/sAipAn BrAnCH MAnAger

Teresa U. Palacios AssistAnt viCe president/sAipAn CHAlAn piAo FACility MAnAger

Marilyn L. Mendiola AssistAnt viCe president/tiniAn FACility MAnAger

Vicente S. Agulto AssistAnt viCe president/rotA BrAnCH MAnAger

Christine B. Quichocho viCe president/eBAnking & neigHBoring islAnds regionAl MAnAger

Mary A. Simmering AssistAnt viCe president/poHnpei BrAnCH MAnAger

Joanne H. Akinaga AssistAnt viCe president/CHuuk BrAnCH MAnAger

Joan A. Pinerof AssistAnt viCe president/yAp BrAnCH MAnAger

Gwendolyn E. San Nicolas AssistAnt viCe president/kosrAe BrAnCH MAnAger

Jackey Salomon AssistAnt viCe president/MAjuro BrAnCH MAnAger

Matthew C. Cruz viCe president/BelAu BrAnCH MAnAger

Shirley N. Quitugua viCe president/sAn FrAnCisCo BrAnCH MAnAger

BG Wealth Management Services

Alexandra L.G. Taitano viCe president/weAltH MAnAgeMent Advisor

Dave B. Guerrero AssistAnt viCe president/Bg weAltH MAnAgeMent & AFid oFFiCer, sAipAn

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Lourdes A. Leon Guerrero• President, CEO and Chair of the Board• President, Guam Women’s Chamber of Commerce• Senator, 23rd, 24th, 26th, 27th and 28th Guam Legislatures• Member, Guam Nurses Association• Member, Teleguam LLC Board of Directors

William D. Leon Guerrero• Vice Chairman of the Board• Chairman, Board of Regents, University of Guam

Roger P. Crouthamel• Board Secretary• Attorney at Law, Guam & CNMI• Director, Transpacific Travel dba Travel Pacificana• Director and Vice President, Sports Concepts, Inc.• Member, Vista Chino Development, LLC• Member, Maite Partners, LLC.• Member, International Dining Concepts, LLC.

Joe T. San Agustin• Speaker, 20th, 21st and 22nd Guam Legislatures• Senator, 14th - 23rd Guam Legislatures• Adjunct Instructor, University of Guam• Chairman, Government of Guam Retirement Fund• Former Director, Department of Administration• Former Director, Bureau of Budget and Management Research

Ralph G. Sablan, M.d.• U.S. Navy Captain, Retired• Former President, Guam Medical Society• Dermatologist, Retired• Lifetime Member, American Academy of Dermatology

Keven F. Camacho• Bank of Guam® Vice President/ Chief Lending Officer• President-Elect, Rotary Club of Northern Guam• Board Member, Sanctuary, Inc.• Secretary, TSC, Inc.

Martin D. Leon Guerrero•  Board Treasurer and Assistant Secretary* Secretary/Treasurer of Adztech & Public Relations, Inc.

Frances L.G. Borja• President, Carmen Safeway Enterprises, Inc.

Joaquin P.L.G. Cook• Bank of Guam® Executive Vice President/Chief Sales & Service Officer• Secretary/Treasurer, Byerly & Cook Corp.• Management Committee, IP&E Holdings, LLC

Patricia P. Ada• General Manager, Board Secretary and Assistant Treasurer, Ada’s Trust and Investment, Inc.• Manager, P and M, LLP• Manager, P.P. Ada Investment

Joseph “Joey” Crisostomo• President, CarsPlus LLC• President, CyclesPlus LLC• Member, Pacific Auto Leasing dba Thrifty Car Rental• Immediate Past Chairman, Armed Forces Committee, Guam Chamber of Commerce

BankGuam Holding Company & Bank of Guam® Board of Directors