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Bank of Hawaii Corporation 2017 Financial Results
Supporting Materials:
  • 2017 Earnings Reaches Record of $4.33 Per Diluted Share
  • 2017 Net Income $184.7 Million
  • Diluted Earnings Per Share $1.01 for the Fourth Quarter of 2017
  • Net Income $43.0 Million for the Fourth Quarter of 2017

HONOLULU--(BUSINESS WIRE)--Jan. 22, 2018-- Bank of Hawaii Corporation (NYSE: BOH) today reported diluted earnings per share of $4.33 for the full year of 2017, up 2.4 percent from diluted earnings per share of $4.23 in 2016. Net income for the year was $184.7 million, up $3.2 million or 1.8 percent from net income of $181.5 million in the previous year. The financial results for 2017 included an additional income tax expense of $3.6 million as a result of the Tax Cuts and Jobs Act, a tax reform bill, signed into law during December 2017. The return on average assets for the full year of 2017 was 1.10 percent compared with 1.15 percent in 2016. The return on average equity for the full year of 2017 was 15.27 percent compared with 15.79 percent in 2016.

“Bank of Hawaii finished 2017 with solid financial performance," said Peter Ho, Chairman, President and CEO. “During the year our loan and deposit balances continued to grow and our net interest margin expanded due to increased rates and the positive remixing of our balance sheet. Expenses were well controlled and our asset quality, capital and liquidity all remained strong.”

Diluted earnings per share were $1.01 for the fourth quarter of 2017, down from $1.08 in the third quarter of 2017 and down from $1.02 in the fourth quarter of 2016. Net income for the fourth quarter of 2017 was $43.0 million, down from $45.9 million in the previous quarter and down from $43.5 million in the same quarter last year. Net income in the fourth quarter of 2017 included the previously mentioned additional income tax expense of $3.6 million. The return on average assets for the fourth quarter of 2017 was 1.00 percent, compared with 1.07 percent in the third quarter of 2017 and 1.07 percent in the fourth quarter last year. The return on average equity for the fourth quarter of 2017 was 13.85 percent compared with 14.89 percent in the third quarter of 2017 and 14.90 percent in the fourth quarter last year.

Financial Highlights

Net interest income, on a taxable-equivalent basis, was $469.1 million for the full year of 2017, an increase of $39.5 million from net interest income of $429.6 million in 2016. Net interest income, on a taxable-equivalent basis, for the fourth quarter of 2017 was $121.6 million, an increase of $2.4 million compared with net interest income of $119.2 million in the third quarter of 2017 and up $11.5 million compared with net interest income of $110.1 million in the fourth quarter last year. Analyses of changes in net interest income are included in Tables 8a, 8b and 8c.

The net interest margin for the full year of 2017 was 2.93 percent, an increase of 10 basis points from the net interest margin of 2.83 percent in 2016. The net interest margin was 2.98 percent in the fourth quarter of 2017, an increase of 6 basis points from the third quarter of 2017 and 15 basis points from the fourth quarter last year.

The provision for credit losses for the full year of 2017 was $16.9 million compared with a provision for credit losses of $4.8 million in 2016. Provision expense in 2016 reflected a recovery of $6.6 million related to one commercial client in Guam. Results for the fourth quarter of 2017 included a provision for credit losses of $4.3 million compared with $4.0 million in the previous quarter and $3.3 million in the same quarter last year.

Noninterest income for the full year of 2017 was $185.4 million compared with noninterest income of $197.3 million in 2016. The decrease from the previous year was primarily due to the decline in mortgage banking income, lower revenue from the customer derivative program, and gains on the sales of assets during 2016. Noninterest income was $41.9 million in the fourth quarter of 2017 compared with noninterest income of $42.4 million in the third quarter of 2017 and noninterest income of $46.5 million in the fourth quarter of 2016.

Noninterest expense for the full year of 2017 was $357.7 million compared with noninterest expense of $350.6 million in 2016. Noninterest expense in 2017 included one-time employee bonuses totaling $2.2 million, including payroll taxes. Noninterest expense in 2016 included net gains of $3.7 million on the disposition of real estate. Adjusted for these items, noninterest expense increased $1.2 million, or 0.3 percent in 2017 compared with the prior year. Noninterest expense was $92.3 million in the fourth quarter of 2017, including the one-time bonuses. Noninterest expense was $88.6 million in the third quarter of 2017 and included $2.1 million in severance which was partially offset by a reduction of $0.9 million in share-based compensation. Noninterest expense was $89.6 million in the fourth quarter of 2016 and included expenses of $1.3 million in compensation related to the significant increase in the stock price during the quarter which was partially offset by a net gain of $1.0 million on the sale of a branch building. An analysis of noninterest expenses related to salaries and benefits is included in Table 9.

The efficiency ratio for the full year of 2017 was 55.66 percent compared with 57.01 percent in 2016. The efficiency ratio for the fourth quarter of 2017 was 57.49 percent compared with 55.82 percent in the previous quarter and 58.33 percent in the same quarter last year.

The effective tax rate for the full year of 2017 was 31.11 percent, which included the previously mentioned $3.6 million one-time adjustment related to the tax reform bill. Excluding this expense, the effective tax rate for the full year of 2017 was 29.78 percent compared with 30.10 percent for the full year of 2016. The effective tax rate for the fourth quarter of 2017 was 32.93 percent. Excluding the tax reform expense, the effective tax rate for the fourth quarter of 2017 was 27.37 percent compared with 30.62 percent in the previous quarter and 28.38 percent in the same quarter last year. The lower effective tax rate excluding the tax reform expense was primarily due to the release of a valuation allowance for the sale of low income housing investments.

The Company’s business segments are defined as Retail Banking, Commercial Banking, Investment Services and Private Banking, and Treasury & Other. Results are determined based on the Company’s internal financial management reporting process and organizational structure. Selected financial information for the business segments is included in Tables 13a and 13b.

Asset Quality

The Company’s overall asset quality continued to remain strong during the fourth quarter of 2017. Total non-performing assets were $16.1 million at December 31, 2017 compared with $17.0 million at September 30, 2017 and $19.8 million at December 31, 2016. Non-performing assets as a percentage of total loans and leases and foreclosed real estate were 0.16 percent at December 31, 2017 compared with 0.18 percent at September 30, 2017 and 0.22 percent at December 31, 2016.

Accruing loans and leases past due 90 days or more were $7.1 million at December 31, 2017 compared with $6.7 million at September 30, 2017 and $7.1 million at December 31, 2016. Restructured loans and leases not included in non-accrual loans or accruing loans past due 90 days or more were $55.7 million at December 31, 2017 compared with $55.0 million at September 30, 2017 and $52.2 million at December 31, 2016. More information on non-performing assets and accruing loans and leases past due 90 days or more is presented in Table 11.

Net charge-offs for the full year of 2017 were $13.8 million or 0.15 percent of total average loans and leases compared with net charge-offs of $3.4 million or 0.04 percent of total average loans and leases in 2016. The lower charge-off rate during 2016 was largely due to the previously mentioned recovery of charged off loans to a commercial client in Guam. Net charge-offs during the fourth quarter of 2017 were $3.8 million or 0.15 percent annualized of total average loans and leases outstanding and were comprised of charge-offs of $5.8 million partially offset by recoveries of $2.1 million. Net charge-offs during the third quarter of 2017 were $3.5 million or 0.15 percent annualized of total average loans and leases outstanding and were comprised of charge-offs of $6.2 million and recoveries of $2.7 million. Net charge-offs during the fourth quarter of 2016 were $3.0 million or 0.14 percent annualized of total average loans and leases outstanding and were comprised of charge-offs of $5.0 million and recoveries of $1.9 million.

The allowance for loan and lease losses was $107.3 million at December 31, 2017, an increase from $106.9 million at September 30, 2017 and $104.3 million at December 31, 2016. The ratio of the allowance for loan and lease losses to total loans and leases outstanding was 1.10 percent at December 31, 2017, a decrease of 2 basis points from September 30, 2017 and 7 basis points from December 31, 2016. The decrease in the ratio of the allowance for loan and lease losses to total loans and leases outstanding is due to significant loan growth during the year and is commensurate with the Company’s strong asset quality and the Hawaii economy. The total reserve for unfunded commitments of $6.8 million at December 31, 2017 was unchanged from the prior quarter and up from at $6.6 million at December 31, 2016. Details of loan and lease charge-offs, recoveries, and the components of the total reserve for credit losses are summarized in Table 12.

Other Financial Highlights

Total assets were $17.1 billion at December 31, 2017, a decrease of $179.3 million from total assets of $17.3 billion at September 30, 2017 and an increase of $596.7 million from total assets of $16.5 billion at December 31, 2016. Average total assets were $17.1 billion during the fourth quarter of 2017, an increase of $112.4 million compared with average total assets of $17.0 billion during the previous quarter and an increase of $871.7 million compared with average total assets of $16.2 billion during the same quarter last year.

The investment securities portfolio was $6.2 billion at December 31, 2017, a decrease of $122.1 million from total securities of $6.3 billion at September 30, 2017 and up $142.1 million from total securities of $6.0 billion at December 31, 2016. The investment securities portfolio remains largely comprised of securities issued by U. S. government agencies and included $3.9 billion in securities held to maturity and $2.2 billion in securities available for sale at December 31, 2017.

Total loans and leases increased to $9.8 billion at December 31, 2017, an increase of $223.0 million or 2.3 percent from total loans and leases of $9.6 billion at September 30, 2017 and up $847.2 million or 9.5 percent from total loans and leases of $8.9 billion at December 31, 2016. The commercial portfolio increased to $3.8 billion at the end of the fourth quarter of 2017, up 0.7 percent from commercial loans of $3.7 billion at the end of the third quarter of 2017 and up 4.1 percent from commercial loans of $3.6 billion at the end of the fourth quarter last year. Consumer loans grew to $6.0 billion at December 31, 2017, up 3.4 percent from consumer loans of $5.8 billion at the end of the third quarter of 2017 and up 13.1 percent from consumer loans of $5.3 billion at the end of the fourth quarter last year. Average total loans and leases were $9.7 billion during the fourth quarter of 2017, an increase of 2.5 percent from average loans and leases of $9.5 billion during the previous quarter and up 9.9 percent from average loans and leases of $8.8 billion during the same quarter last year. Loan and lease portfolio balances are summarized in Table 10.

Total deposits were $14.9 billion at December 31, 2017, down $164.2 million or 1.1 percent from total deposits of $15.0 billion at September 30, 2017 and up $563.7 million or 3.9 percent from total deposits of $14.3 billion at December 31, 2016. Consumer deposits increased to $7.5 billion at December 31, 2017, up $174.7 million or 2.4 percent from consumer deposits of $7.3 billion at the end of the third quarter of 2017 and up $480.7 million or 6.9 percent from $7.0 billion at the end of the fourth quarter last year. Growth remained strong in all consumer deposit categories. Commercial deposits were $6.0 billion at the end of the fourth quarter of 2017, down $118.0 million or 1.9 percent from $6.1 billion at the end of the third quarter of 2017 and down $136.4 million or 2.2 percent from $6.1 billion at the end of the fourth quarter last year. The decrease was largely due to reductions in escrow deposits related to construction projects that were completed during the year. Other deposits declined to $1.4 billion at December 31, 2017, down $220.8 million or 13.4 percent from $1.7 billion at September 30, 2017 and up $219.4 million or 18.1 percent from $1.2 billion at December 31, 2016. The decrease compared with the prior quarter was the result of a reduction in public time deposits due to increased pricing competition. Average total deposits were $14.8 billion in the fourth quarter of 2017, up from average total deposits of $14.7 billion in the previous quarter and up from average total deposits of $14.0 billion during the same quarter last year. Deposit balances are summarized in Tables 7a, 7b, and 10.

During the fourth quarter of 2017, the Company repurchased 128.6 thousand shares of common stock at a total cost of $10.6 million under its share repurchase program. The average cost was $82.60 per share repurchased. From the beginning of the share repurchase program initiated during July 2001 through December 31, 2017, the Company has repurchased 54.2 million shares and returned over $2.0 billion to shareholders at an average cost of $38.29 per share. Remaining buyback authority under the share repurchase program was $20.0 million at December 31, 2017. From January 2 through January 19, 2018 the Company repurchased an additional 19.5 thousand shares of common stock at an average cost of $86.75 per share repurchased.

Total shareholders’ equity was $1.23 billion at December 31, 2017, up slightly from September 30, 2017 and up from $1.16 billion at December 31, 2016. The Tier 1 Capital Ratio was 13.24 percent at December 31, 2017 compared with 13.27 percent at September 30, 2017 and 13.24 percent at December 31, 2016. The Tier 1 Leverage Ratio at December 31, 2017 was 7.26 percent compared with 7.24 percent at September 30, 2017 and 7.21 percent at December 31, 2016.

The Company’s Board of Directors declared a quarterly cash dividend of $0.52 per share on the Company’s outstanding shares. The dividend will be payable on March 14, 2018 to shareholders of record at the close of business on February 28, 2018.

Hawaii Economy

General economic conditions in Hawaii remained healthy during 2017, led by continued strength in the tourism industry, low unemployment, rising real estate prices, and an active construction industry. For the first eleven months of 2017 total visitor arrivals increased 4.9 percent and visitor spending increased 6.6 percent compared to the same period in 2016. The statewide seasonally-adjusted unemployment rate remains low at 2.0 percent in November 2017 compared with 4.1 percent nationally.

Real estate prices on Oahu continue to reach new records. The volume of single-family home sales on Oahu increased 6.3 percent in 2017 and the volume of condominium sales increased 6.9 percent compared with sales in 2016. The median price of single-family homes on Oahu increased 2.7 percent and the median price of condominiums increased 3.8 percent compared with 2016. As of December 31, 2017, months of inventory of single-family homes and condominiums on Oahu declined to 2.1 months and 2.3 months, respectively. More information on current Hawaii economic trends is presented in Table 15.

Conference Call Information

The Company will review its 2017 financial results today at 8:00 a.m. Hawaii Time (1:00 p.m. Eastern Time). The call will be accessible via teleconference and via the investor relations link of Bank of Hawaii Corporation's website, www.boh.com. The toll-free number is 1 (844) 543-5235 in the United States and Canada and 1 (703) 318-2209 for other international callers. Use the pass code “Bank of Hawaii” to access the call. A replay will be available for one week beginning approximately 11:00 a.m. Hawaii Time on Monday, January 22, 2018. The replay number is 1 (855) 859-2056 in the United States and Canada and 1 (404) 537-3406 from other international locations. Enter the pass code 3667149 when prompted. Participants can also dial 1 (800) 585-8367 to access the replay. In addition, a replay will be available on the Company's website, www.boh.com.

Forward-Looking Statements

This news release, and other statements made by the Company in connection with it may contain "forward-looking statements", such as forecasts of our financial results and condition, expectations for our operations and business prospects, and our assumptions used in those forecasts and expectations. Do not unduly rely on forward-looking statements. Actual results might differ significantly from our forecasts and expectations because of a variety of factors. More information about these factors is contained in Bank of Hawaii Corporation's Annual Report on Form 10-K for the year ended December 31, 2016, which was filed with the U.S. Securities and Exchange Commission. We do not promise to update forward-looking statements to reflect later events or circumstances

Bank of Hawaii Corporation is a regional financial services company serving businesses, consumers and governments in Hawaii, American Samoa, and the West Pacific.The Company’s principal subsidiary, Bank of Hawaii, was founded in 1897 and is the largest independent financial institution in Hawaii.For more information about Bank of Hawaii Corporation, see the Company’s web site, www.boh.com.

                               
Bank of Hawaii Corporation and Subsidiaries                              
Financial Highlights   Table 1  
    Three Months Ended   Year Ended  
    December 31,   September 30,   December 31,   December 31,  
(dollars in thousands, except per share amounts)   2017   2017   2016   2017   2016  

For the Period:

                             
Operating Results                              
Net Interest Income   $ 118,770     $ 116,317     $ 107,093     $ 457,238     $ 417,579  
Provision for Credit Losses     4,250       4,000       3,250       16,900       4,750  
Total Noninterest Income     41,855       42,410       46,503       185,417       197,343  
Total Noninterest Expense     92,336       88,598       89,589       357,691       350,578  
Net Income     42,953       45,881       43,513       184,672       181,461  
Basic Earnings Per Share     1.02       1.09       1.03       4.37       4.26  
Diluted Earnings Per Share     1.01       1.08       1.02       4.33       4.23  
Dividends Declared Per Share     0.52       0.52       0.48       2.04       1.89  
                               
Performance Ratios                              
Return on Average Assets     1.00

%

    1.07 %     1.07 %     1.10 %     1.15 %
Return on Average Shareholders' Equity     13.85       14.89       14.90       15.27       15.79  
Efficiency Ratio 1     57.49       55.82       58.33       55.66       57.01  
Net Interest Margin 2     2.98       2.92       2.83       2.93       2.83  
Dividend Payout Ratio 3     50.98       47.71       46.60       46.68       44.37  
Average Shareholders' Equity to Average Assets     7.20       7.21       7.17       7.22       7.26  
                               
Average Balances                              
Average Loans and Leases   $ 9,688,710     $ 9,451,972     $ 8,813,755     $ 9,346,828     $ 8,362,210  
Average Assets     17,084,596       16,972,202       16,212,940       16,749,230       15,825,381  
Average Deposits     14,813,218       14,727,469       13,997,318       14,505,423       13,619,476  
Average Shareholders' Equity     1,230,564       1,222,885       1,161,967       1,209,087       1,149,335  
                               
Per Share of Common Stock                              
Book Value   $ 29.05     $ 28.88     $ 27.24     $ 29.05     $ 27.24  
Tangible Book Value     28.31       28.14       26.50       28.31       26.50  
Market Value                              
Closing     85.70       83.36       88.69       85.70       88.69  
High     88.38       86.19       89.72       90.80       89.72  
Low     77.71       74.72       71.73       74.72       54.55  
                               
               

December 31,

  September 30,  

December 31,

 
                2017   2017   2016  

As of Period End:

                             
Balance Sheet Totals                              
Loans and Leases               $ 9,796,947     $ 9,573,956     $ 8,949,785  
Total Assets                 17,089,052       17,268,302       16,492,367  
Total Deposits                 14,883,968       15,048,160       14,320,240  
Other Debt                 260,716       267,887       267,938  
Total Shareholders' Equity                 1,231,868       1,227,893       1,161,537  
                               
Asset Quality                              
Non-Performing Assets               $ 16,120     $ 17,035     $ 19,761  
Allowance for Loan and Lease Losses                 107,346       106,881       104,273  
Allowance to Loans and Leases Outstanding                 1.10 %     1.12 %     1.17 %
                               
Capital Ratios                              
Common Equity Tier 1 Capital Ratio                 13.24 %     13.27 %     13.24 %
Tier 1 Capital Ratio                 13.24       13.27       13.24  
Total Capital Ratio                 14.46       14.51       14.49  
Tier 1 Leverage Ratio                 7.26       7.24       7.21  
Total Shareholders' Equity to Total Assets                 7.21       7.11       7.04  
Tangible Common Equity to Tangible Assets 4                 7.04       6.94       6.86  
Tangible Common Equity to Risk-Weighted Assets 4                 12.84       12.96       12.81  
                               
Non-Financial Data                              
Full-Time Equivalent Employees                 2,132       2,120       2,122  
Branches                 69       69       69  
ATMs                 387       388       449  
                               
1 Efficiency ratio is defined as noninterest expense divided by total revenue (net interest income and total noninterest income).
2 Net interest margin is defined as net interest income, on a taxable-equivalent basis, as a percentage of average earning assets.  
3 Dividend payout ratio is defined as dividends declared per share divided by basic earnings per share.  
4 Tangible common equity to tangible assets and tangible common equity to risk-weighted assets are Non-GAAP financial measures. See Table 2 “Reconciliation of Non-GAAP Financial Measures."  
             
Bank of Hawaii Corporation and Subsidiaries            
Reconciliation of Non-GAAP Financial Measures   Table 2
    December 31,   September 30,   December 31,
(dollars in thousands)   2017   2017   2016
             
Total Shareholders' Equity   $ 1,231,868   $ 1,227,893   $ 1,161,537

Less:Goodwill

  31,517   31,517   31,517
Tangible Common Equity   $ 1,200,351   $ 1,196,376   $ 1,130,020
             
Total Assets   $ 17,089,052   $ 17,268,302   $ 16,492,367
Less:Goodwill   31,517   31,517   31,517
Tangible Assets   $ 17,057,535   $ 17,236,785   $ 16,460,850
             

Risk-Weighted Assets, determined in accordance with prescribed regulatory requirements 1

  $ 9,348,296   $ 9,234,050   $ 8,823,485
             
Total Shareholders' Equity to Total Assets   7.21%   7.11%   7.04%
Tangible Common Equity to Tangible Assets (Non-GAAP)   7.04%   6.94%   6.86%
             
Tier 1 Capital Ratio   13.24%   13.27%   13.24%
Tangible Common Equity to Risk-Weighted Assets (Non-GAAP)   12.84%   12.96%   12.81%
             
1 Risk-weighted assets as of September 30, 2017 was revised from $9,233,969.
                   
Bank of Hawaii Corporation and Subsidiaries                  
Consolidated Statements of Income     Table 3
    Three Months Ended   Year Ended
    December 31,   September 30,   December 31,   December 31,
(dollars in thousands, except per share amounts)   2017   2017   2016     2017   2016
Interest Income                      
Interest and Fees on Loans and Leases   $ 96,974     $ 94,621     $ 86,532       $ 370,441   $ 333,239
Income on Investment Securities                      
Available-for-Sale     11,866       11,987       10,244         46,772     41,892
Held-to-Maturity     21,782       20,334       19,213         81,740     79,087
Deposits     3       5       2         15     9
Funds Sold     717       1,579       795         3,882     2,861
Other     271       235       281         944     812
Total Interest Income     131,613       128,761       117,067         503,794     457,900
Interest Expense                      
Deposits     6,980       6,663       3,448         22,332     12,647
Securities Sold Under Agreements to Repurchase     4,664       4,664       5,406         19,592     23,406
Funds Purchased     81       -       3         123     12
Short-Term Borrowings     -       -       -         64     -
Other Debt     1,118       1,117       1,117         4,445     4,256
Total Interest Expense     12,843       12,444       9,974         46,556     40,321
Net Interest Income     118,770       116,317       107,093         457,238     417,579
Provision for Credit Losses     4,250       4,000       3,250         16,900     4,750
Net Interest Income After Provision for Credit Losses     114,520       112,317       103,843         440,338     412,829
Noninterest Income                      
Trust and Asset Management     11,105       11,050       11,232         45,430     46,203
Mortgage Banking     2,593       3,237       6,256         12,949     19,895
Service Charges on Deposit Accounts     8,053       8,188       8,537         32,575     33,654
Fees, Exchange, and Other Service Charges     13,784       13,764       13,731         54,845     55,176
Investment Securities Gains (Losses), Net     (617 )     (566 )     (337 )       10,430     10,203
Annuity and Insurance     1,273       1,429       1,457         6,858     7,017
Bank-Owned Life Insurance     1,609       1,861       1,551         6,517     6,561
Other     4,055       3,447       4,076         15,813     18,634
Total Noninterest Income     41,855       42,410       46,503         185,417     197,343
Noninterest Expense                      
Salaries and Benefits     52,195       51,626       50,622         205,536     201,150
Net Occupancy     8,510       7,727       7,581         32,536     30,252
Net Equipment     5,454       5,417       5,191         22,078     20,578
Data Processing     4,310       3,882       3,665         15,483     15,208
Professional Fees     3,266       3,044       2,990         11,681     10,072
FDIC Insurance     2,253       2,107       2,015         8,666     8,615
Other     16,348       14,795       17,525         61,711     64,703
Total Noninterest Expense     92,336       88,598       89,589         357,691     350,578
Income Before Provision for Income Taxes     64,039       66,129       60,757         268,064     259,594
Provision for Income Taxes     21,086       20,248       17,244         83,392     78,133
Net Income   $ 42,953     $ 45,881     $ 43,513       $ 184,672   $ 181,461
Basic Earnings Per Share   $ 1.02     $ 1.09     $ 1.03       $ 4.37   $ 4.26
Diluted Earnings Per Share   $ 1.01     $ 1.08     $ 1.02       $ 4.33   $ 4.23
Dividends Declared Per Share   $ 0.52     $ 0.52     $ 0.48       $ 2.04   $ 1.89
Basic Weighted Average Shares     42,116,452       42,251,541       42,386,480         42,280,931     42,644,100
Diluted Weighted Average Shares     42,450,191       42,565,364       42,672,470         42,607,057     42,879,783
                     
Bank of Hawaii Corporation and Subsidiaries
Consolidated Statements of Comprehensive Income   Table 4
    Three Months Ended   Year Ended
    December 31,   September 30,   December 31,   December 31,
(dollars in thousands)   2017   2017   2016   2017   2016
Net Income   $ 42,953     $ 45,881   $ 43,513     $ 184,672     $ 181,461  
Other Comprehensive Income (Loss), Net of Tax:                    
Net Unrealized Gains (Losses) on Investment Securities     (10,430 )     444     (18,641 )     (1,986 )     (10,318 )
Defined Benefit Plans     738       146     (453 )     1,177       (31 )
Other Comprehensive Income (Loss)     (9,692 )     590     (19,094 )     (809 )     (10,349 )
Comprehensive Income   $ 33,261     $ 46,471   $ 24,419     $ 183,863     $ 171,112  
             
Bank of Hawaii Corporation and Subsidiaries            
Consolidated Statements of Condition           Table 5
    December 31,   September 30,   December 31,
(dollars in thousands)   2017   2017   2016
Assets            
Interest-Bearing Deposits in Other Banks   $ 3,421     $ 3,161     $ 3,187  
Funds Sold     181,413       512,868       707,343  
Investment Securities            
Available-for-Sale     2,232,979       2,322,668       2,186,041  
Held-to-Maturity (Fair Value of $3,894,121; $3,960,956; and $3,827,527)     3,928,170       3,960,598       3,832,997  
Loans Held for Sale     19,231       9,752       62,499  
Loans and Leases     9,796,947       9,573,956       8,949,785  
Allowance for Loan and Lease Losses     (107,346 )     (106,881 )     (104,273 )
Net Loans and Leases     9,689,601       9,467,075       8,845,512  
Total Earning Assets     16,054,815       16,276,122       15,637,579  
Cash and Due from Banks     263,017       245,487       169,077  
Premises and Equipment, Net     130,926       125,162       113,505  
Accrued Interest Receivable     50,485       51,526       46,444  
Foreclosed Real Estate     1,040       1,393       1,686  
Mortgage Servicing Rights     24,622       24,436       23,663  
Goodwill     31,517       31,517       31,517  
Bank-Owned Life Insurance     280,034       278,425       274,188  
Other Assets     252,596       234,234       194,708  
Total Assets   $ 17,089,052     $ 17,268,302     $ 16,492,367  
             
Liabilities            
Deposits            
Noninterest-Bearing Demand   $ 4,724,300     $ 4,825,643     $ 4,772,727  
Interest-Bearing Demand     3,082,563       2,896,559       2,934,107  
Savings     5,389,013       5,363,866       5,395,699  
Time     1,688,092       1,962,092       1,217,707  
Total Deposits     14,883,968       15,048,160       14,320,240  
Funds Purchased     -       -       9,616  
Securities Sold Under Agreements to Repurchase     505,293       505,293       523,378  
Other Debt     260,716       267,887       267,938  
Retirement Benefits Payable     37,312       38,308       48,451  
Accrued Interest Payable     6,946       6,717       5,334  
Taxes Payable and Deferred Taxes     24,009       31,360       21,674  
Other Liabilities     138,940       142,684       134,199  
Total Liabilities     15,857,184       16,040,409       15,330,830  
Shareholders' Equity            

Common Stock ($.01 par value; authorized 500,000,000 shares; issued / outstanding: December 31, 2017 - 57,959,074 / 42,401,443; September 30, 2017 - 57,958,200 / 42,513,348; and December 31, 2016 - 57,856,672 / 42,635,978)

    576       576       576  
Capital Surplus     561,161       558,530       551,628  
Accumulated Other Comprehensive Loss     (34,715 )     (25,023 )     (33,906 )
Retained Earnings     1,512,218       1,491,830       1,415,440  

Treasury Stock, at Cost (Shares: December 31, 2017 - 15,557,631; September 30, 2017 - 15,444,852; and December 31, 2016 - 15,220,694)

    (807,372 )     (798,020 )     (772,201 )
Total Shareholders' Equity     1,231,868       1,227,893       1,161,537  
Total Liabilities and Shareholders' Equity   $ 17,089,052     $ 17,268,302     $ 16,492,367  
                             
Bank of Hawaii Corporation and Subsidiaries
Consolidated Statements of Shareholders' Equity   Table 6
                Accum.            
                Other            
                Compre-            
                hensive            
    Common Shares   Common   Capital   Income   Retained   Treasury    
(dollars in thousands)   Outstanding   Stock   Surplus   (Loss)   Earnings   Stock   Total
Balance as of December 31, 2015   43,282,153     $ 575   $ 542,041   $ (23,557 )   $ 1,316,260     $ (719,059 )   $ 1,116,260  
Net Income   -       -     -     -       181,461       -       181,461  
Other Comprehensive Loss   -       -     -     (10,349 )     -       -       (10,349 )
Share-Based Compensation   -       -     6,786     -       -       -       6,786  
Common Stock Issued under Purchase and Equity                            
Compensation Plans and Related Tax Benefits   259,985       1     2,801     -       (1,124 )     8,665       10,343  
Common Stock Repurchased   (906,160 )     -     -     -       -       (61,807 )     (61,807 )
Cash Dividends Declared ($1.89 per share)   -       -     -     -       (81,157 )     -       (81,157 )
Balance as of December 31, 2016   42,635,978     $ 576   $ 551,628   $ (33,906 )   $ 1,415,440     $ (772,201 )   $ 1,161,537  
                             
Net Income   -       -     -     -       184,672       -       184,672  
Other Comprehensive Loss   -       -     -     (809 )     -       -       (809 )
Share-Based Compensation   -       -     7,369     -       -       -       7,369  
Common Stock Issued under Purchase and Equity                            
Compensation Plans and Related Tax Benefits   337,091       -     2,164     -       (828 )     11,905       13,241  
Common Stock Repurchased   (571,626 )     -     -     -       -       (47,076 )     (47,076 )
Cash Dividends Declared ($2.04 per share)   -       -     -     -       (87,066 )     -       (87,066 )
Balance as of December 31, 2017   42,401,443     $ 576   $ 561,161   $ (34,715 )   $ 1,512,218     $ (807,372 )   $ 1,231,868  
                                       
Bank of Hawaii Corporation and Subsidiaries
Average Balances and Interest Rates - Taxable-Equivalent Basis     Table 7a
    Three Months Ended   Three Months Ended   Three Months Ended
    December 31, 2017   September 30, 2017   December 31, 2016
    Average   Income/   Yield/   Average   Income/   Yield/   Average   Income/   Yield/
(dollars in millions)   Balance   Expense   Rate   Balance   Expense   Rate   Balance   Expense   Rate
Earning Assets                                          
Interest-Bearing Deposits in Other Banks   $ 3.2   $ -   0.46 %   $ 3.5   $ -   0.48 %   $ 4.0   $ -   0.10 %
Funds Sold     221.0     0.7   1.27       575.2     1.6   1.07       622.8     0.8   0.50  
Investment Securities                                          
Available-for-Sale                                          
Taxable     1,669.7     8.5   2.05       1,658.2     8.6   2.08       1,533.8     6.7   1.76  
Non-Taxable     619.0     5.1   3.29       636.7     5.2   3.26       668.7     5.4   3.21  
Held-to-Maturity                                          
Taxable     3,775.6     20.3   2.15       3,631.1     18.8   2.07       3,579.1     17.7   1.97  
Non-Taxable     239.0     2.3   3.87       239.9     2.4   3.87       242.7     2.4   3.89  
Total Investment Securities     6,303.3     36.2   2.30       6,165.9     35.0   2.27       6,024.3     32.2   2.13  
Loans Held for Sale     15.9     0.2   4.02       20.6     0.2   3.88       39.1     0.3   3.61  
Loans and Leases 1                                          
Commercial and Industrial     1,284.5     11.7   3.62       1,251.5     11.3   3.58       1,223.6     10.0   3.25  
Commercial Mortgage     2,063.2     20.2   3.89       2,015.0     19.6   3.87       1,833.8     17.0   3.68  
Construction     213.8     2.6   4.78       241.0     2.9   4.73       276.0     3.0   4.36  
Commercial Lease Financing     202.6     1.3   2.56       204.7     1.2   2.30       204.0     1.1   2.17  
Residential Mortgage     3,420.0     32.6   3.81       3,333.3     31.8   3.82       3,139.4     30.6   3.90  
Home Equity     1,552.4     14.3   3.65       1,502.9     13.8   3.65       1,317.1     11.7   3.54  
Automobile     516.3     5.8   4.43       493.2     5.9   4.71       446.0     5.8   5.14  
Other 2     435.9     8.5   7.80       410.4     8.2   7.98       373.9     7.3   7.76  
Total Loans and Leases     9,688.7     97.0   3.98       9,452.0     94.7   3.99       8,813.8     86.5   3.91  
Other     40.6     0.3   2.67       40.2     0.2   2.34       40.1     0.3   2.80  
Total Earning Assets 3     16,272.7     134.4   3.29       16,257.4     131.7   3.23       15,544.1     120.1   3.08  
Cash and Due from Banks     229.5               151.2               131.5          
Other Assets     582.4               563.6               537.3          
Total Assets   $ 17,084.6             $ 16,972.2             $ 16,212.9          
                                           
Interest-Bearing Liabilities                                          
Interest-Bearing Deposits                                          
Demand   $ 2,877.7     0.5   0.06     $ 2,880.0     0.5   0.07     $ 2,760.5     0.3   0.04  
Savings     5,396.9     1.9   0.14       5,374.4     1.8   0.13       5,339.5     1.2   0.09  
Time     1,767.9     4.6   1.03       1,788.2     4.4   0.97       1,322.7     2.0   0.60  
Total Interest-Bearing Deposits     10,042.5     7.0   0.28       10,042.6     6.7   0.26       9,422.7     3.5   0.15  
Short-Term Borrowings     25.0     0.1   1.27       -     -   -       9.6     -   0.15  
Securities Sold Under Agreements to Repurchase     505.3     4.6   3.61       505.3     4.7   3.61       533.7     5.4   3.96  
Other Debt     267.6     1.1   1.66       267.9     1.1   1.66       267.9     1.1   1.66  
Total Interest-Bearing Liabilities     10,840.4     12.8   0.47       10,815.8     12.5   0.45       10,233.9     10.0   0.38  
Net Interest Income       $ 121.6             $ 119.2             $ 110.1      
Interest Rate Spread           2.82 %       2.78 %       2.70 %
Net Interest Margin           2.98 %       2.92 %       2.83 %
Noninterest-Bearing Demand Deposits     4,770.7               4,684.9               4,574.6          
Other Liabilities     242.9               248.6               242.4          
Shareholders' Equity     1,230.6               1,222.9               1,162.0          
Total Liabilities and Shareholders' Equity   $ 17,084.6             $ 16,972.2             $ 16,212.9          
                                           
                                           
1 Non-performing loans and leases are included in the respective average loan and lease balances. Income, if any, on such loans and leases is recognized on a cash basis.
2 Comprised of other consumer revolving credit, installment, and consumer lease financing.

3 Interest income includes taxable-equivalent basis adjustments, based upon a federal statutory tax rate of 35%, of $2,808,000, $2,920,000 and $3,034,000 for the three months ended December 31, 2017, September 30, 2017, and December 31, 2016, respectively.

 
Bank of Hawaii Corporation and Subsidiaries
Average Balances and Interest Rates - Taxable-Equivalent Basis   Table 7b
    Year Ended     Year Ended
    December 31, 2017     December 31, 2016
    Average   Income/   Yield/     Average   Income/   Yield/
(dollars in millions)   Balance   Expense   Rate     Balance   Expense   Rate
Earning Assets                            
Interest-Bearing Deposits in Other Banks   $ 3.4   $ -   0.45 %   $ 4.1   $ -   0.22 %
Funds Sold     423.0     3.9   0.92       595.9     2.8   0.48  
Investment Securities                            
Available-for-Sale                            
Taxable     1,659.3     33.1   2.00       1,579.1     27.7   1.75  
Non-Taxable     643.7     21.0   3.27       690.6     21.9   3.17  
Held-to-Maturity                            
Taxable     3,648.6     75.7   2.07       3,615.2     72.9   2.02  
Non-Taxable     240.4     9.3   3.88       244.1     9.5   3.90  
Total Investment Securities     6,192.0     139.1   2.25       6,129.0     132.0   2.15  
Loans Held for Sale     22.6     0.9   3.99       32.3     1.2   3.59  
Loans and Leases 1                            
Commercial and Industrial     1,262.8     44.5   3.52       1,179.9     40.3   3.42  
Commercial Mortgage     1,977.1     75.7   3.83       1,735.2     64.5   3.72  
Construction     238.4     11.2   4.69       224.2     10.0   4.43  
Commercial Lease Financing     205.9     4.8   2.32       198.6     4.8   2.40  
Residential Mortgage     3,307.6     126.4   3.82       3,037.0     120.6   3.97  
Home Equity     1,467.7     53.2   3.62       1,211.9     43.7   3.61  
Automobile     486.5     23.2   4.78       416.8     21.5   5.16  
Other 2     400.8     31.8   7.93       358.6     27.7   7.72  
Total Loans and Leases     9,346.8     370.8   3.97       8,362.2     333.1   3.98  
Other     40.5     0.9   2.33       39.2     0.8   2.07  
Total Earning Assets 3     16,028.3     515.6   3.22       15,162.7     469.9   3.10  
Cash and Due from Banks     158.7               129.0          
Other Assets     562.2               533.7          
Total Assets   $ 16,749.2             $ 15,825.4          
                             
Interest-Bearing Liabilities                            
Interest-Bearing Deposits                            
Demand   $ 2,871.7     1.7   0.06     $ 2,757.6     0.9   0.03  
Savings     5,388.5     6.7   0.12       5,217.9     4.6   0.09  
Time     1,589.4     13.9   0.88       1,254.9     7.1   0.57  
Total Interest-Bearing Deposits     9,849.6     22.3   0.23       9,230.4     12.6   0.14  
Short-Term Borrowings     17.7     0.2   1.05       8.4     -   0.15  
Securities Sold Under Agreements to Repurchase     507.0     19.6   3.86       569.8     23.4   4.11  
Other Debt     267.9     4.4   1.66       248.8     4.3   1.71  
Total Interest-Bearing Liabilities     10,642.2     46.5   0.44       10,057.4     40.3   0.40  
Net Interest Income       $ 469.1             $ 429.6      
Interest Rate Spread           2.78 %       2.70 %
Net Interest Margin           2.93 %       2.83 %
Noninterest-Bearing Demand Deposits     4,655.8               4,389.1          
Other Liabilities     242.1               229.6          
Shareholders' Equity     1,209.1               1,149.3          
Total Liabilities and Shareholders' Equity   $ 16,749.2             $ 15,825.4          
                             
                             
1 Non-performing loans and leases are included in the respective average loan and lease balances. Income, if any, on such loans and leases is recognized on a cash basis.
2 Comprised of other consumer revolving credit, installment, and consumer lease financing.

3 Interest income includes taxable-equivalent basis adjustments, based upon a federal statutory tax rate of 35%, of $11,843,000 and $11,991,000 for the years ended December 31, 2017 and December 31, 2016, respectively.

             
Bank of Hawaii Corporation and Subsidiaries            
Analysis of Change in Net Interest Income - Taxable-Equivalent Basis   Table 8a
    Three Months Ended December 31, 2017
    Compared to September 30, 2017
(dollars in millions)   Volume 1   Rate 1   Total
Change in Interest Income:            
Funds Sold   $ (1.1 )   $ 0.2     $ (0.9 )
Investment Securities            
Available-for-Sale            
Taxable     -       (0.1 )     (0.1 )
Non-Taxable     (0.2 )     0.1       (0.1 )
Held-to-Maturity            
Taxable     0.8       0.7       1.5  
Non-Taxable     (0.1 )     -       (0.1 )
Total Investment Securities     0.5       0.7       1.2  
Loans and Leases            
Commercial and Industrial     0.3       0.1       0.4  
Commercial Mortgage     0.5       0.1       0.6  
Construction     (0.3 )     -       (0.3 )
Commercial Lease Financing     -       0.1       0.1  
Residential Mortgage     0.8       -       0.8  
Home Equity     0.5       -       0.5  
Automobile     0.3       (0.4 )     (0.1 )
Other 2     0.5       (0.2 )     0.3  
Total Loans and Leases     2.6       (0.3 )     2.3  
Other     -       0.1       0.1  
Total Change in Interest Income     2.0       0.7       2.7  
             
Change in Interest Expense:            
Interest-Bearing Deposits            
Savings     -       0.1       0.1  
Time     (0.1 )     0.3       0.2  
Total Interest-Bearing Deposits     (0.1 )     0.4       0.3  
Short-Term Borrowings     0.1       -       0.1  
Securities Sold Under Agreements to Repurchase     -       (0.1 )     (0.1 )
Total Change in Interest Expense     -       0.3       0.3  
             
Change in Net Interest Income   $ 2.0     $ 0.4     $ 2.4  
             
1 The change in interest income and expense not solely due to changes in volume or rate has been allocated on a pro-rata basis to the volume and rate columns.
2 Comprised of other consumer revolving credit, installment, and consumer lease financing.
             
Bank of Hawaii Corporation and Subsidiaries            
Analysis of Change in Net Interest Income - Taxable-Equivalent Basis   Table 8b
    Three Months Ended December 31, 2017
    Compared to December 31, 2016
(dollars in millions)   Volume 1   Rate 1   Total
Change in Interest Income:            
Funds Sold   $ (0.8 )   $ 0.7     $ (0.1 )
Investment Securities            
Available-for-Sale            
Taxable     0.6       1.2       1.8  
Non-Taxable     (0.4 )     0.1       (0.3 )
Held-to-Maturity            
Taxable     1.0       1.6       2.6  
Non-Taxable     -       (0.1 )     (0.1 )
Total Investment Securities     1.2       2.8       4.0  
Loans Held for Sale     (0.2 )     0.1       (0.1 )
Loans and Leases            
Commercial and Industrial     0.5       1.2       1.7  
Commercial Mortgage     2.2       1.0       3.2  
Construction     (0.7 )     0.3       (0.4 )
Commercial Lease Financing     -       0.2       0.2  
Residential Mortgage     2.7       (0.7 )     2.0  
Home Equity     2.2       0.4       2.6  
Automobile     0.9       (0.9 )     -  
Other 2     1.2       -       1.2  
Total Loans and Leases     9.0       1.5       10.5  
Total Change in Interest Income     9.2       5.1       14.3  
             
Change in Interest Expense:            
Interest-Bearing Deposits            
Demand     -       0.2       0.2  
Savings     -       0.7       0.7  
Time     0.8       1.8       2.6  
Total Interest-Bearing Deposits     0.8       2.7       3.5  
Short-Term Borrowings     -       0.1       0.1  
Securities Sold Under Agreements to Repurchase     (0.3 )     (0.5 )     (0.8 )
Total Change in Interest Expense     0.5       2.3       2.8  
             
Change in Net Interest Income   $ 8.7     $ 2.8     $ 11.5  
             
1 The change in interest income and expense not solely due to changes in volume or rate has been allocated on a pro-rata basis to the volume and rate columns.
2 Comprised of other consumer revolving credit, installment, and consumer lease financing.
             
Bank of Hawaii Corporation and Subsidiaries            
Analysis of Change in Net Interest Income - Taxable-Equivalent Basis   Table 8c
    Year Ended December 31, 2017
    Compared to December 31, 2016
(dollars in millions)   Volume 1   Rate 1   Total
Change in Interest Income:            
Funds Sold   $ (1.0 )   $ 2.1     $ 1.1  
Investment Securities            
Available-for-Sale            
Taxable     1.4       4.0       5.4  
Non-Taxable     (1.5 )     0.6       (0.9 )
Held-to-Maturity            
Taxable     0.7       2.1       2.8  
Non-Taxable     (0.1 )     (0.1 )     (0.2 )
Total Investment Securities     0.5       6.6       7.1  
Loans Held for Sale     (0.4 )     0.1       (0.3 )
Loans and Leases            
Commercial and Industrial     2.9       1.3       4.2  
Commercial Mortgage     9.2       2.0       11.2  
Construction     0.6       0.6       1.2  
Commercial Lease Financing     0.2       (0.2 )     -  
Residential Mortgage     10.5       (4.7 )     5.8  
Home Equity     9.3       0.2       9.5  
Automobile     3.4       (1.7 )     1.7  
Other 2     3.3       0.8       4.1  
Total Loans and Leases     39.4       (1.7 )     37.7  
Other     -       0.1       0.1  
Total Change in Interest Income     38.5       7.2       45.7  
             
Change in Interest Expense:            
Interest-Bearing Deposits            
Demand     0.1       0.7       0.8  
Savings     0.2       1.9       2.1  
Time     2.2       4.6       6.8  
Total Interest-Bearing Deposits     2.5       7.2       9.7  
Short-Term Borrowings     -       0.2       0.2  
Securities Sold Under Agreements to Repurchase     (2.5 )     (1.3 )     (3.8 )
Other Debt     0.3       (0.2 )     0.1  
Total Change in Interest Expense     0.3       5.9       6.2  
             
Change in Net Interest Income   $ 38.2     $ 1.3     $ 39.5  
             
1 The change in interest income and expense not solely due to changes in volume or rate has been allocated on a pro-rata basis to the volume and rate columns.
2 Comprised of other consumer revolving credit, installment, and consumer lease financing.
                     
Bank of Hawaii Corporation and Subsidiaries                    
Salaries and Benefits   Table 9
    Three Months Ended   Year Ended
    December 31,   September 30,   December 31,   December 31,
(dollars in thousands)   2017   2017   2016   2017   2016
Salaries   $ 31,132   $ 31,224   $ 29,382   $ 122,334   $ 116,721
Incentive Compensation     7,078     4,857     5,784     22,834     23,409
Share-Based Compensation     3,040     1,962     4,126     10,184     12,150
Commission Expense     1,427     1,439     1,955     6,493     7,514
Retirement and Other Benefits     4,675     4,279     4,350     18,154     17,262
Payroll Taxes     2,301     2,353     2,044     11,025     10,133
Medical, Dental, and Life Insurance     2,503     3,444     2,908     12,362     13,038
Separation Expense     39     2,068     73     2,150     923
Total Salaries and Benefits   $ 52,195   $ 51,626   $ 50,622   $ 205,536   $ 201,150
                 
Bank of Hawaii Corporation and Subsidiaries                
Loan and Lease Portfolio Balances                   Table 10
    December 31,   September 30,   June 30,   March 31,   December 31,
(dollars in thousands)   2017   2017   2017   2017   2016
Commercial                    
Commercial and Industrial   $ 1,279,347   $ 1,252,238   $ 1,241,953   $ 1,250,006   $ 1,249,791
Commercial Mortgage     2,103,967     2,050,998     2,009,886     1,909,064     1,889,551
Construction     202,253     232,487     248,030     262,660     270,018
Lease Financing     180,931     204,240     205,043     208,765     208,332
Total Commercial     3,766,498     3,739,963     3,704,912     3,630,495     3,617,692
Consumer                    
Residential Mortgage     3,466,773     3,366,634     3,317,179     3,224,206     3,163,073
Home Equity     1,585,455     1,528,353     1,473,123     1,411,489     1,334,163
Automobile     528,474     506,102     484,092     468,078     454,333
Other 1     449,747     432,904     408,307     379,541     380,524
Total Consumer     6,030,449     5,833,993     5,682,701     5,483,314     5,332,093
Total Loans and Leases   $ 9,796,947   $ 9,573,956   $ 9,387,613   $ 9,113,809   $ 8,949,785
                     
Deposits                    
    December 31,   September 30,   June 30,   March 31,   December 31,
(dollars in thousands)     2017     2017     2017     2017     2016
Consumer   $ 7,478,228   $ 7,303,546   $ 7,278,536   $ 7,196,781   $ 6,997,482
Commercial     5,973,763     6,091,800     5,903,639     6,051,721     6,110,189
Public and Other     1,431,977     1,652,814     1,602,474     1,228,031     1,212,569
Total Deposits   $ 14,883,968   $ 15,048,160   $ 14,784,649   $ 14,476,533   $ 14,320,240
                     
1 Comprised of other revolving credit, installment, and lease financing.
 
Bank of Hawaii Corporation and Subsidiaries
Non-Performing Assets and Accruing Loans and Leases Past Due 90 Days or More   Table 11
    December 31,   September 30,   June 30,   March 31,   December 31,
(dollars in thousands)   2017   2017   2017   2017   2016
Non-Performing Assets                    
Non-Accrual Loans and Leases                    
Commercial                    
Commercial and Industrial   $ 448     $ 901     $ 175     $ 228     $ 151  
Commercial Mortgage     1,398       1,425       1,460       973       997  
Total Commercial     1,846       2,326       1,635       1,201       1,148  
Consumer                    
Residential Mortgage     9,243       9,188       9,337       11,756       13,780  
Home Equity     3,991       4,128       3,405       3,517       3,147  
Total Consumer     13,234       13,316       12,742       15,273       16,927  
Total Non-Accrual Loans and Leases     15,080       15,642       14,377       16,474       18,075  
Foreclosed Real Estate     1,040       1,393       1,991       2,529       1,686  
Total Non-Performing Assets   $ 16,120     $ 17,035     $ 16,368     $ 19,003     $ 19,761  
                     
Accruing Loans and Leases Past Due 90 Days or More                    
Commercial                    
Commercial and Industrial   $ -     $ 5     $ -     $ -     $ -  
Total Commercial     -       5       -       -       -  
Consumer                    
Residential Mortgage   $ 2,703     $ 2,933     $ 2,269     $ 2,313     $ 3,127  
Home Equity     1,624       1,392       2,343       1,133       1,457  
Automobile     886       806       539       673       894  
Other 1     1,934       1,528       1,859       1,738       1,592  
Total Consumer     7,147       6,659       7,010       5,857       7,070  
Total Accruing Loans and Leases Past Due 90 Days or More   $ 7,147     $ 6,664     $ 7,010     $ 5,857     $ 7,070  
Restructured Loans on Accrual Status                    
and Not Past Due 90 Days or More   $ 55,672     $ 55,038     $ 53,158     $ 52,965     $ 52,208  
Total Loans and Leases   $ 9,796,947     $ 9,573,956     $ 9,387,613     $ 9,113,809     $ 8,949,785  
                     
Ratio of Non-Accrual Loans and Leases to Total Loans and Leases     0.15 %     0.16 %     0.15 %     0.18 %     0.20 %
                     

Ratio of Non-Performing Assets to Total Loans and Leases and Foreclosed Real Estate

    0.16 %     0.18 %     0.17 %     0.21 %     0.22 %
                     

Ratio of Commercial Non-Performing Assets to Total Commercial Loans and Leases and Commercial Foreclosed Real Estate

    0.05 %     0.06 %     0.04 %     0.03 %     0.03 %
                     

Ratio of Consumer Non-Performing Assets to Total Consumer Loans and Leases and Consumer Foreclosed Real Estate

    0.24 %     0.25 %     0.26 %     0.32 %     0.35 %
                     

Ratio of Non-Performing Assets and Accruing Loans and Leases Past Due 90 Days or More to Total Loans and Leases and Foreclosed Real Estate

    0.24 %     0.25 %     0.25 %     0.27 %     0.30 %
                     
Quarter to Quarter Changes in Non-Performing Assets                    
Balance at Beginning of Quarter   $ 17,035     $ 16,368     $ 19,003     $ 19,761     $ 18,672  
Additions     2,109       2,212       1,572       1,221       2,142  
Reductions                    
Payments     (368 )     (199 )     (497 )     (1,017 )     (252 )
Return to Accrual Status     (1,779 )     (305 )     (1,370 )     (645 )     (653 )
Sales of Foreclosed Real Estate     (353 )     (951 )     (1,883 )     -       (61 )
Charge-offs/Write-downs     (524 )     (90 )     (457 )     (317 )     (87 )
Total Reductions     (3,024 )     (1,545 )     (4,207 )     (1,979 )     (1,053 )
Balance at End of Quarter   $ 16,120     $ 17,035     $ 16,368     $ 19,003     $ 19,761  
                     
1 Comprised of other revolving credit, installment, and lease financing.
 
Bank of Hawaii Corporation and Subsidiaries
Reserve for Credit Losses   Table 12
    Three Months Ended   Year Ended
    December 31,   September 30,   December 31,   December 31,
(dollars in thousands)   2017   2017   2016   2017   2016
Balance at Beginning of Period   $ 113,703     $ 113,175     $ 110,605     $ 110,845       108,952  
Loans and Leases Charged-Off                    
Commercial                    
Commercial and Industrial     (499 )     (611 )     (195 )     (1,408 )     (865 )
Consumer                    
Residential Mortgage     (4 )     (36 )     (335 )     (729 )     (723 )
Home Equity     (221 )     (129 )     (256 )     (995 )     (1,104 )
Automobile     (2,014 )     (1,921 )     (1,720 )     (7,737 )     (6,355 )
Other 1     (3,108 )     (3,521 )     (2,445 )     (12,386 )     (9,462 )
Total Loans and Leases Charged-Off     (5,846 )     (6,218 )     (4,951 )     (23,255 )     (18,509 )
Recoveries on Loans and Leases Previously Charged-Off                    
Commercial                    
Commercial and Industrial     284       597       506       1,482       8,058  
Commercial Mortgage     -       -       11       -       53  
Construction     -       -       -       -       23  
Lease Financing     1       1       1       3       3  
Consumer                    
Residential Mortgage     182       89       154       639       1,151  
Home Equity     498       837       323       2,681       1,776  
Automobile     576       692       459       2,495       2,207  
Other 1     520       530       487       2,128       1,881  
Total Recoveries on Loans and Leases Previously Charged-Off     2,061       2,746       1,941       9,428       15,152  
Net Loans and Leases Charged-Off     (3,785 )     (3,472 )     (3,010 )     (13,827 )     (3,357 )
Provision for Credit Losses     4,250       4,000       3,250       16,900       4,750  
Provision for Unfunded Commitments     -       -       -       250       500  
Balance at End of Period 2   $ 114,168     $ 113,703     $ 110,845     $ 114,168     $ 110,845  
                     
Components                    
Allowance for Loan and Lease Losses   $ 107,346     $ 106,881       104,273     $ 107,346       104,273  
Reserve for Unfunded Commitments     6,822       6,822       6,572       6,822       6,572  
Total Reserve for Credit Losses   $ 114,168     $ 113,703     $ 110,845     $ 114,168     $ 110,845  
                     
Average Loans and Leases Outstanding   $ 9,688,710     $ 9,451,972     $ 8,813,755     $ 9,346,828     $ 8,362,210  
                     
Ratio of Net Loans and Leases Charged-Off to                    
Average Loans and Leases Outstanding (annualized)     0.15 %     0.15 %     0.14 %     0.15 %     0.04 %
Ratio of Allowance for Loan and Lease Losses to Loans and Leases Outstanding     1.10 %     1.12 %     1.17 %     1.10 %     1.17 %
                     
1 Comprised of other revolving credit, installment, and lease financing.
2 Included in this analysis is activity related to the Company's reserve for unfunded commitments, which is separately recorded in other liabilities in the Consolidated Statements of Condition.
                     
Bank of Hawaii Corporation and Subsidiaries                    
Business Segments Selected Financial Information   Table 13a
            Investment        
            Services and        
    Retail   Commercial   Private   Treasury   Consolidated
(dollars in thousands)   Banking   Banking   Banking   and Other   Total
Three Months Ended December 31, 2017                    
Net Interest Income   $ 65,408     $ 43,932     $ 9,008     $ 422     $ 118,770  
Provision for Credit Losses     3,595       195       (5 )     465       4,250  
Net Interest Income After Provision for Credit Losses     61,813       43,737       9,013       (43 )     114,520  
Noninterest Income     20,910       5,219       13,716       2,010       41,855  
Noninterest Expense     (54,021 )     (19,726 )     (15,982 )     (2,607 )     (92,336 )
Income Before Provision for Income Taxes     28,702       29,230       6,747       (640 )     64,039  
Provision for Income Taxes     (10,222 )     (10,325 )     (2,496 )     1,957       (21,086 )
Net Income   $ 18,480     $ 18,905     $ 4,251     $ 1,317     $ 42,953  
Total Assets as of December 31, 2017   $ 5,936,568     $ 3,742,991     $ 336,455     $ 7,073,038     $ 17,089,052  
                     
Three Months Ended December 31, 2016                    
Net Interest Income   $ 63,169     $ 40,968     $ 6,196     $ (3,240 )   $ 107,093  
Provision for Credit Losses     3,285       (270 )     (5 )     240       3,250  
Net Interest Income After Provision for Credit Losses     59,884       41,238       6,201       (3,480 )     103,843  
Noninterest Income     24,460       5,952       13,764       2,327       46,503  
Noninterest Expense     (52,998 )     (17,926 )     (14,996 )     (3,669 )     (89,589 )
Income Before Provision for Income Taxes     31,346       29,264       4,969       (4,822 )     60,757  
Provision for Income Taxes     (11,109 )     (10,330 )     (1,839 )     6,034       (17,244 )
Net Income   $ 20,237     $ 18,934     $ 3,130     $ 1,212     $ 43,513  
Total Assets as of December 31, 2016   $ 5,342,078     $ 3,565,912     $ 280,410     $ 7,303,967     $ 16,492,367  
                     
Bank of Hawaii Corporation and Subsidiaries    
Business Segments Selected Financial Information   Table 13b
            Investment        
            Services and        
    Retail   Commercial   Private   Treasury   Consolidated
(dollars in thousands)   Banking   Banking   Banking   and Other   Total
Year Ended December 31, 2017                    
Net Interest Income   $ 264,041     $ 171,038     $ 29,693     $ (7,534 )   $ 457,238  
Provision for Credit Losses     14,008       (160 )     (21 )     3,073       16,900  
Net Interest Income After Provision for Credit Losses     250,033       171,198       29,714       (10,607 )     440,338  
Noninterest Income     85,042       21,670       57,105       21,600       185,417  
Noninterest Expense     (209,807 )     (74,209 )     (61,674 )     (12,001 )     (357,691 )
Income Before Provision for Income Taxes     125,268       118,659       25,145       (1,008 )     268,064  
Provision for Income Taxes     (44,545 )     (41,797 )     (9,303 )     12,253       (83,392 )
Net Income   $ 80,723     $ 76,862     $ 15,842     $ 11,245     $ 184,672  
Total Assets as of December 31, 2017   $ 5,936,568     $ 3,742,991     $ 336,455     $ 7,073,038     $ 17,089,052  
                     
                     
Year Ended December 31, 2016                    
Net Interest Income   $ 242,967     $ 156,080     $ 24,714     $ (6,182 )   $ 417,579  
Provision for Credit Losses     10,700       (7,322 )     (23 )     1,395       4,750  
Net Interest Income After Provision for Credit Losses     232,267       163,402       24,737       (7,577 )     412,829  
Noninterest Income     91,824       26,967       57,396       21,156       197,343  
Noninterest Expense     (208,389 )     (70,405 )     (59,782 )     (12,002 )     (350,578 )
Income Before Provision for Income Taxes     115,702       119,964       22,351       1,577       259,594  
Provision for Income Taxes     (41,067 )     (42,667 )     (8,270 )     13,871       (78,133 )
Net Income   $ 74,635     $ 77,297     $ 14,081     $ 15,448     $ 181,461  
Total Assets as of December 31, 2016   $ 5,342,078     $ 3,565,912     $ 280,410     $ 7,303,967     $ 16,492,367  
 
Bank of Hawaii Corporation and Subsidiaries
Selected Quarterly Financial Data   Table 14
    Three Months Ended
    December 31,   September 30,   June 30,   March 31,   December 31,
(dollars in thousands, except per share amounts)   2017   2017   2017   2017   2016
Quarterly Operating Results                    
Interest Income                    
Interest and Fees on Loans and Leases   $ 96,974     $ 94,621     $ 90,909     $ 87,937     $ 86,532  
Income on Investment Securities                    
Available-for-Sale     11,866       11,987       11,835       11,084       10,244  
Held-to-Maturity     21,782       20,334       19,918       19,706       19,213  
Deposits     3       5       2       5       2  
Funds Sold     717       1,579       696       890       795  
Other     271       235       208       230       281  
Total Interest Income     131,613       128,761       123,568       119,852       117,067  
Interest Expense                    
Deposits     6,980       6,663       4,998       3,691       3,448  
Securities Sold Under Agreements to Repurchase     4,664       4,664       5,079       5,185       5,406  
Funds Purchased     81       -       39       3       3  
Short-Term Borrowings     -       -       64       -       -  
Other Debt     1,118       1,117       1,109       1,101       1,117  
Total Interest Expense     12,843       12,444       11,289       9,980       9,974  
Net Interest Income     118,770       116,317       112,279       109,872       107,093  
Provision for Credit Losses     4,250       4,000       4,250       4,400       3,250  
Net Interest Income After Provision for Credit Losses     114,520       112,317       108,029       105,472       103,843  
Noninterest Income                    
Trust and Asset Management     11,105       11,050       11,796       11,479       11,232  
Mortgage Banking     2,593       3,237       3,819       3,300       6,256  
Service Charges on Deposit Accounts     8,053       8,188       8,009       8,325       8,537  
Fees, Exchange, and Other Service Charges     13,784       13,764       13,965       13,332       13,731  
Investment Securities Gains (Losses), Net     (617 )     (566 )     (520 )     12,133       (337 )
Annuity and Insurance     1,273       1,429       2,161       1,995       1,457  
Bank-Owned Life Insurance     1,609       1,861       1,550       1,497       1,551  
Other     4,055       3,447       4,456       3,855       4,076  
Total Noninterest Income     41,855       42,410       45,236       55,916       46,503  
Noninterest Expense                    
Salaries and Benefits     52,195       51,626       50,113       51,602       50,622  
Net Occupancy     8,510       7,727       8,131       8,168       7,581  
Net Equipment     5,454       5,417       5,706       5,501       5,191  
Data Processing     4,310       3,882       3,881       3,410       3,665  
Professional Fees     3,266       3,044       2,592       2,779       2,990  
FDIC Insurance     2,253       2,107       2,097       2,209       2,015  
Other     16,348       14,795       15,669       14,899       17,525  
Total Noninterest Expense     92,336       88,598       88,189       88,568       89,589  
Income Before Provision for Income Taxes     64,039       66,129       65,076       72,820       60,757  
Provision for Income Taxes     21,086       20,248       20,414       21,644       17,244  
Net Income   $ 42,953     $ 45,881     $ 44,662     $ 51,176     $ 43,513  
                     
Basic Earnings Per Share   $ 1.02     $ 1.09     $ 1.05     $ 1.21     $ 1.03  
Diluted Earnings Per Share   $ 1.01     $ 1.08     $ 1.05     $ 1.20     $ 1.02  
                     
Balance Sheet Totals                    
Loans and Leases   $ 9,796,947     $ 9,573,956     $ 9,387,613     $ 9,113,809     $ 8,949,785  
Total Assets     17,089,052       17,268,302       16,981,292       16,664,215       16,492,367  
Total Deposits     14,883,968       15,048,160       14,784,649       14,476,533       14,320,240  
Total Shareholders' Equity     1,231,868       1,227,893       1,213,757       1,193,137       1,161,537  
                     
Performance Ratios                    
Return on Average Assets    

1.00

%

 

 

1.07

%

 

 

1.09

%

 

 

1.26

%

 

 

1.07

%

Return on Average Shareholders' Equity     13.85       14.89       14.87       17.63       14.90  
Efficiency Ratio 1     57.49       55.82       55.99       53.42       58.33  
Net Interest Margin 2     2.98       2.92       2.92       2.89       2.83  
                     
1 Efficiency ratio is defined as noninterest expense divided by total revenue (net interest income and noninterest income).
2 Net interest margin is defined as net interest income, on a taxable-equivalent basis, as a percentage of average earning assets.
 
Bank of Hawaii Corporation and Subsidiaries
Hawaii Economic Trends     Table 15
    Eleven Months Ended   Year Ended
($ in millions; jobs in thousands)   November 30, 2017   December 31, 2016   December 31, 2015
Hawaii Economic Trends                                
State General Fund Revenues 1   $ 5,929.0 3.8 %   $ 6,215.4     3.6 %   $ 5,998.6     8.4   %
General Excise and Use Tax Revenue 1   $ 3,069.2 3.7 %   $ 3,205.7     2.0 %   $ 3,141.5     5.4   %
Jobs 2     670.3         671.7             657.7        
                                 
                  November 30,   December 31,
(spot rates)                 2017   2016   2015
Unemployment 3                                
Statewide, seasonally adjusted                 2.0 %     2.9 %   3.2   %
                                 
Oahu                 1.9       2.4     2.7    
Island of Hawaii                 2.4       3.1     3.7    
Maui                 2.1       2.7     3.1    
Kauai                 2.0       2.8     3.5    
                                 
            December 31,
(percentage change, except months of inventory)     2017   2016   2015   2014
Housing Trends (Single Family Oahu) 4                                
Median Home Price             2.7 %   5.0 %     3.7 %   3.8   %
Home Sales Volume (units)             6.3 %   6.5 %     5.2 %   (0.8 ) %
Months of Inventory             2.1     2.5       2.6     2.6    
                                 
            Monthly Visitor Arrivals,   Percentage Change
(in thousands)           Not Seasonally Adjusted   from Previous Year
Tourism 5                                
November 30, 2017                 748.3           7.3    
October 31, 2017                 737.0           2.8    
September 30, 2017                 701.8           5.1    
August 31, 2017                 818.6           4.8    
July 31, 2017                 891.9           6.8    
June 30, 2017                 835.9           4.5    
May 31, 2017                 751.2           4.5    
April 30, 2017                 753.0           7.5    
March 31, 2017                 802.8           2.1    
February 28, 2017                 700.4           1.7    
January 31, 2017                 756.3           4.9    
December 31, 2016                 828.5           3.6    
November 30, 2016                 697.1           4.7    
October 31, 2016                 717.0           4.3    
September 30, 2016                 667.6           3.1    
August 31, 2016                 780.7           3.1    
July 31, 2016                 835.4           2.1    
June 30, 2016                 800.3           4.2    
May 31, 2016                 718.9           1.3    
April 30, 2016                 700.6           3.4    
March 31, 2016                 786.3           0.8    
February 29, 2016                 688.8           4.1    
January 31, 2016                 721.0           6.2    
                                 
1 Source: Hawaii Department of Business, Economic Development & Tourism
2 Source: U. S. Bureau of Labor
3 Source: Hawaii Department of Labor and Industrial Relations, County jobs data not seasonally adjusted.
4 Source: Honolulu Board of REALTORS
5 Source: Hawaii Tourism Authority
Note: Certain prior period information has been revised.

 

Source: Bank of Hawaii Corporation

Bank of Hawaii Corporation
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or
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