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Bank of Hawaii Corporation First Quarter 2020 Financial Results
  • Diluted Earnings Per Share $0.87
  • Net Income $34.7 Million
  • Company Adopts CECL and Records $33.6 Million Provision
  • Board of Directors Approves Dividend of $0.67 Per Share

HONOLULU,--(BUSINESS WIRE)--Apr. 20, 2020-- Bank of Hawaii Corporation (NYSE: BOH) today reported diluted earnings per share of $0.87 for the first quarter of 2020, a decrease from diluted earnings per share of $1.45 in the previous quarter and $1.43 in the same quarter last year. Net income for the first quarter of 2020 was $34.7 million compared with net income of $58.1 million in the fourth quarter of 2019 and $58.8 million in the first quarter of 2019. The decrease from the previous quarter is the result of an increased provision expense of $33.6 million compared with $4.8 million in the previous quarter and $3.0 million in the first quarter last year. The increase in the provision was related to changes in economic conditions driven by the impact of COVID-19 and considered the effect of significantly slower economic growth and higher unemployment in Hawaii partially offset by the benefits of government stimulus programs.

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"We were pleased with our overall financial performance during the first quarter of 2020 despite the challenges related to COVID-19," said Peter S. Ho, Chairman, President, and CEO. “Our strong balance sheet includes a high-quality securities portfolio, good asset quality, high levels of liquidity, and a solid capital base that will allow us to provide the financial support to our customers and community needed to emerge from the COVID-19 crisis.”

The return on average assets for the first quarter of 2020 was 0.77 percent compared with 1.29 percent during the previous quarter and 1.38 percent in the same quarter last year. The return on average equity for the first quarter of 2020 was 10.64 percent compared with 17.84 percent in the fourth quarter of 2019 and 18.81 percent in the first quarter of 2019.

Financial Highlights

Net interest income, on a taxable-equivalent basis, for the first quarter of 2020 was $126.3 million, an increase of $2.1 million from $124.2 million in the fourth quarter of 2019 and up $0.5 million from $125.8 million in the first quarter of 2019. The net interest margin was 2.96 percent for the first quarter of 2020, up 1 basis point compared with 2.95 percent in the previous quarter and down 16 basis points from 3.12 percent in the first quarter last year. Analyses of the changes in net interest income are included in Tables 8a and 8b.

Results for the first quarter of 2020 included a provision for credit losses of $33.6 million. The provision under CECL is reflective of the Company’s credit risk profile and the future economic outlook and forecasts. Upon adoption of CECL, the Company recorded a $1.7 million decrease to the allowance for loan and lease losses on January 1, 2020 that reflected a generally stable asset quality and economic outlook. At that time, the COVID-19 pandemic was not yet estimated to have the significant impact that ultimately transpired in the latter half of the current quarter.

Noninterest income was $46.1 million in the first quarter of 2020, a decrease of $1.6 million compared with $47.7 million in the fourth quarter of 2019 and an increase of $2.4 million compared with $43.7 million in the first quarter of 2019. There were no significant items in noninterest income during the first quarter of 2020. Noninterest income in the fourth quarter of 2019 included a gain of $3.8 million related to the early buyout of a leveraged lease. Noninterest income in the first quarter of 2019 included a $1.4 million commission related to insurance products offered through a third-party administrator. Adjusted for significant items, the increase in noninterest income compared with the fourth quarter of 2019 and the first quarter last year was largely due to significant growth in customer derivative activity.

Noninterest expense was $96.3 million in the first quarter of 2020, an increase of $3.2 million compared with $93.1 million in the fourth quarter of 2019 and an increase of $3.2 million from $93.1 million in the same quarter last year. Noninterest expense in the first quarter of 2020 included seasonal payroll expenses of approximately $3.1 million and severance expenses of $4.7 million that were partially offset by the elimination of corporate incentive accruals. There were no significant items in noninterest expense during the fourth quarter of 2019. Noninterest expense in the first quarter of 2019 included seasonal payroll expenses of approximately $2.7 million. An analysis of noninterest expenses related to salaries and benefits is included in Table 9.

The efficiency ratio during the first quarter of 2020 was 55.96 percent compared with 54.26 percent in the previous quarter and 55.22 percent in the same quarter last year.

The effective tax rate for the first quarter of 2020 was 17.68 percent compared with 21.15 percent in the previous quarter and 18.85 percent during the same quarter last year. There were no significant items impacting the tax rate during the first quarter of 2020 or the fourth quarter of 2019. The first quarter of 2019 included tax benefits of $1.9 million related to a commercial customer’s exercise of an early-buy-out option on a leveraged lease.

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

Asset Quality

The Company’s asset quality remained stable during the first quarter of 2020. Total non-performing assets were $20.6 million at March 31, 2020, compared with $20.1 million at December 31, 2019 and $17.9 million at March 31, 2019. As a percentage of total loans and leases, including foreclosed real estate, non-performing assets were 0.18 percent at the end of the first quarter of 2020, compared with 0.18 percent at the end of the fourth quarter of 2019 and 0.17 percent at the end of the first quarter last year.

Accruing loans and leases past due 90 days or more were $8.5 million at March 31, 2020, compared with $8.4 million at December 31, 2019 and $6.1 million at March 31, 2019. Restructured loans not included in non-accrual loans or accruing loans past due 90 days or more were $61.4 million at March 31, 2019 compared with $63.1 million at December 31, 2019 and $48.6 million at March 31, 2019. More information on non-performing assets and accruing loans and leases past due 90 days or more is presented in Table 11.

Net loans and leases charged off during the first quarter of 2020 were $3.7 million or 0.14 percent annualized of total average loans and leases outstanding. Loan and lease charge-offs of $7.2 million during the quarter were partially offset by recoveries of $3.4 million. Net charge-offs during the fourth quarter of 2019 were $3.7 million or 0.13 percent annualized of total average loans and leases outstanding and were comprised of $6.2 million in charge-offs partially offset by recoveries of $2.6 million. Net charge-offs during the first quarter of 2019 were $3.7 million or 0.14 percent annualized of total average loans and leases outstanding and were comprised of $6.8 million in charge-offs partially offset by recoveries of $3.2 million.

The allowance for credit losses was $138.2 million at March 31, 2020, an increase from $110.0 million at December 31, 2019 and $106.0 million at March 31, 2019. The ratio of the allowance for credit losses to total loans and leases outstanding was 1.22 percent at March 31, 2020 compared with 1.00 percent at December 31, 2019 and 1.01 percent at March 31, 2019. The reserve for unfunded commitments was $3.3 million at March 31, 2020 compared with $6.8 million at December 31, 2019 and at March 31, 2019. Details of loan and lease charge-offs, recoveries, and components of the total reserve for credit losses are summarized in Table 12.

Other Financial Highlights

Total assets increased to $18.54 billion at March 31, 2020 compared with $18.10 billion at December 31, 2019 and $17.45 billion at March 31, 2019. Average total assets were $18.22 billion during the first quarter of 2020, an increase from $17.82 billion during the fourth quarter of 2019 and $17.24 billion in the first quarter of 2019.

The investment securities portfolio was $5.69 billion at March 31, 2020 compared with $5.66 billion at December 31, 2019 and $5.53 billion at March 31, 2019. The portfolio at March 31, 2020 remains largely comprised of securities issued by U.S. government agencies and includes $3.00 billion in securities held to maturity and $2.68 billion in securities available for sale.

Total loans and leases were $11.35 billion at March 31, 2020, an increase of 3.3 percent from $10.99 billion at December 31, 2019 and up 7.6 percent from $10.55 billion at March 31, 2019. Average total loans were $11.06 billion during the first quarter of 2020, an increase from $10.88 billion during the fourth quarter of 2019 and $10.47 billion in the first quarter of 2019.

The commercial portfolio grew to $4.53 billion at the end of the first quarter of 2020, an increase of 7.5 percent from $4.21 billion at the end of the fourth quarter of 2019 and up 13.3 percent from $4.00 billion at the end of the first quarter last year. Consumer loans grew to $6.82 billion at March 31, 2020, an increase of 0.7 percent from $6.78 billion at the end of the fourth quarter of 2019 and up 4.2 percent from consumer loans of $6.55 billion at the end of the first quarter last year.

Total deposits were $16.06 billion at March 31, 2020, an increase of 1.7 percent from $15.78 billion at December 31, 2019 and up 5.2 percent from total deposits of $15.27 billion at March 31, 2019. Average total deposits were $15.82 billion during the first quarter of 2020, an increase from $15.44 billion during the fourth quarter of 2019 and $14.97 billion in the first quarter of 2019.

Consumer deposits increased to $8.29 billion at March 31, 2020, an increase of 2.2 percent from $8.12 billion at the end of the fourth quarter of 2019 and up 4.4 percent from $7.94 billion at the end of the first quarter last year. Commercial deposits increased to $6.36 billion at the end of the first quarter of 2020, an increase of 0.5 percent from $6.32 billion at the end of the fourth quarter of 2019 and up 3.2 percent from $6.16 billion at the end of the first quarter last year. Other deposits, including public funds, were $1.40 billion at March 31, 2020, an increase of 4.5 percent from $1.34 billion at December 31, 2019 and up 20.8 percent from $1.16 billion at March 31, 2019. Deposit balances are summarized in Tables 7 and 10.

Total shareholders’ equity was $1.33 billion at March 31, 2020, up from $1.29 billion at December 31, 2019 and up from $1.27 billion at March 31, 2019. The Tier 1 Capital Ratio was 11.85 percent at March 31, 2020 compared with 12.18 percent at December 31, 2019 and 12.75 percent at March 31, 2019. The Tier 1 Leverage Ratio at March 31, 2020 was 7.14 percent compared with 7.25 percent at December 31, 2019 and 7.46 percent at March 31, 2019.

During the first quarter of 2020, the Company repurchased 156.4 thousand shares of common stock at a total cost of $14.0 million under its share repurchase program. The average cost was $89.32 per share repurchased. Due to the uncertainty related to the COVID-19 pandemic, the Company temporarily suspended the share repurchase program on March 17, 2020. From the beginning of the share repurchase program initiated during July 2001 through March 16, 2020, the Company has repurchased 57.1 million shares and returned over $2.3 billion to shareholders at an average cost of $40.51 per share. Remaining buyback authority under the share repurchase program was $113.1 million at March 31, 2020.

The Company’s Board of Directors declared a quarterly cash dividend of $0.67 per share on the Company’s outstanding shares. The dividend will be payable on June 12, 2020 to shareholders of record at the close of business on May 29, 2020.

Conference Call Information

The Company will review its first quarter financial results today at 2:00 p.m. Eastern Daylight Time (8:00 a.m. Hawaii Time). The conference call will be accessible via teleconference and the call and presentation materials will be available 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, April 20, 2020. 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 conference ID 4256888 when prompted. In addition, a replay will be available on the Company's website, www.boh.com.

Forward-Looking Statements

This news release including supplemental materials 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, 2019, which was filed with the U.S. Securities and Exchange Commission. We have not committed to update forward-looking statements to reflect later events or circumstances.

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

Bank of Hawaii Corporation and Subsidiaries                  
Financial Highlights               Table 1
   

Three Months Ended

   

March 31,

 

December 31,

 

March 31,

(dollars in thousands, except per share amounts)  

2020

 

2019

 

2019

For the Period:                  
Operating Results                  
Net Interest Income  

$

125,966

   

$

123,885

   

$

124,837

 
Provision for Credit Losses  

 

33,600

   

 

4,750

   

 

3,000

 
Total Noninterest Income  

 

46,149

   

 

47,702

   

 

43,679

 
Total Noninterest Expense  

 

96,312

   

 

93,096

   

 

93,057

 
Net Income  

 

34,742

   

 

58,143

   

 

58,799

 
Basic Earnings Per Share  

 

0.88

   

 

1.46

   

 

1.44

 
Diluted Earnings Per Share  

 

0.87

   

 

1.45

   

 

1.43

 
Dividends Declared Per Share  

 

0.67

   

 

0.67

   

 

0.62

 
                   
Performance Ratios                  
Return on Average Assets  

 

0.77

%

 

 

1.29

%

 

 

1.38

%

Return on Average Shareholders' Equity  

 

10.64

   

 

17.84

   

 

18.81

 
Efficiency Ratio 1  

 

55.96

   

 

54.26

   

 

55.22

 
Net Interest Margin 2  

 

2.96

   

 

2.95

   

 

3.12

 
Dividend Payout Ratio 3  

 

76.14

   

 

45.89

   

 

43.06

 
Average Shareholders' Equity to Average Assets  

 

7.21

   

 

7.26

   

 

7.35

 
                   
Average Balances                  
Average Loans and Leases  

$

11,060,707

   

$

10,878,672

   

$

10,467,321

 
Average Assets  

 

18,222,602

   

 

17,821,004

   

 

17,236,059

 
Average Deposits  

 

15,817,745

   

 

15,441,097

   

 

14,971,404

 
Average Shareholders' Equity  

 

1,313,848

   

 

1,292,930

   

 

1,267,438

 
                   
Per Share of Common Stock                  
Book Value  

$

33.20

   

$

32.14

   

$

30.91

 
Tangible Book Value  

 

32.41

   

 

31.35

   

 

30.14

 
Market Value                  
Closing  

 

54.91

   

 

95.16

   

 

78.87

 
High  

 

95.53

   

 

95.68

   

 

83.94

 
Low  

 

46.70

   

 

81.29

   

 

66.54

 
             
   

March 31,

 

December 31,

 

March 31,

   

2020

 

2019

 

2019

As of Period End:                  
Balance Sheet Totals                  
Loans and Leases  

$

11,352,780

   

$

10,990,892

   

$

10,548,609

 
Total Assets  

 

18,542,233

   

 

18,095,496

   

 

17,446,413

 
Total Deposits  

 

16,055,361

   

 

15,784,482

   

 

15,267,310

 
Other Debt  

 

60,545

   

 

85,565

   

 

110,624

 
Total Shareholders' Equity  

 

1,327,929

   

 

1,286,832

   

 

1,269,690

 
                   
Asset Quality                  
Non-Performing Assets  

$

20,604

   

$

20,117

   

$

17,925

 
Allowance for Credit Losses  

 

138,150

   

 

110,027

   

 

106,023

 
Allowance to Loans and Leases Outstanding  

 

1.22

%

 

 

1.00

%

 

 

1.01

%

                   
Capital Ratios 4                  
Common Equity Tier 1 Capital Ratio  

 

11.85

%

 

 

12.18

%

 

 

12.75

%

Tier 1 Capital Ratio  

 

11.85

   

 

12.18

   

 

12.75

 
Total Capital Ratio  

 

13.10

   

 

13.28

   

 

13.87

 
Tier 1 Leverage Ratio  

 

7.14

   

 

7.25

   

 

7.46

 
Total Shareholders' Equity to Total Assets  

 

7.16

   

 

7.11

   

 

7.28

 
Tangible Common Equity to Tangible Assets 5  

 

7.00

   

 

6.95

   

 

7.11

 
Tangible Common Equity to Risk-Weighted Assets 5  

 

11.85

   

 

11.85

   

 

12.28

 
                   
Non-Financial Data                  
Full-Time Equivalent Employees  

 

2,094

   

 

2,124

   

 

2,112

 
Branches  

 

67

   

 

68

   

 

69

 
ATMs  

 

382

   

 

387

   

 

385

 
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 The Company has elected to apply the modified transition provision related to the impact of the CECL accounting standard on regulatory capital, as provided by the US banking agencies’ March 2020 interim final rule.
5 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
   

March 31,

 

December 31,

 

March 31,

(dollars in thousands)  

2020

 

2019

 

2019

             
Total Shareholders' Equity  

$

1,327,929

 

 

$

1,286,832

 

 

$

1,269,690

 

Less:Goodwill  

 

31,517

 

 

 

31,517

 

 

 

31,517

 

Tangible Common Equity  

$

1,296,412

 

 

$

1,255,315

 

 

$

1,238,173

 

             
Total Assets  

$

18,542,233

 

 

$

18,095,496

 

 

$

17,446,413

 

Less:Goodwill  

 

31,517

 

 

 

31,517

 

 

 

31,517

 

Tangible Assets  

$

18,510,716

 

 

$

18,063,979

 

 

$

17,414,896

 

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

$

10,941,909

 

 

$

10,589,061

 

 

$

10,079,858

 

             
Total Shareholders' Equity to Total Assets  

 

7.16

%

 

 

7.11

%

 

 

7.28

%

Tangible Common Equity to Tangible Assets (Non-GAAP)  

 

7.00

%

 

 

6.95

%

 

 

7.11

%

             
Tier 1 Capital Ratio  

 

11.85

%

 

 

12.18

%

 

 

12.75

%

Tangible Common Equity to Risk-Weighted Assets (Non-GAAP)  

 

11.85

%

 

 

11.85

%

 

 

12.28

%

Bank of Hawaii Corporation and Subsidiaries            
Consolidated Statements of Income           Table 3
   

Three Months Ended

   

March 31,

 

December 31,

 

March 31,

(dollars in thousands, except per share amounts)  

2020

 

2019

 

2019

Interest Income            
Interest and Fees on Loans and Leases  

$

108,210

 

 

$

109,223

 

 

$

108,511

 

Income on Investment Securities            
Available-for-Sale  

 

16,711

 

 

 

16,158

 

 

 

13,432

 

Held-to-Maturity  

 

19,252

 

 

 

18,750

 

 

 

21,921

 

Deposits  

 

9

 

 

 

8

 

 

 

15

 

Funds Sold  

 

546

 

 

 

723

 

 

 

1,444

 

Other  

 

218

 

 

 

239

 

 

 

319

 

Total Interest Income  

 

144,946

 

 

 

145,101

 

 

 

145,642

 

Interest Expense            
Deposits  

 

14,260

 

 

 

16,407

 

 

 

15,284

 

Securities Sold Under Agreements to Repurchase  

 

4,025

 

 

 

4,071

 

 

 

4,571

 

Funds Purchased  

 

72

 

 

 

25

 

 

 

157

 

Short-Term Borrowings  

 

39

 

 

 

-

 

 

 

36

 

Other Debt  

 

584

 

 

 

713

 

 

 

757

 

Total Interest Expense  

 

18,980

 

 

 

21,216

 

 

 

20,805

 

Net Interest Income  

 

125,966

 

 

 

123,885

 

 

 

124,837

 

Provision for Credit Losses  

 

33,600

 

 

 

4,750

 

 

 

3,000

 

Net Interest Income After Provision for Credit Losses  

 

92,366

 

 

 

119,135

 

 

 

121,837

 

Noninterest Income            
Trust and Asset Management  

 

10,915

 

 

 

11,157

 

 

 

10,761

 

Mortgage Banking  

 

2,695

 

 

 

3,199

 

 

 

2,287

 

Service Charges on Deposit Accounts  

 

7,451

 

 

 

7,835

 

 

 

7,364

 

Fees, Exchange, and Other Service Charges  

 

13,200

 

 

 

14,533

 

 

 

14,208

 

Investment Securities Gains (Losses), Net  

 

(970

)

 

 

(906

)

 

 

(835

)

Annuity and Insurance  

 

928

 

 

 

1,272

 

 

 

2,578

 

Bank-Owned Life Insurance  

 

1,580

 

 

 

1,879

 

 

 

1,710

 

Other  

 

10,350

 

 

 

8,733

 

 

 

5,606

 

Total Noninterest Income  

 

46,149

 

 

 

47,702

 

 

 

43,679

 

Noninterest Expense            
Salaries and Benefits  

 

54,463

 

 

 

51,664

 

 

 

56,586

 

Net Occupancy  

 

8,955

 

 

 

8,824

 

 

 

7,594

 

Net Equipment  

 

8,456

 

 

 

7,930

 

 

 

6,833

 

Data Processing  

 

4,788

 

 

 

4,828

 

 

 

4,526

 

Professional Fees  

 

3,208

 

 

 

3,257

 

 

 

2,453

 

FDIC Insurance  

 

1,456

 

 

 

1,376

 

 

 

1,269

 

Other  

 

14,986

 

 

 

15,217

 

 

 

13,796

 

Total Noninterest Expense  

 

96,312

 

 

 

93,096

 

 

 

93,057

 

Income Before Provision for Income Taxes  

 

42,203

 

 

 

73,741

 

 

 

72,459

 

Provision for Income Taxes  

 

7,461

 

 

 

15,598

 

 

 

13,660

 

Net Income  

$

34,742

 

 

$

58,143

 

 

$

58,799

 

Basic Earnings Per Share  

$

0.88

 

 

$

1.46

 

 

$

1.44

 

Diluted Earnings Per Share  

$

0.87

 

 

$

1.45

 

 

$

1.43

 

Dividends Declared Per Share  

$

0.67

 

 

$

0.67

 

 

$

0.62

 

Basic Weighted Average Shares  

 

39,681,611

 

 

 

39,880,619

 

 

 

40,938,318

 

Diluted Weighted Average Shares  

 

39,916,986

 

 

 

40,179,016

 

 

 

41,213,453

 

Bank of Hawaii Corporation and Subsidiaries            
Consolidated Statements of Comprehensive Income           Table 4
   

Three Months Ended

   

March 31,

 

December 31,

 

March 31,

(dollars in thousands)  

2020

 

2019

 

2019

Net Income  

$

34,742

 

$

58,143

 

 

$

58,799

Other Comprehensive Income (Loss), Net of Tax:            
Net Unrealized Gains (Losses) on Investment Securities  

 

41,559

 

 

(5,856

)

 

 

6,919

Defined Benefit Plans  

 

374

 

 

(3,482

)

 

 

246

Other Comprehensive Income (Loss)  

 

41,933

 

 

(9,338

)

 

 

7,165

Comprehensive Income  

$

76,675

 

$

48,805

 

 

$

65,964

Bank of Hawaii Corporation and Subsidiaries            
Consolidated Statements of Condition           Table 5
    March 31,   December 31,   March 31,
(dollars in thousands)  

2020

 

2019

 

2019

Assets            
Interest-Bearing Deposits in Other Banks  

$

6,346

 

 

$

4,979

 

 

$

3,550

 

Funds Sold  

 

96,898

 

 

 

254,574

 

 

 

243,867

 

Investment Securities            
Available-for-Sale  

 

2,681,049

 

 

 

2,619,003

 

 

 

1,859,256

 

Held-to-Maturity (Fair Value of $3,104,020; $3,062,882; and $3,637,496)  

 

3,004,139

 

 

 

3,042,294

 

 

 

3,668,811

 

Loans Held for Sale  

 

20,789

 

 

 

39,062

 

 

 

17,909

 

Loans and Leases  

 

11,352,780

 

 

 

10,990,892

 

 

 

10,548,609

 

Allowance for Credit Losses  

 

(138,150

)

 

 

(110,027

)

 

 

(106,023

)

Net Loans and Leases  

 

11,214,630

 

 

 

10,880,865

 

 

 

10,442,586

 

Total Earning Assets  

 

17,023,851

 

 

 

16,840,777

 

 

 

16,235,979

 

Cash and Due from Banks  

 

453,465

 

 

 

299,105

 

 

 

293,871

 

Premises and Equipment, Net  

 

196,228

 

 

 

188,388

 

 

 

159,344

 

Operating Lease Right-of-Use Assets  

 

98,695

 

 

 

100,838

 

 

 

104,166

 

Accrued Interest Receivable  

 

46,996

 

 

 

46,476

 

 

 

52,820

 

Foreclosed Real Estate  

 

2,506

 

 

 

2,737

 

 

 

3,225

 

Mortgage Servicing Rights  

 

22,537

 

 

 

25,022

 

 

 

24,149

 

Goodwill  

 

31,517

 

 

 

31,517

 

 

 

31,517

 

Bank-Owned Life Insurance  

 

289,536

 

 

 

287,962

 

 

 

285,155

 

Other Assets  

 

376,902

 

 

 

272,674

 

 

 

256,187

 

Total Assets  

$

18,542,233

 

 

$

18,095,496

 

 

$

17,446,413

 

             
Liabilities            
Deposits            
Noninterest-Bearing Demand  

$

4,378,918

 

 

$

4,489,525

 

 

$

4,595,915

 

Interest-Bearing Demand  

 

3,261,101

 

 

 

3,127,205

 

 

 

2,961,444

 

Savings  

 

6,670,530

 

 

 

6,365,321

 

 

 

5,946,881

 

Time  

 

1,744,812

 

 

 

1,802,431

 

 

 

1,763,070

 

Total Deposits  

 

16,055,361

 

 

 

15,784,482

 

 

 

15,267,310

 

Funds Purchased  

 

75,000

 

 

 

-

 

 

 

-

 

Short-Term Borrowings  

 

75,000

 

 

 

-

 

 

 

-

 

Securities Sold Under Agreements to Repurchase  

 

603,206

 

 

 

604,306

 

 

 

504,299

 

Other Debt  

 

60,545

 

 

 

85,565

 

 

 

110,624

 

Operating Lease Liabilities  

 

106,180

 

 

 

108,210

 

 

 

111,230

 

Retirement Benefits Payable  

 

44,124

 

 

 

44,504

 

 

 

40,343

 

Accrued Interest Payable  

 

7,932

 

 

 

8,040

 

 

 

8,474

 

Taxes Payable and Deferred Taxes  

 

32,793

 

 

 

16,085

 

 

 

29,935

 

Other Liabilities  

 

154,163

 

 

 

157,472

 

 

 

104,508

 

Total Liabilities  

 

17,214,304

 

 

 

16,808,664

 

 

 

16,176,723

 

Shareholders' Equity            
Common Stock ($.01 par value; authorized 500,000,000 shares;            
issued / outstanding: March 31, 2020 - 58,251,725 / 39,996,510;            
December 31, 2019 - 58,166,910 / 40,039,695;            
and March 31, 2019 - 58,166,535 / 41,078,688)  

 

579

 

 

 

579

 

 

 

578

 

Capital Surplus  

 

584,392

 

 

 

582,566

 

 

 

574,594

 

Accumulated Other Comprehensive Loss  

 

10,821

 

 

 

(31,112

)

 

 

(43,878

)

Retained Earnings  

 

1,773,607

 

 

 

1,761,415

 

 

 

1,674,264

 

Treasury Stock, at Cost (Shares: March 31, 2020 - 18,255,215;            
December 31, 2019 - 18,127,215; and March 31, 2019 - 17,087,847)  

 

(1,041,470

)

 

 

(1,026,616

)

 

 

(935,868

)

Total Shareholders' Equity  

 

1,327,929

 

 

 

1,286,832

 

 

 

1,269,690

 

Total Liabilities and Shareholders' Equity  

$

18,542,233

 

 

$

18,095,496

 

 

$

17,446,413

 

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, 2019  

40,039,695

 

 

$

579

 

$

582,566

 

$

(31,112

)

 

$

1,761,415

 

 

$

(1,026,616

)

 

$

1,286,832

 

Net Income  

-

 

 

 

-

 

 

-

 

 

-

 

 

 

34,742

 

 

 

-

 

 

 

34,742

 

Other Comprehensive Income  

-

 

 

 

-

 

 

-

 

 

41,933

 

 

 

-

 

 

 

-

 

 

 

41,933

 

Cumulative Change in Accounting Principle  

-

 

 

 

-

 

 

-

 

 

-

 

 

 

3,632

 

 

 

-

 

 

 

3,632

 

Share-Based Compensation  

-

 

 

 

-

 

 

1,497

 

 

-

 

 

 

-

 

 

 

-

 

 

 

1,497

 

Common Stock Issued under Purchase and Equity                            
Compensation Plans  

154,091

 

 

 

-

 

 

329

 

 

-

 

 

 

653

 

 

 

2,779

 

 

 

3,761

 

Common Stock Repurchased  

(197,276

)

 

 

-

 

 

-

 

 

-

 

 

 

-

 

 

 

(17,633

)

 

 

(17,633

)

Cash Dividends Declared ($0.67 per share)  

-

 

 

 

-

 

 

-

 

 

-

 

 

 

(26,835

)

 

 

-

 

 

 

(26,835

)

Balance as of March 31, 2020  

39,996,510

 

 

$

579

 

$

584,392

 

$

10,821

 

 

$

1,773,607

 

 

$

(1,041,470

)

 

$

1,327,929

 

                             
Balance as of December 31, 2018  

41,499,898

 

 

$

577

 

$

571,704

 

$

(51,043

)

 

$

1,641,314

 

 

$

(894,352

)

 

$

1,268,200

 

Net Income  

-

 

 

 

-

 

 

-

 

 

-

 

 

 

58,799

 

 

 

-

 

 

 

58,799

 

Other Comprehensive Income  

-

 

 

 

-

 

 

-

 

 

7,165

 

 

 

-

 

 

 

-

 

 

 

7,165

 

Share-Based Compensation  

-

 

 

 

-

 

 

2,274

 

 

-

 

 

 

-

 

 

 

-

 

 

 

2,274

 

Common Stock Issued under Purchase and Equity                            
Compensation Plans  

131,529

 

 

 

1

 

 

616

 

 

-

 

 

 

(203

)

 

 

1,673

 

 

 

2,087

 

Common Stock Repurchased  

(552,739

)

 

 

-

 

 

-

 

 

-

 

 

 

-

 

 

 

(43,189

)

 

 

(43,189

)

Cash Dividends Declared ($0.62 per share)  

-

 

 

 

-

 

 

-

 

 

-

 

 

 

(25,646

)

 

 

-

 

 

 

(25,646

)

Balance as of March 31, 2019  

41,078,688

 

 

$

578

 

$

574,594

 

$

(43,878

)

 

$

1,674,264

 

 

$

(935,868

)

 

$

1,269,690

 

Bank of Hawaii Corporation and Subsidiaries
Average Balances and Interest Rates - Taxable-Equivalent Basis   Table 7
   

Three Months Ended

 

Three Months Ended

 

Three Months Ended

   

March 31, 2020

 

December 31, 2019

 

March 31, 2019

   

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  

$

1.4

 

$

-

 

2.36

%

 

$

3.4

 

$

-

 

0.90

%

 

$

3.0

 

$

-

 

2.05

%

Funds Sold  

 

152.8

 

 

0.6

 

1.41

   

 

177.7

 

 

0.7

 

1.59

   

 

241.6

 

 

1.5

 

2.39

 
Investment Securities                                          
Available-for-Sale                                          
Taxable  

 

2,702.4

 

 

16.4

 

2.43

   

 

2,578.3

 

 

15.9

 

2.46

   

 

1,595.8

 

 

11.5

 

2.90

 
Non-Taxable  

 

32.4

 

 

0.4

 

4.40

   

 

33.4

 

 

0.4

 

4.35

   

 

279.1

 

 

2.4

 

3.45

 
Held-to-Maturity                                          
Taxable  

 

3,036.2

 

 

18.9

 

2.50

   

 

2,994.7

 

 

18.4

 

2.46

   

 

3,373.5

 

 

20.5

 

2.43

 
Non-Taxable  

 

54.7

 

 

0.4

 

2.67

   

 

61.7

 

 

0.4

 

2.70

   

 

234.1

 

 

1.8

 

3.15

 
Total Investment Securities  

 

5,825.7

 

 

36.1

 

2.48

   

 

5,668.1

 

 

35.1

 

2.47

   

 

5,482.5

 

 

36.2

 

2.65

 
Loans Held for Sale  

 

23.2

 

 

0.2

 

3.54

   

 

31.0

 

 

0.3

 

3.67

   

 

12.4

 

 

0.1

 

4.35

 
Loans and Leases 1                                          
Commercial and Industrial  

 

1,409.3

 

 

13.2

 

3.77

   

 

1,356.1

 

 

13.3

 

3.90

   

 

1,357.8

 

 

15.3

 

4.57

 
Commercial Mortgage  

 

2,549.4

 

 

25.1

 

3.96

   

 

2,479.7

 

 

25.5

 

4.08

   

 

2,310.4

 

 

24.9

 

4.36

 
Construction  

 

213.2

 

 

2.5

 

4.65

   

 

179.1

 

 

2.1

 

4.73

   

 

150.4

 

 

1.9

 

5.08

 
Commercial Lease Financing  

 

111.4

 

 

0.5

 

1.95

   

 

135.4

 

 

0.8

 

2.38

   

 

160.9

 

 

0.9

 

2.28

 
Residential Mortgage  

 

3,895.4

 

 

36.9

 

3.79

   

 

3,850.4

 

 

36.7

 

3.81

   

 

3,680.2

 

 

35.5

 

3.86

 
Home Equity  

 

1,680.2

 

 

15.2

 

3.64

   

 

1,683.4

 

 

15.7

 

3.70

   

 

1,690.0

 

 

16.1

 

3.87

 
Automobile  

 

721.0

 

 

6.4

 

3.56

   

 

715.2

 

 

6.5

 

3.59

   

 

668.2

 

 

6.0

 

3.66

 
Other 2  

 

480.8

 

 

8.4

 

7.06

   

 

479.4

 

 

8.5

 

7.02

   

 

449.4

 

 

7.9

 

7.13

 
Total Loans and Leases  

 

11,060.7

 

 

108.2

 

3.93

   

 

10,878.7

 

 

109.1

 

3.99

   

 

10,467.3

 

 

108.5

 

4.18

 
Other  

 

34.3

 

 

0.2

 

2.54

   

 

34.9

 

 

0.2

 

2.74

   

 

35.5

 

 

0.3

 

3.60

 
Total Earning Assets 3  

 

17,098.1

 

 

145.3

 

3.41

   

 

16,793.8

 

 

145.4

 

3.45

   

 

16,242.3

 

 

146.6

 

3.64

 
Cash and Due from Banks  

 

278.8

           

 

222.2

           

 

240.8

         
Other Assets  

 

845.7

           

 

805.0

           

 

753.0

         
Total Assets  

$

18,222.6

           

$

17,821.0

           

$

17,236.1

         
                                           
Interest-Bearing Liabilities                                          
Interest-Bearing Deposits                                          
Demand  

$

3,110.0

 

 

1.0

 

0.12

   

$

2,990.3

 

 

1.0

 

0.14

   

$

2,939.9

 

 

1.5

 

0.20

 
Savings  

 

6,502.4

 

 

7.1

 

0.44

   

 

6,245.0

 

 

8.0

 

0.51

   

 

5,760.8

 

 

6.7

 

0.47

 
Time  

 

1,743.0

 

 

6.2

 

1.43

   

 

1,842.3

 

 

7.4

 

1.59

   

 

1,703.4

 

 

7.1

 

1.69

 
Total Interest-Bearing Deposits  

 

11,355.4

 

 

14.3

 

0.51

   

 

11,077.6

 

 

16.4

 

0.59

   

 

10,404.1

 

 

15.3

 

0.60

 
Short-Term Borrowings  

 

57.8

 

 

0.1

 

0.76

   

 

5.8

 

 

-

 

1.66

   

 

31.1

 

 

0.2

 

2.49

 
Securities Sold Under Agreements to Repurchase  

 

604.1

 

 

4.0

 

2.64

   

 

604.3

 

 

4.1

 

2.64

   

 

504.3

 

 

4.6

 

3.63

 
Other Debt  

 

66.9

 

 

0.6

 

3.51

   

 

106.2

 

 

0.7

 

2.67

   

 

120.0

 

 

0.7

 

2.55

 
Total Interest-Bearing Liabilities  

 

12,084.2

 

 

19.0

 

0.63

   

 

11,793.9

 

 

21.2

 

0.71

   

 

11,059.5

 

 

20.8

 

0.76

 
Net Interest Income      

$

126.3

           

$

124.2

           

$

125.8

     
Interest Rate Spread          

2.78

%

         

2.74

%

         

2.88

%

Net Interest Margin          

2.96

%

         

2.95

%

         

3.12

%

Noninterest-Bearing Demand Deposits  

 

4,462.3

           

 

4,363.5

           

 

4,567.3

         
Other Liabilities  

 

362.3

           

 

370.7

           

 

341.9

         
Shareholders' Equity  

 

1,313.8

           

 

1,292.9

           

 

1,267.4

         
Total Liabilities and Shareholders' Equity  

$

18,222.6

           

$

17,821.0

           

$

17,236.1

         
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 21%, of $357,000, $352,000, and $981,000 for the three months ended March 31, 2020, December 31, 2019, and March 31, 2019, respectively.
Bank of Hawaii Corporation and Subsidiaries            
Analysis of Change in Net Interest Income - Taxable-Equivalent Basis           Table 8a
   

Three Months Ended March 31, 2020

   

Compared to December 31, 2019

(dollars in millions)  

Volume 1

 

Rate 1

 

Total

Change in Interest Income:            
Funds Sold  

$

 

(0.1

)

 

$

 

-

 

 

$

 

(0.1

)

Investment Securities            
Available-for-Sale            
Taxable  

 

0.7

 

 

 

(0.2

)

 

 

0.5

 

Held-to-Maturity            
Taxable  

 

0.2

 

 

 

0.3

 

 

 

0.5

 

Total Investment Securities  

 

0.9

 

 

 

0.1

 

 

 

1.0

 

Loans Held for Sale  

 

(0.1

)

 

 

-

 

 

 

(0.1

)

Loans and Leases            
Commercial and Industrial  

 

0.4

 

 

 

(0.5

)

 

 

(0.1

)

Commercial Mortgage  

 

0.5

 

 

 

(0.9

)

 

 

(0.4

)

Construction  

 

0.4

 

 

 

-

 

 

 

0.4

 

Commercial Lease Financing  

 

(0.1

)

 

 

(0.2

)

 

 

(0.3

)

Residential Mortgage  

 

0.5

 

 

 

(0.3

)

 

 

0.2

 

Home Equity  

 

(0.1

)

 

 

(0.4

)

 

 

(0.5

)

Automobile  

 

-

 

 

 

(0.1

)

 

 

(0.1

)

Other 2  

 

-

 

 

 

(0.1

)

 

 

(0.1

)

Total Loans and Leases  

 

1.6

 

 

 

(2.5

)

 

 

(0.9

)

Total Change in Interest Income  

 

2.3

 

 

 

(2.4

)

 

 

(0.1

)

             
Change in Interest Expense:            
Interest-Bearing Deposits            
Demand  

 

0.1

 

 

 

(0.1

)

 

 

-

 

Savings  

 

0.3

 

 

 

(1.2

)

 

 

(0.9

)

Time  

 

(0.4

)

 

 

(0.8

)

 

 

(1.2

)

Total Interest-Bearing Deposits  

 

-

 

 

 

(2.1

)

 

 

(2.1

)

Short-Term Borrowings  

 

0.1

 

 

 

-

 

 

 

0.1

 

Securities Sold Under Agreements to Repurchase  

 

(0.1

)

 

 

-

 

 

 

(0.1

)

Other Debt  

 

(0.3

)

 

 

0.2

 

 

 

(0.1

)

Total Change in Interest Expense  

 

(0.3

)

 

 

(1.9

)

 

 

(2.2

)

             
Change in Net Interest Income  

$

 

2.6

 

 

$

 

(0.5

)

 

$

 

2.1

 

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 March 31, 2020
    Compared to March 31, 2019
(dollars in millions)  

Volume 1

 

Rate 1

 

Total

Change in Interest Income:            
Funds Sold  

$

(0.4

)

 

$

(0.5

)

 

$

(0.9

)

Investment Securities            
Available-for-Sale            
Taxable  

 

7.0

 

 

 

(2.1

)

 

 

4.9

 

Non-Taxable  

 

(2.5

)

 

 

0.5

 

 

 

(2.0

)

Held-to-Maturity            
Taxable  

 

(2.2

)

 

 

0.6

 

 

 

(1.6

)

Non-Taxable  

 

(1.2

)

 

 

(0.2

)

 

 

(1.4

)

Total Investment Securities  

 

1.1

 

 

 

(1.2

)

 

 

(0.1

)

Loans Held for Sale  

 

0.1

 

 

 

-

 

 

 

0.1

 

Loans and Leases            
Commercial and Industrial  

 

0.6

 

 

 

(2.7

)

 

 

(2.1

)

Commercial Mortgage  

 

2.5

 

 

 

(2.3

)

 

 

0.2

 

Construction  

 

0.8

 

 

 

(0.2

)

 

 

0.6

 

Commercial Lease Financing  

 

(0.3

)

 

 

(0.1

)

 

 

(0.4

)

Residential Mortgage  

 

2.1

 

 

 

(0.7

)

 

 

1.4

 

Home Equity  

 

(0.1

)

 

 

(0.8

)

 

 

(0.9

)

Automobile  

 

0.5

 

 

 

(0.1

)

 

 

0.4

 

Other 2  

 

0.6

 

 

 

(0.1

)

 

 

0.5

 

Total Loans and Leases  

 

6.7

 

 

 

(7.0

)

 

 

(0.3

)

Other  

 

-

 

 

 

(0.1

)

 

 

(0.1

)

Total Change in Interest Income  

 

7.5

 

 

 

(8.8

)

 

 

(1.3

)

             
Change in Interest Expense:            
Interest-Bearing Deposits            
Demand  

 

0.1

 

 

 

(0.6

)

 

 

(0.5

)

Savings  

 

0.9

 

 

 

(0.5

)

 

 

0.4

 

Time  

 

0.2

 

 

 

(1.1

)

 

 

(0.9

)

Total Interest-Bearing Deposits  

 

1.2

 

 

 

(2.2

)

 

 

(1.0

)

Short-Term Borrowings  

 

0.1

 

 

 

(0.2

)

 

 

(0.1

)

Securities Sold Under Agreements to Repurchase  

 

0.8

 

 

 

(1.4

)

 

 

(0.6

)

Other Debt  

 

(0.4

)

 

 

0.3

 

 

 

(0.1

)

Total Change in Interest Expense  

 

1.7

 

 

 

(3.5

)

 

 

(1.8

)

             
Change in Net Interest Income  

$

5.8

 

 

$

(5.3

)

 

$

0.5

 

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

   

March 31,

 

December 31,

 

March 31,

(dollars in thousands)  

2020

 

2020

 

2019

Salaries  

$

33,486

 

$

33,465

 

$

32,480

Incentive Compensation  

 

245

 

 

4,864

 

 

5,904

Share-Based Compensation  

 

1,291

 

 

1,475

 

 

3,079

Commission Expense  

 

1,374

 

 

2,080

 

 

930

Retirement and Other Benefits  

 

4,706

 

 

4,279

 

 

5,107

Payroll Taxes  

 

4,543

 

 

2,386

 

 

4,247

Medical, Dental, and Life Insurance  

 

4,142

 

 

2,903

 

 

4,465

Separation Expense  

 

4,676

 

 

212

 

 

374

Total Salaries and Benefits  

$

54,463

 

$

51,664

 

$

56,586

Bank of Hawaii Corporation and Subsidiaries
Loan and Lease Portfolio Balances               Table 10
    March 31,   December 31,   September 30,   June 30,   March 31,
(dollars in thousands)  

2020

 

2019

 

2019

 

2019

 

2019

Commercial                    
Commercial and Industrial  

$

1,558,232

 

$

1,379,152

 

$

1,361,011

 

$

1,408,729

 

$

1,331,345

Commercial Mortgage  

 

2,616,243

 

 

2,518,051

 

 

2,477,296

 

 

2,411,289

 

 

2,381,213

Construction  

 

245,390

 

 

194,170

 

 

154,754

 

 

119,228

 

 

132,775

Lease Financing  

 

110,704

 

 

122,454

 

 

163,672

 

 

163,070

 

 

154,919

Total Commercial  

 

4,530,569

 

 

4,213,827

 

 

4,156,733

 

 

4,102,316

 

 

4,000,252

Consumer                    
Residential Mortgage  

 

3,928,183

 

 

3,891,100

 

 

3,846,511

 

 

3,785,006

 

 

3,702,553

Home Equity  

 

1,692,154

 

 

1,676,073

 

 

1,681,951

 

 

1,694,577

 

 

1,698,666

Automobile  

 

716,214

 

 

720,286

 

 

713,424

 

 

703,523

 

 

676,730

Other 1  

 

485,660

 

 

489,606

 

 

482,679

 

 

473,707

 

 

470,408

Total Consumer  

 

6,822,211

 

 

6,777,065

 

 

6,724,565

 

 

6,656,813

 

 

6,548,357

Total Loans and Leases  

$

11,352,780

 

$

10,990,892

 

$

10,881,298

 

$

10,759,129

 

$

10,548,609

                 
Deposits                
    March 31,   December 31,   September 30,   June 30,   March 31,
(dollars in thousands)  

2020

 

2019

 

2019

 

2019

 

2019

Consumer  

$

8,294,464

 

$

8,118,494

 

$

7,893,454

 

$

7,880,284

 

$

7,944,793

Commercial  

 

6,358,583

 

 

6,324,214

 

 

6,153,492

 

 

6,178,984

 

 

6,162,042

Public and Other  

 

1,402,314

 

 

1,341,774

 

 

1,293,806

 

 

1,429,553

 

 

1,160,475

Total Deposits  

$

16,055,361

 

$

15,784,482

 

$

15,340,752

 

$

15,488,821

 

$

15,267,310

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
    March 31,   December 31,   September 30,   June 30,   March 31,
(dollars in thousands)  

2020

 

2019

 

2019

 

2019

 

2019

Non-Performing Assets                    
Non-Accrual Loans and Leases                    
Commercial                    
Commercial and Industrial  

$

634

 

 

$

830

 

 

$

573

 

 

$

552

 

 

$

393

 

Commercial Mortgage  

 

9,048

 

 

 

9,244

 

 

 

11,088

 

 

 

11,310

 

 

 

5,911

 

Total Commercial  

 

9,682

 

 

 

10,074

 

 

 

11,661

 

 

 

11,862

 

 

 

6,304

 

Consumer                    
Residential Mortgage  

 

4,330

 

 

 

4,125

 

 

 

4,258

 

 

 

4,697

 

 

 

5,599

 

Home Equity  

 

4,086

 

 

 

3,181

 

 

 

2,787

 

 

 

2,486

 

 

 

2,797

 

Total Consumer  

 

8,416

 

 

 

7,306

 

 

 

7,045

 

 

 

7,183

 

 

 

8,396

 

Total Non-Accrual Loans and Leases  

 

18,098

 

 

 

17,380

 

 

 

18,706

 

 

 

19,045

 

 

 

14,700

 

Foreclosed Real Estate  

 

2,506

 

 

 

2,737

 

 

 

2,939

 

 

 

2,737

 

 

 

3,225

 

Total Non-Performing Assets  

$

20,604

 

 

$

20,117

 

 

$

21,645

 

 

$

21,782

 

 

$

17,925

 

                     
Accruing Loans and Leases Past Due 90 Days or More                    
Commercial                    
Commercial and Industrial  

$

-

 

 

$

-

 

 

$

81

 

 

$

-

 

 

$

66

 

Total Commercial  

 

-

 

 

 

-

 

 

 

81

 

 

 

-

 

 

 

66

 

Consumer                    
Residential Mortgage  

 

3,024

 

 

 

1,839

 

 

 

2,032

 

 

 

1,859

 

 

 

903

 

Home Equity  

 

3,426

 

 

 

4,125

 

 

 

2,320

 

 

 

2,981

 

 

 

3,381

 

Automobile  

 

866

 

 

 

949

 

 

 

582

 

 

 

607

 

 

 

734

 

Other 1  

 

1,205

 

 

 

1,493

 

 

 

1,076

 

 

 

963

 

 

 

1,033

 

Total Consumer  

 

8,521

 

 

 

8,406

 

 

 

6,010

 

 

 

6,410

 

 

 

6,051

 

Total Accruing Loans and Leases Past Due 90 Days or More  

$

8,521

 

 

$

8,406

 

 

$

6,091

 

 

$

6,410

 

 

$

6,117

 

Restructured Loans on Accrual Status                    
and Not Past Due 90 Days or More  

$

61,425

 

 

$

63,103

 

 

$

46,178

 

 

$

48,563

 

 

$

48,571

 

Total Loans and Leases  

$

11,352,780

 

 

$

10,990,892

 

 

$

10,881,298

 

 

$

10,759,129

 

 

$

10,548,609

 

                     
Ratio of Non-Accrual Loans and Leases to Total Loans and Leases  

 

0.16

%

 

 

0.16

%

 

 

0.17

%

 

 

0.18

%

 

 

0.14

%

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

 

0.18

%

 

 

0.18

%

 

 

0.20

%

 

 

0.20

%

 

 

0.17

%

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

 

0.21

%

 

 

0.24

%

 

 

0.28

%

 

 

0.29

%

 

 

0.16

%

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

 

0.16

%

 

 

0.15

%

 

 

0.15

%

 

 

0.15

%

 

 

0.18

%

                     
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  

 

0.26

%

 

 

0.26

%

 

 

0.25

%

 

 

0.26

%

 

 

0.23

%

                     
Quarter to Quarter Changes in Non-Performing Assets                    
Balance at Beginning of Quarter  

 

20,117

 

 

$

21,645

 

 

$

21,782

 

 

$

17,925

 

 

$

12,930

 

Additions  

 

1,754

 

 

 

883

 

 

 

1,035

 

 

 

6,186

 

 

 

8,217

 

Reductions                    
Payments  

 

(315

)

 

 

(495

)

 

 

(984

)

 

 

(441

)

 

 

(989

)

Return to Accrual Status  

 

(437

)

 

 

(1,673

)

 

 

-

 

 

 

(1,344

)

 

 

(316

)

Sales of Foreclosed Real Estate  

 

(231

)

 

 

(201

)

 

 

-

 

 

 

(374

)

 

 

-

 

Charge-offs/Write-downs  

 

(284

)

 

 

(42

)

 

 

(188

)

 

 

(170

)

 

 

(1,917

)

Total Reductions  

 

(1,267

)

 

 

(2,411

)

 

 

(1,172

)

 

 

(2,329

)

 

 

(3,222

)

Balance at End of Quarter  

$

20,604

 

 

$

20,117

 

 

$

21,645

 

 

$

21,782

 

 

$

17,925

 

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

   

March 31,

 

December 31,

 

March 31,

(dollars in thousands)  

2020

 

2019

 

2019

Balance at Beginning of Period  

$

116,849

 

 

$

115,758

 

 

$

113,515

 

CECL Adoption (Day 1) Impact  

 

(5,072

)

 

 

-

 

 

 

-

 

Loans and Leases Charged-Off            
Commercial            
Commercial and Industrial  

 

(693

)

 

 

(307

)

 

 

(370

)

Commercial Mortgage  

 

-

 

 

 

-

 

 

 

(1,616

)

Consumer            
Residential Mortgage  

 

(20

)

 

 

(50

)

 

 

(4

)

Home Equity  

 

-

 

 

 

(245

)

 

 

(295

)

Automobile  

 

(2,500

)

 

 

(1,990

)

 

 

(1,753

)

Other 1  

 

(3,964

)

 

 

(3,651

)

 

 

(2,790

)

Total Loans and Leases Charged-Off  

 

(7,177

)

 

 

(6,243

)

 

 

(6,828

)

Recoveries on Loans and Leases Previously Charged-Off            
Commercial            
Commercial and Industrial  

 

289

 

 

 

293

 

 

 

501

 

Commercial Mortgage  

 

40

 

 

 

-

 

 

 

-

 

Consumer            
Residential Mortgage  

 

263

 

 

 

699

 

 

 

484

 

Home Equity  

 

976

 

 

 

577

 

 

 

588

 

Automobile  

 

1,005

 

 

 

512

 

 

 

881

 

Other 1  

 

864

 

 

 

503

 

 

 

704

 

Total Recoveries on Loans and Leases Previously Charged-Off  

 

3,437

 

 

 

2,584

 

 

 

3,158

 

Net Loans and Leases Charged-Off  

 

(3,740

)

 

 

(3,659

)

 

 

(3,670

)

Provision for Credit Losses  

 

33,600

 

 

 

4,750

 

 

 

3,000

 

Provision for Unfunded Commitments  

 

(170

)

 

 

-

 

 

 

-

 

Balance at End of Period 2  

$

141,467

 

 

$

116,849

 

 

$

112,845

 

             
Components            
Allowance for Credit Losses  

$

138,150

 

 

$

110,027

 

 

$

106,023

 

Reserve for Unfunded Commitments  

 

3,317

 

 

 

6,822

 

 

 

6,822

 

Total Reserve for Credit Losses  

$

141,467

 

 

$

116,849

 

 

$

112,845

 

             
Average Loans and Leases Outstanding  

$

11,060,707

 

 

$

10,878,672

 

 

$

10,467,321

 

             
Ratio of Net Loans and Leases Charged-Off to            
Average Loans and Leases Outstanding (annualized)  

 

0.14

%

 

 

0.13

%

 

 

0.14

%

Ratio of Allowance for Credit Losses to Loans and Leases Outstanding  

 

1.22

%

 

 

1.00

%

 

 

1.01

%

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 13
                 
    Consumer   Commercial   Treasury   Consolidated
(dollars in thousands)   Banking   Banking   and Other   Total
Three Months Ended March 31, 2020                
Net Interest Income  

$

73,661

 

 

$

45,986

 

 

$

6,319

 

 

$

125,966

 

Provision for Credit Losses  

 

3,545

 

 

 

290

 

 

 

29,765

 

 

 

33,600

 

Net Interest Income After Provision for Credit Losses  

 

70,116

 

 

 

45,696

 

 

 

(23,446

)

 

 

92,366

 

Noninterest Income  

 

32,590

 

 

 

11,735

 

 

 

1,824

 

 

 

46,149

 

Noninterest Expense  

 

(70,900

)

 

 

(17,298

)

 

 

(8,114

)

 

 

(96,312

)

Income Before Provision for Income Taxes  

 

31,806

 

 

 

40,133

 

 

 

(29,736

)

 

 

42,203

 

Provision for Income Taxes  

 

(7,984

)

 

 

(9,760

)

 

 

10,283

 

 

 

(7,461

)

Net Income  

$

23,822

 

 

$

30,373

 

 

$

(19,453

)

 

$

34,742

 

Total Assets as of March 31, 2020  

$

7,385,185

 

 

$

4,584,040

 

 

$

6,573,008

 

 

$

18,542,233

 

                 
Three Months Ended March 31, 2019 1                
Net Interest Income  

$

76,352

 

 

$

47,290

 

 

$

1,195

 

 

$

124,837

 

Provision for Credit Losses  

 

2,224

 

 

 

1,446

 

 

 

(670

)

 

 

3,000

 

Net Interest Income After Provision for Credit Losses  

 

74,128

 

 

 

45,844

 

 

 

1,865

 

 

 

121,837

 

Noninterest Income  

 

34,478

 

 

 

7,061

 

 

 

2,140

 

 

 

43,679

 

Noninterest Expense  

 

(69,427

)

 

 

(20,955

)

 

 

(2,675

)

 

 

(93,057

)

Income Before Provision for Income Taxes  

 

39,179

 

 

 

31,950

 

 

 

1,330

 

 

 

72,459

 

Provision for Income Taxes  

 

(9,834

)

 

 

(6,002

)

 

 

2,176

 

 

 

(13,660

)

Net Income  

$

29,345

 

 

$

25,948

 

 

$

3,506

 

 

$

58,799

 

Total Assets as of March 31, 20191  

$

6,796,106

 

 

$

4,004,176

 

 

$

6,646,131

 

 

$

17,446,413

 

1 Certain prior period information has been reclassified to conform to current presentation.
Bank of Hawaii Corporation and Subsidiaries                          
Selected Quarterly Financial Data                           Table 14
   

Three Months Ended

   

March 31,

 

December 31,

 

September 30,

 

June 30,

 

March 31,

(dollars in thousands, except per share amounts)  

2020

 

2019

 

2019

 

2019

 

2019

Quarterly Operating Results                              
Interest Income                              
Interest and Fees on Loans and Leases  

$

108,210

 

   

$

109,223

 

   

$

110,877

 

   

$

110,401

 

   

$

108,511

 

 
Income on Investment Securities                              
Available-for-Sale  

 

16,711

 

   

 

16,158

 

   

 

17,512

 

   

 

15,072

 

   

 

13,432

 

 
Held-to-Maturity  

 

19,252

 

   

 

18,750

 

   

 

18,796

 

   

 

22,149

 

   

 

21,921

 

 
Deposits  

 

9

 

   

 

8

 

   

 

9

 

   

 

9

 

   

 

15

 

 
Funds Sold  

 

546

 

   

 

723

 

   

 

656

 

   

 

730

 

   

 

1,444

 

 
Other  

 

218

 

   

 

239

 

   

 

233

 

   

 

210

 

   

 

319

 

 
Total Interest Income  

 

144,946

 

   

 

145,101

 

   

 

148,083

 

   

 

148,571

 

   

 

145,642

 

 
Interest Expense                              
Deposits  

 

14,260

 

   

 

16,407

 

   

 

18,055

 

   

 

18,628

 

   

 

15,284

 

 
Securities Sold Under Agreements to Repurchase  

 

4,025

 

   

 

4,071

 

   

 

4,257

 

   

 

4,623

 

   

 

4,571

 

 
Funds Purchased  

 

72

 

   

 

25

 

   

 

146

 

   

 

512

 

   

 

157

 

 
Short-Term Borrowings  

 

39

 

   

 

-

 

   

 

1

 

   

 

1

 

   

 

36

 

 
Other Debt  

 

584

 

   

 

713

 

   

 

728

 

   

 

710

 

   

 

757

 

 
Total Interest Expense  

 

18,980

 

   

 

21,216

 

   

 

23,187

 

   

 

24,474

 

   

 

20,805

 

 
Net Interest Income  

 

125,966

 

   

 

123,885

 

   

 

124,896

 

   

 

124,097

 

   

 

124,837

 

 
Provision for Credit Losses  

 

33,600

 

   

 

4,750

 

   

 

4,250

 

   

 

4,000

 

   

 

3,000

 

 
Net Interest Income After Provision for Credit Losses  

 

92,366

 

   

 

119,135

 

   

 

120,646

 

   

 

120,097

 

   

 

121,837

 

 
Noninterest Income                              
Trust and Asset Management  

 

10,915

 

   

 

11,157

 

   

 

10,930

 

   

 

11,385

 

   

 

10,761

 

 
Mortgage Banking  

 

2,695

 

   

 

3,199

 

   

 

4,864

 

   

 

3,336

 

   

 

2,287

 

 
Service Charges on Deposit Accounts  

 

7,451

 

   

 

7,835

 

   

 

7,592

 

   

 

7,283

 

   

 

7,364

 

 
Fees, Exchange, and Other Service Charges  

 

13,200

 

   

 

14,533

 

   

 

14,900

 

   

 

14,252

 

   

 

14,208

 

 
Investment Securities Gains (Losses), Net  

 

(970

)

   

 

(906

)

   

 

(1,469

)

   

 

(776

)

   

 

(835

)

 
Annuity and Insurance  

 

928

 

   

 

1,272

 

   

 

1,278

 

   

 

1,806

 

   

 

2,578

 

 
Bank-Owned Life Insurance  

 

1,580

 

   

 

1,879

 

   

 

1,647

 

   

 

1,779

 

   

 

1,710

 

 
Other  

 

10,350

 

   

 

8,733

 

   

 

6,765

 

   

 

6,385

 

   

 

5,606

 

 
Total Noninterest Income  

 

46,149

 

   

 

47,702

 

   

 

46,507

 

   

 

45,450

 

   

 

43,679

 

 
Noninterest Expense                              
Salaries and Benefits  

 

54,463

 

   

 

51,664

 

   

 

54,345

 

   

 

53,511

 

   

 

56,586

 

 
Net Occupancy  

 

8,955

 

   

 

8,824

 

   

 

8,803

 

   

 

8,579

 

   

 

7,594

 

 
Net Equipment  

 

8,456

 

   

 

7,930

 

   

 

7,637

 

   

 

6,895

 

   

 

6,833

 

 
Data Processing  

 

4,788

 

   

 

4,828

 

   

 

4,676

 

   

 

4,727

 

   

 

4,526

 

 
Professional Fees  

 

3,208

 

   

 

3,257

 

   

 

2,184

 

   

 

2,177

 

   

 

2,453

 

 
FDIC Insurance  

 

1,456

 

   

 

1,376

 

   

 

1,257

 

   

 

1,290

 

   

 

1,269

 

 
Other  

 

14,986

 

   

 

15,217

 

   

 

21,447

 

   

 

15,546

 

   

 

13,796

 

 
Total Noninterest Expense  

 

96,312

 

   

 

93,096

 

   

 

100,349

 

   

 

92,725

 

   

 

93,057

 

 
Income Before Provision for Income Taxes  

 

42,203

 

   

 

73,741

 

   

 

66,804

 

   

 

72,822

 

   

 

72,459

 

 
Provision for Income Taxes  

 

7,461

 

   

 

15,598

 

   

 

14,752

 

   

 

15,903

 

   

 

13,660

 

 
Net Income  

$

34,742

 

   

$

58,143

 

   

$

52,052

 

   

$

56,919

 

   

$

58,799

 

 
                               
Basic Earnings Per Share  

$

0.88

 

   

$

1.46

 

   

$

1.30

 

   

$

1.40

 

   

$

1.44

 

 
Diluted Earnings Per Share  

$

0.87

 

   

$

1.45

 

   

$

1.29

 

   

$

1.40

 

   

$

1.43

 

 
                               
Balance Sheet Totals                              
Loans and Leases  

$

11,352,780

 

   

$

10,990,892

 

   

$

10,881,298

 

   

$

10,759,129

 

   

$

10,548,609

 

 
Total Assets  

 

18,542,233

 

   

 

18,095,496

 

   

 

17,672,140

 

   

 

17,688,845

 

   

 

17,446,413

 

 
Total Deposits  

 

16,055,361

 

   

 

15,784,482

 

   

 

15,340,752

 

   

 

15,488,821

 

   

 

15,267,310

 

 
Total Shareholders' Equity  

 

1,327,929

 

   

 

1,286,832

 

   

 

1,291,490

 

   

 

1,285,948

 

   

 

1,269,690

 

 
                               
Performance Ratios                              
Return on Average Assets  

 

0.77

 

%

 

 

1.29

 

%

 

 

1.17

 

%

 

 

1.31

 

%

 

 

1.38

 

%

Return on Average Shareholders' Equity  

 

10.64

 

   

 

17.84

 

   

 

16.02

 

   

 

17.97

 

   

 

18.81

 

 
Efficiency Ratio 1  

 

55.96

 

   

 

54.26

 

   

 

58.55

 

   

 

54.69

 

   

 

55.22

 

 
Net Interest Margin 2  

 

2.96

 

   

 

2.95

 

   

 

3.01

 

   

 

3.04

 

   

 

3.12

 

 
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
    Two Months Ended   Year Ended
($ in millions; jobs in thousands)   February 29, 2020   December 31, 2019   December 31, 2018
Hawaii Economic Trends                                  
State General Fund Revenues 1  

$

1,362.3

 

15.2

%

 

$

7,316.5

   

5.5

 

%

 

$

6,933.1

 

   

6.9

%

General Excise and Use Tax Revenue 1  

$

677.8

 

5.8

%

 

$

3,602.2

   

5.1

 

%

 

$

3,426.5

 

   

2.3

%

Jobs 2  

 

651.2

       

 

648.9

         

 

649.9

 

       
                                   
                   

January 31,

 

December 31,

(spot rates)                  

2020

 

2019

 

2018

Unemployment 3                                  
Statewide, seasonally adjusted                  

2.7

 

%

 

 

2.7

 

%

 

2.6

%

                                   
Oahu                  

2.7

 

   

 

2.1

 

   

2.2

 
Island of Hawaii                  

3.5

 

   

 

2.8

 

   

2.9

 
Maui                  

2.8

 

   

 

2.2

 

   

2.2

 
Kauai                  

3.0

 

   

 

2.4

 

   

2.3

 
                                   
             

March 31,

 

December 31,

(percentage change, except months of inventory)            

2020

 

2019

 

2018

 

2017

Housing Trends (Single Family Oahu) 4                                  
Median Home Price            

 

-

%

 

(0.1

)

%

 

 

4.6

 

%

 

2.7

%

Home Sales Volume (units)            

 

11.6

%

 

3.9

 

%

 

 

(7.7

)

%

 

6.3

%

Months of Inventory            

 

2.6

   

2.5

 

   

 

2.8

 

   

2.1

 
                                   
              Monthly Visitor Arrivals,   Percentage Change
(in thousands)             Not Seasonally Adjusted   from Previous Year
Tourism 5                                  
February 29, 2020                  

828.1

 

         

5.8

 
January 31, 2020                  

862.6

 

         

5.1

 
December 31, 2019                  

954.3

 

         

6.0

 
November 30, 2019                  

811.4

 

         

4.2

 
October 31, 2019                  

800.4

 

         

4.8

 
September 30, 2019                  

741.3

 

         

3.5

 
August 31, 2019                  

928.2

 

         

9.8

 
July 31, 2019                  

997.9

 

         

6.2

 
June 30, 2019                  

951.6

 

         

6.1

 
May 31, 2019                  

841.4

 

         

4.6

 
April 30, 2019                  

856.3

 

         

6.6

 
March 31, 2019                  

939.1

 

         

3.9

 
February 28, 2019                  

782.7

 

         

0.5

 
January 31, 2019                  

820.6

 

         

3.0

 
December 31, 2018                  

900.2

 

         

2.3

 
November 30, 2018                  

778.5

 

         

3.9

 
October 31, 2018                  

763.7

 

         

3.5

 
September 30, 2018                  

716.1

 

         

2.2

 
August 31, 2018                  

845.1

 

         

3.2

 
July 31, 2018                  

939.4

 

         

5.3

 
June 30, 2018                  

897.1

 

         

7.3

 
May 31, 2018                  

804.1

 

         

7.0

 
April 30, 2018                  

803.0

 

         

6.6

 
March 31, 2018                  

903.6

 

         

12.5

 
February 28, 2018                  

778.6

 

         

10.3

 
January 31, 2018                  

796.5

 

         

5.4

 
1 Source: Hawaii Department of Business, Economic Development & Tourism
2 Source: U. S. Bureau of Labor Statistics
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

 

Media Inquiries
Stafford Kiguchi
Telephone: 808-694-8580
Mobile: 808-265-6367
E-mail: Stafford.Kiguchi@boh.com

Investor/Analyst Inquiries
Cindy Wyrick
Telephone: 808-694-8430
E-mail: Cindy.Wyrick@boh.com

Source: Bank of Hawaii Corporation