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Bank of Hawaii Corporation Second Quarter 2019 Financial Results
  • Diluted Earnings Per Share $1.40
  • Net Income $56.9 Million
  • Board of Directors Approves Dividend of $0.65 Per Share

HONOLULU--(BUSINESS WIRE)--Jul. 22, 2019-- Bank of Hawaii Corporation (NYSE: BOH) today reported diluted earnings per share of $1.40 for the second quarter of 2019, down from diluted earnings per share of $1.43 in the previous quarter, and up from diluted earnings per share of $1.30 in the same quarter last year. Net income for the second quarter of 2019 was $56.9 million compared with net income of $58.8 million in the first quarter of 2019 and net income of $54.7 million in the second quarter of 2018.

Loan and lease balances increased to $10.8 billion at June 30, 2019, up 2.0 percent from March 31, 2019, and up 7.0 percent compared with June 30, 2018. Total deposits were $15.5 billion at the end of the second quarter of 2019, up 1.5 percent from March 31, 2019 and up 3.7 percent compared with June 30, 2018.

“Bank of Hawaii Corporation continued to perform well during the second quarter of 2019,” said Peter Ho, Chairman, President and CEO. “Loans and deposits continued to grow, asset quality remains strong, and we maintained our disciplined approach to risk, capital, and expense management.”

The return on average assets for the second quarter of 2019 was 1.31 percent, down from 1.38 percent in the previous quarter and up from 1.30 percent in the same quarter last year. The return on average equity for the second quarter of 2019 was 17.97 percent, down from 18.81 percent for the first quarter of 2019 and up from 17.68 percent for the second quarter of 2018. The efficiency ratio for the second quarter of 2019 improved to 54.69 percent compared with 55.22 percent in the previous quarter and 56.12 percent in the same quarter last year.

For the six-month period ended June 30, 2019, net income was $115.7 million, an increase of $6.9 million from net income of $108.8 million during the same period last year. Diluted earnings per share were $2.82 for the first half of 2019, an increase of $0.25 from diluted earnings per share of $2.57 for the first half of 2018.

The return on average assets for the six-month period ended June 30, 2019 was 1.34 percent compared with the return on average assets of 1.29 percent for the same six months in 2018. The year-to-date return on average equity was 18.39 percent for the first half of 2019 compared with the return on average equity of 17.71 percent for the six-month period ended June 30, 2018. The efficiency ratio for the first half of 2019 improved to 54.95 percent compared with 57.01 percent in the same period last year.

Financial Highlights

Net interest income, on a taxable equivalent basis, for the second quarter of 2019 was $124.7 million, a decrease of $1.1 million compared with $125.8 million in the first quarter of 2019 and an increase of $2.9 million compared with $121.8 million in the second quarter of 2018. Net interest income, on a taxable equivalent basis, for the first half of 2019 was $250.5 million, an increase of $8.4 million compared with net interest income of $242.1 million for the first half of 2018. Analyses of the changes in net interest income are included in Tables 8a, 8b and 8c.

The net interest margin was 3.04 percent for the second quarter of 2019, down 8 basis points from 3.12 percent in the previous quarter and equal to the net interest margin of 3.04 percent in the second quarter of 2018. The net interest margin for the first six months of 2019 was 3.08 percent compared with the net interest margin of 3.02 percent for the same six-month period last year.

Results for the second quarter of 2019 included a provision for credit losses of $4.0 million compared with $3.0 million in the previous quarter and $3.5 million in the same quarter last year. The provision for credit losses during the first half of 2019 was $7.0 million compared with a provision for credit losses of $7.6 million during the same period in 2018.

Noninterest income was $45.5 million in the second quarter of 2019, an increase of $1.8 million compared with $43.7 million in the first quarter of 2019 and an increase of $4.2 million compared with $41.3 million in the second quarter of 2018. There were no significant items in noninterest income during the second quarter of 2019. Noninterest income in the first quarter of 2019 included a $1.4 million commission related to insurance products offered through a third-party administrator. Noninterest income during the second quarter of 2018 included a negative adjustment of $1.0 million related to a change in the Visa Class B conversion ratio. Noninterest income for the first half of 2019 was $89.1 million, an increase of $3.8 million compared with noninterest income of $85.3 million for the first half of 2018.

Noninterest expense was $92.7 million in the second quarter of 2019, a decrease of $0.4 million compared with $93.1 million in the first quarter of 2019 and an increase of $1.9 million compared with $90.8 million in the second quarter last year. There were no significant items in noninterest expense during the second quarter of 2019 or the second quarter of 2018. Noninterest expense in the first quarter of 2019 included seasonal payroll expenses of approximately $2.7 million. Noninterest expense for the first half of 2019 was $185.8 million, an increase of $0.6 million compared with noninterest expense of $185.2 million for the first half of 2018. An analysis of noninterest expenses related to salaries and benefits is included in Table 9.

The effective tax rate for the second quarter of 2019 was 21.84 percent compared with 18.85 percent in the previous quarter and 18.94 percent in the same quarter last year. The higher effective tax rate in the second quarter of 2019 was primarily due to repositioning of the investment securities portfolio which reduced municipal securities and the related tax benefit. The effective tax rate for the first half of 2019 was 20.35 percent compared with an effective tax rate of 17.60 percent during the same period last year.

The Company’s business segments are defined as Retail Banking, Commercial Banking, Investment Services and Private 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 Tables 13a and 13b.

Asset Quality

The Company’s asset quality continued to remain strong during the second quarter of 2019. Total non-performing assets were $21.8 million at June 30, 2019 compared with $17.9 million at March 31, 2019 and $15.2 million at June 30, 2018. The increase in non-performing assets during the second quarter of 2019 is due to the addition of commercial mortgage loan exposure to one customer in Guam. As a percentage of total loans and leases, including foreclosed real estate, non-performing assets were 0.20 percent at the end of the second quarter of 2019 compared with 0.17 percent at the end of the first quarter of 2019 and 0.15 percent at the end of the second quarter last year.

Accruing loans and leases past due 90 days or more were $6.4 million at June 30, 2019 compared with $6.1 million at March 31, 2019 and $13.3 million at June 30, 2018. Restructured loans not included in non-accrual loans or accruing loans past due 90 days or more were $48.6 million at June 30, 2019, essentially flat with March 31, 2019 and down from $50.2 million at June 30, 2018. More information on non-performing assets and accruing loans and leases past due 90 days or more is presented in Table 11.

Net loan and lease charge-offs during the second quarter of 2019 were $2.4 million or 0.09 percent annualized of total average loans and leases outstanding. Loan and lease charge-offs of $5.1 million during the quarter were partially offset by recoveries of $2.8 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 comprised of $6.8 million in charge-offs and recoveries of $3.2 million. Net charge-offs during the second quarter of 2018 were $3.3 million or 0.13 percent annualized of total average loans and leases outstanding and comprised of $5.7 million in charge-offs and recoveries of $2.4 million. Net charge-offs during the first half of 2019 were $6.0 million or 0.12 percent annualized of total average loans and leases outstanding compared with net charge-offs of $6.8 million or 0.14 percent annualized of total average loans and leases outstanding for the first half of 2018.

The allowance for loan and lease losses was $107.7 million at June 30, 2019 compared with $106.0 million at March 31, 2019 and $108.2 million at June 30, 2018. The ratio of the allowance for loan and lease losses to total loans and leases was 1.00 percent at June 30, 2019, a decrease of 1 basis point from the previous quarter and 8 basis points from the second quarter last year. The reserve for unfunded commitments of $6.8 million at June 30, 2019 was unchanged from March 31, 2019 and June 30, 2018. 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 $17.7 billion at June 30, 2019, up from $17.4 billion at March 31, 2019 and $17.1 billion at June 30, 2018. Average total assets were $17.5 billion during the second quarter of 2019 compared with $17.2 billion during the previous quarter and $16.9 billion during the second quarter last year.

The investment securities portfolio was $5.6 billion at June 30, 2019, up from $5.5 billion at March 31, 2019 and down from $5.7 billion at June 30, 2018. The portfolio remains largely comprised of securities issued by U.S. government agencies and includes $3.0 billion in securities held to maturity and $2.6 billion in securities available for sale. The securities portfolio at March 31, 2019 included $3.7 billion in securities held to maturity and $1.9 billion in securities available for sale compared with $3.6 billion in securities held to maturity and $2.1 billion in securities available for sale at June 30, 2018.

Total loans and leases were $10.8 billion at June 30, 2019, up from $10.5 billion at March 31, 2019, and $10.1 billion at June 30, 2018. Average total loans and leases increased to $10.6 billion during the second quarter of 2019 compared with $10.5 billion during the previous quarter and $10.0 billion during the same quarter last year. The commercial loan portfolio was $4.1 billion at June 30, 2019, up $102.1 million or 2.6 percent from commercial loans of $4.0 billion at March 31, 2019, and up $286.0 million or 7.5 percent from commercial loans of $3.8 billion at June 30, 2018. The consumer loan portfolio increased to $6.7 billion at June 30, 2019, up $108.5 million or 1.7 percent from consumer loans of $6.5 billion at March 31, 2019 and up $419.8 million or 6.7 percent from consumer loans of $6.2 billion at June 30, 2018. Loan and lease portfolio balances are summarized in Table 10.

Total deposits were $15.5 billion at June 30, 2019, up from $15.3 billion at March 31, 2019 and $14.9 billion at June 30, 2018. Average total deposits were $15.2 billion during the second quarter of 2019, up from $15.0 billion during the previous quarter and $14.7 billion during the same quarter last year. Consumer deposits of $7.9 billion at June 30, 2019 were down $64.5 million or 0.8 percent from consumer deposits at March 31, 2019 and up $207.8 million or 2.7 percent from consumer deposits of $7.7 billion at June 30, 2018. Commercial deposits increased to $6.2 billion at June 30, 2019, up $16.9 million or 0.3 percent from commercial deposits of $6.2 billion at March 31, 2019 and up $257.6 million or 4.3 percent from commercial deposits of $5.9 billion at June 30, 2018. Other deposits, including public funds, were $1.4 billion at June 30, 2019, up $269.1 million from other deposits of $1.2 billion at March 31, 2019 and up $80.0 million from other deposits of $1.3 billion at June 30, 2018. The increase in other deposits from the previous quarter was largely due to seasonal public demand deposits. Deposit balances are summarized in Tables 7a, 7b, and 10.

During the second quarter of 2019, the Company repurchased 433.4 thousand shares of common stock at a total cost of $34.9 million under its share repurchase program at an average cost was $80.49 per share. From the beginning of the share repurchase program initiated during July of 2001 through June 30, 2019, the Company has repurchased 56.2 million shares and returned over $2.2 billion to shareholders at an average cost of $39.81 per share. Remaining buyback authority under the share repurchase program was $86.9 million at June 30, 2019. From July 1 through July 19, 2019, the Company repurchased an additional 84.0 thousand shares of common stock at an average cost of $81.75 per share.

Total shareholders’ equity increased to $1.29 billion at June 30, 2019 compared with $1.27 billion at March 31, 2019 and $1.25 billion at June 30, 2018. The Tier 1 Capital Ratio at June 30, 2019 was 12.46 percent compared with 12.75 percent at March 31, 2019 and 13.27 percent at June 30, 2018. The Tier 1 leverage ratio at June 30, 2019 was 7.36 percent compared with 7.46 percent at March 31, 2019 and 7.53 percent at June 30, 2018.

The Company’s Board of Directors declared a quarterly cash dividend of $0.65 per share on the Company’s outstanding shares. The dividend will be payable on September 16, 2019 to shareholders of record at the close of business on August 30, 2019.

Hawaii Economy

General economic conditions in Hawaii continued to remain positive during the second quarter of 2019. The statewide seasonally-adjusted unemployment rate in Hawaii of 2.8 percent in June 2019 continues to remain among the lowest in the United States compared with 3.7 percent nationally. For the first five months of 2019, total visitor arrivals increased 3.8 percent and air seat capacity increased 1.6 percent compared to the same period in 2018. For the first five months of 2019, visitor spending decreased 3.1 percent even with the continued growth in arrivals. The real estate market remained active during the first half of 2019 despite slower sales. For the first six months of 2019, the volume of single-family home sales on Oahu decreased 3.7 percent and median sales prices were down 0.5 percent compared with the same period in 2018. The volume of condominium sales during the first half of 2019 on Oahu declined 8.8 percent with median sales prices 1.4 percent lower than 2018. As of June 30, 2019, months of inventory of single-family homes and condominiums on Oahu remained low at 3.6 months and 3.9 months, respectively. More information on current Hawaii economic trends is presented in Table 15.

Conference Call Information

The Company will review its second quarter 2019 financial results today at 2:00 p.m. Eastern Time (8:00 a.m. Hawaii 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, July 22, 2019. 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 5038719 when prompted. 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, 2018, 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 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. 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

 

Six Months Ended

 
 

June 30,

 

March 31,

 

June 30,

 

June 30,

 
(dollars in thousands, except per share amounts)

2019

 

2019

 

2018

 

2019

 

2018

 
For the Period:                    
Operating Results                    
Net Interest Income

$

124,097

 

$

124,837

 

$

120,496

 

$

248,934

 

$

239,452

 
Provision for Credit Losses

 

4,000

 

 

3,000

 

 

3,500

 

 

7,000

 

 

7,625

 
Total Noninterest Income

 

45,450

 

 

43,679

 

 

41,298

 

 

89,129

 

 

85,333

 
Total Noninterest Expense

 

92,725

 

 

93,057

 

 

90,791

 

 

185,782

 

 

185,175

 
Net Income

 

56,919

 

 

58,799

 

 

54,718

 

 

115,718

 

 

108,758

 
Basic Earnings Per Share

 

1.40

 

 

1.44

 

 

1.31

 

 

2.84

 

 

2.59

 
Diluted Earnings Per Share

 

1.40

 

 

1.43

 

 

1.30

 

 

2.82

 

 

2.57

 
Dividends Declared Per Share

 

0.65

 

 

0.62

 

 

0.60

 

 

1.27

 

 

1.12

 
                     
Performance Ratios                    
Return on Average Assets

 

1.31

%

 

1.38

%

 

1.30

%

 

1.34

%

 

1.29

%

Return on Average Shareholders' Equity

 

17.97

 

 

18.81

 

 

17.68

 

 

18.39

 

 

17.71

 
Efficiency Ratio 1

 

54.69

 

 

55.22

 

 

56.12

 

 

54.95

 

 

57.01

 
Net Interest Margin 2

 

3.04

 

 

3.12

 

 

3.04

 

 

3.08

 

 

3.02

 
Dividend Payout Ratio 3

 

46.43

 

 

43.06

 

 

45.80

 

 

44.72

 

 

43.24

 
Average Shareholders' Equity to Average Assets

 

7.27

 

 

7.35

 

 

7.34

 

 

7.31

 

 

7.31

 
                     
Average Balances                    
Average Loans and Leases

$

10,631,558

 

$

10,467,321

 

$

9,962,860

 

$

10,549,893

 

$

9,883,746

 
Average Assets

 

17,480,651

 

 

17,236,059

 

 

16,921,820

 

 

17,359,031

 

 

16,939,527

 
Average Deposits

 

15,162,782

 

 

14,971,404

 

 

14,709,299

 

 

15,067,622

 

 

14,714,752

 
Average Shareholders' Equity

 

1,270,162

 

 

1,267,438

 

 

1,241,672

 

 

1,268,808

 

 

1,238,628

 
                     
Per Share of Common Stock                    
Book Value

$

31.61

 

$

30.91

 

$

29.65

 

$

31.61

 

$

29.65

 
Tangible Book Value

 

30.83

 

 

30.14

 

 

28.90

 

 

30.83

 

 

28.90

 
Market Value                    
Closing

 

82.91

 

 

78.87

 

 

83.42

 

 

82.91

 

 

83.42

 
High

 

84.53

 

 

83.94

 

 

88.92

 

 

84.53

 

 

89.09

 
Low

 

75.24

 

 

66.54

 

 

80.20

 

 

66.54

 

 

78.40

 
                     
     

June 30,

  March 31,   December 31,   June 30,  
     

2019

 

 

2019

 

 

2018

 

 

2018

 
As of Period End:                    
Balance Sheet Totals                    
Loans and Leases    

$

10,759,129

 

$

10,548,609

 

$

10,448,774

 

$

10,053,323

 
Total Assets    

 

17,688,845

 

 

17,446,413

 

 

17,143,974

 

 

17,124,162

 
Total Deposits    

 

15,488,821

 

 

15,267,310

 

 

15,027,242

 

 

14,943,358

 
Other Debt    

 

110,605

 

 

110,624

 

 

135,643

 

 

235,681

 
Total Shareholders' Equity    

 

1,285,948

 

 

1,269,690

 

 

1,268,200

 

 

1,247,717

 
                     
Asset Quality                    
Non-Performing Assets    

$

21,782

 

$

17,925

 

$

12,930

 

$

15,157

 
Allowance for Loan and Lease Losses    

 

107,672

 

 

106,023

 

 

106,693

 

 

108,188

 
Allowance to Loans and Leases Outstanding    

 

1.00

%

 

1.01

%

 

1.02

%

 

1.08

%

                     
Capital Ratios                    
Common Equity Tier 1 Capital Ratio    

 

12.46

%

 

12.75

%

 

13.07

%

 

13.27

%

Tier 1 Capital Ratio    

 

12.46

 

 

12.75

 

 

13.07

 

 

13.27

 
Total Capital Ratio    

 

13.57

 

 

13.87

 

 

14.21

 

 

14.47

 
Tier 1 Leverage Ratio    

 

7.36

 

 

7.46

 

 

7.60

 

 

7.53

 
Total Shareholders' Equity to Total Assets    

 

7.27

 

 

7.28

 

 

7.40

 

 

7.29

 
Tangible Common Equity to Tangible Assets 4    

 

7.10

 

 

7.11

 

 

7.23

 

 

7.12

 
Tangible Common Equity to Risk-Weighted Assets 4    

 

12.17

 

 

12.28

 

 

12.52

 

 

12.68

 
                     
Non-Financial Data                    
Full-Time Equivalent Employees    

 

2,152

 

 

2,112

 

 

2,122

 

 

2,173

 
Branches    

 

68

 

 

69

 

 

69

 

 

69

 
ATMs    

 

383

 

 

385

 

 

382

 

 

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 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

 

 

 

 

 

June 30,

 

March 31,

 

December 31,

 

June 30,

 

(dollars in thousands)

 

 

2019

 

 

2019

 

 

2018

 

 

2018

 
                       
Total Shareholders' Equity  

$

1,285,948

 

 

$

1,269,690

 

 

$

1,268,200

 

 

$

1,247,717

 

 
Less: Goodwill  

 

31,517

 

 

 

31,517

 

 

 

31,517

 

 

 

31,517

 

 
Tangible Common Equity  

$

1,254,431

 

 

$

1,238,173

 

 

$

1,236,683

 

 

$

1,216,200

 

 
                       
Total Assets  

$

17,688,845

 

 

$

17,446,413

 

 

$

17,143,974

 

 

$

17,124,162

 

 
Less: Goodwill  

 

31,517

 

 

 

31,517

 

 

 

31,517

 

 

 

31,517

 

 
Tangible Assets  

$

17,657,328

 

 

$

17,414,896

 

 

$

17,112,457

 

 

$

17,092,645

 

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

$

10,309,085

 

 

$

10,079,858

 

 

$

9,878,904

 

 

$

9,593,242

 

 
                       
Total Shareholders' Equity to Total Assets  

 

7.27

%

 

 

7.28

%

 

 

7.40

%

 

 

7.29

%

 
Tangible Common Equity to Tangible Assets (Non-GAAP)  

 

7.10

%

 

 

7.11

%

 

 

7.23

%

 

 

7.12

%

 
                       
Tier 1 Capital Ratio  

 

12.46

%

 

 

12.75

%

 

 

13.07

%

 

 

13.27

%

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

 

12.17

%

 

 

12.28

%

 

 

12.52

%

 

 

12.68

%

 
                       
Bank of Hawaii Corporation and Subsidiaries
Consolidated Statements of Income Table 3
  Three Months Ended   Six Months Ended
 

June 30,

March 31,

June 30,

 

June 30,

(dollars in thousands, except per share amounts)

 

2019

 

 

2019

 

 

2018

 

 

 

2019

 

 

2018

 

Interest Income            
Interest and Fees on Loans and Leases

$

110,401

 

$

108,511

 

$

101,311

 

 

$

218,912

 

$

198,945

 

Income on Investment Securities            
Available-for-Sale

 

15,072

 

 

13,432

 

 

12,380

 

 

 

28,504

 

 

24,521

 

Held-to-Maturity

 

22,149

 

 

21,921

 

 

20,711

 

 

 

44,070

 

 

42,007

 

Deposits

 

9

 

 

15

 

 

(4

)

 

 

24

 

 

14

 

Funds Sold

 

730

 

 

1,444

 

 

846

 

 

 

2,174

 

 

1,603

 

Other

 

210

 

 

319

 

 

341

 

 

 

529

 

 

641

 

Total Interest Income

 

148,571

 

 

145,642

 

 

135,585

 

 

 

294,213

 

 

267,731

 

Interest Expense            
Deposits

 

18,628

 

 

15,284

 

 

9,459

 

 

 

33,912

 

 

17,040

 

Securities Sold Under Agreements to Repurchase

 

4,623

 

 

4,571

 

 

4,617

 

 

 

9,194

 

 

9,181

 

Funds Purchased

 

512

 

 

157

 

 

83

 

 

 

669

 

 

136

 

Short-Term Borrowings

 

1

 

 

36

 

 

13

 

 

 

37

 

 

29

 

Other Debt

 

710

 

 

757

 

 

917

 

 

 

1,467

 

 

1,893

 

Total Interest Expense

 

24,474

 

 

20,805

 

 

15,089

 

 

 

45,279

 

 

28,279

 

Net Interest Income

 

124,097

 

 

124,837

 

 

120,496

 

 

 

248,934

 

 

239,452

 

Provision for Credit Losses

 

4,000

 

 

3,000

 

 

3,500

 

 

 

7,000

 

 

7,625

 

Net Interest Income After Provision for Credit Losses

 

120,097

 

 

121,837

 

 

116,996

 

 

 

241,934

 

 

231,827

 

Noninterest Income            
Trust and Asset Management

 

11,385

 

 

10,761

 

 

11,356

 

 

 

22,146

 

 

22,537

 

Mortgage Banking

 

3,336

 

 

2,287

 

 

2,179

 

 

 

5,623

 

 

4,324

 

Service Charges on Deposit Accounts

 

7,283

 

 

7,364

 

 

6,865

 

 

 

14,647

 

 

13,994

 

Fees, Exchange, and Other Service Charges

 

14,252

 

 

14,208

 

 

14,400

 

 

 

28,460

 

 

28,733

 

Investment Securities Gains (Losses), Net

 

(776

)

 

(835

)

 

(1,702

)

 

 

(1,611

)

 

(2,368

)

Annuity and Insurance

 

1,806

 

 

2,578

 

 

1,847

 

 

 

4,384

 

 

3,053

 

Bank-Owned Life Insurance

 

1,779

 

 

1,710

 

 

1,796

 

 

 

3,489

 

 

3,638

 

Other

 

6,385

 

 

5,606

 

 

4,557

 

 

 

11,991

 

 

11,422

 

Total Noninterest Income

 

45,450

 

 

43,679

 

 

41,298

 

 

 

89,129

 

 

85,333

 

Noninterest Expense            
Salaries and Benefits

 

53,511

 

 

56,586

 

 

52,148

 

 

 

110,097

 

 

106,570

 

Net Occupancy

 

8,579

 

 

7,594

 

 

8,588

 

 

 

16,173

 

 

17,122

 

Net Equipment

 

6,895

 

 

6,833

 

 

5,845

 

 

 

13,728

 

 

11,372

 

Data Processing

 

4,727

 

 

4,526

 

 

4,563

 

 

 

9,253

 

 

8,454

 

Professional Fees

 

2,177

 

 

2,453

 

 

2,546

 

 

 

4,630

 

 

5,319

 

FDIC Insurance

 

1,290

 

 

1,269

 

 

2,182

 

 

 

2,559

 

 

4,339

 

Other

 

15,546

 

 

13,796

 

 

14,919

 

 

 

29,342

 

 

31,999

 

Total Noninterest Expense

 

92,725

 

 

93,057

 

 

90,791

 

 

 

185,782

 

 

185,175

 

Income Before Provision for Income Taxes

 

72,822

 

 

72,459

 

 

67,503

 

 

 

145,281

 

 

131,985

 

Provision for Income Taxes

 

15,903

 

 

13,660

 

 

12,785

 

 

 

29,563

 

 

23,227

 

Net Income

$

56,919

 

$

58,799

 

$

54,718

 

 

$

115,718

 

$

108,758

 

Basic Earnings Per Share

$

1.40

 

$

1.44

 

$

1.31

 

 

$

2.84

 

$

2.59

 

Diluted Earnings Per Share

$

1.40

 

$

1.43

 

$

1.30

 

 

$

2.82

 

$

2.57

 

Dividends Declared Per Share

$

0.65

 

$

0.62

 

$

0.60

 

 

$

1.27

 

$

1.12

 

Basic Weighted Average Shares

 

40,541,594

 

 

40,938,318

 

 

41,884,221

 

 

 

40,738,772

 

 

41,960,743

 

Diluted Weighted Average Shares

 

40,769,767

 

 

41,213,453

 

 

42,152,200

 

 

 

40,988,001

 

 

42,252,900

 

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

Three Months Ended

 

 

Six Months Ended

     

June 30,

 

March 31,

 

June 30,

 

 

June 30,

(dollars in thousands)  

 

2019

 

 

2019

 

 

2018

 

 

 

 

2019

 

 

2018

 

Net Income  

$

56,919

 

$

58,799

 

$

54,718

 

   

$

115,718

 

$

108,758

 

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

 

16,209

 

 

6,919

 

 

(2,974

)

   

 

23,128

 

 

(12,095

)

  Defined Benefit Plans  

 

245

 

 

246

 

 

216

 

   

 

491

 

 

432

 

Other Comprehensive Income (Loss)  

 

16,454

 

 

7,165

 

 

(2,758

)

   

 

23,619

 

 

(11,663

)

Comprehensive Income  

$

73,373

 

$

65,964

 

$

51,960

 

   

$

139,337

 

$

97,095

 

                         
Bank of Hawaii Corporation and Subsidiaries        
Consolidated Statements of Condition       Table 5
 

June 30,

March 31,

December 31,

June 30,

(dollars in thousands)

 

2019

 

 

2019

 

 

2018

 

 

2018

 

Assets        
Interest-Bearing Deposits in Other Banks

$

3,859

 

$

3,550

 

$

3,028

 

$

3,524

 

Funds Sold

 

204,340

 

 

243,867

 

 

198,860

 

 

361,933

 

Investment Securities        
Available-for-Sale

 

2,649,949

 

 

1,859,256

 

 

2,007,942

 

 

2,092,870

 

Held-to-Maturity (Fair Value of $2,973,229; $3,637,496; $3,413,994; and $3,500,497)

 

2,959,611

 

 

3,668,811

 

 

3,482,092

 

 

3,595,891

 

Loans Held for Sale

 

22,706

 

 

17,909

 

 

10,987

 

 

16,025

 

Loans and Leases

 

10,759,129

 

 

10,548,609

 

 

10,448,774

 

 

10,053,323

 

Allowance for Loan and Lease Losses

 

(107,672

)

 

(106,023

)

 

(106,693

)

 

(108,188

)

Net Loans and Leases

 

10,651,457

 

 

10,442,586

 

 

10,342,081

 

 

9,945,135

 

Total Earning Assets

 

16,491,922

 

 

16,235,979

 

 

16,044,990

 

 

16,015,378

 

Cash and Due from Banks

 

282,164

 

 

293,871

 

 

324,081

 

 

312,303

 

Premises and Equipment, Net

 

169,671

 

 

159,344

 

 

151,837

 

 

142,791

 

Operating Lease Right-of-Use Assets

 

103,336

 

 

104,166

 

 

-

 

 

-

 

Accrued Interest Receivable

 

49,726

 

 

52,820

 

 

51,230

 

 

50,594

 

Foreclosed Real Estate

 

2,737

 

 

3,225

 

 

1,356

 

 

2,926

 

Mortgage Servicing Rights

 

24,233

 

 

24,149

 

 

24,310

 

 

24,583

 

Goodwill

 

31,517

 

 

31,517

 

 

31,517

 

 

31,517

 

Bank-Owned Life Insurance

 

285,295

 

 

285,155

 

 

283,771

 

 

281,018

 

Other Assets

 

248,244

 

 

256,187

 

 

230,882

 

 

263,052

 

Total Assets

$

17,688,845

 

$

17,446,413

 

$

17,143,974

 

$

17,124,162

 

         
Liabilities        
Deposits        
Noninterest-Bearing Demand

$

4,528,251

 

$

4,595,915

 

$

4,739,596

 

$

4,729,203

 

Interest-Bearing Demand

 

3,033,066

 

 

2,961,444

 

 

3,002,925

 

 

3,111,069

 

Savings

 

6,004,528

 

 

5,946,881

 

 

5,539,199

 

 

5,389,763

 

Time

 

1,922,976

 

 

1,763,070

 

 

1,745,522

 

 

1,713,323

 

Total Deposits

 

15,488,821

 

 

15,267,310

 

 

15,027,242

 

 

14,943,358

 

Short-Term Borrowings

 

-

 

 

-

 

 

199

 

 

330

 

Securities Sold Under Agreements to Repurchase

 

504,299

 

 

504,299

 

 

504,296

 

 

504,193

 

Other Debt

 

110,605

 

 

110,624

 

 

135,643

 

 

235,681

 

Operating Lease Liabilities

 

110,483

 

 

111,230

 

 

-

 

 

-

 

Retirement Benefits Payable

 

40,047

 

 

40,343

 

 

40,494

 

 

36,730

 

Accrued Interest Payable

 

9,454

 

 

8,474

 

 

8,253

 

 

7,395

 

Taxes Payable and Deferred Taxes

 

21,337

 

 

29,935

 

 

19,736

 

 

15,136

 

Other Liabilities

 

117,851

 

 

104,508

 

 

139,911

 

 

133,622

 

Total Liabilities

 

16,402,897

 

 

16,176,723

 

 

15,875,774

 

 

15,876,445

 

Shareholders' Equity        
Common Stock ($.01 par value; authorized 500,000,000 shares; issued / outstanding: June 30, 2019 - 58,175,367 / 40,687,719; March 31, 2019 - 58,166,535 / 41,078,688; December 31, 2018 - 58,063,689 / 41,499,898; and June 30, 2018 - 58,070,285 / 42,084,066)

 

579

 

 

578

 

 

577

 

 

577

 

Capital Surplus

 

577,346

 

 

574,594

 

 

571,704

 

 

566,436

 

Accumulated Other Comprehensive Loss

 

(27,424

)

 

(43,878

)

 

(51,043

)

 

(53,855

)

Retained Earnings

 

1,704,993

 

 

1,674,264

 

 

1,641,314

 

 

1,581,168

 

Treasury Stock, at Cost (Shares: June 30, 2019 - 17,487,648; March 31, 2019 - 17,087,847; December 31, 2018 - 16,563,791; and June 30, 2018 - 15,986,219)

 

(969,546

)

 

(935,868

)

 

(894,352

)

 

(846,609

)

Total Shareholders' Equity

 

1,285,948

 

 

1,269,690

 

 

1,268,200

 

 

1,247,717

 

Total Liabilities and Shareholders' Equity

$

17,688,845

 

$

17,446,413

 

$

17,143,974

 

$

17,124,162

 

         
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, 2018  

41,499,898

 

 

$

577

 

$

571,704

 

$

(51,043

)

 

$

1,641,314

 

 

$

(894,352

)

 

$

1,268,200

 

 
Net Income  

-

 

 

 

-

 

 

-

 

 

-

 

 

 

115,718

 

 

 

-

 

 

 

115,718

 

 
Other Comprehensive Income  

-

 

 

 

-

 

 

-

 

 

23,619

 

 

 

-

 

 

 

-

 

 

 

23,619

 

 
Share-Based Compensation  

-

 

 

 

-

 

 

4,438

 

 

-

 

 

 

-

 

 

 

-

 

 

 

4,438

 

 
Common Stock Issued under Purchase and Equity                          
Compensation Plans  

174,709

 

 

 

2

 

 

1,204

 

 

-

 

 

 

162

 

 

 

2,981

 

 

 

4,349

 

 
Common Stock Repurchased  

(986,888

)

 

 

-

 

 

-

 

 

-

 

 

 

-

 

 

 

(78,175

)

 

 

(78,175

)

 
Cash Dividends Declared ($1.27 per share)  

-

 

 

 

-

 

 

-

 

 

-

 

 

 

(52,201

)

 

 

-

 

 

 

(52,201

)

 
Balance as of June 30, 2019  

40,687,719

 

 

$

579

 

$

577,346

 

$

(27,424

)

 

$

1,704,993

 

 

$

(969,546

)

 

$

1,285,948

 

 
                               
Balance as of December 31, 2017  

42,401,443

 

 

$

576

 

$

561,161

 

$

(34,715

)

 

$

1,512,218

 

 

$

(807,372

)

 

$

1,231,868

 

 
Net Income  

-

 

 

 

-

 

 

-

 

 

-

 

 

 

108,758

 

 

 

-

 

 

 

108,758

 

 
Other Comprehensive Loss  

-

 

 

 

-

 

 

-

 

 

(11,663

)

 

 

-

 

 

 

-

 

 

 

(11,663

)

 
Reclassification of the Income Tax Effects of the                              
Tax Cuts and Jobs Act from AOCI  

-

 

 

 

-

 

 

-

 

 

(7,477

)

 

 

7,477

 

 

 

-

 

 

 

-

 

 
Share-Based Compensation  

-

 

 

 

-

 

 

4,055

 

 

-

 

 

 

-

 

 

 

-

 

 

 

4,055

 

 
Common Stock Issued under Purchase and Equity                          
Compensation Plans  

179,644

 

 

 

1

 

 

1,220

 

 

-

 

 

 

166

 

 

 

2,992

 

 

 

4,379

 

 
Common Stock Repurchased  

(497,021

)

 

 

-

 

 

-

 

 

-

 

 

 

-

 

 

 

(42,229

)

 

 

(42,229

)

 
Cash Dividends Declared ($1.12 per share)  

-

 

 

 

-

 

 

-

 

 

-

 

 

 

(47,451

)

 

 

-

 

 

 

(47,451

)

 
Balance as of June 30, 2018  

42,084,066

 

 

$

577

 

$

566,436

 

$

(53,855

)

 

$

1,581,168

 

 

$

(846,609

)

 

$

1,247,717

 

 
                               
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

 
 

June 30, 2019

 

March 31, 2019

 

June 30, 2018

 
 

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

$

2.9

$

-

1.25

%

$

3.0

$

-

2.05

%

$

2.9

$

-

(0.52

)

%

Funds Sold

 

123.6

 

0.8

2.34

 

 

241.6

 

1.5

2.39

 

 

185.2

 

0.8

1.81

 

 
Investment Securities                        
Available-for-Sale                        
Taxable

 

2,004.3

 

14.3

2.87

 

 

1,595.8

 

11.5

2.90

 

 

1,564.5

 

9.2

2.35

 

 
Non-Taxable

 

86.8

 

0.9

4.15

 

 

279.1

 

2.4

3.45

 

 

583.6

 

4.0

2.78

 

 
Held-to-Maturity                        
Taxable

 

3,358.0

 

21.0

2.50

 

 

3,373.5

 

20.5

2.43

 

 

3,471.7

 

19.2

2.22

 

 
Non-Taxable

 

193.0

 

1.5

3.08

 

 

234.1

 

1.8

3.15

 

 

237.1

 

1.9

3.17

 

 
Total Investment Securities

 

5,642.1

 

37.7

2.68

 

 

5,482.5

 

36.2

2.65

 

 

5,856.9

 

34.3

2.35

 

 
Loans Held for Sale

 

18.7

 

0.2

4.05

 

 

12.4

 

0.1

4.35

 

 

14.8

 

0.2

4.44

 

 
Loans and Leases 1                        
Commercial and Industrial

 

1,385.7

 

14.9

4.31

 

 

1,357.8

 

15.3

4.57

 

 

1,307.6

 

12.8

3.92

 

 
Commercial Mortgage

 

2,386.3

 

25.9

4.35

 

 

2,310.4

 

24.9

4.36

 

 

2,123.5

 

21.9

4.13

 

 
Construction

 

125.3

 

1.7

5.51

 

 

150.4

 

1.9

5.08

 

 

183.4

 

2.2

4.82

 

 
Commercial Lease Financing

 

159.9

 

1.0

2.49

 

 

160.9

 

0.9

2.28

 

 

179.4

 

1.0

2.24

 

 
Residential Mortgage

 

3,730.4

 

36.0

3.87

 

 

3,680.2

 

35.5

3.86

 

 

3,526.9

 

33.6

3.81

 

 
Home Equity

 

1,694.9

 

16.2

3.83

 

 

1,690.0

 

16.1

3.87

 

 

1,612.7

 

15.1

3.76

 

 
Automobile

 

688.5

 

6.2

3.62

 

 

668.2

 

6.0

3.66

 

 

573.6

 

5.7

3.97

 

 
Other 2

 

460.6

 

8.4

7.33

 

 

449.4

 

7.9

7.13

 

 

455.8

 

8.9

7.86

 

 
Total Loans and Leases

 

10,631.6

 

110.3

4.16

 

 

10,467.3

 

108.5

4.18

 

 

9,962.9

 

101.2

4.07

 

 
Other

 

35.0

 

0.2

2.40

 

 

35.5

 

0.3

3.60

 

 

39.8

 

0.4

3.43

 

 
Total Earning Assets 3

 

16,453.9

 

149.2

3.63

 

 

16,242.3

 

146.6

3.64

 

 

16,062.5

 

136.9

3.41

 

 
Cash and Due from Banks

 

241.6

     

 

240.8

     

 

251.0

     
Other Assets

 

785.2

     

 

753.0

     

 

608.3

     
Total Assets

$

17,480.7

     

$

17,236.1

     

$

16,921.8

     
                         
Interest-Bearing Liabilities                        
Interest-Bearing Deposits                        
Demand

$

2,902.5

 

1.4

0.19

 

$

2,939.9

 

1.5

0.20

 

$

2,969.8

 

1.2

0.16

 

 
Savings

 

6,002.0

 

8.9

0.60

 

 

5,760.8

 

6.7

0.47

 

 

5,392.2

 

3.1

0.23

 

 
Time

 

1,866.6

 

8.3

1.79

 

 

1,703.4

 

7.1

1.69

 

 

1,705.7

 

5.2

1.21

 

 
Total Interest-Bearing Deposits

 

10,771.1

 

18.6

0.69

 

 

10,404.1

 

15.3

0.60

 

 

10,067.7

 

9.5

0.38

 

 
Short-Term Borrowings

 

82.3

 

0.5

2.46

 

 

31.1

 

0.2

2.49

 

 

21.0

 

0.1

1.80

 

 
Securities Sold Under Agreements to Repurchase

 

504.3

 

4.7

3.63

 

 

504.3

 

4.6

3.63

 

 

505.1

 

4.6

3.62

 

 
Other Debt

 

110.6

 

0.7

2.57

 

 

120.0

 

0.7

2.55

 

 

235.7

 

0.9

1.56

 

 
Total Interest-Bearing Liabilities

 

11,468.3

 

24.5

0.85

 

 

11,059.5

 

20.8

0.76

 

 

10,829.5

 

15.1

0.56

 

 
Net Interest Income  

$

124.7

     

$

125.8

     

$

121.8

   
Interest Rate Spread    

2.78

%

   

2.88

%

   

2.85

 

%

Net Interest Margin    

3.04

%

   

3.12

%

   

3.04

 

%

Noninterest-Bearing Demand Deposits

 

4,391.7

     

 

4,567.3

     

 

4,641.6

     
Other Liabilities

 

350.5

     

 

341.9

     

 

209.0

     
Shareholders' Equity

 

1,270.2

     

 

1,267.4

     

 

1,241.7

     
Total Liabilities and Shareholders' Equity

$

17,480.7

     

$

17,236.1

     

$

16,921.8

     
                         
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 $601,000, $981,000, and $1,298,000 for the three months ended June 30, 2019, March 31, 2019, and June 30, 2018, respectively.
Bank of Hawaii Corporation and Subsidiaries  
Average Balances and Interest Rates - Taxable-Equivalent Basis Table 7b  
 

Six Months Ended

 

Six Months Ended

 
 

June 30, 2019

 

June 30, 2018

 
 

Average

Income/

Yield/

 

Average

Income/

Yield/

 
(dollars in millions)

Balance

Expense

Rate

 

Balance

Expense

Rate

 
Earning Assets                
Interest-Bearing Deposits in Other Banks

$

2.9

$

-

1.65

%

$

2.9

$

-

0.94

%

Funds Sold

 

182.3

 

2.2

2.37

 

 

194.9

 

1.6

1.64

 
Investment Securities                
Available-for-Sale                
Taxable

 

1,801.2

 

25.9

2.88

 

 

1,579.7

 

18.0

2.29

 
Non-Taxable

 

182.5

 

3.3

3.63

 

 

594.1

 

8.2

2.76

 
Held-to-Maturity                
Taxable

 

3,365.7

 

41.5

2.46

 

 

3,551.0

 

39.0

2.20

 
Non-Taxable

 

213.4

 

3.3

3.12

 

 

237.6

 

3.8

3.17

 
Total Investment Securities

 

5,562.8

 

74.0

2.66

 

 

5,962.4

 

69.0

2.32

 
Loans Held for Sale

 

15.6

 

0.3

4.16

 

 

14.5

 

0.3

4.11

 
Loans and Leases 1                
Commercial and Industrial

 

1,371.8

 

30.2

4.43

 

 

1,294.3

 

24.6

3.83

 
Commercial Mortgage

 

2,348.6

 

50.7

4.36

 

 

2,110.0

 

42.4

4.06

 
Construction

 

137.8

 

3.6

5.27

 

 

186.4

 

4.3

4.63

 
Commercial Lease Financing

 

160.4

 

1.9

2.38

 

 

179.5

 

2.0

2.22

 
Residential Mortgage

 

3,705.4

 

71.5

3.86

 

 

3,502.6

 

66.9

3.82

 
Home Equity

 

1,692.5

 

32.3

3.85

 

 

1,604.1

 

29.7

3.73

 
Automobile

 

678.4

 

12.3

3.64

 

 

557.7

 

11.3

4.08

 
Other 2

 

455.0

 

16.3

7.23

 

 

449.1

 

17.6

7.88

 
Total Loans and Leases

 

10,549.9

 

218.8

4.17

 

 

9,883.7

 

198.8

4.04

 
Other

 

35.2

 

0.5

3.00

 

 

40.3

 

0.7

3.19

 
Total Earning Assets 3

 

16,348.7

 

295.8

3.63

 

 

16,098.7

 

270.4

3.37

 
Cash and Due from Banks

 

241.2

     

 

239.9

     
Other Assets

 

769.1

     

 

600.9

     
Total Assets

$

17,359.0

     

$

16,939.5

     
                 
Interest-Bearing Liabilities                
Interest-Bearing Deposits                
Demand

$

2,921.1

 

2.8

0.20

 

$

2,974.0

 

1.9

0.13

 
Savings

 

5,882.1

 

15.7

0.54

 

 

5,379.3

 

5.3

0.20

 
Time

 

1,785.4

 

15.4

1.74

 

 

1,709.6

 

9.8

1.16

 
Total Interest-Bearing Deposits

 

10,588.6

 

33.9

0.65

 

 

10,062.9

 

17.0

0.34

 
Short-Term Borrowings

 

56.8

 

0.7

2.47

 

 

20.0

 

0.2

1.64

 
Securities Sold Under Agreements to Repurchase

 

504.3

 

9.2

3.63

 

 

505.2

 

9.2

3.61

 
Other Debt

 

115.3

 

1.5

2.56

 

 

246.3

 

1.9

1.55

 
Total Interest-Bearing Liabilities

 

11,265.0

 

45.3

0.81

 

 

10,834.4

 

28.3

0.52

 
Net Interest Income  

$

250.5

     

$

242.1

   
Interest Rate Spread    

2.82

%

   

2.85

%

Net Interest Margin    

3.08

%

   

3.02

%

Noninterest-Bearing Demand Deposits

 

4,479.0

     

 

4,651.9

     
Other Liabilities

 

346.2

     

 

214.6

     
Shareholders' Equity

 

1,268.8

     

 

1,238.6

     
Total Liabilities and Shareholders' Equity

$

17,359.0

     

$

16,939.5

     
                 
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 $1,582,000 and $2,642,000 for the six months ended June 30, 2019 and June 30, 2018, respectively.
Bank of Hawaii Corporation and Subsidiaries
Analysis of Change in Net Interest Income - Taxable-Equivalent Basis Table 8a
  Three Months Ended June 30, 2019
  Compared to March 31, 2019
(dollars in millions) Volume 1 Rate 1 Total
Change in Interest Income:      
Funds Sold

$

(0.7

)

$

-

 

$

(0.7

)

Investment Securities      
Available-for-Sale      
Taxable

 

2.9

 

 

(0.1

)

 

2.8

 

Non-Taxable

 

(1.9

)

 

0.4

 

 

(1.5

)

Held-to-Maturity      
Taxable

 

(0.1

)

 

0.6

 

 

0.5

 

Non-Taxable

 

(0.3

)

 

-

 

 

(0.3

)

Total Investment Securities

 

0.6

 

 

0.9

 

 

1.5

 

Loans Held for Sale

 

0.1

 

 

-

 

 

0.1

 

Loans and Leases      
Commercial and Industrial

 

0.4

 

 

(0.8

)

 

(0.4

)

Commercial Mortgage

 

1.1

 

 

(0.1

)

 

1.0

 

Construction

 

(0.3

)

 

0.1

 

 

(0.2

)

Commercial Lease Financing

 

-

 

 

0.1

 

 

0.1

 

Residential Mortgage

 

0.5

 

 

-

 

 

0.5

 

Home Equity

 

0.1

 

 

-

 

 

0.1

 

Automobile

 

0.2

 

 

-

 

 

0.2

 

Other 2

 

0.2

 

 

0.3

 

 

0.5

 

Total Loans and Leases

 

2.2

 

 

(0.4

)

 

1.8

 

Other

 

-

 

 

(0.1

)

 

(0.1

)

Total Change in Interest Income

 

2.2

 

 

0.4

 

 

2.6

 

       
Change in Interest Expense:      
Interest-Bearing Deposits      
Demand

 

-

 

 

(0.1

)

 

(0.1

)

Savings

 

0.3

 

 

1.9

 

 

2.2

 

Time

 

0.7

 

 

0.5

 

 

1.2

 

Total Interest-Bearing Deposits

 

1.0

 

 

2.3

 

 

3.3

 

Short-Term Borrowings

 

0.3

 

 

-

 

 

0.3

 

Securities Sold Under Agreements to Repurchase

 

-

 

 

0.1

 

 

0.1

 

Total Change in Interest Expense

 

1.3

 

 

2.4

 

 

3.7

 

       
Change in Net Interest Income

$

0.9

 

$

(2.0

)

$

(1.1

)

       
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 June 30, 2019
  Compared to June 30, 2018
(dollars in millions) Volume 1 Rate 1 Total
Change in Interest Income:      
Funds Sold

$

(0.2

)

$

0.2

 

$

-

 

Investment Securities      
Available-for-Sale      
Taxable

 

2.8

 

 

2.3

 

 

5.1

 

Non-Taxable

 

(4.5

)

 

1.4

 

 

(3.1

)

Held-to-Maturity      
Taxable

 

(0.6

)

 

2.4

 

 

1.8

 

Non-Taxable

 

(0.3

)

 

(0.1

)

 

(0.4

)

Total Investment Securities

 

(2.6

)

 

6.0

 

 

3.4

 

Loans and Leases      
Commercial and Industrial

 

0.8

 

 

1.3

 

 

2.1

 

Commercial Mortgage

 

2.8

 

 

1.2

 

 

4.0

 

Construction

 

(0.8

)

 

0.3

 

 

(0.5

)

Commercial Lease Financing

 

(0.1

)

 

0.1

 

 

-

 

Residential Mortgage

 

1.9

 

 

0.5

 

 

2.4

 

Home Equity

 

0.8

 

 

0.3

 

 

1.1

 

Automobile

 

1.1

 

 

(0.6

)

 

0.5

 

Other 2

 

0.1

 

 

(0.6

)

 

(0.5

)

Total Loans and Leases

 

6.6

 

 

2.5

 

 

9.1

 

Other

 

(0.1

)

 

(0.1

)

 

(0.2

)

Total Change in Interest Income

 

3.7

 

 

8.6

 

 

12.3

 

       
Change in Interest Expense:      
Interest-Bearing Deposits      
Demand

 

-

 

 

0.2

 

 

0.2

 

Savings

 

0.4

 

 

5.4

 

 

5.8

 

Time

 

0.4

 

 

2.7

 

 

3.1

 

Total Interest-Bearing Deposits

 

0.8

 

 

8.3

 

 

9.1

 

Short-Term Borrowings

 

0.4

 

 

-

 

 

0.4

 

Securities Sold Under Agreements to Repurchase

 

-

 

 

0.1

 

 

0.1

 

Other Debt

 

(0.6

)

 

0.4

 

 

(0.2

)

Total Change in Interest Expense

 

0.6

 

 

8.8

 

 

9.4

 

       
Change in Net Interest Income

$

3.1

 

$

(0.2

)

$

2.9

 

       
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
  Six Months Ended June 30, 2019
  Compared to June 30, 2018
(dollars in millions) Volume 1 Rate 1 Total
Change in Interest Income:      
Funds Sold

$

(0.1

)

$

0.7

 

$

0.6

 

Investment Securities      
Available-for-Sale      
Taxable

 

2.8

 

 

5.1

 

 

7.9

 

Non-Taxable

 

(6.9

)

 

2.0

 

 

(4.9

)

Held-to-Maturity      
Taxable

 

(2.1

)

 

4.6

 

 

2.5

 

Non-Taxable

 

(0.4

)

 

(0.1

)

 

(0.5

)

Total Investment Securities

 

(6.6

)

 

11.6

 

 

5.0

 

Loans and Leases      
Commercial and Industrial

 

1.5

 

 

4.1

 

 

5.6

 

Commercial Mortgage

 

5.0

 

 

3.3

 

 

8.3

 

Construction

 

(1.2

)

 

0.5

 

 

(0.7

)

Commercial Lease Financing

 

(0.2

)

 

0.1

 

 

(0.1

)

Residential Mortgage

 

3.9

 

 

0.7

 

 

4.6

 

Home Equity

 

1.7

 

 

0.9

 

 

2.6

 

Automobile

 

2.3

 

 

(1.3

)

 

1.0

 

Other 2

 

0.2

 

 

(1.5

)

 

(1.3

)

Total Loans and Leases

 

13.2

 

 

6.8

 

 

20.0

 

Other

 

(0.1

)

 

(0.1

)

 

(0.2

)

Total Change in Interest Income

 

6.4

 

 

19.0

 

 

25.4

 

       
Change in Interest Expense:      
Interest-Bearing Deposits      
Demand

 

-

 

 

0.9

 

 

0.9

 

Savings

 

0.5

 

 

9.9

 

 

10.4

 

Time

 

0.5

 

 

5.1

 

 

5.6

 

Total Interest-Bearing Deposits

 

1.0

 

 

15.9

 

 

16.9

 

Short-Term Borrowings

 

0.4

 

 

0.1

 

 

0.5

 

Other Debt

 

(1.3

)

 

0.9

 

 

(0.4

)

Total Change in Interest Expense

 

0.1

 

 

16.9

 

 

17.0

 

       
Change in Net Interest Income

$

6.3

 

$

2.1

 

$

8.4

 

       
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  
Salaries and Benefits Table 9
 

Three Months Ended

 

Six Months Ended

 

June 30,

March 31,

June 30,

 

June 30,

(dollars in thousands)

2019

2019

2018

 

2019

2018

Salaries

$

32,834

$

32,480

$

33,269

 

$

65,314

$

65,973

Incentive Compensation

 

5,464

 

5,904

 

4,416

 

 

11,368

 

9,594

Share-Based Compensation

 

1,994

 

3,079

 

2,423

 

 

5,073

 

4,504

Commission Expense

 

1,704

 

930

 

1,272

 

 

2,634

 

2,226

Retirement and Other Benefits

 

4,580

 

5,107

 

4,178

 

 

9,687

 

9,019

Payroll Taxes

 

2,643

 

4,247

 

2,568

 

 

6,890

 

6,740

Medical, Dental, and Life Insurance

 

3,926

 

4,465

 

3,820

 

 

8,391

 

7,281

Separation Expense

 

366

 

374

 

202

 

 

740

 

1,233

Total Salaries and Benefits

$

53,511

$

56,586

$

52,148

 

$

110,097

$

106,570

             
Bank of Hawaii Corporation and Subsidiaries  
Loan and Lease Portfolio Balances Table 10
   

June 30,

March 31,

December 31,

September 30,

June 30,

(dollars in thousands)

 

2019

 

2019

 

2018

 

2018

 

2018

Commercial          
  Commercial and Industrial

$

1,408,729

$

1,331,345

$

1,331,149

$

1,314,609

$

1,282,967

  Commercial Mortgage

 

2,411,289

 

2,381,213

 

2,302,356

 

2,237,020

 

2,169,357

  Construction

 

119,228

 

132,775

 

170,061

 

176,447

 

185,350

  Lease Financing

 

163,070

 

154,919

 

176,226

 

172,232

 

178,598

Total Commercial

 

4,102,316

 

4,000,252

 

3,979,792

 

3,900,308

 

3,816,272

Consumer          
  Residential Mortgage

 

3,785,006

 

3,702,553

 

3,673,796

 

3,596,627

 

3,548,444

  Home Equity

 

1,694,577

 

1,698,666

 

1,681,442

 

1,625,208

 

1,622,314

  Automobile

 

703,523

 

676,730

 

658,133

 

625,086

 

592,705

  Other 1

 

473,707

 

470,408

 

455,611

 

483,833

 

473,588

Total Consumer

 

6,656,813

 

6,548,357

 

6,468,982

 

6,330,754

 

6,237,051

Total Loans and Leases

$

10,759,129

$

10,548,609

$

10,448,774

$

10,231,062

$

10,053,323

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

 

2019

 

2019

 

2018

 

2018

 

2018

Consumer

$

7,880,284

$

7,944,793

$

7,726,731

$

7,627,527

$

7,672,435

Commercial

 

6,178,984

 

6,162,042

 

6,098,186

 

5,967,343

 

5,921,414

Public and Other

 

1,429,553

 

1,160,475

 

1,202,325

 

1,248,465

 

1,349,509

Total Deposits

$

15,488,821

$

15,267,310

$

15,027,242

$

14,843,335

$

14,943,358

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

 

2019

 

 

2019

 

 

2018

 

 

2018

 

 

2018

 

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

$

552

 

$

393

 

$

542

 

$

1,205

 

$

917

 

Commercial Mortgage  

 

11,310

 

 

5,911

 

 

2,040

 

 

652

 

 

659

 

Total Commercial  

 

11,862

 

 

6,304

 

 

2,582

 

 

1,857

 

 

1,576

 

Consumer            
Residential Mortgage  

 

4,697

 

 

5,599

 

 

5,321

 

 

6,359

 

 

6,722

 

Home Equity  

 

2,486

 

 

2,797

 

 

3,671

 

 

3,673

 

 

3,933

 

Total Consumer  

 

7,183

 

 

8,396

 

 

8,992

 

 

10,032

 

 

10,655

 

Total Non-Accrual Loans and Leases  

 

19,045

 

 

14,700

 

 

11,574

 

 

11,889

 

 

12,231

 

Foreclosed Real Estate  

 

2,737

 

 

3,225

 

 

1,356

 

 

1,909

 

 

2,926

 

Total Non-Performing Assets  

$

21,782

 

$

17,925

 

$

12,930

 

$

13,798

 

$

15,157

 

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

$

-

 

$

66

 

$

10

 

$

-

 

$

2

 

Commercial Mortgage  

 

-

 

 

-

 

 

-

 

 

-

 

 

5,680

 

Total Commercial  

 

-

 

 

66

 

 

10

 

 

-

 

 

5,682

 

Consumer            
Residential Mortgage  

$

1,859

 

$

903

 

$

2,446

 

$

2,426

 

$

2,281

 

Home Equity  

 

2,981

 

 

3,381

 

 

2,684

 

 

3,112

 

 

3,016

 

Automobile  

 

607

 

 

734

 

 

513

 

 

829

 

 

674

 

Other 1  

 

963

 

 

1,033

 

 

914

 

 

1,727

 

 

1,660

 

Total Consumer  

 

6,410

 

 

6,051

 

 

6,557

 

 

8,094

 

 

7,631

 

Total Accruing Loans and Leases Past Due 90 Days or More  

$

6,410

 

$

6,117

 

$

6,567

 

$

8,094

 

$

13,313

 

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

$

48,563

 

$

48,571

 

$

48,731

 

$

49,462

 

$

50,212

 

Total Loans and Leases  

$

10,759,129

 

$

10,548,609

 

$

10,448,774

 

$

10,231,062

 

$

10,053,323

 

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

 

0.18

%

 

0.14

%

 

0.11

%

 

0.12

%

 

0.12

%

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

 

0.20

%

 

0.17

%

 

0.12

%

 

0.13

%

 

0.15

%

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

 

0.29

%

 

0.16

%

 

0.06

%

 

0.05

%

 

0.04

%

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

 

0.15

%

 

0.18

%

 

0.16

%

 

0.19

%

 

0.22

%

             
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

%

 

0.23

%

 

0.19

%

 

0.21

%

 

0.28

%

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

$

17,925

 

$

12,930

 

$

13,798

 

$

15,157

 

$

15,736

 

Additions  

 

6,186

 

 

8,217

 

 

4,509

 

 

2,030

 

 

1,949

 

Reductions            
Payments  

 

(441

)

 

(989

)

 

(3,759

)

 

(415

)

 

(1,847

)

Return to Accrual Status  

 

(1,344

)

 

(316

)

 

(605

)

 

(1,420

)

 

(126

)

Sales of Foreclosed Real Estate  

 

(374

)

 

-

 

 

(653

)

 

(1,301

)

 

(421

)

Charge-offs/Write-downs  

 

(170

)

 

(1,917

)

 

(360

)

 

(253

)

 

(134

)

Total Reductions  

 

(2,329

)

 

(3,222

)

 

(5,377

)

 

(3,389

)

 

(2,528

)

Balance at End of Quarter  

$

21,782

 

$

17,925

 

$

12,930

 

$

13,798

 

$

15,157

 

             
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   Six Months Ended
   

June 30,

March 31,

June 30,

 

June 30,

(dollars in thousands)  

 

2019

 

 

2019

 

 

2018

 

 

 

2019

 

 

2018

 

Balance at Beginning of Period  

$

 

112,845

 

$

 

113,515

 

$

 

114,760

 

 

$

 

113,515

 

 

114,168

 

Loans and Leases Charged-Off              
Commercial              
Commercial and Industrial  

 

(206

)

 

(370

)

 

(485

)

 

 

(576

)

 

(691

)

Commercial Mortgage  

 

-

 

 

(1,616

)

 

-

 

 

 

(1,616

)

 

-

 

Consumer              
Residential Mortgage  

 

(51

)

 

(4

)

 

(3

)

 

 

(55

)

 

(100

)

Home Equity  

 

(145

)

 

(295

)

 

(44

)

 

 

(440

)

 

(135

)

Automobile  

 

(1,691

)

 

(1,753

)

 

(1,515

)

 

 

(3,444

)

 

(3,769

)

Other 1  

 

(3,036

)

 

(2,790

)

 

(3,614

)

 

 

(5,826

)

 

(6,954

)

Total Loans and Leases Charged-Off  

 

(5,129

)

 

(6,828

)

 

(5,661

)

 

 

(11,957

)

 

(11,649

)

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

 

401

 

 

501

 

 

366

 

 

 

902

 

 

694

 

Consumer              
Residential Mortgage  

 

95

 

 

484

 

 

214

 

 

 

579

 

 

434

 

Home Equity  

 

746

 

 

588

 

 

451

 

 

 

1,334

 

 

1,076

 

Automobile  

 

908

 

 

881

 

 

738

 

 

 

1,789

 

 

1,337

 

Other 1  

 

628

 

 

704

 

 

642

 

 

 

1,332

 

 

1,325

 

Total Recoveries on Loans and Leases Previously Charged-Off  

 

2,778

 

 

3,158

 

 

2,411

 

 

 

5,936

 

 

4,866

 

Net Loans and Leases Charged-Off  

 

(2,351

)

 

(3,670

)

 

(3,250

)

 

 

(6,021

)

 

(6,783

)

Provision for Credit Losses  

 

4,000

 

 

3,000

 

 

3,500

 

 

 

7,000

 

 

7,625

 

Provision for Unfunded Commitments  

 

-

 

 

-

 

 

-

 

 

 

-

 

 

-

 

Balance at End of Period 2  

$

 

114,494

 

$

 

112,845

 

$

 

115,010

 

 

$

 

114,494

 

$

 

115,010

 

               
Components              
Allowance for Loan and Lease Losses  

$

 

107,672

 

$

 

106,023

 

$

 

108,188

 

 

$

 

107,672

 

 

108,188

 

Reserve for Unfunded Commitments  

 

6,822

 

 

6,822

 

 

6,822

 

 

 

6,822

 

 

6,822

 

Total Reserve for Credit Losses  

$

 

114,494

 

$

 

112,845

 

$

 

115,010

 

 

$

 

114,494

 

$

 

115,010

 

               
Average Loans and Leases Outstanding  

$

 

10,631,558

 

$

 

10,467,321

 

$

 

9,962,860

 

 

$

 

10,549,893

 

$

 

9,883,746

 

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

 

0.09

%

 

0.14

%

 

0.13

%

 

 

0.12

%

 

0.14

%

Ratio of Allowance for Loan and Lease Losses to Loans and Leases Outstanding

 

1.00

%

 

1.01

%

 

1.08

%

 

 

1.00

%

1.08

%

             
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 June 30, 2019          
Net Interest Income

$

67,217

 

$

45,703

 

$

9,846

 

$

1,331

 

$

124,097

 

Provision for Credit Losses

 

2,527

 

 

(175

)

 

(1

)

 

1,649

 

 

4,000

 

Net Interest Income After Provision for Credit Losses

 

64,690

 

 

45,878

 

 

9,847

 

 

(318

)

 

120,097

 

Noninterest Income

 

21,108

 

 

6,938

 

 

14,859

 

 

2,545

 

 

45,450

 

Noninterest Expense

 

(52,086

)

 

(21,260

)

 

(16,457

)

 

(2,922

)

 

(92,725

)

Income Before Provision for Income Taxes

 

33,712

 

 

31,556

 

 

8,249

 

 

(695

)

 

72,822

 

Provision for Income Taxes

 

(8,231

)

 

(7,945

)

 

(2,174

)

 

2,447

 

 

(15,903

)

Net Income

$

25,481

 

$

23,611

 

$

6,075

 

$

1,752

 

$

56,919

 

Total Assets as of June 30, 2019

$

6,586,854

 

$

4,089,452

 

$

337,484

 

$

6,675,055

 

$

17,688,845

 

           
           
Three Months Ended June 30, 2018          
Net Interest Income

$

65,683

 

$

44,010

 

$

10,526

 

$

277

 

$

120,496

 

Provision for Credit Losses

 

3,445

 

 

(194

)

 

-

 

 

249

 

 

3,500

 

Net Interest Income After Provision for Credit Losses

 

62,238

 

 

44,204

 

 

10,526

 

 

28

 

 

116,996

 

Noninterest Income

 

19,598

 

 

5,512

 

 

14,745

 

 

1,443

 

 

41,298

 

Noninterest Expense

 

(51,939

)

 

(19,858

)

 

(16,400

)

 

(2,594

)

 

(90,791

)

Income Before Provision for Income Taxes

 

29,897

 

 

29,858

 

 

8,871

 

 

(1,123

)

 

67,503

 

Provision for Income Taxes

 

(7,473

)

 

(6,740

)

 

(2,338

)

 

3,766

 

 

(12,785

)

Net Income

$

22,424

 

$

23,118

 

$

6,533

 

$

2,643

 

$

54,718

 

Total Assets as of June 30, 2018

$

6,142,457

 

$

3,799,535

 

$

342,464

 

$

6,839,706

 

$

17,124,162

 

           
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
Six Months Ended June 30, 2019          
Net Interest Income

$

133,371

 

$

92,993

 

$

20,044

 

$

2,526

 

$

248,934

 

Provision for Credit Losses

 

4,768

 

 

1,271

 

 

(18

)

 

979

 

 

7,000

 

Net Interest Income After Provision for Credit Losses

 

128,603

 

 

91,722

 

 

20,062

 

 

1,547

 

 

241,934

 

Noninterest Income

 

42,341

 

 

13,999

 

 

28,104

 

 

4,685

 

 

89,129

 

Noninterest Expense

 

(104,610

)

 

(42,215

)

 

(33,360

)

 

(5,597

)

 

(185,782

)

Income Before Provision for Income Taxes

 

66,334

 

 

63,506

 

 

14,806

 

 

635

 

 

145,281

 

Provision for Income Taxes

 

(16,336

)

 

(13,947

)

 

(3,903

)

 

4,623

 

 

(29,563

)

Net Income

$

49,998

 

$

49,559

 

$

10,903

 

$

5,258

 

$

115,718

 

Total Assets as of June 30, 2019

$

6,586,854

 

$

4,089,452

 

$

337,484

 

$

6,675,055

 

$

17,688,845

 

           
           
Six Months Ended June 30, 2018          
Net Interest Income

$

130,080

 

$

86,908

 

$

20,413

 

$

2,051

 

$

239,452

 

Provision for Credit Losses

 

7,188

 

 

(345

)

 

(60

)

 

842

 

 

7,625

 

Net Interest Income After Provision for Credit Losses

 

122,892

 

 

87,253

 

 

20,473

 

 

1,209

 

 

231,827

 

Noninterest Income

 

38,851

 

 

11,154

 

 

28,415

 

 

6,913

 

 

85,333

 

Noninterest Expense

 

(106,538

)

 

(40,190

)

 

(32,607

)

 

(5,840

)

 

(185,175

)

Income Before Provision for Income Taxes

 

55,205

 

 

58,217

 

 

16,281

 

 

2,282

 

 

131,985

 

Provision for Income Taxes

 

(13,764

)

 

(13,564

)

 

(4,292

)

 

8,393

 

 

(23,227

)

Net Income

$

41,441

 

$

44,653

 

$

11,989

 

$

10,675

 

$

108,758

 

Total Assets as of June 30, 2018

$

6,142,457

 

$

3,799,535

 

$

342,464

 

$

6,839,706

 

$

17,124,162

 

           
Bank of Hawaii Corporation and Subsidiaries      
Selected Quarterly Financial Data   Table 14  
  Three Months Ended  
  June 30,   March 31,   December 31,   September 30,   June 30,  
(dollars in thousands, except per share amounts)

 

2019

 

 

 

2019

 

 

 

2018

 

 

 

2018

 

 

 

2018

 

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

$

110,401

 

 

$

108,511

 

 

$

107,404

 

 

$

104,248

 

 

$

101,311

 

 
Income on Investment Securities                    
Available-for-Sale

 

15,072

 

 

 

13,432

 

 

 

13,043

 

 

 

12,588

 

 

 

12,380

 

 
Held-to-Maturity

 

22,149

 

 

 

21,921

 

 

 

21,482

 

 

 

20,821

 

 

 

20,711

 

 
Deposits

 

9

 

 

 

15

 

 

 

10

 

 

 

10

 

 

 

(4

)

 
Funds Sold

 

730

 

 

 

1,444

 

 

 

727

 

 

 

1,393

 

 

 

846

 

 
Other

 

210

 

 

 

319

 

 

 

352

 

 

 

364

 

 

 

341

 

 
Total Interest Income

 

148,571

 

 

 

145,642

 

 

 

143,018

 

 

 

139,424

 

 

 

135,585

 

 
Interest Expense                    
Deposits

 

18,628

 

 

 

15,284

 

 

 

13,172

 

 

 

10,931

 

 

 

9,459

 

 
Securities Sold Under Agreements to Repurchase

 

4,623

 

 

 

4,571

 

 

 

4,671

 

 

 

4,667

 

 

 

4,617

 

 
Funds Purchased

 

512

 

 

 

157

 

 

 

440

 

 

 

33

 

 

 

83

 

 
Short-Term Borrowings

 

1

 

 

 

36

 

 

 

88

 

 

 

28

 

 

 

13

 

 
Other Debt

 

710

 

 

 

757

 

 

 

674

 

 

 

838

 

 

 

917

 

 
Total Interest Expense

 

24,474

 

 

 

20,805

 

 

 

19,045

 

 

 

16,497

 

 

 

15,089

 

 
Net Interest Income

 

124,097

 

 

 

124,837

 

 

 

123,973

 

 

 

122,927

 

 

 

120,496

 

 
Provision for Credit Losses

 

4,000

 

 

 

3,000

 

 

 

2,000

 

 

 

3,800

 

 

 

3,500

 

 
Net Interest Income After Provision for Credit Losses

 

120,097

 

 

 

121,837

 

 

 

121,973

 

 

 

119,127

 

 

 

116,996

 

 
Noninterest Income                    
Trust and Asset Management

 

11,385

 

 

 

10,761

 

 

 

10,558

 

 

 

10,782

 

 

 

11,356

 

 
Mortgage Banking

 

3,336

 

 

 

2,287

 

 

 

2,148

 

 

 

1,965

 

 

 

2,179

 

 
Service Charges on Deposit Accounts

 

7,283

 

 

 

7,364

 

 

 

7,562

 

 

 

7,255

 

 

 

6,865

 

 
Fees, Exchange, and Other Service Charges

 

14,252

 

 

 

14,208

 

 

 

14,576

 

 

 

14,173

 

 

 

14,400

 

 
Investment Securities Gains (Losses), Net

 

(776

)

 

 

(835

)

 

 

(841

)

 

 

(729

)

 

 

(1,702

)

 
Annuity and Insurance

 

1,806

 

 

 

2,578

 

 

 

1,409

 

 

 

1,360

 

 

 

1,847

 

 
Bank-Owned Life Insurance

 

1,779

 

 

 

1,710

 

 

 

1,941

 

 

 

1,620

 

 

 

1,796

 

 
Other

 

6,385

 

 

 

5,606

 

 

 

4,755

 

 

 

5,056

 

 

 

4,557

 

 
Total Noninterest Income

 

45,450

 

 

 

43,679

 

 

 

42,108

 

 

 

41,482

 

 

 

41,298

 

 
Noninterest Expense                    
Salaries and Benefits

 

53,511

 

 

 

56,586

 

 

 

54,856

 

 

 

51,782

 

 

 

52,148

 

 
Net Occupancy

 

8,579

 

 

 

7,594

 

 

 

8,918

 

 

 

8,702

 

 

 

8,588

 

 
Net Equipment

 

6,895

 

 

 

6,833

 

 

 

6,364

 

 

 

6,116

 

 

 

5,845

 

 
Data Processing

 

4,727

 

 

 

4,526

 

 

 

5,151

 

 

 

4,241

 

 

 

4,563

 

 
Professional Fees

 

2,177

 

 

 

2,453

 

 

 

2,467

 

 

 

2,206

 

 

 

2,546

 

 
FDIC Insurance

 

1,290

 

 

 

1,269

 

 

 

1,336

 

 

 

2,057

 

 

 

2,182

 

 
Other

 

15,546

 

 

 

13,796

 

 

 

16,819

 

 

 

15,434

 

 

 

14,919

 

 
Total Noninterest Expense

 

92,725

 

 

 

93,057

 

 

 

95,911

 

 

 

90,538

 

 

 

90,791

 

 
Income Before Provision for Income Taxes

 

72,822

 

 

 

72,459

 

 

 

68,170

 

 

 

70,071

 

 

 

67,503

 

 
Provision for Income Taxes

 

15,903

 

 

 

13,660

 

 

 

14,259

 

 

 

13,138

 

 

 

12,785

 

 
Net Income

$

56,919

 

 

$

58,799

 

 

$

53,911

 

 

$

56,933

 

 

$

54,718

 

 
                     
Basic Earnings Per Share

$

1.40

 

 

$

1.44

 

 

$

1.30

 

 

$

1.37

 

 

$

1.31

 

 
Diluted Earnings Per Share

$

1.40

 

 

$

1.43

 

 

$

1.30

 

 

$

1.36

 

 

$

1.30

 

 
                     
Balance Sheet Totals                    
Loans and Leases

$

10,759,129

 

 

$

10,548,609

 

 

$

10,448,774

 

 

$

10,231,062

 

 

$

10,053,323

 

 
Total Assets

 

17,688,845

 

 

 

17,446,413

 

 

 

17,143,974

 

 

 

16,991,734

 

 

 

17,124,162

 

 
Total Deposits

 

15,488,821

 

 

 

15,267,310

 

 

 

15,027,242

 

 

 

14,843,335

 

 

 

14,943,358

 

 
Total Shareholders' Equity

 

1,285,948

 

 

 

1,269,690

 

 

 

1,268,200

 

 

 

1,253,327

 

 

 

1,247,717

 

 
                     
Performance Ratios                    
Return on Average Assets

 

1.31

 

%

 

1.38

 

%

 

1.26

 

%

 

1.33

 

%

 

1.30

 

%

Return on Average Shareholders' Equity

 

17.97

 

 

 

18.81

 

 

 

17.05

 

 

 

18.06

 

 

 

17.68

 

 
Efficiency Ratio 1

 

54.69

 

 

 

55.22

 

 

 

57.75

 

 

 

55.07

 

 

 

56.12

 

 
Net Interest Margin 2

 

3.04

 

 

 

3.12

 

 

 

3.10

 

 

 

3.07

 

 

 

3.04

 

 
                     
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
  Five Months Ended   Year Ended
($ in millions; jobs in thousands) May 31, 2019   December 31, 2018 December 31, 2017
Hawaii Economic Trends                      
State General Fund Revenues 1

$

3,196.6

6.4

%

$

6,933.1

 

 

6.9

 

%

$

6,485.0

 

4.3

%

General Excise and Use Tax Revenue 1

$

1,551.9

8.3

%

$

3,426.5

 

 

2.3

 

%

$

3,349.8

 

4.5

%

Jobs 2

 

648.9

   

 

660.0

 

     

 

664.5

     
                       
           

June 30,

 

December 31,

(spot rates)          

2019

 

2018

2017

Unemployment 3                      
Statewide, seasonally adjusted          

2.8

 

%

 

2.5

%

2.1

%

                       
Oahu          

3.1

 

 

 

2.2

 

1.7

 
Island of Hawaii          

4.1

 

 

 

2.9

 

2.0

 
Maui          

3.1

 

 

 

2.3

 

1.8

 
Kauai          

3.1

 

 

 

2.3

 

1.7

 
                       
       

June 30,

 

December 31,

(percentage change, except months of inventory)      

2019

 

2018

 

2017

2016

Housing Trends (Single Family Oahu) 4                      
Median Home Price      

 

(0.5

)

%

4.6

 

%

 

2.7

%

5.0

%

Home Sales Volume (units)      

 

(3.7

)

%

(7.7

)

%

 

6.3

%

6.5

%

Months of Inventory      

 

3.6

 

 

2.8

 

 

 

2.1

 

2.5

 
                       
        Monthly Visitor Arrivals,   Percentage Change
(in thousands)       Not Seasonally Adjusted   from Previous Year
Tourism 5                      
                       
May 31, 2019          

841.4

 

     

4.6

 
April 30, 2019          

856.3

 

     

6.6

 
March 31, 2019          

939.1

 

     

3.9

 
February 28, 2019          

782.6

 

     

0.5

 
January 31, 2019          

820.6

 

     

3.0

 
December 31, 2018          

910.1

 

     

3.4

 
November 30, 2018          

782.0

 

     

4.3

 
October 31, 2018          

770.4

 

     

4.4

 
September 30, 2018          

724.9

 

     

3.5

 
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

 
December 31, 2017          

879.7

 

     

6.2

 
November 30, 2017          

749.5

 

     

7.5

 
October 31, 2017          

737.6

 

     

2.9

 
September 30, 2017          

700.5

 

     

4.9

 
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