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Bank of Hawaii Corporation Third Quarter 2017 Financial Results
  • Diluted Earnings Per Share $1.08
  • Net Income $45.9 Million
  • Board of Directors Declares Dividend of $0.52 Per Share
  • Board of Directors Increases Share Repurchase Authorization $100 Million

HONOLULU--(BUSINESS WIRE)--Oct. 23, 2017-- Bank of Hawaii Corporation (NYSE: BOH) today reported diluted earnings per share of $1.08 for the third quarter of 2017, up from $1.05 in the second quarter of 2017 and $1.02 in the third quarter of 2016. Net income for the third quarter of 2017 was $45.9 million, an increase of $1.2 million from net income of $44.7 million in the previous quarter and an increase of $2.4 million from net income of $43.5 million in the same quarter last year.

Loan and lease balances increased to $9.6 billion at September 30, 2017, up 2.0 percent from June 30, 2017 and up 10.1 percent compared with September 30, 2016. Deposits grew to $15.0 billion at the end of the third quarter of 2017, up 1.8 percent from the previous quarter and up 9.0 percent compared with the same quarter last year.

“Bank of Hawaii’s financial results remained strong through the third quarter of 2017,” said Peter S. Ho, Chairman, President and CEO. “Loan and deposit balances increased, asset quality remained solid, our net interest margin was stable, and our core expenses declined during the quarter.”

The return on average assets for the third quarter of 2017 was 1.07 percent, down from 1.09 percent in the previous quarter and 1.09 percent in the same quarter last year. The return on average equity for the third quarter of 2017 was 14.89 percent, up from 14.87 percent for the second quarter of 2017 and equal to the return on average equity of 14.89 percent in the third quarter of 2016. The efficiency ratio for the third quarter of 2017 was 55.82 percent compared with 55.99 percent in the previous quarter and 57.58 percent in the same quarter last year.

For the nine-month period ended September 30, 2017, net income was $141.7 million, an increase of $3.8 million from net income of $137.9 million for the same period last year. Diluted earnings per share were $3.32 for the nine-month period in 2017 compared with diluted earnings per share of $3.21 for the same period in 2016. The 2017 year-to-date return on average assets was 1.14 percent compared with 1.17 percent for the same period in 2016. The 2017 year-to-date return on average equity was 15.77 percent compared with 16.09 percent for the nine months ended September 30, 2016. The efficiency ratio for the nine-month period ended September 30, 2017 declined to 55.05 percent compared with 56.57 percent for the same period last year.

Financial Highlights

Net interest income, on a taxable equivalent basis, for the third quarter of 2017 was $119.2 million, an increase of $3.9 million from net interest income of $115.3 million in the second quarter of 2017 and an increase of $12.3 million from net interest income of $106.9 million in the third quarter of last year. Net interest income in the third quarter of 2016 included a reversal of $0.8 million for an interest recovery previously recorded in the second quarter of 2016. Net interest income for the nine-month period in 2017 was $347.5 million, an increase of $28.1 million from net interest income of $319.4 million for the same period in 2016. Analyses of the changes in net interest income are included in Tables 8a, 8b, and 8c.

The net interest margin was 2.92 percent for the third quarter of 2017, unchanged from the second quarter of 2017 and a 12 basis point increase from the net interest margin of 2.80 percent in the third quarter of 2016. Adjusted for the interest reversal, the net interest margin in the third quarter of 2016 was 2.82 percent. The net interest margin for the first nine months of 2017 was 2.91 percent compared with 2.84 percent for the same nine-month period last year.

Results for the third quarter of 2017 included a provision for credit losses of $4.0 million due to the continued strong growth of loans and leases. Second quarter of 2017 results included a provision for credit losses of $4.3 million. Results for the third quarter of 2016 included a provision for credit losses of $2.5 million. The provision for credit losses during the first nine months of 2017 was $12.7 million compared with $1.5 million during the same period in 2016. Provision expense in 2016 reflected a recovery of $6.6 million related to one commercial client in Guam.

Noninterest income was $42.4 million in the third quarter of 2017, down $2.8 million from noninterest income of $45.2 million in the second quarter of 2017 and down $5.7 million from $48.1 million in the same quarter last year. Mortgage banking income decreased to $3.2 million in the third quarter of 2017 compared with $3.8 million in the second quarter of 2017 and $6.4 million in the third quarter last year. Noninterest income for the nine-months ended September 30, 2017 was $143.6 million compared with noninterest income of $150.8 million for the same period in 2016. The decrease from the previous year was primarily due to the decline in mortgage banking income, lower revenue from the customer derivative program and gains on sales of assets during 2016.

Noninterest expense was $88.6 million in the third quarter of 2017, up $0.4 million from noninterest expense of $88.2 million in the previous quarter and up $1.1 million from $87.5 million in the same quarter last year. Noninterest expense in the third quarter of 2017 included $2.1 million in severance which was partially offset by a reduction of $0.9 million in share-based compensation. Noninterest expense for the nine-months ended September 30, 2017 was $265.4 million compared with noninterest expense of $261.0 million for the same period in 2016. An analysis of noninterest expenses related to salaries and benefits is included in Table 9.

The effective tax rate for the third quarter of 2017 was 30.62 percent compared with 31.37 percent in the previous quarter and 29.84 percent during the same quarter last year. Taxes for the third quarter of 2016 included a $0.7 million release of reserves. The effective tax rate for the nine-month period ended September 30, 2017 was 30.54 percent compared with 30.62 percent for the same period last year.

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

Asset Quality

The Company’s overall asset quality remained solid during the third quarter of 2017. Total non-performing assets were $17.0 million at September 30, 2017 compared with $16.4 million at June 30, 2017 and $18.7 million at September 30, 2016. As a percentage of total loans and leases and foreclosed real estate, non-performing assets were 0.18 percent at September 30, 2017 compared with 0.17 percent at June 30, 2017 and 0.21 percent at September 30, 2016.

Accruing loans and leases past due 90 days or more were $6.7 million at September 30, 2017 compared with $7.0 million at June 30, 2017 and $5.6 million at September 30, 2016. Restructured loans and leases not included in non-accrual loans or accruing loans past due 90 days or more were $55.0 million at September 30, 2017 compared with $53.2 million at June 30, 2017 and $52.1 million at September 30, 2016. 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 third quarter of 2017 were $3.5 million or 0.15 percent annualized of total average loans and leases outstanding. Loan and lease charge-offs of $6.2 million during the quarter were partially offset by recoveries of $2.7 million. Net charge-offs during the second quarter of 2017 were $3.0 million or 0.13 percent annualized of total average loans and leases outstanding and were comprised of $5.5 million in charge-offs partially offset by recoveries of $2.5 million. Net charge-offs during the third quarter of 2016 were $2.4 million or 0.11 percent annualized of total average loans and leases outstanding and were comprised of $4.9 million in charge-offs partially offset by recoveries of $2.5 million. Net charge-offs in the nine-month period ended September 30, 2017 were $10.0 million, or 0.15 percent annualized of total average loans and leases outstanding compared with net charge-offs of $0.3 million, or 0.01 percent annualized of total average loans and leases outstanding for the same period in 2016. The lower charge-off rate during 2016 was largely due to the previously mentioned recovery of previously charged off loans to a commercial client in Guam.

The allowance for loan and lease losses increased to $106.9 million at September 30, 2017 due to continued strong loan growth. The allowance for loan and lease losses was $106.4 million at June 30, 2017 and $104.0 million at September 30, 2016. The ratio of the allowance for loan and lease losses to total loans and leases outstanding was 1.12 percent at September 30, 2017, a decrease of 1 basis point from the previous quarter and down 8 basis points from the end of the same quarter last year. The reserve for unfunded commitments at September 30, 2017 of $6.8 million was unchanged from June 30, 2017 and up from $6.6 million at September 30, 2016. Details of loan and lease charge-offs, recoveries and the components of the total reserve for credit losses are summarized in Table 12.

Other Financial Highlights

Total assets were $17.3 billion at September 30, 2017, an increase of $287.0 million from total assets of $17.0 billion at June 30, 2017 and $1.3 billion from total assets of $16.0 billion at September 30, 2016. Average total assets were $17.0 billion during the third quarter of 2017 compared with $16.5 billion during the previous quarter and $15.9 billion during the same quarter last year.

The investment securities portfolio was $6.3 billion at September 30, 2017, reflecting increases of $183.8 million from total securities of $6.1 billion at June 30, 2017 and $253.9 million from total securities of $6.0 billion at September 30, 2016. The portfolio remains largely comprised of securities issued by U. S. government agencies and included $4.0 billion in securities held to maturity and $2.3 billion in securities available for sale at September 30, 2017.

Total loans and leases were $9.6 billion at September 30, 2017, an increase of $186.3 million from total loans and leases of $9.4 billion at June 30, 2017 and $879.9 million from total loans and leases of $8.7 billion at September 30, 2016. Average total loans and leases increased to $9.5 billion during the third quarter of 2017 compared with $9.2 billion during the second quarter of 2017 and $8.5 billion during the same quarter last year. The commercial loan portfolio increased to $3.7 billion at the end of the third quarter of 2017, up slightly from the end of the previous quarter and up from $3.5 billion at the end of the same quarter last year. Total consumer loans increased to $5.8 billion at the end of the third quarter of 2017, up from $5.7 billion at the end of the second quarter of 2017 and $5.2 billion at the end of the third quarter of 2016. Loan and lease portfolio balances are summarized in Table 10.

Total deposits were $15.0 billion at September 30, 2017, an increase of $263.5 million from total deposits of $14.8 billion at June 30, 2017 and $1.2 billion from total deposits of $13.8 billion at September 30, 2016. Average total deposits increased to $14.7 billion during the third quarter of 2017 compared with $14.3 billion during the previous quarter and $13.7 billion during the same quarter last year. Consumer deposits were $7.3 billion at the end of the third quarter of 2017, up slightly from the end of the previous quarter and up from $6.8 billion at the end of the same quarter last year. Commercial deposits were $6.1 billion at the end of the third quarter of 2017, up from $5.9 billion at the end of the previous quarter and up from $5.8 billion at the end of the same quarter last year. Other deposits, including public funds, were $1.7 billion at the end of the third quarter of 2017, up from $1.6 billion at the end of the previous quarter and up from $1.3 billion at the end of the same quarter last year. Deposit balances are summarized in Tables 7 and 10.

During the third quarter of 2017, the Company repurchased 183.5 thousand shares of common stock at a total cost of $14.8 million under its share repurchase program. The average cost was $80.89 per share repurchased. From the beginning of the share repurchase program initiated during July 2001 through September 30, 2017, the Company repurchased 54.1 million shares and returned nearly $2.1 billion to shareholders at an average cost of $38.19 per share. The Company’s Board of Directors increased the authorization under the share repurchase program by an additional $100.0 million. From October 2 through October 20, 2017 the Company repurchased an additional 44.5 thousand shares of common stock at an average cost of $83.97 per share. Remaining buyback authority under the share repurchase program was $126.9 million at October 20, 2017.

Total shareholders’ equity was $1.2 billion at September 30, 2017. The Tier 1 Capital Ratio was 13.27 percent at September 30, 2017 compared with 13.34 percent at June 30, 2017 and 13.40 percent at September 30, 2016. The Tier 1 leverage ratio at September 30, 2017 was 7.24 percent compared with 7.37 percent at June 30, 2017 and 7.25 percent at September 30, 2016.

The Company’s Board of Directors has declared a quarterly cash dividend of $0.52 per share on the Company’s outstanding shares. The dividend will be payable on December 14, 2017 to shareholders of record at the close of business on November 30, 2017.

Hawaii Economy

General economic conditions in Hawaii remained positive during the third quarter of 2017. The statewide seasonally-adjusted unemployment rate continues to remain low, declining to 2.5 percent in September 2017 compared to 4.2 percent nationally. Tourism remained robust through the first eight months of 2017. Total visitor spending increased 8.5 percent due to growth of 4.7 percent in visitor arrivals and an increase of 3.9 percent in daily spending compared to the same eight-month period in 2016. The real estate market also remains strong. For the first nine months of 2017, the volume of single-family home sales on Oahu increased 5.0 percent and the volume of condominium sales on Oahu increased 5.8 percent compared with the same period in 2016. The median sales price of a single-family home on Oahu increased 3.4 percent and the median price of a condominium on Oahu increased 5.4 percent for the first nine months of 2017 compared to the same nine-month period in 2016. As of September 30, 2017, months of inventory of single-family homes and condominiums on Oahu were 2.4 months and 2.6 months, respectively. More information on current Hawaii economic trends is presented in Table 15.

Conference Call Information

The Company will review its third quarter 2017 financial results today at 2:00 p.m. Eastern Time (8:00 a.m. Hawaii Time). The conference 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 (844) 543-5235 in the United States and Canada and (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, October 23, 2017. The replay number is (855) 859-2056 in the United States and Canada and (404) 537-3406 from other international locations. Enter the pass code 95696390 when prompted. Participants can also dial 1 (800) 585-8367 to access the replay. In addition, a replay will be available on the Company's website, www.boh.com.

Forward-Looking Statements

This news release, and other statements made by the Company in connection with it may contain "forward-looking statements", such as forecasts of our financial results and condition, expectations for our operations and business prospects, and our assumptions used in those forecasts and expectations. Do not unduly rely on forward-looking statements. Actual results might differ significantly from our forecasts and expectations because of a variety of factors. More information about these factors is contained in Bank of Hawaii Corporation's Annual Report on Form 10-K for the year ended December 31, 2016, which was filed with the U.S. Securities and Exchange Commission. We 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, 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       Nine Months Ended    
    September 30,       June 30,       September 30,       September 30,    
(dollars in thousands, except per share amounts)   2017       2017       2016       2017       2016    

For the Period:

                                       
Operating Results                                        
Net Interest Income   $ 116,317       $ 112,279       $ 103,912       $ 338,468       $ 310,486    
Provision for Credit Losses     4,000         4,250         2,500         12,650         1,500    
Total Noninterest Income     42,410         45,236         48,114         143,562         150,840    
Total Noninterest Expense     88,598         88,189         87,532         265,355         260,989    
Net Income     45,881         44,662         43,493         141,719         137,948    
Basic Earnings Per Share     1.09         1.05         1.02         3.35         3.23    
Diluted Earnings Per Share     1.08         1.05         1.02         3.32         3.21    
Dividends Declared Per Share     0.52         0.50         0.48         1.52         1.41    
                                         
Performance Ratios                                        
Return on Average Assets     1.07   %     1.09   %     1.09   %     1.14   %     1.17   %
Return on Average Shareholders' Equity     14.89         14.87         14.89         15.77         16.09    
Efficiency Ratio 1     55.82         55.99         57.58         55.05         56.57    
Net Interest Margin 2     2.92         2.92         2.80         2.91         2.84    
Dividend Payout Ratio 3     47.71         47.62         47.06         45.37         43.65    
Average Shareholders' Equity to Average Assets     7.21         7.30         7.30         7.22         7.30    
                                         
Average Balances                                        
Average Loans and Leases   $ 9,451,972       $ 9,217,779       $ 8,483,588       $ 9,231,615       $ 8,210,596    
Average Assets     16,972,202         16,495,925         15,906,760         16,636,213         15,695,251    
Average Deposits     14,727,469         14,253,149         13,687,186         14,401,698         13,492,609    
Average Shareholders' Equity     1,222,885         1,204,837         1,161,655         1,201,850         1,145,094    
                                         
Per Share of Common Stock                                        
Book Value   $ 28.88       $ 28.45       $ 27.24       $ 28.88       $ 27.24    
Tangible Book Value     28.14         27.72         26.50         28.14         26.50    
Market Value                                        
Closing     83.36         82.97         72.62         83.36         72.62    
High     86.19         84.99         73.44         90.80         73.44    
Low     74.72         75.92         65.19         74.72         54.55    
                                         
            September 30,       June 30,       December 31,       September 30,    
            2017       2017       2016       2016    

As of Period End:

                                       
Balance Sheet Totals                                        
Loans and Leases           $ 9,573,956       $ 9,387,613       $ 8,949,785       $ 8,694,097    
Total Assets             17,268,302         16,981,292         16,492,367         16,014,643    
Total Deposits             15,048,160         14,784,649         14,320,240         13,808,365    
Other Debt             267,887         267,904         267,938         267,954    
Total Shareholders' Equity             1,227,893         1,213,757         1,161,537         1,163,859    
                                         
Asset Quality                                        
Non-Performing Assets           $ 17,035       $ 16,368       $ 19,761       $ 18,672    
Allowance for Loan and Lease Losses             106,881         106,353         104,273         104,033    
Allowance to Loans and Leases Outstanding             1.12   %     1.13   %     1.17   %     1.20   %
                                         
Capital Ratios                                        
Common Equity Tier 1 Capital Ratio             13.27   %     13.34   %     13.24   %     13.40   %
Tier 1 Capital Ratio             13.27         13.34         13.24         13.40    
Total Capital Ratio             14.51         14.58         14.49         14.65    
Tier 1 Leverage Ratio             7.24         7.37         7.21         7.25    
Total Shareholders' Equity to Total Assets             7.11         7.15         7.04         7.27    
Tangible Common Equity to Tangible Assets 4             6.94         6.97         6.86         7.08    
Tangible Common Equity to Risk-Weighted Assets 4             12.96         13.01         12.81         13.18    
                                         
Non-Financial Data                                        
Full-Time Equivalent Employees             2,120         2,142         2,122         2,125    
Branches             69         69         69         70    
ATMs             388         388         449         450    
                                         
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
(dollars in thousands)   September 30,
2017
  June 30,
2017
  December 31,
2016
  September 30,
2016
                 
Total Shareholders' Equity   $ 1,227,893     $ 1,213,757     $ 1,161,537     $ 1,163,859  
Less: Goodwill     31,517       31,517       31,517       31,517  
Tangible Common Equity   $ 1,196,376     $ 1,182,240     $ 1,130,020     $ 1,132,342  
                 
Total Assets   $ 17,268,302     $ 16,981,292     $ 16,492,367     $ 16,014,643  
Less: Goodwill     31,517       31,517       31,517       31,517  
Tangible Assets   $ 17,236,785     $ 16,949,775     $ 16,460,850     $ 15,983,126  
                 

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

  $ 9,233,969     $ 9,087,057     $ 8,823,485     $ 8,591,440  
                 
Total Shareholders' Equity to Total Assets     7.11 %     7.15 %     7.04 %     7.27 %
Tangible Common Equity to Tangible Assets (Non-GAAP)     6.94 %     6.97 %     6.86 %     7.08 %
                 
Tier 1 Capital Ratio     13.27 %     13.34 %     13.24 %     13.40 %
Tangible Common Equity to Risk-Weighted Assets (Non-GAAP)     12.96 %     13.01 %     12.81 %     13.18 %
 
Bank of Hawaii Corporation and Subsidiaries
Consolidated Statements of Income   Table 3
    Three Months Ended   Nine Months Ended
    September 30,   June 30,   September 30,   September 30,
(dollars in thousands, except per share amounts)   2017   2017   2016   2017   2016
Interest Income                    
Interest and Fees on Loans and Leases   $ 94,621     $ 90,909     $ 83,489     $ 273,467   $ 246,707
Income on Investment Securities                    
Available-for-Sale     11,987       11,835       10,313       34,906     31,648
Held-to-Maturity     20,334       19,918       19,315       59,958     59,874
Deposits     5       2       1       12     7
Funds Sold     1,579       696       695       3,165     2,066
Other     235       208       166       673     531
Total Interest Income     128,761       123,568       113,979       372,181     340,833
Interest Expense                    
Deposits     6,663       4,998       3,232       15,352     9,199
Securities Sold Under Agreements to Repurchase     4,664       5,079       5,713       14,928     18,000
Funds Purchased     -       39       3       42     9
Short-Term Borrowings     -       64       -       64     -
Other Debt     1,117       1,109       1,119       3,327     3,139
Total Interest Expense     12,444       11,289       10,067       33,713     30,347
Net Interest Income     116,317       112,279       103,912       338,468     310,486
Provision for Credit Losses     4,000       4,250       2,500       12,650     1,500
Net Interest Income After Provision for Credit Losses     112,317       108,029       101,412       325,818     308,986
Noninterest Income                    
Trust and Asset Management     11,050       11,796       11,008       34,325     34,971
Mortgage Banking     3,237       3,819       6,362       10,356     13,639
Service Charges on Deposit Accounts     8,188       8,009       8,524       24,522     25,117
Fees, Exchange, and Other Service Charges     13,764       13,965       14,023       41,061     41,445
Investment Securities Gains (Losses), Net     (566 )     (520 )     (328 )     11,047     10,540
Annuity and Insurance     1,429       2,161       1,653       5,585     5,560
Bank-Owned Life Insurance     1,861       1,550       1,911       4,908     5,010
Other     3,447       4,456       4,961       11,758     14,558
Total Noninterest Income     42,410       45,236       48,114       143,562     150,840
Noninterest Expense                    
Salaries and Benefits     51,626       50,113       49,725       153,341     150,528
Net Occupancy     7,727       8,131       8,510       24,026     22,671
Net Equipment     5,417       5,706       4,913       16,624     15,387
Data Processing     3,882       3,881       3,620       11,173     11,543
Professional Fees     3,044       2,592       2,396       8,415     7,082
FDIC Insurance     2,107       2,097       2,104       6,413     6,600
Other     14,795       15,669       16,264       45,363     47,178
Total Noninterest Expense     88,598       88,189       87,532       265,355     260,989
Income Before Provision for Income Taxes     66,129       65,076       61,994       204,025     198,837
Provision for Income Taxes     20,248       20,414       18,501       62,306     60,889
Net Income   $ 45,881     $ 44,662     $ 43,493     $ 141,719   $ 137,948
Basic Earnings Per Share   $ 1.09     $ 1.05     $ 1.02     $ 3.35   $ 3.23
Diluted Earnings Per Share   $ 1.08     $ 1.05     $ 1.02     $ 3.32   $ 3.21
Dividends Declared Per Share   $ 0.52     $ 0.50     $ 0.48     $ 1.52   $ 1.41
Basic Weighted Average Shares     42,251,541       42,353,976       42,543,122       42,336,441     42,730,571
Diluted Weighted Average Shares     42,565,364       42,658,885       42,778,346       42,662,163     42,947,059
 
Bank of Hawaii Corporation and Subsidiaries
Consolidated Statements of Comprehensive Income   Table 4
    Three Months Ended   Nine Months Ended
    September 30,   June 30,   September 30,   September 30,
(dollars in thousands)   2017   2017   2016   2017   2016
Net Income   $ 45,881   $ 44,662   $ 43,493     $ 141,719   $ 137,948
Other Comprehensive Income (Loss), Net of Tax:                    
Net Unrealized Gains (Losses) on Investment Securities     444     3,106     (5,528 )     8,444     8,323
Defined Benefit Plans     146     147     140       439     422
Total Other Comprehensive Income (Loss)     590     3,253     (5,388 )     8,883     8,745
Comprehensive Income   $ 46,471   $ 47,915   $ 38,105     $ 150,602   $ 146,693
 
Bank of Hawaii Corporation and Subsidiaries
Consolidated Statements of Condition   Table 5
    September 30,   June 30,   December 31,   September 30,
(dollars in thousands)   2017   2017   2016   2016
Assets                
Interest-Bearing Deposits in Other Banks   $ 3,161     $ 3,913     $ 3,187     $ 4,181  
Funds Sold     512,868       742,221       707,343       506,604  
Investment Securities                
Available-for-Sale     2,322,668       2,316,728       2,186,041       2,213,482  
Held-to-Maturity (Fair Value of $3,960,956; $3,785,641; $3,827,527; and $3,893,542)     3,960,598       3,782,702       3,832,997       3,815,915  
Loans Held for Sale     9,752       20,354       62,499       68,066  
Loans and Leases     9,573,956       9,387,613       8,949,785       8,694,097  
Allowance for Loan and Lease Losses     (106,881 )     (106,353 )     (104,273 )     (104,033 )
Net Loans and Leases     9,467,075       9,281,260       8,845,512       8,590,064  
Total Earning Assets     16,276,122       16,147,178       15,637,579       15,198,312  
Cash and Due from Banks     245,487       128,093       169,077       127,326  
Premises and Equipment, Net     125,162       119,569       113,505       110,288  
Accrued Interest Receivable     51,526       46,595       46,444       46,925  
Foreclosed Real Estate     1,393       1,991       1,686       1,747  
Mortgage Servicing Rights     24,436       24,471       23,663       20,991  
Goodwill     31,517       31,517       31,517       31,517  
Bank-Owned Life Insurance     278,425       277,235       274,188       272,637  
Other Assets     234,234       204,643       194,708       204,900  
Total Assets   $ 17,268,302     $ 16,981,292     $ 16,492,367     $ 16,014,643  
                 
Liabilities                
Deposits                
Noninterest-Bearing Demand   $ 4,825,643     $ 4,706,962     $ 4,772,727     $ 4,437,963  
Interest-Bearing Demand     2,896,559       3,029,549       2,934,107       2,777,095  
Savings     5,363,866       5,364,191       5,395,699       5,306,880  
Time     1,962,092       1,683,947       1,217,707       1,286,427  
Total Deposits     15,048,160       14,784,649       14,320,240       13,808,365  
Funds Purchased     -       -       9,616       9,616  
Securities Sold Under Agreements to Repurchase     505,293       505,292       523,378       551,683  
Other Debt     267,887       267,904       267,938       267,954  
Retirement Benefits Payable     38,308       48,346       48,451       47,522  
Accrued Interest Payable     6,717       5,105       5,334       6,115  
Taxes Payable and Deferred Taxes     31,360       31,444       21,674       24,922  
Other Liabilities     142,684       124,795       134,199       134,607  
Total Liabilities     16,040,409       15,767,535       15,330,830       14,850,784  
Shareholders' Equity                

Common Stock ($.01 par value; authorized 500,000,000 shares; issued / outstanding: September 30, 2017 - 57,958,200 / 42,513,348; June 30, 2017 - 57,972,647 / 42,655,954; December 31, 2016 - 57,856,672 / 42,635,978; and September 30, 2016 - 57,854,843 / 42,733,513)

    576       576       576       576  
Capital Surplus     558,530       556,409       551,628       549,064  
Accumulated Other Comprehensive Loss     (25,023 )     (25,613 )     (33,906 )     (14,812 )
Retained Earnings     1,491,830       1,468,328       1,415,440       1,393,231  

Treasury Stock, at Cost (Shares: September 30, 2017 - 15,444,852; June 30, 2017 - 15,316,693; December 31, 2016 - 15,220,694; and September 30, 2016 - 15,121,330)

    (798,020 )     (785,943 )     (772,201 )     (764,200 )
Total Shareholders' Equity     1,227,893       1,213,757       1,161,537       1,163,859  
Total Liabilities and Shareholders' Equity   $ 17,268,302     $ 16,981,292     $ 16,492,367     $ 16,014,643  
 
Bank of Hawaii Corporation and Subsidiaries
Consolidated Statements of Shareholders' Equity   Table 6
(dollars in thousands)   Common Shares
Outstanding
  Common
Stock
  Capital
Surplus
  Accum.
Other
Compre-
hensive
Income
(Loss)
  Retained
Earnings
  Treasury
Stock
  Total
Balance as of December 31, 2016   42,635,978     $ 576   $ 551,628   $ (33,906 )   $ 1,415,440     $ (772,201 )   $ 1,161,537  
Net Income   -       -     -     -       141,719       -       141,719  
Other Comprehensive Income   -       -     -     8,883       -       -       8,883  
Share-Based Compensation   -       -     5,332     -       -       -       5,332  
Common Stock Issued under Purchase and Equity                            
Compensation Plans and Related Tax Benefits   319,377       -     1,570     -       (383 )     10,552       11,739  
Common Stock Repurchased   (442,007 )     -     -     -       -       (36,371 )     (36,371 )
Cash Dividends Declared ($1.52 per share)   -       -     -     -       (64,946 )     -       (64,946 )
Balance as of September 30, 2017   42,513,348     $ 576   $ 558,530   $ (25,023 )   $ 1,491,830     $ (798,020 )   $ 1,227,893  
                             
Balance as of December 31, 2015   43,282,153     $ 575   $ 542,041   $ (23,557 )   $ 1,316,260     $ (719,059 )   $ 1,116,260  
Net Income   -       -     -     -       137,948       -       137,948  
Other Comprehensive Income   -       -     -     8,745       -       -       8,745  
Share-Based Compensation   -       -     5,020     -       -       -       5,020  
Common Stock Issued under Purchase and Equity                            
Compensation Plans and Related Tax Benefits   224,018       1     2,003     -       (314 )     6,224       7,914  
Common Stock Repurchased   (772,658 )     -     -     -       -       (51,365 )     (51,365 )
Cash Dividends Declared ($1.41 per share)   -       -     -     -       (60,663 )     -       (60,663 )
Balance as of September 30, 2016   42,733,513     $ 576   $ 549,064   $ (14,812 )   $ 1,393,231     $ (764,200 )   $ 1,163,859  
     
Bank of Hawaii Corporation and Subsidiaries    
Average Balances and Interest Rates - Taxable-Equivalent Basis   Table 7a    
    Three Months Ended
September 30, 2017
      Three Months Ended
June 30, 2017
      Three Months Ended
September 30, 2016
   
(dollars in millions)   Average
Balance
  Income/
Expense
  Yield/
Rate
      Average
Balance
  Income/
Expense
  Yield/
Rate
      Average
Balance
  Income/
Expense
  Yield/
Rate
   
Earning Assets                                                
Interest-Bearing Deposits in Other Banks   $ 3.5   $ -   0.48   %   $ 3.6   $ -   0.29   %   $ 4.1   $ -   0.19   %
Funds Sold     575.2     1.6   1.07         353.5     0.7   0.78         585.9     0.7   0.46    
Investment Securities                                                
Available-for-Sale                                                
Taxable     1,658.2     8.6   2.08         1,683.4     8.4   1.98         1,574.9     6.8   1.72    
Non-Taxable     636.7     5.2   3.26         658.9     5.4   3.26         687.1     5.4   3.16    
Held-to-Maturity                                                
Taxable     3,631.1     18.8   2.07         3,596.1     18.4   2.05         3,563.8     17.8   1.99    
Non-Taxable     239.9     2.4   3.87         240.9     2.3   3.88         243.7     2.4   3.90    
Total Investment Securities     6,165.9     35.0   2.27         6,179.3     34.5   2.23         6,069.5     32.4   2.13    
Loans Held for Sale     20.6     0.2   3.88         23.8     0.2   4.04         57.7     0.5   3.52    
Loans and Leases 1                                                
Commercial and Industrial     1,251.5     11.3   3.58         1,251.2     10.9   3.51         1,192.0     9.8   3.26    
Commercial Mortgage     2,015.0     19.6   3.87         1,946.3     18.4   3.80         1,730.2     15.4   3.55    
Construction     241.0     2.9   4.73         240.0     2.8   4.70         239.4     2.6   4.38    
Commercial Lease Financing     204.7     1.2   2.30         208.0     1.2   2.27         195.1     1.2   2.38    
Residential Mortgage     3,333.3     31.8   3.82         3,272.7     31.1   3.80         3,082.9     30.4   3.94    
Home Equity     1,502.9     13.8   3.65         1,445.8     13.1   3.62         1,254.4     11.3   3.59    
Automobile     493.2     5.9   4.71         474.1     5.9   4.97         426.2     5.5   5.15    
Other 2     410.4     8.2   7.98         379.7     7.6   8.06         363.4     7.0   7.69    
Total Loans and Leases     9,452.0     94.7   3.99         9,217.8     91.0   3.96         8,483.6     83.2   3.91    
Other     40.2     0.2   2.34         41.0     0.2   2.03         39.9     0.1   1.66    
Total Earning Assets 3     16,257.4     131.7   3.23         15,819.0     126.6   3.21         15,240.7     116.9   3.06    
Cash and Due from Banks     151.2                 120.8                 133.2            
Other Assets     563.6                 556.1                 532.9            
Total Assets   $ 16,972.2               $ 16,495.9               $ 15,906.8            
                                                 
Interest-Bearing Liabilities                                                
Interest-Bearing Deposits                                                
Demand   $ 2,880.0     0.5   0.07       $ 2,862.7     0.5   0.07       $ 2,770.2     0.2   0.03    
Savings     5,374.4     1.8   0.13         5,376.9     1.6   0.12         5,208.3     1.1   0.09    
Time     1,788.2     4.4   0.97         1,480.5     2.9   0.78         1,272.6     1.9   0.59    
Total Interest-Bearing Deposits     10,042.6     6.7   0.26         9,720.1     5.0   0.21         9,251.1     3.2   0.14    
Short-Term Borrowings     -     -   -         36.5     0.1   1.10         8.7     -   0.13    
Securities Sold Under Agreements to Repurchase     505.3     4.7   3.61         505.3     5.1   3.98         556.5     5.7   4.02    
Other Debt     267.9     1.1   1.66         267.9     1.1   1.66         268.0     1.1   1.66    
Total Interest-Bearing Liabilities     10,815.8     12.5   0.45         10,529.8     11.3   0.43         10,084.3     10.0   0.39    
Net Interest Income       $ 119.2               $ 115.3               $ 106.9        
Interest Rate Spread           2.78   %       2.78   %       2.67   %
Net Interest Margin           2.92   %       2.92   %       2.80   %
Noninterest-Bearing Demand Deposits     4,684.9                 4,533.0                 4,436.1            
Other Liabilities     248.6                 228.3                 224.7            
Shareholders' Equity     1,222.9                 1,204.8                 1,161.7            
Total Liabilities and Shareholders' Equity   $ 16,972.2               $ 16,495.9               $ 15,906.8            
                                                 

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 35%, of $2,920,000, $3,054,000 and $2,967,000 for the three months ended September 30, 2017, June 30, 2017, and September 30, 2016, respectively.

   
     
Bank of Hawaii Corporation and Subsidiaries    
Average Balances and Interest Rates - Taxable-Equivalent Basis   Table 7b    
    Nine Months Ended
September 30, 2017
      Nine Months Ended
September 30, 2016
   
(dollars in millions)   Average
Balance
  Income/
Expense
  Yield/
Rate
      Average
Balance
  Income/
Expense
  Yield/
Rate
   
Earning Assets                                
Interest-Bearing Deposits in Other Banks   $ 3.5   $ -   0.44   %   $ 4.2   $ -   0.26   %
Funds Sold     491.1     3.2   0.85         586.8     2.0   0.46    
Investment Securities                                
Available-for-Sale                                
Taxable     1,655.8     24.6   1.98         1,594.3     20.9   1.75    
Non-Taxable     652.0     15.9   3.26         697.9     16.5   3.16    
Held-to-Maturity                                
Taxable     3,605.8     55.4   2.05         3,627.4     55.2   2.03    
Non-Taxable     240.9     7.0   3.88         244.6     7.2   3.91    
Total Investment Securities     6,154.5     102.9   2.23         6,164.2     99.8   2.16    
Loans Held for Sale     24.9     0.7   3.98         30.0     0.8   3.58    
Loans and Leases 1                                
Commercial and Industrial     1,255.4     32.7   3.49         1,165.2     30.3   3.48    
Commercial Mortgage     1,948.1     55.5   3.81         1,702.1     47.5   3.73    
Construction     246.7     8.6   4.66         206.9     6.9   4.47    
Commercial Lease Financing     207.1     3.5   2.25         196.8     3.7   2.48    
Residential Mortgage     3,269.7     93.8   3.82         3,002.6     90.0   4.00    
Home Equity     1,439.2     38.9   3.61         1,176.5     32.0   3.63    
Automobile     476.4     17.5   4.90         407.0     15.8   5.17    
Other 2     389.0     23.2   7.98         353.5     20.4   7.70    
Total Loans and Leases     9,231.6     273.7   3.96         8,210.6     246.6   4.01    
Other     40.4     0.7   2.22         38.8     0.5   1.83    
Total Earning Assets 3     15,946.0     381.2   3.19         15,034.6     349.7   3.10    
Cash and Due from Banks     134.8                 128.2            
Other Assets     555.4                 532.5            
Total Assets   $ 16,636.2               $ 15,695.3            
                                 
Interest-Bearing Liabilities                                
Interest-Bearing Deposits                                
Demand   $ 2,869.7     1.3   0.06       $ 2,756.7     0.7   0.03    
Savings     5,385.7     4.7   0.12         5,177.0     3.4   0.09    
Time     1,529.2     9.4   0.82         1,232.1     5.1   0.55    
Total Interest-Bearing Deposits     9,784.6     15.4   0.21         9,165.8     9.2   0.13    
Short-Term Borrowings     15.3     0.1   0.91         7.9     -   0.14    
Securities Sold Under Agreements to Repurchase     507.7     14.9   3.88         582.0     18.0   4.06    
Other Debt     267.9     3.3   1.66         242.5     3.1   1.73    
Total Interest-Bearing Liabilities     10,575.5     33.7   0.42         9,998.2     30.3   0.40    
Net Interest Income       $ 347.5               $ 319.4        
Interest Rate Spread           2.77   %           2.70   %
Net Interest Margin           2.91   %           2.84   %
Noninterest-Bearing Demand Deposits     4,617.1                 4,326.8            
Other Liabilities     241.7                 225.2            
Shareholders' Equity     1,201.9                 1,145.1            
Total Liabilities and Shareholders' Equity   $ 16,636.2               $ 15,695.3            
                                 

1 Non-performing loans and leases are included in the respective average loan and lease balances. Income, if any, on such loans and leases is recognized on a cash basis.

   
2 Comprised of other consumer revolving credit, installment, and consumer lease financing.    

3 Interest income includes taxable-equivalent basis adjustments, based upon a federal statutory tax rate of 35%, of $9,035,000 and $8,957,000 for the nine months ended September 30, 2017 and September 30, 2016, respectively.

   
 
Bank of Hawaii Corporation and Subsidiaries
Analysis of Change in Net Interest Income - Taxable-Equivalent Basis   Table 8a
    Three Months Ended September 30, 2017
Compared to June 30, 2017
(dollars in millions)   Volume 1   Rate 1   Total
Change in Interest Income:            
Funds Sold   $ 0.6     $ 0.3     $ 0.9  
Investment Securities            
Available-for-Sale            
Taxable     (0.2 )     0.4       0.2  
Non-Taxable     (0.2 )     -       (0.2 )
Held-to-Maturity            
Taxable     0.2       0.2       0.4  
Non-Taxable     -       0.1       0.1  
Total Investment Securities     (0.2 )     0.7       0.5  
Loans and Leases            
Commercial and Industrial     -       0.4       0.4  
Commercial Mortgage     0.8       0.4       1.2  
Construction     -       0.1       0.1  
Residential Mortgage     0.6       0.1       0.7  
Home Equity     0.6       0.1       0.7  
Automobile     0.3       (0.3 )     -  
Other 2     0.7       (0.1 )     0.6  
Total Loans and Leases     3.0       0.7       3.7  
Total Change in Interest Income     3.4       1.7       5.1  
             
Change in Interest Expense:            
Interest-Bearing Deposits            
Savings     -       0.2       0.2  
Time     0.7       0.8       1.5  
Total Interest-Bearing Deposits     0.7       1.0       1.7  
Short-Term Borrowings     (0.1 )     -       (0.1 )
Securities Sold Under Agreements to Repurchase     -       (0.4 )     (0.4 )
Total Change in Interest Expense     0.6       0.6       1.2  
             
Change in Net Interest Income   $ 2.8     $ 1.1     $ 3.9  
             
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 8b
    Three Months Ended September 30, 2017
Compared to September 30, 2016
(dollars in millions)   Volume 1   Rate 1   Total
Change in Interest Income:            
Funds Sold   $ -     $ 0.9     $ 0.9  
Investment Securities            
Available-for-Sale            
Taxable     0.4       1.4       1.8  
Non-Taxable     (0.4 )     0.2       (0.2 )
Held-to-Maturity            
Taxable     0.3       0.7       1.0  
Total Investment Securities     0.3       2.3       2.6  
Loans Held for Sale     (0.4 )     0.1       (0.3 )
Loans and Leases            
Commercial and Industrial     0.5       1.0       1.5  
Commercial Mortgage     2.7       1.5       4.2  
Construction     0.1       0.2       0.3  
Commercial Lease Financing     0.1       (0.1 )     -  
Residential Mortgage     2.4       (1.0 )     1.4  
Home Equity     2.3       0.2       2.5  
Automobile     0.9       (0.5 )     0.4  
Other 2     0.9       0.3       1.2  
Total Loans and Leases     9.9       1.6       11.5  
Other     -       0.1       0.1  
Total Change in Interest Income     9.8       5.0       14.8  
             
Change in Interest Expense:            
Interest-Bearing Deposits            
Demand     0.1       0.2       0.3  
Savings     -       0.7       0.7  
Time     1.0       1.5       2.5  
Total Interest-Bearing Deposits     1.1       2.4       3.5  
Securities Sold Under Agreements to Repurchase     (0.5 )     (0.5 )     (1.0 )
Total Change in Interest Expense     0.6       1.9       2.5  
             
Change in Net Interest Income   $ 9.2     $ 3.1     $ 12.3  
             
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
    Nine Months Ended September 30, 2017
Compared to September 30, 2016
(dollars in millions)   Volume 1   Rate 1   Total
Change in Interest Income:            
Funds Sold   $ (0.4 )   $ 1.6     $ 1.2  
Investment Securities            
Available-for-Sale            
Taxable     0.9       2.8       3.7  
Non-Taxable     (1.1 )     0.5       (0.6 )
Held-to-Maturity            
Taxable     (0.3 )     0.5       0.2  
Non-Taxable     (0.1 )     (0.1 )     (0.2 )
Total Investment Securities     (0.6 )     3.7       3.1  
Loans Held for Sale     (0.2 )     0.1       (0.1 )
Loans and Leases            
Commercial and Industrial     2.3       0.1       2.4  
Commercial Mortgage     6.9       1.1       8.0  
Construction     1.4       0.3       1.7  
Commercial Lease Financing     0.2       (0.4 )     (0.2 )
Residential Mortgage     7.8       (4.0 )     3.8  
Home Equity     7.1       (0.2 )     6.9  
Automobile     2.6       (0.9 )     1.7  
Other 2     2.1       0.7       2.8  
Total Loans and Leases     30.4       (3.3 )     27.1  
Other     -       0.2       0.2  
Total Change in Interest Income     29.2       2.3       31.5  
             
Change in Interest Expense:            
Interest-Bearing Deposits            
Demand     0.1       0.5       0.6  
Savings     0.1       1.2       1.3  
Time     1.5       2.8       4.3  
Total Interest-Bearing Deposits     1.7       4.5       6.2  
Short-Term Borrowings     -       0.1       0.1  
Securities Sold Under Agreements to Repurchase     (2.3 )     (0.8 )     (3.1 )
Other Debt     0.3       (0.1 )     0.2  
Total Change in Interest Expense     (0.3 )     3.7       3.4  
             
Change in Net Interest Income   $ 29.5     $ (1.4 )   $ 28.1  
             
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  
Salaries and Benefits   Table 9  
    Three Months Ended   Nine Months Ended  
    September 30,   June 30,   September 30,   September 30,  
(dollars in thousands)   2017   2017   2016   2017   2016  
Salaries   $ 31,224   $ 30,553   $ 29,401   $ 91,202   $ 87,339  
Incentive Compensation     4,857     5,125     5,743     15,756     17,625  
Share-Based Compensation     1,962     2,879     2,968     7,144     8,024  
Commission Expense     1,439     1,791     2,051     5,066     5,559  
Retirement and Other Benefits     4,279     4,159     3,866     13,479     12,912  
Payroll Taxes     2,353     2,427     2,224     8,724     8,089  
Medical, Dental, and Life Insurance     3,444     3,136     3,366     9,859     10,130  
Separation Expense     2,068     43     106     2,111     850  
Total Salaries and Benefits   $ 51,626   $ 50,113   $ 49,725   $ 153,341   $ 150,528  
 
Bank of Hawaii Corporation and Subsidiaries
Loan and Lease Portfolio Balances   Table 10
(dollars in thousands)   September 30,
2017
  June 30,
2017
  March 31,
2017
  December 31,
2016
  September 30,
2016
Commercial                    
Commercial and Industrial   $ 1,252,238   $ 1,241,953   $ 1,250,006   $ 1,249,791   $ 1,217,849
Commercial Mortgage     2,050,998     2,009,886     1,909,064     1,889,551     1,807,190
Construction     232,487     248,030     262,660     270,018     263,079
Lease Financing     204,240     205,043     208,765     208,332     201,436
Total Commercial     3,739,963     3,704,912     3,630,495     3,617,692     3,489,554
Consumer                    
Residential Mortgage     3,366,634     3,317,179     3,224,206     3,163,073     3,098,936
Home Equity     1,528,353     1,473,123     1,411,489     1,334,163     1,295,993
Automobile     506,102     484,092     468,078     454,333     437,659
Other 1     432,904     408,307     379,541     380,524     371,955
Total Consumer     5,833,993     5,682,701     5,483,314     5,332,093     5,204,543
Total Loans and Leases   $ 9,573,956   $ 9,387,613   $ 9,113,809   $ 8,949,785   $ 8,694,097
                     
Deposits                    
(dollars in thousands)   September 30,
2017
  June 30,
2017
  March 31,
2017
  December 31,
2016
  September 30,
2016
Consumer   $ 7,303,546   $ 7,278,536   $ 7,196,781   $ 6,997,482   $ 6,781,371
Commercial     6,091,800     5,903,639     6,051,721     6,110,189     5,751,184
Public and Other     1,652,814     1,602,474     1,228,031     1,212,569     1,275,810
Total Deposits   $ 15,048,160   $ 14,784,649   $ 14,476,533   $ 14,320,240   $ 13,808,365
                     
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
(dollars in thousands)   September 30,
2017
  June 31,
2017
  March 31,
2017
  December 31,
2016
  September 30,
2016
Non-Performing Assets                    
Non-Accrual Loans and Leases                    
Commercial                    
Commercial and Industrial   $ 901     $ 175     $ 228     $ 151     $ 201  
Commercial Mortgage     1,425       1,460       973       997       1,023  
Total Commercial     2,326       1,635       1,201       1,148       1,224  
Consumer                    
Residential Mortgage     9,188       9,337       11,756       13,780       12,735  
Home Equity     4,128       3,405       3,517       3,147       2,966  
Total Consumer     13,316       12,742       15,273       16,927       15,701  
Total Non-Accrual Loans and Leases     15,642       14,377       16,474       18,075       16,925  
Foreclosed Real Estate     1,393       1,991       2,529       1,686       1,747  
Total Non-Performing Assets   $ 17,035     $ 16,368     $ 19,003     $ 19,761     $ 18,672  
                     
Accruing Loans and Leases Past Due 90 Days or More                    
Commercial                    
Commercial and Industrial   $ 5     $ -     $ -     $ -     $ -  
Total Commercial     5       -       -       -       -  
Consumer                    
Residential Mortgage   $ 2,933     $ 2,269     $ 2,313     $ 3,127     $ 2,583  
Home Equity     1,392       2,343       1,133       1,457       1,210  
Automobile     806       539       673       894       578  
Other 1     1,528       1,859       1,738       1,592       1,273  
Total Consumer     6,659       7,010       5,857       7,070       5,644  
Total Accruing Loans and Leases Past Due 90 Days or More   $ 6,664     $ 7,010     $ 5,857     $ 7,070     $ 5,644  

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

  $ 55,038     $ 53,158     $ 52,965     $ 52,208     $ 52,095  
Total Loans and Leases   $ 9,573,956     $ 9,387,613     $ 9,113,809     $ 8,949,785     $ 8,694,097  
                     
Ratio of Non-Accrual Loans and Leases to Total Loans and Leases     0.16 %     0.15 %     0.18 %     0.20 %     0.19 %
                     

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

    0.18 %     0.17 %     0.21 %     0.22 %     0.21 %
                     

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

    0.06 %     0.04 %     0.03 %     0.03 %     0.04 %
                     

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

    0.25 %     0.26 %     0.32 %     0.35 %     0.34 %
                     

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

    0.25 %     0.25 %     0.27 %     0.30 %     0.28 %
                     
Quarter to Quarter Changes in Non-Performing Assets                    
Balance at Beginning of Quarter   $ 16,368     $ 19,003     $ 19,761     $ 18,672     $ 16,280  
Additions     2,212       1,572       1,221       2,142       3,730  
Reductions                    
Payments     (199 )     (497 )     (1,017 )     (252 )     (501 )
Return to Accrual Status     (305 )     (1,370 )     (645 )     (653 )     (701 )
Sales of Foreclosed Real Estate     (951 )     (1,883 )     -       (61 )     -  
Charge-offs/Write-downs     (90 )     (457 )     (317 )     (87 )     (136 )
Total Reductions     (1,545 )     (4,207 )     (1,979 )     (1,053 )     (1,338 )
Balance at End of Quarter   $ 17,035     $ 16,368     $ 19,003     $ 19,761     $ 18,672  
                     

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   Nine Months Ended
    September 30,   June 30,   September 30,   September 30,
(dollars in thousands)   2017   2017   2016   2017   2016
Balance at Beginning of Period   $ 113,175     $ 111,636     $ 110,504     $ 110,845       108,952  
Loans and Leases Charged-Off                    
Commercial                    
Commercial and Industrial     (611 )     (124 )     (209 )     (909 )     (670 )
Consumer                    
Residential Mortgage     (36 )     (506 )     (104 )     (725 )     (388 )
Home Equity     (129 )     (282 )     (222 )     (774 )     (848 )
Automobile     (1,921 )     (1,512 )     (1,703 )     (5,723 )     (4,635 )
Other 1     (3,521 )     (3,063 )     (2,678 )     (9,278 )     (7,017 )
Total Loans and Leases Charged-Off     (6,218 )     (5,487 )     (4,916 )     (17,409 )     (13,558 )
Recoveries on Loans and Leases Previously Charged-Off                    
Commercial                    
Commercial and Industrial     597       265       282       1,198       7,552  
Commercial Mortgage     -       -       14       -       42  
Construction     -       -       -       -       23  
Lease Financing     1       1       -       2       2  
Consumer                    
Residential Mortgage     89       264       517       457       997  
Home Equity     837       838       618       2,183       1,453  
Automobile     692       607       615       1,919       1,748  
Other 1     530       551       471       1,608       1,394  
Total Recoveries on Loans and Leases Previously Charged-Off     2,746       2,526       2,517       7,367       13,211  
Net Loans and Leases Charged-Off     (3,472 )     (2,961 )     (2,399 )     (10,042 )     (347 )
Provision for Credit Losses     4,000       4,250       2,500       12,650       1,500  
Provision for Unfunded Commitments     -       250       -       250       500  
Balance at End of Period 2   $ 113,703     $ 113,175     $ 110,605     $ 113,703     $ 110,605  
                     
Components                    
Allowance for Loan and Lease Losses   $ 106,881     $ 106,353       104,033     $ 106,881       104,033  
Reserve for Unfunded Commitments     6,822       6,822       6,572       6,822       6,572  
Total Reserve for Credit Losses   $ 113,703     $ 113,175     $ 110,605     $ 113,703     $ 110,605  
                     
Average Loans and Leases Outstanding   $ 9,451,972     $ 9,217,779     $ 8,483,588     $ 9,231,615     $ 8,210,596  

 

                   

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

    0.15 %     0.13 %     0.11 %     0.15 %     0.01 %
Ratio of Allowance for Loan and Lease Losses to Loans and Leases Outstanding     1.12 %     1.13 %     1.20 %     1.12 %     1.20 %
                     
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
(dollars in thousands)   Retail
Banking
  Commercial
Banking
  Investment
Services and
Private
Banking
  Treasury
and Other
  Consolidated
Total
Three Months Ended September 30, 2017                    
Net Interest Income   $ 67,128     $ 43,438     $ 7,321     $ (1,570 )   $ 116,317  
Provision for Credit Losses     3,512       (35 )     (5 )     528       4,000  
Net Interest Income After Provision for Credit Losses     63,616       43,473       7,326       (2,098 )     112,317  
Noninterest Income     21,287       5,137       13,593       2,393       42,410  
Noninterest Expense     (51,507 )     (17,721 )     (14,925 )     (4,445 )     (88,598 )
Income Before Provision for Income Taxes     33,396       30,889       5,994       (4,150 )     66,129  
Provision for Income Taxes     (11,908 )     (10,891 )     (2,218 )     4,769       (20,248 )
Net Income   $ 21,488     $ 19,998     $ 3,776     $ 619     $ 45,881  
Total Assets as of September 30, 2017   $ 5,758,799     $ 3,695,606     $ 305,015     $ 7,508,882     $ 17,268,302  
                     
Three Months Ended September 30, 2016                    
Net Interest Income   $ 61,747     $ 38,613     $ 6,029     $ (2,477 )   $ 103,912  
Provision for Credit Losses     2,574       (168 )     (7 )     101       2,500  
Net Interest Income After Provision for Credit Losses     59,173       38,781       6,036       (2,578 )     101,412  
Noninterest Income     24,786       6,977       13,662       2,689       48,114  
Noninterest Expense     (51,892 )     (17,449 )     (14,579 )     (3,612 )     (87,532 )
Income Before Provision for Income Taxes     32,067       28,309       5,119       (3,501 )     61,994  
Provision for Income Taxes     (11,329 )     (10,073 )     (1,894 )     4,795       (18,501 )
Net Income   $ 20,738     $ 18,236     $ 3,225     $ 1,294     $ 43,493  
Total Assets as of September 30, 2016   $ 5,206,442     $ 3,428,424     $ 290,207     $ 7,089,570     $ 16,014,643  
 
Bank of Hawaii Corporation and Subsidiaries
Business Segments Selected Financial Information   Table 13b
(dollars in thousands)   Retail
Banking
  Commercial
Banking
  Investment
Services and
Private
Banking
  Treasury
and Other
  Consolidated
Total
Nine Months Ended September 30, 2017                    
Net Interest Income   $ 198,633     $ 127,106     $ 20,685     $ (7,956 )   $ 338,468  
Provision for Credit Losses     10,413       (355 )     (16 )     2,608       12,650  
Net Interest Income After Provision for Credit Losses     188,220       127,461       20,701       (10,564 )     325,818  
Noninterest Income     64,132       16,451       43,389       19,590       143,562  
Noninterest Expense     (155,786 )     (54,483 )     (45,692 )     (9,394 )     (265,355 )
Income Before Provision for Income Taxes     96,566       89,429       18,398       (368 )     204,025  
Provision for Income Taxes     (34,323 )     (31,472 )     (6,807 )     10,296       (62,306 )
Net Income   $ 62,243     $ 57,957     $ 11,591     $ 9,928     $ 141,719  
Total Assets as of September 30, 2017   $ 5,758,799     $ 3,695,606     $ 305,015     $ 7,508,882     $ 17,268,302  
                     
Nine Months Ended September 30, 2016                    
Net Interest Income   $ 179,798     $ 115,112     $ 18,518     $ (2,942 )   $ 310,486  
Provision for Credit Losses     7,415       (7,052 )     (18 )     1,155       1,500  
Net Interest Income After Provision for Credit Losses     172,383       122,164       18,536       (4,097 )     308,986  
Noninterest Income     67,364       21,015       43,632       18,829       150,840  
Noninterest Expense     (155,391 )     (52,479 )     (44,786 )     (8,333 )     (260,989 )
Income Before Provision for Income Taxes     84,356       90,700       17,382       6,399       198,837  
Provision for Income Taxes     (29,958 )     (32,337 )     (6,431 )     7,837       (60,889 )
Net Income   $ 54,398     $ 58,363     $ 10,951     $ 14,236     $ 137,948  
Total Assets as of September 30, 2016   $ 5,206,442     $ 3,428,424     $ 290,207     $ 7,089,570     $ 16,014,643  
     
Bank of Hawaii Corporation and Subsidiaries    
Selected Quarterly Financial Data   Table 14    
    Three Months Ended    
(dollars in thousands, except per share amounts)   September 30,
2017
      June 30,
2017
      March 31,
2017
      December 31,
2016
      September 30,
2016
   
Quarterly Operating Results                                        
Interest Income                                        
Interest and Fees on Loans and Leases   $ 94,621         $ 90,909         $ 87,937       $ 86,532         $ 83,489      
Income on Investment Securities                                        
Available-for-Sale     11,987           11,835           11,084         10,244           10,313      
Held-to-Maturity     20,334           19,918           19,706         19,213           19,315      
Deposits     5           2           5         2           1      
Funds Sold     1,579           696           890         795           695      
Other     235           208           230         281           166      
Total Interest Income     128,761           123,568           119,852         117,067           113,979      
Interest Expense                                        
Deposits     6,663           4,998           3,691         3,448           3,232      
Securities Sold Under Agreements to Repurchase     4,664           5,079           5,185         5,406           5,713      
Funds Purchased     -           39           3         3           3      
Short-Term Borrowings     -           64           -         -           -      
Other Debt     1,117           1,109           1,101         1,117           1,119      
Total Interest Expense     12,444           11,289           9,980         9,974           10,067      
Net Interest Income     116,317           112,279           109,872         107,093           103,912      
Provision for Credit Losses     4,000           4,250           4,400         3,250           2,500      
Net Interest Income After Provision for Credit Losses     112,317           108,029           105,472         103,843           101,412      
Noninterest Income                                        
Trust and Asset Management     11,050           11,796           11,479         11,232           11,008      
Mortgage Banking     3,237           3,819           3,300         6,256           6,362      
Service Charges on Deposit Accounts     8,188           8,009           8,325         8,537           8,524      
Fees, Exchange, and Other Service Charges     13,764           13,965           13,332         13,731           14,023      
Investment Securities Gains (Losses), Net     (566 )         (520 )         12,133         (337 )         (328 )    
Annuity and Insurance     1,429           2,161           1,995         1,457           1,653      
Bank-Owned Life Insurance     1,861           1,550           1,497         1,551           1,911      
Other     3,447           4,456           3,855         4,076           4,961      
Total Noninterest Income     42,410           45,236           55,916         46,503           48,114      
Noninterest Expense                                        
Salaries and Benefits     51,626           50,113           51,602         50,622           49,725      
Net Occupancy     7,727           8,131           8,168         7,581           8,510      
Net Equipment     5,417           5,706           5,501         5,191           4,913      
Data Processing     3,882           3,881           3,410         3,665           3,620      
Professional Fees     3,044           2,592           2,779         2,990           2,396      
FDIC Insurance     2,107           2,097           2,209         2,015           2,104      
Other     14,795           15,669           14,899         17,525           16,264      
Total Noninterest Expense     88,598           88,189           88,568         89,589           87,532      
Income Before Provision for Income Taxes     66,129           65,076           72,820         60,757           61,994      
Provision for Income Taxes     20,248           20,414           21,644         17,244           18,501      
Net Income   $ 45,881         $ 44,662         $ 51,176       $ 43,513         $ 43,493      
                                         
Basic Earnings Per Share   $ 1.09         $ 1.05         $ 1.21       $ 1.03         $ 1.02      
Diluted Earnings Per Share   $ 1.08         $ 1.05         $ 1.20       $ 1.02         $ 1.02      
                                         
Balance Sheet Totals                                        
Loans and Leases   $ 9,573,956         $ 9,387,613         $ 9,113,809       $ 8,949,785         $ 8,694,097      
Total Assets     17,268,302           16,981,292           16,664,215         16,492,367           16,014,643      
Total Deposits     15,048,160           14,784,649           14,476,533         14,320,240           13,808,365      
Total Shareholders' Equity     1,227,893           1,213,757           1,193,137         1,161,537           1,163,859      
                                         
Performance Ratios                                        
Return on Average Assets     1.07     %     1.09     %     1.26   %     1.07     %     1.09     %
Return on Average Shareholders' Equity     14.89           14.87           17.63         14.90           14.89      
Efficiency Ratio 1     55.82           55.99           53.42         58.33           57.58      
Net Interest Margin 2     2.92           2.92           2.89         2.83           2.80      
                                         
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
    Eight Months Ended       Year Ended
($ in millions; jobs in thousands)   August 31, 2017       December 31, 2016   December 31, 2015
Hawaii Economic Trends                                            
State General Fund Revenues 1   $ 4,357.2   4.5   %   $ 6,215.4       3.6   %   $ 5,998.6       8.4     %
General Excise and Use Tax Revenue 1   $ 2,250.2   4.8   %   $ 3,205.7       2.0   %   $ 3,141.5       5.4     %
Jobs 2     672.4             671.7                 658.8            
                                             
                        September 30,       December 31,
(spot rates)                       2017       2016   2015
Unemployment 3                                            
Statewide, seasonally adjusted                       2.5   %     2.9   %   3.2     %
                                             
Oahu                       2.3         2.4       2.7      
Island of Hawaii                       2.8         3.1       3.7      
Maui                       2.5         2.7       3.1      
Kauai                       2.3         2.8       3.5      
                                             
                September 30,       December 31,
(percentage change, except months of inventory)               2017       2016       2015       2014    
Housing Trends (Single Family Oahu) 4                                            
Median Home Price                 3.4   %   5.0   %     3.7   %   3.8     %
Home Sales Volume (units)                 5.0   %   6.5   %     5.2   %   (0.8 )   %
Months of Inventory                 2.4       2.5         2.6       2.6      
                                             
(in thousands)               Monthly Visitor Arrivals,
Not Seasonally Adjusted
      Percentage Change
from Previous Year
   
Tourism 5                                            
                                             
August 31, 2017                       818.6               4.8      
July 31, 2017                       891.9               6.8      
June 30, 2017                       835.9               4.5      
May 31, 2017                       751.2               4.5      
April 30, 2017                       753.0               7.5      
March 31, 2017                       802.8               2.1      
February 28, 2017                       700.4               1.7      
January 31, 2017                       756.3               4.9      
December 31, 2016                       828.5               3.6      
November 30, 2016                       696.9               4.7      
October 31, 2016                       717.5               4.3      
September 30, 2016                       666.6               3.0      
August 31, 2016                       780.7               3.1      
July 31, 2016                       835.4               2.1      
June 30, 2016                       800.3               4.2      
May 31, 2016                       718.9               1.3      
April 30, 2016                       700.6               3.4      
March 31, 2016                       786.3               0.8      
February 29, 2016                       688.8               4.1      
January 31, 2016                       721.0               6.2      
December 31, 2015                       799.5               4.4      
November 30, 2015                       665.9               4.4      
October 31, 2015                       687.7               4.0      
September 30, 2015                       647.2               3.9      
August 31, 2015                       757.5               3.1      
July 31, 2015                       818.5               5.9      
June 30, 2015                       767.9               6.0      
May 31, 2015                       709.7               9.3      
April 30, 2015                       677.8               2.3      
March 31, 2015                       780.1               7.0      
February 28, 2015                       661.7               2.3      
January 31, 2015                       678.9               (0.6 )    
                                             

1 Source: Hawaii Department of Business, Economic Development & Tourism

2 Source: U. S. Bureau of Labor

3 Source: Hawaii Department of Labor and Industrial Relations, County jobs data not seasonally adjusted.

4 Source: Honolulu Board of REALTORS

5 Source: Hawaii Tourism Authority

Note: Certain prior period seasonally adjusted information has been revised.

 

Source: Bank of Hawaii Corporation

Bank of Hawaii Corporation
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or
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