Bank of Hawai‘i Corporation First Quarter 2023 Financial Results

April 24, 2023
  • Average Deposits Up 0.4% Linked Quarter
  • Diluted Earnings Per Common Share $1.14
  • Net Income $46.8 Million
  • Board of Directors Declares Dividend of $0.70 Per Common Share

 

HONOLULU--(BUSINESS WIRE)--Apr. 24, 2023-- Bank of Hawai‘i Corporation (NYSE: BOH) today reported diluted earnings per common share of $1.14 for the first quarter of 2023, compared with diluted earnings per common share of $1.50 in the previous quarter and $1.32 in the same quarter of 2022. Net income for the first quarter of 2023 was $46.8 million, down 23.6% from the previous quarter and down 14.6% from the same quarter of 2022. The return on average common equity for the first quarter of 2023 was 15.79% compared with 21.28% in the previous quarter and 15.44% in the same quarter of 2022.

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“Amidst a challenging macro environmental backdrop, Bank of Hawai‘i delivered solid operating performance in the first quarter of 2023," said Peter Ho, Chairman, President, and CEO. “Average deposits grew 0.4% in the first quarter and were essentially flat from a year ago. Spot deposit balances were down 0.6% from the prior quarter and down 1.1% from the prior year. Deposit costs, while rising, continue to show the benefits of our unique Hawai‘i deposit base which is diversified and long tenured. Loans grew 1.3% on a linked quarter basis with growth across both our consumer and commercial portfolios. Credit quality remains excellent. Non-performing assets were lower on both a linked quarter and year on year basis. Annualized net charge-offs were 0.08% during the quarter.”

Financial Highlights

Net interest income for the first quarter of 2023 was $136.0 million, a decrease of 3.4% from the previous quarter and an increase of 8.5% from the same quarter of 2022. The decrease in net interest income in the first quarter of 2023 compared to the prior quarter was due to two fewer days in the quarter, which reduced net interest income by approximately $1.6 million, as well as higher funding costs, partially offset by loan growth and higher earning asset yields. The increase in net interest income compared to the same period in 2022 was primarily due to loan growth and higher earning asset yields, partially offset by higher funding costs.

Net interest margin was 2.47% in the first quarter of 2023, a decrease of 13 basis points from the previous quarter and an increase of 13 basis points from the same quarter of 2022. The decrease in net interest margin in the first quarter of 2023 compared to the prior quarter was due to higher funding costs, partially offset by higher earning asset yields. The increase in net interest margin from the same period in 2022 was primarily due to higher earning asset yields, partially offset by higher funding costs.

The average yield on loans and leases was 4.03% in the first quarter of 2023, up 22 basis points from the prior quarter and up 93 basis points from the same quarter of 2022. The average yield on total earning assets was 3.42% in the first quarter of 2023, up 25 basis points from the prior quarter and up 98 basis points from the same quarter of 2022. The average cost of interest-bearing deposits was 1.09% in the first quarter of 2023, up 40 basis points from the prior quarter and up 102 basis points from the same quarter of 2022. The average cost of total deposits, including noninterest-bearing deposits, was 0.75%, up 29 basis points from the prior quarter and up 70 basis points from the same quarter of 2022. The changes in yields and rates over the linked quarter and year over year period reflected the higher rate environment, including higher benchmark interest rates.

Noninterest income was $40.7 million in the first quarter of 2023, a decrease of 1.1% from the previous quarter and a decrease of 6.5% from the same period in 2022. Noninterest income in the first quarter of 2023 included a negative adjustment of $0.6 million related to a change in the Visa Class B conversion ratio. Adjusted for this item, noninterest income in the first quarter was $41.3 million, up 0.3% from the prior quarter and down 5.2% from the same period in 2022. The decrease in noninterest income compared to the same period in 2022 was due to lower customer swap transactions and lower mortgage banking income.

Noninterest expense was $111.9 million in the first quarter of 2023, an increase of 9.0% from the previous quarter and an increase of 7.7% from the same quarter of 2022. Noninterest expense in the first quarters 2022 and 2023 included seasonal payroll expenses of approximately $3.7 million and approximately $4.0 million, respectively. In addition, noninterest expense in the first quarter of 2023 included separation expenses of $3.1 million. Adjusted for these items, noninterest expense for the first quarter of 2023 was $104.9 million, an increase of 2.1% from the prior quarter and 4.7% from adjusted noninterest expense in same period in 2022. The linked quarter increase was primarily due to an industry-wide increase in FDIC insurance expense of $1.5 million. The increase from the same period in 2022, adjusting for nonrecurring items in both periods, was primarily due to higher salaries and benefits expense of $1.8 million, higher software license fees of $0.9 million and higher FDIC insurance expense of $1.7 million.

The effective tax rate for the first quarter of 2023 was 25.38% compared with 22.40% in the previous quarter and 22.15% during the same quarter of 2022. The increase in the effective tax rate on a linked quarter basis was due to a non-recurring benefit from the leveraged lease terminations received in the fourth quarter and an unfavorable discrete tax item in the first quarter. The year over year increase was primarily due to lower benefits from tax credit investments. The effective tax rate in the first quarter of 2022 also included benefits from leveraged leases that have since been terminated.

Asset Quality

The Company’s overall asset quality remained strong during the first quarter of 2023. Provision for credit losses for the first quarter of 2023 was $2.0 million compared with $0.2 million in the previous quarter and a net benefit of $5.5 million in the same quarter of 2022.

Total non-performing assets were $12.1 million at March 31, 2023, down $0.5 million from December 31, 2022 and down $7.9 million from March 31, 2022. Non-performing assets as a percentage of total loans and leases and foreclosed real estate were 0.09% at the end of the quarter, flat from the end of the prior quarter and a decrease of 7 basis points from the same quarter of 2022.

Net loan and lease charge-offs during the first quarter of 2023 were $2.7 million or 0.08% annualized of total average loans and leases outstanding. Net loan and lease charge-offs for the first quarter of 2023 were comprised of charge-offs of $4.3 million partially offset by recoveries of $1.6 million. Compared to the prior quarter, net loan and lease charge-offs increased by $0.8 million or 3 basis points annualized on total average loans and leases outstanding. Compared to the same quarter of 2022, net loan and lease charge-offs increased by $1.2 million or 3 basis points annualized on total average loans and leases outstanding.

The allowance for credit losses on loans and leases was $143.6 million at March 31, 2023, a decrease of $0.9 million from December 31, 2022 and a decrease of $8.5 million from March 31, 2022. The ratio of the allowance for credit losses to total loans and leases outstanding was 1.04% at the end of the quarter, down 2 basis points from the end of the prior quarter and down 17 basis points from the end of the same quarter of 2022.

Balance Sheet

Total assets were $23.9 billion at March 31, 2023, an increase of 1.4% from December 31, 2022 and an increase of 4.1% from March 31, 2022, primarily due to growth in our earning assets.

The investment securities portfolio was $8.1 billion at March 31, 2023, a decrease of 1.6% from December 31, 2022 and a decrease of 7.1% from March 31, 2022. These decreases were due to cashflows from the portfolio exceeding the pace of reinvestment. Period end unrealized losses on securities decreased by $120.7 million from the prior quarter end. The investment portfolio remains largely comprised of securities issued by U.S. government agencies and U.S. government-sponsored enterprises.

Total loans and leases were $13.8 billion at March 31, 2023, an increase of 1.3% from December 31, 2022 and an increase of 10.2% from March 31, 2022. Total commercial loans were $5.6 billion at March 31, 2023, an increase of 1.9% from the prior quarter and an increase of 10.9% from the same quarter of 2022, primarily due to an increase in our commercial mortgage portfolio. Total consumer loans were $8.3 billion as of March 31, 2023, an increase of 0.9% from the prior quarter and 9.7% from the same period in 2022, primarily driven by increases in our residential mortgage and home equity portfolios.

Total deposits were $20.5 billion at March 31, 2023, a decrease of 0.6% from December 31, 2022 and a decrease of 1.1% from March 31, 2022. Noninterest bearing deposits made up 31% of total deposit balances as of March 31, 2023, down from 33% as of December 31, 2022 and 36% as of March 31, 2022. Average deposits were $20.4 billion for the first quarter of 2023, up 0.4% from $20.3 billion in the prior quarter, and essentially unchanged from the first quarter of 2022. As of March 31, 2023 insured and collateralized deposits represent 58% of total deposit balances, up from 57% as of December 31, 2022 and 56% as of March 31, 2022.

Capital and Dividends

The Company’s capital levels remain well within regulatory well-capitalized guidelines.

The Tier 1 Capital Ratio was 12.10% at March 31, 2023 compared with 12.15% at December 31, 2022 and 13.22% at March 31, 2022. The Tier 1 Leverage Ratio was 7.19% at March 31, 2023 compared with 7.37% at December 31, 2022 and 7.30% at March 31, 2022. The decline in the Tier 1 Capital Ratio was due to an increase in risk-weighted assets and the decline in the Tier 1 Leverage Ratio was due to an increase in average total assets, both as a result of loan growth over the period.

The Company repurchased 150.0 thousand shares of common stock at a total cost of $9.9 million under its share repurchase program in the first quarter of 2023. Total remaining buyback authority under the share repurchase program was $126.0 million at March 31, 2023.

The Company’s Board of Directors declared a quarterly cash dividend of $0.70 per share on the Company’s outstanding common shares. The dividend will be payable on June 14, 2023 to shareholders of record at the close of business on May 31, 2023.

On April 4, 2023, the Board of Directors declared the quarterly dividend payment of $10.94 per share, equivalent to $0.2735 per depositary share, on its preferred stock. The depositary shares representing the Series A Preferred Stock are traded on the NYSE under the symbol “BOH.PRA.” The dividend will be payable on May 1, 2023 to shareholders of record of the preferred stock as of April 14, 2023.

Conference Call Information

The Company will review its first quarter financial results today at 8:00 a.m. Hawaii Time (2:00 p.m. Eastern Time). The live call, including a slide presentation, will be accessible on the investor relations link of Bank of Hawai‘i Corporation's website, www.boh.com. The webcast can be accessed via the link below: https://register.vevent.com/register/BIf628c91a80f642cb96f2725eff121a04. A replay of the conference call will be available for one year beginning approximately 11:00 a.m. Hawaii Time on Monday, April 24, 2023. The replay will be accessible via the same link. In addition, the 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" (as defined in the Private Securities Litigation Reform Act of 1995) that involve risks and uncertainties that could cause results to be materially different from expectations. Forecasts of our financial results and condition, expectations for our operations and business prospects, and our assumptions used in those forecasts and expectations are examples of certain of these forward-looking statements. 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 Hawai‘i Corporation's Annual Report on Form 10-K for the year ended December 31, 2022 which was filed with the U.S. Securities and Exchange Commission. These forward-looking statements are not guarantees of future performance and speak only as of the date made, and, except as required by law, the Company undertakes no obligation to update or revise any forward-looking statements to reflect subsequent events, new information or future circumstances.

Bank of Hawai‘i Corporation is an independent regional financial services company serving businesses, consumers, and governments in Hawaii and the West Pacific. The Company's principal subsidiary, Bank of Hawai‘i, was founded in 1897. For more information about Bank of Hawai‘i Corporation, see the Company’s web site, www.boh.com. Bank of Hawai‘i Corporation is a trade name of Bank of Hawaii Corporation.

Bank of Hawai‘i Corporation and Subsidiaries  

 

 

 

 

 

 

 

Financial Highlights

 

 

 

 

 

 

 

Table 1

 

 

Three Months Ended

 

 

March 31,

 

 

December 31,

 

 

March 31,

(dollars in thousands, except per share amounts)

 

2023

 

 

2022

 

 

2022

For the Period:                
Operating Results                
Net Interest Income  

$

135,955

   

$

140,738

   

$

125,263

 

Provision for Credit Losses  

 

2,000

   

 

200

   

 

(5,500

)

Total Noninterest Income  

 

40,737

   

 

41,172

   

 

43,551

 

Total Noninterest Expense  

 

111,919

   

 

102,703

   

 

103,874

 

Pre-Provision Net Revenue  

 

64,773

   

 

79,207

   

 

64,940

 

Net Income  

 

46,842

   

 

61,307

   

 

54,834

 

Net Income Available to Common Shareholders  

 

44,873

   

 

59,338

   

 

52,865

 

Basic Earnings Per Common Share  

 

1.14

   

 

1.51

   

 

1.33

 

Diluted Earnings Per Common Share  

 

1.14

   

 

1.50

   

 

1.32

 

Dividends Declared Per Common Share  

 

0.70

   

 

0.70

   

 

0.70

 

                 
Performance Ratios                
Return on Average Assets  

 

0.80

%

 

 

1.05

%

 

 

0.97

%

Return on Average Shareholders' Equity  

 

14.25

   

 

18.91

   

 

14.18

 

Return on Average Common Equity  

 

15.79

   

 

21.28

   

 

15.44

 

Efficiency Ratio 1  

 

63.34

   

 

56.46

   

 

61.53

 

Net Interest Margin 2  

 

2.47

   

 

2.60

   

 

2.34

 

Dividend Payout Ratio 3  

 

61.40

   

 

46.36

   

 

52.63

 

Average Shareholders' Equity to Average Assets  

 

5.59

   

 

5.56

   

 

6.87

 

                 
Average Balances                
Average Loans and Leases  

$

13,717,483

   

$

13,452,791

   

$

12,290,402

 

Average Assets  

 

23,865,478

   

 

23,147,398

   

 

22,847,488

 

Average Deposits  

 

20,430,882

   

 

20,341,327

   

 

20,426,076

 

Average Shareholders' Equity  

 

1,332,889

   

 

1,286,291

   

 

1,568,725

 

                 
Per Share of Common Stock                
Book Value  

$

29.62

   

$

28.54

   

$

31.50

 

Tangible Book Value  

 

28.83

   

 

27.75

   

 

30.71

 

Market Value                
Closing  

 

52.08

   

 

77.56

   

 

83.92

 

High  

 

81.73

   

 

82.87

   

 

92.38

 

Low  

 

34.71

   

 

70.15

   

 

79.60

 

                 
    March 31,     December 31,     March 31,
   

2023

 

 

2022

 

 

2022

As of Period End:                
Balance Sheet Totals                
Loans and Leases  

$

13,824,522

   

$

13,646,420

   

$

12,544,492

 

Total Assets  

 

23,931,977

   

 

23,606,877

   

 

23,000,317

 

Total Deposits  

 

20,491,300

   

 

20,615,696

   

 

20,716,287

 

Other Debt  

 

510,269

   

 

410,294

   

 

10,367

 

Total Shareholders' Equity  

 

1,354,430

   

 

1,316,995

   

 

1,448,885

 

                 
Asset Quality                
Non-Performing Assets  

$

12,124

   

$

12,647

   

$

19,979

 

Allowance for Credit Losses - Loans and Leases  

 

143,577

   

 

144,439

   

 

152,028

 

Allowance to Loans and Leases Outstanding 4  

 

1.04

%

 

 

1.06

%

 

 

1.21

%

                 
Capital Ratios 5                
Common Equity Tier 1 Capital Ratio  

 

10.88

%

 

 

10.92

%

 

 

11.83

%

Tier 1 Capital Ratio  

 

12.10

   

 

12.15

   

 

13.22

 

Total Capital Ratio  

 

13.13

   

 

13.17

   

 

14.41

 

Tier 1 Leverage Ratio  

 

7.19

   

 

7.37

   

 

7.30

 

Total Shareholders' Equity to Total Assets  

 

5.66

   

 

5.58

   

 

6.30

 

Tangible Common Equity to Tangible Assets 6  

 

4.78

   

 

4.69

   

 

5.39

 

Tangible Common Equity to Risk-Weighted Assets 6  

 

7.97

   

 

7.76

   

 

9.77

 

                 
Non-Financial Data                
Full-Time Equivalent Employees  

 

2,025

   

 

2,076

   

 

2,084

 

Branches  

 

51

   

 

51

   

 

54

 

ATMs  

 

320

   

 

320

   

 

307

 

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 common share divided by basic earnings per common share.

4

  The numerator comprises the Allowance for Credit Losses - Loans and Leases.

5

  Regulatory capital ratios as of March 31, 2023 are preliminary.

6

  Tangible common equity to tangible assets and tangible common equity to risk-weighted assets are Non-GAAP financial measures.
    Tangible common equity is defined by the Company as common shareholders' equity minus goodwill.
    See Table 2 "Reconciliation of Non-GAAP Financial Measures".
Bank of Hawai‘i Corporation and Subsidiaries            
Reconciliation of Non-GAAP Financial Measures           Table 2
   

March 31,

 

December 31,

 

March 31,

(dollars in thousands)  

2023

 

2022

 

2022

             
Total Shareholders' Equity  

$

1,354,430

 

 

$

1,316,995

 

 

$

1,448,885

 

Less: Preferred Stock  

 

180,000

 

 

 

180,000

 

 

 

180,000

 
Goodwill  

 

31,517

 

 

 

31,517

 

 

 

31,517

 

Tangible Common Equity  

$

1,142,913

 

 

$

1,105,478

 

 

$

1,237,368

 

             
Total Assets  

 

23,931,977

 

 

 

23,606,877

 

 

 

23,000,317

 

Less: Goodwill  

 

31,517

 

 

 

31,517

 

 

 

31,517

 

Tangible Assets  

$

23,900,460

 

 

$

23,575,360

 

 

$

22,968,800

 

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

$

14,341,397

 

 

$

14,238,798

 

 

$

12,663,646

 

             
Total Shareholders' Equity to Total Assets  

 

5.66

%

 

 

5.58

%

 

 

6.30

%

Tangible Common Equity to Tangible Assets (Non-GAAP)  

 

4.78

%

 

 

4.69

%

 

 

5.39

%

             
Tier 1 Capital Ratio 1  

 

12.10

%

 

 

12.15

%

 

 

13.22

%

Tangible Common Equity to Risk-Weighted Assets (Non-GAAP) 1  

 

7.97

%

 

 

7.76

%

 

 

9.77

%

1

  Regulatory capital ratios as of March 31, 2023 are preliminary.
Bank of Hawai‘i Corporation and Subsidiaries            
Consolidated Statements of Income   Table 3
   

Three Months Ended

   

March 31,

 

December 31,

 

March 31,

(dollars in thousands, except per share amounts)  

2023

 

2022

 

2022

Interest Income            
Interest and Fees on Loans and Leases  

$

136,501

 

 

$

128,683

 

 

$

94,439

 

Income on Investment Securities            
Available-for-Sale  

 

23,893

 

 

 

18,476

 

 

 

17,100

 

Held-to-Maturity  

 

23,948

 

 

 

23,708

 

 

 

18,701

 

Deposits  

 

27

 

 

 

13

 

 

 

4

 

Funds Sold  

 

3,366

 

 

 

1,093

 

 

 

127

 

Other  

 

597

 

 

 

340

 

 

 

202

 

Total Interest Income  

 

188,332

 

 

 

172,313

 

 

 

130,573

 

Interest Expense            
Deposits  

 

37,794

 

 

 

23,494

 

 

 

2,353

 

Securities Sold Under Agreements to Repurchase  

 

5,377

 

 

 

4,289

 

 

 

2,772

 

Funds Purchased  

 

704

 

 

 

318

 

 

 

2

 

Short-Term Borrowings  

 

3,203

 

 

 

1,978

 

 

 

-

 

Other Debt  

 

5,299

 

 

 

1,496

 

 

 

183

 

Total Interest Expense  

 

52,377

 

 

 

31,575

 

 

 

5,310

 

Net Interest Income  

 

135,955

 

 

 

140,738

 

 

 

125,263

 

Provision for Credit Losses  

 

2,000

 

 

 

200

 

 

 

(5,500

)

Net Interest Income After Provision for Credit Losses  

 

133,955

 

 

 

140,538

 

 

 

130,763

 

Noninterest Income            
Trust and Asset Management  

 

10,690

 

 

 

10,652

 

 

 

11,276

 

Mortgage Banking  

 

1,004

 

 

 

991

 

 

 

2,740

 

Service Charges on Deposit Accounts  

 

7,737

 

 

 

7,513

 

 

 

7,272

 

Fees, Exchange, and Other Service Charges  

 

13,808

 

 

 

13,906

 

 

 

12,952

 

Investment Securities Losses, Net  

 

(1,792

)

 

 

(1,124

)

 

 

(1,545

)

Annuity and Insurance  

 

1,271

 

 

 

1,087

 

 

 

791

 

Bank-Owned Life Insurance  

 

2,842

 

 

 

2,475

 

 

 

2,349

 

Other  

 

5,177

 

 

 

5,672

 

 

 

7,716

 

Total Noninterest Income  

 

40,737

 

 

 

41,172

 

 

 

43,551

 

Noninterest Expense            
Salaries and Benefits  

 

65,088

 

 

 

57,639

 

 

 

59,924

 

Net Occupancy  

 

9,872

 

 

 

9,499

 

 

 

9,826

 

Net Equipment  

 

10,375

 

 

 

9,942

 

 

 

9,153

 

Data Processing  

 

4,583

 

 

 

4,579

 

 

 

4,560

 

Professional Fees  

 

3,883

 

 

 

3,958

 

 

 

3,258

 

FDIC Insurance  

 

3,234

 

 

 

1,774

 

 

 

1,502

 

Other  

 

14,884

 

 

 

15,312

 

 

 

15,651

 

Total Noninterest Expense  

 

111,919

 

 

 

102,703

 

 

 

103,874

 

Income Before Provision for Income Taxes  

 

62,773

 

 

 

79,007

 

 

 

70,440

 

Provision for Income Taxes  

 

15,931

 

 

 

17,700

 

 

 

15,606

 

Net Income  

$

46,842

 

 

$

61,307

 

 

$

54,834

 

Preferred Stock Dividends  

 

1,969

 

 

 

1,969

 

 

 

1,969

 

Net Income Available to Common Shareholders  

$

44,873

 

 

$

59,338

 

 

$

52,865

 

Basic Earnings Per Common Share  

$

1.14

 

 

$

1.51

 

 

$

1.33

 

Diluted Earnings Per Common Share  

$

1.14

 

 

$

1.50

 

 

$

1.32

 

Dividends Declared Per Common Share  

$

0.70

 

 

$

0.70

 

 

$

0.70

 

Basic Weighted Average Common Shares  

 

39,276,833

 

 

 

39,395,338

 

 

 

39,752,679

 

Diluted Weighted Average Common Shares  

 

39,465,889

 

 

 

39,618,896

 

 

 

39,956,391

 

Bank of Hawai‘i Corporation and Subsidiaries

 

 

 

 

 

 

Consolidated Statements of Comprehensive Income (Loss)

 

 

 

 

 

Table 4

 

 

Three Months Ended

 

 

March 31,

 

December 31,

 

March 31,

(dollars in thousands)

 

2023

 

2022

 

2022

Net Income  

$

46,842

 

$

61,307

 

$

54,834

 

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

 

29,276

 

 

5,677

 

 

(180,124

)

Defined Benefit Plans  

 

84

 

 

7,359

 

 

353

 

Other Comprehensive Income (Loss)  

 

29,360

 

 

13,036

 

 

(179,771

)

Comprehensive Income (Loss)  

$

76,202

 

$

74,343

 

$

(124,937

)

Bank of Hawai‘i Corporation and Subsidiaries            
Consolidated Statements of Condition           Table 5
   

March 31,

 

December 31,

 

March 31,

(dollars in thousands)  

2023

 

2022

 

2022

Assets            
Interest-Bearing Deposits in Other Banks  

$

2,554

 

 

$

3,724

 

 

$

2,488

 

Funds Sold  

 

272,018

 

 

 

81,364

 

 

 

356,373

 

Investment Securities            
Available-for-Sale  

 

2,815,083

 

 

 

2,844,823

 

 

 

4,258,534

 

Held-to-Maturity (Fair Value of $4,601,876; $4,615,393; and $4,171,262)  

 

5,312,815

 

 

 

5,414,139

 

 

 

4,489,615

 

Loans Held for Sale  

 

2,149

 

 

 

1,035

 

 

 

5,293

 

Loans and Leases  

 

13,824,522

 

 

 

13,646,420

 

 

 

12,544,492

 

Allowance for Credit Losses  

 

(143,577

)

 

 

(144,439

)

 

 

(152,028

)

Net Loans and Leases  

 

13,680,945

 

 

 

13,501,981

 

 

 

12,392,464

 

Total Earning Assets  

 

22,085,564

 

 

 

21,847,066

 

 

 

21,504,767

 

Cash and Due from Banks  

 

337,413

 

 

 

316,679

 

 

 

236,193

 

Premises and Equipment, Net  

 

203,131

 

 

 

206,777

 

 

 

199,743

 

Operating Lease Right-of-Use Assets  

 

91,387

 

 

 

92,307

 

 

 

93,563

 

Accrued Interest Receivable  

 

63,175

 

 

 

61,002

 

 

 

45,392

 

Foreclosed Real Estate  

 

1,040

 

 

 

1,040

 

 

 

2,332

 

Mortgage Servicing Rights  

 

22,102

 

 

 

22,619

 

 

 

23,968

 

Goodwill  

 

31,517

 

 

 

31,517

 

 

 

31,517

 

Bank-Owned Life Insurance  

 

455,602

 

 

 

453,882

 

 

 

446,926

 

Other Assets  

 

641,046

 

 

 

573,988

 

 

 

415,916

 

Total Assets  

$

23,931,977

 

 

$

23,606,877

 

 

$

23,000,317

 

             
Liabilities            
Deposits            
Noninterest-Bearing Demand  

$

6,385,872

 

 

$

6,714,982

 

 

$

7,500,741

 

Interest-Bearing Demand  

 

4,283,801

 

 

 

4,232,567

 

 

 

4,591,178

 

Savings  

 

7,898,874

 

 

 

7,962,410

 

 

 

7,701,849

 

Time  

 

1,922,753

 

 

 

1,705,737

 

 

 

922,519

 

Total Deposits  

 

20,491,300

 

 

 

20,615,696

 

 

 

20,716,287

 

Short-Term Borrowings  

 

325,000

 

 

 

-

 

 

 

-

 

Securities Sold Under Agreements to Repurchase  

 

725,490

 

 

 

725,490

 

 

 

450,490

 

Other Debt  

 

510,269

 

 

 

410,294

 

 

 

10,367

 

Operating Lease Liabilities  

 

99,746

 

 

 

100,526

 

 

 

101,274

 

Retirement Benefits Payable  

 

26,768

 

 

 

26,991

 

 

 

38,008

 

Accrued Interest Payable  

 

13,061

 

 

 

9,698

 

 

 

2,545

 

Taxes Payable  

 

11,039

 

 

 

7,104

 

 

 

17,265

 

Other Liabilities  

 

374,874

 

 

 

394,083

 

 

 

215,196

 

Total Liabilities  

 

22,577,547

 

 

 

22,289,882

 

 

 

21,551,432

 

Shareholders' Equity            
Preferred Stock ($.01 par value; authorized 180,000 shares;            
issued / outstanding: March 31, 2023; December 31, 2022; and March 31, 2022 - 180,000)  

 

180,000

 

 

 

180,000

 

 

 

180,000

 

Common Stock ($.01 par value; authorized 500,000,000 shares;            
issued / outstanding: March 31, 2023 - 58,722,929 / 39,646,506;            
December 31, 2022 - 58,733,625 / 39,835,750; and March 31, 2022 - 58,717,811 / 40,288,365)  

 

583

 

 

 

582

 

 

 

582

 

Capital Surplus  

 

624,126

 

 

 

620,578

 

 

 

607,061

 

Accumulated Other Comprehensive Loss  

 

(405,298

)

 

 

(434,658

)

 

 

(246,153

)

Retained Earnings  

 

2,074,428

 

 

 

2,055,912

 

 

 

1,974,790

 

Treasury Stock, at Cost (Shares: March 31, 2023 - 19,076,423; December 31, 2022 - 18,897,875;            
and March 31, 2022 - 18,429,446)  

 

(1,119,409

)

 

 

(1,105,419

)

 

 

(1,067,395

)

Total Shareholders' Equity  

 

1,354,430

 

 

 

1,316,995

 

 

 

1,448,885

 

Total Liabilities and Shareholders' Equity  

$

23,931,977

 

 

$

23,606,877

 

 

$

23,000,317

 

Bank of Hawai‘i Corporation and Subsidiaries
Consolidated Statements of Shareholders' Equity  

Table 6

                        Accumulated            
                        Other            
    Preferred       Common           Comprehensive            
    Shares  

Preferred

  Shares   Common   Capital   Income   Retained   Treasury    
(dollars in thousands)   Outstanding   Stock   Outstanding   Stock   Surplus   (Loss)   Earnings   Stock   Total
Balance as of December 31, 2022  

180,000

 

$

180,000

 

39,835,750

 

 

$

582

 

$

620,578

 

$

(434,658

)

 

$

2,055,912

 

 

$

(1,105,419

)

 

$

1,316,995

 

Net Income  

-

 

 

-

 

-

 

 

 

-

 

 

-

 

 

-

 

 

 

46,842

 

 

 

-

 

 

 

46,842

 

Other Comprehensive Income  

-

 

 

-

 

-

 

 

 

-

 

 

-

 

 

29,360

 

 

 

-

 

 

 

-

 

 

 

29,360

 

Share-Based Compensation  

-

 

 

-

 

-

 

 

 

-

 

 

3,371

 

 

-

 

 

 

-

 

 

 

-

 

 

 

3,371

 

Common Stock Issued under Purchase and                                    
Equity Compensation Plans  

-

 

 

-

 

13,164

 

 

 

1

 

 

177

 

 

-

 

 

 

1,587

 

 

 

(197

)

 

 

1,568

 

Common Stock Repurchased  

-

 

 

-

 

(202,408

)

 

 

-

 

 

-

 

 

-

 

 

 

-

 

 

 

(13,793

)

 

 

(13,793

)

Cash Dividends Declared Common Stock ($0.70 per share)  

-

 

 

-

 

-

 

 

 

-

 

 

-

 

 

-

 

 

 

(27,944

)

 

 

-

 

 

 

(27,944

)

Cash Dividends Declared Preferred Stock  

-

 

 

-

 

-

 

 

 

-

 

 

-

 

 

-

 

 

 

(1,969

)

 

 

-

 

 

 

(1,969

)

Balance as of March 31, 2023  

180,000

 

$

180,000

 

39,646,506

 

 

$

583

 

$

624,126

 

$

(405,298

)

 

$

2,074,428

 

 

$

(1,119,409

)

 

$

1,354,430

 

                                     
Balance as of December 31, 2021  

180,000

 

 

180,000

 

40,253,193

 

 

 

581

 

 

602,508

 

 

(66,382

)

 

 

1,950,375

 

 

 

(1,055,471

)

 

 

1,611,611

 

Net Income  

-

 

 

-

 

-

 

 

 

-

 

 

-

 

 

-

 

 

 

54,834

 

 

 

-

 

 

 

54,834

 

Other Comprehensive Loss  

-

 

 

-

 

-

 

 

 

-

 

 

-

 

 

(179,771

)

 

 

-

 

 

 

-

 

 

 

(179,771

)

Share-Based Compensation  

-

 

 

-

 

-

 

 

 

-

 

 

4,010

 

 

-

 

 

 

-

 

 

 

-

 

 

 

4,010

 

Common Stock Issued under Purchase and                                    
Equity Compensation Plans  

-

 

 

-

 

197,783

 

 

 

1

 

 

543

 

 

-

 

 

 

(185

)

 

 

2,036

 

 

 

2,395

 

Common Stock Repurchased  

-

 

 

-

 

(162,611

)

 

 

-

 

 

-

 

 

-

 

 

 

-

 

 

 

(13,960

)

 

 

(13,960

)

Cash Dividends Declared Common Stock ($0.70 per share)  

-

 

 

-

 

-

 

 

 

-

 

 

-

 

 

-

 

 

 

(28,265

)

 

 

-

 

 

 

(28,265

)

Cash Dividends Declared Preferred Stock  

-

 

 

-

 

-

 

 

 

-

 

 

-

 

 

-

 

 

 

(1,969

)

 

 

-

 

 

 

(1,969

)

Balance as of March 31, 2022  

180,000

 

$

180,000

 

40,288,365

 

 

$

582

 

$

607,061

 

$

(246,153

)

 

$

1,974,790

 

 

$

(1,067,395

)

 

$

1,448,885

 

Bank of Hawai‘i Corporation and Subsidiaries
Average Balances and Interest Rates - Taxable-Equivalent Basis 1   Table 7
    Three Months Ended   Three Months Ended     Three Months Ended  
    March 31, 2023   December 31, 2022     March 31, 2022  
    Average   Income/   Yield/   Average   Income/   Yield/     Average   Income/   Yield/  
(dollars in millions)   Balance   Expense 2   Rate   Balance   Expense 2   Rate     Balance   Expense 2   Rate  
Earning Assets                                        
Interest-Bearing Deposits in Other Banks  

$

1.7

 

$

-

 

6.25

%

 

$

2.2

 

$

-

 

2.32

%

 

$

3.4

 

$

-

 

0.45

%

Funds Sold  

 

295.9

 

 

3.4

 

4.55

 

 

 

118.1

 

 

1.2

 

3.62

   

 

238.5

 

 

0.1

 

0.21

 
Investment Securities                                        
Available-for-Sale                                        
Taxable  

 

2,820.3

 

 

23.8

 

3.40

 

 

 

2,593.5

 

 

18.4

 

2.83

   

 

4,399.9

 

 

17.1

 

1.56

 
Non-Taxable  

 

9.6

 

 

0.1

 

4.38

 

 

 

7.5

 

 

0.1

 

4.14

   

 

3.0

 

 

-

 

1.93

 
Held-to-Maturity                                        
Taxable  

 

5,336.2

 

 

23.8

 

1.78

 

 

 

5,401.9

 

 

23.5

 

1.74

   

 

4,567.4

 

 

18.6

 

1.63

 
Non-Taxable  

 

35.3

 

 

0.2

 

2.10

 

 

 

35.4

 

 

0.2

 

2.10

   

 

35.8

 

 

0.2

 

2.10

 
Total Investment Securities  

 

8,201.4

 

 

47.9

 

2.34

 

 

 

8,038.3

 

 

42.2

 

2.10

   

 

9,006.1

 

 

35.9

 

1.59

 
Loans Held for Sale  

 

1.5

 

 

-

 

5.30

 

 

 

3.3

 

 

-

 

5.65

   

 

13.7

 

 

0.1

 

2.78

 
Loans and Leases 3                                        
Commercial and Industrial  

 

1,411.4

 

 

16.2

 

4.67

 

 

 

1,379.9

 

 

14.8

 

4.25

   

 

1,332.9

 

 

9.0

 

2.73

 
Paycheck Protection Program  

 

16.9

 

 

0.1

 

2.35

 

 

 

21.3

 

 

0.1

 

2.30

   

 

89.0

 

 

1.8

 

8.33

 
Commercial Mortgage  

 

3,736.9

 

 

45.1

 

4.90

 

 

 

3,627.4

 

 

40.6

 

4.44

   

 

3,158.8

 

 

21.7

 

2.80

 
Construction  

 

280.4

 

 

3.9

 

5.65

 

 

 

246.9

 

 

3.3

 

5.29

   

 

227.6

 

 

2.1

 

3.68

 
Commercial Lease Financing  

 

66.9

 

 

-

 

(0.14

)

 

 

72.0

 

 

0.3

 

1.49

   

 

98.8

 

 

0.4

 

1.45

 
Residential Mortgage  

 

4,666.0

 

 

39.9

 

3.42

 

 

 

4,617.9

 

 

38.9

 

3.37

   

 

4,343.3

 

 

34.9

 

3.21

 
Home Equity  

 

2,239.4

 

 

18.2

 

3.30

 

 

 

2,207.7

 

 

17.9

 

3.23

   

 

1,898.9

 

 

13.3

 

2.83

 
Automobile  

 

871.8

 

 

7.3

 

3.37

 

 

 

851.1

 

 

7.0

 

3.29

   

 

737.4

 

 

5.9

 

3.23

 
Other 4  

 

427.8

 

 

6.2

 

5.83

 

 

 

428.6

 

 

6.1

 

5.64

   

 

403.7

 

 

5.5

 

5.47

 
Total Loans and Leases  

 

13,717.5

 

 

136.9

 

4.03

 

 

 

13,452.8

 

 

129.0

 

3.81

   

 

12,290.4

 

 

94.6

 

3.10

 
Other  

 

67.2

 

 

0.6

 

3.56

 

 

 

50.1

 

 

0.4

 

2.72

   

 

36.7

 

 

0.2

 

2.21

 
Total Earning Assets  

 

22,285.2

 

 

188.8

 

3.42

 

 

 

21,664.8

 

 

172.8

 

3.17

   

 

21,588.8

 

 

130.9

 

2.44

 
Cash and Due from Banks  

 

319.1

         

 

244.3

           

 

233.3

         
Other Assets  

 

1,261.2

         

 

1,238.3

           

 

1,025.4

         
Total Assets  

$

23,865.5

         

$

23,147.4

           

$

22,847.5

         
                                         
Interest-Bearing Liabilities                                        
Interest-Bearing Deposits                                        
Demand  

$

4,215.9

 

 

5.2

 

0.50

 

 

$

4,131.4

 

 

3.5

 

0.33

   

$

4,655.4

 

 

0.5

 

0.04

 
Savings  

 

8,009.0

 

 

20.6

 

1.05

 

 

 

7,869.9

 

 

13.4

 

0.68

   

 

7,540.6

 

 

1.1

 

0.06

 
Time  

 

1,789.9

 

 

12.0

 

2.71

 

 

 

1,467.7

 

 

6.6

 

1.78

   

 

971.5

 

 

0.8

 

0.34

 
Total Interest-Bearing Deposits  

 

14,014.8

 

 

37.8

 

1.09

 

 

 

13,469.0

 

 

23.5

 

0.69

   

 

13,167.5

 

 

2.4

 

0.07

 
Short-Term Borrowings  

 

325.4

 

 

3.9

 

4.80

 

 

 

234.9

 

 

2.3

 

3.82

   

 

6.8

 

 

-

 

0.11

 
Securities Sold Under Agreements to Repurchase  

 

725.5

 

 

5.4

 

2.96

 

 

 

594.5

 

 

4.3

 

2.82

   

 

450.5

 

 

2.8

 

2.46

 
Other Debt  

 

499.6

 

 

5.3

 

4.30

 

 

 

137.5

 

 

1.5

 

4.32

   

 

10.4

 

 

0.2

 

7.05

 
Total Interest-Bearing Liabilities  

 

15,565.3

 

 

52.4

 

1.36

 

 

 

14,435.9

 

 

31.6

 

0.87

   

 

13,635.2

 

 

5.4

 

0.16

 
Net Interest Income      

$

136.4

         

$

141.2

           

$

125.5

     
Interest Rate Spread          

2.06

%

 

       

2.30

%

         

2.28

%

Net Interest Margin          

2.47

%

 

       

2.60

%

         

2.34

%

Noninterest-Bearing Demand Deposits  

 

6,416.1

         

 

6,872.3

           

 

7,258.6

         
Other Liabilities  

 

551.2

         

 

552.9

           

 

385.0

         
Shareholders' Equity  

 

1,332.9

         

 

1,286.3

           

 

1,568.7

         
Total Liabilities and Shareholders' Equity  

$

23,865.5

         

$

23,147.4

           

$

22,847.5

         

1

  Due to rounding, the amounts presented in this table may not tie to other amounts presented elsewhere in this report.

2

  Interest income includes taxable-equivalent basis adjustments, based upon a federal statutory tax rate of 21%, of $495,000, $433,000, and $254,000

 

  for the three months ended March 31, 2023, December 31, 2022, and March 31, 2022, respectively.

3

  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.

4

  Comprised of other consumer revolving credit, installment, and consumer lease financing.
Bank of Hawai‘i Corporation and Subsidiaries
Analysis of Change in Net Interest Income - Taxable-Equivalent Basis   Table 8a
    Three Months Ended March 31, 2023
    Compared to December 31, 2022
(dollars in millions)   Volume 1   Rate 1   Total
Change in Interest Income:            
Funds Sold  

$

1.9

 

 

$

0.3

 

 

$

2.2

 

Investment Securities            
Available-for-Sale            
Taxable  

 

1.6

 

 

 

3.8

 

 

 

5.4

 

Held-to-Maturity            
Taxable  

 

(0.2

)

 

 

0.5

 

 

 

0.3

 

Total Investment Securities  

 

1.4

 

 

 

4.3

 

 

 

5.7

 

Loans and Leases            
Commercial and Industrial  

 

0.3

 

 

 

1.1

 

 

 

1.4

 

Commercial Mortgage  

 

1.0

 

 

 

3.5

 

 

 

4.5

 

Construction  

 

0.4

 

 

 

0.2

 

 

 

0.6

 

Commercial Lease Financing  

 

-

 

 

 

(0.3

)

 

 

(0.3

)

Residential Mortgage  

 

0.4

 

 

 

0.6

 

 

 

1.0

 

Home Equity  

 

0.1

 

 

 

0.2

 

 

 

0.3

 

Automobile  

 

0.1

 

 

 

0.2

 

 

 

0.3

 

Other 2  

 

-

 

 

 

0.1

 

 

 

0.1

 

Total Loans and Leases  

 

2.3

 

 

 

5.6

 

 

 

7.9

 

Other  

 

0.1

 

 

 

0.1

 

 

 

0.2

 

Total Change in Interest Income  

 

5.7

 

 

 

10.3

 

 

 

16.0

 

             
Change in Interest Expense:            
Interest-Bearing Deposits            
Demand  

 

0.1

 

 

 

1.6

 

 

 

1.7

 

Savings  

 

0.2

 

 

 

7.0

 

 

 

7.2

 

Time  

 

1.6

 

 

 

3.8

 

 

 

5.4

 

Total Interest-Bearing Deposits  

 

1.9

 

 

 

12.4

 

 

 

14.3

 

Short-Term Borrowings  

 

1.0

 

 

 

0.6

 

 

 

1.6

 

Securities Sold Under Agreements to Repurchase  

 

0.9

 

 

 

0.2

 

 

 

1.1

 

Other Debt  

 

3.8

 

 

 

-

 

 

 

3.8

 

Total Change in Interest Expense  

 

7.6

 

 

 

13.2

 

 

 

20.8

 

             
Change in Net Interest Income  

$

(1.9

)

 

$

(2.9

)

 

$

(4.8

)

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 Hawai‘i Corporation and Subsidiaries
Analysis of Change in Net Interest Income - Taxable-Equivalent Basis   Table 8b
    Three Months Ended March 31, 2023
    Compared to March 31, 2022
(dollars in millions)   Volume 1   Rate 1   Total
Change in Interest Income:            
Funds Sold  

$

-

 

 

$

3.3

 

 

$

3.3

 

Investment Securities            
Available-for-Sale            
Taxable  

 

(7.8

)

 

 

14.5

 

 

 

6.7

 

Non-Taxable  

 

0.1

 

 

 

-

 

 

 

0.1

 

Held-to-Maturity            
Taxable  

 

3.3

 

 

 

1.9

 

 

 

5.2

 

Total Investment Securities  

 

(4.4

)

 

 

16.4

 

 

 

12.0

 

Loans Held for Sale  

 

(0.1

)

 

 

-

 

 

 

(0.1

)

Loans and Leases            
Commercial and Industrial  

 

0.6

 

 

 

6.6

 

 

 

7.2

 

Paycheck Protection Program  

 

(0.9

)

 

 

(0.8

)

 

 

(1.7

)

Commercial Mortgage  

 

4.6

 

 

 

18.8

 

 

 

23.4

 

Construction  

 

0.6

 

 

 

1.2

 

 

 

1.8

 

Commercial Lease Financing  

 

(0.2

)

 

 

(0.2

)

 

 

(0.4

)

Residential Mortgage  

 

2.7

 

 

 

2.3

 

 

 

5.0

 

Home Equity  

 

2.5

 

 

 

2.4

 

 

 

4.9

 

Automobile  

 

1.1

 

 

 

0.3

 

 

 

1.4

 

Other 2  

 

0.3

 

 

 

0.4

 

 

 

0.7

 

Total Loans and Leases  

 

11.3

 

 

 

31.0

 

 

 

42.3

 

Other  

 

0.2

 

 

 

0.2

 

 

 

0.4

 

Total Change in Interest Income  

 

7.0

 

 

 

50.9

 

 

 

57.9

 

             
Change in Interest Expense:            
Interest-Bearing Deposits            
Demand  

 

-

 

 

 

4.7

 

 

 

4.7

 

Savings  

 

-

 

 

 

19.5

 

 

 

19.5

 

Time  

 

1.2

 

 

 

10.0

 

 

 

11.2

 

Total Interest-Bearing Deposits  

 

1.2

 

 

 

34.2

 

 

 

35.4

 

Short-Term Borrowings  

 

2.0

 

 

 

1.9

 

 

 

3.9

 

Securities Sold Under Agreements to Repurchase  

 

2.0

 

 

 

0.6

 

 

 

2.6

 

Other Debt  

 

5.2

 

 

 

(0.1

)

 

 

5.1

 

Total Change in Interest Expense  

 

10.4

 

 

 

36.6

 

 

 

47.0

 

             
Change in Net Interest Income  

$

(3.4

)

 

$

14.3

 

 

$

10.9

 

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 Hawai‘i Corporation and Subsidiaries            
Salaries and Benefits           Table 9
   

Three Months Ended

   

March 31,

 

December 31,

 

March 31,

(dollars in thousands)  

 

2023

 

 

2022

 

 

 

2022

Salaries  

$

38,617

 

$

37,395

 

 

$

34,932

Incentive Compensation  

 

3,997

 

 

5,356

 

 

 

6,111

Share-Based Compensation  

 

3,159

 

 

3,901

 

 

 

3,799

Commission Expense  

 

647

 

 

830

 

 

 

1,641

Retirement and Other Benefits  

 

5,888

 

 

4,065

 

 

 

4,693

Payroll Taxes  

 

5,848

 

 

2,591

 

 

 

4,944

Medical, Dental, and Life Insurance  

 

3,864

 

 

3,528

 

 

 

3,234

Separation Expense  

 

3,068

 

 

(27

)

 

 

570

Total Salaries and Benefits  

$

65,088

 

$

57,639

 

 

$

59,924

Bank of Hawai‘i Corporation and Subsidiaries                
Loan and Lease Portfolio Balances                   Table 10
   

March 31,

 

December 31,

 

September 30,

 

June 30,

 

March 31,

(dollars in thousands)  

2023

 

2022

 

2022

 

2022

 

2022

Commercial                    
Commercial and Industrial  

$

1,425,916

 

$

1,389,066

 

$

1,368,966

 

$

1,323,830

 

$

1,354,757

Paycheck Protection Program  

 

15,175

 

 

19,579

 

 

22,955

 

 

31,964

 

 

57,809

Commercial Mortgage  

 

3,826,283

 

 

3,725,542

 

 

3,591,943

 

 

3,464,126

 

 

3,257,689

Construction  

 

232,903

 

 

260,825

 

 

236,498

 

 

246,177

 

 

248,363

Lease Financing  

 

65,611

 

 

69,491

 

 

73,989

 

 

89,535

 

 

98,107

Total Commercial  

 

5,565,888

 

 

5,464,503

 

 

5,294,351

 

 

5,155,632

 

 

5,016,725

Consumer                    
Residential Mortgage  

 

4,691,298

 

 

4,653,072

 

 

4,585,723

 

 

4,486,571

 

 

4,405,718

Home Equity  

 

2,260,001

 

 

2,225,950

 

 

2,185,484

 

 

2,101,612

 

 

1,958,285

Automobile  

 

877,979

 

 

870,396

 

 

820,640

 

 

775,065

 

 

742,934

Other 1  

 

429,356

 

 

432,499

 

 

435,408

 

 

432,693

 

 

420,830

Total Consumer  

 

8,258,634

 

 

8,181,917

 

 

8,027,255

 

 

7,795,941

 

 

7,527,767

Total Loans and Leases  

$

13,824,522

 

$

13,646,420

 

$

13,321,606

 

$

12,951,573

 

$

12,544,492

                     
                     
Deposits                    
   

March 31,

 

December 31,

 

September 30,

 

June 30,

 

March 31,

(dollars in thousands)  

2023

 

2022

 

2022

 

2022

 

2022

Consumer  

$

10,158,833

 

$

10,304,335

 

$

10,507,946

 

$

10,554,121

 

$

10,654,192

Commercial  

 

8,594,441

 

 

8,569,670

 

 

8,841,781

 

 

8,824,609

 

 

8,818,477

Public and Other  

 

1,738,026

 

 

1,741,691

 

 

1,539,046

 

 

1,646,951

 

 

1,243,618

Total Deposits  

$

20,491,300

 

$

20,615,696

 

$

20,888,773

 

$

21,025,681

 

$

20,716,287

1

  Comprised of other revolving credit, installment, and lease financing.
Bank of Hawai‘i Corporation and Subsidiaries                    
Non-Performing Assets and Accruing Loans and Leases Past Due 90 Days or More           Table 11
   

March 31,

 

December 31,

 

September 30,

 

June 30,

 

March 31,

(dollars in thousands)  

2023

 

2022

 

2022

 

2022

 

2022

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

$

31

 

 

$

37

 

 

$

49

 

 

$

85

 

 

$

99

 

Commercial Mortgage  

 

3,216

 

 

 

3,309

 

 

 

3,396

 

 

 

3,462

 

 

 

8,065

 

Total Commercial  

 

3,247

 

 

 

3,346

 

 

 

3,445

 

 

 

3,547

 

 

 

8,164

 

Consumer                    
Residential Mortgage  

 

4,199

 

 

 

4,239

 

 

 

4,945

 

 

 

5,179

 

 

 

3,845

 

Home Equity  

 

3,638

 

 

 

4,022

 

 

 

4,438

 

 

 

4,435

 

 

 

5,638

 

Total Consumer  

 

7,837

 

 

 

8,261

 

 

 

9,383

 

 

 

9,614

 

 

 

9,483

 

Total Non-Accrual Loans and Leases  

 

11,084

 

 

 

11,607

 

 

 

12,828

 

 

 

13,161

 

 

 

17,647

 

Foreclosed Real Estate  

 

1,040

 

 

 

1,040

 

 

 

1,040

 

 

 

2,332

 

 

 

2,332

 

Total Non-Performing Assets  

$

12,124

 

 

$

12,647

 

 

$

13,868

 

 

$

15,493

 

 

$

19,979

 

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

$

-

 

 

$

-

 

 

$

-

 

 

$

-

 

 

$

22

 

Total Commercial  

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

22

 

Consumer                    
Residential Mortgage  

 

4,566

 

 

 

2,429

 

 

 

3,279

 

 

 

2,638

 

 

 

4,113

 

Home Equity  

 

1,723

 

 

 

1,673

 

 

 

1,061

 

 

 

2,029

 

 

 

2,722

 

Automobile  

 

598

 

 

 

589

 

 

 

467

 

 

 

359

 

 

 

504

 

Other 1  

 

632

 

 

 

683

 

 

 

513

 

 

 

508

 

 

 

649

 

Total Consumer  

 

7,519

 

 

 

5,374

 

 

 

5,320

 

 

 

5,534

 

 

 

7,988

 

Total Accruing Loans and Leases Past Due 90 Days or More  

$

7,519

 

 

$

5,374

 

 

$

5,320

 

 

$

5,534

 

 

$

8,010

 

Total Loans and Leases  

$

13,824,522

 

 

$

13,646,420

 

 

$

13,321,606

 

 

$

12,951,573

 

 

$

12,544,492

 

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

 

0.08

%

 

 

0.09

%

 

 

0.10

%

 

 

0.10

%

 

 

0.14

%

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

 

0.09

%

 

 

0.09

%

 

 

0.10

%

 

 

0.12

%

 

 

0.16

%

                     
Ratio of Non-Performing Assets to Total Assets  

 

0.05

%

 

 

0.05

%

 

 

0.06

%

 

 

0.06

%

 

 

0.07

%

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

 

0.06

%

 

 

0.06

%

 

 

0.07

%

 

 

0.07

%

 

 

0.16

%

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

 

0.11

%

 

 

0.11

%

 

 

0.13

%

 

 

0.15

%

 

 

0.16

%

                     
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  

 

0.14

%

 

 

0.13

%

 

 

0.14

%

 

 

0.16

%

 

 

0.22

%

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

$

12,647

 

 

$

13,868

 

 

$

15,493

 

 

$

19,979

 

 

$

18,966

 

Additions  

 

552

 

 

 

704

 

 

 

489

 

 

 

2,293

 

 

 

2,243

 

Reductions                    
Payments  

 

(778

)

 

 

(1,605

)

 

 

(706

)

 

 

(5,511

)

 

 

(1,230

)

Return to Accrual Status  

 

(297

)

 

 

(301

)

 

 

(116

)

 

 

(1,267

)

 

 

-

 

Sales of Foreclosed Real Estate  

 

-

 

 

 

-

 

 

 

(1,292

)

 

 

-

 

 

 

-

 

Charge-offs / Write-downs  

 

-

 

 

 

(19

)

 

 

-

 

 

 

(1

)

 

 

-

 

Total Reductions  

 

(1,075

)

 

 

(1,925

)

 

 

(2,114

)

 

 

(6,779

)

 

 

(1,230

)

Balance at End of Quarter  

$

12,124

 

 

$

12,647

 

 

$

13,868

 

 

$

15,493

 

 

$

19,979

 

1

  Comprised of other revolving credit, installment, and lease financing.
Bank of Hawai‘i Corporation and Subsidiaries            
Reserve for Credit Losses           Table 12
   

Three Months Ended

   

March 31,

 

December 31,

 

March 31,

(dollars in thousands)  

2023

 

2022

 

2022

Balance at Beginning of Period  

$

151,247

 

 

$

152,927

 

 

$

164,297

 

             
Loans and Leases Charged-Off            
Commercial            
Commercial and Industrial  

 

(261

)

 

 

(196

)

 

 

(349

)

Consumer            
Home Equity  

 

(50

)

 

 

(10

)

 

 

(68

)

Automobile  

 

(1,663

)

 

 

(1,171

)

 

 

(1,530

)

Other 1  

 

(2,335

)

 

 

(1,846

)

 

 

(1,961

)

Total Loans and Leases Charged-Off  

 

(4,309

)

 

 

(3,223

)

 

 

(3,908

)

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

 

50

 

 

 

87

 

 

 

369

 

Consumer            
Residential Mortgage  

 

61

 

 

 

63

 

 

 

54

 

Home Equity  

 

184

 

 

 

202

 

 

 

515

 

Automobile  

 

672

 

 

 

412

 

 

 

739

 

Other 1  

 

674

 

 

 

604

 

 

 

745

 

Total Recoveries on Loans and Leases Previously Charged-Off  

 

1,641

 

 

 

1,368

 

 

 

2,422

 

Net Charged-Off - Loans and Leases  

 

(2,668

)

 

 

(1,855

)

 

 

(1,486

)

Net Charged-Off - Accrued Interest Receivable  

 

-

 

 

 

(25

)

 

 

(47

)

Provision for Credit Losses:            
Loans and Leases  

 

1,806

 

 

 

(142

)

 

 

(4,307

)

Accrued Interest Receivable  

 

-

 

 

 

25

 

 

 

(367

)

Unfunded Commitments  

 

194

 

 

 

317

 

 

 

(826

)

Total Provision for Credit Losses  

 

2,000

 

 

 

200

 

 

 

(5,500

)

Balance at End of Period  

$

150,579

 

 

$

151,247

 

 

$

157,264

 

             
Components            
Allowance for Credit Losses - Loans and Leases  

$

143,577

 

 

$

144,439

 

 

$

152,028

 

Reserve for Unfunded Commitments  

 

7,002

 

 

 

6,808

 

 

 

5,236

 

Total Reserve for Credit Losses  

$

150,579

 

 

$

151,247

 

 

$

157,264

 

             
Average Loans and Leases Outstanding  

$

13,717,483

 

 

$

13,452,791

 

 

$

12,290,402

 

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

 

0.08

%

 

 

0.05

%

 

 

0.05

%

Ratio of Allowance for Credit Losses to Loans and Leases Outstanding 2  

 

1.04

%

 

 

1.06

%

 

 

1.21

%

1

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

2

  The numerator comprises the Allowance for Credit Losses - Loans and Leases.
Bank of Hawai‘i Corporation and Subsidiaries                
Business Segments Selected Financial Information               Table 13
    Consumer   Commercial   Treasury   Consolidated
(dollars in thousands)   Banking   Banking   and Other   Total
Three Months Ended March 31, 2023                
Net Interest Income (Loss)  

$

98,008

 

 

$

56,705

 

 

$

(18,758

)

 

$

135,955

 

Provision for Credit Losses  

 

2,669

 

 

 

(1

)

 

 

(668

)

 

 

2,000

 

Net Interest Income (Loss) After Provision for Credit Losses  

 

95,339

 

 

 

56,706

 

 

 

(18,090

)

 

 

133,955

 

Noninterest Income  

 

31,154

 

 

 

8,649

 

 

 

934

 

 

 

40,737

 

Noninterest Expense  

 

(85,073

)

 

 

(20,289

)

 

 

(6,557

)

 

 

(111,919

)

Income (Loss) Before Income Taxes  

 

41,420

 

 

 

45,066

 

 

 

(23,713

)

 

 

62,773

 

Provision for Income Taxes  

 

(10,623

)

 

 

(10,793

)

 

 

5,485

 

 

 

(15,931

)

Net Income (Loss)  

$

30,797

 

 

$

34,273

 

 

$

(18,228

)

 

$

46,842

 

Total Assets as of March 31, 2023  

$

8,654,243

 

 

$

5,625,254

 

 

$

9,652,480

 

 

$

23,931,977

 

                 
Three Months Ended March 31, 2022 1                
Net Interest Income  

$

70,361

 

 

$

46,349

 

 

$

8,553

 

 

$

125,263

 

Provision for Credit Losses  

 

1,683

 

 

 

(197

)

 

 

(6,986

)

 

 

(5,500

)

Net Interest Income After Provision for Credit Losses  

 

68,678

 

 

 

46,546

 

 

 

15,539

 

 

 

130,763

 

Noninterest Income  

 

31,969

 

 

 

10,198

 

 

 

1,384

 

 

 

43,551

 

Noninterest Expense  

 

(81,810

)

 

 

(18,669

)

 

 

(3,395

)

 

 

(103,874

)

Income Before Income Taxes  

 

18,837

 

 

 

38,075

 

 

 

13,528

 

 

 

70,440

 

Provision for Income Taxes  

 

(4,714

)

 

 

(9,197

)

 

 

(1,695

)

 

 

(15,606

)

Net Income  

$

14,123

 

 

$

28,878

 

 

$

11,833

 

 

$

54,834

 

Total Assets as of March 31, 2022 1  

$

7,927,186

 

 

$

5,174,115

 

 

$

9,899,016

 

 

$

23,000,317

 

1

  Certain prior period information has been reclassified to conform to current presentation.
Bank of Hawai‘i Corporation and Subsidiaries                  
Selected Quarterly Financial Data                   Table 14
    Three Months Ended  
   

March 31,

 

December 31,

 

September 30,

 

June 30,

 

March 31,

 
(dollars in thousands, except per share amounts)  

2023

 

2022

 

2022

 

2022

 

2022

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

$

136,501

 

 

$

128,683

 

 

$

115,013

 

 

$

101,663

 

 

$

94,439

 

 
Income on Investment Securities                      
Available-for-Sale  

 

23,893

 

 

 

18,476

 

 

 

16,995

 

 

 

17,984

 

 

 

17,100

 

 
Held-to-Maturity  

 

23,948

 

 

 

23,708

 

 

 

20,243

 

 

 

18,838

 

 

 

18,701

 

 
Deposits  

 

27

 

 

 

13

 

 

 

10

 

 

 

5

 

 

 

4

 

 
Funds Sold  

 

3,366

 

 

 

1,093

 

 

 

2,335

 

 

 

719

 

 

 

127

 

 
Other  

 

597

 

 

 

340

 

 

 

322

 

 

 

353

 

 

 

202

 

 
Total Interest Income  

 

188,332

 

 

 

172,313

 

 

 

154,918

 

 

 

139,562

 

 

 

130,573

 

 
Interest Expense                      
Deposits  

 

37,794

 

 

 

23,494

 

 

 

10,296

 

 

 

3,535

 

 

 

2,353

 

 
Securities Sold Under Agreements to Repurchase  

 

5,377

 

 

 

4,289

 

 

 

2,745

 

 

 

2,794

 

 

 

2,772

 

 
Funds Purchased  

 

704

 

 

 

318

 

 

 

40

 

 

 

57

 

 

 

2

 

 
Short-Term Borrowings  

 

3,203

 

 

 

1,978

 

 

 

-

 

 

 

92

 

 

 

-

 

 
Other Debt  

 

5,299

 

 

 

1,496

 

 

 

182

 

 

 

182

 

 

 

183

 

 
Total Interest Expense  

 

52,377

 

 

 

31,575

 

 

 

13,263

 

 

 

6,660

 

 

 

5,310

 

 
Net Interest Income  

 

135,955

 

 

 

140,738

 

 

 

141,655

 

 

 

132,902

 

 

 

125,263

 

 
Provision for Credit Losses  

 

2,000

 

 

 

200

 

 

 

-

 

 

 

(2,500

)

 

 

(5,500

)

 
Net Interest Income After Provision for Credit Losses  

 

133,955

 

 

 

140,538

 

 

 

141,655

 

 

 

135,402

 

 

 

130,763

 

 
Noninterest Income                      
Trust and Asset Management  

 

10,690

 

 

 

10,652

 

 

 

10,418

 

 

 

11,457

 

 

 

11,276

 

 
Mortgage Banking  

 

1,004

 

 

 

991

 

 

 

1,002

 

 

 

1,247

 

 

 

2,740

 

 
Service Charges on Deposit Accounts  

 

7,737

 

 

 

7,513

 

 

 

7,526

 

 

 

7,309

 

 

 

7,272

 

 
Fees, Exchange, and Other Service Charges  

 

13,808

 

 

 

13,906

 

 

 

13,863

 

 

 

14,193

 

 

 

12,952

 

 
Investment Securities Losses, Net  

 

(1,792

)

 

 

(1,124

)

 

 

(2,147

)

 

 

(1,295

)

 

 

(1,545

)

 
Annuity and Insurance  

 

1,271

 

 

 

1,087

 

 

 

1,034

 

 

 

870

 

 

 

791

 

 
Bank-Owned Life Insurance  

 

2,842

 

 

 

2,475

 

 

 

2,486

 

 

 

2,658

 

 

 

2,349

 

 
Other  

 

5,177

 

 

 

5,672

 

 

 

(3,522

)

 

 

5,719

 

 

 

7,716

 

 
Total Noninterest Income  

 

40,737

 

 

 

41,172

 

 

 

30,660

 

 

 

42,158

 

 

 

43,551

 

 
Noninterest Expense                      
Salaries and Benefits  

 

65,088

 

 

 

57,639

 

 

 

59,938

 

 

 

57,769

 

 

 

59,924

 

 
Net Occupancy  

 

9,872

 

 

 

9,499

 

 

 

10,186

 

 

 

9,930

 

 

 

9,826

 

 
Net Equipment  

 

10,375

 

 

 

9,942

 

 

 

9,736

 

 

 

9,543

 

 

 

9,153

 

 
Data Processing  

 

4,583

 

 

 

4,579

 

 

 

4,616

 

 

 

4,607

 

 

 

4,560

 

 
Professional Fees  

 

3,883

 

 

 

3,958

 

 

 

3,799

 

 

 

3,542

 

 

 

3,258

 

 
FDIC Insurance  

 

3,234

 

 

 

1,774

 

 

 

1,680

 

 

 

1,590

 

 

 

1,502

 

 
Other  

 

14,884

 

 

 

15,312

 

 

 

15,794

 

 

 

15,958

 

 

 

15,651

 

 
Total Noninterest Expense  

 

111,