Bank of Hawai‘i Corporation Fourth Quarter 2023 Financial Results

January 22, 2024
  • 2023 Diluted Earnings Per Common Share $4.14
  • 2023 Net Income $171.2 Million
  • Diluted Earnings Per Common Share $0.72 for the Fourth Quarter of 2023
  • Net Income $30.4 Million for the Fourth Quarter of 2023
  • Board of Directors Declares Dividend of $0.70 Per Common Share
  • Industry-wide FDIC Special Assessment Resulted in a $14.7 Million Charge in the Fourth Quarter of 2023

HONOLULU--(BUSINESS WIRE)--Jan. 22, 2024-- Bank of Hawai‘i Corporation (NYSE: BOH) today reported diluted earnings per common share of $4.14 for the full year of 2023 compared with diluted earnings per common share of $5.48 for the full year of 2022. An industry-wide FDIC Special Assessment resulted in a $14.7 million charge in the fourth quarter of 2023 which negatively impacted diluted earnings per common share by $0.29. Net income for the year was $171.2 million, down 24.2% from the previous year. The return on average common equity for the full year of 2023 was 13.89% compared with 17.83% in 2022.

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“Bank of Hawai‘i managed through a challenging economic environment in 2023 and delivered strong financial results,” said Peter Ho, Chairman, President, and CEO. “Over the past year, we have demonstrated the resilience of our brand, deposit base and distinct business model. Total deposits were up 2.1% from the prior year and our credit quality remained excellent with non-performing assets of 0.08% at quarter end and net charge offs of 0.05% in the quarter. Our noninterest income held steady and we continued to demonstrate disciplined expense management. We focused on strengthening our balance sheet during the year and we are well positioned to deliver strong results in 2024.”

Diluted earnings per common share for the fourth quarter of 2023 was $0.72, compared with diluted earnings per common share of $1.17 in the previous quarter and $1.50 in the same quarter of 2022. Net income for the fourth quarter of 2023 was $30.4 million, down 36.5% from the previous quarter and down 50.4% from the same quarter of 2022. The return on average common equity for the fourth quarter of 2023 was 9.55% compared with 15.38% in the previous quarter and 21.28% in the same quarter of 2022.

Financial Highlights

Net interest income for the fourth quarter of 2023 was $115.8 million, a decrease of 4.3% from the previous quarter and a decrease of 17.7% from the same quarter of 2022. The decrease in net interest income in the fourth quarter of 2023 was primarily due to higher funding costs, partially offset by higher earning asset yields.

Net interest margin was 2.13% in the fourth quarter of 2023, unchanged from the previous quarter and a decrease of 47 basis points from the same quarter of 2022. Net interest margin in the fourth quarter of 2023 was negatively impacted by higher funding costs, partially offset by higher earning asset yields.

The average yield on loans and leases was 4.54% in the fourth quarter of 2023, up 20 basis points from the prior quarter and up 73 basis points from the same quarter of 2022. The average yield on total earning assets was 3.85% in the fourth quarter of 2023, up 13 basis points from the prior quarter and up 68 basis points from the same quarter of 2022. The average cost of interest-bearing deposits was 2.30% in the fourth quarter of 2023, up 35 basis points from the prior quarter and up 161 basis points from the same quarter of 2022. The average cost of total deposits, including noninterest-bearing deposits, was 1.67%, up 27 basis points from the prior quarter and up 121 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 $42.3 million in the fourth quarter of 2023, a decrease of 16.0% from the previous quarter and an increase of 2.7% from the same period in 2022. Noninterest income in the third quarter of 2023 included a $14.7 million gain from the early termination of private repurchase agreements, partially offset by a $4.6 million net loss related to investment securities sales and a negative $0.8 million adjustment related to a change in the Visa Class B conversion ratio. Adjusted for these items in the prior quarter, noninterest income increased by 3.0% quarter over quarter.

Noninterest expense was $116.0 million in the fourth quarter of 2023, an increase of 9.8% from the previous quarter and an increase of 12.9% from the same quarter of 2022. Noninterest expense in the fourth quarter of 2023 included an industry-wide FDIC Special Assessment of $14.7 million and $1.7 million of expense savings that are not expected to recur in 2024. Noninterest expense in the third quarter of 2023 included separation expenses of $2.1 million and extraordinary expenses related to the Maui wildfires of $0.4 million. Adjusted core noninterest expense in the fourth quarter of 2023 was $102.9 million, down slightly from adjusted noninterest expense in the previous quarter and up 0.2% from the noninterest expense in the same period in 2022.

The effective tax rate for the fourth quarter of 2023 was 23.25% compared with 24.76% in the previous quarter and 22.40% during the same quarter of 2022. The decrease in the effective tax rate on a linked quarter basis was mainly due to discrete tax items recognized in the fourth quarter. The year over year increase was primarily due to tax benefits in the fourth quarter of 2022 related to our agreement to sell assets that terminated certain leveraged leases.

Asset Quality

The Company’s overall asset quality remained strong during the fourth quarter of 2023. Provision for credit losses for the fourth quarter of 2023 was $2.5 million compared with $2.0 million in the previous quarter and $0.2 million in the same quarter of 2022.

Total non-performing assets were $11.7 million at December 31, 2023, up $0.2 million from September 30, 2023 and down $0.9 million from December 31, 2022. Non-performing assets as a percentage of total loans and leases and foreclosed real estate were 0.08% at the end of the quarter, unchanged from the end of the prior quarter and a decrease of 1 basis point from the same quarter of 2022.

Net loan and lease charge-offs during the fourth quarter of 2023 were $1.7 million or 5 basis points annualized of total average loans and leases outstanding. Net loan and lease charge-offs for the fourth quarter of 2023 were comprised of charge-offs of $3.5 million partially offset by recoveries of $1.8 million. Compared to the prior quarter, net loan and lease charge-offs decreased by $0.3 million or 1 basis point annualized on total average loans and leases outstanding. Compared to the same quarter of 2022, net loan and lease charge-offs decreased by $0.1 million.

The allowance for credit losses on loans and leases was $146.4 million at December 31, 2023, an increase of $1.1 million from September 30, 2023 and an increase of $2.0 million from December 31, 2022. The ratio of the allowance for credit losses to total loans and leases outstanding was 1.05% at the end of the quarter, up 1 basis point from the end of the prior quarter and down 1 basis point from the same quarter of 2022.

Balance Sheet

Total assets were $23.7 billion at December 31, 2023, an increase of 0.8% from September 30, 2023 and an increase of 0.5% from December 31, 2022. The increase from the prior quarter was primarily due to an increase in funds sold. The increase from the same period in 2022 was primarily due to increases in funds sold and loans and leases partially offset by a decrease in investment securities.

The investment securities portfolio was $7.4 billion at December 31, 2023, a decrease of 0.9% from September 30, 2023 and a decrease of 10.3% from December 31, 2022. The decrease from the prior quarter was mainly due to cashflows from the portfolio not being reinvested into securities. The decrease from the same period in 2022 was primarily due to $159.1 million of investment securities sold in the third quarter of 2023 and cashflows from the portfolio not being reinvested into securities. 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 $14.0 billion at December 31, 2023, an increase of 0.3% from September 30, 2023 and an increase of 2.3% from December 31, 2022. Total commercial loans were $5.8 billion at December 31, 2023, an increase of 1.7% from the prior quarter and an increase of 5.7% from the same quarter of 2022, primarily due to an increase in our commercial and industrial portfolio. Total consumer loans were $8.2 billion as of December 31, 2023, a decrease of 0.6% from the prior quarter and an increase of 0.1% from the same period in 2022.

Total deposits were $21.1 billion at December 31, 2023, an increase of 1.2% from September 30, 2023 and an increase of 2.1% from December 31, 2022. Noninterest-bearing deposits made up 29% of total deposit balances as of December 31, 2023, up from 27% as of September 30, 2023, and down from 33% as of December 31, 2022. Average total deposits were $20.7 billion for the fourth quarter of 2023, up 1.0% from $20.5 billion in the prior quarter, and up 1.8% from $20.3 billion in the fourth quarter of 2022. As of December 31, 2023, insured and uninsured but collateralized deposits represent 58% of total deposit balances, relatively flat from 58% as of September 30, 2023, and up from 57% as of December 31, 2022. As of December 31, 2023, our readily available liquidity of $10.2 billion exceeded total uninsured and uncollateralized deposits of $8.9 billion.

Capital and Dividends

The Company’s capital levels increased quarter over quarter and remain well above regulatory well-capitalized minimums.

The Tier 1 Capital Ratio was 12.56% at December 31, 2023 compared with 12.53% at September 30, 2023 and 12.15% at December 31, 2022. The Tier 1 Leverage Ratio was 7.51% at December 31, 2023, up 29 basis points from 7.22% at September 30, 2023 and up 14 basis points from 7.37% at December 31, 2022. The increases from the prior quarter were due to an increase in Tier 1 capital as a result of retained earnings growth and a decrease in average total assets. The increases from the same period in 2022 were mainly due to an increase in Tier 1 capital as a result of retained earnings growth.

No shares of common stock were repurchased under the share repurchase program in the fourth quarter of 2023. Total remaining buyback authority under the share repurchase program was $126.0 million at December 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 March 14, 2024 to shareholders of record at the close of business on February 29, 2024.

On January 5, 2024, the Company announced that 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 February 1, 2024 to shareholders of record of the preferred stock as of the close of business on January 16, 2024.

Conference Call Information

The Company will review its fourth quarter financial results today at 8:00 a.m. Hawai‘i Time (1:00 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: https://register.vevent.com/register/BIa96006b6de704a3690a1e0eeb5330a09. A replay of the webcast will be available for one year beginning approximately 11:00 a.m. Hawai‘i Time on Monday, January 22, 2024. The replay will be available on the Company's website, www.boh.com.

Investor Announcements

Investors and others should note that the Company intends to announce financial and other information to the Company’s investors using the Company’s investor relations website at https://ir.boh.com, social media channels, press releases, SEC filings and public conference calls and webcasts, all for purposes of complying with the Company’s disclosure obligations under Regulation FD. Accordingly, investors should monitor these channels, as information is updated, and new information is posted.

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 and its Form 10-Q for the fiscal quarter ended March 31, 2023, June 30, 2023 and September 30, 2023, which were 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 Hawai‘i 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 website, 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   Year Ended
  December 31,   September 30,   December 31,   December 31,
(dollars in thousands, except per share amounts)

2023

 

2023

 

2022

 

2023

 

2022

 

For the Period:                  
Operating Results                  
Net Interest Income

$

115,785

 

$

120,937

 

$

140,738

 

$

497,025

 

$

540,558

 

Provision for Credit Losses

 

2,500

 

 

2,000

 

 

200

 

 

9,000

 

 

(7,800

)

Total Noninterest Income

 

42,283

 

 

50,334

 

 

41,172

 

 

176,609

 

 

157,541

 

Total Noninterest Expense

 

115,962

 

 

105,601

 

 

102,703

 

 

437,518

 

 

415,265

 

Pre-Provision Net Revenue

 

42,106

 

 

65,670

 

 

79,207

 

 

236,116

 

 

282,834

 

Net Income

 

30,396

 

 

47,903

 

 

61,307

 

 

171,202

 

 

225,804

 

Net Income Available to Common Shareholders 1

 

28,427

 

 

45,934

 

 

59,338

 

 

163,326

 

 

217,928

 

Basic Earnings Per Common Share

 

0.72

 

 

1.17

 

 

1.51

 

 

4.16

 

 

5.50

 

Diluted Earnings Per Common Share

 

0.72

 

 

1.17

 

 

1.50

 

 

4.14

 

 

5.48

 

Dividends Declared Per Common Share

 

0.70

 

 

0.70

 

 

0.70

 

 

2.80

 

 

2.80

 

                   
Performance Ratios                  
Return on Average Assets

 

0.51

%

 

0.78

%

 

1.05

%

 

0.71

%

 

0.98

%

Return on Average Shareholders' Equity

 

8.86

 

 

13.92

 

 

18.91

 

 

12.63

 

 

16.10

 

Return on Average Common Equity

 

9.55

 

 

15.38

 

 

21.28

 

 

13.89

 

 

17.83

 

Efficiency Ratio 2

 

73.36

 

 

61.66

 

 

56.46

 

 

64.95

 

 

59.49

 

Net Interest Margin 3

 

2.13

 

 

2.13

 

 

2.60

 

 

2.24

 

 

2.50

 

Dividend Payout Ratio 4

 

97.22

 

 

59.83

 

 

46.36

 

 

67.31

 

 

50.91

 

Average Shareholders' Equity to Average Assets

 

5.80

 

 

5.60

 

 

5.56

 

 

5.66

 

 

6.10

 

                   
Average Balances                  
Average Loans and Leases

$

13,906,114

 

$

13,903,214

 

$

13,452,791

 

$

13,851,551

 

$

12,896,510

 

Average Assets

 

23,449,215

 

 

24,387,421

 

 

23,147,398

 

 

23,954,186

 

 

23,006,671

 

Average Deposits

 

20,704,070

 

 

20,492,082

 

 

20,341,327

 

 

20,412,378

 

 

20,550,739

 

Average Shareholders' Equity

 

1,360,641

 

 

1,365,143

 

 

1,286,291

 

 

1,355,536

 

 

1,402,533

 

                   
Per Share of Common Stock                  
Book Value

$

31.05

 

$

29.78

 

$

28.54

 

$

31.05

 

$

28.54

 

Tangible Book Value

 

30.25

 

 

28.99

 

 

27.75

 

 

30.25

 

 

27.75

 

Market Value                  
Closing

 

72.46

 

 

49.69

 

 

77.56

 

 

72.46

 

 

77.56

 

High

 

75.19

 

 

58.63

 

 

82.87

 

 

81.73

 

 

92.38

 

Low

 

45.56

 

 

39.02

 

 

70.15

 

 

30.83

 

 

70.15

 

 

 

 

 

 

 

 

 

 

 

         

December 31,

 

September 30,

 

December 31,

         

2023

 

2023

 

2022

 

As of Period End:                  
Balance Sheet Totals                  
Loans and Leases        

$

13,965,026

 

$

13,919,491

 

$

13,646,420

 

Total Assets        

 

23,733,296

 

 

23,549,785

 

 

23,606,877

 

Total Deposits        

 

21,055,045

 

 

20,802,309

 

 

20,615,696

 

Other Debt        

 

560,190

 

 

560,217

 

 

410,294

 

Total Shareholders' Equity        

 

1,414,242

 

 

1,363,840

 

 

1,316,995

 

                   
Asset Quality                  
Non-Performing Assets        

$

11,747

 

$

11,519

 

$

12,647

 

Allowance for Credit Losses - Loans and Leases        

 

146,403

 

 

145,263

 

 

144,439

 

Allowance to Loans and Leases Outstanding 5        

 

1.05

%

 

1.04

%

 

1.06

%

                   
Capital Ratios 6                  
Common Equity Tier 1 Capital Ratio        

 

11.33

%

 

11.29

%

 

10.92

%

Tier 1 Capital Ratio        

 

12.56

 

 

12.53

 

 

12.15

 

Total Capital Ratio        

 

13.60

 

 

13.56

 

 

13.17

 

Tier 1 Leverage Ratio        

 

7.51

 

 

7.22

 

 

7.37

 

Total Shareholders' Equity to Total Assets        

 

5.96

 

 

5.79

 

 

5.58

 

Tangible Common Equity to Tangible Assets 7        

 

5.07

 

 

4.90

 

 

4.69

 

Tangible Common Equity to Risk-Weighted Assets 7        

 

8.45

 

 

8.10

 

 

7.76

 

                   
Non-Financial Data                  
Full-Time Equivalent Employees        

 

1,899

 

 

1,919

 

 

2,076

 

Branches        

 

51

 

 

51

 

 

51

 

ATMs        

 

318

 

 

320

 

 

320

 

1 Due to rounding, the amounts presented in this table may not tie to other amounts presented elsewhere in this report.
2 Efficiency ratio is defined as noninterest expense divided by total revenue (net interest income and total noninterest income).
3 Net interest margin is defined as net interest income, on a taxable-equivalent basis, as a percentage of average earning assets.
4 Dividend payout ratio is defined as dividends declared per common share divided by basic earnings per common share.
5 The numerator comprises the Allowance for Credit Losses - Loans and Leases.
6 Regulatory capital ratios as of December 31, 2023 are preliminary.
7 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

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

 

2023

 

 

2023

 

 

2022

 

       
Total Shareholders' Equity

$

1,414,242

 

$

1,363,840

 

$

1,316,995

 

Less: Preferred Stock

 

180,000

 

 

180,000

 

 

180,000

 

Goodwill

 

31,517

 

 

31,517

 

 

31,517

 

Tangible Common Equity

$

1,202,725

 

$

1,152,323

 

$

1,105,478

 

       
Total Assets

$

23,733,296

 

$

23,549,785

 

$

23,606,877

 

Less: Goodwill

 

31,517

 

 

31,517

 

 

31,517

 

Tangible Assets

$

23,701,779

 

$

23,518,268

 

$

23,575,360

 

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

$

14,226,780

 

$

14,222,825

 

$

14,238,798

 

       
Total Shareholders' Equity to Total Assets

 

5.96

%

 

5.79

%

 

5.58

%

Tangible Common Equity to Tangible Assets (Non-GAAP)

 

5.07

%

 

4.90

%

 

4.69

%

       
Tier 1 Capital Ratio 1

 

12.56

%

 

12.53

%

 

12.15

%

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

 

8.45

%

 

8.10

%

 

7.76

%

       
1 Regulatory capital ratios as of December 31, 2023 are preliminary.
Bank of Hawai‘i Corporation and Subsidiaries
Consolidated Statements of Income       Table 3
  Three Months Ended   Year Ended
  December 31, September 30, December 31,   December 31,
(dollars in thousands, except per share amounts)

 

2023

 

 

2023

 

 

2022

 

 

 

2023

 

 

2022

 

Interest Income            
Interest and Fees on Loans and Leases

$

158,324

 

$

151,245

 

$

128,683

 

 

$

590,611

 

$

439,798

 

Income on Investment Securities            
Available-for-Sale

 

22,782

 

 

23,552

 

 

18,476

 

 

 

93,528

 

 

70,555

 

Held-to-Maturity

 

22,589

 

 

22,838

 

 

23,708

 

 

 

92,750

 

 

81,490

 

Deposits

 

23

 

 

18

 

 

13

 

 

 

86

 

 

32

 

Funds Sold

 

5,705

 

 

12,828

 

 

1,093

 

 

 

28,294

 

 

4,274

 

Other

 

924

 

 

1,464

 

 

340

 

 

 

5,106

 

 

1,217

 

Total Interest Income

 

210,347

 

 

211,945

 

 

172,313

 

 

 

810,375

 

 

597,366

 

Interest Expense            
Deposits

 

87,121

 

 

72,153

 

 

23,494

 

 

 

250,847

 

 

39,678

 

Securities Sold Under Agreements to Repurchase

 

1,459

 

 

4,034

 

 

4,289

 

 

 

16,306

 

 

12,600

 

Funds Purchased

 

-

 

 

-

 

 

318

 

 

 

888

 

 

417

 

Short-Term Borrowings

 

-

 

 

-

 

 

1,978

 

 

 

5,713

 

 

2,070

 

Other Debt

 

5,982

 

 

14,821

 

 

1,496

 

 

 

39,596

 

 

2,043

 

Total Interest Expense

 

94,562

 

 

91,008

 

 

31,575

 

 

 

313,350

 

 

56,808

 

Net Interest Income

 

115,785

 

 

120,937

 

 

140,738

 

 

 

497,025

 

 

540,558

 

Provision for Credit Losses

 

2,500

 

 

2,000

 

 

200

 

 

 

9,000

 

 

(7,800

)

Net Interest Income After Provision for Credit Losses

 

113,285

 

 

118,937

 

 

140,538

 

 

 

488,025

 

 

548,358

 

Noninterest Income            
Trust and Asset Management

 

11,144

 

 

10,548

 

 

10,652

 

 

 

43,597

 

 

43,803

 

Mortgage Banking

 

1,016

 

 

1,059

 

 

991

 

 

 

4,255

 

 

5,980

 

Service Charges on Deposit Accounts

 

7,949

 

 

7,843

 

 

7,513

 

 

 

31,116

 

 

29,620

 

Fees, Exchange, and Other Service Charges

 

13,774

 

 

13,824

 

 

13,906

 

 

 

55,556

 

 

54,914

 

Investment Securities Losses, Net

 

(1,619

)

 

(6,734

)

 

(1,124

)

 

 

(11,455

)

 

(6,111

)

Annuity and Insurance

 

1,271

 

 

1,156

 

 

1,087

 

 

 

4,736

 

 

3,782

 

Bank-Owned Life Insurance

 

3,176

 

 

2,749

 

 

2,475

 

 

 

11,643

 

 

9,968

 

Other

 

5,572

 

 

19,889

 

 

5,672

 

 

 

37,161

 

 

15,585

 

Total Noninterest Income

 

42,283

 

 

50,334

 

 

41,172

 

 

 

176,609

 

 

157,541

 

Noninterest Expense            
Salaries and Benefits

 

53,991

 

 

58,825

 

 

57,639

 

 

 

234,079

 

 

235,270

 

Net Occupancy

 

9,734

 

 

10,327

 

 

9,499

 

 

 

39,924

 

 

39,441

 

Net Equipment

 

9,826

 

 

9,477

 

 

9,942

 

 

 

40,251

 

 

38,374

 

Data Processing

 

4,948

 

 

4,706

 

 

4,579

 

 

 

18,836

 

 

18,362

 

Professional Fees

 

5,079

 

 

3,846

 

 

3,958

 

 

 

17,459

 

 

14,557

 

FDIC Insurance

 

18,545

 

 

3,361

 

 

1,774

 

 

 

28,313

 

 

6,546

 

Other

 

13,839

 

 

15,059

 

 

15,312

 

 

 

58,656

 

 

62,715

 

Total Noninterest Expense

 

115,962

 

 

105,601

 

 

102,703

 

 

 

437,518

 

 

415,265

 

Income Before Provision for Income Taxes

 

39,606

 

 

63,670

 

 

79,007

 

 

 

227,116

 

 

290,634

 

Provision for Income Taxes

 

9,210

 

 

15,767

 

 

17,700

 

 

 

55,914

 

 

64,830

 

Net Income

$

30,396

 

$

47,903

 

$

61,307

 

 

$

171,202

 

$

225,804

 

Preferred Stock Dividends

 

1,969

 

 

1,969

 

 

1,969

 

 

 

7,877

 

 

7,877

 

Net Income Available to Common Shareholders

$

28,427

 

$

45,934

 

$

59,338

 

 

$

163,325

 

$

217,927

 

Basic Earnings Per Common Share

$

0.72

 

$

1.17

 

$

1.51

 

 

$

4.16

 

$

5.50

 

Diluted Earnings Per Common Share

$

0.72

 

$

1.17

 

$

1.50

 

 

$

4.14

 

$

5.48

 

Dividends Declared Per Common Share

$

0.70

 

$

0.70

 

$

0.70

 

 

$

2.80

 

$

2.80

 

Basic Weighted Average Common Shares

 

39,303,525

 

 

39,274,626

 

 

39,395,338

 

 

 

39,274,291

 

 

39,601,089

 

Diluted Weighted Average Common Shares

 

39,539,191

 

 

39,420,531

 

 

39,618,896

 

 

 

39,428,912

 

 

39,788,002

 

Bank of Hawai‘i Corporation and Subsidiaries
Consolidated Statements of Comprehensive Income (Loss)         Table 4
  Three Months Ended   Year Ended
  December 31, September 30, December 31,   December 31,
(dollars in thousands)

 

2023

 

2023

 

 

2022

 

 

2023

 

2022

 

Net Income

$

30,396

$

47,903

 

$

61,307

 

$

171,202

$

225,804

 

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

 

43,357

 

(18,264

)

 

5,677

 

 

36,152

 

(376,694

)

Defined Benefit Plans

 

1,566

 

84

 

 

7,359

 

 

1,818

 

8,418

 

Other Comprehensive Income (Loss)

 

44,923

 

(18,180

)

 

13,036

 

 

37,970

 

(368,276

)

Comprehensive Income (Loss)

$

75,319

$

29,723

 

$

74,343

 

$

209,172

$

(142,472

)

Bank of Hawai‘i Corporation and Subsidiaries
Consolidated Statements of Condition     Table 5
  December 31, September 30, December 31,
(dollars in thousands)

 

2023

 

 

2023

 

 

2022

 

Assets      
Interest-Bearing Deposits in Other Banks

$

2,761

 

$

4,676

 

$

3,724

 

Funds Sold

 

690,112

 

 

386,086

 

 

81,364

 

Investment Securities      
Available-for-Sale

 

2,408,933

 

 

2,387,324

 

 

2,844,823

 

Held-to-Maturity (Fair Value of $4,253,637; $4,104,469; and $4,615,393)

 

4,997,335

 

 

5,088,013

 

 

5,414,139

 

Loans Held for Sale

 

3,124

 

 

1,450

 

 

1,035

 

Loans and Leases

 

13,965,026

 

 

13,919,491

 

 

13,646,420

 

Allowance for Credit Losses

 

(146,403

)

 

(145,263

)

 

(144,439

)

Net Loans and Leases

 

13,818,623

 

 

13,774,228

 

 

13,501,981

 

Total Earning Assets

 

21,920,888

 

 

21,641,777

 

 

21,847,066

 

Cash and Due from Banks

 

308,071

 

 

261,464

 

 

316,679

 

Premises and Equipment, Net

 

194,855

 

 

196,094

 

 

206,777

 

Operating Lease Right-of-Use Assets

 

86,110

 

 

86,896

 

 

92,307

 

Accrued Interest Receivable

 

66,525

 

 

65,541

 

 

61,002

 

Foreclosed Real Estate

 

2,098

 

 

1,040

 

 

1,040

 

Mortgage Servicing Rights

 

20,880

 

 

21,273

 

 

22,619

 

Goodwill

 

31,517

 

 

31,517

 

 

31,517

 

Bank-Owned Life Insurance

 

462,894

 

 

458,260

 

 

453,882

 

Other Assets

 

639,458

 

 

785,923

 

 

573,988

 

Total Assets

$

23,733,296

 

$

23,549,785

 

$

23,606,877

 

       
Liabilities      
Deposits      
Noninterest-Bearing Demand

$

6,058,554

 

$

5,687,442

 

$

6,714,982

 

Interest-Bearing Demand

 

3,749,717

 

 

3,925,469

 

 

4,232,567

 

Savings

 

8,189,472

 

 

8,530,384

 

 

7,962,410

 

Time

 

3,057,302

 

 

2,659,014

 

 

1,705,737

 

Total Deposits

 

21,055,045

 

 

20,802,309

 

 

20,615,696

 

Securities Sold Under Agreements to Repurchase

 

150,490

 

 

150,490

 

 

725,490

 

Other Debt

 

560,190

 

 

560,217

 

 

410,294

 

Operating Lease Liabilities

 

94,693

 

 

95,453

 

 

100,526

 

Retirement Benefits Payable

 

23,673

 

 

26,074

 

 

26,991

 

Accrued Interest Payable

 

41,023

 

 

33,434

 

 

9,698

 

Taxes Payable

 

7,636

 

 

6,965

 

 

7,104

 

Other Liabilities

 

386,304

 

 

511,003

 

 

394,083

 

Total Liabilities

 

22,319,054

 

 

22,185,945

 

 

22,289,882

 

Shareholders' Equity      
Preferred Stock ($.01 par value; authorized 180,000 shares;      
issued / outstanding: December 31, 2023; September 30, 2023;      
and December 31, 2022 - 180,000)

 

180,000

 

 

180,000

 

 

180,000

 

Common Stock ($.01 par value; authorized 500,000,000 shares;      
issued / outstanding: December 31, 2023 - 58,755,465 / 39,753,138;      
September 30, 2023 - 58,767,820 / 39,748,700; and December 31, 2022 - 58,733,625 / 39,835,750)

 

583

 

 

583

 

 

582

 

Capital Surplus

 

636,422

 

 

632,425

 

 

620,578

 

Accumulated Other Comprehensive Loss

 

(396,688

)

 

(441,611

)

 

(434,658

)

Retained Earnings

 

2,107,569

 

 

2,108,702

 

 

2,055,912

 

Treasury Stock, at Cost (Shares: December 31, 2023 - 19,002,327; September 30, 2023 - 19,019,120;      
and December 31, 2022 - 18,897,875)

 

(1,113,644

)

 

(1,116,259

)

 

(1,105,419

)

Total Shareholders' Equity

 

1,414,242

 

 

1,363,840

 

 

1,316,995

 

Total Liabilities and Shareholders' Equity

$

23,733,296

 

$

23,549,785

 

$

23,606,877

 

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, 2021

180,000

 

$

180,000

 

40,253,193

 

 

$

581

 

$

602,508

 

$

(66,382

)

 

$

1,950,375

 

 

$

(1,055,471

)

 

$

1,611,611

 

Net Income

-

 

 

-

 

-

 

 

 

-

 

 

-

 

 

-

 

 

 

225,804

 

 

 

-

 

 

 

225,804

 

Other Comprehensive Loss

-

 

 

-

 

-

 

 

 

-

 

 

-

 

 

(368,276

)

 

 

-

 

 

 

-

 

 

 

(368,276

)

Share-Based Compensation

-

 

 

-

 

-

 

 

 

-

 

 

16,066

 

 

-

 

 

 

-

 

 

 

-

 

 

 

16,066

 

Common Stock Issued under Purchase and Equity                                  
Compensation Plans and Related Tax Benefits

-

 

 

-

 

272,007

 

 

 

1

 

 

2,004

 

 

-

 

 

 

167

 

 

 

5,115

 

 

 

7,287

 

Common Stock Repurchased

-

 

 

-

 

(689,450

)

 

 

-

 

 

-

 

 

-

 

 

 

-

 

 

 

(55,063

)

 

 

(55,063

)

Cash Dividends Declared Common Stock ($2.80 per share)

-

 

 

-

 

-

 

 

 

-

 

 

-

 

 

-

 

 

 

(112,557

)

 

 

-

 

 

 

(112,557

)

Cash Dividends Declared Preferred Stock

-

 

 

-

 

-

 

 

 

-

 

 

-

 

 

-

 

 

 

(7,877

)

 

 

-

 

 

 

(7,877

)

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

-

 

$

-

 

-

 

 

$

-

 

$

-

 

$

-

 

 

$

171,202

 

 

$

-

 

 

$

171,202

 

Other Comprehensive Income

-

 

 

-

 

-

 

 

 

-

 

 

-

 

 

37,970

 

 

 

-

 

 

 

-

 

 

 

37,970

 

Share-Based Compensation

-

 

 

-

 

-

 

 

 

-

 

 

15,656

 

 

-

 

 

 

-

 

 

 

-

 

 

 

15,656

 

Common Stock Issued under Purchase and Equity                                  
Compensation Plans and Related Tax Benefits

-

 

 

-

 

130,286

 

 

 

1

 

 

188

 

 

-

 

 

 

127

 

 

 

6,065

 

 

 

6,381

 

Common Stock Repurchased

-

 

 

-

 

(212,898

)

 

 

-

 

 

-

 

 

-

 

 

 

-

 

 

 

(14,290

)

 

 

(14,290

)

Cash Dividends Declared Common Stock ($2.80 per share)

-

 

 

-

 

-

 

 

 

-

 

 

-

 

 

-

 

 

 

(111,795

)

 

 

-

 

 

 

(111,795

)

Cash Dividends Declared Preferred Stock

-

 

 

-

 

-

 

 

 

-

 

 

-

 

 

-

 

 

 

(7,877

)

 

 

-

 

 

 

(7,877

)

Balance as of December 31, 2023

180,000

 

$

180,000

 

39,753,138

 

 

$

583

 

$

636,422

 

$

(396,688

)

 

$

2,107,569

 

 

$

(1,113,644

)

 

$

1,414,242

 

Bank of Hawai‘i Corporation and Subsidiaries
Average Balances and Interest Rates - Taxable-Equivalent Basis 1                       Table 7a
  Three Months Ended     Three Months Ended     Three Months Ended  
  December 31, 2023     September 30, 2023     December 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

$

4.3

 

$

-

 

2.08

%

 

$

2.9

 

$

-

 

2.40

%

 

$

2.2

 

$

-

 

2.32

%

Funds Sold

 

415.0

 

 

5.7

 

5.38

   

 

944.8

 

 

12.8

 

5.31

   

 

118.1

 

 

1.2

 

3.62

 
Investment Securities                                        
Available-for-Sale                                        
Taxable

 

2,362.4

 

 

22.8

 

3.84

   

 

2,605.4

 

 

23.5

 

3.60

   

 

2,593.5

 

 

18.4

 

2.83

 
Non-Taxable

 

1.8

 

 

-

 

1.90

   

 

3.5

 

 

-

 

3.21

   

 

7.5

 

 

0.1

 

4.14

 
Held-to-Maturity                                        
Taxable

 

5,013.6

 

 

22.4

 

1.79

   

 

5,118.6

 

 

22.7

 

1.77

   

 

5,401.9

 

 

23.5

 

1.74

 
Non-Taxable

 

34.9

 

 

0.2

 

2.10

   

 

35.0

 

 

0.2

 

2.10

   

 

35.4

 

 

0.2

 

2.10

 
Total Investment Securities

 

7,412.7

 

 

45.4

 

2.45

   

 

7,762.5

 

 

46.4

 

2.39

   

 

8,038.3

 

 

42.2

 

2.10

 
Loans Held for Sale

 

3.8

 

 

0.1

 

6.89

   

 

3.8

 

 

0.1

 

6.28

   

 

3.3

 

 

-

 

5.65

 
Loans and Leases 3                                        
Commercial and Industrial

 

1,603.5

 

 

21.3

 

5.27

   

 

1,515.0

 

 

18.9

 

4.96

   

 

1,379.9

 

 

14.8

 

4.25

 
Paycheck Protection Program

 

11.9

 

 

-

 

1.36

   

 

13.1

 

 

-

 

1.32

   

 

21.3

 

 

0.1

 

2.30

 
Commercial Mortgage

 

3,760.1

 

 

51.5

 

5.42

   

 

3,792.6

 

 

51.1

 

5.35

   

 

3,627.4

 

 

40.6

 

4.44

 
Construction

 

279.5

 

 

4.8

 

6.84

   

 

241.9

 

 

3.7

 

6.09

   

 

246.9

 

 

3.3

 

5.29

 
Commercial Lease Financing

 

60.1

 

 

0.3

 

1.95

   

 

62.6

 

 

0.3

 

1.84

   

 

72.0

 

 

0.3

 

1.49

 
Residential Mortgage

 

4,676.0

 

 

45.1

 

3.86

   

 

4,715.3

 

 

42.8

 

3.62

   

 

4,617.9

 

 

38.9

 

3.37

 
Home Equity

 

2,276.2

 

 

20.9

 

3.65

   

 

2,283.5

 

 

20.1

 

3.49

   

 

2,207.7

 

 

17.9

 

3.23

 
Automobile

 

845.7

 

 

8.6

 

4.02

   

 

868.0

 

 

8.2

 

3.75

   

 

851.1

 

 

7.0

 

3.29

 
Other 4

 

393.1

 

 

6.3

 

6.40

   

 

411.2

 

 

6.5

 

6.24

   

 

428.6

 

 

6.1

 

5.64

 
Total Loans and Leases

 

13,906.1

 

 

158.8

 

4.54

   

 

13,903.2

 

 

151.6

 

4.34

   

 

13,452.8

 

 

129.0

 

3.81

 
Other

 

60.0

 

 

1.0

 

6.16

   

 

91.6

 

 

1.5

 

6.40

   

 

50.1

 

 

0.4

 

2.72

 
Total Earning Assets

 

21,801.9

 

 

211.0

 

3.85

   

 

22,708.8

 

 

212.4

 

3.72

   

 

21,664.8

 

 

172.8

 

3.17

 
Cash and Due from Banks

 

243.8

           

 

289.8

           

 

244.3

         
Other Assets

 

1,403.5

           

 

1,388.8

           

 

1,238.3

         
Total Assets

$

23,449.2

           

$

24,387.4

           

$

23,147.4

         
                                         
Interest-Bearing Liabilities                                        
Interest-Bearing Deposits                                        
Demand

$

3,737.3

 

 

7.7

 

0.82

   

$

3,929.7

 

 

6.6

 

0.67

   

$

4,131.4

 

 

3.5

 

0.33

 
Savings

 

8,441.0

 

 

51.1

 

2.40

   

 

7,952.6

 

 

39.1

 

1.95

   

 

7,869.9

 

 

13.4

 

0.68

 
Time

 

2,830.0

 

 

28.3

 

3.97

   

 

2,767.8

 

 

26.5

 

3.79

   

 

1,467.7

 

 

6.6

 

1.78

 
Total Interest-Bearing Deposits

 

15,008.3

 

 

87.1

 

2.30

   

 

14,650.1

 

 

72.2

 

1.95

   

 

13,469.0

 

 

23.5

 

0.69

 
Funds Purchased

 

-

 

 

-

 

-

   

 

-

 

 

-

 

-

   

 

36.6

 

 

0.3

 

3.40

 
Short-Term Borrowings

 

-

 

 

-

 

-

   

 

-

 

 

-

 

-

   

 

198.3

 

 

2.0

 

3.90

 
Securities Sold Under Agreements to Repurchase

 

150.5

 

 

1.5

 

3.79

   

 

528.5

 

 

4.0

 

2.99

   

 

594.5

 

 

4.3

 

2.82

 
Other Debt

 

560.2

 

 

6.0

 

4.24

   

 

1,365.7

 

 

14.8

 

4.31

   

 

137.5

 

 

1.5

 

4.32

 
Total Interest-Bearing Liabilities

 

15,719.0

 

 

94.6

 

2.39

   

 

16,544.3

 

 

91.0

 

2.18

   

 

14,435.9

 

 

31.6

 

0.87

 
Net Interest Income    

$

116.4

           

$

121.4

           

$

141.2

     
Interest Rate Spread        

1.46

%

         

1.54

%

         

2.30

%

Net Interest Margin        

2.13

%

         

2.13

%

         

2.60

%

Noninterest-Bearing Demand Deposits

 

5,695.8

           

 

5,842.0

           

 

6,872.3

         
Other Liabilities

 

673.8

           

 

636.0

           

 

552.9

         
Shareholders' Equity

 

1,360.6

           

 

1,365.1

           

 

1,286.3

         
Total Liabilities and Shareholders' Equity

$

23,449.2

           

$

24,387.4

           

$

23,147.4

         
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 $605,000, $437,000, and $433,000
for the three months ended December 31, 2023, September 30, 2023, and December 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
Average Balances and Interest Rates - Taxable-Equivalent Basis 1   Table 7b
  Year Ended     Year Ended  
  December 31, 2023     December 31, 2022  
  Average   Income /   Yield /     Average   Income /   Yield /  
(dollars in millions) Balance   Expense 2   Rate     Balance   Expense 2   Rate  
Earning Assets                          
Interest-Bearing Deposits in Other Banks

$

3.5

 

$

0.1

 

2.44

%

 

$

3.0

 

$

-

 

1.05

%

Funds Sold

 

540.4

 

 

28.3

 

5.24

   

 

260.5

 

 

4.3

 

1.64

 
Investment Securities                          
Available-for-Sale                          
Taxable

 

2,631.0

 

 

93.4

 

3.55

   

 

3,644.2

 

 

70.5

 

1.93

 
Non-Taxable

 

6.1

 

 

0.2

 

4.06

   

 

4.0

 

 

0.1

 

2.92

 
Held-to-Maturity                          
Taxable

 

5,173.9

 

 

92.2

 

1.78

   

 

4,750.0

 

 

80.9

 

1.70

 
Non-Taxable

 

35.1

 

 

0.7

 

2.10

   

 

35.6

 

 

0.7

 

2.10

 
Total Investment Securities

 

7,846.1

 

 

186.5

 

2.38

   

 

8,433.8

 

 

152.2

 

1.80

 
Loans Held for Sale

 

3.0

 

 

0.2

 

6.16

   

 

6.9

 

 

0.3

 

3.70

 
Loans and Leases 3                          
Commercial and Industrial

 

1,497.1

 

 

74.0

 

4.94

   

 

1,349.3

 

 

46.2

 

3.42

 
Paycheck Protection Program

 

14.1

 

 

0.2

 

1.63

   

 

44.0

 

 

2.7

 

6.07

 
Commercial Mortgage

 

3,776.2

 

 

197.0

 

5.22

   

 

3,420.1

 

 

121.9

 

3.56

 
Construction

 

262.1

 

 

16.0

 

6.09

   

 

232.6

 

 

10.6

 

4.56

 
Commercial Lease Financing

 

63.7

 

 

0.8

 

1.30

   

 

88.5

 

 

1.3

 

1.49

 
Residential Mortgage

 

4,690.5

 

 

168.9

 

3.60

   

 

4,484.2

 

 

147.4

 

3.29

 
Home Equity

 

2,268.0

 

 

78.2

 

3.45

   

 

2,072.2

 

 

62.1

 

3.00

 
Automobile

 

866.1

 

 

31.8

 

3.67

   

 

786.1

 

 

25.4

 

3.23

 
Other 4

 

413.8

 

 

25.3

 

6.12

   

 

419.5

 

 

23.0

 

5.49

 
Total Loans and Leases

 

13,851.6

 

 

592.2

 

4.28

   

 

12,896.5

 

 

440.6

 

3.42

 
Other

 

78.3

 

 

5.1

 

6.51

   

 

40.5

 

 

1.2

 

3.01

 
Total Earning Assets

 

22,322.9

 

 

812.4

 

3.64

   

 

21,641.2

 

 

598.6

 

2.77

 
Cash and Due from Banks

 

292.1

           

 

237.4

         
Other Assets

 

1,339.2

           

 

1,128.1

         
Total Assets

$

23,954.2

           

$

23,006.7

         
                           
Interest-Bearing Liabilities                          
Interest-Bearing Deposits                          
Demand

$

3,978.7

 

 

27.0

 

0.68

   

$

4,377.1

 

 

6.1

 

0.14

 
Savings

 

8,018.4

 

 

137.4

 

1.71

   

 

7,767.7

 

 

22.9

 

0.30

 
Time

 

2,424.8

 

 

86.4

 

3.56

   

 

1,135.5

 

 

10.7

 

0.94

 
Total Interest-Bearing Deposits

 

14,421.9

 

 

250.8

 

1.74

   

 

13,280.3

 

 

39.7

 

0.30

 
Funds Purchased

 

18.5

 

 

0.9

 

4.79

   

 

18.5

 

 

0.4

 

2.26

 
Short-Term Borrowings

 

114.0

 

 

5.7

 

5.01

   

 

58.6

 

 

2.1

 

3.53

 
Securities Sold Under Agreements to Repurchase

 

530.9

 

 

16.3

 

3.07

   

 

479.8

 

 

12.6

 

2.63

 
Other Debt

 

921.8

 

 

39.7

 

4.30

   

 

42.4

 

 

2.0

 

4.82

 
Total Interest-Bearing Liabilities

 

16,007.1

 

 

313.4

 

1.96

   

 

13,879.6

 

 

56.8

 

0.41

 
Net Interest Income    

$

499.0

           

$

541.8

     
Interest Rate Spread        

1.68

%

         

2.36

%

Net Interest Margin        

2.24

%

         

2.50

%

Noninterest-Bearing Demand Deposits

 

5,990.5

           

 

7,270.4

         
Other Liabilities

 

601.1

           

 

454.2

         
Shareholders' Equity

 

1,355.5

           

 

1,402.5

         
Total Liabilities and Shareholders' Equity

$

23,954.2

           

$

23,006.7

         
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 $2,008,000 and $1,251,000
for the year ended December 31, 2023 and December 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 December 31, 2023
    Compared to September 30, 2023
(dollars in millions)   Volume 1   Rate 1   Total
Change in Interest Income:            
Funds Sold  

$

(7.3

)

 

$

0.2

 

 

$

(7.1

)

Investment Securities            
Available-for-Sale            
Taxable  

 

(2.2

)

 

 

1.5

 

 

 

(0.7

)

Held-to-Maturity            
Taxable  

 

(0.5

)

 

 

0.2

 

 

 

(0.3

)

Total Investment Securities  

 

(2.7

)

 

 

1.7

 

 

 

(1.0

)

Loans and Leases            
Commercial and Industrial  

 

1.2

 

 

 

1.2

 

 

 

2.4

 

Commercial Mortgage  

 

(0.4

)

 

 

0.8

 

 

 

0.4

 

Construction  

 

0.6

 

 

 

0.5

 

 

 

1.1

 

Residential Mortgage  

 

(0.4

)

 

 

2.7

 

 

 

2.3

 

Home Equity  

 

(0.1

)

 

 

0.9

 

 

 

0.8

 

Automobile  

 

(0.2

)

 

 

0.6

 

 

 

0.4

 

Other 2  

 

(0.4

)

 

 

0.2

 

 

 

(0.2

)

Total Loans and Leases  

 

0.3

 

 

 

6.9

 

 

 

7.2

 

Other  

 

(0.4

)

 

 

(0.1

)

 

 

(0.5

)

Total Change in Interest Income  

 

(10.1

)

 

 

8.7

 

 

 

(1.4

)

             
Change in Interest Expense:            
Interest-Bearing Deposits            
Demand  

 

(0.3

)

 

 

1.4

 

 

 

1.1

 

Savings  

 

2.5

 

 

 

9.5

 

 

 

12.0

 

Time  

 

0.6

 

 

 

1.2

 

 

 

1.8

 

Total Interest-Bearing Deposits  

 

2.8

 

 

 

12.1

 

 

 

14.9

 

Securities Sold Under Agreements to Repurchase  

 

(3.5

)

 

 

1.0

 

 

 

(2.5

)

Other Debt  

 

(8.6

)

 

 

(0.2

)

 

 

(8.8

)

Total Change in Interest Expense  

 

(9.3

)

 

 

12.9

 

 

 

3.6

 

             
Change in Net Interest Income  

$

(0.8

)

 

$

(4.2

)

 

$

(5.0

)

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 December 31, 2023
    Compared to December 31, 2022
(dollars in millions)   Volume 1   Rate 1   Total
Change in Interest Income:            
Funds Sold  

$

3.8

 

 

$

0.7

 

 

$

4.5

 

Investment Securities            
Available-for-Sale            
Taxable  

 

(1.8

)

 

 

6.2

 

 

 

4.4

 

Non-Taxable  

 

-

 

 

 

(0.1

)

 

 

(0.1

)

Held-to-Maturity            
Taxable  

 

(1.7

)

 

 

0.6

 

 

 

(1.1

)

Total Investment Securities  

 

(3.5

)

 

 

6.7

 

 

 

3.2

 

Loans Held for Sale  

 

-

 

 

 

0.1

 

 

 

0.1

 

Loans and Leases            
Commercial and Industrial  

 

2.6

 

 

 

3.9

 

 

 

6.5

 

Paycheck Protection Program  

 

-

 

 

 

(0.1

)

 

 

(0.1

)

Commercial Mortgage  

 

1.6

 

 

 

9.3

 

 

 

10.9

 

Construction  

 

0.4

 

 

 

1.1

 

 

 

1.5

 

Residential Mortgage  

 

0.5

 

 

 

5.7

 

 

 

6.2

 

Home Equity  

 

0.6

 

 

 

2.4

 

 

 

3.0

 

Automobile  

 

-

 

 

 

1.6

 

 

 

1.6

 

Other 2  

 

(0.6

)

 

 

0.8

 

 

 

0.2

 

Total Loans and Leases  

 

5.1

 

 

 

24.7

 

 

 

29.8

 

Other  

 

0.1

 

 

 

0.5

 

 

 

0.6

 

Total Change in Interest Income  

 

5.5

 

 

 

32.7

 

 

 

38.2

 

             
Change in Interest Expense:            
Interest-Bearing Deposits            
Demand  

 

(0.4

)

 

 

4.6

 

 

 

4.2

 

Savings  

 

1.0

 

 

 

36.7

 

 

 

37.7

 

Time  

 

9.4

 

 

 

12.3

 

 

 

21.7

 

Total Interest-Bearing Deposits  

 

10.0

 

 

 

53.6

 

 

 

63.6

 

Funds Purchased  

 

(0.3

)

 

 

-

 

 

 

(0.3

)

Short-Term Borrowings  

 

(2.0

)

 

 

-

 

 

 

(2.0

)

Securities Sold Under Agreements to Repurchase  

 

(3.9

)

 

 

1.1

 

 

 

(2.8

)

Other Debt  

 

4.5

 

 

 

-

 

 

 

4.5

 

Total Change in Interest Expense  

 

8.3

 

 

 

54.7

 

 

 

63.0

 

             
Change in Net Interest Income  

$

(2.8

)

 

$

(22.0

)

 

$

(24.8

)

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 8c
    Year Ended December 31, 2023
    Compared to December 31, 2022
(dollars in millions)   Volume 1   Rate 1   Total
Change in Interest Income:            
Interest-Bearing Deposits in Other Banks  

$

0.1

 

 

$

-

 

 

$

0.1

 

Funds Sold  

 

7.9

 

 

 

16.1

 

 

 

24.0

 

Investment Securities            
Available-for-Sale            
Taxable  

 

(23.7

)

 

 

46.6

 

 

 

22.9

 

Non-Taxable  

 

0.1

 

 

 

-

 

 

 

0.1

 

Held-to-Maturity            
Taxable  

 

7.4

 

 

 

3.9

 

 

 

11.3

 

Total Investment Securities  

 

(16.2

)

 

 

50.5

 

 

 

34.3

 

Loans Held for Sale  

 

(0.2

)

 

 

0.1

 

 

 

(0.1

)

Loans and Leases            
Commercial and Industrial  

 

5.5

 

 

 

22.3

 

 

 

27.8

 

Paycheck Protection Program  

 

(1.2

)

 

 

(1.3

)

 

 

(2.5

)

Commercial Mortgage  

 

13.8

 

 

 

61.3

 

 

 

75.1

 

Construction  

 

1.5

 

 

 

3.9

 

 

 

5.4

 

Commercial Lease Financing  

 

(0.4

)

 

 

(0.1

)

 

 

(0.5

)

Residential Mortgage  

 

7.0

 

 

 

14.5

 

 

 

21.5

 

Home Equity  

 

6.2

 

 

 

9.9

 

 

 

16.1

 

Automobile  

 

2.7

 

 

 

3.7

 

 

 

6.4

 

Other 2  

 

(0.3

)

 

 

2.6

 

 

 

2.3

 

Total Loans and Leases  

 

34.8

 

 

 

116.8

 

 

 

151.6

 

Other  

 

1.7

 

 

 

2.2

 

 

 

3.9

 

Total Change in Interest Income  

 

28.1

 

 

 

185.7

 

 

 

213.8

 

             
Change in Interest Expense:            
Interest-Bearing Deposits            
Demand  

 

(0.6

)

 

 

21.5

 

 

 

20.9

 

Savings  

 

0.8

 

 

 

113.7

 

 

 

114.5

 

Time  

 

21.8

 

 

 

53.9

 

 

 

75.7

 

Total Interest-Bearing Deposits  

 

22.0

 

 

 

189.1

 

 

 

211.1

 

Funds Purchased  

 

-

 

 

 

0.5

 

 

 

0.5

 

Short-Term Borrowings  

 

2.5

 

 

 

1.1

 

 

 

3.6

 

Securities Sold Under Agreements to Repurchase  

 

1.4

 

 

 

2.3

 

 

 

3.7

 

Other Debt  

 

37.9

 

 

 

(0.2

)

 

 

37.7

 

Total Change in Interest Expense  

 

63.8

 

 

 

192.8

 

 

 

256.6

 

             
Change in Net Interest Income  

$

(35.7

)

 

$

(7.1

)

 

$

(42.8

)

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
Salaries and Benefits           Table 9
  Three Months Ended   Year Ended
 

December 31,

September 30,

December 31,

 

December 31,

(dollars in thousands)

2023

2023

2022

 

2023

2022

Salaries

$

38,492

$

39,426

$

37,395

 

 

$

154,497

$

146,840

Incentive Compensation

 

3,402

 

2,956

 

5,356

 

 

 

13,339

 

23,425

Share-Based Compensation

 

3,443

 

4,072

 

3,901

 

 

 

14,770

 

15,220

Commission Expense

 

700

 

676

 

830

 

 

 

2,798

 

4,708

Retirement and Other Benefits

 

2,521

 

3,809

 

4,065

 

 

 

15,707

 

17,242

Payroll Taxes

 

2,598

 

2,921

 

2,591

 

 

 

14,677

 

13,395

Medical, Dental, and Life Insurance

 

2,500

 

2,835

 

3,528

 

 

 

12,767

 

11,958

Separation Expense

 

335

 

2,130

 

(27

)

 

 

5,524

 

2,482

Total Salaries and Benefits

$

53,991

$

58,825

$

57,639

 

 

$

234,079

$

235,270

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

December 31,

September 30,

June 30,

March 31,

December 31,

(dollars in thousands)

2023

2023

2023

2023

2022

Commercial          
Commercial and Industrial

$

1,652,699

$

1,569,572

$

1,502,676

$

1,425,916

$

1,389,066

Paycheck Protection Program

 

11,369

 

12,529

 

13,789

 

15,175

 

19,579

Commercial Mortgage

 

3,749,016

 

3,784,339

 

3,796,769

 

3,826,283

 

3,725,542

Construction

 

304,463

 

251,507

 

236,428

 

232,903

 

260,825

Lease Financing

 

59,939

 

61,522

 

62,779

 

65,611

 

69,491

Total Commercial

 

5,777,486

 

5,679,469

 

5,612,441

 

5,565,888

 

5,464,503

Consumer          
Residential Mortgage

 

4,684,171

 

4,699,140

 

4,721,976

 

4,691,298

 

4,653,072

Home Equity

 

2,264,827

 

2,285,974

 

2,278,105

 

2,260,001

 

2,225,950

Automobile

 

837,830

 

856,113

 

878,767

 

877,979

 

870,396

Other 1

 

400,712

 

398,795

 

423,600

 

429,356

 

432,499

Total Consumer

 

8,187,540

 

8,240,022

 

8,302,448

 

8,258,634

 

8,181,917

Total Loans and Leases

$

13,965,026

$

13,919,491

$

13,914,889

$

13,824,522

$

13,646,420

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

December 31,

September 30,

June 30,

March 31,

December 31,

(dollars in thousands)

2023

2023

2023

2023

2022

Consumer

$

10,319,809

$

10,036,261

$

10,018,931

$

10,158,833

$

10,304,335

Commercial

 

8,601,224

 

8,564,536

 

8,019,971

 

8,594,441

 

8,569,670

Public and Other

 

2,134,012

 

2,201,512

 

2,469,713

 

1,738,026

 

1,741,691

Total Deposits

$

21,055,045

$

20,802,309

$

20,508,615

$

20,491,300

$

20,615,696

           
           
Average Deposits          
 

Three Months Ended

 

December 31,

September 30,

June 30,

March 31,

December 31,

(dollars in thousands)

2023

2023

2023

2023

2022

Consumer

$

10,092,727

$

9,963,690

$

9,977,239

$

10,178,988

$

10,295,563

Commercial

 

8,581,426

 

8,288,891

 

8,138,358

 

8,611,960

 

8,588,198

Public and Other

 

2,029,917

 

2,239,501

 

1,903,004

 

1,639,934

 

1,457,566

Total Deposits

$

20,704,070

$

20,492,082

$

20,018,601

$

20,430,882

$

20,341,327

Bank of Hawai‘i Corporation and Subsidiaries
Non-Performing Assets and Accruing Loans and Leases Past Due 90 Days or More     Table 11
 

December 31,

September 30,

June 30,

March 31,

December 31,

(dollars in thousands)

2023

2023

2023

2023

2022

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

$

39

 

$

43

 

$

17

 

$

31

 

$

37

 

Commercial Mortgage

 

2,884

 

 

2,996

 

 

3,107

 

 

3,216

 

 

3,309

 

Total Commercial

 

2,923

 

 

3,039

 

 

3,124

 

 

3,247

 

 

3,346

 

Consumer          
Residential Mortgage

 

2,935

 

 

3,706

 

 

3,504

 

 

4,199

 

 

4,239

 

Home Equity

 

3,791

 

 

3,734

 

 

3,809

 

 

3,638

 

 

4,022

 

Total Consumer

 

6,726

 

 

7,440

 

 

7,313

 

 

7,837

 

 

8,261

 

Total Non-Accrual Loans and Leases

 

9,649

 

 

10,479

 

 

10,437

 

 

11,084

 

 

11,607

 

Foreclosed Real Estate

 

2,098

 

 

1,040

 

 

1,040

 

 

1,040

 

 

1,040

 

Total Non-Performing Assets

$

11,747

 

$

11,519

 

$

11,477

 

$

12,124

 

$

12,647

 

           
Accruing Loans and Leases Past Due 90 Days or More          
Consumer          
Residential Mortgage

$

3,814

 

$

3,519

 

$

3,560

 

$

4,566

 

$

2,429

 

Home Equity

 

1,734

 

 

2,172

 

 

2,022

 

 

1,723

 

 

1,673

 

Automobile

 

399

 

 

393

 

 

577

 

 

598

 

 

589

 

Other 1

 

648

 

 

643

 

 

633

 

 

632

 

 

683

 

Total Consumer

 

6,595

 

 

6,727

 

 

6,792

 

 

7,519

 

 

5,374

 

Total Accruing Loans and Leases Past Due 90 Days or More

$

6,595

 

$

6,727

 

$

6,792

 

$

7,519

 

$

5,374

 

Total Loans and Leases

$

13,965,026

 

$

13,919,491

 

$

13,914,889

 

$

13,824,522

 

$

13,646,420

 

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

 

0.07

%

 

0.08

%

 

0.08

%

 

0.08

%

 

0.09

%

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

 

0.08

%

 

0.08

%

 

0.08

%

 

0.09

%

 

0.09

%

           
Ratio of Non-Performing Assets to Total Assets

 

0.05

%

 

0.05

%

 

0.04

%

 

0.05

%

 

0.05

%

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

 

0.05

%

 

0.05

%

 

0.06

%

 

0.06

%

 

0.06

%

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

 

0.11

%

 

0.10

%

 

0.10

%

 

0.11

%

 

0.11

%

           
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

 

0.13

%

 

0.13

%

 

0.13

%

 

0.14

%

 

0.13

%

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

$

11,519

 

$

11,477

 

$

12,124

 

$

12,647

 

$

13,868

 

Additions

 

2,683

 

 

1,318

 

 

1,116

 

 

552

 

 

704

 

Reductions          
Payments

 

(2,018

)

 

(1,017

)

 

(226

)

 

(778

)

 

(1,605

)

Return to Accrual Status

 

(437

)

 

(259

)

 

(1,527

)

 

(297

)

 

(301

)

Charge-offs / Write-downs

 

-

 

 

-

 

 

(10

)

 

-