Bank of Hawaii Corporation Second Quarter 2004 Financial Results
HONOLULU--(BUSINESS WIRE)--July 26, 2004--Bank of Hawaii Corporation (NYSE:BOH)
- Diluted Earnings Per Share Increases to $0.79, Up 65 Percent
- Net Income of $44.2 Million for the Quarter, Up 47 Percent
- Additional Share Repurchase Authorization of $100 Million
- Board of Directors Declares Dividend of $0.30 Per Share
Bank of Hawaii Corporation (NYSE:BOH) today reported diluted earnings per share of $0.79 for the second quarter of 2004, up $0.10 or 14.5 percent from $0.69 in the first quarter of 2004, and up $0.31 or 64.6 percent from $0.48 in the comparable quarter last year. Net income for the second quarter of 2004 was $44.2 million, up $4.4 million or 11.1 percent from $39.8 million in the previous quarter and up $14.2 million or 47.3 percent from $30.0 million reported in the same quarter last year.
Return on average assets for the second quarter of 2004 was 1.80 percent, up from 1.65 percent in the first quarter of 2004, and up from 1.27 percent in the second quarter of 2003. Return on average equity was 24.28 percent for the second quarter of 2004, up from 19.98 percent in the previous quarter and a significant improvement from 12.93 percent in the same quarter last year.
For six months ended June 30, 2004, net income was $84.0 million, up $24.2 million or 40.4 percent from net income of $59.8 million for the same period last year. Diluted earnings per share were $1.48 for the first half of 2004, an increase of 55.8 percent from diluted earnings per share of $0.95 for the first half of 2003. The year-to-date return on average assets was 1.73 percent, up from 1.29 percent for the same six months in 2003. The year-to-date return on average equity was 22.03 percent, up from 12.67 percent for the six months ended June 30, 2003.
"I am pleased to report that we continue to make solid progress in improving our operating efficiency, asset quality and customer service levels," said Michael E. O'Neill, Chairman and CEO. "The Hawaii economy continues to strengthen, and our leadership team remains keenly focused on growing our businesses in our key markets and achieving the goals of our new three-year plan."
In a separate news release issued today, Bank of Hawaii Corporation announced that the Board of Directors elected Allan Landon, President and COO, to succeed Michael E. O'Neill as Chairman and CEO on September 1, 2004. Mr. O'Neill will be leaving Bank of Hawaii.
Financial Highlights
Net interest income, on a taxable equivalent basis, for the second quarter of 2004 was $95.9 million, down $0.2 million from net interest income of $96.1 million in the first quarter of 2004, and up $5.4 million from net interest income of $90.5 million in the second quarter of 2003. The increase from the previous year was largely the result of lower interest rates paid on deposits and a reduction in long-term debt. An analysis of the change in net interest income is included in Table 6.
The net interest margin was 4.17 percent for the second quarter of 2004, down 13 basis points from the net interest margin of 4.30 percent in the previous quarter and up 5 basis points from 4.12 percent in the same quarter last year. The decrease in the net interest margin compared to the previous quarter was largely due to a decrease in the average yield on the loan portfolio.
Credit quality continued to improve during the second quarter of 2004. The Company recognized a $3.5 million negative provision for loan and lease losses during the quarter and did not record a provision for the previous seven quarters. The allowance for loan and lease losses was reduced $2.3 million from March 31, 2004, reflecting the reduced credit risk profile.
Non-interest income was $54.8 million for the second quarter of 2004 compared to non-interest income of $48.8 million in the first quarter of 2004 and $50.7 million in the second quarter of 2003. The improvement from the previous quarter was largely due to a partnership distribution of $3.2 million, a gain of $2.5 million on the sale of land, and increased mortgage banking income. Growth in fee income, including annuity and brokerage fees, was partially offset by a seasonal decline in tax service income and service charges on deposits.
Non-interest expense for the second quarter of 2004 was $85.1 million, up $2.1 million from $83.0 million in the previous quarter and down $10.3 million or 10.8 percent from non-interest expense of $95.4 million in the second quarter of 2003. The increase from the previous quarter was largely the result of charges of $2.2 million to settle litigation and a contribution of $1.0 million to the Bank of Hawaii Charitable Foundation. Non-interest expense in the second quarter of 2003 included $10.1 million in systems replacement costs. Excluding these items, non-interest expense in the second quarter of 2004 was down $2.8 million or 3.3 percent from the same quarter last year.
The efficiency ratio was 56.5 percent for the second quarter of 2004, down from 57.3 percent in the first quarter of 2004. Excluding systems replacement costs, the efficiency ratio was 60.4 percent in the second quarter of 2003. For six months ended June 30, 2004, the efficiency ratio was 56.9 percent compared to 67.0 percent for the same period in 2003. Excluding systems replacement costs, the efficiency ratio was 60.7 percent for the first six months of last year.
The Company's business segments are defined as Retail Banking, Commercial Banking, Investment Services Group, and Treasury and Other Corporate. Results are determined based on the Company's internal financial management reporting process and organizational structure. Business segment performance details are summarized in Table 11a and 11b.
Asset Quality
Bank of Hawaii Corporation's credit quality remained strong during the second quarter of 2004. Non-performing assets declined to $21.2 million at the end of the second quarter of 2004, a decrease of $6.7 million, or 24.1 percent, from non-performing assets of $27.9 million at the end of the first quarter of 2004. Non-performing assets decreased $20.8 million, or 49.6 percent, compared to non-performing assets of $42.0 million at the end of the same quarter last year. At June 30, 2004, the ratio of non-performing assets to total loans and foreclosed real estate was 0.37 percent, down from 0.49 percent at March 31, 2004 and down from 0.77 percent at June 30, 2003.
Non-accrual loans were $16.3 million at June 30, 2004, a reduction of $7.2 million, or 30.6 percent, from $23.5 million at March 31, 2004 and down $16.4 million, or 50.2 percent, from $32.7 million at June 30, 2003. Non-accrual loans as a percentage of total loans were 0.28 percent at June 30, 2004, down from 0.41 percent at the end of the previous quarter and down from 0.60 percent at the end of the comparable quarter last year.
Net charge-offs were in a net recovery position of $1.2 million in the second quarter of 2004 as charge-offs of $8.8 million were more than offset by recoveries of $10.0 million. Net charge-offs in the first quarter of 2004 were $1.9 million, or 0.13 percent (annualized) of total average loans. Net charge-offs during the second quarter of 2003 were $2.1 million, or 0.15 percent (annualized) of total average loans. Net charge-offs for the first six months of 2004 were $0.7 million, or 0.02 percent (annualized) of total average loans compared to $4.9 million, or 0.18 percent (annualized) of total average loans for the same period last year.
The allowance for loan and lease losses was $124.9 million at June 30, 2004. The ratio of the allowance for loan and lease losses to total loans was 2.16 percent at June 30, 2004 compared with 2.23 percent at March 31, 2004 and 2.52 percent at the end of the same quarter last year.
Concentrations of credit exposure to selected components of the portfolio are summarized in Table 8.
Other Financial Highlights
Total assets decreased to $9.7 billion at June 30, 2004, compared to total assets of $10.0 billion at March 31, 2004 and were slightly up from $9.6 billion at June 30, 2003. The decrease in total assets from the previous quarter was primarily due to a lower level of funding resulting from securities sold under agreements to repurchase by public entities.
Total deposits at June 30, 2004 were $7.5 billion, up from total deposits of $7.4 billion at March 31, 2004 and up from total deposits of $7.1 billion at June 30, 2003 due to continued strong growth in demand and savings deposits.
During the second quarter of 2004, Bank of Hawaii Corporation repurchased 2.1 million shares of common stock at a total cost of $92.9 million under the share repurchase program. The average cost per share was $43.91 during the quarter. From the beginning of the share repurchase program in July 2001 through June 30, 2004, the Company repurchased a total of 33.2 million shares and returned a total of $1,005.7 million to the shareholders at an average cost of $30.27 per share.
The Company's Board of Directors has increased the authorization under the share repurchase program by an additional $100 million of common stock. This new authorization, combined with the previously announced authorizations of $1,050 million, brings the total repurchase authority to $1,150 million. From July 1, 2004 through July 23, 2004, the Company repurchased an additional 0.2 million shares of common stock at an average cost of $45.50 per share. Remaining buyback authority was $137.0 million at July 23, 2004.
The Company's capital and liquidity remain strong. At June 30, 2004, the Tier 1 leverage ratio was 7.16 percent compared to 7.88 percent at March 31, 2004 and 9.29 percent at June 30, 2003.
The Company's Board of Directors has declared a quarterly cash dividend of $0.30 per share on the Company's outstanding shares. The dividend will be payable on September 15, 2004 to shareholders of record at the close of business on August 30, 2004.
Economic Outlook
Tourism in Hawaii may reach record levels during the summer of 2004. Total visitor counts were up 9.0 percent year-to-date through May 2004 and up 13.0 percent in June compared to last year. Growth in tourism is a result of the continued strength in domestic visitors to Hawaii and increased international visitors, partially due to the improving Japan economy and favorable yen/dollar exchange rates. Hotel revenues rose 6.0 percent, matched by growth in overall business receipts, during the State fiscal year ending in June 2004.
Hawaii's seasonally-adjusted unemployment rate declined to 3.0 percent in May, one percentage point below a year ago, as labor markets tightened. Seasonally-adjusted payrolls grew at a 1.7 percent annualized rate in the most recent six-month period, and were up 2.1 percent on a year-over-year basis in May 2004.
Hawaii real estate investment continues to dominate near-term growth prospects. Home sales volumes in Honolulu have grown at annual rates of more than 15.0 percent since 1997 and record volumes are expected to be reached this summer. Military housing privatization is anticipated to double annual homebuilding on Oahu beginning in the fourth quarter of 2004. Overall, construction employment is expected to return to early-1990s cyclical peaks.
Honolulu's semiannual inflation rate for the first half of 2004 is expected to repeat the 3.0 percent recorded in the second half of 2003, up from 1.0 percent a year earlier. Strong China, Eastern Asia and Southern California economies, and recoveries in Northern California and the Pacific Northwest, put Hawaii at the center of regional economic strength once again.
Earnings Outlook
Bank of Hawaii Corporation currently anticipates net income for the full year of 2004 will be approximately $163 million to $167 million. Based on present conditions, the Company does not expect to record a provision for loan and lease losses for the remainder of 2004. However, the actual amount of the provision for loan and lease losses depends on determinations of credit risk that are made near the end of each quarter. Earnings per share and return on equity projections continue to be dependent upon the terms and timing of share repurchases.
Conference Call Information
The Company will review its second quarter 2004 financial results today at 8:00 a.m. Hawaii Time (2:00 p.m. Eastern Time). The presentation will be accessible via teleconference and via the Investor Relations link of Bank of Hawaii Corporation's web site, www.boh.com. The conference call number is 800-299-9630 in the United States or 617-786-2904 for international callers. No confirmation code is required to access the call. A replay will be available for one week beginning at 10:00 a.m. Hawaii Time (4:00 p.m. Eastern Time) on Monday, July 26, 2004 by calling 888-286-8010 in the United States or 617-801-6888 for international callers and entering the number 11335073 when prompted. A replay of the presentation will also be available via the Investor Relations link of the Company's web site.
Bank of Hawaii Corporation is a regional financial services company serving businesses, consumers and governments in Hawaii, American Samoa and the West Pacific. The Company's principal subsidiary, Bank of Hawaii, was founded in 1897 and is the largest independent financial institution in Hawaii. For more information about Bank of Hawaii Corporation, see the Company's web site, www.boh.com.
Forward-Looking Statements
This news release contains forward-looking statements concerning, among other things, the economic environment in our service area, the expected level of loan loss provisioning, and anticipated net income, dividends, revenues and expenses during 2004 and beyond. Our forward-looking statements are based on numerous assumptions, any of which could prove to be inaccurate and actual results may differ materially from those projected for a variety of reasons, including, but not limited to: 1) unanticipated changes in business and economic conditions, the competitive environment, fiscal and monetary policies, or legislation in Hawaii and the other markets we serve; 2) changes in our credit quality or risk profile which may increase or decrease the required level of allowance for loan and lease losses; 3) changes in market interest rates that may affect our credit markets and ability to maintain our net interest margin; 4) changes to the amount and timing of our proposed equity repurchases; 5) inability to achieve expected benefits of our business process changes due to adverse changes in implementation processes or costs, operational savings, or timing; 6) real or threatened acts of war or terrorist activity affecting business conditions; and 7) adverse weather and other natural conditions impacting our and our customers' operations. We do not undertake any obligation to update forward-looking statements to reflect later events or circumstances.
Bank of Hawaii Corporation and Subsidiaries
Highlights (Unaudited) Table 1
----------------------------------------------------------------------
(dollars in thousands
except per share amounts) Three Months Ended Six Months Ended
June 30, June 30,
Earnings Highlights and
Performance Ratios 2004 2003 2004 2003
--------------------------- ------------------------------------------
Net Income $44,232 $30,034 $84,031 $59,835
Basic Earnings Per Share 0.84 0.50 1.57 0.99
Diluted Earnings Per Share 0.79 0.48 1.48 0.95
Cash Dividends 15,804 11,370 32,222 22,932
Net Income to Average Total
Assets (ROA) 1.80% 1.27% 1.73% 1.29%
Net Income to Average
Shareholders' Equity (ROE) 24.28% 12.93% 22.03% 12.67%
Net Interest Margin 4.17% 4.12% 4.23% 4.21%
Efficiency Ratio (1) 56.49% 67.55% 56.89% 67.01%
Efficiency Ratio excluding
System Replacement Costs 56.49% 60.39% 56.89% 60.68%
----------------------------------------------------------------------
Statement of Condition Highlights and June 30,
Performance Ratios 2004 2003
---------------------------------------------- -----------------------
Total Assets $9,688,769 $9,550,934
Net Loans 5,662,410 5,333,896
Total Deposits 7,469,288 7,140,849
Total Shareholders' Equity 699,438 913,010
Book Value Per Common Share $13.34 $15.50
Allowance / Loans and
Leases Outstanding 2.16% 2.52%
Average Equity / Average
Assets 7.84% 10.16%
Employees (FTE) 2,683 2,879
Branches and offices 89 91
Market Price Per Share of
Common Stock for the
Quarter Ended:
Closing $45.22 $33.15
High $46.84 $35.90
Low $40.97 $30.75
(1) The efficiency ratio is defined as non-interest expense divided by
total revenue (net interest income and non-interest income).
Bank of Hawaii Corporation and Subsidiaries
Consolidated Statements of Income (Unaudited) Table 2
----------------------------------------------------------------------
(dollars in thousands Three Months Ended Six Months Ended
except per share June 30, June 30,
amounts) 2004 2003 2004 2003
----------------------------------------------------------------------
Interest Income
Interest and Fees on
Loans and Leases $80,346 $85,954 $161,774 $171,727
Income on Investment
Securities - Held
to Maturity 6,711 3,083 13,687 5,366
Income on Investment
Securities -
Available for Sale 21,745 19,815 42,591 42,278
Deposits 1,646 1,161 2,877 2,468
Funds Sold 177 822 594 1,586
Other 865 1,016 1,723 2,205
----------------------------------------------------------------------
Total Interest Income 111,490 111,851 223,246 225,630
----------------------------------------------------------------------
Interest Expense
Deposits 8,560 13,309 17,760 27,756
Securities Sold
Under Agreements to
Repurchase 2,222 2,391 4,148 4,633
Funds Purchased 506 219 737 424
Short-Term
Borrowings 13 25 28 49
Long-Term Debt 4,340 5,422 8,693 11,283
----------------------------------------------------------------------
Total Interest Expense 15,641 21,366 31,366 44,145
----------------------------------------------------------------------
Net Interest Income 95,849 90,485 191,880 181,485
Provision for Loan and
Lease Losses (3,500) - (3,500) -
----------------------------------------------------------------------
Net Interest Income
After Provision for
Loan and Lease Losses 99,349 90,485 195,380 181,485
----------------------------------------------------------------------
Non-Interest Income
Trust and Asset
Management 12,995 12,545 26,859 25,726
Mortgage Banking 2,808 6,061 4,785 6,344
Service Charges on
Deposit Accounts 9,540 8,645 19,490 17,595
Fees, Exchange, and
Other Service
Charges 14,243 13,473 27,482 26,462
Investment
Securities Gains
(Losses) (37) 587 (37) 1,170
Insurance 3,303 3,015 6,946 6,095
Other 11,996 6,413 18,165 12,100
----------------------------------------------------------------------
Total Non-Interest
Income 54,848 50,739 103,690 95,492
----------------------------------------------------------------------
Non-Interest Expense
Salaries and
Benefits 46,689 47,711 92,690 94,140
Net Occupancy
Expense 9,543 9,628 18,929 19,241
Net Equipment
Expense 5,799 9,208 11,763 18,956
Information
Technology Systems
Replacement Project - 10,105 - 17,522
Other 23,094 18,742 44,765 35,735
----------------------------------------------------------------------
Total Non-Interest
Expense 85,125 95,394 168,147 185,594
----------------------------------------------------------------------
Income Before Income
Taxes 69,072 45,830 130,923 91,383
Provision for Income
Taxes 24,840 15,796 46,892 31,548
----------------------------------------------------------------------
Net Income $44,232 $30,034 $84,031 $59,835
======================================================================
Basic Earnings Per
Share $0.84 $0.50 $1.57 $0.99
Diluted Earnings Per
Share $0.79 $0.48 $1.48 $0.95
Dividends Declared Per
Share $0.30 $0.19 $0.60 $0.38
Basic Weighted Average
Shares 52,491,874 59,566,970 53,389,261 60,425,943
Diluted Weighted
Average Shares 55,662,415 62,301,337 56,710,653 62,907,697
======================================================================
Bank of Hawaii Corporation and Subsidiaries
Consolidated Statements of Condition Table 3
----------------------------------------------------------------------
June 30, December 31, June 30,
(dollars in thousands) 2004 2003 2003
----------------------------------------------------------------------
(Unaudited) (Unaudited)
Assets
Interest-Bearing Deposits $179,680 $154,735 $307,552
Investment Securities - Held to
Maturity (Market Value of $663,534,
$720,699, and $555,878) 679,382 727,233 548,719
Investment Securities - Available
for Sale 2,275,272 1,991,116 2,140,607
Funds Sold - - 250,000
Loans Held for Sale 9,565 9,211 71,892
Loans and Leases 5,787,314 5,757,175 5,471,870
Allowance for Loan and Lease
Losses (124,904) (129,080) (137,974)
----------------------------------------------------------------------
Net Loans 5,662,410 5,628,095 5,333,896
----------------------------------------------------------------------
Total Earning Assets 8,806,309 8,510,390 8,652,666
----------------------------------------------------------------------
Cash and Non-Interest-Bearing
Deposits 339,486 363,495 297,868
Premises and Equipment 149,128 160,005 165,542
Customers' Acceptance Liability 1,213 1,707 1,371
Accrued Interest Receivable 36,378 32,672 35,849
Foreclosed Real Estate 4,889 4,377 9,285
Mortgage Servicing Rights 20,819 22,178 24,841
Goodwill 36,216 36,216 36,216
Other Assets 294,331 330,607 327,296
----------------------------------------------------------------------
Total Assets $9,688,769 $9,461,647 $9,550,934
======================================================================
Liabilities
Deposits
Non-Interest-Bearing Demand $1,939,580 $1,933,928 $1,843,750
Interest-Bearing Demand 1,464,207 1,356,330 1,161,409
Savings 2,976,108 2,833,379 2,754,607
Time 1,089,393 1,209,142 1,381,083
----------------------------------------------------------------------
Total Deposits 7,469,288 7,332,779 7,140,849
----------------------------------------------------------------------
Securities Sold Under Agreements to
Repurchase 687,816 472,757 699,256
Funds Purchased 139,055 109,090 90,200
Short-Term Borrowings 11,055 12,690 22,424
Current Maturities of Long-Term Debt 80,000 96,505 34,000
Banker's Acceptances Outstanding 1,213 1,707 1,371
Retirement Benefits Payable 62,821 61,841 62,678
Accrued Interest Payable 7,169 7,483 9,755
Taxes Payable and Deferred Taxes 225,989 207,101 196,868
Other Liabilities 87,325 138,999 81,988
Long-Term Debt 217,600 227,563 298,535
----------------------------------------------------------------------
Total Liabilities 8,989,331 8,668,515 8,637,924
----------------------------------------------------------------------
Shareholders' Equity
Common Stock ($.01 par value);
authorized 500,000,000 shares;
issued / outstanding: June 2004 -
81,711,599 / 52,426,010, December
2003 - 81,647,729 / 54,928,480,
June 2003 - 81,588,394 / 58,896,230 813 807 807
Capital Surplus 403,150 391,701 386,565
Accumulated Other Comprehensive
Income (Loss) (27,258) (5,711) 12,412
Retained Earnings 1,251,689 1,199,077 1,151,623
Deferred Stock Grants (9,391) (8,309) (8,168)
Treasury Stock, at Cost (Shares:
June 2004 - 29,285,589, December
2003 - 26,719,249, June 2003 -
22,692,164) (919,565) (784,433) (630,229)
----------------------------------------------------------------------
Total Shareholders' Equity 699,438 793,132 913,010
----------------------------------------------------------------------
Total Liabilities and Shareholders'
Equity $9,688,769 $9,461,647 $9,550,934
======================================================================
Bank of Hawaii Corporation and Subsidiaries
Consolidated Statements of Shareholders' Equity (Unaudited) Table 4
----------------------------------------------------------------------
Accum.
Other
Compre-
hensive
Common Capital Income
(dollars in thousands) Total Stock Surplus (Loss)
----------------------------------------------------------------------
Balance at December 31, 2003 $793,132 $807 $391,701 $(5,711)
Comprehensive Income:
Net Income 84,031 - - -
Other Comprehensive Income,
Net of Tax:
Change in Unrealized Gains
and Losses on Investment
Securities (21,547) - - (21,547)
Total Comprehensive Income
Common Stock Issued under Stock
Plans and Related Tax Benefits
(908,502 shares) 32,028 6 11,449 -
Treasury Stock Purchased
(3,527,779 shares) (155,984) - - -
Cash Dividends Paid (32,222) - - -
----------------------------------------------------------------------
Balance at June 30, 2004 $699,438 $813 $403,150 $(27,258)
======================================================================
Balance at December 31, 2002 $1,015,759 $806 $372,192 $11,659
Comprehensive Income:
Net Income 59,835 - - -
Other Comprehensive Income,
Net of Tax:
Change in Unrealized Gains
and Losses on Investment
Securities 753 - - 753
Total Comprehensive Income
Common Stock Issued under Stock
Plans and Related Tax Benefits
(992,802 shares) 21,785 1 14,373 -
Treasury Stock Purchased
(5,107,779 shares) (162,190) - - -
Cash Dividends Paid (22,932) - - -
----------------------------------------------------------------------
Balance at June 30, 2003 $913,010 $807 $386,565 $12,412
======================================================================
Deferred Compre-
Retained Stock Treasury hensive
(dollars in thousands) Earnings Grants Stock Income
----------------------------------------------------------------------
Balance at December 31, 2003 $1,199,077 $(8,309) $(784,433)
Comprehensive Income:
Net Income 84,031 - - $84,031
Other Comprehensive Income,
Net of Tax:
Change in Unrealized Gains
and Losses on Investment
Securities - - - (21,547)
---------
Total Comprehensive Income $62,484
=========
Common Stock Issued under Stock
Plans and Related Tax Benefits
(908,502 shares) 803 (1,082) 20,852
Treasury Stock Purchased
(3,527,779 shares) - - (155,984)
Cash Dividends Paid (32,222) - -
-------------------------------------------------------------
Balance at June 30, 2004 $1,251,689 $(9,391) $(919,565)
=============================================================
Balance at December 31, 2002 $1,115,910 $(1,424) $(483,384)
Comprehensive Income:
Net Income 59,835 - - $59,835
Other Comprehensive Income,
Net of Tax:
Change in Unrealized Gains
and Losses on Investment
Securities - - - 753
---------
Total Comprehensive Income $60,588
=========
Common Stock Issued under Stock
Plans and Related Tax Benefits
(992,802 shares) (1,190) (6,744) 15,345
Treasury Stock Purchased
(5,107,779 shares) - - (162,190)
Cash Dividends Paid (22,932) - -
-------------------------------------------------------------
Balance at June 30, 2003 $1,151,623 $(8,168) $(630,229)
=============================================================
Bank of Hawaii Corporation and Subsidiaries
Consolidated Average Balances and Interest Rates - Taxable
Equivalent Basis (Unaudited) Table 5
----------------------------------------------------------------------
Three Months Ended Three Months Ended
June 30, 2004 March 31, 2004
Average Income/ Yield/ Average Income/ Yield/
(dollars in millions) Balance Expense Rate Balance Expense Rate
----------------------------------------------------------------------
Earning Assets
Interest-Bearing
Deposits $408.8 $1.6 1.62% $249.6 $1.2 1.98%
Funds Sold 71.3 0.2 0.99 168.9 0.4 0.99
Investment Securities
Held to Maturity 709.8 6.8 3.80 719.6 7.0 3.90
Available for Sale 2,148.9 21.7 4.05 1,988.5 20.8 4.20
Loans Held for Sale 20.7 0.3 5.54 15.4 0.2 5.33
Loans and Leases
Commercial and
Industrial 828.0 10.2 4.97 844.4 10.1 4.81
Construction 100.4 0.9 3.80 100.4 1.1 4.31
Commercial Mortgage 638.9 8.6 5.39 634.1 8.6 5.45
Residential Mortgage 2,281.8 32.2 5.65 2,317.5 33.3 5.75
Installment 700.4 14.5 8.34 651.0 14.3 8.84
Home Equity 534.6 6.1 4.63 489.2 5.8 4.75
Purchased Home Equity 178.8 1.9 4.16 204.9 2.7 5.18
Lease Financing 510.1 5.6 4.38 500.9 5.4 4.33
----------------------------------------------------------------------
Total Loans and Leases 5,773.0 80.0 5.56 5,742.4 81.3 5.68
----------------------------------------------------------------------
Other 78.1 0.9 4.45 77.5 0.9 4.45
----------------------------------------------------------------------
Total Earning Assets 9,210.6 111.5 4.86 8,961.9 111.8 5.00
----------------------------------------------------------------------
Cash and Non-Interest-
Bearing Deposits 306.3 327.6
Other Assets 376.4 388.4
--------- ---------
Total Assets $9,893.3 $9,677.9
========= =========
Interest-Bearing
Liabilities
Interest-Bearing
Deposits
Demand $1,390.2 0.6 0.17 $1,370.0 0.5 0.15
Savings 2,911.5 3.1 0.43 2,871.6 3.3 0.46
Time 1,129.5 4.9 1.74 1,188.8 5.4 1.83
----------------------------------------------------------------------
Total Interest-Bearing
Deposits 5,431.2 8.6 0.63 5,430.4 9.2 0.68
----------------------------------------------------------------------
Short-Term Borrowings 1,082.5 2.7 1.02 862.3 2.2 1.01
Long-Term Debt 317.3 4.3 5.48 320.9 4.3 5.44
----------------------------------------------------------------------
Total Interest-Bearing
Liabilities 6,831.0 15.6 0.92 6,613.6 15.7 0.96
----------------------------------------------------------------------
Net Interest Income $95.9 $96.1
======= =======
Interest Rate Spread 3.94% 4.04%
Net Interest Margin 4.17% 4.30%
Non-Interest-Bearing
Demand Deposits 1,940.2 1,889.5
Other Liabilities 389.4 373.6
Shareholders' Equity 732.7 801.2
--------- ---------
Total Liabilities and
Shareholders' Equity $9,893.3 $9,677.9
========= =========
Three Months Ended Six Months Ended
June 30, 2003 June 30, 2004
Average Income/ Yield/ Average Income/ Yield/
(dollars in millions) Balance Expense Rate Balance Expense Rate
----------------------------------------------------------------------
Earning Assets
Interest-Bearing
Deposits $212.4 $1.2 2.19% $329.2 $2.8 1.76%
Funds Sold 267.3 0.9 1.23 120.1 0.6 0.99
Investment Securities
Held to Maturity 324.8 3.1 3.85 714.8 13.8 3.85
Available for Sale 2,316.9 19.8 3.42 2,068.7 42.5 4.12
Loans Held for Sale 81.6 1.1 5.43 18.1 0.5 5.45
Loans and Leases
Commercial and
Industrial 834.6 10.0 4.81 836.2 20.3 4.89
Construction 83.0 0.9 4.50 100.4 2.0 4.05
Commercial Mortgage 682.5 10.1 5.93 636.5 17.2 5.42
Residential Mortgage 2,295.1 37.3 6.50 2,299.6 65.5 5.70
Installment 535.6 13.6 10.18 675.7 28.8 8.58
Home Equity 442.7 5.6 5.06 511.9 11.9 4.68
Purchased Home Equity 162.3 2.0 4.96 191.8 4.6 4.70
Lease Financing 482.6 5.3 4.42 505.5 11.0 4.35
----------------------------------------------------------------------
Total Loans and Leases 5,518.4 84.8 6.16 5,757.6 161.3 5.62
----------------------------------------------------------------------
Other 75.3 1.0 5.41 77.8 1.8 4.45
----------------------------------------------------------------------
Total Earning Assets 8,796.7 111.9 5.09 9,086.3 223.3 4.93
----------------------------------------------------------------------
Cash and Non-Interest-
Bearing Deposits 325.6 316.9
Other Assets 385.9 382.4
--------- ---------
Total Assets $9,508.2 $9,785.6
========= =========
Interest-Bearing
Liabilities
Interest-Bearing
Deposits
Demand $1,169.4 0.7 0.25 $1,380.1 1.1 0.16
Savings 2,744.1 4.5 0.65 2,891.6 6.4 0.44
Time 1,427.1 8.2 2.28 1,159.1 10.3 1.79
----------------------------------------------------------------------
Total Interest-Bearing
Deposits 5,340.6 13.4 1.00 5,430.8 17.8 0.66
----------------------------------------------------------------------
Short-Term Borrowings 810.2 2.6 1.30 972.4 4.9 1.02
Long-Term Debt 371.5 5.4 5.84 319.1 8.6 5.46
----------------------------------------------------------------------
Total Interest-Bearing
Liabilities 6,522.3 21.4 1.31 6,722.3 31.3 0.94
----------------------------------------------------------------------
Net Interest Income $90.5 $192.0
======= =======
Interest Rate Spread 3.78% 3.99%
Net Interest Margin 4.12% 4.23%
Non-Interest-Bearing
Demand Deposits 1,695.3 1,914.8
Other Liabilities 358.7 381.5
Shareholders' Equity 931.9 767.0
--------- ---------
Total Liabilities and
Shareholders' Equity $9,508.2 $9,785.6
========= =========
Bank of Hawaii Corporation and Subsidiaries
Analysis of Change in Net Interest Income - Taxable
Equivalent Basis (Unaudited) Table 6
----------------------------------------------------------------------
Three Months Ended June 30, 2004
Compared to March 31, 2004
(dollars in millions) Volume (1) Rate (1) Total
----------------------------------------------------------------------
Change in Interest Income:
Interest-Bearing Deposits $0.6 $(0.2) $0.4
Funds Sold (0.2) - (0.2)
Investment Securities
Held to Maturity - (0.2) (0.2)
Available for Sale 1.6 (0.7) 0.9
Loans Held for Sale 0.1 - 0.1
Loans and Leases
Commercial and Industrial (0.2) 0.3 0.1
Construction - (0.2) (0.2)
Commercial Mortgage 0.1 (0.1) -
Residential Mortgage (0.5) (0.6) (1.1)
Installment 1.0 (0.8) 0.2
Home Equity 0.5 (0.2) 0.3
Purchased Home Equity (0.3) (0.5) (0.8)
Lease Financing 0.1 0.1 0.2
----------------------------------------------------------------------
Total Loans and Leases 0.7 (2.0) (1.3)
----------------------------------------------------------------------
Total Change in Interest Income 2.8 (3.1) (0.3)
----------------------------------------------------------------------
Change in Interest Expense:
Interest-Bearing Deposits
Demand - 0.1 0.1
Savings - (0.2) (0.2)
Time (0.2) (0.3) (0.5)
----------------------------------------------------------------------
Total Interest-Bearing Deposits (0.2) (0.4) (0.6)
----------------------------------------------------------------------
Short-Term Borrowings 0.5 - 0.5
----------------------------------------------------------------------
Total Change in Interest Expense 0.3 (0.4) (0.1)
----------------------------------------------------------------------
Change in Net Interest Income $2.5 $(2.7) $(0.2)
======================================================================
(1) The changes for each category of interest income and expense are
allocated between the portion of changes attributable to the
variance in volume or rate for that category.
Bank of Hawaii Corporation and Subsidiaries
Salaries and Benefits (Unaudited) Table 7
----------------------------------------------------------------------
Three Months Ended Six Months Ended
June 30, June 30,
(dollars in thousands) 2004 2003 2004 2003
----------------------------------------------------------------------
Salaries $27,904 $29,783 $55,108 $58,297
Incentive Compensation 3,260 2,993 7,076 6,584
Stock Based Compensation 3,233 2,206 6,129 3,324
Commission Expense 2,284 2,925 3,911 5,412
Retirement and Other Benefits 4,214 4,091 8,571 8,542
Payroll Taxes 3,103 2,708 6,533 6,157
Medical, Dental, and Life
Insurance 2,136 1,679 4,240 3,749
Separation Expense 555 1,326 1,122 2,075
----------------------------------------------------------------------
Total Salaries and Benefits $46,689 $47,711 $92,690 $94,140
======================================================================
Bank of Hawaii Corporation and Subsidiaries
Loan Portfolio Balances (Unaudited) Table 8
----------------------------------------------------------------------
(dollars in June 30, March 31, Dec. 31, June 30,
thousands) 2004 2004 2003 2003
----------------------------------------------------------------------
Domestic Loans
Commercial
Commercial
and
Industrial $776,815 $793,293 $816,246 $808,503
Commercial
Mortgage 643,382 650,566 639,354 689,759
Construction 98,916 91,002 101,321 83,583
Lease
Financing 447,673 442,590 435,934 416,920
----------------------------------------------------------------------
Total
Commercial 1,966,786 1,977,451 1,992,855 1,998,765
----------------------------------------------------------------------
Consumer
Residential
Mortgage 2,257,624 2,254,654 2,320,410 2,222,003
Home Equity 559,225 510,378 467,019 450,273
Purchased
Home Equity 162,730 191,066 212,514 145,588
Other
Consumer 721,386 671,893 658,831 554,795
Lease
Financing 34,676 34,816 35,320 33,972
----------------------------------------------------------------------
Total Consumer 3,735,641 3,662,807 3,694,094 3,406,631
----------------------------------------------------------------------
Total Domestic
Loans 5,702,427 5,640,258 5,686,949 5,405,396
----------------------------------------------------------------------
Foreign Loans 84,887 74,738 70,226 66,474
----------------------------------------------------------------------
Total Loans and
Leases $5,787,314 $5,714,996 $5,757,175 $5,471,870
======================================================================
Selected Concentrations of Credit Exposure (Unaudited)
----------------------------------------------------------------------
June 30, 2004 Dec. 31, June 30,
2003 (1) 2003 (1)
(dollars in Outstanding Unused Total Total Total
thousands) Commitments Exposure Exposure Exposure
----------------------------------------------------------------------
Air
Transportation
United States
Regional
Passenger
Carriers $45,308 $13,183 $58,491 $59,231 $59,702
United States
National
Passenger
Carriers 37,581 - 37,581 37,259 37,557
Passenger
Carriers
Based Outside
United States 30,325 - 30,325 31,549 31,794
Cargo Carriers 14,122 - 14,122 14,405 14,739
----------------------------------------------------------------------
Total Air
Transportation $127,336 $13,183 $140,519 $142,444 $143,792
======================================================================
Guam
Hotel $15,614 $- $15,614 $17,733 $42,806
Other
Commercial 146,872 42,441 189,313 184,129 183,765
Consumer 306,002 12,075 318,077 288,831 265,851
----------------------------------------------------------------------
Total Guam $468,488 $54,516 $523,004 $490,693 $492,422
======================================================================
Syndicated
Exposure $265,908 $636,293 $902,201 $912,896 $930,118
======================================================================
Other Large
Borrowers (2) $62,734 $216,048 $278,782 $336,748 $372,924
======================================================================
Exposure includes loans, leveraged leases and operating leases.
(1) For three borrowers, reclassifications have occurred between
Regional and National Carriers. Syndicated Exposure has been
restated to include a purchased participation.
(2) Other Large Borrowers is defined as exposure with commitments of
$25 million and greater, excluding those collateralized by cash
and those separately identified as Air Transportation, Guam, and
Syndicated Exposure.
Bank of Hawaii Corporation and Subsidiaries
Consolidated Non-Performing Assets and Accruing Loans Past
Due 90 Days or More (Unaudited) Table 9
----------------------------------------------------------------------
(dollars in June 30, March 31, Dec. 31, Sept. 30, June 30,
thousands) 2004 2004 2003 2003 2003
----------------------------------------------------------------------
Non-Performing
Assets
Non-Accrual
Loans
Commercial
Commercial
and
Industrial $680 $6,009 $6,015 $7,856 $8,832
Commercial
Mortgage 5,649 7,388 9,337 10,977 11,216
Lease
Financing 1,948 1,962 2,181 2,388 2,423
----------------------------------------------------------------------
Total
Commercial 8,277 15,359 17,533 21,221 22,471
----------------------------------------------------------------------
Consumer
Residential
Mortgage 7,688 7,685 9,354 9,669 10,196
Home Equity 306 406 460 497 -
----------------------------------------------------------------------
Total Consumer 7,994 8,091 9,814 10,166 10,196
----------------------------------------------------------------------
Total Non-
Accrual Loans 16,271 23,450 27,347 31,387 32,667
----------------------------------------------------------------------
Foreclosed Real
Estate 4,889 4,416 4,377 8,757 9,285
----------------------------------------------------------------------
Total Non-
Performing
Assets $21,160 $27,866 $31,724 $40,144 $41,952
======================================================================
Accruing Loans
Past Due 90
Days or More
Commercial
Commercial
and
Industrial $19 $707 $725 $695 $523
Commercial
Mortgage 693 702 - - -
Lease
Financing - - 117 - -
----------------------------------------------------------------------
Total
Commercial 712 1,409 842 695 523
----------------------------------------------------------------------
Consumer
Residential
Mortgage 698 595 1,430 2,027 1,817
Home Equity - - - - 84
Purchased
Home Equity 32 107 - 107 98
Other
Consumer 1,142 1,180 1,210 1,059 368
Lease
Financing 57 - - - 19
----------------------------------------------------------------------
Total Consumer 1,929 1,882 2,640 3,193 2,386
----------------------------------------------------------------------
Total Accruing
and Past Due $2,641 $3,291 $3,482 $3,888 $2,909
======================================================================
Total Loans and
Leases $5,787,314 $5,714,996 $5,757,175 $5,570,405 $5,471,870
======================================================================
Ratio of Non-
Accrual Loans
to Total Loans 0.28% 0.41% 0.48% 0.56% 0.60%
----------------------------------------------------------------------
Ratio of Non-
Performing
Assets to
Total Loans
and Foreclosed
Real Estate 0.37% 0.49% 0.55% 0.72% 0.77%
----------------------------------------------------------------------
Ratio of Non-
Performing
Assets and
Accruing Loans
Past Due 90
Days or More
to Total Loans 0.41% 0.55% 0.61% 0.79% 0.82%
----------------------------------------------------------------------
Quarter to
Quarter
Changes in
Non-Performing
Assets
Balance at
Beginning of
Quarter $27,866 $31,724 $40,144 $41,952 $44,217
Additions 3,909 3,293 2,340 3,199 11,603
Reductions
Payments (4,232) (4,555) (3,416) (1,782) (4,279)
Return to
Accrual (2,700) (1,444) (839) (1,464) (7,556)
Sales of
Foreclosed
Assets (147) (310) (4,418) (1,025) (672)
Charge-
offs/Write-
downs (3,536) (842) (2,087) (736) (1,361)
----------------------------------------------------------------------
Total
Reductions (10,615) (7,151) (10,760) (5,007) (13,868)
----------------------------------------------------------------------
Balance at End
of Quarter $21,160 $27,866 $31,724 $40,144 $41,952
======================================================================
Bank of Hawaii Corporation and Subsidiaries
Consolidated Allowance for Loan and Lease Losses
(Unaudited) Table 10
----------------------------------------------------------------------
Three Months Ended Six Months Ended
(dollars in June 30, March 31, June 30, June 30,
thousands) 2004 2004 2003 2004 2003
----------------------------------------------------------------------
Balance at
Beginning of
Period $127,185 $129,080 $140,028 $129,080 $142,853
Loans Charged-
Off
Commercial
Commercial
and
Industrial 3,328 387 565 3,715 2,182
Commercial
Mortgage - 574 400 574 400
Construction - - - - 529
Lease
Financing 379 228 325 607 340
Consumer
Residential
Mortgage 319 145 687 464 1,376
Home Equity 9 - 7 9 89
Purchased
Home Equity 201 90 - 291 -
Other
Consumer 4,564 4,655 3,619 9,219 6,708
Lease
Financing 28 36 50 64 117
----------------------------------------------------------------------
Total Loans
Charged-Off 8,828 6,115 5,653 14,943 11,741
----------------------------------------------------------------------
Recoveries on
Loans
Previously
Charged-Off
Commercial
Commercial
and
Industrial 1,245 954 1,819 2,199 2,391
Commercial
Mortgage 151 689 57 840 74
Construction - 435 55 435 955
Lease
Financing 1 15 - 16 17
Consumer
Residential
Mortgage 304 294 254 598 457
Home Equity 101 39 50 140 103
Purchased
Home Equity 57 - - 57 -
Other
Consumer 1,703 1,663 1,342 3,366 2,669
Lease
Financing 16 55 8 71 53
Foreign 6,469 76 14 6,545 143
----------------------------------------------------------------------
Total
Recoveries on
Loans
Previously
Charged-Off 10,047 4,220 3,599 14,267 6,862
----------------------------------------------------------------------
Net Loan
Recoveries
(Charge-Offs) 1,219 (1,895) (2,054) (676) (4,879)
Provision for
Loan and
Lease Losses (3,500) - - (3,500) -
----------------------------------------------------------------------
Balance at End
of Period $124,904 $127,185 $137,974 $124,904 $137,974
======================================================================
Average Loans
Outstanding $5,772,926 $5,742,368 $5,518,401 $5,757,647 $5,489,783
======================================================================
Ratio of Net
Loan Charge-
Offs to
Average Loans
Outstanding
(annualized) (0.08)% 0.13% 0.15% 0.02% 0.18%
Ratio of
Allowance to
Loans and
Leases
Outstanding 2.16% 2.23% 2.52% 2.16% 2.52%
Bank of Hawaii Corporation and Subsidiaries
Business Segment Selected Financial Information
(Unaudited) Table 11a
----------------------------------------------------------------------
Investment Treasury
(dollars in Retail Commercial Services and Other Consolidated
thousands) Banking Banking Group Corporate Total
----------------------------------------------------------------------
Three Months
Ended June 30,
2004
Net Interest
Income $49,568 $33,607 $2,844 $9,830 $95,849
Provision for
Loan and Lease
Losses 2,587 2,730 (1) (8,816) (3,500)
----------------------------------------------------------------------
Net Interest
Income After
Provision for
Loan and Lease
Losses 46,981 30,877 2,845 18,646 99,349
Non-Interest
Income 24,388 12,188 12,938 5,334 54,848
----------------------------------------------------------------------
71,369 43,065 15,783 23,980 154,197
Non-Interest
Expense (44,560) (23,009) (13,145) (4,411) (85,125)
----------------------------------------------------------------------
Income Before
Income Taxes 26,809 20,056 2,638 19,569 69,072
Provision for
Income Taxes (9,919) (7,421) (976) (6,524) (24,840)
----------------------------------------------------------------------
Allocated Net
Income 16,890 12,635 1,662 13,045 44,232
----------------------------------------------------------------------
Allowance
Funding Value (148) (688) (6) 842 -
GAAP Provision 2,587 2,730 (1) (8,816) (3,500)
Economic
Provision (3,510) (2,821) (99) (3) (6,433)
Tax Effect of
Adjustments 396 288 39 2,951 3,674
----------------------------------------------------------------------
Income Before
Capital Charge 16,215 12,144 1,595 8,019 37,973
Capital Charge (5,485) (5,134) (1,302) (8,231) (20,152)
----------------------------------------------------------------------
Net Income
(Loss) After
Capital Charge
(NIACC) $10,730 $7,010 $293 $(212) $17,821
======================================================================
RAROC (ROE for
the Company) 33% 26% 14% 28% 24%
======================================================================
Total Assets at
June 30, 2004 $3,693,382 $2,331,968 $114,021 $3,549,398 $9,688,769
======================================================================
Three Months
Ended June 30,
2003 (1)
Net Interest
Income $53,139 $34,394 $2,635 $317 $90,485
Provision for
Loan and Lease
Losses 1,321 1,022 - (2,343) -
----------------------------------------------------------------------
Net Interest
Income After
Provision for
Loan and Lease
Losses 51,818 33,372 2,635 2,660 90,485
Non-Interest
Income 26,613 8,302 12,355 3,469 50,739
----------------------------------------------------------------------
78,431 41,674 14,990 6,129 141,224
Information
Technology
Systems
Replacement
Project (368) - (90) (9,647) (10,105)
Non-Interest
Expense (45,238) (23,884) (12,145) (4,022) (85,289)
----------------------------------------------------------------------
Income (Loss)
Before Income
Taxes 32,825 17,790 2,755 (7,540) 45,830
Provision for
Income Taxes (12,145) (6,465) (1,019) 3,833 (15,796)
----------------------------------------------------------------------
Allocated Net
Income (Loss) 20,680 11,325 1,736 (3,707) 30,034
----------------------------------------------------------------------
Allowance
Funding Value (161) (1,100) (7) 1,268 -
GAAP Provision 1,321 1,022 - (2,343) -
Economic
Provision (2,901) (3,031) (108) (5) (6,045)
Tax Effect of
Adjustments 644 1,150 42 401 2,237
----------------------------------------------------------------------
Income (Loss)
Before Capital
Charge 19,583 9,366 1,663 (4,386) 26,226
Capital Charge (5,683) (5,418) (1,255) (13,275) (25,631)
----------------------------------------------------------------------
Net Income
(Loss) After
Capital Charge
(NIACC) $13,900 $3,948 $408 $(17,661) $595
======================================================================
RAROC (ROE for
the Company) 38% 19% 15% (12)% 13%
======================================================================
Total Assets at
June 30, 2003 $3,487,565 $2,242,905 $97,414 $3,723,050 $9,550,934
======================================================================
(1) Certain 2003 information has been reclassified to conform to 2004
presentation.
Bank of Hawaii Corporation and Subsidiaries
Business Segment Selected Financial Information
(Unaudited) Table 11b
----------------------------------------------------------------------
Investment Treasury
(dollars in Retail Commercial Services and Other Consolidated
thousands) Banking Banking Group Corporate Total
----------------------------------------------------------------------
Six Months
Ended June 30,
2004
Net Interest
Income $99,807 $67,671 $5,679 $18,723 $191,880
Provision for
Loan and Lease
Losses 5,334 2,477 48 (11,359) (3,500)
----------------------------------------------------------------------
Net Interest
Income After
Provision for
Loan and Lease
Losses 94,473 65,194 5,631 30,082 195,380
Non-Interest
Income 45,403 22,660 27,338 8,289 103,690
----------------------------------------------------------------------
139,876 87,854 32,969 38,371 299,070
Non-Interest
Expense (87,777) (46,247) (26,082) (8,041) (168,147)
----------------------------------------------------------------------
Income Before
Income Taxes 52,099 41,607 6,887 30,330 130,923
Provision for
Income Taxes (19,277) (15,376) (2,548) (9,691) (46,892)
----------------------------------------------------------------------
Allocated Net
Income 32,822 26,231 4,339 20,639 84,031
----------------------------------------------------------------------
Allowance
Funding Value (277) (1,425) (14) 1,716 -
GAAP Provision 5,334 2,477 48 (11,359) (3,500)
Economic
Provision (6,906) (5,598) (193) (5) (12,702)
Tax Effect of
Adjustments 684 1,682 59 3,570 5,995
----------------------------------------------------------------------
Income Before
Capital Charge 31,657 23,367 4,239 14,561 73,824
Capital Charge (11,255) (10,405) (2,580) (17,950) (42,190)
----------------------------------------------------------------------
Net Income
(Loss) After
Capital Charge
(NIACC) $20,402 $12,962 $1,659 $(3,389) $31,634
======================================================================
RAROC (ROE for
the Company) 31% 25% 18% 27% 22%
======================================================================
Total Assets at
June 30, 2004 $3,693,382 $2,331,968 $114,021 $3,549,398 $9,688,769
======================================================================
Six Months
Ended June 30,
2003 (1)
Net Interest
Income $105,331 $69,353 $5,955 $846 $181,485
Provision for
Loan and Lease
Losses 2,169 3,173 - (5,342) -
----------------------------------------------------------------------
Net Interest
Income After
Provision for
Loan and Lease
Losses 103,162 66,180 5,955 6,188 181,485
Non-Interest
Income 46,310 17,100 25,342 6,740 95,492
----------------------------------------------------------------------
149,472 83,280 31,297 12,928 276,977
Information
Technology
Systems
Replacement
Project (950) (23) (334) (16,215) (17,522)
Non-Interest
Expense (88,878) (47,308) (24,374) (7,512) (168,072)
----------------------------------------------------------------------
Income (Loss)
Before Income
Taxes 59,644 35,949 6,589 (10,799) 91,383
Provision for
Income Taxes (22,068) (13,087) (2,438) 6,045 (31,548)
----------------------------------------------------------------------
Allocated Net
Income (Loss) 37,576 22,862 4,151 (4,754) 59,835
----------------------------------------------------------------------
Allowance
Funding Value (313) (2,241) (17) 2,571 -
GAAP Provision 2,169 3,173 - (5,342) -
Economic
Provision (5,609) (6,094) (236) (10) (11,949)
Tax Effect of
Adjustments 1,389 1,910 93 1,029 4,421
----------------------------------------------------------------------
Income (Loss)
Before Capital
Charge 35,212 19,610 3,991 (6,506) 52,307
Capital Charge (11,255) (10,865) (2,523) (27,740) (52,383)
----------------------------------------------------------------------
Net Income
(Loss) After
Capital Charge
(NIACC) $23,957 $8,745 $1,468 $(34,246) $(76)
======================================================================
RAROC (ROE for
the Company) 35% 20% 18% (9)% 13%
======================================================================
Total Assets at
June 30, 2003 $3,487,565 $2,242,905 $97,414 $3,723,050 $9,550,934
======================================================================
(1) Certain 2003 information has been reclassified to conform to 2004
presentation.
Bank of Hawaii Corporation and Subsidiaries
Quarterly Summary of Selected Consolidated Financial Data
(Unaudited) Table 12
----------------------------------------------------------------------
(dollars in Three Months Ended
thousands
except per June 30, March 31, Dec. 31, Sept. 30, June 30,
share amounts) 2004 2004 2003 2003 2003
----------------------------------------------------------------------
Quarterly
Operating
Results
Interest
Income
Interest and
Fees on
Loans and
Leases $80,346 $81,428 $80,351 $82,715 $85,954
Income on
Investment
Securities -
Held to
Maturity 6,711 6,976 7,183 6,407 3,083
Income on
Investment
Securities -
Available
for Sale 21,745 20,846 19,032 16,483 19,815
Deposits 1,646 1,231 1,169 1,179 1,161
Funds Sold 177 417 85 248 822
Other 865 858 1,007 1,032 1,016
----------------------------------------------------------------------
Total Interest
Income 111,490 111,756 108,827 108,064 111,851
----------------------------------------------------------------------
Interest
Expense
Deposits 8,560 9,200 9,433 10,284 13,309
Securities
Sold Under
Agreements
to
Repurchase 2,222 1,926 1,359 1,947 2,391
Funds
Purchased 506 231 249 271 219
Short-Term
Borrowings 13 15 17 26 25
Long-Term
Debt 4,340 4,353 4,417 4,431 5,422
----------------------------------------------------------------------
Total Interest
Expense 15,641 15,725 15,475 16,959 21,366
----------------------------------------------------------------------
Net Interest
Income 95,849 96,031 93,352 91,105 90,485
Provision for
Loan and
Lease Losses (3,500) - - - -
----------------------------------------------------------------------
Net Interest
Income After
Provision for
Loan and
Lease Losses 99,349 96,031 93,352 91,105 90,485
----------------------------------------------------------------------
Non-Interest
Income
Trust and
Asset
Management 12,995 13,864 12,759 12,511 12,545
Mortgage
Banking 2,808 1,977 3,324 5,888 6,061
Service
Charges on
Deposit
Accounts 9,540 9,950 9,442 8,901 8,645
Fees,
Exchange,
and Other
Service
Charges 14,243 13,239 13,725 16,034 13,473
Investment
Securities
Gains
(Losses) (37) - (20) 639 587
Insurance 3,303 3,643 3,597 3,988 3,015
Other 11,996 6,169 6,610 5,830 6,413
----------------------------------------------------------------------
Total Non-
Interest
Income 54,848 48,842 49,437 53,791 50,739
----------------------------------------------------------------------
Non-Interest
Expense
Salaries and
Benefits 46,689 46,001 46,409 45,731 47,711
Net Occupancy
Expense 9,543 9,386 9,933 9,806 9,628
Net Equipment
Expense 5,799 5,964 7,395 7,301 9,208
Information
Technology
Systems
Replacement
Project - - - 4,349 10,105
Other 23,094 21,671 19,667 21,690 18,742
----------------------------------------------------------------------
Total Non-
Interest
Expense 85,125 83,022 83,404 88,877 95,394
----------------------------------------------------------------------
Income Before
Income Taxes 69,072 61,851 59,385 56,019 45,830
Provision for
Income Taxes 24,840 22,052 20,712 19,332 15,796
----------------------------------------------------------------------
Net Income $44,232 $39,799 $38,673 $36,687 $30,034
======================================================================
Basic Earnings
Per Share $0.84 $0.73 $0.70 $0.64 $0.50
Diluted
Earnings Per
Share $0.79 $0.69 $0.66 $0.61 $0.48
Balance Sheet
Totals
Total Assets $9,688,769 $10,013,442 $9,461,647 $9,370,755 $9,550,934
Net Loans 5,662,410 5,587,811 5,628,095 5,437,730 5,333,896
Total Deposits 7,469,288 7,363,922 7,332,779 7,102,116 7,140,849
Total
Shareholders'
Equity 699,438 785,768 793,132 823,760 913,010
Performance
Ratios
Net Income to
Average Total
Assets (ROA) 1.80% 1.65% 1.66% 1.53% 1.27%
Net Income to
Average
Shareholders'
Equity (ROE) 24.28% 19.98% 18.59% 16.69% 12.93%
Efficiency
Ratio (1) 56.49% 57.31% 58.41% 61.34% 67.55%
Efficiency
Ratio
excluding
System
Replacement
Costs 56.49% 57.31% 58.41% 58.34% 60.39%
(1) The efficiency ratio is defined as non-interest expense divided by
total revenue (net interest income and non-interest income).
CONTACT: Bank of Hawaii Corporation
Stafford Kiguchi, 808-537-8580 (Media)
pager: 877-849-5423
skiguchi@boh.com
Cindy Wyrick, 808-537-8430 (Investors/Analysts)
cwyrick@boh.com
SOURCE: Bank of Hawaii Corporation