Bank of Hawaii Corporation Second Quarter 2005 Financial Results
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HONOLULU--(BUSINESS WIRE)--July 25, 2005--Bank of Hawaii Corporation (NYSE:BOH)
- Diluted Earnings Per Share $0.87; Net Income $46.4 Million
- Board of Directors Declares Dividend of $0.33 Per Share
Bank of Hawaii Corporation (NYSE:BOH) today reported diluted earnings per share of $0.87 for the second quarter of 2005, an increase from diluted earnings per share of $0.83 in the first quarter of 2005 and an increase from $0.79 in the second quarter of 2004. Net income for the second quarter of 2005 was $46.4 million, up $0.9 million from net income of $45.5 million in the previous quarter and up $2.2 million from $44.2 million reported in the same quarter last year.
Results for the second quarter of 2004 included a return to income of $3.5 million before tax ($2.2 million after tax or $0.04 per diluted share), resulting from the release of a portion of the allowance for loan and lease losses. Excluding the release of reserves, results for the second quarter of 2005 increased $4.4 million or $0.12 per diluted share from the same quarter last year.
Return on average assets for the second quarter of 2005 was 1.87 percent, compared to 1.88 percent in the first quarter of 2005, and 1.80 percent in the second quarter of 2004. Return on average equity was 25.98 percent for the second quarter of 2005, up from 23.66 percent in the previous quarter and up from 24.28 percent in the same quarter last year.
"Bank of Hawaii Corporation completed another quarter of solid financial performance," said Allan R. Landon, Chairman and CEO. "We continued to focus on meeting the financial needs of our customers, which contributed to the growth of our businesses in the second quarter."
For the six months ended June 30, 2005, net income was $92.0 million, up $7.9 million or 9.4 percent from net income of $84.0 million for the same period last year. Diluted earnings per share were $1.69 for the first half of 2005, an increase of 14.2 percent from diluted earnings per share of $1.48 for the first half of 2004. The year-to-date return on average assets was 1.87 percent, up from 1.73 percent for the same six months in 2004. The year-to-date return on average equity was 24.78 percent, up from 22.03 percent for the six months ended June 30, 2004.
Financial Highlights
Net interest income, on a taxable equivalent basis, for the second quarter of 2005 was $101.1 million, up $0.4 million from $100.7 million in the first quarter of 2005 and up $5.2 million from $95.9 million in the second quarter of last year. The increase in net interest income from the second quarter of 2004 was largely due to growth in the loan portfolio. An analysis of the change in net interest income from the previous quarter is included in Table 6.
The net interest margin was 4.36 percent for the second quarter of 2005, a 7 basis point decrease from 4.43 percent in the previous quarter and a 19 basis point increase from 4.17 percent in the second quarter of 2004. The decrease from the previous quarter was primarily due to the effects of the flattening yield curve.
The Company did not recognize a provision for loan and lease losses during the second or first quarters of 2005. As previously mentioned, the Company returned to income $3.5 million from a release of the allowance for loan and lease losses during the second quarter of 2004.
Non-interest income was $50.7 million for the second quarter of 2005, a decrease of $1.6 million or 3.1 percent compared to non-interest income of $52.3 million in the first quarter of 2005. The decrease was largely due to a decline in insurance income, deposit account analysis fees, and personal tax preparation fees which are traditionally higher in the first quarter. Non-interest income was $54.8 million in the same quarter last year, including a partnership distribution of $3.2 million and a gain of $2.5 million on the sale of land. Excluding these items, non-interest income increased $1.5 million or 3.0 percent over the second quarter of 2004.
Non-interest expense was $79.0 million in the second quarter of 2005, down $1.9 million or 2.3 percent from non-interest expense of $80.9 million in the previous quarter and down $6.1 million or 7.2 percent from $85.1 million in the same quarter last year. Included in the second quarter of 2004 were charges of $2.2 million to settle litigation. Excluding these charges, non-interest expense decreased $3.9 million or 4.7 percent largely due to a decline in expenses for salaries and benefits. An analysis of salary and benefit expenses is included in Table 7.
The efficiency ratio for the second quarter of 2005 was 52.07 percent, an improvement from 52.86 percent in the previous quarter and from 56.49 percent in the same quarter 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. Selected financial information for the business segments is included in Tables 11a and 11b.
Asset Quality
Bank of Hawaii Corporation's asset quality continued to improve when compared to prior quarters. Non-performing assets were $10.9 million at the end of the second quarter of 2005, a decrease of $2.4 million, or 18.3 percent, compared to non-performing assets of $13.4 million at the end of the previous quarter and a decrease of $10.2 million, or 48.4 percent, compared to $21.2 million at the end of the same quarter last year. At June 30, 2005 the ratio of non-performing assets to total loans, foreclosed real estate, and other investments was 0.18 percent compared with 0.22 percent at March 31, 2005 and 0.37 percent at June 30, 2004.
Non-accrual loans were $9.9 million at June 30, 2005, a reduction of $2.6 million, or 20.4 percent, from $12.5 million at March 31, 2005 and down $6.3 million, or 38.9 percent, from $16.3 million at June 30, 2004. Non-accrual loans as a percentage of total loans at June 30, 2005 were 0.16 percent, down from 0.21 percent at March 31, 2005 and down from 0.28 percent at June 30, 2004.
Net charge-offs for the second quarter of 2005 were $3.7 million, or 0.25 percent (annualized) of total average loans, unchanged from the first quarter of 2005. During the second quarter of 2004 there was a net recovery of $1.2 million. Net charge-offs in the second quarter of 2005 were comprised of $5.6 million in charge-offs partially offset by recoveries of $1.9 million.
The allowance for loan and lease losses was $101.6 million at June 30, 2005, down from $105.0 million at March 31, 2005 and down from $124.9 million at June 30, 2004. The decrease in the allowance from the previous year is largely due to $10.0 million returned to income from releases of the allowance for loan and lease losses during 2004. In addition, during the fourth quarter of 2004, $6.8 million was reclassified from the allowance for loan and lease losses to other liabilities representing the estimate for losses related to unfunded commitments to extend credit. The $3.4 million decrease in the allowance from the previous quarter was primarily due to net charge-offs. The allowance for unfunded commitments at June 30, 2005 was $4.6 million, down from $4.9 million at March 31, 2005.
The ratio of the allowance for loan and lease losses to total loans was 1.65 percent at June 30, 2005, down slightly from 1.75 percent at March 31, 2005 and down from 2.16 percent at June 30, 2004. If the allowance for unfunded commitments had been reclassified at June 30, 2004, the ratio of the allowance for loan and lease losses to total loans would have been 2.06 percent.
Credit exposure to the air transportation industry is summarized in Table 8.
Other Financial Highlights
Total assets were $10.06 billion at June 30, 2005, up from $9.91 billion at March 31, 2005 and up from $9.69 billion at June 30, 2004. Total loans and leases were $6.15 billion at June 30, 2005, up from $6.02 billion at March 31, 2005 and up from $5.79 billion at June 30, 2004. Commercial loans were $2.20 billion at June 30, 2005, up from $2.10 billion at March 31, 2005 and $2.02 billion at June 30, 2004 as commercial loan originations strengthened during the quarter and outpaced payoff activity. Consumer loans were $3.95 billion at June 30, 2005, up from $3.91 billion at March 31, 2005 and $3.76 billion at June 30, 2004 primarily as a result of increases in home equity outstandings from successful loan promotions in a strong Hawaii residential real estate market.
Total deposits at June 30, 2005 were $7.73 billion, slightly down from $7.76 billion at March 31, 2005 and up from $7.47 billion at June 30, 2004. On a linked quarter basis, balances in interest-bearing checking accounts decreased, despite an increase in the number of accounts, mostly due to customers who transferred excess account balances to higher rate time deposits resulting in a growth in time deposits on a linked quarter and year-to-date comparison.
During the second quarter of 2005, Bank of Hawaii Corporation repurchased 1.3 million shares of common stock at a total cost of $60.8 million under its share repurchase program. The average cost was $47.22 per share repurchased. From the beginning of the share repurchase program in July 2001 through June 30, 2005, the Company has repurchased a total of 38.6 million shares and returned a total of $1.3 billion to the shareholders at an average cost of $32.67 per share. From July 1, 2005 through July 22, 2005, the Company repurchased an additional 0.1 million shares of common stock at an average cost of $52.90 per share. Remaining buyback authority under the share repurchase program was $85.1 million at July 22, 2005.
The Company's capital and liquidity remain strong. At June 30, 2005 the Tier 1 leverage ratio was 7.18 percent compared to 7.42 percent at March 31, 2005 and 7.16 percent at June 30, 2004.
The Company's Board of Directors has declared a quarterly cash dividend of $0.33 per share on the Company's outstanding shares. The dividend will be payable on September 15, 2005 to shareholders of record at the close of business on August 29, 2005.
Financial Outlook
Bank of Hawaii Corporation's earnings estimate of approximately $176.0 million to $179.0 million in net income for the full year of 2005 remains unchanged. The Company performs a quarterly analysis of credit quality to determine the adequacy of the reserve for credit losses. The results of this analysis determine the timing and amount of the provision for loan and lease losses. Earnings per share and return on equity projections continue to be dependent upon, among other things, the terms and timing of share repurchases.
Economy
Hawaii continued to experience record high tourism volumes, home prices and employment during the second quarter of 2005. Unemployment declined to 2.7 percent in the quarter, job growth remained strong and Hawaii personal income growth was 6.0 percent (3.0 percent after adjusting for inflation). Construction continued to grow during the second quarter of 2005, including private and military housing initiatives.
Conference Call Information
The Company will review its second quarter 2005 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 800-573-4842 in the United States or 617-224-4327 for international callers. No confirmation code is required to access the call. A replay will be available for one week beginning Monday, July 25, 2005 by calling 888-286-8010 in the United States or 617-801-6888 for international callers and entering the number 37453795 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, including the statements under the caption "Financial Outlook," contains forward-looking statements concerning, among other things, the economic and business environment in our service area and elsewhere, credit quality, the expected level of loan and lease loss provisioning, anticipated net income and other financial and business matters in future periods. 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, legislation in Hawaii and the other markets we serve, or the timing and interpretation of accounting standards; 2) changes in our credit quality or risk profile which may increase or decrease the required level of reserve for credit 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 and repayment of maturing debt; 5) real or threatened acts of war or terrorist activity affecting business conditions; and 6) 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 Three Months Ended Six Months Ended
except per share June 30, June 30,
amounts) 2005 2004 2005 2004
----------------------------------------------------------------------
For the Period:
Interest Income $ 124,105 $ 111,490 $ 244,263 $ 223,246
Net Interest Income 101,039 95,849 201,697 191,880
Net Income 46,429 44,232 91,951 84,031
Basic Earnings Per
Share 0.90 0.84 1.75 1.57
Diluted Earnings Per
Share 0.87 0.79 1.69 1.48
Dividends Declared Per
Share 0.33 0.30 0.66 0.60
Net Income to Average
Total Assets (ROA) 1.87% 1.80% 1.87% 1.73%
Net Income to Average
Shareholders' Equity
(ROE) 25.98 24.28 24.78 22.03
Net Interest Margin (1) 4.36 4.17 4.39 4.23
Efficiency Ratio (2) 52.07 56.49 52.47 56.89
Average Assets $9,969,243 $9,893,303 $9,907,845 $9,785,603
Average Loans and
Leases 6,090,149 5,772,926 6,045,609 5,757,647
Average Deposits 7,747,331 7,371,388 7,717,729 7,345,645
Average Shareholders'
Equity 716,767 732,652 748,344 766,950
Average Equity to
Average Assets 7.19% 7.41% 7.55% 7.84%
June 30,
2005 2004
----------------------------------------------------------------------
At Period End:
Net Loans $ 6,049,831 $5,662,410
Total Assets 10,059,690 9,688,769
Deposits 7,726,758 7,469,288
Long-Term Debt 242,674 297,600
Shareholders' Equity 712,169 699,438
Allowance to Loans and
Leases Outstanding 1.65% 2.16%
Dividend Payout Ratio 37.71 38.22
Leverage Ratio 7.18 7.16
Book Value Per Common
Share $ 13.73 $ 13.34
Employees (FTE) 2,561 2,683
Branches and offices 86 89
Market Price Per Share
of Common Stock for
the Quarter Ended:
Closing $ 50.75 $ 45.22
High 51.30 46.84
Low 43.82 40.97
(1) The net interest margin is defined as net interest income, on a
fully-taxable equivalent basis, as a percentage of average earning
assets.
(2) 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) 2005 2004 (1) 2005 2004 (1)
----------------------------------------------------------------------
Interest Income
Interest and Fees
on Loans and Leases $ 90,119 $ 80,346 $ 176,586 $ 161,774
Income on Investment
Securities -
Available for Sale 27,987 21,745 55,306 42,591
Income on Investment
Securities - Held
to Maturity 5,527 6,711 11,352 13,687
Deposits 36 1,646 59 2,877
Funds Sold 165 177 240 594
Other 271 865 720 1,723
----------------------------------------------------------------------
Total Interest Income 124,105 111,490 244,263 223,246
----------------------------------------------------------------------
Interest Expense
Deposits 13,577 8,560 25,181 17,760
Securities Sold
Under Agreements
to Repurchase 4,562 2,222 7,887 4,148
Funds Purchased 1,151 506 1,884 737
Short-Term Borrowings 45 13 77 28
Long-Term Debt 3,731 4,340 7,537 8,693
----------------------------------------------------------------------
Total Interest Expense 23,066 15,641 42,566 31,366
----------------------------------------------------------------------
Net Interest Income 101,039 95,849 201,697 191,880
Provision for Loan and
Lease Losses - (3,500) - (3,500)
----------------------------------------------------------------------
Net Interest Income
After Provision for
Loan and Lease Losses 101,039 99,349 201,697 195,380
----------------------------------------------------------------------
Non-Interest Income
Trust and Asset
Management 14,058 12,995 28,680 26,859
Mortgage Banking 2,594 2,808 5,184 4,785
Service Charges on
Deposit Accounts 9,569 9,540 19,748 19,490
Fees, Exchange, and
Other Service Charges 15,211 14,243 29,047 27,482
Investment Securities
Gains (Losses) 337 (37) 337 (37)
Insurance 4,330 4,926 10,118 9,584
Other 4,575 10,373 9,875 15,527
----------------------------------------------------------------------
Total Non-Interest
Income 50,674 54,848 102,989 103,690
----------------------------------------------------------------------
Non-Interest Expense
Salaries and Benefits 43,856 46,689 88,625 92,690
Net Occupancy Expense 9,189 9,543 18,734 18,929
Net Equipment Expense 5,377 5,799 10,848 11,763
Other 20,582 23,094 41,660 44,765
----------------------------------------------------------------------
Total Non-Interest
Expense 79,004 85,125 159,867 168,147
----------------------------------------------------------------------
Income Before Income
Taxes 72,709 69,072 144,819 130,923
Provision for Income
Taxes 26,280 24,840 52,868 46,892
----------------------------------------------------------------------
Net Income $ 46,429 $ 44,232 $ 91,951 $ 84,031
======================================================================
Basic Earnings Per
Share $ 0.90 $ 0.84 $ 1.75 $ 1.57
Diluted Earnings Per
Share $ 0.87 $ 0.79 $ 1.69 $ 1.48
Dividends Declared Per
Share $ 0.33 $ 0.30 $ 0.66 $ 0.60
Basic Weighted Average
Shares 51,873,772 52,491,874 52,646,022 53,389,261
Diluted Weighted
Average Shares 53,403,781 55,662,415 54,250,018 56,710,653
======================================================================
(1) Certain 2004 information has been reclassified to conform to 2005
presentation.
Bank of Hawaii Corporation and Subsidiaries
Consolidated Statements of Condition (Unaudited) Table 3
----------------------------------------------------------------------
June 30, Dec. 31, June 30,
(dollars in thousands) 2005 2004 2004
----------------------------------------------------------------------
Assets
Interest-Bearing Deposits $ 4,825 $ 4,592 $ 179,680
Investment Securities -
Available for Sale
Held in Portfolio 2,396,204 2,483,719 2,275,272
Pledged as Collateral 117,947 - -
Investment Securities - Held to
Maturity
(Fair Value of $522,993,
$585,836, and $663,534) 526,767 589,908 679,382
Funds Sold 50,000 21,000 -
Loans Held for Sale 17,435 17,642 9,565
Loans and Leases 6,151,418 5,986,930 5,787,314
Allowance for Loan and Lease
Losses (101,587) (106,796) (124,904)
----------------------------------------------------------------------
Net Loans 6,049,831 5,880,134 5,662,410
----------------------------------------------------------------------
Total Earning Assets 9,163,009 8,996,995 8,806,309
----------------------------------------------------------------------
Cash and Non-Interest-Bearing
Deposits 293,115 225,359 339,486
Premises and Equipment 137,907 146,095 149,128
Customers' Acceptance Liability 1,598 1,406 1,213
Accrued Interest Receivable 38,540 36,044 36,378
Foreclosed Real Estate 292 191 4,889
Mortgage Servicing Rights 18,239 18,769 20,819
Goodwill 34,959 36,216 36,216
Other Assets 372,031 305,116 294,331
----------------------------------------------------------------------
Total Assets $10,059,690 $ 9,766,191 $ 9,688,769
======================================================================
Liabilities
Deposits
Non-Interest-Bearing Demand $ 1,918,749 $ 1,977,703 $ 1,939,580
Interest-Bearing Demand 1,641,873 1,536,323 1,464,207
Savings 2,967,993 2,960,351 2,976,108
Time 1,198,143 1,090,290 1,089,393
----------------------------------------------------------------------
Total Deposits 7,726,758 7,564,667 7,469,288
----------------------------------------------------------------------
Securities Sold Under
Agreements to Repurchase 861,233 568,981 687,816
Funds Purchased 63,565 149,635 139,055
Short-Term Borrowings 9,894 15,000 11,055
Banker's Acceptances Outstanding 1,598 1,406 1,213
Retirement Benefits Payable 66,638 65,708 62,821
Accrued Interest Payable 8,617 7,021 7,169
Taxes Payable and Deferred Taxes 283,082 229,928 225,989
Other Liabilities 83,462 96,373 87,325
Long-Term Debt 242,674 252,638 297,600
----------------------------------------------------------------------
Total Liabilities 9,347,521 8,951,357 8,989,331
----------------------------------------------------------------------
Shareholders' Equity
Common Stock ($.01 par value);
authorized 500,000,000 shares;
issued / outstanding: June
2005 - 81,721,733 / 51,853,734,
December 2004 - 81,711,752 /
54,960,857, June 2004 -
81,711,599 / 52,426,010 815 813 813
Capital Surplus 457,280 450,998 403,150
Accumulated Other Comprehensive
Income (Loss) (18,471) (12,917) (27,258)
Retained Earnings 1,339,119 1,282,425 1,251,689
Deferred Stock Grants (7,166) (8,433) (9,391)
Treasury Stock, at Cost
(Shares: June 2005 -
29,867,999, December 2004
- 26,750,895, June 2004 -
29,285,589) (1,059,408) (898,052) (919,565)
----------------------------------------------------------------------
Total Shareholders' Equity 712,169 814,834 699,438
----------------------------------------------------------------------
Total Liabilities and
Shareholders' Equity $10,059,690 $ 9,766,191 $ 9,688,769
======================================================================
Bank of Hawaii Corporation and Subsidiaries
Consolidated Statements of Shareholders' Equity
(Unaudited) Table 4
----------------------------------------------------------------------
Accum.
Other
Compre-
hensive
(dollars in Common Capital Income Retained
thousands) Total Stock Surplus (Loss) Earnings
----------------------------------------------------------------------
Balance at December
31, 2004 $814,834 $813 $450,998 $(12,917) $1,282,425
Comprehensive Income:
Net Income 91,951 - - - 91,951
Other
Comprehensive
Income, Net of
Tax:
Change in
Unrealized
Gains and
Losses on
Investment
Securities (5,554) - - (5,554) -
Total
Comprehensive
Income
Common Stock Issued
under Stock Plans and
Related Tax Benefits
(605,364 shares) 21,499 2 6,282 - (610)
Treasury Stock
Purchased (3,710,379
shares) (175,914) - - - -
Cash Dividends Paid (34,647) - - - (34,647)
----------------------------------------------------------------------
Balance at June 30,
2005 $712,169 $815 $457,280 $(18,471) $1,339,119
======================================================================
Balance at December
31, 2003 $793,132 $807 $391,701 $ (5,711) $1,199,077
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) - - (21,547) -
Total
Comprehensive
Income
Common Stock Issued
under Stock Plans and
Related Tax Benefits
(908,502 shares) 32,028 6 11,449 - 803
Treasury Stock
Purchased (3,527,779
shares) (155,984) - - - -
Cash Dividends Paid (32,222) - - - (32,222)
----------------------------------------------------------------------
Balance at June 30,
2004 $699,438 $813 $403,150 $(27,258) $1,251,689
======================================================================
Deferred Compre-
Stock Treasury hensive
(dollars in thousands) Grants Stock Income
----------------------------------------------------------------------
Balance at December 31, 2004 $(8,433) $ (898,052)
Comprehensive Income:
Net Income - - $91,951
Other Comprehensive
Income, Net of Tax:
Change in Unrealized
Gains and Losses on
Investment Securities - - (5,554)
------------
Total Comprehensive
Income $86,397
============
Common Stock Issued under Stock
Plans and Related Tax Benefits
(605,364 shares) 1,267 14,558
Treasury Stock Purchased
(3,710,379 shares) - (175,914)
Cash Dividends Paid - -
---------------------------------------------------------
Balance at June 30, 2005 $(7,166) $(1,059,408)
=========================================================
Balance at December 31, 2003 $(8,309) $ (784,433)
Comprehensive Income:
Net Income - - $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) (1,082) 20,852
Treasury Stock Purchased
(3,527,779 shares) - (155,984)
Cash Dividends Paid - -
---------------------------------------------------------
Balance at June 30, 2004 $(9,391) $ (919,565)
=========================================================
Bank of Hawaii Corporation and Subsidiaries
Consolidated Average Balances and Interest Rates - Taxable Equivalent
Basis (Unaudited) Table 5
----------------------------------------------------------------------
Three Months Ended
June 30, 2005
Average Income/ Yield/
(dollars in millions) Balance Expense Rate
----------------------------------------------------------------------
Earning Assets
Interest-Bearing Deposits $ 6.0 $ - 2.36%
Funds Sold 23.1 0.2 2.86
Investment Securities
Available for Sale 2,542.5 28.0 4.41
Held to Maturity 544.1 5.5 4.06
Loans Held for Sale 15.1 0.2 5.72
Loans and Leases (2)
Commercial and Industrial 945.0 14.3 6.07
Construction 140.9 2.1 5.91
Commercial Mortgage 599.3 8.8 5.89
Residential Mortgage 2,343.9 33.1 5.64
Other Revolving Credit and
Installment 739.6 15.4 8.37
Home Equity 719.0 10.8 6.01
Purchased Home Equity 103.3 0.8 3.06
Lease Financing 499.2 4.7 3.74
----------------------------------------------------------------------
Total Loans and Leases 6,090.2 90.0 5.91
----------------------------------------------------------------------
Other 66.3 0.3 1.64
----------------------------------------------------------------------
Total Earning Assets (3) 9,287.3 124.2 5.35
----------------------------------------------------------------------
Cash and Non-Interest-Bearing
Deposits 305.8
Other Assets 376.1
----------
Total Assets $9,969.2
==========
Interest-Bearing Liabilities
Interest-Bearing Deposits
Demand $1,667.3 2.4 0.58
Savings 2,970.8 4.8 0.65
Time 1,159.0 6.4 2.20
----------------------------------------------------------------------
Total Interest-Bearing Deposits 5,797.1 13.6 0.94
----------------------------------------------------------------------
Short-Term Borrowings 822.9 5.8 2.81
Long-Term Debt 242.7 3.7 6.16
----------------------------------------------------------------------
Total Interest-Bearing Liabilities 6,862.7 23.1 1.35
----------------------------------------------------------------------
Net Interest Income $ 101.1
==========
Interest Rate Spread 4.00%
Net Interest Margin 4.36%
Non-Interest-Bearing Demand Deposits 1,950.2
Other Liabilities 439.5
Shareholders' Equity 716.8
----------
Total Liabilities and Shareholders'
Equity $9,969.2
==========
Three Months Ended
March 31, 2005
Average Income/ Yield/
(dollars in millions) Balance Expense Rate
----------------------------------------------------------------------
Earning Assets
Interest-Bearing Deposits $ 4.8 $ - 1.93%
Funds Sold 12.6 0.1 2.37
Investment Securities
Available for Sale 2,491.1 27.4 4.40
Held to Maturity 574.6 5.8 4.06
Loans Held for Sale 13.2 0.2 5.40
Loans and Leases (2)
Commercial and Industrial 904.3 13.2 5.90
Construction 124.1 1.7 5.44
Commercial Mortgage 605.9 8.5 5.73
Residential Mortgage 2,332.1 32.6 5.59
Other Revolving Credit and
Installment 736.8 15.0 8.27
Home Equity 678.8 9.5 5.65
Purchased Home Equity 116.8 1.0 3.54
Lease Financing 501.8 4.8 3.88
----------------------------------------------------------------------
Total Loans and Leases 6,000.6 86.3 5.80
----------------------------------------------------------------------
Other 53.9 0.4 3.38
----------------------------------------------------------------------
Total Earning Assets (3) 9,150.8 120.2 5.29
----------------------------------------------------------------------
Cash and Non-Interest-Bearing
Deposits 315.6
Other Assets 379.4
----------
Total Assets $9,845.8
==========
Interest-Bearing Liabilities
Interest-Bearing Deposits
Demand $1,618.1 1.7 0.42
Savings 2,972.3 4.4 0.60
Time 1,114.7 5.5 2.02
----------------------------------------------------------------------
Total Interest-Bearing Deposits 5,705.1 11.6 0.82
----------------------------------------------------------------------
Short-Term Borrowings 706.2 4.1 2.35
Long-Term Debt 248.7 3.8 6.14
----------------------------------------------------------------------
Total Interest-Bearing Liabilities 6,660.0 19.5 1.19
----------------------------------------------------------------------
Net Interest Income $ 100.7
==========
Interest Rate Spread 4.10%
Net Interest Margin 4.43%
Non-Interest-Bearing Demand Deposits 1,982.7
Other Liabilities 422.8
Shareholders' Equity 780.3
----------
Total Liabilities and Shareholders'
Equity $9,845.8
==========
Three Months Ended
June 30, 2004 (1)
Average Income/ Yield/
(dollars in millions) Balance Expense Rate
----------------------------------------------------------------------
Earning Assets
Interest-Bearing Deposits $ 408.8 $ 1.6 1.62%
Funds Sold 71.3 0.2 0.99
Investment Securities
Available for Sale 2,148.9 21.8 4.06
Held to Maturity 709.8 6.7 3.78
Loans Held for Sale 20.7 0.3 5.54
Loans and Leases (2)
Commercial and Industrial 845.2 10.3 4.90
Construction 100.4 0.9 3.80
Commercial Mortgage 638.9 8.6 5.39
Residential Mortgage 2,281.8 32.2 5.65
Other Revolving Credit and
Installment 683.2 14.4 8.51
Home Equity 534.6 6.1 4.63
Purchased Home Equity 178.8 1.9 4.16
Lease Financing 510.1 5.6 4.38
----------------------------------------------------------------------
Total Loans and Leases 5,773.0 80.0 5.56
----------------------------------------------------------------------
Other 78.1 0.9 4.45
----------------------------------------------------------------------
Total Earning Assets (3) 9,210.6 111.5 4.86
----------------------------------------------------------------------
Cash and Non-Interest-Bearing
Deposits 306.3
Other Assets 376.4
----------
Total Assets $9,893.3
==========
Interest-Bearing Liabilities
Interest-Bearing Deposits
Demand $1,390.2 0.6 0.17
Savings 2,911.5 3.1 0.43
Time 1,129.5 4.9 1.74
----------------------------------------------------------------------
Total Interest-Bearing Deposits 5,431.2 8.6 0.63
----------------------------------------------------------------------
Short-Term Borrowings 1,082.5 2.7 1.02
Long-Term Debt 317.3 4.3 5.48
----------------------------------------------------------------------
Total Interest-Bearing Liabilities 6,831.0 15.6 0.92
----------------------------------------------------------------------
Net Interest Income $ 95.9
==========
Interest Rate Spread 3.94%
Net Interest Margin 4.17%
Non-Interest-Bearing Demand Deposits 1,940.2
Other Liabilities 389.4
Shareholders' Equity 732.7
----------
Total Liabilities and Shareholders'
Equity $9,893.3
==========
Six Months Ended
June 30, 2005
Average Income/ Yield/
(dollars in millions) Balance Expense Rate
----------------------------------------------------------------------
Earning Assets
Interest-Bearing Deposits $ 5.4 $ 0.1 2.17%
Funds Sold 17.9 0.2 2.68
Investment Securities
Available for Sale 2,517.0 55.4 4.41
Held to Maturity 559.3 11.4 4.06
Loans Held for Sale 14.1 0.4 5.57
Loans and Leases (2)
Commercial and Industrial 924.8 27.5 5.99
Construction 132.5 3.7 5.69
Commercial Mortgage 602.6 17.4 5.81
Residential Mortgage 2,338.0 65.7 5.62
Other Revolving Credit and
Installment 738.2 30.5 8.32
Home Equity 699.0 20.2 5.83
Purchased Home Equity 110.0 1.8 3.32
Lease Financing 500.5 9.4 3.81
----------------------------------------------------------------------
Total Loans and Leases 6,045.6 176.2 5.86
----------------------------------------------------------------------
Other 60.1 0.7 2.42
----------------------------------------------------------------------
Total Earning Assets (3) 9,219.4 244.4 5.32
----------------------------------------------------------------------
Cash and Non-Interest-Bearing
Deposits 310.6
Other Assets 377.8
---------
Total Assets $9,907.8
=========
Interest-Bearing Liabilities
Interest-Bearing Deposits
Demand $1,642.9 4.1 0.50
Savings 2,971.5 9.2 0.62
Time 1,137.0 11.9 2.11
----------------------------------------------------------------------
Total Interest-Bearing Deposits 5,751.4 25.2 0.88
----------------------------------------------------------------------
Short-Term Borrowings 764.9 9.9 2.60
Long-Term Debt 245.6 7.5 6.15
----------------------------------------------------------------------
Total Interest-Bearing Liabilities 6,761.9 42.6 1.27
----------------------------------------------------------------------
Net Interest Income $ 201.8
==========
Interest Rate Spread 4.05%
Net Interest Margin 4.39%
Non-Interest-Bearing Demand Deposits 1,966.4
Other Liabilities 431.2
Shareholders' Equity 748.3
---------
Total Liabilities and Shareholders'
Equity $9,907.8
=========
(1) Certain 2004 information has been reclassified to conform to 2005
presentation.
(2) Non-performing loans are included in the respective average loan
balances. Income, if any, on such loans is recognized on a cash
basis.
(3) Interest income includes taxable-equivalent basis adjustment based
upon a statutory tax rate of 35%.
Bank of Hawaii Corporation and Subsidiaries
Analysis of Change in Net Interest Income - Taxable Equivalent Basis
(Unaudited) Table 6
----------------------------------------------------------------------
Three Months Ended June 30, 2005 Compared
to March 31, 2005
(dollars in millions) Volume (1) Rate (1) Time (1) Total
----------------------------------------------------------------------
Change in Interest Income:
Funds Sold $ 0.1 $ - $ - $ 0.1
Investment Securities
Available for Sale 0.5 0.1 - 0.6
Held to Maturity (0.3) - - (0.3)
Loans and Leases
Commercial and Industrial 0.6 0.4 0.1 1.1
Construction 0.3 0.1 - 0.4
Commercial Mortgage (0.1) 0.3 0.1 0.3
Residential Mortgage 0.2 0.3 - 0.5
Other Revolving Credit
and Installment - 0.2 0.2 0.4
Home Equity 0.6 0.6 0.1 1.3
Purchased Home Equity (0.1) (0.1) - (0.2)
Lease Financing - (0.2) 0.1 (0.1)
----------------------------------------------------------------------
Total Loans and Leases 1.5 1.6 0.6 3.7
----------------------------------------------------------------------
Other 0.1 (0.2) - (0.1)
----------------------------------------------------------------------
Total Change in Interest
Income 1.9 1.5 0.6 4.0
----------------------------------------------------------------------
Change in Interest Expense:
Interest-Bearing Deposits
Demand 0.1 0.6 - 0.7
Savings - 0.4 - 0.4
Time 0.3 0.5 0.1 0.9
----------------------------------------------------------------------
Total Interest-Bearing
Deposits 0.4 1.5 0.1 2.0
----------------------------------------------------------------------
Short-Term Borrowings 0.8 0.8 0.1 1.7
Long-Term Debt (0.1) - - (0.1)
----------------------------------------------------------------------
Total Change in Interest
Expense 1.1 2.3 0.2 3.6
----------------------------------------------------------------------
Change in Net Interest
Income $ 0.8 $(0.8) $ 0.4 $ 0.4
======================================================================
(1) The changes for each category of interest income and expense are
allocated between the portion of changes attributable to the
variance in volume, rate or time 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) 2005 2004 2005 2004
----------------------------------------------------------------------
Salaries $26,616 $27,904 $52,669 $55,108
Incentive Compensation 3,725 3,260 7,693 7,076
Stock Based Compensation 1,828 3,233 3,543 6,129
Commission Expense 2,281 2,284 4,533 3,911
Retirement and Other Benefits 4,437 4,214 9,205 8,571
Payroll Taxes 2,205 3,103 5,658 6,533
Medical, Dental, and Life
Insurance 1,823 2,136 4,054 4,240
Separation Expense 941 555 1,270 1,122
----------------------------------------------------------------------
Total Salaries and Benefits $43,856 $46,689 $88,625 $92,690
======================================================================
Bank of Hawaii Corporation and Subsidiaries
Loan Portfolio Balances (Unaudited) Table 8
----------------------------------------------------------------------
June 30, March 31, Dec. 31, June 30,
(dollars in thousands) 2005 2005 2004 (1) 2004 (1)
----------------------------------------------------------------------
Commercial
Commercial and
Industrial $ 997,762 $ 918,878 $ 909,264 $ 800,893
Commercial Mortgage 563,979 609,689 602,678 643,382
Construction 165,772 107,403 122,355 98,916
Lease Financing 471,600 468,349 479,100 479,488
----------------------------------------------------------------------
Total Commercial 2,199,113 2,104,319 2,113,397 2,022,679
----------------------------------------------------------------------
Consumer
Residential Mortgage 2,347,877 2,342,062 2,326,385 2,286,618
Home Equity 739,161 694,261 657,164 559,225
Purchased Home Equity 93,806 109,632 122,728 162,730
Other Revolving
Credit and
Installment 742,834 734,836 734,721 721,386
Lease Financing 28,627 30,680 32,535 34,676
----------------------------------------------------------------------
Total Consumer 3,952,305 3,911,471 3,873,533 3,764,635
----------------------------------------------------------------------
Total Loans and Leases $6,151,418 $6,015,790 $5,986,930 $5,787,314
======================================================================
Air Transportation Credit
Exposure (2) (Unaudited)
----------------------------------------------------------------------
June 30, Dec. 31, June 30,
2005 2004 (1) 2004
Unused Total Total Total
(dollars in Outstanding Commitments Exposure Exposure Exposure
thousands)
----------------------------------------------------------------------
Air
Transportation
United States
Regional
Passenger
Carriers $ 41,556 $ 7,191 $ 48,747 $ 54,981 $ 58,491
United States
National
Passenger
Carriers 37,638 - 37,638 37,377 37,581
Passenger
Carriers
Based Outside
United States 22,249 - 22,249 25,910 30,325
Cargo Carriers 13,475 - 13,475 13,771 14,122
----------------------------------------------------------------------
Total Air
Transportation $114,918 $ 7,191 $122,109 $132,039 $140,519
======================================================================
(1) Certain 2004 information has been reclassified to conform to 2005
presentation.
(2) Exposure includes loans, leveraged leases and operating leases.
Bank of Hawaii Corporation and Subsidiaries
Consolidated Non-Performing Assets and Accruing Loans Past
Due 90 Days or More (Unaudited) Table 9
----------------------------------------------------------------------
June 30, March 31, Dec. 31, June 30,
(dollars in thousands) 2005 2005 2004 2004
----------------------------------------------------------------------
Non-Performing Assets
Non-Accrual Loans
Commercial
Commercial and
Industrial $ 430 $ 470 $ 683 $ 680
Commercial Mortgage 1,739 1,922 2,106 5,649
Lease Financing 1,586 2,418 2,973 1,948
----------------------------------------------------------------------
Total Commercial 3,755 4,810 5,762 8,277
----------------------------------------------------------------------
Consumer
Residential
Mortgage 6,035 7,503 7,688 7,688
Home Equity 156 185 218 306
----------------------------------------------------------------------
Total Consumer 6,191 7,688 7,906 7,994
----------------------------------------------------------------------
Total Non-Accrual Loans 9,946 12,498 13,668 16,271
----------------------------------------------------------------------
Foreclosed Real Estate 292 183 191 4,889
Other Investments 682 684 - -
----------------------------------------------------------------------
Total Non-Performing
Assets $ 10,920 $ 13,365 $ 13,859 $ 21,160
======================================================================
Accruing Loans Past Due
90 Days or More
Commercial
Commercial and
Industrial $ 9 $ 29 $ 52 $ 19
Commercial Mortgage 2,213 2,243 - 693
----------------------------------------------------------------------
Total Commercial 2,222 2,272 52 712
----------------------------------------------------------------------
Consumer
Residential
Mortgage 1,310 604 387 698
Purchased Home
Equity - 70 183 32
Other Revolving
Credit and
Installment 1,417 1,417 1,433 1,142
Lease Financing - - 30 57
----------------------------------------------------------------------
Total Consumer 2,727 2,091 2,033 1,929
----------------------------------------------------------------------
Total Accruing Loans
Past Due 90 Days or
More $ 4,949 $ 4,363 $ 2,085 $ 2,641
======================================================================
Total Loans and Leases $6,151,418 $6,015,790 $5,986,930 $5,787,314
======================================================================
Ratio of Non-Accrual
Loans to Total Loans 0.16% 0.21% 0.23% 0.28%
----------------------------------------------------------------------
Ratio of Non-Performing
Assets to Total Loans,
Foreclosed Real Estate
and Other Investments 0.18% 0.22% 0.23% 0.37%
----------------------------------------------------------------------
Ratio of Non-Performing
Assets and Accruing
Loans Past Due 90 Days
or More to Total Loans 0.26% 0.29% 0.27% 0.41%
----------------------------------------------------------------------
Quarter to Quarter
Changes in Non-
Performing Assets
Balance at Beginning
of Quarter $ 13,365 $ 13,859 $ 15,977 $ 27,866
Additions 3,088 2,796 5,164 3,909
Reductions
Payments (5,097) (2,202) (6,435) (4,232)
Return to Accrual (392) (698) (456) (2,700)
Sales of
Foreclosed
Assets - (129) (206) (147)
Charge-offs/Write-
downs (44) (261) (185) (3,536)
----------------------------------------------------------------------
Total Reductions (5,533) (3,290) (7,282) (10,615)
----------------------------------------------------------------------
Balance at End of
Quarter $ 10,920 $ 13,365 $ 13,859 $ 21,160
======================================================================
Bank of Hawaii Corporation and Subsidiaries
Consolidated Reserve for Credit Losses (Unaudited) Table 10
----------------------------------------------------------------------
Three Months Ended Six Months Ended
June 30, June 30,
(dollars in thousands) 2005 2004 2005 2004
----------------------------------------------------------------------
Balance at Beginning of
Period $ 109,906 $ 127,185 $ 113,596 $ 129,080
Loans Charged-Off
Commercial
Commercial and
Industrial 581 3,328 1,155 3,715
Commercial Mortgage - - - 574
Lease Financing - 379 - 607
Consumer
Residential
Mortgage 67 319 382 464
Home Equity - 9 - 9
Purchased Home
Equity 406 201 698 291
Other Revolving
Credit and
Installment 4,546 4,564 9,128 9,219
Lease Financing 29 28 63 64
----------------------------------------------------------------------
Total Loans
Charged-Off 5,629 8,828 11,426 14,943
----------------------------------------------------------------------
Recoveries on Loans
Previously Charged-Off
Commercial
Commercial and
Industrial 211 1,245 753 2,199
Commercial Mortgage 32 151 94 840
Construction - - - 435
Lease Financing 130 1 162 16
Consumer
Residential
Mortgage 189 304 295 598
Home Equity 5 101 30 140
Purchased Home
Equity 120 57 154 57
Other Revolving
Credit and
Installment 1,166 1,703 2,453 3,366
Lease Financing 33 16 52 71
Foreign - 6,469 - 6,545
----------------------------------------------------------------------
Total Recoveries on
Loans Previously
Charged-Off 1,886 10,047 3,993 14,267
----------------------------------------------------------------------
Net Loan Recoveries
(Charge-Offs) (3,743) 1,219 (7,433) (676)
Provision for Loan and
Lease Losses - (3,500) - (3,500)
----------------------------------------------------------------------
Balance at End of
Period (1) $ 106,163 $ 124,904 $ 106,163 $ 124,904
======================================================================
Components
Allowance for Loan
and Lease Losses 101,587 124,904 101,587 124,904
Reserve for Unfunded
Commitments (2) 4,576 - 4,576 -
----------------------------------------------------------------------
Total Reserve for
Credit Losses $ 106,163 $ 124,904 $ 106,163 $ 124,904
======================================================================
Average Loans
Outstanding $6,090,149 $5,772,926 $6,045,609 $5,757,647
======================================================================
Ratio of Net Loan
(Recoveries)
Charge-Offs to
Average Loans
Outstanding
(annualized) 0.25% (0.08)% 0.25% 0.02%
Ratio of Allowance to
Loans and Leases
Outstanding (2) 1.65% 2.16% 1.65% 2.16%
(1) Included in this analysis is activity related to the Company's
reserve for unfunded commitments, which is separately recorded in
other liabilities in the Consolidated Statements of Condition.
(2) The reclassification of the reserve for unfunded commitments to
other liabilities occurred in the fourth quarter of 2004 on a
prospective basis. Thus, June 30, 2004 allowance for loan and
lease losses and reserve for unfunded commitments were reported
together. At June 30, 2004, the reserve for unfunded commitments
was $5.4 million.
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, 2005
Net Interest
Income $ 54,212 $ 35,525 $ 3,222 $ 8,080 $ 101,039
Provision
for Loan
and Lease
Losses 3,531 236 - (3,767) -
----------------------------------------------------------------------
Net Interest
Income
After
Provision
for Loan
and Lease
Losses 50,681 35,289 3,222 11,847 101,039
Non-Interest
Income 25,080 8,735 14,229 2,630 50,674
----------------------------------------------------------------------
75,761 44,024 17,451 14,477 151,713
Non-Interest
Expense (42,569) (21,019) (13,692) (1,724) (79,004)
----------------------------------------------------------------------
Income Before
Income
Taxes 33,192 23,005 3,759 12,753 72,709
Provision for
Income Taxes (12,281) (8,400) (1,391) (4,208) (26,280)
----------------------------------------------------------------------
Allocated
Net Income 20,911 14,605 2,368 8,545 46,429
----------------------------------------------------------------------
Allowance
Funding
Value (168) (601) (6) 775 -
GAAP
Provision 3,531 236 - (3,767) -
Economic
Provision (3,435) (2,432) (103) (1) (5,971)
Tax Effect of
Adjustments 27 1,035 40 1,107 2,209
----------------------------------------------------------------------
Income Before
Capital
Charge 20,866 12,843 2,299 6,659 42,667
Capital
Charge (5,424) (4,562) (1,428) (8,296) (19,710)
----------------------------------------------------------------------
Net Income
(Loss) After
Capital
Charge
(NIACC) $ 15,442 $ 8,281 $ 871 $ (1,637) $ 22,957
======================================================================
RAROC (ROE
for the
Company) 42% 31% 18% 14% 26%
======================================================================
Total Assets
at June 30,
2005 $3,789,519 $2,533,496 $192,378 $3,544,297 $10,059,690
======================================================================
Three Months Ended
June 30, 2004 (1)
Net Interest
Income $ 49,524 $ 33,583 $ 2,832 $ 9,910 $ 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 46,937 30,853 2,833 18,726 99,349
Non-Interest
Income 24,388 12,141 12,985 5,334 54,848
----------------------------------------------------------------------
71,325 42,994 15,818 24,060 154,197
Non-Interest
Expense (44,560) (22,928) (13,226) (4,411) (85,125)
----------------------------------------------------------------------
Income Before
Income Taxes 26,765 20,066 2,592 19,649 69,072
Provision for
Income Taxes (9,903) (7,423) (959) (6,555) (24,840)
----------------------------------------------------------------------
Allocated
Net Income 16,862 12,643 1,633 13,094 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 16,187 12,152 1,566 8,068 37,973
Capital
Charge (5,485) (5,129) (1,307) (8,231) (20,152)
----------------------------------------------------------------------
Net Income
(Loss) After
Capital
Charge
(NIACC) $ 10,702 $ 7,023 $ 259 $ (163) $ 17,821
======================================================================
RAROC (ROE
for the
Company) 33% 26% 13% 28% 24%
======================================================================
Total Assets
at June 30,
2004 $3,693,382 $2,331,951 $114,038 $3,549,398 $ 9,688,769
======================================================================
(1) Certain 2004 information has been reclassified to conform to 2005
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, 2005
Net Interest
Income $ 106,562 $ 70,087 $ 6,111 $ 18,937 $ 201,697
Provision
for Loan
and Lease
Losses 7,016 652 (1) (7,667) -
----------------------------------------------------------------------
Net Interest
Income After
Provision
for Loan
and Lease
Losses 99,546 69,435 6,112 26,604 201,697
Non-Interest
Income 49,322 20,266 28,855 4,546 102,989
----------------------------------------------------------------------
148,868 89,701 34,967 31,150 304,686
Non-Interest
Expense (85,618) (43,579) (26,911) (3,759) (159,867)
----------------------------------------------------------------------
Income Before
Income Taxes 63,250 46,122 8,056 27,391 144,819
Provision for
Income Taxes (23,403) (16,999) (2,981) (9,485) (52,868)
----------------------------------------------------------------------
Allocated
Net Income 39,847 29,123 5,075 17,906 91,951
----------------------------------------------------------------------
Allowance
Funding
Value (331) (1,202) (12) 1,545 -
GAAP
Provision 7,016 652 (1) (7,667) -
Economic
Provision (6,941) (4,890) (193) (2) (12,026)
Tax Effect of
Adjustments 94 2,013 76 2,267 4,450
----------------------------------------------------------------------
Income Before
Capital
Charge 39,685 25,696 4,945 14,049 84,375
Capital
Charge (10,880) (9,198) (2,769) (18,324) (41,171)
----------------------------------------------------------------------
Net Income
(Loss) After
Capital
Charge
(NIACC) $ 28,805 $ 16,498 $ 2,176 $ (4,275) $ 43,204
======================================================================
RAROC (ROE
for the
Company) 40% 31% 20% 17% 25%
======================================================================
Total Assets
at June 30,
2005 $3,789,519 $2,533,496 $ 192,378 $3,544,297 $10,059,690
======================================================================
Six Months Ended
June 30, 2004 (1)
Net Interest
Income $ 99,681 $ 67,602 $ 5,645 $ 18,952 $ 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 94,347 65,125 5,597 30,311 195,380
Non-Interest
Income 45,403 22,573 27,426 8,288 103,690
----------------------------------------------------------------------
139,750 87,698 33,023 38,599 299,070
Non-Interest
Expense (87,777) (46,072) (26,256) (8,042) (168,147)
----------------------------------------------------------------------
Income Before
Income Taxes 51,973 41,626 6,767 30,557 130,923
Provision for
Income Taxes (19,230) (15,381) (2,504) (9,777) (46,892)
----------------------------------------------------------------------
Allocated
Net Income 32,743 26,245 4,263 20,780 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 31,578 23,381 4,163 14,702 73,824
Capital
Charge (11,255) (10,395) (2,590) (17,950) (42,190)
----------------------------------------------------------------------
Net Income
(Loss) After
Capital
Charge
(NIACC) $ 20,323 $ 12,986 $ 1,573 $ (3,248) $ 31,634
======================================================================
RAROC (ROE
for the
Company) 31% 25% 18% 27% 22%
======================================================================
Total Assets
at June 30,
2004 $3,693,382 $2,331,951 $114,038 $3,549,398 $9,688,769
======================================================================
(1) Certain 2004 information has been reclassified to conform to 2005
presentation.
Bank of Hawaii Corporation and Subsidiaries
Quarterly Summary of Selected Consolidated Financial Data
(Unaudited) Table 12
----------------------------------------------------------------------
(dollars in
thousands Three Months Ended
except per June 30, March 31, Dec. 31, Sept. 30, June 30,
share amounts) 2005 2005 2004 2004 (1) 2004 (1)
----------------------------------------------------------------------
Quarterly
Operating
Results
Interest Income
Interest
and Fees
on Loans
and Leases $ 90,119 $ 86,467 $ 84,100 $ 82,079 $ 80,346
Income on
Investment
Securities
- Available
for Sale 27,987 27,319 26,394 24,543 21,745
Income on
Investment
Securities
- Held to
Maturity 5,527 5,825 6,147 6,370 6,711
Deposits 36 23 107 496 1,646
Funds Sold 165 75 356 108 177
Other 271 449 267 801 865
----------------------------------------------------------------------
Total Interest
Income 124,105 120,158 117,371 114,397 111,490
----------------------------------------------------------------------
Interest Expense
Deposits 13,577 11,604 9,993 8,990 8,560
Securities
Sold Under
Agreements
to
Repurchase 4,562 3,325 3,120 2,085 2,222
Funds
Purchased 1,151 733 395 683 506
Short-Term
Borrowings 45 32 39 15 13
Long-Term
Debt 3,731 3,806 3,893 3,845 4,340
----------------------------------------------------------------------
Total Interest
Expense 23,066 19,500 17,440 15,618 15,641
----------------------------------------------------------------------
Net Interest
Income 101,039 100,658 99,931 98,779 95,849
Provision for
Loan and
Lease Losses - - (6,500) - (3,500)
----------------------------------------------------------------------
Net Interest
Income After
Provision for
Loan and
Lease Losses 101,039 100,658 106,431 98,779 99,349
----------------------------------------------------------------------
Non-Interest
Income
Trust and
Asset
Management 14,058 14,622 13,934 12,672 12,995
Mortgage
Banking 2,594 2,590 1,516 1,711 2,808
Service
Charges on
Deposit
Accounts 9,569 10,179 10,155 9,472 9,540
Fees,
Exchange,
and Other
Service
Charges 15,211 13,836 13,684 13,741 14,243
Investment
Securities
Gains
(Losses) 337 - (757) - (37)
Insurance 4,330 5,788 4,234 5,423 4,926
Other 4,575 5,300 5,584 10,035 10,373
----------------------------------------------------------------------
Total Non-
Interest
Income 50,674 52,315 48,350 53,054 54,848
----------------------------------------------------------------------
Non-Interest
Expense
Salaries and
Benefits 43,856 44,769 45,043 46,566 46,689
Net Occupancy
Expense 9,189 9,545 9,606 9,812 9,543
Net Equipment
Expense 5,377 5,471 6,316 5,847 5,799
Other 20,582 21,078 21,138 21,965 23,094
----------------------------------------------------------------------
Total Non-
Interest
Expense 79,004 80,863 82,103 84,190 85,125
----------------------------------------------------------------------
Income Before
Income Taxes 72,709 72,110 72,678 67,643 69,072
Provision for
Income Taxes 26,280 26,588 26,437 24,576 24,840
----------------------------------------------------------------------
Net Income $ 46,429 $ 45,522 $ 46,241 $ 43,067 $ 44,232
======================================================================
Basic Earnings
Per Share $0.90 $0.85 $0.86 $0.82 $0.84
Diluted
Earnings Per
Share $0.87 $0.83 $0.82 $0.78 $0.79
Balance Sheet
Totals
Total Assets $10,059,690 $9,908,030 $9,766,191 $9,594,809 $9,688,769
Net Loans 6,049,831 5,910,784 5,880,134 5,690,924 5,662,410
Total Deposits 7,726,758 7,760,662 7,564,667 7,413,240 7,469,288
Total
Shareholders'
Equity 712,169 716,656 814,834 756,707 699,438
Performance
Ratios
Net Income to
Average Total
Assets (ROA) 1.87% 1.88% 1.89% 1.77% 1.80%
Net Income to
Average
Shareholders'
Equity (ROE) 25.98 23.66 23.63 23.42 24.28
Efficiency
Ratio (2) 52.07 52.86 55.37 55.45 56.49
(1) Certain 2004 information has been reclassified to conform to 2005
presentation.
(2) 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 or 877-849-5423 (Pager)
skiguchi@boh.com
Cindy Wyrick, 808-537-8430 (Investor/Analyst Inquiries)
cwyrick@boh.com
SOURCE: Bank of Hawaii Corporation