Bank of Hawaii Corporation Third Quarter 2005 Financial Results
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HONOLULU--(BUSINESS WIRE)--Oct. 24, 2005--Bank of Hawaii Corporation (NYSE:BOH)
- Diluted Earnings Per Share $0.85; Net Income $44.8 Million
- Board of Directors Increases Dividend to $0.37 Per Share
Bank of Hawaii Corporation (NYSE:BOH) today reported diluted earnings per share of $0.85 for the third quarter of 2005, an increase from diluted earnings per share of $0.78 in the third quarter of 2004 and a decrease from $0.87 in the second quarter of 2005. Net income for the third quarter of 2005 was $44.8 million, up $1.8 million from net income of $43.1 million in the third quarter of 2004 and down $1.6 million from net income of $46.4 million in the second quarter of 2005. Net income for the third quarter of 2005 included a provision for credit losses of $3.0 million ($1.9 million after tax or $0.04 per diluted share).
Return on average assets for the third quarter of 2005 was 1.74 percent, compared to 1.77 percent in the third quarter of 2004 and 1.87 percent in the second quarter of 2005. Return on average equity was 24.61 percent for the third quarter of 2005, up from 23.42 percent in the same quarter last year and down from 25.98 percent in the previous quarter.
"We are pleased with Bank of Hawaii Corporation's financial performance for the third quarter of 2005," said Allan R. Landon, Chairman and CEO. "We increased revenue, loans and deposits, and maintained reasonable expense levels. Although we returned to provisioning for credit losses during the quarter, our credit quality and the Hawaii economy remain strong."
For the nine months ended September 30, 2005, net income was $136.8 million, up $9.7 million or 7.6 percent from net income of $127.1 million for the same period last year. Diluted earnings per share were $2.55 for the first nine months of 2005, an increase from $2.26 for the first nine months of 2004. Year-to-date results for 2005 include the previously mentioned $3.0 million provision for credit losses compared to a return to income of $3.5 million in the same period last year resulting from the release of a portion of the allowance for loan and lease losses.
The return on average assets for the nine months ended September 30, 2005 was 1.83 percent, up from 1.74 percent for the same period in 2004. The year-to-date return on average equity was 24.72 percent, up from 22.48 percent for the nine months ended September 30, 2004.
Financial Highlights
Net interest income, on a taxable equivalent basis, for the third quarter of 2005 was $102.0 million, up $3.2 million from $98.8 million in the third quarter of 2004 and up $0.9 million from $101.1 million in the second quarter of 2005. The increase in net interest income was largely due to growth in loans and higher average yields on the investment securities and loan portfolios. Partially offsetting the positive increase in interest income was an increase in interest expense resulting from selective rate increases on interest-bearing deposits. An analysis of the change in net interest income from the previous quarter is included in Table 6.
The net interest margin was 4.30 percent for the third quarter of 2005, a 9 basis point decrease from 4.39 percent in the prior year quarter and a 6 basis point decrease from 4.36 percent in the second quarter of 2005. The decrease in the net interest margin compared to the previous quarter was largely due to a higher level of liquidity. The decrease in the net interest margin compared to the same quarter last year was largely due to the effects of the flattening yield curve.
As previously mentioned, the Company recorded a provision for credit losses of $3.0 million in the third quarter of 2005. Charge-offs during the quarter of $15.3 million included a $10.0 million write-off of a fully reserved aircraft lease and were partially offset by recoveries of $2.3 million. The Company did not recognize a provision for credit losses during the third quarter of 2004 or during the second quarter of 2005.
Non-interest income was $55.5 million for the third quarter of 2005, an increase of $2.5 million or 4.6 percent compared to non-interest income of $53.1 million in the third quarter of 2004. Non-interest income in the third quarters of 2005 and 2004 included gains of $3.4 million and $5.2 million, respectively, on the sale of assets at the end of leveraged leases. Excluding these items, non-interest income increased $4.3 million or 9.0 percent over the same quarter last year. Non-interest income increased $4.8 million or 9.6 percent compared to $50.7 million in the second quarter of 2005.
Non-interest expense was $84.6 million in the third quarter of 2005, up $0.4 million or 0.5 percent from non-interest expense of $84.2 million in the same quarter last year and up $5.6 million or 7.1 percent from $79.0 million in the second quarter of 2005. Included in the third quarter of 2005 were previously announced charges of $3.8 million for legal and other expenses related to the mutual fund business. An analysis of salary and benefit expenses is included in Table 7.
The efficiency ratio for the third quarter of 2005 was 53.72 percent, an improvement from 55.45 percent in the same quarter last year and up from 52.07 percent in the previous quarter.
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
Overall asset quality remained strong and stable during the third quarter of 2005. Non-performing assets were $8.3 million at the end of the third quarter of 2005, a decrease of $2.7 million, or 24.5 percent, compared to non-performing assets of $10.9 million at the end of the previous quarter and a decrease of $7.7 million, or 48.4 percent, compared to $16.0 million at the end of the same quarter last year. At September 30, 2005 the ratio of non-performing assets to total loans, foreclosed real estate, and other investments was 0.13 percent compared with 0.18 percent at June 30, 2005 and 0.27 percent at September 30, 2004.
Non-accrual loans were $7.2 million at September 30, 2005, a reduction of $2.8 million, or 28.1 percent, from $9.9 million at June 30, 2005 and down $8.6 million, or 54.6 percent, from $15.8 million at September 30, 2004. Non-accrual loans as a percentage of total loans were 0.12 percent at September 30, 2005, down from 0.16 percent at June 30, 2005 and from 0.27 percent at September 30, 2004.
Net charge-offs for the third quarter of 2005 were $13.0 million, or 0.84 percent (annualized) of total average loans, including the previously mentioned write-off of an aircraft lease. Net charge-offs in the previous quarter were $3.7 million, or 0.25 percent (annualized) of total average loans. In the third quarter of 2004, net charge-offs were $0.3 million, or 0.02 percent (annualized) of total average loans. Net charge-offs for the first nine months of 2005 were $20.4 million, or 0.45 percent (annualized) of total average loans compared to $0.9 million or 0.02 percent (annualized) of total average loans in the same period last year. Net charge-offs in the first nine months of 2004 included a $6.0 million recovery of a previously charged-off loan from the divested Asia business.
The allowance for loan and lease losses was $91.7 million at September 30, 2005, down from $101.6 million at June 30, 2005 and down from $124.7 million at September 30, 2004. The $9.9 million decrease in the allowance from the previous quarter was primarily due to net charge-offs. The decrease from the previous year is largely due to net charges-offs, $6.5 million returned to income from releases of the allowance for loan and lease losses during 2004 and $6.8 million reclassified to other liabilities for potential losses related to unfunded commitments to extend credit. The allowance for unfunded commitments was $4.5 million at September 30, 2005, down from $4.6 million at June 30, 2005.
The ratio of the allowance for loan and lease losses to total loans was 1.48 percent at September 30, 2005. The decrease from the ratio of 1.65 percent at June 30, 2005 was largely due to the previously mentioned write-off of an aircraft lease. The ratio of the allowance for loan and lease losses to total loans was 2.14 percent at September 30, 2004. If the allowance for unfunded commitments had been reclassified at September 30, 2004, the ratio would have been 2.03 percent.
Credit exposure to the air transportation industry is summarized in Table 8.
Other Financial Highlights
Total assets were $10.09 billion at September 30, 2005, up from $10.06 billion at June 30, 2005 and up from $9.59 billion at September 30, 2004. Total loans and leases were $6.20 billion at September 30, 2005, up from $6.15 billion at June 30, 2005 and up from $5.82 billion at September 30, 2004.
Commercial loan outstandings were $2.20 billion at September 30, 2005, essentially flat with June 30, 2005 and up from $2.02 billion at September 30, 2004. Strong commercial loan originations and advances during the third quarter of 2005 were offset by payoff activity. Consumer loan outstandings were $4.00 billion at September 30, 2005, up from $3.95 billion at June 30, 2005 and up from $3.79 billion at September 30, 2004. Growth in residential mortgage and home equity lending continues to be supported by robust construction activity and the strong Hawaii housing market.
Total deposits at September 30, 2005 were $7.76 billion, up from $7.73 billion at June 30, 2005 and up from $7.41 billion at September 30, 2004. Non-interest-bearing demand and savings accounts balances decreased during the quarter as customers shifted funds to higher rate interest-bearing accounts and time deposits.
During the third quarter of 2005, Bank of Hawaii Corporation repurchased 762.7 thousand shares of common stock at a total cost of $38.8 million under its share repurchase program. The average cost was $50.85 per share repurchased. From the beginning of the share repurchase program in July 2001 through September 30, 2005, the Company has repurchased a total of 39.4 million shares and returned $1.3 billion to the shareholders at an average cost of $33.03 per share. From October 1, 2005 through October 21, 2005, the Company repurchased 75.0 thousand shares of common stock at an average cost of $48.66 per share. Remaining buyback authority under the share repurchase program was $46.6 million at October 21, 2005.
The Company's capital and liquidity remain strong. At September 30, 2005 the Tier 1 leverage ratio was 6.98 percent compared to 7.14 percent at June 30, 2005 and 7.69 percent at September 30, 2004.
The Company's Board of Directors declared a quarterly cash dividend of $0.37 per share on the Company's outstanding shares. The dividend will be payable on December 14, 2005 to shareholders of record at the close of business on November 30, 2005.
Financial Outlook
Bank of Hawaii Corporation currently estimates net income for the full year of 2005 will be approximately $179 million to $181 million. 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 credit losses.
Conference Call Information
The Company will review its third 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 866-700-7477 in the United States or 617-213-8840 for international callers. No confirmation code is required to access the call. A replay will be available for one week beginning Monday, October 24, 2005 by calling 888-286-8010 in the United States or 617-801-6888 for international callers and entering the number 43957291 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, and other statements made by the Company may contain, forward-looking statements concerning, among other things, the economic and business environment in our service area and elsewhere, growth in the lending portfolio, credit quality, 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, taxing authority interpretations, 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 that 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) unpredictable costs and other consequences of legal or regulatory matters involving the Company; 5) changes to the amount and timing of our proposed equity repurchases; 6) real or threatened acts of war or terrorist activity affecting business conditions; and 7) adverse weather, public health and other natural conditions impacting the Company and its customers' operations. We do not undertake an 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 Nine Months Ended
except per share September 30, September 30,
amounts) 2005 2004 2005 2004
----------------------------------------------------------------------
For the Period:
Interest Income $129,234 $114,397 $373,497 $337,643
Net Interest Income 101,960 98,779 303,657 290,659
Net Income 44,829 43,067 136,780 127,098
Basic Earnings Per Share 0.87 0.82 2.62 2.40
Diluted Earnings Per
Share 0.85 0.78 2.55 2.26
Dividends Declared Per
Share 0.33 0.30 0.99 0.90
Net Income to Average
Total Assets (ROA) 1.74% 1.77% 1.83% 1.74%
Net Income to Average
Shareholders' Equity
(ROE) 24.61 23.42 24.72 22.48
Net Interest Margin (1) 4.30 4.39 4.36 4.29
Efficiency Ratio(2) 53.72 55.45 52.90 56.40
Average Assets $10,196,047 $9,668,495 $10,004,968 $9,746,283
Average Loans and Leases 6,170,302 5,796,350 6,087,629 5,770,642
Average Deposits 7,833,638 7,479,776 7,756,789 7,390,682
Average Shareholders'
Equity 722,758 731,583 739,721 755,075
Average Equity to
Average Assets 7.09% 7.57% 7.39% 7.75%
September 30,
2005 2004
----------------------------------------------------------------------
At Period End:
Net Loans $6,110,892 $5,690,924
Total Assets 10,085,235 9,594,809
Deposits 7,756,586 7,413,240
Long-Term Debt 242,692 252,619
Shareholders' Equity 696,311 756,707
Allowance to Loans and
Leases Outstanding 1.48% 2.14%
Dividend Payout Ratio 37.80 37.57
Leverage Ratio 6.98 7.69
Book Value Per Common
Share $13.58 $14.27
Employees (FTE) 2,591 2,655
Branches and Offices 85 88
Market Price Per Share of Common
Stock for the Quarter Ended:
Closing $49.22 $47.25
High 54.44 48.07
Low 47.44 43.55
(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 Nine Months Ended
except per September June September September
share 30, 30, 30, 30,
amounts) 2005 2005 2004 (1) 2005 2004 (1)
----------------------------------------------------------------------
Interest Income
Interest and
Fees on Loans
and Leases $94,381 $90,119 $82,079 $270,967 $243,853
Income on
Investment
Securities -
Available
for Sale 28,482 27,987 24,543 83,788 67,134
Income on
Investment
Securities -
Held to
Maturity 5,109 5,527 6,370 16,461 20,057
Deposits 57 36 496 116 3,373
Funds Sold 935 165 108 1,175 702
Other 270 271 801 990 2,524
----------------------------------------------------------------------
Total Interest
Income 129,234 124,105 114,397 373,497 337,643
----------------------------------------------------------------------
Interest Expense
Deposits 15,766 13,577 8,990 40,947 26,750
Securities
Sold Under
Agreements to
Repurchase 6,796 4,562 2,085 14,683 6,233
Funds Purchased 901 1,151 683 2,785 1,420
Short-Term
Borrowings 50 45 15 127 43
Long-Term Debt 3,761 3,731 3,845 11,298 12,538
----------------------------------------------------------------------
Total Interest
Expense 27,274 23,066 15,618 69,840 46,984
----------------------------------------------------------------------
Net Interest
Income 101,960 101,039 98,779 303,657 290,659
Provision for
Credit Losses 3,000 - - 3,000 (3,500)
----------------------------------------------------------------------
Net Interest
Income After
Provision for
Credit Losses 98,960 101,039 98,779 300,657 294,159
----------------------------------------------------------------------
Non-Interest Income
Trust and Asset
Management 14,052 14,058 12,672 42,732 39,531
Mortgage
Banking 2,618 2,594 1,711 7,802 6,496
Service Charges
on Deposit
Accounts 10,046 9,569 9,472 29,794 28,962
Fees, Exchange,
and Other
Service
Charges 15,394 15,211 13,741 44,441 41,223
Investment
Securities
Gains (Losses) 8 337 - 345 (37)
Insurance 5,324 4,330 5,423 15,442 15,007
Other 8,074 4,575 10,035 17,949 25,562
----------------------------------------------------------------------
Total Non-
Interest Income 55,516 50,674 53,054 158,505 156,744
----------------------------------------------------------------------
Non-Interest Expense
Salaries and
Benefits 44,366 43,856 46,566 132,991 139,256
Net Occupancy 9,896 9,189 9,812 28,630 28,741
Net Equipment 5,335 5,377 5,847 16,183 17,610
Professional
Fees 5,689 2,905 3,428 11,645 10,632
Other 19,310 17,677 18,537 55,014 56,098
----------------------------------------------------------------------
Total Non-
Interest Expense 84,596 79,004 84,190 244,463 252,337
----------------------------------------------------------------------
Income Before
Income Taxes 69,880 72,709 67,643 214,699 198,566
Provision for
Income Taxes 25,051 26,280 24,576 77,919 71,468
----------------------------------------------------------------------
Net Income $44,829 $46,429 $43,067 $136,780 $127,098
======================================================================
Basic Earnings
Per Share $0.87 $0.90 $0.82 $2.62 $2.40
Diluted Earnings
Per Share $0.85 $0.87 $0.78 $2.55 $2.26
Dividends
Declared Per
Share $0.33 $0.33 $0.30 $0.99 $0.90
Basic Weighted
Average
Shares 51,385,840 51,873,772 52,390,081 52,221,345 53,053,770
Diluted
Weighted
Average
Shares 52,844,961 53,403,781 55,472,868 53,745,612 56,297,277
======================================================================
(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
----------------------------------------------------------------------
September June December September
30, 30, 31, 30,
(dollars in thousands) 2005 2005 2004 2004
----------------------------------------------------------------------
Assets
Interest-Bearing Deposits $10,119 $4,825 $4,592 $29,976
Investment Securities -
Available for Sale
Held in Portfolio 2,381,462 2,396,204 2,483,719 2,328,327
Pledged as Collateral 172,500 117,947 - -
Investment Securities -
Held to Maturity
(Fair Value of
$475,884, $522,993,
$585,836, and
$624,587) 485,041 526,767 589,908 630,276
Funds Sold 10,000 50,000 21,000 25,000
Loans Held for Sale 18,095 17,435 17,642 18,595
Loans and Leases 6,202,546 6,151,418 5,986,930 5,815,575
Allowance for Loan
and Lease Losses (91,654) (101,587) (106,796) (124,651)
----------------------------------------------------------------------
Net Loans 6,110,892 6,049,831 5,880,134 5,690,924
----------------------------------------------------------------------
Total Earning Assets 9,188,109 9,163,009 8,996,995 8,723,098
----------------------------------------------------------------------
Cash and Non-Interest-
Bearing Deposits 296,152 293,115 225,359 290,974
Premises and Equipment 135,952 137,907 146,095 149,698
Customers' Acceptance
Liability 1,081 1,598 1,406 920
Accrued Interest
Receivable 40,898 38,540 36,044 36,074
Foreclosed Real Estate 413 292 191 208
Mortgage Servicing
Rights 18,049 18,239 18,769 19,995
Goodwill 34,959 34,959 36,216 36,216
Other Assets 369,622 372,031 305,116 337,626
----------------------------------------------------------------------
Total Assets $10,085,235 $10,059,690 $9,766,191 $9,594,809
======================================================================
Liabilities
Deposits
Non-Interest-Bearing
Demand $1,890,904 $1,918,749 $1,977,703 $1,898,602
Interest-Bearing
Demand 1,716,306 1,641,873 1,536,323 1,471,836
Savings 2,880,066 2,967,993 2,960,351 2,991,386
Time 1,269,310 1,198,143 1,090,290 1,051,416
----------------------------------------------------------------------
Total Deposits 7,756,586 7,726,758 7,564,667 7,413,240
----------------------------------------------------------------------
Securities Sold Under
Agreements to Repurchase 756,407 861,233 568,981 682,630
Funds Purchased 172,365 63,565 149,635 69,755
Short-Term Borrowings 8,537 9,894 15,000 11,939
Banker's Acceptances
Outstanding 1,081 1,598 1,406 920
Retirement Benefits
Payable 67,136 66,638 65,708 62,976
Accrued Interest Payable 9,416 8,617 7,021 6,162
Taxes Payable and
Deferred Taxes 276,678 283,082 229,928 249,265
Other Liabilities 98,026 83,462 96,373 88,596
Long-Term Debt 242,692 242,674 252,638 252,619
----------------------------------------------------------------------
Total Liabilities 9,388,924 9,347,521 8,951,357 8,838,102
----------------------------------------------------------------------
Shareholders' Equity
Common Stock ($.01 par
value); authorized
500,000,000 shares;
issued / outstanding:
September 2005 -
81,722,233 / 51,282,537,
June 2005 - 81,721,733 /
51,853,734, December 2004
- 81,711,752 / 54,960,857,
September 2004 -
81,710,695 / 53,021,591 815 815 813 813
Capital Surplus 463,084 457,280 450,998 413,696
Accumulated Other
Comprehensive Income
(Loss) (34,697) (18,471) (12,917) (5,698)
Retained Earnings 1,366,058 1,339,119 1,282,425 1,277,615
Deferred Stock Grants (5,974) (7,166) (8,433) (9,490)
Treasury Stock, at Cost
(Shares: September 2005 -
30,439,696, June 2005 -
29,867,999, December
2004 - 26,750,895,
September 2004 -
28,689,104) (1,092,975) (1,059,408) (898,052) (920,229)
----------------------------------------------------------------------
Total Shareholders'
Equity 696,311 712,169 814,834 756,707
----------------------------------------------------------------------
Total Liabilities and
Shareholders' Equity $10,085,235 $10,059,690 $9,766,191 $9,594,809
======================================================================
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, 2004 $814,834 $813 $450,998 $(12,917)
Comprehensive Income:
Net Income 136,780 - - -
Other Comprehensive Income,
Net of Tax:
Change in Unrealized
Gains and Losses on
Investment Securities (21,780) - - (21,780)
Total Comprehensive Income
Common Stock Issued under
Stock Plans and
Related Tax Benefits
(803,278 shares) 33,268 2 12,086 -
Treasury Stock Purchased
(4,478,932 shares) (214,997) - - -
Cash Dividends Paid (51,794) - - -
----------------------------------------------------------------------
Balance at September 30, 2005 $696,311 $815 $463,084 $(34,697)
======================================================================
Balance at December 31, 2003 $793,132 $807 $391,701 $(5,711)
Comprehensive Income:
Net Income 127,098 - - -
Other Comprehensive Income,
Net of Tax:
Change in Unrealized
Gains and Losses on
Investment Securities 13 - - 13
Total Comprehensive Income
Common Stock Issued under Stock
Plans and Related Tax Benefits
(2,305,545 shares) 71,984 6 21,995 -
Treasury Stock Purchased
(4,209,363 shares) (187,394) - - -
Cash Dividends Paid (48,126) - - -
----------------------------------------------------------------------
Balance at September 30, 2004 $756,707 $813 $413,696 $(5,698)
======================================================================
Deferred Compre-
Retained Stock Treasury hensive
(dollars in thousands) Earnings Grants Stock Income
----------------------------------------------------------------------
Balance at December 31, 2004 $1,282,425 $(8,433) $(898,052)
Comprehensive Income:
Net Income 136,780 - - $136,780
Other Comprehensive Income,
Net of Tax:
Change in Unrealized
Gains and Losses on
Investment Securities - - - (21,780)
---------
Total Comprehensive Income $115,000
=========
Common Stock Issued under Stock
Plans and Related Tax Benefits
(803,278 shares) (1,353) 2,459 20,074
Treasury Stock Purchased
(4,478,932 shares) - - (214,997)
Cash Dividends Paid (51,794) - -
-------------------------------------------------------------
Balance at September 30, 2005 $1,366,058 $(5,974)$(1,092,975)
=============================================================
Balance at December 31, 2003 $1,199,077 $(8,309) $(784,433)
Comprehensive Income:
Net Income 127,098 - - $127,098
Other Comprehensive Income,
Net of Tax:
Change in Unrealized
Gains and Losses on
Investment Securities - - - 13
---------
Total Comprehensive Income $127,111
=========
Common Stock Issued under Stock
Plans and Related Tax Benefits
(2,305,545 shares) (434) (1,181) 51,598
Treasury Stock Purchased
(4,209,363 shares) - - (187,394)
Cash Dividends Paid (48,126) - -
-------------------------------------------------------------
Balance at September 30, 2004 $1,277,615 $(9,490) $(920,229)
=============================================================
Bank of Hawaii Corporation and Subsidiaries
Consolidated Average Balances and Interest Rates - Taxable
Equivalent Basis (Unaudited) Table 5
----------------------------------------------------------------------
Three Months Ended Three Months Ended
September 30, 2005 June 30, 2005
Average Income/ Yield/ Average Income/ Yield/
(dollars in millions) Balance Expense Rate Balance Expense Rate
----------------------------------------------------------------------
Earning Assets
Interest-Bearing Deposits $6.4 $0.1 3.55% $6.0 $ - 2.36%
Funds Sold 105.7 0.9 3.54 23.1 0.2 2.86
Investment Securities
Available for Sale 2,574.2 28.5 4.43 2,542.5 28.0 4.41
Held to Maturity 507.5 5.1 4.03 544.1 5.5 4.06
Loans Held for Sale 17.0 0.3 5.82 15.1 0.2 5.72
Loans and Leases (2)
Commercial and
Industrial 984.2 15.8 6.38 945.0 14.3 6.07
Construction 186.4 3.0 6.35 140.9 2.1 5.91
Commercial Mortgage 560.2 8.4 5.95 599.3 8.8 5.89
Residential Mortgage 2,352.3 33.7 5.73 2,343.9 33.1 5.64
Other Revolving Credit
and Installment 742.6 15.9 8.52 739.6 15.4 8.37
Home Equity 758.2 12.2 6.40 719.0 10.8 6.01
Purchased Home Equity 88.7 0.6 2.71 103.3 0.8 3.06
Lease Financing 497.7 4.5 3.55 499.2 4.7 3.74
----------------------------------------------------------------------
Total Loans and Leases 6,170.3 94.1 6.07 6,090.2 90.0 5.91
----------------------------------------------------------------------
Other 79.4 0.3 1.35 66.3 0.3 1.64
----------------------------------------------------------------------
Total Earning Assets (3) 9,460.5 129.3 5.44 9,287.3 124.2 5.35
----------------------------------------------------------------------
Cash and Non-Interest-
Bearing Deposits 316.1 305.8
Other Assets 419.4 376.1
---------- ---------
Total Assets $10,196.0 $9,969.2
========== =========
Interest-Bearing Liabilities
Interest-Bearing Deposits
Demand $1,730.7 2.9 0.66 $1,667.3 2.4 0.58
Savings 2,890.2 5.3 0.73 2,970.8 4.8 0.65
Time 1,241.9 7.6 2.42 1,159.0 6.4 2.20
----------------------------------------------------------------------
Total Interest-Bearing
Deposits 5,862.8 15.8 1.07 5,797.1 13.6 0.94
----------------------------------------------------------------------
Short-Term Borrowings 953.2 7.7 3.22 822.9 5.8 2.81
Long-Term Debt 242.7 3.8 6.19 242.7 3.7 6.16
----------------------------------------------------------------------
Total Interest-Bearing
Liabilities 7,058.7 27.3 1.53 6,862.7 23.1 1.35
----------------------------------------------------------------------
Net Interest Income $102.0 $101.1
======== =======
Interest Rate Spread 3.91% 4.00%
Net Interest Margin 4.30% 4.36%
Non-Interest-Bearing
Demand Deposits 1,970.9 1,950.2
Other Liabilities 443.7 439.5
Shareholders' Equity 722.7 716.8
---------- ---------
Total Liabilities and
Shareholders' Equity $10,196.0 $9,969.2
========== =========
Three Months Ended Nine Months Ended
September 30, 2004 (1) September 30, 2005
Average Income/ Yield/ Average Income/ Yield/
(dollars in millions) Balance Expense Rate Balance Expense Rate
----------------------------------------------------------------------
Earning Assets
Interest-Bearing Deposits $82.6 $0.5 2.39% $5.8 $0.1 2.69%
Funds Sold 28.6 0.1 1.51 47.5 1.2 3.30
Investment Securities
Available for Sale 2,325.5 24.6 4.23 2,536.3 83.9 4.41
Held to Maturity 659.0 6.3 3.87 541.8 16.5 4.05
Loans Held for Sale 11.3 0.2 5.74 15.1 0.6 5.66
Loans and Leases (2)
Commercial and
Industrial 815.1 10.7 5.27 946.6 43.3 6.12
Construction 81.1 1.0 5.01 150.7 6.7 5.97
Commercial Mortgage 658.9 8.8 5.29 588.3 25.8 5.85
Residential Mortgage 2,280.8 32.1 5.62 2,341.0 99.3 5.65
Other Revolving Credit
and Installment 705.6 15.1 8.53 739.7 46.4 8.39
Home Equity 583.7 7.1 4.83 718.9 32.5 6.04
Purchased Home Equity 155.2 1.7 4.29 102.8 2.4 3.15
Lease Financing 516.0 5.4 4.17 499.6 13.9 3.72
----------------------------------------------------------------------
Total Loans and Leases 5,796.4 81.9 5.63 6,087.6 270.3 5.93
----------------------------------------------------------------------
Other 78.7 0.8 4.05 66.6 1.0 1.99
----------------------------------------------------------------------
Total Earning Assets (3) 8,982.1 114.4 5.08 9,300.7 373.6 5.36
----------------------------------------------------------------------
Cash and Non-Interest-
Bearing Deposits 316.9 312.5
Other Assets 369.5 391.8
--------- ----------
Total Assets $9,668.5 $10,005.0
========= ==========
Interest-Bearing Liabilities
Interest-Bearing Deposits
Demand $1,471.0 0.9 0.24 $1,672.5 6.9 0.56
Savings 2,998.4 3.2 0.43 2,944.1 14.5 0.66
Time 1,078.4 4.9 1.81 1,172.3 19.5 2.22
----------------------------------------------------------------------
Total Interest-Bearing
Deposits 5,547.8 9.0 0.64 5,788.9 40.9 0.95
----------------------------------------------------------------------
Short-Term Borrowings 816.9 2.8 1.36 828.4 17.6 2.84
Long-Term Debt 246.8 3.8 6.22 244.7 11.3 6.16
----------------------------------------------------------------------
Total Interest-Bearing
Liabilities 6,611.5 15.6 0.94 6,862.0 69.8 1.36
----------------------------------------------------------------------
Net Interest Income $98.8 $303.8
======== =======
Interest Rate Spread 4.14% 4.00%
Net Interest Margin 4.39% 4.36%
Non-Interest-Bearing
Demand Deposits 1,932.0 1,967.9
Other Liabilities 393.4 435.4
Shareholders' Equity 731.6 739.7
--------- ----------
Total Liabilities and
Shareholders' Equity $9,668.5 $10,005.0
========= ==========
(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 September 30, 2005
Compared to June 30, 2005
(dollars in millions) Volume (1) Rate (1) Time (1) Total
----------------------------------------------------------------------
Change in Interest Income:
Interest-Bearing Deposits $ - $ 0.1 $ - $ 0.1
Funds Sold 0.7 - - 0.7
Investment Securities
Available for Sale 0.4 0.1 - 0.5
Held to Maturity (0.4) - - (0.4)
Loans Held for Sale 0.1 - - 0.1
Loans and Leases
Commercial and Industrial 0.6 0.7 0.2 1.5
Construction 0.7 0.2 - 0.9
Commercial Mortgage (0.6) 0.1 0.1 (0.4)
Residential Mortgage 0.1 0.5 - 0.6
Other Revolving Credit and
Installment 0.1 0.2 0.2 0.5
Home Equity 0.6 0.7 0.1 1.4
Purchased Home Equity (0.1) (0.1) - (0.2)
Lease Financing - (0.3) 0.1 (0.2)
----------------------------------------------------------------------
Total Loans and Leases 1.4 2.0 0.7 4.1
----------------------------------------------------------------------
Total Change in Interest Income 2.2 2.2 0.7 5.1
----------------------------------------------------------------------
Change in Interest Expense:
Interest-Bearing Deposits
Demand 0.1 0.4 - 0.5
Savings (0.2) 0.6 0.1 0.5
Time 0.5 0.6 0.1 1.2
----------------------------------------------------------------------
Total Interest-Bearing Deposits 0.4 1.6 0.2 2.2
----------------------------------------------------------------------
Short-Term Borrowings 1.1 0.8 - 1.9
Long-Term Debt - 0.1 - 0.1
----------------------------------------------------------------------
Total Change in Interest Expense 1.5 2.5 0.2 4.2
----------------------------------------------------------------------
Change in Net Interest Income $ 0.7 $ (0.3) $ 0.5 $ 0.9
======================================================================
(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 Nine Months Ended
September June September September
30, 30, 30, 30,
(dollars in thousands) 2005 2005(1) 2004(1) 2005 2004(1)
----------------------------------------------------------------------
Salaries $27,652 $26,758 $27,993 $80,521 $83,307
Incentive Compensation 4,385 3,725 4,383 12,078 11,459
Stock Based Compensation 1,855 1,828 2,671 5,398 8,800
Commission Expense 1,864 2,281 1,780 6,397 5,691
Retirement and Other
Benefits 4,512 4,437 4,099 13,717 12,670
Payroll Taxes 2,091 2,205 2,415 7,749 8,948
Medical, Dental, and Life
Insurance 1,805 1,823 2,064 5,859 6,304
Separation Expense 202 799 1,161 1,272 2,077
----------------------------------------------------------------------
Total Salaries and
Benefits $44,366 $43,856 $46,566 $132,991 $139,256
======================================================================
(1) Certain prior information has been reclassified to conform to
current presentation.
Bank of Hawaii Corporation and Subsidiaries
Loan Portfolio Balances (Unaudited) Table 8
----------------------------------------------------------------------
September June December September
30, 30, 31, 30,
(dollars in thousands) 2005 2005 (1) 2004 (1) 2004 (1)
----------------------------------------------------------------------
Commercial
Commercial and
Industrial $968,146 $1,000,554 $911,843 $792,400
Commercial Mortgage 574,034 563,581 602,678 648,991
Construction 190,603 165,772 122,103 104,457
Lease Financing 468,378 471,600 479,100 479,063
----------------------------------------------------------------------
Total Commercial 2,201,161 2,201,507 2,115,724 2,024,911
----------------------------------------------------------------------
Consumer
Residential Mortgage 2,370,717 2,345,483 2,324,058 2,290,940
Home Equity 778,723 739,161 657,164 609,981
Purchased Home Equity 81,076 93,806 122,728 143,300
Other Revolving Credit
and Installment 743,764 742,834 734,721 712,647
Lease Financing 27,105 28,627 32,535 33,796
----------------------------------------------------------------------
Total Consumer 4,001,385 3,949,911 3,871,206 3,790,664
----------------------------------------------------------------------
Total Loans and Leases $6,202,546 $6,151,418 $5,986,930 $5,815,575
======================================================================
Air Transportation Credit Exposure(2) (Unaudited)
----------------------------------------------------------------------
September 30, Dec. 31, Sept. 30,
2005 2004(1) 2004
------------------------------- --------- ---------
(dollars in Unused Total Total Total
thousands) Outstanding Commitments Exposure Exposure Exposure
----------------------------------------------------------------------
United States
Regional Passenger
Carriers $41,206 $1,656 $42,862 $54,981 $57,505
United States
National Passenger
Carriers 27,816 - 27,816 37,377 37,771
Passenger Carriers
Based Outside United
States 21,573 - 21,573 25,910 28,540
Cargo Carriers 13,240 - 13,240 13,771 13,771
----------------------------------------------------------------------
Total Air
Transportation $103,835 $1,656 $105,491 $132,039 $137,587
======================================================================
(1) Certain prior information has been reclassified to conform to
current 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
----------------------------------------------------------------------
September June December September
30, 30, 31, 30,
(dollars in thousands) 2005 2005 2004 2004
----------------------------------------------------------------------
Non-Performing Assets
Non-Accrual Loans
Commercial
Commercial and
Industrial $471 $430 $683 $775
Commercial Mortgage 1,555 1,739 2,106 5,552
Lease Financing 4 1,586 2,973 1,913
----------------------------------------------------------------------
Total Commercial 2,030 3,755 5,762 8,240
----------------------------------------------------------------------
Consumer
Residential Mortgage 5,083 6,034 7,688 7,278
Home Equity 41 156 218 251
----------------------------------------------------------------------
Total Consumer 5,124 6,190 7,906 7,529
----------------------------------------------------------------------
Total Non-Accrual Loans 7,154 9,945 13,668 15,769
----------------------------------------------------------------------
Foreclosed Real Estate 413 292 191 208
Other Investments 683 683 - -
----------------------------------------------------------------------
Total Non-Performing Assets $8,250 $10,920 $13,859 $15,977
======================================================================
Accruing Loans Past Due 90 Days or More
Commercial
Commercial and Industrial $- $9 $52 $65
Commercial Mortgage - 2,213 - 688
----------------------------------------------------------------------
Total Commercial - 2,222 52 753
----------------------------------------------------------------------
Consumer
Residential Mortgage 1,545 1,310 387 2,588
Purchased Home Equity 83 - 183 97
Other Revolving Credit
and Installment 1,479 1,417 1,433 1,533
Lease Financing 51 - 30 32
----------------------------------------------------------------------
Total Consumer 3,158 2,727 2,033 4,250
----------------------------------------------------------------------
Total Accruing Loans Past
Due 90 Days or More $3,158 $4,949 $2,085 $5,003
======================================================================
Total Loans and Leases $6,202,546 $6,151,418 $5,986,930 $5,815,575
======================================================================
Ratio of Non-Accrual Loans
to Total Loans 0.12% 0.16% 0.23% 0.27%
----------------------------------------------------------------------
Ratio of Non-Performing
Assets to Total Loans,
Foreclosed Real Estate
and Other Investments 0.13% 0.18% 0.23% 0.27%
----------------------------------------------------------------------
Ratio of Non-Performing
Assets and Accruing Loans
Past Due 90 Days or More
to Total Loans 0.18% 0.26% 0.27% 0.36%
----------------------------------------------------------------------
Quarter to Quarter Changes in Non-Performing Assets
Balance at Beginning of
Quarter $10,920 $13,365 $15,977 $21,160
Additions 919 3,088 5,164 2,094
Reductions
Payments (1,326) (5,097) (6,435) (1,386)
Return to Accrual (2,007) (392) (456) (1,122)
Sales of Foreclosed
Assets - - (206) (682)
Charge-offs/Write-downs (256) (44) (185) (88)
Transfer to Premises - - - (3,999)
----------------------------------------------------------------------
Total Reductions (3,589) (5,533) (7,282) (7,277)
----------------------------------------------------------------------
Balance at End of Quarter $8,250 $10,920 $13,859 $15,977
======================================================================
Bank of Hawaii Corporation and Subsidiaries
Consolidated Reserve for Credit Losses (Unaudited) Table 10
----------------------------------------------------------------------
Three Months Ended Nine Months Ended
September 30, September 30,
(dollars in thousands) 2005 2004 2005 2004
----------------------------------------------------------------------
Balance at Beginning of
Period $106,163 $124,904 $113,596 $129,080
Loans Charged-Off
Commercial
Commercial and Industrial 620 227 1,775 3,942
Commercial Mortgage - - - 574
Lease Financing 10,049 - 10,049 607
Consumer
Residential Mortgage 130 226 512 690
Home Equity - 11 - 20
Purchased Home Equity 26 173 723 464
Other Revolving Credit
and Installment 4,488 4,268 13,617 13,487
Lease Financing 6 45 69 109
----------------------------------------------------------------------
Total Loans Charged-Off 15,319 4,950 26,745 19,893
----------------------------------------------------------------------
Recoveries on Loans Previously Charged-Off
Commercial
Commercial and Industrial 528 1,206 1,281 3,431
Commercial Mortgage 146 1,093 240 1,933
Construction - 94 - 529
Lease Financing - 2 162 18
Consumer
Residential Mortgage 190 207 485 805
Home Equity 4 14 34 154
Purchased Home Equity 126 51 281 108
Other Revolving Credit
and Installment 1,322 1,502 3,775 4,868
Lease Financing 7 9 58 80
Foreign - 519 - 7,038
----------------------------------------------------------------------
Total Recoveries on Loans
Previously Charged-Off 2,323 4,697 6,316 18,964
----------------------------------------------------------------------
Net Loan Charge-Offs (12,996) (253) (20,429) (929)
Provision for Credit Losses 3,000 - 3,000 (3,500)
----------------------------------------------------------------------
Balance at End of Period (1) $96,167 $124,651 $96,167 $124,651
======================================================================
Components
Allowance for Loan and
Lease Losses $91,654 $124,651 $91,654 $124,651
Reserve for Unfunded
Commitments (2) 4,513 - 4,513 -
----------------------------------------------------------------------
Total Reserve for Credit
Losses $96,167 $124,651 $96,167 $124,651
======================================================================
Average Loans
Outstanding $6,170,302 $5,796,350 $6,087,629 $5,770,642
======================================================================
Ratio of Net Loan Charge-
Offs to Average Loans
Outstanding (annualized) 0.84% 0.02% 0.45% 0.02%
Ratio of Allowance to Loans
and Leases Outstanding (2) 1.48% 2.14% 1.48% 2.14%
(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, September 30, 2004 allowance for loan and
lease losses and reserve for unfunded commitments were reported
together. At September 30, 2004, the reserve for unfunded
commitments was $6.7 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
September 30,
2005
Net Interest
Income $56,549 $36,017 $3,223 $6,171 $101,960
Provision for
Credit Losses 2,946 10,564 - (10,510) 3,000
----------------------------------------------------------------------
Net Interest
Income After
Provision for
Credit Losses 53,603 25,453 3,223 16,681 98,960
Non-Interest
Income 25,595 13,385 14,097 2,439 55,516
----------------------------------------------------------------------
79,198 38,838 17,320 19,120 154,476
Non-Interest
Expense (44,517) (22,025) (15,683) (2,371) (84,596)
----------------------------------------------------------------------
Income Before
Income Taxes 34,681 16,813 1,637 16,749 69,880
Provision for
Income Taxes (12,832) (6,327) (606) (5,286) (25,051)
----------------------------------------------------------------------
Allocated Net
Income 21,849 10,486 1,031 11,463 44,829
----------------------------------------------------------------------
Allowance
Funding Value (178) (586) (5) 769 -
GAAP Provision 2,946 10,564 - (10,510) 3,000
Economic
Provision (3,364) (2,410) (105) (1) (5,880)
Tax Effect of
Adjustments 221 (2,800) 41 3,604 1,066
----------------------------------------------------------------------
Income Before
Capital Charge 21,474 15,254 962 5,325 43,015
Capital Charge (5,569) (4,645) (1,548) (8,113) (19,875)
----------------------------------------------------------------------
Net Income
(Loss) After
Capital Charge
(NIACC) $15,905 $10,609 $(586) $(2,788) $23,140
======================================================================
RAROC (ROE for
the Company) 42% 36% 7% 16% 25%
======================================================================
Total Assets at
September 30,
2005 $3,829,656 $2,538,084 $184,757 $3,532,738 $10,085,235
======================================================================
Three Months
Ended
September 30,
2004 (1)
Net Interest
Income $51,329 $33,967 $2,889 $10,594 $98,779
Provision for
Credit Losses 2,121 (847) (1) (1,273) -
----------------------------------------------------------------------
Net Interest
Income After
Provision for
Credit Losses 49,208 34,814 2,890 11,867 98,779
Non-Interest
Income 22,430 15,350 12,812 2,462 53,054
----------------------------------------------------------------------
71,638 50,164 15,702 14,329 151,833
Non-Interest
Expense (43,605) (23,019) (13,632) (3,934) (84,190)
----------------------------------------------------------------------
Income Before
Income Taxes 28,033 27,145 2,070 10,395 67,643
Provision for
Income Taxes (10,372) (10,069) (766) (3,369) (24,576)
----------------------------------------------------------------------
Allocated Net
Income 17,661 17,076 1,304 7,026 43,067
----------------------------------------------------------------------
Allowance
Funding Value (166) (621) (6) 793 -
GAAP Provision 2,121 (847) (1) (1,273) -
Economic
Provision (3,584) (2,467) (86) (1) (6,138)
Tax Effect of
Adjustments 602 1,456 34 179 2,271
----------------------------------------------------------------------
Income Before
Capital Charge 16,634 14,597 1,245 6,724 39,200
Capital Charge (5,441) (4,824) (1,344) (8,515) (20,124)
----------------------------------------------------------------------
Net Income
(Loss) After
Capital Charge
(NIACC) $11,193 $9,773 $(99) $(1,791) $19,076
======================================================================
RAROC (ROE for
the Company) 33% 33% 10% 20% 23%
======================================================================
Total Assets at
September 30,
2004 $3,711,048 $2,295,901 $124,943 $3,462,917 $9,594,809
======================================================================
(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
----------------------------------------------------------------------
Nine Months
Ended
September 30,
2005
Net Interest
Income $163,111 $106,105 $9,334 $25,107 $303,657
Provision for
Credit Losses 9,962 11,216 (1) (18,177) 3,000
----------------------------------------------------------------------
Net Interest
Income After
Provision for
Credit Losses 153,149 94,889 9,335 43,284 300,657
Non-Interest
Income 74,917 33,651 42,952 6,985 158,505
----------------------------------------------------------------------
228,066 128,540 52,287 50,269 459,162
Non-Interest
Expense (130,135) (65,604) (42,594) (6,130) (244,463)
----------------------------------------------------------------------
Income Before
Income Taxes 97,931 62,936 9,693 44,139 214,699
Provision for
Income Taxes (36,235) (23,326) (3,586) (14,772) (77,919)
----------------------------------------------------------------------
Allocated Net
Income 61,696 39,610 6,107 29,367 136,780
----------------------------------------------------------------------
Allowance
Funding Value (509) (1,788) (17) 2,314 -
GAAP Provision 9,962 11,216 (1) (18,177) 3,000
Economic
Provision (10,304) (7,300) (298) (3) (17,905)
Tax Effect of
Adjustments 315 (787) 117 5,871 5,516
----------------------------------------------------------------------
Income Before
Capital Charge 61,160 40,951 5,908 19,372 127,391
Capital Charge (16,449) (13,842) (4,317) (26,436) (61,044)
----------------------------------------------------------------------
Net Income
(Loss) After
Capital Charge
(NIACC) $44,711 $27,109 $1,591 $(7,064) $66,347
======================================================================
RAROC (ROE for
the Company) 41% 33% 15% 16% 25%
======================================================================
Total Assets at
September 30,
2005 $3,829,656 $2,538,084 $184,757 $3,532,738 $10,085,235
======================================================================
Nine Months
Ended
September 30,
2004 (1)
Net Interest
Income $151,010 $101,569 $8,533 $29,547 $290,659
Provision for
Credit Losses 7,455 1,630 47 (12,632) (3,500)
----------------------------------------------------------------------
Net Interest
Income After
Provision for
Credit Losses 143,555 99,939 8,486 42,179 294,159
Non-Interest
Income 67,833 37,923 40,238 10,750 156,744
----------------------------------------------------------------------
211,388 137,862 48,724 52,929 450,903
Non-Interest
Expense (131,382) (69,092) (39,888) (11,975) (252,337)
----------------------------------------------------------------------
Income Before
Income Taxes 80,006 68,770 8,836 40,954 198,566
Provision for
Income Taxes (29,602) (25,450) (3,269) (13,147) (71,468)
----------------------------------------------------------------------
Allocated Net
Income 50,404 43,320 5,567 27,807 127,098
----------------------------------------------------------------------
Allowance
Funding Value (442) (2,045) (20) 2,507 -
GAAP Provision 7,455 1,630 47 (12,632) (3,500)
Economic
Provision (10,489) (8,065) (279) (6) (18,839)
Tax Effect of
Adjustments 1,286 3,138 93 3,749 8,266
----------------------------------------------------------------------
Income Before
Capital Charge 48,214 37,978 5,408 21,425 113,025
Capital Charge (16,696) (15,218) (3,934) (26,465) (62,313)
----------------------------------------------------------------------
Net Income
(Loss) After
Capital Charge
(NIACC) $31,518 $22,760 $1,474 $(5,040) $50,712
======================================================================
RAROC (ROE for
the Company) 32% 27% 15% 24% 22%
======================================================================
Total Assets at
September 30,
2004 $3,711,048 $2,295,901 $124,943 $3,462,917 $9,594,809
======================================================================
(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 Three Months Ended
thousands September June March December September
except per 30, 30, 31, 31, 30,
share amounts) 2005 2005 2005 2004 2004 (1)
----------------------------------------------------------------------
Quarterly Operating Results
Interest Income
Interest
and Fees on
Loans and
Leases $94,381 $90,119 $86,467 $84,100 $82,079
Income on
Investment
Securities -
Available
for Sale 28,482 27,987 27,319 26,394 24,543
Income on
Investment
Securities -
Held to
Maturity 5,109 5,527 5,825 6,147 6,370
Deposits 57 36 23 107 496
Funds Sold 935 165 75 356 108
Other 270 271 449 267 801
----------------------------------------------------------------------
Total Interest
Income 129,234 124,105 120,158 117,371 114,397
----------------------------------------------------------------------
Interest Expense
Deposits 15,766 13,577 11,604 9,993 8,990
Securities
Sold Under
Agreements to
Repurchase 6,796 4,562 3,325 3,120 2,085
Funds
Purchased 901 1,151 733 395 683
Short-Term
Borrowings 50 45 32 39 15
Long-Term Debt 3,761 3,731 3,806 3,893 3,845
----------------------------------------------------------------------
Total Interest
Expense 27,274 23,066 19,500 17,440 15,618
----------------------------------------------------------------------
Net Interest
Income 101,960 101,039 100,658 99,931 98,779
Provision for
Credit Losses 3,000 - - (6,500) -
----------------------------------------------------------------------
Net Interest
Income After
Provision for
Credit Losses 98,960 101,039 100,658 106,431 98,779
----------------------------------------------------------------------
Non-Interest Income
Trust and Asset
Management 14,052 14,058 14,622 13,934 12,672
Mortgage
Banking 2,618 2,594 2,590 1,516 1,711
Service
Charges on
Deposit
Accounts 10,046 9,569 10,179 10,155 9,472
Fees,
Exchange,
and Other
Service
Charges 15,394 15,211 13,836 13,684 13,741
Investment
Securities
Gains (Losses) 8 337 - (757) -
Insurance 5,324 4,330 5,788 4,234 5,423
Other 8,074 4,575 5,300 5,584 10,035
----------------------------------------------------------------------
Total Non-Interest
Income 55,516 50,674 52,315 48,350 53,054
----------------------------------------------------------------------
Non-Interest Expense
Salaries and
Benefits 44,366 43,856 44,769 45,043 46,566
Net Occupancy 9,896 9,189 9,545 9,606 9,812
Net Equipment 5,335 5,377 5,471 6,316 5,847
Professional
Fees 5,689 2,905 3,051 3,580 3,428
Other 19,310 17,677 18,027 17,558 18,537
----------------------------------------------------------------------
Total Non-Interest
Expense 84,596 79,004 80,863 82,103 84,190
----------------------------------------------------------------------
Income Before
Income Taxes 69,880 72,709 72,110 72,678 67,643
Provision for
Income Taxes 25,051 26,280 26,588 26,437 24,576
----------------------------------------------------------------------
Net Income $44,829 $46,429 $45,522 $46,241 $43,067
======================================================================
Basic Earnings
Per Share $0.87 $0.90 $0.85 $0.86 $0.82
Diluted Earnings
Per Share $0.85 $0.87 $0.83 $0.82 $0.78
Balance Sheet
Totals
Total Assets $10,085,235 $10,059,690 $9,908,030 $9,766,191 $9,594,809
Net Loans 6,110,892 6,049,831 5,910,784 5,880,134 5,690,924
Total
Deposits 7,756,586 7,726,758 7,760,662 7,564,667 7,413,240
Total
Shareholders'
Equity 696,311 712,169 716,656 814,834 756,707
Performance
Ratios
Net Income to
Average Total
Assets (ROA) 1.74% 1.87% 1.88% 1.89% 1.77%
Net Income to
Average
Shareholders
Equity (ROE) 24.61 25.98 23.66 23.63 23.42
Efficiency
Ratio (2) 53.72 52.07 52.86 55.37 55.45
(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 (Media)
Pager: 877-849-5423
skiguchi@boh.com
Cindy Wyrick, 808-537-8430 (Investors/Analysts)
cwyrick@boh.com
SOURCE: Bank of Hawaii Corporation