UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report |
|
|
|
(Date of earliest event reported) |
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July 26, 2004 |
BANK OF HAWAII CORPORATION
(Exact name of registrant as specified in its charter)
Delaware |
|
1-6887 |
|
99-0148992 |
|
(State of Incorporation) |
|
(Commission |
|
(IRS Employer |
|
130 Merchant Street, Honolulu, Hawaii |
|
96813 |
|
(Address of principal executive offices) |
|
(Zip Code) |
|
|
|
|
|
(Registrant’s
telephone number, |
|
(808) 537-8430 |
Item 12. Results of Operations and Financial Conditions.
(a) Exhibit 99.1
Press Release: Bank of Hawaii Corporation Second Quarter 2004 Financial Results
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
Date: July 26, 2004 |
BANK OF HAWAII CORPORATION |
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|
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/s/ Michael E. O’Neill |
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Michael E. O’Neill |
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Chairman and Chief Executive |
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2
EXHIBIT 99.1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
BANK OF HAWAII CORPORATION
EXHIBIT TO CURRENT REPORT ON
FORM 8-K DATED July 26, 2004
Commission File Number 1-6887
Bank of Hawaii Corporation Second Quarter 2004 Financial Results
• Diluted Earnings Per Share Increases to $0.79, Up 65 Percent
• Net Income of $44.2 Million for the Quarter, Up 47 Percent
• Additional Share Repurchase Authorization of $100 Million
• Board of Directors Declares Dividend of $0.30 Per Share
FOR IMMEDIATE RELEASE
HONOLULU, HI (July 26, 2004) – Bank of Hawaii Corporation (NYSE: BOH) today reported diluted earnings per share of $0.79 for the second quarter of 2004, up $0.10 or 14.5 percent from $0.69 in the first quarter of 2004, and up $0.31 or 64.6 percent from $0.48 in the comparable quarter last year. Net income for the second quarter of 2004 was $44.2 million, up $4.4 million or 11.1 percent from $39.8 million in the previous quarter and up $14.2 million or 47.3 percent from $30.0 million reported in the same quarter last year.
Return on average assets for the second quarter of 2004 was 1.80 percent, up from 1.65 percent in the first quarter of 2004, and up from 1.27 percent in the second quarter of 2003. Return on average equity was 24.28 percent for the second quarter of 2004, up from 19.98 percent in the previous quarter and a significant improvement from 12.93 percent in the same quarter last year.
For six months ended June 30, 2004, net income was $84.0 million, up $24.2 million or 40.4 percent from net income of $59.8 million for the same period last year. Diluted earnings per share were $1.48 for the first half of 2004, an increase of 55.8 percent from diluted earnings per share of $0.95 for the first half of 2003. The year-to-date return on average assets was 1.73 percent, up from 1.29 percent for the same six months in 2003. The year-to-date return on average equity was 22.03 percent, up from 12.67 percent for the six months ended June 30, 2003.
“I am pleased to report that we continue to make solid progress in improving our operating efficiency, asset quality and customer service levels,” said Michael E. O’Neill, Chairman and CEO. “The Hawaii economy continues to strengthen, and our leadership team remains keenly focused on growing our businesses in our key markets and achieving the goals of our new three-year plan.”
- more -
Bank of Hawaii Corporation Second Quarter 2004 Financial Results
In a separate news release issued today, Bank of Hawaii Corporation announced that the Board of Directors elected Allan Landon, President and COO, to succeed Michael E. O’Neill as Chairman and CEO on September 1, 2004. Mr. O’Neill will be leaving Bank of Hawaii.
Financial Highlights
Net interest income, on a taxable equivalent basis, for the second quarter of 2004 was $95.9 million, down $0.2 million from net interest income of $96.1 million in the first quarter of 2004, and up $5.4 million from net interest income of $90.5 million in the second quarter of 2003. The increase from the previous year was largely the result of lower interest rates paid on deposits and a reduction in long-term debt. An analysis of the change in net interest income is included in Table 6.
The net interest margin was 4.17 percent for the second quarter of 2004, down 13 basis points from the net interest margin of 4.30 percent in the previous quarter and up 5 basis points from 4.12 percent in the same quarter last year. The decrease in the net interest margin compared to the previous quarter was largely due to a decrease in the average yield on the loan portfolio.
Credit quality continued to improve during the second quarter of 2004. The Company recognized a $3.5 million negative provision for loan and lease losses during the quarter and did not record a provision for the previous seven quarters. The allowance for loan and lease losses was reduced $2.3 million from March 31, 2004, reflecting the reduced credit risk profile.
Non-interest income was $54.8 million for the second quarter of 2004 compared to non-interest income of $48.8 million in the first quarter of 2004 and $50.7 million in the second quarter of 2003. The improvement from the previous quarter was largely due to a partnership distribution of $3.2 million, a gain of $2.5 million on the sale of land, and increased mortgage banking income. Growth in fee income, including annuity and brokerage fees, was partially offset by a seasonal decline in tax service income and service charges on deposits.
Non-interest expense for the second quarter of 2004 was $85.1 million, up $2.1 million from $83.0 million in the previous quarter and down $10.3 million or 10.8 percent from non-interest expense of $95.4 million in the second quarter of 2003. The increase from the previous quarter was largely the result of charges of $2.2 million to settle litigation and a contribution of $1.0 million to the Bank of Hawaii Charitable Foundation. Non-interest expense in the second quarter of 2003 included $10.1 million in systems replacement costs. Excluding these items, non-interest expense in the second quarter of 2004 was down $2.8 million or 3.3 percent from the same quarter last year.
The efficiency ratio was 56.5 percent for the second quarter of 2004, down from 57.3 percent in the first quarter of 2004. Excluding systems replacement costs, the efficiency ratio was 60.4 percent in the second quarter of 2003. For six months ended June 30, 2004, the efficiency ratio was 56.9 percent compared to 67.0 percent for the same period in 2003. Excluding systems replacement costs, the efficiency ratio was 60.7 percent for the first six months of last year.
The Company’s business segments are defined as Retail Banking, Commercial Banking, Investment Services Group, and Treasury and Other Corporate. Results are determined based on the Company’s internal financial management reporting process and organizational structure. Business segment performance details are summarized in Table 11a and 11b.
2
Asset Quality
Bank of Hawaii Corporation’s credit quality remained strong during the second quarter of 2004. Non-performing assets declined to $21.2 million at the end of the second quarter of 2004, a decrease of $6.7 million, or 24.1 percent, from non-performing assets of $27.9 million at the end of the first quarter of 2004. Non-performing assets decreased $20.8 million, or 49.6 percent, compared to non-performing assets of $42.0 million at the end of the same quarter last year. At June 30, 2004, the ratio of non-performing assets to total loans and foreclosed real estate was 0.37 percent, down from 0.49 percent at March 31, 2004 and down from 0.77 percent at June 30, 2003.
Non-accrual loans were $16.3 million at June 30, 2004, a reduction of $7.2 million, or 30.6 percent, from $23.5 million at March 31, 2004 and down $16.4 million, or 50.2 percent, from $32.7 million at June 30, 2003. Non-accrual loans as a percentage of total loans were 0.28 percent at June 30, 2004, down from 0.41 percent at the end of the previous quarter and down from 0.60 percent at the end of the comparable quarter last year.
Net charge-offs were in a net recovery position of $1.2 million in the second quarter of 2004 as charge-offs of $8.8 million were more than offset by recoveries of $10.0 million. Net charge-offs in the first quarter of 2004 were $1.9 million, or 0.13 percent (annualized) of total average loans. Net charge-offs during the second quarter of 2003 were $2.1 million, or 0.15 percent (annualized) of total average loans. Net charge-offs for the first six months of 2004 were $0.7 million, or 0.02 percent (annualized) of total average loans compared to $4.9 million, or 0.18 percent (annualized) of total average loans for the same period last year.
The allowance for loan and lease losses was $124.9 million at June 30, 2004. The ratio of the allowance for loan and lease losses to total loans was 2.16 percent at June 30, 2004 compared with 2.23 percent at March 31, 2004 and 2.52 percent at the end of the same quarter last year.
Concentrations of credit exposure to selected components of the portfolio are summarized in Table 8.
Other Financial Highlights
Total assets decreased to $9.7 billion at June 30, 2004, compared to total assets of $10.0 billion at March 31, 2004 and were slightly up from $9.6 billion at June 30, 2003. The decrease in total assets from the previous quarter was primarily due to a lower level of funding resulting from securities sold under agreements to repurchase by public entities.
Total deposits at June 30, 2004 were $7.5 billion, up from total deposits of $7.4 billion at March 31, 2004 and up from total deposits of $7.1 billion at June 30, 2003 due to continued strong growth in demand and savings deposits.
During the second quarter of 2004, Bank of Hawaii Corporation repurchased 2.1 million shares of common stock at a total cost of $92.9 million under the share repurchase program. The average cost per share was $43.91 during the quarter. From the beginning of the share repurchase program in July 2001 through June 30, 2004, the Company repurchased a total of 33.2 million shares and returned a total of $1,005.7 million to the shareholders at an average cost of $30.27 per share.
3
The Company’s Board of Directors has increased the authorization under the share repurchase program by an additional $100 million of common stock. This new authorization, combined with the previously announced authorizations of $1,050 million, brings the total repurchase authority to $1,150 million. From July 1, 2004 through July 23, 2004, the Company repurchased an additional 0.2 million shares of common stock at an average cost of $45.50 per share. Remaining buyback authority was $137.0 million at July 23, 2004.
The Company’s capital and liquidity remain strong. At June 30, 2004, the Tier 1 leverage ratio was 7.16 percent compared to 7.88 percent at March 31, 2004 and 9.29 percent at June 30, 2003.
The Company’s Board of Directors has declared a quarterly cash dividend of $0.30 per share on the Company’s outstanding shares. The dividend will be payable on September 15, 2004 to shareholders of record at the close of business on August 30, 2004.
Economic Outlook
Tourism in Hawaii may reach record levels during the summer of 2004. Total visitor counts were up 9.0 percent year-to-date through May 2004 and up 13.0 percent in June compared to last year. Growth in tourism is a result of the continued strength in domestic visitors to Hawaii and increased international visitors, partially due to the improving Japan economy and favorable yen/dollar exchange rates. Hotel revenues rose 6.0 percent, matched by growth in overall business receipts, during the State fiscal year ending in June 2004.
Hawaii’s seasonally-adjusted unemployment rate declined to 3.0 percent in May, one percentage point below a year ago, as labor markets tightened. Seasonally-adjusted payrolls grew at a 1.7 percent annualized rate in the most recent six-month period, and were up 2.1 percent on a year-over-year basis in May 2004.
Hawaii real estate investment continues to dominate near-term growth prospects. Home sales volumes in Honolulu have grown at annual rates of more than 15.0 percent since 1997 and record volumes are expected to be reached this summer. Military housing privatization is anticipated to double annual homebuilding on Oahu beginning in the fourth quarter of 2004. Overall, construction employment is expected to return to early-1990s cyclical peaks.
Honolulu’s semiannual inflation rate for the first half of 2004 is expected to repeat the 3.0 percent recorded in the second half of 2003, up from 1.0 percent a year earlier. Strong China, Eastern Asia and Southern California economies, and recoveries in Northern California and the Pacific Northwest, put Hawaii at the center of regional economic strength once again.
Earnings Outlook
Bank of Hawaii Corporation currently anticipates net income for the full year of 2004 will be approximately $163 million to $167 million. Based on present conditions, the Company does not expect to record a provision for loan and lease losses for the remainder of 2004. However, the actual amount of the provision for loan and lease losses depends on determinations of credit risk that are made near the end of each quarter. Earnings per share and return on equity projections continue to be dependent upon the terms and timing of share repurchases.
4
Conference Call Information
The Company will review its second quarter 2004 financial results today at 8:00 a.m. Hawaii Time (2:00 p.m. Eastern Time). The presentation will be accessible via teleconference and via the Investor Relations link of Bank of Hawaii Corporation’s web site, www.boh.com. The conference call number is 800-299-9630 in the United States or 617-786-2904 for international callers. No confirmation code is required to access the call. A replay will be available for one week beginning at 10:00 a.m. Hawaii Time (4:00 p.m. Eastern Time) on Monday, July 26, 2004 by calling 888-286-8010 in the United States or 617-801-6888 for international callers and entering the number 11335073 when prompted. A replay of the presentation will also be available via the Investor Relations link of the Company’s web site.
Bank of Hawaii Corporation is a regional financial services company serving businesses, consumers and governments in Hawaii, American Samoa and the West Pacific. The Company’s principal subsidiary, Bank of Hawaii, was founded in 1897 and is the largest independent financial institution in Hawaii. For more information about Bank of Hawaii Corporation, see the Company’s web site, www.boh.com.
Forward-Looking Statements
This news release contains forward-looking statements concerning, among other things, the economic environment in our service area, the expected level of loan loss provisioning, and anticipated net income, dividends, revenues and expenses during 2004 and beyond. Our forward-looking statements are based on numerous assumptions, any of which could prove to be inaccurate and actual results may differ materially from those projected for a variety of reasons, including, but not limited to: 1) unanticipated changes in business and economic conditions, the competitive environment, fiscal and monetary policies, or legislation in Hawaii and the other markets we serve; 2) changes in our credit quality or risk profile which may increase or decrease the required level of allowance for loan and lease losses; 3) changes in market interest rates that may affect our credit markets and ability to maintain our net interest margin; 4) changes to the amount and timing of our proposed equity repurchases; 5) inability to achieve expected benefits of our business process changes due to adverse changes in implementation processes or costs, operational savings, or timing; 6) real or threatened acts of war or terrorist activity affecting business conditions; and 7) adverse weather and other natural conditions impacting our and our customers’ operations. We do not undertake any obligation to update forward-looking statements to reflect later events or circumstances.
# # # #
5
|
Bank of Hawaii Corporation and Subsidiaries |
|
|
|
Highlights (Unaudited) |
|
Table 1 |
|
(dollars in thousands except per share amounts) |
|
Three Months Ended |
|
Six Months Ended |
|
||||||||
|
Earnings Highlights and Performance Ratios |
|
2004 |
|
2003 |
|
2004 |
|
2003 |
|
||||
|
|
|
|
|
|
|
|
|
|
|
||||
|
Net Income |
|
$ |
44,232 |
|
$ |
30,034 |
|
$ |
84,031 |
|
$ |
59,835 |
|
|
Basic Earnings Per Share |
|
0.84 |
|
0.50 |
|
1.57 |
|
0.99 |
|
||||
|
Diluted Earnings Per Share |
|
0.79 |
|
0.48 |
|
1.48 |
|
0.95 |
|
||||
|
Cash Dividends |
|
15,804 |
|
11,370 |
|
32,222 |
|
22,932 |
|
||||
|
Net Income to Average Total Assets (ROA) |
|
1.80 |
% |
1.27 |
% |
1.73 |
% |
1.29 |
% |
||||
|
Net Income to Average Shareholders’ Equity (ROE) |
|
24.28 |
% |
12.93 |
% |
22.03 |
% |
12.67 |
% |
||||
|
Net Interest Margin |
|
4.17 |
% |
4.12 |
% |
4.23 |
% |
4.21 |
% |
||||
|
Efficiency Ratio (1) |
|
56.49 |
% |
67.55 |
% |
56.89 |
% |
67.01 |
% |
||||
|
Efficiency Ratio excluding System Replacement Costs |
|
56.49 |
% |
60.39 |
% |
56.89 |
% |
60.68 |
% |
||||
|
|
|
|
|
June 30, |
|
||||
|
Statement of Condition Highlights and Performance Ratios |
|
|
|
2004 |
|
2003 |
|
||
|
|
|
|
|
|
|
|
|
||
|
Total Assets |
|
|
|
$ |
9,688,769 |
|
$ |
9,550,934 |
|
|
Net Loans |
|
|
|
5,662,410 |
|
5,333,896 |
|
||
|
Total Deposits |
|
|
|
7,469,288 |
|
7,140,849 |
|
||
|
Total Shareholders’ Equity |
|
|
|
699,438 |
|
913,010 |
|
||
|
|
|
|
|
|
|
|
|
||
|
Book Value Per Common Share |
|
|
|
$ |
13.34 |
|
$ |
15.50 |
|
|
Allowance / Loans and Leases Outstanding |
|
|
|
2.16 |
% |
2.52 |
% |
||
|
Average Equity / Average Assets |
|
|
|
7.84 |
% |
10.16 |
% |
||
|
Employees (FTE) |
|
|
|
2,683 |
|
2,879 |
|
||
|
Branches and offices |
|
|
|
89 |
|
91 |
|
||
|
|
|
|
|
|
|
|
|
||
|
Market Price Per Share of Common Stock for the Quarter Ended: |
|
|
|
|
|
|
|
||
|
|
|
Closing |
|
$ |
45.22 |
|
$ |
33.15 |
|
|
|
|
High |
|
$ |
46.84 |
|
$ |
35.90 |
|
|
|
|
Low |
|
$ |
40.97 |
|
$ |
30.75 |
|
(1) The efficiency ratio is defined as non-interest expense divided by total revenue (net interest income and non-interest income).
|
Bank of Hawaii Corporation and Subsidiaries |
|
|
|
Consolidated Statements of Income (Unaudited) |
|
Table 2 |
|
|
|
Three
Months Ended |
|
Six Months
Ended |
|
||||||||
|
(dollars in thousands except per share amounts) |
|
2004 |
|
2003 |
|
2004 |
|
2003 |
|
||||
|
Interest Income |
|
|
|
|
|
|
|
|
|
||||
|
Interest and Fees on Loans and Leases |
|
$ |
80,346 |
|
$ |
85,954 |
|
$ |
161,774 |
|
$ |
171,727 |
|
|
Income on Investment Securities - Held to Maturity |
|
6,711 |
|
3,083 |
|
13,687 |
|
5,366 |
|
||||
|
Income on Investment Securities - Available for Sale |
|
21,745 |
|
19,815 |
|
42,591 |
|
42,278 |
|
||||
|
Deposits |
|
1,646 |
|
1,161 |
|
2,877 |
|
2,468 |
|
||||
|
Funds Sold |
|
177 |
|
822 |
|
594 |
|
1,586 |
|
||||
|
Other |
|
865 |
|
1,016 |
|
1,723 |
|
2,205 |
|
||||
|
Total Interest Income |
|
111,490 |
|
111,851 |
|
223,246 |
|
225,630 |
|
||||
|
Interest Expense |
|
|
|
|
|
|
|
|
|
||||
|
Deposits |
|
8,560 |
|
13,309 |
|
17,760 |
|
27,756 |
|
||||
|
Securities Sold Under Agreements to Repurchase |
|
2,222 |
|
2,391 |
|
4,148 |
|
4,633 |
|
||||
|
Funds Purchased |
|
506 |
|
219 |
|
737 |
|
424 |
|
||||
|
Short-Term Borrowings |
|
13 |
|
25 |
|
28 |
|
49 |
|
||||
|
Long-Term Debt |
|
4,340 |
|
5,422 |
|
8,693 |
|
11,283 |
|
||||
|
Total Interest Expense |
|
15,641 |
|
21,366 |
|
31,366 |
|
44,145 |
|
||||
|
Net Interest Income |
|
95,849 |
|
90,485 |
|
191,880 |
|
181,485 |
|
||||
|
Provision for Loan and Lease Losses |
|
(3,500 |
) |
— |
|
(3,500 |
) |
— |
|
||||
|
Net Interest Income After Provision for Loan and Lease Losses |
|
99,349 |
|
90,485 |
|
195,380 |
|
181,485 |
|
||||
|
Non-Interest Income |
|
|
|
|
|
|
|
|
|
||||
|
Trust and Asset Management |
|
12,995 |
|
12,545 |
|
26,859 |
|
25,726 |
|
||||
|
Mortgage Banking |
|
2,808 |
|
6,061 |
|
4,785 |
|
6,344 |
|
||||
|
Service Charges on Deposit Accounts |
|
9,540 |
|
8,645 |
|
19,490 |
|
17,595 |
|
||||
|
Fees, Exchange, and Other Service Charges |
|
14,243 |
|
13,473 |
|
27,482 |
|
26,462 |
|
||||
|
Investment Securities Gains (Losses) |
|
(37 |
) |
587 |
|
(37 |
) |
1,170 |
|
||||
|
Insurance |
|
3,303 |
|
3,015 |
|
6,946 |
|
6,095 |
|
||||
|
Other |
|
11,996 |
|
6,413 |
|
18,165 |
|
12,100 |
|
||||
|
Total Non-Interest Income |
|
54,848 |
|
50,739 |
|
103,690 |
|
95,492 |
|
||||
|
Non-Interest Expense |
|
|
|
|
|
|
|
|
|
||||
|
Salaries and Benefits |
|
46,689 |
|
47,711 |
|
92,690 |
|
94,140 |
|
||||
|
Net Occupancy Expense |
|
9,543 |
|
9,628 |
|
18,929 |
|
19,241 |
|
||||
|
Net Equipment Expense |
|
5,799 |
|
9,208 |
|
11,763 |
|
18,956 |
|
||||
|
Information Technology Systems Replacement Project |
|
— |
|
10,105 |
|
— |
|
17,522 |
|
||||
|
Other |
|
23,094 |
|
18,742 |
|
44,765 |
|
35,735 |
|
||||
|
Total Non-Interest Expense |
|
85,125 |
|
95,394 |
|
168,147 |
|
185,594 |
|
||||
|
Income Before Income Taxes |
|
69,072 |
|
45,830 |
|
130,923 |
|
91,383 |
|
||||
|
Provision for Income Taxes |
|
24,840 |
|
15,796 |
|
46,892 |
|
31,548 |
|
||||
|
Net Income |
|
$ |
44,232 |
|
$ |
30,034 |
|
$ |
84,031 |
|
$ |
59,835 |
|
|
Basic Earnings Per Share |
|
$ |
0.84 |
|
$ |
0.50 |
|
$ |
1.57 |
|
$ |
0.99 |
|
|
Diluted Earnings Per Share |
|
$ |
0.79 |
|
$ |
0.48 |
|
$ |
1.48 |
|
$ |
0.95 |
|
|
Dividends Declared Per Share |
|
$ |
0.30 |
|
$ |
0.19 |
|
$ |
0.60 |
|
$ |
0.38 |
|
|
Basic Weighted Average Shares |
|
52,491,874 |
|
59,566,970 |
|
53,389,261 |
|
60,425,943 |
|
||||
|
Diluted Weighted Average Shares |
|
55,662,415 |
|
62,301,337 |
|
56,710,653 |
|
62,907,697 |
|
||||
|
Bank of Hawaii Corporation and Subsidiaries |
|
|
|
Consolidated Statements of Condition |
|
Table 3 |
|
(dollars in thousands) |
|
June 30, |
|
December 31, |
|
June 30, |
|
|||
|
|
|
(Unaudited) |
|
|
|
(Unaudited) |
|
|||
|
Assets |
|
|
|
|
|
|
|
|||
|
Interest-Bearing Deposits |
|
$ |
179,680 |
|
$ |
154,735 |
|
$ |
307,552 |
|
|
Investment Securities - Held to Maturity (Market Value of $663,534, $720,699, and $555,878) |
|
679,382 |
|
727,233 |
|
548,719 |
|
|||
|
Investment Securities - Available for Sale |
|
2,275,272 |
|
1,991,116 |
|
2,140,607 |
|
|||
|
Funds Sold |
|
— |
|
— |
|
250,000 |
|
|||
|
Loans Held for Sale |
|
9,565 |
|
9,211 |
|
71,892 |
|
|||
|
Loans and Leases |
|
5,787,314 |
|
5,757,175 |
|
5,471,870 |
|
|||
|
Allowance for Loan and Lease Losses |
|
(124,904 |
) |
(129,080 |
) |
(137,974 |
) |
|||
|
Net Loans |
|
5,662,410 |
|
5,628,095 |
|
5,333,896 |
|
|||
|
Total Earning Assets |
|
8,806,309 |
|
8,510,390 |
|
8,652,666 |
|
|||
|
Cash and Non-Interest-Bearing Deposits |
|
339,486 |
|
363,495 |
|
297,868 |
|
|||
|
Premises and Equipment |
|
149,128 |
|
160,005 |
|
165,542 |
|
|||
|
Customers’ Acceptance Liability |
|
1,213 |
|
1,707 |
|
1,371 |
|
|||
|
Accrued Interest Receivable |
|
36,378 |
|
32,672 |
|
35,849 |
|
|||
|
Foreclosed Real Estate |
|
4,889 |
|
4,377 |
|
9,285 |
|
|||
|
Mortgage Servicing Rights |
|
20,819 |
|
22,178 |
|
24,841 |
|
|||
|
Goodwill |
|
36,216 |
|
36,216 |
|
36,216 |
|
|||
|
Other Assets |
|
294,331 |
|
330,607 |
|
327,296 |
|
|||
|
Total Assets |
|
$ |
9,688,769 |
|
$ |
9,461,647 |
|
$ |
9,550,934 |
|
|
Liabilities |
|
|
|
|
|
|
|
|||
|
Deposits |
|
|
|
|
|
|
|
|||
|
Non-Interest-Bearing Demand |
|
$ |
1,939,580 |
|
$ |
1,933,928 |
|
$ |
1,843,750 |
|
|
Interest-Bearing Demand |
|
1,464,207 |
|
1,356,330 |
|
1,161,409 |
|
|||
|
Savings |
|
2,976,108 |
|
2,833,379 |
|
2,754,607 |
|
|||
|
Time |
|
1,089,393 |
|
1,209,142 |
|
1,381,083 |
|
|||
|
Total Deposits |
|
7,469,288 |
|
7,332,779 |
|
7,140,849 |
|
|||
|
Securities Sold Under Agreements to Repurchase |
|
687,816 |
|
472,757 |
|
699,256 |
|
|||
|
Funds Purchased |
|
139,055 |
|
109,090 |
|
90,200 |
|
|||
|
Short-Term Borrowings |
|
11,055 |
|
12,690 |
|
22,424 |
|
|||
|
Current Maturities of Long-Term Debt |
|
80,000 |
|
96,505 |
|
34,000 |
|
|||
|
Banker’s Acceptances Outstanding |
|
1,213 |
|
1,707 |
|
1,371 |
|
|||
|
Retirement Benefits Payable |
|
62,821 |
|
61,841 |
|
62,678 |
|
|||
|
Accrued Interest Payable |
|
7,169 |
|
7,483 |
|
9,755 |
|
|||
|
Taxes Payable and Deferred Taxes |
|
225,989 |
|
207,101 |
|
196,868 |
|
|||
|
Other Liabilities |
|
87,325 |
|
138,999 |
|
81,988 |
|
|||
|
Long-Term Debt |
|
217,600 |
|
227,563 |
|
298,535 |
|
|||
|
Total Liabilities |
|
8,989,331 |
|
8,668,515 |
|
8,637,924 |
|
|||
|
Shareholders’ Equity |
|
|
|
|
|
|
|
|||
|
Common Stock ($.01 par value); authorized 500,000,000 shares; issued / outstanding: June 2004 - 81,711,599 / 52,426,010, December 2003 - 81,647,729 / 54,928,480, June 2003 - 81,588,394 / 58,896,230 |
|
813 |
|
807 |
|
807 |
|
|||
|
Capital Surplus |
|
403,150 |
|
391,701 |
|
386,565 |
|
|||
|
Accumulated Other Comprehensive Income (Loss) |
|
(27,258 |
) |
(5,711 |
) |
12,412 |
|
|||
|
Retained Earnings |
|
1,251,689 |
|
1,199,077 |
|
1,151,623 |
|
|||
|
Deferred Stock Grants |
|
(9,391 |
) |
(8,309 |
) |
(8,168 |
) |
|||
|
Treasury Stock, at Cost (Shares: June 2004 - 29,285,589, December 2003 - 26,719,249, June 2003 - 22,692,164) |
|
(919,565 |
) |
(784,433 |
) |
(630,229 |
) |
|||
|
Total Shareholders’ Equity |
|
699,438 |
|
793,132 |
|
913,010 |
|
|||
|
Total Liabilities and Shareholders’ Equity |
|
$ |
9,688,769 |
|
$ |
9,461,647 |
|
$ |
9,550,934 |
|
|
Bank of Hawaii Corporation and Subsidiaries |
|
|
|
Consolidated Statements of Shareholders’ Equity (Unaudited) |
|
Table 4 |
|
(dollars in thousands) |
|
Total |
|
Common |
|
Capital |
|
Accum. |
|
Retained |
|
Deferred |
|
Treasury |
|
Compre-hensive |
|
|||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
|
Balance at December 31, 2003 |
|
$ |
793,132 |
|
$ |
807 |
|
$ |
391,701 |
|
$ |
(5,711 |
) |
$ |
1,199,077 |
|
$ |
(8,309 |
) |
$ |
(784,433 |
) |
|
|
||
|
Comprehensive Income: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
|
Net Income |
|
84,031 |
|
— |
|
— |
|
— |
|
84,031 |
|
— |
|
— |
|
$ |
84,031 |
|
||||||||
|
Other Comprehensive Income, Net of Tax: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
|
Change in Unrealized Gains and Losses on Investment Securities |
|
(21,547 |
) |
— |
|
— |
|
(21,547 |
) |
— |
|
— |
|
— |
|
(21,547 |
) |
|||||||||
|
Total Comprehensive Income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
62,484 |
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
|
Common Stock Issued under Stock Plans and Related Tax Benefits (908,502 shares) |
|
32,028 |
|
6 |
|
11,449 |
|
— |
|
803 |
|
(1,082 |
) |
20,852 |
|
|
|
|||||||||
|
Treasury Stock Purchased (3,527,779 shares) |
|
(155,984 |
) |
— |
|
— |
|
— |
|
— |
|
— |
|
(155,984 |
) |
|
|
|||||||||
|
Cash Dividends Paid |
|
(32,222 |
) |
— |
|
— |
|
— |
|
(32,222 |
) |
— |
|
— |
|
|
|
|||||||||
|
Balance at June 30, 2004 |
|
$ |
699,438 |
|
$ |
813 |
|
$ |
403,150 |
|
$ |
(27,258 |
) |
$ |
1,251,689 |
|
$ |
(9,391 |
) |
$ |
(919,565 |
) |
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
|
Balance at December 31, 2002 |
|
$ |
1,015,759 |
|
$ |
806 |
|
$ |
372,192 |
|
$ |
11,659 |
|
$ |
1,115,910 |
|
$ |
(1,424 |
) |
$ |
(483,384 |
) |
|
|
||
|
Comprehensive Income: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
|
Net Income |
|
59,835 |
|
— |
|
— |
|
— |
|
59,835 |
|
— |
|
— |
|
$ |
59,835 |
|
||||||||
|
Other Comprehensive Income, Net of Tax: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
|
Change in Unrealized Gains and Losses on Investment Securities |
|
753 |
|
— |
|
— |
|
753 |
|
— |
|
— |
|
— |
|
753 |
|
|||||||||
|
Total Comprehensive Income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
60,588 |
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
|
Common Stock Issued under Stock Plans and Related Tax Benefits (992,802 shares) |
|
21,785 |
|
1 |
|
14,373 |
|
— |
|
(1,190 |
) |
(6,744 |
) |
15,345 |
|
|
|
|||||||||
|
Treasury Stock Purchased (5,107,779 shares) |
|
(162,190 |
) |
— |
|
— |
|
— |
|
— |
|
— |
|
(162,190 |
) |
|
|
|||||||||
|
Cash Dividends Paid |
|
(22,932 |
) |
— |
|
— |
|
— |
|
(22,932 |
) |
— |
|
— |
|
|
|
|||||||||
|
Balance at June 30, 2003 |
|
$ |
913,010 |
|
$ |
807 |
|
$ |
386,565 |
|
$ |
12,412 |
|
$ |
1,151,623 |
|
$ |
(8,168 |
) |
$ |
(630,229 |
) |
|
|
||
|
Bank of Hawaii Corporation and Subsidiaries |
|
|
|
Consolidated Average Balances and Interest Rates - Taxable Equivalent Basis (Unaudited) |
|
Table 5 |
|
(dollars in millions) |
|
Three
Months Ended |
|
Three
Months Ended |
|
Three
Months Ended |
|
Six Months
Ended |
|
||||||||||||||||||||||||
|
|
Average |
|
Income/ |
|
Yield/ |
|
Average |
|
Income/ |
|
Yield/ |
|
Average |
|
Income/ |
|
Yield/ |
|
Average |
|
Income/ |
|
Yield/ |
|
|||||||||
|
Earning Assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
Interest-Bearing Deposits |
|
$ |
408.8 |
|
$ |
1.6 |
|
1.62 |
% |
$ |
249.6 |
|
$ |
1.2 |
|
1.98 |
% |
$ |
212.4 |
|
$ |
1.2 |
|
2.19 |
% |
$ |
329.2 |
|
$ |
2.8 |
|
1.76 |
% |
|
Funds Sold |
|
71.3 |
|
0.2 |
|
0.99 |
|
168.9 |
|
0.4 |
|
0.99 |
|
267.3 |
|
0.9 |
|
1.23 |
|
120.1 |
|
0.6 |
|
0.99 |
|
||||||||
|
Investment Securities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
Held to Maturity |
|
709.8 |
|
6.8 |
|
3.80 |
|
719.6 |
|
7.0 |
|
3.90 |
|
324.8 |
|
3.1 |
|
3.85 |
|
714.8 |
|
13.8 |
|
3.85 |
|
||||||||
|
Available for Sale |
|
2,148.9 |
|
21.7 |
|
4.05 |
|
1,988.5 |
|
20.8 |
|
4.20 |
|
2,316.9 |
|
19.8 |
|
3.42 |
|
2,068.7 |
|
42.5 |
|
4.12 |
|
||||||||
|
Loans Held for Sale |
|
20.7 |
|
0.3 |
|
5.54 |
|
15.4 |
|
0.2 |
|
5.33 |
|
81.6 |
|
1.1 |
|
5.43 |
|
18.1 |
|
0.5 |
|
5.45 |
|
||||||||
|
Loans and Leases |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
Commercial and Industrial |
|
828.0 |
|
10.2 |
|
4.97 |
|
844.4 |
|
10.1 |
|
4.81 |
|
834.6 |
|
10.0 |
|
4.81 |
|
836.2 |
|
20.3 |
|
4.89 |
|
||||||||
|
Construction |
|
100.4 |
|
0.9 |
|
3.80 |
|
100.4 |
|
1.1 |
|
4.31 |
|
83.0 |
|
0.9 |
|
4.50 |
|
100.4 |
|
2.0 |
|
4.05 |
|
||||||||
|
Commercial Mortgage |
|
638.9 |
|
8.6 |
|
5.39 |
|
634.1 |
|
8.6 |
|
5.45 |
|
682.5 |
|
10.1 |
|
5.93 |
|
636.5 |
|
17.2 |
|
5.42 |
|
||||||||
|
Residential Mortgage |
|
2,281.8 |
|
32.2 |
|
5.65 |
|
2,317.5 |
|
33.3 |
|
5.75 |
|
2,295.1 |
|
37.3 |
|
6.50 |
|
2,299.6 |
|
65.5 |
|
5.70 |
|
||||||||
|
Installment |
|
700.4 |
|
14.5 |
|
8.34 |
|
651.0 |
|
14.3 |
|
8.84 |
|
535.6 |
|
13.6 |
|
10.18 |
|
675.7 |
|
28.8 |
|
8.58 |
|
||||||||
|
Home Equity |
|
534.6 |
|
6.1 |
|
4.63 |
|
489.2 |
|
5.8 |
|
4.75 |
|
442.7 |
|
5.6 |
|
5.06 |
|
511.9 |
|
11.9 |
|
4.68 |
|
||||||||
|
Purchased Home Equity |
|
178.8 |
|
1.9 |
|
4.16 |
|
204.9 |
|
2.7 |
|
5.18 |
|
162.3 |
|
2.0 |
|
4.96 |
|
191.8 |
|
4.6 |
|
4.70 |
|
||||||||
|
Lease Financing |
|
510.1 |
|
5.6 |
|
4.38 |
|
500.9 |
|
5.4 |
|
4.33 |
|
482.6 |
|
5.3 |
|
4.42 |
|
505.5 |
|
11.0 |
|
4.35 |
|
||||||||
|
Total Loans and Leases |
|
5,773.0 |
|
80.0 |
|
5.56 |
|
5,742.4 |
|
81.3 |
|
5.68 |
|
5,518.4 |
|
84.8 |
|
6.16 |
|
5,757.6 |
|
161.3 |
|
5.62 |
|
||||||||
|
Other |
|
78.1 |
|
0.9 |
|
4.45 |
|
77.5 |
|
0.9 |
|
4.45 |
|
75.3 |
|
1.0 |
|
5.41 |
|
77.8 |
|
1.8 |
|
4.45 |
|
||||||||
|
Total Earning Assets |
|
9,210.6 |
|
111.5 |
|
4.86 |
|
8,961.9 |
|
111.8 |
|
5.00 |
|
8,796.7 |
|
111.9 |
|
5.09 |
|
9,086.3 |
|
223.3 |
|
4.93 |
|
||||||||
|
Cash and Non-Interest-Bearing Deposits |
|
306.3 |
|
|
|
|
|
327.6 |
|
|
|
|
|
325.6 |
|
|
|
|
|
316.9 |
|
|
|
|
|
||||||||
|
Other Assets |
|
376.4 |
|
|
|
|
|
388.4 |
|
|
|
|
|
385.9 |
|
|
|
|
|
382.4 |
|
|
|
|
|
||||||||
|
Total Assets |
|
$ |
9,893.3 |
|
|
|
|
|
$ |
9,677.9 |
|
|
|
|
|
$ |
9,508.2 |
|
|
|
|
|
$ |
9,785.6 |
|
|
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
Interest-Bearing Liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
Interest-Bearing Deposits |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
Demand |
|
$ |
1,390.2 |
|
0.6 |
|
0.17 |
|
$ |
1,370.0 |
|
0.5 |
|
0.15 |
|
$ |
1,169.4 |
|
0.7 |
|
0.25 |
|
$ |
1,380.1 |
|
1.1 |
|
0.16 |
|
||||
|
Savings |
|
2,911.5 |
|
3.1 |
|
0.43 |
|
2,871.6 |
|
3.3 |
|
0.46 |
|
2,744.1 |
|
4.5 |
|
0.65 |
|
2,891.6 |
|
6.4 |
|
0.44 |
|
||||||||
|
Time |
|
1,129.5 |
|
4.9 |
|
1.74 |
|
1,188.8 |
|
5.4 |
|
1.83 |
|
1,427.1 |
|
8.2 |
|
2.28 |
|
1,159.1 |
|
10.3 |
|
1.79 |
|
||||||||
|
Total Interest-Bearing Deposits |
|
5,431.2 |
|
8.6 |
|
0.63 |
|
5,430.4 |
|
9.2 |
|
0.68 |
|
5,340.6 |
|
13.4 |
|
1.00 |
|
5,430.8 |
|
17.8 |
|
0.66 |
|
||||||||
|
Short-Term Borrowings |
|
1,082.5 |
|
2.7 |
|
1.02 |
|
862.3 |
|
2.2 |
|
1.01 |
|
810.2 |
|
2.6 |
|
1.30 |
|
972.4 |
|
4.9 |
|
1.02 |
|
||||||||
|
Long-Term Debt |
|
317.3 |
|
4.3 |
|
5.48 |
|
320.9 |
|
4.3 |
|
5.44 |
|
371.5 |
|
5.4 |
|
5.84 |
|
319.1 |
|
8.6 |
|
5.46 |
|
||||||||
|
Total Interest-Bearing Liabilities |
|
6,831.0 |
|
15.6 |
|
0.92 |
|
6,613.6 |
|
15.7 |
|
0.96 |
|
6,522.3 |
|
21.4 |
|
1.31 |
|
6,722.3 |
|
31.3 |
|
0.94 |
|
||||||||
|
Net Interest Income |
|
|
|
$ |
95.9 |
|
|
|
|
|
$ |
96.1 |
|
|
|
|
|
$ |
90.5 |
|
|
|
|
|
$ |
192.0 |
|
|
|
||||
|
Interest Rate Spread |
|
|
|
|
|
3.94 |
% |
|
|
|
|
4.04 |
% |
|
|
|
|
3.78 |
% |
|
|
|
|
3.99 |
% |
||||||||
|
Net Interest Margin |
|
|
|
|
|
4.17 |
% |
|
|
|
|
4.30 |
% |
|
|
|
|
4.12 |
% |
|
|
|
|
4.23 |
% |
||||||||
|
Non-Interest-Bearing Demand Deposits |
|
1,940.2 |
|
|
|
|
|
1,889.5 |
|
|
|
|
|
1,695.3 |
|
|
|
|
|
1,914.8 |
|
|
|
|
|
||||||||
|
Other Liabilities |
|
389.4 |
|
|
|
|
|
373.6 |
|
|
|
|
|
358.7 |
|
|
|
|
|
381.5 |
|
|
|
|
|
||||||||
|
Shareholders’ Equity |
|
732.7 |
|
|
|
|
|
801.2 |
|
|
|
|
|
931.9 |
|
|
|
|
|
767.0 |
|
|
|
|
|
||||||||
|
Total Liabilities and Shareholders’ Equity |
|
$ |
9,893.3 |
|
|
|
|
|
$ |
9,677.9 |
|
|
|
|
|
$ |
9,508.2 |
|
|
|
|
|
$ |
9,785.6 |
|
|
|
|
|
||||
|
Bank of Hawaii Corporation and Subsidiaries |
|
|
|
Analysis of Change in Net Interest Income - Taxable Equivalent Basis (Unaudited) |
|
Table 6 |
|
(dollars in millions) |
|
Three Months Ended June 30, 2004 Compared to March 31, 2004 |
|
|||||||
|
|
Volume (1) |
|
Rate (1) |
|
Total |
|
||||
|
|
|
|
|
|
|
|
|
|||
|
Change in Interest Income: |
|
|
|
|
|
|
|
|||
|
Interest-Bearing Deposits |
|
$ |
0.6 |
|
$ |
(0.2 |
) |
$ |
0.4 |
|
|
Funds Sold |
|
(0.2 |
) |
— |
|
(0.2 |
) |
|||
|
Investment Securities |
|
|
|
|
|
|
|
|||
|
Held to Maturity |
|
— |
|
(0.2 |
) |
(0.2 |
) |
|||
|
Available for Sale |
|
1.6 |
|
(0.7 |
) |
0.9 |
|
|||
|
Loans Held for Sale |
|
0.1 |
|
— |
|
0.1 |
|
|||
|
Loans and Leases |
|
|
|
|
|
|
|
|||
|
Commercial and Industrial |
|
(0.2 |
) |
0.3 |
|
0.1 |
|
|||
|
Construction |
|
— |
|
(0.2 |
) |
(0.2 |
) |
|||
|
Commercial Mortgage |
|
0.1 |
|
(0.1 |
) |
— |
|
|||
|
Residential Mortgage |
|
(0.5 |
) |
(0.6 |
) |
(1.1 |
) |
|||
|
Installment |
|
1.0 |
|
(0.8 |
) |
0.2 |
|
|||
|
Home Equity |
|
0.5 |
|
(0.2 |
) |
0.3 |
|
|||
|
Purchased Home Equity |
|
(0.3 |
) |
(0.5 |
) |
(0.8 |
) |
|||
|
Lease Financing |
|
0.1 |
|
0.1 |
|
0.2 |
|
|||
|
Total Loans and Leases |
|
0.7 |
|
(2.0 |
) |
(1.3 |
) |
|||
|
Total Change in Interest Income |
|
2.8 |
|
(3.1 |
) |
(0.3 |
) |
|||
|
|
|
|
|
|
|
|
|
|||
|
Change in Interest Expense: |
|
|
|
|
|
|
|
|||
|
Interest-Bearing Deposits |
|
|
|
|
|
|
|
|||
|
Demand |
|
— |
|
0.1 |
|
0.1 |
|
|||
|
Savings |
|
— |
|
(0.2 |
) |
(0.2 |
) |
|||
|
Time |
|
(0.2 |
) |
(0.3 |
) |
(0.5 |
) |
|||
|
Total Interest-Bearing Deposits |
|
(0.2 |
) |
(0.4 |
) |
(0.6 |
) |
|||
|
Short-Term Borrowings |
|
0.5 |
|
— |
|
0.5 |
|
|||
|
Total Change in Interest Expense |
|
0.3 |
|
(0.4 |
) |
(0.1 |
) |
|||
|
|
|
|
|
|
|
|
|
|||
|
Change in Net Interest Income |
|
$ |
2.5 |
|
$ |
(2.7 |
) |
$ |
(0.2 |
) |
(1) The changes for each category of interest income and expense are allocated between the portion of changes attributable to the variance in volume or rate for that category.
|
Bank of Hawaii Corporation and Subsidiaries |
|
|
|
Salaries and Benefits (Unaudited) |
|
Table 7 |
|
|
|
Three
Months Ended |
|
Six Months
Ended |
|
||||||||
|
(dollars in thousands) |
|
2004 |
|
2003 |
|
2004 |
|
2003 |
|
||||
|
|
|
|
|
|
|
|
|
|
|
||||
|
Salaries |
|
$ |
27,904 |
|
$ |
29,783 |
|
$ |
55,108 |
|
$ |
58,297 |
|
|
Incentive Compensation |
|
3,260 |
|
2,993 |
|
7,076 |
|
6,584 |
|
||||
|
Stock Based Compensation |
|
3,233 |
|
2,206 |
|
6,129 |
|
3,324 |
|
||||
|
Commission Expense |
|
2,284 |
|
2,925 |
|
3,911 |
|
5,412 |
|
||||
|
Retirement and Other Benefits |
|
4,214 |
|
4,091 |
|
8,571 |
|
8,542 |
|
||||
|
Payroll Taxes |
|
3,103 |
|
2,708 |
|
6,533 |
|
6,157 |
|
||||
|
Medical, Dental, and Life Insurance |
|
2,136 |
|
1,679 |
|
4,240 |
|
3,749 |
|
||||
|
Separation Expense |
|
555 |
|
1,326 |
|
1,122 |
|
2,075 |
|
||||
|
Total Salaries and Benefits |
|
$ |
46,689 |
|
$ |
47,711 |
|
$ |
92,690 |
|
$ |
94,140 |
|
|
Bank of Hawaii Corporation and Subsidiaries |
|
|
|
Loan Portfolio Balances (Unaudited) |
|
Table 8 |
|
(dollars in thousands) |
|
June 30, |
|
March 31, |
|
December 31, |
|
June 30, |
|
||||
|
Domestic Loans |
|
|
|
|
|
|
|
|
|
||||
|
Commercial |
|
|
|
|
|
|
|
|
|
||||
|
Commercial and Industrial |
|
$ |
776,815 |
|
$ |
793,293 |
|
$ |
816,246 |
|
$ |
808,503 |
|
|
Commercial Mortgage |
|
643,382 |
|
650,566 |
|
639,354 |
|
689,759 |
|
||||
|
Construction |
|
98,916 |
|
91,002 |
|
101,321 |
|
83,583 |
|
||||
|
Lease Financing |
|
447,673 |
|
442,590 |
|
435,934 |
|
416,920 |
|
||||
|
Total Commercial |
|
1,966,786 |
|
1,977,451 |
|
1,992,855 |
|
1,998,765 |
|
||||
|
Consumer |
|
|
|
|
|
|
|
|
|
||||
|
Residential Mortgage |
|
2,257,624 |
|
2,254,654 |
|
2,320,410 |
|
2,222,003 |
|
||||
|
Home Equity |
|
559,225 |
|
510,378 |
|
467,019 |
|
450,273 |
|
||||
|
Purchased Home Equity |
|
162,730 |
|
191,066 |
|
212,514 |
|
145,588 |
|
||||
|
Other Consumer |
|
721,386 |
|
671,893 |
|
658,831 |
|
554,795 |
|
||||
|
Lease Financing |
|
34,676 |
|
34,816 |
|
35,320 |
|
33,972 |
|
||||
|
Total Consumer |
|
3,735,641 |
|
3,662,807 |
|
3,694,094 |
|
3,406,631 |
|
||||
|
Total Domestic Loans |
|
5,702,427 |
|
5,640,258 |
|
5,686,949 |
|
5,405,396 |
|
||||
|
Foreign Loans |
|
84,887 |
|
74,738 |
|
70,226 |
|
66,474 |
|
||||
|
Total Loans and Leases |
|
$ |
5,787,314 |
|
$ |
5,714,996 |
|
$ |
5,757,175 |
|
$ |
5,471,870 |
|
Selected Concentrations of Credit Exposure (Unaudited)
|
(dollars in thousands) |
|
Outstanding |
|
June 30,
2004 |
|
Total |
|
Dec. 31,
2003 (1) |
|
June 30,
2003 (1) |
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
|
Air Transportation |
|
|
|
|
|
|
|
|
|
|
|
|||||
|
United States Regional Passenger Carriers |
|
$ |
45,308 |
|
$ |
13,183 |
|
$ |
58,491 |
|
$ |
59,231 |
|
$ |
59,702 |
|
|
United States National Passenger Carriers |
|
37,581 |
|
— |
|
37,581 |
|
37,259 |
|
37,557 |
|
|||||
|
Passenger Carriers Based Outside United States |
|
30,325 |
|
— |
|
30,325 |
|
31,549 |
|
31,794 |
|
|||||
|
Cargo Carriers |
|
14,122 |
|
— |
|
14,122 |
|
14,405 |
|
14,739 |
|
|||||
|
Total Air Transportation |
|
$ |
127,336 |
|
$ |
13,183 |
|
$ |
140,519 |
|
$ |
142,444 |
|
$ |
143,792 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
|
Guam |
|
|
|
|
|
|
|
|
|
|
|
|||||
|
Hotel |
|
$ |
15,614 |
|
$ |
— |
|
$ |
15,614 |
|
$ |
17,733 |
|
$ |
42,806 |
|
|
Other Commercial |
|
146,872 |
|
42,441 |
|
189,313 |
|
184,129 |
|
183,765 |
|
|||||
|
Consumer |
|
306,002 |
|
12,075 |
|
318,077 |
|
288,831 |
|
265,851 |
|
|||||
|
Total Guam |
|
$ |
468,488 |
|
$ |
54,516 |
|
$ |
523,004 |
|
$ |
490,693 |
|
$ |
492,422 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
|
Syndicated Exposure |
|
$ |
265,908 |
|
$ |
636,293 |
|
$ |
902,201 |
|
$ |
912,896 |
|
$ |
930,118 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
|
Other Large Borrowers (2) |
|
$ |
62,734 |
|
$ |
216,048 |
|
$ |
278,782 |
|
$ |
336,748 |
|
$ |
372,924 |
|
Exposure includes loans, leveraged leases and operating leases.
(1) For three borrowers, reclassifications have occurred between Regional and National Carriers. Syndicated Exposure has been restated to include a purchased participation.
(2) Other Large Borrowers is defined as exposure with commitments of $25 million and greater, excluding those collateralized by cash and those separately identified as Air Transportation, Guam, and Syndicated Exposure.
|
Bank of Hawaii Corporation and Subsidiaries |
|
|
|
Consolidated Non-Performing Assets and Accruing Loans Past Due 90 Days or More (Unaudited) |
|
Table 9 |
|
(dollars in thousands) |
|
June 30, |
|
March 31, |
|
December 31, |
|
September 30, |
|
June 30, |
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
|
Non-Performing Assets |
|
|
|
|
|
|
|
|
|
|
|
|||||
|
Non-Accrual Loans |
|
|
|
|
|
|
|
|
|
|
|
|||||
|
Commercial |
|
|
|
|
|
|
|
|
|
|
|
|||||
|
Commercial and Industrial |
|
$ |
680 |
|
$ |
6,009 |
|
$ |
6,015 |
|
$ |
7,856 |
|
$ |
8,832 |
|
|
Commercial Mortgage |
|
5,649 |
|
7,388 |
|
9,337 |
|
10,977 |
|
11,216 |
|
|||||
|
Lease Financing |
|
1,948 |
|
1,962 |
|
2,181 |
|
2,388 |
|
2,423 |
|
|||||
|
Total Commercial |
|
8,277 |
|
15,359 |
|
17,533 |
|
21,221 |
|
22,471 |
|
|||||
|
Consumer |
|
|
|
|
|
|
|
|
|
|
|
|||||
|
Residential Mortgage |
|
7,688 |
|
7,685 |
|
9,354 |
|
9,669 |
|
10,196 |
|
|||||
|
Home Equity |
|
306 |
|
406 |
|
460 |
|
497 |
|
— |
|
|||||
|
Total Consumer |
|
7,994 |
|
8,091 |
|
9,814 |
|
10,166 |
|
10,196 |
|
|||||
|
Total Non-Accrual Loans |
|
16,271 |
|
23,450 |
|
27,347 |
|
31,387 |
|
32,667 |
|
|||||
|
Foreclosed Real Estate |
|
4,889 |
|
4,416 |
|
4,377 |
|
8,757 |
|
9,285 |
|
|||||
|
Total Non-Performing Assets |
|
$ |
21,160 |
|
$ |
27,866 |
|
$ |
31,724 |
|
$ |
40,144 |
|
$ |
41,952 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
|
Accruing Loans Past Due 90 Days or More |
|
|
|
|
|
|
|
|
|
|
|
|||||
|
Commercial |
|
|
|
|
|
|
|
|
|
|
|
|||||
|
Commercial and Industrial |
|
$ |
19 |
|
$ |
707 |
|
$ |
725 |
|
$ |
695 |
|
$ |
523 |
|
|
Commercial Mortgage |
|
693 |
|
702 |
|
— |
|
— |
|
— |
|
|||||
|
Lease Financing |
|
— |
|
— |
|
117 |
|
— |
|
— |
|
|||||
|
Total Commercial |
|
712 |
|
1,409 |
|
842 |
|
695 |
|
523 |
|
|||||
|
Consumer |
|
|
|
|
|
|
|
|
|
|
|
|||||
|
Residential Mortgage |
|
698 |
|
595 |
|
1,430 |
|
2,027 |
|
1,817 |
|
|||||
|
Home Equity |
|
— |
|
— |
|
— |
|
— |
|
84 |
|
|||||
|
Purchased Home Equity |
|
32 |
|
107 |
|
— |
|
107 |
|
98 |
|
|||||
|
Other Consumer |
|
1,142 |
|
1,180 |
|
1,210 |
|
1,059 |
|
368 |
|
|||||
|
Lease Financing |
|
57 |
|
— |
|
— |
|
— |
|
19 |
|
|||||
|
Total Consumer |
|
1,929 |
|
1,882 |
|
2,640 |
|
3,193 |
|
2,386 |
|
|||||
|
Total Accruing and Past Due |
|
$ |
2,641 |
|
$ |
3,291 |
|
$ |
3,482 |
|
$ |
3,888 |
|
$ |
2,909 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
|
Total Loans and Leases |
|
$ |
5,787,314 |
|
$ |
5,714,996 |
|
$ |
5,757,175 |
|
$ |
5,570,405 |
|
$ |
5,471,870 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
|
Ratio of Non-Accrual Loans to Total Loans |
|
0.28 |
% |
0.41 |
% |
0.48 |
% |
0.56 |
% |
0.60 |
% |
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
|
Ratio of Non-Performing Assets to Total Loans and Foreclosed Real Estate |
|
0.37 |
% |
0.49 |
% |
0.55 |
% |
0.72 |
% |
0.77 |
% |
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
|
Ratio of Non-Performing Assets and Accruing Loans Past Due 90 Days or More to Total Loans |
|
0.41 |
% |
0.55 |
% |
0.61 |
% |
0.79 |
% |
0.82 |
% |
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
|
Quarter to Quarter Changes in Non-Performing Assets |
|
|
|
|
|
|
|
|
|
|
|
|||||
|
Balance at Beginning of Quarter |
|
$ |
27,866 |
|
$ |
31,724 |
|
$ |
40,144 |
|
$ |
41,952 |
|
$ |
44,217 |
|
|
Additions |
|
3,909 |
|
3,293 |
|
2,340 |
|
3,199 |
|
11,603 |
|
|||||
|
Reductions |
|
|
|
|
|
|
|
|
|
|
|
|||||
|
Payments |
|
(4,232 |
) |
(4,555 |
) |
(3,416 |
) |
(1,782 |
) |
(4,279 |
) |
|||||
|
Return to Accrual |
|
(2,700 |
) |
(1,444 |
) |
(839 |
) |
(1,464 |
) |
(7,556 |
) |
|||||
|
Sales of Foreclosed Assets |
|
(147 |
) |
(310 |
) |
(4,418 |
) |
(1,025 |
) |
(672 |
) |
|||||
|
Charge-offs/Write-downs |
|
(3,536 |
) |
(842 |
) |
(2,087 |
) |
(736 |
) |
(1,361 |
) |
|||||
|
Total Reductions |
|
(10,615 |
) |
(7,151 |
) |
(10,760 |
) |
(5,007 |
) |
(13,868 |
) |
|||||
|
Balance at End of Quarter |
|
$ |
21,160 |
|
$ |
27,866 |
|
$ |
31,724 |
|
$ |
40,144 |
|
$ |
41,952 |
|
|
Bank of Hawaii Corporation and Subsidiaries |
|
|
|
Consolidated Allowance for Loan and Lease Losses (Unaudited) |
|
Table 10 |
|
|
|
Three Months Ended |
|
Six Months Ended |
|
|||||||||||
|
|
|
June 30, |
|
March 31, |
|
June 30, |
|
June 30, |
|
|||||||
|
(dollars in thousands) |
|
2004 |
|
2004 |
|
2003 |
|
2004 |
|
2003 |
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
|
Balance at Beginning of Period |
|
$ |
127,185 |
|
$ |
129,080 |
|
$ |
140,028 |
|
$ |
129,080 |
|
$ |
142,853 |
|
|
Loans Charged-Off |
|
|
|
|
|
|
|
|
|
|
|
|||||
|
Commercial |
|
|
|
|
|
|
|
|
|
|
|
|||||
|
Commercial and Industrial |
|
3,328 |
|
387 |
|
565 |
|
3,715 |
|
2,182 |
|
|||||
|
Commercial Mortgage |
|
— |
|
574 |
|
400 |
|
574 |
|
400 |
|
|||||
|
Construction |
|
— |
|
— |
|
— |
|
— |
|
529 |
|
|||||
|
Lease Financing |
|
379 |
|
228 |
|
325 |
|
607 |
|
340 |
|
|||||
|
Consumer |
|
|
|
|
|
|
|
|
|
|
|
|||||
|
Residential Mortgage |
|
319 |
|
145 |
|
687 |
|
464 |
|
1,376 |
|
|||||
|
Home Equity |
|
9 |
|
— |
|
7 |
|
9 |
|
89 |
|
|||||
|
Purchased Home Equity |
|
201 |
|
90 |
|
— |
|
291 |
|
— |
|
|||||
|
Other Consumer |
|
4,564 |
|
4,655 |
|
3,619 |
|
9,219 |
|
6,708 |
|
|||||
|
Lease Financing |
|
28 |
|
36 |
|
50 |
|
64 |
|
117 |
|
|||||
|
Total Loans Charged-Off |
|
8,828 |
|
6,115 |
|
5,653 |
|
14,943 |
|
11,741 |
|
|||||
|
Recoveries on Loans Previously Charged-Off |
|
|
|
|
|
|
|
|
|
|
|
|||||
|
Commercial |
|
|
|
|
|
|
|
|
|
|
|
|||||
|
Commercial and Industrial |
|
1,245 |
|
954 |
|
1,819 |
|
2,199 |
|
2,391 |
|
|||||
|
Commercial Mortgage |
|
151 |
|
689 |
|
57 |
|
840 |
|
74 |
|
|||||
|
Construction |
|
— |
|
435 |
|
55 |
|
435 |
|
955 |
|
|||||
|
Lease Financing |
|
1 |
|
15 |
|
— |
|
16 |
|
17 |
|
|||||
|
Consumer |
|
|
|
|
|
|
|
|
|
|
|
|||||
|
Residential Mortgage |
|
304 |
|
294 |
|
254 |
|
598 |
|
457 |
|
|||||
|
Home Equity |
|
101 |
|
39 |
|
50 |
|
140 |
|
103 |
|
|||||
|
Purchased Home Equity |
|
57 |
|
— |
|
— |
|
57 |
|
— |
|
|||||
|
Other Consumer |
|
1,703 |
|
1,663 |
|
1,342 |
|
3,366 |
|
2,669 |
|
|||||
|
Lease Financing |
|
16 |
|
55 |
|
8 |
|
71 |
|
53 |
|
|||||
|
Foreign |
|
6,469 |
|
76 |
|
14 |
|
6,545 |
|
143 |
|
|||||
|
Total Recoveries on Loans Previously Charged-Off |
|
10,047 |
|
4,220 |
|
3,599 |
|
14,267 |
|
6,862 |
|
|||||
|
Net Loan Recoveries (Charge-Offs) |
|
1,219 |
|
(1,895 |
) |
(2,054 |
) |
(676 |
) |
(4,879 |
) |
|||||
|
Provision for Loan and Lease Losses |
|
(3,500 |
) |
— |
|
— |
|
(3,500 |
) |
— |
|
|||||
|
Balance at End of Period |
|
$ |
124,904 |
|
$ |
127,185 |
|
$ |
137,974 |
|
$ |
124,904 |
|
$ |
137,974 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
|
Average Loans Outstanding |
|
$ |
5,772,926 |
|
$ |
5,742,368 |
|
$ |
5,518,401 |
|
$ |
5,757,647 |
|
$ |
5,489,783 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
|
Ratio of Net Loan Charge-Offs to Average Loans Outstanding (annualized) |
|
(0.08 |
)% |
0.13 |
% |
0.15 |
% |
0.02 |
% |
0.18 |
% |
|||||
|
Ratio of Allowance to Loans and Leases Outstanding |
|
2.16 |
% |
2.23 |
% |
2.52 |
% |
2.16 |
% |
2.52 |
% |
|||||
|
Bank of Hawaii Corporation and Subsidiaries |
|
|
|
Business Segment Selected Financial Information (Unaudited) |
|
Table 11a |
|
(dollars in thousands) |
|
Retail |
|
Commercial |
|
Investment |
|
Treasury |
|
Consolidated |
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
|
Three Months Ended June 30, 2004 |
|
|
|
|
|
|
|
|
|
|
|
|||||
|
Net Interest Income |
|
$ |
49,568 |
|
$ |
33,607 |
|
$ |
2,844 |
|
$ |
9,830 |
|
$ |
95,849 |
|
|
Provision for Loan and Lease Losses |
|
2,587 |
|
2,730 |
|
(1 |
) |
(8,816 |
) |
(3,500 |
) |
|||||
|
Net Interest Income After Provision for Loan and Lease Losses |
|
46,981 |
|
30,877 |
|
2,845 |
|
18,646 |
|
99,349 |
|
|||||
|
Non-Interest Income |
|
24,388 |
|
12,188 |
|
12,938 |
|
5,334 |
|
54,848 |
|
|||||
|
|
|
71,369 |
|
43,065 |
|
15,783 |
|
23,980 |
|
154,197 |
|
|||||
|
Non-Interest Expense |
|
(44,560 |
) |
(23,009 |
) |
(13,145 |
) |
(4,411 |
) |
(85,125 |
) |
|||||
|
Income Before Income Taxes |
|
26,809 |
|
20,056 |
|
2,638 |
|
19,569 |
|
69,072 |
|
|||||
|
Provision for Income Taxes |
|
(9,919 |
) |
(7,421 |
) |
(976 |
) |
(6,524 |
) |
(24,840 |
) |
|||||
|
Allocated Net Income |
|
16,890 |
|
12,635 |
|
1,662 |
|
13,045 |
|
44,232 |
|
|||||
|
Allowance Funding Value |
|
(148 |
) |
(688 |
) |
(6 |
) |
842 |
|
— |
|
|||||
|
GAAP Provision |
|
2,587 |
|
2,730 |
|
(1 |
) |
(8,816 |
) |
(3,500 |
) |
|||||
|
Economic Provision |
|
(3,510 |
) |
(2,821 |
) |
(99 |
) |
(3 |
) |
(6,433 |
) |
|||||
|
Tax Effect of Adjustments |
|
396 |
|
288 |
|
39 |
|
2,951 |
|
3,674 |
|
|||||
|
Income Before Capital Charge |
|
16,215 |
|
12,144 |
|
1,595 |
|
8,019 |
|
37,973 |
|
|||||
|
Capital Charge |
|
(5,485 |
) |
(5,134 |
) |
(1,302 |
) |
(8,231 |
) |
(20,152 |
) |
|||||
|
Net Income (Loss) After Capital Charge (NIACC) |
|
$ |
10,730 |
|
$ |
7,010 |
|
$ |
293 |
|
$ |
(212 |
) |
$ |
17,821 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
|
RAROC (ROE for the Company) |
|
33 |
% |
26 |
% |
14 |
% |
28 |
% |
24 |
% |
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
|
Total Assets at June 30, 2004 |
|
$ |
3,693,382 |
|
$ |
2,331,968 |
|
$ |
114,021 |
|
$ |
3,549,398 |
|
$ |
9,688,769 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
|
Three Months Ended June 30, 2003 (1) |
|
|
|
|
|
|
|
|
|
|
|
|||||
|
Net Interest Income |
|
$ |
53,139 |
|
$ |
34,394 |
|
$ |
2,635 |
|
$ |
317 |
|
$ |
90,485 |
|
|
Provision for Loan and Lease Losses |
|
1,321 |
|
1,022 |
|
— |
|
(2,343 |
) |
— |
|
|||||
|
Net Interest Income After Provision for Loan and Lease Losses |
|
51,818 |
|
33,372 |
|
2,635 |
|
2,660 |
|
90,485 |
|
|||||
|
Non-Interest Income |
|
26,613 |
|
8,302 |
|
12,355 |
|
3,469 |
|
50,739 |
|
|||||
|
|
|
78,431 |
|
41,674 |
|
14,990 |
|
6,129 |
|
141,224 |
|
|||||
|
Information Technology Systems Replacement Project |
|
(368 |
) |
— |
|
(90 |
) |
(9,647 |
) |
(10,105 |
) |
|||||
|
Non-Interest Expense |
|
(45,238 |
) |
(23,884 |
) |
(12,145 |
) |
(4,022 |
) |
(85,289 |
) |
|||||
|
Income (Loss) Before Income Taxes |
|
32,825 |
|
17,790 |
|
2,755 |
|
(7,540 |
) |
45,830 |
|
|||||
|
Provision for Income Taxes |
|
(12,145 |
) |
(6,465 |
) |
(1,019 |
) |
3,833 |
|
(15,796 |
) |
|||||
|
Allocated Net Income (Loss) |
|
20,680 |
|
11,325 |
|
1,736 |
|
(3,707 |
) |
30,034 |
|
|||||
|
Allowance Funding Value |
|
(161 |
) |
(1,100 |
) |
(7 |
) |
1,268 |
|
— |
|
|||||
|
GAAP Provision |
|
1,321 |
|
1,022 |
|
— |
|
(2,343 |
) |
— |
|
|||||
|
Economic Provision |
|
(2,901 |
) |
(3,031 |
) |
(108 |
) |
(5 |
) |
(6,045 |
) |
|||||
|
Tax Effect of Adjustments |
|
644 |
|
1,150 |
|
42 |
|
401 |
|
2,237 |
|
|||||
|
Income (Loss) Before Capital Charge |
|
19,583 |
|
9,366 |
|
1,663 |
|
(4,386 |
) |
26,226 |
|
|||||
|
Capital Charge |
|
(5,683 |
) |
(5,418 |
) |
(1,255 |
) |
(13,275 |
) |
(25,631 |
) |
|||||
|
Net Income (Loss) After Capital Charge (NIACC) |
|
$ |
13,900 |
|
$ |
3,948 |
|
$ |
408 |
|
$ |
(17,661 |
) |
$ |
595 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
|
RAROC (ROE for the Company) |
|
38 |
% |
19 |
% |
15 |
% |
(12 |
)% |
13 |
% |
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
|
Total Assets at June 30, 2003 |
|
$ |
3,487,565 |
|
$ |
2,242,905 |
|
$ |
97,414 |
|
$ |
3,723,050 |
|
$ |
9,550,934 |
|
(1) Certain 2003 information has been reclassified to conform to 2004 presentation.
|
(dollars in thousands) |
|
Retail |
|
Commercial |
|
Investment |
|
Treasury |
|
Consolidated |
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
|
Six Months Ended June 30, 2004 |
|
|
|
|
|
|
|
|
|
|
|
|||||
|
Net Interest Income |
|
$ |
99,807 |
|
$ |
67,671 |
|
$ |
5,679 |
|
$ |
18,723 |
|
$ |
191,880 |
|
|
Provision for Loan and Lease Losses |
|
5,334 |
|
2,477 |
|
48 |
|
(11,359 |
) |
(3,500 |
) |
|||||
|
Net Interest Income After Provision for Loan and Lease Losses |
|
94,473 |
|
65,194 |
|
5,631 |
|
30,082 |
|
195,380 |
|
|||||
|
Non-Interest Income |
|
45,403 |
|
22,660 |
|
27,338 |
|
8,289 |
|
103,690 |
|
|||||
|
|
|
139,876 |
|
87,854 |
|
32,969 |
|
38,371 |
|
299,070 |
|
|||||
|
Non-Interest Expense |
|
(87,777 |
) |
(46,247 |
) |
(26,082 |
) |
(8,041 |
) |
(168,147 |
) |
|||||
|
Income Before Income Taxes |
|
52,099 |
|
41,607 |
|
6,887 |
|
30,330 |
|
130,923 |
|
|||||
|
Provision for Income Taxes |
|
(19,277 |
) |
(15,376 |
) |
(2,548 |
) |
(9,691 |
) |
(46,892 |
) |
|||||
|
Allocated Net Income |
|
32,822 |
|
26,231 |
|
4,339 |
|
20,639 |
|
84,031 |
|
|||||
|
Allowance Funding Value |
|
(277 |
) |
(1,425 |
) |
(14 |
) |
1,716 |
|
— |
|
|||||
|
GAAP Provision |
|
5,334 |
|
2,477 |
|
48 |
|
(11,359 |
) |
(3,500 |
) |
|||||
|
Economic Provision |
|
(6,906 |
) |
(5,598 |
) |
(193 |
) |
(5 |
) |
(12,702 |
) |
|||||
|
Tax Effect of Adjustments |
|
684 |
|
1,682 |
|
59 |
|
3,570 |
|
5,995 |
|
|||||
|
Income Before Capital Charge |
|
31,657 |
|
23,367 |
|
4,239 |
|
14,561 |
|
73,824 |
|
|||||
|
Capital Charge |
|
(11,255 |
) |
(10,405 |
) |
(2,580 |
) |
(17,950 |
) |
(42,190 |
) |
|||||
|
Net Income (Loss) After Capital Charge (NIACC) |
|
$ |
20,402 |
|
$ |
12,962 |
|
$ |
1,659 |
|
$ |
(3,389 |
) |
$ |
31,634 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
|
RAROC (ROE for the Company) |
|
31 |
% |
25 |
% |
18 |
% |
27 |
% |
22 |
% |
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
|
Total Assets at June 30, 2004 |
|
$ |
3,693,382 |
|
$ |
2,331,968 |
|
$ |
114,021 |
|
$ |
3,549,398 |
|
$ |
9,688,769 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
|
Six Months Ended June 30, 2003 (1) |
|
|
|
|
|
|
|
|
|
|
|
|||||
|
Net Interest Income |
|
$ |
105,331 |
|
$ |
69,353 |
|
$ |
5,955 |
|
$ |
846 |
|
$ |
181,485 |
|
|
Provision for Loan and Lease Losses |
|
2,169 |
|
3,173 |
|
— |
|
(5,342 |
) |
— |
|
|||||
|
Net Interest Income After Provision for Loan and Lease Losses |
|
103,162 |
|
66,180 |
|
5,955 |
|
6,188 |
|
181,485 |
|
|||||
|
Non-Interest Income |
|
46,310 |
|
17,100 |
|
25,342 |
|
6,740 |
|
95,492 |
|
|||||
|
|
|
149,472 |
|
83,280 |
|
31,297 |
|
12,928 |
|
276,977 |
|
|||||
|
Information Technology Systems Replacement Project |
|
(950 |
) |
(23 |
) |
(334 |
) |
(16,215 |
) |
(17,522 |
) |
|||||
|
Non-Interest Expense |
|
(88,878 |
) |
(47,308 |
) |
(24,374 |
) |
(7,512 |
) |
(168,072 |
) |
|||||
|
Income (Loss) Before Income Taxes |
|
59,644 |
|
35,949 |
|
6,589 |
|
(10,799 |
) |
91,383 |
|
|||||
|
Provision for Income Taxes |
|
(22,068 |
) |
(13,087 |
) |
(2,438 |
) |
6,045 |
|
(31,548 |
) |
|||||
|
Allocated Net Income (Loss) |
|
37,576 |
|
22,862 |
|
4,151 |
|
(4,754 |
) |
59,835 |
|
|||||
|
Allowance Funding Value |
|
(313 |
) |
(2,241 |
) |
(17 |
) |
2,571 |
|
— |
|
|||||
|
GAAP Provision |
|
2,169 |
|
3,173 |
|
— |
|
(5,342 |
) |
— |
|
|||||
|
Economic Provision |
|
(5,609 |
) |
(6,094 |
) |
(236 |
) |
(10 |
) |
(11,949 |
) |
|||||
|
Tax Effect of Adjustments |
|
1,389 |
|
1,910 |
|
93 |
|
1,029 |
|
4,421 |
|
|||||
|
Income (Loss) Before Capital Charge |
|
35,212 |
|
19,610 |
|
3,991 |
|
(6,506 |
) |
52,307 |
|
|||||
|
Capital Charge |
|
(11,255 |
) |
(10,865 |
) |
(2,523 |
) |
(27,740 |
) |
(52,383 |
) |
|||||
|
Net Income (Loss) After Capital Charge (NIACC) |
|
$ |
23,957 |
|
$ |
8,745 |
|
$ |
1,468 |
|
$ |
(34,246 |
) |
$ |
(76 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
|
RAROC (ROE for the Company) |
|
35 |
% |
20 |
% |
18 |
% |
(9 |
)% |
13 |
% |
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
|
Total Assets at June 30, 2003 |
|
$ |
3,487,565 |
|
$ |
2,242,905 |
|
$ |
97,414 |
|
$ |
3,723,050 |
|
$ |
9,550,934 |
|
(1) Certain 2003 information has been reclassified to conform to 2004 presentation.
|
Bank of Hawaii Corporation and Subsidiaries |
|
|
|
Quarterly Summary of Selected Consolidated Financial Data (Unaudited) |
|
Table 12 |
|
|
|
Three Months Ended |
|
|||||||||||||
|
(dollars in thousands except per share amounts) |
|
June 30, |
|
March 31, |
|
December 31, |
|
September 30, |
|
June 30, |
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
|
Quarterly Operating Results |
|
|
|
|
|
|
|
|
|
|
|
|||||
|
Interest Income |
|
|
|
|
|
|
|
|
|
|
|
|||||
|
Interest and Fees on Loans and Leases |
|
$ |
80,346 |
|
$ |
81,428 |
|
$ |
80,351 |
|
$ |
82,715 |
|
$ |
85,954 |
|
|
Income on Investment Securities - Held to Maturity |
|
6,711 |
|
6,976 |
|
7,183 |
|
6,407 |
|
3,083 |
|
|||||
|
Income on Investment Securities - Available for Sale |
|
21,745 |
|
20,846 |
|
19,032 |
|
16,483 |
|
19,815 |
|
|||||
|
Deposits |
|
1,646 |
|
1,231 |
|
1,169 |
|
1,179 |
|
1,161 |
|
|||||
|
Funds Sold |
|
177 |
|
417 |
|
85 |
|
248 |
|
822 |
|
|||||
|
Other |
|
865 |
|
858 |
|
1,007 |
|
1,032 |
|
1,016 |
|
|||||
|
Total Interest Income |
|
111,490 |
|
111,756 |
|
108,827 |
|
108,064 |
|
111,851 |
|
|||||
|
Interest Expense |
|
|
|
|
|
|
|
|
|
|
|
|||||
|
Deposits |
|
8,560 |
|
9,200 |
|
9,433 |
|
10,284 |
|
13,309 |
|
|||||
|
Securities Sold Under Agreements to Repurchase |
|
2,222 |
|
1,926 |
|
1,359 |
|
1,947 |
|
2,391 |
|
|||||
|
Funds Purchased |
|
506 |
|
231 |
|
249 |
|
271 |
|
219 |
|
|||||
|
Short-Term Borrowings |
|
13 |
|
15 |
|
17 |
|
26 |
|
25 |
|
|||||
|
Long-Term Debt |
|
4,340 |
|
4,353 |
|
4,417 |
|
4,431 |
|
5,422 |
|
|||||
|
Total Interest Expense |
|
15,641 |
|
15,725 |
|
15,475 |
|
16,959 |
|
21,366 |
|
|||||
|
Net Interest Income |
|
95,849 |
|
96,031 |
|
93,352 |
|
91,105 |
|
90,485 |
|
|||||
|
Provision for Loan and Lease Losses |
|
(3,500 |
) |
— |
|
— |
|
— |
|
— |
|
|||||
|
Net Interest Income After Provision for Loan and Lease Losses |
|
99,349 |
|
96,031 |
|
93,352 |
|
91,105 |
|
90,485 |
|
|||||
|
Non-Interest Income |
|
|
|
|
|
|
|
|
|
|
|
|||||
|
Trust and Asset Management |
|
12,995 |
|
13,864 |
|
12,759 |
|
12,511 |
|
12,545 |
|
|||||
|
Mortgage Banking |
|
2,808 |
|
1,977 |
|
3,324 |
|
5,888 |
|
6,061 |
|
|||||
|
Service Charges on Deposit Accounts |
|
9,540 |
|
9,950 |
|
9,442 |
|
8,901 |
|
8,645 |
|
|||||
|
Fees, Exchange, and Other Service Charges |
|
14,243 |
|
13,239 |
|
13,725 |
|
16,034 |
|
13,473 |
|
|||||
|
Investment Securities Gains (Losses) |
|
(37 |
) |
— |
|
(20 |
) |
639 |
|
587 |
|
|||||
|
Insurance |
|
3,303 |
|
3,643 |
|
3,597 |
|
3,988 |
|
3,015 |
|
|||||
|
Other |
|
11,996 |
|
6,169 |
|
6,610 |
|
5,830 |
|
6,413 |
|
|||||
|
Total Non-Interest Income |
|
54,848 |
|
48,842 |
|
49,437 |
|
53,791 |
|
50,739 |
|
|||||
|
Non-Interest Expense |
|
|
|
|
|
|
|
|
|
|
|
|||||
|
Salaries and Benefits |
|
46,689 |
|
46,001 |
|
46,409 |
|
45,731 |
|
47,711 |
|
|||||
|
Net Occupancy Expense |
|
9,543 |
|
9,386 |
|
9,933 |
|
9,806 |
|
9,628 |
|
|||||
|
Net Equipment Expense |
|
5,799 |
|
5,964 |
|
7,395 |
|
7,301 |
|
9,208 |
|
|||||
|
Information Technology Systems Replacement Project |
|
— |
|
— |
|
— |
|
4,349 |
|
10,105 |
|
|||||
|
Other |
|
23,094 |
|
21,671 |
|
19,667 |
|
21,690 |
|
18,742 |
|
|||||
|
Total Non-Interest Expense |
|
85,125 |
|
83,022 |
|
83,404 |
|
88,877 |
|
95,394 |
|
|||||
|
Income Before Income Taxes |
|
69,072 |
|
61,851 |
|
59,385 |
|
56,019 |
|
45,830 |
|
|||||
|
Provision for Income Taxes |
|
24,840 |
|
22,052 |
|
20,712 |
|
19,332 |
|
15,796 |
|
|||||
|
Net Income |
|
$ |
44,232 |
|
$ |
39,799 |
|
$ |
38,673 |
|
$ |
36,687 |
|
$ |
30,034 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
|
Basic Earnings Per Share |
|
$ |
0.84 |
|
$ |
0.73 |
|
$ |
0.70 |
|
$ |
0.64 |
|
$ |
0.50 |
|
|
Diluted Earnings Per Share |
|
$ |
0.79 |
|
$ |
0.69 |
|
$ |
0.66 |
|
$ |
0.61 |
|
$ |
0.48 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
|
Balance Sheet Totals |
|
|
|
|
|
|
|
|
|
|
|
|||||
|
Total Assets |
|
$ |
9,688,769 |
|
$ |
10,013,442 |
|
$ |
9,461,647 |
|
$ |
9,370,755 |
|
$ |
9,550,934 |
|
|
Net Loans |
|
5,662,410 |
|
5,587,811 |
|
5,628,095 |
|
5,437,730 |
|
5,333,896 |
|
|||||
|
Total Deposits |
|
7,469,288 |
|
7,363,922 |
|
7,332,779 |
|
7,102,116 |
|
7,140,849 |
|
|||||
|
Total Shareholders’ Equity |
|
699,438 |
|
785,768 |
|
793,132 |
|
823,760 |
|
913,010 |
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
|
Performance Ratios |
|
|
|
|
|
|
|
|
|
|
|
|||||
|
Net Income to Average Total Assets (ROA) |
|
1.80 |
% |
1.65 |
% |
1.66 |
% |
1.53 |
% |
1.27 |
% |
|||||
|
Net Income to Average Shareholders’ Equity (ROE) |
|
24.28 |
% |
19.98 |
% |
18.59 |
% |
16.69 |
% |
12.93 |
% |
|||||
|
Efficiency Ratio (1) |
|
56.49 |
% |
57.31 |
% |
58.41 |
% |
61.34 |
% |
67.55 |
% |
|||||
|
Efficiency Ratio excluding System Replacement Costs |
|
56.49 |
% |
57.31 |
% |
58.41 |
% |
58.34 |
% |
60.39 |
% |
|||||
(1) The efficiency ratio is defined as non-interest expense divided by total revenue (net interest income and non-interest income).