Document


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)
 
                       October 24, 2016
 
 
BANK OF HAWAII CORPORATION
(Exact name of registrant as specified in its charter)
 
Delaware
 
1-6887
 
99-0148992
(State of Incorporation)
 
(Commission
 
(IRS Employer
 
 
File Number)
 
Identification No.)
 
130 Merchant Street, Honolulu, Hawaii
 
96813
(Address of principal executive offices)
 
(Zip Code)
 
(Registrant's telephone number,
 
 
including area code)
 
 
(888) 643-3888
 
 
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
 
o  Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
 
o  Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
 
o  Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
 
o  Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4 (c))






Item 2.02.                                       Results of Operations and Financial Condition.
 
On October 24, 2016, Bank of Hawaii Corporation announced its results of operations for the quarter ended September 30, 2016.  The public announcement was made by means of a press release, the text of which is furnished as Exhibit 99.1 hereto and incorporated herein by reference.


Item 9.01.                                       Financial Statements and Exhibits.
 
(d)
Exhibits
 
Exhibit No.
 
99.1
October 24, 2016 Press Release: Bank of Hawaii Corporation Third Quarter 2016 Financial Results.  Any internet addresses provided in this release are for informational purposes only and are not intended to be hyperlinks.  Furnished herewith.






Signatures
 
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 hereunto duly authorized.
 
 
Date: October 24, 2016
Bank of Hawaii Corporation
 
 
 
 
 
By:
/s/ Mark A. Rossi
 
 
     Mark A. Rossi
 
 
     Vice Chairman and Corporate Secretary



Exhibit
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https://cdn.kscope.io/b4a9839a609c1b1bf88df84f657eb07d-bohclogoa01a01a01a04.jpg
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Bank of Hawaii Corporation Third Quarter 2016 Financial Results

Diluted Earnings Per Share $1.02
Net Income $43.5 Million
Board of Directors Declares Dividend of $0.48 Per Share

FOR IMMEDIATE RELEASE

HONOLULU, HI (October 24, 2016) -- Bank of Hawaii Corporation (NYSE: BOH) today reported diluted earnings per share of $1.02 for the third quarter of 2016, down from $1.03 in the second quarter of 2016 and up from $0.79 in the third quarter of 2015. Net income for the third quarter of 2016 was $43.5 million, down from net income of $44.2 million in the previous quarter and up from $34.3 million in the same quarter last year. Results for the third quarter of 2015 included impairment charges totaling $6.5 million, net of tax, related to the Company’s decision to dispose of its remaining aircraft leases.

Loan and lease balances increased to $8.7 billion at September 30, 2016, up 4.4 percent from June 30, 2016 and up 13.1 percent compared with September 30, 2015. Deposits grew to $13.8 billion at the end of the third quarter of 2016, up 1.2 percent from the previous quarter and up 6.7 percent compared with the same quarter last year.

"Bank of Hawaii’s operating results were strong in the third quarter of 2016," said Peter S. Ho, Chairman, President and CEO.  “Loan and deposit balances continued to grow, asset quality remained strong and our core expenses remain on track.”
 
The return on average assets for the third quarter of 2016 was 1.09 percent, down from 1.14 percent in the previous quarter and up from 0.89 percent in the same quarter last year. The return on average equity for the third quarter of 2016 was 14.89 percent, down from 15.56 percent for the second quarter of 2016 and up from 12.45 percent in the third quarter of 2015. The efficiency ratio for the third quarter of 2016 was 57.58 percent compared with 57.35 percent in the previous quarter and 65.12 percent in the same quarter last year. The higher efficiency ratio in the third quarter of 2015 was largely due to the aircraft impairment charges.
  

  
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Bank of Hawaii Corporation Third Quarter 2016 Financial Results     Page 2

For the nine-month period ended September 30, 2016, net income was $137.9 million, an increase from net income of $117.9 million for the same period last year. Diluted earnings per share were $3.21 for the nine-month period in 2016 compared with diluted earnings per share of $2.71 for the same period in 2015. The 2016 year-to-date return on average assets was 1.17 percent compared with 1.05 percent for the same period in 2015. The 2016 year-to-date return on average equity was 16.09 percent compared with 14.62 percent for the nine months ended September 30, 2015. The efficiency ratio for the nine-month period ended September 30, 2016 was 56.57 percent compared with 60.47 percent for the same period last year.     

Financial Highlights

Net interest income, on a taxable equivalent basis, for the third quarter of 2016 was $106.9 million, up slightly from net interest income of $106.5 million in the second quarter of 2016 and up from net interest income of $100.9 million in the third quarter of 2015. Net interest income in the third quarter of 2016 included a reversal of $0.8 million for an interest recovery previously recorded in the second quarter of 2016. Net interest income in the second quarter of 2016 included interest recoveries of $1.0 million. Net interest income for the nine-month period in 2016 was $319.4 million compared with $301.4 million for the same period in 2015. Analyses of the changes in net interest income are included in Tables 8a, 8b, and 8c.

The net interest margin was 2.80 percent for the third quarter of 2016, a 5 basis point decrease from 2.85 percent in the second quarter of 2016 and a 3 basis point increase from 2.77 percent in the third quarter of 2015. Adjusted for the interest reversal and recoveries previously mentioned, the net interest margin in the third and second quarters of 2016 were stable at 2.82 percent. The net interest margin for the first nine months of 2016 was 2.84 percent compared with 2.79 percent for the same nine-month period last year.

Results for the third quarter of 2016 included a provision for credit losses of $2.5 million due to the continued strong growth of loans and leases. Results for the second quarter of 2016 included a provision for credit losses of $1.0 million. There was no provision for credit losses during the third quarter of 2015.

Noninterest income was $48.1 million in the third quarter of 2016, up from $46.5 million in the second quarter of 2016 and $43.2 million in the third quarter of 2015. Mortgage banking income increased to $6.4 million in the third quarter of 2016 due to higher loan production, up from $4.1 million in the second quarter of 2016 and $3.3 million in the third quarter last year. Noninterest income in the second quarter of 2016 included a service fee of $1.2 million resulting from the sale of trust real estate. Noninterest income in the third quarter of 2015 included a $1.0 million estimated loss on the pending sale of an aircraft lease. Noninterest income for the nine-months ended September 30, 2016 was $150.8 million compared with noninterest income of $141.5 million for the same period in 2015. The increase was primarily due to an increase in mortgage banking income.

Noninterest expense was $87.5 million in the third quarter of 2016, up from $86.1 million in the previous quarter and down from $91.9 million in the same quarter last year. The decrease compared with the prior year quarter was primarily due to a $9.5 million impairment charge on aircraft in which the leases had expired. Noninterest expense for the nine-months ended September 30, 2016 was $261.0 million compared with noninterest expense of $262.4 million for the same period in 2015. An analysis of noninterest expenses related to salaries and benefits is included in Table 9.








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Bank of Hawaii Corporation Third Quarter 2016 Financial Results     Page 3

The effective tax rate for the third quarter of 2016 was 29.84 percent compared with 29.77 percent in the previous quarter and 30.37 percent during the same quarter last year. Taxes for the third quarter of 2016 included a $.7 million release of reserves. Taxes for the second quarter of 2016 included a $1.3 million release of reserves. Taxes for the third quarter of 2015 included a benefit of $4.0 million related to the aircraft impairment charges. The effective tax rate for the nine-month period ended September 30, 2016 was 30.62 percent, down from 31.28 percent for the same period last year.

The Company’s business segments are defined as Retail Banking, Commercial Banking, Investment Services, and Treasury & Other. 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 13a and 13b.
    
Asset Quality

The Company’s overall asset quality remained strong during the third quarter of 2016. Total non-performing assets were $18.7 million at September 30, 2016 compared with $16.3 million at June 30, 2016 and $29.5 million at September 30, 2015. As a percentage of total loans and leases and foreclosed real estate, non-performing assets were 0.21 percent at September 30, 2016 compared with 0.20 percent at June 30, 2016 and 0.38 percent at September 30, 2015.

Accruing loans and leases past due 90 days or more were $5.6 million at September 30, 2016, down from $8.8 million at June 30, 2016 and $8.1 million at September 30, 2015. Restructured loans and leases not included in non-accrual loans or accruing loans past due 90 days or more were $52.1 million at September 30, 2016 compared with $52.2 million at June 30, 2016 and $49.5 million at September 30, 2015. More information on non-performing assets and accruing loans and leases past due 90 days or more is presented in Table 11.

Net loans and leases charged off during the third quarter of 2016 were $2.4 million or 0.11 percent annualized of total average loans and leases outstanding. Loan and lease charge-offs of $4.9 million during the quarter were partially offset by recoveries of $2.5 million. Net charge-offs during the second quarter of 2016 were $1.7 million or 0.09 percent annualized of total average loans and leases outstanding and were comprised of $3.7 million in charge-offs partially offset by recoveries of $2.0 million. Net charge-offs during the third quarter of 2015 were $2.0 million or 0.10 percent annualized of total average loans and leases outstanding and were comprised of $4.4 million in charge-offs partially offset by recoveries of $2.4 million. Net charge-offs in the nine-month period ended September 30, 2016 were $0.3 million, or 0.01 percent annualized of total average loans and leases outstanding compared with net charge-offs of $4.7 million, or 0.09 percent annualized of total average loans and leases outstanding for the same period in 2015. The lower charge-off rate during 2016 is largely due to the full recovery of loans previously charged off relating to a commercial client in Guam.

The allowance for loan and lease losses increased to $104.0 million at September 30, 2016. The ratio of the allowance for loan and lease losses to total loans and leases outstanding was 1.20 percent at September 30, 2016, a decrease of 5 basis points from the previous quarter and commensurate with continued improvements in credit quality and the Hawaii economy. The reserve for unfunded commitments at September 30, 2016 was unchanged at $6.6 million from June 30, 2016. Details of loan and lease charge-offs, recoveries and the components of the total reserve for credit losses are summarized in Table 12.






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Bank of Hawaii Corporation Third Quarter 2016 Financial Results     Page 4

Other Financial Highlights

Total assets were $16.01 billion at September 30, 2016, up from $15.86 billion at June 30, 2016 and $15.16 billion at September 30, 2015. Average total assets were $15.91 billion during the third quarter of 2016, up from $15.64 billion during the previous quarter and $15.22 billion during the same quarter last year.

The investment securities portfolio was $6.03 billion at September 30, 2016, down from $6.10 billion at June 30, 2016 and $6.40 billion at September 30, 2015 as loan growth continued to outpace deposit growth. The portfolio remains largely comprised of securities issued by U. S. government agencies and included $3.82 billion in securities held to maturity and $2.21 billion in securities available for sale at September 30, 2016. 

Total loans and leases increased to $8.69 billion at September 30, 2016, up from $8.33 billion at June 30, 2016 and $7.69 billion at September 30, 2015. Average total loans and leases were $8.48 billion during the third quarter of 2016, up from $8.21 billion during the second quarter of 2016 and $7.55 billion during the same quarter last year. The commercial loan portfolio increased to $3.49 billion at the end of the quarter, up from commercial loans of $3.31 billion at the end of the previous quarter and up from $3.12 billion at the end of the same quarter last year. Total consumer loans increased to $5.20 billion at the end of the third quarter of 2016, up from $5.03 billion at the end of the second quarter of 2016 and up from $4.57 billion at the end of the third quarter of 2015. Loan and lease portfolio balances are summarized in Table 10.

Total deposits were $13.81 billion at September 30, 2016, up from $13.64 billion at June 30, 2016 and up from $12.94 billion at September 30, 2015. Average total deposits were $13.69 billion during the third quarter of 2016, up from $13.45 billion during the previous quarter and $13.01 billion during the same quarter last year.

During the third quarter of 2016, the Company repurchased 204.0 thousand shares of common stock at a total cost of $14.3 million under its share repurchase program. The average cost was $69.94 per share repurchased. From the beginning of the share repurchase program initiated during July 2001 through September 30, 2016, the Company has repurchased 53.5 million shares and returned over $2.0 billion to shareholders at an average cost of $37.74 per share. Remaining buyback authority under the share repurchase program was $75.4 million at September 30, 2016. From October 1 through October 21, 2016, the Company repurchased an additional 54.0 thousand shares of common stock at an average cost of $73.39 per share.

Total shareholders’ equity was $1.16 billion at September 30, 2016, up slightly from June 30, 2016 and an increase from $1.10 billion at September 30, 2015. The Tier 1 Capital Ratio was 13.40 percent at the end of the third quarter of 2016 compared with 13.66 percent at the end of the second quarter of 2016 and 14.11 percent at the end of the same quarter last year. The Tier 1 leverage ratio at September 30, 2016 was 7.25 percent compared with 7.29 percent at June 30, 2016 and 7.18 percent at September 30, 2015.

The Company’s Board of Directors declared a quarterly cash dividend of $0.48 per share on the Company’s outstanding shares. The dividend will be payable on December 14, 2016 to shareholders of record at the close of business on November 30, 2016.










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Bank of Hawaii Corporation Third Quarter 2016 Financial Results     Page 5

Hawaii Economy

General economic conditions in Hawaii remained positive during the third quarter of 2016 due to stable tourism, low unemployment, the strong real estate market, and ongoing construction activity.  For the first eight months of 2016, total visitor spending increased 3.0 percent and total visitor arrivals increased 2.6 percent compared to the same period in 2015.  The statewide seasonally-adjusted unemployment rate was 3.3 percent in September 2016 compared to 5.0 percent nationally.  For the first nine months of 2016, the volume of single-family home sales on Oahu increased 4.8 percent and the volume of condominium sales on Oahu increased 9.0 percent compared with the same period in 2015.  The median sales price of a single-family homes on Oahu increased 5.2 percent and the median price of a condominium on Oahu increased 8.7 percent for the first nine months of 2016 compared to the same nine-month period in 2015.  As of September 30, 2016, months of inventory of single-family homes and condominiums on Oahu remained low at 2.9 months and 3.0 months, respectively.  More information on current Hawaii economic trends is presented in Table 15.

Conference Call Information

The Company will review its third quarter 2016 financial results today at 2:00 p.m. Eastern Time (8:00 a.m. Hawaii Time). The conference call will be accessible via teleconference and via the investor relations link of Bank of Hawaii Corporation's website, www.boh.com. The toll-free number is 1 (877) 783-7534 in the United States and 1 (530) 379-4714 for international callers. Use the pass code “Bank of Hawaii” to access the call. A replay will be available for one week beginning approximately 11:00 a.m. Hawaii Time on Monday, October 24, 2016. The replay number is 1 (855) 859-2056 in the United States and 1 (404) 537-3406 from international locations. Enter the pass code 40167040 when prompted. Participants can also dial 1 (800) 585-8367 to access the replay. In addition, a replay will be available on the Company's website, www.boh.com.

Forward-Looking Statements

This news release, and other statements made by the Company in connection with it may contain "forward-looking statements", such as forecasts of our financial results and condition, expectations for our operations and business prospects, and our assumptions used in those forecasts and expectations.  Do not unduly rely on forward-looking statements.  Actual results might differ significantly from our forecasts and expectations because of a variety of factors. More information about these factors is contained in Bank of Hawaii Corporation's Annual Report on Form 10-K for the year ended December 31, 2015, which was filed with the U.S. Securities and Exchange Commission. We have not committed to update forward-looking statements to reflect later events or circumstances.

Bank of Hawaii Corporation is an independent 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. For more information about Bank of Hawaii Corporation, see the Company’s web site, www.boh.com.


# # # #






Bank of Hawaii Corporation and Subsidiaries
 
 
 
 
 
 
 
Financial Highlights
 
 
 
 
 
 
 
 
Table 1

 
 
Three Months Ended
 
Nine Months Ended
 
 
September 30,
 
June 30,
 
September 30,
 
September 30,
 
(dollars in thousands, except per share amounts)
2016
 
2016
 
2015
 
2016
 
2015
 
For the Period:
 
 
 
 
 
 
 
 
 
 
Operating Results
 
 
 
 
 
 
 
 
 
 
Net Interest Income
$
103,912

 
$
103,550

 
$
97,891

 
$
310,486

 
$
292,443

 
Provision for Credit Losses
2,500

 
1,000

 

 
1,500

 

 
Total Noninterest Income
48,114

 
46,519

 
43,221

 
150,840

 
141,453

 
Total Noninterest Expense
87,532

 
86,071

 
91,888

 
260,989

 
262,377

 
Net Income
43,493

 
44,245

 
34,276

 
137,948

 
117,872

 
Basic Earnings Per Share
1.02

 
1.04

 
0.79

 
3.23

 
2.72

 
Diluted Earnings Per Share
1.02

 
1.03

 
0.79

 
3.21

 
2.71

 
Dividends Declared Per Share
0.48

 
0.48

 
0.45

 
1.41

 
1.35

 
 
 
 
 
 
 
 
 
 
 
 
Performance Ratios
 
 
 
 
 
 
 
 
 
 
Return on Average Assets
1.09

%
1.14

%
0.89

%
1.17

%
1.05

%
Return on Average Shareholders' Equity
14.89

 
15.56

 
12.45

 
16.09

 
14.62

 
Efficiency Ratio 1
57.58

 
57.35

 
65.12

 
56.57

 
60.47

 
Net Interest Margin 2
2.80

 
2.85

 
2.77

 
2.84

 
2.79

 
Dividend Payout Ratio 3
47.06

 
46.15

 
56.96

 
43.65

 
49.63

 
Average Shareholders' Equity to Average Assets
7.30

 
7.31

 
7.18

 
7.30

 
7.15

 
 
 
 
 
 
 
 
 
 
 
 
Average Balances
 
 
 
 
 
 
 
 
 
 
Average Loans and Leases
$
8,483,588

 
$
8,205,104

 
$
7,545,985

 
$
8,210,596

 
$
7,301,656

 
Average Assets
15,906,760

 
15,639,596

 
15,220,660

 
15,695,251

 
15,069,405

 
Average Deposits
13,687,186

 
13,453,953

 
13,008,890

 
13,492,609

 
12,887,019

 
Average Shareholders' Equity
1,161,655

 
1,143,884

 
1,092,592

 
1,145,094

 
1,077,828

 
 
 
 
 
 
 
 
 
 
 
 
Per Share of Common Stock
 
 
 
 
 
 
 
 
 
 
Book Value
$
27.24

 
$
26.96

 
$
25.34

 
$
27.24

 
$
25.34

 
Tangible Book Value
26.50

 
26.23

 
24.61

 
26.50

 
24.61

 
Market Value
 
 
 
 
 
 
 
 
 
 
   Closing
72.62

 
68.80

 
63.49

 
72.62

 
63.49

 
   High
73.44

 
72.77

 
69.00

 
73.44

 
69.00

 
   Low
65.19

 
64.96

 
58.53

 
54.55

 
53.90

 
 
 
 
 
 
 
 
 
 
 
 
 


 
September 30,

 
June 30,

 
December 31,

 
September 30,

 
 


 
2016

 
2016

 
2015

 
2015

 
As of Period End:
 
 
 
 
 
 
 
 
 
 
Balance Sheet Totals
 
 
 
 
 
 
 
 
 
 
Loans and Leases


 
$
8,694,097

 
$
8,331,469

 
$
7,878,985

 
$
7,689,772

 
Total Assets

 
16,014,643

 
15,860,901

 
15,455,016

 
15,164,123

 
Total Deposits

 
13,808,365

 
13,643,807

 
13,251,103

 
12,936,962

 
Other Debt

 
267,954

 
267,970

 
245,786

 
270,801

 
Total Shareholders' Equity

 
1,163,859

 
1,157,219

 
1,116,260

 
1,098,354

 
 
 
 
 
 
 
 
 
 
 
 
Asset Quality
 
 
 
 
 
 
 
 
 
 
Non-Performing Assets


 
$
18,672

 
$
16,280

 
$
28,801

 
$
29,545

 
Allowance for Loan and Lease Losses

 
104,033

 
103,932

 
102,880

 
104,038

 
Allowance to Loans and Leases Outstanding

 
1.20

%
1.25

%
1.31

%
1.35

%
 
 
 
 
 
 
 
 
 
 
 
Capital Ratios
 
 
 
 
 
 
 
 
 
 
Common Equity Tier 1 Capital Ratio

 
13.40

%
13.66

%
13.97

%
14.11

%
Tier 1 Capital Ratio

 
13.40

 
13.66

 
13.97

 
14.11

 
Total Capital Ratio

 
14.65

 
14.91

 
15.22

 
15.37

 
Tier 1 Leverage Ratio

 
7.25

 
7.29

 
7.26

 
7.18

 
Total Shareholders' Equity to Total Assets

 
7.27

 
7.30

 
7.22

 
7.24

 
Tangible Common Equity to Tangible Assets 4


 
7.08

 
7.11

 
7.03

 
7.05

 
Tangible Common Equity to Risk-Weighted Assets 4


 
13.18

 
13.49

 
13.62

 
13.78

 
 
 
 
 
 
 
 
 
 
 
 
Non-Financial Data
 
 
 
 
 
 
 
 
 
 
Full-Time Equivalent Employees

 
2,125

 
2,136

 
2,164

 
2,154

 
Branches

 
70

 
70

 
70

 
72

 
ATMs

 
450

 
451

 
456

 
455

 
 
 
 
 
 
 
 
 
 
 
 
1  Efficiency ratio is defined as noninterest expense divided by total revenue (net interest income and total noninterest income).
 
 
 
 
2  Net interest margin is defined as net interest income, on a taxable-equivalent basis, as a percentage of average earning assets.
 
 
 
 
3  Dividend payout ratio is defined as dividends declared per share divided by basic earnings per share.
 
 
 
 
4  Tangible common equity to tangible assets and tangible common equity to risk-weighted assets are Non-GAAP financial measures. See Table 2 “Reconciliation of Non-GAAP Financial Measures."
 




Bank of Hawaii Corporation and Subsidiaries
 
 
 
 
 
Reconciliation of Non-GAAP Financial Measures
 
 
 
 
Table 2

 
 
September 30,

 
June 30,

 
December 31,

 
September 30,

(dollars in thousands)
2016

 
2016

 
2015

 
2015

Total Shareholders' Equity
$
1,163,859

 
$
1,157,219

 
$
1,116,260

 
$
1,098,354

Less:
Goodwill
31,517

 
31,517

 
31,517

 
31,517

Tangible Common Equity
$
1,132,342

 
$
1,125,702

 
$
1,084,743

 
$
1,066,837

 
 
 
 
 
 
 
 
 
Total Assets
$
16,014,643

 
$
15,860,901

 
$
15,455,016

 
$
15,164,123

Less:
Goodwill
31,517

 
31,517

 
31,517

 
31,517

Tangible Assets
$
15,983,126

 
$
15,829,384

 
$
15,423,499

 
$
15,132,606

 
 
 
 
 
 
 
 
 
Risk-Weighted Assets, determined in accordance
 
 
 
 
 
 
 
 
with prescribed regulatory requirements 1
$
8,591,440

 
$
8,343,158

 
$
7,962,484

 
$
7,740,028

 
 
 
 
 
 
 
 
 
Total Shareholders' Equity to Total Assets
7.27
%
 
7.30
%
 
7.22
%
 
7.24
%
Tangible Common Equity to Tangible Assets (Non-GAAP)
7.08
%
 
7.11
%
 
7.03
%
 
7.05
%
 
 
 
 
 
 
 
 
 
Tier 1 Capital Ratio
13.40
%
 
13.66
%
 
13.97
%
 
14.11
%
Tangible Common Equity to Risk-Weighted Assets (Non-GAAP)
13.18
%
 
13.49
%
 
13.62
%
 
13.78
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
1   Risk-weighted assets as of June 30, 2016 were revised from $8,341,990 to conform to the current period calculation.
 
 




Bank of Hawaii Corporation and Subsidiaries
 
 
 
Consolidated Statements of Income
 
 
 
Table 3

 
Three Months Ended
 
Nine Months Ended
 
September 30,
June 30,
September 30,
 
September 30,
(dollars in thousands, except per share amounts)
2016
2016
2015
 
2016
2015
Interest Income
 
 
 
 
 
 
   Interest and Fees on Loans and Leases
$
83,489

$
82,323

$
75,874

 
$
246,707

$
220,400

   Income on Investment Securities
 
 
 
 
 
 
      Available-for-Sale
10,313

10,521

10,192

 
31,648

30,663

      Held-to-Maturity
19,315

20,168

20,689

 
59,874

67,928

   Deposits
1

2

2

 
7

7

   Funds Sold
695

618

291

 
2,066

818

   Other
166

153

312

 
531

924

Total Interest Income
113,979

113,785

107,360

 
340,833

320,740

Interest Expense
 
 
 
 
 
 
   Deposits
3,232

3,081

2,410

 
9,199

7,183

   Securities Sold Under Agreements to Repurchase
5,713

6,134

6,307

 
18,000

19,118

   Funds Purchased
3

3

3

 
9

9

   Other Debt
1,119

1,017

749

 
3,139

1,987

Total Interest Expense
10,067

10,235

9,469

 
30,347

28,297

Net Interest Income
103,912

103,550

97,891

 
310,486

292,443

Provision for Credit Losses
2,500

1,000


 
1,500


Net Interest Income After Provision for Credit Losses
101,412

102,550

97,891

 
308,986

292,443

Noninterest Income
 
 
 
 
 
 
   Trust and Asset Management
11,008

12,707

11,907

 
34,971

36,442

   Mortgage Banking
6,362

4,088

3,291

 
13,639

8,453

   Service Charges on Deposit Accounts
8,524

8,150

8,669

 
25,117

25,409

   Fees, Exchange, and Other Service Charges
14,023

13,978

13,340

 
41,445

39,589

   Investment Securities Gains (Losses), Net
(328
)
(312
)
24

 
10,540

10,341

   Annuity and Insurance
1,653

2,006

1,721

 
5,560

5,650

   Bank-Owned Life Insurance
1,911

1,551

1,609

 
5,010

5,431

   Other
4,961

4,351

2,660

 
14,558

10,138

Total Noninterest Income
48,114

46,519

43,221

 
150,840

141,453

Noninterest Expense
 
 
 
 
 
 
   Salaries and Benefits
49,725

50,289

46,576

 
150,528

143,966

   Net Occupancy
8,510

7,158

7,403

 
22,671

25,341

   Net Equipment
4,913

5,065

4,804

 
15,387

14,918

   Data Processing
3,620

3,972

3,920

 
11,543

11,366

   Professional Fees
2,396

2,047

2,258

 
7,082

6,857

   FDIC Insurance
2,104

2,144

2,139

 
6,600

6,347

   Other
16,264

15,396

24,788

 
47,178

53,582

Total Noninterest Expense
87,532

86,071

91,888

 
260,989

262,377

Income Before Provision for Income Taxes
61,994

62,998

49,224

 
198,837

171,519

Provision for Income Taxes
18,501

18,753

14,948

 
60,889

53,647

Net Income
$
43,493

$
44,245

$
34,276

 
$
137,948

$
117,872

Basic Earnings Per Share
$
1.02

$
1.04

$
0.79

 
$
3.23

$
2.72

Diluted Earnings Per Share
$
1.02

$
1.03

$
0.79

 
$
3.21

$
2.71

Dividends Declared Per Share
$
0.48

$
0.48

$
0.45

 
$
1.41

$
1.35

Basic Weighted Average Shares
42,543,122

42,729,731

43,181,233

 
42,730,571

43,290,137

Diluted Weighted Average Shares
42,778,346

42,942,960

43,427,730

 
42,947,059

43,514,898





Bank of Hawaii Corporation and Subsidiaries
 
 
 
 
Consolidated Statements of Comprehensive Income
 
 
 
 
Table 4

 
 
Three Months Ended
 
Nine Months Ended
 
 
September 30,
June 30,
September 30,
 
September 30,
(dollars in thousands)
2016
2016
2015
 
2016
2015
Net Income
$
43,493

$
44,245

$
34,276

 
$
137,948

$
117,872

Other Comprehensive Income (Loss), Net of Tax:
 
 
 
 
 
 
 
Net Unrealized Gains (Losses) on Investment Securities
(5,528
)
5,157

7,051

 
8,323

4,735

 
Defined Benefit Plans
140

141

219

 
422

659

Total Other Comprehensive Income (Loss)
(5,388
)
5,298

7,270

 
8,745

5,394

Comprehensive Income
$
38,105

$
49,543

$
41,546

 
$
146,693

$
123,266





Bank of Hawaii Corporation and Subsidiaries
Consolidated Statements of Condition
 
 
 
Table 5

 
September 30,

June 30,

December 31,

September 30,

(dollars in thousands)
2016

2016

2015

2015

Assets
 
 
 
 
Interest-Bearing Deposits in Other Banks
$
4,181

$
3,819

$
4,130

$
3,609

Funds Sold
506,604

615,395

592,892

274,873

Investment Securities
 
 
 
 
   Available-for-Sale
2,213,482

2,299,638

2,256,818

2,279,722

   Held-to-Maturity (Fair Value of $3,893,542; $3,890,220; $4,006,412; and $4,181,613)
3,815,915

3,798,200

3,982,736

4,121,768

Loans Held for Sale
68,066

105,824

4,808

3,222

Loans and Leases
8,694,097

8,331,469

7,878,985

7,689,772

   Allowance for Loan and Lease Losses
(104,033
)
(103,932
)
(102,880
)
(104,038
)
     Net Loans and Leases
8,590,064

8,227,537

7,776,105

7,585,734

Total Earning Assets
15,198,312

15,050,413

14,617,489

14,268,928

Cash and Due from Banks
127,326

133,836

158,699

208,601

Premises and Equipment, Net
110,288

109,832

111,199

108,987

Accrued Interest Receivable
46,925

45,709

44,719

47,512

Foreclosed Real Estate
1,747

1,728

824

1,392

Mortgage Servicing Rights
20,991

19,631

23,002

23,301

Goodwill
31,517

31,517

31,517

31,517

Bank-Owned Life Insurance
272,637

271,274

268,175

266,568

Other Assets
204,900

196,961

199,392

207,317

Total Assets
$
16,014,643

$
15,860,901

$
15,455,016

$
15,164,123

 
 
 
 
 
Liabilities
 
 
 
 
Deposits
 
 
 
 
   Noninterest-Bearing Demand
$
4,437,963

$
4,383,496

$
4,286,331

$
4,102,713

   Interest-Bearing Demand
2,777,095

2,838,744

2,761,930

2,631,542

   Savings
5,306,880

5,165,808

5,025,191

5,016,462

   Time
1,286,427

1,255,759

1,177,651

1,186,245

Total Deposits
13,808,365

13,643,807

13,251,103

12,936,962

Funds Purchased
9,616

7,333

7,333

8,459

Securities Sold Under Agreements to Repurchase
551,683

586,785

628,857

632,138

Other Debt
267,954

267,970

245,786

270,801

Retirement Benefits Payable
47,522

47,438

47,374

54,978

Accrued Interest Payable
6,115

5,532

5,032

5,869

Taxes Payable and Deferred Taxes
24,922

20,979

17,737

25,294

Other Liabilities
134,607

123,838

135,534

131,268

Total Liabilities
14,850,784

14,703,682

14,338,756

14,065,769

Shareholders' Equity
 
 
 
 
Common Stock ($.01 par value; authorized 500,000,000 shares;
 
 
 
 
   issued / outstanding: September 30, 2016 - 57,854,843 / 42,733,513;
 
 
 
 
   June 30, 2016 - 57,856,419 / 42,916,163; December 31, 2015 - 57,749,071 / 43,282,153;
 
 
 
 
   and September 30, 2015 - 57,749,071 / 43,342,940)
576

576

575

575

Capital Surplus
549,064

546,928

542,041

539,112

Accumulated Other Comprehensive Loss
(14,812
)
(9,424
)
(23,557
)
(21,292
)
Retained Earnings
1,393,231

1,370,308

1,316,260

1,293,416

Treasury Stock, at Cost (Shares: September 30, 2016 - 15,121,330; June 30, 2016 - 14,940,256;
 
 
 
 
    December 31, 2015 - 14,466,918; and September 30, 2015 - 14,406,131)
(764,200
)
(751,169
)
(719,059
)
(713,457
)
Total Shareholders' Equity
1,163,859

1,157,219

1,116,260

1,098,354

Total Liabilities and Shareholders' Equity
$
16,014,643

$
15,860,901

$
15,455,016

$
15,164,123





Bank of Hawaii Corporation and Subsidiaries
 
 
 
 
Consolidated Statements of Shareholders' Equity
 
 
 
Table 6

 
 
 
 
 
Accum.

 
 
 
 
 
 
 
 
Other

 
 
 
 
 
 
 
 
Compre-

 
 
 
 
 
 
 
 
hensive

 
 
 
 
Common Shares
 
Common

Capital

Income

Retained

Treasury

 
(dollars in thousands)
Outstanding

Stock

Surplus

(Loss)

Earnings

Stock

Total

Balance as of December 31, 2015
43,282,153

$
575

$
542,041

$
(23,557
)
$
1,316,260

$
(719,059
)
$
1,116,260

Net Income




137,948


137,948

Other Comprehensive Income



8,745



8,745

Share-Based Compensation


5,020




5,020

Common Stock Issued under Purchase and Equity
 
 
 
 
 
 
 
 
Compensation Plans and Related Tax Benefits
224,018

1

2,003


(314
)
6,224

7,914

Common Stock Repurchased
(772,658
)




(51,365
)
(51,365
)
Cash Dividends Declared ($1.41 per share)




(60,663
)

(60,663
)
Balance as of September 30, 2016
42,733,513

$
576

$
549,064

$
(14,812
)
$
1,393,231

$
(764,200
)
$
1,163,859









Balance as of December 31, 2014
43,724,208

$
574

$
531,932

$
(26,686
)
$
1,234,801

$
(685,535
)
$
1,055,086

Net Income




117,872


117,872

Other Comprehensive Income



5,394



5,394

Share-Based Compensation


5,698




5,698

Common Stock Issued under Purchase and Equity
 
 
 
 
 
 
 
 
Compensation Plans and Related Tax Benefits
246,851

1

1,482


(376
)
11,011

12,118

Common Stock Repurchased
(628,119
)




(38,933
)
(38,933
)
Cash Dividends Declared ($1.35 per share)




(58,881
)

(58,881
)
Balance as of September 30, 2015
43,342,940

$
575

$
539,112

$
(21,292
)
$
1,293,416

$
(713,457
)
$
1,098,354





Bank of Hawaii Corporation and Subsidiaries
 
 
 
 
 
 
 
 
Average Balances and Interest Rates - Taxable-Equivalent Basis
 
 
 
 
Table 7a
 
 
 
 
Three Months Ended
 
Three Months Ended
 
Three Months Ended
 
 
 
September 30, 2016
 
June 30, 2016
 
September 30, 2015
 
 
 
Average

Income/

Yield/

 
Average

Income/

Yield/

 
Average

Income/

Yield/

 
(dollars in millions)
Balance

Expense

Rate

 
Balance

Expense

Rate

 
Balance

Expense

Rate

 
Earning Assets
 
 
 
 
 
 
 
 
 
 
 
 
Interest-Bearing Deposits in Other Banks
$
4.1

$

0.19

%
$
4.0

$

0.17

%
$
3.4

$

0.22

%
Funds Sold
585.9

0.7

0.46

 
526.8

0.6

0.46

 
508.2

0.3

0.22

 
Investment Securities
 
 
 
 
 
 
 
 
 
 
 
 
 
Available-for-Sale
 
 
 
 
 
 
 
 
 
 
 
 
 
   Taxable
1,574.9

6.8

1.72

 
1,619.7

6.9

1.72

 
1,524.4

6.5

1.69

 
 
   Non-Taxable
687.1

5.4

3.16

 
691.8

5.5

3.17

 
719.4

5.8

3.19

 
 
Held-to-Maturity
 
 
 
 
 
 
 
 
 
 
 
 
 
   Taxable
3,563.8

17.8

1.99

 
3,639.5

18.6

2.05

 
3,953.3

19.1

1.93

 
 
   Non-Taxable
243.7

2.4

3.90

 
244.6

2.4

3.91

 
247.3

2.4

3.93

 
Total Investment Securities
6,069.5

32.4

2.13

 
6,195.6

33.4

2.16

 
6,444.4

33.8

2.09

 
Loans Held for Sale
57.7

0.5

3.52

 
19.9

0.2

3.64

 
13.4

0.1

3.82

 
Loans and Leases 1
 
 
 
 
 
 
 
 
 
 
 
 
 
Commercial and Industrial
1,192.0

9.8

3.26

 
1,176.0

9.8

3.36

 
1,166.7

9.3

3.15

 
 
Commercial Mortgage
1,730.2

15.4

3.55

 
1,686.7

16.4

3.91

 
1,568.2

15.0

3.79

 
 
Construction
239.4

2.6

4.38

 
210.8

2.3

4.44

 
124.5

1.5

4.93

 
 
Commercial Lease Financing
195.1

1.2

2.38

 
196.4

1.2

2.36

 
216.2

1.9

3.50

 
 
Residential Mortgage
3,082.9

30.4

3.94

 
3,005.4

30.1

4.01

 
2,832.4

28.8

4.07

 
 
Home Equity
1,254.4

11.3

3.59

 
1,170.9

10.5

3.61

 
961.3

8.6

3.58

 
 
Automobile
426.2

5.5

5.15

 
405.9

5.2

5.18

 
359.2

4.7

5.18

 
 
Other 2
363.4

7.0

7.69

 
353.0

6.9

7.78

 
317.5

6.1

7.60

 
Total Loans and Leases
8,483.6

83.2

3.91

 
8,205.1

82.4

4.03

 
7,546.0

75.9

4.00

 
Other
39.9

0.1

1.66

 
38.1

0.1

1.61

 
37.5

0.3

3.33

 
Total Earning Assets 3
15,240.7

116.9

3.06

 
14,989.5

116.7

3.12

 
14,552.9

110.4

3.02

 
Cash and Due from Banks
133.2

 
 
 
120.4

 
 
 
131.6

 
 
 
Other Assets
532.9

 
 
 
529.7

 
 
 
536.2

 
 
 
Total Assets
$
15,906.8

 
 
 
$
15,639.6

 
 
 
$
15,220.7

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest-Bearing Liabilities
 
 
 
 
 
 
 
 
 
 
 
 
Interest-Bearing Deposits
 
 
 
 
 
 
 
 
 
 
 
 
 
Demand
$
2,770.2

0.2

0.03

 
$
2,738.1

0.3

0.04

 
$
2,622.4

0.2

0.03

 
 
Savings
5,208.3

1.1

0.09

 
5,184.8

1.1

0.09

 
5,067.8

1.1

0.09

 
 
Time
1,272.6

1.9

0.59

 
1,214.8

1.7

0.57

 
1,201.3

1.1

0.36

 
Total Interest-Bearing Deposits
9,251.1

3.2

0.14

 
9,137.7

3.1

0.14

 
8,891.5

2.4

0.11

 
Short-Term Borrowings
8.7


0.13

 
7.3


0.15

 
8.5


0.14

 
Securities Sold Under Agreements to Repurchase
556.5

5.7

4.02

 
586.8

6.1

4.14

 
643.3

6.3

3.84

 
Other Debt
268.0

1.1

1.66

 
226.8

1.0

1.80

 
223.2

0.8

1.34

 
Total Interest-Bearing Liabilities
10,084.3

10.0

0.39

 
9,958.6

10.2

0.41

 
9,766.5

9.5

0.38

 
Net Interest Income
 
$
106.9

 
 
 
$
106.5

 
 
 
$
100.9

 
 
 
Interest Rate Spread
 
 
2.67

%
 
 
2.71

%
 
 
2.64

%
 
Net Interest Margin
 
 
2.80

%
 
 
2.85

%
 
 
2.77

%
Noninterest-Bearing Demand Deposits
4,436.1

 
 
 
4,316.3

 
 
 
4,117.4

 
 
 
Other Liabilities
224.7

 
 
 
220.8

 
 
 
244.2

 
 
 
Shareholders' Equity
1,161.7

 
 
 
1,143.9

 
 
 
1,092.6

 
 
 
Total Liabilities and Shareholders' Equity
$
15,906.8

 
 
 
$
15,639.6

 
 
 
$
15,220.7

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
1  Non-performing loans and leases are included in the respective average loan and lease balances. Income, if any, on such loans and leases is recognized on a cash basis.
 
2  Comprised of other consumer revolving credit, installment, and consumer lease financing.
 
 
 
 
 
 
3  Interest income includes taxable-equivalent basis adjustments, based upon a federal statutory tax rate of 35%, of $2,967,000, $2,977,000 and $3,035,000 for the three months
 
 
ended September 30, 2016, June 30, 2016, and September 30, 2015, respectively.
 
 



Bank of Hawaii Corporation and Subsidiaries
 
 
 
 
Average Balances and Interest Rates - Taxable-Equivalent Basis
 
 
 
Table 7b

 
 
 
Nine Months Ended
 
Nine Months Ended
 
 
 
September 30, 2016
 
September 30, 2015
 
 
 
Average

Income/

Yield/

 
Average

Income/

Yield/

 
(dollars in millions)
Balance

Expense

Rate

 
Balance

Expense

Rate

 
Earning Assets
 
 
 
 
 
 
 
 
Interest-Bearing Deposits in Other Banks
$
4.2

$

0.26

%
$
3.3

$

0.27

%
Funds Sold
586.8

2.0

0.46

 
488.8

0.8

0.22

 
Investment Securities
 
 
 
 
 
 
 
 
 
Available-for-Sale
 
 
 
 
 
 
 
 
 
   Taxable
1,594.3

20.9

1.75

 
1,547.8

19.5

1.68

 
 
   Non-Taxable
697.9

16.5

3.16

 
722.8

17.2

3.18

 
 
Held-to-Maturity
 
 
 
 
 
 
 
 
 
   Taxable
3,627.4

55.2

2.03

 
4,032.8

63.2

2.09

 
 
   Non-Taxable
244.6

7.2

3.91

 
248.2

7.3

3.93

 
Total Investment Securities
6,164.2

99.8

2.16

 
6,551.6

107.2

2.18

 
Loans Held for Sale
30.0

0.8

3.58

 
9.2

0.3

3.72

 
Loans and Leases 1
 
 
 
 
 
 
 
 
 
Commercial and Industrial
1,165.2

30.3

3.48

 
1,151.3

27.2

3.16

 
 
Commercial Mortgage
1,702.1

47.5

3.73

 
1,506.3

43.0

3.82

 
 
Construction
206.9

6.9

4.47

 
118.2

4.2

4.75

 
 
Commercial Lease Financing
196.8

3.7

2.48

 
222.4

5.8

3.46

 
 
Residential Mortgage
3,002.6

90.0

4.00

 
2,734.0

84.6

4.13

 
 
Home Equity
1,176.5

32.0

3.63

 
915.8

24.9

3.63

 
 
Automobile
407.0

15.8

5.17

 
345.1

13.5

5.21

 
 
Other 2
353.5

20.4

7.70

 
308.6

17.3

7.49

 
Total Loans and Leases
8,210.6

246.6

4.01

 
7,301.7

220.5

4.03

 
Other
38.8

0.5

1.83

 
51.6

0.9

2.39

 
Total Earning Assets 3
15,034.6

349.7

3.10

 
14,406.2

329.7

3.05

 
Cash and Due from Banks
128.2

 
 
 
131.3

 
 
 
Other Assets
532.5

 
 
 
531.9

 
 
 
Total Assets
$
15,695.3

 
 
 
$
15,069.4

 
 
 
 
 
 
 
 
 
 
 
 
 
Interest-Bearing Liabilities
 
 
 
 
 
 
 
 
Interest-Bearing Deposits
 
 
 
 
 
 
 
 
 
Demand
$
2,756.7

0.7

0.03

 
$
2,604.0

0.6

0.03

 
 
Savings
5,177.0

3.4

0.09

 
5,011.2

3.3

0.09

 
 
Time
1,232.1

5.1

0.55

 
1,278.1

3.3

0.35

 
Total Interest-Bearing Deposits
9,165.8

9.2

0.13

 
8,893.3

7.2

0.11

 
Short-Term Borrowings
7.9


0.14

 
8.5


0.14

 
Securities Sold Under Agreements to Repurchase
582.0

18.0

4.06

 
664.4

19.1

3.79

 
Other Debt
242.5

3.1

1.73

 
190.5

2.0

1.39

 
Total Interest-Bearing Liabilities
9,998.2

30.3

0.40

 
9,756.7

28.3

0.38

 
Net Interest Income
 
$
319.4

 
 
 
$
301.4

 
 
 
Interest Rate Spread
 
 
2.70

%
 
 
2.67

%
 
Net Interest Margin
 
 
2.84

%
 
 
2.79

%
Noninterest-Bearing Demand Deposits
4,326.8

 
 
 
3,993.7

 
 
 
Other Liabilities
225.2

 
 
 
241.2

 
 
 
Shareholders' Equity
1,145.1

 
 
 
1,077.8

 
 
 
Total Liabilities and Shareholders' Equity
$
15,695.3

 
 
 
$
15,069.4

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
1  Non-performing loans and leases are included in the respective average loan and lease balances. Income, if any, on such loans and leases is recognized on a cash basis.
 
2  Comprised of other consumer revolving credit, installment, and consumer lease financing.
 
 
 
 
 
3 Interest income includes taxable-equivalent basis adjustments, based upon a federal statutory tax rate of 35%, of $8,957,000 and $8,921,000 for the nine months
 
 
ended September 30, 2016 and September 30, 2015, respectively.
 
 
 
 
 




Bank of Hawaii Corporation and Subsidiaries
 
 
 
Analysis of Change in Net Interest Income - Taxable-Equivalent Basis
 
Table 8a

 
Three Months Ended September 30, 2016
 
Compared to June 30, 2016
(dollars in millions)
Volume 1

Rate 1

Total

Change in Interest Income:
 
 
 
Funds Sold
$
0.1

$

$
0.1

Investment Securities
 
 
 
   Available-for-Sale
 
 
 
      Taxable
(0.1
)

(0.1
)
      Non-Taxable
(0.1
)

(0.1
)
   Held-to-Maturity
 
 
 
      Taxable
(0.3
)
(0.5
)
(0.8
)
Total Investment Securities
(0.5
)
(0.5
)
(1.0
)
Loans Held for Sale
0.3


0.3

Loans and Leases



   Commercial and Industrial
0.2

(0.2
)

   Commercial Mortgage
0.4

(1.4
)
(1.0
)
   Construction
0.3


0.3

   Residential Mortgage
0.8

(0.5
)
0.3

   Home Equity
0.9

(0.1
)
0.8

   Automobile
0.3


0.3

   Other 2
0.2

(0.1
)
0.1

Total Loans and Leases
3.1

(2.3
)
0.8

Total Change in Interest Income
3.0

(2.8
)
0.2

 
 
 
 
Change in Interest Expense:
 
 
 
Interest-Bearing Deposits
 
 
 
   Demand

(0.1
)
(0.1
)
   Time
0.1

0.1

0.2

Total Interest-Bearing Deposits
0.1


0.1

Securities Sold Under Agreements to Repurchase
(0.3
)
(0.1
)
(0.4
)
Other Debt
0.2

(0.1
)
0.1

Total Change in Interest Expense

(0.2
)
(0.2
)
 
 
 
 
Change in Net Interest Income
$
3.0

$
(2.6
)
$
0.4

 
 
 
 
 
 
 
 
1 The change in interest income and expense not solely due to changes in volume or rate has been allocated on a pro-rata basis to the volume and rate columns.
2  Comprised of other consumer revolving credit, installment, and consumer lease financing.




Bank of Hawaii Corporation and Subsidiaries
 
 
Analysis of Change in Net Interest Income - Taxable-Equivalent Basis
 
Table 8b

 
Three Months Ended September 30, 2016
 
Compared to September 30, 2015
(dollars in millions)
Volume 1

Rate 1

Total

Change in Interest Income:
 
 
 
Funds Sold
$
0.1

$
0.3

$
0.4

Investment Securities
 
 
 
   Available-for-Sale
 
 
 
      Taxable
0.2

0.1

0.3

      Non-Taxable
(0.3
)
(0.1
)
(0.4
)
   Held-to-Maturity
 
 
 
      Taxable
(1.9
)
0.6

(1.3
)
Total Investment Securities
(2.0
)
0.6

(1.4
)
Loans Held for Sale
0.4


0.4

Loans and Leases
 
 
 
   Commercial and Industrial
0.2

0.3

0.5

   Commercial Mortgage
1.5

(1.1
)
0.4

   Construction
1.3

(0.2
)
1.1

   Commercial Lease Financing
(0.2
)
(0.5
)
(0.7
)
   Residential Mortgage
2.5

(0.9
)
1.6

   Home Equity
2.6

0.1

2.7

   Automobile
0.8


0.8

   Other 2
0.9


0.9

Total Loans and Leases
9.6

(2.3
)
7.3

Other

(0.2
)
(0.2
)
Total Change in Interest Income
8.1

(1.6
)
6.5

 
 
 
 
Change in Interest Expense:
 
 
 
Interest-Bearing Deposits
 
 
 
   Time
0.1

0.7

0.8

Total Interest-Bearing Deposits
0.1

0.7

0.8

Securities Sold Under Agreements to Repurchase
(0.9
)
0.3

(0.6
)
Other Debt
0.2

0.1

0.3

Total Change in Interest Expense
(0.6
)
1.1

0.5

 
 
 
 
Change in Net Interest Income
$
8.7

$
(2.7
)
$
6.0

 
 
 
 
 
 
 
 
1 The change in interest income and expense not solely due to changes in volume or rate has been allocated on a pro-rata basis to the volume and rate columns.
2  Comprised of other consumer revolving credit, installment, and consumer lease financing.
 




Bank of Hawaii Corporation and Subsidiaries
 
 
Analysis of Change in Net Interest Income - Taxable-Equivalent Basis
 
Table 8c

 
Nine Months Ended September 30, 2016
 
Compared to September 30, 2015
(dollars in millions)
Volume 1

Rate 1

Total

Change in Interest Income:
 
 
 
Funds Sold
$
0.2

$
1.0

$
1.2

Investment Securities
 
 
 
   Available-for-Sale
 
 
 
      Taxable
0.6

0.8

1.4

      Non-Taxable
(0.6
)
(0.1
)
(0.7
)
   Held-to-Maturity
 
 
 
      Taxable
(6.2
)
(1.8
)
(8.0
)
      Non-Taxable
(0.1
)

(0.1
)
Total Investment Securities
(6.3
)
(1.1
)
(7.4
)
Loans Held for Sale
0.5


0.5

Loans and Leases
 
 
 
   Commercial and Industrial
0.4

2.7

3.1

   Commercial Mortgage
5.5

(1.0
)
4.5

   Construction
3.0

(0.3
)
2.7

   Commercial Lease Financing
(0.6
)
(1.5
)
(2.1
)
   Residential Mortgage
8.1

(2.7
)
5.4

   Home Equity
7.1


7.1

   Automobile
2.4

(0.1
)
2.3

   Other 2
2.6

0.5

3.1

Total Loans and Leases
28.5

(2.4
)
26.1

Other
(0.2
)
(0.2
)
(0.4
)
Total Change in Interest Income
22.7

(2.7
)
20.0

 
 
 
 
Change in Interest Expense:
 
 
 
Interest-Bearing Deposits
 
 
 
   Demand

0.1

0.1

   Savings
0.1


0.1

   Time
(0.1
)
1.9

1.8

Total Interest-Bearing Deposits

2.0

2.0

Securities Sold Under Agreements to Repurchase
(2.4
)
1.3

(1.1
)
Other Debt
0.6

0.5

1.1

Total Change in Interest Expense
(1.8
)
3.8

2.0

 
 
 
 
Change in Net Interest Income
$
24.5

$
(6.5
)
$
18.0

 
 
 
 
 
 
 
 
1 The change in interest income and expense not solely due to changes in volume or rate has been allocated on a pro-rata basis to the volume and rate columns.
2 Comprised of other consumer revolving credit, installment, and consumer lease financing.
 




Bank of Hawaii Corporation and Subsidiaries
 
 
 
 
Salaries and Benefits
 
 
 
 
 
Table 9

 
Three Months Ended
 
Nine Months Ended
 
September 30,
June 30,
September 30,
 
September 30,
(dollars in thousands)
2016
2016
2015
 
2016
2015
Salaries
$
29,401

$
28,797

$
28,905

 
$
87,339

$
85,033

Incentive Compensation
5,743

5,917

4,223

 
17,625

13,696

Share-Based Compensation
2,968

2,746

2,616

 
8,024

7,712

Commission Expense
2,051

2,151

1,639

 
5,559

5,158

Retirement and Other Benefits
3,866

4,092

4,064

 
12,912

12,912

Payroll Taxes
2,224

2,288

2,200

 
8,089

8,063

Medical, Dental, and Life Insurance
3,366

3,872

2,870

 
10,130

8,503

Separation Expense
106

426

59

 
850

2,889

Total Salaries and Benefits
$
49,725

$
50,289

$
46,576

 
$
150,528

$
143,966





Bank of Hawaii Corporation and Subsidiaries
 
 
 
Loan and Lease Portfolio Balances
 
 
 
Table 10

 
 
September 30,

June 30,

March 31,

December 31,

September 30,

(dollars in thousands)
2016

2016

2016

2015

2015

Commercial
 
 
 
 
 
 
Commercial and Industrial
$
1,217,849

$
1,174,879

$
1,180,341

$
1,115,168

$
1,169,817

 
Commercial Mortgage
1,807,190

1,712,271

1,687,199

1,677,147

1,622,119

 
Construction
263,079

226,062

192,909

156,660

129,254

 
Lease Financing
201,436

192,630

195,804

204,877

202,055

Total Commercial
3,489,554

3,305,842

3,256,253

3,153,852

3,123,245

Consumer
 
 
 
 
 
 
Residential Mortgage
3,098,936

3,032,981

2,929,388

2,925,605

2,875,605

 
Home Equity
1,295,993

1,213,154

1,131,796

1,069,400

993,817

 
Automobile
437,659

417,017

399,825

381,735

367,640

 
Other 1
371,955

362,475

348,348

348,393

329,465

Total Consumer
5,204,543

5,025,627

4,809,357

4,725,133

4,566,527

Total Loans and Leases
$
8,694,097

$
8,331,469

$
8,065,610

$
7,878,985

$
7,689,772

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Deposits
 
 
 
 
 
 
September 30,

June 30,

March 31,

December 31,

September 30,

(dollars in thousands)
2016

2016

2016

2015

2015

Consumer
$
6,781,371

$
6,618,164

$
6,568,651

$
6,445,510

$
6,254,862

Commercial
5,751,184

5,697,490

5,678,987

5,502,739

5,397,857

Public and Other
1,275,810

1,328,153

1,241,254

1,302,854

1,284,243

Total Deposits
$
13,808,365

$
13,643,807

$
13,488,892

$
13,251,103

$
12,936,962

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




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

 
 
 
September 30,

June 30,

March 31,

December 31,

September 30,

(dollars in thousands)
2016

2016

2016

2015

2015

Non-Performing Assets
 
 
 
 
 
Non-Accrual Loans and Leases
 
 
 
 
 
 
Commercial
 
 
 
 
 
 
 
Commercial and Industrial
$
201

$
269

$
666

$
5,829

$
8,532

 
 
Commercial Mortgage
1,023

1,194

3,401

3,469

1,058

 
Total Commercial
1,224

1,463

4,067

9,298

9,590

 
Consumer
 
 
 
 
 
 
 
Residential Mortgage
12,735

9,979

13,719

14,598

14,749

 
 
Home Equity
2,966

3,110

2,501

4,081

3,814

 
Total Consumer
15,701

13,089

16,220

18,679

18,563

Total Non-Accrual Loans and Leases
16,925

14,552

20,287

27,977

28,153

Foreclosed Real Estate
1,747

1,728

1,728

824

1,392

Total Non-Performing Assets
$
18,672

$
16,280

$
22,015

$
28,801

$
29,545

 
 
 
 
 
 
 
 
Accruing Loans and Leases Past Due 90 Days or More
 
 
 
 
Consumer
 
 
 
 
 
 
Residential Mortgage
$
2,583

$
5,640

$
4,219

$
4,453

$
5,060

 
Home Equity
1,210

1,128

2,096

1,710

1,396

 
Automobile
578

464

524

315

631

 
Other 1
1,273

1,518

1,099

1,096

1,058

Total Consumer
5,644

8,750

7,938

7,574

8,145

Total Accruing Loans and Leases Past Due 90 Days or More
$
5,644

$
8,750

$
7,938

$
7,574

$
8,145

Restructured Loans on Accrual Status
 
 
 
 
 
   and Not Past Due 90 Days or More
$
52,095

$
52,173

$
50,707

$
49,430

$
49,506

Total Loans and Leases
$
8,694,097

$
8,331,469

$
8,065,610

$
7,878,985

$
7,689,772

 
 
 
 
 
 
 
 
Ratio of Non-Accrual Loans and Leases to Total Loans and Leases
0.19
%
0.17
%
0.25
%
0.36
%
0.37
%
 
 
 
 
 
 
 
 
Ratio of Non-Performing Assets to Total Loans and Leases
 
 
 
 
 
 
and Foreclosed Real Estate
0.21
%
0.20
%
0.27
%
0.37
%
0.38
%
 
 
 
 
 
 
 
 
Ratio of Commercial Non-Performing Assets to Total Commercial Loans
 
 
 
 
 
 
and Leases and Commercial Foreclosed Real Estate
0.04
%
0.04
%
0.12
%
0.29
%
0.31
%
 
 
 
 
 
 
 
 
Ratio of Consumer Non-Performing Assets to Total Consumer Loans
 
 
 
 
 
 
and Leases and Consumer Foreclosed Real Estate
0.34
%
0.29
%
0.37
%
0.41
%
0.44
%
 
 
 
 
 
 
 
 
Ratio of Non-Performing Assets and Accruing Loans and Leases
 
 
 
 
 
Past Due 90 Days or More to Total Loans and Leases
 
 
 
 
 
 
and Foreclosed Real Estate
0.28
%
0.30
%
0.37
%
0.46
%
0.49
%
 
 
 
 
 
 
 
 
Quarter to Quarter Changes in Non-Performing Assets
 
 
 
 
 
Balance at Beginning of Quarter
$
16,280

$
22,015

$
28,801

$
29,545

$
29,450

Additions
3,730

1,300

4,002

2,353

4,427

Reductions
 
 
 
 
 
 
Payments
(501
)
(3,401
)
(6,012
)
(2,473
)
(1,191
)
 
Return to Accrual Status
(701
)
(3,560
)
(4,272
)
(24
)
(1,748
)
 
Sales of Foreclosed Real Estate


(248
)
(458
)
(1,300
)
 
Charge-offs/Write-downs
(136
)
(74
)
(256
)
(142
)
(93
)
Total Reductions
(1,338
)
(7,035
)
(10,788
)
(3,097
)
(4,332
)
Balance at End of Quarter
$
18,672

$
16,280

$
22,015

$
28,801

$
29,545

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



Bank of Hawaii Corporation and Subsidiaries
 
 
 
 
 
Reserve for Credit Losses
 
 
 
 
 
Table 12

 
 
 
Three Months Ended
 
Nine Months Ended
 
 
 
September 30,
June 30,
September 30,
 
September 30,
(dollars in thousands)
2016
2016
2015
 
2016
2015
Balance at Beginning of Period
$
110,504

$
111,249

$
111,893

 
$
108,952

$
114,575

Loans and Leases Charged-Off
 
 
 
 
 
 
 
Commercial
 
 
 
 
 
 
 
 
Commercial and Industrial
(209
)
(204
)
(160
)
 
(670
)
(650
)
 
Consumer
 
 
 
 
 
 
 
 
Residential Mortgage
(104
)
(79
)

 
(388
)
(613
)
 
 
Home Equity
(222
)
17

(634
)
 
(848
)
(1,061
)
 
 
Automobile
(1,703
)
(1,372
)
(1,476
)
 
(4,635
)
(4,141
)
 
 
Other 1
(2,678
)
(2,117
)
(2,123
)
 
(7,017
)
(5,512
)
Total Loans and Leases Charged-Off
(4,916
)
(3,755
)
(4,393
)
 
(13,558
)
(11,977
)
Recoveries on Loans and Leases Previously Charged-Off
 
 
 
 
 
 
 
Commercial
 
 
 
 
 
 
 
 
Commercial and Industrial
282

403

426

 
7,552

1,528

 
 
Commercial Mortgage
14

14

15

 
42

43

 
 
Construction


8

 
23

24

 
 
Lease Financing

1

55

 
2

131

 
Consumer
 
 
 
 
 
 
 
 
Residential Mortgage
517

279

282

 
997

720

 
 
Home Equity
618

322

693

 
1,453

2,140

 
 
Automobile
615

541

508

 
1,748

1,398

 
 
Other 1
471

450

438

 
1,394

1,343

Total Recoveries on Loans and Leases Previously Charged-Off
2,517

2,010

2,425

 
13,211

7,327

Net Loans and Leases Charged-Off
(2,399
)
(1,745
)
(1,968
)
 
(347
)
(4,650
)
Provision for Credit Losses
2,500

1,000


 
1,500


Provision for Unfunded Commitments


185

 
500

185

Balance at End of Period 2
$
110,605

$
110,504

$
110,110

 
$
110,605

$
110,110

 
 
 
 
 
 
 
 
 
Components
 
 
 
 
 
 
Allowance for Loan and Lease Losses
$
104,033

$
103,932

$
104,038

 
$
104,033

$
104,038

Reserve for Unfunded Commitments
6,572

6,572

6,072

 
6,572

6,072

Total Reserve for Credit Losses
$
110,605

$
110,504

$
110,110

 
$
110,605

$
110,110

 
 
 
 
 
 
 
 
 
Average Loans and Leases Outstanding
$
8,483,588

$
8,205,104

$
7,545,985

 
$
8,210,596

$
7,301,656

 
 
 
 
 
 
 
 
 
Ratio of Net Loans and Leases Charged-Off to
 
 
 
 
 
 
 
Average Loans and Leases Outstanding (annualized)
0.11
%
0.09
%
0.10
%
 
0.01
%
0.09
%
Ratio of Allowance for Loan and Lease Losses to Loans and Leases
       Outstanding
1.20
%
1.25
%
1.35
%
 
1.20
%
1.35
%
 
 
 
 
 
 
 
 
 
 
1  Comprised of other revolving credit, installment, and lease financing.
2  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.



Bank of Hawaii Corporation and Subsidiaries
 
 
Business Segments Selected Financial Information
 
 
Table 13a

 
Retail

Commercial

Investment

Treasury

Consolidated

(dollars in thousands)
Banking

Banking

Services

and Other

Total

Three Months Ended September 30, 2016
 
 
 
 
 
Net Interest Income
$
61,747

$
38,613

$
6,029

$
(2,477
)
$
103,912

Provision for Credit Losses
2,574

(168
)
(7
)
101

2,500

Net Interest Income After Provision for Credit Losses
59,173

38,781

6,036

(2,578
)
101,412

Noninterest Income
24,786

6,977

13,662

2,689

48,114

Noninterest Expense
(51,892
)
(17,449
)
(14,579
)
(3,612
)
(87,532
)
Income Before Provision for Income Taxes
32,067

28,309

5,119

(3,501
)
61,994

Provision for Income Taxes
(11,329
)
(10,073
)
(1,894
)
4,795

(18,501
)
Net Income
$
20,738

$
18,236

$
3,225

$
1,294

$
43,493

Total Assets as of September 30, 2016
$
5,206,442

$
3,428,424

$
290,207

$
7,089,570

$
16,014,643

 
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended September 30, 2015 1
 
 
 
 
 
Net Interest Income
$
51,732

$
37,133

$
4,517

$
4,509

$
97,891

Provision for Credit Losses
2,209

(226
)
(20
)
(1,963
)

Net Interest Income After Provision for Credit Losses
49,523

37,359

4,537

6,472

97,891

Noninterest Income
21,206

4,873

14,363

2,779

43,221

Noninterest Expense
(49,963
)
(25,632
)
(14,031
)
(2,262
)
(91,888
)
Income Before Provision for Income Taxes
20,766

16,600

4,869

6,989

49,224

Provision for Income Taxes
(7,352
)
(5,566
)
(1,802
)
(228
)
(14,948
)
Net Income
$
13,414

$
11,034

$
3,067

$
6,761

$
34,276

Total Assets as of September 30, 2015 1
$
4,578,333

$
3,102,598

$
232,641

$
7,250,551

$
15,164,123

 
 
 
 
 
 
 
 
 
 
 
 
1  Certain prior period information has been reclassified to conform to current presentation.
 
 
 



Bank of Hawaii Corporation and Subsidiaries
 
 
Business Segments Selected Financial Information
 
 
Table 13b

 
Retail

Commercial

Investment

Treasury

Consolidated

(dollars in thousands)
Banking

Banking

Services

and Other

Total

Nine Months Ended September 30, 2016
 
 
 
 
 
Net Interest Income
$
179,798

$
115,112

$
18,518

$
(2,942
)
$
310,486

Provision for Credit Losses
7,415

(7,052
)
(18
)
1,155

1,500

Net Interest Income After Provision for Credit Losses
172,383

122,164

18,536

(4,097
)
308,986

Noninterest Income
67,364

21,015

43,632

18,829

150,840

Noninterest Expense
(155,391
)
(52,479
)
(44,786
)
(8,333
)
(260,989
)
Income Before Provision for Income Taxes
84,356

90,700

17,382

6,399

198,837

Provision for Income Taxes
(29,958
)
(32,337
)
(6,431
)
7,837

(60,889
)
Net Income
$
54,398

$
58,363

$
10,951

$
14,236

$
137,948

Total Assets as of September 30, 2016
$
5,206,442

$
3,428,424

$
290,207

$
7,089,570

$
16,014,643

 
 
 
 
 
 
 
 
 
 
 
 
Nine Months Ended September 30, 2015 1
 
 
 
 
 
Net Interest Income
$
150,631

$
107,293

$
13,153

$
21,366

$
292,443

Provision for Credit Losses
5,659

(957
)
(37
)
(4,665
)

Net Interest Income After Provision for Credit Losses
144,972

108,250

13,190

26,031

292,443

Noninterest Income
61,123

16,417

44,770

19,143

141,453

Noninterest Expense
(149,461
)
(60,239
)
(43,192
)
(9,485
)
(262,377
)
Income Before Provision for Income Taxes
56,634

64,428

14,768

35,689

171,519

Provision for Income Taxes
(20,097
)
(22,390
)
(5,464
)
(5,696
)
(53,647
)
Net Income
$
36,537

$
42,038

$
9,304

$
29,993

$
117,872

Total Assets as of September 30, 2015 1
$
4,578,333

$
3,102,598

$
232,641

$
7,250,551

$
15,164,123

 
 
 
 
 
 
 
 
 
 
 
 
1  Certain prior period information has been reclassified to conform to current presentation.
 
 
 



Bank of Hawaii Corporation and Subsidiaries
 
 
 
 
 
 
 
Selected Quarterly Financial Data
 
 
 
 
 
 
 
Table 14

 
 
Three Months Ended
 
 
September 30,

 
June 30,

 
March 31,

 
December 31,

 
September 30,

 
(dollars in thousands, except per share amounts)
2016

 
2016

 
2016

 
2015

 
2015

 
Quarterly Operating Results
 
 
 
 
 
 
 
 
 
 
Interest Income
 
 
 
 
 
 
 
 
 
 
   Interest and Fees on Loans and Leases
$
83,489

 
$
82,323

 
$
80,895

 
$
78,122

 
$
75,874

 
   Income on Investment Securities
 
 
 
 
 
 
 
 
 
 
      Available-for-Sale
10,313

 
10,521

 
10,814

 
10,829

 
10,192

 
      Held-to-Maturity
19,315

 
20,168

 
20,391

 
21,722

 
20,689

 
   Deposits
1

 
2

 
4

 
1

 
2

 
   Funds Sold
695

 
618

 
753

 
315

 
291

 
   Other
166

 
153

 
212

 
381

 
312

 
Total Interest Income
113,979

 
113,785

 
113,069

 
111,370

 
107,360

 
Interest Expense
 
 
 
 
 
 
 
 
 
 
   Deposits
3,232

 
3,081

 
2,886

 
2,443

 
2,410

 
   Securities Sold Under Agreements to Repurchase
5,713

 
6,134

 
6,153

 
6,246

 
6,307

 
   Funds Purchased
3

 
3

 
3

 
3

 
3

 
   Other Debt
1,119

 
1,017

 
1,003

 
1,034

 
749

 
Total Interest Expense
10,067

 
10,235

 
10,045

 
9,726

 
9,469

 
Net Interest Income
103,912

 
103,550

 
103,024

 
101,644

 
97,891

 
Provision for Credit Losses
2,500

 
1,000

 
(2,000
)
 
1,000

 

 
Net Interest Income After Provision for Credit Losses
101,412

 
102,550

 
105,024

 
100,644

 
97,891

 
Noninterest Income
 
 
 
 
 
 
 
 
 
 
   Trust and Asset Management
11,008

 
12,707

 
11,256

 
11,243

 
11,907

 
   Mortgage Banking
6,362

 
4,088

 
3,189

 
3,130

 
3,291

 
   Service Charges on Deposit Accounts
8,524

 
8,150

 
8,443

 
8,663

 
8,669

 
   Fees, Exchange, and Other Service Charges
14,023

 
13,978

 
13,444

 
13,764

 
13,340

 
   Investment Securities Gains (Losses), Net
(328
)
 
(312
)
 
11,180

 
(181
)
 
24

 
   Annuity and Insurance
1,653

 
2,006

 
1,901

 
2,014

 
1,721

 
   Bank-Owned Life Insurance
1,911

 
1,551

 
1,548

 
1,608

 
1,609

 
   Other
4,961

 
4,351

 
5,246

 
4,525

 
2,660

 
Total Noninterest Income
48,114

 
46,519

 
56,207

 
44,766

 
43,221

 
Noninterest Expense
 
 
 
 
 
 
 
 
 
 
   Salaries and Benefits
49,725

 
50,289

 
50,514

 
47,997

 
46,576

 
   Net Occupancy
8,510

 
7,158

 
7,003

 
4,876

 
7,403

 
   Net Equipment
4,913

 
5,065

 
5,409

 
5,244

 
4,804

 
   Data Processing
3,620

 
3,972

 
3,951

 
5,106

 
3,920

 
   Professional Fees
2,396

 
2,047

 
2,639

 
2,803

 
2,258

 
   FDIC Insurance
2,104

 
2,144

 
2,352

 
2,322

 
2,139

 
   Other
16,264

 
15,396

 
15,518

 
17,379

 
24,788

 
Total Noninterest Expense
87,532

 
86,071

 
87,386

 
85,727

 
91,888

 
Income Before Provision for Income Taxes
61,994

 
62,998

 
73,845

 
59,683

 
49,224

 
Provision for Income Taxes
18,501

 
18,753

 
23,635

 
16,851

 
14,948

 
Net Income
$
43,493

 
$
44,245

 
$
50,210

 
$
42,832

 
$
34,276

 
 
 
 
 
 
 
 
 
 
 
 
Basic Earnings Per Share
$
1.02

 
$
1.04

 
$
1.17

 
$
1.00

 
$
0.79

 
Diluted Earnings Per Share
$
1.02

 
$
1.03

 
$
1.16

 
$
0.99

 
$
0.79

 
 
 
 
 
 
 
 
 
 
 
 
Balance Sheet Totals
 
 
 
 
 
 
 
 
 
 
Loans and Leases
$
8,694,097

 
$
8,331,469

 
$
8,065,610

 
$
7,878,985

 
$
7,689,772

 
Total Assets
16,014,643

 
15,860,901

 
15,654,695

 
15,455,016

 
15,164,123

 
Total Deposits
13,808,365

 
13,643,807

 
13,488,892

 
13,251,103

 
12,936,962

 
Total Shareholders' Equity
1,163,859

 
1,157,219

 
1,138,753

 
1,116,260

 
1,098,354

 
 
 
 
 
 
 
 
 
 
 
 
Performance Ratios
 
 
 
 
 
 
 
 
 
 
Return on Average Assets
1.09

%
1.14

%
1.30

%
1.11

%
0.89

%
Return on Average Shareholders' Equity
14.89

 
15.56

 
17.88

 
15.41

 
12.45

 
Efficiency Ratio 1
57.58

 
57.35

 
54.88

 
58.55

 
65.12

 
Net Interest Margin 2
2.80

 
2.85

 
2.86

 
2.85

 
2.77

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
1  Efficiency ratio is defined as noninterest expense divided by total revenue (net interest income and noninterest income).
 
 
 
2  Net interest margin is defined as net interest income, on a taxable-equivalent basis, as a percentage of average earning assets.
 
 
 



Bank of Hawaii Corporation and Subsidiaries
 
 
 
 
 
 
 
 
 
Hawaii Economic Trends
 
 
 
 
 
 
 
 
 
Table 15
 
Eight Months Ended
 
 
Year Ended
($ in millions; jobs in thousands)
August 31, 2016
 
 
December 31, 2015
December 31, 2014
Hawaii Economic Trends
 
 
 
 
 
 
 
 
 
 
 
 
   State General Fund Revenues 1
$
4,167.5

5.0

%
 
$
5,998.6

 
8.4

%
$
5,535.7

 
1.6

%
   General Excise and Use Tax Revenue 1
$
2,146.7

1.6

%
 
$
3,141.5

 
5.4

%
$
2,979.8

 
2.5

%
   Jobs 2
660.9

 
 
 
658.8

 
 
 
643.7

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
September 30,
 
December 31,
(spot rates)
 
 
 
 
 
 
2016
 
2015
2014
 
Unemployment 3
 
 
 
 
 
 
 
 
 
 
 
 
  Statewide, seasonally adjusted
 
 
 
 
 
 
3.3

%
3.2

%
4.0

%
 
 
 
 
 
 
 
 
 
 
 
 
 
   Oahu
 
 
 
 
 
 
3.0

 
2.7

 
3.5

 
   Island of Hawaii
 
 
 
 
 
 
3.7

 
3.7

 
4.7

 
   Maui
 
 
 
 
 
 
3.3

 
3.1

 
3.8

 
   Kauai
 
 
 
 
 
 
3.3

 
3.5

 
4.3

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
September 30,
 
December 31,
(percentage change, except months of inventory)
 
 
 
2016
 
2015
 
2014
2013
 
Housing Trends (Single Family Oahu) 4
 
 
 
 
 
 
 
 
 
 
 
 
   Median Home Price
 
 
 
 
5.2

%
3.7

%
3.8

%
4.8

%
   Home Sales Volume (units)
 
 
 
 
4.8

%
5.2

%
(0.8
)
%
4.6

%
   Months of Inventory
 
 
 
 
2.9

 
2.6

 
2.6

 
2.7

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Monthly Visitor Arrivals,
 
Percentage Change
(in thousands)
 
 
 
 
Not Seasonally Adjusted
 
from Previous Year
Tourism 5
 
 
 
 
 
 
 
 
 
 
 
 
August 31, 2016
 
 
 
 
 
 
780.7

 
 
 
3.1

 
July 31, 2016
 
 
 
 
 
 
835.4

 
 
 
2.1

 
June 30, 2016
 
 
 
 
 
 
800.3

 
 
 
4.2

 
May 31, 2016
 
 
 
 
 
 
718.9

 
 
 
1.3

 
April 30, 2016
 
 
 
 
 
 
700.6

 
 
 
3.4

 
March 31, 2016
 
 
 
 
 
 
786.3

 
 
 
0.8

 
February 29, 2016
 
 
 
 
 
 
688.8

 
 
 
4.1

 
January 31, 2016
 
 
 
 
 
 
721.0

 
 
 
6.2

 
December 31, 2015
 
 
 
 
 
 
794.2

 
 
 
3.7

 
November 30, 2015
 
 
 
 
 
 
661.4

 
 
 
3.7

 
October 31, 2015
 
 
 
 
 
 
692.9

 
 
 
4.8

 
September 30, 2015
 
 
 
 
 
 
652.6

 
 
 
4.7

 
August 31, 2015
 
 
 
 
 
 
757.5

 
 
 
3.1

 
July 31, 2015
 
 
 
 
 
 
818.5

 
 
 
5.9

 
June 30, 2015
 
 
 
 
 
 
767.9

 
 
 
6.0

 
May 31, 2015
 
 
 
 
 
 
709.7

 
 
 
9.3

 
April 30, 2015
 
 
 
 
 
 
677.8

 
 
 
2.3

 
March 31, 2015
 
 
 
 
 
 
780.1

 
 
 
7.0

 
February 28, 2015
 
 
 
 
 
 
661.7

 
 
 
2.3

 
January 31, 2015
 
 
 
 
 
 
678.9

 
 
 
(0.6
)
 
December 31, 2014
 
 
 
 
 
 
766.0

 
 
 
6.3

 
November 30, 2014
 
 
 
 
 
 
638.0

 
 
 
2.2

 
October 31, 2014
 
 
 
 
 
 
661.0

 
 
 
3.2

 
September 30, 2014
 
 
 
 
 
 
623.1

 
 
 
4.2

 
August 31, 2014
 
 
 
 
 
 
734.7

 
 
 
(1.9
)
 
July 31, 2014
 
 
 
 
 
 
772.8

 
 
 
2.0

 
June 30, 2014
 
 
 
 
 
 
724.5

 
 
 
1.1

 
May 31, 2014
 
 
 
 
 
 
649.1

 
 
 
1.8

 
April 30, 2014
 
 
 
 
 
 
662.6

 
 
 
(0.7
)
 
March 31, 2014
 
 
 
 
 
 
728.8

 
 
 
(5.2
)
 
February 28, 2014
 
 
 
 
 
 
646.8

 
 
 
(4.3
)
 
January 31, 2014
 
 
 
 
 
 
682.6

 
 
 
0.1

 
 
 
 
 
 
 
 
 
 
 
 
 
 
1  Source: Hawaii Department of Business, Economic Development & Tourism
 
 
 
 
 
 
 
2  Source: U. S. Bureau of Labor
 
 
 
 
 
 
 
 
 
 
3  Source: Hawaii Department of Labor and Industrial Relations, County jobs data not seasonally adjusted.
 
 
 
 
 
4  Source: Honolulu Board of REALTORS
 
 
 
 
 
 
 
 
 
 
5  Source: Hawaii Tourism Authority
 
 
 
 
 
 
 
 
 
    Note: Certain prior period seasonally adjusted information has been revised.