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) | January 28, 2019 | |||
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))
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
o Emerging growth company
o If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Item 2.02. Results of Operations and Financial Condition.
On January 28, 2019, Bank of Hawaii Corporation announced its results of operations for the quarter ended December 31, 2018. 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 January 28, 2019 Press Release: Bank of Hawaii Corporation Fourth Quarter 2018 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: January 28, 2019 | Bank of Hawaii Corporation | |
By: | /s/ Mark A. Rossi | |
Mark A. Rossi | ||
Vice Chairman and Corporate Secretary | ||
 | ||
 |  | |
Bank of Hawaii Corporation 2018 Financial Results
•2018 Earnings $5.23 Per Diluted Share
•2018 Net Income $219.6 Million
•Diluted Earnings Per Share $1.30 for the Fourth Quarter of 2018
•Net Income $53.9 Million for the Fourth Quarter of 2018
•Board of Directors Declares Dividend of $0.62 Per Share
•Board of Directors Authorizes Increase in Share Repurchase of $130.0 Million
FOR IMMEDIATE RELEASE
HONOLULU, HI (January 28, 2019) -- Bank of Hawaii Corporation (NYSE: BOH) today reported diluted earnings per share of $5.23 for the full year of 2018, up 20.8 percent from diluted earnings per share of $4.33 in 2017. Net income for the year was $219.6 million, up $34.9 million or 18.9 percent from net income of $184.7 million in the previous year. The return on average assets for the full year of 2018 increased to 1.29 percent compared with 1.10 percent in 2017. The return on average equity for the full year of 2018 increased to 17.63 percent compared with 15.27 percent in 2017.
“Bank of Hawaii finished 2018 with solid financial performance," said Peter Ho, Chairman, President, and CEO. “During the year our loan and deposit balances continued to grow and our net interest margin expanded. Our asset quality, capital and liquidity all remained strong. During the fourth quarter we completed the sale of our MyBankoh Rewards Credit Card portfolio in order to focus on our co-branded Hawaiian Airlines Bank of Hawaii World Elite Mastercard program.”
Diluted earnings per share were $1.30 for the fourth quarter of 2018, down from $1.36 in the third quarter of 2018 and up from $1.01 in the fourth quarter of 2017. Net income for the fourth quarter of 2018 was $53.9 million, down from $56.9 million in the previous quarter and up from $43.0 million in the same quarter last year. The return on average assets for the fourth quarter of 2018 was 1.26 percent, compared with 1.33 percent in the third quarter of 2018 and 1.00 percent in the fourth quarter last year. The return on average equity for the fourth quarter of 2018 was 17.05 percent compared with 18.06 percent in the third quarter of 2018 and 13.85 percent in the fourth quarter last year.
- more -
Bank of Hawaii Corporation 2018 Financial Results Page 2
Financial Highlights
Net interest income, on a taxable-equivalent basis, was $491.5 million for the full year of 2018, an increase of $22.4 million from net interest income of $469.1 million in 2017. Net interest income, on a taxable-equivalent basis, for the fourth quarter of 2018 was $125.2 million, an increase of $1.0 million compared with net interest income of $124.2 million in the third quarter of 2018 and up $3.6 million compared with net interest income of $121.6 million in the fourth quarter last year. Analyses of changes in net interest income are included in Tables 8a, 8b and 8c.
The net interest margin for the full year of 2018 was 3.05 percent, an increase of 12 basis points from the net interest margin of 2.93 percent in 2017. The net interest margin was 3.10 percent in the fourth quarter of 2018, an increase of 3 basis points from the third quarter of 2018 and 12 basis points from the fourth quarter last year. The sale of the credit card portfolio in the fourth quarter of 2018 resulted in a decrease of 2 basis points in the fourth quarter net interest margin.
The provision for credit losses for the full year of 2018 was $13.4 million compared with a provision for credit losses of $16.9 million in 2017. Results for the fourth quarter of 2018 included a provision for credit losses of $2.0 million compared with $3.8 million in the previous quarter and $4.3 million in the same quarter last year.
Noninterest income for the full year of 2018 was $168.9 million compared with noninterest income of $185.4 million in 2017. Results for 2017 included a gain of $12.5 million on the sale of Visa Class B shares compared with a charge of $1.0 million for the adjustment to the conversions ratio in 2018 and $0.9 million in higher fees related to the Visa Class B shares sold. Excluding the Visa sale, the decrease from the previous year was primarily due to a decline in mortgage banking income and service charges on deposits that were partially offset by a gain resulting from a low-income housing investment sale and distribution. Noninterest income was $42.1 million in the fourth quarter of 2018 compared with noninterest income of $41.5 million in the third quarter of 2018 and noninterest income of $41.9 million in the fourth quarter of 2017.
Noninterest expense for the full year of 2018 was $371.6 million compared with noninterest expense of $357.7 million in 2017. Noninterest expense was $95.9 million in the fourth quarter of 2018 and included $4.1 million in one-time significant items related to employee separation, a medical expense, an operational loss, and legal expenses. Noninterest expense was $90.5 million in the third quarter of 2018. There were no significant items in noninterest expense during the third quarter of 2018. Noninterest expense was $92.3 million in the fourth quarter of 2017 and included one-time employee bonuses totaling $2.2 million, including payroll taxes. An analysis of noninterest expenses related to salaries and benefits is included in Table 9.
The efficiency ratio for the full year of 2018 was 56.71 percent compared with 55.66 percent in 2017. The efficiency ratio for the fourth quarter of 2018 was 57.75 percent compared with 55.07 percent in the previous quarter and 57.49 percent in the same quarter last year.
The effective tax rate for the full year of 2018 was 18.73 percent. The effective tax rate for the full year of 2017 was 31.11 percent, which included a one-time adjustment in the fourth quarter of $3.6 million related to the Tax Cuts and Jobs Act. Excluding this expense, the effective tax rate for the full year of 2017 was 29.78 percent. The lower effective tax rate in 2018 was primarily due to the reduction in the federal corporate tax rate as a result of the tax reform bill. The effective tax rate for the fourth quarter of 2018 was 20.92 percent compared with 18.75 percent in the previous quarter and 32.93 percent during the same quarter last year.
- more -
Bank of Hawaii Corporation 2018 Financial Results Page 3
The Company’s business segments are defined as Retail Banking, Commercial Banking, Investment Services and Private Banking, 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 continued to remain strong during the fourth quarter of 2018. Total non-performing assets were $12.9 million at December 31, 2018 compared with $13.8 million at September 30, 2018 and $16.1 million at December 31, 2017. Non-performing assets as a percentage of total loans and leases and foreclosed real estate were 0.12 percent at December 31, 2018 compared with 0.13 percent at September 30, 2018 and 0.16 percent at December 31, 2017.
Accruing loans and leases past due 90 days or more were $6.6 million at December 31, 2018 compared with $8.1 million at September 30, 2018 and $7.1 million at December 31, 2017. Restructured loans and leases not included in non-accrual loans or accruing loans past due 90 days or more declined to $48.7 million at December 31, 2018 compared with $49.5 million at September 30, 2018 and $55.7 million at December 31, 2017. More information on non-performing assets and accruing loans and leases past due 90 days or more is presented in Table 11.
Net charge-offs for the full year of 2018 were $14.1 million or 0.14 percent of total average loans and leases compared with net charge-offs of $13.8 million or 0.15 percent of total average loans and leases in 2017. Net charge-offs during the fourth quarter of 2018 were $4.0 million or 0.15 percent annualized of total average loans and leases outstanding and were comprised of charge-offs of $6.9 million partially offset by recoveries of $2.9 million. Net charge-offs during the third quarter of 2018 were $3.3 million or 0.13 percent annualized of total average loans and leases outstanding and were comprised of charge-offs of $6.0 million and recoveries of $2.7 million. Net charge-offs during the fourth quarter of 2017 were $3.8 million or 0.15 percent annualized of total average loans and leases outstanding and were comprised of charge-offs of $5.8 million and recoveries of $2.1 million.
The allowance for loan and lease losses was $106.7 million at December 31, 2018, a decrease from $108.7 million at September 30, 2018 and $107.3 million at December 31, 2017. The ratio of the allowance for loan and lease losses to total loans and leases outstanding was 1.02 percent at December 31, 2018, a decrease of 4 basis points from September 30, 2018 and 8 basis points from December 31, 2017. The reduction in the provision for the allowance for loan and lease losses compared with the net charge-offs during the fourth quarter of 2018 was largely due to the release of credit loss reserves related to the credit card portfolio. The total reserve for unfunded commitments of $6.8 million at December 31, 2018 was unchanged from the prior quarter and the same quarter last year. Details of loan and lease charge-offs, recoveries, and the components of the total reserve for credit losses are summarized in Table 12.
Other Financial Highlights
Total assets were $17.1 billion at December 31, 2018, an increase of $152.2 million from total assets of $17.0 billion at September 30, 2018 and an increase of $54.9 million from total assets of $17.1 billion at December 31, 2017. Average total assets were $17.0 billion during the fourth quarter of 2018, a decrease of $26.8 million compared with average total assets of $17.0 billion during the previous quarter and a decrease of $96.0 million compared with average total assets of $17.1 billion during the same quarter last year.
- more -
Bank of Hawaii Corporation 2018 Financial Results Page 4
The investment securities portfolio was $5.5 billion at December 31, 2018, a decrease of $224.1 million from total securities of $5.7 billion at September 30, 2018 and a decrease of $671.1 million from total securities of $6.2 billion at December 31, 2017. The investment securities portfolio remains largely comprised of securities issued by U.S. government agencies and included $3.5 billion in securities held to maturity and $2.0 billion in securities available for sale at December 31, 2018.
Total loans and leases increased to $10.4 billion at December 31, 2018, an increase of $217.7 million or 2.1 percent from total loans and leases of $10.2 billion at September 30, 2018 and up $651.8 million or 6.7 percent from total loans and leases of $9.8 billion at December 31, 2017. The commercial portfolio increased to $4.0 billion at the end of the fourth quarter of 2018, up $79.5 million or 2.0 percent from commercial loans of $3.9 billion at the end of the third quarter of 2018 and up $213.3 million or 5.7 percent from commercial loans of $3.8 billion at the end of the fourth quarter last year. Consumer loans grew to $6.5 billion at December 31, 2018, up $138.2 million or 2.2 percent from consumer loans of $6.3 billion at the end of the third quarter of 2018 and up $438.5 million or 7.3 percent from consumer loans of $6.0 billion at the end of the fourth quarter last year. The previously mentioned sale of the credit card portfolio during the fourth quarter of 2018 reduced the consumer loan portfolio by $51.6 million in outstanding balances. Average total loans and leases were $10.3 billion during the fourth quarter of 2018, an increase of 2.4 percent from average loans and leases of $10.1 billion during the previous quarter and up 6.5 percent from average loans and leases of $9.7 billion during the same quarter last year. Loan and lease portfolio balances are summarized in Table 10.
Total deposits were $15.0 billion at December 31, 2018, up $183.9 million or 1.2 percent from total deposits of $14.8 billion at September 30, 2018 and up $143.3 million or 1.0 percent from total deposits of $14.9 billion at December 31, 2017. Consumer deposits increased to $7.7 billion at December 31, 2018, up $99.2 million or 1.3 percent from consumer deposits of $7.6 billion at the end of the third quarter of 2018 and up $248.5 million or 3.3 percent from $7.5 billion at the end of the fourth quarter last year. Commercial deposits increased to $6.1 billion at the end of the fourth quarter of 2018, up $130.8 million or 2.2 percent from $6.0 billion at the end of the third quarter of 2018 and up $124.4 million or 2.1 percent from $6.0 billion at the end of the fourth quarter last year. Other deposits, including public funds, were $1.2 billion at December 31, 2018, down slightly from $1.2 billion at September 30, 2018 and down from $1.4 billion at December 31, 2017 largely due to the strategic decision to continue the reduction of public time deposits. Average total deposits were $14.8 billion during the fourth quarter of 2018, a decrease of $41.0 million compared with average total deposits of $14.8 billion during the previous quarter and a decrease of $33.7 million compared with average total deposits of $14.8 billion during the same quarter last year. Deposit balances are summarized in Tables 7a, 7b, and 10.
During the fourth quarter of 2018, the Company repurchased 325.4 thousand shares of common stock at a total cost of $24.9 million under its share repurchase program. The average cost was $76.63 per share repurchased. From the beginning of the share repurchase program initiated during July 2001 through December 31, 2018, the Company has repurchased 55.3 million shares and returned nearly $2.2 billion to shareholders at an average cost of $39.14 per share. From January 2 through January 25, 2019 the Company repurchased an additional 178.0 thousand shares of common stock at an average cost of $72.68 per share repurchased. The Company’s Board of Directors increased the authorization under the share repurchase program by an additional $130.0 million. Remaining buyback authority under the share repurchase program was $148.8 million at January 25, 2019.
Total shareholders’ equity was $1.27 billion at December 31, 2018, up from $1.25 billion at September 30, 2018, and up from $1.23 billion at December 31, 2017. The Tier 1 Capital Ratio was 13.07 percent at December 31, 2018 compared with 13.20 percent at September 30, 2018 and 13.24 percent at December 31, 2017. The Tier 1 Leverage Ratio at December 31, 2018 was 7.60 percent compared with 7.55 percent at September 30, 2018 and 7.26 percent at December 31, 2017.
- more -
Bank of Hawaii Corporation 2018 Financial Results Page 5
The Company’s Board of Directors declared a quarterly cash dividend of $0.62 per share on the Company’s outstanding shares. The dividend will be payable on March 14, 2019 to shareholders of record at the close of business on February 28, 2019.
Hawaii Economy
General economic conditions in Hawaii remained healthy during 2018, led by record-high visitors, low unemployment, rising real estate prices, and an active construction industry. For the first eleven months of 2018 total visitor arrivals increased 6.1 percent and visitor spending increased 8.0 percent compared to the same period in 2017. The statewide seasonally-adjusted unemployment rate remains low at 2.5 percent in December 2018 compared with 3.9 percent nationally.
Real estate prices on Oahu remained strong during 2018. The volume of single-family home and condominium sales on Oahu decreased compared with 2017, with single-family home sales down 7.7 percent and condominium sales down 2.5 percent. The median sales prices continued to increase during the year, with the median sales price of a single-family home in 2018 up 4.6 percent and the median sales price of a condominium up 3.7 percent compared with 2017. As of December 31, 2018, months of inventory of single-family homes and condominiums on Oahu were 2.8 months and 2.9 months, respectively. More information on current Hawaii economic trends is presented in Table 15.
Conference Call Information
The Company will review its 2018 financial results today at 8:00 a.m. Hawaii Time (1:00 p.m. Eastern Time). The 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 (844) 543-5235 in the United States and Canada and 1 (703) 318-2209 for other 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, January 28, 2019. The replay number is 1 (855) 859-2056 in the United States and Canada and 1 (404) 537-3406 from other international locations. Enter the pass code 6070839 when prompted. 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, 2017, which was filed with the U.S. Securities and Exchange Commission. We do not promise 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 website, www.boh.com.
# # # #
Bank of Hawaii Corporation and Subsidiaries | ||||||||||||||||||||
Financial Highlights | Table 1 | |||||||||||||||||||
Three Months Ended | Year Ended | |||||||||||||||||||
December 31, | September 30, | December 31, | December 31, | |||||||||||||||||
(dollars in thousands, except per share amounts) | 2018 | 2018 | 2017 | 2018 | 2017 | |||||||||||||||
For the Period: | ||||||||||||||||||||
Operating Results | ||||||||||||||||||||
Net Interest Income | $ | 123,973 | $ | 122,927 | $ | 118,770 | $ | 486,352 | $ | 457,238 | ||||||||||
Provision for Credit Losses | 2,000 | 3,800 | 4,250 | 13,425 | 16,900 | |||||||||||||||
Total Noninterest Income | 42,108 | 41,482 | 41,855 | 168,923 | 185,417 | |||||||||||||||
Total Noninterest Expense | 95,911 | 90,538 | 92,336 | 371,624 | 357,691 | |||||||||||||||
Net Income | 53,911 | 56,933 | 42,953 | 219,602 | 184,672 | |||||||||||||||
Basic Earnings Per Share | 1.30 | 1.37 | 1.02 | 5.26 | 4.37 | |||||||||||||||
Diluted Earnings Per Share | 1.30 | 1.36 | 1.01 | 5.23 | 4.33 | |||||||||||||||
Dividends Declared Per Share | 0.62 | 0.60 | 0.52 | 2.34 | 2.04 | |||||||||||||||
Performance Ratios | ||||||||||||||||||||
Return on Average Assets | 1.26 | % | 1.33 | % | 1.00 | % | 1.29 | % | 1.10 | % | ||||||||||
Return on Average Shareholders' Equity | 17.05 | 18.06 | 13.85 | 17.63 | 15.27 | |||||||||||||||
Efficiency Ratio 1 | 57.75 | 55.07 | 57.49 | 56.71 | 55.66 | |||||||||||||||
Net Interest Margin 2 | 3.10 | 3.07 | 2.98 | 3.05 | 2.93 | |||||||||||||||
Dividend Payout Ratio 3 | 47.69 | 43.80 | 50.98 | 44.49 | 46.68 | |||||||||||||||
Average Shareholders' Equity to Average Assets | 7.39 | 7.35 | 7.20 | 7.34 | 7.22 | |||||||||||||||
Average Balances | ||||||||||||||||||||
Average Loans and Leases | $ | 10,320,051 | $ | 10,081,886 | $ | 9,688,710 | $ | 10,043,661 | $ | 9,346,828 | ||||||||||
Average Assets | 16,988,550 | 17,015,340 | 17,084,596 | 16,970,992 | 16,749,230 | |||||||||||||||
Average Deposits | 14,779,511 | 14,820,480 | 14,813,218 | 14,757,724 | 14,505,423 | |||||||||||||||
Average Shareholders' Equity | 1,254,704 | 1,250,500 | 1,230,564 | 1,245,672 | 1,209,087 | |||||||||||||||
Per Share of Common Stock | ||||||||||||||||||||
Book Value | $ | 30.56 | $ | 29.98 | $ | 29.05 | $ | 30.56 | $ | 29.05 | ||||||||||
Tangible Book Value | 29.80 | 29.22 | 28.31 | 29.80 | 28.31 | |||||||||||||||
Market Value | ||||||||||||||||||||
Closing | 67.32 | 78.91 | 85.70 | 67.32 | 85.70 | |||||||||||||||
High | 82.80 | 86.53 | 88.38 | 89.09 | 90.80 | |||||||||||||||
Low | 63.64 | 78.30 | 77.71 | 63.64 | 74.72 | |||||||||||||||
December 31, | September 30, | December 31, | ||||||||||||||||||
2018 | 2018 | 2017 | ||||||||||||||||||
As of Period End: | ||||||||||||||||||||
Balance Sheet Totals | ||||||||||||||||||||
Loans and Leases | $ | 10,448,774 | $ | 10,231,062 | $ | 9,796,947 | ||||||||||||||
Total Assets | 17,143,974 | 16,991,734 | 17,089,052 | |||||||||||||||||
Total Deposits | 15,027,242 | 14,843,335 | 14,883,968 | |||||||||||||||||
Other Debt | 135,643 | 185,662 | 260,716 | |||||||||||||||||
Total Shareholders' Equity | 1,268,200 | 1,253,327 | 1,231,868 | |||||||||||||||||
Asset Quality | ||||||||||||||||||||
Non-Performing Assets | $ | 12,930 | $ | 13,798 | $ | 16,120 | ||||||||||||||
Allowance for Loan and Lease Losses | 106,693 | 108,690 | 107,346 | |||||||||||||||||
Allowance to Loans and Leases Outstanding | 1.02 | % | 1.06 | % | 1.10 | % | ||||||||||||||
Capital Ratios | ||||||||||||||||||||
Common Equity Tier 1 Capital Ratio | 13.07 | % | 13.20 | % | 13.24 | % | ||||||||||||||
Tier 1 Capital Ratio | 13.07 | 13.20 | 13.24 | |||||||||||||||||
Total Capital Ratio | 14.21 | 14.38 | 14.46 | |||||||||||||||||
Tier 1 Leverage Ratio | 7.60 | 7.55 | 7.26 | |||||||||||||||||
Total Shareholders' Equity to Total Assets | 7.40 | 7.38 | 7.21 | |||||||||||||||||
Tangible Common Equity to Tangible Assets 4 | 7.23 | 7.20 | 7.04 | |||||||||||||||||
Tangible Common Equity to Risk-Weighted Assets 4 | 12.52 | 12.56 | 12.84 | |||||||||||||||||
Non-Financial Data | ||||||||||||||||||||
Full-Time Equivalent Employees | 2,122 | 2,143 | 2,132 | |||||||||||||||||
Branches | 69 | 69 | 69 | |||||||||||||||||
ATMs | 382 | 382 | 387 | |||||||||||||||||
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." | ||||||||||||||||||||
Note: Common Equity Tier 1 and Tier 1 Capital Ratios were revised from 13.19% and Tangible Common Equity to Risk-Weighted Assets were revised from 12.55% as of September 30, 2018. | ||||||||||||||||||||
Bank of Hawaii Corporation and Subsidiaries | ||||||||||||||
Reconciliation of Non-GAAP Financial Measures | Table 2 | |||||||||||||
December 31, | September 30, | December 31, | ||||||||||||
(dollars in thousands) | 2018 | 2018 | 2017 | |||||||||||
Total Shareholders' Equity | $ | 1,268,200 | $ | 1,253,327 | $ | 1,231,868 | ||||||||
Less: | Goodwill | 31,517 | 31,517 | 31,517 | ||||||||||
Tangible Common Equity | $ | 1,236,683 | $ | 1,221,810 | $ | 1,200,351 | ||||||||
Total Assets | $ | 17,143,974 | $ | 16,991,734 | $ | 17,089,052 | ||||||||
Less: | Goodwill | 31,517 | 31,517 | 31,517 | ||||||||||
Tangible Assets | $ | 17,112,457 | $ | 16,960,217 | $ | 17,057,535 | ||||||||
Risk-Weighted Assets, determined in accordance | ||||||||||||||
with prescribed regulatory requirements | $ | 9,878,904 | $ | 9,731,082 | $ | 9,348,296 | ||||||||
Total Shareholders' Equity to Total Assets | 7.40 | % | 7.38 | % | 7.21 | % | ||||||||
Tangible Common Equity to Tangible Assets (Non-GAAP) | 7.23 | % | 7.20 | % | 7.04 | % | ||||||||
Tier 1 Capital Ratio | 13.07 | % | 13.20 | % | 13.24 | % | ||||||||
Tangible Common Equity to Risk-Weighted Assets (Non-GAAP) | 12.52 | % | 12.56 | % | 12.84 | % | ||||||||
Note: Risk-Weighted Assets was revised from $9,732,618, Tier 1 Capital Ratio was revised from 13.19%, and Tangible Common Equity to Risk-Weighted Assets was revised from 12.55% as of September 30, 2018. | ||||||||||||||
Bank of Hawaii Corporation and Subsidiaries | ||||||||||||||||
Consolidated Statements of Income | Table 3 | |||||||||||||||
Three Months Ended | Year Ended | |||||||||||||||
December 31, | September 30, | December 31, | December 31, | |||||||||||||
(dollars in thousands, except per share amounts) | 2018 | 2018 | 2017 | 2018 | 2017 | |||||||||||
Interest Income | ||||||||||||||||
Interest and Fees on Loans and Leases | $ | 107,404 | $ | 104,248 | $ | 96,974 | $ | 410,597 | $ | 370,441 | ||||||
Income on Investment Securities | ||||||||||||||||
Available-for-Sale | 13,043 | 12,588 | 11,866 | 50,152 | 46,772 | |||||||||||
Held-to-Maturity | 21,482 | 20,821 | 21,782 | 84,310 | 81,740 | |||||||||||
Deposits | 10 | 10 | 3 | 34 | 15 | |||||||||||
Funds Sold | 727 | 1,393 | 717 | 3,723 | 3,882 | |||||||||||
Other | 352 | 364 | 271 | 1,357 | 944 | |||||||||||
Total Interest Income | 143,018 | 139,424 | 131,613 | 550,173 | 503,794 | |||||||||||
Interest Expense | ||||||||||||||||
Deposits | 13,172 | 10,931 | 6,980 | 41,143 | 22,332 | |||||||||||
Securities Sold Under Agreements to Repurchase | 4,671 | 4,667 | 4,664 | 18,519 | 19,592 | |||||||||||
Funds Purchased | 440 | 33 | 81 | 609 | 123 | |||||||||||
Short-Term Borrowings | 88 | 28 | — | 145 | 64 | |||||||||||
Other Debt | 674 | 838 | 1,118 | 3,405 | 4,445 | |||||||||||
Total Interest Expense | 19,045 | 16,497 | 12,843 | 63,821 | 46,556 | |||||||||||
Net Interest Income | 123,973 | 122,927 | 118,770 | 486,352 | 457,238 | |||||||||||
Provision for Credit Losses | 2,000 | 3,800 | 4,250 | 13,425 | 16,900 | |||||||||||
Net Interest Income After Provision for Credit Losses | 121,973 | 119,127 | 114,520 | 472,927 | 440,338 | |||||||||||
Noninterest Income | ||||||||||||||||
Trust and Asset Management | 10,558 | 10,782 | 11,105 | 43,877 | 45,430 | |||||||||||
Mortgage Banking | 2,148 | 1,965 | 2,593 | 8,437 | 12,949 | |||||||||||
Service Charges on Deposit Accounts | 7,562 | 7,255 | 8,053 | 28,811 | 32,575 | |||||||||||
Fees, Exchange, and Other Service Charges | 14,576 | 14,173 | 13,784 | 57,482 | 54,845 | |||||||||||
Investment Securities Gains (Losses), Net | (841 | ) | (729 | ) | (617 | ) | (3,938 | ) | 10,430 | |||||||
Annuity and Insurance | 1,409 | 1,360 | 1,273 | 5,822 | 6,858 | |||||||||||
Bank-Owned Life Insurance | 1,941 | 1,620 | 1,609 | 7,199 | 6,517 | |||||||||||
Other | 4,755 | 5,056 | 4,055 | 21,233 | 15,813 | |||||||||||
Total Noninterest Income | 42,108 | 41,482 | 41,855 | 168,923 | 185,417 | |||||||||||
Noninterest Expense | ||||||||||||||||
Salaries and Benefits | 54,856 | 51,782 | 51,698 | 213,208 | 203,729 | |||||||||||
Net Occupancy | 8,918 | 8,702 | 8,510 | 34,742 | 32,536 | |||||||||||
Net Equipment | 6,364 | 6,116 | 5,454 | 23,852 | 22,078 | |||||||||||
Data Processing | 5,151 | 4,241 | 4,310 | 17,846 | 15,483 | |||||||||||
Professional Fees | 2,467 | 2,206 | 3,266 | 9,992 | 11,681 | |||||||||||
FDIC Insurance | 1,336 | 2,057 | 2,253 | 7,732 | 8,666 | |||||||||||
Other | 16,819 | 15,434 | 16,845 | 64,252 | 63,518 | |||||||||||
Total Noninterest Expense | 95,911 | 90,538 | 92,336 | 371,624 | 357,691 | |||||||||||
Income Before Provision for Income Taxes | 68,170 | 70,071 | 64,039 | 270,226 | 268,064 | |||||||||||
Provision for Income Taxes | 14,259 | 13,138 | 21,086 | 50,624 | 83,392 | |||||||||||
Net Income | $ | 53,911 | $ | 56,933 | $ | 42,953 | $ | 219,602 | $ | 184,672 | ||||||
Basic Earnings Per Share | $ | 1.30 | $ | 1.37 | $ | 1.02 | $ | 5.26 | $ | 4.37 | ||||||
Diluted Earnings Per Share | $ | 1.30 | $ | 1.36 | $ | 1.01 | $ | 5.23 | $ | 4.33 | ||||||
Dividends Declared Per Share | $ | 0.62 | $ | 0.60 | $ | 0.52 | $ | 2.34 | $ | 2.04 | ||||||
Basic Weighted Average Shares | 41,325,456 | 41,620,776 | 42,116,452 | 41,714,770 | 42,280,931 | |||||||||||
Diluted Weighted Average Shares | 41,601,649 | 41,899,401 | 42,450,191 | 41,999,399 | 42,607,057 | |||||||||||
Note: Certain prior period information has been reclassified to conform to current presentation. | ||||||||||||||||
Bank of Hawaii Corporation and Subsidiaries | |||||||||||||||||
Consolidated Statements of Comprehensive Income | Table 4 | ||||||||||||||||
Three Months Ended | Year Ended | ||||||||||||||||
December 31, | September 30, | December 31, | December 31, | ||||||||||||||
(dollars in thousands) | 2018 | 2018 | 2017 | 2018 | 2017 | ||||||||||||
Net Income | $ | 53,911 | $ | 56,933 | $ | 42,953 | $ | 219,602 | $ | 184,672 | |||||||
Other Comprehensive Income (Loss), Net of Tax: | |||||||||||||||||
Net Unrealized Gains (Losses) on Investment Securities | 11,169 | (5,599 | ) | (10,430 | ) | (6,525 | ) | (1,986 | ) | ||||||||
Defined Benefit Plans | (2,974 | ) | 216 | 738 | (2,326 | ) | 1,177 | ||||||||||
Other Comprehensive Income (Loss) | 8,195 | (5,383 | ) | (9,692 | ) | (8,851 | ) | (809 | ) | ||||||||
Comprehensive Income | $ | 62,106 | $ | 51,550 | $ | 33,261 | $ | 210,751 | $ | 183,863 | |||||||
Bank of Hawaii Corporation and Subsidiaries | ||||||||||
Consolidated Statements of Condition | Table 5 | |||||||||
December 31, | September 30, | December 31, | ||||||||
(dollars in thousands) | 2018 | 2018 | 2017 | |||||||
Assets | ||||||||||
Interest-Bearing Deposits in Other Banks | $ | 3,028 | $ | 3,725 | $ | 3,421 | ||||
Funds Sold | 198,860 | 104,199 | 181,413 | |||||||
Investment Securities | ||||||||||
Available-for-Sale | 2,007,942 | 2,049,687 | 2,232,979 | |||||||
Held-to-Maturity (Fair Value of $3,413,994; $3,549,235; and $3,894,121) | 3,482,092 | 3,664,487 | 3,928,170 | |||||||
Loans Held for Sale | 10,987 | 18,063 | 19,231 | |||||||
Loans and Leases | 10,448,774 | 10,231,062 | 9,796,947 | |||||||
Allowance for Loan and Lease Losses | (106,693 | ) | (108,690 | ) | (107,346 | ) | ||||
Net Loans and Leases | 10,342,081 | 10,122,372 | 9,689,601 | |||||||
Total Earning Assets | 16,044,990 | 15,962,533 | 16,054,815 | |||||||
Cash and Due from Banks | 324,081 | 227,049 | 263,017 | |||||||
Premises and Equipment, Net | 151,837 | 142,928 | 130,926 | |||||||
Accrued Interest Receivable | 51,230 | 54,839 | 50,485 | |||||||
Foreclosed Real Estate | 1,356 | 1,909 | 1,040 | |||||||
Mortgage Servicing Rights | 24,310 | 24,463 | 24,622 | |||||||
Goodwill | 31,517 | 31,517 | 31,517 | |||||||
Bank-Owned Life Insurance | 283,771 | 282,637 | 280,034 | |||||||
Other Assets | 230,882 | 263,859 | 252,596 | |||||||
Total Assets | $ | 17,143,974 | $ | 16,991,734 | $ | 17,089,052 | ||||
Liabilities | ||||||||||
Deposits | ||||||||||
Noninterest-Bearing Demand | $ | 4,739,596 | $ | 4,678,981 | $ | 4,724,300 | ||||
Interest-Bearing Demand | 3,002,925 | 2,975,069 | 3,082,563 | |||||||
Savings | 5,539,199 | 5,444,053 | 5,389,013 | |||||||
Time | 1,745,522 | 1,745,232 | 1,688,092 | |||||||
Total Deposits | 15,027,242 | 14,843,335 | 14,883,968 | |||||||
Short-Term Borrowings | 199 | 629 | — | |||||||
Securities Sold Under Agreements to Repurchase | 504,296 | 504,293 | 505,293 | |||||||
Other Debt | 135,643 | 185,662 | 260,716 | |||||||
Retirement Benefits Payable | 40,494 | 36,288 | 37,312 | |||||||
Accrued Interest Payable | 8,253 | 7,689 | 6,946 | |||||||
Taxes Payable and Deferred Taxes | 19,736 | 15,549 | 24,009 | |||||||
Other Liabilities | 139,911 | 144,962 | 138,940 | |||||||
Total Liabilities | 15,875,774 | 15,738,407 | 15,857,184 | |||||||
Shareholders' Equity | ||||||||||
Common Stock ($.01 par value; authorized 500,000,000 shares; | ||||||||||
issued / outstanding: December 31, 2018 - 58,063,689 / 41,499,898; | ||||||||||
September 30, 2018 - 58,070,578 / 41,809,551; | ||||||||||
and December 31, 2017 - 57,959,074 / 42,401,443) | 577 | 577 | 576 | |||||||
Capital Surplus | 571,704 | 569,223 | 561,161 | |||||||
Accumulated Other Comprehensive Loss | (51,043 | ) | (59,238 | ) | (34,715 | ) | ||||
Retained Earnings | 1,641,314 | 1,612,998 | 1,512,218 | |||||||
Treasury Stock, at Cost (Shares: December 31, 2018 - 16,563,791; | ||||||||||
September 30, 2018 - 16,261,027; and December 31, 2017 - 15,557,631) | (894,352 | ) | (870,233 | ) | (807,372 | ) | ||||
Total Shareholders' Equity | 1,268,200 | 1,253,327 | 1,231,868 | |||||||
Total Liabilities and Shareholders' Equity | $ | 17,143,974 | $ | 16,991,734 | $ | 17,089,052 | ||||
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, 2016 | 42,635,978 | $ | 576 | $ | 551,628 | $ | (33,906 | ) | $ | 1,415,440 | $ | (772,201 | ) | $ | 1,161,537 | ||||||
Net Income | — | — | — | — | 184,672 | — | 184,672 | ||||||||||||||
Other Comprehensive Loss | — | — | — | (809 | ) | — | — | (809 | ) | ||||||||||||
Share-Based Compensation | — | — | 7,369 | — | — | — | 7,369 | ||||||||||||||
Common Stock Issued under Purchase and Equity | |||||||||||||||||||||
Compensation Plans and Related Tax Benefits | 337,091 | — | 2,164 | — | (828 | ) | 11,905 | 13,241 | |||||||||||||
Common Stock Repurchased | (571,626 | ) | — | — | — | — | (47,076 | ) | (47,076 | ) | |||||||||||
Cash Dividends Declared ($2.04 per share) | — | — | — | — | (87,066 | ) | — | (87,066 | ) | ||||||||||||
Balance as of December 31, 2017 | 42,401,443 | $ | 576 | $ | 561,161 | $ | (34,715 | ) | $ | 1,512,218 | $ | (807,372 | ) | $ | 1,231,868 | ||||||
Net Income | — | — | — | — | 219,602 | — | 219,602 | ||||||||||||||
Other Comprehensive Loss | — | — | — | (8,851 | ) | — | — | (8,851 | ) | ||||||||||||
Reclassification of the Income Tax Effects of the | |||||||||||||||||||||
Tax Cuts and Jobs Act from AOCI | — | — | — | (7,477 | ) | 7,477 | — | — | |||||||||||||
Share-Based Compensation | — | — | 8,146 | — | — | — | 8,146 | ||||||||||||||
Common Stock Issued under Purchase and Equity | |||||||||||||||||||||
Compensation Plans and Related Tax Benefits | 219,210 | 1 | 2,397 | — | 513 | 5,008 | 7,919 | ||||||||||||||
Common Stock Repurchased | (1,120,755 | ) | — | — | — | — | (91,988 | ) | (91,988 | ) | |||||||||||
Cash Dividends Declared ($2.34 per share) | — | — | — | — | (98,496 | ) | — | (98,496 | ) | ||||||||||||
Balance as of December 31, 2018 | 41,499,898 | $ | 577 | $ | 571,704 | $ | (51,043 | ) | $ | 1,641,314 | $ | (894,352 | ) | $ | 1,268,200 | ||||||
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 | ||||||||||||||||||||||||||
December 31, 2018 | September 30, 2018 | December 31, 2017 | ||||||||||||||||||||||||||
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 | $ | 3.3 | $ | — | 1.21 | % | $ | 3.6 | $ | — | 1.09 | % | $ | 3.2 | $ | — | 0.46 | % | ||||||||||
Funds Sold | 128.2 | 0.7 | 2.22 | 281.9 | 1.4 | 1.93 | 221.0 | 0.7 | 1.27 | |||||||||||||||||||
Investment Securities | ||||||||||||||||||||||||||||
Available-for-Sale | ||||||||||||||||||||||||||||
Taxable | 1,480.5 | 10.0 | 2.70 | 1,512.1 | 9.5 | 2.51 | 1,669.7 | 8.5 | 2.05 | |||||||||||||||||||
Non-Taxable | 556.4 | 3.8 | 2.77 | 567.5 | 3.9 | 2.75 | 619.0 | 5.1 | 3.29 | |||||||||||||||||||
Held-to-Maturity | ||||||||||||||||||||||||||||
Taxable | 3,360.5 | 20.0 | 2.38 | 3,413.7 | 19.3 | 2.26 | 3,775.6 | 20.3 | 2.15 | |||||||||||||||||||
Non-Taxable | 235.1 | 1.9 | 3.16 | 236.1 | 1.9 | 3.16 | 239.0 | 2.3 | 3.87 | |||||||||||||||||||
Total Investment Securities | 5,632.5 | 35.7 | 2.53 | 5,729.4 | 34.6 | 2.41 | 6,303.3 | 36.2 | 2.30 | |||||||||||||||||||
Loans Held for Sale | 12.1 | 0.2 | 4.63 | 14.9 | 0.2 | 4.45 | 15.9 | 0.2 | 4.02 | |||||||||||||||||||
Loans and Leases 1 | ||||||||||||||||||||||||||||
Commercial and Industrial | 1,351.1 | 14.3 | 4.21 | 1,279.4 | 13.0 | 4.04 | 1,284.5 | 11.7 | 3.62 | |||||||||||||||||||
Commercial Mortgage | 2,256.0 | 24.2 | 4.25 | 2,180.5 | 23.0 | 4.19 | 2,063.2 | 20.2 | 3.89 | |||||||||||||||||||
Construction | 179.8 | 2.2 | 4.79 | 187.0 | 2.2 | 4.65 | 213.8 | 2.6 | 4.78 | |||||||||||||||||||
Commercial Lease Financing | 173.2 | 1.0 | 2.42 | 175.0 | 1.0 | 2.30 | 202.6 | 1.3 | 2.56 | |||||||||||||||||||
Residential Mortgage | 3,615.8 | 35.1 | 3.88 | 3,563.5 | 34.0 | 3.82 | 3,420.0 | 32.6 | 3.81 | |||||||||||||||||||
Home Equity | 1,652.4 | 15.7 | 3.78 | 1,622.4 | 15.7 | 3.83 | 1,552.4 | 14.3 | 3.65 | |||||||||||||||||||
Automobile | 641.8 | 6.0 | 3.73 | 606.3 | 5.9 | 3.84 | 516.3 | 5.8 | 4.43 | |||||||||||||||||||
Other 2 | 450.0 | 8.8 | 7.72 | 467.8 | 9.3 | 7.90 | 435.9 | 8.5 | 7.80 | |||||||||||||||||||
Total Loans and Leases | 10,320.1 | 107.3 | 4.14 | 10,081.9 | 104.1 | 4.11 | 9,688.7 | 97.0 | 3.98 | |||||||||||||||||||
Other | 36.8 | 0.4 | 3.82 | 38.9 | 0.4 | 3.74 | 40.6 | 0.3 | 2.67 | |||||||||||||||||||
Total Earning Assets 3 | 16,133.0 | 144.3 | 3.56 | 16,150.6 | 140.7 | 3.47 | 16,272.7 | 134.4 | 3.29 | |||||||||||||||||||
Cash and Due from Banks | 234.3 | 252.1 | 229.5 | |||||||||||||||||||||||||
Other Assets | 621.3 | 612.6 | 582.4 | |||||||||||||||||||||||||
Total Assets | $ | 16,988.6 | $ | 17,015.3 | $ | 17,084.6 | ||||||||||||||||||||||
Interest-Bearing Liabilities | ||||||||||||||||||||||||||||
Interest-Bearing Deposits | ||||||||||||||||||||||||||||
Demand | $ | 2,888.3 | 1.5 | 0.20 | $ | 2,999.5 | 1.3 | 0.17 | $ | 2,877.7 | 0.5 | 0.06 | ||||||||||||||||
Savings | 5,494.5 | 4.5 | 0.32 | 5,482.4 | 3.8 | 0.28 | 5,396.9 | 1.9 | 0.14 | |||||||||||||||||||
Time | 1,800.7 | 7.2 | 1.59 | 1,683.0 | 5.8 | 1.37 | 1,767.9 | 4.6 | 1.03 | |||||||||||||||||||
Total Interest-Bearing Deposits | 10,183.5 | 13.2 | 0.51 | 10,164.9 | 10.9 | 0.43 | 10,042.5 | 7.0 | 0.28 | |||||||||||||||||||
Short-Term Borrowings | 89.6 | 0.5 | 2.31 | 11.6 | 0.1 | 2.06 | 25.0 | 0.1 | 1.27 | |||||||||||||||||||
Securities Sold Under Agreements to Repurchase | 504.3 | 4.7 | 3.62 | 504.3 | 4.7 | 3.62 | 505.3 | 4.6 | 3.61 | |||||||||||||||||||
Other Debt | 145.2 | 0.7 | 1.85 | 208.5 | 0.8 | 1.60 | 267.6 | 1.1 | 1.66 | |||||||||||||||||||
Total Interest-Bearing Liabilities | 10,922.6 | 19.1 | 0.69 | 10,889.3 | 16.5 | 0.60 | 10,840.4 | 12.8 | 0.47 | |||||||||||||||||||
Net Interest Income | $ | 125.2 | $ | 124.2 | $ | 121.6 | ||||||||||||||||||||||
Interest Rate Spread | 2.87 | % | 2.87 | % | 2.82 | % | ||||||||||||||||||||||
Net Interest Margin | 3.10 | % | 3.07 | % | 2.98 | % | ||||||||||||||||||||||
Noninterest-Bearing Demand Deposits | 4,596.0 | 4,655.6 | 4,770.7 | |||||||||||||||||||||||||
Other Liabilities | 215.3 | 219.9 | 242.9 | |||||||||||||||||||||||||
Shareholders' Equity | 1,254.7 | 1,250.5 | 1,230.6 | |||||||||||||||||||||||||
Total Liabilities and Shareholders' Equity | $ | 16,988.6 | $ | 17,015.3 | $ | 17,084.6 | ||||||||||||||||||||||
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 21% for 2018 and 35% for 2017, of $1,263,000 for the three months ended | ||||||||||||||||||||||||||||
December 31, 2018, $1,265,000 for the three months ended September 30, 2018, and $2,808,000 for the three months ended December 31, 2017. | ||||||||||||||||||||||||||||
Bank of Hawaii Corporation and Subsidiaries | |||||||||||||||||||
Average Balances and Interest Rates - Taxable-Equivalent Basis | Table 7b | ||||||||||||||||||
Year Ended | Year Ended | ||||||||||||||||||
December 31, 2018 | December 31, 2017 | ||||||||||||||||||
Average | Income/ | Yield/ | Average | Income/ | Yield/ | ||||||||||||||
(dollars in millions) | Balance | Expense | Rate | Balance | Expense | Rate | |||||||||||||
Earning Assets | |||||||||||||||||||
Interest-Bearing Deposits in Other Banks | $ | 3.2 | $ | — | 1.05 | % | $ | 3.4 | $ | — | 0.45 | % | |||||||
Funds Sold | 200.0 | 3.7 | 1.86 | 423.0 | 3.9 | 0.92 | |||||||||||||
Investment Securities | |||||||||||||||||||
Available-for-Sale | |||||||||||||||||||
Taxable | 1,537.7 | 37.6 | 2.44 | 1,659.3 | 33.1 | 2.00 | |||||||||||||
Non-Taxable | 577.9 | 15.9 | 2.76 | 643.7 | 21.0 | 3.27 | |||||||||||||
Held-to-Maturity | |||||||||||||||||||
Taxable | 3,468.4 | 78.4 | 2.26 | 3,648.6 | 75.7 | 2.07 | |||||||||||||
Non-Taxable | 236.5 | 7.5 | 3.17 | 240.4 | 9.3 | 3.88 | |||||||||||||
Total Investment Securities | 5,820.5 | 139.4 | 2.39 | 6,192.0 | 139.1 | 2.25 | |||||||||||||
Loans Held for Sale | 14.0 | 0.6 | 4.31 | 22.6 | 0.9 | 3.99 | |||||||||||||
Loans and Leases 1 | |||||||||||||||||||
Commercial and Industrial | 1,304.8 | 51.9 | 3.98 | 1,262.8 | 44.5 | 3.52 | |||||||||||||
Commercial Mortgage | 2,164.6 | 89.7 | 4.14 | 1,977.1 | 75.7 | 3.83 | |||||||||||||
Construction | 184.9 | 8.6 | 4.68 | 238.4 | 11.2 | 4.69 | |||||||||||||
Commercial Lease Financing | 176.8 | 4.1 | 2.29 | 205.9 | 4.8 | 2.32 | |||||||||||||
Residential Mortgage | 3,546.5 | 136.0 | 3.84 | 3,307.6 | 126.4 | 3.82 | |||||||||||||
Home Equity | 1,620.8 | 61.1 | 3.77 | 1,467.7 | 53.2 | 3.62 | |||||||||||||
Automobile | 591.2 | 23.2 | 3.92 | 486.5 | 23.2 | 4.78 | |||||||||||||
Other 2 | 454.1 | 35.6 | 7.85 | 400.8 | 31.8 | 7.93 | |||||||||||||
Total Loans and Leases | 10,043.7 | 410.2 | 4.08 | 9,346.8 | 370.8 | 3.97 | |||||||||||||
Other | 39.0 | 1.4 | 3.48 | 40.5 | 0.9 | 2.33 | |||||||||||||
Total Earning Assets 3 | 16,120.4 | 555.3 | 3.44 | 16,028.3 | 515.6 | 3.22 | |||||||||||||
Cash and Due from Banks | 241.6 | 158.7 | |||||||||||||||||
Other Assets | 609.0 | 562.2 | |||||||||||||||||
Total Assets | $ | 16,971.0 | $ | 16,749.2 | |||||||||||||||
Interest-Bearing Liabilities | |||||||||||||||||||
Interest-Bearing Deposits | |||||||||||||||||||
Demand | $ | 2,958.8 | 4.7 | 0.16 | $ | 2,871.7 | 1.7 | 0.06 | |||||||||||
Savings | 5,434.3 | 13.6 | 0.25 | 5,388.5 | 6.7 | 0.12 | |||||||||||||
Time | 1,725.9 | 22.8 | 1.32 | 1,589.4 | 13.9 | 0.88 | |||||||||||||
Total Interest-Bearing Deposits | 10,119.0 | 41.1 | 0.41 | 9,849.6 | 22.3 | 0.23 | |||||||||||||
Short-Term Borrowings | 35.5 | 0.8 | 2.13 | 17.7 | 0.2 | 1.05 | |||||||||||||
Securities Sold Under Agreements to Repurchase | 504.7 | 18.5 | 3.67 | 507.0 | 19.6 | 3.86 | |||||||||||||
Other Debt | 211.3 | 3.4 | 1.61 | 267.9 | 4.4 | 1.66 | |||||||||||||
Total Interest-Bearing Liabilities | 10,870.5 | 63.8 | 0.59 | 10,642.2 | 46.5 | 0.44 | |||||||||||||
Net Interest Income | $ | 491.5 | $ | 469.1 | |||||||||||||||
Interest Rate Spread | 2.85 | % | 2.78 | % | |||||||||||||||
Net Interest Margin | 3.05 | % | 2.93 | % | |||||||||||||||
Noninterest-Bearing Demand Deposits | 4,638.7 | 4,655.8 | |||||||||||||||||
Other Liabilities | 216.1 | 242.1 | |||||||||||||||||
Shareholders' Equity | 1,245.7 | 1,209.1 | |||||||||||||||||
Total Liabilities and Shareholders' Equity | $ | 16,971.0 | $ | 16,749.2 | |||||||||||||||
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 21% for 2018 and 35% for 2017, of $5,170,000 for the year ended | |||||||||||||||||||
December 31, 2018 and $11,843,000 for the year ended December 31, 2017. | |||||||||||||||||||
Bank of Hawaii Corporation and Subsidiaries | |||||||||
Analysis of Change in Net Interest Income - Taxable-Equivalent Basis | Table 8a | ||||||||
Three Months Ended December 31, 2018 | |||||||||
Compared to September 30, 2018 | |||||||||
(dollars in millions) | Volume 1 | Rate 1 | Total | ||||||
Change in Interest Income: | |||||||||
Funds Sold | $ | (0.9 | ) | $ | 0.2 | $ | (0.7 | ) | |
Investment Securities | |||||||||
Available-for-Sale | |||||||||
Taxable | (0.2 | ) | 0.7 | 0.5 | |||||
Non-Taxable | (0.1 | ) | — | (0.1 | ) | ||||
Held-to-Maturity | |||||||||
Taxable | (0.3 | ) | 1.0 | 0.7 | |||||
Total Investment Securities | (0.6 | ) | 1.7 | 1.1 | |||||
Loans and Leases | |||||||||
Commercial and Industrial | 0.8 | 0.5 | 1.3 | ||||||
Commercial Mortgage | 0.8 | 0.4 | 1.2 | ||||||
Construction | (0.1 | ) | 0.1 | — | |||||
Residential Mortgage | 0.5 | 0.6 | 1.1 | ||||||
Home Equity | 0.2 | (0.2 | ) | — | |||||
Automobile | 0.3 | (0.2 | ) | 0.1 | |||||
Other 2 | (0.3 | ) | (0.2 | ) | (0.5 | ) | |||
Total Loans and Leases | 2.2 | 1.0 | 3.2 | ||||||
Total Change in Interest Income | 0.7 | 2.9 | 3.6 | ||||||
Change in Interest Expense: | |||||||||
Interest-Bearing Deposits | |||||||||
Demand | — | 0.2 | 0.2 | ||||||
Savings | — | 0.7 | 0.7 | ||||||
Time | 0.4 | 1.0 | 1.4 | ||||||
Total Interest-Bearing Deposits | 0.4 | 1.9 | 2.3 | ||||||
Short-Term Borrowings | 0.4 | — | 0.4 | ||||||
Other Debt | (0.2 | ) | 0.1 | (0.1 | ) | ||||
Total Change in Interest Expense | 0.6 | 2.0 | 2.6 | ||||||
Change in Net Interest Income | $ | 0.1 | $ | 0.9 | $ | 1.0 | |||
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 8b | ||||||||
Three Months Ended December 31, 2018 | |||||||||
Compared to December 31, 2017 | |||||||||
(dollars in millions) | Volume 1 | Rate 1 | Total | ||||||
Change in Interest Income: | |||||||||
Funds Sold | $ | (0.4 | ) | $ | 0.4 | $ | — | ||
Investment Securities | |||||||||
Available-for-Sale | |||||||||
Taxable | (1.0 | ) | 2.5 | 1.5 | |||||
Non-Taxable | (0.5 | ) | (0.8 | ) | (1.3 | ) | |||
Held-to-Maturity | |||||||||
Taxable | (2.4 | ) | 2.1 | (0.3 | ) | ||||
Non-Taxable | — | (0.4 | ) | (0.4 | ) | ||||
Total Investment Securities | (3.9 | ) | 3.4 | (0.5 | ) | ||||
Loans Held for Sale | |||||||||
Loans and Leases | |||||||||
Commercial and Industrial | 0.6 | 2.0 | 2.6 | ||||||
Commercial Mortgage | 2.0 | 2.0 | 4.0 | ||||||
Construction | (0.4 | ) | — | (0.4 | ) | ||||
Commercial Lease Financing | (0.2 | ) | (0.1 | ) | (0.3 | ) | |||
Residential Mortgage | 1.9 | 0.6 | 2.5 | ||||||
Home Equity | 0.9 | 0.5 | 1.4 | ||||||
Automobile | 1.2 | (1.0 | ) | 0.2 | |||||
Other 2 | 0.4 | (0.1 | ) | 0.3 | |||||
Total Loans and Leases | 6.4 | 3.9 | 10.3 | ||||||
Other | (0.1 | ) | 0.2 | 0.1 | |||||
Total Change in Interest Income | 2.0 | 7.9 | 9.9 | ||||||
Change in Interest Expense: | |||||||||
Interest-Bearing Deposits | |||||||||
Demand | — | 1.0 | 1.0 | ||||||
Savings | — | 2.6 | 2.6 | ||||||
Time | 0.1 | 2.5 | 2.6 | ||||||
Total Interest-Bearing Deposits | 0.1 | 6.1 | 6.2 | ||||||
Short-Term Borrowings | 0.3 | 0.1 | 0.4 | ||||||
Securities Sold Under Agreements to Repurchase | — | 0.1 | 0.1 | ||||||
Other Debt | (0.5 | ) | 0.1 | (0.4 | ) | ||||
Total Change in Interest Expense | (0.1 | ) | 6.4 | 6.3 | |||||
Change in Net Interest Income | $ | 2.1 | $ | 1.5 | $ | 3.6 | |||
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 | ||||||||
Year Ended December 31, 2018 | |||||||||
Compared to December 31, 2017 | |||||||||
(dollars in millions) | Volume 1 | Rate 1 | Total | ||||||
Change in Interest Income: | |||||||||
Funds Sold | $ | (2.8 | ) | $ | 2.6 | $ | (0.2 | ) | |
Investment Securities | |||||||||
Available-for-Sale | |||||||||
Taxable | (2.5 | ) | 7.0 | 4.5 | |||||
Non-Taxable | (2.0 | ) | (3.1 | ) | (5.1 | ) | |||
Held-to-Maturity | |||||||||
Taxable | (3.9 | ) | 6.6 | 2.7 | |||||
Non-Taxable | (0.1 | ) | (1.7 | ) | (1.8 | ) | |||
Total Investment Securities | (8.5 | ) | 8.8 | 0.3 | |||||
Loans Held for Sale | (0.4 | ) | 0.1 | (0.3 | ) | ||||
Loans and Leases | |||||||||
Commercial and Industrial | 1.5 | 5.9 | 7.4 | ||||||
Commercial Mortgage | 7.6 | 6.4 | 14.0 | ||||||
Construction | (2.5 | ) | (0.1 | ) | (2.6 | ) | |||
Commercial Lease Financing | (0.7 | ) | — | (0.7 | ) | ||||
Residential Mortgage | 9.1 | 0.5 | 9.6 | ||||||
Home Equity | 5.7 | 2.2 | 7.9 | ||||||
Automobile | 4.5 | (4.5 | ) | — | |||||
Other 2 | 4.1 | (0.3 | ) | 3.8 | |||||
Total Loans and Leases | 29.3 | 10.1 | 39.4 | ||||||
Other | 0.1 | 0.4 | 0.5 | ||||||
Total Change in Interest Income | 17.7 | 22.0 | 39.7 | ||||||
Change in Interest Expense: | |||||||||
Interest-Bearing Deposits | |||||||||
Demand | 0.1 | 2.9 | 3.0 | ||||||
Savings | 0.1 | 6.8 | 6.9 | ||||||
Time | 1.3 | 7.6 | 8.9 | ||||||
Total Interest-Bearing Deposits | 1.5 | 17.3 | 18.8 | ||||||
Short-Term Borrowings | 0.3 | 0.3 | 0.6 | ||||||
Securities Sold Under Agreements to Repurchase | (0.1 | ) | (1.0 | ) | (1.1 | ) | |||
Other Debt | (0.9 | ) | (0.1 | ) | (1.0 | ) | |||
Total Change in Interest Expense | 0.8 | 16.5 | 17.3 | ||||||
Change in Net Interest Income | $ | 16.9 | $ | 5.5 | $ | 22.4 | |||
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 | ||||||||||||||||
Salaries and Benefits | Table 9 | |||||||||||||||
Three Months Ended | Year Ended | |||||||||||||||
December 31, | September 30, | December 31, | December 31, | |||||||||||||
(dollars in thousands) | 2018 | 2018 | 2017 | 2018 | 2017 | |||||||||||
Salaries | $ | 33,603 | $ | 33,308 | $ | 31,132 | $ | 132,884 | $ | 122,334 | ||||||
Incentive Compensation | 5,715 | 5,378 | 7,078 | 20,687 | 22,834 | |||||||||||
Share-Based Compensation | 1,417 | 2,153 | 3,040 | 8,074 | 10,184 | |||||||||||
Commission Expense | 1,158 | 1,034 | 1,427 | 4,418 | 6,493 | |||||||||||
Retirement and Other Benefits | 4,369 | 3,925 | 4,178 | 17,313 | 16,347 | |||||||||||
Payroll Taxes | 2,277 | 2,372 | 2,301 | 11,389 | 11,025 | |||||||||||
Medical, Dental, and Life Insurance | 5,237 | 3,616 | 2,503 | 16,134 | 12,362 | |||||||||||
Separation Expense | 1,080 | (4 | ) | 39 | 2,309 | 2,150 | ||||||||||
Total Salaries and Benefits | $ | 54,856 | $ | 51,782 | $ | 51,698 | $ | 213,208 | $ | 203,729 | ||||||
Note: Certain prior period information has been reclassified to conform to current presentation. | ||||||||||||||||
Bank of Hawaii Corporation and Subsidiaries | ||||||||||||||||
Loan and Lease Portfolio Balances | Table 10 | |||||||||||||||
December 31, | September 30, | June 30, | March 31, | December 31, | ||||||||||||
(dollars in thousands) | 2018 | 2018 | 2018 | 2018 | 2017 | |||||||||||
Commercial | ||||||||||||||||
Commercial and Industrial | $ | 1,331,149 | $ | 1,314,609 | $ | 1,282,967 | $ | 1,329,096 | $ | 1,279,347 | ||||||
Commercial Mortgage | 2,302,356 | 2,237,020 | 2,169,357 | 2,097,339 | 2,103,967 | |||||||||||
Construction | 170,061 | 176,447 | 185,350 | 186,530 | 202,253 | |||||||||||
Lease Financing | 176,226 | 172,232 | 178,598 | 179,771 | 180,931 | |||||||||||
Total Commercial | 3,979,792 | 3,900,308 | 3,816,272 | 3,792,736 | 3,766,498 | |||||||||||
Consumer | ||||||||||||||||
Residential Mortgage | 3,673,796 | 3,596,627 | 3,548,444 | 3,505,239 | 3,466,773 | |||||||||||
Home Equity | 1,681,442 | 1,625,208 | 1,622,314 | 1,601,698 | 1,585,455 | |||||||||||
Automobile | 658,133 | 625,086 | 592,705 | 558,468 | 528,474 | |||||||||||
Other 1 | 455,611 | 483,833 | 473,588 | 458,487 | 449,747 | |||||||||||
Total Consumer | 6,468,982 | 6,330,754 | 6,237,051 | 6,123,892 | 6,030,449 | |||||||||||
Total Loans and Leases | $ | 10,448,774 | $ | 10,231,062 | $ | 10,053,323 | $ | 9,916,628 | $ | 9,796,947 | ||||||
Deposits | ||||||||||||||||
December 31, | September 30, | June 30, | March 31, | December 31, | ||||||||||||
(dollars in thousands) | 2018 | 2018 | 2018 | 2018 | 2017 | |||||||||||
Consumer | $ | 7,726,731 | $ | 7,627,527 | $ | 7,672,435 | $ | 7,665,926 | $ | 7,478,228 | ||||||
Commercial | 6,098,186 | 5,967,343 | 5,921,414 | 5,897,194 | 5,973,763 | |||||||||||
Public and Other | 1,202,325 | 1,248,465 | 1,349,509 | 1,394,013 | 1,431,977 | |||||||||||
Total Deposits | $ | 15,027,242 | $ | 14,843,335 | $ | 14,943,358 | $ | 14,957,133 | $ | 14,883,968 | ||||||
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 | ||||||||||||||||
December 31, | September 30, | June 30, | March 31, | December 31, | |||||||||||||
(dollars in thousands) | 2018 | 2018 | 2018 | 2018 | 2017 | ||||||||||||
Non-Performing Assets | |||||||||||||||||
Non-Accrual Loans and Leases | |||||||||||||||||
Commercial | |||||||||||||||||
Commercial and Industrial | $ | 542 | $ | 1,205 | $ | 917 | $ | 986 | $ | 448 | |||||||
Commercial Mortgage | 2,040 | 652 | 659 | 1,367 | 1,398 | ||||||||||||
Total Commercial | 2,582 | 1,857 | 1,576 | 2,353 | 1,846 | ||||||||||||
Consumer | |||||||||||||||||
Residential Mortgage | 5,321 | 6,359 | 6,722 | 6,725 | 9,243 | ||||||||||||
Home Equity | 3,671 | 3,673 | 3,933 | 3,890 | 3,991 | ||||||||||||
Total Consumer | 8,992 | 10,032 | 10,655 | 10,615 | 13,234 | ||||||||||||
Total Non-Accrual Loans and Leases | 11,574 | 11,889 | 12,231 | 12,968 | 15,080 | ||||||||||||
Foreclosed Real Estate | 1,356 | 1,909 | 2,926 | 2,768 | 1,040 | ||||||||||||
Total Non-Performing Assets | $ | 12,930 | $ | 13,798 | $ | 15,157 | $ | 15,736 | $ | 16,120 | |||||||
Accruing Loans and Leases Past Due 90 Days or More | |||||||||||||||||
Commercial | |||||||||||||||||
Commercial and Industrial | $ | 10 | $ | — | $ | 2 | $ | — | $ | — | |||||||
Commercial Mortgage | — | — | 5,680 | — | — | ||||||||||||
Total Commercial | 10 | — | 5,682 | — | — | ||||||||||||
Consumer | |||||||||||||||||
Residential Mortgage | $ | 2,446 | $ | 2,426 | $ | 2,281 | $ | 2,927 | $ | 2,703 | |||||||
Home Equity | 2,684 | 3,112 | 3,016 | 3,013 | 1,624 | ||||||||||||
Automobile | 513 | 829 | 674 | 333 | 886 | ||||||||||||
Other 1 | 914 | 1,727 | 1,660 | 1,895 | 1,934 | ||||||||||||
Total Consumer | 6,557 | 8,094 | 7,631 | 8,168 | 7,147 | ||||||||||||
Total Accruing Loans and Leases Past Due 90 Days or More | $ | 6,567 | $ | 8,094 | $ | 13,313 | $ | 8,168 | $ | 7,147 | |||||||
Restructured Loans on Accrual Status | |||||||||||||||||
and Not Past Due 90 Days or More | $ | 48,731 | $ | 49,462 | $ | 50,212 | $ | 56,743 | $ | 55,672 | |||||||
Total Loans and Leases | $ | 10,448,774 | $ | 10,231,062 | $ | 10,053,323 | $ | 9,916,628 | $ | 9,796,947 | |||||||
Ratio of Non-Accrual Loans and Leases to Total Loans and Leases | 0.11 | % | 0.12 | % | 0.12 | % | 0.13 | % | 0.15 | % | |||||||
Ratio of Non-Performing Assets to Total Loans and Leases | |||||||||||||||||
and Foreclosed Real Estate | 0.12 | % | 0.13 | % | 0.15 | % | 0.16 | % | 0.16 | % | |||||||
Ratio of Commercial Non-Performing Assets to Total Commercial Loans | |||||||||||||||||
and Leases and Commercial Foreclosed Real Estate | 0.06 | % | 0.05 | % | 0.04 | % | 0.06 | % | 0.05 | % | |||||||
Ratio of Consumer Non-Performing Assets to Total Consumer Loans | |||||||||||||||||
and Leases and Consumer Foreclosed Real Estate | 0.16 | % | 0.19 | % | 0.22 | % | 0.22 | % | 0.24 | % | |||||||
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 | 0.19 | % | 0.21 | % | 0.28 | % | 0.24 | % | 0.24 | % | |||||||
Quarter to Quarter Changes in Non-Performing Assets | |||||||||||||||||
Balance at Beginning of Quarter | $ | 13,798 | $ | 15,157 | $ | 15,736 | $ | 16,120 | $ | 17,035 | |||||||
Additions | 4,509 | 2,030 | 1,949 | 2,332 | 2,109 | ||||||||||||
Reductions | |||||||||||||||||
Payments | (3,759 | ) | (415 | ) | (1,847 | ) | (1,251 | ) | (368 | ) | |||||||
Return to Accrual Status | (605 | ) | (1,420 | ) | (126 | ) | (1,270 | ) | (1,779 | ) | |||||||
Sales of Foreclosed Real Estate | (653 | ) | (1,301 | ) | (421 | ) | — | (353 | ) | ||||||||
Charge-offs/Write-downs | (360 | ) | (253 | ) | (134 | ) | (195 | ) | (524 | ) | |||||||
Total Reductions | (5,377 | ) | (3,389 | ) | (2,528 | ) | (2,716 | ) | (3,024 | ) | |||||||
Balance at End of Quarter | $ | 12,930 | $ | 13,798 | $ | 15,157 | $ | 15,736 | $ | 16,120 | |||||||
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 | Year Ended | |||||||||||||||||
December 31, | September 30, | December 31, | December 31, | |||||||||||||||
(dollars in thousands) | 2018 | 2018 | 2017 | 2018 | 2017 | |||||||||||||
Balance at Beginning of Period | $ | 115,512 | $ | 115,010 | $ | 113,703 | $ | 114,168 | $ | 110,845 | ||||||||
Loans and Leases Charged-Off | ||||||||||||||||||
Commercial | ||||||||||||||||||
Commercial and Industrial | (365 | ) | (449 | ) | (499 | ) | (1,505 | ) | (1,408 | ) | ||||||||
Consumer | ||||||||||||||||||
Residential Mortgage | (1 | ) | — | (4 | ) | (101 | ) | (729 | ) | |||||||||
Home Equity | (406 | ) | (124 | ) | (221 | ) | (665 | ) | (995 | ) | ||||||||
Automobile | (2,335 | ) | (2,114 | ) | (2,014 | ) | (8,218 | ) | (7,737 | ) | ||||||||
Other 1 | (3,781 | ) | (3,340 | ) | (3,108 | ) | (14,075 | ) | (12,386 | ) | ||||||||
Total Loans and Leases Charged-Off | (6,888 | ) | (6,027 | ) | (5,846 | ) | (24,564 | ) | (23,255 | ) | ||||||||
Recoveries on Loans and Leases Previously Charged-Off | ||||||||||||||||||
Commercial | ||||||||||||||||||
Commercial and Industrial | 803 | 542 | 284 | 2,039 | 1,482 | |||||||||||||
Lease Financing | — | — | 1 | — | 3 | |||||||||||||
Consumer | ||||||||||||||||||
Residential Mortgage | 112 | 261 | 182 | 807 | 639 | |||||||||||||
Home Equity | 367 | 558 | 498 | 2,001 | 2,681 | |||||||||||||
Automobile | 949 | 616 | 576 | 2,902 | 2,495 | |||||||||||||
Other 1 | 660 | 752 | 520 | 2,737 | 2,128 | |||||||||||||
Total Recoveries on Loans and Leases Previously Charged-Off | 2,891 | 2,729 | 2,061 | 10,486 | 9,428 | |||||||||||||
Net Loans and Leases Charged-Off | (3,997 | ) | (3,298 | ) | (3,785 | ) | (14,078 | ) | (13,827 | ) | ||||||||
Provision for Credit Losses | 2,000 | 3,800 | 4,250 | 13,425 | 16,900 | |||||||||||||
Provision for Unfunded Commitments | — | — | — | — | 250 | |||||||||||||
$ | 113,515 | $ | 115,512 | $ | 114,168 | $ | 113,515 | $ | 114,168 | |||||||||
Components | ||||||||||||||||||
Allowance for Loan and Lease Losses | $ | 106,693 | $ | 108,690 | $ | 107,346 | $ | 106,693 | $ | 107,346 | ||||||||
Reserve for Unfunded Commitments | 6,822 | 6,822 | 6,822 | 6,822 | 6,822 | |||||||||||||
Total Reserve for Credit Losses | $ | 113,515 | $ | 115,512 | $ | 114,168 | $ | 113,515 | $ | 114,168 | ||||||||
Average Loans and Leases Outstanding | $ | 10,320,051 | $ | 10,081,886 | $ | 9,688,710 | $ | 10,043,661 | $ | 9,346,828 | ||||||||
Ratio of Net Loans and Leases Charged-Off to | ||||||||||||||||||
Average Loans and Leases Outstanding (annualized) | 0.15 | % | 0.13 | % | 0.15 | % | 0.14 | % | 0.15 | % | ||||||||
Ratio of Allowance for Loan and Lease Losses to Loans and Leases Outstanding | 1.02 | % | 1.06 | % | 1.10 | % | 1.02 | % | 1.10 | % | ||||||||
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 | ||||||||||||||
Investment | |||||||||||||||
Services and | |||||||||||||||
Retail | Commercial | Private | Treasury | Consolidated | |||||||||||
(dollars in thousands) | Banking | Banking | Banking | and Other | Total | ||||||||||
Three Months Ended December 31, 2018 | |||||||||||||||
Net Interest Income | $ | 67,452 | $ | 46,429 | $ | 10,235 | $ | (143 | ) | $ | 123,973 | ||||
Provision for Credit Losses | 4,481 | (484 | ) | (1 | ) | (1,996 | ) | 2,000 | |||||||
Net Interest Income After Provision for Credit Losses | 62,971 | 46,913 | 10,236 | 1,853 | 121,973 | ||||||||||
Noninterest Income | 20,339 | 6,338 | 13,397 | 2,034 | 42,108 | ||||||||||
Noninterest Expense | (53,417 | ) | (20,912 | ) | (17,583 | ) | (3,999 | ) | (95,911 | ) | |||||
Income Before Provision for Income Taxes | 29,893 | 32,339 | 6,050 | (112 | ) | 68,170 | |||||||||
Provision for Income Taxes | (7,465 | ) | (7,714 | ) | (1,595 | ) | 2,515 | (14,259 | ) | ||||||
Net Income | $ | 22,428 | $ | 24,625 | $ | 4,455 | $ | 2,403 | $ | 53,911 | |||||
Total Assets as of December 31, 2018 | $ | 6,365,263 | $ | 3,958,523 | $ | 349,832 | $ | 6,470,356 | $ | 17,143,974 | |||||
Three Months Ended December 31, 2017 | |||||||||||||||
Net Interest Income | $ | 65,408 | $ | 43,932 | $ | 9,008 | $ | 422 | $ | 118,770 | |||||
Provision for Credit Losses | 3,595 | 195 | (5 | ) | 465 | 4,250 | |||||||||
Net Interest Income After Provision for Credit Losses | 61,813 | 43,737 | 9,013 | (43 | ) | 114,520 | |||||||||
Noninterest Income | 20,910 | 5,219 | 13,716 | 2,010 | 41,855 | ||||||||||
Noninterest Expense | (54,021 | ) | (19,726 | ) | (15,982 | ) | (2,607 | ) | (92,336 | ) | |||||
Income Before Provision for Income Taxes | 28,702 | 29,230 | 6,747 | (640 | ) | 64,039 | |||||||||
Provision for Income Taxes | (10,222 | ) | (10,325 | ) | (2,496 | ) | 1,957 | (21,086 | ) | ||||||
Net Income | $ | 18,480 | $ | 18,905 | $ | 4,251 | $ | 1,317 | $ | 42,953 | |||||
Total Assets as of December 31, 2017 | $ | 5,936,568 | $ | 3,742,991 | $ | 336,455 | $ | 7,073,038 | $ | 17,089,052 | |||||
Bank of Hawaii Corporation and Subsidiaries | |||||||||||||||
Business Segments Selected Financial Information | Table 13b | ||||||||||||||
Investment | |||||||||||||||
Services and | |||||||||||||||
Retail | Commercial | Private | Treasury | Consolidated | |||||||||||
(dollars in thousands) | Banking | Banking | Banking | and Other | Total | ||||||||||
Year Ended December 31, 2018 | |||||||||||||||
Net Interest Income | $ | 264,459 | $ | 179,577 | $ | 41,222 | $ | 1,094 | $ | 486,352 | |||||
Provision for Credit Losses | 14,898 | (760 | ) | (61 | ) | (652 | ) | 13,425 | |||||||
Net Interest Income After Provision for Credit Losses | 249,561 | 180,337 | 41,283 | 1,746 | 472,927 | ||||||||||
Noninterest Income | 79,004 | 23,733 | 55,338 | 10,848 | 168,923 | ||||||||||
Noninterest Expense | (211,761 | ) | (81,344 | ) | (65,847 | ) | (12,672 | ) | (371,624 | ) | |||||
Income Before Provision for Income Taxes | 116,804 | 122,726 | 30,774 | (78 | ) | 270,226 | |||||||||
Provision for Income Taxes | (29,172 | ) | (28,496 | ) | (8,113 | ) | 15,157 | (50,624 | ) | ||||||
Net Income | $ | 87,632 | $ | 94,230 | $ | 22,661 | $ | 15,079 | $ | 219,602 | |||||
Total Assets as of December 31, 2018 | $ | 6,365,263 | $ | 3,958,523 | $ | 349,832 | $ | 6,470,356 | $ | 17,143,974 | |||||
Year Ended December 31, 2017 | |||||||||||||||
Net Interest Income | $ | 264,041 | $ | 171,038 | $ | 29,693 | $ | (7,534 | ) | $ | 457,238 | ||||
Provision for Credit Losses | 14,008 | (160 | ) | (21 | ) | 3,073 | 16,900 | ||||||||
Net Interest Income After Provision for Credit Losses | 250,033 | 171,198 | 29,714 | (10,607 | ) | 440,338 | |||||||||
Noninterest Income | 85,042 | 21,670 | 57,105 | 21,600 | 185,417 | ||||||||||
Noninterest Expense | (209,807 | ) | (74,209 | ) | (61,674 | ) | (12,001 | ) | (357,691 | ) | |||||
Income Before Provision for Income Taxes | 125,268 | 118,659 | 25,145 | (1,008 | ) | 268,064 | |||||||||
Provision for Income Taxes | (44,545 | ) | (41,797 | ) | (9,303 | ) | 12,253 | (83,392 | ) | ||||||
Net Income | $ | 80,723 | $ | 76,862 | $ | 15,842 | $ | 11,245 | $ | 184,672 | |||||
Total Assets as of December 31, 2017 | $ | 5,936,568 | $ | 3,742,991 | $ | 336,455 | $ | 7,073,038 | $ | 17,089,052 | |||||
Bank of Hawaii Corporation and Subsidiaries | ||||||||||||||||||||
Selected Quarterly Financial Data | Table 14 | |||||||||||||||||||
Three Months Ended | ||||||||||||||||||||
December 31, | September 30, | June 30, | March 31, | December 31, | ||||||||||||||||
(dollars in thousands, except per share amounts) | 2018 | 2018 | 2018 | 2018 | 2017 | |||||||||||||||
Quarterly Operating Results | ||||||||||||||||||||
Interest Income | ||||||||||||||||||||
Interest and Fees on Loans and Leases | $ | 107,404 | $ | 104,248 | $ | 101,311 | $ | 97,634 | $ | 96,974 | ||||||||||
Income on Investment Securities | ||||||||||||||||||||
Available-for-Sale | 13,043 | 12,588 | 12,380 | 12,141 | 11,866 | |||||||||||||||
Held-to-Maturity | 21,482 | 20,821 | 20,711 | 21,296 | 21,782 | |||||||||||||||
Deposits | 10 | 10 | (4 | ) | 18 | 3 | ||||||||||||||
Funds Sold | 727 | 1,393 | 846 | 757 | 717 | |||||||||||||||
Other | 352 | 364 | 341 | 300 | 271 | |||||||||||||||
Total Interest Income | 143,018 | 139,424 | 135,585 | 132,146 | 131,613 | |||||||||||||||
Interest Expense | ||||||||||||||||||||
Deposits | 13,172 | 10,931 | 9,459 | 7,581 | 6,980 | |||||||||||||||
Securities Sold Under Agreements to Repurchase | 4,671 | 4,667 | 4,617 | 4,564 | 4,664 | |||||||||||||||
Funds Purchased | 440 | 33 | 83 | 53 | 81 | |||||||||||||||
Short-Term Borrowings | 88 | 28 | 13 | 16 | — | |||||||||||||||
Other Debt | 674 | 838 | 917 | 976 | 1,118 | |||||||||||||||
Total Interest Expense | 19,045 | 16,497 | 15,089 | 13,190 | 12,843 | |||||||||||||||
Net Interest Income | 123,973 | 122,927 | 120,496 | 118,956 | 118,770 | |||||||||||||||
Provision for Credit Losses | 2,000 | 3,800 | 3,500 | 4,125 | 4,250 | |||||||||||||||
Net Interest Income After Provision for Credit Losses | 121,973 | 119,127 | 116,996 | 114,831 | 114,520 | |||||||||||||||
Noninterest Income | ||||||||||||||||||||
Trust and Asset Management | 10,558 | 10,782 | 11,356 | 11,181 | 11,105 | |||||||||||||||
Mortgage Banking | 2,148 | 1,965 | 2,179 | 2,145 | 2,593 | |||||||||||||||
Service Charges on Deposit Accounts | 7,562 | 7,255 | 6,865 | 7,129 | 8,053 | |||||||||||||||
Fees, Exchange, and Other Service Charges | 14,576 | 14,173 | 14,400 | 14,333 | 13,784 | |||||||||||||||
Investment Securities Gains (Losses), Net | (841 | ) | (729 | ) | (1,702 | ) | (666 | ) | (617 | ) | ||||||||||
Annuity and Insurance | 1,409 | 1,360 | 1,847 | 1,206 | 1,273 | |||||||||||||||
Bank-Owned Life Insurance | 1,941 | 1,620 | 1,796 | 1,842 | 1,609 | |||||||||||||||
Other | 4,755 | 5,056 | 4,557 | 6,865 | 4,055 | |||||||||||||||
Total Noninterest Income | 42,108 | 41,482 | 41,298 | 44,035 | 41,855 | |||||||||||||||
Noninterest Expense | ||||||||||||||||||||
Salaries and Benefits | 54,856 | 51,782 | 52,148 | 54,422 | 51,698 | |||||||||||||||
Net Occupancy | 8,918 | 8,702 | 8,588 | 8,534 | 8,510 | |||||||||||||||
Net Equipment | 6,364 | 6,116 | 5,845 | 5,527 | 5,454 | |||||||||||||||
Data Processing | 5,151 | 4,241 | 4,563 | 3,891 | 4,310 | |||||||||||||||
Professional Fees | 2,467 | 2,206 | 2,546 | 2,773 | 3,266 | |||||||||||||||
FDIC Insurance | 1,336 | 2,057 | 2,182 | 2,157 | 2,253 | |||||||||||||||
Other | 16,819 | 15,434 | 14,919 | 17,080 | 16,845 | |||||||||||||||
Total Noninterest Expense | 95,911 | 90,538 | 90,791 | 94,384 | 92,336 | |||||||||||||||
Income Before Provision for Income Taxes | 68,170 | 70,071 | 67,503 | 64,482 | 64,039 | |||||||||||||||
Provision for Income Taxes | 14,259 | 13,138 | 12,785 | 10,442 | 21,086 | |||||||||||||||
Net Income | $ | 53,911 | $ | 56,933 | $ | 54,718 | $ | 54,040 | $ | 42,953 | ||||||||||
Basic Earnings Per Share | $ | 1.30 | $ | 1.37 | $ | 1.31 | $ | 1.29 | $ | 1.02 | ||||||||||
Diluted Earnings Per Share | $ | 1.30 | $ | 1.36 | $ | 1.30 | $ | 1.28 | $ | 1.01 | ||||||||||
Balance Sheet Totals | ||||||||||||||||||||
Loans and Leases | $ | 10,448,774 | $ | 10,231,062 | $ | 10,053,323 | $ | 9,916,628 | $ | 9,796,947 | ||||||||||
Total Assets | 17,143,974 | 16,991,734 | 17,124,162 | 17,136,030 | 17,089,052 | |||||||||||||||
Total Deposits | 15,027,242 | 14,843,335 | 14,943,358 | 14,957,133 | 14,883,968 | |||||||||||||||
Total Shareholders' Equity | 1,268,200 | 1,253,327 | 1,247,717 | 1,241,193 | 1,231,868 | |||||||||||||||
Performance Ratios | ||||||||||||||||||||
Return on Average Assets | 1.26 | % | 1.33 | % | 1.30 | % | 1.29 | % | 1.00 | % | ||||||||||
Return on Average Shareholders' Equity | 17.05 | 18.06 | 17.68 | 17.74 | 13.85 | |||||||||||||||
Efficiency Ratio 1 | 57.75 | 55.07 | 56.12 | 57.91 | 57.49 | |||||||||||||||
Net Interest Margin 2 | 3.10 | 3.07 | 3.04 | 3.00 | 2.98 | |||||||||||||||
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. | ||||||||||||||||||||
Note: Certain prior period information has been reclassified to conform to current presentation. | ||||||||||||||||||||
Bank of Hawaii Corporation and Subsidiaries | |||||||||||||||||||||
Hawaii Economic Trends | Table 15 | ||||||||||||||||||||
Eleven Months Ended | Year Ended | ||||||||||||||||||||
($ in millions; jobs in thousands) | November 30, 2018 | December 31, 2017 | December 31, 2016 | ||||||||||||||||||
Hawaii Economic Trends | |||||||||||||||||||||
State General Fund Revenues 1 | $ | 6,362.7 | 7.3 | % | $ | 6,485.0 | 4.3 | % | $ | 6,215.4 | 3.6 | % | |||||||||
General Excise and Use Tax Revenue 1 | $ | 3,146.1 | 2.5 | % | $ | 3,349.8 | 4.5 | % | $ | 3,205.7 | 2.0 | % | |||||||||
Jobs 2 | 668.8 | 668.2 | 669.4 | ||||||||||||||||||
December 31, | |||||||||||||||||||||
(spot rates) | 2018 | 2017 | 2016 | ||||||||||||||||||
Unemployment 3 | |||||||||||||||||||||
Statewide, seasonally adjusted | 2.5 | % | 2.1 | % | 2.9 | % | |||||||||||||||
Oahu | 2.2 | 1.7 | 2.4 | ||||||||||||||||||
Island of Hawaii | 2.9 | 2.0 | 3.1 | ||||||||||||||||||
Maui | 2.3 | 1.8 | 2.7 | ||||||||||||||||||
Kauai | 2.3 | 1.7 | 2.8 | ||||||||||||||||||
December 31, | |||||||||||||||||||||
(percentage change, except months of inventory) | 2018 | 2017 | 2016 | 2015 | |||||||||||||||||
Housing Trends (Single Family Oahu) 4 | |||||||||||||||||||||
Median Home Price | 4.6 | % | 2.7 | % | 5.0 | % | 3.7 | % | |||||||||||||
Home Sales Volume (units) | (7.7 | ) | % | 6.3 | % | 6.5 | % | 5.2 | % | ||||||||||||
Months of Inventory | 2.8 | 2.1 | 2.5 | 2.6 | |||||||||||||||||
Monthly Visitor Arrivals, | Percentage Change | ||||||||||||||||||||
(in thousands) | Not Seasonally Adjusted | from Previous Year | |||||||||||||||||||
Tourism 5 | |||||||||||||||||||||
November 30, 2018 | 782.0 | 4.3 | |||||||||||||||||||
October 31, 2018 | 770.4 | 4.4 | |||||||||||||||||||
September 30, 2018 | 724.9 | 3.5 | |||||||||||||||||||
August 31, 2018 | 845.1 | 3.2 | |||||||||||||||||||
July 31, 2018 | 939.4 | 5.3 | |||||||||||||||||||
June 30, 2018 | 897.1 | 7.3 | |||||||||||||||||||
May 31, 2018 | 804.1 | 7.0 | |||||||||||||||||||
April 30, 2018 | 803.0 | 6.6 | |||||||||||||||||||
March 31, 2018 | 903.6 | 12.5 | |||||||||||||||||||
February 28, 2018 | 778.6 | 10.3 | |||||||||||||||||||
January 31, 2018 | 796.5 | 5.4 | |||||||||||||||||||
December 31, 2017 | 880.4 | 6.3 | |||||||||||||||||||
November 30, 2017 | 749.5 | 7.5 | |||||||||||||||||||
October 31, 2017 | 737.6 | 2.9 | |||||||||||||||||||
September 30, 2017 | 700.5 | 4.9 | |||||||||||||||||||
August 31, 2017 | 818.6 | 4.8 | |||||||||||||||||||
July 31, 2017 | 891.9 | 6.8 | |||||||||||||||||||
June 30, 2017 | 835.9 | 4.5 | |||||||||||||||||||
May 31, 2017 | 751.2 | 4.5 | |||||||||||||||||||
April 30, 2017 | 753.0 | 7.5 | |||||||||||||||||||
March 31, 2017 | 802.8 | 2.1 | |||||||||||||||||||
February 28, 2017 | 706.1 | 2.5 | |||||||||||||||||||
January 31, 2017 | 756.0 | 4.9 | |||||||||||||||||||
1 Source: Hawaii Department of Business, Economic Development & Tourism | |||||||||||||||||||||
2 Source: U. S. Bureau of Labor Statistics | |||||||||||||||||||||
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 | |||||||||||||||||||||