Document


UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549

FORM 8-K/A
(Amendment No.1)
 
CURRENT REPORT PURSUANT
TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
 
 
Date of Report
 
 
 
(Date of earliest event reported)
 
                     April 22, 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.





Explanatory Note

This Amendment No. 1 on Form 8-K/A (this "Form 8-K/A") is an amendment to the Current Report of Form 8-K of Bank of Hawaii Corporation, dated April 22, 2019 (the "Original Form 8-K"). This Form 8-K/A is being filed for the purpose of updating the pass code to 4456158 within the April 22, 2019 Press Release: Bank of Hawaii Corporation First Quarter 2019 Financial Results. No other changes were made to the Exhibit 99.1.

Item 2.02.                                       Results of Operations and Financial Condition.
 
On April 22, 2019, Bank of Hawaii Corporation announced its results of operations for the quarter ended March 31, 2019.  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    Amended April 22, 2019 Press Release: Bank of Hawaii Corporation First Quarter 2019 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: April 22, 2019
Bank of Hawaii Corporation
 
 
 
 
 
By:
/s/ Mark A. Rossi
 
 
     Mark A. Rossi
 
 
     Vice Chairman and Corporate Secretary



Exhibit
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Bank of Hawaii Corporation First Quarter 2019 Financial Results

Diluted Earnings Per Share $1.43
Net Income $58.8 Million
Board of Directors Increases Dividend to $0.65 Per Share

FOR IMMEDIATE RELEASE

HONOLULU, HI (April 22, 2019) -- Bank of Hawaii Corporation (NYSE: BOH) today reported diluted earnings per share of $1.43 for the first quarter of 2019, an increase from diluted earnings per share of $1.30 in the previous quarter and $1.28 in the same quarter last year. Net income for the first quarter of 2019 was $58.8 million, an increase of $4.9 million compared with net income of $53.9 million in the fourth quarter of 2018 and up $4.8 million from net income of $54.0 million in the first quarter of 2018.

"We were pleased with our financial performance during the first quarter of 2019," said Peter S. Ho, Chairman, President, and CEO. “We had growth in both loans and deposits, our net interest margin expanded, asset quality remained strong, and expenses were well controlled.”
 
The return on average assets for the first quarter of 2019 was 1.38 percent, up from 1.26 percent during the previous quarter and 1.29 percent in the same quarter last year. The return on average equity for the first quarter of 2019 was 18.81 percent, up from 17.05 percent in the fourth quarter of 2018 and 17.74 percent in the first quarter of 2018.

Financial Highlights

Net interest income, on a taxable-equivalent basis, for the first quarter of 2019 was $125.8 million, an increase of $0.6 million from net interest income of $125.2 million in the fourth quarter of 2018 and an increase of $5.5 million from net interest income of $120.3 million in the first quarter of 2018. The net interest margin was 3.12 percent for the first quarter of 2019, up 2 basis points compared with the net interest margin of 3.10 percent in the previous quarter and up 12 basis points from the net interest margin of 3.00 percent for the first quarter last year. Analyses of the changes in net interest income are included in Tables 8a and 8b.




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Bank of Hawaii Corporation First Quarter 2019 Financial Results     Page 2
 

Results for the first quarter of 2019 included a provision for credit losses of $3.0 million compared with a provision for credit losses of $2.0 million in the fourth quarter of 2018 and $4.1 million in the first quarter of 2018. The lower provision for credit losses during the fourth quarter of 2018 was largely due to the release of credit loss reserves related to the sale of the credit card portfolio.

Noninterest income was $43.7 million in the first quarter of 2019, an increase of $1.6 million compared with noninterest income of $42.1 million in the fourth quarter of 2018 and a decrease of $0.3 million compared with noninterest income of $44.0 million in the first quarter of 2018. Noninterest income in the first quarter of 2019 included a $1.4 million commission related to insurance products offered through a third-party administrator. Noninterest income in the first quarter of 2018 included $2.8 million from a low-income housing investment sale. There were no significant items in noninterest income during the fourth quarter of 2018.

Noninterest expense was $93.1 million in the first quarter of 2019, a decrease of $2.8 million compared with noninterest expense of $95.9 million in the fourth quarter of 2018 and a decrease of $1.3 million from noninterest expense of $94.4 million in the same quarter last year. Noninterest expense in the first quarter of 2019 included seasonal payroll expenses of approximately $2.7 million. Noninterest expense in the fourth quarter of 2018 included $3.0 million in one-time significant items related to a medical expense, an operational loss, and legal expenses. Noninterest expense in the first quarter of 2018 included seasonal payroll expenses of approximately $2.5 million in addition to a legal reserve of $2.0 million. An analysis of noninterest expenses related to salaries and benefits is included in Table 9.

The efficiency ratio during the first quarter of 2019 declined to 55.22 percent compared with 57.75 percent in the previous quarter and 57.91 percent in the same quarter last year.

The effective tax rate for the first quarter of 2019 was 18.85 percent compared with an effective tax rate of 20.92 percent in the previous quarter and 16.19 percent during the same quarter last year.  The first quarter of 2019 included tax benefits of $1.9 million related to a commercial customer’s exercise of an early-buy-out option on a leveraged lease. There were no significant items impacting the tax rate during the fourth quarter of 2018. The tax rate during the first quarter of 2018 was favorably impacted by a $2.0 million adjustment to the Company’s low-income housing investments.

The Company’s business segments are defined as Retail Banking, Commercial Banking, Investment Services and Private Banking, and Treasury & Other. Results for the business segments are determined based on the Company’s internal financial management reporting process and organizational structure. Selected financial information is included in Table 13.

Asset Quality

The Company’s asset quality remained strong during the first quarter of 2019. Total non-performing assets were $17.9 million at March 31, 2019, compared with non-performing assets of $12.9 million at December 31, 2018 and $15.7 million at March 31, 2018. As a percentage of total loans and leases, including foreclosed real estate, non-performing assets were 0.17 percent at the end of the first quarter of 2019, compared with 0.12 percent at the end of the fourth quarter of 2018 and 0.16 percent at the end of the first quarter last year.
  

  



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Bank of Hawaii Corporation First Quarter 2019 Financial Results     Page 3

Accruing loans and leases past due 90 days or more were $6.1 million at March 31, 2019, compared with $6.6 million at December 31, 2018 and $8.2 million at March 31, 2018. Restructured loans not included in non-accrual loans or accruing loans past due 90 days or more were $48.6 million at March 31, 2019, down from $48.7 million at December 31, 2018 and $56.7 million at March 31, 2018. 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 first quarter of 2019 were $3.7 million or 0.14 percent annualized of total average loans and leases outstanding. Loan and lease charge-offs of $6.8 million during the quarter were partially offset by recoveries of $3.2 million. 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 $6.9 million in charge-offs partially offset by recoveries of $2.9 million. Net charge-offs during the first quarter of 2018 were $3.5 million or 0.15 percent annualized of total average loans and leases outstanding and were comprised of $6.0 million in charge-offs partially offset by recoveries of $2.5 million.

The allowance for loan and lease losses was $106.0 million at March 31, 2019, a decrease from $106.7 million at December 31, 2018 and $107.9 million at March 31, 2018. The ratio of the allowance for loan and lease losses to total loans and leases outstanding was 1.01 percent at March 31, 2019 compared with 1.02 percent at December 31, 2018 and 1.09 percent at March 31, 2018. The reserve for unfunded commitments of $6.8 million at March 31, 2019 was unchanged from the prior quarter and the same quarter last year. Details of loan and lease charge-offs, recoveries, and components of the total reserve for credit losses are summarized in Table 12.

Other Financial Highlights

Total assets were $17.4 billion at March 31, 2019, up from total assets of $17.1 billion at December 31, 2018 and $17.1 billion at March 31, 2018. Average total assets were $17.2 billion during the first quarter of 2019, an increase from average total assets of $17.0 billion during the previous quarter and the same quarter last year.

The investment securities portfolio was $5.5 billion at March 31, 2019 compared with $5.5 billion at December 31, 2018 and $6.0 billion at March 31, 2018. The portfolio at March 31, 2019 remains largely comprised of securities issued by U.S. government agencies and includes $3.7 billion in securities held to maturity and $1.9 billion in securities available for sale. 

Total loans and leases were $10.5 billion at March 31, 2019, an increase of $99.8 million or 1.0 percent from total loans and leases of $10.4 billion at December 31, 2018 and up $632.0 million or 6.4 percent from $9.9 billion at March 31, 2018. Average total loans and leases were $10.5 billion during the first quarter of 2019, an increase of 1.4 percent from average loans and leases of $10.3 billion during the previous quarter and up 6.8 percent from $9.8 billion during the same quarter last year. The commercial portfolio was $4.0 billion at the end of the first quarter of 2019, up $20.5 million or 0.5 percent from commercial loans of $4.0 billion at the end of the fourth quarter of 2018 and up $207.5 million or 5.5 percent from commercial loans of $3.8 billion at the end of the first quarter last year. The previously mentioned early buy out of a leveraged lease during the first quarter of 2019 reduced the commercial loan portfolio by $15.0 million in outstanding balances. Consumer loans were $6.5 billion at March 31, 2019, up $79.4 million or 1.2 percent from consumer loans of $6.5 billion at the end of the fourth quarter of 2018 and up $424.5 million or 6.9 percent from $6.1 billion at the end of the first quarter last year. Loan and lease portfolio balances are summarized in Table 10.







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Bank of Hawaii Corporation First Quarter 2019 Financial Results     Page 4

Total deposits were $15.3 billion at March 31, 2019, up $240.1 million or 1.6 percent from total deposits of $15.0 billion at December 31, 2018 and up $310.2 million or 2.1 percent from total deposits of $15.0 billion at March 31, 2018. Average total deposits were $15.0 billion during the first quarter of 2019, an increase of $191.9 million compared with average total deposits of $14.8 billion during the previous quarter and an increase of $251.1 million compared with average total deposits of $14.7 billion during the same quarter last year. Consumer deposits increased to $7.9 billion at March 31, 2019, up $218.1 million or 2.8 percent from consumer deposits of $7.7 billion at the end of the fourth quarter of 2018 and up $278.9 million or 3.6 percent from $7.7 billion at the end of the first quarter last year. Commercial deposits increased to $6.2 billion at March 31, 2019, up $63.9 million or 1.0 percent from commercial deposits of $6.1 billion at the end of the fourth quarter of 2018 and up $264.8 million or 4.5 percent from $5.9 billion at the end of the first quarter last year. Other deposits, including public funds, were $1.2 billion at March 31, 2019, down slightly from $1.2 billion at December 31, 2018 and down from $1.4 billion at March 31, 2018. Deposit balances are summarized in Tables 7 and 10.

Total shareholders’ equity was $1.3 billion at March 31, 2019, up slightly from December 31, 2018 and an increase from $1.2 billion at March 31, 2018. The Tier 1 Capital Ratio was 12.75 percent at March 31, 2019 compared with 13.07 percent at December 31, 2018 and 13.37 percent at March 31, 2018. The Tier 1 Leverage Ratio at March 31, 2019 was 7.46 percent compared with 7.60 percent at December 31, 2018 and 7.46 percent at March 31, 2018.

During the first quarter of 2019, the Company repurchased 513.4 thousand shares of common stock at a total cost of $39.9 million under its share repurchase program. The average cost was $77.79 per share repurchased. From the beginning of the share repurchase program initiated during July 2001 through March 31, 2019, the Company has repurchased 55.8 million shares and returned over $2.2 billion to shareholders at an average cost of $39.50 per share. Remaining buyback authority under the share repurchase program was $121.8 million at March 31, 2019. From April 1 through April 18, 2019 the Company repurchased an additional 114.0 thousand shares of common stock at an average cost of $80.79 per share.

The Company’s Board of Directors declared a quarterly cash dividend of $0.65 per share on the Company’s outstanding shares, an increase of 4.8 percent from the cash dividend of $0.62 per share in the previous quarter. The dividend will be payable on June 14, 2019 to shareholders of record at the close of business on May 31, 2019.

Hawaii Economy

General economic conditions in Hawaii remained healthy during the first quarter of 2019. The statewide seasonally-adjusted unemployment continues to remain low at 2.8 percent in March 2019, well below the 3.8 percent unemployment rate nationally.

The real estate market on Oahu remained strong during the first quarter of 2019 with a moderate decrease in home sales. Single-family home sales declined 5.7 percent and condominium sales declined 10.5 percent compared with sales during the first quarter of 2018. The median sales price of a single-family home increased 2.0 percent and the median sales price of a condominium decreased 3.2 percent compared with the same quarter last year.  As of March 31, 2019, the inventory of single-family homes and condominiums on Oahu was 3.4 months and 3.6 months, respectively. 








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Bank of Hawaii Corporation First Quarter 2019 Financial Results                 Page 5

For the first two months of 2019, total visitor arrivals increased 1.8 percent although visitor spending declined 2.4 percent compared to the same period in 2018. Tourism during 2019 is expected to continue performing well. Scheduled air seats to Hawaii are projected to expand as Southwest Airlines began flying to Hawaii in March and Hawaiian Airlines began offering the first non-stop flights between Hawaii and Boston in April. More information on current Hawaii economic trends is presented in Table 15.

Conference Call Information

The Company will review its first quarter financial results today at 2:00 p.m. Eastern Daylight Time (8:00 a.m. Hawaii 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 10:00 a.m. Hawaii Time on Monday, April 22, 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 4456158 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, 2018, 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 website, www.boh.com.



# # # #






Bank of Hawaii Corporation and Subsidiaries
 
 
 
Financial Highlights
 
 
 
 
Table 1

 
 
Three Months Ended
 
 
March 31,
 
December 31,
 
March 31,
 
(dollars in thousands, except per share amounts)
2019
 
2018
 
2018
 
For the Period:
 
 
 
 
 
 
Operating Results
 
 
 
 
 
 
Net Interest Income
$
124,837

 
$
123,973

 
$
118,956

 
Provision for Credit Losses
3,000

 
2,000

 
4,125

 
Total Noninterest Income
43,679

 
42,108

 
44,035

 
Total Noninterest Expense
93,057

 
95,911

 
94,384

 
Net Income
58,799

 
53,911

 
54,040

 
Basic Earnings Per Share
1.44

 
1.30

 
1.29

 
Diluted Earnings Per Share
1.43

 
1.30

 
1.28

 
Dividends Declared Per Share
0.62

 
0.62

 
0.52

 
 
 
 
 
 
 
 
Performance Ratios
 
 
 
 
 
 
Return on Average Assets
1.38

%
1.26

%
1.29

%
Return on Average Shareholders' Equity
18.81

 
17.05

 
17.74

 
Efficiency Ratio 1
55.22

 
57.75

 
57.91

 
Net Interest Margin 2
3.12

 
3.10

 
3.00

 
Dividend Payout Ratio 3
43.06

 
47.69

 
40.31

 
Average Shareholders' Equity to Average Assets
7.35

 
7.39

 
7.29

 
 
 
 
 
 
 
 
Average Balances
 
 
 
 
 
 
Average Loans and Leases
$
10,467,321

 
$
10,320,051

 
$
9,803,753

 
Average Assets
17,236,059

 
16,988,550

 
16,957,430

 
Average Deposits
14,971,404

 
14,779,511

 
14,720,266

 
Average Shareholders' Equity
1,267,438

 
1,254,704

 
1,235,550

 
 
 
 
 
 
 
 
Per Share of Common Stock
 
 
 
 
 
 
Book Value
$
30.91

 
$
30.56

 
$
29.33

 
Tangible Book Value
30.14

 
29.80

 
28.59

 
Market Value
 
 
 
 
 
 
   Closing
78.87

 
67.32

 
83.10

 
   High
83.94

 
82.80

 
89.09

 
   Low
66.54

 
63.64

 
78.40

 
 
 
 
 
 
 
 
 
March 31,

 
December 31,

 
March 31,

 
 
2019

 
2018

 
2018

 
As of Period End:
 
 
 
 
 
 
Balance Sheet Totals
 
 
 
 
 
 
Loans and Leases
$
10,548,609

 
$
10,448,774

 
$
9,916,628

 
Total Assets
17,446,413

 
17,143,974

 
17,136,030

 
Total Deposits
15,267,310

 
15,027,242

 
14,957,133

 
Other Debt
110,624

 
135,643

 
235,699

 
Total Shareholders' Equity
1,269,690

 
1,268,200

 
1,241,193

 
 
 
 
 
 
 
 
Asset Quality
 
 
 
 
 
 
Non-Performing Assets
$
17,925

 
$
12,930

 
$
15,736

 
Allowance for Loan and Lease Losses
106,023

 
106,693

 
107,938

 
Allowance to Loans and Leases Outstanding
1.01

%
1.02

%
1.09

%
 
 
 
 
 
 
 
Capital Ratios
 
 
 
 
 
 
Common Equity Tier 1 Capital Ratio
12.75

%
13.07

%
13.37

%
Tier 1 Capital Ratio
12.75

 
13.07

 
13.37

 
Total Capital Ratio
13.87

 
14.21

 
14.58

 
Tier 1 Leverage Ratio
7.46

 
7.60

 
7.46

 
Total Shareholders' Equity to Total Assets
7.28

 
7.40

 
7.24

 
Tangible Common Equity to Tangible Assets 4
7.11

 
7.23

 
7.07

 
Tangible Common Equity to Risk-Weighted Assets 4
12.28

 
12.52

 
12.80

 
 
 
 
 
 
 
 
Non-Financial Data
 
 
 
 
 
 
Full-Time Equivalent Employees
2,112

 
2,122

 
2,138

 
Branches
69

 
69

 
69

 
ATMs
385

 
382

 
377

 
 
 
 
 
 
 
 
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: Total Capital Ratio was revised from 14.59% as of March 31, 2018.




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

 
 

 
March 31,

 
December 31,

 
March 31,

(dollars in thousands)

 
2019

 
2018

 
2018

 
 
 
 
 
 
 
 
Total Shareholders' Equity

 
$
1,269,690

 
$
1,268,200

 
$
1,241,193

Less:
Goodwill

 
31,517

 
31,517

 
31,517

Tangible Common Equity

 
$
1,238,173

 
$
1,236,683

 
$
1,209,676

 
 
 
 
 
 
 
 
 
Total Assets

 
$
17,446,413

 
$
17,143,974

 
$
17,136,030

Less:
Goodwill

 
31,517

 
31,517

 
31,517

Tangible Assets

 
$
17,414,896

 
$
17,112,457

 
$
17,104,513

 
 
 
 
 
 
 
 
 
Risk-Weighted Assets, determined in accordance
 
 
 
 
 
 
 
 
   with prescribed regulatory requirements

 
$
10,079,858

 
$
9,878,904

 
$
9,452,847

 
 
 
 
 
 
 
 
 
Total Shareholders' Equity to Total Assets

 
7.28
%
 
7.40
%
 
7.24
%
Tangible Common Equity to Tangible Assets (Non-GAAP)

 
7.11
%
 
7.23
%
 
7.07
%
 
 
 
 
 
 
 
 
 
Tier 1 Capital Ratio

 
12.75
%
 
13.07
%
 
13.37
%
Tangible Common Equity to Risk-Weighted Assets (Non-GAAP)

 
12.28
%
 
12.52
%
 
12.80
%
 
 
 
 
 
 
 
 
 
Note: Risk-Weighted Assets was revised from $9,451,647 as of March 31, 2018.
 
 
 




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

 
Three Months Ended
 
March 31,
December 31,
March 31,
(dollars in thousands, except per share amounts)
2019
2018
2018
Interest Income
 
 
 
   Interest and Fees on Loans and Leases
$
108,511

$
107,404

$
97,634

   Income on Investment Securities
 
 
 
      Available-for-Sale
13,432

13,043

12,141

      Held-to-Maturity
21,921

21,482

21,296

   Deposits
15

10

18

   Funds Sold
1,444

727

757

   Other
319

352

300

Total Interest Income
145,642

143,018

132,146

Interest Expense
 
 
 
   Deposits
15,284

13,172

7,581

   Securities Sold Under Agreements to Repurchase
4,571

4,671

4,564

   Funds Purchased
157

440

53

   Short-Term Borrowings
36

88

16

   Other Debt
757

674

976

Total Interest Expense
20,805

19,045

13,190

Net Interest Income
124,837

123,973

118,956

Provision for Credit Losses
3,000

2,000

4,125

Net Interest Income After Provision for Credit Losses
121,837

121,973

114,831

Noninterest Income
 
 
 
   Trust and Asset Management
10,761

10,558

11,181

   Mortgage Banking
2,287

2,148

2,145

   Service Charges on Deposit Accounts
7,364

7,562

7,129

   Fees, Exchange, and Other Service Charges
14,208

14,576

14,333

   Investment Securities Gains (Losses), Net
(835
)
(841
)
(666
)
   Annuity and Insurance
2,578

1,409

1,206

   Bank-Owned Life Insurance
1,710

1,941

1,842

   Other
5,606

4,755

6,865

Total Noninterest Income
43,679

42,108

44,035

Noninterest Expense
 
 
 
   Salaries and Benefits
56,586

54,856

54,422

   Net Occupancy
7,594

8,918

8,534

   Net Equipment
6,833

6,364

5,527

   Data Processing
4,526

5,151

3,891

   Professional Fees
2,453

2,467

2,773

   FDIC Insurance
1,269

1,336

2,157

   Other
13,796

16,819

17,080

Total Noninterest Expense
93,057

95,911

94,384

Income Before Provision for Income Taxes
72,459

68,170

64,482

Provision for Income Taxes
13,660

14,259

10,442

Net Income
$
58,799

$
53,911

$
54,040

Basic Earnings Per Share
$
1.44

$
1.30

$
1.29

Diluted Earnings Per Share
$
1.43

$
1.30

$
1.28

Dividends Declared Per Share
$
0.62

$
0.62

$
0.52

Basic Weighted Average Shares
40,938,318

41,325,456

42,038,573

Diluted Weighted Average Shares
41,213,453

41,601,649

42,358,425

 
 
 
 





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

 
 
Three Months Ended
 
 
March 31,
December 31,
March 31,
(dollars in thousands)
2019
2018
2018
Net Income
$
58,799

$
53,911

$
54,040

Other Comprehensive Income (Loss), Net of Tax:
 
 
 
 
Net Unrealized Gains (Losses) on Investment Securities
6,919

11,169

(9,121
)
 
Defined Benefit Plans
246

(2,974
)
216

Other Comprehensive Income (Loss)
7,165

8,195

(8,905
)
Comprehensive Income
$
65,964

$
62,106

$
45,135





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

 

March 31,

December 31,

March 31,

(dollars in thousands)

2019

2018

2018

Assets
 
 
 
 
Interest-Bearing Deposits in Other Banks
 
$
3,550

$
3,028

$
2,589

Funds Sold
 
243,867

198,860

387,766

Investment Securities
 
 
 
 
   Available-for-Sale
 
1,859,256

2,007,942

2,184,187

   Held-to-Maturity (Fair Value of $3,637,496; $3,413,994; and $3,711,149)
 
3,668,811

3,482,092

3,789,092

Loans Held for Sale
 
17,909

10,987

23,548

Loans and Leases
 
10,548,609

10,448,774

9,916,628

   Allowance for Loan and Lease Losses
 
(106,023
)
(106,693
)
(107,938
)
     Net Loans and Leases
 
10,442,586

10,342,081

9,808,690

Total Earning Assets
 
16,235,979

16,044,990

16,195,872

Cash and Due from Banks
 
293,871

324,081

174,871

Premises and Equipment, Net
 
159,344

151,837

137,201

Operating Lease Right-of-Use Assets
 
104,166



Accrued Interest Receivable
 
52,820

51,230

52,941

Foreclosed Real Estate
 
3,225

1,356

2,768

Mortgage Servicing Rights
 
24,149

24,310

24,493

Goodwill
 
31,517

31,517

31,517

Bank-Owned Life Insurance
 
285,155

283,771

280,537

Other Assets
 
256,187

230,882

235,830

Total Assets
 
$
17,446,413

$
17,143,974

$
17,136,030

 
 
 
 
 
Liabilities
 
 
 
 
Deposits
 
 
 
 
   Noninterest-Bearing Demand
 
$
4,595,915

$
4,739,596

$
4,759,777

   Interest-Bearing Demand
 
2,961,444

3,002,925

3,028,373

   Savings
 
5,946,881

5,539,199

5,397,291

   Time
 
1,763,070

1,745,522

1,771,692

Total Deposits
 
15,267,310

15,027,242

14,957,133

Short-Term Borrowings
 

199


Securities Sold Under Agreements to Repurchase
 
504,299

504,296

505,293

Other Debt
 
110,624

135,643

235,699

Operating Lease Liabilities
 
111,230



Retirement Benefits Payable
 
40,343

40,494

37,046

Accrued Interest Payable
 
8,474

8,253

8,229

Taxes Payable and Deferred Taxes
 
29,935

19,736

29,557

Other Liabilities
 
104,508

139,911

121,880

Total Liabilities
 
16,176,723

15,875,774

15,894,837

Shareholders' Equity
 
 
 
 
Common Stock ($.01 par value; authorized 500,000,000 shares;
 
 
 
 
   issued / outstanding: March 31, 2019 - 58,166,535 / 41,078,688;
 
 
 
 
   December 31, 2018 - 58,063,689 / 41,499,898;
 
 
 
 
   and March 31, 2018 - 58,051,646 / 42,314,414)
 
578

577

577

Capital Surplus
 
574,594

571,704

563,598

Accumulated Other Comprehensive Loss
 
(43,878
)
(51,043
)
(51,097
)
Retained Earnings
 
1,674,264

1,641,314

1,551,900

Treasury Stock, at Cost (Shares: March 31, 2019 - 17,087,847;
 
 
 
 
    December 31, 2018 - 16,563,791; and March 31, 2018 - 15,737,232)
 
(935,868
)
(894,352
)
(823,785
)
Total Shareholders' Equity
 
1,269,690

1,268,200

1,241,193

Total Liabilities and Shareholders' Equity
 
$
17,446,413

$
17,143,974

$
17,136,030




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, 2018
41,499,898

$
577

$
571,704

$
(51,043
)
$
1,641,314

$
(894,352
)
$
1,268,200

Net Income




58,799


58,799

Other Comprehensive Income



7,165



7,165

Share-Based Compensation


2,274




2,274

Common Stock Issued under Purchase and Equity
 
 
 
 
 
 
 
 
 Compensation Plans
131,529

1

616


(203
)
1,673

2,087

Common Stock Repurchased
(552,739
)




(43,189
)
(43,189
)
Cash Dividends Declared ($0.62 per share)




(25,646
)

(25,646
)
Balance as of March 31, 2019
41,078,688

$
578

$
574,594

$
(43,878
)
$
1,674,264

$
(935,868
)
$
1,269,690

 
 
 
 
 
 
 
 
Balance as of December 31, 2017
42,401,443

$
576

$
561,161

$
(34,715
)
$
1,512,218

$
(807,372
)
$
1,231,868

Net Income




54,040


54,040

Other Comprehensive Loss



(8,905
)


(8,905
)
Reclassification of the Income Tax Effects of the
 
 
 
 
 
 
 
 
 Tax Cuts and Jobs Act from AOCI



(7,477
)
7,477



Share-Based Compensation


1,867




1,867

Common Stock Issued under Purchase and Equity
 
 
 
 
 
 
 
 
 Compensation Plans
121,299

1

570


252

1,128

1,951

Common Stock Repurchased
(208,328
)




(17,541
)
(17,541
)
Cash Dividends Declared ($0.52 per share)




(22,087
)

(22,087
)
Balance as of March 31, 2018
42,314,414

$
577

$
563,598

$
(51,097
)
$
1,551,900

$
(823,785
)
$
1,241,193





Bank of Hawaii Corporation and Subsidiaries
 
 
 
 
 
 
 
 
Average Balances and Interest Rates - Taxable-Equivalent Basis
 
 
 
 
Table 7
 
 
 
 
Three Months Ended
 
Three Months Ended
 
Three Months Ended
 
 
 
March 31, 2019
 
December 31, 2018
 
March 31, 2018
 
 
 
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
$
3.0

$

2.05

%
$
3.3

$

1.21

%
$
3.0

$

2.34

%
Funds Sold
241.6

1.5

2.39

 
128.2

0.7

2.22

 
204.7

0.8

1.48

 
Investment Securities
 
 
 
 
 
 
 
 
 
 
 
 
 
Available-for-Sale
 
 
 
 
 
 
 
 
 
 
 
 
 
   Taxable
1,595.8

11.5

2.90

 
1,480.5

10.0

2.70

 
1,595.1

8.9

2.23

 
 
   Non-Taxable
279.1

2.4

3.45

 
556.4

3.8

2.77

 
604.7

4.1

2.74

 
 
Held-to-Maturity
 
 
 
 
 
 
 
 
 
 
 
 
 
   Taxable
3,373.5

20.5

2.43

 
3,360.5

20.0

2.38

 
3,631.2

19.8

2.18

 
 
   Non-Taxable
234.1

1.8

3.15

 
235.1

1.9

3.16

 
238.0

1.9

3.18

 
Total Investment Securities
5,482.5

36.2

2.65

 
5,632.5

35.7

2.53

 
6,069.0

34.7

2.29

 
Loans Held for Sale
12.4

0.1

4.35

 
12.1

0.2

4.63

 
14.1

0.1

3.76

 
Loans and Leases 1
 
 
 
 
 
 
 
 
 
 
 
 
 
Commercial and Industrial
1,357.8

15.3

4.57

 
1,351.1

14.3

4.21

 
1,280.9

11.8

3.73

 
 
Commercial Mortgage
2,310.4

24.9

4.36

 
2,256.0

24.2

4.25

 
2,096.4

20.6

3.99

 
 
Construction
150.4

1.9

5.08

 
179.8

2.2

4.79

 
189.4

2.1

4.45

 
 
Commercial Lease Financing
160.9

0.9

2.28

 
173.2

1.0

2.42

 
179.6

1.0

2.21

 
 
Residential Mortgage
3,680.2

35.5

3.86

 
3,615.8

35.1

3.88

 
3,478.2

33.3

3.83

 
 
Home Equity
1,690.0

16.1

3.87

 
1,652.4

15.7

3.78

 
1,595.4

14.6

3.70

 
 
Automobile
668.2

6.0

3.66

 
641.8

6.0

3.73

 
541.5

5.6

4.19

 
 
Other 2
449.4

7.9

7.13

 
450.0

8.8

7.72

 
442.4

8.6

7.91

 
Total Loans and Leases
10,467.3

108.5

4.18

 
10,320.1

107.3

4.14

 
9,803.8

97.6

4.02

 
Other
35.5

0.3

3.60

 
36.8

0.4

3.82

 
40.7

0.3

2.95

 
Total Earning Assets 3
16,242.3

146.6

3.64

 
16,133.0

144.3

3.56

 
16,135.3

133.5

3.33

 
Cash and Due from Banks
240.8

 
 
 
234.3

 
 
 
228.6

 
 
 
Other Assets
753.0

 
 
 
621.3

 
 
 
593.5

 
 
 
Total Assets
$
17,236.1

 
 
 
$
16,988.6

 
 
 
$
16,957.4

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest-Bearing Liabilities
 
 
 
 
 
 
 
 
 
 
 
 
Interest-Bearing Deposits
 
 
 
 
 
 
 
 
 
 
 
 
 
Demand
$
2,939.9

1.5

0.20

 
$
2,888.3

1.5

0.20

 
$
2,978.1

0.8

0.10

 
 
Savings
5,760.8

6.7

0.47

 
5,494.5

4.5

0.32

 
5,366.3

2.1

0.16

 
 
Time
1,703.4

7.1

1.69

 
1,800.7

7.2

1.59

 
1,713.5

4.7

1.11

 
Total Interest-Bearing Deposits
10,404.1

15.3

0.60

 
10,183.5

13.2

0.51

 
10,057.9

7.6

0.31

 
Short-Term Borrowings
31.1

0.2

2.49

 
89.6

0.5

2.31

 
19.1

0.1

1.45

 
Securities Sold Under Agreements to Repurchase
504.3

4.6

3.63

 
504.3

4.7

3.62

 
505.3

4.5

3.61

 
Other Debt
120.0

0.7

2.55

 
145.2

0.7

1.85

 
257.1

1.0

1.54

 
Total Interest-Bearing Liabilities
11,059.5

20.8

0.76

 
10,922.6

19.1

0.69

 
10,839.4

13.2

0.49

 
Net Interest Income
 
$
125.8

 
 
 
$
125.2

 
 
 
$
120.3

 
 
 
Interest Rate Spread
 
 
2.88

%
 
 
2.87

%
 
 
2.84

%
 
Net Interest Margin
 
 
3.12

%
 
 
3.10

%
 
 
3.00

%
Noninterest-Bearing Demand Deposits
4,567.3

 
 
 
4,596.0

 
 
 
4,662.4

 
 
 
Other Liabilities
341.9

 
 
 
215.3

 
 
 
220.0

 
 
 
Shareholders' Equity
1,267.4

 
 
 
1,254.7

 
 
 
1,235.6

 
 
 
Total Liabilities and Shareholders' Equity
$
17,236.1

 
 
 
$
16,988.6

 
 
 
$
16,957.4

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
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 21%, of $981,000, $1,263,000, and $1,344,000
 
 
for the three months ended March 31, 2019, December 31, 2018, and March 31, 2018, respectively.
 
 



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

 
Three Months Ended March 31, 2019
 
Compared to December 31, 2018
(dollars in millions)
Volume 1

Rate 1

Total

Change in Interest Income:
 
 
 
Funds Sold
$
0.7

$
0.1

$
0.8

Investment Securities
 
 
 
   Available-for-Sale
 
 
 
      Taxable
0.8

0.7

1.5

      Non-Taxable
(2.2
)
0.8

(1.4
)
   Held-to-Maturity
 
 
 
      Taxable
0.1

0.4

0.5

      Non-Taxable
(0.1
)

(0.1
)
Total Investment Securities
(1.4
)
1.9

0.5

Loans Held for Sale

(0.1
)
(0.1
)
Loans and Leases



   Commercial and Industrial
0.1

0.9

1.0

   Commercial Mortgage
0.3

0.4

0.7

   Construction
(0.4
)
0.1

(0.3
)
   Commercial Lease Financing
(0.1
)

(0.1
)
   Residential Mortgage
0.6

(0.2
)
0.4

   Home Equity
0.2

0.2

0.4

   Automobile
0.2

(0.2
)

   Other 2
(0.1
)
(0.8
)
(0.9
)
Total Loans and Leases
0.8

0.4

1.2

Other

(0.1
)
(0.1
)
Total Change in Interest Income
0.1

2.2

2.3

 
 
 
 
Change in Interest Expense:
 
 
 
Interest-Bearing Deposits
 
 
 
   Savings
0.2

2.0

2.2

   Time
(0.5
)
0.4

(0.1
)
Total Interest-Bearing Deposits
(0.3
)
2.4

2.1

Short-Term Borrowings
(0.4
)
0.1

(0.3
)
Securities Sold Under Agreements to Repurchase

(0.1
)
(0.1
)
Other Debt
(0.1
)
0.1


Total Change in Interest Expense
(0.8
)
2.5

1.7

 
 
 
 
Change in Net Interest Income
$
0.9

$
(0.3
)
$
0.6

 
 
 
 
 
 
 
 
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 8b

 
Three Months Ended March 31, 2019
 
Compared to March 31, 2018
(dollars in millions)
Volume 1

Rate 1

Total

Change in Interest Income:
 
 
 
Funds Sold
$
0.2

$
0.5

$
0.7

Investment Securities
 
 
 
   Available-for-Sale
 
 
 
      Taxable

2.6

2.6

      Non-Taxable
(2.6
)
0.9

(1.7
)
   Held-to-Maturity
 
 
 
      Taxable
(1.4
)
2.1

0.7

      Non-Taxable
(0.1
)

(0.1
)
Total Investment Securities
(4.1
)
5.6

1.5

Loans and Leases
 
 
 
   Commercial and Industrial
0.8

2.7

3.5

   Commercial Mortgage
2.2

2.1

4.3

   Construction
(0.5
)
0.3

(0.2
)
   Commercial Lease Financing
(0.1
)

(0.1
)
   Residential Mortgage
2.0

0.2

2.2

   Home Equity
0.8

0.7

1.5

   Automobile
1.2

(0.8
)
0.4

   Other 2
0.2

(0.9
)
(0.7
)
Total Loans and Leases
6.6

4.3

10.9

Other
(0.2
)
0.2


Total Change in Interest Income
2.5

10.6

13.1

 
 
 
 
Change in Interest Expense:
 
 
 
Interest-Bearing Deposits
 
 
 
   Demand

0.7

0.7

   Savings
0.2

4.4

4.6

   Time

2.4

2.4

Total Interest-Bearing Deposits
0.2

7.5

7.7

Short-Term Borrowings
0.1


0.1

Securities Sold Under Agreements to Repurchase

0.1

0.1

Other Debt
(0.7
)
0.4

(0.3
)
Total Change in Interest Expense
(0.4
)
8.0

7.6

 
 
 
 
Change in Net Interest Income
$
2.9

$
2.6

$
5.5

 
 
 
 
 
 
 
 
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
 
March 31,
December 31,
March 31,
(dollars in thousands)
2019
2018
2018
Salaries
$
32,480

$
33,603

$
32,704

Incentive Compensation
5,904

5,715

5,178

Share-Based Compensation
3,079

1,417

2,081

Commission Expense
930

1,158

954

Retirement and Other Benefits
5,107

4,369

4,841

Payroll Taxes
4,247

2,277

4,172

Medical, Dental, and Life Insurance
4,465

5,237

3,461

Separation Expense
374

1,080

1,031

Total Salaries and Benefits
$
56,586

$
54,856

$
54,422

 
 
 
 
 
 
 
 

    




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

 
 
March 31,

December 31,

September 30,

June 30,

March 31,

(dollars in thousands)
2019

2018

2018

2018

2018

Commercial
 
 
 
 
 
 
Commercial and Industrial
$
1,331,345

$
1,331,149

$
1,314,609

$
1,282,967

$
1,329,096

 
Commercial Mortgage
2,381,213

2,302,356

2,237,020

2,169,357

2,097,339

 
Construction
132,775

170,061

176,447

185,350

186,530

 
Lease Financing
154,919

176,226

172,232

178,598

179,771

Total Commercial
4,000,252

3,979,792

3,900,308

3,816,272

3,792,736

Consumer
 
 
 
 
 
 
Residential Mortgage
3,702,553

3,673,796

3,596,627

3,548,444

3,505,239

 
Home Equity
1,698,666

1,681,442

1,625,208

1,622,314

1,601,698

 
Automobile
676,730

658,133

625,086

592,705

558,468

 
Other 1
470,408

455,611

483,833

473,588

458,487

Total Consumer
6,548,357

6,468,982

6,330,754

6,237,051

6,123,892

Total Loans and Leases
$
10,548,609

$
10,448,774

$
10,231,062

$
10,053,323

$
9,916,628

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Deposits
 
 
 
 
 
 
March 31,

December 31,

September 30,

June 30,

March 31,

(dollars in thousands)
2019

2018

2018

2018

2018

Consumer
$
7,944,793

$
7,726,731

$
7,627,527

$
7,672,435

$
7,665,926

Commercial
6,162,042

6,098,186

5,967,343

5,921,414

5,897,194

Public and Other
1,160,475

1,202,325

1,248,465

1,349,509

1,394,013

Total Deposits
$
15,267,310

$
15,027,242

$
14,843,335

$
14,943,358

$
14,957,133

 
 
 
 
 
 
 
 
 
 
 
 
 
 
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

 
 
 
March 31,

December 31,

September 30,

June 30,

March 31,

(dollars in thousands)
2019

2018

2018

2018

2018

Non-Performing Assets
 
 
 
 
 
Non-Accrual Loans and Leases
 
 
 
 
 
 
Commercial
 
 
 
 
 
 
 
Commercial and Industrial
$
393

$
542

$
1,205

$
917

$
986

 
 
Commercial Mortgage
5,911

2,040

652

659

1,367

 
Total Commercial
6,304

2,582

1,857

1,576

2,353

 
Consumer
 
 
 
 
 
 
 
Residential Mortgage
5,599

5,321

6,359

6,722

6,725

 
 
Home Equity
2,797

3,671

3,673

3,933

3,890

 
Total Consumer
8,396

8,992

10,032

10,655

10,615

Total Non-Accrual Loans and Leases
14,700

11,574

11,889

12,231

12,968

Foreclosed Real Estate
3,225

1,356

1,909

2,926

2,768

Total Non-Performing Assets
$
17,925

$
12,930

$
13,798

$
15,157

$
15,736

 
 
 
 
 
 
 
 
Accruing Loans and Leases Past Due 90 Days or More
 
 
 
 
Commercial
 
 
 
 
 
 
Commercial and Industrial
$
66

$
10

$

$
2

$

 
Commercial Mortgage



5,680


Total Commercial
66

10


5,682


Consumer
 
 
 
 
 
 
Residential Mortgage
$
903

$
2,446

$
2,426

$
2,281

$
2,927

 
Home Equity
3,381

2,684

3,112

3,016

3,013

 
Automobile
734

513

829

674

333

 
Other 1
1,033

914

1,727

1,660

1,895

Total Consumer
6,051

6,557

8,094

7,631

8,168

Total Accruing Loans and Leases Past Due 90 Days or More
$
6,117

$
6,567

$
8,094

$
13,313

$
8,168

Restructured Loans on Accrual Status
 
 
 
 
 
   and Not Past Due 90 Days or More
$
48,571

$
48,731

$
49,462

$
50,212

$
56,743

Total Loans and Leases
$
10,548,609

$
10,448,774

$
10,231,062

$
10,053,323

$
9,916,628

 
 
 
 
 
 
 
 
Ratio of Non-Accrual Loans and Leases to Total Loans and Leases
0.14
%
0.11
%
0.12
%
0.12
%
0.13
%
 
 
 
 
 
 
 
 
Ratio of Non-Performing Assets to Total Loans and Leases
 
 
 
 
 
 
and Foreclosed Real Estate
0.17
%
0.12
%
0.13
%
0.15
%
0.16
%
 
 
 
 
 
 
 
 
Ratio of Commercial Non-Performing Assets to Total Commercial Loans
 
 
 
 
 
 
and Leases and Commercial Foreclosed Real Estate
0.16
%
0.06
%
0.05
%
0.04
%
0.06
%
 
 
 
 
 
 
 
 
Ratio of Consumer Non-Performing Assets to Total Consumer Loans
 
 
 
 
 
 
and Leases and Consumer Foreclosed Real Estate
0.18
%
0.16
%
0.19
%
0.22
%
0.22
%
 
 
 
 
 
 
 
 
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
0.23
%
0.19
%
0.21
%
0.28
%
0.24
%
 
 
 
 
 
 
 
 
Quarter to Quarter Changes in Non-Performing Assets
 
 
 
 
 
Balance at Beginning of Quarter
$
12,930

$
13,798

$
15,157

$
15,736

$
16,120

Additions
8,217

4,509

2,030

1,949

2,332

Reductions
 
 
 
 
 
 
Payments
(989
)
(3,759
)
(415
)
(1,847
)
(1,251
)
 
Return to Accrual Status
(316
)
(605
)
(1,420
)
(126
)
(1,270
)
 
Sales of Foreclosed Real Estate

(653
)
(1,301
)
(421
)

 
Charge-offs/Write-downs
(1,917
)
(360
)
(253
)
(134
)
(195
)
Total Reductions
(3,222
)
(5,377
)
(3,389
)
(2,528
)
(2,716
)
Balance at End of Quarter
$
17,925

$
12,930

$
13,798

$
15,157

$
15,736

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
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
 
 
 
March 31,
December 31,
March 31,
(dollars in thousands)
2019
2018
2018
Balance at Beginning of Period
$
113,515

$
115,512

$
114,168

Loans and Leases Charged-Off
 
 
 
 
Commercial
 
 
 
 
 
Commercial and Industrial
(370
)
(365
)
(206
)
 
 
Commercial Mortgage
(1,616
)


 
Consumer
 
 
 
 
 
Residential Mortgage
(4
)
(1
)
(97
)
 
 
Home Equity
(295
)
(406
)
(91
)
 
 
Automobile
(1,753
)
(2,335
)
(2,254
)
 
 
Other 1
(2,790
)
(3,781
)
(3,340
)
Total Loans and Leases Charged-Off
(6,828
)
(6,888
)
(5,988
)
Recoveries on Loans and Leases Previously Charged-Off
 
 
 
 
Commercial
 
 
 
 
 
Commercial and Industrial
501

803

328

 
Consumer
 
 
 
 
 
Residential Mortgage
484

112

220

 
 
Home Equity
588

367

625

 
 
Automobile
881

949

599

 
 
Other 1
704

660

683

Total Recoveries on Loans and Leases Previously Charged-Off
3,158

2,891

2,455

Net Loans and Leases Charged-Off
(3,670
)
(3,997
)
(3,533
)
Provision for Credit Losses
3,000

2,000

4,125

Balance at End of Period 2
$
112,845

$
113,515

$
114,760

 
 
 
 
 
 
Components
 
 
 
Allowance for Loan and Lease Losses
$
106,023

$
106,693

$
107,938

Reserve for Unfunded Commitments
6,822

6,822

6,822

Total Reserve for Credit Losses
$
112,845

$
113,515

$
114,760

 
 
 
 
 
 
Average Loans and Leases Outstanding
$
10,467,321

$
10,320,051

$
9,803,753

 
 
 
 
 
 
Ratio of Net Loans and Leases Charged-Off to
 
 
 
 
Average Loans and Leases Outstanding (annualized)
0.14
%
0.15
%
0.15
%
Ratio of Allowance for Loan and Lease Losses to Loans and Leases Outstanding
1.01
%
1.02
%
1.09
%
 
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 13

 
 
 
Investment

 
 
 
 
 
Services and

 
 
 
Retail

Commercial

Private

Treasury

Consolidated

(dollars in thousands)
Banking

Banking

Banking

and Other

Total

Three Months Ended March 31, 2019
 
 
 
 
 
Net Interest Income
$
66,154

$
47,290

$
10,198

$
1,195

$
124,837

Provision for Credit Losses
2,241

1,446

(17
)
(670
)
3,000

Net Interest Income After Provision for Credit Losses
63,913

45,844

10,215

1,865

121,837

Noninterest Income
21,233

7,061

13,245

2,140

43,679

Noninterest Expense
(52,524
)
(20,955
)
(16,903
)
(2,675
)
(93,057
)
Income Before Provision for Income Taxes
32,622

31,950

6,557

1,330

72,459

Provision for Income Taxes
(8,105
)
(6,002
)
(1,729
)
2,176

(13,660
)
Net Income
$
24,517

$
25,948

$
4,828

$
3,506

$
58,799

Total Assets as of March 31, 2019
$
6,454,127

$
4,004,176

$
341,979

$
6,646,131

$
17,446,413

 
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended March 31, 2018
 
 
 
 
 
Net Interest Income
$
64,397

$
42,898

$
9,887

$
1,774

$
118,956

Provision for Credit Losses
3,743

(151
)
(60
)
593

4,125

Net Interest Income After Provision for Credit Losses
60,654

43,049

9,947

1,181

114,831

Noninterest Income
19,253

5,642

13,670

5,470

44,035

Noninterest Expense
(54,599
)
(20,332
)
(16,207
)
(3,246
)
(94,384
)
Income Before Provision for Income Taxes
25,308

28,359

7,410

3,405

64,482

Provision for Income Taxes
(6,291
)
(6,824
)
(1,954
)
4,627

(10,442
)
Net Income
$
19,017

$
21,535

$
5,456

$
8,032

$
54,040

Total Assets as of March 31, 2018
$
6,041,271

$
3,771,678

$
332,454

$
6,990,627

$
17,136,030

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 



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

 
 
Three Months Ended
 
 
March 31,

 
December 31,

 
September 30,

 
June 30,

 
March 31,

 
(dollars in thousands, except per share amounts)
2019

 
2018

 
2018

 
2018

 
2018

 
Quarterly Operating Results
 
 
 
 
 
 
 
 
 
 
Interest Income
 
 
 
 
 
 
 
 
 
 
   Interest and Fees on Loans and Leases
$
108,511

 
$
107,404

 
$
104,248

 
$
101,311

 
$
97,634

 
   Income on Investment Securities
 
 
 
 
 
 
 
 
 
 
      Available-for-Sale
13,432

 
13,043

 
12,588

 
12,380

 
12,141

 
      Held-to-Maturity
21,921

 
21,482

 
20,821

 
20,711

 
21,296

 
   Deposits
15

 
10

 
10

 
(4
)
 
18

 
   Funds Sold
1,444

 
727

 
1,393

 
846

 
757

 
   Other
319

 
352

 
364

 
341

 
300

 
Total Interest Income
145,642

 
143,018

 
139,424

 
135,585

 
132,146

 
Interest Expense
 
 
 
 
 
 
 
 
 
 
   Deposits
15,284

 
13,172

 
10,931

 
9,459

 
7,581

 
   Securities Sold Under Agreements to Repurchase
4,571

 
4,671

 
4,667

 
4,617

 
4,564

 
   Funds Purchased
157

 
440

 
33

 
83

 
53

 
   Short-Term Borrowings
36

 
88

 
28

 
13

 
16

 
   Other Debt
757

 
674

 
838

 
917

 
976

 
Total Interest Expense
20,805

 
19,045

 
16,497

 
15,089

 
13,190

 
Net Interest Income
124,837

 
123,973

 
122,927

 
120,496

 
118,956

 
Provision for Credit Losses
3,000

 
2,000

 
3,800

 
3,500

 
4,125

 
Net Interest Income After Provision for Credit Losses
121,837

 
121,973

 
119,127

 
116,996

 
114,831

 
Noninterest Income
 
 
 
 
 
 
 
 
 
 
   Trust and Asset Management
10,761

 
10,558

 
10,782

 
11,356

 
11,181

 
   Mortgage Banking
2,287

 
2,148

 
1,965

 
2,179

 
2,145

 
   Service Charges on Deposit Accounts
7,364

 
7,562

 
7,255

 
6,865

 
7,129

 
   Fees, Exchange, and Other Service Charges
14,208

 
14,576

 
14,173

 
14,400

 
14,333

 
   Investment Securities Gains (Losses), Net
(835
)
 
(841
)
 
(729
)
 
(1,702
)
 
(666
)
 
   Annuity and Insurance
2,578

 
1,409

 
1,360

 
1,847

 
1,206

 
   Bank-Owned Life Insurance
1,710

 
1,941

 
1,620

 
1,796

 
1,842

 
   Other
5,606

 
4,755

 
5,056

 
4,557

 
6,865

 
Total Noninterest Income
43,679

 
42,108

 
41,482

 
41,298

 
44,035

 
Noninterest Expense
 
 
 
 
 
 
 
 
 
 
   Salaries and Benefits
56,586

 
54,856

 
51,782

 
52,148

 
54,422

 
   Net Occupancy
7,594

 
8,918

 
8,702

 
8,588

 
8,534

 
   Net Equipment
6,833

 
6,364

 
6,116

 
5,845

 
5,527

 
   Data Processing
4,526

 
5,151

 
4,241

 
4,563

 
3,891

 
   Professional Fees
2,453

 
2,467

 
2,206

 
2,546

 
2,773

 
   FDIC Insurance
1,269

 
1,336

 
2,057

 
2,182

 
2,157

 
   Other
13,796

 
16,819

 
15,434

 
14,919

 
17,080

 
Total Noninterest Expense
93,057

 
95,911

 
90,538

 
90,791

 
94,384

 
Income Before Provision for Income Taxes
72,459

 
68,170

 
70,071

 
67,503

 
64,482

 
Provision for Income Taxes
13,660

 
14,259

 
13,138

 
12,785

 
10,442

 
Net Income
$
58,799

 
$
53,911

 
$
56,933

 
$
54,718

 
$
54,040

 
 
 
 
 
 
 
 
 
 
 
 
Basic Earnings Per Share
$
1.44

 
$
1.30

 
$
1.37

 
$
1.31

 
$
1.29

 
Diluted Earnings Per Share
$
1.43

 
$
1.30

 
$
1.36

 
$
1.30

 
$
1.28

 
 
 
 
 
 
 
 
 
 
 
 
Balance Sheet Totals
 
 
 
 
 
 
 
 
 
 
Loans and Leases
$
10,548,609

 
$
10,448,774

 
$
10,231,062

 
$
10,053,323

 
$
9,916,628

 
Total Assets
17,446,413

 
17,143,974

 
16,991,734

 
17,124,162

 
17,136,030

 
Total Deposits
15,267,310

 
15,027,242

 
14,843,335

 
14,943,358

 
14,957,133

 
Total Shareholders' Equity
1,269,690

 
1,268,200

 
1,253,327

 
1,247,717

 
1,241,193

 
 
 
 
 
 
 
 
 
 
 
 
Performance Ratios
 
 
 
 
 
 
 
 
 
 
Return on Average Assets
1.38

%
1.26

%
1.33

%
1.30

%
1.29

%
Return on Average Shareholders' Equity
18.81

 
17.05

 
18.06

 
17.68

 
17.74

 
Efficiency Ratio 1
55.22

 
57.75

 
55.07

 
56.12

 
57.91

 
Net Interest Margin 2
3.12

 
3.10

 
3.07

 
3.04

 
3.00

 
 
 
 
 
 
 
 
 
 
 
 
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
 
Two Months Ended
 
 
Year Ended
($ in millions; jobs in thousands)
February 28, 2019
 
 
December 31, 2018
December 31, 2017
Hawaii Economic Trends
 
 
 
 
 
 
 
 
 
 
 
 
   State General Fund Revenues 1
$
1,200.3

(2.9
)
%
 
$
6,933.1

 
6.9

%
$
6,485.0

 
4.3

%
   General Excise and Use Tax Revenue 1
$
640.5

(5.2
)
%
 
$
3,426.5

 
2.3

%
$
3,349.8

 
4.5

%
   Jobs 2
656.5

 
 
 
660.0

 
 
 
664.5

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
March 31,
 
December 31,
(spot rates)
 
 
 
 
 
 
2019
 
2018
2017
 
Unemployment 3
 
 
 
 
 
 
 
 
 
 
 
 
  Statewide, seasonally adjusted
 
 
 
 
 
 
2.8

%
2.5

%
2.1

%
 
 
 
 
 
 
 
 
 
 
 
 
 
   Oahu
 
 
 
 
 
 
2.7

 
2.2

 
1.7

 
   Island of Hawaii
 
 
 
 
 
 
3.7

 
2.9

 
2.0

 
   Maui
 
 
 
 
 
 
2.8

 
2.3

 
1.8

 
   Kauai
 
 
 
 
 
 
3.0

 
2.3

 
1.7

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
March 31,
 
December 31,
(percentage change, except months of inventory)
 
 
 
2019
 
2018
 
2017
2016
 
Housing Trends (Single Family Oahu) 4
 
 
 
 
 
 
 
 
 
 
 
 
   Median Home Price
 
 
 
 
2.0

%
4.6

%
2.7

%
5.0

%
   Home Sales Volume (units)
 
 
 
 
(5.7
)
%
(7.7
)
%
6.3

%
6.5

%
   Months of Inventory
 
 
 
 
3.4

 
2.8

 
2.1

 
2.5

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

 
 
 
 
 
 

 
 
 

 
February 28, 2019
 
 
 
 
 
 
782.6

 
 
 
0.5

 
January 31, 2019
 
 
 
 
 
 
820.6

 
 
 
3.0

 
December 31, 2018
 
 
 
 
 
 
910.1

 
 
 
3.4

 
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