•

Diluted Earnings Per Common Share $1.32

•

Net Income $54.8 Million

•

Board of Directors Declares Dividend of $0.70 Per Common Share

•

The return on average assets for the first quarter of 2022 was 0.97% compared with 1.12% in the previous quarter and 1.15% in the same quarter of 2021.  The return on average common equity for the first quarter of 2022 was 15.44% compared with 17.40% in the previous quarter and 17.65% in the same quarter of 2021.  

o

The decrease from prior quarter was primarily driven by lower provision release and seasonal payroll expenses.

o

The decrease from prior year was primarily driven by lower provision release.

•

Net interest income for the first quarter of 2022 was $125.3 million, a decrease of 0.9% from the fourth quarter of 2021 and an increase of 3.9% from the first quarter of 2021.  Net interest margin was 2.34% in the first quarter of 2022, unchanged compared to the previous quarter and a decrease of 9 basis points from the same quarter of 2021.  

o

One-time significant items in the fourth quarter of 2021 included a negative $0.9 million adjustment to net interest income for deferred mortgage loan fees related to prior quarters of 2021.  The adjustment had a negative impact of 2 basis points on the net interest margin.

Bank of Hawaii Corporation First Quarter 2022 Financial Results                                          

Page 2

•

The provision for credit losses for the first quarter of 2022 was a net benefit of $5.5 million compared with a net benefit of $9.7 million in the previous quarter and a net benefit of $14.3 million in the same quarter of 2021.  

•

Noninterest income was $43.6 million in the first quarter of 2022, an increase of 2.3% from the previous quarter and an increase of 1.4% from the same quarter of 2021.  

•

Noninterest expense was $103.9 million in the first quarter of 2022, an increase of 2.2% from the previous quarter and an increase of 5.1% from the same quarter of 2021.  

o

Noninterest expense in the first quarter of 2022 included seasonal payroll expenses of approximately $3.7 million.  

o

One-time significant items in the fourth quarter of 2021 included $1.2 million related to an increase in vacation carryover limits.  

o

Noninterest expense in the first quarter of 2021 included seasonal payroll expenses of approximately $2.1 million, charges related to the rollout of contactless cards of $1.9 million, and separation expenses of $1.8 million.

•

The effective tax rate for the first quarter of 2022 was 22.15% compared with 17.08% in the previous quarter and 24.09% during the same quarter of 2021.  

o

The fourth quarter of 2021 included a $3.6 million benefit due to larger than expected tax credits from 2020 and a reduction in the valuation allowance related to low-income housing partnerships.

•

Total non-performing assets were $20.0 million at March 31, 2022, up by $1.0 million from December 31, 2021 and up $2.1 million from March 31, 2021.  Non-performing assets as a percentage of total loans and leases and foreclosed real estate were 0.16% at the end of the quarter, an increase of 1 basis point from the end of both the prior quarter and same quarter of 2021.  

•

Net loan and lease charge-offs during the first quarter of 2022 were $1.5 million or 0.05% annualized of total average loans and leases outstanding.

o

Net loan and lease charge-offs for the first quarter of 2022 were comprised of charge-offs of $3.9 million partially offset by recoveries of $2.4 million.  

o

Compared to the prior quarter, net loan and lease charge-offs increased by $0.8 million or 3 basis points annualized on total average loans and leases outstanding.  

o

Compared to the same quarter of 2021, net loan and lease charge-offs decreased by $1.4 million or 5 basis points annualized on total average loans and leases outstanding.

•

The allowance for credit losses on loans and leases was $152.0 million at March 31, 2022, a decrease of $5.8 million from December 31, 2021 and $46.3 million from March 31, 2021.  The ratio of the allowance for credit losses to total loans and leases outstanding was 1.21% at the end of the quarter, down 8 basis points from the end of the prior quarter and down 42 basis points from the end of the same quarter of 2021.  

Bank of Hawaii Corporation First Quarter 2022 Financial Results                                          

Page 3

•

Total assets were $23.0 billion at March 31, 2022, an increase of 0.9% from December 31, 2021 and an increase of 4.8% from March 31, 2021.  

•

The investment securities portfolio was $8.7 billion at March 31, 2022, a decrease of 2.5% from December 31, 2021 and an increase of 16.8% from March 31, 2021.

o

The investment portfolio remains largely comprised of securities issued by U.S. government agencies and U.S. government-sponsored enterprises.

o

The increase from March 31, 2021 was primarily due to growth in deposits that outpaced loan growth.  

•

Total loans and leases were $12.5 billion at March 31, 2022, an increase of 2.3% from December 31, 2021 and an increase of 3.3% from March 31, 2021.  

o

Total loans and leases excluding PPP loans were $12.5 billion at March 31, 2022, an increase of 2.9% from December 31, 2021 and an increase of 9.4% from March 31, 2021.  

•

Total deposits reached a new record high of $20.7 billion at March 31, 2022, an increase of 1.7% from December 31, 2021 and an increase of 5.9% from March 31, 2021.

•

The Tier 1 Capital Ratio was 13.22% at March 31, 2022 compared with 13.56% at December 31, 2021 and 12.35% at March 31, 2021.  

o

The increase from the same period in 2021 was driven by the issuance of $180 million of Fixed Rate Non-Cumulative Perpetual Preferred Stock, Series A in the second quarter of 2021.

•

The Tier 1 Leverage Ratio was 7.30% at March 31, 2022 compared with 7.32% at December 31, 2021 and 6.61% at March 31, 2021.

o

The increase from the same period in 2021 was driven by the aforementioned issuance of preferred stock in the second quarter of 2021.

•

The Company repurchased 116.8 thousand shares of common stock at a total cost of $10.0 million under its share repurchase program in the first quarter of 2022 at an average cost of $85.34 per share repurchased.

o

Total remaining buyback authority under the share repurchase program was $75.8 million at March 31, 2022.

•

The Company’s Board of Directors declared a quarterly cash dividend of $0.70 per share on the Company’s outstanding common shares.  The dividend will be payable on June 14, 2022 to shareholders of record at the close of business on May 31, 2022.  

Bank of Hawaii Corporation First Quarter 2022 Financial Results                                          

Page 4

•

On April 5, 2022, the Board of Directors declared the quarterly dividend payment of $10.94 per share, equivalent to $0.2735 per depositary share, on its preferred stock.  The depositary shares representing the Series A Preferred Stock are traded on the NYSE under the symbol “BOH.PRA.”  The dividend will be payable on May 2, 2022 to shareholders of record of the preferred stock at the close of business on April 18, 2022.

•

The webcast link is https://edge.media-server.com/mmc/p/5x73dqat.

•

The toll-free number for the teleconference 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 of the conference call will be available for one week beginning approximately 11:00 a.m. Hawaii Time on Monday, April 25, 2022.  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 conference ID 4637209 when prompted. In addition, the replay will be available on 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)

2022

2021

2021

For the Period:

Operating Results

Net Interest Income

$

125,263

$

126,388

$

120,569

Provision for Credit Losses

(5,500

)

(9,700

)

(14,300

)

Total Noninterest Income

43,551

42,574

42,970

Total Noninterest Expense

103,874

101,678

98,865

Net Income

54,834

63,837

59,949

Basic Earnings Per Common Share

1.33

1.56

1.51

Diluted Earnings Per Common Share

1.32

1.55

1.50

Dividends Declared Per Common Share

0.70

0.70

0.67

Performance Ratios

Return on Average Assets

0.97

%

1.12

%

1.15

%

Return on Average Shareholders' Equity

14.18

15.92

17.65

Return on Average Common Equity

15.44

17.40

17.65

Efficiency Ratio ¹

61.53

60.18

60.45

Net Interest Margin ²

2.34

2.34

2.43

Dividend Payout Ratio ³

52.63

44.87

44.37

Average Shareholders' Equity to Average Assets

6.87

7.02

6.51

Average Balances

Average Loans and Leases

$

12,290,402

$

12,086,705

$

11,952,587

Average Assets

22,847,488

22,666,280

21,150,670

Average Deposits

20,426,076

20,222,470

18,665,222

Average Shareholders' Equity

1,568,725

1,590,600

1,377,272

Per Share of Common Stock

Book Value

$

31.50

$

35.57

$

33.67

Tangible Book Value

30.71

34.78

32.89

Market Value

   Closing

83.92

83.76

89.49

   High

92.38

88.96

99.10

   Low

79.60

78.73

75.65

March 31,

December 31,

March 31,

2022

2021

2021

As of Period End:

Balance Sheet Totals

Loans and Leases

$

12,544,492

$

12,259,076

$

12,140,703

Total Assets

23,000,317

22,784,941

21,947,271

Total Deposits

20,716,287

20,360,108

19,556,651

Other Debt

10,367

10,391

60,459

Total Shareholders' Equity

1,448,885

1,611,611

1,360,221

Asset Quality

Non-Performing Assets

$

19,979

$

18,966

$

17,883

Allowance for Credit Losses - Loans and Leases

152,028

157,821

198,343

Allowance to Loans and Leases Outstanding ⁴

1.21

%

1.29

%

1.63

%

Capital Ratios ⁵

Common Equity Tier 1 Capital Ratio

11.83

%

12.12

%

12.35

%

Tier 1 Capital Ratio

13.22

13.56

12.35

Total Capital Ratio

14.41

14.81

13.61

Tier 1 Leverage Ratio

7.30

7.32

6.61

Total Shareholders' Equity to Total Assets

6.30

7.07

6.20

Tangible Common Equity to Tangible Assets ⁶

5.39

6.15

6.06

Tangible Common Equity to Risk-Weighted Assets ⁶

9.77

11.44

11.78

Non-Financial Data

Full-Time Equivalent Employees

2,084

2,056

2,058

Branches

54

54

63

ATMs

307

307

361

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 common share divided by basic earnings per common share.

⁴  The numerator comprises the Allowance for Credit Losses - Loans and Leases.

⁵  Regulatory capital ratios as of March 31, 2022 are preliminary.

⁶  Tangible common equity to tangible assets and tangible common equity to risk-weighted assets are Non-GAAP financial measures.  Tangible common equity is defined by the Company as common shareholders' equity minus goodwill.

    See Table 2 "Reconciliation of Non-GAAP Financial Measures".

Bank of Hawaii Corporation and Subsidiaries

Reconciliation of Non-GAAP Financial Measures

Table 2

March 31,

December 31,

March 31,

(dollars in thousands)

2022

2021

2021

Total Shareholders' Equity

$

1,448,885

$

1,611,611

$

1,360,221

Less: Preferred Stock

180,000

180,000

-

          Goodwill

31,517

31,517

31,517

Tangible Common Equity

$

1,237,368

$

1,400,094

$

1,328,704

Total Assets

23,000,317

22,784,941

21,947,271

Less: Goodwill

31,517

31,517

31,517

Tangible Assets

$

22,968,800

$

22,753,424

$

21,915,754

Risk-Weighted Assets, determined in accordance

   with prescribed regulatory requirements ¹

$

12,663,646

$

12,236,805

$

11,275,565

Total Shareholders' Equity to Total Assets

6.30

%

7.07

%

6.20

%

Tangible Common Equity to Tangible Assets (Non-GAAP)

5.39

%

6.15

%

6.06

%

Tier 1 Capital Ratio ¹

13.22

%

13.56

%

12.35

%

Tangible Common Equity to Risk-Weighted Assets (Non-GAAP) ¹

9.77

%

11.44

%

11.78

%

¹  Regulatory capital ratios as of March 31, 2022 are preliminary.

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)

2022

2021

2021

Interest Income

Interest and Fees on Loans and Leases

$

94,439

$

97,853

$

99,299

Income on Investment Securities

Available-for-Sale

17,100

15,850

15,837

Held-to-Maturity

18,701

18,325

13,300

Deposits

4

1

7

Funds Sold

127

104

137

Other

202

176

185

Total Interest Income

130,573

132,309

128,765

Interest Expense

Deposits

2,353

2,898

4,329

Securities Sold Under Agreements to Repurchase

2,772

2,834

3,533

Funds Purchased

2

6

1

Other Debt

183

183

333

Total Interest Expense

5,310

5,921

8,196

Net Interest Income

125,263

126,388

120,569

Provision for Credit Losses

(5,500

)

(9,700

)

(14,300

)

Net Interest Income After Provision for Credit Losses

130,763

136,088

134,869

Noninterest Income

Trust and Asset Management

11,276

11,693

11,278

Mortgage Banking

2,740

2,908

5,862

Service Charges on Deposit Accounts

7,272

6,861

6,128

Fees, Exchange, and Other Service Charges

12,952

14,439

13,607

Investment Securities Losses, Net

(1,545

)

(1,258

)

(1,203

)

Annuity and Insurance

791

876

702

Bank-Owned Life Insurance

2,349

1,907

1,917

Other

7,716

5,148

4,679

Total Noninterest Income

43,551

42,574

42,970

Noninterest Expense

Salaries and Benefits

59,924

59,434

56,251

Net Occupancy

9,826

9,028

9,090

Net Equipment

9,153

9,105

8,878

Data Processing

4,560

4,696

6,322

Professional Fees

3,258

3,427

3,406

FDIC Insurance

1,502

1,619

1,654

Other

15,651

14,369

13,264

Total Noninterest Expense

103,874

101,678

98,865

Income Before Provision for Income Taxes

70,440

76,984

78,974

Provision for Income Taxes

15,606

13,147

19,025

Net Income

$

54,834

$

63,837

$

59,949

Preferred Stock Dividends

1,969

1,969

-

Net Income Available to Common Shareholders

$

52,865

$

61,868

$

59,949

Basic Earnings Per Common Share

$

1.33

$

1.56

$

1.51

Diluted Earnings Per Common Share

$

1.32

$

1.55

$

1.50

Dividends Declared Per Common Share

$

0.70

$

0.70

$

0.67

Basic Weighted Average Common Shares

39,752,679

39,741,063

39,827,590

Diluted Weighted Average Common Shares

39,956,391

39,955,525

40,071,477

Bank of Hawaii Corporation and Subsidiaries

Consolidated Statements of Comprehensive Income (Loss)

Table 4

Three Months Ended

March 31,

December 31,

March 31,

(dollars in thousands)

2022

2021

2021

Net Income

$

54,834

$

63,837

$

59,949

Other Comprehensive Loss, Net of Tax:

Net Unrealized Losses on Investment Securities

(180,124

)

(26,244

)

(50,050

)

Defined Benefit Plans

353

8,430

441

Other Comprehensive Loss

(179,771

)

(17,814

)

(49,609

)

Comprehensive Income (Loss)

$

(124,937

)

$

46,023

$

10,340

Bank of Hawaii Corporation and Subsidiaries

Consolidated Statements of Condition

Table 5

March 31,

December 31,

March 31,

(dollars in thousands)

2022

2021

2021

Assets

Interest-Bearing Deposits in Other Banks

$

2,488

$

2,571

$

4,506

Funds Sold

356,373

361,536

1,101,631

Investment Securities

   Available-for-Sale

4,258,534

4,276,056

4,024,763

   Held-to-Maturity (Fair Value of $4,171,262; $4,646,619; $3,477,346)

4,489,615

4,694,780

3,464,360

Loans Held for Sale

5,293

26,746

18,320

Loans and Leases

12,544,492

12,259,076

12,140,703

   Allowance for Credit Losses

(152,028

)

(157,821

)

(198,343

)

     Net Loans and Leases

12,392,464

12,101,255

11,942,360

Total Earning Assets

21,504,767

21,462,944

20,555,940

Cash and Due from Banks

236,193

196,327

286,717

Premises and Equipment, Net

199,743

199,393

198,107

Operating Lease Right-of-Use Assets

93,563

95,621

97,750

Accrued Interest Receivable

45,392

45,242

47,917

Foreclosed Real Estate

2,332

2,332

2,332

Mortgage Servicing Rights

23,968

22,251

22,320

Goodwill

31,517

31,517

31,517

Bank-Owned Life Insurance

446,926

344,587

291,764

Other Assets

415,916

384,727

412,907

Total Assets

$

23,000,317

$

22,784,941

$

21,947,271

Liabilities

Deposits

   Noninterest-Bearing Demand

7,500,741

7,275,287

6,227,436

   Interest-Bearing Demand

4,591,178

4,628,567

4,379,243

   Savings

7,701,849

7,456,165

7,474,580

   Time

922,519

1,000,089

1,475,392

Total Deposits

20,716,287

20,360,108

19,556,651

Securities Sold Under Agreements to Repurchase

450,490

450,490

600,490

Other Debt

10,367

10,391

60,459

Operating Lease Liabilities

101,274

103,210

105,820

Retirement Benefits Payable

38,008

38,494

50,687

Accrued Interest Payable

2,545

2,499

4,109

Taxes Payable

17,265

11,901

15,599

Other Liabilities

215,196

196,237

193,235

Total Liabilities

21,551,432

21,173,330

20,587,050

Shareholders' Equity

Preferred Stock ($.01 par value; authorized 180,000 shares;

   issued / outstanding: March 31, 2022 and December 31, 2021 - 180,000)

180,000

180,000

-

Common Stock ($.01 par value; authorized 500,000,000 shares;

   issued / outstanding: March 31, 2022 - 58,717,811 / 40,288,365;

   December 31, 2021 - 58,554,669 / 40,253,193;  and March 31, 2021 - 58,553,365 / 40,394,234)

582

581

580

Capital Surplus

607,061

602,508

594,804

Accumulated Other Comprehensive Loss

(246,153

)

(66,382

)

(41,787

)

Retained Earnings

1,974,790

1,950,375

1,844,057

Treasury Stock, at Cost (Shares: March 31, 2022 - 18,429,446; December 31, 2021 - 18,301,476;

  and March 31, 2021 - 18,159,131)

(1,067,395

)

(1,055,471

)

(1,037,433

)

Total Shareholders' Equity

1,448,885

1,611,611

1,360,221

Total Liabilities and Shareholders' Equity

$

23,000,317

$

22,784,941

$

21,947,271

Bank of Hawaii Corporation and Subsidiaries

Consolidated Statements of Shareholders' Equity

Table 6

Accum.

Other

Compre-

Preferred

Common

hensive

Shares

Preferred

Shares

Common

Capital

Income

Retained

Treasury

(dollars in thousands)

Outstanding

Stock

Outstanding

Stock

Surplus

(Loss)

Earnings

Stock

Total

Balance as of December 31, 2021

180,000

$

180,000

40,253,193

$

581

$

602,508

$

(66,382

)

$

1,950,375

$

(1,055,471

)

$

1,611,611

Net Income

-

-

-

-

-

-

54,834

-

54,834

Other Comprehensive Loss

-

-

-

-

-

(179,771

)

-

-

(179,771

)

Share-Based Compensation

-

-

-

-

4,010

-

-

-

4,010

Common Stock Issued under Purchase and

        Equity Compensation Plans

-

-

197,783

1

543

-

(185

)

2,036

2,395

Common Stock Repurchased

-

-

(162,611

)

-

-

-

-

(13,960

)

(13,960

)

Cash Dividends Declared Common Stock

        ($0.70 per share)

-

-

-

-

-

-

(28,265

)

-

(28,265

)

Cash Dividends Declared Preferred Stock

-

-

-

-

-

-

(1,969

)

-

(1,969

)

Balance as of March 31, 2022

180,000

$

180,000

40,288,365

$

582

$

607,061

$

(246,153

)

$

1,974,790

$

(1,067,395

)

$

1,448,885

Balance as of December 31, 2020

-

-

40,119,312

580

591,360

7,822

1,811,979

(1,037,234

)

1,374,507

Net Income

-

-

-

-

-

-

59,949

-

59,949

Other Comprehensive Loss

-

-

-

-

-

(49,609

)

-

-

(49,609

)

Share-Based Compensation

-

-

-

-

2,780

-

-

-

2,780

Common Stock Issued under Purchase and

        Equity Compensation Plans

-

-

310,905

-

664

-

(845

)

2,990

2,809

Common Stock Repurchased

-

-

(35,983

)

-

-

-

-

(3,189

)

(3,189

)

Cash Dividends Declared Common Stock

        ($0.67 per share)

-

-

-

-

-

-

(27,026

)

-

(27,026

)

Balance as of March 31, 2021

-

$

-

40,394,234

$

580

$

594,804

$

(41,787

)

$

1,844,057

$

(1,037,433

)

$

1,360,221

Bank of Hawaii Corporation and Subsidiaries

Average Balances and Interest Rates - Taxable-Equivalent Basis ¹

Table 7

Three Months Ended

Three Months Ended

Three Months Ended

March 31, 2022

December 31, 2021

March 31, 2021

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

$

3.4

$

-

0.45

%

$

2.2

$

-

0.05

%

$

3.2

$

-

0.93

%

Funds Sold

238.5

0.1

0.21

273.2

0.1

0.15

550.6

0.1

0.10

Investment Securities

Available-for-Sale

     Taxable

4,399.9

17.1

1.56

4,308.6

15.8

1.47

4,007.9

15.8

1.57

     Non-Taxable

3.0

-

1.93

5.8

0.1

3.67

12.3

0.1

4.27