8-K
false00000461950000046195us-gaap:SeriesAPreferredStockMember2023-10-232023-10-230000046195us-gaap:CommonStockMember2023-10-232023-10-2300000461952023-10-232023-10-23

 

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

October 23, 2023

(Date of earliest event reported)

 

 

BANK OF HAWAII CORPORATION

(Exact name of registrant as specified in its charter)

 

Delaware

1-6887

99-0148992

(State of Incorporation)

(Commission File Number)

(IRS Employer Identification No.)

 

130 Merchant Street

Honolulu

Hawaii

96813

(Address of principal executive offices)

(City)

(State)

(Zip Code)

 

(888) 643-3888

(Registrant's telephone number, including area code)

Not Applicable

(Former name or former address, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class

 

Trading Symbol(s)

 

Name of each exchange on which registered

Common Stock, par value $0.01 per share

 

BOH

 

New York Stock Exchange

 

 

 

 

 

Depository Shares, Each Representing 1/40th Interest in a Share of 4.375% Fixed Rate Non-Cumulative Preferred Stock, Series A

 

BOH.PRA

 

New York Stock Exchange

 

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:

 

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

 

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

 

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

 

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).

Emerging growth company

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 October 23, 2023, Bank of Hawaii Corporation announced its results of operations for the quarter ended September 30, 2023. The public announcement was made by means of a press release, the text of which is furnished as Exhibit 99.1 hereto and incorporated herein by reference.

Item 9.01. Financial Statements and Exhibits.

(d) Exhibits

 

Exhibit No.

 

 

 

99.1

October 23, 2023 Press Release: Bank of Hawaii Corporation Third Quarter 2023 Financial Results. Any internet addresses provided in this release are for informational purposes only and are not intended to be hyperlinks. Furnished herewith.

 

 

99.2

Bank of Hawaii Corporation Third Quarter 2023 Financial Report

 

 

104

Cover Page Interactive Data File (embedded within the Inline XBRL document)

 

 


 

Signatures

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

Date: October 23, 2023

Bank of Hawaii Corporation

By:

/s/ Patrick M. McGuirk

Patrick M. McGuirk

Vice Chair and Chief Administrative Officer

 

 

 


EX-99.1

 

Exhibit 99.1

 

https://cdn.kscope.io/524afc58f014dc3a96700d0b3de2beeb-img208590026_0.jpg 

Bank of Hawai‘i Corporation Third Quarter 2023 Financial Results

Diluted Earnings Per Common Share $1.17
Net Income $47.9 Million
Total Deposits Up 1.4% Linked Quarter
Board of Directors Declares Dividend of $0.70 Per Common Share

 

FOR IMMEDIATE RELEASE

 

HONOLULU, HI (October 23, 2023) -- Bank of Hawai‘i Corporation (NYSE: BOH) today reported diluted earnings per common share of $1.17 for the third quarter of 2023, compared with diluted earnings per common share of $1.12 in the previous quarter and $1.28 in the same quarter of 2022. Net income for the third quarter of 2023 was $47.9 million, up 4.0% from the previous quarter and down 9.3% from the same quarter of 2022. The return on average common equity for the third quarter of 2023 was 15.38% compared with 14.95% in the previous quarter and 16.98% in the same quarter of 2022.

“Bank of Hawai‘i delivered another quarter of solid financial results,” said Peter Ho, Chairman, President, and CEO. “Total deposits were up 1.4% linked quarter, and average deposits were up by 2.4%, driven by growth in core relationship deposits. Our credit quality remained strong, with non-performing assets of 0.08% at quarter end and net charge offs of 0.06% in the quarter. NIM declined modestly by 9 basis points, while our core noninterest income and operating expense remained steady. Finally, one of our key priorities this quarter was to support our clients, employees, and community as we coped with the tragic situation in Maui. Taking care of our community has always been a fundamental priority and we will continue to support our community as we build a stronger Maui.”

 

Financial Highlights

 

Net interest income for the third quarter of 2023 was $120.9 million, a decrease of 2.7% from the previous quarter and a decrease of 14.6% from the same quarter of 2022. The decrease in net interest income in the third quarter of 2023 was primarily due to higher funding costs, partially offset by higher earning asset yields.

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https://cdn.kscope.io/524afc58f014dc3a96700d0b3de2beeb-img208590026_1.jpg 


 

 

 

 

Bank of Hawai‘i Corporation Third Quarter 2023 Financial Results Page 2

Net interest margin was 2.13% in the third quarter of 2023, a decrease of 9 basis points from the previous quarter and 47 basis points from the same quarter of 2022. The decrease in net interest margin was due to higher funding costs and increased liquidity, partially offset by higher earning asset yields.

The average yield on loans and leases was 4.34% in the third quarter of 2023, up 15 basis points from the prior quarter and up 85 basis points from the same quarter of 2022. The average yield on total earning assets was 3.72% in the third quarter of 2023, up 16 basis points from the prior quarter and up 88 basis points from the same quarter of 2022. The average cost of interest-bearing deposits was 1.95% in the third quarter of 2023, up 41 basis points from the prior quarter and up 165 basis points from the same quarter of 2022. The average cost of total deposits, including noninterest-bearing deposits, was 1.40%, up 32 basis points from the prior quarter and up 120 basis points from the same quarter of 2022. The changes in yields and rates over the linked quarter and year over year period reflected the higher rate environment, including higher benchmark interest rates.

Noninterest income was $50.3 million in the third quarter of 2023, an increase of 16.4% from the previous quarter and an increase of 64.2% from the same period in 2022. Noninterest income in the third quarter of 2023 included a $14.7 million gain from the early termination of private repurchase agreements, partially offset by a $4.6 million net loss related to investment securities sales and a negative $0.8 million adjustment related to a change in the Visa Class B conversion ratio. Noninterest income in the second quarter of 2023 included $1.5 million from the sale of a low-income housing tax credit investment. Noninterest income in the third quarter of 2022 included a one-time pre-tax charge of $6.9 million related to our agreement to sell assets that terminated certain leveraged leases and a negative $0.9 million adjustment related to a change in the Visa Class B conversion ratio. Adjusted for these items, noninterest income in the third quarter of 2023 was $41.0 million, down 1.6% from adjusted noninterest income in the previous quarter, and up 6.6% from adjusted noninterest income in the same period in 2022.

Noninterest expense was $105.6 million in the third quarter of 2023, an increase of 1.5% from the previous quarter and a decrease of 0.1% from the same quarter of 2022. Noninterest expense in the third quarter of 2023 included separation expenses of $2.1 million and extraordinary expenses related to the Maui wildfires of $0.4 million. Noninterest expense in the third quarter of 2022 included $1.8 million in separation expenses. Adjusted noninterest expense in the third quarter of 2023 was $103.1 million, down 0.9% from the previous quarter and down 0.8% from adjusted noninterest expense in the same period in 2022.

The effective tax rate for the third quarter of 2023 was 24.76% compared with 24.57% in the previous quarter and 20.68% during the same quarter of 2022. The increase in the effective tax rate on a linked quarter basis was mainly due to a decrease in benefits from tax credit investments from the second quarter. The year over year increase was primarily due to tax benefits in the third quarter of 2022 related to the aforementioned agreement to sell assets that terminated certain leveraged leases.

Asset Quality

The Company’s overall asset quality remained strong during the third quarter of 2023. Provision for credit losses for the third quarter of 2023 was $2.0 million compared with $2.5 million in the previous quarter. The Company had no provision for credit loss in the third quarter of 2022.

 

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Bank of Hawai‘i Corporation Third Quarter 2023 Financial Results Page 3

Total non-performing assets were $11.5 million at September 30, 2023, flat from June 30, 2023 and down $2.3 million from September 30, 2022. Non-performing assets as a percentage of total loans and leases and foreclosed real estate were 0.08% at the end of the quarter, flat from the end of the prior quarter and a decrease of 2 basis points from the same quarter of 2022.

Net loan and lease charge-offs during the third quarter of 2023 were $2.0 million or 6 basis points annualized of total average loans and leases outstanding. Net loan and lease charge-offs for the third quarter of 2023 were comprised of charge-offs of $3.6 million partially offset by recoveries of $1.6 million. Compared to the prior quarter, net loan and lease charge-offs increased by $0.7 million or 2 basis points annualized on total average loans and leases outstanding. Compared to the same quarter of 2022, net loan and lease charge-offs increased by $0.9 million or 3 basis points annualized on total average loans and leases outstanding.

The allowance for credit losses on loans and leases was $145.3 million at September 30, 2023, a decrease of $0.1 million from June 30, 2023 and a decrease of $1.2 million from September 30, 2022. The ratio of the allowance for credit losses to total loans and leases outstanding was 1.04% at the end of the quarter, flat from the end of the prior quarter and down 6 basis points from the same quarter of 2022.

Balance Sheet

Total assets were $23.5 billion at September 30, 2023, a decrease of 5.6% from June 30, 2023 and an increase of 1.8% from September 30, 2022. The decrease from the prior quarter was primarily due to a decrease in funds sold. The increase from the same period in 2022 was primarily due to an increase in our loans and leases.

Total funds sold and cash and due from banks was $0.6 billion at September 30, 2023, a decrease of $1.0 billion from June 30, 2023 and flat from September 30, 2022. The decrease was primarily due to termination of $1.8 billion of wholesale funding during the quarter, including Federal Home Loan Bank advances and private repurchase agreements.

The investment securities portfolio was $7.5 billion at September 30, 2023, a decrease of 5.0% from June 30, 2023 and a decrease of 5.2% from September 30, 2022. These decreases were due to sales of $159.1 million of investment securities during the quarter and cashflows from the portfolio not being reinvested into securities. The investment portfolio remains largely comprised of securities issued by U.S. government agencies and U.S. government-sponsored enterprises.

Total loans and leases were $13.9 billion at September 30, 2023, flat from June 30, 2023 and an increase of 4.5% from September 30, 2022. Total commercial loans were $5.7 billion at September 30, 2023, an increase of 1.2% from the prior quarter and an increase of 7.3% from the same quarter of 2022. The increase from the same period in 2022 was primarily due to increases in our commercial mortgage and commercial and industrial portfolios. Total consumer loans were $8.2 billion as of September 30, 2023, a decrease of 0.8% from the prior quarter and an increase of 2.7% from the same period in 2022. The increase from the same period in 2022 was primarily driven by increases in our residential mortgage and home equity portfolios.

 

 

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Bank of Hawai‘i Corporation Third Quarter 2023 Financial Results Page 4

Total deposits were $20.8 billion at September 30, 2023, an increase of 1.4% from June 30, 2023 and a decrease of 0.4% from September 30, 2022. Noninterest-bearing deposits made up 27% of total deposit balances as of September 30, 2023, down from 29% as of June 30, 2023, and down from 35% as of September 30, 2022. Average deposits were $20.5 billion for the third quarter of 2023, up 2.4% from $20.0 billion in the prior quarter, and down 1.8% from $20.9 billion in the third quarter of 2022. As of September 30, 2023, insured and uninsured but collateralized deposits represent 58% of total deposit balances, down from 61% as of June 30, 2023, and up from 56% as of September 30, 2022. As of September 30, 2023, our readily available liquidity of $9.6 billion exceeded total uninsured and uncollateralized deposits.

 

Capital and Dividends

The Company’s capital levels increased quarter over quarter and remain well above regulatory well-capitalized minimums.

The Tier 1 Capital Ratio was 12.53% at September 30, 2023 compared with 12.21% at June 30, 2023 and 12.72% at September 30, 2022. The Tier 1 Leverage Ratio was 7.22% at September 30, 2023, up 1 basis point from 7.21% at June 30, 2023 and down 6 basis points from 7.28% at September 30, 2022. The increases from the prior quarter were due to an increase in Tier 1 capital as a result of retained earnings growth and a decrease in risk-weighted assets. The decreases from the same period in 2022 were due to an increase in risk-weighted assets and average total assets, as a result of loan growth over the period.

No shares of common stock were repurchased under the share repurchase program in the third quarter of 2023. Total remaining buyback authority under the share repurchase program was $126.0 million at September 30, 2023.

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 December 14, 2023 to shareholders of record at the close of business on November 30, 2023.

On October 5, 2023, the Company announced that 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 November 1, 2023 to shareholders of record of the preferred stock as of the close of business on October 17, 2023.

 

Conference Call Information

 

The Company will review its third quarter financial results today at 8:00 a.m. Hawai‘i Time (2:00 p.m. Eastern Time). The live call, including a slide presentation, will be accessible on the investor relations link of Bank of Hawai‘i Corporation's website, www.boh.com. The webcast can be accessed via the link: https://register.vevent.com/register/BId0e4643fbbd64cdfae5f15202d1ffbba. A replay of the conference call will be available for one year beginning approximately 11:00 a.m. Hawai‘i Time on Monday, October 23, 2023. The replay will be available on the Company's website, www.boh.com.

 

 

 

 

 

 

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Bank of Hawai‘i Corporation Third Quarter 2023 Financial Results Page 5

 

Investor Announcements

 

Investors and others should note that the Company intends to announce financial and other information to the Company’s investors using the Company’s investor relations website at https://ir.boh.com, social media channels, press releases, SEC filings and public conference calls and webcasts, all for purposes of complying with the Company’s disclosure obligations under Regulation FD. Accordingly, investors should monitor these channels, as information is updated, and new information is posted.

Forward-Looking Statements

 

This news release, and other statements made by the Company in connection with it may contain "forward-looking statements" (as defined in the Private Securities Litigation Reform Act of 1995) that involve risks and uncertainties that could cause results to be materially different from expectations. Forecasts of our financial results and condition, expectations for our operations and business prospects, and our assumptions used in those forecasts and expectations are examples of certain of these forward-looking statements. 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 Hawai‘i Corporation's Annual Report on Form 10-K for the year ended December 31, 2022 and its Form 10-Q for the fiscal quarter ended March 31, 2023 and June 30, 2023, which were filed with the U.S. Securities and Exchange Commission. These forward-looking statements are not guarantees of future performance and speak only as of the date made, and, except as required by law, the Company undertakes no obligation to update or revise any forward-looking statements to reflect subsequent events, new information or future circumstances.

 

Bank of Hawai‘i Corporation is an independent regional financial services company serving businesses, consumers, and governments in Hawaii and the West Pacific. The Company's principal subsidiary, Bank of Hawai‘i, was founded in 1897. For more information about Bank of Hawai‘i Corporation, see the Company’s web site, www.boh.com. Bank of Hawai‘i Corporation is a trade name of Bank of Hawaii Corporation

# # # #

 

 

 

 

 


 

Bank of Hawai‘i Corporation and Subsidiaries

 

 

 

 

 

 

 

 

Financial Highlights

 

 

 

 

 

 

 

 

 

 

Table 1

Three Months Ended

 

 

Nine Months Ended

September 30,

 

 

June 30,

 

 

September 30,

 

 

September 30,

 

 

(dollars in thousands, except per share amounts)

2023

 

 

2023

 

 

2022

 

 

2023

 

 

2022

 

 

For the Period:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating Results

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Interest Income

$

120,937

 

 

$

124,348

 

 

$

141,655

 

 

$

381,240

 

 

$

399,820

 

 

Provision for Credit Losses

 

2,000

 

 

 

2,500

 

 

 

-

 

 

 

6,500

 

 

 

(8,000

)

 

Total Noninterest Income

 

50,334

 

 

 

43,255

 

 

 

30,660

 

 

 

134,326

 

 

 

116,369

 

 

Total Noninterest Expense

 

105,601

 

 

 

104,036

 

 

 

105,749

 

 

 

321,556

 

 

 

312,562

 

 

Pre-Provision Net Revenue

 

65,670

 

 

 

63,567

 

 

 

66,566

 

 

 

194,010

 

 

 

203,627

 

 

Net Income

 

47,903

 

 

 

46,061

 

 

 

52,801

 

 

 

140,806

 

 

 

164,497

 

 

Net Income Available to Common Shareholders

 

45,934

 

 

 

44,092

 

 

 

50,832

 

 

 

134,899

 

 

 

158,590

 

 

Basic Earnings Per Common Share

 

1.17

 

 

 

1.12

 

 

 

1.28

 

 

 

3.44

 

 

 

4.00

 

 

Diluted Earnings Per Common Share

 

1.17

 

 

 

1.12

 

 

 

1.28

 

 

 

3.42

 

 

 

3.98

 

 

Dividends Declared Per Common Share

 

0.70

 

 

 

0.70

 

 

 

0.70

 

 

 

2.10

 

 

 

2.10

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Performance Ratios

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Return on Average Assets

 

0.78

 

%

 

0.77

 

%

 

0.91

 

%

 

0.78

 

%

 

0.96

 

%

Return on Average Shareholders' Equity

 

13.92

 

 

 

13.55

 

 

 

15.31

 

 

 

13.91

 

 

 

15.25

 

 

Return on Average Common Equity

 

15.38

 

 

 

14.95

 

 

 

16.98

 

 

 

15.37

 

 

 

16.81

 

 

Efficiency Ratio 1

 

61.66

 

 

 

62.07

 

 

 

61.37

 

 

 

62.37

 

 

 

60.55

 

 

Net Interest Margin 2

 

2.13

 

 

 

2.22

 

 

 

2.60

 

 

 

2.27

 

 

 

2.47

 

 

Dividend Payout Ratio 3

 

59.83

 

 

 

62.50

 

 

 

54.69

 

 

 

61.05

 

 

 

52.50

 

 

Average Shareholders' Equity to Average Assets

 

5.60

 

 

 

5.65

 

 

 

5.91

 

 

 

5.61

 

 

 

6.28

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Average Balances

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Average Loans and Leases

$

13,903,214

 

 

$

13,876,754

 

 

$

13,126,717

 

 

$

13,833,164

 

 

$

12,709,045

 

 

Average Assets

 

24,387,421

 

 

 

24,114,443

 

 

 

23,135,820

 

 

 

24,124,360

 

 

 

22,959,246

 

 

Average Deposits

 

20,492,082

 

 

 

20,018,601

 

 

 

20,863,681

 

 

 

20,314,079

 

 

 

20,621,310

 

 

Average Shareholders' Equity

 

1,365,143

 

 

 

1,363,059

 

 

 

1,367,946

 

 

 

1,353,815

 

 

 

1,441,706

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Per Share of Common Stock

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Book Value

$

29.78

 

 

$

29.66

 

 

$

27.55

 

 

$

29.78

 

 

$

27.55

 

 

Tangible Book Value

 

28.99

 

 

 

28.87

 

 

 

26.76

 

 

 

28.99

 

 

 

26.76

 

 

Market Value

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

   Closing

 

49.69

 

 

 

41.23

 

 

 

76.12

 

 

 

49.69

 

 

 

76.12

 

 

   High

 

58.63

 

 

 

52.37

 

 

 

85.45

 

 

 

81.73

 

 

 

92.38

 

 

   Low

 

39.02

 

 

 

30.83

 

 

 

70.89

 

 

 

30.83

 

 

 

70.89

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

September 30,

 

 

June 30,

 

 

December 31,

 

 

September 30,

 

 

 

 

 

2023

 

 

2023

 

 

2022

 

 

2022

 

 

As of Period End:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance Sheet Totals

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loans and Leases

 

 

 

$

13,919,491

 

 

$

13,914,889

 

 

$

13,646,420

 

 

$

13,321,606

 

 

Total Assets

 

 

 

 

23,549,785

 

 

 

24,947,936

 

 

 

23,606,877

 

 

 

23,134,040

 

 

Total Deposits

 

 

 

 

20,802,309

 

 

 

20,508,615

 

 

 

20,615,696

 

 

 

20,888,773

 

 

Other Debt

 

 

 

 

560,217

 

 

 

1,760,243

 

 

 

410,294

 

 

 

10,319

 

 

Total Shareholders' Equity

 

 

 

 

1,363,840

 

 

 

1,358,279

 

 

 

1,316,995

 

 

 

1,282,384

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Asset Quality

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-Performing Assets

 

 

 

$

11,519

 

 

$

11,477

 

 

$

12,647

 

 

$

13,868

 

 

Allowance for Credit Losses - Loans and Leases

 

 

 

 

145,263

 

 

 

145,367

 

 

 

144,439

 

 

 

146,436

 

 

Allowance to Loans and Leases Outstanding 4

 

 

 

 

1.04

 

%

 

1.04

 

%

 

1.06

 

%

 

1.10

 

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Capital Ratios 5

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Common Equity Tier 1 Capital Ratio

 

 

 

 

11.29

 

%

 

11.00

 

%

 

10.92

 

%

 

11.42

 

%

Tier 1 Capital Ratio

 

 

 

 

12.53

 

 

 

12.21

 

 

 

12.15

 

 

 

12.72

 

 

Total Capital Ratio

 

 

 

 

13.56

 

 

 

13.24

 

 

 

13.17

 

 

 

13.82

 

 

Tier 1 Leverage Ratio

 

 

 

 

7.22

 

 

 

7.21

 

 

 

7.37

 

 

 

7.28

 

 

Total Shareholders' Equity to Total Assets

 

 

 

 

5.79

 

 

 

5.44

 

 

 

5.58

 

 

 

5.54

 

 

Tangible Common Equity to Tangible Assets 6

 

 

 

 

4.90

 

 

 

4.60

 

 

 

4.69

 

 

 

4.64

 

 

Tangible Common Equity to Risk-Weighted Assets 6

 

 

 

 

8.10

 

 

 

7.97

 

 

 

7.76

 

 

 

7.97

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-Financial Data

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Full-Time Equivalent Employees

 

 

 

 

1,919

 

 

 

2,025

 

 

 

2,076

 

 

 

2,115

 

 

Branches

 

 

 

 

51

 

 

 

51

 

 

 

51

 

 

 

51

 

 

ATMs

 

 

 

 

320

 

 

 

320

 

 

 

320

 

 

 

316

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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 September 30, 2023 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 Hawai‘i Corporation and Subsidiaries

 

 

 

 

 

Reconciliation of Non-GAAP Financial Measures

 

 

 

Table 2

 

 

September 30,

 

June 30,

 

December 31,

 

September 30,

 

(dollars in thousands)

2023

 

2023

 

2022

 

2022

 

 

 

 

 

 

 

 

 

Total Shareholders' Equity

$

1,363,840

 

$

1,358,279

 

$

1,316,995

 

$

1,282,384

 

Less: Preferred Stock

 

180,000

 

 

180,000

 

 

180,000

 

 

180,000

 

          Goodwill

 

31,517

 

 

31,517

 

 

31,517

 

 

31,517

 

Tangible Common Equity

$

1,152,323

 

$

1,146,762

 

$

1,105,478

 

$

1,070,867

 

 

 

 

 

 

 

 

 

Total Assets

$

23,549,785

 

$

24,947,936

 

$

23,606,877

 

$

23,134,040

 

Less: Goodwill

 

31,517

 

 

31,517

 

 

31,517

 

 

31,517

 

Tangible Assets

$

23,518,268

 

$

24,916,419

 

$

23,575,360

 

$

23,102,523

 

 

 

 

 

 

 

 

 

Risk-Weighted Assets, determined in accordance

 

 

 

 

 

 

 

 

     with prescribed regulatory requirements 1

$

14,222,825

 

$

14,391,943

 

$

14,238,798

 

$

13,428,188

 

 

 

 

 

 

 

 

 

Total Shareholders' Equity to Total Assets

 

5.79

%

 

5.44

%

 

5.58

%

 

5.54

%

Tangible Common Equity to Tangible Assets (Non-GAAP)

 

4.90

%

 

4.60

%

 

4.69

%

 

4.64

%

 

 

 

 

 

 

 

 

Tier 1 Capital Ratio 1

 

12.53

%

 

12.21

%

 

12.15

%

 

12.72

%

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

 

8.10

%

 

7.97

%

 

7.76

%

 

7.97

%

 

 

 

 

 

 

 

 

 

1  Regulatory capital ratios as of September 30, 2023 are preliminary.

 

 

 

 

 

 

 

 

 

 

 


 

 

Bank of Hawai‘i Corporation and Subsidiaries

 

 

 

 

 

 

Consolidated Statements of Income

 

 

 

 

 

 

Table 3

 

 

Three Months Ended

 

 

Nine Months Ended

 

 

September 30,

 

June 30,

 

September 30,

 

 

September 30,

 

(dollars in thousands, except per share amounts)

2023

 

2023

 

2022

 

 

2023

 

2022

 

Interest Income

 

 

 

 

 

 

 

 

 

 

 

Interest and Fees on Loans and Leases

$

151,245

 

$

144,541

 

$

115,013

 

 

$

432,287

 

$

311,115

 

Income on Investment Securities

 

 

 

 

 

 

 

 

 

 

 

Available-for-Sale

 

23,552

 

 

23,301

 

 

16,995

 

 

 

70,746

 

 

52,079

 

Held-to-Maturity

 

22,838

 

 

23,375

 

 

20,243

 

 

 

70,161

 

 

57,782

 

Deposits

 

18

 

 

18

 

 

10

 

 

 

63

 

 

19

 

Funds Sold

 

12,828

 

 

6,395

 

 

2,335

 

 

 

22,589

 

 

3,181

 

Other

 

1,464

 

 

2,121

 

 

322

 

 

 

4,182

 

 

877

 

Total Interest Income

 

211,945

 

 

199,751

 

 

154,918

 

 

 

600,028

 

 

425,053

 

Interest Expense

 

 

 

 

 

 

 

 

 

 

 

Deposits

 

72,153

 

 

53,779

 

 

10,296

 

 

 

163,726

 

 

16,184

 

Securities Sold Under Agreements to Repurchase

 

4,034

 

 

5,436

 

 

2,745

 

 

 

14,847

 

 

8,311

 

Funds Purchased

 

-

 

 

184

 

 

40

 

 

 

888

 

 

99

 

Short-Term Borrowings

 

-

 

 

2,510

 

 

-

 

 

 

5,713

 

 

92

 

Other Debt

 

14,821

 

 

13,494

 

 

182

 

 

 

33,614

 

 

547

 

Total Interest Expense

 

91,008

 

 

75,403

 

 

13,263

 

 

 

218,788

 

 

25,233

 

Net Interest Income

 

120,937

 

 

124,348

 

 

141,655

 

 

 

381,240

 

 

399,820

 

Provision for Credit Losses

 

2,000

 

 

2,500

 

 

-

 

 

 

6,500

 

 

(8,000

)

Net Interest Income After Provision for Credit Losses

 

118,937

 

 

121,848

 

 

141,655

 

 

 

374,740

 

 

407,820

 

Noninterest Income

 

 

 

 

 

 

 

 

 

 

 

Trust and Asset Management

 

10,548

 

 

11,215

 

 

10,418

 

 

 

32,453

 

 

33,151

 

Mortgage Banking

 

1,059

 

 

1,176

 

 

1,002

 

 

 

3,239

 

 

4,989

 

Service Charges on Deposit Accounts

 

7,843

 

 

7,587

 

 

7,526

 

 

 

23,167

 

 

22,107

 

Fees, Exchange, and Other Service Charges

 

13,824

 

 

14,150

 

 

13,863

 

 

 

41,782

 

 

41,008

 

Investment Securities Losses, Net

 

(6,734

)

 

(1,310

)

 

(2,147

)

 

 

(9,836

)

 

(4,987

)

Annuity and Insurance

 

1,156

 

 

1,038

 

 

1,034

 

 

 

3,465

 

 

2,695

 

Bank-Owned Life Insurance

 

2,749

 

 

2,876

 

 

2,486

 

 

 

8,467

 

 

7,493

 

Other

 

19,889

 

 

6,523

 

 

(3,522

)

 

 

31,589

 

 

9,913

 

Total Noninterest Income

 

50,334

 

 

43,255

 

 

30,660

 

 

 

134,326

 

 

116,369

 

Noninterest Expense

 

 

 

 

 

 

 

 

 

 

 

Salaries and Benefits

 

58,825

 

 

56,175

 

 

59,938

 

 

 

180,088

 

 

177,631

 

Net Occupancy

 

10,327

 

 

9,991

 

 

10,186

 

 

 

30,190

 

 

29,942

 

Net Equipment

 

9,477

 

 

10,573

 

 

9,736

 

 

 

30,425

 

 

28,432

 

Data Processing

 

4,706

 

 

4,599

 

 

4,616

 

 

 

13,888

 

 

13,783

 

Professional Fees

 

3,846

 

 

4,651

 

 

3,799

 

 

 

12,380

 

 

10,599

 

FDIC Insurance

 

3,361

 

 

3,173

 

 

1,680

 

 

 

9,768

 

 

4,772

 

Other

 

15,059

 

 

14,874

 

 

15,794

 

 

 

44,817

 

 

47,403

 

Total Noninterest Expense

 

105,601

 

 

104,036

 

 

105,749

 

 

 

321,556

 

 

312,562

 

Income Before Provision for Income Taxes

 

63,670

 

 

61,067

 

 

66,566

 

 

 

187,510

 

 

211,627

 

Provision for Income Taxes

 

15,767

 

 

15,006

 

 

13,765

 

 

 

46,704

 

 

47,130

 

Net Income

$

47,903

 

$

46,061

 

$

52,801

 

 

$

140,806

 

$

164,497

 

Preferred Stock Dividends

 

1,969

 

 

1,969

 

 

1,969

 

 

 

5,908

 

 

5,908

 

Net Income Available to Common Shareholders

$

45,934

 

$

44,092

 

$

50,832

 

 

$

134,898

 

$

158,589

 

Basic Earnings Per Common Share

$

1.17

 

$

1.12

 

$

1.28

 

 

$

3.44

 

$

4.00

 

Diluted Earnings Per Common Share

$

1.17

 

$

1.12

 

$

1.28

 

 

$

3.42

 

$

3.98

 

Dividends Declared Per Common Share

$

0.70

 

$

0.70

 

$

0.70

 

 

$

2.10

 

$

2.10

 

Basic Weighted Average Common Shares

 

39,274,626

 

 

39,241,559

 

 

39,567,047

 

 

 

39,264,450

 

 

39,670,409

 

Diluted Weighted Average Common Shares

 

39,420,531

 

 

39,317,521

 

 

39,758,209

 

 

 

39,392,433

 

 

39,848,795

 

 

 


 

 

Bank of Hawai‘i Corporation and Subsidiaries

 

 

 

 

 

 

Consolidated Statements of Comprehensive Income (Loss)

 

 

 

 

Table 4

 

 

Three Months Ended

 

 

Nine Months Ended

 

 

September 30,

 

June 30,

 

September 30,

 

 

September 30,

 

(dollars in thousands)

2023

 

2023

 

2022

 

 

2023

 

2022

 

Net Income

$

47,903

 

$

46,061

 

$

52,801

 

 

$

140,806

 

$

164,497

 

Other Comprehensive Loss, Net of Tax:

 

 

 

 

 

 

 

 

 

 

 

Net Unrealized Losses on Investment Securities

 

(18,264

)

 

(18,217

)

 

(79,600

)

 

 

(7,205

)

 

(382,371

)

Defined Benefit Plans

 

84

 

 

84

 

 

354

 

 

 

252

 

 

1,059

 

Other Comprehensive Loss

 

(18,180

)

 

(18,133

)

 

(79,246

)

 

 

(6,953

)

 

(381,312

)

Comprehensive Income (Loss)

$

29,723

 

$

27,928

 

$

(26,445

)

 

$

133,853

 

$

(216,815

)

 

 


 

 

Bank of Hawai‘i Corporation and Subsidiaries

 

 

 

 

 

Consolidated Statements of Condition

 

 

 

Table 5

 

 

September 30,

 

June 30,

 

December 31,

 

September 30,

 

(dollars in thousands)

2023

 

2023

 

2022

 

2022

 

Assets

 

 

 

 

 

 

 

 

Interest-Bearing Deposits in Other Banks

$

4,676

 

$

2,261

 

$

3,724

 

$

5,429

 

Funds Sold

 

386,086

 

 

1,273,109

 

 

81,364

 

 

402,714

 

Investment Securities

 

 

 

 

 

 

 

 

   Available-for-Sale

 

2,387,324

 

 

2,666,723

 

 

2,844,823

 

 

2,424,608

 

   Held-to-Maturity (Fair Value of $4,104,469; $4,411,003; $4,615,393; and $4,668,074)

 

5,088,013

 

 

5,202,698

 

 

5,414,139

 

 

5,461,160

 

Loans Held for Sale

 

1,450

 

 

3,359

 

 

1,035

 

 

418

 

Loans and Leases

 

13,919,491

 

 

13,914,889

 

 

13,646,420

 

 

13,321,606

 

   Allowance for Credit Losses

 

(145,263

)

 

(145,367

)

 

(144,439

)

 

(146,436

)

     Net Loans and Leases

 

13,774,228

 

 

13,769,522

 

 

13,501,981

 

 

13,175,170

 

Total Earning Assets

 

21,641,777

 

 

22,917,672

 

 

21,847,066

 

 

21,469,499

 

Cash and Due from Banks

 

261,464

 

 

398,072

 

 

316,679

 

 

247,506

 

Premises and Equipment, Net

 

196,094

 

 

200,297

 

 

206,777

 

 

208,251

 

Operating Lease Right-of-Use Assets

 

86,896

 

 

89,286

 

 

92,307

 

 

94,613

 

Accrued Interest Receivable

 

65,541

 

 

64,720

 

 

61,002

 

 

50,143

 

Foreclosed Real Estate

 

1,040

 

 

1,040

 

 

1,040

 

 

1,040

 

Mortgage Servicing Rights

 

21,273

 

 

21,626

 

 

22,619

 

 

23,104

 

Goodwill

 

31,517

 

 

31,517

 

 

31,517

 

 

31,517

 

Bank-Owned Life Insurance

 

458,260

 

 

456,889

 

 

453,882

 

 

451,407

 

Other Assets

 

785,923

 

 

766,817

 

 

573,988

 

 

556,960

 

Total Assets

$

23,549,785

 

$

24,947,936

 

$

23,606,877

 

$

23,134,040

 

 

 

 

 

 

 

 

 

Liabilities

 

 

 

 

 

 

 

 

Deposits

 

 

 

 

 

 

 

 

   Noninterest-Bearing Demand

$

5,687,442

 

$

5,968,344

 

$

6,714,982

 

$

7,300,157

 

   Interest-Bearing Demand

 

3,925,469

 

 

4,119,166

 

 

4,232,567

 

 

4,399,625

 

   Savings

 

8,530,384

 

 

7,756,426

 

 

7,962,410

 

 

7,954,006

 

   Time

 

2,659,014

 

 

2,664,679

 

 

1,705,737

 

 

1,234,985

 

Total Deposits

 

20,802,309

 

 

20,508,615

 

 

20,615,696

 

 

20,888,773

 

Securities Sold Under Agreements to Repurchase

 

150,490

 

 

725,490

 

 

725,490

 

 

425,490

 

Other Debt

 

560,217

 

 

1,760,243

 

 

410,294

 

 

10,319

 

Operating Lease Liabilities

 

95,453

 

 

97,768

 

 

100,526

 

 

102,705

 

Retirement Benefits Payable

 

26,074

 

 

26,434

 

 

26,991

 

 

37,053

 

Accrued Interest Payable

 

33,434

 

 

26,737

 

 

9,698

 

 

3,405

 

Taxes Payable

 

6,965

 

 

132

 

 

7,104

 

 

13,527

 

Other Liabilities

 

511,003

 

 

444,238

 

 

394,083

 

 

370,384

 

Total Liabilities

 

22,185,945

 

 

23,589,657

 

 

22,289,882

 

 

21,851,656

 

Shareholders' Equity

 

 

 

 

 

 

 

 

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

 

 

 

 

 

 

 

 

      issued / outstanding: September 30, 2023; June 30, 2023; December 31, 2022;

 

 

 

 

 

 

 

 

     and September 30, 2022 - 180,000)

 

180,000

 

 

180,000

 

 

180,000

 

 

180,000

 

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

 

 

 

 

 

 

 

 

      issued / outstanding: September 30, 2023 - 58,767,820 / 39,748,700;

 

 

 

 

 

 

 

 

      June 30, 2023 - 58,771,036 / 39,725,348; December 31, 2022 - 58,733,625 / 39,835,750;

 

 

 

 

 

 

 

 

      and September 30, 2022 - 58,728,796 / 40,011,473)

 

583

 

 

583

 

 

582

 

 

582

 

Capital Surplus

 

632,425

 

 

628,202

 

 

620,578

 

 

615,985

 

Accumulated Other Comprehensive Loss

 

(441,611

)

 

(423,431

)

 

(434,658

)

 

(447,694

)

Retained Earnings

 

2,108,702

 

 

2,091,289

 

 

2,055,912

 

 

2,024,641

 

Treasury Stock, at Cost (Shares: September 30, 2023 - 19,019,120; June 30, 2023 - 19,045,688;

 

 

 

 

 

 

 

 

      December 31, 2022 - 18,897,875; and September 30, 2022 - 18,717,323)

 

(1,116,259

)

 

(1,118,364

)

 

(1,105,419

)

 

(1,091,130

)

Total Shareholders' Equity

 

1,363,840

 

 

1,358,279

 

 

1,316,995

 

 

1,282,384

 

Total Liabilities and Shareholders' Equity

$

23,549,785

 

$

24,947,936

 

$

23,606,877

 

$

23,134,040

 

 

 

 

 


 

 

Bank of Hawai‘i Corporation and Subsidiaries

 

 

 

 

 

Consolidated Statements of Shareholders' Equity

 

 

 

Table 6

 

 

 

 

 

 

 

 

 

 

 

 

Accumulated

 

 

 

 

 

 

 

 

Preferred

 

 

 

Common

 

 

 

 

 

Other

 

 

 

 

 

 

 

 

Shares

 

Preferred

 

Shares

 

Common

 

Capital

 

Comprehensive

 

Retained

 

Treasury

 

 

 

(dollars in thousands)

Outstanding

 

Stock

 

Outstanding

 

Stock

 

Surplus

 

Loss

 

Earnings

 

Stock

 

Total

 

Balance as of December 31, 2022

 

180,000

 

$

180,000

 

 

39,835,750

 

$

582

 

$

620,578

 

$

(434,658

)

$

2,055,912

 

$

(1,105,419

)

$

1,316,995

 

Net Income

 

-

 

 

-

 

 

-

 

 

-

 

 

-

 

 

-

 

 

140,806

 

 

-

 

 

140,806

 

Other Comprehensive Loss

 

-

 

 

-

 

 

-

 

 

-

 

 

-

 

 

(6,953

)

 

-

 

 

-

 

 

(6,953

)

Share-Based Compensation

 

-

 

 

-

 

 

-

 

 

-

 

 

11,979

 

 

-

 

 

-

 

 

-

 

 

11,979

 

Common Stock Issued under Purchase and

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    Equity Compensation Plans

 

-

 

 

-

 

 

121,040

 

 

1

 

 

(132

)

 

-

 

 

1,716

 

 

3,216

 

 

4,801

 

Common Stock Repurchased

 

-

 

 

-

 

 

(208,090

)

 

-

 

 

-

 

 

-

 

 

-

 

 

(14,056

)

 

(14,056

)

Cash Dividends Declared Common Stock ($2.10 per share)

 

-

 

 

-

 

 

-

 

 

-

 

 

-

 

 

-

 

 

(83,824

)

 

-

 

 

(83,824

)

Cash Dividends Declared Preferred Stock

 

-

 

 

-

 

 

-

 

 

-

 

 

-

 

 

-

 

 

(5,908

)

 

-

 

 

(5,908

)

Balance as of September 30, 2023

 

180,000

 

$

180,000

 

 

39,748,700

 

$

583

 

$

632,425

 

$

(441,611

)

$

2,108,702

 

$

(1,116,259

)

$

1,363,840

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

-

 

 

-

 

 

-

 

 

-

 

 

-

 

 

-

 

 

164,497

 

 

-

 

 

164,497

 

Other Comprehensive Loss

 

-

 

 

-

 

 

-

 

 

-

 

 

-

 

 

(381,312

)

 

-

 

 

-

 

 

(381,312

)

Share-Based Compensation

 

-

 

 

-

 

 

-

 

 

-

 

 

11,947

 

 

-

 

 

-

 

 

-

 

 

11,947

 

Common Stock Issued under Purchase and

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    Equity Compensation Plans

 

-

 

 

-

 

 

247,966

 

 

1

 

 

1,530

 

 

-

 

 

256

 

 

3,889

 

 

5,676

 

Common Stock Repurchased

 

-

 

 

-

 

 

(489,686

)

 

-

 

 

-

 

 

-

 

 

-

 

 

(39,548

)

 

(39,548

)

Cash Dividends Declared Common Stock ($2.10 per share)

 

-

 

 

-

 

 

-

 

 

-

 

 

-

 

 

-

 

 

(84,579

)

 

-

 

 

(84,579

)

Cash Dividends Declared Preferred Stock

 

-

 

 

-

 

 

-

 

 

-

 

 

-

 

 

-

 

 

(5,908

)

 

-

 

 

(5,908

)

Balance as of September 30, 2022

 

180,000

 

$

180,000

 

 

40,011,473

 

$

582

 

$

615,985

 

$

(447,694

)

$

2,024,641

 

$

(1,091,130

)

$

1,282,384

 

 

 

 

 


 

 

Bank of Hawai‘i Corporation and Subsidiaries

 

 

 

 

 

 

Average Balances and Interest Rates - Taxable-Equivalent Basis 1

 

Table 7a

 

Three Months Ended

 

 

Three Months Ended

 

 

Three Months Ended

 

 

 

September 30, 2023

 

 

June 30, 2023

 

 

September 30, 2022

 

 

 

Average

 

Income /

 

Yield /

 

 

Average

 

Income /

 

Yield /

 

 

Average

 

Income /

 

Yield /

 

 

(dollars in millions)

Balance

 

Expense 2

 

Rate

 

 

Balance

 

Expense 2

 

Rate

 

 

Balance

 

Expense 2

 

Rate

 

 

Earning Assets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest-Bearing Deposits in Other Banks

$

2.9

 

$

-

 

 

2.40

 

%

$

5.1

 

$

-

 

 

1.48

 

%

$

2.9

 

$

-

 

 

1.32

 

%

Funds Sold

 

944.8

 

 

12.8

 

 

5.31

 

 

 

500.1

 

 

6.4

 

 

5.06

 

 

 

411.8

 

 

2.3

 

 

2.22

 

 

Investment Securities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Available-for-Sale

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

     Taxable

 

2,605.4

 

 

23.5

 

 

3.60

 

 

 

2,741.1

 

 

23.2

 

 

3.39

 

 

 

3,481.9

 

 

17.0

 

 

1.95

 

 

     Non-Taxable

 

3.5

 

 

-

 

 

3.21

 

 

 

9.6

 

 

0.1

 

 

4.40

 

 

 

2.5

 

 

-

 

 

1.56

 

 

Held-to-Maturity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

     Taxable

 

5,118.6

 

 

22.7

 

 

1.77

 

 

 

5,231.3

 

 

23.2

 

 

1.78

 

 

 

4,645.7

 

 

20.1

 

 

1.73

 

 

     Non-Taxable

 

35.0

 

 

0.2

 

 

2.10

 

 

 

35.2

 

 

0.2

 

 

2.10

 

 

 

35.6

 

 

0.2

 

 

2.10

 

 

Total Investment Securities

 

7,762.5

 

 

46.4

 

 

2.39

 

 

 

8,017.2

 

 

46.7

 

 

2.33

 

 

 

8,165.7

 

 

37.3

 

 

1.82

 

 

Loans Held for Sale

 

3.8

 

 

0.1

 

 

6.28

 

 

 

2.7

 

 

-

 

 

5.50

 

 

 

4.3

 

 

0.1

 

 

4.46

 

 

Loans and Leases 3

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial and Industrial

 

1,515.0

 

 

18.9

 

 

4.96

 

 

 

1,456.1

 

 

17.5

 

 

4.82

 

 

 

1,353.8

 

 

12.5

 

 

3.66

 

 

Paycheck Protection Program

 

13.1

 

 

-

 

 

1.32

 

 

 

14.5

 

 

-

 

 

1.30

 

 

 

28.0

 

 

0.2

 

 

3.02

 

 

Commercial Mortgage

 

3,792.6

 

 

51.1

 

 

5.35

 

 

 

3,814.9

 

 

49.3

 

 

5.19

 

 

 

3,530.9

 

 

33.3

 

 

3.74

 

 

Construction

 

241.9

 

 

3.7

 

 

6.09

 

 

 

246.8

 

 

3.5

 

 

5.70

 

 

 

233.0

 

 

2.8

 

 

4.81

 

 

Commercial Lease Financing

 

62.6

 

 

0.3

 

 

1.84

 

 

 

65.4

 

 

0.3

 

 

1.67

 

 

 

89.1

 

 

0.4

 

 

1.58

 

 

Residential Mortgage

 

4,715.3

 

 

42.8

 

 

3.62

 

 

 

4,704.0

 

 

41.2

 

 

3.50

 

 

 

4,526.6

 

 

37.4

 

 

3.30

 

 

Home Equity

 

2,283.5

 

 

20.1

 

 

3.49

 

 

 

2,272.3

 

 

19.0

 

 

3.35

 

 

 

2,144.8

 

 

16.4

 

 

3.04

 

 

Automobile

 

868.0

 

 

8.2

 

 

3.75

 

 

 

879.3

 

 

7.7

 

 

3.53

 

 

 

795.5

 

 

6.4

 

 

3.19

 

 

Other 4

 

411.2

 

 

6.5

 

 

6.24

 

 

 

423.5

 

 

6.4

 

 

6.04

 

 

 

425.0

 

 

5.9

 

 

5.48

 

 

Total Loans and Leases

 

13,903.2

 

 

151.6

 

 

4.34

 

 

 

13,876.8

 

 

144.9

 

 

4.19

 

 

 

13,126.7

 

 

115.3

 

 

3.49

 

 

Other

 

91.6

 

 

1.5

 

 

6.40

 

 

 

94.8

 

 

2.2

 

 

8.94

 

 

 

36.9

 

 

0.3

 

 

3.49

 

 

Total Earning Assets

 

22,708.8

 

 

212.4

 

 

3.72

 

 

 

22,496.7

 

 

200.2

 

 

3.56

 

 

 

21,748.3

 

 

155.3

 

 

2.84

 

 

Cash and Due from Banks

 

289.8

 

 

 

 

 

 

 

316.6

 

 

 

 

 

 

 

233.5

 

 

 

 

 

 

Other Assets

 

1,388.8

 

 

 

 

 

 

 

1,301.1

 

 

 

 

 

 

 

1,154.0

 

 

 

 

 

 

Total Assets

$

24,387.4

 

 

 

 

 

 

$

24,114.4

 

 

 

 

 

 

$

23,135.8

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest-Bearing Liabilities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest-Bearing Deposits

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Demand

$

3,929.7

 

 

6.6

 

 

0.67

 

 

$

4,037.4

 

 

7.5

 

 

0.75

 

 

$

4,286.0

 

 

1.4

 

 

0.13

 

 

Savings

 

7,952.6

 

 

39.1

 

 

1.95

 

 

 

7,667.6

 

 

26.6

 

 

1.39

 

 

 

7,962.0

 

 

6.6

 

 

0.33

 

 

Time

 

2,767.8

 

 

26.5

 

 

3.79

 

 

 

2,296.1

 

 

19.7

 

 

3.44

 

 

 

1,146.9

 

 

2.3

 

 

0.79

 

 

Total Interest-Bearing Deposits

 

14,650.1

 

 

72.2

 

 

1.95

 

 

 

14,001.1

 

 

53.8

 

 

1.54

 

 

 

13,394.9

 

 

10.3

 

 

0.30

 

 

Funds Purchased

 

-

 

 

-

 

 

-

 

 

 

14.6

 

 

0.2

 

 

5.00

 

 

 

4.9

 

 

0.1

 

 

3.17

 

 

Short-Term Borrowings

 

-

 

 

-

 

 

-

 

 

 

195.2

 

 

2.5

 

 

5.09

 

 

 

-

 

 

-

 

 

-

 

 

Securities Sold Under Agreements to Repurchase

 

528.5

 

 

4.0

 

 

2.99

 

 

 

725.5

 

 

5.4

 

 

2.96

 

 

 

425.5

 

 

2.7

 

 

2.52

 

 

Other Debt

 

1,365.7

 

 

14.8

 

 

4.31

 

 

 

1,255.8

 

 

13.5

 

 

4.31

 

 

 

10.3

 

 

0.2

 

 

7.05

 

 

Total Interest-Bearing Liabilities

 

16,544.3

 

 

91.0

 

 

2.18

 

 

 

16,192.2

 

 

75.4

 

 

1.87

 

 

 

13,835.6

 

 

13.3

 

 

0.38

 

 

Net Interest Income

 

 

$

121.4

 

 

 

 

 

 

$

124.8

 

 

 

 

 

 

$

142.0

 

 

 

 

Interest Rate Spread

 

 

 

 

 

1.54

 

 %

 

 

 

 

 

1.69

 

 %

 

 

 

 

 

2.46

 

 %

Net Interest Margin

 

 

 

 

 

2.13

 

 %

 

 

 

 

 

2.22

 

 %

 

 

 

 

 

2.60

 

 %

Noninterest-Bearing Demand Deposits

 

5,842.0

 

 

 

 

 

 

 

6,017.5

 

 

 

 

 

 

 

7,468.8

 

 

 

 

 

 

Other Liabilities

 

636.0

 

 

 

 

 

 

 

541.6

 

 

 

 

 

 

 

463.5

 

 

 

 

 

 

Shareholders' Equity

 

1,365.1

 

 

 

 

 

 

 

1,363.1

 

 

 

 

 

 

 

1,367.9

 

 

 

 

 

 

Total Liabilities and Shareholders' Equity

$

24,387.4

 

 

 

 

 

 

$

24,114.4

 

 

 

 

 

 

$

23,135.8

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1  Due to rounding, the amounts presented in this table may not tie to other amounts presented elsewhere in this report.

2  Interest income includes taxable-equivalent basis adjustments, based upon a federal statutory tax rate of 21%, of $437,000, $471,000, and $343,000

    for the three months ended September 30, 2023, June 30, 2023, and September 30, 2022, respectively.

3  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.

4  Comprised of other consumer revolving credit, installment, and consumer lease financing.

 

 


 

 

Bank of Hawai‘i Corporation and Subsidiaries

 

 

 

 

 

 

 

Average Balances and Interest Rates - Taxable-Equivalent Basis 1

 

Table 7b

 

Nine Months Ended

 

 

Nine Months Ended

 

 

 

September 30, 2023

 

 

September 30, 2022

 

 

 

Average

 

Income /

 

Yield /

 

 

Average

 

Income /

 

Yield /

 

 

(dollars in millions)

Balance

 

Expense 2

 

Rate

 

 

Balance

 

Expense 2

 

Rate

 

 

Earning Assets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest-Bearing Deposits in Other Banks

$

3.2

 

$

0.1

 

 

2.60

 

%

$

3.3

 

$

-

 

 

0.76

 

%

Funds Sold

 

582.7

 

 

22.6

 

 

5.11

 

 

 

308.6

 

 

3.2

 

 

1.36

 

 

Investment Securities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Available-for-Sale

 

 

 

 

 

 

 

 

 

 

 

 

 

 

     Taxable

 

2,721.5

 

 

70.6

 

 

3.46

 

 

 

3,998.2

 

 

52.0

 

 

1.74

 

 

     Non-Taxable

 

7.6

 

 

0.2

 

 

4.22

 

 

 

2.8

 

 

-

 

 

1.84

 

 

Held-to-Maturity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

     Taxable

 

5,227.8

 

 

69.7

 

 

1.78

 

 

 

4,530.4

 

 

57.4

 

 

1.69

 

 

     Non-Taxable

 

35.2

 

 

0.6

 

 

2.10

 

 

 

35.7

 

 

0.6

 

 

2.10

 

 

Total Investment Securities

 

7,992.1

 

 

141.1

 

 

2.36

 

 

 

8,567.1

 

 

110.0

 

 

1.71

 

 

Loans Held for Sale

 

2.7

 

 

0.1

 

 

5.82

 

 

 

8.1

 

 

0.2

 

 

3.43

 

 

Loans and Leases 3

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial and Industrial

 

1,461.2

 

 

52.7

 

 

4.82

 

 

 

1,339.0

 

 

31.4

 

 

3.13

 

 

Paycheck Protection Program

 

14.8

 

 

0.2

 

 

1.70

 

 

 

51.7

 

 

2.5

 

 

6.59

 

 

Commercial Mortgage

 

3,781.7

 

 

145.6

 

 

5.15

 

 

 

3,350.3

 

 

81.3

 

 

3.25

 

 

Construction

 

256.2

 

 

11.1

 

 

5.81

 

 

 

227.7

 

 

7.3

 

 

4.30

 

 

Commercial Lease Financing

 

64.9

 

 

0.5

 

 

1.11

 

 

 

94.0

 

 

1.0

 

 

1.49

 

 

Residential Mortgage

 

4,695.4

 

 

123.8

 

 

3.51

 

 

 

4,439.1

 

 

108.6

 

 

3.26

 

 

Home Equity

 

2,265.2

 

 

57.3

 

 

3.38

 

 

 

2,026.5

 

 

44.1

 

 

2.91

 

 

Automobile

 

873.0

 

 

23.2

 

 

3.55

 

 

 

764.2

 

 

18.4

 

 

3.21

 

 

Other 4

 

420.8

 

 

19.0

 

 

6.04

 

 

 

416.5

 

 

17.0

 

 

5.44

 

 

Total Loans and Leases

 

13,833.2

 

 

433.4

 

 

4.19

 

 

 

12,709.0

 

 

311.6

 

 

3.27

 

 

Other

 

84.6

 

 

4.1

 

 

6.59

 

 

 

37.2

 

 

0.9

 

 

3.14

 

 

Total Earning Assets

 

22,498.5

 

 

601.4

 

 

3.57

 

 

 

21,633.3

 

 

425.9

 

 

2.63

 

 

Cash and Due from Banks

 

308.4

 

 

 

 

 

 

 

235.0

 

 

 

 

 

 

Other Assets

 

1,317.5

 

 

 

 

 

 

 

1,090.9

 

 

 

 

 

 

Total Assets

$

24,124.4

 

 

 

 

 

 

$

22,959.2

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest-Bearing Liabilities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest-Bearing Deposits

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Demand

$

4,060.0

 

 

19.3

 

 

0.64

 

 

$

4,459.9

 

 

2.6

 

 

0.08

 

 

Savings

 

7,876.1

 

 

86.3

 

 

1.46

 

 

 

7,733.3

 

 

9.5

 

 

0.16

 

 

Time

 

2,288.2

 

 

58.1

 

 

3.40

 

 

 

1,023.6

 

 

4.1

 

 

0.53

 

 

Total Interest-Bearing Deposits

 

14,224.3

 

 

163.7

 

 

1.54

 

 

 

13,216.8

 

 

16.2

 

 

0.16

 

 

Funds Purchased

 

24.8

 

 

0.9

 

 

4.72

 

 

 

12.4

 

 

0.1

 

 

1.05

 

 

Short-Term Borrowings

 

152.4

 

 

5.7

 

 

4.94

 

 

 

11.5

 

 

0.1

 

 

1.06

 

 

Securities Sold Under Agreements to Repurchase

 

659.1

 

 

14.8

 

 

2.97

 

 

 

441.1

 

 

8.3

 

 

2.48

 

 

Other Debt

 

1,043.6

 

 

33.7

 

 

4.31

 

 

 

10.3

 

 

0.6

 

 

7.05

 

 

Total Interest-Bearing Liabilities

 

16,104.2

 

 

218.8

 

 

1.81

 

 

 

13,692.1

 

 

25.3

 

 

0.25

 

 

Net Interest Income

 

 

$

382.6

 

 

 

 

 

 

$

400.6

 

 

 

 

Interest Rate Spread

 

 

 

 

 

1.76

 

 %

 

 

 

 

 

2.38

 

 %

Net Interest Margin

 

 

 

 

 

2.27

 

 %

 

 

 

 

 

2.47

 

 %

Noninterest-Bearing Demand Deposits

 

6,089.8

 

 

 

 

 

 

 

7,404.5

 

 

 

 

 

 

Other Liabilities

 

576.6

 

 

 

 

 

 

 

420.9

 

 

 

 

 

 

Shareholders' Equity

 

1,353.8

 

 

 

 

 

 

 

1,441.7

 

 

 

 

 

 

Total Liabilities and Shareholders' Equity

$

24,124.4

 

 

 

 

 

 

$

22,959.2

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1  Due to rounding, the amounts presented in this table may not tie to other amounts presented elsewhere in this report.

2  Interest income includes taxable-equivalent basis adjustments, based upon a federal statutory tax rate of 21%, of $1,403,000 and $818,000

   for the nine months ended September 30, 2023 and September 30, 2022, respectively.

3  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.

4  Comprised of other consumer revolving credit, installment, and consumer lease financing.

 

 


 

 

Bank of Hawai‘i Corporation and Subsidiaries

 

 

 

Analysis of Change in Net Interest Income - Taxable-Equivalent Basis

 

Table 8a

 

 

Three Months Ended September 30, 2023

 

 

Compared to June 30, 2023

 

(dollars in millions)

Volume 1

 

Rate 1

 

Total

 

Change in Interest Income:

 

 

 

 

 

 

Funds Sold

$

6.1

 

$

0.3

 

$

6.4

 

Investment Securities

 

 

 

 

 

 

   Available-for-Sale

 

 

 

 

 

 

      Taxable

 

(1.1

)

 

1.4

 

 

0.3

 

      Non-Taxable

 

(0.1

)

 

-

 

 

(0.1

)

   Held-to-Maturity

 

 

 

 

 

 

      Taxable

 

(0.5

)

 

-

 

 

(0.5

)

      Non-Taxable

 

-

 

 

-

 

 

-

 

Total Investment Securities

 

(1.7

)

 

1.4

 

 

(0.3

)

Loans Held for Sale

 

0.1

 

 

-

 

 

0.1

 

Loans and Leases

 

 

 

 

 

 

   Commercial and Industrial

 

0.8

 

 

0.6

 

 

1.4

 

   Paycheck Protection Program

 

-

 

 

-

 

 

-

 

   Commercial Mortgage

 

(0.2

)

 

2.0

 

 

1.8

 

   Construction

 

(0.1

)

 

0.3

 

 

0.2

 

   Commercial Lease Financing

 

-

 

 

-

 

 

-

 

   Residential Mortgage

 

0.2

 

 

1.4

 

 

1.6

 

   Home Equity

 

0.1

 

 

1.0

 

 

1.1

 

   Automobile

 

(0.1

)

 

0.6

 

 

0.5

 

   Other 2

 

(0.2

)

 

0.3

 

 

0.1

 

Total Loans and Leases

 

0.5

 

 

6.2

 

 

6.7

 

Other

 

(0.1

)

 

(0.6

)

 

(0.7

)

Total Change in Interest Income

 

4.9

 

 

7.3

 

 

12.2

 

 

 

 

 

 

 

Change in Interest Expense:

 

 

 

 

 

 

Interest-Bearing Deposits

 

 

 

 

 

 

   Demand

 

(0.2

)

 

(0.7

)

 

(0.9

)

   Savings

 

1.1

 

 

11.4

 

 

12.5

 

   Time

 

4.5

 

 

2.3

 

 

6.8

 

Total Interest-Bearing Deposits

 

5.4

 

 

13.0

 

 

18.4

 

Funds Purchased

 

(0.2

)

 

-

 

 

(0.2

)

Short-Term Borrowings

 

(2.5

)

 

-

 

 

(2.5

)

Securities Sold Under Agreements to Repurchase

 

(1.4

)

 

-

 

 

(1.4

)

Other Debt

 

1.3

 

 

-

 

 

1.3

 

Total Change in Interest Expense

 

2.6

 

 

13.0

 

 

15.6

 

 

 

 

 

 

 

 

Change in Net Interest Income

$

2.3

 

$

(5.7

)

$

(3.4

)

 

 

 

 

 

 

 

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 Hawai‘i Corporation and Subsidiaries

 

 

 

Analysis of Change in Net Interest Income - Taxable-Equivalent Basis

 

Table 8b

 

 

Three Months Ended September 30, 2023

 

 

Compared to September 30, 2022

 

(dollars in millions)

Volume 1

 

Rate 1

 

Total

 

Change in Interest Income:

 

 

 

 

 

 

Funds Sold

$

5.1

 

$

5.4

 

$

10.5

 

Investment Securities

 

 

 

 

 

 

   Available-for-Sale

 

 

 

 

 

 

      Taxable

 

(5.1

)

 

11.6

 

 

6.5

 

      Non-Taxable

 

-

 

 

-

 

 

-

 

   Held-to-Maturity

 

 

 

 

 

 

      Taxable

 

2.1

 

 

0.5

 

 

2.6

 

      Non-Taxable

 

-

 

 

-

 

 

-

 

Total Investment Securities

 

(3.0

)

 

12.1

 

 

9.1

 

Loans Held for Sale

 

-

 

 

-

 

 

-

 

Loans and Leases

 

 

 

 

 

 

   Commercial and Industrial

 

1.6

 

 

4.8

 

 

6.4

 

   Paycheck Protection Program

 

(0.1

)

 

(0.1

)

 

(0.2

)

   Commercial Mortgage

 

2.6

 

 

15.2

 

 

17.8

 

   Construction

 

0.1

 

 

0.8

 

 

0.9

 

   Commercial Lease Financing

 

(0.2

)

 

0.1

 

 

(0.1

)

   Residential Mortgage

 

1.7

 

 

3.7

 

 

5.4

 

   Home Equity

 

1.2

 

 

2.5

 

 

3.7

 

   Automobile

 

0.6

 

 

1.2

 

 

1.8

 

   Other 2

 

(0.2

)

 

0.8

 

 

0.6

 

Total Loans and Leases

 

7.3

 

 

29.0

 

 

36.3

 

Other

 

0.7

 

 

0.5

 

 

1.2

 

Total Change in Interest Income

 

10.1

 

 

47.0

 

 

57.1

 

 

 

 

 

 

 

Change in Interest Expense:

 

 

 

 

 

 

Interest-Bearing Deposits

 

 

 

 

 

 

   Demand

 

(0.1

)

 

5.3

 

 

5.2

 

   Savings

 

-

 

 

32.5

 

 

32.5

 

   Time

 

6.6

 

 

17.6

 

 

24.2

 

Total Interest-Bearing Deposits

 

6.5

 

 

55.4

 

 

61.9

 

Funds Purchased

 

(0.1

)

 

-

 

 

(0.1

)

Short-Term Borrowings

 

-

 

 

-

 

 

-

 

Securities Sold Under Agreements to Repurchase

 

0.7

 

 

0.6

 

 

1.3

 

Other Debt

 

14.7

 

 

(0.1

)

 

14.6

 

Total Change in Interest Expense

 

21.8

 

 

55.9

 

 

77.7

 

 

 

 

 

 

 

 

Change in Net Interest Income

$

(11.7

)

$

(8.9

)

$

(20.6

)

 

 

 

 

 

 

 

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 Hawai‘i Corporation and Subsidiaries

 

 

 

Analysis of Change in Net Interest Income - Taxable-Equivalent Basis

 

Table 8c

 

 

Nine Months Ended September 30, 2023

 

 

Compared to September 30, 2022

 

(dollars in millions)

Volume 1

 

Rate 1

 

Total

 

Change in Interest Income:

 

 

 

 

 

 

Interest-Bearing Deposits in Other Banks

$

0.1

 

$

-

 

$

0.1

 

Funds Sold

 

4.7

 

 

14.7

 

 

19.4

 

Investment Securities

 

 

 

 

 

 

   Available-for-Sale

 

 

 

 

 

 

      Taxable

 

(20.6

)

 

39.2

 

 

18.6

 

      Non-Taxable

 

0.1

 

 

0.1

 

 

0.2

 

   Held-to-Maturity

 

 

 

 

 

 

      Taxable

 

9.2

 

 

3.1

 

 

12.3

 

      Non-Taxable

 

-

 

 

-

 

 

-

 

Total Investment Securities

 

(11.3

)

 

42.4

 

 

31.1

 

Loans Held for Sale

 

(0.2

)

 

0.1

 

 

(0.1

)

Loans and Leases

 

 

 

 

 

 

   Commercial and Industrial

 

3.1

 

 

18.2

 

 

21.3

 

   Paycheck Protection Program

 

(1.2

)

 

(1.1

)

 

(2.3

)

   Commercial Mortgage

 

11.6

 

 

52.7

 

 

64.3

 

   Construction

 

1.0

 

 

2.8

 

 

3.8

 

   Commercial Lease Financing

 

(0.4

)

 

(0.1

)

 

(0.5

)

   Residential Mortgage

 

6.5

 

 

8.7

 

 

15.2

 

   Home Equity

 

5.6

 

 

7.6

 

 

13.2

 

   Automobile

 

2.7

 

 

2.1

 

 

4.8

 

   Other 2

 

0.1

 

 

1.9

 

 

2.0

 

Total Loans and Leases

 

29.0

 

 

92.8

 

 

121.8

 

Other

 

1.7

 

 

1.5

 

 

3.2

 

Total Change in Interest Income

 

24.0

 

 

151.5

 

 

175.5

 

 

 

 

 

 

 

Change in Interest Expense:

 

 

 

 

 

 

Interest-Bearing Deposits

 

 

 

 

 

 

   Demand

 

(0.3

)

 

17.0

 

 

16.7

 

   Savings

 

0.2

 

 

76.6

 

 

76.8

 

   Time

 

10.0

 

 

44.0

 

 

54.0

 

Total Interest-Bearing Deposits

 

9.9

 

 

137.6

 

 

147.5

 

Funds Purchased

 

0.2

 

 

0.6

 

 

0.8

 

Short-Term Borrowings

 

4.3

 

 

1.3

 

 

5.6

 

Securities Sold Under Agreements to Repurchase

 

4.7

 

 

1.8

 

 

6.5

 

Other Debt

 

33.4

 

 

(0.3

)

 

33.1

 

Total Change in Interest Expense

 

52.5

 

 

141.0

 

 

193.5

 

 

 

 

 

 

 

 

Change in Net Interest Income

$

(28.5

)

$

10.5

 

$

(18.0

)

 

 

 

 

 

 

 

1  The change in interest income and expense not solely due to changes in volume or rate has been allocated on a pro-rata basis to the volume and rate columns.

 

2  Comprised of other consumer revolving credit, installment, and consumer lease financing.

 

 

 

 


 

 

Bank of Hawai‘i Corporation and Subsidiaries

 

 

 

 

 

 

Salaries and Benefits

 

 

 

 

 

 

Table 9

 

 

Three Months Ended

 

 

Nine Months Ended

 

 

September 30,

 

June 30,

 

September 30,

 

 

September 30,

 

(dollars in thousands)

2023

 

2023

 

2022

 

 

2023

 

2022

 

Salaries

$

39,426

 

$

37,962

 

$

37,792

 

 

$

116,005

 

$

109,445

 

Incentive Compensation

 

2,956

 

 

2,984

 

 

5,885

 

 

 

9,937

 

 

18,069

 

Share-Based Compensation

 

4,072

 

 

4,096

 

 

3,558

 

 

 

11,327

 

 

11,319

 

Commission Expense

 

676

 

 

775

 

 

1,005

 

 

 

2,098

 

 

3,878

 

Retirement and Other Benefits

 

3,809

 

 

3,489

 

 

4,448

 

 

 

13,186

 

 

13,177

 

Payroll Taxes

 

2,921

 

 

3,310

 

 

2,826

 

 

 

12,079

 

 

10,804

 

Medical, Dental, and Life Insurance

 

2,835

 

 

3,568

 

 

2,605

 

 

 

10,267

 

 

8,430

 

Separation Expense

 

2,130

 

 

(9

)

 

1,819

 

 

 

5,189

 

 

2,509

 

Total Salaries and Benefits

$

58,825

 

$

56,175

 

$

59,938

 

 

$

180,088

 

$

177,631

 

 

 

 


 

 

Bank of Hawai‘i Corporation and Subsidiaries

 

 

 

 

 

Loan and Lease Portfolio Balances

 

 

 

Table 10

 

 

September 30,

 

June 30,

 

March 31,

 

December 31,

 

September 30,

 

(dollars in thousands)

2023

 

2023

 

2023

 

2022

 

2022

 

Commercial

 

 

 

 

 

 

 

 

 

 

Commercial and Industrial

$

1,569,572

 

$

1,502,676

 

$

1,425,916

 

$

1,389,066

 

$

1,368,966

 

Paycheck Protection Program

 

12,529

 

 

13,789

 

 

15,175

 

 

19,579

 

 

22,955

 

Commercial Mortgage

 

3,784,339

 

 

3,796,769

 

 

3,826,283

 

 

3,725,542

 

 

3,591,943

 

Construction

 

251,507

 

 

236,428

 

 

232,903

 

 

260,825

 

 

236,498

 

Lease Financing

 

61,522

 

 

62,779

 

 

65,611

 

 

69,491

 

 

73,989

 

Total Commercial

 

5,679,469

 

 

5,612,441

 

 

5,565,888

 

 

5,464,503

 

 

5,294,351

 

Consumer

 

 

 

 

 

 

 

 

 

 

Residential Mortgage

 

4,699,140

 

 

4,721,976

 

 

4,691,298

 

 

4,653,072

 

 

4,585,723

 

Home Equity

 

2,285,974

 

 

2,278,105

 

 

2,260,001

 

 

2,225,950

 

 

2,185,484

 

Automobile

 

856,113

 

 

878,767

 

 

877,979

 

 

870,396

 

 

820,640

 

Other 1

 

398,795

 

 

423,600

 

 

429,356

 

 

432,499

 

 

435,408

 

Total Consumer

 

8,240,022

 

 

8,302,448

 

 

8,258,634

 

 

8,181,917

 

 

8,027,255

 

Total Loans and Leases

$

13,919,491

 

$

13,914,889

 

$

13,824,522

 

$

13,646,420

 

$

13,321,606

 

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

 

 

 

 

 

 

 

 

 

 

 

Deposits

 

 

 

 

 

 

 

 

 

 

September 30,

 

June 30,

 

March 31,

 

December 31,

 

September 30,

 

(dollars in thousands)

2023

 

2023

 

2023

 

2022

 

2022

 

Consumer

$

10,036,261

 

$

10,018,931

 

$

10,158,833

 

$

10,304,335

 

$

10,507,946

 

Commercial

 

8,564,536

 

 

8,019,971

 

 

8,594,441

 

 

8,569,670

 

 

8,841,781

 

Public and Other

 

2,201,512

 

 

2,469,713

 

 

1,738,026

 

 

1,741,691

 

 

1,539,046

 

Total Deposits

$

20,802,309

 

$

20,508,615

 

$

20,491,300

 

$

20,615,696

 

$

20,888,773

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Average Deposits

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

September 30,

 

June 30,

 

March 31,

 

December 31,

 

September 30,

 

(dollars in thousands)

2023

 

2023

 

2023

 

2022

 

2022

 

Consumer

$

9,963,690

 

$

9,977,239

 

$

10,178,988

 

$

10,295,563

 

$

10,485,895

 

Commercial

 

8,288,891

 

 

8,138,358

 

 

8,611,960

 

 

8,588,198

 

 

9,002,432

 

Public and Other

 

2,239,501

 

 

1,903,004

 

 

1,639,934

 

 

1,457,566

 

 

1,375,354

 

Total Deposits

$

20,492,082

 

$

20,018,601

 

$

20,430,882

 

$

20,341,327

 

$

20,863,681

 

 

 


 

 

Bank of Hawai‘i Corporation and Subsidiaries

 

 

 

Non-Performing Assets and Accruing Loans and Leases Past Due 90 Days or More

 

Table 11

 

 

September 30,

 

June 30,

 

March 31,

 

December 31,

 

September 30,

 

(dollars in thousands)

2023

 

2023

 

2023

 

2022

 

2022

 

Non-Performing Assets

 

 

 

 

 

 

 

 

 

 

Non-Accrual Loans and Leases

 

 

 

 

 

 

 

 

 

 

Commercial

 

 

 

 

 

 

 

 

 

 

Commercial and Industrial

$

43

 

$

17

 

$

31

 

$

37

 

$

49

 

Commercial Mortgage

 

2,996

 

 

3,107

 

 

3,216

 

 

3,309

 

 

3,396

 

Total Commercial

 

3,039

 

 

3,124

 

 

3,247

 

 

3,346

 

 

3,445

 

Consumer

 

 

 

 

 

 

 

 

 

 

Residential Mortgage

 

3,706

 

 

3,504

 

 

4,199

 

 

4,239

 

 

4,945

 

Home Equity

 

3,734

 

 

3,809

 

 

3,638

 

 

4,022

 

 

4,438

 

Total Consumer

 

7,440

 

 

7,313

 

 

7,837

 

 

8,261

 

 

9,383

 

Total Non-Accrual Loans and Leases

 

10,479

 

 

10,437

 

 

11,084

 

 

11,607

 

 

12,828

 

Foreclosed Real Estate

 

1,040

 

 

1,040

 

 

1,040

 

 

1,040

 

 

1,040

 

Total Non-Performing Assets

$

11,519

 

$

11,477

 

$

12,124

 

$

12,647

 

$

13,868

 

 

 

 

 

 

 

 

 

 

 

Accruing Loans and Leases Past Due 90 Days or More

 

 

 

 

 

 

 

 

 

 

Consumer

 

 

 

 

 

 

 

 

 

 

Residential Mortgage

$

3,519

 

$

3,560

 

$

4,566

 

$

2,429

 

$

3,279

 

Home Equity

 

2,172

 

 

2,022

 

 

1,723

 

 

1,673

 

 

1,061

 

Automobile

 

393

 

 

577

 

 

598

 

 

589

 

 

467

 

Other 1

 

643

 

 

633

 

 

632

 

 

683

 

 

513

 

Total Consumer

 

6,727

 

 

6,792

 

 

7,519

 

 

5,374

 

 

5,320

 

Total Accruing Loans and Leases Past Due 90 Days or More

 

6,727

 

 

6,792

 

 

7,519

 

 

5,374

 

 

5,320

 

Total Loans and Leases

$

13,919,491

 

$

13,914,889

 

$

13,824,522

 

$

13,646,420

 

$

13,321,606

 

 

 

 

 

 

 

 

 

 

 

Ratio of Non-Accrual Loans and Leases to Total Loans and Leases

 

0.08

%

 

0.08

%

 

0.08

%

 

0.09

%

 

0.10

%

 

 

 

 

 

 

 

 

 

 

Ratio of Non-Performing Assets to Total Loans and Leases

 

 

 

 

 

 

 

 

 

 

and Foreclosed Real Estate

 

0.08

%

 

0.08

%

 

0.09

%

 

0.09

%

 

0.10

%

 

 

 

 

 

 

 

 

 

 

Ratio of Non-Performing Assets to Total Assets

 

0.05

%

 

0.04

%

 

0.05

%

 

0.05

%

 

0.06

%

 

 

 

 

 

 

 

 

 

 

Ratio of Commercial Non-Performing Assets to Total Commercial Loans

 

 

 

 

 

 

 

 

 

 

and Leases and Commercial Foreclosed Real Estate

 

0.05

%

 

0.06

%

 

0.06

%

 

0.06

%

 

0.07

%

 

 

 

 

 

 

 

 

 

 

Ratio of Consumer Non-Performing Assets to Total Consumer Loans

 

 

 

 

 

 

 

 

 

 

and Leases and Consumer Foreclosed Real Estate

 

0.10

%

 

0.10

%

 

0.11

%

 

0.11

%

 

0.13

%

 

 

 

 

 

 

 

 

 

 

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

 

0.13

%

 

0.13

%

 

0.14

%

 

0.13

%

 

0.14

%

 

 

 

 

 

 

 

 

 

 

Quarter to Quarter Changes in Non-Performing Assets

 

 

 

 

 

 

 

 

 

 

Balance at Beginning of Quarter

$

11,477

 

$

12,124

 

$

12,647

 

$

13,868

 

$

15,493

 

Additions

 

1,318

 

 

1,116

 

 

552

 

 

704

 

 

489

 

Reductions

 

 

 

 

 

 

 

 

 

 

Payments

 

(1,017

)

 

(226

)

 

(778

)

 

(1,605

)

 

(706

)

Return to Accrual Status

 

(259

)

 

(1,527

)

 

(297

)

 

(301

)

 

(116

)

Sales of Foreclosed Real Estate

 

-

 

 

-

 

 

-

 

 

-

 

 

(1,292

)

Charge-offs / Write-downs

 

-

 

 

(10

)

 

-

 

 

(19

)

 

-

 

Total Reductions

 

(1,276

)

 

(1,763

)

 

(1,075

)

 

(1,925

)

 

(2,114

)

Balance at End of Quarter

$

11,519

 

$

11,477

 

$

12,124

 

$

12,647

 

$

13,868

 

 

 

 

 

 

 

 

 

 

 

 

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

 

 

 

 

 

 

 

 

 

 

 

 


 

 

Bank of Hawai‘i Corporation and Subsidiaries

 

Reserve for Credit Losses

 

 

 

 

 

 

Table 12

 

 

Three Months Ended

 

 

Nine Months Ended

 

 

September 30,

 

June 30,

 

September 30,

 

 

September 30,

 

(dollars in thousands)

2023

 

2023

 

2022

 

 

2023

 

2022

 

Balance at Beginning of Period

$

151,702

 

$

150,579

 

$

154,098

 

 

$

151,247

 

$

164,297

 

 

 

 

 

 

 

 

 

 

 

 

Loans and Leases Charged-Off

 

 

 

 

 

 

 

 

 

 

 

Commercial

 

 

 

 

 

 

 

 

 

 

 

Commercial and Industrial

 

(294

)

 

(203

)

 

(147

)

 

 

(758

)

 

(729

)

Consumer

 

 

 

 

 

 

 

 

 

 

 

Residential Mortgage

 

-

 

 

(6

)

 

-

 

 

 

(6

)

 

(80

)

Home Equity

 

(13

)

 

(5

)

 

-

 

 

 

(68

)

 

(90

)

Automobile

 

(1,353

)

 

(1,293

)

 

(794

)

 

 

(4,309

)

 

(3,481

)

Other 1

 

(1,957

)

 

(2,004

)

 

(1,924

)

 

 

(6,296

)

 

(5,739

)

Total Loans and Leases Charged-Off

 

(3,617

)

 

(3,511

)

 

(2,865

)

 

 

(11,437

)

 

(10,119

)

Recoveries on Loans and Leases Previously Charged-Off

 

 

 

 

 

 

 

 

 

 

 

Commercial

 

 

 

 

 

 

 

 

 

 

 

Commercial and Industrial

 

72

 

 

103

 

 

45

 

 

 

225

 

 

465

 

Consumer

 

 

 

 

 

 

 

 

 

 

 

Residential Mortgage

 

69

 

 

58

 

 

156

 

 

 

188

 

 

1,130

 

Home Equity

 

131

 

 

578

 

 

367

 

 

 

893

 

 

1,298

 

Automobile

 

721

 

 

777

 

 

441

 

 

 

2,170

 

 

1,864

 

Other 1

 

575

 

 

618

 

 

709

 

 

 

1,867

 

 

2,098

 

Total Recoveries on Loans and Leases Previously Charged-Off

 

1,568

 

 

2,134

 

 

1,718

 

 

 

5,343

 

 

6,855

 

Net Charged-Off - Loans and Leases

 

(2,049

)

 

(1,377

)

 

(1,147

)

 

 

(6,094

)

 

(3,264

)

Net Charged-Off - Accrued Interest Receivable

 

-

 

 

-

 

 

-

 

 

 

-

 

 

(47

)

Provision for Credit Losses:

 

 

 

 

 

 

 

 

 

 

 

Loans and Leases

 

1,945

 

 

3,167

 

 

(929

)

 

 

6,918

 

 

(8,121

)

Accrued Interest Receivable

 

-

 

 

-

 

 

-

 

 

 

-

 

 

(367

)

Unfunded Commitments

 

55

 

 

(667

)

 

905

 

 

 

(418

)

 

429

 

Total Provision for Credit Losses

 

2,000

 

 

2,500

 

 

(24

)

 

 

6,500

 

 

(8,059

)

Balance at End of Period

$

151,653

 

$

151,702

 

$

152,927

 

 

$

151,653

 

$

152,927

 

 

 

 

 

 

 

 

 

 

 

 

 

Components

 

 

 

 

 

 

 

 

 

 

 

Allowance for Credit Losses - Loans and Leases

$

145,263

 

$

145,367

 

$

146,436

 

 

$

145,263

 

$

146,436

 

Reserve for Unfunded Commitments

 

6,390

 

 

6,335

 

 

6,491

 

 

 

6,390

 

 

6,491

 

Total Reserve for Credit Losses

$

151,653

 

$

151,702

 

$

152,927

 

 

$

151,653

 

$

152,927

 

 

 

 

 

 

 

 

 

 

 

 

Average Loans and Leases Outstanding

$

13,903,214

 

$

13,876,754

 

$

13,126,717

 

 

$

13,833,164

 

$

12,709,045

 

 

 

 

 

 

 

 

 

 

 

 

Ratio of Net Loans and Leases Charged-Off to

 

 

 

 

 

 

 

 

 

 

 

     Average Loans and Leases Outstanding (annualized)

 

0.06

%

 

0.04

%

 

0.03

%

 

 

0.06

%

 

0.03

%

Ratio of Allowance for Credit Losses to Loans and Leases Outstanding 2

 

1.04

%

 

1.04

%

 

1.10

%

 

 

1.04

%

 

1.10

%

 

 

 

 

 

 

 

 

 

 

 

 

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

 

 

 

 

 

 

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

 

 

 

 

 

 

 

 


 

 

Bank of Hawai‘i Corporation and Subsidiaries

 

 

 

 

 

Business Segments Selected Financial Information

 

 

 

Table 13a

 

 

Consumer

 

Commercial

 

Treasury

 

Consolidated

 

(dollars in thousands)

Banking

 

Banking

 

and Other

 

Total

 

Three Months Ended September 30, 2023

 

 

 

 

 

 

 

 

Net Interest Income (Loss)

$

100,913

 

$

53,823

 

$

(33,799

)

$

120,937

 

Provision for Credit Losses

 

1,974

 

 

74

 

 

(48

)

 

2,000

 

Net Interest Income (Loss) After Provision for Credit Losses

 

98,939

 

 

53,749

 

 

(33,751

)

 

118,937

 

Noninterest Income

 

31,027

 

 

8,483

 

 

10,824

 

 

50,334

 

Noninterest Expense

 

(81,377

)

 

(18,937

)

 

(5,287

)

 

(105,601

)

Income (Loss) Before Income Taxes

 

48,589

 

 

43,295

 

 

(28,214

)

 

63,670

 

Provision for Income Taxes

 

(12,582

)

 

(10,987

)

 

7,802

 

 

(15,767

)

Net Income (Loss)

$

36,007

 

$

32,308

 

$

(20,412

)

$

47,903

 

Total Assets as of September 30, 2023

$

8,584,221

 

$

5,719,577

 

$

9,245,987

 

$

23,549,785

 

 

 

 

 

 

 

 

 

Three Months September 30, 2022 1

 

 

 

 

 

 

 

 

Net Interest Income (Loss)

$

85,658

 

$

56,251

 

$

(254

)

$

141,655

 

Provision for Credit Losses

 

1,148

 

 

(1

)

 

(1,147

)

 

-

 

Net Interest Income After Provision for Credit Losses

 

84,510

 

 

56,252

 

 

893

 

 

141,655

 

Noninterest Income (Loss)

 

30,974

 

 

(911

)

 

597

 

 

30,660

 

Noninterest Expense

 

(83,408

)

 

(17,330

)

 

(5,011

)

 

(105,749

)

Income (Loss) Before Income Taxes

 

32,076

 

 

38,011

 

 

(3,521

)

 

66,566

 

Provision for Income Taxes

 

(8,067

)

 

(9,206

)

 

3,508

 

 

(13,765

)

Net Income (Loss)

$

24,009

 

$

28,805

 

$

(13

)

$

52,801

 

Total Assets as of September 30, 2022

$

8,399,068

 

$

5,486,330

 

$

9,248,642

 

$

23,134,040

 

 

 

 

 

 

 

 

 

 

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

 

 

 


 

 

Bank of Hawai‘i Corporation and Subsidiaries

 

 

 

 

 

Business Segments Selected Financial Information

 

 

 

Table 13b

 

 

Consumer

 

Commercial

 

Treasury

 

Consolidated

 

(dollars in thousands)

Banking

 

Banking

 

and Other

 

Total

 

Nine Months Ended September 30, 2023

 

 

 

 

 

 

 

 

Net Interest Income (Loss)

$

298,512

 

$

164,202

 

$

(81,474

)

$

381,240

 

Provision for Credit Losses

 

6,035

 

 

59

 

 

406

 

 

6,500

 

Net Interest Income (Loss) After Provision for Credit Losses

 

292,477

 

 

164,143

 

 

(81,880

)

 

374,740

 

Noninterest Income

 

94,126

 

 

25,072

 

 

15,128

 

 

134,326

 

Noninterest Expense

 

(247,543

)

 

(58,528

)

 

(15,485

)

 

(321,556

)

Income (Loss) Before Income Taxes

 

139,060

 

 

130,687

 

 

(82,237

)

 

187,510

 

Provision for Income Taxes

 

(35,838

)

 

(32,490

)

 

21,624

 

 

(46,704

)

Net Income (Loss)

$

103,222

 

$

98,197

 

$

(60,613

)

$

140,806

 

Total Assets as of September 30, 2023

$

8,584,221

 

$

5,719,577

 

$

9,245,987

 

$

23,549,785

 

 

 

 

 

 

 

 

 

Nine Months Ended September 30, 2022 1

 

 

 

 

 

 

 

 

Net Interest Income

$

232,646

 

$

152,394

 

$

14,780

 

$

399,820

 

Provision for Credit Losses

 

3,463

 

 

(200

)

 

(11,263

)

 

(8,000

)

Net Interest Income After Provision for Credit Losses

 

229,183

 

 

152,594

 

 

26,043

 

 

407,820

 

Noninterest Income

 

94,811

 

 

17,650

 

 

3,908

 

 

116,369

 

Noninterest Expense

 

(247,854

)

 

(53,014

)

 

(11,694

)

 

(312,562

)

Income Before Income Taxes

 

76,140

 

 

117,230

 

 

18,257

 

 

211,627

 

Provision for Income Taxes

 

(19,114

)

 

(28,654

)

 

638

 

 

(47,130

)

Net Income

$

57,026

 

$

88,576

 

$

18,895

 

$

164,497

 

Total Assets as of September 30, 2022

$

8,399,068

 

$

5,486,330

 

$

9,248,642

 

$

23,134,040

 

 

 

 

 

 

 

 

 

 

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

 

 

 


 

 

Bank of Hawai‘i Corporation and Subsidiaries

 

 

 

Selected Quarterly Financial Data

 

 

Table 14

 

Three Months Ended

 

 

 

September 30,

 

 

June 30,

 

 

March 31,

 

 

December 31,

 

 

September 30,

 

 

(dollars in thousands, except per share amounts)

2023

 

 

2023

 

 

2023

 

 

2022

 

 

2022

 

 

Quarterly Operating Results

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest Income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest and Fees on Loans and Leases

$

151,245

 

 

$

144,541

 

 

$

136,501

 

 

$

128,683

 

 

$

115,013

 

 

Income on Investment Securities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Trading

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Available-for-Sale

 

23,552

 

 

 

23,301

 

 

 

23,893

 

 

 

18,476

 

 

 

16,995

 

 

Held-to-Maturity

 

22,838

 

 

 

23,375

 

 

 

23,948

 

 

 

23,708

 

 

 

20,243

 

 

Deposits

 

18

 

 

 

18

 

 

 

27

 

 

 

13

 

 

 

10

 

 

Funds Sold

 

12,828

 

 

 

6,395

 

 

 

3,366

 

 

 

1,093

 

 

 

2,335

 

 

Other

 

1,464

 

 

 

2,121

 

 

 

597

 

 

 

340

 

 

 

322

 

 

Total Interest Income

 

211,945

 

 

 

199,751

 

 

 

188,332

 

 

 

172,313

 

 

 

154,918

 

 

Interest Expense

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Deposits

 

72,153

 

 

 

53,779

 

 

 

37,794

 

 

 

23,494

 

 

 

10,296

 

 

Securities Sold Under Agreements to Repurchase

 

4,034

 

 

 

5,436

 

 

 

5,377

 

 

 

4,289

 

 

 

2,745

 

 

Funds Purchased

 

-

 

 

 

184

 

 

 

704

 

 

 

318

 

 

 

40

 

 

Short-Term Borrowings

 

-

 

 

 

2,510

 

 

 

3,203

 

 

 

1,978

 

 

 

-

 

 

Other Debt

 

14,821

 

 

 

13,494

 

 

 

5,299

 

 

 

1,496

 

 

 

182

 

 

Total Interest Expense

 

91,008

 

 

 

75,403

 

 

 

52,377

 

 

 

31,575

 

 

 

13,263

 

 

Net Interest Income

 

120,937

 

 

 

124,348

 

 

 

135,955

 

 

 

140,738

 

 

 

141,655

 

 

Provision for Credit Losses

 

2,000

 

 

 

2,500

 

 

 

2,000

 

 

 

200

 

 

 

-

 

 

Net Interest Income After Provision for Credit Losses

 

118,937

 

 

 

121,848

 

 

 

133,955

 

 

 

140,538

 

 

 

141,655

 

 

Noninterest Income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Trust and Asset Management

 

10,548

 

 

 

11,215

 

 

 

10,690

 

 

 

10,652

 

 

 

10,418

 

 

Mortgage Banking

 

1,059

 

 

 

1,176

 

 

 

1,004

 

 

 

991

 

 

 

1,002

 

 

Service Charges on Deposit Accounts

 

7,843

 

 

 

7,587

 

 

 

7,737

 

 

 

7,513

 

 

 

7,526

 

 

Fees, Exchange, and Other Service Charges

 

13,824

 

 

 

14,150

 

 

 

13,808

 

 

 

13,906

 

 

 

13,863

 

 

Investment Securities Losses, Net

 

(6,734

)

 

 

(1,310

)

 

 

(1,792

)

 

 

(1,124

)

 

 

(2,147

)

 

Annuity and Insurance

 

1,156

 

 

 

1,038

 

 

 

1,271

 

 

 

1,087

 

 

 

1,034

 

 

Bank-Owned Life Insurance

 

2,749

 

 

 

2,876

 

 

 

2,842

 

 

 

2,475

 

 

 

2,486

 

 

Other

 

19,889

 

 

 

6,523

 

 

 

5,177

 

 

 

5,672

 

 

 

(3,522

)

 

Total Noninterest Income

 

50,334

 

 

 

43,255

 

 

 

40,737

 

 

 

41,172

 

 

 

30,660

 

 

Noninterest Expense

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Salaries and Benefits

 

58,825

 

 

 

56,175

 

 

 

65,088

 

 

 

57,639

 

 

 

59,938

 

 

Net Occupancy

 

10,327

 

 

 

9,991

 

 

 

9,872

 

 

 

9,499

 

 

 

10,186

 

 

Net Equipment

 

9,477

 

 

 

10,573

 

 

 

10,375

 

 

 

9,942

 

 

 

9,736

 

 

Data Processing

 

4,706

 

 

 

4,599

 

 

 

4,583

 

 

 

4,579

 

 

 

4,616

 

 

Professional Fees

 

3,846

 

 

 

4,651

 

 

 

3,883

 

 

 

3,958

 

 

 

3,799

 

 

FDIC Insurance

 

3,361

 

 

 

3,173

 

 

 

3,234

 

 

 

1,774

 

 

 

1,680

 

 

Other

 

15,059

 

 

 

14,874

 

 

 

14,884

 

 

 

15,312

 

 

 

15,794

 

 

Total Noninterest Expense

 

105,601

 

 

 

104,036

 

 

 

111,919

 

 

 

102,703

 

 

 

105,749

 

 

Income Before Provision for Income Taxes

 

63,670

 

 

 

61,067

 

 

 

62,773

 

 

 

79,007

 

 

 

66,566

 

 

Provision for Income Taxes

 

15,767

 

 

 

15,006

 

 

 

15,931

 

 

 

17,700

 

 

 

13,765

 

 

Net Income

$

47,903

 

 

$

46,061

 

 

$

46,842

 

 

$

61,307

 

 

$

52,801

 

 

Preferred Stock Dividends

 

1,969

 

 

 

1,969

 

 

 

1,969

 

 

 

1,969

 

 

 

1,969

 

 

Net Income Available to Common Shareholders

$

45,934

 

 

$

44,092

 

 

$

44,873

 

 

$

59,338

 

 

$

50,832

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic Earnings Per Common Share

$

1.17

 

 

$

1.12

 

 

$

1.14

 

 

$

1.51

 

 

$

1.28

 

 

Diluted Earnings Per Common Share

$

1.17

 

 

$

1.12

 

 

$

1.14

 

 

$

1.50

 

 

$

1.28

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance Sheet Totals

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loans and Leases

$

13,919,491

 

 

$

13,914,889

 

 

$

13,824,522

 

 

$

13,646,420

 

 

$

13,321,606

 

 

Total Assets

 

23,549,785

 

 

 

24,947,936

 

 

 

23,931,977

 

 

 

23,606,877

 

 

 

23,134,040

 

 

Total Deposits

 

20,802,309

 

 

 

20,508,615

 

 

 

20,491,300

 

 

 

20,615,696

 

 

 

20,888,773

 

 

Total Shareholders' Equity

 

1,363,840

 

 

 

1,358,279

 

 

 

1,354,430

 

 

 

1,316,995

 

 

 

1,282,384

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Performance Ratios

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Return on Average Assets

 

0.78

 

 %

 

0.77

 

 %

 

0.80

 

 %

 

1.05

 

 %

 

0.91

 

 %

Return on Average Shareholders' Equity

 

13.92

 

 

 

13.55

 

 

 

14.25

 

 

 

18.91

 

 

 

15.31

 

 

Return on Average Common Equity

 

15.38

 

 

 

14.95

 

 

 

15.79

 

 

 

21.28

 

 

 

16.98

 

 

Efficiency Ratio 1

 

61.66

 

 

 

62.07

 

 

 

63.34

 

 

 

56.46

 

 

 

61.37

 

 

Net Interest Margin 2

 

2.13

 

 

 

2.22

 

 

 

2.47

 

 

 

2.60

 

 

 

2.60

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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 Hawai‘i Corporation and Subsidiaries

 

 

 

 

 

Hawaii Economic Trends

 

 

Table 15

 

Eight Months Ended

 

 

Year Ended

(dollars in millions; jobs in thousands)

August 31, 2023

 

 

December 31, 2022

December 31, 2021

Hawaii Economic Trends

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

State General Fund Revenues 1

$

6,461.9

 

 

(3.5

)

 %

$

9,441.3

 

 

 

16.0

 

 %

$

8,137.9

 

 

 

26.9

 

 %

General Excise and Use Tax Revenue 1

 

3,027.8

 

 

5.9

 

 

 

4,263.4

 

 

 

18.3

 

 

 

3,604.3

 

 

 

18.6

 

 

Jobs 2

 

657.3

 

 

 

 

654.5

 

 

 

 

 

642.6

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

September 30,

 

 

December 31,

 

 

 

 

 

 

 

 

 

2023

 

 

2022

2021

Unemployment, seasonally adjusted 3

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 Statewide

 

 

 

 

 

 

 

 

 

2.8

 

 %

 

3.7

 

 %

 

3.2

 

 %

 Honolulu County

 

 

 

 

 

 

 

 

 

2.2

 

 

 

3.3

 

 

 

3.7

 

 

 Hawaii County

 

 

 

 

 

 

 

 

 

2.2

 

 

 

4.7

 

 

 

1.8

 

 

 Maui County

 

 

 

 

 

 

 

 

 

6.4

 

 

 

4.5

 

 

 

2.4

 

 

 Kauai County

 

 

 

 

 

 

 

 

 

2.0

 

 

 

4.7

 

 

 

2.7

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

September 30,

 

 

December 31,

(1-year percentage change, except months of inventory)

 

 

 

 

 

2023

 

 

2022

 

 

2021

 

 

2020

 

 

Housing Trends (Single Family Oahu) 4

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Median Home Price

 

 

 

 

 

 

(5.4

)

 %

 

11.6

 

 %

 

19.3

 

 %

 

5.2

 

 %

Home Sales Volume (units)

 

 

 

 

 

 

(30.5

)

 %

 

(23.2

)

 %

 

17.9

 

 %

 

2.3

 

 %

Months of Inventory

 

 

 

 

 

 

2.7

 

 

 

2.1

 

 

 

0.8

 

 

 

1.4

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Monthly Visitor Arrivals,

 

 

Percentage Change

(in thousands, except percent change)

 

 

 

 

 

Not Seasonally Adjusted

 

 

from Previous Year

Tourism 5

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

      August 31, 2023

 

 

 

 

 

 

 

 

 

766.0

 

 

 

 

 

 

(7.7

)

%

      July 31, 2023

 

 

 

 

 

 

 

 

 

929.4

 

 

 

 

 

 

1.2

 

 

      June 30, 2023

 

 

 

 

 

 

 

 

 

886.0

 

 

 

 

 

 

5.3

 

 

      May 31, 2023

 

 

 

 

 

 

 

 

 

790.5

 

 

 

 

 

 

2.1

 

 

      April 30, 2023

 

 

 

 

 

 

 

 

 

806.2

 

 

 

 

 

 

(0.4

)

 

      March 31, 2023

 

 

 

 

 

 

 

 

 

892.2

 

 

 

 

 

 

13.6

 

 

      February 28, 2023

 

 

 

 

 

 

 

 

 

733.6

 

 

 

 

 

 

17.6

 

 

      January 31, 2023

 

 

 

 

 

 

 

 

 

775.1

 

 

 

 

 

 

36.7

 

 

      December 31, 2022

 

 

 

 

 

 

 

 

 

858.1

 

 

 

 

 

 

14.0

 

 

      November 30, 2022

 

 

 

 

 

 

 

 

 

725.5

 

 

 

 

 

 

18.2

 

 

      October 31, 2022

 

 

 

 

 

 

 

 

 

726.1

 

 

 

 

 

 

31.8

 

 

      September 30, 2022

 

 

 

 

 

 

 

 

 

691.8

 

 

 

 

 

 

37.1

 

 

      August 31, 2022

 

 

 

 

 

 

 

 

 

829.8

 

 

 

 

 

 

14.8

 

 

      July 31, 2022

 

 

 

 

 

 

 

 

 

918.6

 

 

 

 

 

 

4.4

 

 

      June 30, 2022

 

 

 

 

 

 

 

 

 

841.8

 

 

 

 

 

 

6.4

 

 

      May 31, 2022

 

 

 

 

 

 

 

 

 

774.1

 

 

 

 

 

 

22.9

 

 

      April 30, 2022

 

 

 

 

 

 

 

 

 

809.6

 

 

 

 

 

 

67.3

 

 

      March 31, 2022

 

 

 

 

 

 

 

 

 

785.7

 

 

 

 

 

 

78.7

 

 

      February 28, 2022

 

 

 

 

 

 

 

 

 

623.7

 

 

 

 

 

 

165.1

 

 

      January 31, 2022

 

 

 

 

 

 

 

 

 

567.2

 

 

 

 

 

 

229.8

 

 

      December 31,2021

 

 

 

 

 

 

 

 

 

752.8

 

 

 

 

 

 

219.3

 

 

      November 30, 2021

 

 

 

 

 

 

 

 

 

614.0

 

 

 

 

 

 

234.1

 

 

      October 31, 2021

 

 

 

 

 

 

 

 

 

550.8

 

 

 

 

 

 

618.2

 

 

      September 30, 2021

 

 

 

 

 

 

 

 

 

504.6

 

 

 

 

 

 

2,641.0

 

 

      August 31, 2021

 

 

 

 

 

 

 

 

 

723.0

 

 

 

 

 

 

2,995.6

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1  Source: Hawaii Department of Business, Economic Development & Tourism

2  Source: U.S. Bureau of Labor Statistics

3  Source: University of Hawaii Economic Research Organization (UHERO)

4  Source: Honolulu Board of Realtors

5  Source: Hawaii Tourism Authority

 

 


Slide 1

Bank of Hawai‘i Corporation third quarter 2023 financial report October 23, 2023 Exhibit 99.2


Slide 2

this presentation, and other statements made by the Company in connection with it, may contain forward-looking statements concerning, among other things, forecasts of our financial results and condition, expectations for our operations and business prospects, and our assumptions used in those forecasts and expectations. we have not committed to update forward-looking statements to reflect later events or circumstances disclosure 2 forward-looking statements


Slide 3

diversified, lower risk loan assets highlights broad & deep market penetration quality balance sheet performance earnings highlights strong credit period end total deposits increased 1.4% average deposits increased 2.4% growth attributed to increase in core customer deposits wholesale funding decreased by $1.8 billion $1.17 earnings per diluted share 1.40% average cost of total deposits 15.38% return on average common equity 0.06% net charge-off rate 0.08% non-performing assets level 79% of loan portfolio real-estate secured with combined wtd avg LTV of 55% CRE portfolio comprises 27% of total loans wtd avg LTV of 55%; only 8% maturing prior to 2025; CRE office exposure only 3% of total loans $9.6 billion in readily available liquidity exceeds uninsured/uncollateralized deposits strong liquidity


Slide 4

our deposits through our 125 year history in the islands, Bank of Hawai‘i has developed an exceptionally seasoned deposit base, built one relationship at a time, over many years, and in neighborhoods and communities we understand unique marketplace diversified long tenured ✔ ✔ ✔


Slide 5

unique deposit market source: FDIC Annual Summary of Deposits as of June 30, 2023 the leader in a unique deposit market with five local competitors holding 97% of the bank deposit market


Slide 6

insured/collateralized deposits note: as of September 30, 2023


Slide 7

long tenured deposit base note: as of September 30, 2023


Slide 8

spot balance increased by 1.4% average balance increased by 2.4% stable deposit balances $ in billions


Slide 9

compares 9/27/23 vs. 12/28/22; small banks data derived from H.8 Assets and Liabilities of Commercial Banks in the United States, Table 9 - Assets and Liabilities of Small Domestically Charted Commercial Banks in the United States, not seasonally adjusted compares 9/30/23 vs. 12/31/22 (1) (2) 2023 deposit balances change


Slide 10

cost of funds interest-bearing deposits source: S&P Capital IQ; KBW Regional Banking Index (KRX) as of 1/3/23


Slide 11

cost of funds total deposits source: S&P Capital IQ; KBW Regional Banking Index (KRX) as of 1/3/23


Slide 12

deposit beta performance source: S&P Capital IQ; KBW Regional Banking Index (KRX) as of 1/3/23


Slide 13

note: as of September 30, 2023, FRB borrowing capacity includes Bank Term Funding Program margins, cash includes fed funds sold and cash and due from banks, and securities available includes unencumbered investment securities Bank of Hawai‘i carries substantial liquidity lines and equivalents for both day-to-day operational and liquidity backstop purposes readily available liquidity


Slide 14

unemployment experience & forecast source for Hawai‘i unemployment: University of Hawaii Economic Research Organization (UHERO), seasonally adjusted source for national unemployment: Bureau of Labor Statistics, seasonally adjusted 14


Slide 15

15 visitor arrivals monthly by market, indexed to January 2017 source: Hawaii Department of Business, Economic Development, and Tourism (DBEDT) Aug-23


Slide 16

revenue per available room revenue per available room (RevPAR) source: Hawaii Department of Business, Economic Development, and Tourism (DBEDT) Aug-23


Slide 17

  single family homes condominiums   Sep 2023 Sep 2022 Sep 2019 Δ Sep 2022 Δ Sep 2019 Sep 2023 Sep 2022 Sep 2019 Δ Sep 2022 Δ Sep 2019 median sales price (000s) $1,050 $1,100 $777 -4.5% 35.1% $533 $503 $445 6.0% 19.7% months of inventory 2.7 1.9 3.5 0.8 months -0.8 months 3.0 2.0 3.9 1.0 months -0.9 months closed sales 232 278 347 -16.5% -33.1% 376 496 466 -24.2% -19.3% median days on market 20 18 29 2 days 9 day 21 14 27 7 days 6 days stable real estate prices Oahu market indicators – September 2023 source: Honolulu Board of Realtors, compiled from MLS data


Slide 18

credit performance


Slide 19

lending philosophy note: as of September 30, 2023 we lend in our core markets to long-standing relationships


Slide 20

de-risking the balance sheet core non-core consumer residential mortgage home equity auto other consumer residential mortgage – land, interest only home equity – purchased auto – Oregon, origination FICO < 680 personal flexline credit card commercial C&I commercial real estate construction leasing scored small business non-relationship SNC large ticket leasing


Slide 21

historical net charge-off rates lower net charge offs through different economic cycles KRX – represents historical average net charge-off rates for banks in the KBW Regional Banking index as of 1/3/23 (source: S&P Capital IQ) all banks – represents historical average net charge-off rates for all FDIC insured banks (source: FDIC)


Slide 22

loan portfolio 41% commercial 71% real estate secured wtd avg LTV 56% 56% w/ BOH ≥ 10 yrs avg bal $0.7MM CRE C&I residential mortgage home equity auto leasing other consumer construction 59% consumer 84% real estate secured wtd avg LTV 54% 58% w/ BOH ≥ 10 yrs avg bal $0.07MM 79% of portfolio secured with real estate with combined weighted average loan to value of 55% note: excludes $13MM in PPP loan balances including deferred costs and fees


Slide 23

commercial real estate (CRE) 27% of total loans $3.8B CRE asset type % total CRE wtd avg LTV multi-family 24% 59% industrial 20% 56% retail 18% 55% lodging 15% 52% office 10% 56% specialty 11% 53% other 2% 48% total CRE 100% 55%


Slide 24

CRE office 3% of total loans 56% wtd avg LTV $1.8MM average exposure 25% CBD (Downtown Honolulu) - 63% wtd avg LTV - 47% with repayment guaranties 2% maturing prior to 2025 highlights $0.38B


Slide 25

Oahu investor office market source: Colliers vacancy and rents remain stable as conversions to alternative purpose continue to drive decline in inventory 13.6 million square feet


Slide 26

Honolulu multi-family market source: CoStar 30,367 units severely limited existing and new supply, compounded by the high cost of homeownership, continues to drive rental demand


Slide 27

Oahu industrial market source: Colliers 41.5 million square feet vacancy rates at a historic low, while available industrial space listings remain near record low


Slide 28

Oahu retail market source: Colliers 17.1 million square feet record retail sales and tourism spend continue to support post-pandemic recovery


Slide 29

Oahu lodging market source: Hawaii Tourism Authority, UHERO outlook is generally positive, as inventory remains flat and occupancy & RevPar report comparably with pre-pandemic tourism 30.9 thousand rooms


Slide 30

CRE scheduled maturities 8% maturing prior to 2025


Slide 31

CRE tail risk $0.03B of CRE with LTV > 80% LTV > 80% - 0.8% of CRE, 0.2% of total loans


Slide 32

construction 2% of total loans $0.3B construction asset type % total construction wtd avg LTV housing – low income / affordable 46% 65% housing – other 5% 45% retail 21% 64% industrial 10% 67% lodging 13% 51% office 4% 69% specialty 1% 56% total construction 100% 62%


Slide 33

Maui economic impact 2021 percentage of state total by county source: University of Hawaii Economic Research Organization (UHERO)


Slide 34

Maui portfolio 12% of total loans, 1% of total loans located in fire impacted zone $1.6B total Maui * principally comprised of loans secured by real estate ** land value based on 50% 2023 land tax assessed value fire impacted zone not destroyed/ no loss estimated potential loss destroyed real estate covered by insurance & land** 50% of unsecured loans $millions destroyed real estate covered by insurance secured* unsecured fire impacted zone 10.5%


Slide 35

credit quality * 51% of total criticized in CRE with 57% wtd avg LTV


Slide 36

financial update


Slide 37

= NIM $ in millions NII and NIM net interest income (NII) and net interest margin (NIM) challenges from inverted yield curve and higher short term rates deposit rates and betas remain well below peers NIM declined by 9 basis points in 3Q23 compared to 2Q23


Slide 38

hedging program increased pay-fixed/receive-float swaps by $1.8 billion ($2.0 billion total notional) in 3Q23 to hedge a portion of fixed-rate asset exposure asset composition note: fixed excludes $1.8 billion of fixed-rate assets swapped to floating through the hedging program, fixed/float breakdown includes loans, investment portfolio (using par value), and fed funds sold, 9/30/23 pro forma includes $500.0 million of pay-fixed/receive-float swaps executed in October 2023, numbers may not add up due to rounding


Slide 39

asset repricing note: numbers may not add up due to rounding, loans repricing/swaps includes $1.0 billion of fixed-rate loans swapped to floating rate assets, inv. portfolio repricing/swaps and fed funds sold includes $1.0 billion of fixed-rate available-for-sale securities swapped to floating rate assets, matured/run-off yield for loans includes only fixed-rate loans; matured/run-off yield for investment portfolio excludes securities sold in 3Q23 matured/run-off yield $8.5B $8.7B reinvestment opportunity


Slide 40

balance sheet summary note: numbers may not add up due to rounding $ in millions


Slide 41

noninterest income $ in millions stable core noninterest income from diverse sources normalizing items: +$0.9 Visa Class B conversion ratio adjustment +$6.9 terminated leveraged leases normalizing items: -$1.5 sale of a low-income housing tax credit investment normalizing items: +$0.8 Visa Class B conversion ratio adjustment +$4.6 net loss on securities sales -$14.7 gain on early termination of private repurchase agreements note: numbers may not add up due to rounding


Slide 42

noninterest expense $ in millions disciplined expense management in challenging operating environment normalizing items: -$1.8 separation normalizing items: -$2.1 separation -$0.4 extraordinary expenses related to Maui wildfires note: numbers may not add up due to rounding


Slide 43

financial summary $ in millions, except per share amounts note: numbers may not add up due to rounding 3Q 2023 2Q 2023 3Q 2022 ∆ 2Q 2023 ∆ 3Q 2022 net interest income $ 120.9 $ 124.3 $ 141.7 $ (3.4) $ (20.7) noninterest income 50.3   43.3   30.7   7.1   19.7   total revenue 171.3 167.6 172.3 3.7 (1.0) noninterest expense 105.6   104.0   105.7   1.6   (0.1)   operating income 65.7   63.6   66.6 2.1 (0.9) credit provision 2.0 2.5 - (0.5) 2.0 income taxes 15.8 15.0 13.8 0.8 2.0 net income $ 47.9   $ 46.1   $ 52.8   $ 1.8   $ (4.9)   net income available to common $ 45.9   $ 44.1   50.8   $ 1.8   $ (4.9)   diluted EPS $ 1.17   $ 1.12   $ 1.28   $ 0.05   $ (0.11)   return on assets 0.78 % 0.77 % 0.91 % 0.01 % (0.13) % return on common equity 15.38 14.95 16.98 0.43 (1.60) net interest margin 2.13 2.22 2.60 (0.09) (0.47) efficiency ratio 61.66 62.07 61.37 (0.41) 0.29 end of period balance shareholders' equity $ 1,364 $ 1,358 $ 1,282 0.4 % 6.4 %


Slide 44

capital note: 3Q23 regulatory capital ratios are preliminary 13.6% organic capital continues to grow


Slide 45

unique and competitively advantageous deposit market high quality deposit base market leading cost of deposits high quality assets exceptional credit quality strong risk-based capital takeaways


Slide 46

Q & A


Slide 47

appendix


Slide 48

Hawai‘i economy $ in billions source: Hawaii Department of Business, Economic Development, and Tourism (DBEDT)