Bank of Hawaii Corporation 2004 Financial Results
Click here for a printable version of the Fourth Quarter 2004 Financial Results.
HONOLULU--(BUSINESS WIRE)--Jan. 24, 2005--Bank of Hawaii Corporation (NYSE:BOH)
- 2004 Diluted Earnings Per Share $3.08, Up 39% From 2003
- 2004 Net Income $173.3 Million, Up 28% From 2003
- Board of Directors Increases Share Repurchase Authorization $100 Million
- Board of Directors Declares Dividend of $0.33 Per Share
Bank of Hawaii Corporation (NYSE:BOH) today reported diluted earnings per share for 2004 of $3.08, up $0.87 or 39.4 percent from diluted earnings per share of $2.21 in 2003. Net income for the year was $173.3 million, up $38.1 million or 28.2 percent from $135.2 million in the previous year. The return on average assets in 2004 was 1.78 percent, up from 1.44 percent in 2003. The return on average equity for the year was 22.78 percent, up from 15.02 percent in 2003.
"I am very pleased with Bank of Hawaii Corporation's financial performance in 2004. We exceeded the financial objectives of the first year of our three-year plan," said Allan R. Landon, Chairman and CEO. "Additionally, we grew our businesses, improved our processes, and maintained excellent asset quality. The Hawaii economy remains solid and we are optimistic about 2005."
Diluted earnings per share for the fourth quarter of 2004 were $0.82, up $0.16 or 24.2 percent from $0.66 per diluted share for the same period last year. Net income in the fourth quarter of 2004 was $46.2 million, up $7.6 million or 19.6 percent from net income of $38.7 million in the fourth quarter last year. Results for the fourth quarter of 2004 included a return to income of $6.5 million before tax ($4.1 million after tax or $0.07 per diluted share), resulting from a release of the allowance for loan and lease losses due to further improvement in the Company's credit quality and continued strong economic conditions. The return on average assets for the fourth quarter of 2004 was 1.89 percent, up from 1.66 percent in the fourth quarter of 2003. The return on average equity was 23.63 percent for the quarter, up from 18.59 percent in the same quarter last year.
Financial Highlights
Net interest income, on a taxable equivalent basis, for the fourth quarter of 2004 was $100.0 million, up $1.2 million from $98.8 million in the third quarter of 2004 and up $6.6 million from $93.4 million in the fourth quarter last year. The increase in net interest income from the previous quarter was largely due to an increase in average earning assets. An analysis of the change in net interest income for the full year of 2004 is included in Table 6.
The net interest margin was 4.40 percent for the fourth quarter of 2004, a 1 basis point increase from 4.39 percent in the previous quarter and a 5 basis point increase from 4.35 percent in the fourth quarter of 2003. The net interest margin for the full year of 2004 was 4.32 percent, a 9 basis point increase from 4.23 percent in 2003.
The Company returned to income $6.5 million of the allowance for loan and lease losses during the fourth quarter of 2004. This was attributable to further improvement in the credit quality of the loan portfolio, lower than anticipated net charge-offs during 2004, management's ongoing assessment of the portfolio, and continued strength in the economic environment. In addition, the Company revised its allocation of the components of the allowance for loan and lease losses as a result of current accounting interpretations.
Non-interest income was $48.4 million for the fourth quarter, a decrease of $4.7 million or 8.9 percent compared to non-interest income of $53.1 million in the third quarter of 2004. Non-interest income in the third quarter of 2004 included a gain of $5.2 million on the sale of assets at the end of a leveraged lease transaction. Excluding this gain, non-interest income increased $0.5 million as growth in trust and asset management fees and service charges on deposits offset losses on the sale of investment securities and a decline in insurance income. Non-interest income was down $1.1 million or 2.2 percent from non-interest income of $49.4 million in the fourth quarter of 2003 largely due to a decline in gains on sales of mortgage loans.
Non-interest expense was $82.1 million in the fourth quarter of 2004, down $2.1 million or 2.5 percent from $84.2 million in the previous quarter and down $1.3 million or 1.6 percent from $83.4 million in the same quarter last year. The decrease for both periods was due to a reduction in salaries and benefits related to incentive compensation and separation expenses. In addition, the fourth quarter of 2003 included higher stock-based compensation expense that was offset by a curtailment gain on post-retirement benefits. An analysis of salary and benefit expenses is included in Table 7.
The efficiency ratio for the fourth quarter of 2004 was 55.37 percent, an improvement from 55.45 percent in the previous quarter and from 58.41 percent in the same quarter last year. The efficiency ratio for the full year of 2004 was 56.14 percent compared to 63.38 percent for 2003. Excluding systems replacement costs, the efficiency ratio for 2003 was 59.51 percent.
The Company's business segments are defined as Retail Banking, Commercial Banking, Investment Services Group, and Treasury and Other Corporate. Results are determined based on the Company's internal financial management reporting process and organizational structure. Previously reported results have been reclassified to conform to current methodologies. Business segment performance details are summarized in Tables 11a and 11b.
Asset Quality
Bank of Hawaii Corporation's strong credit quality continued to improve during the fourth quarter of 2004. Non-performing assets were $13.9 million at the end of the quarter, a decrease of $2.1 million, or 13.3 percent, compared to non-performing assets of $16.0 million at the end of the previous quarter. Non-performing assets declined $17.9 million, or 56.3 percent, compared to $31.7 million at the end of 2003. At December 31, 2004 the ratio of non-performing assets to total loans and foreclosed real estate was 0.23 percent compared with 0.27 percent at September 30, 2004 and 0.55 percent at December 31, 2003.
Non-accrual loans were $13.7 million at December 31, 2004, a reduction of $2.1 million, or 13.3 percent, from $15.8 million at September 30, 2004 and down $13.7 million, or 50.0 percent, from $27.3 million at December 31, 2003. Non-accrual loans as a percentage of total loans were 0.23 percent at December 31, 2004, down from 0.27 percent at the end of the previous quarter and down from 0.48 percent at the end of 2003.
Net charge-offs during the fourth quarter of 2004 were $4.6 million, or 0.31 percent (annualized) of total average loans, compared to $0.3 million, or 0.02 percent (annualized) of total average loans in the third quarter of 2004. Net charge-offs in the fourth quarter of 2004 were comprised of $6.7 million in charge-offs partially offset by recoveries of $2.1 million. Net charge-offs during the fourth quarter of 2003 were $3.6 million, or 0.26 percent (annualized) of total average loans. Net charge-offs for the full year of 2004 were $5.5 million, or 0.09 percent of total average loans, a decrease of $8.3 million, or 60.2 percent, from net charge-offs of $13.8 million, or 0.25 percent of total average loans in 2003.
The allowance for loan and lease losses was $106.8 million at December 31, 2004 down from $124.7 million at September 30, 2004 and down from $129.1 million at December 31, 2003. The decrease in the allowance from the previous quarter was partially due to the previously mentioned $6.5 million return to income from the allowance for loan and lease losses. The decrease from the previous year also reflects a $3.5 million return to income from the allowance for loan and lease losses during the second quarter of 2004. In addition, during the fourth quarter of 2004 $6.8 million was reclassified from the allowance for loan and lease losses to other liabilities representing the estimate for probable credit losses inherent in unfunded commitments to extend credit. The process used to determine the reserve for unfunded commitments remains consistent with the process for determining the allowance for loan and lease losses. The allowance for unfunded commitments at December 31, 2004 was up from $6.7 million at September 30, 2004 and down from $6.9 million at December 31, 2003.
The ratio of the allowance for loan and lease losses to total loans was 1.78 percent at December 31, 2004, down from 2.14 percent at September 30, 2004 and down from 2.24 percent at December 31, 2003. If the allowance for unfunded commitments had been reclassified at either September 30, 2004 or at December 31, 2003, the ratio of the allowance for loan and lease losses to total loans would have been 2.03 percent and 2.12 percent, respectively.
Concentrations of credit exposure to selected components of the portfolio are summarized in Table 8.
Other Financial Highlights
Total assets were $9.77 billion at December 31, 2004, up from $9.59 billion at September 30, 2004 and up from $9.46 billion at December 31, 2003. Total loans and leases were $5.99 billion at December 31, 2004, up from $5.82 billion at September 30, 2004 and up from $5.76 billion at December 31, 2003. Commercial lending increased during the quarter. Total commercial loans were $2.04 billion at December 31, 2004, up $87 million compared to $1.96 billion at September 30, 2004 and up $51 million from $1.99 billion at December 31, 2003. Consumer lending continued its solid pace in the fourth quarter. Total consumer loans were $3.86 billion at December 31, 2004, up $79 million compared to $3.78 billion at the end of the previous quarter and up $163 million compared to $3.69 billion at the end of 2003.
Total deposits at December 31, 2004 were $7.56 billion, up $151 million from total deposits of $7.41 billion at September 30, 2004 and up $232 million from total deposits of $7.33 billion at December 31, 2003. Non-interest bearing demand deposits were $1.98 billion at December 31, 2004, up $79 million compared to $1.90 billion at September 30, 2004 and up $44 million from $1.93 billion at December 31, 2003.
During the fourth quarter of 2004, Bank of Hawaii Corporation repurchased 1.0 million shares of common stock at a total cost of $50.3 million under its share repurchase program. The average cost was $49.01 per share repurchased during the quarter. From the beginning of the share repurchase program in July 2001 through December 31, 2004, the Company repurchased a total of 34.9 million shares and returned a total of $1,087.5 million to the shareholders at an average cost of $31.13 per share.
The Company's Board of Directors has increased the authorization under the share repurchase program by an additional $100 million of common stock. This new authorization, combined with the previously announced authorizations of $1,150 million, brings the total repurchase authority to $1,250 million. From January 1, 2005 through January 21, 2005, the Company repurchased an additional 0.4 million shares of common stock at an average cost of $48.98 per share. Remaining buyback authority under the share repurchase program was $141.7 million at January 21, 2005.
The Company's capital and liquidity remain strong. At December 31, 2004 the Tier 1 leverage ratio was 8.29 percent compared to 7.69 percent at September 30, 2004 and 8.43 percent at December 31, 2003.
The Company's Board of Directors has declared a quarterly cash dividend of $0.33 per share on the Company's outstanding shares. The dividend will be payable on March 14, 2005 to shareholders of record at the close of business on February 28, 2005.
Outlook
Hawaii enters 2005 with continued payroll growth, low unemployment, nominal personal income growth approaching 6.0 percent, reasonable inflation, and tourism at record levels. The dollar's continuing weakness and solid economic growth in Asia should contribute to further increases in international tourism. Construction and real estate investment are expected to remain strong drivers of growth in the Hawaii economy.
Bank of Hawaii Corporation currently estimates that its net income for 2005 should be approximately $174 million to $177 million. Based on current economic conditions, the Company expects further credit quality improvement and, as a result, the allowance for loan and lease losses may be further reduced. Net income estimates for 2005 include a $10 million provision for loan and lease losses. An analysis of credit quality is performed quarterly to determine the adequacy of the allowance for loan and lease losses. The results of this analysis determine the timing and amount of the provision for loan and lease losses. Earnings per share and return on equity projections continue to be dependent upon, among other things, the terms and timing of share repurchases.
Conference Call Information
The Company will review its fourth quarter 2004 financial results today at 8:00 a.m. Hawaii Time (1:00 p.m. Eastern Time). The presentation will be accessible via teleconference and via the Investor Relations link of Bank of Hawaii Corporation's web site, www.boh.com. The conference call number is 800-573-4752 in the United States or 617-224-4324 for international callers. No confirmation code is required to access the call. A replay will be available for one week beginning Monday, January 24, 2005 by calling 888-286-8010 in the United States or 617-801-6888 for international callers and entering the number 60030955 when prompted. A replay of the presentation will also be available via the Investor Relations link of the Company's web site.
Bank of Hawaii Corporation is a regional financial services company serving businesses, consumers and governments in Hawaii, American Samoa and the West Pacific. The Company's principal subsidiary, Bank of Hawaii, was founded in 1897 and is the largest independent financial institution in Hawaii. For more information about Bank of Hawaii Corporation, see the Company's web site, www.boh.com.
Forward-Looking Statements
This news release, including the statements under the caption "Outlook," contains forward-looking statements concerning, among other things, the economic and business environment in our service area and elsewhere, credit quality, the expected level of loan and lease loss provisioning, and anticipated net income and other financial and business matters in future periods. Our forward-looking statements are based on numerous assumptions, any of which could prove to be inaccurate and actual results may differ materially from those projected for a variety of reasons, including, but not limited to: 1) unanticipated changes in business and economic conditions, the competitive environment, fiscal and monetary policies, or legislation in Hawaii and the other markets we serve; 2) changes in our credit quality or risk profile which may increase or decrease the required level of allowance for loan and lease losses; 3) changes in market interest rates that may affect our credit markets and ability to maintain our net interest margin; 4) changes to the amount and timing of our proposed equity repurchases and repayment of maturing debt; 5) inability to achieve expected benefits of our business process changes due to adverse changes in implementation processes or costs, operational savings, or timing; 6) real or threatened acts of war or terrorist activity affecting business conditions; and 7) adverse weather and other natural conditions impacting our and our customers' operations. We do not undertake any obligation to update forward-looking statements to reflect later events or circumstances.
Bank of Hawaii Corporation and Subsidiaries
Highlights (Unaudited) Table 1
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(dollars in thousands except
per share amounts) Three Months Year
Ended Ended
Earnings Highlights and December 31, December 31,
Performance Ratios 2004 2003 2004 2003
----------------------------------------------------------------------
Net Income $46,241 $38,673 $173,339 $135,195
Basic Earnings Per Share 0.86 0.70 3.26 2.32
Diluted Earnings Per Share 0.82 0.66 3.08 2.21
Cash Dividends 18,200 16,770 66,326 50,589
Net Income to Average Total
Assets (ROA) 1.89% 1.66% 1.78% 1.44%
Net Income to Average
Shareholders' Equity (ROE) 23.63% 18.59% 22.78% 15.02%
Net Interest Margin 4.40% 4.35% 4.32% 4.23%
Efficiency Ratio (1) 55.37% 58.41% 56.14% 63.38%
Efficiency Ratio excluding
System Replacement Costs 55.37% 58.41% 56.14% 59.51%
----------------------------------------------------------------------
Statement of Condition Highlights and December 31,
Performance Ratios 2004 2003
------------------------------------- ------------------------
Total Assets $9,766,191 $9,461,647
Net Loans 5,880,134 5,628,095
Total Deposits 7,564,667 7,332,779
Total Shareholders' Equity 814,834 793,132
Book Value Per Common Share $14.83 $14.44
Allowance / Loans and Leases
Outstanding 1.78% 2.24%
Average Equity / Average
Assets 7.81% 9.60%
Employees (FTE) 2,623 2,702
Branches and offices 87 89
Market Price Per Share of Common
Stock for the Quarter Ended:
Closing $50.74 $42.20
High $51.10 $42.99
Low $46.80 $33.69
(1) The efficiency ratio is defined as non-interest expense divided by
total revenue (net interest income and non-interest income).
Bank of Hawaii Corporation and Subsidiaries
Consolidated Statements of Income (Unaudited) Table 2
----------------------------------------------------------------------
(dollars in thousands Three Months Ended Year Ended
except per share December 31, December 31,
amounts) 2004 2003 2004 2003
----------------------------------------------------------------------
Interest Income
Interest and Fees on
Loans and Leases $84,100 $80,351 $327,953 $334,793
Income on Investment
Securities -
Available for Sale 26,394 19,032 93,528 77,793
Income on Investment
Securities - Held
to Maturity 6,147 7,183 26,204 18,956
Deposits 107 1,169 3,480 4,816
Funds Sold 356 85 1,058 1,919
Other 267 1,007 2,791 4,244
----------------------------------------------------------------------
Total Interest Income 117,371 108,827 455,014 442,521
----------------------------------------------------------------------
Interest Expense
Deposits 9,993 9,433 36,743 47,473
Securities Sold
Under Agreements to
Repurchase 3,120 1,359 9,353 7,939
Funds Purchased 395 249 1,815 944
Short-Term
Borrowings 39 17 82 92
Long-Term Debt 3,893 4,417 16,431 20,131
----------------------------------------------------------------------
Total Interest Expense 17,440 15,475 64,424 76,579
----------------------------------------------------------------------
Net Interest Income 99,931 93,352 390,590 365,942
Provision for Loan and
Lease Losses (6,500) - (10,000) -
----------------------------------------------------------------------
Net Interest Income
After Provision for
Loan and Lease Losses 106,431 93,352 400,590 365,942
----------------------------------------------------------------------
Non-Interest Income
Trust and Asset
Management 13,934 12,759 53,465 50,996
Mortgage Banking 1,516 3,324 8,012 15,556
Service Charges on
Deposit Accounts 10,155 9,442 39,117 35,938
Fees, Exchange, and
Other Service
Charges 13,684 13,725 54,907 56,221
Investment
Securities Gains
(Losses) (757) (20) (794) 1,789
Insurance 4,234 4,762 19,241 19,145
Other 5,584 5,445 31,146 19,075
----------------------------------------------------------------------
Total Non-Interest
Income 48,350 49,437 205,094 198,720
----------------------------------------------------------------------
Non-Interest Expense
Salaries and
Benefits 45,043 46,409 184,299 186,280
Net Occupancy
Expense 9,606 9,933 38,347 38,980
Net Equipment
Expense 6,316 7,395 23,926 33,652
Information
Technology Systems
Replacement Project - - - 21,871
Other 21,138 19,667 87,868 77,092
----------------------------------------------------------------------
Total Non-Interest
Expense 82,103 83,404 334,440 357,875
----------------------------------------------------------------------
Income Before Income
Taxes 72,678 59,385 271,244 206,787
Provision for Income
Taxes 26,437 20,712 97,905 71,592
----------------------------------------------------------------------
Net Income $46,241 $38,673 $173,339 $135,195
======================================================================
Basic Earnings Per
Share $0.86 $0.70 $3.26 $2.32
Diluted Earnings Per
Share $0.82 $0.66 $3.08 $2.21
Dividends Declared Per
Share $0.33 $0.30 $1.23 $0.87
Basic Weighted Average
Shares 53,766,057 55,374,874 53,232,815 58,338,566
Diluted Weighted
Average Shares 56,055,531 58,570,941 56,241,044 61,085,567
======================================================================
Bank of Hawaii Corporation and Subsidiaries
Consolidated Statements of Condition (Unaudited) Table 3
----------------------------------------------------------------------
December 31, December 31,
(dollars in thousands) 2004 2003
----------------------------------------------------------------------
Assets
Interest-Bearing Deposits $4,592 $154,735
Investment Securities - Available for Sale 2,483,719 1,991,116
Investment Securities - Held to Maturity
(Market Value of $585,836 and $720,699) 589,908 727,233
Funds Sold 21,000 -
Loans Held for Sale 17,642 9,211
Loans and Leases 5,986,930 5,757,175
Allowance for Loan and Lease Losses (106,796) (129,080)
----------------------------------------------------------------------
Net Loans 5,880,134 5,628,095
----------------------------------------------------------------------
Total Earning Assets 8,996,995 8,510,390
----------------------------------------------------------------------
Cash and Non-Interest-Bearing Deposits 225,359 363,495
Premises and Equipment 146,095 160,005
Customers' Acceptance Liability 1,406 1,707
Accrued Interest Receivable 36,044 32,672
Foreclosed Real Estate 191 4,377
Mortgage Servicing Rights 18,769 22,178
Goodwill 36,216 36,216
Other Assets 305,116 330,607
----------------------------------------------------------------------
Total Assets $9,766,191 $9,461,647
======================================================================
Liabilities
Deposits
Non-Interest-Bearing Demand $1,977,703 $1,933,928
Interest-Bearing Demand 1,536,323 1,356,330
Savings 2,960,351 2,833,379
Time 1,090,290 1,209,142
----------------------------------------------------------------------
Total Deposits 7,564,667 7,332,779
----------------------------------------------------------------------
Securities Sold Under Agreements to
Repurchase 568,981 472,757
Funds Purchased 149,635 109,090
Short-Term Borrowings 15,000 12,690
Banker's Acceptances Outstanding 1,406 1,707
Retirement Benefits Payable 65,708 61,841
Accrued Interest Payable 7,021 7,483
Taxes Payable and Deferred Taxes 229,928 207,101
Other Liabilities 96,373 138,999
Long-Term Debt 252,638 324,068
----------------------------------------------------------------------
Total Liabilities 8,951,357 8,668,515
----------------------------------------------------------------------
Shareholders' Equity
Common Stock ($.01 par value); authorized
500,000,000 shares; issued / outstanding:
December 2004 - 81,711,752 / 54,960,857,
December 2003 - 81,647,729 / 54,928,480, 813 807
Capital Surplus 450,998 391,701
Accumulated Other Comprehensive Income
(Loss) (12,917) (5,711)
Retained Earnings 1,282,425 1,199,077
Deferred Stock Grants (8,433) (8,309)
Treasury Stock, at Cost (Shares: December
2004 - 26,750,895, December 2003 -
26,719,249) (898,052) (784,433)
----------------------------------------------------------------------
Total Shareholders' Equity 814,834 793,132
----------------------------------------------------------------------
Total Liabilities and Shareholders' Equity $9,766,191 $9,461,647
======================================================================
Bank of Hawaii Corporation and Subsidiaries
Consolidated Statements of Shareholders' Equity (Unaudited) Table 4
----------------------------------------------------------------------
Accum.
Other
Compre-
hensive
Common Capital Income
(dollars in thousands) Total Stock Surplus (Loss)
----------------------------------------------------------------------
Balance at December 31, 2003 $793,132 $807 $391,701 $(5,711)
Comprehensive Income:
Net Income 173,339 - - -
Other Comprehensive
Income, Net of Tax:
Change in Unrealized
Gains and Losses on
Investment Securities (5,519) - - (5,519)
Change in Pension
Liability Adjustments (1,687) - - (1,687)
Total Comprehensive Income
Common Stock Issued under
Stock Plans and Related Tax
Benefits (5,280,205 shares) 159,972 6 59,297 -
Treasury Stock Purchased
(5,243,458 shares) (238,077) - - -
Cash Dividends Paid (66,326) - - -
----------------------------------------------------------------------
Balance at December 31, 2004 $814,834 $813 $450,998 $(12,917)
======================================================================
Balance at December 31, 2002 $1,015,759 $806 $372,192 $11,659
Comprehensive Income:
Net Income 135,195 - - -
Other Comprehensive
Income, Net of Tax:
Change in Unrealized
Gains and Losses on
Investment Securities (16,434) - - (16,434)
Change in Pension
Liability Adjustments (936) - - (936)
Total Comprehensive Income
Common Stock Issued under
Stock Plans and Related Tax
Benefits (1,683,424 shares) 40,115 1 19,509 -
Treasury Stock Purchased
(9,762,079 shares) (329,978) - - -
Cash Dividends Paid (50,589) - - -
----------------------------------------------------------------------
Balance at December 31, 2003 $793,132 $807 $391,701 $(5,711)
======================================================================
----------------------------------------------------------------------
Deferred Compre-
Retained Stock Treasury hensive
(dollars in thousands) Earnings Grants Stock Income
----------------------------------------------------------------------
Balance at December 31, 2003 $1,199,077 $(8,309) $(784,433)
Comprehensive Income:
Net Income 173,339 - - $173,339
Other Comprehensive
Income, Net of Tax:
Change in Unrealized
Gains and Losses on
Investment Securities - - - (5,519)
Change in Pension
Liability Adjustments - - - (1,687)
----------
Total Comprehensive Income $166,133
==========
Common Stock Issued under
Stock Plans and Related Tax
Benefits (5,280,205 shares) (23,665) (124) 124,458
Treasury Stock Purchased
(5,243,458 shares) - - (238,077)
Cash Dividends Paid (66,326) - -
-------------------------------------------------------------
Balance at December 31, 2004 $1,282,425 $(8,433) $(898,052)
=============================================================
Balance at December 31, 2002 $1,115,910 $(1,424) $(483,384)
Comprehensive Income:
Net Income 135,195 - - $135,195
Other Comprehensive
Income, Net of Tax:
Change in Unrealized
Gains and Losses on
Investment Securities - - - (16,434)
Change in Pension
Liability Adjustments - - - (936)
----------
Total Comprehensive Income $117,825
==========
Common Stock Issued under
Stock Plans and Related Tax
Benefits (1,683,424 shares) (1,439) (6,885) 28,929
Treasury Stock Purchased
(9,762,079 shares) - - (329,978)
Cash Dividends Paid (50,589) - -
-------------------------------------------------------------
Balance at December 31, 2003 $1,199,077 $(8,309) $(784,433)
=============================================================
Bank of Hawaii Corporation and Subsidiaries
Consolidated Average Balances and Interest Rates - Taxable
Equivalent Basis (Unaudited) Table 5a
----------------------------------------------------------------------
Three Months Ended Three Months Ended
December 31, 2004 September 30, 2004
Average Income/ Yield/ Average Income/ Yield/
(dollars in millions) Balance Expense Rate Balance Expense Rate
----------------------------------------------------------------------
Earning Assets
Interest-Bearing
Deposits $21.0 $0.1 2.05% $82.6 $0.5 2.39%
Funds Sold 74.3 0.4 1.92 28.6 0.1 1.51
Investment Securities
Available for Sale 2,444.9 26.4 4.32 2,325.5 24.6 4.23
Held to Maturity 615.1 6.1 4.00 659.0 6.3 3.87
Loans Held for Sale 15.9 0.2 5.72 11.3 0.2 5.74
Loans and Leases
Commercial and
Industrial 773.6 11.2 5.78 796.2 10.6 5.34
Construction 115.2 1.5 5.10 81.1 1.0 5.01
Commercial Mortgage 624.4 8.6 5.47 658.9 8.8 5.29
Residential Mortgage 2,304.9 32.3 5.61 2,282.6 32.1 5.62
Installment 738.2 15.6 8.38 722.7 15.2 8.38
Home Equity 632.6 8.4 5.25 583.7 7.1 4.83
Purchased Home
Equity 134.4 1.2 3.71 155.2 1.7 4.29
Lease Financing 511.1 5.1 3.97 516.0 5.4 4.17
----------------------------------------------------------------------
Total Loans and Leases 5,834.4 83.9 5.73 5,796.4 81.9 5.63
----------------------------------------------------------------------
Other 60.7 0.3 1.74 78.7 0.8 4.05
----------------------------------------------------------------------
Total Earning Assets 9,066.3 117.4 5.17 8,982.1 114.4 5.08
----------------------------------------------------------------------
Cash and Non-Interest-
Bearing Deposits 307.5 316.9
Other Assets 369.2 369.5
--------- ---------
Total Assets $9,743.0 $9,668.5
========= =========
Interest-Bearing
Liabilities
Interest-Bearing
Deposits
Demand $1,500.0 $1.3 0.33% $1,471.0 $0.9 0.24%
Savings 2,998.5 3.6 0.48 2,998.4 3.2 0.43
Time 1,063.7 5.1 1.92 1,078.4 4.9 1.81
----------------------------------------------------------------------
Total Interest-Bearing
Deposits 5,562.2 10.0 0.71 5,547.8 9.0 0.64
----------------------------------------------------------------------
Short-Term Borrowings 776.0 3.5 1.82 816.9 2.8 1.36
Long-Term Debt 252.6 3.9 6.16 246.8 3.8 6.22
----------------------------------------------------------------------
Total Interest-Bearing
Liabilities 6,590.8 17.4 1.05 6,611.5 15.6 0.94
----------------------------------------------------------------------
Net Interest Income $100.0 $98.8
======= =======
Interest Rate Spread 4.12% 4.14%
Net Interest Margin 4.40% 4.39%
Non-Interest-Bearing
Demand Deposits 1,954.2 1,932.0
Other Liabilities 419.4 393.4
Shareholders' Equity 778.6 731.6
--------- ---------
Total Liabilities and
Shareholders' Equity $9,743.0 $9,668.5
========= =========
-----------------------------------------------
Three Months Ended
December 31, 2003
Average Income/ Yield/
(dollars in millions) Balance Expense Rate
-----------------------------------------------
Earning Assets
Interest-Bearing
Deposits $218.6 $1.2 2.12%
Funds Sold 34.3 0.1 0.99
Investment Securities
Available for Sale 1,900.2 19.0 4.01
Held to Maturity 740.5 7.2 3.88
Loans Held for Sale 13.9 0.2 6.21
Loans and Leases
Commercial and
Industrial 858.2 10.6 4.90
Construction 99.2 1.1 4.30
Commercial Mortgage 627.4 8.9 5.62
Residential Mortgage 2,336.3 34.5 5.90
Installment 598.1 13.4 8.89
Home Equity 453.0 5.6 4.89
Purchased Home Equity 104.7 0.6 2.24
Lease Financing 494.0 5.5 4.44
-----------------------------------------------
Total Loans and Leases 5,570.9 80.2 5.73
-----------------------------------------------
Other 76.8 1.0 5.20
-----------------------------------------------
Total Earning Assets 8,555.2 108.9 5.07
-----------------------------------------------
Cash and Non-Interest-
Bearing Deposits 323.5
Other Assets 379.1
---------
Total Assets $9,257.8
=========
Interest-Bearing
Liabilities
Interest-Bearing
Deposits
Demand $1,293.8 0.5 0.16%
Savings 2,786.6 3.2 0.46
Time 1,227.9 5.7 1.83
-----------------------------------------------
Total Interest-Bearing
Deposits 5,308.3 9.4 0.71
-----------------------------------------------
Short-Term Borrowings 608.0 1.7 1.06
Long-Term Debt 324.2 4.4 5.43
-----------------------------------------------
Total Interest-Bearing
Liabilities 6,240.5 15.5 0.99
-----------------------------------------------
Net Interest Income $93.4
=======
Interest Rate Spread 4.08%
Net Interest Margin 4.35%
Non-Interest-Bearing
Demand Deposits 1,836.4
Other Liabilities 355.7
Shareholders' Equity 825.2
---------
Total Liabilities and
Shareholders' Equity $9,257.8
=========
Bank of Hawaii Corporation and Subsidiaries
Consolidated Average Balances and Interest Rates - Taxable
Equivalent Basis (Unaudited) Table 5b
----------------------------------------------------------------------
Year Ended Year Ended
December 31, 2004 December 31, 2003
Average Income/ Yield/ Average Income/ Yield/
(dollars in millions) Balance Expense Rate Balance Expense Rate
----------------------------------------------------------------------
Earning Assets
Interest-Bearing
Deposits $189.7 $3.5 1.83% $227.3 $4.8 2.12%
Funds Sold 85.6 1.0 1.24 162.9 1.9 1.18
Investment Securities
Available for Sale 2,227.8 93.7 4.21 2,142.8 77.9 3.64
Held to Maturity 675.7 26.2 3.88 487.6 19.0 3.89
Loans Held for Sale 15.8 0.9 5.58 39.5 2.2 5.48
Loans and Leases
Commercial and
Industrial 810.4 42.3 5.22 860.3 41.9 4.87
Construction 99.3 4.5 4.56 96.3 4.4 4.56
Commercial Mortgage 639.1 34.5 5.40 644.8 37.4 5.81
Residential Mortgage 2,296.7 129.9 5.66 2,295.0 145.6 6.34
Installment 703.2 59.6 8.47 548.8 52.6 9.59
Home Equity 560.3 27.4 4.88 444.6 22.5 5.05
Purchased Home Equity 168.2 7.4 4.41 144.7 5.9 4.10
Lease Financing 509.5 21.5 4.21 489.9 22.3 4.55
----------------------------------------------------------------------
Total Loans and Leases 5,786.7 327.1 5.65 5,524.4 332.6 6.02
----------------------------------------------------------------------
Other 73.8 2.8 3.78 75.7 4.3 5.61
----------------------------------------------------------------------
Total Earning Assets 9,055.1 455.2 5.03 8,660.2 442.7 5.11
----------------------------------------------------------------------
Cash and Non-Interest-
Bearing Deposits 314.6 328.4
Other Assets 375.8 388.9
--------- ---------
Total Assets $9,745.5 $9,377.5
========= =========
Interest-Bearing
Liabilities
Interest-Bearing
Deposits
Demand $1,433.1 $3.2 0.22% $1,215.7 $2.5 0.20%
Savings 2,945.3 13.2 0.45 2,723.9 15.7 0.58
Time 1,114.8 20.3 1.82 1,352.3 29.3 2.17
----------------------------------------------------------------------
Total Interest-Bearing
Deposits 5,493.2 36.7 0.67 5,291.9 47.5 0.90
----------------------------------------------------------------------
Short-Term Borrowings 884.0 11.3 1.27 724.2 9.0 1.24
Long-Term Debt 284.2 16.4 5.78 352.7 20.1 5.71
----------------------------------------------------------------------
Total Interest-Bearing
Liabilities 6,661.4 64.4 0.97 6,368.8 76.6 1.20
----------------------------------------------------------------------
Net Interest Income $390.8 $366.1
======= =======
Interest Rate Spread 4.06% 3.91%
Net Interest Margin 4.32% 4.23%
Non-Interest-Bearing
Demand Deposits 1,929.1 1,753.9
Other Liabilities 394.0 354.7
Shareholders' Equity 761.0 900.1
--------- ---------
Total Liabilities and
Shareholders' Equity $9,745.5 $9,377.5
========= =========
Bank of Hawaii Corporation and Subsidiaries
Analysis of Change in Net Interest Income - Taxable Equivalent
Basis (Unaudited) Table 6
----------------------------------------------------------------------
Year Ended December 31, 2004
Compared to December 31, 2003
(dollars in millions) Volume (1) Rate (1) Total
----------------------------------------------------------------------
Change in Interest Income:
Interest-Bearing Deposits $(0.7) $(0.6) $(1.3)
Funds Sold (1.0) 0.1 (0.9)
Investment Securities
Available for Sale 3.2 12.6 15.8
Held to Maturity 7.2 - 7.2
Loans Held for Sale (1.3) - (1.3)
Loans and Leases
Commercial and Industrial (2.5) 2.9 0.4
Construction 0.1 - 0.1
Commercial Mortgage (0.3) (2.6) (2.9)
Residential Mortgage 0.1 (15.8) (15.7)
Installment 13.6 (6.6) 7.0
Home Equity 5.7 (0.8) 4.9
Purchased Home Equity 1.0 0.5 1.5
Lease Financing 0.9 (1.7) (0.8)
----------------------------------------------------------------------
Total Loans and Leases 18.6 (24.1) (5.5)
----------------------------------------------------------------------
Other (0.1) (1.4) (1.5)
----------------------------------------------------------------------
Total Change in Interest Income 25.9 (13.4) 12.5
----------------------------------------------------------------------
Change in Interest Expense:
Interest-Bearing Deposits
Demand 0.5 0.2 0.7
Savings 1.2 (3.7) (2.5)
Time (4.7) (4.3) (9.0)
----------------------------------------------------------------------
Total Interest-Bearing Deposits (3.0) (7.8) (10.8)
----------------------------------------------------------------------
Short-Term Borrowings 2.1 0.2 2.3
Long-Term Debt (3.9) 0.2 (3.7)
----------------------------------------------------------------------
Total Change in Interest Expense (4.8) (7.4) (12.2)
----------------------------------------------------------------------
Change in Net Interest Income $30.7 $(6.0) $24.7
======================================================================
(1) The changes for each category of interest income and expense are
divided between the portion of changes attributable to the
variance in volume or rate for that category.
Bank of Hawaii Corporation and Subsidiaries
Salaries and Benefits (Unaudited) Table 7
----------------------------------------------------------------------
Three Months Year
Ended Ended
December 31, December 31,
(dollars in thousands) 2004 2003 2004 2003
----------------------------------------------------------------------
Salaries $27,947 $27,972 $110,851 $114,376
Incentive Compensation 3,999 5,130 15,458 15,747
Stock-Based Compensation 2,926 5,128 11,726 9,215
Commission Expense 1,991 1,833 7,682 10,797
Retirement and Other Benefits 3,230 882 15,900 14,353
Payroll Taxes 2,115 2,009 11,063 10,454
Medical, Dental, and Life
Insurance 2,050 1,981 8,354 7,371
Separation Expense 785 1,474 3,265 3,967
----------------------------------------------------------------------
Total Salaries and Benefits $45,043 $46,409 $184,299 $186,280
======================================================================
Bank of Hawaii Corporation and Subsidiaries
Loan Portfolio Balances (Unaudited) Table 8
----------------------------------------------------------------------
December September June March December
(dollars in 31, 30, 30, 31, 31,
thousands) 2004 2004 2004 2004 2003
----------------------------------------------------------------------
Domestic Loans
Commercial
Commercial
and
Industrial $871,485 $755,455 $776,815 $793,293 $816,246
Commercial
Mortgage 602,678 648,991 643,382 650,566 639,354
Construction 122,355 104,709 98,916 91,002 101,321
Lease
Financing 446,937 447,005 447,673 442,590 435,934
----------------------------------------------------------------------
Total
Commercial 2,043,455 1,956,160 1,966,786 1,977,451 1,992,855
----------------------------------------------------------------------
Consumer
Residential
Mortgage 2,293,202 2,261,814 2,257,624 2,254,654 2,320,410
Home Equity 657,164 609,981 559,225 510,378 467,019
Purchased
Home Equity 122,728 143,300 162,730 191,066 212,514
Other
Consumer 751,821 729,747 721,386 671,893 658,831
Lease
Financing 32,535 33,796 34,676 34,816 35,320
----------------------------------------------------------------------
Total Consumer 3,857,450 3,778,638 3,735,641 3,662,807 3,694,094
----------------------------------------------------------------------
Total Domestic
Loans 5,900,905 5,734,798 5,702,427 5,640,258 5,686,949
----------------------------------------------------------------------
Foreign Loans 86,025 80,777 84,887 74,738 70,226
----------------------------------------------------------------------
Total Loans and
Leases $5,986,930 $5,815,575 $5,787,314 $5,714,996 $5,757,175
======================================================================
Selected Concentrations of Credit Exposure (Unaudited)
----------------------------------------------------------------------
December 31, 2004 Sept. 30, Dec. 31,
2004 2003 (1)
(dollars in Unused Total Total Total
thousands) Outstanding Commitments Exposure Exposure Exposure
----------------------------------------------------------------------
Air
Transportation
United States
Regional
Passenger
Carriers $41,057 $11,707 $52,764 $57,505 $59,231
United States
National
Passenger
Carriers 39,594 - 39,594 37,771 37,259
Passenger
Carriers Based
Outside United
States 25,910 - 25,910 28,540 31,549
Cargo Carriers 13,771 - 13,771 13,771 14,405
----------------------------------------------------------------------
Total Air
Transportation $120,332 $11,707 $132,039 $137,587 $142,444
======================================================================
Guam
Hotel $6,014 $- $6,014 $9,348 $17,733
Other Commercial 143,819 42,467 186,286 197,460 184,129
Consumer 376,948 13,486 390,434 321,657 288,831
----------------------------------------------------------------------
Total Guam $526,781 $55,953 $582,734 $528,465 $490,693
======================================================================
Syndicated
Exposure $201,359 $588,399 $789,758 $790,354 $925,864
======================================================================
Other Large
Borrowers (2) $109,921 $192,481 $302,402 $298,026 $336,748
======================================================================
Exposure includes loans, leveraged leases and operating leases.
(1) For three borrowers, reclassifications occurred between Regional
and National Carriers. Syndicated Exposure was restated.
(2) Other Large Borrowers is defined as exposure with commitments of
$25 million and greater, excluding those collateralized by cash
and those separately identified as Air Transportation, Guam, and
Syndicated Exposure.
Bank of Hawaii Corporation and Subsidiaries
Consolidated Non-Performing Assets and Accruing Loans Past Due
90 Days or More (Unaudited) Table 9
----------------------------------------------------------------------
December September June March December
(dollars in 31, 30, 30, 31, 31,
thousands) 2004 2004 2004 2004 2003
----------------------------------------------------------------------
Non-Performing
Assets
Non-Accrual
Loans
Commercial
Commercial
and
Industrial $683 $775 $680 $6,009 $6,015
Commercial
Mortgage 2,106 5,552 5,649 7,388 9,337
Lease
Financing 2,973 1,913 1,948 1,962 2,181
----------------------------------------------------------------------
Total
Commercial 5,762 8,240 8,277 15,359 17,533
----------------------------------------------------------------------
Consumer
Residential
Mortgage 7,688 7,278 7,688 7,685 9,354
Home Equity 218 251 306 406 460
----------------------------------------------------------------------
Total Consumer 7,906 7,529 7,994 8,091 9,814
----------------------------------------------------------------------
Total Non-
Accrual Loans 13,668 15,769 16,271 23,450 27,347
----------------------------------------------------------------------
Foreclosed Real
Estate 191 208 4,889 4,416 4,377
----------------------------------------------------------------------
Total Non-
Performing
Assets $13,859 $15,977 $21,160 $27,866 $31,724
======================================================================
Accruing Loans
Past Due 90
Days or More
Commercial
Commercial
and
Industrial $52 $65 $19 $707 $725
Commercial
Mortgage - 688 693 702 -
Lease
Financing - - - - 117
----------------------------------------------------------------------
Total
Commercial 52 753 712 1,409 842
----------------------------------------------------------------------
Consumer
Residential
Mortgage 387 2,588 698 595 1,430
Purchased
Home Equity 183 97 32 107 -
Other
Consumer 1,433 1,533 1,142 1,180 1,210
Lease
Financing 30 32 57 - -
----------------------------------------------------------------------
Total Consumer 2,033 4,250 1,929 1,882 2,640
----------------------------------------------------------------------
Total Accruing
and Past Due $2,085 $5,003 $2,641 $3,291 $3,482
======================================================================
Total Loans and
Leases $5,986,930 $5,815,575 $5,787,314 $5,714,996 $5,757,175
======================================================================
Ratio of Non-
Accrual Loans
to Total Loans 0.23% 0.27% 0.28% 0.41% 0.48%
----------------------------------------------------------------------
Ratio of Non-
Performing
Assets to
Total Loans
and Foreclosed
Real Estate 0.23% 0.27% 0.37% 0.49% 0.55%
----------------------------------------------------------------------
Ratio of Non-
Performing
Assets and
Accruing Loans
Past Due 90
Days or More
to Total Loans 0.27% 0.36% 0.41% 0.55% 0.61%
----------------------------------------------------------------------
Quarter to
Quarter
Changes in
Non-Performing
Assets
Balance at
Beginning of
Quarter $15,977 $21,160 $27,866 $31,724 $40,144
Additions 7,178 2,094 3,909 3,293 2,340
Reductions
Payments (8,449) (1,386) (4,232) (4,555) (3,416)
Return to
Accrual (456) (1,122) (2,700) (1,444) (839)
Sales of
Foreclosed
Assets (206) (682) (147) (310) (4,418)
Charge-
offs/Write-
downs (185) (88) (3,536) (842) (2,087)
Transfer to
Premises - (3,999) - - -
----------------------------------------------------------------------
Total
Reductions (9,296) (7,277) (10,615) (7,151) (10,760)
----------------------------------------------------------------------
Balance at End
of Quarter $13,859 $15,977 $21,160 $27,866 $31,724
======================================================================
Bank of Hawaii Corporation and Subsidiaries
Consolidated Allowance for Loan and Lease Losses (Unaudited) Table 10
----------------------------------------------------------------------
Three Months Ended Year Ended
December September December December
(dollars in 31, 30, 31, 31,
thousands) 2004 2004 2003 2004 2003
----------------------------------------------------------------------
Balance at
Beginning of
Period $124,651 $124,904 $132,675 $129,080 $142,853
Loans Charged-
Off
Commercial
Commercial
and
Industrial 465 227 1,997 4,408 5,311
Commercial
Mortgage - - - 575 548
Construction - - - - 529
Lease
Financing 774 - - 1,381 353
Consumer
Residential
Mortgage 128 226 462 819 1,877
Home Equity - 11 250 20 339
Purchased
Home Equity 343 173 143 807 257
Other
Consumer 4,903 4,268 3,919 18,390 17,412
Lease
Financing 47 45 100 155 267
----------------------------------------------------------------------
Total Loans
Charged-Off 6,660 4,950 6,871 26,555 26,893
----------------------------------------------------------------------
Recoveries on
Loans
Previously
Charged-Off
Commercial
Commercial
and
Industrial 542 1,206 936 3,973 3,878
Commercial
Mortgage 119 1,093 23 2,052 129
Construction - 94 3 529 958
Lease
Financing 1 2 88 19 106
Consumer
Residential
Mortgage 109 207 115 915 1,027
Home Equity 5 14 4 158 -
Purchased
Home Equity 16 51 - 125 133
Other
Consumer 1,267 1,502 2,015 6,136 6,177
Lease
Financing 23 9 30 103 82
Foreign 23 519 62 7,061 630
----------------------------------------------------------------------
Total
Recoveries on
Loans
Previously
Charged-Off 2,105 4,697 3,276 21,071 13,120
----------------------------------------------------------------------
Net Loan
Recoveries
(Charge-Offs) (4,555) (253) (3,595) (5,484) (13,773)
Provision for
Loan and
Lease Losses (6,500) - - (10,000) -
Other
Adjustments (6,800) - - (6,800) -
----------------------------------------------------------------------
Balance at End
of Period $106,796 $124,651 $129,080 $106,796 $129,080
======================================================================
Average Loans
Outstanding $5,834,379 $5,796,350 $5,570,844 $5,786,663 $5,524,423
======================================================================
Ratio of Net
Loan Charge-
Offs to
Average Loans
Outstanding
(annualized) 0.31% 0.02% 0.26% 0.09% 0.25%
Ratio of
Allowance to
Loans and
Leases
Outstanding 1.78% 2.14% 2.24% 1.78% 2.24%
Bank of Hawaii Corporation and Subsidiaries
Business Segment Selected Financial Information (Unaudited) Table 11a
----------------------------------------------------------------------
Investment Treasury
(dollars in Retail Commercial Services and Other Consolidated
thousands) Banking Banking Group Corporate Total
----------------------------------------------------------------------
Three Months
Ended December
31, 2004
Net Interest
Income $52,531 $33,905 $2,995 $10,500 $99,931
Provision for
Loan and Lease
Losses 2,991 1,602 - (11,093) (6,500)
----------------------------------------------------------------------
Net Interest
Income After
Provision for
Loan and Lease
Losses 49,540 32,303 2,995 21,593 106,431
Non-Interest
Income 22,590 9,410 13,747 2,603 48,350
----------------------------------------------------------------------
72,130 41,713 16,742 24,196 154,781
Non-Interest
Expense (43,287) (21,758) (12,377) (4,681) (82,103)
----------------------------------------------------------------------
Income Before
Income Taxes 28,843 19,955 4,365 19,515 72,678
Provision for
Income Taxes (10,672) (7,379) (1,615) (6,771) (26,437)
----------------------------------------------------------------------
Allocated Net
Income 18,171 12,576 2,750 12,744 46,241
----------------------------------------------------------------------
Allowance
Funding Value (162) (608) (6) 776 -
GAAP Provision 2,991 1,602 - (11,093) (6,500)
Economic
Provision (3,565) (2,463) (91) (1) (6,120)
Tax Effect of
Adjustments 272 544 36 3,817 4,669
----------------------------------------------------------------------
Income Before
Capital Charge 17,707 11,651 2,689 6,243 38,290
Capital Charge (5,461) (4,672) (1,289) (9,992) (21,414)
----------------------------------------------------------------------
Net Income
(Loss) After
Capital Charge
(NIACC) $12,246 $6,979 $1,400 $(3,749) $16,876
======================================================================
RAROC (ROE for
the Company) 35% 27% 23% 16% 24%
======================================================================
Total Assets at
December 31,
2004 $3,773,950 $2,376,776 $117,602 $3,497,863 $9,766,191
======================================================================
Three Months
Ended December
31, 2003 (1)
Net Interest
Income $49,691 $33,685 $2,888 $7,088 $93,352
Provision for
Loan and Lease
Losses 2,288 1,694 - (3,982) -
----------------------------------------------------------------------
Net Interest
Income After
Provision for
Loan and Lease
Losses 47,403 31,991 2,888 11,070 93,352
Non-Interest
Income 23,229 11,218 12,461 2,529 49,437
----------------------------------------------------------------------
70,632 43,209 15,349 13,599 142,789
Non-Interest
Expense (44,340) (21,102) (12,716) (5,246) (83,404)
----------------------------------------------------------------------
Income Before
Income Taxes 26,292 22,107 2,633 8,353 59,385
Provision for
Income Taxes (9,728) (8,049) (974) (1,961) (20,712)
----------------------------------------------------------------------
Allocated Net
Income 16,564 14,058 1,659 6,392 38,673
----------------------------------------------------------------------
Allowance
Funding Value (130) (806) (8) 944 -
GAAP Provision 2,288 1,694 - (3,982) -
Economic
Provision (3,309) (2,879) (98) (4) (6,290)
Tax Effect of
Adjustments 426 737 39 1,126 2,328
----------------------------------------------------------------------
Income Before
Capital Charge 15,839 12,804 1,592 4,476 34,711
Capital Charge (5,663) (5,367) (1,271) (10,396) (22,697)
----------------------------------------------------------------------
Net Income
(Loss) After
Capital Charge
(NIACC) $10,176 $7,437 $321 $(5,920) $12,014
======================================================================
RAROC (ROE for
the Company) 31% 26% 14% 21% 19%
======================================================================
Total Assets at
December 31,
2003 $3,667,095 $2,323,267 $109,003 $3,362,282 $9,461,647
======================================================================
(1) Certain 2003 information has been reclassified to conform to 2004
presentation.
Bank of Hawaii Corporation and Subsidiaries
Business Segment Selected Financial Information (Unaudited) Table 11b
----------------------------------------------------------------------
Investment Treasury
(dollars in Retail Commercial Services and Other Consolidated
thousands) Banking Banking Group Corporate Total
----------------------------------------------------------------------
Year Ended
December 31,
2004
Net Interest
Income $203,541 $135,477 $11,524 $40,048 $390,590
Provision for
Loan and Lease
Losses 10,446 3,232 47 (23,725) (10,000)
----------------------------------------------------------------------
Net Interest
Income After
Provision for
Loan and Lease
Losses 193,095 132,245 11,477 63,773 400,590
Non-Interest
Income 90,424 47,470 53,847 13,353 205,094
----------------------------------------------------------------------
283,519 179,715 65,324 77,126 605,684
Non-Interest
Expense (174,670) (91,097) (52,018) (16,655) (334,440)
----------------------------------------------------------------------
Income Before
Income Taxes 108,849 88,618 13,306 60,471 271,244
Provision for
Income Taxes (40,274) (32,790) (4,924) (19,917) (97,905)
----------------------------------------------------------------------
Allocated Net
Income 68,575 55,828 8,382 40,554 173,339
----------------------------------------------------------------------
Allowance
Funding Value (605) (2,653) (25) 3,283 -
GAAP Provision 10,446 3,232 47 (23,725) (10,000)
Economic
Provision (14,054) (10,528) (370) (8) (24,960)
Tax Effect of
Adjustments 1,559 3,681 129 7,566 12,935
----------------------------------------------------------------------
Income Before
Capital Charge 65,921 49,560 8,163 27,670 151,314
Capital Charge (22,157) (19,905) (5,209) (36,458) (83,729)
----------------------------------------------------------------------
Net Income
(Loss) After
Capital Charge
(NIACC) $43,764 $29,655 $2,954 $(8,788) $67,585
======================================================================
RAROC (ROE for
the Company) 33% 27% 17% 22% 23%
======================================================================
Total Assets at
December 31,
2004 $3,773,950 $2,376,776 $117,602 $3,497,863 $9,766,191
======================================================================
Year Ended
December 31,
2003 (1)
Net Interest
Income $208,189 $137,164 $11,515 $9,074 $365,942
Provision for
Loan and Lease
Losses 6,909 8,415 (5) (15,319) -
----------------------------------------------------------------------
Net Interest
Income After
Provision for
Loan and Lease
Losses 201,280 128,749 11,520 24,393 365,942
Non-Interest
Income 95,168 40,975 49,998 12,579 198,720
----------------------------------------------------------------------
296,448 169,724 61,518 36,972 564,662
Information
Technology
Systems
Replacement
Project (986) (23) (333) (20,529) (21,871)
Non-Interest
Expense (180,484) (91,376) (49,174) (14,970) (336,004)
----------------------------------------------------------------------
Income Before
Income Taxes 114,978 78,325 12,011 1,473 206,787
Provision for
Income Taxes (42,542) (28,502) (4,444) 3,896 (71,592)
----------------------------------------------------------------------
Allocated Net
Income 72,436 49,823 7,567 5,369 135,195
----------------------------------------------------------------------
Allowance
Funding Value (595) (3,987) (32) 4,614 -
GAAP Provision 6,909 8,415 (5) (15,319) -
Economic
Provision (11,932) (12,120) (432) (25) (24,509)
Tax Effect of
Adjustments 2,079 2,846 174 3,969 9,068
----------------------------------------------------------------------
Income (Loss)
Before Capital
Charge 68,897 44,977 7,272 (1,392) 119,754
Capital Charge (22,715) (21,889) (5,032) (49,405) (99,041)
----------------------------------------------------------------------
Net Income
(Loss) After
Capital Charge
(NIACC) $46,182 $23,088 $2,240 $(50,797) $20,713
======================================================================
RAROC (ROE for
the Company) 33% 23% 16% (1)% 15%
======================================================================
Total Assets at
December 31,
2003 $3,667,095 $2,323,267 $109,003 $3,362,282 $9,461,647
======================================================================
(1) Certain 2003 information has been reclassified to conform to 2004
presentation.
Bank of Hawaii Corporation and Subsidiaries
Quarterly Summary of Selected Consolidated Financial Data
(Unaudited) Table 12
----------------------------------------------------------------------
Three Months Ended
(dollars in December September June March December
thousands except 31, 30, 30, 31, 31,
per share amounts) 2004 2004 2004 2004 2003
----------------------------------------------------------------------
Quarterly Operating
Results
Interest Income
Interest and Fees
on Loans and
Leases $84,100 $82,079 $80,346 $81,428 $80,351
Income on
Investment
Securities -
Available for
Sale 26,394 24,543 21,745 20,846 19,032
Income on
Investment
Securities -
Held to Maturity 6,147 6,370 6,711 6,976 7,183
Deposits 107 496 1,646 1,231 1,169
Funds Sold 356 108 177 417 85
Other 267 801 865 858 1,007
----------------------------------------------------------------------
Total Interest
Income 117,371 114,397 111,490 111,756 108,827
----------------------------------------------------------------------
Interest Expense
Deposits 9,993 8,990 8,560 9,200 9,433
Securities Sold
Under Agreements
to Repurchase 3,120 2,085 2,222 1,926 1,359
Funds Purchased 395 683 506 231 249
Short-Term
Borrowings 39 15 13 15 17
Long-Term Debt 3,893 3,845 4,340 4,353 4,417
----------------------------------------------------------------------
Total Interest
Expense 17,440 15,618 15,641 15,725 15,475
----------------------------------------------------------------------
Net Interest Income 99,931 98,779 95,849 96,031 93,352
Provision for Loan
and Lease Losses (6,500) - (3,500) - -
----------------------------------------------------------------------
Net Interest Income
After Provision
for Loan and Lease
Losses 106,431 98,779 99,349 96,031 93,352
----------------------------------------------------------------------
Non-Interest Income
Trust and Asset
Management 13,934 12,672 12,995 13,864 12,759
Mortgage Banking 1,516 1,711 2,808 1,977 3,324
Service Charges
on Deposit
Accounts 10,155 9,472 9,540 9,950 9,442
Fees, Exchange,
and Other
Service Charges 13,684 13,741 14,243 13,239 13,725
Investment
Securities Gains
(Losses) (757) - (37) - (20)
Insurance 4,234 5,423 4,926 4,658 4,762
Other 5,584 10,035 10,373 5,154 5,445
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Total Non-Interest
Income 48,350 53,054 54,848 48,842 49,437
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Non-Interest
Expense
Salaries and
Benefits 45,043 46,566 46,689 46,001 46,409
Net Occupancy
Expense 9,606 9,812 9,543 9,386 9,933
Net Equipment
Expense 6,316 5,847 5,799 5,964 7,395
Other 21,138 21,965 23,094 21,671 19,667
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Total Non-Interest
Expense 82,103 84,190 85,125 83,022 83,404
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Income Before
Income Taxes 72,678 67,643 69,072 61,851 59,385
Provision for
Income Taxes 26,437 24,576 24,840 22,052 20,712
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Net Income $46,241 $43,067 $44,232 $39,799 $38,673
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Basic Earnings Per
Share $0.86 $0.82 $0.84 $0.73 $0.70
Diluted Earnings
Per Share $0.82 $0.78 $0.79 $0.69 $0.66
Balance Sheet
Totals
Total Assets 9,766,191 9,594,809 9,688,769 10,013,442 9,461,647
Net Loans 5,880,134 5,690,924 5,662,410 5,587,811 5,628,095
Total Deposits 7,564,667 7,413,240 7,469,288 7,363,922 7,332,779
Total Shareholders'
Equity 814,834 756,707 699,438 785,768 793,132
Performance Ratios
Net Income to
Average Total
Assets (ROA) 1.89% 1.77% 1.80% 1.65% 1.66%
Net Income to
Average
Shareholders'
Equity (ROE) 23.63% 23.42% 24.28% 19.98% 18.59%
Efficiency Ratio
(1) 55.37% 55.45% 56.49% 57.31% 58.41%
(1) The efficiency ratio is defined as non-interest expense divided by
total revenue (net interest income and non-interest income).
CONTACT: Bank of Hawaii Corporation
Stafford Kiguchi, 808-537-8580 (Media)
Pager: 877-849-5423
skiguchi@boh.com
Cindy Wyrick, 808-537-8430 (Investors/Analysts)
cwyrick@boh.com
SOURCE: Bank of Hawaii Corporation