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 |
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(Date of earliest event reported) |
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April 24, 2006 |
BANK OF HAWAII CORPORATION
(Exact name of registrant as specified in its charter)
Delaware |
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1-6887 |
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99-0148992 |
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(State of Incorporation) |
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(Commission |
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(IRS Employer |
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File Number) |
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Identification No.) |
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130 Merchant Street, Honolulu, Hawaii |
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96813 |
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(Address of principal executive offices) |
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(Zip Code) |
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(Registrant’s telephone number, |
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including area code) |
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(808) 537-8430 |
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Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
¨ 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))
Item 2.02. Results of Operations and Financial Conditions.
On April 24, 2006, Bank of Hawaii Corporation announced its results of operations for the quarter ending March 31, 2006. The public announcement was made by means of a press release, the text of which is furnished as Exhibit 99.1 hereto and is incorporated herein by reference.
Item 9.01. Financial Statements and Exhibits
(d) Exhibits
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Exhibit No. |
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99.1 |
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April 24, 2006 Press Release |
SIGNATURE
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.
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Date April 25, 2006 |
BANK OF HAWAII CORPORATION |
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/s/ Cynthia G. Wyrick |
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Cynthia G. Wyrick |
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Executive Vice President and |
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Corporate Secretary |
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2
Exhibit 99.1
FOR IMMEDIATE RELEASE
Bank of Hawaii Corporation First Quarter 2006 Financial Results
• Diluted Earnings Per Share $0.87
• Net Income $45.4 Million
• Board of Directors Declares Dividend of $0.37 Per Share
HONOLULU, HI (April 24, 2006) — Bank of Hawaii Corporation (NYSE: BOH) today reported diluted earnings per share of $0.87 for the first quarter of 2006, an increase from diluted earnings per share of $0.83 in the same quarter last year and an increase from diluted earnings per share of $0.86 in the previous quarter. Net income for the first quarter of 2006 was $45.4 million, essentially unchanged from $45.5 million in the first quarter of 2005, and up from $44.8 million in the fourth quarter of 2005.
The return on average assets for the first quarter of 2006 was 1.82 percent compared to 1.88 percent for the first quarter of 2005 and 1.76 percent in the fourth quarter of 2005. The return on average equity for the first quarter of 2006 was 26.13 percent, up from 23.66 percent for the first quarter of 2005 and up from 25.19 percent in the fourth quarter of 2005.
“Bank of Hawaii had a good start in 2006 with solid performance in the first quarter,” said Allan R. Landon, Chairman and CEO. “We’ve had good loan origination volumes, our deposits continue to be strong and the Hawaii economy remains solid. We are optimistic about achieving our goals for the remainder of the year.”
Results for the first quarter of 2006 included a provision for credit losses of $2.8 million compared to $1.6 million in the fourth quarter of 2005. The Company did not record a provision for credit losses during the first quarter of 2005.
Financial Highlights
The net interest margin for the first quarter of 2006 was stable at 4.41 percent compared to previous quarters. Net interest income, on a taxable equivalent basis, for the first quarter of 2006 was $102.2 million, up $1.5 million from $100.7 million in the first quarter last year and down $1.3 million from $103.5 million in the fourth quarter of 2005. The increase in net interest income compared to the same quarter last year was primarily due to an increase in the yield on earning assets which was partially offset by a rise in deposit and short term borrowing rates. The
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130 Merchant Street • PO Box 2900 • Honolulu HI 96846-6000 • Fax 808-537-8440 • Website www.boh.com
decrease in net interest income compared to the previous quarter was largely due to fewer days in the first quarter and a shift in the funding mix. An analysis of the change in net interest income is included in Table 6.
As previously mentioned, the provision for credit losses during the first quarter of 2006 was $2.8 million and equaled net charge-offs for the quarter.
Non-interest income was $52.6 million for the first quarter of 2006, an increase of $0.3 million compared to non-interest income of $52.3 million in the same quarter last year and an increase of $1.8 million compared to non-interest income of $50.8 million in the fourth quarter of 2005.
Non-interest expense was $80.8 million in the first quarter of 2006, essentially flat with non-interest expense of $80.9 million in the first quarter of 2005 and a decrease of $2.4 million from non-interest expense of $83.2 million in the previous quarter. Non-interest expense in the first quarter of 2005 included a gain of $1.1 million on the sale of a foreclosed property largely offset by a goodwill impairment charge of $1.3 million related to the Company’s insurance business. The decrease from the fourth quarter was largely due to a reduction in legal expenses which was partially offset by an accrual for legal claims. An analysis of salaries and benefit expenses is included in Table 7.
The efficiency ratio for the first quarter of 2006 was 52.22 percent, an improvement from 52.86 percent in the same quarter last year and from 53.92 percent in the previous quarter.
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. Business segment performance details are summarized in Table 11.
Asset Quality
Non-performing assets declined to $5.9 million and the ratio of non-performing assets to total loans and leases, foreclosed real estate, and other investments decreased to 0.09 percent at March 31, 2006. Non-accrual loans and leases were $5.2 million at the end of the first quarter of 2006, resulting in a decrease in the ratio of non-accrual loans and leases as a percentage of total loans and leases to 0.08 percent at March 31, 2006. An analysis of asset quality is presented in Table 9.
Net charge-offs for the first quarter of 2006 were $2.8 million, or 0.18 percent annualized, of total average loans and leases compared to net charge-offs of $3.7 million, or 0.25 percent annualized, of total average loans and leases in the same quarter last year. Net charge-offs in the fourth quarter of 2005 were $1.6 million, including a recovery of $3.0 million, or 0.10 percent annualized, of total average loans and leases. Details of the reserve for credit losses are summarized in Table 10.
The allowance for loan and lease losses was $91.1 million at March 31, 2006, down from $105.0 at March 31, 2005 and essentially unchanged from December 31, 2005. The ratio of the allowance for loan and lease losses to total loans and leases was 1.46 percent at March 31, 2006, down from 1.75 percent at March 31, 2005 and down from 1.48 percent at December 31, 2005.
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2
Other Financial Highlights
Total assets were $10.53 billion at March 31, 2006, up $620 million from $9.91 billion at March 31, 2005 and up $341 million from $10.19 billion at December 31, 2005. Total loans and leases were $6.25 billion at March 31, 2006, up $230 million from $6.02 billion at March 31, 2005 and up $78 million from $6.17 billion at December 31, 2005. Loan and lease portfolio balances are included in Table 8.
Total deposits at March 31, 2006 were $8.15 billion, up $386 million from $7.76 billion at March 31, 2005 and up $240 million from $7.91 billion at December 31, 2005.
During the first quarter of 2006, Bank of Hawaii Corporation repurchased 0.7 million shares of common stock at a total cost of $34.7 million under its share repurchase program. The average cost was $53.22 per share repurchased. From the beginning of the repurchase program in July 2001 through March 31, 2006, the Company repurchased a total of 40.6 million shares and returned nearly $1.37 billion to the shareholders at an average cost of $33.63 per share. From April 1, 2006 through April 21, 2006, the Company repurchased an additional 130 thousand shares of common stock at an average cost of $53.18 per share. Remaining buyback authority under the share repurchase program was $76.4 million at April 21, 2006.
At March 31, 2006 the Tier 1 leverage ratio was 7.19 percent compared to 7.42 percent at March 31, 2005 and 7.14 percent at December 31, 2005.
The Company’s Board of Directors has declared a quarterly cash dividend of $0.37 per share on the Company’s outstanding shares. The dividend will be payable on June 14, 2006 to shareholders of record at the close of business on May 31, 2006.
Financial Outlook
Bank of Hawaii Corporation’s previous earnings estimate of net income for the full year of 2006 remains unchanged at approximately $187 million, including a $17 million provision for credit losses. An analysis of credit quality is performed quarterly to determine the adequacy of the reserve for credit losses. This analysis determines the timing and amount of the provision for credit losses.
Conference Call Information
The Company will review its first quarter 2006 financial results today at 8:00 a.m. Hawaii Time (2:00 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) 510-9661 in the United States or (617) 614-3452 for international callers. No passcode is required to access the call. A replay will be available for one week beginning Monday, April 24, 2006 by calling (888) 286-8010 in the United States or (617) 801-6888 for international callers and entering the number 67899656 when prompted. A replay of the presentation will also be available via the Investor Relations link of the Company’s web site.
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3
Bank of Hawaii Corporation is a bank holding company providing a broad range of financial products and services to customers in Hawaii and the Pacific Islands (Guam, nearby islands and American Samoa). 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 contains, and other statements made by the Company may contain, forward-looking statements concerning, among other things, the economic and business environment in our service area and elsewhere, credit quality, 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, taxing authority interpretations, legislation in Hawaii and the other markets we serve, or the timing and interpretation of proposed accounting standards; 2) changes in our credit quality or risk profile that may increase or decrease the required level of reserve for credit losses; 3) changes in market interest rates that may affect our credit markets and ability to maintain our net interest margin; 4) unpredictable costs and other consequences of legal, tax or regulatory matters involving the Company; 5) changes to the amount and timing of our proposed equity repurchases; 6) real or threatened acts of war or terrorist activity affecting business conditions; and 7) adverse weather, public health and other natural conditions impacting the Company and its customers’ operations. For further discussion of these and other risks and uncertainties that could cause actual results to differ materially from such forward-looking statements, please refer to the risk factors discussed in our Annual Report on Form 10-K for the year ended December 31, 2005 filed with the U.S. Securities and Exchange Commission. We do not undertake an obligation to update forward-looking statements to reflect later events or circumstances.
# # # #
4
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Bank of Hawaii Corporation and Subsidiaries |
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Highlights (Unaudited) |
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Table 1 |
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Three Months Ended |
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March 31, |
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December 31, |
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March 31, |
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(dollars in thousands except per share amounts) |
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2006 |
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2005 |
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2005 1 |
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For the Period: |
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Interest Income |
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$ |
135,403 |
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$ |
132,945 |
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$ |
120,158 |
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Net Interest Income |
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102,202 |
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103,456 |
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100,658 |
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Net Income |
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45,350 |
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44,781 |
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45,522 |
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Basic Earnings Per Share |
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0.89 |
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0.88 |
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0.85 |
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Diluted Earnings Per Share |
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0.87 |
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0.86 |
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0.83 |
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Dividends Declared Per Share |
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0.37 |
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0.37 |
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0.33 |
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Net Income to Average Total Assets (ROA) |
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1.82% |
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1.76% |
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1.88% |
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Net Income to Average Shareholders’ Equity (ROE) |
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26.13 |
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25.19 |
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23.66 |
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Net Interest Margin 2 |
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4.41 |
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4.42 |
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4.42 |
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Efficiency Ratio 3 |
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52.22 |
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53.92 |
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52.86 |
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Average Assets |
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$ |
10,091,665 |
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$ |
10,079,483 |
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$ |
9,845,765 |
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Average Loans and Leases |
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6,181,697 |
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6,177,424 |
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6,000,572 |
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Average Deposits |
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7,742,623 |
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7,795,381 |
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7,687,798 |
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Average Shareholders’ Equity |
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703,856 |
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705,428 |
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780,271 |
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Average Equity to Average Assets |
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6.97% |
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7.00% |
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7.92% |
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Market Price Per Share of Common Stock: |
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Closing |
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$ |
53.31 |
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$ |
51.54 |
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$ |
45.26 |
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High |
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55.15 |
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53.19 |
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50.95 |
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Low |
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51.40 |
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47.21 |
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44.33 |
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March 31, |
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December 31, |
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March 31, |
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2006 |
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2005 |
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2005 |
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At Period End: |
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Net Loans and Leases |
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$ |
6,155,061 |
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$ |
6,077,446 |
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$ |
5,910,784 |
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Total Assets |
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10,528,049 |
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10,187,038 |
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9,908,030 |
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Deposits |
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8,147,101 |
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7,907,468 |
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7,760,662 |
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Long-Term Debt |
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242,730 |
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242,703 |
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242,656 |
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Shareholders’ Equity |
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681,078 |
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693,352 |
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716,656 |
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Ratio of Allowance for Loan and Lease Losses to Loans and Leases Outstanding |
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1.46% |
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1.48% |
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1.75% |
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Dividend Payout Ratio 4 |
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41.57 |
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42.05 |
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38.82 |
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Leverage Capital Ratio |
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7.19 |
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7.14 |
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7.42 |
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Book Value Per Common Share |
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$ |
13.36 |
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$ |
13.52 |
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$ |
13.57 |
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Full-Time Equivalent Employees |
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2,561 |
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2,585 |
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2,593 |
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Branches and Offices |
|
85 |
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85 |
|
87 |
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1 Certain prior period information has been reclassified to conform to current presentation.
2 The net interest margin is defined as net interest income, on a fully-taxable equivalent basis, as a percentage of average earning assets.
3 The efficiency ratio is defined as non-interest expense divided by total revenue (net interest income and non-interest income).
4 Dividend payout ratio is defined as dividends declared per share divided by basic earnings per share for the quarter.
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Bank of Hawaii Corporation and Subsidiaries |
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Consolidated Statements of Income (Unaudited) |
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Table 2 |
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Three Months Ended |
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March 31, |
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December 31, |
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March 31, |
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(dollars in thousands except per share amounts) |
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2006 |
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2005 |
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2005 |
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Interest Income |
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Interest and Fees on Loans and Leases |
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$ |
99,371 |
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$ |
97,697 |
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$ |
86,467 |
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Income on Investment Securities - Available for Sale |
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30,835 |
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29,820 |
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27,319 |
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Income on Investment Securities - Held to Maturity |
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4,757 |
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4,899 |
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5,825 |
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Deposits |
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43 |
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103 |
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23 |
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Funds Sold |
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125 |
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154 |
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75 |
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Other |
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272 |
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272 |
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449 |
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Total Interest Income |
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135,403 |
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132,945 |
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120,158 |
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Interest Expense |
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Deposits |
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19,633 |
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17,479 |
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11,604 |
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Securities Sold Under Agreements to Repurchase |
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7,890 |
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6,504 |
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3,325 |
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Funds Purchased |
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1,893 |
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1,730 |
|
733 |
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Short-Term Borrowings |
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57 |
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61 |
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32 |
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Long-Term Debt |
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3,728 |
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3,715 |
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3,806 |
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Total Interest Expense |
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33,201 |
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29,489 |
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19,500 |
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|||
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Net Interest Income |
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102,202 |
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103,456 |
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100,658 |
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Provision for Credit Losses |
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2,761 |
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1,588 |
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— |
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Net Interest Income After Provision for Credit Losses |
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99,441 |
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101,868 |
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100,658 |
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Non-Interest Income |
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|
|
|
|
|
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Trust and Asset Management |
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14,848 |
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14,098 |
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14,622 |
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Mortgage Banking |
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2,987 |
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2,597 |
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2,590 |
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Service Charges on Deposit Accounts |
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10,132 |
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10,151 |
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10,179 |
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Fees, Exchange, and Other Service Charges |
|
14,767 |
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15,147 |
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13,836 |
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Investment Securities Gains (Losses) |
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— |
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(4 |
) |
— |
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Insurance |
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5,019 |
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4,201 |
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5,788 |
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Other |
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4,819 |
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4,619 |
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5,300 |
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Total Non-Interest Income |
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52,572 |
|
50,809 |
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52,315 |
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|||
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Non-Interest Expense |
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|
|
|
|
|
|
|||
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Salaries and Benefits |
|
45,786 |
|
43,319 |
|
44,769 |
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|||
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Net Occupancy |
|
9,643 |
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9,643 |
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9,545 |
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|||
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Net Equipment |
|
5,028 |
|
5,358 |
|
5,471 |
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|||
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Professional Fees |
|
438 |
|
4,057 |
|
3,051 |
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|||
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Other |
|
19,923 |
|
20,802 |
|
18,027 |
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|||
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Total Non-Interest Expense |
|
80,818 |
|
83,179 |
|
80,863 |
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|||
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Income Before Income Taxes |
|
71,195 |
|
69,498 |
|
72,110 |
|
|||
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Provision for Income Taxes |
|
25,845 |
|
24,717 |
|
26,588 |
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|||
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Net Income |
|
$ |
45,350 |
|
$ |
44,781 |
|
$ |
45,522 |
|
|
Basic Earnings Per Share |
|
$ |
0.89 |
|
$ |
0.88 |
|
$ |
0.85 |
|
|
Diluted Earnings Per Share |
|
$ |
0.87 |
|
$ |
0.86 |
|
$ |
0.83 |
|
|
Dividends Declared Per Share |
|
$ |
0.37 |
|
$ |
0.37 |
|
$ |
0.33 |
|
|
Basic Weighted Average Shares |
|
50,785,244 |
|
50,743,172 |
|
53,401,787 |
|
|||
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Diluted Weighted Average Shares |
|
52,106,954 |
|
52,042,845 |
|
55,020,050 |
|
|||
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Bank of Hawaii Corporation and Subsidiaries |
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|
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Consolidated Statements of Condition (Unaudited) |
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Table 3 |
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|
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March 31, |
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December 31, |
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March 31, |
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(dollars in thousands) |
|
2006 |
|
2005 |
|
2005 |
|
|||
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Assets |
|
|
|
|
|
|
|
|||
|
Interest-Bearing Deposits |
|
$ |
5,171 |
|
$ |
4,893 |
|
$ |
5,897 |
|
|
Funds Sold |
|
328,000 |
|
— |
|
70,000 |
|
|||
|
Investment Securities - Available for Sale |
|
|
|
|
|
|
|
|||
|
Held in Portfolio |
|
2,268,644 |
|
2,333,417 |
|
2,495,447 |
|
|||
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Pledged as Collateral |
|
280,560 |
|
204,798 |
|
— |
|
|||
|
Investment Securities - Held to Maturity |
|
433,021 |
|
454,240 |
|
558,834 |
|
|||
|
Loans Held for Sale |
|
22,754 |
|
17,915 |
|
20,897 |
|
|||
|
Loans and Leases |
|
6,246,125 |
|
6,168,536 |
|
6,015,790 |
|
|||
|
Allowance for Loan and Lease Losses |
|
(91,064 |
) |
(91,090 |
) |
(105,006 |
) |
|||
|
Net Loans and Leases |
|
6,155,061 |
|
6,077,446 |
|
5,910,784 |
|
|||
|
Total Earning Assets |
|
9,493,211 |
|
9,092,709 |
|
9,061,859 |
|
|||
|
Cash and Non-Interest-Bearing Deposits |
|
422,436 |
|
493,825 |
|
306,852 |
|
|||
|
Premises and Equipment |
|
143,392 |
|
133,913 |
|
141,615 |
|
|||
|
Customers’ Acceptance Liability |
|
729 |
|
1,056 |
|
1,054 |
|
|||
|
Accrued Interest Receivable |
|
44,149 |
|
43,033 |
|
38,427 |
|
|||
|
Foreclosed Real Estate |
|
358 |
|
358 |
|
183 |
|
|||
|
Mortgage Servicing Rights |
|
18,468 |
|
18,010 |
|
18,510 |
|
|||
|
Goodwill |
|
34,959 |
|
34,959 |
|
34,959 |
|
|||
|
Other Assets |
|
370,347 |
|
369,175 |
|
304,571 |
|
|||
|
Total Assets |
|
$ |
10,528,049 |
|
$ |
10,187,038 |
|
$ |
9,908,030 |
|
|
Liabilities |
|
|
|
|
|
|
|
|||
|
Deposits |
|
|
|
|
|
|
|
|||
|
Non-Interest-Bearing Demand |
|
$ |
2,377,355 |
|
$ |
2,134,916 |
|
$ |
1,943,616 |
|
|
Interest-Bearing Demand |
|
1,674,294 |
|
1,678,454 |
|
1,702,158 |
|
|||
|
Savings |
|
2,716,572 |
|
2,819,258 |
|
2,968,624 |
|
|||
|
Time |
|
1,378,880 |
|
1,274,840 |
|
1,146,264 |
|
|||
|
Total Deposits |
|
8,147,101 |
|
7,907,468 |
|
7,760,662 |
|
|||
|
Funds Purchased |
|
55,930 |
|
268,110 |
|
76,100 |
|
|||
|
Short-Term Borrowings |
|
2,025 |
|
9,447 |
|
8,376 |
|
|||
|
Securities Sold Under Agreements to Repurchase |
|
957,166 |
|
609,380 |
|
664,206 |
|
|||
|
Long-Term Debt |
|
242,730 |
|
242,703 |
|
242,656 |
|
|||
|
Banker’s Acceptances Outstanding |
|
729 |
|
1,056 |
|
1,054 |
|
|||
|
Retirement Benefits Payable |
|
71,708 |
|
71,116 |
|
66,233 |
|
|||
|
Accrued Interest Payable |
|
11,882 |
|
10,910 |
|
7,669 |
|
|||
|
Taxes Payable and Deferred Taxes |
|
273,088 |
|
269,094 |
|
274,164 |
|
|||
|
Other Liabilities |
|
84,612 |
|
104,402 |
|
90,254 |
|
|||
|
Total Liabilities |
|
9,846,971 |
|
9,493,686 |
|
9,191,374 |
|
|||
|
Shareholders’ Equity |
|
|
|
|
|
|
|
|||
|
Common Stock ($.01 par value); authorized 500,000,000 shares; issued / outstanding: March 2006 - 56,858,558 / 50,970,829, December 2005 - 56,827,483 / 51,276,286, March 2005 - 81,711,752 / 52,826,818 |
|
566 |
|
565 |
|
815 |
|
|||
|
Capital Surplus |
|
467,678 |
|
473,338 |
|
453,227 |
|
|||
|
Accumulated Other Comprehensive Income (Loss) |
|
(65,668 |
) |
(47,818 |
) |
(33,469 |
) |
|||
|
Retained Earnings |
|
565,702 |
|
546,591 |
|
1,310,070 |
|
|||
|
Deferred Stock Grants |
|
— |
|
(11,080 |
) |
(8,145 |
) |
|||
|
Treasury Stock, at Cost (Shares: March 2006 - 5,887,729, December 2005 - 5,551,197, March 2005 - 28,884,934) |
|
(287,200 |
) |
(268,244 |
) |
(1,005,842 |
) |
|||
|
Total Shareholders’ Equity |
|
681,078 |
|
693,352 |
|
716,656 |
|
|||
|
Total Liabilities and Shareholders’ Equity |
|
$ |
10,528,049 |
|
$ |
10,187,038 |
|
$ |
9,908,030 |
|
|
Bank of Hawaii Corporation and Subsidiaries |
|
|
|
Consolidated Statements of Shareholders’ Equity (Unaudited) |
|
Table 4 |
|
|
|
|
|
|
|
|
|
Accum. |
|
|
|
|
|
|
|
|
|
||||||||
|
|
|
|
|
|
|
|
|
Other |
|
|
|
|
|
|
|
|
|
||||||||
|
|
|
|
|
|
|
|
|
Compre- |
|
|
|
|
|
|
|
|
|
||||||||
|
|
|
|
|
|
|
|
|
hensive |
|
|
|
Deferred |
|
|
|
Compre- |
|
||||||||
|
|
|
|
|
Common |
|
Capital |
|
Income |
|
Retained |
|
Stock |
|
Treasury |
|
hensive |
|
||||||||
|
(dollars in thousands) |
|
Total |
|
Stock |
|
Surplus |
|
(Loss) |
|
Earnings |
|
Grants |
|
Stock |
|
Income |
|
||||||||
|
Balance at December 31, 2005 |
|
$ |
693,352 |
|
$ |
565 |
|
$ |
473,338 |
|
$ |
(47,818 |
) |
$ |
546,591 |
|
$ |
(11,080 |
) |
$ |
(268,244 |
) |
|
|
|
|
Comprehensive Income: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
Net Income |
|
45,350 |
|
— |
|
— |
|
— |
|
45,350 |
|
— |
|
— |
|
$ |
45,350 |
|
|||||||
|
Other Comprehensive Income, Net of Tax: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
Change in Unrealized Gains and Losses on Investment Securities |
|
(17,850 |
) |
— |
|
— |
|
(17,850 |
) |
— |
|
— |
|
— |
|
(17,850 |
) |
||||||||
|
Total Comprehensive Income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
27,500 |
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
Common Stock Issued under Stock Plans and Related Tax Benefits (393,036 shares) |
|
16,014 |
|
1 |
|
(5,660 |
) |
— |
|
(7,299 |
) |
11,080 |
|
17,892 |
|
|
|
||||||||
|
Treasury Stock Purchased (697,974 shares) |
|
(36,848 |
) |
— |
|
— |
|
— |
|
— |
|
— |
|
(36,848 |
) |
|
|
||||||||
|
Cash Dividends Paid |
|
(18,940 |
) |
— |
|
— |
|
— |
|
(18,940 |
) |
— |
|
— |
|
|
|
||||||||
|
Balance at March 31, 2006 |
|
$ |
681,078 |
|
$ |
566 |
|
$ |
467,678 |
|
$ |
(65,668 |
) |
$ |
565,702 |
|
$ |
— |
|
$ |
(287,200 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
Balance at December 31, 2004 |
|
$ |
814,834 |
|
$ |
813 |
|
$ |
450,998 |
|
$ |
(12,917 |
) |
$ |
1,282,425 |
|
$ |
(8,433 |
) |
$ |
(898,052 |
) |
|
|
|
|
Comprehensive Income: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
Net Income |
|
45,522 |
|
— |
|
— |
|
— |
|
45,522 |
|
— |
|
— |
|
$ |
45,522 |
|
|||||||
|
Other Comprehensive Income, Net of Tax: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
Change in Unrealized Gains and Losses on Investment Securities |
|
(20,552 |
) |
— |
|
— |
|
(20,552 |
) |
— |
|
— |
|
— |
|
(20,552 |
) |
||||||||
|
Total Comprehensive Income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
24,970 |
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
Common Stock Issued under Stock Plans and Related Tax Benefits (278,339 shares) |
|
9,027 |
|
2 |
|
2,229 |
|
— |
|
(282 |
) |
288 |
|
6,790 |
|
|
|
||||||||
|
Treasury Stock Purchased (2,411,752 shares) |
|
(114,580 |
) |
— |
|
— |
|
— |
|
— |
|
— |
|
(114,580 |
) |
|
|
||||||||
|
Cash Dividends Paid |
|
(17,595 |
) |
— |
|
— |
|
— |
|
(17,595 |
) |
— |
|
— |
|
|
|
||||||||
|
Balance at March 31, 2005 |
|
$ |
716,656 |
|
$ |
815 |
|
$ |
453,227 |
|
$ |
(33,469 |
) |
$ |
1,310,070 |
|
$ |
(8,145 |
) |
$ |
(1,005,842 |
) |
|
|
|
|
Bank of Hawaii Corporation and Subsidiaries |
|
|
|
Consolidated Average Balances and Interest Rates - Taxable Equivalent Basis (Unaudited) |
|
Table 5 |
|
|
|
Three Months Ended |
|
Three Months Ended |
|
Three Months Ended |
|
||||||||||||||||||||
|
|
|
March 31, 2006 |
|
December 31, 2005 1 |
|
March 31, 2005 1 |
|
||||||||||||||||||||
|
|
|
Average |
|
Income/ |
|
Yield/ |
|
Average |
|
Income/ |
|
Yield/ |
|
Average |
|
Income/ |
|
Yield/ |
|
||||||||
|
(dollars in millions) |
|
Balance |
|
Expense |
|
Rate |
|
Balance |
|
Expense |
|
Rate |
|
Balance |
|
Expense |
|
Rate |
|
||||||||
|
Earning Assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
Interest-Bearing Deposits |
|
$ |
5.3 |
|
$ |
— |
|
3.30% |
|
$ |
11.2 |
|
$ |
0.1 |
|
3.64% |
|
$ |
4.8 |
|
$ |
— |
|
1.93% |
|
||
|
Funds Sold |
|
11.0 |
|
0.1 |
|
4.61 |
|
15.1 |
|
0.1 |
|
4.05 |
|
12.6 |
|
0.1 |
|
2.40 |
|
||||||||
|
Investment Securities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
Available for Sale |
|
2,589.4 |
|
30.9 |
|
4.78 |
|
2,573.2 |
|
29.9 |
|
4.64 |
|
2,491.1 |
|
27.4 |
|
4.40 |
|
||||||||
|
Held to Maturity |
|
443.7 |
|
4.7 |
|
4.29 |
|
469.9 |
|
4.9 |
|
4.17 |
|
574.6 |
|
5.8 |
|
4.06 |
|
||||||||
|
Loans Held for Sale |
|
12.0 |
|
0.2 |
|
6.02 |
|
12.8 |
|
0.2 |
|
5.67 |
|
13.2 |
|
0.2 |
|
5.40 |
|
||||||||
|
Loans and Leases 2 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
Commercial and Industrial |
|
931.9 |
|
16.2 |
|
7.05 |
|
943.7 |
|
16.0 |
|
6.74 |
|
918.8 |
|
13.4 |
|
5.89 |
|
||||||||
|
Construction |
|
142.6 |
|
2.8 |
|
8.03 |
|
161.3 |
|
2.9 |
|
7.22 |
|
106.7 |
|
1.4 |
|
5.38 |
|
||||||||
|
Commercial Mortgage |
|
571.9 |
|
9.2 |
|
6.50 |
|
565.7 |
|
9.0 |
|
6.33 |
|
605.9 |
|
8.5 |
|
5.73 |
|
||||||||
|
Residential Mortgage |
|
2,436.4 |
|
35.7 |
|
5.85 |
|
2,406.3 |
|
34.7 |
|
5.77 |
|
2,333.8 |
|
32.6 |
|
5.59 |
|
||||||||
|
Other Revolving Credit and Installment |
|
725.7 |
|
15.9 |
|
8.89 |
|
738.8 |
|
16.2 |
|
8.70 |
|
738.0 |
|
15.1 |
|
8.27 |
|
||||||||
|
Home Equity |
|
880.7 |
|
15.2 |
|
7.01 |
|
868.1 |
|
14.3 |
|
6.53 |
|
795.6 |
|
10.5 |
|
5.34 |
|
||||||||
|
Lease Financing |
|
492.5 |
|
4.2 |
|
3.42 |
|
493.5 |
|
4.4 |
|
3.53 |
|
501.8 |
|
4.8 |
|
3.82 |
|
||||||||
|
Total Loans and Leases |
|
6,181.7 |
|
99.2 |
|
6.47 |
|
6,177.4 |
|
97.5 |
|
6.28 |
|
6,000.6 |
|
86.3 |
|
5.80 |
|
||||||||
|
Other |
|
79.4 |
|
0.3 |
|
1.39 |
|
79.4 |
|
0.3 |
|
1.36 |
|
53.9 |
|
0.4 |
|
3.38 |
|
||||||||
|
Total Earning Assets 3 |
|
9,322.5 |
|
135.4 |
|
5.85 |
|
9,339.0 |
|
133.0 |
|
5.67 |
|
9,150.8 |
|
120.2 |
|
5.29 |
|
||||||||
|
Cash and Non-Interest-Bearing Deposits |
|
331.8 |
|
|
|
|
|
314.7 |
|
|
|
|
|
315.6 |
|
|
|
|
|
||||||||
|
Other Assets |
|
437.4 |
|
|
|
|
|
425.8 |
|
|
|
|
|
379.4 |
|
|
|
|
|
||||||||
|
Total Assets |
|
$ |
10,091.7 |
|
|
|
|
|
$ |
10,079.5 |
|
|
|
|
|
$ |
9,845.8 |
|
|
|
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
Interest-Bearing Liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
Interest-Bearing Deposits |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
Demand |
|
$ |
1,654.7 |
|
3.3 |
|
0.82 |
|
$ |
1,650.9 |
|
3.1 |
|
0.75 |
|
$ |
1,618.1 |
|
1.7 |
|
0.42 |
|
|||||
|
Savings |
|
2,756.2 |
|
7.2 |
|
1.06 |
|
2,882.4 |
|
6.1 |
|
0.83 |
|
2,972.3 |
|
4.4 |
|
0.60 |
|
||||||||
|
Time |
|
1,309.7 |
|
9.1 |
|
2.82 |
|
1,273.6 |
|
8.3 |
|
2.59 |
|
1,114.7 |
|
5.5 |
|
2.02 |
|
||||||||
|
Total Interest-Bearing Deposits |
|
5,720.6 |
|
19.6 |
|
1.39 |
|
5,806.9 |
|
17.5 |
|
1.19 |
|
5,705.1 |
|
11.6 |
|
0.82 |
|
||||||||
|
Short-Term Borrowings |
|
178.0 |
|
2.0 |
|
4.44 |
|
178.1 |
|
1.8 |
|
3.99 |
|
128.6 |
|
0.8 |
|
2.41 |
|
||||||||
|
Securities Sold Under Agreements to Repurchase |
|
772.0 |
|
7.9 |
|
4.15 |
|
710.5 |
|
6.5 |
|
3.63 |
|
577.6 |
|
3.3 |
|
2.33 |
|
||||||||
|
Long-Term Debt |
|
242.7 |
|
3.7 |
|
6.16 |
|
242.7 |
|
3.7 |
|
6.11 |
|
248.7 |
|
3.8 |
|
6.14 |
|
||||||||
|
Total Interest-Bearing Liabilities |
|
6,913.3 |
|
33.2 |
|
1.95 |
|
6,938.2 |
|
29.5 |
|
1.69 |
|
6,660.0 |
|
19.5 |
|
1.19 |
|
||||||||
|
Net Interest Income |
|
|
|
$ |
102.2 |
|
|
|
|
|
$ |
103.5 |
|
|
|
|
|
$ |
100.7 |
|
|
|
|||||
|
Interest Rate Spread |
|
|
|
|
|
3.90% |
|
|
|
|
|
3.98% |
|
|
|
|
|
4.10% |
|
||||||||
|
Net Interest Margin |
|
|
|
|
|
4.41% |
|
|
|
|
|
4.42% |
|
|
|
|
|
4.42% |
|
||||||||
|
Non-Interest-Bearing Demand Deposits |
|
2,022.0 |
|
|
|
|
|
1,988.5 |
|
|
|
|
|
1,982.7 |
|
|
|
|
|
||||||||
|
Other Liabilities |
|
452.5 |
|
|
|
|
|
447.4 |
|
|
|
|
|
422.8 |
|
|
|
|
|
||||||||
|
Shareholders’ Equity |
|
703.9 |
|
|
|
|
|
705.4 |
|
|
|
|
|
780.3 |
|
|
|
|
|
||||||||
|
Total Liabilities and Shareholders’ Equity |
|
$ |
10,091.7 |
|
|
|
|
|
$ |
10,079.5 |
|
|
|
|
|
$ |
9,845.8 |
|
|
|
|
|
|||||
1 Certain prior period information has been reclassified to conform to current presentation.
2 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.
3 Interest income includes taxable-equivalent basis adjustment based upon a statutory tax rate of 35%.
|
Bank of Hawaii Corporation and Subsidiaries |
|
|
|
Analysis of Change in Net Interest Income - Taxable Equivalent Basis (Unaudited) |
|
Table 6 |
|
|
|
Three Months Ended March 31, 2006 compared to December 31, 2005 |
|
||||||||||
|
(dollars in millions) |
|
Volume 1 |
|
Rate 1 |
|
Time 1 |
|
Total |
|
||||
|
Change in Interest Income: |
|
|
|
|
|
|
|
|
|
||||
|
Interest-Bearing Deposits |
|
$ |
(0.1 |
) |
$ |
— |
|
$ |
— |
|
$ |
(0.1 |
) |
|
Investment Securities |
|
|
|
|
|
|
|
|
|
||||
|
Available for Sale |
|
0.2 |
|
0.9 |
|
(0.1 |
) |
1.0 |
|
||||
|
Held to Maturity |
|
(0.3 |
) |
0.1 |
|
— |
|
(0.2 |
) |
||||
|
Loans and Leases |
|
|
|
|
|
|
|
|
|
||||
|
Commercial and Industrial |
|
(0.2 |
) |
0.7 |
|
(0.3 |
) |
0.2 |
|
||||
|
Construction |
|
(0.4 |
) |
0.3 |
|
— |
|
(0.1 |
) |
||||
|
Commercial Mortgage |
|
0.1 |
|
0.3 |
|
(0.2 |
) |
0.2 |
|
||||
|
Residential Mortgage |
|
0.5 |
|
0.5 |
|
— |
|
1.0 |
|
||||
|
Other Revolving Credit and Installment |
|
(0.3 |
) |
0.4 |
|
(0.4 |
) |
(0.3 |
) |
||||
|
Home Equity |
|
0.2 |
|
1.0 |
|
(0.3 |
) |
0.9 |
|
||||
|
Lease Financing |
|
— |
|
(0.2 |
) |
— |
|
(0.2 |
) |
||||
|
Total Loans and Leases |
|
(0.1 |
) |
3.0 |
|
(1.2 |
) |
1.7 |
|
||||
|
Total Change in Interest Income |
|
(0.3 |
) |
4.0 |
|
(1.3 |
) |
2.4 |
|
||||
|
|
|
|
|
|
|
|
|
|
|
||||
|
Change in Interest Expense: |
|
|
|
|
|
|
|
|
|
||||
|
Interest-Bearing Deposits |
|
|
|
|
|
|
|
|
|
||||
|
Demand |
|
— |
|
0.3 |
|
(0.1 |
) |
0.2 |
|
||||
|
Savings |
|
(0.4 |
) |
1.6 |
|
(0.1 |
) |
1.1 |
|
||||
|
Time |
|
0.3 |
|
0.5 |
|
— |
|
0.8 |
|
||||
|
Total Interest-Bearing Deposits |
|
(0.1 |
) |
2.4 |
|
(0.2 |
) |
2.1 |
|
||||
|
Short-Term Borrowings |
|
— |
|
0.2 |
|
— |
|
0.2 |
|
||||
|
Securities Sold Under Agreements to Repurchase |
|
0.6 |
|
0.9 |
|
(0.1 |
) |
1.4 |
|
||||
|
Total Change in Interest Expense |
|
0.5 |
|
3.5 |
|
(0.3 |
) |
3.7 |
|
||||
|
|
|
|
|
|
|
|
|
|
|
||||
|
Change in Net Interest Income |
|
$ |
(0.8 |
) |
$ |
0.5 |
|
$ |
(1.0 |
) |
$ |
(1.3 |
) |
1 The changes for each category of interest income and expense are allocated between the portion of changes attributable to the variance in volume, rate or time for that category.
|
Bank of Hawaii Corporation and Subsidiaries |
|
|
|
Salaries and Benefits (Unaudited) |
|
Table 7 |
|
|
|
Three Months Ended |
|
|||||||
|
|
|
March 31, |
|
December 31, |
|
March 31, |
|
|||
|
(dollars in thousands) |
|
2006 |
|
2005 |
|
2005 1 |
|
|||
|
Salaries |
|
$ |
26,724 |
|
$ |
27,765 |
|
$ |
26,111 |
|
|
Incentive Compensation |
|
4,321 |
|
4,067 |
|
3,968 |
|
|||
|
Share-Based Compensation |
|
1,481 |
|
720 |
|
1,715 |
|
|||
|
Commission Expense |
|
1,922 |
|
1,715 |
|
2,252 |
|
|||
|
Retirement and Other Benefits |
|
5,235 |
|
4,245 |
|
4,768 |
|
|||
|
Payroll Taxes |
|
3,385 |
|
1,999 |
|
3,453 |
|
|||
|
Medical, Dental, and Life Insurance |
|
2,161 |
|
2,168 |
|
2,231 |
|
|||
|
Separation Expense |
|
557 |
|
640 |
|
271 |
|
|||
|
Total Salaries and Benefits |
|
$ |
45,786 |
|
$ |
43,319 |
|
$ |
44,769 |
|
1 Certain prior period information has been reclassified to conform to current presentation.
|
Bank of Hawaii Corporation and Subsidiaries |
|
|
|
Loan and Lease Portfolio Balances (Unaudited) |
|
Table 8 |
|
|
|
March 31, |
|
December 31, |
|
March 31, |
|
|||
|
(dollars in thousands) |
|
2006 |
|
2005 1 |
|
2005 1 |
|
|||
|
Commercial |
|
|
|
|
|
|
|
|||
|
Commercial and Industrial |
|
$ |
957,893 |
|
$ |
918,842 |
|
$ |
932,978 |
|
|
Commercial Mortgage |
|
591,770 |
|
558,346 |
|
609,689 |
|
|||
|
Construction |
|
154,737 |
|
153,682 |
|
88,769 |
|
|||
|
Lease Financing |
|
467,688 |
|
470,155 |
|
468,349 |
|
|||
|
Total Commercial |
|
2,172,088 |
|
2,101,025 |
|
2,099,785 |
|
|||
|
Consumer |
|
|
|
|
|
|
|
|||
|
Residential Mortgage |
|
2,441,664 |
|
2,431,198 |
|
2,345,182 |
|
|||
|
Home Equity |
|
888,528 |
|
874,400 |
|
803,893 |
|
|||
|
Other Revolving Credit and Installment |
|
719,553 |
|
736,364 |
|
736,250 |
|
|||
|
Lease Financing |
|
24,292 |
|
25,549 |
|
30,680 |
|
|||
|
Total Consumer |
|
4,074,037 |
|
4,067,511 |
|
3,916,005 |
|
|||
|
Total Loans and Leases |
|
$ |
6,246,125 |
|
$ |
6,168,536 |
|
$ |
6,015,790 |
|
Air Transportation Credit Exposure 2 (Unaudited)
|
|
|
March 31, 2006 |
|
Dec. 31, 2005 |
|
March 31, 2005 |
|
|||||||||
|
|
|
|
|
Unused |
|
Total |
|
Total |
|
Total |
|
|||||
|
(dollars in thousands) |
|
Outstanding |
|
Commitments |
|
Exposure |
|
Exposure |
|
Exposure |
|
|||||
|
Passenger Carriers Based In the United States |
|
$ |
68,609 |
|
$ |
— |
|
$ |
68,609 |
|
$ |
68,829 |
|
$ |
90,353 |
|
|
Passenger Carriers Based Outside the United States |
|
20,613 |
|
— |
|
20,613 |
|
20,678 |
|
24,888 |
|
|||||
|
Cargo Carriers |
|
13,240 |
|
— |
|
13,240 |
|
13,240 |
|
13,475 |
|
|||||
|
Total Air Transportation Credit Exposure |
|
$ |
102,462 |
|
$ |
— |
|
$ |
102,462 |
|
$ |
102,747 |
|
$ |
128,716 |
|
1 Certain prior period information has been reclassified to conform to current presentation.
2 Exposure includes loans, leveraged leases and operating leases.
|
Bank of Hawaii Corporation and Subsidiaries |
|
|
|
Consolidated Non-Performing Assets and Accruing Loans and Leases Past Due 90 Days or More (Unaudited) |
|
Table 9 |
|
|
|
March 31, |
|
December 31, |
|
September 30, |
|
June 30, |
|
March 31, |
|
|||||
|
(dollars in thousands) |
|
2006 |
|
2005 1 |
|
2005 1 |
|
2005 1 |
|
2005 1 |
|
|||||
|
Non-Performing Assets |
|
|
|
|
|
|
|
|
|
|
|
|||||
|
Non-Accrual Loans and Leases |
|
|
|
|
|
|
|
|
|
|
|
|||||
|
Commercial |
|
|
|
|
|
|
|
|
|
|
|
|||||
|
Commercial and Industrial |
|
$ |
236 |
|
$ |
212 |
|
$ |
471 |
|
$ |
430 |
|
$ |
470 |
|
|
Commercial Mortgage |
|
52 |
|
130 |
|
1,617 |
|
1,805 |
|
1,994 |
|
|||||
|
Lease Financing |
|
— |
|
— |
|
4 |
|
1,586 |
|
2,418 |
|
|||||
|
Total Commercial |
|
288 |
|
342 |
|
2,092 |
|
3,821 |
|
4,882 |
|
|||||
|
Consumer |
|
|
|
|
|
|
|
|
|
|
|
|||||
|
Residential Mortgage |
|
4,922 |
|
5,439 |
|
5,021 |
|
5,968 |
|
7,432 |
|
|||||
|
Home Equity |
|
38 |
|
39 |
|
41 |
|
156 |
|
185 |
|
|||||
|
Total Consumer |
|
4,960 |
|
5,478 |
|
5,062 |
|
6,124 |
|
7,617 |
|
|||||
|
Total Non-Accrual Loans and Leases |
|
5,248 |
|
5,820 |
|
7,154 |
|
9,945 |
|
12,499 |
|
|||||
|
Foreclosed Real Estate |
|
358 |
|
358 |
|
413 |
|
292 |
|
183 |
|
|||||
|
Other Investments |
|
300 |
|
300 |
|
683 |
|
683 |
|
683 |
|
|||||
|
Total Non-Performing Assets |
|
$ |
5,906 |
|
$ |
6,478 |
|
$ |
8,250 |
|
$ |
10,920 |
|
$ |
13,365 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
|
Accruing Loans and Leases Past Due 90 Days or More |
|
|
|
|
|
|
|
|
|
|
|
|||||
|
Commercial |
|
|
|
|
|
|
|
|
|
|
|
|||||
|
Commercial and Industrial |
|
$ |
— |
|
$ |
— |
|
$ |
— |
|
$ |
9 |
|
$ |
29 |
|
|
Commercial Mortgage |
|
— |
|
— |
|
— |
|
2,213 |
|
2,243 |
|
|||||
|
Total Commercial |
|
— |
|
— |
|
— |
|
2,222 |
|
2,272 |
|
|||||
|
Consumer |
|
|
|
|
|
|
|
|
|
|
|
|||||
|
Residential Mortgage |
|
464 |
|
1,132 |
|
1,545 |
|
1,310 |
|
604 |
|
|||||
|
Home Equity |
|
85 |
|
185 |
|
83 |
|
— |
|
70 |
|
|||||
|
Other Revolving Credit and Installment |
|
1,390 |
|
1,504 |
|
1,479 |
|
1,417 |
|
1,417 |
|
|||||
|
Lease Financing |
|
18 |
|
29 |
|
51 |
|
— |
|
— |
|
|||||
|
Total Consumer |
|
1,957 |
|
2,850 |
|
3,158 |
|
2,727 |
|
2,091 |
|
|||||
|
Total Accruing Loans and Leases Past Due 90 Days or More |
|
$ |
1,957 |
|
$ |
2,850 |
|
$ |
3,158 |
|
$ |
4,949 |
|
$ |
4,363 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
|
Total Loans and Leases |
|
$ |
6,246,125 |
|
$ |
6,168,536 |
|
$ |
6,202,546 |
|
$ |
6,151,418 |
|
$ |
6,015,790 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
|
Ratio of Non-Accrual Loans and Leases to Total Loans and Leases |
|
0.08% |
|
0.09% |
|
0.12% |
|
0.16% |
|
0.21% |
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
|
Ratio of Non-Performing Assets to Total Loans and Leases, Foreclosed Real Estate and Other Investments |
|
0.09% |
|
0.11% |
|
0.13% |
|
0.18% |
|
0.22% |
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
|
Ratio of Non-Performing Assets and Accruing Loans and Leases Past Due 90 Days or More to Total Loans and Leases |
|
0.13% |
|
0.15% |
|
0.18% |
|
0.26% |
|
0.29% |
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
|
Quarter to Quarter Changes in Non-Performing Assets |
|
|
|
|
|
|
|
|
|
|
|
|||||
|
Balance at Beginning of Quarter |
|
$ |
6,478 |
|
$ |
8,250 |
|
$ |
10,920 |
|
$ |
13,365 |
|
$ |
13,859 |
|
|
Additions |
|
907 |
|
1,191 |
|
919 |
|
3,088 |
|
2,796 |
|
|||||
|
Reductions |
|
|
|
|
|
|
|
|
|
|
|
|||||
|
Payments |
|
(445 |
) |
(2,345 |
) |
(1,326 |
) |
(5,097 |
) |
(2,202 |
) |
|||||
|
Return to Accrual |
|
(985 |
) |
(231 |
) |
(2,007 |
) |
(392 |
) |
(698 |
) |
|||||
|
Sales of Foreclosed Assets |
|
— |
|
(122 |
) |
— |
|
— |
|
(129 |
) |
|||||
|
Charge-offs/Write-downs |
|
(49 |
) |
(265 |
) |
(256 |
) |
(44 |
) |
(261 |
) |
|||||
|
Total Reductions |
|
(1,479 |
) |
(2,963 |
) |
(3,589 |
) |
(5,533 |
) |
(3,290 |
) |
|||||
|
Balance at End of Quarter |
|
$ |
5,906 |
|
$ |
6,478 |
|
$ |
8,250 |
|
$ |
10,920 |
|
$ |
13,365 |
|
1 Certain prior period information has been reclassified to conform to current presentation.
|
Bank of Hawaii Corporation and Subsidiaries |
|
|
|
Consolidated Reserve for Credit Losses (Unaudited) |
|
Table 10 |
|
|
|
Three Months Ended |
|
|||||||
|
|
|
March 31, |
|
December 31, |
|
March 31, |
|
|||
|
(dollars in thousands) |
|
2006 |
|
2005 |
|
2005 |
|
|||
|
Balance at Beginning of Period |
|
$ |
96,167 |
|
$ |
96,167 |
|
$ |
113,596 |
|
|
Loans and Leases Charged-Off |
|
|
|
|
|
|
|
|||
|
Commercial |
|
|
|
|
|
|
|
|||
|
Commercial and Industrial |
|
(382 |
) |
(732 |
) |
(574 |
) |
|||
|
Consumer |
|
|
|
|
|
|
|
|||
|
Residential Mortgage |
|
(10 |
) |
(134 |
) |
(315 |
) |
|||
|
Home Equity |
|
(141 |
) |
(236 |
) |
(292 |
) |
|||
|
Other Revolving Credit and Installment |
|
(4,254 |
) |
(5,651 |
) |
(4,582 |
) |
|||
|
Lease Financing |
|
(12 |
) |
(35 |
) |
(34 |
) |
|||
|
Total Loans and Leases Charged-Off |
|
(4,799 |
) |
(6,788 |
) |
(5,797 |
) |
|||
|
Recoveries on Loans and Leases Previously Charged-Off |
|
|
|
|
|
|
|
|||
|
Commercial |
|
|
|
|
|
|
|
|||
|
Commercial and Industrial |
|
295 |
|
470 |
|
541 |
|
|||
|
Commercial Mortgage |
|
89 |
|
3,006 |
|
62 |
|
|||
|
Lease Financing |
|
— |
|
26 |
|
32 |
|
|||
|
Consumer |
|
|
|
|
|
|
|
|||
|
Residential Mortgage |
|
122 |
|
156 |
|
106 |
|
|||
|
Home Equity |
|
61 |
|
97 |
|
60 |
|
|||
|
Other Revolving Credit and Installment |
|
1,462 |
|
1,440 |
|
1,287 |
|
|||
|
Lease Financing |
|
9 |
|
5 |
|
19 |
|
|||
|
Total Recoveries on Loans and Leases Previously Charged-Off |
|
2,038 |
|
5,200 |
|
2,107 |
|
|||
|
Net Loan and Lease Charge-Offs |
|
(2,761 |
) |
(1,588 |
) |
(3,690 |
) |
|||
|
Provision for Credit Losses |
|
2,761 |
|
1,588 |
|
— |
|
|||
|
Balance at End of Period 1 |
|
$ |
96,167 |
|
$ |
96,167 |
|
$ |
109,906 |
|
|
|
|
|
|
|
|
|
|
|||
|
Components |
|
|
|
|
|
|
|
|||
|
Allowance for Loan and Lease Losses |
|
$ |
91,064 |
|
$ |
91,090 |
|
$ |
105,006 |
|
|
Reserve for Unfunded Commitments |
|
5,103 |
|
5,077 |
|
4,900 |
|
|||
|
Total Reserve for Credit Losses |
|
$ |
96,167 |
|
$ |
96,167 |
|
$ |
109,906 |
|
|
|
|
|
|
|
|
|
|
|||
|
Average Loans and Leases Outstanding |
|
$ |
6,181,697 |
|
$ |
6,177,424 |
|
$ |
6,000,572 |
|
|
|
|
|
|
|
|
|
|
|||
|
Ratio of Net Loan and Lease Charge-Offs to Average Loans and Leases Outstanding (annualized) |
|
0.18% |
|
0.10% |
|
0.25% |
|
|||
|
Ratio of Allowance for Loan and Lease Losses to Loans and Leases Outstanding |
|
1.46% |
|
1.48% |
|
1.75% |
|
|||
1 Included in this analysis is activity related to the Company’s reserve for unfunded commitments, which is separately recorded in other liabilities in the Consolidated Statements of Condition.
|
Bank of Hawaii Corporation and Subsidiaries |
|
|
|
Business Segment Selected Financial Information (Unaudited) |
|
Table 11 |
|
|
|
|
|
|
|
Investment |
|
Treasury |
|
|
|
|||||
|
|
|
Retail |
|
Commercial |
|
Services |
|
and Other |
|
Consolidated |
|
|||||
|
(dollars in thousands) |
|
Banking |
|
Banking |
|
Group |
|
Corporate |
|
Total |
|
|||||
|
Three Months Ended March 31, 2006 |
|
|
|
|
|
|
|
|
|
|
|
|||||
|
Net Interest Income |
|
$ |
57,659 |
|
$ |
34,777 |
|
$ |
3,404 |
|
$ |
6,362 |
|
$ |
102,202 |
|
|
Provision for Credit Losses |
|
2,494 |
|
421 |
|
— |
|
(154 |
) |
2,761 |
|
|||||
|
Net Interest Income After Provision for Credit Losses |
|
55,165 |
|
34,356 |
|
3,404 |
|
6,516 |
|
99,441 |
|
|||||
|
Non-Interest Income |
|
23,038 |
|
9,808 |
|
17,422 |
|
2,304 |
|
52,572 |
|
|||||
|
|
|
78,203 |
|
44,164 |
|
20,826 |
|
8,820 |
|
152,013 |
|
|||||
|
Non-Interest Expense |
|
(40,897 |
) |
(21,894 |
) |
(16,214 |
) |
(1,813 |
) |
(80,818 |
) |
|||||
|
Income Before Income Taxes |
|
37,306 |
|
22,270 |
|
4,612 |
|
7,007 |
|
71,195 |
|
|||||
|
Provision for Income Taxes |
|
(13,803 |
) |
(8,187 |
) |
(1,706 |
) |
(2,149 |
) |
(25,845 |
) |
|||||
|
Allocated Net Income |
|
23,503 |
|
14,083 |
|
2,906 |
|
4,858 |
|
45,350 |
|
|||||
|
Allowance Funding Value |
|
(189 |
) |
(546 |
) |
(8 |
) |
743 |
|
— |
|
|||||
|
Provision for Credit Losses |
|
2,494 |
|
421 |
|
— |
|
(154 |
) |
2,761 |
|
|||||
|
Economic Provision |
|
(3,160 |
) |
(2,283 |
) |
(102 |
) |
— |
|
(5,545 |
) |
|||||
|
Tax Effect of Adjustments |
|
316 |
|
891 |
|
41 |
|
(218 |
) |
1,030 |
|
|||||
|
Income Before Capital Charge |
|
22,964 |
|
12,566 |
|
2,837 |
|
5,229 |
|
43,596 |
|
|||||
|
Capital Charge |
|
(5,392 |
) |
(4,415 |
) |
(1,583 |
) |
(7,977 |
) |
(19,367 |
) |
|||||
|
Net Income (Loss) After Capital Charge (NIACC) |
|
$ |
17,572 |
|
$ |
8,151 |
|
$ |
1,254 |
|
$ |
(2,748 |
) |
$ |
24,229 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
|
RAROC (ROE for the Company) |
|
48% |
|
32% |
|
20% |
|
17% |
|
26% |
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
|
Total Assets at March 31, 2006 |
|
$ |
3,874,845 |
|
$ |
2,542,730 |
|
$ |
189,084 |
|
$ |
3,921,390 |
|
$ |
10,528,049 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
|
Three Months Ended March 31, 2005 1 |
|
|
|
|
|
|
|
|
|
|
|
|||||
|
Net Interest Income |
|
$ |
52,310 |
|
$ |
34,562 |
|
$ |
2,929 |
|
$ |
10,857 |
|
$ |
100,658 |
|
|
Provision for Credit Losses |
|
3,485 |
|
416 |
|
— |
|
(3,901 |
) |
— |
|
|||||
|
Net Interest Income After Provision for Credit Losses |
|
48,825 |
|
34,146 |
|
2,929 |
|
14,758 |
|
100,658 |
|
|||||
|
Non-Interest Income |
|
21,528 |
|
11,531 |
|
17,340 |
|
1,916 |
|
52,315 |
|
|||||
|
|
|
70,353 |
|
45,677 |
|
20,269 |
|
16,674 |
|
152,973 |
|
|||||
|
Non-Interest Expense |
|
(40,273 |
) |
(22,560 |
) |
(15,995 |
) |
(2,035 |
) |
(80,863 |
) |
|||||
|
Income Before Income Taxes |
|
30,080 |
|
23,117 |
|
4,274 |
|
14,639 |
|
72,110 |
|
|||||
|
Provision for Income Taxes |
|
(11,130 |
) |
(8,598 |
) |
(1,582 |
) |
(5,278 |
) |
(26,588 |
) |
|||||
|
Allocated Net Income |
|
18,950 |
|
14,519 |
|
2,692 |
|
9,361 |
|
45,522 |
|
|||||
|
Allowance Funding Value |
|
(162 |
) |
(602 |
) |
(6 |
) |
770 |
|
— |
|
|||||
|
Provision for Credit Losses |
|
3,485 |
|
416 |
|
— |
|
(3,901 |
) |
— |
|
|||||
|
Economic Provision |
|
(3,505 |
) |
(2,458 |
) |
(90 |
) |
(2 |
) |
(6,055 |
) |
|||||
|
Tax Effect of Adjustments |
|
67 |
|
978 |
|
36 |
|
1,159 |
|
2,240 |
|
|||||
|
Income Before Capital Charge |
|
18,835 |
|
12,853 |
|
2,632 |
|
7,387 |
|
41,707 |
|
|||||
|
Capital Charge |
|
(5,288 |
) |
(4,636 |
) |
(1,510 |
) |
(10,027 |
) |
(21,461 |
) |
|||||
|
Net Income (Loss) After Capital Charge (NIACC) |
|
$ |
13,547 |
|
$ |
8,217 |
|
$ |
1,122 |
|
$ |
(2,640 |
) |
$ |
20,246 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
|
RAROC (ROE for the Company) |
|
40% |
|
31% |
|
19% |
|
20% |
|
24% |
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
|
Total Assets at March 31, 2005 |
|
$ |
3,791,538 |
|
$ |
2,390,204 |
|
$ |
142,619 |
|
$ |
3,583,669 |
|
$ |
9,908,030 |
|
1 Certain prior period information has been reclassified to conform to current presentation.
|
|
|
|
|
Quarterly Summary of Selected Consolidated Financial Data (Unaudited) |
|
Table 12 |
|
|
|
Three Months Ended |
|
|||||||||||||
|
|
|
March 31, |
|
December 31, |
|
September 30, |
|
June 30, |
|
March 31, |
|
|||||
|
(dollars in thousands except per share amounts) |
|
2006 |
|
2005 |
|
2005 |
|
2005 |
|
2005 1 |
|
|||||
|
Quarterly Operating Results |
|
|
|
|
|
|
|
|
|
|
|
|||||
|
Interest Income |
|
|
|
|
|
|
|
|
|
|
|
|||||
|
Interest and Fees on Loans and Leases |
|
$ |
99,371 |
|
$ |
97,697 |
|
$ |
94,381 |
|
$ |
90,119 |
|
$ |
86,467 |
|
|
Income on Investment Securities - Available for Sale |
|
30,835 |
|
29,820 |
|
28,482 |
|
27,987 |
|
27,319 |
|
|||||
|
Income on Investment Securities - Held to Maturity |
|
4,757 |
|
4,899 |
|
5,109 |
|
5,527 |
|
5,825 |
|
|||||
|
Deposits |
|
43 |
|
103 |
|
57 |
|
36 |
|
23 |
|
|||||
|
Funds Sold |
|
125 |
|
154 |
|
935 |
|
165 |
|
75 |
|
|||||
|
Other |
|
272 |
|
272 |
|
270 |
|
271 |
|
449 |
|
|||||
|
Total Interest Income |
|
135,403 |
|
132,945 |
|
129,234 |
|
124,105 |
|
120,158 |
|
|||||
|
Interest Expense |
|
|
|
|
|
|
|
|
|
|
|
|||||
|
Deposits |
|
19,633 |
|
17,479 |
|
15,766 |
|
13,577 |
|
11,604 |
|
|||||
|
Securities Sold Under Agreements to Repurchase |
|
7,890 |
|
6,504 |
|
6,796 |
|
4,562 |
|
3,325 |
|
|||||
|
Funds Purchased |
|
1,893 |
|
1,730 |
|
901 |
|
1,151 |
|
733 |
|
|||||
|
Short-Term Borrowings |
|
57 |
|
61 |
|
50 |
|
45 |
|
32 |
|
|||||
|
Long-Term Debt |
|
3,728 |
|
3,715 |
|
3,761 |
|
3,731 |
|
3,806 |
|
|||||
|
Total Interest Expense |
|
33,201 |
|
29,489 |
|
27,274 |
|
23,066 |
|
19,500 |
|
|||||
|
Net Interest Income |
|
102,202 |
|
103,456 |
|
101,960 |
|
101,039 |
|
100,658 |
|
|||||
|
Provision for Credit Losses |
|
2,761 |
|
1,588 |
|
3,000 |
|
— |
|
— |
|
|||||
|
Net Interest Income After Provision for Credit Losses |
|
99,441 |
|
101,868 |
|
98,960 |
|
101,039 |
|
100,658 |
|
|||||
|
Non-Interest Income |
|
|
|
|
|
|
|
|
|
|
|
|||||
|
Trust and Asset Management |
|
14,848 |
|
14,098 |
|
14,052 |
|
14,058 |
|
14,622 |
|
|||||
|
Mortgage Banking |
|
2,987 |
|
2,597 |
|
2,618 |
|
2,594 |
|
2,590 |
|
|||||
|
Service Charges on Deposit Accounts |
|
10,132 |
|
10,151 |
|
10,046 |
|
9,569 |
|
10,179 |
|
|||||
|
Fees, Exchange, and Other Service Charges |
|
14,767 |
|
15,147 |
|
15,394 |
|
15,211 |
|
13,836 |
|
|||||
|
Investment Securities Gains (Losses) |
|
— |
|
(4 |
) |
8 |
|
337 |
|
— |
|
|||||
|
Insurance |
|
5,019 |
|
4,201 |
|
5,324 |
|
4,330 |
|
5,788 |
|
|||||
|
Other |
|
4,819 |
|
4,619 |
|
8,074 |
|
4,575 |
|
5,300 |
|
|||||
|
Total Non-Interest Income |
|
52,572 |
|
50,809 |
|
55,516 |
|
50,674 |
|
52,315 |
|
|||||
|
Non-Interest Expense |
|
|
|
|
|
|
|
|
|
|
|
|||||
|
Salaries and Benefits |
|
45,786 |
|
43,319 |
|
44,366 |
|
43,856 |
|
44,769 |
|
|||||
|
Net Occupancy |
|
9,643 |
|
9,643 |
|
9,896 |
|
9,189 |
|
9,545 |
|
|||||
|
Net Equipment |
|
5,028 |
|
5,358 |
|
5,335 |
|
5,377 |
|
5,471 |
|
|||||
|
Professional Fees |
|
438 |
|
4,057 |
|
5,689 |
|
2,905 |
|
3,051 |
|
|||||
|
Other |
|
19,923 |
|
20,802 |
|
19,310 |
|
17,677 |
|
18,027 |
|
|||||
|
Total Non-Interest Expense |
|
80,818 |
|
83,179 |
|
84,596 |
|
79,004 |
|
80,863 |
|
|||||
|
Income Before Income Taxes |
|
71,195 |
|
69,498 |
|
69,880 |
|
72,709 |
|
72,110 |
|
|||||
|
Provision for Income Taxes |
|
25,845 |
|
24,717 |
|
25,051 |
|
26,280 |
|
26,588 |
|
|||||
|
Net Income |
|
$ |
45,350 |
|
$ |
44,781 |
|
$ |
44,829 |
|
$ |
46,429 |
|
$ |
45,522 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
|
Basic Earnings Per Share |
|
$ |
0.89 |
|
$ |
0.88 |
|
$ |
0.87 |
|
$ |
0.90 |
|
$ |
0.85 |
|
|
Diluted Earnings Per Share |
|
$ |
0.87 |
|
$ |
0.86 |
|
$ |
0.85 |
|
$ |
0.87 |
|
$ |
0.83 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
|
Balance Sheet Totals |
|
|
|
|
|
|
|
|
|
|
|
|||||
|
Total Assets |
|
$ |
10,528,049 |
|
$ |
10,187,038 |
|
$ |
10,085,235 |
|
$ |
10,059,690 |
|
$ |
9,908,030 |
|
|
Net Loans and Leases |
|
6,155,061 |
|
6,077,446 |
|
6,110,892 |
|
6,049,831 |
|
5,910,784 |
|
|||||
|
Total Deposits |
|
8,147,101 |
|
7,907,468 |
|
7,756,586 |
|
7,726,758 |
|
7,760,662 |
|
|||||
|
Total Shareholders’ Equity |
|
681,078 |
|
693,352 |
|
696,311 |
|
712,169 |
|
716,656 |
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
|
Performance Ratios |
|
|
|
|
|
|
|
|
|
|
|
|||||
|
Net Income to Average Total Assets (ROA) |
|
1.82% |
|
1.76% |
|
1.74% |
|
1.87% |
|
1.88% |
|
|||||
|
Net Income to Average Shareholders’ Equity (ROE) |
|
26.13 |
|
25.19 |
|
24.61 |
|
25.98 |
|
23.66 |
|
|||||
|
Net Interest Margin 2 |
|
4.41 |
|
4.42 |
|
4.30 |
|
4.36 |
|
4.42 |
|
|||||
|
Efficiency Ratio 3 |
|
52.22 |
|
53.92 |
|
53.72 |
|
52.07 |
|
52.86 |
|
|||||
1 Certain prior period information has been reclassified to conform to current presentation.
2 The net interest margin is defined as net interest income, on a fully-taxable equivalent basis, as a percentage of average earning assets.
3 The efficiency ratio is defined as non-interest expense divided by total revenue (net interest income and non-interest income).