Bank of Hawaii Corporation First Quarter 2021 Financial Results

April 26, 2021
  • Diluted Earnings Per Share $1.50
  • Net Income $59.9 Million
  • Board of Directors Declares Dividend of $0.67 Per Share

HONOLULU--(BUSINESS WIRE)--Apr. 26, 2021-- Bank of Hawaii Corporation (NYSE: BOH) today reported diluted earnings per share of $1.50 for the first quarter of 2021, compared with diluted earnings per share of $1.06 in the previous quarter and $0.87 in the same quarter last year. Net income for the first quarter of 2021 was $59.9 million compared with net income of $42.3 million in the fourth quarter of 2020 and $34.7 million in the first quarter of 2020.

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“We are pleased with our financial performance during the first quarter of 2021," said Peter Ho, Chairman, President, and CEO. “Our balance sheet remains strong with deposit balances and total assets reaching new record highs, solid asset quality, and high levels of liquidity and capital.”

The return on average assets for the first quarter of 2021 was 1.15 percent compared with 0.83 percent during the previous quarter and 0.77 percent in the same quarter last year. The return on average equity for the first quarter of 2021 was 17.65 percent compared with 12.26 percent during the previous quarter and 10.64 percent in the same quarter last year.

Financial Highlights

Net interest income, on a taxable-equivalent basis, for the first quarter of 2021 was $120.8 million, an increase of $1.0 million from $119.8 million in the fourth quarter of 2020 and down $5.5 million from $126.3 million in the first quarter of 2020. The net interest margin was 2.43 percent in the first quarter of 2021, a decrease of 5 basis points from 2.48 percent the previous quarter and 53 basis points from 2.96 percent in the same quarter last year. Net interest income in the fourth quarter of 2020 included a charge of $3.0 million related to an impairment in the residual value of a leveraged lease which had a negative impact of 6 basis points on the net interest margin. The decrease in the net interest margin is largely due to higher levels of liquidity from continued strong deposit growth and lower interest rates. Analyses of changes in net interest income are included in Tables 8a and 8b.

Results for the first quarter of 2021 included a negative provision for credit losses of $14.3 million compared with a provision for credit losses of $15.2 million in the previous quarter and $33.6 million in the same quarter last year.

Noninterest income was $43.0 million in the first quarter of 2021 compared with noninterest income of $45.3 million in the fourth quarter of 2020 and $46.1 million in the first quarter of 2020. The decrease in noninterest income during the first quarter of 2021 compared with the prior quarter is largely due to a decrease in customer derivative program and mortgage banking income. The decrease in noninterest income compared to the first quarter of 2020 is largely due to a decrease in customer derivative program income and lower service charges on deposit accounts.

Noninterest expense was $98.9 million in the first quarter of 2021 compared with noninterest expense of $98.7 million in the fourth quarter of 2020 and $96.3 million in the first quarter of 2020. Noninterest expense in the first quarter of 2021 included seasonal payroll expenses of approximately $2.1 million, charges related to the rollout of contactless cards of $1.9 million, and separation expenses of $1.8 million. Noninterest expense in the first quarter of 2021 also included the restoration of corporate incentives that were eliminated in the first quarter of 2020. Noninterest expense in the fourth quarter of 2020 included $6.1 million in charges related to the decision to permanently close twelve branches and reduce the current number of cash-only ATMs. Noninterest expense in the fourth quarter of 2020 also included a charge of $0.8 million related to the true-up of amortization on an investment. Noninterest expense in the first quarter of 2020 included seasonal payroll expenses of approximately $3.1 million and separation expenses of $4.7 million that were partially offset by the elimination of corporate incentive accruals. An analysis of noninterest expenses related to salaries and benefits is included in Table 9.

The efficiency ratio during the first quarter of 2021 was 60.45 percent compared with 59.88 percent in the previous quarter and 55.96 percent during the same quarter last year.

The effective tax rate for the first quarter of 2021 was 24.09 percent compared with 16.87 percent in the previous quarter and 17.68 percent during the same quarter in 2020. The increase in the effective tax rate for the first quarter of 2021 was primarily due to higher pretax book income in the first quarter of 2021. The fourth quarter of 2020 included a return to provision adjustment of $1.6 million. There were no significant items impacting the tax rate during the first quarter of 2020.

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

Asset Quality

The Company’s overall asset quality remained stable during the first quarter of 2021. Total non-performing assets were $17.9 million at March 31, 2021, down from $18.5 million at December 31, 2020 and from $20.6 million at March 31, 2020. Non-performing assets as a percentage of total loans and leases and foreclosed real estate were 0.15 percent at the end of the first quarter of 2021, compared with 0.15 percent at the end of the fourth quarter of 2020 and 0.18 percent at the end of the first quarter of 2020.

Bank of Hawaii Corporation First Quarter 2021 Financial Results Page 3

Accruing loans and leases past due 90 days or more were $10.4 million at March 31, 2021 compared with $10.5 million at December 31, 2020 and $8.5 million at March 31, 2020. Restructured loans on accrual status and not past due 90 days or more were $74.2 million at March 31, 2021 compared with $68.1 million at December 31, 2020 and $61.4 million at March 31, 2020. More information on non-performing assets and accruing loans and leases past due 90 days or more is presented in Table 11.

Net loan and lease charge-offs during the first quarter of 2021 were $2.9 million or 0.10 percent annualized of total average loans and leases outstanding and were comprised of charge-offs of $6.3 million partially offset by recoveries of $3.4 million. Net charge-offs during the fourth quarter of 2020 were a net recovery of $0.3 million and were comprised of charge-offs of $3.2 million fully offset by recoveries of $3.5 million. Net charge-offs during the first quarter of 2020 were $3.7 million or 0.14 percent annualized of total average loans and leases outstanding and were comprised of $7.2 million of charge-offs partially offset by recoveries of $3.4 million.

The allowance for credit losses on loans and leases was $198.3 million at March 31, 2021, a decrease from $216.3 million at December 31, 2020 and an increase from $138.2 million at March 31, 2020. The ratio of the allowance for credit losses to total loans and leases outstanding was 1.63 percent at March 31, 2021, down from 1.81 percent at December 31, 2020 and up from 1.22 percent at March 31, 2020. The reserve for unfunded commitments was $3.0 million at March 31, 2021, a slight increase from $2.4 million at the end of the prior quarter and down from $3.3 million at the end of the same quarter in 2020. Details of loan and lease charge-offs, recoveries, and the components of the total reserve for credit losses are summarized in Table 12.

Other Financial Highlights 

Total assets increased to a new record of $21.9 billion at March 31, 2021, compared with total assets of $20.6 billion at December 31, 2020 and $18.5 billion at March 31, 2020. Average total assets were $21.2 billion during the first quarter of 2021, an increase from $20.4 billion during the fourth quarter of 2020 and $18.2 billion in the first quarter of 2020.

The investment securities portfolio was $7.5 billion at March 31, 2021, up from $7.1 billion at December 31, 2020 and from $5.7 billion at March 31, 2020 due to growth in deposits that continued to outpace loan growth. The portfolio remains largely comprised of securities issued by U.S. government agencies and includes $4.0 billion in securities available-for-sale and $3.5 billion in securities held-to-maturity at March 31, 2021. The securities portfolio at December 31, 2020 included $3.8 billion in securities available-for-sale and $3.3 billion in securities held-to-maturity. The securities portfolio at March 31, 2020 included $2.7 billion in securities available-for-sale and $3.0 billion in securities held-to-maturity.

Total loans and leases were $12.1 billion at March 31, 2021, an increase of 1.7 percent from total loans and leases of $11.9 billion at December 31, 2020 and up 6.9 percent from $11.4 billion at March 31, 2020. Average total loans and leases were $12.0 billion during the first quarter of 2021, an increase from average total loans and leases of $11.8 billion during the fourth quarter of 2020 and $11.1 billion during the first quarter of 2020.

The commercial loan portfolio was $5.3 billion at the end of March 31, 2021, an increase of $158.7 million or 3.1 percent from $5.1 billion at the end of the fourth quarter of 2020 and up $728.8 million or 16.1 percent from $4.5 billion at the end of the first quarter of 2020. Consumer loans were $6.9 billion at March 31, 2021, an increase of $42.0 million or 0.6 percent from $6.8 billion at the end of the fourth quarter of 2020 and up $59.1 million or 0.9 percent from $6.8 billion at the end of the first quarter of 2020. Loan and lease portfolio balances are summarized in Table 10.

Total deposits were $19.6 billion at March 31, 2021, an increase of 7.4 percent from total deposits of $18.2 billion at December 31, 2020 and up 21.8 percent from total deposits of $16.1 billion at March 31, 2020. Average total deposits were $18.7 billion during the first quarter of 2021, an increase from $17.8 billion during the fourth quarter of 2020 and from $15.8 billion during first quarter of 2020.

Consumer deposits were $9.7 billion at March 31, 2021, an increase of $399.0 million or 4.3 percent from $9.3 billion at the end of the fourth quarter of 2020 and an increase of $1.5 billion or 17.5 percent from $8.3 billion at the end of the first quarter of 2020. Commercial deposits were $8.2 billion at March 31, 2021, an increase of $938.3 million or 12.8 percent from $7.3 billion at the end of the fourth quarter of 2020 and an increase of $1.9 billion or 29.6 percent from $6.4 billion at the end of the first quarter of 2020. Other deposits, including public funds, were $1.6 billion at March 31, 2021, an increase of $7.8 million or 0.5 percent from $1.6 billion at the end of the fourth quarter of 2020 and an increase of $166.5 million or 11.9 percent from $1.4 billion at the end of the first quarter of 2020. Deposit balances are summarized in Tables 7 and 10.

Total shareholders’ equity was $1.4 billion at March 31, 2021, a decrease of $14.3 million from December 31, 2020, and an increase of $32.3 million from March 31, 2020. In the first quarter of 2021 there were no repurchases under the share repurchase program. The Tier 1 Capital Ratio was 12.35 percent at March 31, 2021 compared with 12.06 percent at December 31, 2020 and 11.81 percent at March 31, 2020. The Tier 1 Leverage Ratio at March 31, 2021 was 6.61 percent compared with 6.71 percent at December 31, 2020 and 7.12 percent at March 30, 2020. The decrease in the Tier 1 Leverage ratio is due to balance sheet growth related to the significant increase in customer deposits.

The Company’s Board of Directors declared a quarterly cash dividend of $0.67 per share on the Company’s outstanding shares. The dividend will be payable on June 14, 2021 to shareholders of record at the close of business on May 28, 2021.

Conference Call Information

The Company will review its first quarter financial results today at 8:00 a.m. Hawaii Time (2:00 p.m. Eastern Time). The live call, including a slide presentation, will be accessible on the investor relations link of Bank of Hawaii Corporation's website, www.boh.com. The webcast link is https://edge.media-server.com/mmc/p/xbnzsss3. The toll-free number for the teleconference is 1 (844) 543-5235 in the United States and Canada and 1 (703) 318-2209 for other international callers. Use the pass code “Bank of Hawaii” to access the call. A replay of the conference call will be available for one week beginning approximately 11:00 a.m. Hawaii Time on Monday, April 26, 2021. The replay number is 1 (855) 859-2056 in the United States and Canada and 1 (404) 537-3406 from other international locations. Enter the conference ID 8037629 when prompted. In addition, the replay will be available on the Company's website, www.boh.com.

Forward-Looking Statements

This news release, and other statements made by the Company in connection with it may contain "forward-looking statements" (as defined in the Private Securities Litigation Reform Act of 1995) that involve risks and uncertainties that could cause results to be materially different from expectations. Forecasts of our financial results and condition, expectations for our operations and business prospects, and our assumptions used in those forecasts and expectations are examples of certain of these forward-looking statements. Do not unduly rely on forward-looking statements. Actual results might differ significantly from our forecasts and expectations because of a variety of factors. More information about these factors is contained in Bank of Hawaii Corporation's Annual Report on Form 10-K for the year ended December 31, 2020, which was filed with the U.S. Securities and Exchange Commission. These forward-looking statements are not guarantees of future performance and speak only as of the date made, and, except as required by law, the Company undertakes no obligation to update or revise any forward-looking statements to reflect subsequent events, new information or future circumstances.

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

Bank of Hawaii Corporation and Subsidiaries              
Financial Highlights           Table 1  
   

Three Months Ended

 
   

March 31,

 

December 31,

 

March 31,

 
(dollars in thousands, except per share amounts)  

2021

 

2020

 

2020

 
For the Period:              
Operating Results              
Net Interest Income  

$

120,569

 

 

$

119,499

 

$

125,966

 
Provision for Credit Losses  

 

(14,300

)

 

 

15,200

 

 

33,600

 
Total Noninterest Income  

 

42,970

 

 

 

45,258

 

 

46,149

 
Total Noninterest Expense  

 

98,865

 

 

 

98,654

 

 

96,312

 
Net Income  

 

59,949

 

 

 

42,314

 

 

34,742

 
Basic Earnings Per Share  

 

1.51

 

 

 

1.06

 

 

0.88

 
Diluted Earnings Per Share  

 

1.50

 

 

 

1.06

 

 

0.87

 
Dividends Declared Per Share  

 

0.67

 

 

 

0.67

 

 

0.67

 
               
Performance Ratios              
Return on Average Assets  

 

1.15

%

 

0.83

%

 

0.77

%

Return on Average Shareholders' Equity  

 

17.65

 

 

 

12.26

 

 

10.64

 
Efficiency Ratio 1  

 

60.45

 

 

 

59.88

 

 

55.96

 
Net Interest Margin 2  

 

2.43

 

 

 

2.48

 

 

2.96

 
Dividend Payout Ratio 3  

 

44.37

 

 

 

63.21

 

 

76.14

 
Average Shareholders' Equity to Average Assets  

 

6.51

 

 

 

6.74

 

 

7.21

 
               
Average Balances              
Average Loans and Leases  

$

11,952,587

 

 

$

11,835,929

 

$

11,060,707

 
Average Assets  

 

21,150,670

 

 

 

20,382,633

 

 

18,222,602

 
Average Deposits  

 

18,665,222

 

 

 

17,819,116

 

 

15,817,745

 
Average Shareholders' Equity  

 

1,377,272

 

 

 

1,372,971

 

 

1,313,848

 
               
Per Share of Common Stock              
Book Value  

$

33.67

 

 

$

34.26

 

$

33.20

 
Tangible Book Value  

 

32.89

 

 

 

33.47

 

 

32.41

 
Market Value              
Closing  

 

89.49

 

 

 

76.62

 

 

54.91

 
High  

 

99.10

 

 

 

80.38

 

 

95.53

 
Low  

 

75.65

 

 

 

49.25

 

 

46.70

 
               
   

March 31,

 

December 31,

 

March 31,

 
   

2021

 

2020

 

2020

 
As of Period End:              
Balance Sheet Totals              
Loans and Leases  

$

12,140,703

 

 

$

11,940,020

 

$

11,352,780

 
Total Assets  

 

21,947,271

 

 

 

20,603,651

 

 

18,542,233

 
Total Deposits  

 

19,556,651

 

 

 

18,211,621

 

 

16,055,361

 
Other Debt  

 

60,459

 

 

 

60,481

 

 

60,545

 
Total Shareholders' Equity  

 

1,360,221

 

 

 

1,374,507

 

 

1,327,929

 
               
Asset Quality              
Non-Performing Assets  

$

17,883

 

 

$

18,481

 

$

20,604

 
Allowance for Credit Losses  

 

198,343

 

 

 

216,252

 

 

138,150

 
Allowance to Loans and Leases Outstanding  

 

1.63

%

 

1.81

%

 

1.22

%

               
Capital Ratios 4              
Common Equity Tier 1 Capital Ratio  

 

12.35

%

 

12.06

%

 

11.81

%

Tier 1 Capital Ratio  

 

12.35

 

 

 

12.06

 

 

11.81

 
Total Capital Ratio  

 

13.61

 

 

 

13.31

 

 

13.06

 
Tier 1 Leverage Ratio  

 

6.61

 

 

 

6.71

 

 

7.12

 
Total Shareholders' Equity to Total Assets  

 

6.20

 

 

 

6.67

 

 

7.16

 
Tangible Common Equity to Tangible Assets 5  

 

6.06

 

 

 

6.53

 

 

7.00

 
Tangible Common Equity to Risk-Weighted Assets 5  

 

11.78

 

 

 

11.89

 

 

11.85

 
               
Non-Financial Data              
Full-Time Equivalent Employees  

 

2,058

 

 

 

2,022

 

 

2,094

 
Branches  

 

63

 

 

 

65

 

 

67

 
ATMs  

 

361

 

 

 

357

 

 

382

 

1

  Efficiency ratio is defined as noninterest expense divided by total revenue (net interest income and total noninterest income).

2

  Net interest margin is defined as net interest income, on a taxable-equivalent basis, as a percentage of average earning assets.

3

  Dividend payout ratio is defined as dividends declared per share divided by basic earnings per share.

4

  Regulatory capital ratios as of March 31, 2021 are preliminary. CET 1 / Tier 1 Capital Ratios revised from 11.85%, Total Capital Ratio revised from 13.10%, and Tier 1 Leverage Ratio revised from 7.14% as of March 31, 2020.

5

  Tangible common equity to tangible assets and tangible common equity to risk-weighted assets are Non-GAAP financial measures. See Table 2 “Reconciliation of Non-GAAP Financial Measures."
Bank of Hawaii Corporation and Subsidiaries            
Reconciliation of Non-GAAP Financial Measures  

 

 

 

 

Table 2

   

March 31,

 

December 31,

 

March 31,

(dollars in thousands)  

2021

 

2020

 

2020

             
Total Shareholders' Equity  

$

1,360,221

 

 

$

1,374,507

 

 

$

1,327,929

 

Less:Goodwill  

 

31,517

 

 

 

31,517

 

 

 

31,517

 

Tangible Common Equity  

$

1,328,704

 

 

$

1,342,990

 

 

$

1,296,412

 

             
Total Assets  

$

21,947,271

 

 

$

20,603,651

 

 

$

18,542,233

 

Less:Goodwill  

 

31,517

 

 

 

31,517

 

 

 

31,517

 

Tangible Assets  

$

21,915,754

 

 

$

20,572,134

 

 

$

18,510,716

 

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

$

11,275,565

 

 

$

11,295,077

 

 

$

10,944,260

 

             
Total Shareholders' Equity to Total Assets  

 

6.20

%

 

 

6.67

%

 

 

7.16

%

Tangible Common Equity to Tangible Assets (Non-GAAP)  

 

6.06

%

 

 

6.53

%

 

 

7.00

%

             
Tier 1 Capital Ratio   

 

12.35

%

 

 

12.06

%

 

 

11.81

%

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

 

11.78

%

 

 

11.89

%

 

 

11.85

%

Note: Risk-Weighted Assets and Regulatory capital ratios as of March 31, 2021 are preliminary. Risk-Weighted Assets revised from $10,941,909 and Tier 1 Capital Ratio revised from 11.85% as of March 31, 2020.
Bank of Hawaii Corporation and Subsidiaries            
Consolidated Statements of Income           Table 3
   

Three Months Ended

   

March 31,

 

December 31,

 

March 31,

(dollars in thousands, except per share amounts)  

2021

 

2020

 

2020

Interest Income            
Interest and Fees on Loans and Leases  

$

99,299

 

 

$

98,471

 

 

$

108,210

 

Income on Investment Securities            
Available-for-Sale  

 

15,837

 

 

 

15,449

 

 

 

16,711

 

Held-to-Maturity  

 

13,300

 

 

 

14,113

 

 

 

19,252

 

Deposits  

 

7

 

 

 

1

 

 

 

9

 

Funds Sold  

 

137

 

 

 

115

 

 

 

546

 

Other  

 

185

 

 

 

167

 

 

 

218

 

Total Interest Income  

 

128,765

 

 

 

128,316

 

 

 

144,946

 

Interest Expense            
Deposits  

 

4,329

 

 

 

4,861

 

 

 

14,260

 

Securities Sold Under Agreements to Repurchase  

 

3,533

 

 

 

3,614

 

 

 

4,025

 

Funds Purchased  

 

1

 

 

 

5

 

 

 

72

 

Short-Term Borrowings  

 

-

 

 

 

-

 

 

 

39

 

Other Debt  

 

333

 

 

 

337

 

 

 

584

 

Total Interest Expense  

 

8,196

 

 

 

8,817

 

 

 

18,980

 

Net Interest Income  

 

120,569

 

 

 

119,499

 

 

 

125,966

 

Provision for Credit Losses  

 

(14,300

)

 

 

15,200

 

 

 

33,600

 

Net Interest Income After Provision for Credit Losses  

 

134,869

 

 

 

104,299

 

 

 

92,366

 

Noninterest Income            
Trust and Asset Management  

 

11,278

 

 

 

11,239

 

 

 

10,915

 

Mortgage Banking  

 

5,862

 

 

 

6,851

 

 

 

2,695

 

Service Charges on Deposit Accounts  

 

6,128

 

 

 

6,335

 

 

 

7,451

 

Fees, Exchange, and Other Service Charges  

 

13,607

 

 

 

12,143

 

 

 

13,200

 

Investment Securities Gains (Losses), Net  

 

(1,203

)

 

 

(1,193

)

 

 

(970

)

Annuity and Insurance  

 

702

 

 

 

670

 

 

 

928

 

Bank-Owned Life Insurance  

 

1,917

 

 

 

2,353

 

 

 

1,580

 

Other  

 

4,679

 

 

 

6,860

 

 

 

10,350

 

Total Noninterest Income  

 

42,970

 

 

 

45,258

 

 

 

46,149

 

Noninterest Expense            
Salaries and Benefits  

 

56,251

 

 

 

50,200

 

 

 

54,463

 

Net Occupancy  

 

9,090

 

 

 

14,536

 

 

 

8,955

 

Net Equipment  

 

8,878

 

 

 

9,574

 

 

 

8,456

 

Data Processing  

 

6,322

 

 

 

4,604

 

 

 

4,788

 

Professional Fees  

 

3,406

 

 

 

3,174

 

 

 

3,208

 

FDIC Insurance  

 

1,654

 

 

 

1,484

 

 

 

1,456

 

Other  

 

13,264

 

 

 

15,082

 

 

 

14,986

 

Total Noninterest Expense  

 

98,865

 

 

 

98,654

 

 

 

96,312

 

Income Before Provision for Income Taxes  

 

78,974

 

 

 

50,903

 

 

 

42,203

 

Provision for Income Taxes  

 

19,025

 

 

 

8,589

 

 

 

7,461

 

Net Income  

$

59,949

 

 

$

42,314

 

 

$

34,742

 

Basic Earnings Per Share  

$

1.51

 

 

$

1.06

 

 

$

0.88

 

Diluted Earnings Per Share  

$

1.50

 

 

$

1.06

 

 

$

0.87

 

Dividends Declared Per Share  

$

0.67

 

 

$

0.67

 

 

$

0.67

 

Basic Weighted Average Shares  

 

39,827,590

 

 

 

39,773,851

 

 

 

39,681,611

 

Diluted Weighted Average Shares  

 

40,071,477

 

 

 

39,963,736

 

 

 

39,916,986

 

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

March 31,

 

December 31,

 

March 31,

(dollars in thousands)  

2021

 

2020

 

2020

Net Income  

$

59,949

 

 

$

42,314

 

 

$

34,742

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

 

(50,050

)

 

 

(961

)

 

 

41,559

Defined Benefit Plans  

 

441

 

 

 

(5,616

)

 

 

374

Other Comprehensive Income (Loss)  

 

(49,609

)

 

 

(6,577

)

 

 

41,933

Comprehensive Income  

$

10,340

 

 

$

35,737

 

 

$

76,675

Bank of Hawaii Corporation and Subsidiaries            
Consolidated Statements of Condition  

 

 

 

 

Table 5

   

March 31,

 

December 31,

 

March 31,

(dollars in thousands)  

2021

 

2020

 

2020

Assets            
Interest-Bearing Deposits in Other Banks  

$

4,506

 

 

$

1,646

 

 

$

6,346

 

Funds Sold  

 

1,101,631

 

 

 

333,022

 

 

 

96,898

 

Investment Securities            
Available-for-Sale  

 

4,024,763

 

 

 

3,791,689

 

 

 

2,681,049

 

Held-to-Maturity (Fair Value of $3,477,346; $3,348,693; and $3,104,020)  

 

3,464,360

 

 

 

3,262,727

 

 

 

3,004,139

 

Loans Held for Sale  

 

18,320

 

 

 

82,565

 

 

 

20,789

 

Loans and Leases  

 

12,140,703

 

 

 

11,940,020

 

 

 

11,352,780

 

Allowance for Credit Losses  

 

(198,343

)

 

 

(216,252

)

 

 

(138,150

)

Net Loans and Leases  

 

11,942,360

 

 

 

11,723,768

 

 

 

11,214,630

 

Total Earning Assets  

 

20,555,940

 

 

 

19,195,417

 

 

 

17,023,851

 

Cash and Due from Banks  

 

286,717

 

 

 

279,420

 

 

 

453,465

 

Premises and Equipment, Net  

 

198,107

 

 

 

199,695

 

 

 

196,228

 

Operating Lease Right-of-Use Assets  

 

97,750

 

 

 

99,542

 

 

 

98,695

 

Accrued Interest Receivable  

 

47,917

 

 

 

49,303

 

 

 

46,996

 

Foreclosed Real Estate  

 

2,332

 

 

 

2,332

 

 

 

2,506

 

Mortgage Servicing Rights  

 

22,320

 

 

 

19,652

 

 

 

22,537

 

Goodwill  

 

31,517

 

 

 

31,517

 

 

 

31,517

 

Bank-Owned Life Insurance  

 

291,764

 

 

 

291,480

 

 

 

289,536

 

Other Assets  

 

412,907

 

 

 

435,293

 

 

 

376,902

 

Total Assets  

$

21,947,271

 

 

$

20,603,651

 

 

$

18,542,233

 

             
Liabilities            
Deposits            
Noninterest-Bearing Demand  

$

6,227,436

 

 

$

5,749,612

 

 

$

4,378,918

 

Interest-Bearing Demand  

 

4,379,243

 

 

 

4,040,733

 

 

 

3,261,101

 

Savings  

 

7,474,580

 

 

 

6,759,213

 

 

 

6,670,530

 

Time  

 

1,475,392

 

 

 

1,662,063

 

 

 

1,744,812

 

Total Deposits  

 

19,556,651

 

 

 

18,211,621

 

 

 

16,055,361

 

Funds Purchased  

 

-

 

 

 

-

 

 

 

75,000

 

Short-Term Borrowings  

 

-

 

 

 

-

 

 

 

75,000

 

Securities Sold Under Agreements to Repurchase  

 

600,490

 

 

 

600,590

 

 

 

603,206

 

Other Debt  

 

60,459

 

 

 

60,481

 

 

 

60,545

 

Operating Lease Liabilities  

 

105,820

 

 

 

107,412

 

 

 

106,180

 

Retirement Benefits Payable  

 

50,687

 

 

 

51,197

 

 

 

44,124

 

Accrued Interest Payable  

 

4,109

 

 

 

5,117

 

 

 

7,932

 

Taxes Payable and Deferred Taxes  

 

15,599

 

 

 

2,463

 

 

 

32,793

 

Other Liabilities  

 

193,235

 

 

 

190,263

 

 

 

154,163

 

Total Liabilities  

 

20,587,050

 

 

 

19,229,144

 

 

 

17,214,304

 

Shareholders' Equity            
Common Stock ($.01 par value; authorized 500,000,000 shares;            
issued / outstanding: March 31, 2021 - 58,553,365 / 40,394,234;            
December 31, 2020 - 58,285,624 / 40,119,312;            
and March 31, 2020 - 58,251,725 / 39,996,510)  

 

580

 

 

 

580

 

 

 

579

 

Capital Surplus  

 

594,804

 

 

 

591,360

 

 

 

584,392

 

Accumulated Other Comprehensive Income (Loss)  

 

(41,787

)

 

 

7,822

 

 

 

10,821

 

Retained Earnings  

 

1,844,057

 

 

 

1,811,979

 

 

 

1,773,607

 

Treasury Stock, at Cost (Shares: March 31, 2021 - 18,159,131;            
December 31, 2020 - 18,166,312; and March 31, 2020 - 18,255,215)  

 

(1,037,433

)

 

 

(1,037,234

)

 

 

(1,041,470

)

Total Shareholders' Equity  

 

1,360,221

 

 

 

1,374,507

 

 

 

1,327,929

 

Total Liabilities and Shareholders' Equity  

$

21,947,271

 

 

$

20,603,651

 

 

$

18,542,233

 

Bank of Hawaii Corporation and Subsidiaries                    
Consolidated Statements of Shareholders' Equity                       Table 6
   

 

 

 

 

 

 

Accum.

 

 

 

 

 

 

   

 

 

 

 

 

 

Other

 

 

 

 

 

 

   

 

 

 

 

 

 

Compre-

 

 

 

 

 

 

   

 

 

 

 

 

 

hensive

 

 

 

 

 

 

   

Common Shares

 

Common

 

Capital

 

Income

 

Retained

 

Treasury

 

 

(dollars in thousands)  

Outstanding

 

Stock

 

Surplus

 

(Loss)

 

Earnings

 

Stock

 

Total

Balance as of December 31, 2020  

40,119,312

 

 

$

580

 

$

591,360

 

$

7,822

 

 

$

1,811,979

 

 

$

(1,037,234

)

 

$

1,374,507

 

Net Income  

-

 

 

 

-

 

 

-

 

 

-

 

 

 

59,949

 

 

 

-

 

 

 

59,949

 

Other Comprehensive Loss  

-

 

 

 

-

 

 

-

 

 

(49,609

)

 

 

-

 

 

 

-

 

 

 

(49,609

)

Share-Based Compensation  

-

 

 

 

-

 

 

2,780

 

 

-

 

 

 

-

 

 

 

-

 

 

 

2,780

 

Common Stock Issued under Purchase and Equity                            
Compensation Plans  

310,905

 

 

 

-

 

 

664

 

 

-

 

 

 

(845

)

 

 

2,990

 

 

 

2,809

 

Common Stock Repurchased  

(35,983

)

 

 

-

 

 

-

 

 

-

 

 

 

-

 

 

 

(3,189

)

 

 

(3,189

)

Cash Dividends Declared ($0.67 per share)  

-

 

 

 

-

 

 

-

 

 

-

 

 

 

(27,026

)

 

 

-

 

 

 

(27,026

)

Balance as of March 31, 2021  

40,394,234

 

 

$

580

 

$

594,804

 

$

(41,787

)

 

$

1,844,057

 

 

$

(1,037,433

)

 

$

1,360,221

 

                             
                             
Balance as of December 31, 2019  

40,039,695

 

 

$

579

 

$

582,566

 

$

(31,112

)

 

$

1,761,415

 

 

$

(1,026,616

)

 

$

1,286,832

 

Net Income  

-

 

 

 

-

 

 

-

 

 

-

 

 

 

34,742

 

 

 

-

 

 

 

34,742

 

Other Comprehensive Income  

-

 

 

 

-

 

 

-

 

 

41,933

 

 

 

-

 

 

 

-

 

 

 

41,933

 

Cumulative Change in Accounting Principle  

-

 

 

 

-

 

 

-

 

 

-

 

 

 

3,632

 

 

 

-

 

 

 

3,632

 

Share-Based Compensation  

-

 

 

 

-

 

 

1,497

 

 

-

 

 

 

-

 

 

 

-

 

 

 

1,497

 

Common Stock Issued under Purchase and Equity                            
Compensation Plans  

154,091

 

 

 

-

 

 

329

 

 

-

 

 

 

653

 

 

 

2,779

 

 

 

3,761

 

Common Stock Repurchased  

(197,276

)

 

 

-

 

 

-

 

 

-

 

 

 

-

 

 

 

(17,633

)

 

 

(17,633

)

Cash Dividends Declared ($0.67 per share)  

-

 

 

 

-

 

 

-

 

 

-

 

 

 

(26,835

)

 

 

-

 

 

 

(26,835

)

Balance as of March 31, 2020  

39,996,510

 

 

$

579

 

$

584,392

 

$

10,821

 

 

$

1,773,607

 

 

$

(1,041,470

)

 

$

1,327,929

 

Bank of Hawaii Corporation and Subsidiaries                                  
Average Balances and Interest Rates - Taxable-Equivalent Basis                         Table 7  
   

Three Months Ended

 

 

Three Months Ended

 

 

Three Months Ended

 
   

March 31, 2021

 

 

December 31, 2020

 

 

March 31, 2020

 
   

Average

 

Income/

 

Yield/

 

 

Average

 

Income/

 

Yield/

 

 

Average

 

Income/

 

Yield/

 
(dollars in millions)  

Balance

 

Expense

 

Rate

 

 

Balance

 

Expense

 

Rate

 

 

Balance

 

Expense

 

Rate

 
Earning Assets                                          
Interest-Bearing Deposits in Other Banks  

$

3.2

 

$

-

 

0.93

%

 

$

2.2

 

$

-

 

 

0.16

%

 

$

1.4

 

$

-

 

2.36

%

Funds Sold  

 

550.6

 

 

0.1

 

0.10

   

 

451.6

 

 

0.1

 

 

0.10

   

 

152.8

 

 

0.6

 

1.41

 
Investment Securities                                          
Available-for-Sale                                          
Taxable  

 

4,007.9

 

 

15.8

 

1.57

   

 

3,605.8

 

 

15.3

 

 

1.69

   

 

2,702.4

 

 

16.4

 

2.43

 
Non-Taxable  

 

12.3

 

 

0.1

 

4.27

   

 

20.2

 

 

0.2

 

 

4.33

   

 

32.4

 

 

0.4

 

4.40

 
Held-to-Maturity                                          
Taxable  

 

3,385.8

 

 

13.1

 

1.55

   

 

3,246.7

 

 

13.9

 

 

1.71

   

 

3,036.2

 

 

18.9

 

2.50

 
Non-Taxable  

 

38.1

 

 

0.2

 

2.55

   

 

47.1

 

 

0.3

 

 

2.66

   

 

54.7

 

 

0.4

 

2.67

 
Total Investment Securities  

 

7,444.1

 

 

29.2

 

1.57

   

 

6,919.8

 

 

29.7

 

 

1.71

   

 

5,825.7

 

 

36.1

 

2.48

 
Loans Held for Sale  

 

26.2

 

 

0.2

 

2.76

   

 

15.1

 

 

0.1

 

 

2.98

   

 

23.2

 

 

0.2

 

3.54

 
Loans and Leases 1                                          
Commercial and Industrial  

 

1,904.5

 

 

14.3

 

3.05

   

 

1,897.4

 

 

14.0

 

 

2.95

   

 

1,409.3

 

 

13.2

 

3.77

 
Commercial Mortgage  

 

2,846.0

 

 

21.3

 

3.04

   

 

2,768.0

 

 

21.7

 

 

3.12

   

 

2,549.4

 

 

25.1

 

3.96

 
Construction  

 

264.1

 

 

2.3

 

3.48

   

 

257.4

 

 

2.3

 

 

3.62

   

 

213.2

 

 

2.5

 

4.65

 
Commercial Lease Financing  

 

106.4

 

 

0.4

 

1.43

   

 

112.2

 

 

(2.5

)

 

(9.07

)

 

 

111.4

 

 

0.5

 

1.95

 
Residential Mortgage  

 

4,146.6

 

 

35.9

 

3.46

   

 

4,089.7

 

 

36.4

 

 

3.57

   

 

3,895.4

 

 

36.9

 

3.79

 
Home Equity  

 

1,594.1

 

 

12.6

 

3.20

   

 

1,600.9

 

 

13.2

 

 

3.28

   

 

1,680.2

 

 

15.2

 

3.64

 
Automobile  

 

708.3

 

 

6.1

 

3.51

   

 

706.1

 

 

6.4

 

 

3.59

   

 

721.0

 

 

6.4

 

3.56

 
Other 2  

 

382.6

 

 

6.4

 

6.75

   

 

404.2

 

 

7.0

 

 

6.85

   

 

480.8

 

 

8.4

 

7.06

 
Total Loans and Leases  

 

11,952.6

 

 

99.3

 

3.35

   

 

11,835.9

 

 

98.5

 

 

3.32

   

 

11,060.7

 

 

108.2

 

3.93

 
Other  

 

33.4

 

 

0.2

 

2.21

   

 

33.3

 

 

0.2

 

 

2.01

   

 

34.3

 

 

0.2

 

2.54

 
Total Earning Assets 3  

 

20,010.1

 

 

129.0

 

2.60

   

 

19,257.9

 

 

128.6

 

 

2.66

   

 

17,098.1

 

 

145.3

 

3.41

 
Cash and Due from Banks  

 

270.7

           

 

240.4

           

 

278.8

         
Other Assets  

 

869.9

           

 

884.3

           

 

845.7

         
Total Assets  

$

21,150.7

           

$

20,382.6

           

$

18,222.6

         
                                           
Interest-Bearing Liabilities                                          
Interest-Bearing Deposits                                          
Demand  

$

4,186.4

 

 

0.6

 

0.06

   

$

3,899.5

 

 

0.6

 

 

0.06

   

$

3,110.0

 

 

1.0

 

0.12

 
Savings  

 

7,016.6

 

 

1.5

 

0.09

   

 

6,728.8

 

 

1.4

 

 

0.08

   

 

6,502.4

 

 

7.1

 

0.44

 
Time  

 

1,630.0

 

 

2.2

 

0.56

   

 

1,696.0

 

 

2.9

 

 

0.68

   

 

1,743.0

 

 

6.2

 

1.43

 
Total Interest-Bearing Deposits  

 

12,833.0

 

 

4.3

 

0.14

   

 

12,324.3

 

 

4.9

 

 

0.16

   

 

11,355.4

 

 

14.3

 

0.51

 
Short-Term Borrowings  

 

2.4

 

 

-

 

0.09

   

 

19.2

 

 

-

 

 

0.10

   

 

57.8

 

 

0.1

 

0.76

 
Securities Sold Under Agreements to Repurchase  

 

600.5

 

 

3.6

 

2.35

   

 

600.9

 

 

3.6

 

 

2.35

   

 

604.1

 

 

4.0

 

2.64

 
Other Debt  

 

60.5

 

 

0.3

 

2.22

   

 

60.5

 

 

0.3

 

 

2.22

   

 

66.9

 

 

0.6

 

3.51

 
Total Interest-Bearing Liabilities  

 

13,496.4

 

 

8.2

 

0.24

   

 

13,004.9

 

 

8.8

 

 

0.27

   

 

12,084.2

 

 

19.0

 

0.63

 
Net Interest Income      

$

120.8

           

$

119.8

 

           

$

126.3

     
Interest Rate Spread          

2.36

%

     

2.39

%

     

2.78

%

Net Interest Margin          

2.43

%

     

2.48

%

     

2.96

%

Noninterest-Bearing Demand Deposits  

 

5,832.2

           

 

5,494.8

           

 

4,462.3

         
Other Liabilities  

 

444.8

           

 

509.9

           

 

362.3

         
Shareholders' Equity  

 

1,377.3

           

 

1,373.0

           

 

1,313.8

         
Total Liabilities and Shareholders' Equity  

$

21,150.7

           

$

20,382.6

           

$

18,222.6

         

1

 

Non-performing loans and leases are included in the respective average loan and lease balances. Income, if any, on such loans and leases is recognized on a cash basis.

2

 

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

3

 

Interest income includes taxable-equivalent basis adjustments, based upon a federal statutory tax rate of 21%, of $252,000, $287,000, and $357,000 for the three months ended March 31, 2021, December 31, 2020, and March 31, 2020, respectively.

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

Three Months Ended March 31, 2021

   

Compared to December 31, 2020

(dollars in millions)  

Volume 1

 

Rate 1

 

Total

Change in Interest Income:            
Investment Securities            
Available-for-Sale            
Taxable  

$

1.6

 

 

$

(1.1

)

 

$

0.5

 

Non-Taxable  

 

(0.1

)

 

 

-

 

 

 

(0.1

)

Held-to-Maturity            
Taxable  

 

0.6

 

 

 

(1.4

)

 

 

(0.8

)

Non-Taxable  

 

(0.1

)

 

 

-

 

 

 

(0.1

)

Total Investment Securities  

 

2.0

 

 

 

(2.5

)

 

 

(0.5

)

Loans Held for Sale  

 

0.1

 

 

 

-

 

 

 

0.1

 

Loans and Leases            
Commercial and Industrial  

 

-

 

 

 

0.3

 

 

 

0.3

 

Commercial Mortgage  

 

0.4

 

 

 

(0.8

)

 

 

(0.4

)

Construction  

 

0.1

 

 

 

(0.1

)

 

 

-

 

Commercial Lease Financing  

 

0.1

 

 

 

2.8

 

 

 

2.9

 

Residential Mortgage  

 

0.5

 

 

 

(1.0

)

 

 

(0.5

)

Home Equity  

 

(0.1

)

 

 

(0.5

)

 

 

(0.6

)

Automobile  

 

-

 

 

 

(0.3

)

 

 

(0.3

)

Other 2  

 

(0.5

)

 

 

(0.1

)

 

 

(0.6

)

Total Loans and Leases  

 

0.5

 

 

 

0.3

 

 

 

0.8

 

Total Change in Interest Income  

 

2.6

 

 

 

(2.2

)

 

 

0.4

 

             
Change in Interest Expense:            
Interest-Bearing Deposits            
Savings  

 

-

 

 

 

0.1

 

 

 

0.1

 

Time  

 

(0.1

)

 

 

(0.6

)

 

 

(0.7

)

Total Interest-Bearing Deposits  

 

(0.1

)

 

 

(0.5

)

 

 

(0.6

)

Total Change in Interest Expense  

 

(0.1

)

 

 

(0.5

)

 

 

(0.6

)

             
Change in Net Interest Income  

$

2.7

 

 

$

(1.7

)

 

$

1.0

 

1

 

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

2

 

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

Bank of Hawaii Corporation and Subsidiaries            
Analysis of Change in Net Interest Income - Taxable-Equivalent Basis           Table 8b
    Three Months Ended March 31, 2021
    Compared to March 31, 2020
(dollars in millions)   Volume 1   Rate 1   Total
Change in Interest Income:            
Funds Sold  

$

0.4

 

 

$

(0.9

)

 

$

(0.5

)

Investment Securities            
Available-for-Sale            
Taxable  

 

6.4

 

 

 

(7.0

)

 

 

(0.6

)

Non-Taxable  

 

(0.2

)

 

 

(0.1

)

 

 

(0.3

)

Held-to-Maturity            
Taxable  

 

2.0

 

 

 

(7.8

)

 

 

(5.8

)

Non-Taxable  

 

(0.1

)

 

 

(0.1

)

 

 

(0.2

)

Total Investment Securities  

 

8.1

 

 

 

(15.0

)

 

 

(6.9

)

Loans and Leases            
Commercial and Industrial  

 

3.9

 

 

 

(2.8

)

 

 

1.1

 

Commercial Mortgage  

 

2.6

 

 

 

(6.4

)

 

 

(3.8

)

Construction  

 

0.5

 

 

 

(0.7

)

 

 

(0.2

)

Commercial Lease Financing  

 

-

 

 

 

(0.1

)

 

 

(0.1

)

Residential Mortgage  

 

2.3

 

 

 

(3.3

)

 

 

(1.0

)

Home Equity  

 

(0.8

)

 

 

(1.8

)

 

 

(2.6

)

Automobile  

 

(0.2

)

 

 

(0.1

)

 

 

(0.3

)

Other 2  

 

(1.7

)

 

 

(0.3

)

 

 

(2.0

)

Total Loans and Leases  

 

6.6

 

 

 

(15.5

)

 

 

(8.9

)

Total Change in Interest Income  

 

15.1

 

 

 

(31.4

)

 

 

(16.3

)

             
Change in Interest Expense:            
Interest-Bearing Deposits            
Demand  

 

0.2

 

 

 

(0.6

)

 

 

(0.4

)

Savings  

 

0.5

 

 

 

(6.1

)

 

 

(5.6

)

Time  

 

(0.4

)

 

 

(3.6

)

 

 

(4.0

)

Total Interest-Bearing Deposits  

 

0.3

 

 

 

(10.3

)

 

 

(10.0

)

Short-Term Borrowings  

 

(0.1

)

 

 

-

 

 

 

(0.1

)

Securities Sold Under Agreements to Repurchase  

 

0.1

 

 

 

(0.5

)

 

 

(0.4

)

Other Debt  

 

(0.1

)

 

 

(0.2

)

 

 

(0.3

)

Total Change in Interest Expense  

 

0.2

 

 

 

(11.0

)

 

 

(10.8

)

             
Change in Net Interest Income  

$

14.9

 

 

$

(20.4

)

 

$

(5.5

)

1

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

2

  Comprised of other consumer revolving credit, installment, and consumer lease financing.
Bank of Hawaii Corporation and Subsidiaries            
Salaries and Benefits           Table 9
    Three Months Ended
   

March 31,

 

December 31,

 

March 31,

(dollars in thousands)  

2021

 

2020

 

2020

Salaries  

$

31,569

 

$

33,907

 

 

$

33,486

Incentive Compensation  

 

5,914

 

 

3,084

 

 

 

245

Share-Based Compensation  

 

2,584

 

 

2,029

 

 

 

1,291

Commission Expense  

 

2,436

 

 

2,164

 

 

 

1,374

Retirement and Other Benefits  

 

5,517

 

 

5,212

 

 

 

4,706

Payroll Taxes  

 

3,968

 

 

2,292

 

 

 

4,543

Medical, Dental, and Life Insurance  

 

2,424

 

 

1,523

 

 

 

4,142

Separation Expense  

 

1,839

 

 

(11

)

 

 

4,676

Total Salaries and Benefits  

$

56,251

 

$

50,200

 

 

$

54,463

Bank of Hawaii Corporation and Subsidiaries                
Loan and Lease Portfolio Balances               Table 10
    March 31,   December 31,   September 30,   June 30,   March 31,
(dollars in thousands)  

2021

 

2020

 

2020

 

2020

 

2020

Commercial                    
Commercial and Industrial  

$ 2,013,981

 

$ 1,875,293

 

$ 1,908,482

 

$ 1,956,939

 

$ 1,558,232

Commercial Mortgage  

2,859,246

 

2,854,829

 

2,745,611

 

2,707,534

 

2,616,243

Construction  

281,164

 

259,798

 

250,943

 

245,099

 

245,390

Lease Financing  

104,980

 

110,766

 

111,831

 

113,187

 

110,704

Total Commercial  

5,259,371

 

5,100,686

 

5,016,867

 

5,022,759

 

4,530,569

Consumer                    
Residential Mortgage  

4,216,976

 

4,130,513

 

4,044,228

 

3,989,393

 

3,928,183

Home Equity  

1,577,500

 

1,604,538

 

1,605,486

 

1,640,887

 

1,692,154

Automobile  

710,407

 

708,800

 

709,937

 

700,702

 

716,214

Other 1  

376,449

 

395,483

 

417,090

 

451,629

 

485,660

Total Consumer  

6,881,332

 

6,839,334

 

6,776,741

 

6,782,611

 

6,822,211

Total Loans and Leases  

$ 12,140,703

 

$ 11,940,020

 

$ 11,793,608

 

$ 11,805,370

 

$ 11,352,780

                     
                     
Deposits                
    March 31,   December 31,   September 30,   June 30,   March 31,
(dollars in thousands)  

2021

 

2020

 

2020

 

2020

 

2020

Consumer  

$ 9,746,713

 

$ 9,347,725

 

$ 8,903,808

 

$ 8,766,885

 

$ 8,294,464

Commercial  

8,241,102

 

7,302,832

 

7,159,531

 

7,295,033

 

6,358,583

Public and Other  

1,568,836

 

1,561,064

 

1,675,544

 

1,361,237

 

1,402,314

Total Deposits  

$ 19,556,651

 

$ 18,211,621

 

$ 17,738,883

 

$ 17,423,155

 

$ 16,055,361

1

 

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

Bank of Hawaii Corporation and Subsidiaries                    
Non-Performing Assets and Accruing Loans and Leases Past Due 90 Days or More       Table 11
   

March 31,

 

December 31,

 

September 30,

 

June 30,

 

March 31,

(dollars in thousands)  

2021

 

2020

 

2020

 

2020

 

2020

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

$

293

 

 

$

441

 

 

$

475

 

 

$

459

 

 

$

634

 

Commercial Mortgage  

 

8,503

 

 

 

8,527

 

 

 

8,615

 

 

 

8,672

 

 

 

9,048

 

Total Commercial  

 

8,796

 

 

 

8,968

 

 

 

9,090

 

 

 

9,131

 

 

 

9,682

 

Consumer                    
Residential Mortgage  

 

1,804

 

 

 

3,223

 

 

 

3,543

 

 

 

5,888

 

 

 

4,330

 

Home Equity  

 

4,951

 

 

 

3,958

 

 

 

3,661

 

 

 

5,176

 

 

 

4,086

 

Total Consumer  

 

6,755

 

 

 

7,181

 

 

 

7,204

 

 

 

11,064

 

 

 

8,416

 

Total Non-Accrual Loans and Leases  

 

15,551

 

 

 

16,149

 

 

 

16,294

 

 

 

20,195

 

 

 

18,098

 

Foreclosed Real Estate  

 

2,332

 

 

 

2,332

 

 

 

2,332

 

 

 

2,506

 

 

 

2,506

 

Total Non-Performing Assets  

$

17,883

 

 

$

18,481

 

 

$

18,626

 

 

$

22,701

 

 

$

20,604

 

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

$

9

 

 

$

-

 

 

$

-

 

 

$

-

 

 

$

-

 

Total Commercial  

 

9

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

Consumer                    
Residential Mortgage  

$

4,069

 

 

$

5,274

 

 

$

6,607

 

 

$

4,937

 

 

$

3,024

 

Home Equity  

 

4,906

 

 

 

3,187

 

 

 

2,571

 

 

 

3,519

 

 

 

3,426

 

Automobile  

 

604

 

 

 

925

 

 

 

156

 

 

 

133

 

 

 

866

 

Other 1  

 

828

 

 

 

1,160

 

 

 

258

 

 

 

296

 

 

 

1,205

 

Total Consumer  

 

10,407

 

 

 

10,546

 

 

 

9,592

 

 

 

8,885

 

 

 

8,521

 

Total Accruing Loans and Leases Past Due 90 Days or More  

$

10,416

 

 

$

10,546

 

 

$

9,592

 

 

$

8,885

 

 

$

8,521

 

Restructured Loans on Accrual Status                    
and Not Past Due 90 Days or More  

$

74,216

 

 

$

68,065

 

 

$

58,650

 

 

$

59,713

 

 

$

61,425

 

Total Loans and Leases  

$

12,140,703

 

 

$

11,940,020

 

 

$

11,793,608

 

 

$

11,805,370

 

 

$

11,352,780

 

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

 

0.13

%

 

 

0.14

%

 

 

0.14

%

 

 

0.17

%

 

 

0.16

%

                     
Ratio of Non-Performing Assets to Total Loans and Leases                    
and Foreclosed Real Estate  

 

0.15

%

 

 

0.15

%

 

 

0.16

%

 

 

0.19

%

 

 

0.18

%

                     
Ratio of Commercial Non-Performing Assets to Total Commercial Loans                    
and Leases and Commercial Foreclosed Real Estate  

 

0.17

%

 

 

0.18

%

 

 

0.18

%

 

 

0.18

%

 

 

0.21

%

                     
Ratio of Consumer Non-Performing Assets to Total Consumer Loans                    
and Leases and Consumer Foreclosed Real Estate  

 

0.13

%

 

 

0.14

%

 

 

0.14

%

 

 

0.20

%

 

 

0.16

%

                     
Ratio of Non-Performing Assets and Accruing Loans and Leases                    
Past Due 90 Days or More to Total Loans and Leases                    
and Foreclosed Real Estate  

 

0.23

%

 

 

0.24

%

 

 

0.24

%

 

 

0.27

%

 

 

0.26

%

                     
Quarter to Quarter Changes in Non-Performing Assets                    
Balance at Beginning of Quarter  

$

18,481

 

 

$

18,626

 

 

$

22,701

 

 

$

20,604

 

 

$

20,117

 

Additions  

 

2,992

 

 

 

434

 

 

 

938

 

 

 

5,856

 

 

 

1,754

 

Reductions                    
Payments  

 

(2,481

)

 

 

(490

)

 

 

(3,729

)

 

 

(2,736

)

 

 

(315

)

Return to Accrual Status  

 

(1,014

)

 

 

-

 

 

 

(1,035

)

 

 

(822

)

 

 

(437

)

Sales of Foreclosed Real Estate  

 

-

 

 

 

-

 

 

 

(175

)

 

 

-

 

 

 

(231

)

Charge-offs/Write-downs  

 

(95

)

 

 

(89

)

 

 

(74

)

 

 

(201

)

 

 

(284

)

Total Reductions  

 

(3,590

)

 

 

(579

)

 

 

(5,013

)

 

 

(3,759

)

 

 

(1,267

)

Balance at End of Quarter  

$

17,883

 

 

$

18,481

 

 

$

18,626

 

 

$

22,701

 

 

$

20,604

 

1  

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

Bank of Hawaii Corporation and Subsidiaries            
Reserve for Credit Losses           Table 12
    Three Months Ended
   

March 31,

 

December 31,

 

March 31,

(dollars in thousands)  

2021

 

2020

 

2020

Balance at Beginning of Period  

$

221,303

 

 

$

205,813

 

 

$

116,849

 

             
CECL Adoption (Day 1) Impact  

 

-

 

 

 

-

 

 

 

(5,072

)

             
Loans and Leases Charged-Off            
Commercial            
Commercial and Industrial  

 

(248

)

 

 

(177

)

 

 

(693

)

Consumer            
Residential Mortgage  

 

(4

)

 

 

(120

)

 

 

(20

)

Home Equity  

 

(16

)

 

 

(81

)

 

 

-

 

Automobile  

 

(2,109

)

 

 

(393

)

 

 

(2,500

)

Other 1  

 

(3,914

)

 

 

(2,460

)

 

 

(3,964

)

Total Loans and Leases Charged-Off  

 

(6,291

)

 

 

(3,231

)

 

 

(7,177

)

Recoveries on Loans and Leases Previously Charged-Off            
Commercial            
Commercial and Industrial  

 

112

 

 

 

244

 

 

 

289

 

Commercial Mortgage  

 

-

 

 

 

-

 

 

 

40

 

Consumer            
Residential Mortgage  

 

955

 

 

 

497

 

 

 

263

 

Home Equity  

 

533

 

 

 

868

 

 

 

976

 

Automobile  

 

919

 

 

 

910

 

 

 

1,005

 

Other 1  

 

856

 

 

 

968

 

 

 

864

 

Total Recoveries on Loans and Leases Previously Charged-Off  

 

3,375

 

 

 

3,487

 

 

 

3,437

 

Net Recovered (Charged-Off) - Loans and Leases  

 

(2,916

)

 

 

256

 

 

 

(3,740

)

Net Charged-Off - Accrued Interest Receivable  

 

(308

)

 

 

-

 

 

 

-

 

Provision for Credit Losses:            
Loans and Leases  

 

(14,993

)

 

 

12,500

 

 

 

33,600

 

Accrued Interest Receivable 2  

 

-

 

 

 

2,700

 

 

 

-

 

Unfunded Commitments 3  

 

693

 

 

 

34

 

 

 

(170

)

Balance at End of Period  

$

203,779

 

 

$

221,303

 

 

$

141,467

 

             
Components            
Allowance for Credit Losses - Loans and Leases  

$

198,343

 

 

 

216,252

 

 

 

138,150

 

Allowance for Credit Losses - Accrued Interest Receivable 2  

 

2,392

 

 

 

2,700

 

 

 

-

 

Reserve for Unfunded Commitments 3  

 

3,044

 

 

 

2,351

 

 

 

3,317

 

Total Reserve for Credit Losses  

$

203,779

 

 

$

221,303

 

 

$

141,467

 

             
Average Loans and Leases Outstanding  

$

11,952,587

 

 

$

11,835,929

 

 

$

11,060,707

 

             
Ratio of Net Loans and Leases Charged-Off (Recovered) to            
Average Loans and Leases Outstanding (annualized)  

 

0.10

%

 

 

(0.01

%)

 

 

0.14

%

Ratio of Allowance for Credit Losses to Loans and Leases Outstanding  

 

1.63

%

 

 

1.81

%

 

 

1.22

%

1

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

2

  Beginning December 31, 2020, the Company established a reserve on accrued interest receivable related to loans in which interest payment forbearances were granted to borrowers impacted by the COVID-19 pandemic. The reserve was recorded as a contra-asset against accrued interest receivable with the offset to provision for credit losses.

3

  The reserve for unfunded commitments is separately recorded in other liabilities in the consolidated statements of condition. For the three months ended March 31, 2021, the offsetting provision was recorded in provision for credit losses in the consolidated statements of income. In previous reporting periods, the offsetting provision was recorded in other noninterest expense.
Bank of Hawaii Corporation and Subsidiaries                
Business Segments Selected Financial Information               Table 13
   

Consumer

 

Commercial

 

Treasury

 

Consolidated

(dollars in thousands)  

Banking

 

Banking

 

and Other

 

Total

Three Months Ended March 31, 2021                
Net Interest Income  

$

69,762

 

 

$

47,143

 

 

$

3,664

 

 

$

120,569

 

Provision for Credit Losses  

 

2,866

 

 

 

50

 

 

 

(17,216

)

 

 

(14,300

)

Net Interest Income After Provision for Credit Losses  

 

66,896

 

 

 

47,093

 

 

 

20,880

 

 

 

134,869

 

Noninterest Income  

 

33,698

 

 

 

7,858

 

 

 

1,414

 

 

 

42,970

 

Noninterest Expense  

 

(78,181

)

 

 

(15,677

)

 

 

(5,007

)

 

 

(98,865

)

Income Before Income Taxes  

 

22,413

 

 

 

39,274

 

 

 

17,287

 

 

 

78,974

 

Provision for Income Taxes  

 

(5,474

)

 

 

(9,558

)

 

 

(3,993

)

 

 

(19,025

)

Net Income  

$

16,939

 

 

$

29,716

 

 

$

13,294

 

 

$

59,949

 

Total Assets as of March 31, 2021  

$

7,556,756

 

 

$

5,224,386

 

 

$

9,166,129

 

 

$

21,947,271

 

                 
Three Months Ended March 31, 2020 1                
Net Interest Income  

$

73,914

 

 

$

45,237

 

 

$

6,815

 

 

$

125,966

 

Provision for Credit Losses  

 

3,451

 

 

 

290

 

 

 

29,859

 

 

 

33,600

 

Net Interest Income (Loss) After Provision for Credit Losses  

 

70,463

 

 

 

44,947

 

 

 

(23,044

)

 

 

92,366

 

Noninterest Income  

 

32,590

 

 

 

11,735

 

 

 

1,824

 

 

 

46,149

 

Noninterest Expense  

 

(70,746

)

 

 

(17,346

)

 

 

(8,220

)

 

 

(96,312

)

Income (Loss) Before Income Taxes  

 

32,307

 

 

 

39,336

 

 

 

(29,440

)

 

 

42,203

 

Provision for Income Taxes  

 

(8,116

)

 

 

(9,555

)

 

 

10,210

 

 

 

(7,461

)

Net Income (Loss)  

$

24,191

 

 

$

29,781

 

 

$

(19,230

)

 

$

34,742

 

Total Assets as of March 31, 2020 1  

$

7,388,217

 

 

$

4,728,651

 

 

$

6,425,365

 

 

$

18,542,233

 

1

  Certain prior period information has been reclassified to conform to current presentation.
Bank of Hawaii Corporation and Subsidiaries                          
Selected Quarterly Financial Data                           Table 14  
    Three Months Ended  
   

March 31,

 

 

December 31,

 

 

September 30,

 

 

June 30,

 

March 31,

 
(dollars in thousands, except per share amounts)  

2021

 

 

2020

 

 

2020

 

 

2020

 

2020

 
Quarterly Operating Results                              
Interest Income                              
Interest and Fees on Loans and Leases  

$

99,299

 

   

$

98,471

 

   

$

103,189

 

   

$

107,628

   

$

108,210

 

 
Income on Investment Securities                              
Available-for-Sale  

 

15,837

 

   

 

15,449

 

   

 

14,558

 

   

 

14,576

   

 

16,711

 

 
Held-to-Maturity  

 

13,300

 

   

 

14,113

 

   

 

15,967

 

   

 

16,723

   

 

19,252

 

 
Deposits  

 

7

 

   

 

1

 

   

 

3

 

   

 

1

   

 

9

 

 
Funds Sold  

 

137

 

   

 

115

 

   

 

149

 

   

 

92

   

 

546

 

 
Other  

 

185

 

   

 

167

 

   

 

151

 

   

 

125

   

 

218

 

 
Total Interest Income  

 

128,765

 

   

 

128,316

 

   

 

134,017

 

   

 

139,145

   

 

144,946

 

 
Interest Expense                              
Deposits  

 

4,329

 

   

 

4,861

 

   

 

5,891

 

   

 

7,954

   

 

14,260

 

 
Securities Sold Under Agreements to Repurchase  

 

3,533

 

   

 

3,614

 

   

 

3,622

 

   

 

4,020

   

 

4,025

 

 
Funds Purchased  

 

1

 

   

 

5

 

   

 

-

 

   

 

18

   

 

72

 

 
Short-Term Borrowings  

 

-

 

   

 

-

 

   

 

1

 

   

 

22

   

 

39

 

 
Other Debt  

 

333

 

   

 

337

 

   

 

337

 

   

 

440

   

 

584

 

 
Total Interest Expense  

 

8,196

 

   

 

8,817

 

   

 

9,851

 

   

 

12,454

   

 

18,980

 

 
Net Interest Income  

 

120,569

 

   

 

119,499

 

   

 

124,166

 

   

 

126,691

   

 

125,966

 

 
Provision for Credit Losses  

 

(14,300

)

   

 

15,200

 

   

 

28,600

 

   

 

40,400

   

 

33,600

 

 
Net Interest Income After Provision for Credit Losses  

 

134,869

 

   

 

104,299

 

   

 

95,566

 

   

 

86,291

   

 

92,366

 

 
Noninterest Income                              
Trust and Asset Management  

 

11,278

 

   

 

11,239

 

   

 

10,752

 

   

 

10,550

   

 

10,915

 

 
Mortgage Banking  

 

5,862

 

   

 

6,851

 

   

 

4,047

 

   

 

4,278

   

 

2,695

 

 
Service Charges on Deposit Accounts  

 

6,128

 

   

 

6,335

 

   

 

6,027

 

   

 

5,097

   

 

7,451

 

 
Fees, Exchange, and Other Service Charges  

 

13,607

 

   

 

12,143

 

   

 

12,296

 

   

 

9,417

   

 

13,200

 

 
Investment Securities Gains (Losses), Net  

 

(1,203

)

   

 

(1,193

)

   

 

(1,121

)

   

 

13,216

   

 

(970

)

 
Annuity and Insurance  

 

702

 

   

 

670

 

   

 

881

 

   

 

883

   

 

928

 

 
Bank-Owned Life Insurance  

 

1,917

 

   

 

2,353

 

   

 

1,806

 

   

 

1,649

   

 

1,580

 

 
Other  

 

4,679

 

   

 

6,860

 

   

 

7,046

 

   

 

6,178

   

 

10,350

 

 
Total Noninterest Income  

 

42,970

 

   

 

45,258

 

   

 

41,734

 

   

 

51,268

   

 

46,149

 

 
Noninterest Expense                              
Salaries and Benefits  

 

56,251

 

   

 

50,200

 

   

 

51,951

 

   

 

50,715

   

 

54,463

 

 
Net Occupancy  

 

9,090

 

   

 

14,536

 

   

 

7,281

 

   

 

8,761

   

 

8,955

 

 
Net Equipment  

 

8,878

 

   

 

9,574

 

   

 

9,223

 

   

 

8,195

   

 

8,456

 

 
Data Processing  

 

6,322

 

   

 

4,604

 

   

 

4,691

 

   

 

4,416

   

 

4,788

 

 
Professional Fees  

 

3,406

 

   

 

3,174

 

   

 

2,743

 

   

 

3,061

   

 

3,208

 

 
FDIC Insurance  

 

1,654

 

   

 

1,484

 

   

 

1,282

 

   

 

1,558

   

 

1,456

 

 
Other  

 

13,264

 

   

 

15,082

 

   

 

12,778

 

   

 

12,186

   

 

14,986

 

 
Total Noninterest Expense  

 

98,865

 

   

 

98,654

 

   

 

89,949

 

   

 

88,892

   

 

96,312

 

 
Income Before Provision for Income Taxes  

 

78,974

 

   

 

50,903

 

   

 

47,351

 

   

 

48,667

   

 

42,203

 

 
Provision for Income Taxes  

 

19,025

 

   

 

8,589

 

   

 

9,511

 

   

 

9,759

   

 

7,461

 

 
Net Income  

$

59,949

 

   

$

42,314

 

   

$

37,840

 

   

$

38,908

   

$

34,742

 

 
                               
Basic Earnings Per Share  

$

1.51

 

   

$

1.06

 

   

$

0.95

 

   

$

0.98

   

$

0.88

 

 
Diluted Earnings Per Share  

$

1.50

 

   

$

1.06

 

   

$

0.95

 

   

$

0.98

   

$

0.87

 

 
                               
Balance Sheet Totals                              
Loans and Leases  

$

12,140,703

 

   

$

11,940,020

 

   

$

11,793,608

 

   

$

11,805,370

   

$

11,352,780

 

 
Total Assets  

 

21,947,271

 

   

 

20,603,651

 

   

 

20,109,489

 

   

 

19,769,942

   

 

18,542,233

 

 
Total Deposits  

 

19,556,651

 

   

 

18,211,621

 

   

 

17,738,883

 

   

 

17,423,155

   

 

16,055,361

 

 
Total Shareholders' Equity  

 

1,360,221

 

   

 

1,374,507

 

   

 

1,361,739

 

   

 

1,352,082

   

 

1,327,929

 

 
                               
Performance Ratios                              
Return on Average Assets  

 

1.15

%

 

 

0.83

%

 

 

0.76

%

 

 

0.82

%

 

 

0.77

%

Return on Average Shareholders' Equity  

 

17.65

 

   

 

12.26

 

   

 

11.01

 

   

 

11.58

   

 

10.64

 

 
Efficiency Ratio 1  

 

60.45

 

   

 

59.88

 

   

 

54.22

 

   

 

49.95

   

 

55.96

 

 
Net Interest Margin 2  

 

2.43

 

   

 

2.48

 

   

 

2.67

 

   

 

2.83

   

 

2.96

 

 

1

  Efficiency ratio is defined as noninterest expense divided by total revenue (net interest income and noninterest income).

2

  Net interest margin is defined as net interest income, on a taxable-equivalent basis, as a percentage of average earning assets.
Bank of Hawaii Corporation and Subsidiaries                        
Hawaii Economic Trends                                 Table 15
   

Two Months Ended

 

Year Ended

($ in millions; jobs in thousands)  

February 28, 2021

 

December 31, 2020

 

December 31, 2019

Hawaii Economic Trends                                  
State General Fund Revenues 1  

$ 1,111.9

 

(17.6)

%

 

$ 6,415.1

   

(12.3)

%

 

$ 7,316.5

   

5.5

%

General Excise and Use Tax Revenue 1  

$ 551.1

 

(18.9)

%

 

$ 3,038.8

   

(15.6)

%

 

$ 3,602.2

   

5.1

%

Jobs 2  

595.3

       

588.2

         

659.7

       
                                   
                   

March 31,

 

December 31,

(spot rates)                  

2021

 

2020

 

2019

Unemployment, seasonally adjusted 3                                  
Statewide                  

9.0

%

 

10.3

%

 

2.1

%

                                   
Oahu                  

7.6

   

9.3

   

2.0

 
Island of Hawaii                  

8.3

   

10.1

   

2.5

 
Maui                  

12.1

   

14.3

   

2.0

 
Kauai                  

13.0

   

13.9

   

2.1

 
                                   
             

March 31,

 

December 31,

(percentage change, except months of inventory)            

2021

 

2020

 

2019

 

2018

Housing Trends (Single Family Oahu) 4                                  
Median Home Price            

17.3

%

5.2

%

 

(0.1)

%

 

4.6

%

Home Sales Volume (units)            

11.9

%

2.3

%

 

3.9

%

 

(7.7)

%

Months of Inventory            

1.3

   

1.4

   

2.5

   

2.8

 
                                   
              Monthly Visitor Arrivals,     Percentage Change
(in thousands)             Not Seasonally Adjusted     from Previous Year
Tourism 5                                  
February 28, 2021                  

235.3

         

(71.6)

 
January 31, 2021                  

172.0

         

(80.1)

 
December 31, 2020                  

235.8

         

(75.2)

 
November 30, 2020                  

183.8

         

(77.3)

 
October 31, 2020                  

76.6

         

(90.4)

 
September 30, 2020                  

18.9

         

(97.4)

 
August 31, 2020                  

22.3

         

(97.6)

 
July 31, 2020                  

22.6

         

(97.7)

 
June 30, 2020                  

17.1

         

(98.2)

 
May 31, 2020                  

9.1

         

(98.9)

 
April 30, 2020                  

4.6

         

(99.5)

 
March 31, 2020                  

434.9

         

(53.7)

 
February 29, 2020                  

828.1

         

5.8

 
January 31, 2020                  

862.6

         

5.1

 
December 31, 2019                  

952.4

         

5.8

 
November 30, 2019                  

809.1

         

3.9

 
October 31, 2019                  

796.2

         

4.3

 
September 30, 2019                  

738.2

         

3.1

 
August 31, 2019                  

926.4

         

9.6

 
July 31, 2019                  

995.2

         

5.9

 
June 30, 2019                  

951.6

         

6.1

 
May 31, 2019                  

841.4

         

4.6

 
April 30, 2019                  

856.3

         

6.6

 
March 31, 2019                  

939.1

         

3.9

 
February 28, 2019                  

782.7

         

0.5

 
January 31, 2019                  

820.6

         

3.0

 

1

  Source: Hawaii Department of Business, Economic Development & Tourism

2

  Source: U. S. Bureau of Labor Statistics

3

  Source: UHERO

4

  Source: Honolulu Board of REALTORS

5

  Source: Hawaii Tourism Authority

 

Media Inquiries
Melissa Torres-Laing
Email:  Melissa.Torres-Laing@boh.com
Telephone: 808-694-8384
Mobile: 808-859-1703

Investor/Analyst Inquiries
Janelle Higa
Email:  Janelle.Higa@boh.com
Telephone: 808-694-8007

Source: Bank of Hawaii Corporation

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