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 | ||||
(Date of earliest event reported) | July 25, 2016 | |||
BANK OF HAWAII CORPORATION
(Exact name of registrant as specified in its charter)
Delaware | 1-6887 | 99-0148992 | ||
(State of Incorporation) | (Commission | (IRS Employer | ||
File Number) | Identification No.) | |||
130 Merchant Street, Honolulu, Hawaii | 96813 | |
(Address of principal executive offices) | (Zip Code) | |
(Registrant's telephone number, | |||
including area code) | (888) 643-3888 | ||
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):
o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o 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 Condition.
On July 25, 2016, Bank of Hawaii Corporation announced its results of operations for the quarter ended June 30, 2016. The public announcement was made by means of a press release, the text of which is furnished as Exhibit 99.1 hereto and incorporated herein by reference.
Item 9.01. Financial Statements and Exhibits.
(d) | Exhibits |
Exhibit No.
99.1 | July 25, 2016 Press Release: Bank of Hawaii Corporation Second Quarter 2016 Financial Results. Any internet addresses provided in this release are for informational purposes only and are not intended to be hyperlinks. Furnished herewith. |
Signatures
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
Date: July 25, 2016 | Bank of Hawaii Corporation | |
By: | /s/ Mark A. Rossi | |
Mark A. Rossi | ||
Vice Chairman and Corporate Secretary | ||
 | ||
 |  | |
Bank of Hawaii Corporation Second Quarter 2016 Financial Results
•Diluted Earnings Per Share $1.03
•Net Income $44.2 Million
•Board of Directors Increases Dividend to $0.48 Per Share
FOR IMMEDIATE RELEASE
HONOLULU, HI (July 25, 2016) -- Bank of Hawaii Corporation (NYSE: BOH) today reported diluted earnings per share of $1.03 for the second quarter of 2016, down from diluted earnings per share of $1.16 in the previous quarter and up from diluted earnings per share of $0.95 in the same quarter last year. Net income for the second quarter of 2016 was $44.2 million compared with net income of $50.2 million in the first quarter of 2016 and net income of $41.2 million in the second quarter of 2015. Income for the first quarter of 2016 included sales of $11.2 million in Visa Class B shares. There were no sales of Visa shares during the second quarter of 2016 or the second quarter of 2015.
Loan and lease balances increased to $8.3 billion at June 30, 2016, up 3.3 percent from March 31, 2016 and up 12.2 percent compared with June 30, 2015. Deposits grew 1.1 percent during the quarter, as balances increased to $13.6 billion at June 30, 2016 compared with $13.5 billion at March 31, 2016 and $13.1 billion at June 30, 2015.
“Bank of Hawaii Corporation continued to perform well during the second quarter of 2016,” said Peter Ho, Chairman, President and CEO. “Loan balances continued to grow, our margin was stable and asset quality remains strong. We continued to make progress on our many initiatives and completed the installation of 116 smart ATM machines during the quarter. By the end of the second quarter consumer deposit transactions from these new ATMs and our mobile application have increased to approximately 30% of consumer deposit transactions enabling our branch staff to spend more time serving our customers.”
The return on average assets for the second quarter of 2016 was 1.14 percent, down from 1.30 percent in the previous quarter and up from 1.10 percent in the same quarter last year. The return on average equity for the second quarter of 2016 was 15.56 percent, down from 17.88 percent for the first quarter of 2016 and up from 15.33 percent in the second quarter of 2015. The efficiency ratio for the second quarter of 2016 was 57.35 percent compared with 54.88 percent in the previous quarter and 58.16 percent in the same quarter last year.
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Bank of Hawaii Corporation Second Quarter 2016 Financial Results Page 2
For the six-month period ended June 30, 2016, net income was $94.5 million, an increase of $10.9 million from net income of $83.6 million during the same period last year. Diluted earnings per share were $2.19 for the first half of 2016, up from $1.92 for the first half of 2015. The return on average assets for the six-month period ended June 30, 2016 was 1.22 percent compared with 1.12 percent for the same six months in 2015. The year-to-date return on average equity was 16.71 percent, up from 15.75 percent for the six months ended June 30, 2015. The efficiency ratio for the first half of 2016 improved to 56.08 percent compared with 58.23 percent in the same period last year.
Financial Highlights
Net interest income, on a taxable equivalent basis, for the second quarter of 2016 was $106.5 million, an increase of $0.5 million compared with net interest income of $106.0 million in the first quarter of 2016 and an increase of $5.7 million compared with net interest income of $100.8 million in the second quarter of 2015. Net interest income in the second quarter of 2016 included interest recoveries of $1.0 million. The first quarter of 2016 included interest recoveries of $1.3 million. Net interest income for the first half of 2016 was $212.6 million, an increase of $12.2 million compared with net interest income of $200.4 million for the first half of 2015. Analyses of the changes in net interest income are included in Tables 8a, 8b and 8c.
The net interest margin was 2.85 percent for the second quarter of 2016, down from 2.86 percent in the previous quarter and a 4 basis point increase from the net interest margin of 2.81 percent in the second quarter of 2015. The net interest margin for the first six months of 2016 was 2.86 percent compared with 2.81 percent for the same six-month period last year.
Results for the second quarter of 2016 included a provision for credit losses of $1.0 million due to the continued strong growth of loans and leases partially offset by improved credit metrics. Results for the first quarter of 2016 included a negative provision for credit losses of $2.0 million largely due to the full recovery of loans previously charged off. There was no provision for credit losses during the second quarter of 2015.
Noninterest income was $46.5 million in the second quarter of 2016, a decrease of $9.7 million compared with noninterest income of $56.2 million in the first quarter of 2016 and an increase of $0.6 million compared with noninterest income of $45.9 million in the second quarter of 2015. Noninterest income in the second quarter of 2016 included a service fee of $1.2 million resulting from the sale of trust real estate. Mortgage banking income increased to $4.1 million in the second quarter of 2016 due to higher loan production and increased sales of conforming loans. The increase in gains on loan sales was partially offset by a $2.6 million valuation impairment to our mortgage servicing rights primarily due to the recent decline in interest rates. Noninterest income in the first quarter of 2016 included a net gain of $11.2 million resulting from the sale of Visa Class B shares and net gains of $1.9 million related to sales of previously leased assets. Noninterest income in the second quarter of 2015 included a fee of $0.5 million related to the transition of services provided to some institutional 401k plans. Noninterest income for the first half of 2016 was $102.7 million, an increase of $4.5 million compared with noninterest income of $98.2 million for the first half of 2015.
Noninterest expense was $86.1 million in the second quarter of 2016, down $1.3 million compared with noninterest expense of $87.4 million in the first quarter of 2016 and up $2.5 million compared with noninterest expense of $83.6 million in the second quarter last year. Noninterest expense in the second quarter of 2016 included higher incentive compensation compared with the second quarter last year due to continued strong business growth, an increase of $1.0 million in medical costs from the previous quarter and separation expense of $0.4 million. Second quarter expenses were partially offset by a net gain of $1.3 million from the sale of bank-owned real estate property. Noninterest expense in the first quarter of 2016 included seasonal payroll-related expenses, higher incentive compensation compared with the previous year, and an increase of $0.5 million to the provision for unfunded commitments. First quarter
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Bank of Hawaii Corporation Second Quarter 2016 Financial Results Page 3
expenses were partially offset by a net gain of $1.5 million from the sale of a real estate property. Noninterest expense in the second quarter of 2015 included separation expense of $0.9 million. An analysis of noninterest expenses related to salaries and benefits is included in Table 9. Noninterest expense for the first half of 2016 was $173.5 million, an increase of $3.0 million compared with noninterest expense of $170.5 million for the first half of 2015.
The effective tax rate for the second quarter of 2016 was 29.77 percent compared with 32.01 percent in the previous quarter and 31.56 percent in the same quarter last year. The lower effective tax rate in second quarter of 2016 was primarily due to the release of state tax reserves due to the lapse in the statute of limitations related to prior tax years. The effective tax rate for the first half of 2016 was 30.98 percent compared with 31.64 percent during the same period last year.
The Company’s business segments are defined as Retail Banking, Commercial Banking, Investment Services, and Treasury & Other. Results are determined based on the Company’s internal financial management reporting process and organizational structure. Selected financial information for the business segments is included in Tables 13a and 13b.
Asset Quality
The Company’s asset quality remained strong during the second quarter of 2016. Total non-performing assets declined to $16.3 million at June 30, 2016, down $5.7 million from non-performing assets of $22.0 million at March 31, 2016 and down $13.2 million from non-performing assets of $29.5 million at June 30, 2015. As a percentage of total loans and leases, including foreclosed real estate, non-performing assets were 0.20 percent at the end of the second quarter of 2016, down from 0.27 percent at the end of the first quarter of 2016, and down from 0.40 percent at the end of the second quarter last year.
Accruing loans and leases past due 90 days or more were $8.8 million at June 30, 2016, up from $7.9 million at March 31, 2016 and down from $9.7 million at June 30, 2015. Restructured loans not included in non-accrual loans or accruing loans past due 90 days or more were $52.2 million at June 30, 2016, up from $50.7 million at March 31, 2016 and $48.3 million at June 30, 2015. 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 second quarter of 2016 were $1.7 million or 0.09 percent annualized of total average loans and leases outstanding. Loan and lease charge-offs of $3.7 million were partially offset by recoveries of $2.0 million. The Company recorded a net recovery of loans and leases previously charged off of $3.8 million during the first quarter of 2016 as charge-offs of $4.9 million were more than offset by recoveries of $8.7 million. Net charge-offs in the second quarter of 2015 were $1.5 million and comprised of $3.5 million in charge-offs and recoveries of $2.0 million. Net recoveries in the first half of 2016 were $2.1 million compared with net charge-offs of $2.7 million, or 0.08 percent annualized of total average loans and leases outstanding for the first half of 2015.
The allowance for loan and lease losses was reduced to $103.9 million at June 30, 2016. The ratio of the allowance for loan and lease losses to total loans and leases was 1.25 percent at June 30, 2016, a decrease of 5 basis points from the previous quarter and commensurate with improvements in credit quality and the Hawaii economy. The reserve for unfunded commitments at June 30, 2016 was unchanged at $6.6 million. Details of loan and lease charge-offs, recoveries, and the components of the total reserve for credit losses are summarized in Table 12.
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Bank of Hawaii Corporation Second Quarter 2016 Financial Results Page 4
Other Financial Highlights
Total assets were $15.86 billion at June 30, 2016, up from $15.65 billion at March 31, 2016 and $15.25 billion at June 30, 2015. Average total assets increased to $15.64 billion during the second quarter of 2016, up from $15.54 billion during the previous quarter and $15.04 billion during the same quarter last year.
The investment securities portfolio was $6.10 billion at June 30, 2016, down from $6.21 billion at March 31, 2016 and $6.47 billion at June 30, 2015 as loan growth continues to outpace deposit growth. The portfolio remains largely comprised of securities issued by U. S. government agencies and included $3.80 billion in securities held to maturity and $2.30 billion in securities available for sale at June 30, 2016.
Total loans and leases were $8.33 billion at June 30, 2016, up from $8.07 billion at March 31, 2016 and up from $7.43 billion at June 30, 2015. Average total loans and leases were $8.21 billion during the second quarter of 2016, up from $7.94 billion during the first quarter of 2016, and up from $7.30 billion during the same quarter last year.
The commercial loan portfolio was $3.31 billion at the end of the second quarter of 2016, an increase of 1.5 percent from commercial loans of $3.26 billion at the end of the first quarter of 2016, and up 8.6 percent from commercial loans of $3.04 billion at the end of the same quarter last year. The consumer loan portfolio was $5.03 billion at the end of the second quarter of 2016, an increase of 4.5 percent from consumer loans of $4.81 billion at the end of the first quarter of 2016 and up 14.6 percent from $4.39 billion at the end of the same quarter last year. Loan and lease portfolio balances are summarized in Table 10.
Total deposits increased to $13.64 billion at June 30, 2016 compared with $13.49 billion at March 31, 2016 and $13.09 billion at June 30, 2015. Average total deposits were $13.45 billion during the second quarter of 2016, up from $13.33 billion during the previous quarter and $12.86 billion during the same quarter last year.
Consumer deposits were $6.62 billion at June 30, 2016, up from $6.57 billion at March 31, 2016 and up from $6.22 billion at June 30, 2015. Commercial deposits were $5.70 billion at June 30, 2016, up from $5.68 billion at March 31, 2016 and up from $5.52 billion at June 30, 2015. Other deposits, including public funds, were $1.33 billion at June 30, 2016, up from $1.24 billion at March 31, 2016 and down slightly from $1.34 billion at June 30, 2015. Deposit balances are summarized in Tables 7 and 10.
During the second quarter of 2016, the Company repurchased 213.0 thousand shares of common stock at a total cost of $14.6 million under its share repurchase program. The average cost was $68.71 per share repurchased. From the beginning of the share repurchase program initiated during July of 2001 through June 30, 2016, the Company has repurchased 53.3 million shares and returned over $2.0 billion to shareholders at an average cost of $37.62 per share. From July 1 through July 22, 2016, the Company repurchased an additional 60.0 thousand shares of common stock at an average cost of $68.65 per share. Remaining buyback authority under the share repurchase program was $85.6 million at July 22, 2016.
Total shareholders’ equity was $1.16 billion at June 30, 2016, up from $1.14 billion at March 31, 2016 and up from $1.08 billion at June 30, 2015. At June 30, 2016, the Tier 1 Capital Ratio was 13.66 percent compared with 13.85 percent at March 31, 2016 and 14.47 percent at June 30, 2015. The Tier 1 leverage ratio at June 30, 2016 was 7.29 percent compared with 7.25 percent at March 31, 2016 and 7.21 percent at June 30, 2015.
The Company’s Board of Directors declared a quarterly cash dividend of $0.48 per share on the Company’s outstanding shares. The dividend will be payable on September 15, 2016 to shareholders of record at the close of business on August 31, 2016.
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Bank of Hawaii Corporation Second Quarter 2016 Financial Results Page 5
Hawaii Economy
Economic conditions in Hawaii continue to remain positive during the second quarter of 2016 due to an active construction industry, stable tourism, low unemployment, and a strong real estate market. For the first five months of 2016, total visitor spending increased 1.0 percent and total arrivals increased 3.1 percent compared to the same period in 2015. The statewide seasonally-adjusted unemployment rate in Hawaii was 3.3 percent in June 2016 compared to 4.9 percent nationally. For the first six months of 2016, the volume of single-family home sales on Oahu increased 7.8 percent compared with the same period in 2015. The volume of condominium sales on Oahu increased 10.7 percent compared with the same period in 2015. During the first half of 2016 the median sales price of single-family homes on Oahu was 6.1 percent higher and the median sales price of a condominium was 7.4 percent higher compared with 2015. As of June 30, 2016, months of inventory of single-family homes and condominiums on Oahu remained low at approximately 3.0 months and 3.1 months, respectively. More information on current Hawaii economic trends is presented in Table 15.
Conference Call Information
The Company will review its second quarter 2016 financial results today at 2:00 p.m. Eastern Time (8:00 a.m. Hawaii Time). The call will be accessible via teleconference and via the investor relations link of Bank of Hawaii Corporation's website, www.boh.com. The toll-free number is 1 (877) 783-7534 in the United States and 1 (530) 379-4714 for international callers. Use the pass code “Bank of Hawaii” to access the call. A replay will be available for one week beginning approximately 11:00 a.m. Hawaii Time on Monday, July 25, 2016. The replay number is 1 (855) 859-2056 in the United States and 1 (404) 537-3406 from international locations. Enter the pass code 40106598 when prompted. Participants can also dial 1 (800) 585-8367 to access the replay. In addition, a 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", such as forecasts of our financial results and condition, expectations for our operations and business prospects, and our assumptions used in those forecasts and expectations. 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, 2015, which was filed with the U.S. Securities and Exchange Commission. We have not committed to update forward-looking statements to reflect later events or circumstances.
Bank of Hawaii Corporation is a regional financial services company serving businesses, consumers, and governments in Hawaii, American Samoa, and the West Pacific. The Company’s principal subsidiary, Bank of Hawaii, was founded in 1897 and is the largest independent financial institution in Hawaii. For more information about Bank of Hawaii Corporation, see the Company’s web site, www.boh.com.
# # # #
Bank of Hawaii Corporation and Subsidiaries | ||||||||||||||||||||
Financial Highlights | Table 1 | |||||||||||||||||||
Three Months Ended | Six Months Ended | |||||||||||||||||||
June 30, | March 31, | June 30, | June 30, | |||||||||||||||||
(dollars in thousands, except per share amounts) | 2016 | 2016 | 2015 | 2016 | 2015 | |||||||||||||||
For the Period: | ||||||||||||||||||||
Operating Results | ||||||||||||||||||||
Net Interest Income | $ | 103,550 | $ | 103,024 | $ | 97,782 | $ | 206,574 | $ | 194,552 | ||||||||||
Provision for Credit Losses | 1,000 | (2,000 | ) | — | (1,000 | ) | — | |||||||||||||
Total Noninterest Income | 46,519 | 56,207 | 45,925 | 102,726 | 98,232 | |||||||||||||||
Total Noninterest Expense | 86,071 | 87,386 | 83,574 | 173,457 | 170,489 | |||||||||||||||
Net Income | 44,245 | 50,210 | 41,154 | 94,455 | 83,596 | |||||||||||||||
Basic Earnings Per Share | 1.04 | 1.17 | 0.95 | 2.21 | 1.93 | |||||||||||||||
Diluted Earnings Per Share | 1.03 | 1.16 | 0.95 | 2.19 | 1.92 | |||||||||||||||
Dividends Declared Per Share | 0.48 | 0.45 | 0.45 | 0.93 | 0.90 | |||||||||||||||
Performance Ratios | ||||||||||||||||||||
Return on Average Assets | 1.14 | % | 1.30 | % | 1.10 | % | 1.22 | % | 1.12 | % | ||||||||||
Return on Average Shareholders' Equity | 15.56 | 17.88 | 15.33 | 16.71 | 15.75 | |||||||||||||||
Efficiency Ratio 1 | 57.35 | 54.88 | 58.16 | 56.08 | 58.23 | |||||||||||||||
Net Interest Margin 2 | 2.85 | 2.86 | 2.81 | 2.86 | 2.81 | |||||||||||||||
Dividend Payout Ratio 3 | 46.15 | 38.46 | 47.37 | 42.08 | 46.63 | |||||||||||||||
Average Shareholders' Equity to Average Assets | 7.31 | 7.27 | 7.16 | 7.29 | 7.14 | |||||||||||||||
Average Balances | ||||||||||||||||||||
Average Loans and Leases | $ | 8,205,104 | $ | 7,940,097 | $ | 7,300,506 | $ | 8,072,600 | $ | 7,177,467 | ||||||||||
Average Assets | 15,639,596 | 15,537,073 | 15,038,500 | 15,588,335 | 14,992,524 | |||||||||||||||
Average Deposits | 13,453,953 | 13,334,550 | 12,863,274 | 13,394,251 | 12,825,074 | |||||||||||||||
Average Shareholders' Equity | 1,143,884 | 1,129,561 | 1,076,467 | 1,136,722 | 1,070,324 | |||||||||||||||
Per Share of Common Stock | ||||||||||||||||||||
Book Value | $ | 26.96 | $ | 26.43 | $ | 24.88 | $ | 26.96 | $ | 24.88 | ||||||||||
Tangible Book Value | 26.23 | 25.70 | 24.15 | 26.23 | 24.15 | |||||||||||||||
Market Value | ||||||||||||||||||||
Closing | 68.80 | 68.28 | 66.68 | 68.80 | 66.68 | |||||||||||||||
High | 72.77 | 69.37 | 68.10 | 72.77 | 68.10 | |||||||||||||||
Low | 64.96 | 54.55 | 58.70 | 54.55 | 53.90 | |||||||||||||||
June 30, | March 31, | December 31, | June 30, | |||||||||||||||||
2016 | 2016 | 2015 | 2015 | |||||||||||||||||
As of Period End: | ||||||||||||||||||||
Balance Sheet Totals | ||||||||||||||||||||
Loans and Leases | $ | 8,331,469 | $ | 8,065,610 | $ | 7,878,985 | $ | 7,428,438 | ||||||||||||
Total Assets | 15,860,901 | 15,654,695 | 15,455,016 | 15,248,043 | ||||||||||||||||
Total Deposits | 13,643,807 | 13,488,892 | 13,251,103 | 13,090,695 | ||||||||||||||||
Other Debt | 267,970 | 220,771 | 245,786 | 170,816 | ||||||||||||||||
Total Shareholders' Equity | 1,157,219 | 1,138,753 | 1,116,260 | 1,082,939 | ||||||||||||||||
Asset Quality | ||||||||||||||||||||
Non-Performing Assets | $ | 16,280 | $ | 22,015 | $ | 28,801 | $ | 29,450 | ||||||||||||
Allowance for Loan and Lease Losses | 103,932 | 104,677 | 102,880 | 106,006 | ||||||||||||||||
Allowance to Loans and Leases Outstanding | 1.25 | % | 1.30 | % | 1.31 | % | 1.43 | % | ||||||||||||
Capital Ratios | ||||||||||||||||||||
Common Equity Tier 1 Capital Ratio | 13.66 | % | 13.85 | % | 13.97 | % | 14.47 | % | ||||||||||||
Tier 1 Capital Ratio | 13.66 | 13.85 | 13.97 | 14.47 | ||||||||||||||||
Total Capital Ratio | 14.91 | 15.10 | 15.22 | 15.72 | ||||||||||||||||
Tier 1 Leverage Ratio | 7.29 | 7.25 | 7.26 | 7.21 | ||||||||||||||||
Total Shareholders' Equity to Total Assets | 7.30 | 7.27 | 7.22 | 7.10 | ||||||||||||||||
Tangible Common Equity to Tangible Assets 4 | 7.11 | 7.09 | 7.03 | 6.91 | ||||||||||||||||
Tangible Common Equity to Risk-Weighted Assets 4 | 13.49 | 13.62 | 13.62 | 14.03 | ||||||||||||||||
Non-Financial Data | ||||||||||||||||||||
Full-Time Equivalent Employees | 2,136 | 2,139 | 2,164 | 2,166 | ||||||||||||||||
Branches | 70 | 70 | 70 | 71 | ||||||||||||||||
ATMs | 451 | 452 | 456 | 455 | ||||||||||||||||
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 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 | |||||||||||||||
June 30, | March 31, | December 31, | June 30, | |||||||||||||
(dollars in thousands) | 2016 | 2016 | 2015 | 2015 | ||||||||||||
Total Shareholders' Equity | $ | 1,157,219 | $ | 1,138,753 | $ | 1,116,260 | $ | 1,082,939 | ||||||||
Less: | Goodwill | 31,517 | 31,517 | 31,517 | 31,517 | |||||||||||
Tangible Common Equity | $ | 1,125,702 | $ | 1,107,236 | $ | 1,084,743 | $ | 1,051,422 | ||||||||
Total Assets | $ | 15,860,901 | $ | 15,654,695 | $ | 15,455,016 | $ | 15,248,043 | ||||||||
Less: | Goodwill | 31,517 | 31,517 | 31,517 | 31,517 | |||||||||||
Tangible Assets | $ | 15,829,384 | $ | 15,623,178 | $ | 15,423,499 | $ | 15,216,526 | ||||||||
Risk-Weighted Assets, determined in accordance | ||||||||||||||||
with prescribed regulatory requirements | $ | 8,341,990 | $ | 8,130,093 | $ | 7,962,484 | $ | 7,495,744 | ||||||||
Total Shareholders' Equity to Total Assets | 7.30 | % | 7.27 | % | 7.22 | % | 7.10 | % | ||||||||
Tangible Common Equity to Tangible Assets (Non-GAAP) | 7.11 | % | 7.09 | % | 7.03 | % | 6.91 | % | ||||||||
Tier 1 Capital Ratio | 13.66 | % | 13.85 | % | 13.97 | % | 14.47 | % | ||||||||
Tangible Common Equity to Risk-Weighted Assets (Non-GAAP) | 13.49 | % | 13.62 | % | 13.62 | % | 14.03 | % | ||||||||
Bank of Hawaii Corporation and Subsidiaries | ||||||||||||||||
Consolidated Statements of Income | Table 3 | |||||||||||||||
Three Months Ended | Six Months Ended | |||||||||||||||
June 30, | March 31, | June 30, | June 30, | |||||||||||||
(dollars in thousands, except per share amounts) | 2016 | 2016 | 2015 | 2016 | 2015 | |||||||||||
Interest Income | ||||||||||||||||
Interest and Fees on Loans and Leases | $ | 82,323 | $ | 80,895 | $ | 73,565 | $ | 163,218 | $ | 144,526 | ||||||
Income on Investment Securities | ||||||||||||||||
Available-for-Sale | 10,521 | 10,814 | 10,273 | 21,335 | 20,471 | |||||||||||
Held-to-Maturity | 20,168 | 20,391 | 22,832 | 40,559 | 47,239 | |||||||||||
Deposits | 2 | 4 | 2 | 6 | 5 | |||||||||||
Funds Sold | 618 | 753 | 268 | 1,371 | 527 | |||||||||||
Other | 153 | 212 | 310 | 365 | 612 | |||||||||||
Total Interest Income | 113,785 | 113,069 | 107,250 | 226,854 | 213,380 | |||||||||||
Interest Expense | ||||||||||||||||
Deposits | 3,081 | 2,886 | 2,405 | 5,967 | 4,773 | |||||||||||
Securities Sold Under Agreements to Repurchase | 6,134 | 6,153 | 6,440 | 12,287 | 12,811 | |||||||||||
Funds Purchased | 3 | 3 | 3 | 6 | 6 | |||||||||||
Other Debt | 1,017 | 1,003 | 620 | 2,020 | 1,238 | |||||||||||
Total Interest Expense | 10,235 | 10,045 | 9,468 | 20,280 | 18,828 | |||||||||||
Net Interest Income | 103,550 | 103,024 | 97,782 | 206,574 | 194,552 | |||||||||||
Provision for Credit Losses | 1,000 | (2,000 | ) | — | (1,000 | ) | — | |||||||||
Net Interest Income After Provision for Credit Losses | 102,550 | 105,024 | 97,782 | 207,574 | 194,552 | |||||||||||
Noninterest Income | ||||||||||||||||
Trust and Asset Management | 12,707 | 11,256 | 12,355 | 23,963 | 24,535 | |||||||||||
Mortgage Banking | 4,088 | 3,189 | 3,469 | 7,277 | 5,162 | |||||||||||
Service Charges on Deposit Accounts | 8,150 | 8,443 | 8,203 | 16,593 | 16,740 | |||||||||||
Fees, Exchange, and Other Service Charges | 13,978 | 13,444 | 13,352 | 27,422 | 26,249 | |||||||||||
Investment Securities Gains (Losses), Net | (312 | ) | 11,180 | 86 | 10,868 | 10,317 | ||||||||||
Annuity and Insurance | 2,006 | 1,901 | 1,885 | 3,907 | 3,929 | |||||||||||
Bank-Owned Life Insurance | 1,551 | 1,548 | 2,088 | 3,099 | 3,822 | |||||||||||
Other | 4,351 | 5,246 | 4,487 | 9,597 | 7,478 | |||||||||||
Total Noninterest Income | 46,519 | 56,207 | 45,925 | 102,726 | 98,232 | |||||||||||
Noninterest Expense | ||||||||||||||||
Salaries and Benefits | 50,289 | 50,514 | 47,610 | 100,803 | 97,390 | |||||||||||
Net Occupancy | 7,158 | 7,003 | 8,605 | 14,161 | 17,938 | |||||||||||
Net Equipment | 5,065 | 5,409 | 4,826 | 10,474 | 10,114 | |||||||||||
Data Processing | 3,972 | 3,951 | 3,673 | 7,923 | 7,446 | |||||||||||
Professional Fees | 2,047 | 2,639 | 2,265 | 4,686 | 4,599 | |||||||||||
FDIC Insurance | 2,144 | 2,352 | 2,068 | 4,496 | 4,208 | |||||||||||
Other | 15,396 | 15,518 | 14,527 | 30,914 | 28,794 | |||||||||||
Total Noninterest Expense | 86,071 | 87,386 | 83,574 | 173,457 | 170,489 | |||||||||||
Income Before Provision for Income Taxes | 62,998 | 73,845 | 60,133 | 136,843 | 122,295 | |||||||||||
Provision for Income Taxes | 18,753 | 23,635 | 18,979 | 42,388 | 38,699 | |||||||||||
Net Income | $ | 44,245 | $ | 50,210 | $ | 41,154 | $ | 94,455 | $ | 83,596 | ||||||
Basic Earnings Per Share | $ | 1.04 | $ | 1.17 | $ | 0.95 | $ | 2.21 | $ | 1.93 | ||||||
Diluted Earnings Per Share | $ | 1.03 | $ | 1.16 | $ | 0.95 | $ | 2.19 | $ | 1.92 | ||||||
Dividends Declared Per Share | $ | 0.48 | $ | 0.45 | $ | 0.45 | $ | 0.93 | $ | 0.90 | ||||||
Basic Weighted Average Shares | 42,729,731 | 42,920,794 | 43,305,813 | 42,825,369 | 43,345,667 | |||||||||||
Diluted Weighted Average Shares | 42,942,960 | 43,126,526 | 43,518,349 | 43,033,199 | 43,558,664 | |||||||||||
Bank of Hawaii Corporation and Subsidiaries | |||||||||||||||||
Consolidated Statements of Comprehensive Income | Table 4 | ||||||||||||||||
Three Months Ended | Six Months Ended | ||||||||||||||||
June 30, | March 31, | June 30, | June 30, | ||||||||||||||
(dollars in thousands) | 2016 | 2016 | 2015 | 2016 | 2015 | ||||||||||||
Net Income | $ | 44,245 | $ | 50,210 | $ | 41,154 | $ | 94,455 | $ | 83,596 | |||||||
Other Comprehensive Income (Loss), Net of Tax: | |||||||||||||||||
Net Unrealized Gains (Losses) on Investment Securities | 5,157 | 8,694 | (7,610 | ) | 13,851 | (2,316 | ) | ||||||||||
Defined Benefit Plans | 141 | 141 | 220 | 282 | 440 | ||||||||||||
Total Other Comprehensive Income (Loss) | 5,298 | 8,835 | (7,390 | ) | 14,133 | (1,876 | ) | ||||||||||
Comprehensive Income | $ | 49,543 | $ | 59,045 | $ | 33,764 | $ | 108,588 | $ | 81,720 | |||||||
Bank of Hawaii Corporation and Subsidiaries | ||||||||||||
Consolidated Statements of Condition | Table 5 | |||||||||||
June 30, | March 31, | December 31, | June 30, | |||||||||
(dollars in thousands) | 2016 | 2016 | 2015 | 2015 | ||||||||
Assets | ||||||||||||
Interest-Bearing Deposits in Other Banks | $ | 3,819 | $ | 4,453 | $ | 4,130 | $ | 3,420 | ||||
Funds Sold | 615,395 | 626,206 | 592,892 | 602,598 | ||||||||
Investment Securities | ||||||||||||
Available-for-Sale | 2,299,638 | 2,293,751 | 2,256,818 | 2,275,361 | ||||||||
Held-to-Maturity (Fair Value of $3,890,220; $3,981,830; $4,006,412; and $4,240,732) | 3,798,200 | 3,911,703 | 3,982,736 | 4,199,121 | ||||||||
Loans Held for Sale | 105,824 | 16,854 | 4,808 | 18,483 | ||||||||
Loans and Leases | 8,331,469 | 8,065,610 | 7,878,985 | 7,428,438 | ||||||||
Allowance for Loan and Lease Losses | (103,932 | ) | (104,677 | ) | (102,880 | ) | (106,006 | ) | ||||
Net Loans and Leases | 8,227,537 | 7,960,933 | 7,776,105 | 7,322,432 | ||||||||
Total Earning Assets | 15,050,413 | 14,813,900 | 14,617,489 | 14,421,415 | ||||||||
Cash and Due from Banks | 133,836 | 164,012 | 158,699 | 150,874 | ||||||||
Premises and Equipment, Net | 109,832 | 111,086 | 111,199 | 108,439 | ||||||||
Accrued Interest Receivable | 45,709 | 47,504 | 44,719 | 44,475 | ||||||||
Foreclosed Real Estate | 1,728 | 1,728 | 824 | 1,989 | ||||||||
Mortgage Servicing Rights | 19,631 | 22,663 | 23,002 | 23,426 | ||||||||
Goodwill | 31,517 | 31,517 | 31,517 | 31,517 | ||||||||
Bank-Owned Life Insurance | 271,274 | 269,723 | 268,175 | 265,133 | ||||||||
Other Assets | 196,961 | 192,562 | 199,392 | 200,775 | ||||||||
Total Assets | $ | 15,860,901 | $ | 15,654,695 | $ | 15,455,016 | $ | 15,248,043 | ||||
Liabilities | ||||||||||||
Deposits | ||||||||||||
Noninterest-Bearing Demand | $ | 4,383,496 | $ | 4,329,321 | $ | 4,286,331 | $ | 4,156,847 | ||||
Interest-Bearing Demand | 2,838,744 | 2,759,357 | 2,761,930 | 2,699,517 | ||||||||
Savings | 5,165,808 | 5,172,206 | 5,025,191 | 5,044,711 | ||||||||
Time | 1,255,759 | 1,228,008 | 1,177,651 | 1,189,620 | ||||||||
Total Deposits | 13,643,807 | 13,488,892 | 13,251,103 | 13,090,695 | ||||||||
Funds Purchased | 7,333 | 7,333 | 7,333 | 8,459 | ||||||||
Short-Term Borrowings | — | 408 | — | — | ||||||||
Securities Sold Under Agreements to Repurchase | 586,785 | 586,785 | 628,857 | 672,310 | ||||||||
Other Debt | 267,970 | 220,771 | 245,786 | 170,816 | ||||||||
Retirement Benefits Payable | 47,438 | 47,408 | 47,374 | 55,181 | ||||||||
Accrued Interest Payable | 5,532 | 5,661 | 5,032 | 5,254 | ||||||||
Taxes Payable and Deferred Taxes | 20,979 | 43,134 | 17,737 | 26,244 | ||||||||
Other Liabilities | 123,838 | 115,550 | 135,534 | 136,145 | ||||||||
Total Liabilities | 14,703,682 | 14,515,942 | 14,338,756 | 14,165,104 | ||||||||
Shareholders' Equity | ||||||||||||
Common Stock ($.01 par value; authorized 500,000,000 shares; | ||||||||||||
issued / outstanding: June 30, 2016 - 57,856,419 / 42,916,163; | ||||||||||||
March 31, 2016 - 57,849,536 / 43,080,503; December 31, 2015 - 57,749,071 / 43,282,153; | ||||||||||||
and June 30, 2015 - 57,745,324 / 43,535,020) | 576 | 576 | 575 | 575 | ||||||||
Capital Surplus | 546,928 | 544,267 | 542,041 | 536,782 | ||||||||
Accumulated Other Comprehensive Loss | (9,424 | ) | (14,722 | ) | (23,557 | ) | (28,562 | ) | ||||
Retained Earnings | 1,370,308 | 1,347,374 | 1,316,260 | 1,278,672 | ||||||||
Treasury Stock, at Cost (Shares: June 30, 2016 - 14,940,256; March 31, 2016 - 14,769,033; | ||||||||||||
December 31, 2015 - 14,466,918; and June 30, 2015 - 14,210,304) | (751,169 | ) | (738,742 | ) | (719,059 | ) | (704,528 | ) | ||||
Total Shareholders' Equity | 1,157,219 | 1,138,753 | 1,116,260 | 1,082,939 | ||||||||
Total Liabilities and Shareholders' Equity | $ | 15,860,901 | $ | 15,654,695 | $ | 15,455,016 | $ | 15,248,043 | ||||
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, 2015 | 43,282,153 | $ | 575 | $ | 542,041 | $ | (23,557 | ) | $ | 1,316,260 | $ | (719,059 | ) | $ | 1,116,260 | ||||||
Net Income | — | — | — | — | 94,455 | — | 94,455 | ||||||||||||||
Other Comprehensive Income | — | — | — | 14,133 | — | — | 14,133 | ||||||||||||||
Share-Based Compensation | — | — | 3,314 | — | — | — | 3,314 | ||||||||||||||
Common Stock Issued under Purchase and Equity | |||||||||||||||||||||
Compensation Plans and Related Tax Benefits | 201,445 | 1 | 1,573 | — | (277 | ) | 4,900 | 6,197 | |||||||||||||
Common Stock Repurchased | (567,435 | ) | — | — | — | — | (37,010 | ) | (37,010 | ) | |||||||||||
Cash Dividends Declared ($0.93 per share) | — | — | — | — | (40,130 | ) | — | (40,130 | ) | ||||||||||||
Balance as of June 30, 2016 | 42,916,163 | $ | 576 | $ | 546,928 | $ | (9,424 | ) | $ | 1,370,308 | $ | (751,169 | ) | $ | 1,157,219 | ||||||
Balance as of December 31, 2014 | 43,724,208 | $ | 574 | $ | 531,932 | $ | (26,686 | ) | $ | 1,234,801 | $ | (685,535 | ) | $ | 1,055,086 | ||||||
Net Income | — | — | — | — | 83,596 | — | 83,596 | ||||||||||||||
Other Comprehensive Loss | — | — | — | (1,876 | ) | — | — | (1,876 | ) | ||||||||||||
Share-Based Compensation | — | — | 3,731 | — | — | — | 3,731 | ||||||||||||||
Common Stock Issued under Purchase and Equity | |||||||||||||||||||||
Compensation Plans and Related Tax Benefits | 213,289 | 1 | 1,119 | — | (408 | ) | 5,394 | 6,106 | |||||||||||||
Common Stock Repurchased | (402,477 | ) | — | — | — | — | (24,387 | ) | (24,387 | ) | |||||||||||
Cash Dividends Declared ($0.90 per share) | — | — | — | — | (39,317 | ) | — | (39,317 | ) | ||||||||||||
Balance as of June 30, 2015 | 43,535,020 | $ | 575 | $ | 536,782 | $ | (28,562 | ) | $ | 1,278,672 | $ | (704,528 | ) | $ | 1,082,939 | ||||||
Bank of Hawaii Corporation and Subsidiaries | ||||||||||||||||||||||||||||
Average Balances and Interest Rates - Taxable-Equivalent Basis | Table 7a | |||||||||||||||||||||||||||
Three Months Ended | Three Months Ended | Three Months Ended | ||||||||||||||||||||||||||
June 30, 2016 | March 31, 2016 | June 30, 2015 | ||||||||||||||||||||||||||
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 | $ | 4.0 | $ | — | 0.17 | % | $ | 4.4 | $ | — | 0.41 | % | $ | 3.5 | $ | — | 0.17 | % | ||||||||||
Funds Sold | 526.8 | 0.6 | 0.46 | 647.7 | 0.8 | 0.46 | 473.5 | 0.3 | 0.22 | |||||||||||||||||||
Investment Securities | ||||||||||||||||||||||||||||
Available-for-Sale | ||||||||||||||||||||||||||||
Taxable | 1,619.7 | 6.9 | 1.72 | 1,588.5 | 7.2 | 1.80 | 1,558.6 | 6.5 | 1.68 | |||||||||||||||||||
Non-Taxable | 691.8 | 5.5 | 3.17 | 715.0 | 5.6 | 3.15 | 725.8 | 5.8 | 3.17 | |||||||||||||||||||
Held-to-Maturity | ||||||||||||||||||||||||||||
Taxable | 3,639.5 | 18.6 | 2.05 | 3,679.6 | 18.8 | 2.05 | 4,006.4 | 21.3 | 2.12 | |||||||||||||||||||
Non-Taxable | 244.6 | 2.4 | 3.91 | 245.5 | 2.4 | 3.91 | 248.2 | 2.4 | 3.93 | |||||||||||||||||||
Total Investment Securities | 6,195.6 | 33.4 | 2.16 | 6,228.6 | 34.0 | 2.19 | 6,539.0 | 36.0 | 2.20 | |||||||||||||||||||
Loans Held for Sale | 19.9 | 0.2 | 3.64 | 12.2 | 0.1 | 3.89 | 11.1 | 0.1 | 3.66 | |||||||||||||||||||
Loans and Leases 1 | ||||||||||||||||||||||||||||
Commercial and Industrial | 1,176.0 | 9.8 | 3.36 | 1,127.4 | 10.8 | 3.84 | 1,156.3 | 9.1 | 3.16 | |||||||||||||||||||
Commercial Mortgage | 1,686.7 | 16.4 | 3.91 | 1,689.2 | 15.7 | 3.74 | 1,499.7 | 14.4 | 3.85 | |||||||||||||||||||
Construction | 210.8 | 2.3 | 4.44 | 170.0 | 2.0 | 4.63 | 126.0 | 1.5 | 4.85 | |||||||||||||||||||
Commercial Lease Financing | 196.4 | 1.2 | 2.36 | 198.9 | 1.3 | 2.69 | 225.1 | 2.0 | 3.47 | |||||||||||||||||||
Residential Mortgage | 3,005.4 | 30.1 | 4.01 | 2,918.5 | 29.6 | 4.05 | 2,736.2 | 28.3 | 4.14 | |||||||||||||||||||
Home Equity | 1,170.9 | 10.5 | 3.61 | 1,103.5 | 10.1 | 3.69 | 906.8 | 8.1 | 3.60 | |||||||||||||||||||
Automobile | 405.9 | 5.2 | 5.18 | 388.6 | 5.0 | 5.19 | 344.4 | 4.5 | 5.20 | |||||||||||||||||||
Other 2 | 353.0 | 6.9 | 7.78 | 344.0 | 6.5 | 7.64 | 306.0 | 5.7 | 7.51 | |||||||||||||||||||
Total Loans and Leases | 8,205.1 | 82.4 | 4.03 | 7,940.1 | 81.0 | 4.09 | 7,300.5 | 73.6 | 4.04 | |||||||||||||||||||
Other | 38.1 | 0.1 | 1.61 | 38.4 | 0.2 | 2.21 | 51.6 | 0.3 | 2.40 | |||||||||||||||||||
Total Earning Assets 3 | 14,989.5 | 116.7 | 3.12 | 14,871.4 | 116.1 | 3.13 | 14,379.2 | 110.3 | 3.07 | |||||||||||||||||||
Cash and Due from Banks | 120.4 | 131.0 | 125.8 | |||||||||||||||||||||||||
Other Assets | 529.7 | 534.7 | 533.5 | |||||||||||||||||||||||||
Total Assets | $ | 15,639.6 | $ | 15,537.1 | $ | 15,038.5 | ||||||||||||||||||||||
Interest-Bearing Liabilities | ||||||||||||||||||||||||||||
Interest-Bearing Deposits | ||||||||||||||||||||||||||||
Demand | $ | 2,738.1 | 0.3 | 0.04 | $ | 2,761.6 | 0.3 | 0.04 | $ | 2,611.9 | 0.2 | 0.03 | ||||||||||||||||
Savings | 5,184.8 | 1.1 | 0.09 | 5,137.6 | 1.1 | 0.09 | 5,023.5 | 1.1 | 0.09 | |||||||||||||||||||
Time | 1,214.8 | 1.7 | 0.57 | 1,208.4 | 1.5 | 0.50 | 1,256.6 | 1.1 | 0.35 | |||||||||||||||||||
Total Interest-Bearing Deposits | 9,137.7 | 3.1 | 0.14 | 9,107.6 | 2.9 | 0.13 | 8,892.0 | 2.4 | 0.11 | |||||||||||||||||||
Short-Term Borrowings | 7.3 | — | 0.15 | 7.8 | — | 0.14 | 8.5 | — | 0.14 | |||||||||||||||||||
Securities Sold Under Agreements to Repurchase | 586.8 | 6.1 | 4.14 | 602.9 | 6.2 | 4.04 | 672.2 | 6.5 | 3.79 | |||||||||||||||||||
Other Debt | 226.8 | 1.0 | 1.80 | 232.3 | 1.0 | 1.73 | 173.9 | 0.6 | 1.43 | |||||||||||||||||||
Total Interest-Bearing Liabilities | 9,958.6 | 10.2 | 0.41 | 9,950.6 | 10.1 | 0.40 | 9,746.6 | 9.5 | 0.39 | |||||||||||||||||||
Net Interest Income | $ | 106.5 | $ | 106.0 | $ | 100.8 | ||||||||||||||||||||||
Interest Rate Spread | 2.71 | % | 2.73 | % | 2.68 | % | ||||||||||||||||||||||
Net Interest Margin | 2.85 | % | 2.86 | % | 2.81 | % | ||||||||||||||||||||||
Noninterest-Bearing Demand Deposits | 4,316.3 | 4,227.0 | 3,971.3 | |||||||||||||||||||||||||
Other Liabilities | 220.8 | 229.9 | 244.1 | |||||||||||||||||||||||||
Shareholders' Equity | 1,143.9 | 1,129.6 | 1,076.5 | |||||||||||||||||||||||||
Total Liabilities and Shareholders' Equity | $ | 15,639.6 | $ | 15,537.1 | $ | 15,038.5 | ||||||||||||||||||||||
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 35%, of $2,977,000, $3,013,000 and $3,008,000 for the three months | ||||||||||||||||||||||||||||
ended June 30, 2016, March 31, 2016, and June 30, 2015, respectively. | ||||||||||||||||||||||||||||
Bank of Hawaii Corporation and Subsidiaries | |||||||||||||||||||
Average Balances and Interest Rates - Taxable-Equivalent Basis | Table 7b | ||||||||||||||||||
Six Months Ended | Six Months Ended | ||||||||||||||||||
June 30, 2016 | June 30, 2015 | ||||||||||||||||||
Average | Income/ | Yield/ | Average | Income/ | Yield/ | ||||||||||||||
(dollars in millions) | Balance | Expense | Rate | Balance | Expense | Rate | |||||||||||||
Earning Assets | |||||||||||||||||||
Interest-Bearing Deposits in Other Banks | $ | 4.2 | $ | — | 0.30 | % | $ | 3.2 | $ | — | 0.30 | % | |||||||
Funds Sold | 587.3 | 1.4 | 0.46 | 478.9 | 0.5 | 0.22 | |||||||||||||
Investment Securities | |||||||||||||||||||
Available-for-Sale | |||||||||||||||||||
Taxable | 1,604.1 | 14.1 | 1.76 | 1,559.7 | 13.0 | 1.67 | |||||||||||||
Non-Taxable | 703.4 | 11.1 | 3.16 | 724.6 | 11.5 | 3.17 | |||||||||||||
Held-to-Maturity | |||||||||||||||||||
Taxable | 3,659.5 | 37.5 | 2.05 | 4,073.2 | 44.0 | 2.17 | |||||||||||||
Non-Taxable | 245.1 | 4.8 | 3.91 | 248.7 | 4.9 | 3.94 | |||||||||||||
Total Investment Securities | 6,212.1 | 67.5 | 2.17 | 6,606.2 | 73.4 | 2.23 | |||||||||||||
Loans Held for Sale | 16.0 | 0.3 | 3.74 | 7.1 | 0.1 | 3.65 | |||||||||||||
Loans and Leases 1 | |||||||||||||||||||
Commercial and Industrial | 1,151.7 | 20.6 | 3.59 | 1,143.5 | 18.0 | 3.17 | |||||||||||||
Commercial Mortgage | 1,687.9 | 32.1 | 3.82 | 1,474.8 | 28.1 | 3.84 | |||||||||||||
Construction | 190.4 | 4.3 | 4.53 | 115.0 | 2.6 | 4.64 | |||||||||||||
Commercial Lease Financing | 197.7 | 2.5 | 2.53 | 225.5 | 3.9 | 3.44 | |||||||||||||
Residential Mortgage | 2,962.0 | 59.6 | 4.03 | 2,684.0 | 55.8 | 4.16 | |||||||||||||
Home Equity | 1,137.2 | 20.6 | 3.65 | 892.7 | 16.2 | 3.66 | |||||||||||||
Automobile | 397.2 | 10.2 | 5.19 | 338.0 | 8.8 | 5.23 | |||||||||||||
Other 2 | 348.5 | 13.4 | 7.71 | 304.0 | 11.2 | 7.43 | |||||||||||||
Total Loans and Leases | 8,072.6 | 163.3 | 4.06 | 7,177.5 | 144.6 | 4.05 | |||||||||||||
Other | 38.2 | 0.4 | 1.91 | 58.8 | 0.6 | 2.08 | |||||||||||||
Total Earning Assets 3 | 14,930.4 | 232.9 | 3.13 | 14,331.7 | 219.2 | 3.07 | |||||||||||||
Cash and Due from Banks | 125.7 | 131.1 | |||||||||||||||||
Other Assets | 532.2 | 529.7 | |||||||||||||||||
Total Assets | $ | 15,588.3 | $ | 14,992.5 | |||||||||||||||
Interest-Bearing Liabilities | |||||||||||||||||||
Interest-Bearing Deposits | |||||||||||||||||||
Demand | $ | 2,749.9 | 0.5 | 0.04 | $ | 2,594.6 | 0.4 | 0.03 | |||||||||||
Savings | 5,161.2 | 2.3 | 0.09 | 4,982.5 | 2.2 | 0.09 | |||||||||||||
Time | 1,211.6 | 3.2 | 0.53 | 1,317.1 | 2.2 | 0.34 | |||||||||||||
Total Interest-Bearing Deposits | 9,122.7 | 6.0 | 0.13 | 8,894.2 | 4.8 | 0.11 | |||||||||||||
Short-Term Borrowings | 7.5 | — | 0.15 | 8.4 | — | 0.14 | |||||||||||||
Securities Sold Under Agreements to Repurchase | 594.9 | 12.3 | 4.09 | 675.2 | 12.8 | 3.77 | |||||||||||||
Other Debt | 229.5 | 2.0 | 1.77 | 173.9 | 1.2 | 1.43 | |||||||||||||
Total Interest-Bearing Liabilities | 9,954.6 | 20.3 | 0.41 | 9,751.7 | 18.8 | 0.39 | |||||||||||||
Net Interest Income | $ | 212.6 | $ | 200.4 | |||||||||||||||
Interest Rate Spread | 2.72 | % | 2.68 | % | |||||||||||||||
Net Interest Margin | 2.86 | % | 2.81 | % | |||||||||||||||
Noninterest-Bearing Demand Deposits | 4,271.6 | 3,930.9 | |||||||||||||||||
Other Liabilities | 225.4 | 239.6 | |||||||||||||||||
Shareholders' Equity | 1,136.7 | 1,070.3 | |||||||||||||||||
Total Liabilities and Shareholders' Equity | $ | 15,588.3 | $ | 14,992.5 | |||||||||||||||
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 35%, of $5,990,000 and $5,886,000 for the six months | |||||||||||||||||||
ended June 30, 2016 and June 30, 2015, respectively. | |||||||||||||||||||
Bank of Hawaii Corporation and Subsidiaries | |||||||||
Analysis of Change in Net Interest Income - Taxable-Equivalent Basis | Table 8a | ||||||||
Three Months Ended June 30, 2016 | |||||||||
Compared to March 31, 2016 | |||||||||
(dollars in millions) | Volume 1 | Rate 1 | Total | ||||||
Change in Interest Income: | |||||||||
Funds Sold | $ | (0.2 | ) | $ | — | $ | (0.2 | ) | |
Investment Securities | |||||||||
Available-for-Sale | |||||||||
Taxable | 0.1 | (0.4 | ) | (0.3 | ) | ||||
Non-Taxable | (0.2 | ) | 0.1 | (0.1 | ) | ||||
Held-to-Maturity | |||||||||
Taxable | (0.2 | ) | — | (0.2 | ) | ||||
Total Investment Securities | (0.3 | ) | (0.3 | ) | (0.6 | ) | |||
Loans Held for Sale | 0.1 | — | 0.1 | ||||||
Loans and Leases | |||||||||
Commercial and Industrial | 0.4 | (1.4 | ) | (1.0 | ) | ||||
Commercial Mortgage | — | 0.7 | 0.7 | ||||||
Construction | 0.4 | (0.1 | ) | 0.3 | |||||
Commercial Lease Financing | — | (0.1 | ) | (0.1 | ) | ||||
Residential Mortgage | 0.9 | (0.4 | ) | 0.5 | |||||
Home Equity | 0.6 | (0.2 | ) | 0.4 | |||||
Automobile | 0.2 | — | 0.2 | ||||||
Other 2 | 0.3 | 0.1 | 0.4 | ||||||
Total Loans and Leases | 2.8 | (1.4 | ) | 1.4 | |||||
Other | — | (0.1 | ) | (0.1 | ) | ||||
Total Change in Interest Income | 2.4 | (1.8 | ) | 0.6 | |||||
Change in Interest Expense: | |||||||||
Interest-Bearing Deposits | |||||||||
Time | — | 0.2 | 0.2 | ||||||
Total Interest-Bearing Deposits | — | 0.2 | 0.2 | ||||||
Securities Sold Under Agreements to Repurchase | (0.2 | ) | 0.1 | (0.1 | ) | ||||
Total Change in Interest Expense | (0.2 | ) | 0.3 | 0.1 | |||||
Change in Net Interest Income | $ | 2.6 | $ | (2.1 | ) | $ | 0.5 | ||
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 | |||||||||
Analysis of Change in Net Interest Income - Taxable-Equivalent Basis | Table 8b | ||||||||
Three Months Ended June 30, 2016 | |||||||||
Compared to June 30, 2015 | |||||||||
(dollars in millions) | Volume 1 | Rate 1 | Total | ||||||
Change in Interest Income: | |||||||||
Funds Sold | $ | — | $ | 0.3 | $ | 0.3 | |||
Investment Securities | |||||||||
Available-for-Sale | |||||||||
Taxable | 0.2 | 0.2 | 0.4 | ||||||
Non-Taxable | (0.3 | ) | — | (0.3 | ) | ||||
Held-to-Maturity | |||||||||
Taxable | (1.9 | ) | (0.8 | ) | (2.7 | ) | |||
Total Investment Securities | (2.0 | ) | (0.6 | ) | (2.6 | ) | |||
Loans Held for Sale | 0.1 | — | 0.1 | ||||||
Loans and Leases | |||||||||
Commercial and Industrial | 0.1 | 0.6 | 0.7 | ||||||
Commercial Mortgage | 1.8 | 0.2 | 2.0 | ||||||
Construction | 0.9 | (0.1 | ) | 0.8 | |||||
Commercial Lease Financing | (0.2 | ) | (0.6 | ) | (0.8 | ) | |||
Residential Mortgage | 2.7 | (0.9 | ) | 1.8 | |||||
Home Equity | 2.4 | — | 2.4 | ||||||
Automobile | 0.7 | — | 0.7 | ||||||
Other 2 | 1.0 | 0.2 | 1.2 | ||||||
Total Loans and Leases | 9.4 | (0.6 | ) | 8.8 | |||||
Other | (0.1 | ) | (0.1 | ) | (0.2 | ) | |||
Total Change in Interest Income | 7.4 | (1.0 | ) | 6.4 | |||||
Change in Interest Expense: | |||||||||
Interest-Bearing Deposits | |||||||||
Demand | — | 0.1 | 0.1 | ||||||
Time | — | 0.6 | 0.6 | ||||||
Total Interest-Bearing Deposits | — | 0.7 | 0.7 | ||||||
Securities Sold Under Agreements to Repurchase | (0.9 | ) | 0.5 | (0.4 | ) | ||||
Other Debt | 0.2 | 0.2 | 0.4 | ||||||
Total Change in Interest Expense | (0.7 | ) | 1.4 | 0.7 | |||||
Change in Net Interest Income | $ | 8.1 | $ | (2.4 | ) | $ | 5.7 | ||
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 8c | ||||||||
Six Months Ended June 30, 2016 | |||||||||
Compared to June 30, 2015 | |||||||||
(dollars in millions) | Volume 1 | Rate 1 | Total | ||||||
Change in Interest Income: | |||||||||
Funds Sold | $ | 0.2 | $ | 0.7 | $ | 0.9 | |||
Investment Securities | |||||||||
Available-for-Sale | |||||||||
Taxable | 0.4 | 0.7 | 1.1 | ||||||
Non-Taxable | (0.3 | ) | (0.1 | ) | (0.4 | ) | |||
Held-to-Maturity | |||||||||
Taxable | (4.3 | ) | (2.2 | ) | (6.5 | ) | |||
Non-Taxable | (0.1 | ) | — | (0.1 | ) | ||||
Total Investment Securities | (4.3 | ) | (1.6 | ) | (5.9 | ) | |||
Loans Held for Sale | 0.2 | — | 0.2 | ||||||
Loans and Leases | |||||||||
Commercial and Industrial | 0.1 | 2.5 | 2.6 | ||||||
Commercial Mortgage | 4.1 | (0.1 | ) | 4.0 | |||||
Construction | 1.8 | (0.1 | ) | 1.7 | |||||
Commercial Lease Financing | (0.4 | ) | (1.0 | ) | (1.4 | ) | |||
Residential Mortgage | 5.6 | (1.8 | ) | 3.8 | |||||
Home Equity | 4.4 | — | 4.4 | ||||||
Automobile | 1.5 | (0.1 | ) | 1.4 | |||||
Other 2 | 1.7 | 0.5 | 2.2 | ||||||
Total Loans and Leases | 18.8 | (0.1 | ) | 18.7 | |||||
Other | (0.2 | ) | — | (0.2 | ) | ||||
Total Change in Interest Income | 14.7 | (1.0 | ) | 13.7 | |||||
Change in Interest Expense: | |||||||||
Interest-Bearing Deposits | |||||||||
Demand | — | 0.1 | 0.1 | ||||||
Savings | 0.1 | — | 0.1 | ||||||
Time | (0.2 | ) | 1.2 | 1.0 | |||||
Total Interest-Bearing Deposits | (0.1 | ) | 1.3 | 1.2 | |||||
Securities Sold Under Agreements to Repurchase | (1.5 | ) | 1.0 | (0.5 | ) | ||||
Other Debt | 0.4 | 0.4 | 0.8 | ||||||
Total Change in Interest Expense | (1.2 | ) | 2.7 | 1.5 | |||||
Change in Net Interest Income | $ | 15.9 | $ | (3.7 | ) | $ | 12.2 | ||
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 | Six Months Ended | |||||||||||||||
June 30, | March 31, | June 30, | June 30, | |||||||||||||
(dollars in thousands) | 2016 | 2016 | 2015 | 2016 | 2015 | |||||||||||
Salaries | $ | 28,797 | $ | 29,141 | $ | 28,214 | $ | 57,938 | $ | 56,128 | ||||||
Incentive Compensation | 5,917 | 5,965 | 4,959 | 11,882 | 9,473 | |||||||||||
Share-Based Compensation | 2,746 | 2,310 | 2,751 | 5,056 | 5,096 | |||||||||||
Commission Expense | 2,151 | 1,357 | 1,927 | 3,508 | 3,519 | |||||||||||
Retirement and Other Benefits | 4,092 | 4,954 | 4,117 | 9,046 | 8,848 | |||||||||||
Payroll Taxes | 2,288 | 3,577 | 2,278 | 5,865 | 5,863 | |||||||||||
Medical, Dental, and Life Insurance | 3,872 | 2,892 | 2,449 | 6,764 | 5,633 | |||||||||||
Separation Expense | 426 | 318 | 915 | 744 | 2,830 | |||||||||||
Total Salaries and Benefits | $ | 50,289 | $ | 50,514 | $ | 47,610 | $ | 100,803 | $ | 97,390 | ||||||
Bank of Hawaii Corporation and Subsidiaries | ||||||||||||||||
Loan and Lease Portfolio Balances | Table 10 | |||||||||||||||
June 30, | March 31, | December 31, | September 30, | June 30, | ||||||||||||
(dollars in thousands) | 2016 | 2016 | 2015 | 2015 | 2015 | |||||||||||
Commercial | ||||||||||||||||
Commercial and Industrial | $ | 1,174,879 | $ | 1,180,341 | $ | 1,115,168 | $ | 1,169,817 | $ | 1,173,259 | ||||||
Commercial Mortgage | 1,712,271 | 1,687,199 | 1,677,147 | 1,622,119 | 1,528,685 | |||||||||||
Construction | 226,062 | 192,909 | 156,660 | 129,254 | 118,714 | |||||||||||
Lease Financing | 192,630 | 195,804 | 204,877 | 202,055 | 222,113 | |||||||||||
Total Commercial | 3,305,842 | 3,256,253 | 3,153,852 | 3,123,245 | 3,042,771 | |||||||||||
Consumer | ||||||||||||||||
Residential Mortgage | 3,032,981 | 2,929,388 | 2,925,605 | 2,875,605 | 2,787,847 | |||||||||||
Home Equity | 1,213,154 | 1,131,796 | 1,069,400 | 993,817 | 931,191 | |||||||||||
Automobile | 417,017 | 399,825 | 381,735 | 367,640 | 352,128 | |||||||||||
Other 1 | 362,475 | 348,348 | 348,393 | 329,465 | 314,501 | |||||||||||
Total Consumer | 5,025,627 | 4,809,357 | 4,725,133 | 4,566,527 | 4,385,667 | |||||||||||
Total Loans and Leases | $ | 8,331,469 | $ | 8,065,610 | $ | 7,878,985 | $ | 7,689,772 | $ | 7,428,438 | ||||||
Deposits | ||||||||||||||||
June 30, | March 31, | December 31, | September 30, | June 30, | ||||||||||||
(dollars in thousands) | 2016 | 2016 | 2015 | 2015 | 2015 | |||||||||||
Consumer | $ | 6,618,164 | $ | 6,568,651 | $ | 6,445,510 | $ | 6,254,862 | $ | 6,221,691 | ||||||
Commercial | 5,697,490 | 5,678,987 | 5,502,739 | 5,397,857 | 5,524,153 | |||||||||||
Public and Other | 1,328,153 | 1,241,254 | 1,302,854 | 1,284,243 | 1,344,851 | |||||||||||
Total Deposits | $ | 13,643,807 | $ | 13,488,892 | $ | 13,251,103 | $ | 12,936,962 | $ | 13,090,695 | ||||||
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 | ||||||||||||||||
June 30, | March 31, | December 31, | September 30, | June 30, | |||||||||||||
(dollars in thousands) | 2016 | 2016 | 2015 | 2015 | 2015 | ||||||||||||
Non-Performing Assets | |||||||||||||||||
Non-Accrual Loans and Leases | |||||||||||||||||
Commercial | |||||||||||||||||
Commercial and Industrial | $ | 269 | $ | 666 | $ | 5,829 | $ | 8,532 | $ | 8,299 | |||||||
Commercial Mortgage | 1,194 | 3,401 | 3,469 | 1,058 | 716 | ||||||||||||
Total Commercial | 1,463 | 4,067 | 9,298 | 9,590 | 9,015 | ||||||||||||
Consumer | |||||||||||||||||
Residential Mortgage | 9,979 | 13,719 | 14,598 | 14,749 | 14,918 | ||||||||||||
Home Equity | 3,110 | 2,501 | 4,081 | 3,814 | 3,528 | ||||||||||||
Total Consumer | 13,089 | 16,220 | 18,679 | 18,563 | 18,446 | ||||||||||||
Total Non-Accrual Loans and Leases | 14,552 | 20,287 | 27,977 | 28,153 | 27,461 | ||||||||||||
Foreclosed Real Estate | 1,728 | 1,728 | 824 | 1,392 | 1,989 | ||||||||||||
Total Non-Performing Assets | $ | 16,280 | $ | 22,015 | $ | 28,801 | $ | 29,545 | $ | 29,450 | |||||||
Accruing Loans and Leases Past Due 90 Days or More | |||||||||||||||||
Commercial | |||||||||||||||||
Commercial and Industrial | $ | — | $ | — | $ | — | $ | — | $ | 750 | |||||||
Total Commercial | — | — | — | — | 750 | ||||||||||||
Consumer | |||||||||||||||||
Residential Mortgage | 5,640 | 4,219 | 4,453 | 5,060 | 4,789 | ||||||||||||
Home Equity | 1,128 | 2,096 | 1,710 | 1,396 | 2,395 | ||||||||||||
Automobile | 464 | 524 | 315 | 631 | 323 | ||||||||||||
Other 1 | 1,518 | 1,099 | 1,096 | 1,058 | 1,395 | ||||||||||||
Total Consumer | 8,750 | 7,938 | 7,574 | 8,145 | 8,902 | ||||||||||||
Total Accruing Loans and Leases Past Due 90 Days or More | $ | 8,750 | $ | 7,938 | $ | 7,574 | $ | 8,145 | $ | 9,652 | |||||||
Restructured Loans on Accrual Status | |||||||||||||||||
and Not Past Due 90 Days or More | $ | 52,173 | $ | 50,707 | $ | 49,430 | $ | 49,506 | $ | 48,339 | |||||||
Total Loans and Leases | $ | 8,331,469 | $ | 8,065,610 | $ | 7,878,985 | $ | 7,689,772 | $ | 7,428,438 | |||||||
Ratio of Non-Accrual Loans and Leases to Total Loans and Leases | 0.17 | % | 0.25 | % | 0.36 | % | 0.37 | % | 0.37 | % | |||||||
Ratio of Non-Performing Assets to Total Loans and Leases | |||||||||||||||||
and Foreclosed Real Estate | 0.20 | % | 0.27 | % | 0.37 | % | 0.38 | % | 0.40 | % | |||||||
Ratio of Commercial Non-Performing Assets to Total Commercial | |||||||||||||||||
Loans and Leases and Commercial Foreclosed Real Estate | 0.04 | % | 0.12 | % | 0.29 | % | 0.31 | % | 0.32 | % | |||||||
Ratio of Consumer Non-Performing Assets to Total Consumer Loans | |||||||||||||||||
and Leases and Consumer Foreclosed Real Estate | 0.29 | % | 0.37 | % | 0.41 | % | 0.44 | % | 0.45 | % | |||||||
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 | 0.30 | % | 0.37 | % | 0.46 | % | 0.49 | % | 0.53 | % | |||||||
Quarter to Quarter Changes in Non-Performing Assets | |||||||||||||||||
Balance at Beginning of Quarter | $ | 22,015 | $ | 28,801 | $ | 29,545 | $ | 29,450 | $ | 28,777 | |||||||
Additions | 1,300 | 4,002 | 2,353 | 4,427 | 1,909 | ||||||||||||
Reductions | |||||||||||||||||
Payments | (3,401 | ) | (6,012 | ) | (2,473 | ) | (1,191 | ) | (1,020 | ) | |||||||
Return to Accrual Status | (3,560 | ) | (4,272 | ) | (24 | ) | (1,748 | ) | — | ||||||||
Sales of Foreclosed Real Estate | — | (248 | ) | (458 | ) | (1,300 | ) | (83 | ) | ||||||||
Charge-offs/Write-downs | (74 | ) | (256 | ) | (142 | ) | (93 | ) | (133 | ) | |||||||
Total Reductions | (7,035 | ) | (10,788 | ) | (3,097 | ) | (4,332 | ) | (1,236 | ) | |||||||
Balance at End of Quarter | $ | 16,280 | $ | 22,015 | $ | 28,801 | $ | 29,545 | $ | 29,450 | |||||||
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 | Six Months Ended | |||||||||||||||||
June 30, | March 31, | June 30, | June 30, | |||||||||||||||
(dollars in thousands) | 2016 | 2016 | 2015 | 2016 | 2015 | |||||||||||||
Balance at Beginning of Period | $ | 111,249 | $ | 108,952 | $ | 113,348 | $ | 108,952 | $ | 114,575 | ||||||||
Loans and Leases Charged-Off | ||||||||||||||||||
Commercial | ||||||||||||||||||
Commercial and Industrial | (204 | ) | (257 | ) | (255 | ) | (461 | ) | (490 | ) | ||||||||
Consumer | ||||||||||||||||||
Residential Mortgage | (79 | ) | (205 | ) | (54 | ) | (284 | ) | (613 | ) | ||||||||
Home Equity | 17 | (643 | ) | (211 | ) | (626 | ) | (427 | ) | |||||||||
Automobile | (1,372 | ) | (1,560 | ) | (1,237 | ) | (2,932 | ) | (2,665 | ) | ||||||||
Other 1 | (2,117 | ) | (2,222 | ) | (1,739 | ) | (4,339 | ) | (3,389 | ) | ||||||||
Total Loans and Leases Charged-Off | (3,755 | ) | (4,887 | ) | (3,496 | ) | (8,642 | ) | (7,584 | ) | ||||||||
Recoveries on Loans and Leases Previously Charged-Off | ||||||||||||||||||
Commercial | ||||||||||||||||||
Commercial and Industrial | 403 | 6,867 | 456 | 7,270 | 1,102 | |||||||||||||
Commercial Mortgage | 14 | 14 | 14 | 28 | 28 | |||||||||||||
Construction | — | 23 | 8 | 23 | 16 | |||||||||||||
Lease Financing | 1 | 1 | 8 | 2 | 76 | |||||||||||||
Consumer | ||||||||||||||||||
Residential Mortgage | 279 | 201 | 96 | 480 | 438 | |||||||||||||
Home Equity | 322 | 513 | 566 | 835 | 1,447 | |||||||||||||
Automobile | 541 | 592 | 396 | 1,133 | 890 | |||||||||||||
Other 1 | 450 | 473 | 497 | 923 | 905 | |||||||||||||
Total Recoveries on Loans and Leases Previously Charged-Off | 2,010 | 8,684 | 2,041 | 10,694 | 4,902 | |||||||||||||
Net Loans and Leases Recovered (Charged-Off) | (1,745 | ) | 3,797 | (1,455 | ) | 2,052 | (2,682 | ) | ||||||||||
Provision for Credit Losses | 1,000 | (2,000 | ) | — | (1,000 | ) | — | |||||||||||
Provision for Unfunded Commitments | — | 500 | — | 500 | — | |||||||||||||
Balance at End of Period 2 | $ | 110,504 | $ | 111,249 | $ | 111,893 | $ | 110,504 | $ | 111,893 | ||||||||
Components | ||||||||||||||||||
Allowance for Loan and Lease Losses | $ | 103,932 | $ | 104,677 | $ | 106,006 | $ | 103,932 | $ | 106,006 | ||||||||
Reserve for Unfunded Commitments | 6,572 | 6,572 | 5,887 | 6,572 | 5,887 | |||||||||||||
Total Reserve for Credit Losses | $ | 110,504 | $ | 111,249 | $ | 111,893 | $ | 110,504 | $ | 111,893 | ||||||||
Average Loans and Leases Outstanding | $ | 8,205,104 | $ | 7,940,097 | $ | 7,300,506 | $ | 8,072,600 | $ | 7,177,467 | ||||||||
Ratio of Net Loans and Leases Charged-Off (Recovered) to | ||||||||||||||||||
Average Loans and Leases Outstanding (annualized) | 0.09 | % | -0.19 | % | 0.08 | % | -0.05 | % | 0.08 | % | ||||||||
Ratio of Allowance for Loan and Lease Losses to Loans and Leases Outstanding | 1.25 | % | 1.30 | % | 1.43 | % | 1.25 | % | 1.43 | % | ||||||||
1 Comprised of other revolving credit, installment, and lease financing. | ||||||||||||||||||
2 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 Segments Selected Financial Information | Table 13a | ||||||||||||||
Retail | Commercial | Investment | Treasury | Consolidated | |||||||||||
(dollars in thousands) | Banking | Banking | Services | and Other | Total | ||||||||||
Three Months Ended June 30, 2016 | |||||||||||||||
Net Interest Income | $ | 60,041 | $ | 38,151 | $ | 6,037 | $ | (679 | ) | $ | 103,550 | ||||
Provision for Credit Losses | 2,006 | (258 | ) | (5 | ) | (743 | ) | 1,000 | |||||||
Net Interest Income After Provision for Credit Losses | 58,035 | 38,409 | 6,042 | 64 | 102,550 | ||||||||||
Noninterest Income | 21,771 | 6,438 | 15,946 | 2,364 | 46,519 | ||||||||||
Noninterest Expense | (50,758 | ) | (17,762 | ) | (14,780 | ) | (2,771 | ) | (86,071 | ) | |||||
Income Before Provision for Income Taxes | 29,048 | 27,085 | 7,208 | (343 | ) | 62,998 | |||||||||
Provision for Income Taxes | (10,402 | ) | (9,608 | ) | (2,667 | ) | 3,924 | (18,753 | ) | ||||||
Net Income | $ | 18,646 | $ | 17,477 | $ | 4,541 | $ | 3,581 | $ | 44,245 | |||||
Total Assets as of June 30, 2016 | $ | 5,076,204 | $ | 3,239,572 | $ | 282,143 | $ | 7,262,982 | $ | 15,860,901 | |||||
Three Months Ended June 30, 2015 1 | |||||||||||||||
Net Interest Income | $ | 50,550 | $ | 35,886 | $ | 4,335 | $ | 7,011 | $ | 97,782 | |||||
Provision for Credit Losses | 1,727 | (266 | ) | (8 | ) | (1,453 | ) | — | |||||||
Net Interest Income After Provision for Credit Losses | 48,823 | 36,152 | 4,343 | 8,464 | 97,782 | ||||||||||
Noninterest Income | 20,809 | 5,892 | 15,680 | 3,544 | 45,925 | ||||||||||
Noninterest Expense | (49,158 | ) | (16,720 | ) | (14,572 | ) | (3,124 | ) | (83,574 | ) | |||||
Income Before Provision for Income Taxes | 20,474 | 25,324 | 5,451 | 8,884 | 60,133 | ||||||||||
Provision for Income Taxes | (7,219 | ) | (8,958 | ) | (2,017 | ) | (785 | ) | (18,979 | ) | |||||
Net Income | $ | 13,255 | $ | 16,366 | $ | 3,434 | $ | 8,099 | $ | 41,154 | |||||
Total Assets as of June 30, 2015 1 | $ | 4,404,619 | $ | 2,985,351 | $ | 204,253 | $ | 7,653,820 | $ | 15,248,043 | |||||
1 Certain prior period information has been reclassified to conform to current presentation. | |||||||||||||||
Bank of Hawaii Corporation and Subsidiaries | |||||||||||||||
Business Segments Selected Financial Information | Table 13b | ||||||||||||||
Retail | Commercial | Investment | Treasury | Consolidated | |||||||||||
(dollars in thousands) | Banking | Banking | Services | and Other | Total | ||||||||||
Six Months Ended June 30, 2016 | |||||||||||||||
Net Interest Income | $ | 118,051 | $ | 76,499 | $ | 12,489 | $ | (465 | ) | $ | 206,574 | ||||
Provision for Credit Losses | 4,841 | (6,884 | ) | (11 | ) | 1,054 | (1,000 | ) | |||||||
Net Interest Income After Provision for Credit Losses | 113,210 | 83,383 | 12,500 | (1,519 | ) | 207,574 | |||||||||
Noninterest Income | 42,578 | 14,038 | 29,970 | 16,140 | 102,726 | ||||||||||
Noninterest Expense | (103,499 | ) | (35,030 | ) | (30,207 | ) | (4,721 | ) | (173,457 | ) | |||||
Income Before Provision for Income Taxes | 52,289 | 62,391 | 12,263 | 9,900 | 136,843 | ||||||||||
Provision for Income Taxes | (18,629 | ) | (22,264 | ) | (4,537 | ) | 3,042 | (42,388 | ) | ||||||
Net Income | $ | 33,660 | $ | 40,127 | $ | 7,726 | $ | 12,942 | $ | 94,455 | |||||
Total Assets as of June 30, 2016 | $ | 5,076,204 | $ | 3,239,572 | $ | 282,143 | $ | 7,262,982 | $ | 15,860,901 | |||||
Six Months Ended June 30, 2015 1 | |||||||||||||||
Net Interest Income | $ | 98,899 | $ | 70,160 | $ | 8,636 | $ | 16,857 | $ | 194,552 | |||||
Provision for Credit Losses | 3,450 | (731 | ) | (17 | ) | (2,702 | ) | — | |||||||
Net Interest Income After Provision for Credit Losses | 95,449 | 70,891 | 8,653 | 19,559 | 194,552 | ||||||||||
Noninterest Income | 39,917 | 11,544 | 30,407 | 16,364 | 98,232 | ||||||||||
Noninterest Expense | (99,498 | ) | (34,607 | ) | (29,161 | ) | (7,223 | ) | (170,489 | ) | |||||
Income Before Provision for Income Taxes | 35,868 | 47,828 | 9,899 | 28,700 | 122,295 | ||||||||||
Provision for Income Taxes | (12,745 | ) | (16,824 | ) | (3,662 | ) | (5,468 | ) | (38,699 | ) | |||||
Net Income | $ | 23,123 | $ | 31,004 | $ | 6,237 | $ | 23,232 | $ | 83,596 | |||||
Total Assets as of June 30, 2015 1 | $ | 4,404,619 | $ | 2,985,351 | $ | 204,253 | $ | 7,653,820 | $ | 15,248,043 | |||||
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 | ||||||||||||||||||||
June 30, | March 31, | December 31, | September 30, | June 30, | ||||||||||||||||
(dollars in thousands, except per share amounts) | 2016 | 2016 | 2015 | 2015 | 2015 | |||||||||||||||
Quarterly Operating Results | ||||||||||||||||||||
Interest Income | ||||||||||||||||||||
Interest and Fees on Loans and Leases | $ | 82,323 | $ | 80,895 | $ | 78,122 | $ | 75,874 | $ | 73,565 | ||||||||||
Income on Investment Securities | ||||||||||||||||||||
Available-for-Sale | 10,521 | 10,814 | 10,829 | 10,192 | 10,273 | |||||||||||||||
Held-to-Maturity | 20,168 | 20,391 | 21,722 | 20,689 | 22,832 | |||||||||||||||
Deposits | 2 | 4 | 1 | 2 | 2 | |||||||||||||||
Funds Sold | 618 | 753 | 315 | 291 | 268 | |||||||||||||||
Other | 153 | 212 | 381 | 312 | 310 | |||||||||||||||
Total Interest Income | 113,785 | 113,069 | 111,370 | 107,360 | 107,250 | |||||||||||||||
Interest Expense | ||||||||||||||||||||
Deposits | 3,081 | 2,886 | 2,443 | 2,410 | 2,405 | |||||||||||||||
Securities Sold Under Agreements to Repurchase | 6,134 | 6,153 | 6,246 | 6,307 | 6,440 | |||||||||||||||
Funds Purchased | 3 | 3 | 3 | 3 | 3 | |||||||||||||||
Other Debt | 1,017 | 1,003 | 1,034 | 749 | 620 | |||||||||||||||
Total Interest Expense | 10,235 | 10,045 | 9,726 | 9,469 | 9,468 | |||||||||||||||
Net Interest Income | 103,550 | 103,024 | 101,644 | 97,891 | 97,782 | |||||||||||||||
Provision for Credit Losses | 1,000 | (2,000 | ) | 1,000 | — | — | ||||||||||||||
Net Interest Income After Provision for Credit Losses | 102,550 | 105,024 | 100,644 | 97,891 | 97,782 | |||||||||||||||
Noninterest Income | ||||||||||||||||||||
Trust and Asset Management | 12,707 | 11,256 | 11,243 | 11,907 | 12,355 | |||||||||||||||
Mortgage Banking | 4,088 | 3,189 | 3,130 | 3,291 | 3,469 | |||||||||||||||
Service Charges on Deposit Accounts | 8,150 | 8,443 | 8,663 | 8,669 | 8,203 | |||||||||||||||
Fees, Exchange, and Other Service Charges | 13,978 | 13,444 | 13,764 | 13,340 | 13,352 | |||||||||||||||
Investment Securities Gains (Losses), Net | (312 | ) | 11,180 | (181 | ) | 24 | 86 | |||||||||||||
Annuity and Insurance | 2,006 | 1,901 | 2,014 | 1,721 | 1,885 | |||||||||||||||
Bank-Owned Life Insurance | 1,551 | 1,548 | 1,608 | 1,609 | 2,088 | |||||||||||||||
Other | 4,351 | 5,246 | 4,525 | 2,660 | 4,487 | |||||||||||||||
Total Noninterest Income | 46,519 | 56,207 | 44,766 | 43,221 | 45,925 | |||||||||||||||
Noninterest Expense | ||||||||||||||||||||
Salaries and Benefits | 50,289 | 50,514 | 47,997 | 46,576 | 47,610 | |||||||||||||||
Net Occupancy | 7,158 | 7,003 | 4,876 | 7,403 | 8,605 | |||||||||||||||
Net Equipment | 5,065 | 5,409 | 5,244 | 4,804 | 4,826 | |||||||||||||||
Data Processing | 3,972 | 3,951 | 5,106 | 3,920 | 3,673 | |||||||||||||||
Professional Fees | 2,047 | 2,639 | 2,803 | 2,258 | 2,265 | |||||||||||||||
FDIC Insurance | 2,144 | 2,352 | 2,322 | 2,139 | 2,068 | |||||||||||||||
Other | 15,396 | 15,518 | 17,379 | 24,788 | 14,527 | |||||||||||||||
Total Noninterest Expense | 86,071 | 87,386 | 85,727 | 91,888 | 83,574 | |||||||||||||||
Income Before Provision for Income Taxes | 62,998 | 73,845 | 59,683 | 49,224 | 60,133 | |||||||||||||||
Provision for Income Taxes | 18,753 | 23,635 | 16,851 | 14,948 | 18,979 | |||||||||||||||
Net Income | $ | 44,245 | $ | 50,210 | $ | 42,832 | $ | 34,276 | $ | 41,154 | ||||||||||
Basic Earnings Per Share | $ | 1.04 | $ | 1.17 | $ | 1.00 | $ | 0.79 | $ | 0.95 | ||||||||||
Diluted Earnings Per Share | $ | 1.03 | $ | 1.16 | $ | 0.99 | $ | 0.79 | $ | 0.95 | ||||||||||
Balance Sheet Totals | ||||||||||||||||||||
Loans and Leases | $ | 8,331,469 | $ | 8,065,610 | $ | 7,878,985 | $ | 7,689,772 | $ | 7,428,438 | ||||||||||
Total Assets | 15,860,901 | 15,654,695 | 15,455,016 | 15,164,123 | 15,248,043 | |||||||||||||||
Total Deposits | 13,643,807 | 13,488,892 | 13,251,103 | 12,936,962 | 13,090,695 | |||||||||||||||
Total Shareholders' Equity | 1,157,219 | 1,138,753 | 1,116,260 | 1,098,354 | 1,082,939 | |||||||||||||||
Performance Ratios | ||||||||||||||||||||
Return on Average Assets | 1.14 | % | 1.30 | % | 1.11 | % | 0.89 | % | 1.10 | % | ||||||||||
Return on Average Shareholders' Equity | 15.56 | 17.88 | 15.41 | 12.45 | 15.33 | |||||||||||||||
Efficiency Ratio 1 | 57.35 | 54.88 | 58.55 | 65.12 | 58.16 | |||||||||||||||
Net Interest Margin 2 | 2.85 | 2.86 | 2.85 | 2.77 | 2.81 | |||||||||||||||
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 | ||||||||||||||||||||
Five Months Ended | Year Ended | ||||||||||||||||||||
($ in millions; jobs in thousands) | May 31, 2016 | December 31, 2015 | December 31, 2014 | ||||||||||||||||||
Hawaii Economic Trends | |||||||||||||||||||||
State General Fund Revenues 1 | $ | 2,601.0 | 4.4 | % | $ | 5,998.6 | 8.4 | % | $ | 5,535.7 | 1.6 | % | |||||||||
General Excise and Use Tax Revenue 1 | $ | 1,351.1 | 3.3 | % | $ | 3,141.5 | 5.4 | % | $ | 2,979.8 | 2.5 | % | |||||||||
Jobs 2 | 665.8 | 658.8 | 643.7 | ||||||||||||||||||
June 30, | December 31, | ||||||||||||||||||||
(spot rates) | 2016 | 2015 | 2014 | ||||||||||||||||||
Unemployment 3 | |||||||||||||||||||||
Statewide, seasonally adjusted | 3.3 | % | 3.2 | % | 4.0 | % | |||||||||||||||
Oahu | 3.6 | 2.7 | 3.5 | ||||||||||||||||||
Island of Hawaii | 5.0 | 3.7 | 4.7 | ||||||||||||||||||
Maui | 3.9 | 3.1 | 3.8 | ||||||||||||||||||
Kauai | 4.0 | 3.5 | 4.3 | ||||||||||||||||||
June 30, | December 31, | ||||||||||||||||||||
(percentage change, except months of inventory) | 2016 | 2015 | 2014 | 2013 | |||||||||||||||||
Housing Trends (Single Family Oahu) 4 | |||||||||||||||||||||
Median Home Price | 6.1 | % | 3.7 | % | 3.8 | % | 4.8 | % | |||||||||||||
Home Sales Volume (units) | 7.8 | % | 5.2 | % | (0.8 | ) | % | 4.6 | % | ||||||||||||
Months of Inventory | 3.0 | 2.6 | 2.6 | 2.7 | |||||||||||||||||
Monthly Visitor Arrivals, | Percentage Change | ||||||||||||||||||||
(in thousands) | Not Seasonally Adjusted | from Previous Year | |||||||||||||||||||
Tourism 5 | |||||||||||||||||||||
May 31, 2016 | 718.9 | 1.3 | |||||||||||||||||||
April 30, 2016 | 700.6 | 3.4 | |||||||||||||||||||
March 31, 2016 | 786.3 | 0.8 | |||||||||||||||||||
February 29, 2016 | 688.8 | 4.1 | |||||||||||||||||||
January 31, 2016 | 721.0 | 6.2 | |||||||||||||||||||
December 31, 2015 | 794.2 | 3.7 | |||||||||||||||||||
November 30, 2015 | 661.4 | 3.7 | |||||||||||||||||||
October 31, 2015 | 692.9 | 4.8 | |||||||||||||||||||
September 30, 2015 | 652.6 | 4.7 | |||||||||||||||||||
August 31, 2015 | 755.9 | 2.9 | |||||||||||||||||||
July 31, 2015 | 816.3 | 5.6 | |||||||||||||||||||
June 30, 2015 | 767.9 | 6.0 | |||||||||||||||||||
May 31, 2015 | 709.7 | 9.3 | |||||||||||||||||||
April 30, 2015 | 677.8 | 2.3 | |||||||||||||||||||
March 31, 2015 | 780.1 | 7.0 | |||||||||||||||||||
February 28, 2015 | 661.7 | 2.3 | |||||||||||||||||||
January 31, 2015 | 678.9 | (0.6 | ) | ||||||||||||||||||
December 31, 2014 | 766.0 | 6.3 | |||||||||||||||||||
November 30, 2014 | 638.0 | 2.2 | |||||||||||||||||||
October 31, 2014 | 661.0 | 3.2 | |||||||||||||||||||
September 30, 2014 | 623.1 | 4.2 | |||||||||||||||||||
August 31, 2014 | 734.7 | (1.9 | ) | ||||||||||||||||||
July 31, 2014 | 772.8 | 2.0 | |||||||||||||||||||
June 30, 2014 | 724.5 | 1.1 | |||||||||||||||||||
May 31, 2014 | 649.1 | 1.8 | |||||||||||||||||||
April 30, 2014 | 662.6 | (0.7 | ) | ||||||||||||||||||
March 31, 2014 | 728.8 | (5.2 | ) | ||||||||||||||||||
February 28, 2014 | 646.8 | (4.3 | ) | ||||||||||||||||||
January 31, 2014 | 682.6 | 0.1 | |||||||||||||||||||
1 Source: Hawaii Department of Business, Economic Development & Tourism | |||||||||||||||||||||
2 Source: U. S. Bureau of Labor | |||||||||||||||||||||
3 Source: Hawaii Department of Labor and Industrial Relations, County jobs data not seasonally adjusted. | |||||||||||||||||||||
4 Source: Honolulu Board of REALTORS | |||||||||||||||||||||
5 Source: Hawaii Tourism Authority | |||||||||||||||||||||
Note: Certain prior period seasonally adjusted information has been revised. | |||||||||||||||||||||