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) | April 24, 2017 | |||
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))
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
o Emerging growth company
o If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Item 2.02. Results of Operations and Financial Condition.
On April 24, 2017, Bank of Hawaii Corporation announced its results of operations for the quarter ended March 31, 2017. 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 | April 24, 2017 Press Release: Bank of Hawaii Corporation First Quarter 2017 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: April 24, 2017 | Bank of Hawaii Corporation | |
By: | /s/ Mark A. Rossi | |
Mark A. Rossi | ||
Vice Chairman and Corporate Secretary | ||
 | ||
 |  | |
Bank of Hawaii Corporation First Quarter 2017 Financial Results
Ÿ Diluted Earnings Per Share $1.20
Ÿ Net Income $51.2 Million
Ÿ Board of Directors Authorizes Dividend of $0.50 Per Share
FOR IMMEDIATE RELEASE
HONOLULU, HI (April 24, 2017) -- Bank of Hawaii Corporation (NYSE: BOH) today reported diluted earnings per share of $1.20 for the first quarter of 2017, up from $1.02 in the previous quarter and up from $1.16 in the same quarter last year. Net income for the first quarter of 2017 was $51.2 million, an increase of $7.7 million compared with net income of $43.5 million in the fourth quarter of 2016 and up $1.0 million from net income of $50.2 million in the first quarter of 2016.
Loan and lease balances increased to $9.1 billion at March 31, 2017, up 1.8 percent from December 31, 2016 and 13.0 percent compared with March 31, 2016. Deposit growth remained strong during the quarter, increasing 1.1 percent from December 31, 2016 and 7.3 percent from March 31, 2016.
"Bank of Hawaii Corporation began 2017 with good financial performance in the first quarter," said Peter S. Ho, Chairman, President, and CEO. “Our balance sheet growth remained strong and we maintained our disciplined approach to risk and capital management. During the quarter we sold $12.5 million in Visa Class B shares, our margin expanded to 2.89 percent and our asset quality continued its stable trend.”
The return on average assets for the first quarter of 2017 was 1.26 percent, an increase from 1.07 percent during the previous quarter and down from 1.30 percent in the same quarter last year. The return on average equity for the first quarter of 2017 was 17.63 percent, up from 14.90 percent in the fourth quarter of 2016 and down slightly from 17.88 percent in the first quarter of 2016. The efficiency ratio during the first quarter of 2017 was 53.42 percent, an improvement from 58.33 percent in the previous quarter and 54.88 percent in the same quarter last year.
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Bank of Hawaii Corporation First Quarter 2017 Financial Results Page 2
Financial Highlights
Net interest income, on a taxable-equivalent basis, for the first quarter of 2017 was $112.9 million, up $2.8 million from net interest income of $110.1 million in the fourth quarter of 2016 and up $6.9 million from net interest income of $106.0 million in the first quarter of 2016. Net interest income in the first quarter of 2016 included interest recoveries of $1.3 million related to one commercial client in Guam. The net interest margin was 2.89 percent for the first quarter of 2017, up 6 basis points compared with the previous quarter and up 3 basis points from the first quarter last year. Analyses of the changes in net interest income are included in Tables 8a and 8b.
Results for the first quarter of 2017 included a provision for credit losses of $4.4 million due to continued growth of loans and leases. Results for the fourth quarter of 2016 included a provision for credit losses of $3.3 million. Results for the first quarter of 2016 included a negative provision for credit losses of $2.0 million largely due to a recovery of loans previously charged off related to the previously mentioned commercial client.
Noninterest income was $55.9 million in the first quarter of 2017, an increase of $9.4 million compared with noninterest income of $46.5 million in the fourth quarter of 2016 and a decrease of $0.3 million compared with noninterest income of $56.2 million in the first quarter of 2016. Noninterest income in the first quarter of 2017 included a gain of $12.5 million resulting from the sale of 90,000 Visa Class B shares. There were no significant items in noninterest income during the fourth quarter of 2016. Noninterest income in the first quarter of 2016 included a gain of $11.4 million resulting from the sale of 100,000 Visa Class B shares and net gains of $1.9 million related to sales of leased assets. As of March 31, 2017, the Company has 90,914 Visa Class B shares remaining. Mortgage banking income totaled $3.3 million in the first quarter of 2017 compared with $6.3 million in the previous quarter and $3.2 million in the same quarter last year.
Noninterest expense was $88.6 million in the first quarter of 2017, down $1.0 million from noninterest expense of $89.6 million in the fourth quarter of 2016 and up $1.2 million from noninterest expense of $87.4 million in the same quarter last year. Noninterest expense in the first quarter of 2017 included seasonal payroll expenses of approximately $2.5 million. Noninterest expense in the fourth quarter of 2016 included expenses of $1.3 million in compensation related to the increase in the stock price during the quarter partially offset by a net gain of $1.0 million on the sale of a branch building. Noninterest expense in the first quarter of 2016 included seasonal payroll-related expenses of approximately $2.5 million and an increase of $0.5 million to the provision for unfunded commitments partially offset by a net gain of $1.5 million for the sale of a real estate property in Guam.
The effective tax rate for the first quarter of 2017 was 29.72 percent compared with 28.38 percent in the previous quarter and 32.01 percent during the same quarter last year.
The Company’s business segments are defined as Retail Banking, Commercial Banking, Investment Services, 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 for the business segments is included in Table 13.
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Bank of Hawaii Corporation First Quarter 2017 Financial Results Page 3
Asset Quality
The Company’s asset quality remained solid during the first quarter of 2017. Total non-performing assets decreased to $19.0 million at March 31, 2017, down from non-performing assets of $19.8 million at December 31, 2016 and $22.0 million at March 31, 2016. As a percentage of total loans and leases, including foreclosed real estate, non-performing assets were 0.21 percent at the end of the first quarter of 2017, down from 0.22 percent at the end of the fourth quarter of 2016 and 0.27 percent at the end of the first quarter last year.
Accruing loans and leases past due 90 days or more were $5.9 million at March 31, 2017, down from $7.1 million at December 31, 2016 and $7.9 million at March 31, 2016. Restructured loans not included in non-accrual loans or accruing loans past due 90 days or more were $53.0 million at March 31, 2017, up from $52.2 million at December 31, 2016 and $50.7 million at March 31, 2016. More information on non-performing assets and accruing loans and leases past due 90 days or more is presented in Table 11.
Net loans and leases charged off during the first quarter of 2017 were $3.6 million or 0.16 percent annualized of total average loans and leases outstanding. Loan and lease charge-offs of $5.7 million during the quarter were partially offset by recoveries of $2.1 million. Net charge-offs during the fourth quarter of 2016 were $3.0 million or 0.14 percent annualized of total average loans and leases outstanding and were comprised of $5.0 million in charge-offs partially offset by recoveries of $1.9 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.
The allowance for loan and lease losses was $105.1 million at March 31, 2017, an increase from $104.3 million at December 31, 2016 and $104.7 million at March 31, 2016. The ratio of the allowance for loan and lease losses to total loans and leases outstanding was 1.15 percent at March 31, 2017 compared with 1.17 percent at December 31, 2016 and 1.30 percent at March 31, 2016. The reserve for unfunded commitments was $6.6 million at March 31, 2017 unchanged from December 31, 2016 and March 31, 2016. 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 were $16.66 billion at March 31, 2017, up from $16.49 billion at December 31, 2016 and $15.65 billion at March 31, 2016. Average total assets were $16.43 billion during the first quarter of 2017, an increase from average total assets of $16.21 billion during the previous quarter and $15.54 billion during the same quarter last year.
The investment securities portfolio was $6.19 billion at March 31, 2017 compared with $6.02 billion at December 31, 2016 and $6.21 billion at March 31, 2016. The portfolio at March 31, 2017 remains largely comprised of securities issued by U. S. government agencies and includes $3.85 billion in securities held to maturity and $2.34 billion in securities available for sale.
Total loans and leases were $9.11 billion at March 31, 2017, up from $8.95 billion at December 31, 2016 and $8.07 billion at March 31, 2016. Average total loans and leases were $9.02 billion during the first quarter of 2017, up from $8.81 billion during the fourth quarter of 2016 and $7.94 billion during the same quarter last year.
The commercial loan portfolio was $3.63 billion at the end of the first quarter of 2017, up slightly from commercial loans of $3.62 billion at the end of the fourth quarter of 2016 and up 11.5 percent from commercial loans of $3.26 billion at the end of the same quarter last year. The consumer loan portfolio increased to $5.48 billion at the end of the first quarter of 2017, up 2.8 percent from consumer loans of $5.33 billion at the end of the fourth quarter of 2016 and up 14.0 percent from $4.81 billion at the end of the same quarter last year. Loan and lease portfolio balances are summarized in Table 10.
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Bank of Hawaii Corporation First Quarter 2017 Financial Results Page 4
Total deposits increased to $14.48 billion at March 31, 2017 compared with $14.32 billion at December 31, 2016 and $13.49 billion at March 31, 2016. Average total deposits were $14.22 billion during the first quarter of 2017, up from $14.00 billion during the previous quarter and $13.33 billion during the same quarter last year.
Consumer deposits increased to $7.20 billion at the end of the first quarter of 2017, up 2.8 percent from the previous quarter and up 9.6 percent compared with the first quarter last year. Commercial deposits were $6.05 billion at the end of the first quarter of 2017, down 1.0 percent from the previous quarter and up 6.6 percent compared with the first quarter last year. Other deposits, including public funds, were $1.23 billion at the end of the first quarter, up 1.3 percent from the previous quarter and down 1.1 percent compared with the same quarter last year. Deposit balances are summarized in Tables 7 and 10.
Total shareholders’ equity increased to $1.19 billion at March 31, 2017 compared with $1.16 billion at December 31, 2016 and $1.14 billion at March 31, 2016. The Tier 1 Capital Ratio was 13.41 percent at March 31, 2017 compared with 13.24 percent at December 31, 2016 and 13.85 percent at March 31, 2016. The Tier 1 Leverage Ratio at March 31, 2017 was 7.29 percent compared with 7.21 percent at December 31, 2016 and 7.25 percent at March 31, 2016.
During the first quarter of 2017, the Company repurchased 114.0 thousand shares of common stock at a total cost of $9.6 million under its share repurchase program. The average cost was $84.53 per share repurchased. From the beginning of the share repurchase program initiated during July 2001 through March 31, 2017, the Company has repurchased 53.8 million shares and returned over $2.0 billion to shareholders at an average cost of $37.94 per share. Remaining buyback authority under the share repurchase program was $55.4 million at March 31, 2017. From April 1 through April 21, 2017 the Company repurchased an additional 31.3 thousand shares of common stock at an average cost of $79.97 per share.
The Company’s Board of Directors declared a quarterly cash dividend of $0.50 per share on the Company’s outstanding shares. The dividend will be payable on June 14, 2017 to shareholders of record at the close of business on May 31, 2017.
Hawaii Economy
General economic conditions in Hawaii remained positive during the first quarter of 2017 due to a continuation of the strong tourism market, active construction industry, low unemployment, and robust real estate market. For the first two months of 2017, total visitor arrivals increased 3.3 percent and visitor spending increased 9.0 percent compared to the same period in 2016. The statewide seasonally-adjusted unemployment rate was 2.7 percent in March 2017 compared to 4.5 percent nationally.
For the first quarter of 2017, the volume of single-family home sales on Oahu increased 1.0 percent and the volume of condominium sales on Oahu increased 7.1 percent compared with the same period last year. During the first quarter of 2017, the median sales price of a single-family home on Oahu increased 3.5 percent and the median sales price of a condominium on Oahu increased 2.6 percent compared with the same period last year. As of March 31, 2017, months of inventory of single-family homes and condominiums on Oahu were at 2.7 months. More information on current Hawaii economic trends is presented in Table 15.
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Bank of Hawaii Corporation First Quarter 2017 Financial Results Page 5
Conference Call Information
The Company will review its first quarter financial results today at 2:00 p.m. Eastern Daylight 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 (844) 543-5235 in the United States and 1 (703) 318-2209 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, April 24, 2017. The replay number is 1 (855) 859-2056 in the United States and 1 (404) 537-3406 from international locations. Enter the pass code 4087401 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, 2016, 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. 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) | 2017 | 2016 | 2016 | |||||||||
For the Period: | ||||||||||||
Operating Results | ||||||||||||
Net Interest Income | $ | 109,872 | $ | 107,093 | $ | 103,024 | ||||||
Provision for Credit Losses | 4,400 | 3,250 | (2,000 | ) | ||||||||
Total Noninterest Income | 55,916 | 46,503 | 56,207 | |||||||||
Total Noninterest Expense | 88,568 | 89,589 | 87,386 | |||||||||
Net Income | 51,176 | 43,513 | 50,210 | |||||||||
Basic Earnings Per Share | 1.21 | 1.03 | 1.17 | |||||||||
Diluted Earnings Per Share | 1.20 | 1.02 | 1.16 | |||||||||
Dividends Declared Per Share | 0.50 | 0.48 | 0.45 | |||||||||
Performance Ratios | ||||||||||||
Return on Average Assets | 1.26 | % | 1.07 | % | 1.30 | % | ||||||
Return on Average Shareholders' Equity | 17.63 | 14.90 | 17.88 | |||||||||
Efficiency Ratio 1 | 53.42 | 58.33 | 54.88 | |||||||||
Net Interest Margin 2 | 2.89 | 2.83 | 2.86 | |||||||||
Dividend Payout Ratio 3 | 41.32 | 46.60 | 38.46 | |||||||||
Average Shareholders' Equity to Average Assets | 7.16 | 7.17 | 7.27 | |||||||||
Average Balances | ||||||||||||
Average Loans and Leases | $ | 9,020,351 | $ | 8,813,755 | $ | 7,940,097 | ||||||
Average Assets | 16,434,606 | 16,212,940 | 15,537,073 | |||||||||
Average Deposits | 14,218,886 | 13,997,318 | 13,334,550 | |||||||||
Average Shareholders' Equity | 1,177,326 | 1,161,967 | 1,129,561 | |||||||||
Per Share of Common Stock | ||||||||||||
Book Value | $ | 27.92 | $ | 27.24 | $ | 26.43 | ||||||
Tangible Book Value | 27.18 | 26.50 | 25.70 | |||||||||
Market Value | ||||||||||||
Closing | 82.36 | 88.69 | 68.28 | |||||||||
High | 90.80 | 89.72 | 69.37 | |||||||||
Low | 77.03 | 71.73 | 54.55 | |||||||||
March 31, | December 31, | March 31, | ||||||||||
2017 | 2016 | 2016 | ||||||||||
As of Period End: | ||||||||||||
Balance Sheet Totals | ||||||||||||
Loans and Leases | $ | 9,113,809 | $ | 8,949,785 | $ | 8,065,610 | ||||||
Total Assets | 16,664,215 | 16,492,367 | 15,654,695 | |||||||||
Total Deposits | 14,476,533 | 14,320,240 | 13,488,892 | |||||||||
Other Debt | 267,921 | 267,938 | 220,771 | |||||||||
Total Shareholders' Equity | 1,193,137 | 1,161,537 | 1,138,753 | |||||||||
Asset Quality | ||||||||||||
Non-Performing Assets | $ | 19,003 | $ | 19,761 | $ | 22,015 | ||||||
Allowance for Loan and Lease Losses | 105,064 | 104,273 | 104,677 | |||||||||
Allowance to Loans and Leases Outstanding | 1.15 | % | 1.17 | % | 1.30 | % | ||||||
Capital Ratios | ||||||||||||
Common Equity Tier 1 Capital Ratio | 13.41 | % | 13.24 | % | 13.85 | % | ||||||
Tier 1 Capital Ratio | 13.41 | 13.24 | 13.85 | |||||||||
Total Capital Ratio | 14.66 | 14.49 | 15.10 | |||||||||
Tier 1 Leverage Ratio | 7.29 | 7.21 | 7.25 | |||||||||
Total Shareholders' Equity to Total Assets | 7.16 | 7.04 | 7.27 | |||||||||
Tangible Common Equity to Tangible Assets 4 | 6.98 | 6.86 | 7.09 | |||||||||
Tangible Common Equity to Risk-Weighted Assets 4 | 13.04 | 12.81 | 13.62 | |||||||||
Non-Financial Data | ||||||||||||
Full-Time Equivalent Employees | 2,115 | 2,122 | 2,139 | |||||||||
Branches | 69 | 69 | 70 | |||||||||
ATMs | 441 | 449 | 452 | |||||||||
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 | ||||||||||||
March 31, | December 31, | March 31, | |||||||||||
(dollars in thousands) | 2017 | 2016 | 2016 | ||||||||||
Total Shareholders' Equity | $ | 1,193,137 | $ | 1,161,537 | $ | 1,138,753 | |||||||
Less: | Goodwill | 31,517 | 31,517 | 31,517 | |||||||||
Tangible Common Equity | $ | 1,161,620 | $ | 1,130,020 | $ | 1,107,236 | |||||||
Total Assets | $ | 16,664,215 | $ | 16,492,367 | $ | 15,654,695 | |||||||
Less: | Goodwill | 31,517 | 31,517 | 31,517 | |||||||||
Tangible Assets | $ | 16,632,698 | $ | 16,460,850 | $ | 15,623,178 | |||||||
Risk-Weighted Assets, determined in accordance | |||||||||||||
with prescribed regulatory requirements | $ | 8,908,024 | $ | 8,823,485 | $ | 8,130,093 | |||||||
Total Shareholders' Equity to Total Assets | 7.16 | % | 7.04 | % | 7.27 | % | |||||||
Tangible Common Equity to Tangible Assets (Non-GAAP) | 6.98 | % | 6.86 | % | 7.09 | % | |||||||
Tier 1 Capital Ratio | 13.41 | % | 13.24 | % | 13.85 | % | |||||||
Tangible Common Equity to Risk-Weighted Assets (Non-GAAP) | 13.04 | % | 12.81 | % | 13.62 | % | |||||||
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) | 2017 | 2016 | 2016 | ||||||
Interest Income | |||||||||
Interest and Fees on Loans and Leases | $ | 87,937 | $ | 86,532 | $ | 80,895 | |||
Income on Investment Securities | |||||||||
Available-for-Sale | 11,084 | 10,244 | 10,814 | ||||||
Held-to-Maturity | 19,706 | 19,213 | 20,391 | ||||||
Deposits | 5 | 2 | 4 | ||||||
Funds Sold | 890 | 795 | 753 | ||||||
Other | 230 | 281 | 212 | ||||||
Total Interest Income | 119,852 | 117,067 | 113,069 | ||||||
Interest Expense | |||||||||
Deposits | 3,691 | 3,448 | 2,886 | ||||||
Securities Sold Under Agreements to Repurchase | 5,185 | 5,406 | 6,153 | ||||||
Funds Purchased | 3 | 3 | 3 | ||||||
Other Debt | 1,101 | 1,117 | 1,003 | ||||||
Total Interest Expense | 9,980 | 9,974 | 10,045 | ||||||
Net Interest Income | 109,872 | 107,093 | 103,024 | ||||||
Provision for Credit Losses | 4,400 | 3,250 | (2,000 | ) | |||||
Net Interest Income After Provision for Credit Losses | 105,472 | 103,843 | 105,024 | ||||||
Noninterest Income | |||||||||
Trust and Asset Management | 11,479 | 11,232 | 11,256 | ||||||
Mortgage Banking | 3,300 | 6,256 | 3,189 | ||||||
Service Charges on Deposit Accounts | 8,325 | 8,537 | 8,443 | ||||||
Fees, Exchange, and Other Service Charges | 13,332 | 13,731 | 13,444 | ||||||
Investment Securities Gains (Losses), Net | 12,133 | (337 | ) | 11,180 | |||||
Annuity and Insurance | 1,995 | 1,457 | 1,901 | ||||||
Bank-Owned Life Insurance | 1,497 | 1,551 | 1,548 | ||||||
Other | 3,855 | 4,076 | 5,246 | ||||||
Total Noninterest Income | 55,916 | 46,503 | 56,207 | ||||||
Noninterest Expense | |||||||||
Salaries and Benefits | 51,602 | 50,622 | 50,514 | ||||||
Net Occupancy | 8,168 | 7,581 | 7,003 | ||||||
Net Equipment | 5,501 | 5,191 | 5,409 | ||||||
Data Processing | 3,410 | 3,665 | 3,951 | ||||||
Professional Fees | 2,779 | 2,990 | 2,639 | ||||||
FDIC Insurance | 2,209 | 2,015 | 2,352 | ||||||
Other | 14,899 | 17,525 | 15,518 | ||||||
Total Noninterest Expense | 88,568 | 89,589 | 87,386 | ||||||
Income Before Provision for Income Taxes | 72,820 | 60,757 | 73,845 | ||||||
Provision for Income Taxes | 21,644 | 17,244 | 23,635 | ||||||
Net Income | $ | 51,176 | $ | 43,513 | $ | 50,210 | |||
Basic Earnings Per Share | $ | 1.21 | $ | 1.03 | $ | 1.17 | |||
Diluted Earnings Per Share | $ | 1.20 | $ | 1.02 | $ | 1.16 | |||
Dividends Declared Per Share | $ | 0.50 | $ | 0.48 | $ | 0.45 | |||
Basic Weighted Average Shares | 42,406,006 | 42,386,480 | 42,920,794 | ||||||
Diluted Weighted Average Shares | 42,749,866 | 42,672,470 | 43,126,526 | ||||||
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) | 2017 | 2016 | 2016 | |||||||
Net Income | $ | 51,176 | $ | 43,513 | $ | 50,210 | ||||
Other Comprehensive Income (Loss), Net of Tax: | ||||||||||
Net Unrealized Gains (Losses) on Investment Securities | 4,894 | (18,641 | ) | 8,694 | ||||||
Defined Benefit Plans | 146 | (453 | ) | 141 | ||||||
Total Other Comprehensive Income (Loss) | 5,040 | (19,094 | ) | 8,835 | ||||||
Comprehensive Income | $ | 56,216 | $ | 24,419 | $ | 59,045 | ||||
Bank of Hawaii Corporation and Subsidiaries | |||||||||
Consolidated Statements of Condition | Table 5 | ||||||||
March 31, | December 31, | March 31, | |||||||
(dollars in thousands) | 2017 | 2016 | 2016 | ||||||
Assets | |||||||||
Interest-Bearing Deposits in Other Banks | $ | 3,486 | $ | 3,187 | $ | 4,453 | |||
Funds Sold | 620,065 | 707,343 | 626,206 | ||||||
Investment Securities | |||||||||
Available-for-Sale | 2,341,570 | 2,186,041 | 2,293,751 | ||||||
Held-to-Maturity (Fair Value of $3,848,609; $3,827,527; and $3,981,830) | 3,848,088 | 3,832,997 | 3,911,703 | ||||||
Loans Held for Sale | 20,899 | 62,499 | 16,854 | ||||||
Loans and Leases | 9,113,809 | 8,949,785 | 8,065,610 | ||||||
Allowance for Loan and Lease Losses | (105,064 | ) | (104,273 | ) | (104,677 | ) | |||
Net Loans and Leases | 9,008,745 | 8,845,512 | 7,960,933 | ||||||
Total Earning Assets | 15,842,853 | 15,637,579 | 14,813,900 | ||||||
Cash and Due from Banks | 119,972 | 169,077 | 164,012 | ||||||
Premises and Equipment, Net | 114,865 | 113,505 | 111,086 | ||||||
Accrued Interest Receivable | 48,654 | 46,444 | 47,504 | ||||||
Foreclosed Real Estate | 2,529 | 1,686 | 1,728 | ||||||
Mortgage Servicing Rights | 24,291 | 23,663 | 22,663 | ||||||
Goodwill | 31,517 | 31,517 | 31,517 | ||||||
Bank-Owned Life Insurance | 275,685 | 274,188 | 269,723 | ||||||
Other Assets | 203,849 | 194,708 | 192,562 | ||||||
Total Assets | $ | 16,664,215 | $ | 16,492,367 | $ | 15,654,695 | |||
Liabilities | |||||||||
Deposits | |||||||||
Noninterest-Bearing Demand | $ | 4,593,783 | $ | 4,772,727 | $ | 4,329,321 | |||
Interest-Bearing Demand | 2,886,573 | 2,934,107 | 2,759,357 | ||||||
Savings | 5,596,080 | 5,395,699 | 5,172,206 | ||||||
Time | 1,400,097 | 1,217,707 | 1,228,008 | ||||||
Total Deposits | 14,476,533 | 14,320,240 | 13,488,892 | ||||||
Funds Purchased | 4,616 | 9,616 | 7,333 | ||||||
Short-Term Borrowings | — | — | 408 | ||||||
Securities Sold Under Agreements to Repurchase | 505,292 | 523,378 | 586,785 | ||||||
Other Debt | 267,921 | 267,938 | 220,771 | ||||||
Retirement Benefits Payable | 48,436 | 48,451 | 47,408 | ||||||
Accrued Interest Payable | 6,410 | 5,334 | 5,661 | ||||||
Taxes Payable and Deferred Taxes | 42,046 | 21,674 | 43,134 | ||||||
Other Liabilities | 119,824 | 134,199 | 115,550 | ||||||
Total Liabilities | 15,471,078 | 15,330,830 | 14,515,942 | ||||||
Shareholders' Equity | |||||||||
Common Stock ($.01 par value; authorized 500,000,000 shares; | |||||||||
issued / outstanding: March 31, 2017 - 57,962,462 / 42,736,032; | |||||||||
December 31, 2016 - 57,856,672 / 42,635,978; | |||||||||
and March 31, 2016 - 57,849,536 / 43,080,503) | 576 | 576 | 576 | ||||||
Capital Surplus | 553,898 | 551,628 | 544,267 | ||||||
Accumulated Other Comprehensive Loss | (28,866 | ) | (33,906 | ) | (14,722 | ) | |||
Retained Earnings | 1,444,495 | 1,415,440 | 1,347,374 | ||||||
Treasury Stock, at Cost (Shares: March 31, 2017 - 15,226,430; | |||||||||
December 31, 2016 - 15,220,694; and March 31, 2016 - 14,769,033) | (776,966 | ) | (772,201 | ) | (738,742 | ) | |||
Total Shareholders' Equity | 1,193,137 | 1,161,537 | 1,138,753 | ||||||
Total Liabilities and Shareholders' Equity | $ | 16,664,215 | $ | 16,492,367 | $ | 15,654,695 | |||
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, 2016 | 42,635,978 | $ | 576 | $ | 551,628 | $ | (33,906 | ) | $ | 1,415,440 | $ | (772,201 | ) | $ | 1,161,537 | ||||||
Net Income | — | — | — | — | 51,176 | — | 51,176 | ||||||||||||||
Other Comprehensive Income | — | — | — | 5,040 | — | — | 5,040 | ||||||||||||||
Share-Based Compensation | — | — | 1,735 | — | — | — | 1,735 | ||||||||||||||
Common Stock Issued under Purchase and Equity | |||||||||||||||||||||
Compensation Plans and Related Tax Benefits | 235,803 | — | 535 | — | (702 | ) | 6,744 | 6,577 | |||||||||||||
Common Stock Repurchased | (135,749 | ) | — | — | — | — | (11,509 | ) | (11,509 | ) | |||||||||||
Cash Dividends Declared ($0.50 per share) | — | — | — | — | (21,419 | ) | — | (21,419 | ) | ||||||||||||
Balance as of March 31, 2017 | 42,736,032 | $ | 576 | $ | 553,898 | $ | (28,866 | ) | $ | 1,444,495 | $ | (776,966 | ) | $ | 1,193,137 | ||||||
Balance as of December 31, 2015 | 43,282,153 | $ | 575 | $ | 542,041 | $ | (23,557 | ) | $ | 1,316,260 | $ | (719,059 | ) | $ | 1,116,260 | ||||||
Net Income | — | — | — | — | 50,210 | — | 50,210 | ||||||||||||||
Other Comprehensive Income | — | — | — | 8,835 | — | — | 8,835 | ||||||||||||||
Share-Based Compensation | — | — | 1,599 | — | — | — | 1,599 | ||||||||||||||
Common Stock Issued under Purchase and Equity | |||||||||||||||||||||
Compensation Plans and Related Tax Benefits | 141,083 | 1 | 627 | — | 368 | 1,775 | 2,771 | ||||||||||||||
Common Stock Repurchased | (342,733 | ) | — | — | — | — | (21,458 | ) | (21,458 | ) | |||||||||||
Cash Dividends Declared ($0.45 per share) | — | — | — | — | (19,464 | ) | — | (19,464 | ) | ||||||||||||
Balance as of March 31, 2016 | 43,080,503 | $ | 576 | $ | 544,267 | $ | (14,722 | ) | $ | 1,347,374 | $ | (738,742 | ) | $ | 1,138,753 | ||||||
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, 2017 | December 31, 2016 | March 31, 2016 | ||||||||||||||||||||||||||
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 | $ | 3.3 | $ | — | 0.57 | % | $ | 4.0 | $ | — | 0.10 | % | $ | 4.4 | $ | — | 0.41 | % | ||||||||||
Funds Sold | 544.1 | 0.9 | 0.65 | 622.8 | 0.8 | 0.50 | 647.7 | 0.8 | 0.46 | |||||||||||||||||||
Investment Securities | ||||||||||||||||||||||||||||
Available-for-Sale | ||||||||||||||||||||||||||||
Taxable | 1,625.4 | 7.5 | 1.87 | 1,533.8 | 6.7 | 1.76 | 1,588.5 | 7.2 | 1.80 | |||||||||||||||||||
Non-Taxable | 660.7 | 5.4 | 3.26 | 668.7 | 5.4 | 3.21 | 715.0 | 5.6 | 3.15 | |||||||||||||||||||
Held-to-Maturity | ||||||||||||||||||||||||||||
Taxable | 3,589.8 | 18.2 | 2.03 | 3,579.1 | 17.7 | 1.97 | 3,679.6 | 18.8 | 2.05 | |||||||||||||||||||
Non-Taxable | 241.8 | 2.4 | 3.89 | 242.7 | 2.4 | 3.89 | 245.5 | 2.4 | 3.91 | |||||||||||||||||||
Total Investment Securities | 6,117.7 | 33.5 | 2.19 | 6,024.3 | 32.2 | 2.13 | 6,228.6 | 34.0 | 2.19 | |||||||||||||||||||
Loans Held for Sale | 30.4 | 0.3 | 3.99 | 39.1 | 0.3 | 3.61 | 12.2 | 0.1 | 3.89 | |||||||||||||||||||
Loans and Leases 1 | ||||||||||||||||||||||||||||
Commercial and Industrial | 1,263.7 | 10.5 | 3.38 | 1,223.6 | 10.0 | 3.25 | 1,127.4 | 10.8 | 3.84 | |||||||||||||||||||
Commercial Mortgage | 1,881.5 | 17.5 | 3.76 | 1,833.8 | 17.0 | 3.68 | 1,689.2 | 15.7 | 3.74 | |||||||||||||||||||
Construction | 259.1 | 2.9 | 4.54 | 276.0 | 3.0 | 4.36 | 170.0 | 2.0 | 4.63 | |||||||||||||||||||
Commercial Lease Financing | 208.7 | 1.1 | 2.18 | 204.0 | 1.1 | 2.17 | 198.9 | 1.3 | 2.69 | |||||||||||||||||||
Residential Mortgage | 3,201.7 | 30.9 | 3.86 | 3,139.4 | 30.6 | 3.90 | 2,918.5 | 29.6 | 4.05 | |||||||||||||||||||
Home Equity | 1,367.4 | 12.0 | 3.56 | 1,317.1 | 11.7 | 3.54 | 1,103.5 | 10.1 | 3.69 | |||||||||||||||||||
Automobile | 461.7 | 5.8 | 5.04 | 446.0 | 5.8 | 5.14 | 388.6 | 5.0 | 5.19 | |||||||||||||||||||
Other 2 | 376.6 | 7.3 | 7.89 | 373.9 | 7.3 | 7.76 | 344.0 | 6.5 | 7.64 | |||||||||||||||||||
Total Loans and Leases | 9,020.4 | 88.0 | 3.94 | 8,813.8 | 86.5 | 3.91 | 7,940.1 | 81.0 | 4.09 | |||||||||||||||||||
Other | 40.1 | 0.2 | 2.30 | 40.1 | 0.3 | 2.80 | 38.4 | 0.2 | 2.21 | |||||||||||||||||||
Total Earning Assets 3 | 15,756.0 | 122.9 | 3.14 | 15,544.1 | 120.1 | 3.08 | 14,871.4 | 116.1 | 3.13 | |||||||||||||||||||
Cash and Due from Banks | 132.2 | 131.5 | 131.0 | |||||||||||||||||||||||||
Other Assets | 546.4 | 537.3 | 534.7 | |||||||||||||||||||||||||
Total Assets | $ | 16,434.6 | $ | 16,212.9 | $ | 15,537.1 | ||||||||||||||||||||||
Interest-Bearing Liabilities | ||||||||||||||||||||||||||||
Interest-Bearing Deposits | ||||||||||||||||||||||||||||
Demand | $ | 2,866.4 | 0.3 | 0.04 | $ | 2,760.5 | 0.3 | 0.04 | $ | 2,761.6 | 0.3 | 0.04 | ||||||||||||||||
Savings | 5,406.2 | 1.3 | 0.09 | 5,339.5 | 1.2 | 0.09 | 5,137.6 | 1.1 | 0.09 | |||||||||||||||||||
Time | 1,313.7 | 2.1 | 0.65 | 1,322.7 | 2.0 | 0.60 | 1,208.4 | 1.5 | 0.50 | |||||||||||||||||||
Total Interest-Bearing Deposits | 9,586.3 | 3.7 | 0.16 | 9,422.7 | 3.5 | 0.15 | 9,107.6 | 2.9 | 0.13 | |||||||||||||||||||
Short-Term Borrowings | 9.5 | — | 0.15 | 9.6 | — | 0.15 | 7.8 | — | 0.14 | |||||||||||||||||||
Securities Sold Under Agreements to Repurchase | 512.2 | 5.2 | 4.05 | 533.7 | 5.4 | 3.96 | 602.9 | 6.2 | 4.04 | |||||||||||||||||||
Other Debt | 267.9 | 1.1 | 1.66 | 267.9 | 1.1 | 1.66 | 232.3 | 1.0 | 1.73 | |||||||||||||||||||
Total Interest-Bearing Liabilities | 10,375.9 | 10.0 | 0.39 | 10,233.9 | 10.0 | 0.38 | 9,950.6 | 10.1 | 0.40 | |||||||||||||||||||
Net Interest Income | $ | 112.9 | $ | 110.1 | $ | 106.0 | ||||||||||||||||||||||
Interest Rate Spread | 2.75 | % | 2.70 | % | 2.73 | % | ||||||||||||||||||||||
Net Interest Margin | 2.89 | % | 2.83 | % | 2.86 | % | ||||||||||||||||||||||
Noninterest-Bearing Demand Deposits | 4,632.6 | 4,574.6 | 4,227.0 | |||||||||||||||||||||||||
Other Liabilities | 248.8 | 242.4 | 229.9 | |||||||||||||||||||||||||
Shareholders' Equity | 1,177.3 | 1,162.0 | 1,129.6 | |||||||||||||||||||||||||
Total Liabilities and Shareholders' Equity | $ | 16,434.6 | $ | 16,212.9 | $ | 15,537.1 | ||||||||||||||||||||||
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 of $3,061,000, $3,034,000 and $3,013,000 for the three months | ||||||||||||||||||||||||||||
ended March 31, 2017, December 31, 2016, and March 31, 2016, respectively. | ||||||||||||||||||||||||||||
Bank of Hawaii Corporation and Subsidiaries | |||||||||
Analysis of Change in Net Interest Income - Taxable-Equivalent Basis | Table 8a | ||||||||
Three Months Ended March 31, 2017 | |||||||||
Compared to December 31, 2016 | |||||||||
(dollars in millions) | Volume 1 | Rate 1 | Total | ||||||
Change in Interest Income: | |||||||||
Funds Sold | $ | (0.1 | ) | $ | 0.2 | $ | 0.1 | ||
Investment Securities | |||||||||
Available-for-Sale | |||||||||
Taxable | 0.4 | 0.4 | 0.8 | ||||||
Non-Taxable | (0.1 | ) | 0.1 | — | |||||
Held-to-Maturity | |||||||||
Taxable | — | 0.5 | 0.5 | ||||||
Total Investment Securities | 0.3 | 1.0 | 1.3 | ||||||
Loans Held for Sale | |||||||||
Loans and Leases | |||||||||
Commercial and Industrial | 0.2 | 0.3 | 0.5 | ||||||
Commercial Mortgage | 0.3 | 0.2 | 0.5 | ||||||
Construction | (0.2 | ) | 0.1 | (0.1 | ) | ||||
Residential Mortgage | 0.6 | (0.3 | ) | 0.3 | |||||
Home Equity | 0.3 | — | 0.3 | ||||||
Automobile | 0.1 | (0.1 | ) | — | |||||
Total Loans and Leases | 1.3 | 0.2 | 1.5 | ||||||
Other | — | (0.1 | ) | (0.1 | ) | ||||
Total Change in Interest Income | 1.5 | 1.3 | 2.8 | ||||||
Change in Interest Expense: | |||||||||
Interest-Bearing Deposits | |||||||||
Savings | — | 0.1 | 0.1 | ||||||
Time | — | 0.1 | 0.1 | ||||||
Total Interest-Bearing Deposits | — | 0.2 | 0.2 | ||||||
Securities Sold Under Agreements to Repurchase | (0.3 | ) | 0.1 | (0.2 | ) | ||||
Total Change in Interest Expense | (0.3 | ) | 0.3 | — | |||||
Change in Net Interest Income | $ | 1.8 | $ | 1.0 | $ | 2.8 | |||
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, 2017 | |||||||||
Compared to March 31, 2016 | |||||||||
(dollars in millions) | Volume 1 | Rate 1 | Total | ||||||
Change in Interest Income: | |||||||||
Funds Sold | $ | (0.1 | ) | $ | 0.2 | $ | 0.1 | ||
Investment Securities | |||||||||
Available-for-Sale | |||||||||
Taxable | 0.1 | 0.2 | 0.3 | ||||||
Non-Taxable | (0.4 | ) | 0.2 | (0.2 | ) | ||||
Held-to-Maturity | |||||||||
Taxable | (0.5 | ) | (0.1 | ) | (0.6 | ) | |||
Total Investment Securities | (0.8 | ) | 0.3 | (0.5 | ) | ||||
Loans Held for Sale | 0.2 | — | 0.2 | ||||||
Loans and Leases | |||||||||
Commercial and Industrial | 1.1 | (1.4 | ) | (0.3 | ) | ||||
Commercial Mortgage | 1.7 | 0.1 | 1.8 | ||||||
Construction | 0.9 | — | 0.9 | ||||||
Commercial Lease Financing | 0.1 | (0.3 | ) | (0.2 | ) | ||||
Residential Mortgage | 2.7 | (1.4 | ) | 1.3 | |||||
Home Equity | 2.3 | (0.4 | ) | 1.9 | |||||
Automobile | 0.9 | (0.1 | ) | 0.8 | |||||
Other 2 | 0.6 | 0.2 | 0.8 | ||||||
Total Loans and Leases | 10.3 | (3.3 | ) | 7.0 | |||||
Total Change in Interest Income | 9.6 | (2.8 | ) | 6.8 | |||||
Change in Interest Expense: | |||||||||
Interest-Bearing Deposits | |||||||||
Savings | 0.1 | 0.1 | 0.2 | ||||||
Time | 0.1 | 0.5 | 0.6 | ||||||
Total Interest-Bearing Deposits | 0.2 | 0.6 | 0.8 | ||||||
Securities Sold Under Agreements to Repurchase | (1.0 | ) | — | (1.0 | ) | ||||
Other Debt | 0.1 | — | 0.1 | ||||||
Total Change in Interest Expense | (0.7 | ) | 0.6 | (0.1 | ) | ||||
Change in Net Interest Income | $ | 10.3 | $ | (3.4 | ) | $ | 6.9 | ||
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) | 2017 | 2016 | 2016 | ||||||
Salaries | $ | 29,425 | $ | 29,382 | $ | 29,141 | |||
Incentive Compensation | 5,774 | 5,784 | 5,965 | ||||||
Share-Based Compensation | 2,303 | 4,126 | 2,310 | ||||||
Commission Expense | 1,836 | 1,955 | 1,357 | ||||||
Retirement and Other Benefits | 5,041 | 4,350 | 4,954 | ||||||
Payroll Taxes | 3,944 | 2,044 | 3,577 | ||||||
Medical, Dental, and Life Insurance | 3,279 | 2,908 | 2,892 | ||||||
Separation Expense | — | 73 | 318 | ||||||
Total Salaries and Benefits | $ | 51,602 | $ | 50,622 | $ | 50,514 | |||
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) | 2017 | 2016 | 2016 | 2016 | 2016 | |||||||||||
Commercial | ||||||||||||||||
Commercial and Industrial | $ | 1,250,006 | $ | 1,249,791 | $ | 1,217,849 | $ | 1,174,879 | $ | 1,180,341 | ||||||
Commercial Mortgage | 1,909,064 | 1,889,551 | 1,807,190 | 1,712,271 | 1,687,199 | |||||||||||
Construction | 262,660 | 270,018 | 263,079 | 226,062 | 192,909 | |||||||||||
Lease Financing | 208,765 | 208,332 | 201,436 | 192,630 | 195,804 | |||||||||||
Total Commercial | 3,630,495 | 3,617,692 | 3,489,554 | 3,305,842 | 3,256,253 | |||||||||||
Consumer | ||||||||||||||||
Residential Mortgage | 3,224,206 | 3,163,073 | 3,098,936 | 3,032,981 | 2,929,388 | |||||||||||
Home Equity | 1,411,489 | 1,334,163 | 1,295,993 | 1,213,154 | 1,131,796 | |||||||||||
Automobile | 468,078 | 454,333 | 437,659 | 417,017 | 399,825 | |||||||||||
Other 1 | 379,541 | 380,524 | 371,955 | 362,475 | 348,348 | |||||||||||
Total Consumer | 5,483,314 | 5,332,093 | 5,204,543 | 5,025,627 | 4,809,357 | |||||||||||
Total Loans and Leases | $ | 9,113,809 | $ | 8,949,785 | $ | 8,694,097 | $ | 8,331,469 | $ | 8,065,610 | ||||||
Deposits | ||||||||||||||||
March 31, | December 31, | September 30, | June 30, | March 31, | ||||||||||||
(dollars in thousands) | 2017 | 2016 | 2016 | 2016 | 2016 | |||||||||||
Consumer | $ | 7,196,781 | $ | 6,997,482 | $ | 6,781,371 | $ | 6,618,164 | $ | 6,568,651 | ||||||
Commercial | 6,051,721 | 6,110,189 | 5,751,184 | 5,697,490 | 5,678,987 | |||||||||||
Public and Other | 1,228,031 | 1,212,569 | 1,275,810 | 1,328,153 | 1,241,254 | |||||||||||
Total Deposits | $ | 14,476,533 | $ | 14,320,240 | $ | 13,808,365 | $ | 13,643,807 | $ | 13,488,892 | ||||||
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) | 2017 | 2016 | 2016 | 2016 | 2016 | ||||||||||||
Non-Performing Assets | |||||||||||||||||
Non-Accrual Loans and Leases | |||||||||||||||||
Commercial | |||||||||||||||||
Commercial and Industrial | $ | 228 | $ | 151 | $ | 201 | $ | 269 | $ | 666 | |||||||
Commercial Mortgage | 973 | 997 | 1,023 | 1,194 | 3,401 | ||||||||||||
Total Commercial | 1,201 | 1,148 | 1,224 | 1,463 | 4,067 | ||||||||||||
Consumer | |||||||||||||||||
Residential Mortgage | 11,756 | 13,780 | 12,735 | 9,979 | 13,719 | ||||||||||||
Home Equity | 3,517 | 3,147 | 2,966 | 3,110 | 2,501 | ||||||||||||
Total Consumer | 15,273 | 16,927 | 15,701 | 13,089 | 16,220 | ||||||||||||
Total Non-Accrual Loans and Leases | 16,474 | 18,075 | 16,925 | 14,552 | 20,287 | ||||||||||||
Foreclosed Real Estate | 2,529 | 1,686 | 1,747 | 1,728 | 1,728 | ||||||||||||
Total Non-Performing Assets | $ | 19,003 | $ | 19,761 | $ | 18,672 | $ | 16,280 | $ | 22,015 | |||||||
Accruing Loans and Leases Past Due 90 Days or More | |||||||||||||||||
Consumer | |||||||||||||||||
Residential Mortgage | $ | 2,313 | $ | 3,127 | $ | 2,583 | $ | 5,640 | $ | 4,219 | |||||||
Home Equity | 1,133 | 1,457 | 1,210 | 1,128 | 2,096 | ||||||||||||
Automobile | 673 | 894 | 578 | 464 | 524 | ||||||||||||
Other 1 | 1,738 | 1,592 | 1,273 | 1,518 | 1,099 | ||||||||||||
Total Consumer | 5,857 | 7,070 | 5,644 | 8,750 | 7,938 | ||||||||||||
Total Accruing Loans and Leases Past Due 90 Days or More | $ | 5,857 | $ | 7,070 | $ | 5,644 | $ | 8,750 | $ | 7,938 | |||||||
Restructured Loans on Accrual Status | |||||||||||||||||
and Not Past Due 90 Days or More | $ | 52,965 | $ | 52,208 | $ | 52,095 | $ | 52,173 | $ | 50,707 | |||||||
Total Loans and Leases | $ | 9,113,809 | $ | 8,949,785 | $ | 8,694,097 | $ | 8,331,469 | $ | 8,065,610 | |||||||
Ratio of Non-Accrual Loans and Leases to Total Loans and Leases | 0.18 | % | 0.20 | % | 0.19 | % | 0.17 | % | 0.25 | % | |||||||
Ratio of Non-Performing Assets to Total Loans and Leases | |||||||||||||||||
and Foreclosed Real Estate | 0.21 | % | 0.22 | % | 0.21 | % | 0.20 | % | 0.27 | % | |||||||
Ratio of Commercial Non-Performing Assets to Total Commercial Loans | |||||||||||||||||
and Leases and Commercial Foreclosed Real Estate | 0.03 | % | 0.03 | % | 0.04 | % | 0.04 | % | 0.12 | % | |||||||
Ratio of Consumer Non-Performing Assets to Total Consumer Loans | |||||||||||||||||
and Leases and Consumer Foreclosed Real Estate | 0.32 | % | 0.35 | % | 0.34 | % | 0.29 | % | 0.37 | % | |||||||
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 | 0.27 | % | 0.30 | % | 0.28 | % | 0.30 | % | 0.37 | % | |||||||
Quarter to Quarter Changes in Non-Performing Assets | |||||||||||||||||
Balance at Beginning of Quarter | $ | 19,761 | $ | 18,672 | $ | 16,280 | $ | 22,015 | $ | 28,801 | |||||||
Additions | 1,221 | 2,142 | 3,730 | 1,300 | 4,002 | ||||||||||||
Reductions | |||||||||||||||||
Payments | (1,017 | ) | (252 | ) | (501 | ) | (3,401 | ) | (6,012 | ) | |||||||
Return to Accrual Status | (645 | ) | (653 | ) | (701 | ) | (3,560 | ) | (4,272 | ) | |||||||
Sales of Foreclosed Real Estate | — | (61 | ) | — | — | (248 | ) | ||||||||||
Charge-offs/Write-downs | (317 | ) | (87 | ) | (136 | ) | (74 | ) | (256 | ) | |||||||
Total Reductions | (1,979 | ) | (1,053 | ) | (1,338 | ) | (7,035 | ) | (10,788 | ) | |||||||
Balance at End of Quarter | $ | 19,003 | $ | 19,761 | $ | 18,672 | $ | 16,280 | $ | 22,015 | |||||||
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) | 2017 | 2016 | 2016 | ||||||||
Balance at Beginning of Period | $ | 110,845 | $ | 110,605 | $ | 108,952 | |||||
Loans and Leases Charged-Off | |||||||||||
Commercial | |||||||||||
Commercial and Industrial | (174 | ) | (195 | ) | (257 | ) | |||||
Consumer | |||||||||||
Residential Mortgage | (183 | ) | (335 | ) | (205 | ) | |||||
Home Equity | (363 | ) | (256 | ) | (643 | ) | |||||
Automobile | (2,290 | ) | (1,720 | ) | (1,560 | ) | |||||
Other 1 | (2,694 | ) | (2,445 | ) | (2,222 | ) | |||||
Total Loans and Leases Charged-Off | (5,704 | ) | (4,951 | ) | (4,887 | ) | |||||
Recoveries on Loans and Leases Previously Charged-Off | |||||||||||
Commercial | |||||||||||
Commercial and Industrial | 336 | 506 | 6,867 | ||||||||
Commercial Mortgage | — | 11 | 14 | ||||||||
Construction | — | — | 23 | ||||||||
Lease Financing | — | 1 | 1 | ||||||||
Consumer | |||||||||||
Residential Mortgage | 104 | 154 | 201 | ||||||||
Home Equity | 508 | 323 | 513 | ||||||||
Automobile | 620 | 459 | 592 | ||||||||
Other 1 | 527 | 487 | 473 | ||||||||
Total Recoveries on Loans and Leases Previously Charged-Off | 2,095 | 1,941 | 8,684 | ||||||||
Net Loans and Leases Recovered (Charged-Off) | (3,609 | ) | (3,010 | ) | 3,797 | ||||||
Provision for Credit Losses | 4,400 | 3,250 | (2,000 | ) | |||||||
Provision for Unfunded Commitments | — | — | 500 | ||||||||
Balance at End of Period 2 | $ | 111,636 | $ | 110,845 | $ | 111,249 | |||||
Components | |||||||||||
Allowance for Loan and Lease Losses | $ | 105,064 | $ | 104,273 | $ | 104,677 | |||||
Reserve for Unfunded Commitments | 6,572 | 6,572 | 6,572 | ||||||||
Total Reserve for Credit Losses | $ | 111,636 | $ | 110,845 | $ | 111,249 | |||||
Average Loans and Leases Outstanding | $ | 9,020,351 | $ | 8,813,755 | $ | 7,940,097 | |||||
Ratio of Net Loans and Leases Charged-Off (Recovered) to | |||||||||||
Average Loans and Leases Outstanding (annualized) | 0.16 | % | 0.14 | % | -0.19 | % | |||||
Ratio of Allowance for Loan and Lease Losses to Loans and Leases Outstanding | 1.15 | % | 1.17 | % | 1.30 | % | |||||
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 13 | ||||||||||||||
Retail | Commercial | Investment | Treasury | Consolidated | |||||||||||
(dollars in thousands) | Banking | Banking | Services | and Other | Total | ||||||||||
Three Months Ended March 31, 2017 | |||||||||||||||
Net Interest Income | $ | 65,158 | $ | 41,931 | $ | 6,650 | $ | (3,867 | ) | $ | 109,872 | ||||
Provision for Credit Losses | 3,801 | (188 | ) | (5 | ) | 792 | 4,400 | ||||||||
Net Interest Income After Provision for Credit Losses | 61,357 | 42,119 | 6,655 | (4,659 | ) | 105,472 | |||||||||
Noninterest Income | 20,925 | 5,438 | 14,549 | 15,004 | 55,916 | ||||||||||
Noninterest Expense | (52,260 | ) | (18,355 | ) | (15,471 | ) | (2,482 | ) | (88,568 | ) | |||||
Income Before Provision for Income Taxes | 30,022 | 29,202 | 5,733 | 7,863 | 72,820 | ||||||||||
Provision for Income Taxes | (10,673 | ) | (10,256 | ) | (2,121 | ) | 1,406 | (21,644 | ) | ||||||
Net Income | $ | 19,349 | $ | 18,946 | $ | 3,612 | $ | 9,269 | $ | 51,176 | |||||
Total Assets as of March 31, 2017 | $ | 5,438,421 | $ | 3,577,524 | $ | 288,178 | $ | 7,360,092 | $ | 16,664,215 | |||||
Three Months Ended March 31, 2016 | |||||||||||||||
Net Interest Income | $ | 58,010 | $ | 38,348 | $ | 6,452 | $ | 214 | $ | 103,024 | |||||
Provision for Credit Losses | 2,835 | (6,626 | ) | (6 | ) | 1,797 | (2,000 | ) | |||||||
Net Interest Income After Provision for Credit Losses | 55,175 | 44,974 | 6,458 | (1,583 | ) | 105,024 | |||||||||
Noninterest Income | 20,807 | 7,600 | 14,024 | 13,776 | 56,207 | ||||||||||
Noninterest Expense | (52,741 | ) | (17,268 | ) | (15,427 | ) | (1,950 | ) | (87,386 | ) | |||||
Income Before Provision for Income Taxes | 23,241 | 35,306 | 5,055 | 10,243 | 73,845 | ||||||||||
Provision for Income Taxes | (8,227 | ) | (12,656 | ) | (1,870 | ) | (882 | ) | (23,635 | ) | |||||
Net Income | $ | 15,014 | $ | 22,650 | $ | 3,185 | $ | 9,361 | $ | 50,210 | |||||
Total Assets as of March 31, 2016 | $ | 4,763,749 | $ | 3,196,413 | $ | 284,891 | $ | 7,409,642 | $ | 15,654,695 | |||||
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) | 2017 | 2016 | 2016 | 2016 | 2016 | |||||||||||||||
Quarterly Operating Results | ||||||||||||||||||||
Interest Income | ||||||||||||||||||||
Interest and Fees on Loans and Leases | $ | 87,937 | $ | 86,532 | $ | 83,489 | $ | 82,323 | $ | 80,895 | ||||||||||
Income on Investment Securities | ||||||||||||||||||||
Available-for-Sale | 11,084 | 10,244 | 10,313 | 10,521 | 10,814 | |||||||||||||||
Held-to-Maturity | 19,706 | 19,213 | 19,315 | 20,168 | 20,391 | |||||||||||||||
Deposits | 5 | 2 | 1 | 2 | 4 | |||||||||||||||
Funds Sold | 890 | 795 | 695 | 618 | 753 | |||||||||||||||
Other | 230 | 281 | 166 | 153 | 212 | |||||||||||||||
Total Interest Income | 119,852 | 117,067 | 113,979 | 113,785 | 113,069 | |||||||||||||||
Interest Expense | ||||||||||||||||||||
Deposits | 3,691 | 3,448 | 3,232 | 3,081 | 2,886 | |||||||||||||||
Securities Sold Under Agreements to Repurchase | 5,185 | 5,406 | 5,713 | 6,134 | 6,153 | |||||||||||||||
Funds Purchased | 3 | 3 | 3 | 3 | 3 | |||||||||||||||
Other Debt | 1,101 | 1,117 | 1,119 | 1,017 | 1,003 | |||||||||||||||
Total Interest Expense | 9,980 | 9,974 | 10,067 | 10,235 | 10,045 | |||||||||||||||
Net Interest Income | 109,872 | 107,093 | 103,912 | 103,550 | 103,024 | |||||||||||||||
Provision for Credit Losses | 4,400 | 3,250 | 2,500 | 1,000 | (2,000 | ) | ||||||||||||||
Net Interest Income After Provision for Credit Losses | 105,472 | 103,843 | 101,412 | 102,550 | 105,024 | |||||||||||||||
Noninterest Income | ||||||||||||||||||||
Trust and Asset Management | 11,479 | 11,232 | 11,008 | 12,707 | 11,256 | |||||||||||||||
Mortgage Banking | 3,300 | 6,256 | 6,362 | 4,088 | 3,189 | |||||||||||||||
Service Charges on Deposit Accounts | 8,325 | 8,537 | 8,524 | 8,150 | 8,443 | |||||||||||||||
Fees, Exchange, and Other Service Charges | 13,332 | 13,731 | 14,023 | 13,978 | 13,444 | |||||||||||||||
Investment Securities Gains (Losses), Net | 12,133 | (337 | ) | (328 | ) | (312 | ) | 11,180 | ||||||||||||
Annuity and Insurance | 1,995 | 1,457 | 1,653 | 2,006 | 1,901 | |||||||||||||||
Bank-Owned Life Insurance | 1,497 | 1,551 | 1,911 | 1,551 | 1,548 | |||||||||||||||
Other | 3,855 | 4,076 | 4,961 | 4,351 | 5,246 | |||||||||||||||
Total Noninterest Income | 55,916 | 46,503 | 48,114 | 46,519 | 56,207 | |||||||||||||||
Noninterest Expense | ||||||||||||||||||||
Salaries and Benefits | 51,602 | 50,622 | 49,725 | 50,289 | 50,514 | |||||||||||||||
Net Occupancy | 8,168 | 7,581 | 8,510 | 7,158 | 7,003 | |||||||||||||||
Net Equipment | 5,501 | 5,191 | 4,913 | 5,065 | 5,409 | |||||||||||||||
Data Processing | 3,410 | 3,665 | 3,620 | 3,972 | 3,951 | |||||||||||||||
Professional Fees | 2,779 | 2,990 | 2,396 | 2,047 | 2,639 | |||||||||||||||
FDIC Insurance | 2,209 | 2,015 | 2,104 | 2,144 | 2,352 | |||||||||||||||
Other | 14,899 | 17,525 | 16,264 | 15,396 | 15,518 | |||||||||||||||
Total Noninterest Expense | 88,568 | 89,589 | 87,532 | 86,071 | 87,386 | |||||||||||||||
Income Before Provision for Income Taxes | 72,820 | 60,757 | 61,994 | 62,998 | 73,845 | |||||||||||||||
Provision for Income Taxes | 21,644 | 17,244 | 18,501 | 18,753 | 23,635 | |||||||||||||||
Net Income | $ | 51,176 | $ | 43,513 | $ | 43,493 | $ | 44,245 | $ | 50,210 | ||||||||||
Basic Earnings Per Share | $ | 1.21 | $ | 1.03 | $ | 1.02 | $ | 1.04 | $ | 1.17 | ||||||||||
Diluted Earnings Per Share | $ | 1.20 | $ | 1.02 | $ | 1.02 | $ | 1.03 | $ | 1.16 | ||||||||||
Balance Sheet Totals | ||||||||||||||||||||
Loans and Leases | $ | 9,113,809 | $ | 8,949,785 | $ | 8,694,097 | $ | 8,331,469 | $ | 8,065,610 | ||||||||||
Total Assets | 16,664,215 | 16,492,367 | 16,014,643 | 15,860,901 | 15,654,695 | |||||||||||||||
Total Deposits | 14,476,533 | 14,320,240 | 13,808,365 | 13,643,807 | 13,488,892 | |||||||||||||||
Total Shareholders' Equity | 1,193,137 | 1,161,537 | 1,163,859 | 1,157,219 | 1,138,753 | |||||||||||||||
Performance Ratios | ||||||||||||||||||||
Return on Average Assets | 1.26 | % | 1.07 | % | 1.09 | % | 1.14 | % | 1.30 | % | ||||||||||
Return on Average Shareholders' Equity | 17.63 | 14.90 | 14.89 | 15.56 | 17.88 | |||||||||||||||
Efficiency Ratio 1 | 53.42 | 58.33 | 57.58 | 57.35 | 54.88 | |||||||||||||||
Net Interest Margin 2 | 2.89 | 2.83 | 2.80 | 2.85 | 2.86 | |||||||||||||||
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, 2017 | December 31, 2016 | December 31, 2015 | ||||||||||||||||||
Hawaii Economic Trends | |||||||||||||||||||||
State General Fund Revenues 1 | $ | 1,115.7 | 4.9 | % | $ | 6,215.4 | 3.6 | % | $ | 5,998.6 | 8.4 | % | |||||||||
General Excise and Use Tax Revenue 1 | $ | 576.1 | 0.3 | % | $ | 3,205.7 | 2.0 | % | $ | 3,141.5 | 5.4 | % | |||||||||
Jobs 2 | 675.5 | 671.7 | 658.8 | ||||||||||||||||||
March 31, | December 31, | ||||||||||||||||||||
(spot rates) | 2017 | 2016 | 2015 | ||||||||||||||||||
Unemployment 3 | |||||||||||||||||||||
Statewide, seasonally adjusted | 2.7 | % | 2.9 | % | 3.2 | % | |||||||||||||||
Oahu | 2.4 | 2.4 | 2.7 | ||||||||||||||||||
Island of Hawaii | 3.1 | 3.1 | 3.7 | ||||||||||||||||||
Maui | 2.9 | 2.7 | 3.1 | ||||||||||||||||||
Kauai | 2.8 | 2.8 | 3.5 | ||||||||||||||||||
March 31, | December 31, | ||||||||||||||||||||
(percentage change, except months of inventory) | 2017 | 2016 | 2015 | 2014 | |||||||||||||||||
Housing Trends (Single Family Oahu) 4 | |||||||||||||||||||||
Median Home Price | 3.5 | % | 5.0 | % | 3.7 | % | 3.8 | % | |||||||||||||
Home Sales Volume (units) | 1.0 | % | 6.5 | % | 5.2 | % | (0.8 | ) | % | ||||||||||||
Months of Inventory | 2.7 | 2.5 | 2.6 | 2.6 | |||||||||||||||||
Monthly Visitor Arrivals, | Percentage Change | ||||||||||||||||||||
(in thousands) | Not Seasonally Adjusted | from Previous Year | |||||||||||||||||||
Tourism 5 | |||||||||||||||||||||
February 28, 2017 | 700.4 | 1.7 | |||||||||||||||||||
January 31, 2017 | 756.3 | 4.9 | |||||||||||||||||||
December 31, 2016 | 828.5 | 3.6 | |||||||||||||||||||
November 30, 2016 | 696.9 | 4.7 | |||||||||||||||||||
October 31, 2016 | 717.5 | 4.3 | |||||||||||||||||||
September 30, 2016 | 666.6 | 3.0 | |||||||||||||||||||
August 31, 2016 | 780.7 | 3.1 | |||||||||||||||||||
July 31, 2016 | 835.4 | 2.1 | |||||||||||||||||||
June 30, 2016 | 800.3 | 4.2 | |||||||||||||||||||
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 | 799.5 | 4.4 | |||||||||||||||||||
November 30, 2015 | 665.9 | 4.4 | |||||||||||||||||||
October 31, 2015 | 687.7 | 4.0 | |||||||||||||||||||
September 30, 2015 | 647.2 | 3.9 | |||||||||||||||||||
August 31, 2015 | 757.5 | 3.1 | |||||||||||||||||||
July 31, 2015 | 818.5 | 5.9 | |||||||||||||||||||
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 | ) | ||||||||||||||||||
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. | |||||||||||||||||||||