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
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Item 2.02. Results of Operations and Financial Condition.
On April 20, 2020, Bank of Hawaii Corporation announced its results of operations for the quarter ended March 31, 2020. 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 20, 2020 Press Release: Bank of Hawaii Corporation First Quarter 2020 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 20, 2020 | Bank of Hawaii Corporation | |||||||
| By: | /s/ Mark A. Rossi | |||||||
| Mark A. Rossi | ||||||||
| Vice Chairman and Corporate Secretary | ||||||||
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Bank of Hawaii Corporation First Quarter 2020 Financial Results
•Diluted Earnings Per Share $0.87
•Net Income $34.7 Million
•Company Adopts CECL and Records $33.6 Million Provision
•Board of Directors Declares Dividend of $0.67 Per Share
FOR IMMEDIATE RELEASE
HONOLULU, HI (April 20, 2020) -- Bank of Hawaii Corporation (NYSE: BOH) today reported diluted earnings per share of $0.87 for the first quarter of 2020, a decrease from diluted earnings per share of $1.45 in the previous quarter and $1.43 in the same quarter last year. Net income for the first quarter of 2020 was $34.7 million compared with net income of $58.1 million in the fourth quarter of 2019 and $58.8 million in the first quarter of 2019. The decrease from the previous quarter is the result of an increased provision expense of $33.6 million compared with $4.8 million in the previous quarter and $3.0 million in the first quarter last year. The increase in the provision was related to changes in economic conditions driven by the impact of COVID-19 and considered the effect of significantly slower economic growth and higher unemployment in Hawaii partially offset by the benefits of government stimulus programs.
"We were pleased with our overall financial performance during the first quarter of 2020 despite the challenges related to COVID-19," said Peter S. Ho, Chairman, President, and CEO. “Our strong balance sheet includes a high-quality securities portfolio, good asset quality, high levels of liquidity, and a solid capital base that will allow us to provide the financial support to our customers and community needed to emerge from the COVID-19 crisis.”
The return on average assets for the first quarter of 2020 was 0.77 percent compared with 1.29 percent during the previous quarter and 1.38 percent in the same quarter last year. The return on average equity for the first quarter of 2020 was 10.64 percent compared with 17.84 percent in the fourth quarter of 2019 and 18.81 percent in the first quarter of 2019.
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Bank of Hawaii Corporation First Quarter 2020 Financial Results Page 2
Financial Highlights
Net interest income, on a taxable-equivalent basis, for the first quarter of 2020 was $126.3 million, an increase of $2.1 million from $124.2 million in the fourth quarter of 2019 and up $0.5 million from $125.8 million in the first quarter of 2019. The net interest margin was 2.96 percent for the first quarter of 2020, up 1 basis point compared with 2.95 percent in the previous quarter and down 16 basis points from 3.12 percent in 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 2020 included a provision for credit losses of $33.6 million. The provision under CECL is reflective of the Company’s credit risk profile and the future economic outlook and forecasts. Upon adoption of CECL, the Company recorded a $1.7 million decrease to the allowance for loan and lease losses on January 1, 2020 that reflected a generally stable asset quality and economic outlook. At that time, the COVID-19 pandemic was not yet estimated to have the significant impact that ultimately transpired in the latter half of the current quarter.
Noninterest income was $46.1 million in the first quarter of 2020, a decrease of $1.6 million compared with $47.7 million in the fourth quarter of 2019 and an increase of $2.4 million compared with $43.7 million in the first quarter of 2019. There were no significant items in noninterest income during the first quarter of 2020. Noninterest income in the fourth quarter of 2019 included a gain of $3.8 million related to the early buyout of a leveraged lease. Noninterest income in the first quarter of 2019 included a $1.4 million commission related to insurance products offered through a third-party administrator. Adjusted for significant items, the increase in noninterest income compared with the fourth quarter of 2019 and the first quarter last year was largely due to significant growth in customer derivative activity.
Noninterest expense was $96.3 million in the first quarter of 2020, an increase of $3.2 million compared with $93.1 million in the fourth quarter of 2019 and an increase of $3.2 million from $93.1 million in the same quarter last year. Noninterest expense in the first quarter of 2020 included seasonal payroll expenses of approximately $3.1 million and severance expenses of $4.7 million that were partially offset by the elimination of corporate incentive accruals. There were no significant items in noninterest expense during the fourth quarter of 2019. Noninterest expense in the first quarter of 2019 included seasonal payroll expenses of approximately $2.7 million. An analysis of noninterest expenses related to salaries and benefits is included in Table 9.
The efficiency ratio during the first quarter of 2020 was 55.96 percent compared with 54.26 percent in the previous quarter and 55.22 percent in the same quarter last year.
The effective tax rate for the first quarter of 2020 was 17.68 percent compared with 21.15 percent in the previous quarter and 18.85 percent during the same quarter last year. There were no significant items impacting the tax rate during the first quarter of 2020 or the fourth quarter of 2019. The first quarter of 2019 included tax benefits of $1.9 million related to a commercial customer’s exercise of an early-buy-out option on a leveraged lease.
The Company’s business segments are defined as Consumer Banking, Commercial Banking, and Treasury & Other. Results for the business segments are determined based on the Company’s internal financial management reporting process and organizational structure. Selected financial information is included in Table 13.
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Bank of Hawaii Corporation First Quarter 2020 Financial Results Page 3
Asset Quality
The Company’s asset quality remained stable during the first quarter of 2020. Total non-performing assets were $20.6 million at March 31, 2020, compared with $20.1 million at December 31, 2019 and $17.9 million at March 31, 2019. As a percentage of total loans and leases, including foreclosed real estate, non-performing assets were 0.18 percent at the end of the first quarter of 2020, compared with 0.18 percent at the end of the fourth quarter of 2019 and 0.17 percent at the end of the first quarter last year.
Accruing loans and leases past due 90 days or more were $8.5 million at March 31, 2020, compared with $8.4 million at December 31, 2019 and $6.1 million at March 31, 2019. Restructured loans not included in non-accrual loans or accruing loans past due 90 days or more were $61.4 million at March 31, 2019 compared with $63.1 million at December 31, 2019 and $48.6 million at March 31, 2019. 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 2020 were $3.7 million or 0.14 percent annualized of total average loans and leases outstanding. Loan and lease charge-offs of $7.2 million during the quarter were partially offset by recoveries of $3.4 million. Net charge-offs during the fourth quarter of 2019 were $3.7 million or 0.13 percent annualized of total average loans and leases outstanding and were comprised of $6.2 million in charge-offs partially offset by recoveries of $2.6 million. Net charge-offs during the first quarter of 2019 were $3.7 million or 0.14 percent annualized of total average loans and leases outstanding and were comprised of $6.8 million in charge-offs partially offset by recoveries of $3.2 million.
The allowance for credit losses was $138.2 million at March 31, 2020, an increase from $110.0 million at December 31, 2019 and $106.0 million at March 31, 2019. The ratio of the allowance for credit losses to total loans and leases outstanding was 1.22 percent at March 31, 2020 compared with 1.00 percent at December 31, 2019 and 1.01 percent at March 31, 2019. The reserve for unfunded commitments was $3.3 million at March 31, 2020 compared with $6.8 million at December 31, 2019 and at March 31, 2019. Details of loan and lease charge-offs, recoveries, and components of the total reserve for credit losses are summarized in Table 12.
Other Financial Highlights
Total assets increased to $18.54 billion at March 31, 2020 compared with $18.10 billion at December 31, 2019 and $17.45 billion at March 31, 2019. Average total assets were $18.22 billion during the first quarter of 2020, an increase from $17.82 billion during the fourth quarter of 2019 and $17.24 billion in the first quarter of 2019.
The investment securities portfolio was $5.69 billion at March 31, 2020 compared with $5.66 billion at December 31, 2019 and $5.53 billion at March 31, 2019. The portfolio at March 31, 2020 remains largely comprised of securities issued by U.S. government agencies and includes $3.00 billion in securities held to maturity and $2.68 billion in securities available for sale.
Total loans and leases were $11.35 billion at March 31, 2020, an increase of 3.3 percent from $10.99 billion at December 31, 2019 and up 7.6 percent from $10.55 billion at March 31, 2019. Average total loans were $11.06 billion during the first quarter of 2020, an increase from $10.88 billion during the fourth quarter of 2019 and $10.47 billion in the first quarter of 2019.
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Bank of Hawaii Corporation First Quarter 2020 Financial Results Page 4
The commercial portfolio grew to $4.53 billion at the end of the first quarter of 2020, an increase of 7.5 percent from $4.21 billion at the end of the fourth quarter of 2019 and up 13.3 percent from $4.00 billion at the end of the first quarter last year. Consumer loans grew to $6.82 billion at March 31, 2020, an increase of 0.7 percent from $6.78 billion at the end of the fourth quarter of 2019 and up 4.2 percent from consumer loans of $6.55 billion at the end of the first quarter last year.
Total deposits were $16.06 billion at March 31, 2020, an increase of 1.7 percent from $15.78 billion at December 31, 2019 and up 5.2 percent from total deposits of $15.27 billion at March 31, 2019. Average total deposits were $15.82 billion during the first quarter of 2020, an increase from $15.44 billion during the fourth quarter of 2019 and $14.97 billion in the first quarter of 2019.
Consumer deposits increased to $8.29 billion at March 31, 2020, an increase of 2.2 percent from $8.12 billion at the end of the fourth quarter of 2019 and up 4.4 percent from $7.94 billion at the end of the first quarter last year. Commercial deposits increased to $6.36 billion at the end of the first quarter of 2020, an increase of 0.5 percent from $6.32 billion at the end of the fourth quarter of 2019 and up 3.2 percent from $6.16 billion at the end of the first quarter last year. Other deposits, including public funds, were $1.40 billion at March 31, 2020, an increase of 4.5 percent from $1.34 billion at December 31, 2019 and up 20.8 percent from $1.16 billion at March 31, 2019. Deposit balances are summarized in Tables 7 and 10.
Total shareholders’ equity was $1.33 billion at March 31, 2020, up from $1.29 billion at December 31, 2019 and up from $1.27 billion at March 31, 2019. The Tier 1 Capital Ratio was 11.85 percent at March 31, 2020 compared with 12.18 percent at December 31, 2019 and 12.75 percent at March 31, 2019. The Tier 1 Leverage Ratio at March 31, 2020 was 7.14 percent compared with 7.25 percent at December 31, 2019 and 7.46 percent at March 31, 2019.
During the first quarter of 2020, the Company repurchased 156.4 thousand shares of common stock at a total cost of $14.0 million under its share repurchase program. The average cost was $89.32 per share repurchased. Due to the uncertainty related to the COVID-19 pandemic, the Company temporarily suspended the share repurchase program on March 17, 2020. From the beginning of the share repurchase program initiated during July 2001 through March 16, 2020, the Company has repurchased 57.1 million shares and returned over $2.3 billion to shareholders at an average cost of $40.51 per share. Remaining buyback authority under the share repurchase program was $113.1 million at March 31, 2020.
The Company’s Board of Directors declared a quarterly cash dividend of $0.67 per share on the Company’s outstanding shares. The dividend will be payable on June 12, 2020 to shareholders of record at the close of business on May 29, 2020.
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 conference call will be accessible via teleconference and the call and presentation materials will be available via the investor relations link of Bank of Hawaii Corporation's website, www.boh.com. TThe toll-free number is 1 (844) 543-5235 in the United States and Canada and 1 (703) 318-2209 for other international callers. Use the pass code “Bank of Hawaii” to access the call. A replay will be available for one week beginning approximately 11:00 a.m. Hawaii Time on Monday, April 20, 2020. The replay number is 1 (855) 859-2056 in the United States and Canada and 1 (404) 537-3406 from other international locations. Enter the conference ID 4256888 when prompted. In addition, a replay will be available on the Company's website, www.boh.com.
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Bank of Hawaii Corporation First Quarter 2020 Financial Results Page 5
Forward-Looking Statements
This news release including supplemental materials 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, 2019, 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 an independent 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 website, 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) | 2020 | 2019 | 2019 | |||||||||||||||||
| For the Period: | ||||||||||||||||||||
| Operating Results | ||||||||||||||||||||
| Net Interest Income | $ | 125,966 | $ | 123,885 | $ | 124,837 | ||||||||||||||
| Provision for Credit Losses | 33,600 | 4,750 | 3,000 | |||||||||||||||||
| Total Noninterest Income | 46,149 | 47,702 | 43,679 | |||||||||||||||||
| Total Noninterest Expense | 96,312 | 93,096 | 93,057 | |||||||||||||||||
| Net Income | 34,742 | 58,143 | 58,799 | |||||||||||||||||
| Basic Earnings Per Share | 0.88 | 1.46 | 1.44 | |||||||||||||||||
| Diluted Earnings Per Share | 0.87 | 1.45 | 1.43 | |||||||||||||||||
| Dividends Declared Per Share | 0.67 | 0.67 | 0.62 | |||||||||||||||||
| Performance Ratios | ||||||||||||||||||||
| Return on Average Assets | 0.77 | % | 1.29 | % | 1.38 | % | ||||||||||||||
| Return on Average Shareholders' Equity | 10.64 | 17.84 | 18.81 | |||||||||||||||||
Efficiency Ratio 1 | 55.96 | 54.26 | 55.22 | |||||||||||||||||
Net Interest Margin 2 | 2.96 | 2.95 | 3.12 | |||||||||||||||||
Dividend Payout Ratio 3 | 76.14 | 45.89 | 43.06 | |||||||||||||||||
| Average Shareholders' Equity to Average Assets | 7.21 | 7.26 | 7.35 | |||||||||||||||||
| Average Balances | ||||||||||||||||||||
| Average Loans and Leases | $ | 11,060,707 | $ | 10,878,672 | $ | 10,467,321 | ||||||||||||||
| Average Assets | 18,222,602 | 17,821,004 | 17,236,059 | |||||||||||||||||
| Average Deposits | 15,817,745 | 15,441,097 | 14,971,404 | |||||||||||||||||
| Average Shareholders' Equity | 1,313,848 | 1,292,930 | 1,267,438 | |||||||||||||||||
| Per Share of Common Stock | ||||||||||||||||||||
| Book Value | $ | 33.20 | $ | 32.14 | $ | 30.91 | ||||||||||||||
| Tangible Book Value | 32.41 | 31.35 | 30.14 | |||||||||||||||||
| Market Value | ||||||||||||||||||||
| Closing | 54.91 | 95.16 | 78.87 | |||||||||||||||||
| High | 95.53 | 95.68 | 83.94 | |||||||||||||||||
| Low | 46.70 | 81.29 | 66.54 | |||||||||||||||||
| March 31, | December 31, | March 31, | ||||||||||||||||||
| 2020 | 2019 | 2019 | ||||||||||||||||||
| As of Period End: | ||||||||||||||||||||
| Balance Sheet Totals | ||||||||||||||||||||
| Loans and Leases | $ | 11,352,780 | $ | 10,990,892 | $ | 10,548,609 | ||||||||||||||
| Total Assets | 18,542,233 | 18,095,496 | 17,446,413 | |||||||||||||||||
| Total Deposits | 16,055,361 | 15,784,482 | 15,267,310 | |||||||||||||||||
| Other Debt | 60,545 | 85,565 | 110,624 | |||||||||||||||||
| Total Shareholders' Equity | 1,327,929 | 1,286,832 | 1,269,690 | |||||||||||||||||
| Asset Quality | ||||||||||||||||||||
| Non-Performing Assets | $ | 20,604 | $ | 20,117 | $ | 17,925 | ||||||||||||||
| Allowance for Credit Losses | 138,150 | 110,027 | 106,023 | |||||||||||||||||
| Allowance to Loans and Leases Outstanding | 1.22 | % | 1.00 | % | 1.01 | % | ||||||||||||||
Capital Ratios 4 | ||||||||||||||||||||
| Common Equity Tier 1 Capital Ratio | 11.85 | % | 12.18 | % | 12.75 | % | ||||||||||||||
| Tier 1 Capital Ratio | 11.85 | 12.18 | 12.75 | |||||||||||||||||
| Total Capital Ratio | 13.10 | 13.28 | 13.87 | |||||||||||||||||
| Tier 1 Leverage Ratio | 7.14 | 7.25 | 7.46 | |||||||||||||||||
| Total Shareholders' Equity to Total Assets | 7.16 | 7.11 | 7.28 | |||||||||||||||||
Tangible Common Equity to Tangible Assets 5 | 7.00 | 6.95 | 7.11 | |||||||||||||||||
Tangible Common Equity to Risk-Weighted Assets 5 | 11.85 | 11.85 | 12.28 | |||||||||||||||||
| Non-Financial Data | ||||||||||||||||||||
| Full-Time Equivalent Employees | 2,094 | 2,124 | 2,112 | |||||||||||||||||
| Branches | 67 | 68 | 69 | |||||||||||||||||
| ATMs | 382 | 387 | 385 | |||||||||||||||||
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 The Company has elected to apply the modified transition provision related to the impact of the CECL accounting standard on regulatory capital, as provided by the US banking agencies’ March 2020 interim final rule. | ||||||||||||||||||||
5 Tangible common equity to tangible assets and tangible common equity to risk-weighted assets are Non-GAAP financial measures. See Table 2 “Reconciliation of Non-GAAP Financial Measures." | ||||||||||||||||||||
| Bank of Hawaii Corporation and Subsidiaries | ||||||||||||||||||||||||||
| Reconciliation of Non-GAAP Financial Measures | Table 2 | |||||||||||||||||||||||||
| March 31, | December 31, | March 31, | ||||||||||||||||||||||||
| (dollars in thousands) | 2020 | 2019 | 2019 | |||||||||||||||||||||||
| Total Shareholders' Equity | $ | 1,327,929 | $ | 1,286,832 | $ | 1,269,690 | ||||||||||||||||||||
| Less: | Goodwill | 31,517 | 31,517 | 31,517 | ||||||||||||||||||||||
| Tangible Common Equity | $ | 1,296,412 | $ | 1,255,315 | $ | 1,238,173 | ||||||||||||||||||||
| Total Assets | $ | 18,542,233 | $ | 18,095,496 | $ | 17,446,413 | ||||||||||||||||||||
| Less: | Goodwill | 31,517 | 31,517 | 31,517 | ||||||||||||||||||||||
| Tangible Assets | $ | 18,510,716 | $ | 18,063,979 | $ | 17,414,896 | ||||||||||||||||||||
| Risk-Weighted Assets, determined in accordance | ||||||||||||||||||||||||||
| with prescribed regulatory requirements | $ | 10,941,909 | $ | 10,589,061 | $ | 10,079,858 | ||||||||||||||||||||
| Total Shareholders' Equity to Total Assets | 7.16 | % | 7.11 | % | 7.28 | % | ||||||||||||||||||||
| Tangible Common Equity to Tangible Assets (Non-GAAP) | 7.00 | % | 6.95 | % | 7.11 | % | ||||||||||||||||||||
| Tier 1 Capital Ratio | 11.85 | % | 12.18 | % | 12.75 | % | ||||||||||||||||||||
| Tangible Common Equity to Risk-Weighted Assets (Non-GAAP) | 11.85 | % | 11.85 | % | 12.28 | % | ||||||||||||||||||||
| 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) | 2020 | 2019 | 2019 | |||||||||||
| Interest Income | ||||||||||||||
| Interest and Fees on Loans and Leases | $ | 108,210 | $ | 109,223 | $ | 108,511 | ||||||||
| Income on Investment Securities | ||||||||||||||
| Available-for-Sale | 16,711 | 16,158 | 13,432 | |||||||||||
| Held-to-Maturity | 19,252 | 18,750 | 21,921 | |||||||||||
| Deposits | 9 | 8 | 15 | |||||||||||
| Funds Sold | 546 | 723 | 1,444 | |||||||||||
| Other | 218 | 239 | 319 | |||||||||||
| Total Interest Income | 144,946 | 145,101 | 145,642 | |||||||||||
| Interest Expense | ||||||||||||||
| Deposits | 14,260 | 16,407 | 15,284 | |||||||||||
| Securities Sold Under Agreements to Repurchase | 4,025 | 4,071 | 4,571 | |||||||||||
| Funds Purchased | 72 | 25 | 157 | |||||||||||
| Short-Term Borrowings | 39 | — | 36 | |||||||||||
| Other Debt | 584 | 713 | 757 | |||||||||||
| Total Interest Expense | 18,980 | 21,216 | 20,805 | |||||||||||
| Net Interest Income | 125,966 | 123,885 | 124,837 | |||||||||||
| Provision for Credit Losses | 33,600 | 4,750 | 3,000 | |||||||||||
| Net Interest Income After Provision for Credit Losses | 92,366 | 119,135 | 121,837 | |||||||||||
| Noninterest Income | ||||||||||||||
| Trust and Asset Management | 10,915 | 11,157 | 10,761 | |||||||||||
| Mortgage Banking | 2,695 | 3,199 | 2,287 | |||||||||||
| Service Charges on Deposit Accounts | 7,451 | 7,835 | 7,364 | |||||||||||
| Fees, Exchange, and Other Service Charges | 13,200 | 14,533 | 14,208 | |||||||||||
| Investment Securities Gains (Losses), Net | (970) | (906) | (835) | |||||||||||
| Annuity and Insurance | 928 | 1,272 | 2,578 | |||||||||||
| Bank-Owned Life Insurance | 1,580 | 1,879 | 1,710 | |||||||||||
| Other | 10,350 | 8,733 | 5,606 | |||||||||||
| Total Noninterest Income | 46,149 | 47,702 | 43,679 | |||||||||||
| Noninterest Expense | ||||||||||||||
| Salaries and Benefits | 54,463 | 51,664 | 56,586 | |||||||||||
| Net Occupancy | 8,955 | 8,824 | 7,594 | |||||||||||
| Net Equipment | 8,456 | 7,930 | 6,833 | |||||||||||
| Data Processing | 4,788 | 4,828 | 4,526 | |||||||||||
| Professional Fees | 3,208 | 3,257 | 2,453 | |||||||||||
| FDIC Insurance | 1,456 | 1,376 | 1,269 | |||||||||||
| Other | 14,986 | 15,217 | 13,796 | |||||||||||
| Total Noninterest Expense | 96,312 | 93,096 | 93,057 | |||||||||||
| Income Before Provision for Income Taxes | 42,203 | 73,741 | 72,459 | |||||||||||
| Provision for Income Taxes | 7,461 | 15,598 | 13,660 | |||||||||||
| Net Income | $ | 34,742 | $ | 58,143 | $ | 58,799 | ||||||||
| Basic Earnings Per Share | $ | 0.88 | $ | 1.46 | $ | 1.44 | ||||||||
| Diluted Earnings Per Share | $ | 0.87 | $ | 1.45 | $ | 1.43 | ||||||||
| Dividends Declared Per Share | $ | 0.67 | $ | 0.67 | $ | 0.62 | ||||||||
| Basic Weighted Average Shares | 39,681,611 | 39,880,619 | 40,938,318 | |||||||||||
| Diluted Weighted Average Shares | 39,916,986 | 40,179,016 | 41,213,453 | |||||||||||
| 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) | 2020 | 2019 | 2019 | ||||||||||||||
| Net Income | $ | 34,742 | $ | 58,143 | $ | 58,799 | |||||||||||
| Other Comprehensive Income (Loss), Net of Tax: | |||||||||||||||||
| Net Unrealized Gains (Losses) on Investment Securities | 41,559 | (5,856) | 6,919 | ||||||||||||||
| Defined Benefit Plans | 374 | (3,482) | 246 | ||||||||||||||
| Other Comprehensive Income (Loss) | 41,933 | (9,338) | 7,165 | ||||||||||||||
| Comprehensive Income | $ | 76,675 | $ | 48,805 | $ | 65,964 | |||||||||||
| Bank of Hawaii Corporation and Subsidiaries | ||||||||||||||
| Consolidated Statements of Condition | Table 5 | |||||||||||||
| March 31, | December 31, | March 31, | ||||||||||||
| (dollars in thousands) | 2020 | 2019 | 2019 | |||||||||||
| Assets | ||||||||||||||
| Interest-Bearing Deposits in Other Banks | $ | 6,346 | $ | 4,979 | $ | 3,550 | ||||||||
| Funds Sold | 96,898 | 254,574 | 243,867 | |||||||||||
| Investment Securities | ||||||||||||||
| Available-for-Sale | 2,681,049 | 2,619,003 | 1,859,256 | |||||||||||
| Held-to-Maturity (Fair Value of $3,104,020; $3,062,882; and $3,637,496) | 3,004,139 | 3,042,294 | 3,668,811 | |||||||||||
| Loans Held for Sale | 20,789 | 39,062 | 17,909 | |||||||||||
| Loans and Leases | 11,352,780 | 10,990,892 | 10,548,609 | |||||||||||
| Allowance for Credit Losses | (138,150) | (110,027) | (106,023) | |||||||||||
| Net Loans and Leases | 11,214,630 | 10,880,865 | 10,442,586 | |||||||||||
| Total Earning Assets | 17,023,851 | 16,840,777 | 16,235,979 | |||||||||||
| Cash and Due from Banks | 453,465 | 299,105 | 293,871 | |||||||||||
| Premises and Equipment, Net | 196,228 | 188,388 | 159,344 | |||||||||||
| Operating Lease Right-of-Use Assets | 98,695 | 100,838 | 104,166 | |||||||||||
| Accrued Interest Receivable | 46,996 | 46,476 | 52,820 | |||||||||||
| Foreclosed Real Estate | 2,506 | 2,737 | 3,225 | |||||||||||
| Mortgage Servicing Rights | 22,537 | 25,022 | 24,149 | |||||||||||
| Goodwill | 31,517 | 31,517 | 31,517 | |||||||||||
| Bank-Owned Life Insurance | 289,536 | 287,962 | 285,155 | |||||||||||
| Other Assets | 376,902 | 272,674 | 256,187 | |||||||||||
| Total Assets | $ | 18,542,233 | $ | 18,095,496 | $ | 17,446,413 | ||||||||
| Liabilities | ||||||||||||||
| Deposits | ||||||||||||||
| Noninterest-Bearing Demand | $ | 4,378,918 | $ | 4,489,525 | $ | 4,595,915 | ||||||||
| Interest-Bearing Demand | 3,261,101 | 3,127,205 | 2,961,444 | |||||||||||
| Savings | 6,670,530 | 6,365,321 | 5,946,881 | |||||||||||
| Time | 1,744,812 | 1,802,431 | 1,763,070 | |||||||||||
| Total Deposits | 16,055,361 | 15,784,482 | 15,267,310 | |||||||||||
| Funds Purchased | 75,000 | — | — | |||||||||||
| Short-Term Borrowings | 75,000 | — | — | |||||||||||
| Securities Sold Under Agreements to Repurchase | 603,206 | 604,306 | 504,299 | |||||||||||
| Other Debt | 60,545 | 85,565 | 110,624 | |||||||||||
| Operating Lease Liabilities | 106,180 | 108,210 | 111,230 | |||||||||||
| Retirement Benefits Payable | 44,124 | 44,504 | 40,343 | |||||||||||
| Accrued Interest Payable | 7,932 | 8,040 | 8,474 | |||||||||||
| Taxes Payable and Deferred Taxes | 32,793 | 16,085 | 29,935 | |||||||||||
| Other Liabilities | 154,163 | 157,472 | 104,508 | |||||||||||
| Total Liabilities | 17,214,304 | 16,808,664 | 16,176,723 | |||||||||||
| Shareholders' Equity | ||||||||||||||
| Common Stock ($.01 par value; authorized 500,000,000 shares; | ||||||||||||||
| issued / outstanding: March 31, 2020 - 58,251,725 / 39,996,510; | ||||||||||||||
| December 31, 2019 - 58,166,910 / 40,039,695; | ||||||||||||||
| and March 31, 2019 - 58,166,535 / 41,078,688) | 579 | 579 | 578 | |||||||||||
| Capital Surplus | 584,392 | 582,566 | 574,594 | |||||||||||
| Accumulated Other Comprehensive Loss | 10,821 | (31,112) | (43,878) | |||||||||||
| Retained Earnings | 1,773,607 | 1,761,415 | 1,674,264 | |||||||||||
| Treasury Stock, at Cost (Shares: March 31, 2020 - 18,255,215; | ||||||||||||||
| December 31, 2019 - 18,127,215; and March 31, 2019 - 17,087,847) | (1,041,470) | (1,026,616) | (935,868) | |||||||||||
| Total Shareholders' Equity | 1,327,929 | 1,286,832 | 1,269,690 | |||||||||||
| Total Liabilities and Shareholders' Equity | $ | 18,542,233 | $ | 18,095,496 | $ | 17,446,413 | ||||||||
| 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, 2019 | 40,039,695 | $ | 579 | $ | 582,566 | $ | (31,112) | $ | 1,761,415 | $ | (1,026,616) | $ | 1,286,832 | |||||||||||||
| Net Income | — | — | — | — | 34,742 | — | 34,742 | |||||||||||||||||||
| Other Comprehensive Income | — | — | — | 41,933 | — | — | 41,933 | |||||||||||||||||||
| Cumulative Change in Accounting Principle | — | — | — | — | 3,632 | — | 3,632 | |||||||||||||||||||
| Share-Based Compensation | — | — | 1,497 | — | — | — | 1,497 | |||||||||||||||||||
| Common Stock Issued under Purchase and Equity | ||||||||||||||||||||||||||
| Compensation Plans | 154,091 | — | 329 | — | 653 | 2,779 | 3,761 | |||||||||||||||||||
| Common Stock Repurchased | (197,276) | — | — | — | — | (17,633) | (17,633) | |||||||||||||||||||
| Cash Dividends Declared ($0.67 per share) | — | — | — | — | (26,835) | — | (26,835) | |||||||||||||||||||
| Balance as of March 31, 2020 | 39,996,510 | $ | 579 | $ | 584,392 | $ | 10,821 | $ | 1,773,607 | $ | (1,041,470) | $ | 1,327,929 | |||||||||||||
| Balance as of December 31, 2018 | 41,499,898 | $ | 577 | $ | 571,704 | $ | (51,043) | $ | 1,641,314 | $ | (894,352) | $ | 1,268,200 | |||||||||||||
| Net Income | — | — | — | — | 58,799 | — | 58,799 | |||||||||||||||||||
| Other Comprehensive Income | — | — | — | 7,165 | — | — | 7,165 | |||||||||||||||||||
| Share-Based Compensation | — | — | 2,274 | — | — | — | 2,274 | |||||||||||||||||||
| Common Stock Issued under Purchase and Equity | ||||||||||||||||||||||||||
| Compensation Plans | 131,529 | 1 | 616 | — | (203) | 1,673 | 2,087 | |||||||||||||||||||
| Common Stock Repurchased | (552,739) | — | — | — | — | (43,189) | (43,189) | |||||||||||||||||||
| Cash Dividends Declared ($0.62 per share) | — | — | — | — | (25,646) | — | (25,646) | |||||||||||||||||||
| Balance as of March 31, 2019 | 41,078,688 | $ | 578 | $ | 574,594 | $ | (43,878) | $ | 1,674,264 | $ | (935,868) | $ | 1,269,690 | |||||||||||||
| 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, 2020 | December 31, 2019 | March 31, 2019 | |||||||||||||||||||||||||||||||||||||||
| 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 | $ | 1.4 | $ | — | 2.36 | % | $ | 3.4 | $ | — | 0.90 | % | $ | 3.0 | $ | — | 2.05 | % | |||||||||||||||||||||||
| Funds Sold | 152.8 | 0.6 | 1.41 | 177.7 | 0.7 | 1.59 | 241.6 | 1.5 | 2.39 | ||||||||||||||||||||||||||||||||
| Investment Securities | |||||||||||||||||||||||||||||||||||||||||
| Available-for-Sale | |||||||||||||||||||||||||||||||||||||||||
| Taxable | 2,702.4 | 16.4 | 2.43 | 2,578.3 | 15.9 | 2.46 | 1,595.8 | 11.5 | 2.90 | ||||||||||||||||||||||||||||||||
| Non-Taxable | 32.4 | 0.4 | 4.40 | 33.4 | 0.4 | 4.35 | 279.1 | 2.4 | 3.45 | ||||||||||||||||||||||||||||||||
| Held-to-Maturity | |||||||||||||||||||||||||||||||||||||||||
| Taxable | 3,036.2 | 18.9 | 2.50 | 2,994.7 | 18.4 | 2.46 | 3,373.5 | 20.5 | 2.43 | ||||||||||||||||||||||||||||||||
| Non-Taxable | 54.7 | 0.4 | 2.67 | 61.7 | 0.4 | 2.70 | 234.1 | 1.8 | 3.15 | ||||||||||||||||||||||||||||||||
| Total Investment Securities | 5,825.7 | 36.1 | 2.48 | 5,668.1 | 35.1 | 2.47 | 5,482.5 | 36.2 | 2.65 | ||||||||||||||||||||||||||||||||
| Loans Held for Sale | 23.2 | 0.2 | 3.54 | 31.0 | 0.3 | 3.67 | 12.4 | 0.1 | 4.35 | ||||||||||||||||||||||||||||||||
Loans and Leases 1 | |||||||||||||||||||||||||||||||||||||||||
| Commercial and Industrial | 1,409.3 | 13.2 | 3.77 | 1,356.1 | 13.3 | 3.90 | 1,357.8 | 15.3 | 4.57 | ||||||||||||||||||||||||||||||||
| Commercial Mortgage | 2,549.4 | 25.1 | 3.96 | 2,479.7 | 25.5 | 4.08 | 2,310.4 | 24.9 | 4.36 | ||||||||||||||||||||||||||||||||
| Construction | 213.2 | 2.5 | 4.65 | 179.1 | 2.1 | 4.73 | 150.4 | 1.9 | 5.08 | ||||||||||||||||||||||||||||||||
| Commercial Lease Financing | 111.4 | 0.5 | 1.95 | 135.4 | 0.8 | 2.38 | 160.9 | 0.9 | 2.28 | ||||||||||||||||||||||||||||||||
| Residential Mortgage | 3,895.4 | 36.9 | 3.79 | 3,850.4 | 36.7 | 3.81 | 3,680.2 | 35.5 | 3.86 | ||||||||||||||||||||||||||||||||
| Home Equity | 1,680.2 | 15.2 | 3.64 | 1,683.4 | 15.7 | 3.70 | 1,690.0 | 16.1 | 3.87 | ||||||||||||||||||||||||||||||||
| Automobile | 721.0 | 6.4 | 3.56 | 715.2 | 6.5 | 3.59 | 668.2 | 6.0 | 3.66 | ||||||||||||||||||||||||||||||||
Other 2 | 480.8 | 8.4 | 7.06 | 479.4 | 8.5 | 7.02 | 449.4 | 7.9 | 7.13 | ||||||||||||||||||||||||||||||||
| Total Loans and Leases | 11,060.7 | 108.2 | 3.93 | 10,878.7 | 109.1 | 3.99 | 10,467.3 | 108.5 | 4.18 | ||||||||||||||||||||||||||||||||
| Other | 34.3 | 0.2 | 2.54 | 34.9 | 0.2 | 2.74 | 35.5 | 0.3 | 3.60 | ||||||||||||||||||||||||||||||||
Total Earning Assets 3 | 17,098.1 | 145.3 | 3.41 | 16,793.8 | 145.4 | 3.45 | 16,242.3 | 146.6 | 3.64 | ||||||||||||||||||||||||||||||||
| Cash and Due from Banks | 278.8 | 222.2 | 240.8 | ||||||||||||||||||||||||||||||||||||||
| Other Assets | 845.7 | 805.0 | 753.0 | ||||||||||||||||||||||||||||||||||||||
| Total Assets | $ | 18,222.6 | $ | 17,821.0 | $ | 17,236.1 | |||||||||||||||||||||||||||||||||||
| Interest-Bearing Liabilities | |||||||||||||||||||||||||||||||||||||||||
| Interest-Bearing Deposits | |||||||||||||||||||||||||||||||||||||||||
| Demand | $ | 3,110.0 | 1.0 | 0.12 | $ | 2,990.3 | 1.0 | 0.14 | $ | 2,939.9 | 1.5 | 0.20 | |||||||||||||||||||||||||||||
| Savings | 6,502.4 | 7.1 | 0.44 | 6,245.0 | 8.0 | 0.51 | 5,760.8 | 6.7 | 0.47 | ||||||||||||||||||||||||||||||||
| Time | 1,743.0 | 6.2 | 1.43 | 1,842.3 | 7.4 | 1.59 | 1,703.4 | 7.1 | 1.69 | ||||||||||||||||||||||||||||||||
| Total Interest-Bearing Deposits | 11,355.4 | 14.3 | 0.51 | 11,077.6 | 16.4 | 0.59 | 10,404.1 | 15.3 | 0.60 | ||||||||||||||||||||||||||||||||
| Short-Term Borrowings | 57.8 | 0.1 | 0.76 | 5.8 | — | 1.66 | 31.1 | 0.2 | 2.49 | ||||||||||||||||||||||||||||||||
| Securities Sold Under Agreements to Repurchase | 604.1 | 4.0 | 2.64 | 604.3 | 4.1 | 2.64 | 504.3 | 4.6 | 3.63 | ||||||||||||||||||||||||||||||||
| Other Debt | 66.9 | 0.6 | 3.51 | 106.2 | 0.7 | 2.67 | 120.0 | 0.7 | 2.55 | ||||||||||||||||||||||||||||||||
| Total Interest-Bearing Liabilities | 12,084.2 | 19.0 | 0.63 | 11,793.9 | 21.2 | 0.71 | 11,059.5 | 20.8 | 0.76 | ||||||||||||||||||||||||||||||||
| Net Interest Income | $ | 126.3 | $ | 124.2 | $ | 125.8 | |||||||||||||||||||||||||||||||||||
| Interest Rate Spread | 2.78 | % | 2.74 | % | 2.88 | % | |||||||||||||||||||||||||||||||||||
| Net Interest Margin | 2.96 | % | 2.95 | % | 3.12 | % | |||||||||||||||||||||||||||||||||||
| Noninterest-Bearing Demand Deposits | 4,462.3 | 4,363.5 | 4,567.3 | ||||||||||||||||||||||||||||||||||||||
| Other Liabilities | 362.3 | 370.7 | 341.9 | ||||||||||||||||||||||||||||||||||||||
| Shareholders' Equity | 1,313.8 | 1,292.9 | 1,267.4 | ||||||||||||||||||||||||||||||||||||||
| Total Liabilities and Shareholders' Equity | $ | 18,222.6 | $ | 17,821.0 | $ | 17,236.1 | |||||||||||||||||||||||||||||||||||
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 21%, of $357,000, $352,000, and $981,000 | |||||||||||||||||||||||||||||||||||||||||
for the three months ended March 31, 2020, December 31, 2019, and March 31, 2019, respectively. | |||||||||||||||||||||||||||||||||||||||||
| Bank of Hawaii Corporation and Subsidiaries | |||||||||||
| Analysis of Change in Net Interest Income - Taxable-Equivalent Basis | Table 8a | ||||||||||
| Three Months Ended March 31, 2020 | |||||||||||
| Compared to December 31, 2019 | |||||||||||
| (dollars in millions) | Volume 1 | Rate 1 | Total | ||||||||
| Change in Interest Income: | |||||||||||
| Funds Sold | $ | (0.1) | $ | — | $ | (0.1) | |||||
| Investment Securities | |||||||||||
| Available-for-Sale | |||||||||||
| Taxable | 0.7 | (0.2) | 0.5 | ||||||||
| Held-to-Maturity | |||||||||||
| Taxable | 0.2 | 0.3 | 0.5 | ||||||||
| Total Investment Securities | 0.9 | 0.1 | 1.0 | ||||||||
| Loans Held for Sale | (0.1) | — | (0.1) | ||||||||
| Loans and Leases | |||||||||||
| Commercial and Industrial | 0.4 | (0.5) | (0.1) | ||||||||
| Commercial Mortgage | 0.5 | (0.9) | (0.4) | ||||||||
| Construction | 0.4 | — | 0.4 | ||||||||
| Commercial Lease Financing | (0.1) | (0.2) | (0.3) | ||||||||
| Residential Mortgage | 0.5 | (0.3) | 0.2 | ||||||||
| Home Equity | (0.1) | (0.4) | (0.5) | ||||||||
| Automobile | — | (0.1) | (0.1) | ||||||||
Other 2 | — | (0.1) | (0.1) | ||||||||
| Total Loans and Leases | 1.6 | (2.5) | (0.9) | ||||||||
| Total Change in Interest Income | 2.3 | (2.4) | (0.1) | ||||||||
| Change in Interest Expense: | |||||||||||
| Interest-Bearing Deposits | |||||||||||
| Demand | 0.1 | (0.1) | — | ||||||||
| Savings | 0.3 | (1.2) | (0.9) | ||||||||
| Time | (0.4) | (0.8) | (1.2) | ||||||||
| Total Interest-Bearing Deposits | — | (2.1) | (2.1) | ||||||||
| Short-Term Borrowings | 0.1 | — | 0.1 | ||||||||
| Securities Sold Under Agreements to Repurchase | (0.1) | — | (0.1) | ||||||||
| Other Debt | (0.3) | 0.2 | (0.1) | ||||||||
| Total Change in Interest Expense | (0.3) | (1.9) | (2.2) | ||||||||
| Change in Net Interest Income | $ | 2.6 | $ | (0.5) | $ | 2.1 | |||||
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, 2020 | |||||||||||
| Compared to March 31, 2019 | |||||||||||
| (dollars in millions) | Volume 1 | Rate 1 | Total | ||||||||
| Change in Interest Income: | |||||||||||
| Funds Sold | $ | (0.4) | $ | (0.5) | $ | (0.9) | |||||
| Investment Securities | |||||||||||
| Available-for-Sale | |||||||||||
| Taxable | 7.0 | (2.1) | 4.9 | ||||||||
| Non-Taxable | (2.5) | 0.5 | (2.0) | ||||||||
| Held-to-Maturity | |||||||||||
| Taxable | (2.2) | 0.6 | (1.6) | ||||||||
| Non-Taxable | (1.2) | (0.2) | (1.4) | ||||||||
| Total Investment Securities | 1.1 | (1.2) | (0.1) | ||||||||
| Loans Held for Sale | 0.1 | — | 0.1 | ||||||||
| Loans and Leases | |||||||||||
| Commercial and Industrial | 0.6 | (2.7) | (2.1) | ||||||||
| Commercial Mortgage | 2.5 | (2.3) | 0.2 | ||||||||
| Construction | 0.8 | (0.2) | 0.6 | ||||||||
| Commercial Lease Financing | (0.3) | (0.1) | (0.4) | ||||||||
| Residential Mortgage | 2.1 | (0.7) | 1.4 | ||||||||
| Home Equity | (0.1) | (0.8) | (0.9) | ||||||||
| Automobile | 0.5 | (0.1) | 0.4 | ||||||||
Other 2 | 0.6 | (0.1) | 0.5 | ||||||||
| Total Loans and Leases | 6.7 | (7.0) | (0.3) | ||||||||
| Other | — | (0.1) | (0.1) | ||||||||
| Total Change in Interest Income | 7.5 | (8.8) | (1.3) | ||||||||
| Change in Interest Expense: | |||||||||||
| Interest-Bearing Deposits | |||||||||||
| Demand | 0.1 | (0.6) | (0.5) | ||||||||
| Savings | 0.9 | (0.5) | 0.4 | ||||||||
| Time | 0.2 | (1.1) | (0.9) | ||||||||
| Total Interest-Bearing Deposits | 1.2 | (2.2) | (1.0) | ||||||||
| Short-Term Borrowings | 0.1 | (0.2) | (0.1) | ||||||||
| Securities Sold Under Agreements to Repurchase | 0.8 | (1.4) | (0.6) | ||||||||
| Other Debt | (0.4) | 0.3 | (0.1) | ||||||||
| Total Change in Interest Expense | 1.7 | (3.5) | (1.8) | ||||||||
| Change in Net Interest Income | $ | 5.8 | $ | (5.3) | $ | 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 | |||||||||||
| Salaries and Benefits | Table 9 | ||||||||||
| Three Months Ended | |||||||||||
| March 31, | December 31, | March 31, | |||||||||
| (dollars in thousands) | 2020 | 2020 | 2019 | ||||||||
| Salaries | $ | 33,486 | $ | 33,465 | $ | 32,480 | |||||
| Incentive Compensation | 245 | 4,864 | 5,904 | ||||||||
| Share-Based Compensation | 1,291 | 1,475 | 3,079 | ||||||||
| Commission Expense | 1,374 | 2,080 | 930 | ||||||||
| Retirement and Other Benefits | 4,706 | 4,279 | 5,107 | ||||||||
| Payroll Taxes | 4,543 | 2,386 | 4,247 | ||||||||
| Medical, Dental, and Life Insurance | 4,142 | 2,903 | 4,465 | ||||||||
| Separation Expense | 4,676 | 212 | 374 | ||||||||
| Total Salaries and Benefits | $ | 54,463 | $ | 51,664 | $ | 56,586 | |||||
| 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) | 2020 | 2019 | 2019 | 2019 | 2019 | |||||||||||||||
| Commercial | ||||||||||||||||||||
| Commercial and Industrial | $ | 1,558,232 | $ | 1,379,152 | $ | 1,361,011 | $ | 1,408,729 | $ | 1,331,345 | ||||||||||
| Commercial Mortgage | 2,616,243 | 2,518,051 | 2,477,296 | 2,411,289 | 2,381,213 | |||||||||||||||
| Construction | 245,390 | 194,170 | 154,754 | 119,228 | 132,775 | |||||||||||||||
| Lease Financing | 110,704 | 122,454 | 163,672 | 163,070 | 154,919 | |||||||||||||||
| Total Commercial | 4,530,569 | 4,213,827 | 4,156,733 | 4,102,316 | 4,000,252 | |||||||||||||||
| Consumer | ||||||||||||||||||||
| Residential Mortgage | 3,928,183 | 3,891,100 | 3,846,511 | 3,785,006 | 3,702,553 | |||||||||||||||
| Home Equity | 1,692,154 | 1,676,073 | 1,681,951 | 1,694,577 | 1,698,666 | |||||||||||||||
| Automobile | 716,214 | 720,286 | 713,424 | 703,523 | 676,730 | |||||||||||||||
Other 1 | 485,660 | 489,606 | 482,679 | 473,707 | 470,408 | |||||||||||||||
| Total Consumer | 6,822,211 | 6,777,065 | 6,724,565 | 6,656,813 | 6,548,357 | |||||||||||||||
| Total Loans and Leases | $ | 11,352,780 | $ | 10,990,892 | $ | 10,881,298 | $ | 10,759,129 | $ | 10,548,609 | ||||||||||
| Deposits | ||||||||||||||||||||
| March 31, | December 31, | September 30, | June 30, | March 31, | ||||||||||||||||
| (dollars in thousands) | 2020 | 2019 | 2019 | 2019 | 2019 | |||||||||||||||
| Consumer | $ | 8,294,464 | $ | 8,118,494 | $ | 7,893,454 | $ | 7,880,284 | $ | 7,944,793 | ||||||||||
| Commercial | 6,358,583 | 6,324,214 | 6,153,492 | 6,178,984 | 6,162,042 | |||||||||||||||
| Public and Other | 1,402,314 | 1,341,774 | 1,293,806 | 1,429,553 | 1,160,475 | |||||||||||||||
| Total Deposits | $ | 16,055,361 | $ | 15,784,482 | $ | 15,340,752 | $ | 15,488,821 | $ | 15,267,310 | ||||||||||
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) | 2020 | 2019 | 2019 | 2019 | 2019 | ||||||||||||||||||
| Non-Performing Assets | |||||||||||||||||||||||
| Non-Accrual Loans and Leases | |||||||||||||||||||||||
| Commercial | |||||||||||||||||||||||
| Commercial and Industrial | $ | 634 | $ | 830 | $ | 573 | $ | 552 | $ | 393 | |||||||||||||
| Commercial Mortgage | 9,048 | 9,244 | 11,088 | 11,310 | 5,911 | ||||||||||||||||||
| Total Commercial | 9,682 | 10,074 | 11,661 | 11,862 | 6,304 | ||||||||||||||||||
| Consumer | |||||||||||||||||||||||
| Residential Mortgage | 4,330 | 4,125 | 4,258 | 4,697 | 5,599 | ||||||||||||||||||
| Home Equity | 4,086 | 3,181 | 2,787 | 2,486 | 2,797 | ||||||||||||||||||
| Total Consumer | 8,416 | 7,306 | 7,045 | 7,183 | 8,396 | ||||||||||||||||||
| Total Non-Accrual Loans and Leases | 18,098 | 17,380 | 18,706 | 19,045 | 14,700 | ||||||||||||||||||
| Foreclosed Real Estate | 2,506 | 2,737 | 2,939 | 2,737 | 3,225 | ||||||||||||||||||
| Total Non-Performing Assets | $ | 20,604 | $ | 20,117 | $ | 21,645 | $ | 21,782 | $ | 17,925 | |||||||||||||
| Accruing Loans and Leases Past Due 90 Days or More | |||||||||||||||||||||||
| Commercial | |||||||||||||||||||||||
| Commercial and Industrial | $ | — | $ | — | $ | 81 | $ | — | $ | 66 | |||||||||||||
| Total Commercial | — | — | 81 | — | 66 | ||||||||||||||||||
| Consumer | |||||||||||||||||||||||
| Residential Mortgage | $ | 3,024 | $ | 1,839 | $ | 2,032 | $ | 1,859 | $ | 903 | |||||||||||||
| Home Equity | 3,426 | 4,125 | 2,320 | 2,981 | 3,381 | ||||||||||||||||||
| Automobile | 866 | 949 | 582 | 607 | 734 | ||||||||||||||||||
Other 1 | 1,205 | 1,493 | 1,076 | 963 | 1,033 | ||||||||||||||||||
| Total Consumer | 8,521 | 8,406 | 6,010 | 6,410 | 6,051 | ||||||||||||||||||
| Total Accruing Loans and Leases Past Due 90 Days or More | $ | 8,521 | $ | 8,406 | $ | 6,091 | $ | 6,410 | $ | 6,117 | |||||||||||||
| Restructured Loans on Accrual Status | |||||||||||||||||||||||
| and Not Past Due 90 Days or More | $ | 61,425 | $ | 63,103 | $ | 46,178 | $ | 48,563 | $ | 48,571 | |||||||||||||
| Total Loans and Leases | $ | 11,352,780 | $ | 10,990,892 | $ | 10,881,298 | $ | 10,759,129 | $ | 10,548,609 | |||||||||||||
| Ratio of Non-Accrual Loans and Leases to Total Loans and Leases | 0.16 | % | 0.16 | % | 0.17 | % | 0.18 | % | 0.14 | % | |||||||||||||
| Ratio of Non-Performing Assets to Total Loans and Leases | |||||||||||||||||||||||
| and Foreclosed Real Estate | 0.18 | % | 0.18 | % | 0.20 | % | 0.20 | % | 0.17 | % | |||||||||||||
| Ratio of Commercial Non-Performing Assets to Total Commercial Loans and | |||||||||||||||||||||||
| Leases and Commercial Foreclosed Real Estate | 0.21 | % | 0.24 | % | 0.28 | % | 0.29 | % | 0.16 | % | |||||||||||||
| Ratio of Consumer Non-Performing Assets to Total Consumer Loans | |||||||||||||||||||||||
| and Leases and Consumer Foreclosed Real Estate | 0.16 | % | 0.15 | % | 0.15 | % | 0.15 | % | 0.18 | % | |||||||||||||
| 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 | 0.26 | % | 0.26 | % | 0.25 | % | 0.26 | % | 0.23 | % | |||||||||||||
| Quarter to Quarter Changes in Non-Performing Assets | |||||||||||||||||||||||
| Balance at Beginning of Quarter | $ | 20,117 | $ | 21,645 | $ | 21,782 | $ | 17,925 | $ | 12,930 | |||||||||||||
| Additions | 1,754 | 883 | 1,035 | 6,186 | 8,217 | ||||||||||||||||||
| Reductions | |||||||||||||||||||||||
| Payments | (315) | (495) | (984) | (441) | (989) | ||||||||||||||||||
| Return to Accrual Status | (437) | (1,673) | — | (1,344) | (316) | ||||||||||||||||||
| Sales of Foreclosed Real Estate | (231) | (201) | — | (374) | — | ||||||||||||||||||
| Charge-offs/Write-downs | (284) | (42) | (188) | (170) | (1,917) | ||||||||||||||||||
| Total Reductions | (1,267) | (2,411) | (1,172) | (2,329) | (3,222) | ||||||||||||||||||
| Balance at End of Quarter | $ | 20,604 | $ | 20,117 | $ | 21,645 | $ | 21,782 | $ | 17,925 | |||||||||||||
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) | 2020 | 2019 | 2019 | |||||||||||||||||
| Balance at Beginning of Period | $ | 116,849 | $ | 115,758 | $ | 113,515 | ||||||||||||||
| Loans and Leases Charged-Off | ||||||||||||||||||||
| Commercial | ||||||||||||||||||||
| Commercial and Industrial | (693) | (307) | (370) | |||||||||||||||||
| Commercial Mortgage | — | — | (1,616) | |||||||||||||||||
| Consumer | ||||||||||||||||||||
| Residential Mortgage | (20) | (50) | (4) | |||||||||||||||||
| Home Equity | — | (245) | (295) | |||||||||||||||||
| Automobile | (2,500) | (1,990) | (1,753) | |||||||||||||||||
Other 1 | (3,964) | (3,651) | (2,790) | |||||||||||||||||
| Total Loans and Leases Charged-Off | (7,177) | (6,243) | (6,828) | |||||||||||||||||
| Recoveries on Loans and Leases Previously Charged-Off | ||||||||||||||||||||
| Commercial | ||||||||||||||||||||
| Commercial and Industrial | 289 | 293 | 501 | |||||||||||||||||
| Commercial Mortgage | 40 | — | — | |||||||||||||||||
| Consumer | ||||||||||||||||||||
| Residential Mortgage | 263 | 699 | 484 | |||||||||||||||||
| Home Equity | 976 | 577 | 588 | |||||||||||||||||
| Automobile | 1,005 | 512 | 881 | |||||||||||||||||
Other 1 | 864 | 503 | 704 | |||||||||||||||||
| Total Recoveries on Loans and Leases Previously Charged-Off | 3,437 | 2,584 | 3,158 | |||||||||||||||||
| Net Loans and Leases Charged-Off | (3,740) | (3,659) | (3,670) | |||||||||||||||||
| Provision for Credit Losses | 33,600 | 4,750 | 3,000 | |||||||||||||||||
| Provision for Unfunded Commitments | (170) | — | — | |||||||||||||||||
Balance at End of Period 2 | $ | 141,467 | $ | 116,849 | $ | 112,845 | ||||||||||||||
| Components | ||||||||||||||||||||
| Allowance for Credit Losses | $ | 138,150 | $ | 110,027 | $ | 106,023 | ||||||||||||||
| Reserve for Unfunded Commitments | 3,317 | 6,822 | 6,822 | |||||||||||||||||
| Total Reserve for Credit Losses | $ | 141,467 | $ | 116,849 | $ | 112,845 | ||||||||||||||
| Average Loans and Leases Outstanding | $ | 11,060,707 | $ | 10,878,672 | $ | 10,467,321 | ||||||||||||||
| Ratio of Net Loans and Leases Charged-Off to | ||||||||||||||||||||
| Average Loans and Leases Outstanding (annualized) | 0.14 | % | 0.13 | % | 0.14 | % | ||||||||||||||
| Ratio of Allowance for Credit Losses to Loans and Leases Outstanding | 1.22 | % | 1.00 | % | 1.01 | % | ||||||||||||||
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 | ||||||||||||||||
| Consumer | Commercial | Treasury | Consolidated | ||||||||||||||
| (dollars in thousands) | Banking | Banking | and Other | Total | |||||||||||||
| Three Months Ended March 31, 2020 | |||||||||||||||||
| Net Interest Income | $ | 73,661 | $ | 45,986 | $ | 6,319 | $ | 125,966 | |||||||||
| Provision for Credit Losses | 3,545 | 290 | 29,765 | 33,600 | |||||||||||||
| Net Interest Income After Provision for Credit Losses | 70,116 | 45,696 | (23,446) | 92,366 | |||||||||||||
| Noninterest Income | 32,590 | 11,735 | 1,824 | 46,149 | |||||||||||||
| Noninterest Expense | (70,900) | (17,298) | (8,114) | (96,312) | |||||||||||||
| Income Before Provision for Income Taxes | 31,806 | 40,133 | (29,736) | 42,203 | |||||||||||||
| Provision for Income Taxes | (7,984) | (9,760) | 10,283 | (7,461) | |||||||||||||
| Net Income | $ | 23,822 | $ | 30,373 | $ | (19,453) | $ | 34,742 | |||||||||
| Total Assets as of March 31, 2020 | $ | 7,385,185 | $ | 4,584,040 | $ | 6,573,008 | $ | 18,542,233 | |||||||||
Three Months Ended March 31, 2019 1 | |||||||||||||||||
| Net Interest Income | $ | 76,352 | $ | 47,290 | $ | 1,195 | $ | 124,837 | |||||||||
| Provision for Credit Losses | 2,224 | 1,446 | (670) | 3,000 | |||||||||||||
| Net Interest Income After Provision for Credit Losses | 74,128 | 45,844 | 1,865 | 121,837 | |||||||||||||
| Noninterest Income | 34,478 | 7,061 | 2,140 | 43,679 | |||||||||||||
| Noninterest Expense | (69,427) | (20,955) | (2,675) | (93,057) | |||||||||||||
| Income Before Provision for Income Taxes | 39,179 | 31,950 | 1,330 | 72,459 | |||||||||||||
| Provision for Income Taxes | (9,834) | (6,002) | 2,176 | (13,660) | |||||||||||||
| Net Income | $ | 29,345 | $ | 25,948 | $ | 3,506 | $ | 58,799 | |||||||||
Total Assets as of March 31, 2019 1 | $ | 6,796,106 | $ | 4,004,176 | $ | 6,646,131 | $ | 17,446,413 | |||||||||
1 Certain prior period information has been reclassified to conform to current presentation. | |||||||||||||||||
| Bank of Hawaii Corporation and Subsidiaries | ||||||||||||||||||||||||||||||||
| Selected Quarterly Financial Data | Table 14 | |||||||||||||||||||||||||||||||
| Three Months Ended | ||||||||||||||||||||||||||||||||
| March 31, | December 31, | September 30, | June 30, | March 31, | ||||||||||||||||||||||||||||
| (dollars in thousands, except per share amounts) | 2020 | 2019 | 2019 | 2019 | 2019 | |||||||||||||||||||||||||||
| Quarterly Operating Results | ||||||||||||||||||||||||||||||||
| Interest Income | ||||||||||||||||||||||||||||||||
| Interest and Fees on Loans and Leases | $ | 108,210 | $ | 109,223 | $ | 110,877 | $ | 110,401 | $ | 108,511 | ||||||||||||||||||||||
| Income on Investment Securities | ||||||||||||||||||||||||||||||||
| Available-for-Sale | 16,711 | 16,158 | 17,512 | 15,072 | 13,432 | |||||||||||||||||||||||||||
| Held-to-Maturity | 19,252 | 18,750 | 18,796 | 22,149 | 21,921 | |||||||||||||||||||||||||||
| Deposits | 9 | 8 | 9 | 9 | 15 | |||||||||||||||||||||||||||
| Funds Sold | 546 | 723 | 656 | 730 | 1,444 | |||||||||||||||||||||||||||
| Other | 218 | 239 | 233 | 210 | 319 | |||||||||||||||||||||||||||
| Total Interest Income | 144,946 | 145,101 | 148,083 | 148,571 | 145,642 | |||||||||||||||||||||||||||
| Interest Expense | ||||||||||||||||||||||||||||||||
| Deposits | 14,260 | 16,407 | 18,055 | 18,628 | 15,284 | |||||||||||||||||||||||||||
| Securities Sold Under Agreements to Repurchase | 4,025 | 4,071 | 4,257 | 4,623 | 4,571 | |||||||||||||||||||||||||||
| Funds Purchased | 72 | 25 | 146 | 512 | 157 | |||||||||||||||||||||||||||
| Short-Term Borrowings | 39 | — | 1 | 1 | 36 | |||||||||||||||||||||||||||
| Other Debt | 584 | 713 | 728 | 710 | 757 | |||||||||||||||||||||||||||
| Total Interest Expense | 18,980 | 21,216 | 23,187 | 24,474 | 20,805 | |||||||||||||||||||||||||||
| Net Interest Income | 125,966 | 123,885 | 124,896 | 124,097 | 124,837 | |||||||||||||||||||||||||||
| Provision for Credit Losses | 33,600 | 4,750 | 4,250 | 4,000 | 3,000 | |||||||||||||||||||||||||||
| Net Interest Income After Provision for Credit Losses | 92,366 | 119,135 | 120,646 | 120,097 | 121,837 | |||||||||||||||||||||||||||
| Noninterest Income | ||||||||||||||||||||||||||||||||
| Trust and Asset Management | 10,915 | 11,157 | 10,930 | 11,385 | 10,761 | |||||||||||||||||||||||||||
| Mortgage Banking | 2,695 | 3,199 | 4,864 | 3,336 | 2,287 | |||||||||||||||||||||||||||
| Service Charges on Deposit Accounts | 7,451 | 7,835 | 7,592 | 7,283 | 7,364 | |||||||||||||||||||||||||||
| Fees, Exchange, and Other Service Charges | 13,200 | 14,533 | 14,900 | 14,252 | 14,208 | |||||||||||||||||||||||||||
| Investment Securities Gains (Losses), Net | (970) | (906) | (1,469) | (776) | (835) | |||||||||||||||||||||||||||
| Annuity and Insurance | 928 | 1,272 | 1,278 | 1,806 | 2,578 | |||||||||||||||||||||||||||
| Bank-Owned Life Insurance | 1,580 | 1,879 | 1,647 | 1,779 | 1,710 | |||||||||||||||||||||||||||
| Other | 10,350 | 8,733 | 6,765 | 6,385 | 5,606 | |||||||||||||||||||||||||||
| Total Noninterest Income | 46,149 | 47,702 | 46,507 | 45,450 | 43,679 | |||||||||||||||||||||||||||
| Noninterest Expense | ||||||||||||||||||||||||||||||||
| Salaries and Benefits | 54,463 | 51,664 | 54,345 | 53,511 | 56,586 | |||||||||||||||||||||||||||
| Net Occupancy | 8,955 | 8,824 | 8,803 | 8,579 | 7,594 | |||||||||||||||||||||||||||
| Net Equipment | 8,456 | 7,930 | 7,637 | 6,895 | 6,833 | |||||||||||||||||||||||||||
| Data Processing | 4,788 | 4,828 | 4,676 | 4,727 | 4,526 | |||||||||||||||||||||||||||
| Professional Fees | 3,208 | 3,257 | 2,184 | 2,177 | 2,453 | |||||||||||||||||||||||||||
| FDIC Insurance | 1,456 | 1,376 | 1,257 | 1,290 | 1,269 | |||||||||||||||||||||||||||
| Other | 14,986 | 15,217 | 21,447 | 15,546 | 13,796 | |||||||||||||||||||||||||||
| Total Noninterest Expense | 96,312 | 93,096 | 100,349 | 92,725 | 93,057 | |||||||||||||||||||||||||||
| Income Before Provision for Income Taxes | 42,203 | 73,741 | 66,804 | 72,822 | 72,459 | |||||||||||||||||||||||||||
| Provision for Income Taxes | 7,461 | 15,598 | 14,752 | 15,903 | 13,660 | |||||||||||||||||||||||||||
| Net Income | $ | 34,742 | $ | 58,143 | $ | 52,052 | $ | 56,919 | $ | 58,799 | ||||||||||||||||||||||
| Basic Earnings Per Share | $ | 0.88 | $ | 1.46 | $ | 1.30 | $ | 1.40 | $ | 1.44 | ||||||||||||||||||||||
| Diluted Earnings Per Share | $ | 0.87 | $ | 1.45 | $ | 1.29 | $ | 1.40 | $ | 1.43 | ||||||||||||||||||||||
| Balance Sheet Totals | ||||||||||||||||||||||||||||||||
| Loans and Leases | $ | 11,352,780 | $ | 10,990,892 | $ | 10,881,298 | $ | 10,759,129 | $ | 10,548,609 | ||||||||||||||||||||||
| Total Assets | 18,542,233 | 18,095,496 | 17,672,140 | 17,688,845 | 17,446,413 | |||||||||||||||||||||||||||
| Total Deposits | 16,055,361 | 15,784,482 | 15,340,752 | 15,488,821 | 15,267,310 | |||||||||||||||||||||||||||
| Total Shareholders' Equity | 1,327,929 | 1,286,832 | 1,291,490 | 1,285,948 | 1,269,690 | |||||||||||||||||||||||||||
| Performance Ratios | ||||||||||||||||||||||||||||||||
| Return on Average Assets | 0.77 | % | 1.29 | % | 1.17 | % | 1.31 | % | 1.38 | % | ||||||||||||||||||||||
| Return on Average Shareholders' Equity | 10.64 | 17.84 | 16.02 | 17.97 | 18.81 | |||||||||||||||||||||||||||
Efficiency Ratio 1 | 55.96 | 54.26 | 58.55 | 54.69 | 55.22 | |||||||||||||||||||||||||||
Net Interest Margin 2 | 2.96 | 2.95 | 3.01 | 3.04 | 3.12 | |||||||||||||||||||||||||||
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 29, 2020 | December 31, 2019 | December 31, 2018 | |||||||||||||||||||||||||||||||||||
| Hawaii Economic Trends | ||||||||||||||||||||||||||||||||||||||
State General Fund Revenues 1 | $ | 1,362.3 | 15.2 | % | $ | 7,316.5 | 5.5 | % | $ | 6,933.1 | 6.9 | % | ||||||||||||||||||||||||||
General Excise and Use Tax Revenue 1 | $ | 677.8 | 5.8 | % | $ | 3,602.2 | 5.1 | % | $ | 3,426.5 | 2.3 | % | ||||||||||||||||||||||||||
Jobs 2 | 651.2 | 648.9 | 649.9 | |||||||||||||||||||||||||||||||||||
| January 31, | December 31, | |||||||||||||||||||||||||||||||||||||
| (spot rates) | 2020 | 2019 | 2018 | |||||||||||||||||||||||||||||||||||
Unemployment 3 | ||||||||||||||||||||||||||||||||||||||
| Statewide, seasonally adjusted | 2.7 | % | 2.7 | % | 2.6 | % | ||||||||||||||||||||||||||||||||
| Oahu | 2.7 | 2.1 | 2.2 | |||||||||||||||||||||||||||||||||||
| Island of Hawaii | 3.5 | 2.8 | 2.9 | |||||||||||||||||||||||||||||||||||
| Maui | 2.8 | 2.2 | 2.2 | |||||||||||||||||||||||||||||||||||
| Kauai | 3.0 | 2.4 | 2.3 | |||||||||||||||||||||||||||||||||||
| March 31, | December 31, | |||||||||||||||||||||||||||||||||||||
| (percentage change, except months of inventory) | 2020 | 2019 | 2018 | 2017 | ||||||||||||||||||||||||||||||||||
Housing Trends (Single Family Oahu) 4 | ||||||||||||||||||||||||||||||||||||||
| Median Home Price | — | % | (0.1) | % | 4.6 | % | 2.7 | % | ||||||||||||||||||||||||||||||
| Home Sales Volume (units) | 11.6 | % | 3.9 | % | (7.7) | % | 6.3 | % | ||||||||||||||||||||||||||||||
| Months of Inventory | 2.6 | 2.5 | 2.8 | 2.1 | ||||||||||||||||||||||||||||||||||
| Monthly Visitor Arrivals, | Percentage Change | |||||||||||||||||||||||||||||||||||||
| (in thousands) | Not Seasonally Adjusted | from Previous Year | ||||||||||||||||||||||||||||||||||||
Tourism 5 | ||||||||||||||||||||||||||||||||||||||
| February 29, 2020 | 828.1 | 5.8 | ||||||||||||||||||||||||||||||||||||
| January 31, 2020 | 862.6 | 5.1 | ||||||||||||||||||||||||||||||||||||
| December 31, 2019 | 954.3 | 6.0 | ||||||||||||||||||||||||||||||||||||
| November 30, 2019 | 811.4 | 4.2 | ||||||||||||||||||||||||||||||||||||
| October 31, 2019 | 800.4 | 4.8 | ||||||||||||||||||||||||||||||||||||
| September 30, 2019 | 741.3 | 3.5 | ||||||||||||||||||||||||||||||||||||
| August 31, 2019 | 928.2 | 9.8 | ||||||||||||||||||||||||||||||||||||
| July 31, 2019 | 997.9 | 6.2 | ||||||||||||||||||||||||||||||||||||
| June 30, 2019 | 951.6 | 6.1 | ||||||||||||||||||||||||||||||||||||
| May 31, 2019 | 841.4 | 4.6 | ||||||||||||||||||||||||||||||||||||
| April 30, 2019 | 856.3 | 6.6 | ||||||||||||||||||||||||||||||||||||
| March 31, 2019 | 939.1 | 3.9 | ||||||||||||||||||||||||||||||||||||
| February 28, 2019 | 782.7 | 0.5 | ||||||||||||||||||||||||||||||||||||
| January 31, 2019 | 820.6 | 3.0 | ||||||||||||||||||||||||||||||||||||
| December 31, 2018 | 900.2 | 2.3 | ||||||||||||||||||||||||||||||||||||
| November 30, 2018 | 778.5 | 3.9 | ||||||||||||||||||||||||||||||||||||
| October 31, 2018 | 763.7 | 3.5 | ||||||||||||||||||||||||||||||||||||
| September 30, 2018 | 716.1 | 2.2 | ||||||||||||||||||||||||||||||||||||
| August 31, 2018 | 845.1 | 3.2 | ||||||||||||||||||||||||||||||||||||
| July 31, 2018 | 939.4 | 5.3 | ||||||||||||||||||||||||||||||||||||
| June 30, 2018 | 897.1 | 7.3 | ||||||||||||||||||||||||||||||||||||
| May 31, 2018 | 804.1 | 7.0 | ||||||||||||||||||||||||||||||||||||
| April 30, 2018 | 803.0 | 6.6 | ||||||||||||||||||||||||||||||||||||
| March 31, 2018 | 903.6 | 12.5 | ||||||||||||||||||||||||||||||||||||
| February 28, 2018 | 778.6 | 10.3 | ||||||||||||||||||||||||||||||||||||
| January 31, 2018 | 796.5 | 5.4 | ||||||||||||||||||||||||||||||||||||
1 Source: Hawaii Department of Business, Economic Development & Tourism | ||||||||||||||||||||||||||||||||||||||
2 Source: U. S. Bureau of Labor Statistics | ||||||||||||||||||||||||||||||||||||||
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 | ||||||||||||||||||||||||||||||||||||||
4/18/2020 Bank of Hawaii Corporation COVID-19 supplement April 2020 overview For more than 120 years, Bank of Hawaii has served our island communities. Natural events, over the decades, have taught us to prepare for the unexpected. As islanders, we are naturally conservative and place a premium on conservation. Having always been part of our communities, we are innately driven to nurture our community. As we confront COVID-19, we are well prepared and indeed uniquely positioned to weather the storm. the Hawaii market faces short/mid term long term value COVID-19 is challenge will accrue to we are well a health, although the firms committed positioned ethical, social long term to balancing the and economic attractiveness of and well needs of all crisis its visitor & prepared stakeholders military assets remains intact 2 1
4/18/2020 Hawaii COVID-19 infection activity 3 response timeline 3/25 branches rationalized 3/23 Honolulu C&C work from home 2/3 mass purchase of PPE and sanitation 2/20 3/18 products board review & BOH discussion work from home 1/28 3/10 Initial exec plan presented to meeting BOD January February March 4 2
4/18/2020 COVID-19 strategic implementation plan objectives • the health and safety of our employees are paramount. we are committed to providing a safe working environment • we are committed to providing for the essential financial needs of our customers and our community • we recognize certain customers provide essential service for our community. we will prioritize their banking needs accordingly 5 operations • branch structure reduced from 68 branches to 31 branches – coverage in all markets • 1,300 person corporate headquarters - tower reduced to 250 personnel effective week prior to shelter in place order • redundant teams and location sites created for certain operational functions • ~60% of workforce working from home. all equipped with laptop, VPN and mobile token capabilities 6 3
4/18/2020 employee support / workplace considerations • onsite employees receive $500/mos. stipend FT, $250/mos. PT • all COVID-19 incidents managed in conjunction with medical and industrial cleaning advisory groups • web based employee morale/engagement tool deployed • onsite employees afforded surplus sick leave as needed • executive team participates in twice daily video conference. frequent engagement with downline reports 7 customer • committed to providing full service banking capabilities via revised physical layout, work-from-home workforce and digital capabilities • payment relief provided to both consumer and commercial customers • processed over 2,100 PPP loans totaling in excess of $525 million • electronically distributed 65,000 stimulus payments totaling $112 million • committed to exploring emerging loan products 8 4
4/18/2020 customer modifications commercial - $ commercial - count # 451 15.7% oustandings $ $711 348 $613 95 $90 8 $9 principal interest P&I total principal interest P&I total consumer - count # 4,728 consumer – $ 3,827 5.9% outstandings $ $399 $333 901 $66 forbearance extension total forbearance extension total 9 community support • $3 million donation from Bank of Hawaii Foundation to Hawaii Community Foundation to support Hawaii COVID-19 support activities. proceeds focused on protecting frontline health professionals, nourishing the community and revitalization • donated 1,200 PPE items to the two largest healthcare providers in the state plus $100,000 in financial support for further PPE investment • waived ATM fees on all BOH ATM’s through June 2020 • provided line staff with broader authority to waive account level fees 10 5
4/18/2020 economic impact • unprecedented modern economic event • obvious and substantial impact to Hawaii and West Pacific markets • federal stimulus – both monetary and fiscal critical and meaningful • quality health outcome and recovery key to Hawaii market re-emergence 11 diversified Hawaii economy GDP by Industry Real Estate and Rentals 20% jobs by industry Government and Defense… 20% Trade, Transportation and Utilities 19% Professional Services 11% Leisure and Government Hospitality and Defense Leisure and Hospitality 10% 19% 19% Education and Health Services 8% Natural Resources, Mining and… 6% Real Estate and Rentals Finance, Finance, Insurance and Information 6% 2% Insurance and Information Personal Income by Industry Trade, 8% Transportati Government and Defense Spending 29% on and Professional Utilities Services Trade, Transportation and Utilities 16% 19% 12% Natural Professional Services 16% Resources, Education Mining and and Health Education and Health Services 12% Construction Services Leisure and Hospitality 11% 8% 13% Natural Resources, Mining and… 8% Finance, Insurance and Information 5% Real Estate and Rentals 3% Source: UHERO, 2019 data 12 6
4/18/2020 UHERO economic forecast Unemployment Rate Non-Farm Payroll 656.1 652.6 13.7 648.9 642.8 $ in in $ thousands 582.1 4.1 2.7 2.8 2.8 2019 2020F 2021F 2022F 2023F 2019 2020F 2021F 2022F 2023F Source: UHERO Forecast as of March 31, 2020 13 economic forecast Real GDP Personal Income Total Vistor Arrivals (MMs) Real Visitor Expenditures ($B) 17.7 99.2 16.8 17.0 98.0 15.9 97.3 96.7 89.9 87.6 10.3 10.5 10.2 10.4 9.3 84.5 $ in in $ billions 81.3 81.0 6.1 79.2 2019 2020F 2021F 2022F 2023F 2019 2020F 2021F 2022F 2023F 53.652.0 7.6 4.4 3.3 3.7 2.1 2.2 1.3 1.3 5.3 8.9 5.5 2.4 1.0 -0.3 % Change % Change -2.6 -40.8 -40.8 -7.7 2019 2020F 2021F 2022F 2023F 2019 2020F 2021F 2022F 2023F Source: UHERO Forecast as of March 31, 2020 14 7
4/18/2020 over $6 billion Hawaii COVID-19 relief Hawaii Funding $Millions State and County Government Response Efforts $1,250 Paycheck Protection 21% Hawaii Airports Program SBA Loans $133 $2,046 2% 33% Hawaii Health Care Providers $143 2% Local Schools and Colleges Unemployment Assistance $53 $1,140 1% 19% Supplemental Nutrition Direct Cash Payments Assistance Program Kauai Public Transit $1,240 $130 Services & Community 20% 2% Development Block Grants $13 0% Source: Press releases from Senator Brian Schatz as of April 14 and SBA as of April 16 15 BOH well positioned COVID-19 Bank of Hawaii • unprecedented • seasoned management team • substantial economic impact • exceptional liquidity • likely prolonged return • conservative loan to pre COVID-19 levels portfolio • Hawaii visitor industry • preeminent market reliant on normalized position social distancing • strong capital levels 16 8
4/18/2020 exceptional liquidity • high quality, liquid investment portfolio • exceptional core deposit base • flexible loan to deposit ratio • low cost funding base 17 conservative investment portfolio securities portfolio as of March 31, 2020 our investment securities portfolio consists of high-quality securities Sector Muni 2% Corp • 94% Aaa-rated, 100% A-rated 4% or higher • Highly Liquid and Pledgeable • Secure and Reliable Cash Flows Government/ Agency 94% Moody’s Rating Cash Flow Aa A 2% Bullets 4% 10% Monthly Payments Aaa 90% 94% 18 9
4/18/2020 strong mix of deposits as of March 31, 2020 solid base of core customers and core deposits Public Funds Time 9% 11% Commercial 39% Checking 48% Consumer Savings 52% 41% 91% core consumer and 89% core checking and commercial customers savings deposits 19 solid funding base loan to deposit ratio compared with peers supports balance sheet flexibility 110% 98% 98% 100% 93% 93% 94% 94% 91% 91% 91% 90% 87% 83% 85% 83% 84% 79% 80% 70% 70% 70% 66% 63% 61% 59% 60% 54% 55% 52% 51% 51% 50% 40% 30% 20% 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Bank of Hawaii Peer Median S&P Regional Bank Index excluding banks greater than $50BN 20 10
4/18/2020 long history of deposit growth we have a long history of sustained deposit growth and low cost of deposits Financial Crisis 18,000 5.0 16,000 4.5 14,000 4.0 3.5 12,000 Deposit Cost 3.0 10,000 2.5 8,000 2.0 6,000 1.5 TotalMillions) ($ Deposits 1.10 4,000 1.0 0.73 2,000 0.610.5 - 0.0 Total Deposits Deposit Cost - BOH Deposit Cost - Hawaii Average Deposit Cost - National Average 21 conservative underwriting & portfolio construction we lend in markets we understand, to people we know, in communities we trust • diversified loan portfolio by category • disciplined approach to exposure limits • 73% of overall portfolio secured by quality real estate with combined wtd avg LTV of 57% • higher risk categories well mitigated 22 11
4/18/2020 geographic footprint – 92% Hawaii 23 long term relationships 57% of consumer borrowers > 10 year BOH relationship 64% of commercial borrowers > 10 year BOH relationship 24 12
4/18/2020 commercial loans – granularity 04^ 93% of loans under $30MM 72% under $15MM 25 loan portfolio C&I residential 14% mortgage 35% 60% consumer 40% commercial CRE 23% home equity 15% auto other construction 4% 6% 2% leasing 1% 26 13
4/18/2020 consumer loans • 57% wtd avg LTV • 798 wtd avg FICO • 0.2% <700FICO/>80% LTV residential mortgage $3.9B • 750 wtd avg FICO (58%) • 1.4% + 30 days delinquent • 1.1% <700FICO/30+ day other $0.5B Indirect (7%) home $0.7B equity (10%) $1.7B (25%) • 723 wtd avg FICO • 59% wtd avg LTV • 29% wtd avg DTI • 780 wtd avg FICO • 4.2% <700 FICO/>45% DTI • 3.3% <700FICO/>80% LTV 27 commercial loans leasing $0.1B / (2%) • seasoned Hawaii portfolio • 61% Hawaii based • 55% wtd avg LTV • 37% national large • 97% LTV ≤ 75% ticketed • 4% criticized construction $0.2B / (5%) CRE • 61% wtd avg LTV (5%) $2.6B • concentration in housing (58%) • Oahu centric C&I $1.6B (35%) • seasoned Hawaii centric • 94.4% non-levered • 1.3% levered & criticized 28 14
4/18/2020 higher risk industries lodging, retail, restaurant/entertainment represent 11% of outstandings restaurant/entertainment retail Lodging` 1% lodging retail 5% 5% all others 89% 29 retail – $0.6 B (5%) retail industry exposure • 88% real estate secured • 52% wtd avg LTV • average exposure $3.3 MM • largest exposure $25 MM • 76% of portfolio has an LTV ≤ 65% • 95.8% is secured or has essential anchor essential business anchors 30 15
4/18/2020 lodging – $0.5 B (5%) • 71% real estate secured • 51% wtd avg LTV • average exposure $11 MM • largest exposure $40 MM • 84% of portfolio has an LTV ≤ 65% • 95% of unsecured outstandings to global hotel and timeshare brands 31 restaurant/entertainment – $0.1 B (1%) • 39% secured with wtd avg LTV 63% • granular unsecured exposure with 82% under $10MM 32 16
4/18/2020 strong capital levels • capital levels substantially above “well capitalized” minimums • simple capital structure • strong history of dividends 33 strong capital position as of December 31, 2019 capital maintained at levels well in excess of required minimums and comparatively low risk assets 78.4 13.28 % 12.18 12.18 58.5 10.00 % 8.00 6.50 Common Equity Tier 1 Tier 1 Capital Ratio Total Capital Ratio BOH $10-50B Capital Ratio BOH Regulatory Well-Cap Minimum RWA/Total Assets S&P Regional Bank Index excluding banks greater than $50BN 34 17
4/18/2020 unbroken history of dividends we have a long and unbroken history of dividends $3.00 Recession Recession Financial Crisis $2.50 $2.00 $1.50 $1.00 $0.50 $0.00 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Historical dividends adjusted for stock splits 35 appendix 18
4/18/2020 consumer behavior pivot consumer deposits % 60% online deposit openings 43% % 35% 32% 28% 25% 14% 12% 1/31/20 4/10/20 1/31/20 4/10/20 teller ATM mobile online loan application Zelle enrollees % 35% 38% # 39,038 30,377 22% 15% 1/31/20 4/10/20 1/31/20 4/10/20 residential mortgage home equity 37 diversified and stable deposits commercial and consumer (as of March 31, 2020) our deposits are granular and stable Account Size Age $8,000 $10MM+ Consumer & Business Balances 14% $7,000 Millions $5MM- <$100K $6,000 10MM 31% 5% $5,000 $1MM- $4,000 5MM 14% $3,000 $500K- $2,000 1MM $100-250K 8% 17% $1,000 $250-500K 11% $- 0 - 1 year 1 - 5 years 5 - 10 years 10+ years 86% have a balance less than $10MM 67% have a balance less than $1MM 68% have tenure greater than 5 years 47% have a balance less than $250K Charts represent sum of commercial and consumer customer deposit balances in each category shown. 38 19
4/18/2020 single family home price performance Honolulu single family home prices were relatively stable through great recession 350 Financial Crisis 303 300 297 296 250 200 150 100 50 0 Urban Honolulu San Francisco/ San Mateo/ Redwood City Los Angeles/ Long Beach/ Glendale Source: Federal Reserve Economic Data, All-Transaction House Price Index, Index 2000 Q1=100. 39 residential mortgage – current LTV 40 20
4/18/2020 residential mortgage – monitoring FICO 41 home equity – current CLTV 42 21
4/18/2020 home equity – monitoring FICO 43 automobile – DTI 44 22
4/18/2020 automobile – monitoring FICO 45 other consumer – delinquency status 46 23
4/18/2020 other consumer – monitoring FICO 47 commercial & industrial – leveraged 48 24
4/18/2020 commercial mortgage – current LTV 49 construction – current LTV 50 25
4/18/2020 lease financing – leveraged vs non-leveraged 51 26