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Bank of Hawaii Corporation First Quarter 2021 Financial Results

Nachrichtenquelle: Business Wire (engl.)
26.04.2021, 12:45  |  104   |   |   

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

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

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

Financial Highlights

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

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

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

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

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

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

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

Asset Quality

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

Bank of Hawaii Corporation First Quarter 2021 Financial Results Page 3

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

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

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

Other Financial Highlights

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

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

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

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

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

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

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

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

Conference Call Information

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

Forward-Looking Statements

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

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

Bank of Hawaii Corporation and Subsidiaries
Financial Highlights Table 1

Three Months Ended

March 31,

 

December 31,

 

March 31,

(dollars in thousands, except per share amounts)

2021

 

2020

 

2020

For the Period:
Operating Results
Net Interest Income

$

120,569

 

$

119,499

$

125,966

Provision for Credit Losses

 

(14,300

)

 

15,200

 

33,600

Total Noninterest Income

 

42,970

 

 

45,258

 

46,149

Total Noninterest Expense

 

98,865

 

 

98,654

 

96,312

Net Income

 

59,949

 

 

42,314

 

34,742

Basic Earnings Per Share

 

1.51

 

 

1.06

 

0.88

Diluted Earnings Per Share

 

1.50

 

 

1.06

 

0.87

Dividends Declared Per Share

 

0.67

 

 

0.67

 

0.67

 
Performance Ratios
Return on Average Assets

 

1.15

%

 

0.83

%

 

0.77

%

Return on Average Shareholders' Equity

 

17.65

 

 

12.26

 

10.64

Efficiency Ratio 1

 

60.45

 

 

59.88

 

55.96

Net Interest Margin 2

 

2.43

 

 

2.48

 

2.96

Dividend Payout Ratio 3

 

44.37

 

 

63.21

 

76.14

Average Shareholders' Equity to Average Assets

 

6.51

 

 

6.74

 

7.21

 
Average Balances
Average Loans and Leases

$

11,952,587

 

$

11,835,929

$

11,060,707

Average Assets

 

21,150,670

 

 

20,382,633

 

18,222,602

Average Deposits

 

18,665,222

 

 

17,819,116

 

15,817,745

Average Shareholders' Equity

 

1,377,272

 

 

1,372,971

 

1,313,848

 
Per Share of Common Stock
Book Value

$

33.67

 

$

34.26

$

33.20

Tangible Book Value

 

32.89

 

 

33.47

 

32.41

Market Value
Closing

 

89.49

 

 

76.62

 

54.91

High

 

99.10

 

 

80.38

 

95.53

Low

 

75.65

 

 

49.25

 

46.70

 

March 31,

 

December 31,

 

March 31,

2021

 

2020

 

2020

As of Period End:
Balance Sheet Totals
Loans and Leases

$

12,140,703

 

$

11,940,020

$

11,352,780

Total Assets

 

21,947,271

 

 

20,603,651

 

18,542,233

Total Deposits

 

19,556,651

 

 

18,211,621

 

16,055,361

Other Debt

 

60,459

 

 

60,481

 

60,545

Total Shareholders' Equity

 

1,360,221

 

 

1,374,507

 

1,327,929

 
Asset Quality
Non-Performing Assets

$

17,883

 

$

18,481

$

20,604

Allowance for Credit Losses

 

198,343

 

 

216,252

 

138,150

Allowance to Loans and Leases Outstanding

 

1.63

%

 

1.81

%

 

1.22

%

 
Capital Ratios 4
Common Equity Tier 1 Capital Ratio

 

12.35

%

 

12.06

%

 

11.81

%

Tier 1 Capital Ratio

 

12.35

 

 

12.06

 

11.81

Total Capital Ratio

 

13.61

 

 

13.31

 

13.06

Tier 1 Leverage Ratio

 

6.61

 

 

6.71

 

7.12

Total Shareholders' Equity to Total Assets

 

6.20

 

 

6.67

 

7.16

Tangible Common Equity to Tangible Assets 5

 

6.06

 

 

6.53

 

7.00

Tangible Common Equity to Risk-Weighted Assets 5

 

11.78

 

 

11.89

 

11.85

 
Non-Financial Data
Full-Time Equivalent Employees

 

2,058

 

 

2,022

 

2,094

Branches

 

63

 

 

65

 

67

ATMs

 

361

 

 

357

 

382

1

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

2

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

3

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

4

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

5

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

 

 

 

 

Table 2

March 31,

 

December 31,

 

March 31,

(dollars in thousands)

2021

 

2020

 

2020

 
Total Shareholders' Equity

$

1,360,221

 

$

1,374,507

 

$

1,327,929

 

Less:Goodwill

 

31,517

 

 

31,517

 

 

31,517

 

Tangible Common Equity

$

1,328,704

 

$

1,342,990

 

$

1,296,412

 

 
Total Assets

$

21,947,271

 

$

20,603,651

 

$

18,542,233

 

Less:Goodwill

 

31,517

 

 

31,517

 

 

31,517

 

Tangible Assets

$

21,915,754

 

$

20,572,134

 

$

18,510,716

 

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

$

11,275,565

 

$

11,295,077

 

$

10,944,260

 

 
Total Shareholders' Equity to Total Assets

 

6.20

%

 

6.67

%

 

7.16

%

Tangible Common Equity to Tangible Assets (Non-GAAP)

 

6.06

%

 

6.53

%

 

7.00

%

 
Tier 1 Capital Ratio

 

12.35

%

 

12.06

%

 

11.81

%

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

 

11.78

%

 

11.89

%

 

11.85

%

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

Three Months Ended

March 31,

 

December 31,

 

March 31,

(dollars in thousands, except per share amounts)

2021

 

2020

 

2020

Interest Income
Interest and Fees on Loans and Leases

$

99,299

 

$

98,471

 

$

108,210

 

Income on Investment Securities
Available-for-Sale

 

15,837

 

 

15,449

 

 

16,711

 

Held-to-Maturity

 

13,300

 

 

14,113

 

 

19,252

 

Deposits

 

7

 

 

1

 

 

9

 

Funds Sold

 

137

 

 

115

 

 

546

 

Other

 

185

 

 

167

 

 

218

 

Total Interest Income

 

128,765

 

 

128,316

 

 

144,946

 

Interest Expense
Deposits

 

4,329

 

 

4,861

 

 

14,260

 

Securities Sold Under Agreements to Repurchase

 

3,533

 

 

3,614

 

 

4,025

 

Funds Purchased

 

1

 

 

5

 

 

72

 

Short-Term Borrowings

 

-

 

 

-

 

 

39

 

Other Debt

 

333

 

 

337

 

 

584

 

Total Interest Expense

 

8,196

 

 

8,817

 

 

18,980

 

Net Interest Income

 

120,569

 

 

119,499

 

 

125,966

 

Provision for Credit Losses

 

(14,300

)

 

15,200

 

 

33,600

 

Net Interest Income After Provision for Credit Losses

 

134,869

 

 

104,299

 

 

92,366

 

Noninterest Income
Trust and Asset Management

 

11,278

 

 

11,239

 

 

10,915

 

Mortgage Banking

 

5,862

 

 

6,851

 

 

2,695

 

Service Charges on Deposit Accounts

 

6,128

 

 

6,335

 

 

7,451

 

Fees, Exchange, and Other Service Charges

 

13,607

 

 

12,143

 

 

13,200

 

Investment Securities Gains (Losses), Net

 

(1,203

)

 

(1,193

)

 

(970

)

Annuity and Insurance

 

702

 

 

670

 

 

928

 

Bank-Owned Life Insurance

 

1,917

 

 

2,353

 

 

1,580

 

Other

 

4,679

 

 

6,860

 

 

10,350

 

Total Noninterest Income

 

42,970

 

 

45,258

 

 

46,149

 

Noninterest Expense
Salaries and Benefits

 

56,251

 

 

50,200

 

 

54,463

 

Net Occupancy

 

9,090

 

 

14,536

 

 

8,955

 

Net Equipment

 

8,878

 

 

9,574

 

 

8,456

 

Data Processing

 

6,322

 

 

4,604

 

 

4,788

 

Professional Fees

 

3,406

 

 

3,174

 

 

3,208

 

FDIC Insurance

 

1,654

 

 

1,484

 

 

1,456

 

Other

 

13,264

 

 

15,082

 

 

14,986

 

Total Noninterest Expense

 

98,865

 

 

98,654

 

 

96,312

 

Income Before Provision for Income Taxes

 

78,974

 

 

50,903

 

 

42,203

 

Provision for Income Taxes

 

19,025

 

 

8,589

 

 

7,461

 

Net Income

$

59,949

 

$

42,314

 

$

34,742

 

Basic Earnings Per Share

$

1.51

 

$

1.06

 

$

0.88

 

Diluted Earnings Per Share

$

1.50

 

$

1.06

 

$

0.87

 

Dividends Declared Per Share

$

0.67

 

$

0.67

 

$

0.67

 

Basic Weighted Average Shares

 

39,827,590

 

 

39,773,851

 

 

39,681,611

 

Diluted Weighted Average Shares

 

40,071,477

 

 

39,963,736

 

 

39,916,986

 

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

March 31,

 

December 31,

 

March 31,

(dollars in thousands)

2021

 

2020

 

2020

Net Income

$

59,949

 

$

42,314

 

$

34,742

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

 

(50,050

)

 

(961

)

 

41,559

Defined Benefit Plans

 

441

 

 

(5,616

)

 

374

Other Comprehensive Income (Loss)

 

(49,609

)

 

(6,577

)

 

41,933

Comprehensive Income

$

10,340

 

$

35,737

 

$

76,675

Bank of Hawaii Corporation and Subsidiaries
Consolidated Statements of Condition

 

 

 

 

Table 5

March 31,

 

December 31,

 

March 31,

(dollars in thousands)

2021

 

2020

 

2020

Assets
Interest-Bearing Deposits in Other Banks

$

4,506

 

$

1,646

 

$

6,346

 

Funds Sold

 

1,101,631

 

 

333,022

 

 

96,898

 

Investment Securities
Available-for-Sale

 

4,024,763

 

 

3,791,689

 

 

2,681,049

 

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

 

3,464,360

 

 

3,262,727

 

 

3,004,139

 

Loans Held for Sale

 

18,320

 

 

82,565

 

 

20,789

 

Loans and Leases

 

12,140,703

 

 

11,940,020

 

 

11,352,780

 

Allowance for Credit Losses

 

(198,343

)

 

(216,252

)

 

(138,150

)

Net Loans and Leases

 

11,942,360

 

 

11,723,768

 

 

11,214,630

 

Total Earning Assets

 

20,555,940

 

 

19,195,417

 

 

17,023,851

 

Cash and Due from Banks

 

286,717

 

 

279,420

 

 

453,465

 

Premises and Equipment, Net

 

198,107

 

 

199,695

 

 

196,228

 

Operating Lease Right-of-Use Assets

 

97,750

 

 

99,542

 

 

98,695

 

Accrued Interest Receivable

 

47,917

 

 

49,303

 

 

46,996

 

Foreclosed Real Estate

 

2,332

 

 

2,332

 

 

2,506

 

Mortgage Servicing Rights

 

22,320

 

 

19,652

 

 

22,537

 

Goodwill

 

31,517

 

 

31,517

 

 

31,517

 

Bank-Owned Life Insurance

 

291,764

 

 

291,480

 

 

289,536

 

Other Assets

 

412,907

 

 

435,293

 

 

376,902

 

Total Assets

$

21,947,271

 

$

20,603,651

 

$

18,542,233

 

 
Liabilities
Deposits
Noninterest-Bearing Demand

$

6,227,436

 

$

5,749,612

 

$

4,378,918

 

Interest-Bearing Demand

 

4,379,243

 

 

4,040,733

 

 

3,261,101

 

Savings

 

7,474,580

 

 

6,759,213

 

 

6,670,530

 

Time

 

1,475,392

 

 

1,662,063

 

 

1,744,812

 

Total Deposits

 

19,556,651

 

 

18,211,621

 

 

16,055,361

 

Funds Purchased

 

-

 

 

-

 

 

75,000

 

Short-Term Borrowings

 

-

 

 

-

 

 

75,000

 

Securities Sold Under Agreements to Repurchase

 

600,490

 

 

600,590

 

 

603,206

 

Other Debt

 

60,459

 

 

60,481

 

 

60,545

 

Operating Lease Liabilities

 

105,820

 

 

107,412

 

 

106,180

 

Retirement Benefits Payable

 

50,687

 

 

51,197

 

 

44,124

 

Accrued Interest Payable

 

4,109

 

 

5,117

 

 

7,932

 

Taxes Payable and Deferred Taxes

 

15,599

 

 

2,463

 

 

32,793

 

Other Liabilities

 

193,235

 

 

190,263

 

 

154,163

 

Total Liabilities

 

20,587,050

 

 

19,229,144

 

 

17,214,304

 

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

 

580

 

 

580

 

 

579

 

Capital Surplus

 

594,804

 

 

591,360

 

 

584,392

 

Accumulated Other Comprehensive Income (Loss)

 

(41,787

)

 

7,822

 

 

10,821

 

Retained Earnings

 

1,844,057

 

 

1,811,979

 

 

1,773,607

 

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

 

(1,037,433

)

 

(1,037,234

)

 

(1,041,470

)

Total Shareholders' Equity

 

1,360,221

 

 

1,374,507

 

 

1,327,929

 

Total Liabilities and Shareholders' Equity

$

21,947,271

 

$

20,603,651

 

$

18,542,233

 

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

 

 

 

 

 

 

Accum.

 

 

 

 

 

 

 

 

 

 

 

 

Other

 

 

 

 

 

 

 

 

 

 

 

 

Compre-

 

 

 

 

 

 

 

 

 

 

 

 

hensive

 

 

 

 

 

 

Common Shares

 

Common

 

Capital

 

Income

 

Retained

 

Treasury

 

 

(dollars in thousands)

Outstanding

 

Stock

 

Surplus

 

(Loss)

 

Earnings

 

Stock

 

Total

Balance as of December 31, 2020

40,119,312

 

$

580

$

591,360

$

7,822

 

$

1,811,979

 

$

(1,037,234

)

$

1,374,507

 

Net Income

-

 

 

-

 

-

 

-

 

 

59,949

 

 

-

 

 

59,949

 

Other Comprehensive Loss

-

 

 

-

 

-

 

(49,609

)

 

-

 

 

-

 

 

(49,609

)

Share-Based Compensation

-

 

 

-

 

2,780

 

-

 

 

-

 

 

-

 

 

2,780

 

Common Stock Issued under Purchase and Equity
Compensation Plans

310,905

 

 

-

 

664

 

-

 

 

(845

)

 

2,990

 

 

2,809

 

Common Stock Repurchased

(35,983

)

 

-

 

-

 

-

 

 

-

 

 

(3,189

)

 

(3,189

)

Cash Dividends Declared ($0.67 per share)

-

 

 

-

 

-

 

-

 

 

(27,026

)

 

-

 

 

(27,026

)

Balance as of March 31, 2021

40,394,234

 

$

580

$

594,804

$

(41,787

)

$

1,844,057

 

$

(1,037,433

)

$

1,360,221

 

 
 
Balance as of December 31, 2019

40,039,695

 

$

579

$

582,566

$

(31,112

)

$

1,761,415

 

$

(1,026,616

)

$

1,286,832

 

Net Income

-

 

 

-

 

-

 

-

 

 

34,742

 

 

-

 

 

34,742

 

Other Comprehensive Income

-

 

 

-

 

-

 

41,933

 

 

-

 

 

-

 

 

41,933

 

Cumulative Change in Accounting Principle

-

 

 

-

 

-

 

-

 

 

3,632

 

 

-

 

 

3,632

 

Share-Based Compensation

-

 

 

-

 

1,497

 

-

 

 

-

 

 

-

 

 

1,497

 

Common Stock Issued under Purchase and Equity
Compensation Plans

154,091

 

 

-

 

329

 

-

 

 

653

 

 

2,779

 

 

3,761

 

Common Stock Repurchased

(197,276

)

 

-

 

-

 

-

 

 

-

 

 

(17,633

)

 

(17,633

)

Cash Dividends Declared ($0.67 per share)

-

 

 

-

 

-

 

-

 

 

(26,835

)

 

-

 

 

(26,835

)

Balance as of March 31, 2020

39,996,510

 

$

579

$

584,392

$

10,821

 

$

1,773,607

 

$

(1,041,470

)

$

1,327,929

 

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

Three Months Ended

 

 

Three Months Ended

 

 

Three Months Ended

March 31, 2021

 

 

December 31, 2020

 

 

March 31, 2020

Average

 

Income/

 

Yield/

 

 

Average

 

Income/

 

Yield/

 

 

Average

 

Income/

 

Yield/

(dollars in millions)

Balance

 

Expense

 

Rate

 

 

Balance

 

Expense

 

Rate

 

 

Balance

 

Expense

 

Rate

Earning Assets
Interest-Bearing Deposits in Other Banks

$

3.2

$

-

0.93

%

$

2.2

$

-

 

0.16

%

$

1.4

$

-

2.36

%

Funds Sold

 

550.6

 

0.1

0.10

 

451.6

 

0.1

 

0.10

 

152.8

 

0.6

1.41

Investment Securities
Available-for-Sale
Taxable

 

4,007.9

 

15.8

1.57

 

3,605.8

 

15.3

 

1.69

 

2,702.4

 

16.4

2.43

Non-Taxable

 

12.3

 

0.1

4.27

 

20.2

 

0.2

 

4.33

 

32.4

 

0.4

4.40

Held-to-Maturity
Taxable

 

3,385.8

 

13.1

1.55

 

3,246.7

 

13.9

 

1.71

 

3,036.2

 

18.9

2.50

Non-Taxable

 

38.1

 

0.2

2.55

 

47.1

 

0.3

 

2.66

 

54.7

 

0.4

2.67

Total Investment Securities

 

7,444.1

 

29.2

1.57

 

6,919.8

 

29.7

 

1.71

 

5,825.7

 

36.1

2.48

Loans Held for Sale

 

26.2

 

0.2

2.76

 

15.1

 

0.1

 

2.98

 

23.2

 

0.2

3.54

Loans and Leases 1
Commercial and Industrial

 

1,904.5

 

14.3

3.05

 

1,897.4

 

14.0

 

2.95

 

1,409.3

 

13.2

3.77

Commercial Mortgage

 

2,846.0

 

21.3

3.04

 

2,768.0

 

21.7

 

3.12

 

2,549.4

 

25.1

3.96

Construction

 

264.1

 

2.3

3.48

 

257.4

 

2.3

 

3.62

 

213.2

 

2.5

4.65

Commercial Lease Financing

 

106.4

 

0.4

1.43

 

112.2

 

(2.5

)

(9.07

)

 

111.4

 

0.5

1.95

Residential Mortgage

 

4,146.6

 

35.9

3.46

 

4,089.7

 

36.4

 

3.57

 

3,895.4

 

36.9

3.79

Home Equity

 

1,594.1

 

12.6

3.20

 

1,600.9

 

13.2

 

3.28

 

1,680.2

 

15.2

3.64

Automobile

 

708.3

 

6.1

3.51

 

706.1

 

6.4

 

3.59

 

721.0

 

6.4

3.56

Other 2

 

382.6

 

6.4

6.75

 

404.2

 

7.0

 

6.85

 

480.8

 

8.4

7.06

Total Loans and Leases

 

11,952.6

 

99.3

3.35

 

11,835.9

 

98.5

 

3.32

 

11,060.7

 

108.2

3.93

Other

 

33.4

 

0.2

2.21

 

33.3

 

0.2

 

2.01

 

34.3

 

0.2

2.54

Total Earning Assets 3

 

20,010.1

 

129.0

2.60

 

19,257.9

 

128.6

 

2.66

 

17,098.1

 

145.3

3.41

Cash and Due from Banks

 

270.7

 

240.4

 

278.8

Other Assets

 

869.9

 

884.3

 

845.7

Total Assets

$

21,150.7

$

20,382.6

$

18,222.6

 
Interest-Bearing Liabilities
Interest-Bearing Deposits
Demand

$

4,186.4

 

0.6

0.06

$

3,899.5

 

0.6

 

0.06

$

3,110.0

 

1.0

0.12

Savings

 

7,016.6

 

1.5

0.09

 

6,728.8

 

1.4

 

0.08

 

6,502.4

 

7.1

0.44

Time

 

1,630.0

 

2.2

0.56

 

1,696.0

 

2.9

 

0.68

 

1,743.0

 

6.2

1.43

Total Interest-Bearing Deposits

 

12,833.0

 

4.3

0.14

 

12,324.3

 

4.9

 

0.16

 

11,355.4

 

14.3

0.51

Short-Term Borrowings

 

2.4

 

-

0.09

 

19.2

 

-

 

0.10

 

57.8

 

0.1

0.76

Securities Sold Under Agreements to Repurchase

 

600.5

 

3.6

2.35

 

600.9

 

3.6

 

2.35

 

604.1

 

4.0

2.64

Other Debt

 

60.5

 

0.3

2.22

 

60.5

 

0.3

 

2.22

 

66.9

 

0.6

3.51

Total Interest-Bearing Liabilities

 

13,496.4

 

8.2

0.24

 

13,004.9

 

8.8

 

0.27

 

12,084.2

 

19.0

0.63

Net Interest Income

$

120.8

$

119.8

 

$

126.3

Interest Rate Spread

2.36

%

2.39

%

2.78

%

Net Interest Margin

2.43

%

2.48

%

2.96

%

Noninterest-Bearing Demand Deposits

 

5,832.2

 

5,494.8

 

4,462.3

Other Liabilities

 

444.8

 

509.9

 

362.3

Shareholders' Equity

 

1,377.3

 

1,373.0

 

1,313.8

Total Liabilities and Shareholders' Equity

$

21,150.7

$

20,382.6

$

18,222.6

1

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

2

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

3

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

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

Three Months Ended March 31, 2021

Compared to December 31, 2020

(dollars in millions)

Volume 1

 

Rate 1

 

Total

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

$

1.6

 

$

(1.1

)

$

0.5

 

Non-Taxable

 

(0.1

)

 

-

 

 

(0.1

)

Held-to-Maturity
Taxable

 

0.6

 

 

(1.4

)

 

(0.8

)

Non-Taxable

 

(0.1

)

 

-

 

 

(0.1

)

Total Investment Securities

 

2.0

 

 

(2.5

)

 

(0.5

)

Loans Held for Sale

 

0.1

 

 

-

 

 

0.1

 

Loans and Leases
Commercial and Industrial

 

-

 

 

0.3

 

 

0.3

 

Commercial Mortgage

 

0.4

 

 

(0.8

)

 

(0.4

)

Construction

 

0.1

 

 

(0.1

)

 

-

 

Commercial Lease Financing

 

0.1

 

 

2.8

 

 

2.9

 

Residential Mortgage

 

0.5

 

 

(1.0

)

 

(0.5

)

Home Equity

 

(0.1

)

 

(0.5

)

 

(0.6

)

Automobile

 

-

 

 

(0.3

)

 

(0.3

)

Other 2

 

(0.5

)

 

(0.1

)

 

(0.6

)

Total Loans and Leases

 

0.5

 

 

0.3

 

 

0.8

 

Total Change in Interest Income

 

2.6

 

 

(2.2

)

 

0.4

 

 
Change in Interest Expense:
Interest-Bearing Deposits
Savings

 

-

 

 

0.1

 

 

0.1

 

Time

 

(0.1

)

 

(0.6

)

 

(0.7

)

Total Interest-Bearing Deposits

 

(0.1

)

 

(0.5

)

 

(0.6

)

Total Change in Interest Expense

 

(0.1

)

 

(0.5

)

 

(0.6

)

 
Change in Net Interest Income

$

2.7

 

$

(1.7

)

$

1.0

 

1

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

2

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

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

$

0.4

 

$

(0.9

)

$

(0.5

)

Investment Securities
Available-for-Sale
Taxable

 

6.4

 

 

(7.0

)

 

(0.6

)

Non-Taxable

 

(0.2

)

 

(0.1

)

 

(0.3

)

Held-to-Maturity
Taxable

 

2.0

 

 

(7.8

)

 

(5.8

)

Non-Taxable

 

(0.1

)

 

(0.1

)

 

(0.2

)

Total Investment Securities

 

8.1

 

 

(15.0

)

 

(6.9

)

Loans and Leases
Commercial and Industrial

 

3.9

 

 

(2.8

)

 

1.1

 

Commercial Mortgage

 

2.6

 

 

(6.4

)

 

(3.8

)

Construction

 

0.5

 

 

(0.7

)

 

(0.2

)

Commercial Lease Financing

 

-

 

 

(0.1

)

 

(0.1

)

Residential Mortgage

 

2.3

 

 

(3.3

)

 

(1.0

)

Home Equity

 

(0.8

)

 

(1.8

)

 

(2.6

)

Automobile

 

(0.2

)

 

(0.1

)

 

(0.3

)

Other 2

 

(1.7

)

 

(0.3

)

 

(2.0

)

Total Loans and Leases

 

6.6

 

 

(15.5

)

 

(8.9

)

Total Change in Interest Income

 

15.1

 

 

(31.4

)

 

(16.3

)

 
Change in Interest Expense:
Interest-Bearing Deposits
Demand

 

0.2

 

 

(0.6

)

 

(0.4

)

Savings

 

0.5

 

 

(6.1

)

 

(5.6

)

Time

 

(0.4

)

 

(3.6

)

 

(4.0

)

Total Interest-Bearing Deposits

 

0.3

 

 

(10.3

)

 

(10.0

)

Short-Term Borrowings

 

(0.1

)

 

-

 

 

(0.1

)

Securities Sold Under Agreements to Repurchase

 

0.1

 

 

(0.5

)

 

(0.4

)

Other Debt

 

(0.1

)

 

(0.2

)

 

(0.3

)

Total Change in Interest Expense

 

0.2

 

 

(11.0

)

 

(10.8

)

 
Change in Net Interest Income

$

14.9

 

$

(20.4

)

$

(5.5

)

1

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

2

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

March 31,

 

December 31,

 

March 31,

(dollars in thousands)

2021

 

2020

 

2020

Salaries

$

31,569

$

33,907

 

$

33,486

Incentive Compensation

 

5,914

 

3,084

 

 

245

Share-Based Compensation

 

2,584

 

2,029

 

 

1,291

Commission Expense

 

2,436

 

2,164

 

 

1,374

Retirement and Other Benefits

 

5,517

 

5,212

 

 

4,706

Payroll Taxes

 

3,968

 

2,292

 

 

4,543

Medical, Dental, and Life Insurance

 

2,424

 

1,523

 

 

4,142

Separation Expense

 

1,839

 

(11

)

 

4,676

Total Salaries and Benefits

$

56,251

$

50,200

 

$

54,463

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

2021

2020

2020

2020

2020

Commercial
Commercial and Industrial

$ 2,013,981

$ 1,875,293

$ 1,908,482

$ 1,956,939

$ 1,558,232

Commercial Mortgage

2,859,246

2,854,829

2,745,611

2,707,534

2,616,243

Construction

281,164

259,798

250,943

245,099

245,390

Lease Financing

104,980

110,766

111,831

113,187

110,704

Total Commercial

5,259,371

5,100,686

5,016,867

5,022,759

4,530,569

Consumer
Residential Mortgage

4,216,976

4,130,513

4,044,228

3,989,393

3,928,183

Home Equity

1,577,500

1,604,538

1,605,486

1,640,887

1,692,154

Automobile

710,407

708,800

709,937

700,702

716,214

Other 1

376,449

395,483

417,090

451,629

485,660

Total Consumer

6,881,332

6,839,334

6,776,741

6,782,611

6,822,211

Total Loans and Leases

$ 12,140,703

$ 11,940,020

$ 11,793,608

$ 11,805,370

$ 11,352,780

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

2021

2020

2020

2020

2020

Consumer

$ 9,746,713

$ 9,347,725

$ 8,903,808

$ 8,766,885

$ 8,294,464

Commercial

8,241,102

7,302,832

7,159,531

7,295,033

6,358,583

Public and Other

1,568,836

1,561,064

1,675,544

1,361,237

1,402,314

Total Deposits

$ 19,556,651

$ 18,211,621

$ 17,738,883

$ 17,423,155

$ 16,055,361

1

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

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

March 31,

 

December 31,

 

September 30,

 

June 30,

 

March 31,

(dollars in thousands)

2021

 

2020

 

2020

 

2020

 

2020

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

$

293

 

$

441

 

$

475

 

$

459

 

$

634

 

Commercial Mortgage

 

8,503

 

 

8,527

 

 

8,615

 

 

8,672

 

 

9,048

 

Total Commercial

 

8,796

 

 

8,968

 

 

9,090

 

 

9,131

 

 

9,682

 

Consumer
Residential Mortgage

 

1,804

 

 

3,223

 

 

3,543

 

 

5,888

 

 

4,330

 

Home Equity

 

4,951

 

 

3,958

 

 

3,661

 

 

5,176

 

 

4,086

 

Total Consumer

 

6,755

 

 

7,181

 

 

7,204

 

 

11,064

 

 

8,416

 

Total Non-Accrual Loans and Leases

 

15,551

 

 

16,149

 

 

16,294

 

 

20,195

 

 

18,098

 

Foreclosed Real Estate

 

2,332

 

 

2,332

 

 

2,332

 

 

2,506

 

 

2,506

 

Total Non-Performing Assets

$

17,883

 

$

18,481

 

$

18,626

 

$

22,701

 

$

20,604

 

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

$

9

 

$

-

 

$

-

 

$

-

 

$

-

 

Total Commercial

 

9

 

 

-

 

 

-

 

 

-

 

 

-

 

Consumer
Residential Mortgage

$

4,069

 

$

5,274

 

$

6,607

 

$

4,937

 

$

3,024

 

Home Equity

 

4,906

 

 

3,187

 

 

2,571

 

 

3,519

 

 

3,426

 

Automobile

 

604

 

 

925

 

 

156

 

 

133

 

 

866

 

Other 1

 

828

 

 

1,160

 

 

258

 

 

296

 

 

1,205

 

Total Consumer

 

10,407

 

 

10,546

 

 

9,592

 

 

8,885

 

 

8,521

 

Total Accruing Loans and Leases Past Due 90 Days or More

$

10,416

 

$

10,546

 

$

9,592

 

$

8,885

 

$

8,521

 

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

$

74,216

 

$

68,065

 

$

58,650

 

$

59,713

 

$

61,425

 

Total Loans and Leases

$

12,140,703

 

$

11,940,020

 

$

11,793,608

 

$

11,805,370

 

$

11,352,780

 

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

 

0.13

%

 

0.14

%

 

0.14

%

 

0.17

%

 

0.16

%

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

 

0.15

%

 

0.15

%

 

0.16

%

 

0.19

%

 

0.18

%

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

 

0.17

%

 

0.18

%

 

0.18

%

 

0.18

%

 

0.21

%

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

 

0.13

%

 

0.14

%

 

0.14

%

 

0.20

%

 

0.16

%

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

 

0.23

%

 

0.24

%

 

0.24

%

 

0.27

%

 

0.26

%

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

$

18,481

 

$

18,626

 

$

22,701

 

$

20,604

 

$

20,117

 

Additions

 

2,992

 

 

434

 

 

938

 

 

5,856

 

 

1,754

 

Reductions
Payments

 

(2,481

)

 

(490

)

 

(3,729

)

 

(2,736

)

 

(315

)

Return to Accrual Status

 

(1,014

)

 

-

 

 

(1,035

)

 

(822

)

 

(437

)

Sales of Foreclosed Real Estate

 

-

 

 

-

 

 

(175

)

 

-

 

 

(231

)

Charge-offs/Write-downs

 

(95

)

 

(89

)

 

(74

)

 

(201

)

 

(284

)

Total Reductions

 

(3,590

)

 

(579

)

 

(5,013

)

 

(3,759

)

 

(1,267

)

Balance at End of Quarter

$

17,883

 

$

18,481

 

$

18,626

 

$

22,701

 

$

20,604

 

1

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

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

March 31,

 

December 31,

 

March 31,

(dollars in thousands)

2021

 

2020

 

2020

Balance at Beginning of Period

$

221,303

 

$

205,813

 

$

116,849

 

 
CECL Adoption (Day 1) Impact

 

-

 

 

-

 

 

(5,072

)

 
Loans and Leases Charged-Off
Commercial
Commercial and Industrial

 

(248

)

 

(177

)

 

(693

)

Consumer
Residential Mortgage

 

(4

)

 

(120

)

 

(20

)

Home Equity

 

(16

)

 

(81

)

 

-

 

Automobile

 

(2,109

)

 

(393

)

 

(2,500

)

Other 1

 

(3,914

)

 

(2,460

)

 

(3,964

)

Total Loans and Leases Charged-Off

 

(6,291

)

 

(3,231

)

 

(7,177

)

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

 

112

 

 

244

 

 

289

 

Commercial Mortgage

 

-

 

 

-

 

 

40

 

Consumer
Residential Mortgage

 

955

 

 

497

 

 

263

 

Home Equity

 

533

 

 

868

 

 

976

 

Automobile

 

919

 

 

910

 

 

1,005

 

Other 1

 

856

 

 

968

 

 

864

 

Total Recoveries on Loans and Leases Previously Charged-Off

 

3,375

 

 

3,487

 

 

3,437

 

Net Recovered (Charged-Off) - Loans and Leases

 

(2,916

)

 

256

 

 

(3,740

)

Net Charged-Off - Accrued Interest Receivable

 

(308

)

 

-

 

 

-

 

Provision for Credit Losses:
Loans and Leases

 

(14,993

)

 

12,500

 

 

33,600

 

Accrued Interest Receivable 2

 

-

 

 

2,700

 

 

-

 

Unfunded Commitments 3

 

693

 

 

34

 

 

(170

)

Balance at End of Period

$

203,779

 

$

221,303

 

$

141,467

 

 
Components
Allowance for Credit Losses - Loans and Leases

$

198,343

 

 

216,252

 

 

138,150

 

Allowance for Credit Losses - Accrued Interest Receivable 2

 

2,392

 

 

2,700

 

 

-

 

Reserve for Unfunded Commitments 3

 

3,044

 

 

2,351

 

 

3,317

 

Total Reserve for Credit Losses

$

203,779

 

$

221,303

 

$

141,467

 

 
Average Loans and Leases Outstanding

$

11,952,587

 

$

11,835,929

 

$

11,060,707

 

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

 

0.10

%

 

(0.01

%)

 

0.14

%

Ratio of Allowance for Credit Losses to Loans and Leases Outstanding

 

1.63

%

 

1.81

%

 

1.22

%

1

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

2

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

3

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

Consumer

 

Commercial

 

Treasury

 

Consolidated

(dollars in thousands)

Banking

 

Banking

 

and Other

 

Total

Three Months Ended March 31, 2021
Net Interest Income

$

69,762

 

$

47,143

 

$

3,664

 

$

120,569

 

Provision for Credit Losses

 

2,866

 

 

50

 

 

(17,216

)

 

(14,300

)

Net Interest Income After Provision for Credit Losses

 

66,896

 

 

47,093

 

 

20,880

 

 

134,869

 

Noninterest Income

 

33,698

 

 

7,858

 

 

1,414

 

 

42,970

 

Noninterest Expense

 

(78,181

)

 

(15,677

)

 

(5,007

)

 

(98,865

)

Income Before Income Taxes

 

22,413

 

 

39,274

 

 

17,287

 

 

78,974

 

Provision for Income Taxes

 

(5,474

)

 

(9,558

)

 

(3,993

)

 

(19,025

)

Net Income

$

16,939

 

$

29,716

 

$

13,294

 

$

59,949

 

Total Assets as of March 31, 2021

$

7,556,756

 

$

5,224,386

 

$

9,166,129

 

$

21,947,271

 

 
Three Months Ended March 31, 2020 1
Net Interest Income

$

73,914

 

$

45,237

 

$

6,815

 

$

125,966

 

Provision for Credit Losses

 

3,451

 

 

290

 

 

29,859

 

 

33,600

 

Net Interest Income (Loss) After Provision for Credit Losses

 

70,463

 

 

44,947

 

 

(23,044

)

 

92,366

 

Noninterest Income

 

32,590

 

 

11,735

 

 

1,824

 

 

46,149

 

Noninterest Expense

 

(70,746

)

 

(17,346

)

 

(8,220

)

 

(96,312

)

Income (Loss) Before Income Taxes

 

32,307

 

 

39,336

 

 

(29,440

)

 

42,203

 

Provision for Income Taxes

 

(8,116

)

 

(9,555

)

 

10,210

 

 

(7,461

)

Net Income (Loss)

$

24,191

 

$

29,781

 

$

(19,230

)

$

34,742

 

Total Assets as of March 31, 2020 1

$

7,388,217

 

$

4,728,651

 

$

6,425,365

 

$

18,542,233

 

1

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

March 31,

 

 

December 31,

 

 

September 30,

 

 

June 30,

 

March 31,

(dollars in thousands, except per share amounts)

2021

 

 

2020

 

 

2020

 

 

2020

 

2020

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

$

99,299

 

$

98,471

 

$

103,189

 

$

107,628

$

108,210

 

Income on Investment Securities
Available-for-Sale

 

15,837

 

 

15,449

 

 

14,558

 

 

14,576

 

16,711

 

Held-to-Maturity

 

13,300

 

 

14,113

 

 

15,967

 

 

16,723

 

19,252

 

Deposits

 

7

 

 

1

 

 

3

 

 

1

 

9

 

Funds Sold

 

137

 

 

115

 

 

149

 

 

92

 

546

 

Other

 

185

 

 

167

 

 

151

 

 

125

 

218

 

Total Interest Income

 

128,765

 

 

128,316

 

 

134,017

 

 

139,145

 

144,946

 

Interest Expense
Deposits

 

4,329

 

 

4,861

 

 

5,891

 

 

7,954

 

14,260

 

Securities Sold Under Agreements to Repurchase

 

3,533

 

 

3,614

 

 

3,622

 

 

4,020

 

4,025

 

Funds Purchased

 

1

 

 

5

 

 

-

 

 

18

 

72

 

Short-Term Borrowings

 

-

 

 

-

 

 

1

 

 

22

 

39

 

Other Debt

 

333

 

 

337

 

 

337

 

 

440

 

584

 

Total Interest Expense

 

8,196

 

 

8,817

 

 

9,851

 

 

12,454

 

18,980

 

Net Interest Income

 

120,569

 

 

119,499

 

 

124,166

 

 

126,691

 

125,966

 

Provision for Credit Losses

 

(14,300

)

 

15,200

 

 

28,600

 

 

40,400

 

33,600

 

Net Interest Income After Provision for Credit Losses

 

134,869

 

 

104,299

 

 

95,566

 

 

86,291

 

92,366

 

Noninterest Income
Trust and Asset Management

 

11,278

 

 

11,239

 

 

10,752

 

 

10,550

 

10,915

 

Mortgage Banking

 

5,862

 

 

6,851

 

 

4,047

 

 

4,278

 

2,695

 

Service Charges on Deposit Accounts

 

6,128

 

 

6,335

 

 

6,027

 

 

5,097

 

7,451

 

Fees, Exchange, and Other Service Charges

 

13,607

 

 

12,143

 

 

12,296

 

 

9,417

 

13,200

 

Investment Securities Gains (Losses), Net

 

(1,203

)

 

(1,193

)

 

(1,121

)

 

13,216

 

(970

)

Annuity and Insurance

 

702

 

 

670

 

 

881

 

 

883

 

928

 

Bank-Owned Life Insurance

 

1,917

 

 

2,353

 

 

1,806

 

 

1,649

 

1,580

 

Other

 

4,679

 

 

6,860

 

 

7,046

 

 

6,178

 

10,350

 

Total Noninterest Income

 

42,970

 

 

45,258

 

 

41,734

 

 

51,268

 

46,149

 

Noninterest Expense
Salaries and Benefits

 

56,251

 

 

50,200

 

 

51,951

 

 

50,715

 

54,463

 

Net Occupancy

 

9,090

 

 

14,536

 

 

7,281

 

 

8,761

 

8,955

 

Net Equipment

 

8,878

 

 

9,574

 

 

9,223

 

 

8,195

 

8,456

 

Data Processing

 

6,322

 

 

4,604

 

 

4,691

 

 

4,416

 

4,788

 

Professional Fees

 

3,406

 

 

3,174

 

 

2,743

 

 

3,061

 

3,208

 

FDIC Insurance

 

1,654

 

 

1,484

 

 

1,282

 

 

1,558

 

1,456

 

Other

 

13,264

 

 

15,082

 

 

12,778

 

 

12,186

 

14,986

 

Total Noninterest Expense

 

98,865

 

 

98,654

 

 

89,949

 

 

88,892

 

96,312

 

Income Before Provision for Income Taxes

 

78,974

 

 

50,903

 

 

47,351

 

 

48,667

 

42,203

 

Provision for Income Taxes

 

19,025

 

 

8,589

 

 

9,511

 

 

9,759

 

7,461

 

Net Income

$

59,949

 

$

42,314

 

$

37,840

 

$

38,908

$

34,742

 

 
Basic Earnings Per Share

$

1.51

 

$

1.06

 

$

0.95

 

$

0.98

$

0.88

 

Diluted Earnings Per Share

$

1.50

 

$

1.06

 

$

0.95

 

$

0.98

$

0.87

 

 
Balance Sheet Totals
Loans and Leases

$

12,140,703

 

$

11,940,020

 

$

11,793,608

 

$

11,805,370

$

11,352,780

 

Total Assets

 

21,947,271

 

 

20,603,651

 

 

20,109,489

 

 

19,769,942

 

18,542,233

 

Total Deposits

 

19,556,651

 

 

18,211,621

 

 

17,738,883

 

 

17,423,155

 

16,055,361

 

Total Shareholders' Equity

 

1,360,221

 

 

1,374,507

 

 

1,361,739

 

 

1,352,082

 

1,327,929

 

 
Performance Ratios
Return on Average Assets

 

1.15

%

 

0.83

%

 

0.76

%

 

0.82

%

 

0.77

%

Return on Average Shareholders' Equity

 

17.65

 

 

12.26

 

 

11.01

 

 

11.58

 

10.64

 

Efficiency Ratio 1

 

60.45

 

 

59.88

 

 

54.22

 

 

49.95

 

55.96

 

Net Interest Margin 2

 

2.43

 

 

2.48

 

 

2.67

 

 

2.83

 

2.96

 

1

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

2

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

Two Months Ended

 

Year Ended

($ in millions; jobs in thousands)

February 28, 2021

 

December 31, 2020

 

December 31, 2019

Hawaii Economic Trends
State General Fund Revenues 1

$ 1,111.9

(17.6)

%

$ 6,415.1

(12.3)

%

$ 7,316.5

5.5

%

General Excise and Use Tax Revenue 1

$ 551.1

(18.9)

%

$ 3,038.8

(15.6)

%

$ 3,602.2

5.1

%

Jobs 2

595.3

588.2

659.7

 

March 31,

 

December 31,

(spot rates)

2021

 

2020

 

2019

Unemployment, seasonally adjusted 3
Statewide

9.0

%

10.3

%

2.1

%

 
Oahu <