- Diluted Earnings Per Common Share $1.12
- Net Income $46.1 Million
- Total Deposits Up 0.1% Linked Quarter
- Immediately Available Liquidity Increased to $8.5
Billion
- Board of Directors Declares Dividend of $0.70 Per Common
Share
Bank of Hawai‘i Corporation (NYSE: BOH) today reported diluted
earnings per common share of $1.12 for the second quarter of 2023,
compared with diluted earnings per common share of $1.14 in the
previous quarter and $1.38 in the same quarter of 2022. Net income
for the second quarter of 2023 was $46.1 million, down 1.7% from
the previous quarter and down 19.0% from the same quarter of 2022.
The return on average common equity for the second quarter of 2023
was 14.95% compared with 15.79% in the previous quarter and 18.19%
in the same quarter of 2022.
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“Bank of Hawai‘i delivered solid financial results in the second
quarter of 2023,” said Peter Ho, Chairman, President, and CEO. “Our
brand strength, built through 125 years of building lasting and
long-standing relationships with the consumers, businesses and
municipalities of Hawai‘i, helped us deliver yet another quarter of
stable deposit performance. Total deposits were up modestly from a
quarter ago. We also added additional liquidity to the balance
sheet with cash and other immediately available borrowing lines
growing to $8.5 billion at quarter end. Loans grew 0.7% with growth
coming from both our consumer and commercial businesses. Credit
quality remained pristine with non-performing assets of 0.08% at
quarter end and net charge offs of 0.04% in the quarter. CRE loans
and office CRE loans were 27.3% and 2.7% of total loans at quarter
end with both categories having weighted average LTVs of 56%.
Scheduled maturities for CRE loans and office CRE loans total 10%
and 3% respectively through 2024. Finally, our capital position
improved in the quarter, as measured by CET 1, Tier 1 Capital,
Total Capital and Tier 1 Leverage.”
Financial Highlights
Net interest income for the second quarter of 2023 was $124.3
million, a decrease of 8.5% from the previous quarter and a
decrease of 6.4% from the same quarter of 2022. The decrease in net
interest income in the second quarter of 2023 was primarily due to
higher funding costs, partially offset by higher earning asset
yields.
Net interest margin was 2.22% in the second quarter of 2023, a
decrease of 25 basis points from the previous quarter and from the
same quarter of 2022. The decrease in net interest margin was due
to higher funding costs and increased liquidity, partially offset
by higher earning asset yields.
The average yield on loans and leases was 4.19% in the second
quarter of 2023, up 16 basis points from the prior quarter and up
98 basis points from the same quarter of 2022. The average yield on
total earning assets was 3.56% in the second quarter of 2023, up 14
basis points from the prior quarter and up 96 basis points from the
same quarter of 2022. The average cost of interest-bearing deposits
was 1.54% in the second quarter of 2023, up 45 basis points from
the prior quarter and up 143 basis points from the same quarter of
2022. The average cost of total deposits, including
noninterest-bearing deposits, was 1.08%, up 33 basis points from
the prior quarter and up 101 basis points from the same quarter of
2022. The changes in yields and rates over the linked quarter and
year over year period reflected the higher rate environment,
including higher benchmark interest rates.
Noninterest income was $43.3 million in the second quarter of
2023, an increase of 6.2% from the previous quarter and an increase
of 2.6% from the same period in 2022. Noninterest income in the
second quarter of 2023 included $1.5 million from the sale of a
low-income housing tax credit investment, while noninterest income
in the first quarter of 2023 included a negative adjustment of $0.6
million related to a change in the Visa Class B conversion ratio.
Adjusted noninterest income in the second quarter of 2023 was $41.7
million, up 1.0% from adjusted noninterest income in the prior
quarter and down 1.0% from the same period in 2022.
Noninterest expense was $104.0 million in the second quarter of
2023, a decrease of 7.0% from the previous quarter and an increase
of 1.1% from the same quarter of 2022. Noninterest expense in the
first quarter of 2023 included seasonal payroll expenses of
approximately $4.0 million and separation expenses of $3.1 million.
Adjusted for these items in the prior quarter, noninterest expense
decreased by 0.8% quarter over quarter.
The effective tax rate for the second quarter of 2023 was 24.57%
compared with 25.38% in the previous quarter and 23.80% during the
same quarter of 2022. The decrease in the effective tax rate on a
linked quarter basis was mainly due to an unfavorable discrete tax
item in the first quarter and an increase in benefits from tax
credit investments in the current quarter. The year over year
increase was primarily due to lower benefits from tax credit
investments and benefits from leveraged leases that have since been
terminated which were included in the effective tax rate for the
second quarter of 2022.
Asset Quality
The Company’s overall asset quality remained strong during the
second quarter of 2023. Provision for credit losses for the second
quarter of 2023 was $2.5 million compared with $2.0 million in the
previous quarter and a net benefit of $2.5 million in the same
quarter of 2022.
Total non-performing assets were $11.5 million at June 30, 2023,
down $0.6 million from March 31, 2023 and down $4.0 million from
June 30, 2022. Non-performing assets as a percentage of total loans
and leases and foreclosed real estate were 0.08% at the end of the
quarter, a decrease of 1 basis point from the end of the prior
quarter and a decrease of 4 basis points from the same quarter of
2022.
Net loan and lease charge-offs during the second quarter of 2023
were $1.4 million or 4 basis points annualized of total average
loans and leases outstanding. Net loan and lease charge-offs for
the second quarter of 2023 were comprised of charge-offs of $3.5
million partially offset by recoveries of $2.1 million. Compared to
the prior quarter, net loan and lease charge-offs decreased by $1.3
million or 4 basis points annualized on total average loans and
leases outstanding. Compared to the same quarter of 2022, net loan
and lease charge-offs increased by $0.7 million or 2 basis points
annualized on total average loans and leases outstanding.
The allowance for credit losses on loans and leases was $145.4
million at June 30, 2023, an increase of $1.8 million from March
31, 2023 and a decrease of $3.1 million from June 30, 2022. The
ratio of the allowance for credit losses to total loans and leases
outstanding was 1.04% at the end of the quarter, flat from the end
of the prior quarter and down 10 basis points from the end of the
same quarter of 2022.
Balance Sheet
Total assets were $24.9 billion at June 30, 2023, an increase of
4.2% from March 31, 2023 and an increase of 7.4% from June 30,
2022, primarily due to growth in our earning assets.
Total funds sold and cash and due from banks was $1.7 billion at
June 30, 2023, an increase of $1.1 billion from March 31, 2023 and
$0.8 billion from June 30, 2022 and represented 6.7% of total
assets. The growth was due to an increase in short-duration term
funding of $1.3 billion that enhanced on balance sheet liquidity
and provides a hedge against rising short-term rates.
The investment securities portfolio was $7.9 billion at June 30,
2023, a decrease of 3.2% from March 31, 2023 and a decrease of 4.9%
from June 30, 2022. These decreases were due to cashflows from the
portfolio not being reinvested into securities. The investment
portfolio remains largely comprised of securities issued by U.S.
government agencies and U.S. government-sponsored enterprises.
Total loans and leases were $13.9 billion at June 30, 2023, an
increase of 0.7% from March 31, 2023 and an increase of 7.4% from
June 30, 2022. Total commercial loans were $5.6 billion at June 30,
2023, an increase of 0.8% from the prior quarter and an increase of
8.9% from the same quarter of 2022. The increase from the same
period in 2022 was primarily due to an increase in our commercial
mortgage and commercial and industrial portfolios. Total consumer
loans were $8.3 billion as of June 30, 2023, an increase of 0.5%
from the prior quarter and 6.5% from the same period in 2022,
primarily driven by increases in our residential mortgage and home
equity portfolios.
Total deposits were $20.5 billion at June 30, 2023, an increase
of 0.1% from March 31, 2023 and a decrease of 2.5% from June 30,
2022. Noninterest-bearing deposits made up 29% of total deposit
balances as of June 30, 2023, down from 31% as of March 31, 2023
and 35% as of June 30, 2022. Average deposits were $20.0 billion
for the second quarter of 2023, down 2.0% from $20.4 billion in the
prior quarter, and down 2.7% from the second quarter of 2022. As of
June 30, 2023 insured and collateralized deposits represent 61% of
total deposit balances, up from 58% as of March 31, 2023 and 57% as
of June 30, 2022.
Capital and Dividends
The Company’s capital levels remain well above regulatory
well-capitalized minimums.
The Tier 1 Capital Ratio was 12.21% at June 30, 2023 compared
with 12.10% at March 31, 2023 and 13.01% at June 30, 2022. The Tier
1 Leverage Ratio was 7.21% at June 30, 2023 compared with 7.19% at
March 31, 2023 and 7.29% at June 30, 2022. The increase from the
prior quarter was due to an increase in Tier 1 capital as a result
of retained earnings growth partially offset by an increase in
risk-weighted and average total assets, as a result of loan growth
and increased liquidity over the period. The decrease from the same
period in 2022 in the Tier 1 Capital Ratio was due to an increase
in risk-weighted assets, and the decline in the Tier 1 Leverage
Ratio was due to an increase in average total assets, both as a
result of increased liquidity and loan growth over the period.
No shares of common stock were repurchased under the share
repurchase program in the second quarter of 2023. Total remaining
buyback authority under the share repurchase program was $126.0
million at June 30, 2023.
The Company’s Board of Directors declared a quarterly cash
dividend of $0.70 per share on the Company’s outstanding common
shares. The dividend will be payable on September 15, 2023 to
shareholders of record at the close of business on August 31,
2023.
On July 7, 2023, the Board of Directors declared the quarterly
dividend payment of $10.94 per share, equivalent to $0.2735 per
depositary share, on its preferred stock. The depositary shares
representing the Series A Preferred Stock are traded on the NYSE
under the symbol “BOH.PRA.” The dividend will be payable on August
1, 2023 to shareholders of record of the preferred stock as of the
close of business on July 17, 2023.
Conference Call
Information
The Company will review its second 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 Hawai‘i Corporation's website,
www.boh.com. The webcast can be accessed via the link:
https://register.vevent.com/register/BIa86de171556d47818c0a5a7106c5f8bd.
A replay of the conference call will be available for one year
beginning approximately 11:00 a.m. Hawaii Time on Monday, July 24,
2023. The replay will be accessible via the same link. 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 Hawai‘i Corporation's
Annual Report on Form 10-K for the year ended December 31, 2022 and
its Form 10-Q for the fiscal quarter ended March 31, 2023, which
were 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 Hawai‘i 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 Hawai‘i, was founded in 1897. For more information about
Bank of Hawai‘i Corporation, see the Company’s web site,
www.boh.com. Bank of Hawai‘i Corporation is a trade name of Bank of
Hawaii Corporation.
Bank of Hawai‘i Corporation and Subsidiaries Financial
Highlights
Table 1
Three Months Ended
Six Months Ended
June 30,
March 31,
June 30,
June 30,
(dollars in thousands, except per share amounts)
2023
2023
2022
2023
2022
For the Period: Operating
Results Net Interest Income
$
124,348
$
135,955
$
132,902
$
260,303
$
258,165
Provision for Credit Losses
2,500
2,000
(2,500
)
4,500
(8,000
)
Total Noninterest Income
43,255
40,737
42,158
83,992
85,709
Total Noninterest Expense
104,036
111,919
102,939
215,955
206,813
Pre-Provision Net Revenue
63,567
64,773
72,121
128,340
137,061
Net Income
46,061
46,842
56,862
92,903
111,696
Net Income Available to Common Shareholders
44,092
44,873
54,893
88,965
107,758
Basic Earnings Per Common Share
1.12
1.14
1.38
2.27
2.71
Diluted Earnings Per Common Share
1.12
1.14
1.38
2.26
2.70
Dividends Declared Per Common Share
0.70
0.70
0.70
1.40
1.40
Performance Ratios Return on Average Assets
0.77
%
0.80
%
1.00
%
0.78
%
0.98
%
Return on Average Shareholders' Equity
13.55
14.25
16.40
13.90
15.23
Return on Average Common Equity
14.95
15.79
18.19
15.36
16.73
Efficiency Ratio 1
62.07
63.34
58.80
62.72
60.14
Net Interest Margin 2
2.22
2.47
2.47
2.34
2.41
Dividend Payout Ratio 3
62.50
61.40
50.72
61.67
51.66
Average Shareholders' Equity to Average Assets
5.65
5.59
6.08
5.62
6.47
Average Balances Average Loans and Leases
$
13,876,754
$
13,717,483
$
12,700,825
$
13,797,559
$
12,496,747
Average Assets
24,114,443
23,865,478
22,891,262
23,990,649
22,869,496
Average Deposits
20,018,601
20,430,882
20,569,363
20,223,603
20,498,115
Average Shareholders' Equity
1,363,059
1,332,889
1,390,653
1,348,057
1,479,197
Per Share of Common Stock Book Value
$
29.66
$
29.62
$
29.09
$
29.66
$
29.09
Tangible Book Value
28.87
28.83
28.30
28.87
28.30
Market Value Closing
41.23
52.08
74.40
41.23
74.40
High
52.37
81.73
84.93
81.73
92.38
Low
30.83
34.71
70.97
30.83
70.97
June 30,
March 31,
December 31,
June 30,
2023
2023
2022
2022
As of Period End: Balance
Sheet Totals Loans and Leases
$
13,914,889
$
13,824,522
$
13,646,420
$
12,951,573
Total Assets
24,947,936
23,931,977
23,606,877
23,232,699
Total Deposits
20,508,615
20,491,300
20,615,696
21,025,681
Other Debt
1,760,243
510,269
410,294
10,343
Total Shareholders' Equity
1,358,279
1,354,430
1,316,995
1,348,746
Asset Quality Non-Performing Assets
$
11,477
$
12,124
$
12,647
$
15,493
Allowance for Credit Losses - Loans and Leases
145,367
143,577
144,439
148,512
Allowance to Loans and Leases Outstanding 4
1.04
%
1.04
%
1.06
%
1.15
%
Capital Ratios 5 Common Equity Tier 1 Capital Ratio
11.00
%
10.88
%
10.92
%
11.66
%
Tier 1 Capital Ratio
12.21
12.10
12.15
13.01
Total Capital Ratio
13.24
13.13
13.17
14.14
Tier 1 Leverage Ratio
7.21
7.19
7.37
7.29
Total Shareholders' Equity to Total Assets
5.44
5.66
5.58
5.81
Tangible Common Equity to Tangible Assets 6
4.60
4.78
4.69
4.90
Tangible Common Equity to Risk-Weighted Assets 6
7.97
7.97
7.76
8.72
Non-Financial Data Full-Time Equivalent Employees
2,025
2,025
2,076
2,114
Branches
51
51
51
54
ATMs
320
320
320
310
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 common share divided by basic earnings
per common share.
4
The numerator comprises the
Allowance for Credit Losses - Loans and Leases.
5
Regulatory capital ratios as of
June 30, 2023 are preliminary.
6
Tangible common equity to
tangible assets and tangible common equity to risk-weighted assets
are Non-GAAP financial measures.
Tangible common equity is defined
by the Company as common shareholders' equity minus goodwill.
See Table 2 "Reconciliation of
Non-GAAP Financial Measures".
Bank of Hawai‘i Corporation and Subsidiaries
Reconciliation of Non-GAAP Financial Measures
Table 2
June 30,
March 31,
December 31,
June 30,
(dollars in thousands)
2023
2023
2022
2022
Total Shareholders' Equity
$
1,358,279
$
1,354,430
$
1,316,995
$
1,348,746
Less: Preferred Stock
180,000
180,000
180,000
180,000
Goodwill
31,517
31,517
31,517
31,517
Tangible Common Equity
$
1,146,762
$
1,142,913
$
1,105,478
$
1,137,229
Total Assets
$
24,947,936
$
23,931,977
$
23,606,877
$
23,232,699
Less: Goodwill
31,517
31,517
31,517
31,517
Tangible Assets
$
24,916,419
$
23,900,460
$
23,575,360
$
23,201,182
Risk-Weighted Assets, determined in accordance with
prescribed regulatory requirements 1
$
14,391,943
$
14,341,397
$
14,238,798
$
13,035,674
Total Shareholders' Equity to Total Assets
5.44
%
5.66
%
5.58
%
5.81
%
Tangible Common Equity to Tangible Assets (Non-GAAP)
4.60
%
4.78
%
4.69
%
4.90
%
Tier 1 Capital Ratio 1
12.21
%
12.10
%
12.15
%
13.01
%
Tangible Common Equity to Risk-Weighted Assets (Non-GAAP) 1
7.97
%
7.97
%
7.76
%
8.72
%
1
Regulatory capital ratios as of
June 30, 2023 are preliminary.
Bank of Hawai‘i Corporation and Subsidiaries
Consolidated Statements of Income
Table 3
Three Months Ended
Six Months Ended
June 30,
March 31,
June 30,
June 30,
(dollars in thousands, except per share amounts)
2023
2023
2022
2023
2022
Interest Income Interest and Fees on Loans and Leases
$
144,541
$
136,501
$
101,663
$
281,042
$
196,102
Income on Investment Securities Available-for-Sale
23,301
23,893
17,984
47,194
35,084
Held-to-Maturity
23,375
23,948
18,838
47,323
37,539
Deposits
18
27
5
45
9
Funds Sold
6,395
3,366
719
9,761
846
Other
2,121
597
353
2,718
555
Total Interest Income
199,751
188,332
139,562
388,083
270,135
Interest Expense Deposits
53,779
37,794
3,535
91,573
5,888
Securities Sold Under Agreements to Repurchase
5,436
5,377
2,794
10,813
5,566
Funds Purchased
184
704
57
888
59
Short-Term Borrowings
2,510
3,203
92
5,713
92
Other Debt
13,494
5,299
182
18,793
365
Total Interest Expense
75,403
52,377
6,660
127,780
11,970
Net Interest Income
124,348
135,955
132,902
260,303
258,165
Provision for Credit Losses
2,500
2,000
(2,500
)
4,500
(8,000
)
Net Interest Income After Provision for Credit Losses
121,848
133,955
135,402
255,803
266,165
Noninterest Income Trust and Asset Management
11,215
10,690
11,457
21,905
22,733
Mortgage Banking
1,176
1,004
1,247
2,180
3,987
Service Charges on Deposit Accounts
7,587
7,737
7,309
15,324
14,581
Fees, Exchange, and Other Service Charges
14,150
13,808
14,193
27,958
27,145
Investment Securities Losses, Net
(1,310
)
(1,792
)
(1,295
)
(3,102
)
(2,840
)
Annuity and Insurance
1,038
1,271
870
2,309
1,661
Bank-Owned Life Insurance
2,876
2,842
2,658
5,718
5,007
Other
6,523
5,177
5,719
11,700
13,435
Total Noninterest Income
43,255
40,737
42,158
83,992
85,709
Noninterest Expense Salaries and Benefits
56,175
65,088
57,769
121,263
117,693
Net Occupancy
9,991
9,872
9,930
19,863
19,756
Net Equipment
10,573
10,375
9,543
20,948
18,696
Data Processing
4,599
4,583
4,607
9,182
9,167
Professional Fees
4,651
3,883
3,542
8,534
6,800
FDIC Insurance
3,173
3,234
1,590
6,407
3,092
Other
14,874
14,884
15,958
29,758
31,609
Total Noninterest Expense
104,036
111,919
102,939
215,955
206,813
Income Before Provision for Income Taxes
61,067
62,773
74,621
123,840
145,061
Provision for Income Taxes
15,006
15,931
17,759
30,937
33,365
Net Income
$
46,061
$
46,842
$
56,862
$
92,903
$
111,696
Preferred Stock Dividends
1,969
1,969
1,969
3,938
3,938
Net Income Available to Common Shareholders
$
44,092
$
44,873
$
54,893
$
88,965
$
107,758
Basic Earnings Per Common Share
$
1.12
$
1.14
$
1.38
$
2.27
$
2.71
Diluted Earnings Per Common Share
$
1.12
$
1.14
$
1.38
$
2.26
$
2.70
Dividends Declared Per Common Share
$
0.70
$
0.70
$
0.70
$
1.40
$
1.40
Basic Weighted Average Common Shares
39,241,559
39,276,833
39,693,593
39,259,279
39,722,985
Diluted Weighted Average Common Shares
39,317,521
39,465,889
39,842,608
39,382,359
39,896,700
Bank of Hawai‘i Corporation and Subsidiaries
Consolidated Statements of Comprehensive Income (Loss)
Table 4
Three Months Ended
Six Months Ended
June 30,
March 31,
June 30,
June 30,
(dollars in thousands)
2023
2023
2022
2023
2022
Net Income
$
46,061
$
46,842
$
56,862
$
92,903
$
111,696
Other Comprehensive Income (Loss), Net of Tax: Net Unrealized Gains
(Losses) on Investment Securities
(18,217
)
29,276
(122,647
)
11,059
(302,771
)
Defined Benefit Plans
84
84
352
168
705
Other Comprehensive Income (Loss)
(18,133
)
29,360
(122,295
)
11,227
(302,066
)
Comprehensive Income (Loss)
$
27,928
$
76,202
$
(65,433
)
$
104,130
$
(190,370
)
Bank of Hawai‘i Corporation and Subsidiaries
Consolidated Statements of Condition
Table 5
June 30,
March 31,
December 31,
June 30,
(dollars in thousands)
2023
2023
2022
2022
Assets Interest-Bearing Deposits in Other Banks
$
2,261
$
2,554
$
3,724
$
2,264
Funds Sold
1,273,109
272,018
81,364
576,430
Investment Securities Available-for-Sale
2,666,723
2,815,083
2,844,823
3,955,476
Held-to-Maturity (Fair Value of $4,411,003; $4,601,876; $4,615,393;
and $3,823,739)
5,202,698
5,312,815
5,414,139
4,321,693
Loans Held for Sale
3,359
2,149
1,035
4,514
Loans and Leases
13,914,889
13,824,522
13,646,420
12,951,573
Allowance for Credit Losses
(145,367
)
(143,577
)
(144,439
)
(148,512
)
Net Loans and Leases
13,769,522
13,680,945
13,501,981
12,803,061
Total Earning Assets
22,917,672
22,085,564
21,847,066
21,663,438
Cash and Due from Banks
398,072
337,413
316,679
260,672
Premises and Equipment, Net
200,297
203,131
206,777
202,063
Operating Lease Right-of-Use Assets
89,286
91,387
92,307
91,901
Accrued Interest Receivable
64,720
63,175
61,002
47,141
Foreclosed Real Estate
1,040
1,040
1,040
2,332
Mortgage Servicing Rights
21,626
22,102
22,619
23,540
Goodwill
31,517
31,517
31,517
31,517
Bank-Owned Life Insurance
456,889
455,602
453,882
448,925
Other Assets
766,817
641,046
573,988
461,170
Total Assets
$
24,947,936
$
23,931,977
$
23,606,877
$
23,232,699
Liabilities Deposits Noninterest-Bearing Demand
$
5,968,344
$
6,385,872
$
6,714,982
$
7,374,055
Interest-Bearing Demand
4,119,166
4,283,801
4,232,567
4,339,520
Savings
7,756,426
7,898,874
7,962,410
8,054,899
Time
2,664,679
1,922,753
1,705,737
1,257,207
Total Deposits
20,508,615
20,491,300
20,615,696
21,025,681
Short-Term Borrowings
-
325,000
-
-
Securities Sold Under Agreements to Repurchase
725,490
725,490
725,490
425,490
Other Debt
1,760,243
510,269
410,294
10,343
Operating Lease Liabilities
97,768
99,746
100,526
99,722
Retirement Benefits Payable
26,434
26,768
26,991
37,532
Accrued Interest Payable
26,737
13,061
9,698
2,545
Taxes Payable
132
11,039
7,104
10,607
Other Liabilities
444,238
374,874
394,083
272,033
Total Liabilities
23,589,657
22,577,547
22,289,882
21,883,953
Shareholders' Equity Preferred Stock ($.01 par value;
authorized 180,000 shares; issued / outstanding: June 30, 2023;
March 31, 2023; December 31, 2022; and June 30, 2022 - 180,000)
180,000
180,000
180,000
180,000
Common Stock ($.01 par value; authorized 500,000,000 shares; issued
/ outstanding: June 30, 2023 - 58,771,036 / 39,725,348; March 31,
2023 - 58,722,929 / 39,646,506; December 31, 2022 - 58,733,625 /
39,835,750; and June 30, 2022 - 58,727,909 / 40,182,659)
583
583
582
582
Capital Surplus
628,202
624,126
620,578
611,694
Accumulated Other Comprehensive Loss
(423,431
)
(405,298
)
(434,658
)
(368,448
)
Retained Earnings
2,091,289
2,074,428
2,055,912
2,002,005
Treasury Stock, at Cost (Shares: June 30, 2023 - 19,045,688; March
31, 2023 - 19,076,423; December 31, 2022 - 18,897,875; and June 30,
2022 - 18,545,250)
(1,118,364
)
(1,119,409
)
(1,105,419
)
(1,077,087
)
Total Shareholders' Equity
1,358,279
1,354,430
1,316,995
1,348,746
Total Liabilities and Shareholders' Equity
$
24,947,936
$
23,931,977
$
23,606,877
$
23,232,699
Bank of Hawai‘i Corporation and Subsidiaries
Consolidated Statements of Shareholders' Equity
Table 6
Accumulated
Other
Preferred
Common
Comprehensive
Shares
Preferred
Shares
Common
Capital
Income
Retained
Treasury
(dollars in thousands)
Outstanding
Stock
Outstanding
Stock
Surplus
(Loss)
Earnings
Stock
Total
Balance as of December 31, 2022
180,000
$
180,000
39,835,750
$
582
$
620,578
$
(434,658
)
$
2,055,912
$
(1,105,419
)
$
1,316,995
Net Income
-
-
-
-
-
-
92,903
-
92,903
Other Comprehensive Income
-
-
-
-
-
11,227
-
-
11,227
Share-Based Compensation
-
-
-
-
7,672
-
-
-
7,672
Common Stock Issued under Purchase and Equity Compensation Plans
-
-
94,765
1
(48
)
-
2,286
986
3,225
Common Stock Repurchased
-
-
(205,167
)
-
-
-
-
(13,931
)
(13,931
)
Cash Dividends Declared Common Stock ($1.40 per share)
-
-
-
-
-
-
(55,874
)
-
(55,874
)
Cash Dividends Declared Preferred Stock
-
-
-
-
-
-
(3,938
)
-
(3,938
)
Balance as of June 30, 2023
180,000
$
180,000
39,725,348
$
583
$
628,202
$
(423,431
)
$
2,091,289
$
(1,118,364
)
$
1,358,279
Balance as of December 31, 2021
180,000
$
180,000
40,253,193
$
581
$
602,508
$
(66,382
)
$
1,950,375
$
(1,055,471
)
$
1,611,611
Net Income
-
-
-
-
-
-
111,696
-
111,696
Other Comprehensive Loss
-
-
-
-
-
(302,066
)
-
-
(302,066
)
Share-Based Compensation
-
-
-
-
8,172
-
-
-
8,172
Common Stock Issued under Purchase and Equity Compensation Plans
-
-
228,225
1
1,014
-
346
2,697
4,058
Common Stock Repurchased
-
-
(298,759
)
-
-
-
-
(24,313
)
(24,313
)
Cash Dividends Declared Common Stock ($1.40 per share)
-
-
-
-
-
-
(56,474
)
-
(56,474
)
Cash Dividends Declared Preferred Stock
-
-
-
-
-
-
(3,938
)
-
(3,938
)
Balance as of June 30, 2022
180,000
$
180,000
40,182,659
$
582
$
611,694
$
(368,448
)
$
2,002,005
$
(1,077,087
)
$
1,348,746
Bank of Hawai‘i Corporation and Subsidiaries
Average Balances and Interest Rates - Taxable-Equivalent Basis
1
Table 7a
Three Months Ended
Three Months Ended
Three Months Ended
June 30, 2023
March 31, 2023
June 30, 2022
Average
Income /
Yield /
Average
Income /
Yield /
Average
Income /
Yield /
(dollars in millions)
Balance
Expense 2
Rate
Balance
Expense 2
Rate
Balance
Expense 2
Rate
Earning Assets Interest-Bearing Deposits in Other Banks
$
5.1
$
-
1.48
%
$
1.7
$
-
6.25
%
$
3.5
$
-
0.59
%
Funds Sold
500.1
6.4
5.06
295.9
3.4
4.55
273.5
0.7
1.04
Investment Securities Available-for-Sale Taxable
2,741.1
23.2
3.39
2,820.3
23.8
3.40
4,123.1
18.0
1.74
Non-Taxable
9.6
0.1
4.40
9.6
0.1
4.38
2.9
-
1.99
Held-to-Maturity Taxable
5,231.3
23.2
1.78
5,336.2
23.8
1.78
4,377.0
18.7
1.71
Non-Taxable
35.2
0.2
2.10
35.3
0.2
2.10
35.7
0.2
2.10
Total Investment Securities
8,017.2
46.7
2.33
8,201.4
47.9
2.34
8,538.7
36.9
1.73
Loans Held for Sale
2.7
-
5.50
1.5
-
5.30
6.3
0.1
4.06
Loans and Leases 3 Commercial and Industrial
1,456.1
17.5
4.82
1,411.4
16.2
4.67
1,330.0
9.9
2.99
Paycheck Protection Program
14.5
-
1.30
16.9
0.1
2.35
38.7
0.5
5.26
Commercial Mortgage
3,814.9
49.3
5.19
3,736.9
45.1
4.90
3,357.2
26.2
3.13
Construction
246.8
3.5
5.70
280.4
3.9
5.65
222.6
2.4
4.39
Commercial Lease Financing
65.4
0.3
1.67
66.9
-
(0.14
)
94.2
0.3
1.44
Residential Mortgage
4,704.0
41.2
3.50
4,666.0
39.9
3.42
4,445.7
36.4
3.26
Home Equity
2,272.3
19.0
3.35
2,239.4
18.2
3.30
2,032.9
14.4
2.85
Automobile
879.3
7.7
3.53
871.8
7.3
3.37
759.1
6.1
3.20
Other 4
423.5
6.4
6.04
427.8
6.2
5.83
420.4
5.6
5.38
Total Loans and Leases
13,876.8
144.9
4.19
13,717.5
136.9
4.03
12,700.8
101.8
3.21
Other
94.8
2.2
8.94
67.2
0.6
3.56
38.2
0.3
3.70
Total Earning Assets
22,496.7
200.2
3.56
22,285.2
188.8
3.42
21,561.0
139.8
2.60
Cash and Due from Banks
316.6
319.1
238.4
Other Assets
1,301.1
1,261.2
1,091.9
Total Assets
$
24,114.4
$
23,865.5
$
22,891.3
Interest-Bearing Liabilities Interest-Bearing
Deposits Demand
$
4,037.4
7.5
0.75
$
4,215.9
5.2
0.50
$
4,442.2
0.7
0.06
Savings
7,667.6
26.6
1.39
8,009.0
20.6
1.05
7,692.8
1.9
0.10
Time
2,296.1
19.7
3.44
1,789.9
12.0
2.71
950.4
0.9
0.40
Total Interest-Bearing Deposits
14,001.1
53.8
1.54
14,014.8
37.8
1.09
13,085.4
3.5
0.11
Funds Purchased
14.6
0.2
5.00
60.4
0.7
4.66
25.3
-
0.89
Short-Term Borrowings
195.2
2.5
5.09
265.0
3.2
4.84
34.5
0.1
1.06
Securities Sold Under Agreements to Repurchase
725.5
5.4
2.96
725.5
5.4
2.96
447.7
2.8
2.47
Other Debt
1,255.8
13.5
4.31
499.6
5.3
4.30
10.4
0.3
7.05
Total Interest-Bearing Liabilities
16,192.2
75.4
1.87
15,565.3
52.4
1.36
13,603.3
6.7
0.20
Net Interest Income
$
124.8
$
136.4
$
133.1
Interest Rate Spread
1.69
%
2.06
%
2.40
%
Net Interest Margin
2.22
%
2.47
%
2.47
%
Noninterest-Bearing Demand Deposits
6,017.5
6,416.1
7,484.0
Other Liabilities
541.6
551.2
413.3
Shareholders' Equity
1,363.1
1,332.9
1,390.7
Total Liabilities and Shareholders' Equity
$
24,114.4
$
23,865.5
$
22,891.3
1
Due to rounding, the amounts
presented in this table may not tie to other amounts presented
elsewhere in this report.
2
Interest income includes
taxable-equivalent basis adjustments, based upon a federal
statutory tax rate of 21%, of $471,000, $495,000, and $221,000 for
the three months ended June 30, 2023, March 31, 2023, and June 30,
2022, respectively.
3
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.
4
Comprised of other consumer
revolving credit, installment, and consumer lease financing.
Bank of Hawai‘i Corporation and Subsidiaries
Average Balances and Interest Rates - Taxable-Equivalent Basis
1 Table 7b Six Months Ended Six Months
Ended June 30, 2023 June 30, 2022 Average
Income / Yield / Average Income /
Yield / (dollars in millions)
Balance Expense
2 Rate Balance Expense 2 Rate
Earning Assets Interest-Bearing Deposits in Other Banks
$
3.4
$
-
2.68
%
$
3.5
$
-
0.52
%
Funds Sold
398.6
9.8
4.87
256.1
0.8
0.66
Investment Securities Available-for-Sale Taxable
2,780.4
47.0
3.40
4,260.6
35.1
1.65
Non-Taxable
9.6
0.2
4.39
3.0
-
1.96
Held-to-Maturity Taxable
5,283.6
47.0
1.78
4,471.7
37.2
1.67
Non-Taxable
35.2
0.4
2.10
35.8
0.4
2.10
Total Investment Securities
8,108.8
94.6
2.34
8,771.1
72.7
1.66
Loans Held for Sale
2.1
0.1
5.42
10.0
0.2
3.19
Loans and Leases 3 Commercial and Industrial
1,433.8
33.8
4.75
1,331.5
18.9
2.86
Paycheck Protection Program
15.7
0.1
1.86
63.7
2.3
7.39
Commercial Mortgage
3,776.2
94.5
5.04
3,258.5
48.0
2.97
Construction
263.5
7.4
5.68
225.1
4.5
4.03
Commercial Lease Financing
66.1
0.3
0.76
96.5
0.7
1.44
Residential Mortgage
4,685.2
81.0
3.46
4,394.8
71.2
3.24
Home Equity
2,255.9
37.2
3.33
1,966.3
27.7
2.84
Automobile
875.6
15.0
3.45
748.3
11.9
3.22
Other 4
425.6
12.5
5.94
412.1
11.1
5.42
Total Loans and Leases
13,797.6
281.8
4.11
12,496.8
196.3
3.16
Other
81.0
2.7
6.70
37.3
0.6
2.97
Total Earning Assets
22,391.5
389.0
3.49
21,574.8
270.6
2.52
Cash and Due from Banks
317.8
235.8
Other Assets
1,281.3
1,058.9
Total Assets
$
23,990.6
$
22,869.5
Interest-Bearing Liabilities Interest-Bearing
Deposits Demand
$
4,126.2
12.7
0.62
$
4,548.2
1.2
0.05
Savings
7,837.3
47.2
1.21
7,617.1
2.9
0.08
Time
2,044.4
31.7
3.12
960.9
1.8
0.37
Total Interest-Bearing Deposits
14,007.9
91.6
1.32
13,126.2
5.9
0.09
Funds Purchased
37.4
0.9
4.72
16.2
0.1
0.72
Short-Term Borrowings
229.9
5.7
4.94
17.3
0.1
1.06
Securities Sold Under Agreements to Repurchase
725.5
10.8
2.96
449.1
5.6
2.47
Other Debt
879.8
18.7
4.31
10.4
0.3
7.05
Total Interest-Bearing Liabilities
15,880.5
127.7
1.62
13,619.2
12.0
0.18
Net Interest Income
$
261.3
$
258.6
Interest Rate Spread
1.87
%
2.34
%
Net Interest Margin
2.34
%
2.41
%
Noninterest-Bearing Demand Deposits
6,215.7
7,371.9
Other Liabilities
546.3
399.2
Shareholders' Equity
1,348.1
1,479.2
Total Liabilities and Shareholders' Equity
$
23,990.6
$
22,869.5
1
Due to rounding, the amounts
presented in this table may not tie to other amounts presented
elsewhere in this report.
2
Interest income includes
taxable-equivalent basis adjustments, based upon a federal
statutory tax rate of 21%, of $966,000 and $475,000 for the six
months ended June 30, 2023 and June 30, 2022, respectively.
3
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.
4
Comprised of other consumer
revolving credit, installment, and consumer lease financing.
Bank of Hawai‘i Corporation and Subsidiaries
Analysis of Change in Net Interest Income - Taxable-Equivalent
Basis
Table 8a
Three Months Ended June 30, 2023 Compared to March 31,
2023 (dollars in millions)
Volume 1 Rate 1
Total Change in Interest Income: Funds Sold
$
2.6
$
0.4
$
3.0
Investment Securities Available-for-Sale Taxable
(0.6
)
-
(0.6
)
Held-to-Maturity Taxable
(0.5
)
(0.1
)
(0.6
)
Total Investment Securities
(1.1
)
(0.1
)
(1.2
)
Loans and Leases Commercial and Industrial
0.7
0.6
1.3
Paycheck Protection Program
(0.1
)
-
(0.1
)
Commercial Mortgage
1.1
3.1
4.2
Construction
(0.4
)
-
(0.4
)
Commercial Lease Financing
-
0.3
0.3
Residential Mortgage
0.3
1.0
1.3
Home Equity
0.4
0.4
0.8
Automobile
0.1
0.3
0.4
Other 2
(0.1
)
0.3
0.2
Total Loans and Leases
2.0
6.0
8.0
Other
0.4
1.2
1.6
Total Change in Interest Income
3.9
7.5
11.4
Change in Interest Expense: Interest-Bearing Deposits Demand
(0.2
)
2.5
2.3
Savings
(0.9
)
6.9
6.0
Time
3.9
3.8
7.7
Total Interest-Bearing Deposits
2.8
13.2
16.0
Funds Purchased
(0.5
)
-
(0.5
)
Short-Term Borrowings
(0.9
)
0.2
(0.7
)
Other Debt
8.2
-
8.2
Total Change in Interest Expense
9.6
13.4
23.0
Change in Net Interest Income
$
(5.7
)
$
(5.9
)
$
(11.6
)
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 Hawai‘i Corporation and Subsidiaries
Analysis of Change in Net Interest Income - Taxable-Equivalent
Basis
Table 8b
Three Months Ended June 30, 2023 Compared to June 30,
2022 (dollars in millions)
Volume 1 Rate 1
Total Change in Interest Income: Funds Sold
$
1.0
$
4.7
$
5.7
Investment Securities Available-for-Sale Taxable
(7.6
)
12.8
5.2
Non-Taxable
0.1
-
0.1
Held-to-Maturity Taxable
3.7
0.8
4.5
Total Investment Securities
(3.8
)
13.6
9.8
Loans Held for Sale
(0.1
)
-
(0.1
)
Loans and Leases Commercial and Industrial
1.0
6.6
7.6
Paycheck Protection Program
(0.2
)
(0.3
)
(0.5
)
Commercial Mortgage
4.0
19.1
23.1
Construction
0.3
0.8
1.1
Commercial Lease Financing
(0.1
)
0.1
-
Residential Mortgage
2.2
2.6
4.8
Home Equity
1.8
2.8
4.6
Automobile
1.0
0.6
1.6
Other 2
-
0.8
0.8
Total Loans and Leases
10.0
33.1
43.1
Other
1.0
0.9
1.9
Total Change in Interest Income
8.1
52.3
60.4
Change in Interest Expense: Interest-Bearing Deposits Demand
(0.1
)
6.9
6.8
Savings
-
24.7
24.7
Time
2.9
15.9
18.8
Total Interest-Bearing Deposits
2.8
47.5
50.3
Funds Purchased
-
0.2
0.2
Short-Term Borrowings
1.3
1.1
2.4
Securities Sold Under Agreements to Repurchase
2.0
0.6
2.6
Other Debt
13.4
(0.2
)
13.2
Total Change in Interest Expense
19.5
49.2
68.7
Change in Net Interest Income
$
(11.4
)
$
3.1
$
(8.3
)
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 Hawai‘i Corporation and Subsidiaries
Analysis of Change in Net Interest Income - Taxable-Equivalent
Basis
Table 8c
Six Months Ended June 30, 2023 Compared to June 30,
2022 (dollars in millions)
Volume 1 Rate 1
Total Change in Interest Income: Funds Sold
$
0.8
$
8.2
$
9.0
Investment Securities Available-for-Sale Taxable
(15.4
)
27.3
11.9
Non-Taxable
0.1
0.1
0.2
Held-to-Maturity Taxable
7.1
2.7
9.8
Total Investment Securities
(8.2
)
30.1
21.9
Loans Held for Sale
(0.2
)
0.1
(0.1
)
Loans and Leases Commercial and Industrial
1.6
13.3
14.9
Paycheck Protection Program
(1.1
)
(1.1
)
(2.2
)
Commercial Mortgage
8.6
37.9
46.5
Construction
0.9
2.0
2.9
Commercial Lease Financing
(0.3
)
(0.1
)
(0.4
)
Residential Mortgage
4.8
5.0
9.8
Home Equity
4.4
5.1
9.5
Automobile
2.2
0.9
3.1
Other 2
0.3
1.1
1.4
Total Loans and Leases
21.4
64.1
85.5
Other
1.0
1.1
2.1
Total Change in Interest Income
14.8
103.6
118.4
Change in Interest Expense: Interest-Bearing Deposits Demand
(0.1
)
11.6
11.5
Savings
0.1
44.2
44.3
Time
3.9
26.0
29.9
Total Interest-Bearing Deposits
3.9
81.8
85.7
Funds Purchased
0.2
0.6
0.8
Short-Term Borrowings
4.3
1.3
5.6
Securities Sold Under Agreements to Repurchase
3.9
1.3
5.2
Other Debt
18.6
(0.2
)
18.4
Total Change in Interest Expense
30.9
84.8
115.7
Change in Net Interest Income
$
(16.1
)
$
18.8
$
2.7
1
The change in interest income and
expense not solely due to changes in volume or rate has been
allocated on a pro-rata basis to the volume and rate columns.
2
Comprised of other consumer
revolving credit, installment, and consumer lease financing.
Bank of Hawai‘i Corporation and Subsidiaries Salaries and
Benefits
Table 9
Three Months Ended
Six Months Ended
June 30,
March 31,
June 30,
June 30,
(dollars in thousands)
2023
2023
2022
2023
2022
Salaries
$
37,962
$
38,617
$
36,721
$
76,579
$
71,653
Incentive Compensation
2,984
3,997
6,073
6,981
12,184
Share-Based Compensation
4,096
3,159
3,962
7,255
7,761
Commission Expense
775
647
1,232
1,422
2,873
Retirement and Other Benefits
3,489
5,888
4,036
9,377
8,729
Payroll Taxes
3,310
5,848
3,034
9,158
7,978
Medical, Dental, and Life Insurance
3,568
3,864
2,591
7,432
5,825
Separation Expense
(9
)
3,068
120
3,059
690
Total Salaries and Benefits
$
56,175
$
65,088
$
57,769
$
121,263
$
117,693
Bank of Hawai‘i Corporation and Subsidiaries Loan
and Lease Portfolio Balances Table 10 June 30,
March 31, December 31, September 30, June
30, (dollars in thousands)
2023
2023
2022
2022
2022
Commercial Commercial and Industrial
$
1,502,676
$
1,425,916
)
$
1,389,066
)
$
1,368,966
)
$
1,323,830
)
Paycheck Protection Program
13,789
15,175
19,579
22,955
31,964
Commercial Mortgage
3,796,769
3,826,283
3,725,542
3,591,943
3,464,126
Construction
236,428
232,903
260,825
236,498
246,177
Lease Financing
62,779
65,611
69,491
73,989
89,535
Total Commercial
5,612,441
5,565,888
5,464,503
5,294,351
5,155,632
Consumer Residential Mortgage
4,721,976
4,691,298
4,653,072
4,585,723
4,486,571
Home Equity
2,278,105
2,260,001
2,225,950
2,185,484
2,101,612
Automobile
878,767
877,979
870,396
820,640
775,065
Other 1
423,600
429,356
432,499
435,408
432,693
Total Consumer
8,302,448
8,258,634
8,181,917
8,027,255
7,795,941
Total Loans and Leases
$
13,914,889
$
13,824,522
$
13,646,420
$
13,321,606
$
12,951,573
1 Comprised of other revolving credit, installment, and
lease financing.
Deposits June 30,
March 31, December 31, September 30, June
30, (dollars in thousands)
2023
2023
2022
2022
2022
Consumer
$
10,018,931
$
10,158,833
$
10,304,335
$
10,507,946
$
10,554,121
Commercial
8,019,971
8,594,441
8,569,670
8,841,781
8,824,609
Public and Other
2,469,713
1,738,026
1,741,691
1,539,046
1,646,951
Total Deposits
$
20,508,615
$
20,491,300
$
20,615,696
$
20,888,773
$
21,025,681
Average Deposits Three Months Ended
June 30, March 31, December 31, September
30, June 30, (dollars in thousands)
2023
2023
2022
2022
2022
Consumer
$
9,977,239
$
10,178,988
$
10,295,563
$
10,485,895
$
10,617,060
Commercial
8,138,358
8,611,960
8,588,198
9,002,432
8,874,988
Public and Other
1,903,004
1,639,934
1,457,566
1,375,354
1,077,315
Total Deposits
$
20,018,601
$
20,430,882
$
20,341,327
$
20,863,681
$
20,569,363
Bank of Hawai‘i Corporation and Subsidiaries
Non-Performing Assets and Accruing Loans and Leases Past Due 90
Days or More
Table 11
June 30,
March 31,
December 31,
September 30,
June 30,
(dollars in thousands)
2023
2023
2022
2022
2022
Non-Performing Assets Non-Accrual Loans and Leases
Commercial Commercial and Industrial
$
17
$
31
$
37
$
49
$
85
Commercial Mortgage
3,107
3,216
3,309
3,396
3,462
Total Commercial
3,124
3,247
3,346
3,445
3,547
Consumer Residential Mortgage
3,504
4,199
4,239
4,945
5,179
Home Equity
3,809
3,638
4,022
4,438
4,435
Total Consumer
7,313
7,837
8,261
9,383
9,614
Total Non-Accrual Loans and Leases
10,437
11,084
11,607
12,828
13,161
Foreclosed Real Estate
1,040
1,040
1,040
1,040
2,332
Total Non-Performing Assets
$
11,477
$
12,124
$
12,647
$
13,868
$
15,493
Accruing Loans and Leases Past Due 90 Days or More
Consumer Residential Mortgage
$
3,560
$
4,566
$
2,429
$
3,279
$
2,638
Home Equity
2,022
1,723
1,673
1,061
2,029
Automobile
577
598
589
467
359
Other 1
633
632
683
513
508
Total Consumer
6,792
7,519
5,374
5,320
5,534
Total Accruing Loans and Leases Past Due 90 Days or More
$
6,792
$
7,519
$
5,374
$
5,320
$
5,534
Total Loans and Leases
$
13,914,889
$
13,824,522
$
13,646,420
$
13,321,606
$
12,951,573
Ratio of Non-Accrual Loans and Leases to Total Loans and
Leases
0.08
%
0.08
%
0.09
%
0.10
%
0.10
%
Ratio of Non-Performing Assets to Total Loans and Leases and
Foreclosed Real Estate
0.08
%
0.09
%
0.09
%
0.10
%
0.12
%
Ratio of Non-Performing Assets to Total Assets
0.04
%
0.05
%
0.05
%
0.06
%
0.06
%
Ratio of Commercial Non-Performing Assets to Total
Commercial Loans and Leases and Commercial Foreclosed Real Estate
0.06
%
0.06
%
0.06
%
0.07
%
0.07
%
Ratio of Consumer Non-Performing Assets to Total Consumer
Loans and Leases and Consumer Foreclosed Real Estate
0.10
%
0.11
%
0.11
%
0.13
%
0.15
%
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
0.13
%
0.14
%
0.13
%
0.14
%
0.16
%
Quarter to Quarter Changes in Non-Performing Assets
Balance at Beginning of Quarter
$
12,124
$
12,647
$
13,868
$
15,493
$
19,979
Additions
1,116
552
704
489
2,293
Reductions Payments
(226
)
(778
)
(1,605
)
(706
)
(5,511
)
Return to Accrual Status
(1,527
)
(297
)
(301
)
(116
)
(1,267
)
Sales of Foreclosed Real Estate
-
-
-
(1,292
)
-
Charge-offs / Write-downs
(10
)
-
(19
)
-
(1
)
Total Reductions
(1,763
)
(1,075
)
(1,925
)
(2,114
)
(6,779
)
Balance at End of Quarter
$
11,477
$
12,124
$
12,647
$
13,868
$
15,493
1
Comprised of other revolving
credit, installment, and lease financing.
Bank of Hawai‘i Corporation and Subsidiaries
Reserve for Credit Losses
Table 12
Three Months Ended
Six Months Ended
June 30,
March 31,
June 30,
June 30,
(dollars in thousands)
2023
2023
2022
2023
2022
Balance at Beginning of Period
$
150,579
$
151,247
$
157,264
$
151,247
$
164,297
Loans and Leases Charged-Off Commercial Commercial and
Industrial
(203
)
(261
)
(233
)
(464
)
(582
)
Consumer Residential Mortgage
(6
)
-
(80
)
(6
)
(80
)
Home Equity
(5
)
(50
)
(22
)
(55
)
(90
)
Automobile
(1,293
)
(1,663
)
(1,157
)
(2,956
)
(2,687
)
Other 1
(2,004
)
(2,335
)
(1,854
)
(4,339
)
(3,815
)
Total Loans and Leases Charged-Off
(3,511
)
(4,309
)
(3,346
)
(7,820
)
(7,254
)
Recoveries on Loans and Leases Previously Charged-Off Commercial
Commercial and Industrial
103
50
51
153
420
Consumer Residential Mortgage
58
61
920
119
974
Home Equity
578
184
416
762
931
Automobile
777
672
684
1,449
1,423
Other 1
618
674
644
1,292
1,389
Total Recoveries on Loans and Leases Previously Charged-Off
2,134
1,641
2,715
3,775
5,137
Net Charged-Off - Loans and Leases
(1,377
)
(2,668
)
(631
)
(4,045
)
(2,117
)
Net Charged-Off - Accrued Interest Receivable
-
-
-
-
(47
)
Provision for Credit Losses: Loans and Leases
3,167
1,806
(2,885
)
4,973
(7,192
)
Accrued Interest Receivable
-
-
-
-
(367
)
Unfunded Commitments
(667
)
194
350
(473
)
(476
)
Total Provision for Credit Losses
2,500
2,000
(2,535
)
4,500
(8,035
)
Balance at End of Period
$
151,702
$
150,579
$
154,098
$
151,702
$
154,098
Components Allowance for Credit Losses - Loans and
Leases
$
145,367
$
143,577
$
148,512
$
145,367
$
148,512
Reserve for Unfunded Commitments
6,335
7,002
5,586
6,335
5,586
Total Reserve for Credit Losses
$
151,702
$
150,579
$
154,098
$
151,702
$
154,098
Average Loans and Leases Outstanding
$
13,876,754
$
13,717,483
$
12,700,825
$
13,797,559
$
12,496,747
Ratio of Net Loans and Leases Charged-Off to Average Loans
and Leases Outstanding (annualized)
0.04
%
0.08
%
0.02
%
0.06
%
0.03
%
Ratio of Allowance for Credit Losses to Loans and Leases
Outstanding 2
1.04
%
1.04
%
1.15
%
1.04
%
1.15
%
1
Comprised of other revolving
credit, installment, and lease financing.
2
The numerator comprises the
Allowance for Credit Losses - Loans and Leases.
Bank of Hawai‘i Corporation and Subsidiaries
Business Segments Selected Financial Information
Table 13a
Consumer
Commercial
Treasury
Consolidated
(dollars in thousands)
Banking
Banking
and Other
Total
Three Months Ended June 30, 2023 Net Interest Income (Loss)
$
99,814
$
53,673
$
(29,139
)
$
124,348
Provision for Credit Losses
1,392
(15
)
1,123
2,500
Net Interest Income (Loss) After Provision for Credit Losses
98,422
53,688
(30,262
)
121,848
Noninterest Income
31,944
7,939
3,372
43,255
Noninterest Expense
(81,275
)
(19,302
)
(3,459
)
(104,036
)
Income (Loss) Before Income Taxes
49,091
42,325
(30,349
)
61,067
Provision for Income Taxes
(12,645
)
(10,710
)
8,349
(15,006
)
Net Income (Loss)
$
36,446
$
31,615
$
(22,000
)
$
46,061
Total Assets as of June 30, 2023
$
8,739,294
$
5,714,929
$
10,493,713
$
24,947,936
Three Months Ended June 30, 2022 1 Net Interest
Income
$
76,872
$
49,791
$
6,239
$
132,902
Provision for Credit Losses
632
(1
)
(3,131
)
(2,500
)
Net Interest Income After Provision for Credit Losses
76,240
49,792
9,370
135,402
Noninterest Income
31,868
8,363
1,927
42,158
Noninterest Expense
(82,856
)
(17,014
)
(3,069
)
(102,939
)
Income Before Income Taxes
25,252
41,141
8,228
74,621
Provision for Income Taxes
(6,339
)
(10,252
)
(1,168
)
(17,759
)
Net Income
$
18,913
$
30,889
$
7,060
$
56,862
Total Assets as of June 30, 2022 1
$
8,205,352
$
5,339,224
$
9,688,123
$
23,232,699
1
Certain prior period information
has been reclassified to conform to current presentation.
Bank of Hawai‘i Corporation and Subsidiaries
Business Segments Selected Financial Information
Table 13b
Consumer
Commercial
Treasury
Consolidated
(dollars in thousands)
Banking
Banking
and Other
Total
Six Months Ended June 30, 2023 Net Interest Income (Loss)
$
197,822
$
110,378
$
(47,897
)
$
260,303
Provision for Credit Losses
4,061
(16
)
455
4,500
Net Interest Income (Loss) After Provision for Credit Losses
193,761
110,394
(48,352
)
255,803
Noninterest Income
63,098
16,588
4,306
83,992
Noninterest Expense
(166,348
)
(39,591
)
(10,016
)
(215,955
)
Income (Loss) Before Income Taxes
90,511
87,391
(54,062
)
123,840
Provision for Income Taxes
(23,268
)
(21,503
)
13,834
(30,937
)
Net Income (Loss)
$
67,243
$
65,888
$
(40,228
)
$
92,903
Total Assets as of June 30, 2023
$
8,739,294
$
5,714,929
$
10,493,713
$
24,947,936
Six Months Ended June 30, 2022 1 Net Interest Income
$
147,233
$
96,140
$
14,792
$
258,165
Provision for Credit Losses
2,315
(198
)
(10,117
)
(8,000
)
Net Interest Income After Provision for Credit Losses
144,918
96,338
24,909
266,165
Noninterest Income
63,837
18,561
3,311
85,709
Noninterest Expense
(164,666
)
(35,683
)
(6,464
)
(206,813
)
Income Before Income Taxes
44,089
79,216
21,756
145,061
Provision for Income Taxes
(11,053
)
(19,449
)
(2,863
)
(33,365
)
Net Income
$
33,036
$
59,767
$
18,893
$
111,696
Total Assets as of June 30, 2022 1
$
8,205,352
$
5,339,224
$
9,688,123
$
23,232,699
1
Certain prior period information
has been reclassified to conform to current presentation.
Bank of Hawai‘i Corporation and Subsidiaries
Selected Quarterly Financial Data
Table 14
Three Months Ended
June 30,
March 31,
December 31,
September 30,
June 30,
(dollars in thousands, except per share amounts)
2023
2023
2022
2022
2022
Quarterly Operating Results Interest Income Interest and
Fees on Loans and Leases
$
144,541
$
136,501
$
128,683
$
115,013
$
101,663
Income on Investment Securities Available-for-Sale
23,301
23,893
18,476
16,995
17,984
Held-to-Maturity
23,375
23,948
23,708
20,243
18,838
Deposits
18
27
13
10
5
Funds Sold
6,395
3,366
1,093
2,335
719
Other
2,121
597
340
322
353
Total Interest Income
199,751
188,332
172,313
154,918
139,562
Interest Expense Deposits
53,779
37,794
23,494
10,296
3,535
Securities Sold Under Agreements to Repurchase
5,436
5,377
4,289
2,745
2,794
Funds Purchased
184
704
318
40
57
Short-Term Borrowings
2,510
3,203
1,978
-
92
Other Debt
13,494
5,299
1,496
182
182
Total Interest Expense
75,403
52,377
31,575
13,263
6,660
Net Interest Income
124,348
135,955
140,738
141,655
132,902
Provision for Credit Losses
2,500
2,000
200
-
(2,500
)
Net Interest Income After Provision for Credit Losses
121,848
133,955
140,538
141,655
135,402
Noninterest Income Trust and Asset Management
11,215
10,690
10,652
10,418
11,457
Mortgage Banking
1,176
1,004
991
1,002
1,247
Service Charges on Deposit Accounts
7,587
7,737
7,513
7,526
7,309
Fees, Exchange, and Other Service Charges
14,150
13,808
13,906
13,863
14,193
Investment Securities Losses, Net
(1,310
)
(1,792
)
(1,124
)
(2,147
)
(1,295
)
Annuity and Insurance
1,038
1,271
1,087
1,034
870
Bank-Owned Life Insurance
2,876
2,842
2,475
2,486
2,658
Other
6,523
5,177
5,672
(3,522
)
5,719
Total Noninterest Income
43,255
40,737
41,172
30,660
42,158
Noninterest Expense Salaries and Benefits
56,175
65,088
57,639
59,938
57,769
Net Occupancy
9,991
9,872
9,499
10,186
9,930
Net Equipment
10,573
10,375
9,942
9,736
9,543
Data Processing
4,599
4,583
4,579
4,616
4,607
Professional Fees
4,651
3,883
3,958
3,799
3,542
FDIC Insurance
3,173
3,234
1,774
1,680
1,590
Other
14,874
14,884
15,312
15,794
15,958
Total Noninterest Expense
104,036
111,919
102,703
105,749
102,939
Income Before Provision for Income Taxes
61,067
62,773
79,007
66,566
74,621
Provision for Income Taxes
15,006
15,931
17,700
13,765
17,759
Net Income
$
46,061
$
46,842
$
61,307
$
52,801
$
56,862
Preferred Stock Dividends
1,969
1,969
1,969
1,969
1,969
Net Income Available to Common Shareholders
$
44,092
$
44,873
$
59,338
$
50,832
$
54,893
Basic Earnings Per Common Share
$
1.12
$
1.14
$
1.51
$
1.28
$
1.38
Diluted Earnings Per Common Share
$
1.12
$
1.14
$
1.50
$
1.28
$
1.38
Balance Sheet Totals Loans and Leases
$
13,914,889
$
13,824,522
$
13,646,420
$
13,321,606
$
12,951,573
Total Assets
24,947,936
23,931,977
23,606,877
23,134,040
23,232,699
Total Deposits
20,508,615
20,491,300
20,615,696
20,888,773
21,025,681
Total Shareholders' Equity
1,358,279
1,354,430
1,316,995
1,282,384
1,348,746
Performance Ratios Return on Average Assets
0.77
%
0.80
%
1.05
%
0.91
%
1.00
%
Return on Average Shareholders' Equity
13.55
14.25
18.91
15.31
16.40
Return on Average Common Equity
14.95
15.79
21.28
16.98
18.19
Efficiency Ratio 1
62.07
63.34
56.46
61.37
58.80
Net Interest Margin 2
2.22
2.47
2.60
2.60
2.47
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 Hawai‘i Corporation and Subsidiaries
Hawaii Economic Trends
Table 15
Five Months Ended
Year Ended
(dollars in millions; jobs in thousands)
May 31, 2023
December 31, 2022
December 31, 2021
Hawaii Economic Trends State General Fund Revenues 1
$
4,204.9
(3.6
)%
$
9,441.3
16.0
%
$
8,137.9
26.9
%
General Excise and Use Tax Revenue 1
1,916.0
9.4
4,263.4
18.3
3,604.3
18.6
Jobs 2
657.4
654.5
642.6
June 30,
December 31,
2023
2022
2021
Unemployment, seasonally adjusted 3 Statewide
3.0
%
3.7
%
3.2
%
Honolulu County
3.1
3.3
3.7
Hawaii County
3.0
4.7
1.8
Maui County
2.5
4.5
2.4
Kauai County
2.6
4.7
2.7
June 30,
December 31,
(1-year percentage change, except months of inventory)
2023
2022
2021
2020
Housing Trends (Single Family Oahu) 4 Median Home Price
(5.5
)%
11.6
%
19.3
%
5.2
%
Home Sales Volume (units)
(34.6
)%
(23.2
)%
17.9
%
2.3
%
Months of Inventory
2.6
2.1
0.8
1.4
Monthly Visitor Arrivals, PercentageChange (in
thousands)
Not Seasonally Adjusted from Previous Year
Tourism 5 May 31, 2023
790.5
2.1
%
April 30, 2023
806.2
(0.4
)
March 31, 2023
892.2
13.6
February 28, 2023
733.6
17.6
January 31, 2023
775.1
36.7
December 31, 2022
858.1
14.0
November 30, 2022
725.5
18.2
October 31, 2022
726.1
31.8
September 30, 2022
691.8
37.1
August 31, 2022
829.7
14.8
July 31, 2022
919.2
4.5
June 30, 2022
841.8
6.4
May 31, 2022
774.1
22.9
April 30, 2022
809.6
67.3
March 31, 2022
785.7
78.7
February 28, 2022
623.7
165.1
January 31, 2022
567.2
229.8
December 31,2021
752.8
219.3
November 30, 2021
614.0
234.1
October 31, 2021
550.8
618.2
September 30, 2021
504.6
2,641.0
August 31, 2021
723.0
2,995.6
July 31, 2021
879.6
3,798.4
June 30, 2021
791.1
4,534.7
May 31, 2021
629.7
6,807.4
1
Source: Hawaii Department of
Business, Economic Development & Tourism
2
Source: U.S. Bureau of Labor
Statistics
3
Source: University of Hawaii
Economic Research Organization (UHERO)
4
Source: Honolulu Board of
Realtors
5
Source: Hawaii Tourism
Authority
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230724848205/en/
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