Bank of Hawaii Corporation Second Quarter 2022 Financial Results

  • Diluted Earnings Per Common Share $1.38
  • Net Income $56.9 Million
  • Board of Directors Declares Dividend of $0.70 Per Common Share

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BOH 2Q 2022 Earnings Release Supplement

HONOLULU--()--Bank of Hawaii Corporation (NYSE: BOH) today reported diluted earnings per common share of $1.38 for the second quarter of 2022, compared with diluted earnings per common share of $1.32 in the previous quarter and $1.68 in the same quarter last year. Net income for the second quarter of 2022 was $56.9 million, up 3.7% from the first quarter of 2022 and down 15.8% from the second quarter of 2021. The decrease from the second quarter of 2021 was primarily due to a smaller release of the allowance for credit losses and lower PPP income in the current quarter and one-time items in the second quarter of 2021.

“Bank of Hawaii performed well during the second quarter of 2022," said Peter Ho, Chairman, President, and CEO. “Net interest margin expanded, driven by robust core loan growth and higher interest rates. At the same time, asset quality continued its sound and stable trend, and capital and liquidity remained strong, positioning us well for the future.”

Financial Highlights

  • The return on average assets for the second quarter of 2022 was 1.00% compared with 0.97% in the previous quarter and 1.23% in the same quarter of 2021.
  • The return on average common equity for the second quarter of 2022 was 18.19% compared with 15.44% in the previous quarter and 19.61% in the same quarter of 2021.
  • Net interest income for the second quarter of 2022 was $132.9 million, an increase of 6.1% from the first quarter of 2022 and an increase of 7.6% from the second quarter of 2021. Net interest margin was 2.47% in the second quarter of 2022, an increase of 13 basis points compared to the previous quarter and an increase of 10 basis points from the same quarter of 2021.
    • The increase in net interest income and margin in the second quarter of 2022 compared to prior periods was due to the higher rate environment and continued strong loan growth.
    • The second quarter of 2022 included $1.1 million of interest recoveries.
  • The provision for credit losses for the second quarter of 2022 was a net benefit of $2.5 million compared with a net benefit of $5.5 million in the previous quarter and a net benefit of $16.1 million in the same quarter of 2021.
  • Noninterest income was $42.2 million in the second quarter of 2022, a decrease of 3.2% from the previous quarter and a decrease of 5.1% from the same quarter of 2021.
    • Noninterest income in the second quarter of 2021 included a gain of $3.7 million related to the sale of investment securities.
  • Noninterest expense was $102.9 million in the second quarter of 2022, a decrease of 0.9% from the previous quarter and an increase of 6.6% from the same quarter of 2021.
    • Compared to the same period in 2021, noninterest expense included the impact of higher salaries and benefits and occupancy expenses. Significant one-time items included in noninterest expense during the second quarter of 2021 were fees related to the early termination of FHLB advances and repurchase agreements of $3.2 million offset by a gain on the sale of property of $3.1 million.
  • The effective tax rate for the second quarter of 2022 was 23.80% compared with 22.15% in the previous quarter and 22.84% during the same quarter of 2021.

Asset Quality

The Company’s overall asset quality continued to remain strong during the second quarter of 2022.

  • Total non-performing assets were $15.5 million at June 30, 2022, down by $4.5 million from March 31, 2022 and down $3.5 million from June 30, 2021. Non-performing assets as a percentage of total loans and leases and foreclosed real estate were 0.12% at the end of the quarter, a decrease of 4 basis points from the end of both the prior quarter and same quarter of 2021.
  • Net loan and lease charge-offs during the second quarter of 2022 were $0.6 million or 0.02% annualized of total average loans and leases outstanding.
    • Net loan and lease charge-offs for the second quarter of 2022 were comprised of charge-offs of $3.3 million partially offset by recoveries of $2.7 million.
    • Compared to the prior quarter, net loan and lease charge-offs decreased by $0.9 million or 3 basis points annualized on total average loans and leases outstanding.
    • Compared to the same quarter of 2021, net loan and lease charge-offs decreased by $0.6 million or 2 basis points annualized on total average loans and leases outstanding.
  • The allowance for credit losses on loans and leases was $148.5 million at June 30, 2022, a decrease of $3.5 million from March 31, 2022 and a decrease of $31.9 million from June 30, 2021. The ratio of the allowance for credit losses to total loans and leases outstanding was 1.15% at the end of the quarter, down 6 basis points from the end of the prior quarter and down 35 basis points from the end of the same quarter of 2021.

Balance Sheet

  • Total assets were $23.2 billion at June 30, 2022, an increase of 1.0% from March 31, 2022 and an increase of 2.5% from June 30, 2021.
  • The investment securities portfolio was $8.3 billion at June 30, 2022, a decrease of 5.4% from March 31, 2022 and an increase of 2.3% from June 30, 2021.
    • 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 $13.0 billion at June 30, 2022, an increase of 3.2% from March 31, 2022 and an increase of 7.6% from June 30, 2021.
    • Total loans and leases excluding PPP loans were $12.9 billion at June 30, 2022, an increase of 3.5% from March 31, 2022 and an increase of 12.1% from June 30, 2021.
  • Total deposits reached a new record high of $21.0 billion at June 30, 2022, an increase of 1.5% from March 31, 2022 and an increase of 4.2% from June 30, 2021.

Capital and Dividends

  • The Tier 1 Capital Ratio was 13.01% at June 30, 2022 compared with 13.22% at March 31, 2022 and 13.87% at June 30, 2021.
  • The Tier 1 Leverage Ratio was 7.29% at June 30, 2022 compared with 7.30% at March 31, 2022 and 7.31% at June 30, 2021.
  • The Company repurchased 131.0 thousand shares of common stock at a total cost of $10.0 million under its share repurchase program in the second quarter of 2022 at an average cost of $75.94 per share repurchased.
    • Total remaining buyback authority under the share repurchase program was $65.8 million at June 30, 2022.
  • 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, 2022 to shareholders of record at the close of business on August 31, 2022.
  • On July 5, 2022, 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, 2022 to shareholders of record of the preferred stock at the close of business on July 18, 2022.

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 Hawaii Corporation'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, 2021 and its Form 10-Q for the fiscal quarter ended March 31, 2022, 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 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 Hawai'i, 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

Six Months Ended

June 30,

March 31,

June 30,

June 30,

(dollars in thousands, except per share amounts)

2022

2022

2021

2022

2021

For the Period:
Operating Results
Net Interest Income

$

132,902

 

$

125,263

 

$

123,514

 

$

258,165

 

$

244,083

 

Provision for Credit Losses

 

(2,500

)

 

(5,500

)

 

(16,100

)

 

(8,000

)

 

(30,400

)

Total Noninterest Income

 

42,158

 

 

43,551

 

 

44,431

 

 

85,709

 

 

87,401

 

Total Noninterest Expense

 

102,939

 

 

103,874

 

 

96,527

 

 

206,813

 

 

195,392

 

Net Income

 

56,862

 

 

54,834

 

 

67,533

 

 

111,696

 

 

127,482

 

Basic Earnings Per Common Share

 

1.38

 

 

1.33

 

 

1.69

 

 

2.71

 

 

3.20

 

Diluted Earnings Per Common Share

 

1.38

 

 

1.32

 

 

1.68

 

 

2.70

 

 

3.18

 

Dividends Declared Per Common Share

 

0.70

 

 

0.70

 

 

0.67

 

 

1.40

 

 

1.34

 

 
Performance Ratios
Return on Average Assets

 

1.00

 

%

 

0.97

 

%

 

1.23

 

%

 

0.98

 

%

 

1.19

 

%

Return on Average Shareholders' Equity

 

16.40

 

 

14.18

 

 

19.17

 

 

15.23

 

 

18.43

 

Return on Average Common Equity 1

 

18.19

 

 

15.44

 

 

19.61

 

 

16.73

 

 

18.64

 

Efficiency Ratio 2

 

58.80

 

 

61.53

 

 

57.47

 

 

60.14

 

 

58.94

 

Net Interest Margin 3

 

2.47

 

 

2.34

 

 

2.37

 

 

2.41

 

 

2.40

 

Dividend Payout Ratio 4

 

50.72

 

 

52.63

 

 

39.64

 

 

51.66

 

 

41.88

 

Average Shareholders' Equity to Average Assets

 

6.08

 

 

6.87

 

 

6.40

 

 

6.47

 

 

6.45

 

 
Average Balances
Average Loans and Leases

$

12,700,825

 

$

12,290,402

 

$

12,096,308

 

$

12,496,747

 

$

12,024,844

 

Average Assets

 

22,891,262

 

 

22,847,488

 

 

22,073,569

 

 

22,869,496

 

 

21,614,669

 

Average Deposits

 

20,569,363

 

 

20,426,076

 

 

19,698,285

 

 

20,498,115

 

 

19,184,607

 

Average Shareholders' Equity

 

1,390,653

 

 

1,568,725

 

 

1,412,924

 

 

1,479,197

 

 

1,395,197

 

 
Per Share of Common Stock
Book Value 1

$

29.09

 

$

31.50

 

$

34.68

 

$

29.09

 

$

34.68

 

Tangible Book Value 1

 

28.30

 

 

30.71

 

 

33.91

 

 

28.30

 

 

33.91

 

Market Value
Closing

 

74.40

 

 

83.92

 

 

84.22

 

 

74.40

 

 

84.22

 

High

 

84.93

 

 

92.38

 

 

95.95

 

 

92.38

 

 

99.10

 

Low

 

70.97

 

 

79.60

 

 

81.23

 

 

70.97

 

 

75.65

 

 

June 30,

March 31,

December 31,

June 30,

2022

2022

2021

2021

As of Period End:
Balance Sheet Totals
Loans and Leases

$

12,951,573

 

$

12,544,492

 

$

12,259,076

 

$

12,041,378

 

Total Assets

 

23,232,699

 

 

23,000,317

 

 

22,784,941

 

 

22,672,183

 

Total Deposits

 

21,025,681

 

 

20,716,287

 

 

20,360,108

 

 

20,169,709

 

Other Debt

 

10,343

 

 

10,367

 

 

10,391

 

 

10,437

 

Total Shareholders' Equity

 

1,348,746

 

 

1,448,885

 

 

1,611,611

 

 

1,583,531

 

 
Asset Quality
Non-Performing Assets

$

15,493

 

$

19,979

 

$

18,966

 

$

18,974

 

Allowance for Credit Losses - Loans and Leases

 

148,512

 

 

152,028

 

 

157,821

 

 

180,385

 

Allowance to Loans and Leases Outstanding 5

 

1.15

 

%

 

1.21

 

%

 

1.29

 

%

 

1.50

 

%

 
Capital Ratios 6
Common Equity Tier 1 Capital Ratio

 

11.66

 

%

 

11.83

 

%

 

12.12

 

%

 

12.36

 

%

Tier 1 Capital Ratio

 

13.01

 

 

13.22

 

 

13.56

 

 

13.87

 

Total Capital Ratio

 

14.14

 

 

14.41

 

 

14.81

 

 

15.13

 

Tier 1 Leverage Ratio

 

7.29

 

 

7.30

 

 

7.32

 

 

7.31

 

Total Shareholders' Equity to Total Assets

 

5.81

 

 

6.30

 

 

7.07

 

 

6.98

 

Tangible Common Equity to Tangible Assets 1, 7

 

4.90

 

 

5.39

 

 

6.15

 

 

6.06

 

Tangible Common Equity to Risk-Weighted Assets 1, 7

 

8.72

 

 

9.77

 

 

11.44

 

 

11.81

 

 
Non-Financial Data
Full-Time Equivalent Employees

 

2,114

 

 

2,084

 

 

2,056

 

 

2,085

 

Branches

 

54

 

 

54

 

 

54

 

 

54

 

ATMs

 

310

 

 

307

 

 

307

 

 

312

 

 

1 Return on Average Common Equity was revised from 19.60% for the three months ended June 30, 2021 and 18.63% for the six months ended June 30, 2021; Book Value was revised from $34.80 for the three months ended and six months ended June 30, 2021; Tangible Book Value was revised from $34.02 for the three months ended and six months ended June 30, 2021; Tangible Common Equity to Tangible Assets was revised from 6.08% for the three months ended June 30, 2021; Tangible Common Equity to Risk-Weighted Assets was revised from 11.85% for the three months ended June 30, 2021.

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

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

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

5 The numerator comprises the Allowance for Credit Losses - Loans and Leases.

6 Regulatory capital ratios as of June 30, 2022 are preliminary.

7 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 Hawaii Corporation and Subsidiaries

Reconciliation of Non-GAAP Financial Measures

Table 2

June 30,

March 31,

December 31,

June 30,

(dollars in thousands)

2022

2022

2021

2021

 
Total Shareholders' Equity

$

1,348,746

 

$

1,448,885

 

$

1,611,611

 

$

1,583,531

 

Less: Preferred Stock 1

 

180,000

 

 

180,000

 

 

180,000

 

 

180,000

 

Goodwill

 

31,517

 

 

31,517

 

 

31,517

 

 

31,517

 

Tangible Common Equity 1

$

1,137,229

 

$

1,237,368

 

$

1,400,094

 

$

1,372,014

 

 
Total Assets

 

23,232,699

 

 

23,000,317

 

 

22,784,941

 

 

22,672,183

 

Less: Goodwill

 

31,517

 

 

31,517

 

 

31,517

 

 

31,517

 

Tangible Assets

$

23,201,182

 

$

22,968,800

 

$

22,753,424

 

$

22,640,666

 

 
Risk-Weighted Assets, determined in accordance
with prescribed regulatory requirements 2

$

13,035,674

 

$

12,663,646

 

$

12,236,805

 

$

11,614,522

 

 
Total Shareholders' Equity to Total Assets

 

5.81

%

 

6.30

%

 

7.07

%

 

6.98

%

Tangible Common Equity to Tangible Assets (Non-GAAP) 1

 

4.90

%

 

5.39

%

 

6.15

%

 

6.06

%

 
Tier 1 Capital Ratio 1

 

13.01

%

 

13.22

%

 

13.56

%

 

13.87

%

Tangible Common Equity to Risk-Weighted Assets (Non-GAAP) 1, 2

 

8.72

%

 

9.77

%

 

11.44

%

 

11.81

%

 
1 Preferred Stock was revised from $175,487 for the three months ended June 30, 2021; Tangible Common Equity was revised from $1,376,527 for the three months ended June 30, 2021; Tangible Common Equity to Tangible Assets (Non-GAAP) was revised from 6.08% for the three months ended June 30, 2021; Tangible Common Equity to Risk-Weighted Assets (Non-GAAP) was revised from 11.85% for the three months ended June 30, 2021.
2 Regulatory capital ratios as of June 30, 2022 are preliminary.

Bank of Hawaii Corporation and Subsidiaries

Consolidated Statements of Income

Table 3

Three Months Ended

Six Months Ended

June 30,

March 31,

June 30,

June 30,

(dollars in thousands, except per share amounts)

2022

2022

2021

2022

2021

Interest Income
Interest and Fees on Loans and Leases

$

101,663

 

$

94,439

 

$

100,894

 

$

196,102

 

$

200,193

 

Income on Investment Securities
Available-for-Sale

 

17,984

 

 

17,100

 

 

16,467

 

 

35,084

 

 

32,304

 

Held-to-Maturity

 

18,838

 

 

18,701

 

 

13,576

 

 

37,539

 

 

26,876

 

Deposits

 

5

 

 

4

 

 

-

 

 

9

 

 

7

 

Funds Sold

 

719

 

 

127

 

 

260

 

 

846

 

 

397

 

Other

 

353

 

 

202

 

 

182

 

 

555

 

 

367

 

Total Interest Income

 

139,562

 

 

130,573

 

 

131,379

 

 

270,135

 

 

260,144

 

Interest Expense
Deposits

 

3,535

 

 

2,353

 

 

4,152

 

 

5,888

 

 

8,481

 

Securities Sold Under Agreements to Repurchase

 

2,794

 

 

2,772

 

 

3,470

 

 

5,566

 

 

7,003

 

Funds Purchased

 

57

 

 

2

 

 

-

 

 

59

 

 

1

 

Short-Term Borrowings

 

92

 

 

-

 

 

-

 

 

92

 

 

-

 

Other Debt

 

182

 

 

183

 

 

243

 

 

365

 

 

576

 

Total Interest Expense

 

6,660

 

 

5,310

 

 

7,865

 

 

11,970

 

 

16,061

 

Net Interest Income

 

132,902

 

 

125,263

 

 

123,514

 

 

258,165

 

 

244,083

 

Provision for Credit Losses

 

(2,500

)

 

(5,500

)

 

(16,100

)

 

(8,000

)

 

(30,400

)

Net Interest Income After Provision for Credit Losses

 

135,402

 

 

130,763

 

 

139,614

 

 

266,165

 

 

274,483

 

Noninterest Income
Trust and Asset Management

 

11,457

 

 

11,276

 

 

11,682

 

 

22,733

 

 

22,960

 

Mortgage Banking

 

1,247

 

 

2,740

 

 

3,058

 

 

3,987

 

 

8,920

 

Service Charges on Deposit Accounts

 

7,309

 

 

7,272

 

 

6,065

 

 

14,581

 

 

12,193

 

Fees, Exchange, and Other Service Charges

 

14,193

 

 

12,952

 

 

13,807

 

 

27,145

 

 

27,414

 

Investment Securities Losses, Net

 

(1,295

)

 

(1,545

)

 

2,423

 

 

(2,840

)

 

1,220

 

Annuity and Insurance

 

870

 

 

791

 

 

911

 

 

1,661

 

 

1,613

 

Bank-Owned Life Insurance

 

2,658

 

 

2,349

 

 

2,063

 

 

5,007

 

 

3,980

 

Other

 

5,719

 

 

7,716

 

 

4,422

 

 

13,435

 

 

9,101

 

Total Noninterest Income

 

42,158

 

 

43,551

 

 

44,431

 

 

85,709

 

 

87,401

 

Noninterest Expense
Salaries and Benefits

 

57,769

 

 

59,924

 

 

56,161

 

 

117,693

 

 

112,412

 

Net Occupancy

 

9,930

 

 

9,826

 

 

5,047

 

 

19,756

 

 

14,137

 

Net Equipment

 

9,543

 

 

9,153

 

 

8,796

 

 

18,696

 

 

17,674

 

Data Processing

 

4,607

 

 

4,560

 

 

4,557

 

 

9,167

 

 

10,879

 

Professional Fees

 

3,542

 

 

3,258

 

 

3,114

 

 

6,800

 

 

6,520

 

FDIC Insurance

 

1,590

 

 

1,502

 

 

1,669

 

 

3,092

 

 

3,323

 

Other

 

15,958

 

 

15,651

 

 

17,183

 

 

31,609

 

 

30,447

 

Total Noninterest Expense

 

102,939

 

 

103,874

 

 

96,527

 

 

206,813

 

 

195,392

 

Income Before Provision for Income Taxes

 

74,621

 

 

70,440

 

 

87,518

 

 

145,061

 

 

166,492

 

Provision for Income Taxes

 

17,759

 

 

15,606

 

 

19,985

 

 

33,365

 

 

39,010

 

Net Income

$

56,862

 

$

54,834

 

$

67,533

 

$

111,696

 

$

127,482

 

Preferred Stock Dividends

 

1,969

 

 

1,969

 

 

-

 

 

3,938

 

 

-

 

Net Income Available to Common Shareholders

$

54,893

 

$

52,865

 

$

67,533

 

$

107,758

 

$

127,482

 

Basic Earnings Per Common Share

$

1.38

 

$

1.33

 

$

1.69

 

$

2.71

 

$

3.20

 

Diluted Earnings Per Common Share

$

1.38

 

$

1.32

 

$

1.68

 

$

2.70

 

$

3.18

 

Dividends Declared Per Common Share

$

0.70

 

$

0.70

 

$

0.67

 

$

1.40

 

$

1.34

 

Basic Weighted Average Common Shares

 

39,693,593

 

 

39,752,679

 

 

39,902,583

 

 

39,722,985

 

 

39,865,268

 

Diluted Weighted Average Common Shares

 

39,842,608

 

 

39,956,391

 

 

40,122,905

 

 

39,896,700

 

 

40,096,527

 

Bank of Hawaii 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)

2022

2022

2021

2022

2021

Net Income

$

56,862

 

$

54,834

 

$

67,533

 

$

111,696

 

$

127,482

 

Other Comprehensive Loss, Net of Tax:
Net Unrealized Losses on Investment Securities

 

(122,647

)

 

(180,124

)

 

(123

)

 

(302,771

)

 

(50,173

)

Defined Benefit Plans

 

352

 

 

353

 

 

442

 

 

705

 

 

883

 

Other Comprehensive Income (Loss)

 

(122,295

)

 

(179,771

)

 

319

 

 

(302,066

)

 

(49,290

)

Comprehensive Income (Loss)

$

(65,433

)

$

(124,937

)

$

67,852

 

$

(190,370

)

$

78,192

 

Bank of Hawaii Corporation and Subsidiaries

Consolidated Statements of Condition

Table 5

June 30,

March 31,

December 31,

June 30,

(dollars in thousands)

2022

2022

2021

2021

Assets
Interest-Bearing Deposits in Other Banks

$

2,264

 

$

2,488

 

$

2,571

 

$

2,584

 

Funds Sold

 

576,430

 

 

356,373

 

 

361,536

 

 

909,730

 

Investment Securities
Available-for-Sale

 

3,955,476

 

 

4,258,534

 

 

4,276,056

 

 

4,522,941

 

Held-to-Maturity (Fair Value of $3,823,739; $4,171,262; $4,646,619; and $3,965,117)

 

4,321,693

 

 

4,489,615

 

 

4,694,780

 

 

3,947,613

 

Loans Held for Sale

 

4,514

 

 

5,293

 

 

26,746

 

 

47,490

 

Loans and Leases

 

12,951,573

 

 

12,544,492

 

 

12,259,076

 

 

12,041,378

 

Allowance for Credit Losses

 

(148,512

)

 

(152,028

)

 

(157,821

)

 

(180,385

)

Net Loans and Leases

 

12,803,061

 

 

12,392,464

 

 

12,101,255

 

 

11,860,993

 

Total Earning Assets

 

21,663,438

 

 

21,504,767

 

 

21,462,944

 

 

21,291,351

 

Cash and Due from Banks

 

260,672

 

 

236,193

 

 

196,327

 

 

269,153

 

Premises and Equipment, Net

 

202,063

 

 

199,743

 

 

199,393

 

 

198,508

 

Operating Lease Right-of-Use Assets

 

91,901

 

 

93,563

 

 

95,621

 

 

97,264

 

Accrued Interest Receivable

 

47,141

 

 

45,392

 

 

45,242

 

 

47,046

 

Foreclosed Real Estate

 

2,332

 

 

2,332

 

 

2,332

 

 

2,332

 

Mortgage Servicing Rights

 

23,540

 

 

23,968

 

 

22,251

 

 

21,473

 

Goodwill

 

31,517

 

 

31,517

 

 

31,517

 

 

31,517

 

Bank-Owned Life Insurance

 

448,925

 

 

446,926

 

 

344,587

 

 

292,805

 

Other Assets

 

461,170

 

 

415,916

 

 

384,727

 

 

420,734

 

Total Assets

$

23,232,699

 

$

23,000,317

 

$

22,784,941

 

$

22,672,183

 

 
Liabilities
Deposits
Noninterest-Bearing Demand

$

7,374,055

 

$

7,500,741

 

$

7,275,287

 

$

6,570,232

 

Interest-Bearing Demand

 

4,339,520

 

 

4,591,178

 

 

4,628,567

 

 

4,498,825

 

Savings

 

8,054,899

 

 

7,701,849

 

 

7,456,165

 

 

7,704,575

 

Time

 

1,257,207

 

 

922,519

 

 

1,000,089

 

 

1,396,077

 

Total Deposits

 

21,025,681

 

 

20,716,287

 

 

20,360,108

 

 

20,169,709

 

Securities Sold Under Agreements to Repurchase

 

425,490

 

 

450,490

 

 

450,490

 

 

550,490

 

Other Debt

 

10,343

 

 

10,367

 

 

10,391

 

 

10,437

 

Operating Lease Liabilities

 

99,722

 

 

101,274

 

 

103,210

 

 

105,380

 

Retirement Benefits Payable

 

37,532

 

 

38,008

 

 

38,494

 

 

50,260

 

Accrued Interest Payable

 

2,545

 

 

2,545

 

 

2,499

 

 

3,879

 

Taxes Payable

 

10,607

 

 

17,265

 

 

11,901

 

 

11,844

 

Other Liabilities

 

272,033

 

 

215,196

 

 

196,237

 

 

186,653

 

Total Liabilities

 

21,883,953

 

 

21,551,432

 

 

21,173,330

 

 

21,088,652

 

Shareholders' Equity
Preferred Stock ($.01 par value; authorized 180,000 shares;
issued / outstanding: June 30, 2022; March 31, 2022; December 31, 2021;

 

180,000

 

 

180,000

 

 

180,000

 

 

180,000

 

and June 30, 2021 - 180,000)
Common Stock ($.01 par value; authorized 500,000,000 shares;
issued / outstanding: June 30, 2022 - 58,727,909 / 40,182,659;
March 31, 2022 - 58,717,811 / 40,288,365; December 31, 2021 - 58,554,669 / 40,253,193;

 

582

 

 

582

 

 

581

 

 

580

 

and June 30, 2021 - 58,557,754 / 40,465,482)
Capital Surplus

 

611,694

 

 

607,061

 

 

602,508

 

 

594,261

 

Accumulated Other Comprehensive Loss

 

(368,448

)

 

(246,153

)

 

(66,382

)

 

(41,468

)

Retained Earnings

 

2,002,005

 

 

1,974,790

 

 

1,950,375

 

 

1,884,431

 

Treasury Stock, at Cost (Shares: June 30, 2022 - 18,545,250; March 31, 2022 - 18,429,446;
December 31, 2021 - 18,301,476; and June 30, 2021 - 18,092,272)

 

(1,077,087

)

 

(1,067,395

)

 

(1,055,471

)

 

(1,034,273

)

Total Shareholders' Equity

 

1,348,746

 

 

1,448,885

 

 

1,611,611

 

 

1,583,531

 

Total Liabilities and Shareholders' Equity

$

23,232,699

 

$

23,000,317

 

$

22,784,941

 

$

22,672,183

 

Bank of Hawaii Corporation and Subsidiaries

Consolidated Statements of Shareholders' Equity

Table 6

Accumulated

Other

Compre-

Preferred

Common

hensive

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, 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

 

 
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

-

 

-

-

 

 

-

 

-

 

 

-

 

 

127,482

 

 

-

 

 

127,482

 

Other Comprehensive Loss

-

 

-

-

 

 

-

 

-

 

 

(49,290

)

 

-

 

 

-

 

 

(49,290

)

Share-Based Compensation

-

 

-

-

 

 

-

 

6,122

 

 

-

 

 

-

 

 

-

 

 

6,122

 

Preferred Stock Issued, Net

180,000

 

180,000

-

 

 

-

 

(4,513

)

 

-

 

 

-

 

 

-

 

 

175,487

 

Common Stock Issued under Purchase and
Equity Compensation Plans

-

 

-

383,326

 

 

-

 

1,292

 

 

-

 

 

(891

)

 

6,259

 

 

6,660

 

Common Stock Repurchased

-

 

-

(37,156

)

 

-

 

-

 

 

-

 

 

-

 

 

(3,298

)

 

(3,298

)

Cash Dividends Declared Common Stock
($1.34 per share)

-

 

-

-

 

 

-

 

-

 

 

-

 

 

(54,139

)

 

-

 

 

(54,139

)

Balance as of June 30, 2021

180,000

$

180,000

40,465,482

 

$

580

$

594,261

 

$

(41,468

)

$

1,884,431

 

$

(1,034,273

)

$

1,583,531

 

Bank of Hawaii 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, 2022

March 31, 2022

June 30, 2021

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

$

3.5

$

-

0.59

%

$

3.4

$

-

0.45

%

$

2.2

$

-

0.04

%

Funds Sold

 

273.5

 

0.7

1.04

 

238.5

 

0.1

0.21

 

946.2

 

0.3

0.11

Investment Securities
Available-for-Sale
Taxable

 

4,123.1

 

18.0

1.74

 

4,399.9

 

17.1

1.56

 

4,290.8

 

16.3

1.53

Non-Taxable

 

2.9

 

-

1.99

 

3.0

 

-

1.93

 

12.3

 

0.1

4.27

Held-to-Maturity
Taxable

 

4,377.0

 

18.7

1.71

 

4,567.4

 

18.6

1.63

 

3,496.2

 

13.4

1.53

Non-Taxable

 

35.7

 

0.2

2.10

 

35.8

 

0.2

2.10

 

41.5

 

0.3

2.53

Total Investment Securities

 

8,538.7

 

36.9

1.73

 

9,006.1

 

35.9

1.59

 

7,840.8

 

30.1

1.54

Loans Held for Sale

 

6.3

 

0.1

4.06

 

13.7

 

0.1

2.78

 

25.7

 

0.2

2.86

Loans and Leases 2
Commercial and Industrial

 

1,330.0

 

9.9

2.99

 

1,332.9

 

9.0

2.73

 

1,271.4

 

9.3

2.93

Paycheck Protection Program

 

38.7

 

0.5

5.26

 

89.0

 

1.8

8.33

 

663.1

 

7.5

4.55

Commercial Mortgage

 

3,357.2

 

26.2

3.13

 

3,158.8

 

21.7

2.80

 

2,883.5

 

21.3

2.96

Construction

 

222.6

 

2.4

4.39

 

227.6

 

2.1

3.68

 

285.6

 

2.6

3.66

Commercial Lease Financing

 

94.2

 

0.3

1.44

 

98.8

 

0.4

1.45

 

105.7

 

0.4

1.54

Residential Mortgage

 

4,445.7

 

36.4

3.26

 

4,343.3

 

34.9

3.21

 

4,234.3

 

35.6

3.35

Home Equity

 

2,032.9

 

14.4

2.85

 

1,898.9

 

13.3

2.83

 

1,573.4

 

12.1

3.09

Automobile

 

759.1

 

6.1

3.20

 

737.4

 

5.9

3.23

 

710.4

 

6.1

3.45

Other 3

 

420.4

 

5.6

5.38

 

403.7

 

5.5

5.47

 

368.9

 

6.0

6.53

Total Loans and Leases

 

12,700.8

 

101.8

3.21

 

12,290.4

 

94.6

3.10

 

12,096.3

 

100.9

3.34

Other

 

38.2

 

0.3

3.70

 

36.7

 

0.2

2.21

 

32.3

 

0.2

2.26

Total Earning Assets 4

 

21,561.0

 

139.8

2.60

 

21,588.8

 

130.9

2.44

 

20,943.5

 

131.7

2.52

Cash and Due from Banks

 

238.4

 

233.3

 

256.1

Other Assets

 

1,091.9

 

1,025.4

 

874.0

Total Assets

$

22,891.3

$

22,847.5

$

22,073.6

 
Interest-Bearing Liabilities
Interest-Bearing Deposits
Demand

$

4,442.2

 

0.7

0.06

$

4,655.4

 

0.5

0.04

$

4,452.4

 

0.7

0.07

Savings

 

7,692.8

 

1.9

0.10

 

7,540.6

 

1.1

0.06

 

7,533.0

 

1.8

0.09

Time

 

950.4

 

0.9

0.40

 

971.5

 

0.8

0.34

 

1,418.4

 

1.7

0.47

Total Interest-Bearing Deposits

 

13,085.4

 

3.5

0.11

 

13,167.5

 

2.4

0.07

 

13,403.8

 

4.2

0.12

Short-Term Borrowings

 

59.8

 

0.1

0.98

 

6.8

 

-

0.11

 

-

 

-

-

Securities Sold Under Agreements to Repurchase

 

447.7

 

2.8

2.47

 

450.5

 

2.8

2.46

 

570.3

 

3.5

2.41

Other Debt

 

10.4

 

0.3

7.05

 

10.4

 

0.2

7.05

 

30.2

 

0.2

3.22

Total Interest-Bearing Liabilities

 

13,603.3

 

6.7

0.20

 

13,635.2

 

5.4

0.16

 

14,004.3

 

7.9

0.22

Net Interest Income

$

133.1

$

125.5

$

123.8

Interest Rate Spread

2.40

%

2.28

%

2.30

%

Net Interest Margin

2.47

%

2.34

%

2.37

%

Noninterest-Bearing Demand Deposits

 

7,484.0

 

7,258.6

 

6,294.5

Other Liabilities

 

413.3

 

385.0

 

361.9

Shareholders' Equity

 

1,390.7

 

1,568.7

 

1,412.9

Total Liabilities and Shareholders' Equity

$

22,891.3

$

22,847.5

$

22,073.6

 

1 Due to rounding, the amounts presented in this table may not tie to other amounts presented elsewhere in this report.

2 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.

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

4 Interest income includes taxable-equivalent basis adjustments, based upon a federal statutory tax rate of 21%, of $221,000, $254,000, and $269,000 for the three months ended June 30, 2022, March 31, 2022, and June 30, 2021, respectively.

Bank of Hawaii Corporation and Subsidiaries

Average Balances and Interest Rates - Taxable-Equivalent Basis 1

Table 7b

Six Months Ended

Six Months Ended

June 30, 2022

June 30, 2021

Average

Income/

Yield/

Average

Income/

Yield/

(dollars in millions)

Balance

Expense

Rate

Balance

Expense

Rate

Earning Assets
Interest-Bearing Deposits in Other Banks

$

3.5

$

-

0.52

%

$

2.7

$

-

0.56

%

Funds Sold

 

256.1

 

0.8

0.66

 

749.5

 

0.4

0.11

Investment Securities
Available-for-Sale
Taxable

 

4,260.6

 

35.1

1.65

 

4,150.2

 

32.1

1.55

Non-Taxable

 

3.0

 

-

1.96

 

12.3

 

0.3

4.27

Held-to-Maturity
Taxable

 

4,471.7

 

37.2

1.67

 

3,441.3

 

26.5

1.54

Non-Taxable

 

35.8

 

0.4

2.10

 

39.8

 

0.5

2.54

Total Investment Securities

 

8,771.1

 

72.7

1.66

 

7,643.6

 

59.4

1.55

Loans Held for Sale

 

10.0

 

0.2

3.19

 

25.9

 

0.4

2.81

Loans and Leases 2
Commercial and Industrial

 

1,331.5

 

18.9

2.86

 

1,295.4

 

19.0

2.96

Paycheck Protection Program

 

63.7

 

2.3

7.39

 

624.1

 

12.1

3.91

Commercial Mortgage

 

3,258.5

 

48.0

2.97

 

2,864.9

 

42.6

3.00

Construction

 

225.1

 

4.5

4.03

 

274.9

 

4.9

3.57

Commercial Lease Financing

 

96.5

 

0.7

1.44

 

106.1

 

0.8

1.48

Residential Mortgage

 

4,394.8

 

71.2

3.24

 

4,190.7

 

71.4

3.41

Home Equity

 

1,966.3

 

27.7

2.84

 

1,583.7

 

24.7

3.14

Automobile

 

748.3

 

11.9

3.22

 

709.3

 

12.2

3.48

Other 3

 

412.1

 

11.1

5.42

 

375.7

 

12.4

6.64

Total Loans and Leases

 

12,496.8

 

196.3

3.16

 

12,024.8

 

200.1

3.35

Other

 

37.3

 

0.6

2.97

 

32.9

 

0.4

2.24

Total Earning Assets 4

 

21,574.8

 

270.6

2.52

 

20,479.4

 

260.7

2.56

Cash and Due from Banks

 

235.8

 

263.4

Other Assets

 

1,058.9

 

871.9

Total Assets

$

22,869.5

$

21,614.7

 
Interest-Bearing Liabilities
Interest-Bearing Deposits
Demand

$

4,548.2

 

1.2

0.05

$

4,320.2

 

1.3

0.06

Savings

 

7,617.1

 

2.9

0.08

 

7,276.2

 

3.3

0.09

Time

 

960.9

 

1.8

0.37

 

1,523.6

 

3.9

0.52

Total Interest-Bearing Deposits

 

13,126.2

 

5.9

0.09

 

13,120.0

 

8.5

0.13

Short-Term Borrowings

 

33.5

 

0.2

0.89

 

1.2

 

-

0.09

Securities Sold Under Agreements to Repurchase

 

449.1

 

5.6

2.47

 

585.3

 

7.0

2.38

Other Debt

 

10.4

 

0.3

7.05

 

45.3

 

0.6

2.56

Total Interest-Bearing Liabilities

 

13,619.2

 

12.0

0.18

 

13,751.8

 

16.1

0.23

Net Interest Income

$

258.6

$

244.6

Interest Rate Spread

2.34

%

2.33

%

Net Interest Margin

2.41

%

2.40

%

Noninterest-Bearing Demand Deposits

 

7,371.9

 

6,064.6

Other Liabilities

 

399.2

 

403.1

Shareholders' Equity

 

1,479.2

 

1,395.2

Total Liabilities and Shareholders' Equity

$

22,869.5

$

21,614.7

 

1 Due to rounding, the amounts presented in this table may not tie to other amounts presented elsewhere in this report.

2 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.

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

4 Interest income includes taxable-equivalent basis adjustments, based upon a federal statutory tax rate of 21%, of $475,000 and $521,000 for six months ended June 30, 2022 and June 30, 2021, respectively.

Bank of Hawaii Corporation and Subsidiaries

Analysis of Change in Net Interest Income - Taxable-Equivalent Basis

Table 8a

Three Months Ended June 30, 2022

Compared to March 31, 2022

(dollars in millions)

Volume 1

Rate 1

Total

Change in Interest Income:
Funds Sold

$

-

 

$

0.6

 

$

0.6

 

Investment Securities
Available-for-Sale
Taxable

 

(1.1

)

 

2.0

 

 

0.9

 

Held-to-Maturity
Taxable

 

(0.8

)

 

0.9

 

 

0.1

 

Total Investment Securities

 

(1.9

)

 

2.9

 

 

1.0

 

Loans and Leases
Commercial and Industrial

 

-

 

 

0.9

 

 

0.9

 

Paycheck Protection Program

 

(0.8

)

 

(0.5

)

 

(1.3

)

Commercial Mortgage

 

1.6

 

 

2.9

 

 

4.5

 

Construction

 

-

 

 

0.3

 

 

0.3

 

Commercial Lease Financing

 

(0.1

)

 

-

 

 

(0.1

)

Residential Mortgage

 

0.9

 

 

0.6

 

 

1.5

 

Home Equity

 

1.0

 

 

0.1

 

 

1.1

 

Automobile

 

0.2

 

 

-

 

 

0.2

 

Other 2

 

0.2

 

 

(0.1

)

 

0.1

 

Total Loans and Leases

 

3.0

 

 

4.2

 

 

7.2

 

Other

 

-

 

 

0.1

 

 

0.1

 

Total Change in Interest Income

 

1.1

 

 

7.8

 

 

8.9

 

 
Change in Interest Expense:
Interest-Bearing Deposits
Demand

 

-

 

 

0.2

 

 

0.2

 

Savings

 

-

 

 

0.8

 

 

0.8

 

Time

 

-

 

 

0.1

 

 

0.1

 

Total Interest-Bearing Deposits

 

-

 

 

1.1

 

 

1.1

 

Short-Term Borrowings

 

-

 

 

0.1

 

 

0.1

 

Other Debt

 

-

 

 

0.1

 

 

0.1

 

Total Change in Interest Expense

 

-

 

 

1.3

 

 

1.3

 

 
Change in Net Interest Income

$

1.1

 

$

6.5

 

$

7.6

 

 

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 Hawaii Corporation and Subsidiaries

Analysis of Change in Net Interest Income - Taxable-Equivalent Basis

Table 8b

Three Months Ended June 30, 2022

Compared to June 30, 2021

(dollars in millions)

Volume 1

Rate 1

Total

Change in Interest Income:
Funds Sold

$

(0.3

)

$

0.7

 

$

0.4

 

Investment Securities
Available-for-Sale
Taxable

 

(0.6

)

 

2.3

 

 

1.7

 

Non-Taxable

 

(0.1

)

 

-

 

 

(0.1

)

Held-to-Maturity
Taxable

 

3.6

 

 

1.7

 

 

5.3

 

Non-Taxable

 

-

 

 

(0.1

)

 

(0.1

)

Total Investment Securities

 

2.9

 

 

3.9

 

 

6.8

 

Loans Held for Sale

 

(0.2

)

 

0.1

 

 

(0.1

)

Loans and Leases
Commercial and Industrial

 

0.4

 

 

0.2

 

 

0.6

 

Paycheck Protection Program

 

(8.0

)

 

1.0

 

 

(7.0

)

Commercial Mortgage

 

3.7

 

 

1.2

 

 

4.9

 

Construction

 

(0.7

)

 

0.5

 

 

(0.2

)

Commercial Lease Financing

 

-

 

 

(0.1

)

 

(0.1

)

Residential Mortgage

 

1.8

 

 

(1.0

)

 

0.8

 

Home Equity

 

3.3

 

 

(1.0

)

 

2.3

 

Automobile

 

0.4

 

 

(0.4

)

 

-

 

Other 2

 

0.8

 

 

(1.2

)

 

(0.4

)

Total Loans and Leases

 

1.7

 

 

(0.8

)

 

0.9

 

Other

 

-

 

 

0.1

 

 

0.1

 

Total Change in Interest Income

 

4.1

 

 

4.0

 

 

8.1

 

 
Change in Interest Expense:
Interest-Bearing Deposits
Savings

 

-

 

 

0.1

 

 

0.1

 

Time

 

(0.5

)

 

(0.3

)

 

(0.8

)

Total Interest-Bearing Deposits

 

(0.5

)

 

(0.2

)

 

(0.7

)

Short-Term Borrowings

 

0.1

 

 

-

 

 

0.1

 

Securities Sold Under Agreements to Repurchase

 

(0.8

)

 

0.1

 

 

(0.7

)

Other Debt

 

(0.1

)

 

0.2

 

 

0.1

 

Total Change in Interest Expense

 

(1.3

)

 

0.1

 

 

(1.2

)

 
Change in Net Interest Income

$

5.4

 

$

3.9

 

$

9.3

 

 

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 Hawaii Corporation and Subsidiaries

Analysis of Change in Net Interest Income - Taxable-Equivalent Basis

Table 8c

Six Months Ended June 30, 2022

Compared to June 30, 2021

(dollars in millions)

Volume 1

Rate 1

Total

Change in Interest Income:
Funds Sold

$

(0.4

)

$

0.8

 

$

0.4

 

Investment Securities
Available-for-Sale
Taxable

 

0.9

 

 

2.1

 

 

3.0

 

Non-Taxable

 

(0.2

)

 

(0.1

)

 

(0.3

)

Held-to-Maturity
Taxable

 

8.4

 

 

2.3

 

 

10.7

 

Non-Taxable

 

-

 

 

(0.1

)

 

(0.1

)

Total Investment Securities

 

9.1

 

 

4.2

 

 

13.3

 

Loans Held for Sale

 

(0.2

)

 

-

 

 

(0.2

)

Loans and Leases
Commercial and Industrial

 

0.6

 

 

(0.7

)

 

(0.1

)

Paycheck Protection Program

 

(15.8

)

 

6.0

 

 

(9.8

)

Commercial Mortgage

 

5.9

 

 

(0.5

)

 

5.4

 

Construction

 

(1.0

)

 

0.6

 

 

(0.4

)

Commercial Lease Financing

 

-

 

 

(0.1

)

 

(0.1

)

Residential Mortgage

 

3.4

 

 

(3.6

)

 

(0.2

)

Home Equity

 

5.5

 

 

(2.5

)

 

3.0

 

Automobile

 

0.7

 

 

(1.0

)

 

(0.3

)

Other 2

 

1.1

 

 

(2.4

)

 

(1.3

)

Total Loans and Leases

 

0.4

 

 

(4.2

)

 

(3.8

)

Other

 

0.1

 

 

0.1

 

 

0.2

 

Total Change in Interest Income

 

9.0

 

 

0.9

 

 

9.9

 

 
Change in Interest Expense:
Interest-Bearing Deposits
Demand

 

0.1

 

 

(0.2

)

 

(0.1

)

Savings

 

0.1

 

 

(0.5

)

 

(0.4

)

Time

 

(1.2

)

 

(0.9

)

 

(2.1

)

Total Interest-Bearing Deposits

 

(1.0

)

 

(1.6

)

 

(2.6

)

Short-Term Borrowings

 

0.2

 

 

-

 

 

0.2

 

Securities Sold Under Agreements to Repurchase

 

(1.6

)

 

0.2

 

 

(1.4

)

Other Debt

 

(0.8

)

 

0.5

 

 

(0.3

)

Total Change in Interest Expense

 

(3.2

)

 

(0.9

)

 

(4.1

)

 
Change in Net Interest Income

$

12.2

 

$

1.8

 

$

14.0

 

 

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

Salaries and Benefits

Table 9

Three Months Ended

Six Months Ended

June 30,

March 31,

June 30,

June 30,

(dollars in thousands)

2022

2022

2021

2022

2021

Salaries

$

36,721

$

34,932

$

33,413

$

71,653

$

64,982

Incentive Compensation

 

6,073

 

6,111

 

5,172

 

12,184

 

11,086

Share-Based Compensation

 

3,962

 

3,799

 

3,174

 

7,761

 

5,758

Commission Expense

 

1,232

 

1,641

 

2,599

 

2,873

 

5,035

Retirement and Other Benefits

 

4,036

 

4,693

 

5,289

 

8,729

 

10,806

Payroll Taxes

 

3,034

 

4,944

 

3,026

 

7,978

 

6,994

Medical, Dental, and Life Insurance

 

2,591

 

3,234

 

3,204

 

5,825

 

5,628

Separation Expense

 

120

 

570

 

284

 

690

 

2,123

Total Salaries and Benefits

$

57,769

$

59,924

$

56,161

$

117,693

$

112,412

Bank of Hawaii Corporation and Subsidiaries

Loan and Lease Portfolio Balances

Table 10

June 30,

March 31,

December 31,

September 30,

June 30,

(dollars in thousands)

2022

2022

2021

2021

2021

Commercial
Commercial and Industrial

$

1,323,830

$

1,354,757

$

1,361,921

$

1,325,446

$

1,257,305

Paycheck Protection Program

 

31,964

 

57,809

 

126,779

 

268,480

 

513,513

Commercial Mortgage

 

3,464,126

 

3,257,689

 

3,152,130

 

2,994,520

 

2,944,435

Construction

 

246,177

 

248,363

 

220,254

 

296,052

 

277,393

Lease Financing

 

89,535

 

98,107

 

105,108

 

107,526

 

110,500

Total Commercial

 

5,155,632

 

5,016,725

 

4,966,192

 

4,992,024

 

5,103,146

Consumer
Residential Mortgage

 

4,486,571

 

4,405,718

 

4,309,602

 

4,272,540

 

4,264,180

Home Equity

 

2,101,612

 

1,958,285

 

1,836,588

 

1,680,229

 

1,594,781

Automobile

 

775,065

 

742,934

 

736,565

 

727,234

 

714,729

Other 1

 

432,693

 

420,830

 

410,129

 

400,723

 

364,542

Total Consumer

 

7,795,941

 

7,527,767

 

7,292,884

 

7,080,726

 

6,938,232

Total Loans and Leases

$

12,951,573

$

12,544,492

$

12,259,076

$

12,072,750

$

12,041,378

 
 
Deposits

June 30,

March 31,

December 31,

September 30,

June 30,

(dollars in thousands)

2022

2022

2021

2021

2021

Consumer

$

10,554,121

$

10,654,192

$

10,438,844

$

10,150,199

$

9,848,285

Commercial

 

8,824,609

 

8,818,477

 

8,641,932

 

8,767,733

 

8,675,909

Public and Other

 

1,646,951

 

1,243,618

 

1,279,332

 

1,575,746

 

1,645,515

Total Deposits

$

21,025,681

$

20,716,287

$

20,360,108

$

20,493,678

$

20,169,709

 

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

Bank of Hawaii Corporation and Subsidiaries

Non-Performing Assets and Accruing Loans and Leases Past Due 90 Days or More

Table 11

June 30,

March 31,

December 31,

September 30,

June 30,

(dollars in thousands)

2022

2022

2021

2021

2021

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

$

85

 

$

99

 

$

243

 

$

209

 

$

258

 

Commercial Mortgage

 

3,462

 

 

8,065

 

 

8,205

 

 

8,309

 

 

8,413

 

Total Commercial

 

3,547

 

 

8,164

 

 

8,448

 

 

8,518

 

 

8,671

 

Consumer
Residential Mortgage

 

5,179

 

 

3,845

 

 

3,305

 

 

4,348

 

 

2,437

 

Home Equity

 

4,435

 

 

5,638

 

 

4,881

 

 

5,422

 

 

5,534

 

Total Consumer

 

9,614

 

 

9,483

 

 

8,186

 

 

9,770

 

 

7,971

 

Total Non-Accrual Loans and Leases

 

13,161

 

 

17,647

 

 

16,634

 

 

18,288

 

 

16,642

 

Foreclosed Real Estate

 

2,332

 

 

2,332

 

 

2,332

 

 

2,332

 

 

2,332

 

Total Non-Performing Assets

$

15,493

 

$

19,979

 

$

18,966

 

$

20,620

 

$

18,974

 

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

$

-

 

$

22

 

$

-

 

$

-

 

$

-

 

Total Commercial

 

-

 

 

22

 

 

-

 

 

-

 

 

-

 

Consumer
Residential Mortgage

 

2,638

 

 

4,113

 

 

3,159

 

 

4,776

 

 

4,069

 

Home Equity

 

2,029

 

 

2,722

 

 

3,456

 

 

2,946

 

 

4,498

 

Automobile

 

359

 

 

504

 

 

729

 

 

395

 

 

277

 

Other 1

 

508

 

 

649

 

 

426

 

 

593

 

 

434

 

Total Consumer

 

5,534

 

 

7,988

 

 

7,770

 

 

8,710

 

 

9,278

 

Total Accruing Loans and Leases Past Due 90 Days or More

$

5,534

 

$

8,010

 

$

7,770

 

$

8,710

 

$

9,278

 

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

$

46,024

 

$

54,136

 

$

60,519

 

$

62,787

 

$

74,926

 

Total Loans and Leases

$

12,951,573

 

$

12,544,492

 

$

12,259,076

 

$

12,072,750

 

$

12,041,378

 

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

 

0.10

%

 

0.14

%

 

0.14

%

 

0.15

%

 

0.14

%

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

 

0.12

%

 

0.16

%

 

0.15

%

 

0.17

%

 

0.16

%

 
Ratio of Non-Performing Assets to Total Assets

 

0.06

%

 

0.07

%

 

0.07

%

 

0.08

%

 

0.07

%

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

 

0.07

%

 

0.16

%

 

0.17

%

 

0.17

%

 

0.17

%

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

 

0.15

%

 

0.16

%

 

0.14

%

 

0.17

%

 

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

 

0.16

%

 

0.22

%

 

0.22

%

 

0.24

%

 

0.23

%

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

$

19,979

 

$

18,966

 

$

20,620

 

$

18,974

 

$

17,883

 

Additions

 

2,293

 

 

2,243

 

 

357

 

 

3,171

 

 

2,229

 

Reductions
Payments

 

(5,511

)

 

(1,230

)

 

(972

)

 

(889

)

 

(722

)

Return to Accrual Status

 

(1,267

)

 

-

 

 

(1,038

)

 

(606

)

 

(416

)

Charge-offs/Write-downs

 

(1

)

 

-

 

 

(1

)

 

(30

)

 

-

 

Total Reductions

 

(6,779

)

 

(1,230

)

 

(2,011

)

 

(1,525

)

 

(1,138

)

Balance at End of Quarter

$

15,493

 

$

19,979

 

$

18,966

 

$

20,620

 

$

18,974

 

 

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

Bank of Hawaii Corporation and Subsidiaries

Reserve for Credit Losses

Table 12

Three Months Ended

Six Months Ended

June 30,

March 31,

June 30,

June 30,

(dollars in thousands)

2022

2022

2021

2022

2021

Balance at Beginning of Period

$

157,264

 

$

164,297

 

$

203,779

 

$

164,297

 

$

221,303

 

 
Loans and Leases Charged-Off
Commercial
Commercial and Industrial

 

(233

)

 

(349

)

 

(456

)

 

(582

)

 

(704

)

Consumer
Residential Mortgage

 

(80

)

 

-

 

 

(115

)

 

(80

)

 

(119

)

Home Equity

 

(22

)

 

(68

)

 

(107

)

 

(90

)

 

(123

)

Automobile

 

(1,157

)

 

(1,530

)

 

(1,209

)

 

(2,687

)

 

(3,318

)

Other 1

 

(1,854

)

 

(1,961

)

 

(2,422

)

 

(3,815

)

 

(6,336

)

Total Loans and Leases Charged-Off

 

(3,346

)

 

(3,908

)

 

(4,309

)

 

(7,254

)

 

(10,600

)

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

 

51

 

 

369

 

 

144

 

 

420

 

 

256

 

Consumer
Residential Mortgage

 

920

 

 

54

 

 

481

 

 

974

 

 

1,436

 

Home Equity

 

416

 

 

515

 

 

527

 

 

931

 

 

1,060

 

Automobile

 

684

 

 

739

 

 

1,172

 

 

1,423

 

 

2,091

 

Other 1

 

644

 

 

745

 

 

801

 

 

1,389

 

 

1,657

 

Total Recoveries on Loans and Leases Previously Charged-Off

 

2,715

 

 

2,422

 

 

3,125

 

 

5,137

 

 

6,500

 

Net Charged-Off - Loans and Leases

 

(631

)

 

(1,486

)

 

(1,184

)

 

(2,117

)

 

(4,100

)

Net Charged-Off - Accrued Interest Receivable

 

-

 

 

(47

)

 

(124

)

 

(47

)

 

(432

)

Provision for Credit Losses:
Loans and Leases

 

(2,885

)

 

(4,307

)

 

(16,774

)

 

(7,192

)

 

(31,767

)

Accrued Interest Receivable

 

-

 

 

(367

)

 

(828

)

 

(367

)

 

(828

)

Unfunded Commitments

 

350

 

 

(826

)

 

1,502

 

 

(476

)

 

2,195

 

Balance at End of Period

$

154,098

 

$

157,264

 

$

186,371

 

$

154,098

 

$

186,371