Bank of Hawaii Corporation

10/25/2021 | Press release | Distributed by Public on 10/25/2021 04:54

Bank of Hawaii Corporation Third Quarter 2021 Financial Results

Bank of Hawaii Corporation Third Quarter 2021 Financial Results

October 25, 2021
  • Diluted Earnings Per Common Share $1.52
  • Net Income $62.1 Million
  • Board of Directors Declares Dividend of $0.70 Per Share

HONOLULU--(BUSINESS WIRE)--Oct. 25, 2021-- Bank of Hawaii Corporation (NYSE: BOH) today reported diluted earnings per common share of $1.52 for the third quarter of 2021, compared with diluted earnings per common share of $1.68 in the previous quarter and $0.95 in the same quarter last year. Net income for the third quarter of 2021 was $62.1 million, down 8.1% from the second quarter of 2021 and up 64.0% from the third quarter of 2020.

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"Bank of Hawaii's operating results were solid in the third quarter of 2021," said Peter Ho, Chairman, President, and CEO. "Core consumer and commercial loan and deposit growth was strong in the quarter. Credit quality in the quarter remained good."

Financial Highlights

  • The return on average assets for the third quarter of 2021 was 1.07% compared with 1.23% in the previous quarter and 0.76% in the same quarter last year.
  • The return on average common equity for the third quarter of 2021 was 17.08% compared with 19.61% in the previous quarter and 11.01% in the same quarter last year.
  • Net interest income for the third quarter of 2021 was $126.8 million, an increase of 2.7% from the second quarter of 2021 and an increase of 2.1% from the third quarter of 2020. Net interest margin was 2.32% in the third quarter of 2021, a decrease of 5 basis points from the previous quarter and 35 basis points from the same quarter last year.
    • The decrease in the net interest margin from prior year is largely due to higher levels of liquidity from continued strong deposit growth and lower interest rates, partially offset by higher fees from Paycheck Protection Program ("PPP") loans, deployment of excess liquidity and core loan growth.
  • The provision for credit losses for the third quarter of 2021 was a net benefit of $10.4 million compared with a net benefit of $16.1 million in the previous quarter and net expense of $28.6 million in the same quarter last year.
  • Noninterest income was $41.4 million in the third quarter of 2021, a decrease of 6.9% from the second quarter of 2021 and a decrease of 0.9% from the third quarter of 2020.
    • One-time items in the second quarter of 2021 included a gain of $3.7 million related to the sale of investment securities.
  • Noninterest expense was $96.5 million in the third quarter of 2021, flat to the second quarter of 2021 and an increase of 7.3% from the third quarter of 2020.
    • One-time significant items in the third quarter of 2021 included a gain of $6.3 million related to the sale of property partially offset by $3.8 million of fees related to the early termination of repurchase agreements and $1.2 million in severance.
    • One-time significant items in the second quarter of 2021 included 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.
    • One-time significant items in the third quarter of 2020 included a gain of $1.9 million related to the sale of a branch building partially offset by $1.8 million in severance.
  • The efficiency ratio during the third quarter of 2021 was 57.38% compared with 57.47% in the previous quarter and 54.22% during the same quarter last year.
    • The increase in the efficiency ratio from prior year is driven by an increase in noninterest expense.
  • The effective tax rate for the third quarter of 2021 was 24.40% compared with 22.84% in the previous quarter and 20.09% during the same quarter last year.
    • The increase from same quarter prior year is primarily due to higher pretax book income compared to relatively stable tax adjustments and the delayed impact of the TCJA on the deductibility of deferred executive compensation.

Asset Quality

The Company's overall asset quality continued to remain stable during the third quarter of 2021.

  • Total non-performing assets were $20.6 million at September 30, 2021, up $1.6 million from June 30, 2021 and $2.0 million from September 30, 2020. Non-performing assets as percentage of total loans and leases and foreclosed real estate were 0.17% at the end of the quarter of 2021, up 1 basis point from the end of the prior quarter and the end of the same quarter last year.
  • Net loan and lease charge-offs during the third quarter of 2021 were $1.2 million or 0.04% annualized of total average loans and leases outstanding.
    • Net loan and lease charge-offs for the third quarter of 2021 were comprised of charge-offs of $3.4 million partially offset by recoveries of $2.3 million.
    • Compared to the prior quarter, net loan and lease charge-offs were flat.
    • Compared to the third quarter of 2020, net loan and lease charge-offs increased by $2.7 million or 9 basis points annualized on total average loans and leases outstanding.
  • The allowance for credit losses on loans and leases was $167.9 million at September 30, 2021, a decrease of $12.5 million from June 30, 2021 and $35.6 million from September 30, 2020. The ratio of the allowance for credit losses to total loans and leases outstanding was 1.39% at the end of the quarter, down 11 basis points from the end of the prior quarter and 34 basis points from the end of the same quarter last year.

Balance Sheet

  • Total assets increased to a new record of $23.0 billion at September 30, 2021, an increase of 1.3% from June 30, 2021 and 14.2% from September 30, 2020.
  • The investment securities portfolio was $9.3 billion at September 30, 2021, up 9.2% from June 30, 2021 and 44.8% from September 30, 2020 due to growth in deposits that continued to outpace loan growth.
    • 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 $12.1 billion at September 30, 2021, an increase of 0.3% from June 30, 2021 and 2.4% from September 30, 2020.
    • Total loans excluding PPP loans were $11.8 billion at September 30, 2021, an increase of 2.4% from June 30, 2021 and an increase of 4.8% from September 30, 2020.
  • Total deposits were $20.5 billion at September 30, 2021, an increase of 1.6% from June 30, 2021 and an increase of 15.5% from September 30, 2020.
  • The Company early terminated $100.0 million of repurchase agreements in the third quarter of 2021.

Capital and Dividends

  • The Tier 1 Capital Ratio was 13.47% at September 30, 2021 compared with 13.87% at June 30, 2021 and 12.09% at September 30, 2020.
    • The increase from the same quarter in the prior year was driven by the issuance of preferred stock in the second quarter of 2021.
  • The Tier 1 Leverage Ratio was 7.10% at September 30, 2021 compared with 7.31% at June 30, 2021 and 6.81% at September 30, 2020.
    • The increase from the same quarter in the prior year was driven by the issuance of $180 million of Fixed Rate Non-Cumulative Perpetual Preferred Stock, Series A in the second quarter of 2021.
  • The Company repurchased 241.3 thousand shares of common stock at a total cost of $20.0 million under its share repurchase program in the third quarter of 2021 at an average cost of $82.89 per share repurchased.
    • Total remaining buyback authority under the share repurchase program was $93.1 million at September 30, 2021.
  • 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 December 14, 2021 to shareholders of record at the close of business on November 30, 2021.
  • On October 5, 2021, the Board of Directors declared the quarterly dividend payment of $10.94 per share, equivalent to $0.2735 per depositary share, on its Fixed Rate Non-Cumulative Perpetual Preferred Stock, Series A. 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 November 1, 2021 to shareholders of record of the preferred stock at the close of business on October 18, 2021.

Conference Call Information

The Company will review its third quarter financial results today at 8:00 a.m. Hawaii Time (2:00 p.m. Eastern Time). The live call, including a slide presentation, will be accessible on the investor relations link of Bank of Hawaii Corporation's website, www.boh.com.

  • The webcast link is https://edge.media-server.com/mmc/p/3r3nw6ad
  • The toll-free number for the teleconference is 1 (844) 543-5235 in the United States and Canada and 1 (703) 318-2209 for other international callers. Use the pass code "Bank of Hawaii" to access the call.
  • A replay of the conference call will be available for one week beginning approximately 11:00 a.m. Hawaii Time on Monday, October 25, 2021. The replay number is 1 (855) 859-2056 in the United States and Canada and 1 (404) 537-3406 from other international locations. Enter the conference ID 6897518 when prompted. In addition, the replay will be available on the Company's website, www.boh.com.

Forward-Looking Statements

This news release, and other statements made by the Company in connection with it may contain "forward-looking statements" (as defined in the Private Securities Litigation Reform Act of 1995) that involve risks and uncertainties that could cause results to be materially different from expectations. Forecasts of our financial results and condition, expectations for our operations and business prospects, and our assumptions used in those forecasts and expectations are examples of certain of these forward-looking statements. Do not unduly rely on forward-looking statements. Actual results might differ significantly from our forecasts and expectations because of a variety of factors. More information about these factors is contained in Bank of Hawaii Corporation's Annual Report on Form 10-K for the year ended December 31, 2020 and its Form 10-Q for the fiscal quarters ended March 31, 2021 and June 30, 2021, 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 Hawaii, was founded in 1897. For more information about Bank of Hawaii Corporation, see the Company's web site, www.boh.com.

Bank of Hawaii Corporation and Subsidiaries
Financial Highlights

Table 1

Three Months Ended Nine Months Ended
September 30, June 30, September 30, September 30,
(dollars in thousands, except per share amounts)

2021

2021

2020

2021

2020

For the Period:
Operating Results
Net Interest Income

$

126,819

$

123,514

$

124,166

$

370,902

$

376,823

Provision for Credit Losses 1

(10,400

)

(16,100

)

28,600

(40,800

)

102,600

Total Noninterest Income

41,378

44,431

41,734

128,779

139,151

Total Noninterest Expense

96,519

96,527

89,949

291,911

275,153

Net Income

62,053

67,533

37,840

189,535

111,490

Basic Earnings Per Common Share

1.53

1.69

0.95

4.73

2.81

Diluted Earnings Per Common Share

1.52

1.68

0.95

4.70

2.80

Dividends Declared Per Common Share

0.70

0.67

0.67

2.04

2.01

Performance Ratios
Return on Average Assets

1.07

%

1.23

%

0.76

%

1.15

%

0.78

%

Return on Average Shareholders' Equity

15.41

19.17

11.01

17.31

11.08

Return on Average Common Equity 8

17.08

19.61

11.01

18.10

11.08

Efficiency Ratio 2

57.38

57.47

54.22

58.42

53.33

Net Interest Margin 3

2.32

2.37

2.67

2.37

2.82

Dividend Payout Ratio 4

45.75

39.64

70.53

42.95

71.53

Average Shareholders' Equity to Average Assets

6.95

6.40

6.93

6.63

7.06

Average Balances
Average Loans and Leases

$

11,958,321

$

12,096,308

$

11,739,785

$

12,002,426

$

11,510,222

Average Assets

22,993,036

22,073,569

19,741,139

22,079,174

19,053,626

Average Deposits

20,473,777

19,698,285

17,270,206

19,619,053

16,591,640

Average Shareholders' Equity

1,598,076

1,412,924

1,367,756

1,463,566

1,344,402

Per Share of Common Stock
Book Value

$

35.30

$

34.80

$

33.99

$

35.30

$

33.99

Tangible Book Value 8

34.38

33.91

33.21

34.38

33.21

Market Value
Closing

82.17

84.22

50.52

82.17

50.52

High

87.12

95.95

61.94

99.10

95.53

Low

75.68

81.23

48.77

75.65

46.70

September 30,

June 30,

December 31,

September 30,

2021

2021

2020

2020

As of Period End:
Balance Sheet Totals
Loans and Leases

$

12,072,750

$

12,041,378

$

11,940,020

$

11,793,608

Total Assets

22,965,383

22,672,183

20,603,651

20,109,489

Total Deposits

20,493,678

20,169,709

18,211,621

17,738,883

Other Debt

10,414

10,437

60,481

60,502

Total Shareholders' Equity

1,597,109

1,583,531

1,374,507

1,361,739

Asset Quality
Non-Performing Assets

$

20,620

$

18,974

$

18,481

$

18,626

Allowance for Credit Losses - Loans and Leases

167,920

180,385

216,252

203,496

Allowance to Loans and Leases Outstanding 5

1.39

%

1.50

%

1.81

%

1.73

%
Capital Ratios 6
Common Equity Tier 1 Capital Ratio

12.02

%

12.36

%

12.06

%

12.09

%
Tier 1 Capital Ratio

13.47

13.87

12.06

12.09

Total Capital Ratio

14.72

15.13

13.31

13.35

Tier 1 Leverage Ratio

7.10

7.31

6.71

6.81

Total Shareholders' Equity to Total Assets

6.95

6.98

6.67

6.77

Tangible Common Equity to Tangible Assets 7, 8

6.04

6.06

6.53

6.63

Tangible Common Equity to Risk-Weighted Assets 7,8

11.46

11.81

11.89

12.02

Non-Financial Data
Full-Time Equivalent Employees

2,049

2,085

2,022

2,038

Branches

54

54

65

67

ATMs

303

312

357

358

1

Provision for Credit Losses for 2021 includes Provision for Unfunded Commitments and Accrued Interest Receivable, 2020 represents only Provisions for Loans and Leases.

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 September 30, 2021 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 and intangible assets. Intangible assets are included as a component of other assets in the Consolidated Statements of Condition. See Table 2 "Reconciliation of Non-GAAP Financial Measures."

8

Return on Average Common Equity was revised from 19.60% for the three months ended June 30, 2021, Tangible Common Equity to Tangible Asset 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, and Tangible Book Value was revised from $34.02 for the three months ended June 30, 2021.
Bank of Hawaii Corporation and Subsidiaries
Reconciliation of Non-GAAP Financial Measures

Table 2

September 30,

June 30,

December 31,

September 30,

(dollars in thousands)

2021

2021

2020

2020

Total Shareholders' Equity

$

1,597,109

$

1,583,531

$

1,374,507

$

1,361,739

Less: Preferred Stock

180,000

180,000

-

-

Goodwill

31,517

31,517

31,517

31,517

Tangible Common Equity

$

1,385,592

$

1,372,014

$

1,342,990

$

1,330,222

Total Assets

$

22,965,383

$

22,672,183

$

20,603,651

$

20,109,489

Less: Goodwill

31,517

31,517

31,517

31,517

Tangible Assets

$

22,933,866

$

22,640,666

$

20,572,134

$

20,077,972

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

$

12,093,010

$

11,614,522

$

11,295,077

$

11,068,888

Total Shareholders' Equity to Total Assets

6.95

%

6.98

%

6.67

%

6.77

%

Tangible Common Equity to Tangible Assets (Non-GAAP)

6.04

%

6.06

%

6.53

%

6.63

%

Tier 1 Capital Ratio

13.47

%

13.87

%

12.06

%

12.09

%

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

11.46

%

11.81

%

11.89

%

12.02

%

Note: Risk-Weighted Assets and Regulatory capital ratios as of September 30, 2021 are preliminary.
Bank of Hawaii Corporation and Subsidiaries
Consolidated Statements of Income Table 3
Three Months Ended Nine Months Ended
September 30, June 30, September 30, September 30,
(dollars in thousands, except per share amounts)

2021

2021

2020

2021

2020

Interest Income
Interest and Fees on Loans and Leases

$

100,570

$

100,894

$

103,189

$

300,763

$

319,027

Income on Investment Securities
Available-for-Sale

16,396

16,467

14,558

48,700

45,845

Held-to-Maturity

16,754

13,576

15,967

43,630

51,942

Deposits

2

-

3

9

13

Funds Sold

382

260

149

779

787

Other

159

182

151

526

494

Total Interest Income

134,263

131,379

134,017

394,407

418,108

Interest Expense
Deposits

3,837

4,152

5,891

12,318

28,105

Securities Sold Under Agreements to Repurchase

3,423

3,470

3,622

10,426

11,667

Funds Purchased

-

-

-

1

90

Short-Term Borrowings

-

-

1

-

62

Other Debt

184

243

337

760

1,361

Total Interest Expense

7,444

7,865

9,851

23,505

41,285

Net Interest Income

126,819

123,514

124,166

370,902

376,823

Provision for Credit Losses

(10,400

)

(16,100

)

28,600

(40,800

)

102,600

Net Interest Income After Provision for Credit Losses

137,219

139,614

95,566

411,702

274,223

Noninterest Income
Trust and Asset Management

11,415

11,682

10,752

34,375

32,217

Mortgage Banking

3,136

3,058

4,047

12,056

11,020

Service Charges on Deposit Accounts

6,510

6,065

6,027

18,703

18,575

Fees, Exchange, and Other Service Charges

13,604

13,807

12,296

41,018

34,913

Investment Securities Gains (Losses), Net

(1,259

)

2,423

(1,121

)

(39

)

11,125

Annuity and Insurance

735

911

881

2,348

2,692

Bank-Owned Life Insurance

1,897

2,063

1,806

5,877

5,035

Other

5,340

4,422

7,046

14,441

23,574

Total Noninterest Income

41,378

44,431

41,734

128,779

139,151

Noninterest Expense
Salaries and Benefits

56,447

56,161

51,951

168,859

157,129

Net Occupancy

3,079

5,047

7,281

17,216

24,997

Net Equipment

8,924

8,796

9,223

26,598

25,874

Data Processing

4,722

4,557

4,691

15,601

13,895

Professional Fees

2,948

3,114

2,743

9,468

9,012

FDIC Insurance

1,594

1,669

1,282

4,917

4,296

Other

18,805

17,183

12,778

49,252

39,950

Total Noninterest Expense

96,519

96,527

89,949

291,911

275,153

Income Before Provision for Income Taxes

82,078

87,518

47,351

248,570

138,221

Provision for Income Taxes

20,025

19,985

9,511

59,035

26,731

Net Income

$

62,053

$

67,533

$

37,840

$

189,535

$

111,490

Preferred Stock Dividends

1,006

-

-

1,006

-

Net Income Available to Common Shareholders

$

61,047

$

67,533

$

37,840

$

188,529

$

111,490

Basic Earnings Per Common Share

$

1.53

$

1.69

$

0.95

$

4.73

$

2.81

Diluted Earnings Per Common Share

$

1.52

$

1.68

$

0.95

$

4.70

$

2.80

Dividends Declared Per Common Share

$

0.70

$

0.67

$

0.67

$

2.04

$

2.01

Basic Weighted Average Common Shares

39,881,437

39,902,583

39,745,120

39,870,450

39,710,252

Diluted Weighted Average Common Shares

40,080,919

40,122,905

39,869,135

40,088,899

39,872,406

Bank of Hawaii Corporation and Subsidiaries
Consolidated Statements of Comprehensive Income

Table 4

Three Months Ended Nine Months Ended
September 30, June 30, September 30, September 30,
(dollars in thousands)

2021

2021

2020

2021

2020

Net Income

$

62,053

$

67,533

$

37,840

$

189,535

$

111,490

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

(7,541

)

(123

)

(4,900

)

(57,714

)

44,389

Defined Benefit Plans

441

442

374

1,324

1,122

Other Comprehensive Income (Loss)

(7,100

)

319

(4,526

)

(56,390

)

45,511

Comprehensive Income

$

54,953

$

67,852

$

33,314

$

133,145

$

157,001

Bank of Hawaii Corporation and Subsidiaries
Consolidated Statements of Condition Table 5

September 30,

June 30,

December 31,

September 30,

(dollars in thousands)

2021

2021

2020

2020

Assets
Interest-Bearing Deposits in Other Banks

$

2,188

$

2,584

$

1,646

$

4,233

Funds Sold

422,063

909,730

333,022

736,524

Investment Securities
Available-for-Sale

4,353,520

4,522,941

3,791,689

3,190,313

Held-to-Maturity (Fair Value of $4,895,763; $3,965,117; $3,348,693; and $3,288,668)

4,899,880

3,947,613

3,262,727

3,198,830

Loans Held for Sale

21,965

47,490

82,565

-

Loans and Leases

12,072,750

12,041,378

11,940,020

11,793,608

Allowance for Credit Losses

(167,920

)

(180,385

)

(216,252

)

(203,496

)

Net Loans and Leases

11,904,830

11,860,993

11,723,768

11,590,112

Total Earning Assets

21,604,446

21,291,351

19,195,417

18,720,012

Cash and Due from Banks

231,711

269,153

279,420

260,167

Premises and Equipment, Net

199,144

198,508

199,695

199,021

Operating Lease Right-of-Use Assets

97,007

97,264

99,542

96,200

Accrued Interest Receivable

46,751

47,046

49,303

57,370

Foreclosed Real Estate

2,332

2,332

2,332

2,332

Mortgage Servicing Rights

22,099

21,473

19,652

21,887

Goodwill

31,517

31,517

31,517

31,517

Bank-Owned Life Insurance

293,230

292,805

291,480

291,231

Other Assets

437,146

420,734

435,293

429,752

Total Assets

$

22,965,383

$

22,672,183

$

20,603,651

$

20,109,489

Liabilities
Deposits
Noninterest-Bearing Demand

$

7,111,693

$

6,570,232

$

5,749,612

$

5,428,567

Interest-Bearing Demand

4,768,725

4,498,825

4,040,733

3,824,448

Savings

7,540,345

7,704,575

6,759,213

6,763,891

Time

1,072,915

1,396,077

1,662,063

1,721,977

Total Deposits

20,493,678

20,169,709

18,211,621

17,738,883

Securities Sold Under Agreements to Repurchase

450,490

550,490

600,590

602,106

Other Debt

10,414

10,437

60,481

60,502

Operating Lease Liabilities

104,452

105,380

107,412

103,869

Retirement Benefits Payable

49,802

50,260

51,197

43,505

Accrued Interest Payable

3,415

3,879

5,117

6,613

Taxes Payable and Deferred Taxes

9,815

11,844

2,463

12,124

Other Liabilities

246,208

186,653

190,263

180,148

Total Liabilities

21,368,274

21,088,652

19,229,144

18,747,750

Shareholders' Equity
Preferred Stock ($.01 par value; authorized 180,000 shares; issued and outstanding: September 30, 2021 and June 30, 2021 - 180,000 shares)

180,000

180,000

-

-

Common Stock ($.01 par value; authorized 500,000,000 shares; issued / outstanding: September 30, 2021 - 58,559,089 / 40,305,801; June 30, 2021 - 58,557,754 / 40,465,482; December 31, 2020 - 58,285,624 / 40,119,312; and September 30, 2020 - 58,248,690 / 40,060,675)

580

580

580

580

Capital Surplus

598,341

594,261

591,360

588,632

Accumulated Other Comprehensive Income (Loss)

(48,568

)

(41,468

)

7,822

14,399

Retained Earnings

1,916,861

1,884,431

1,811,979

1,797,763

Treasury Stock, at Cost (Shares: September 30, 2021 - 18,253,288; June 30, 2021 - 18,092,272; December 31, 2020 - 18,166,312; and September 30, 2020 - 18,188,015)

(1,050,105

)

(1,034,273

)

(1,037,234

)

(1,039,635

)

Total Shareholders' Equity

1,597,109

1,583,531

1,374,507

1,361,739

Total Liabilities and Shareholders' Equity

$

22,965,383

$

22,672,183

$

20,603,651

$

20,109,489

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

Accum.

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, 2020

-

$

-

40,119,312

$

580

$

591,360

$

7,822

$

1,811,979

$

(1,037,234

)

$

1,374,507

Net Income

-

-

-

-

-

-

189,535

-

189,535

Other Comprehensive Loss

-

-

-

-

-

(56,390

)

-

-

(56,390

)

Share-Based Compensation

-

-

-

-

9,658

-

-

-

9,658

Preferred Stock Issued, Net

180,000

180,000

-

-

(4,513

)

-

-

-

175,487

Common Stock Issued under Purchase and Equity Compensation Plans

-

-

466,265

-

1,836

-

(1,218

)

10,541

11,159

Common Stock Repurchased

-

-

(279,776

)

-

-

-

-

(23,412

)

(23,412

)

Cash Dividends Declared Common Stock
($2.04 per share)

-

-

-

-

-

-

(82,429

)

-

(82,429

)

Cash Dividends Declared Preferred Stock

-

-

-

-

-

-

(1,006

)

-

(1,006

)

Balance as of September 30, 2021

180,000

$

180,000

40,305,801

$

580

$

598,341

$

(48,568

)

$

1,916,861

$

(1,050,105

)

$

1,597,109

Balance as of December 31, 2019

-

$

-

40,039,695

$

579

$

582,566

$

(31,112

)

$

1,761,415

$

(1,026,616

)

$

1,286,832

Net Income

-

-

-

-

-

-

111,490

-

111,490

Other Comprehensive Income

-

-

-

-

-

45,511

-

-

45,511

Cumulative Change in Accounting Principle

-

-

-

-

-

-

3,632

-

3,632

Share-Based Compensation

-

-

-

-

5,347

-

-

-

5,347

Common Stock Issued under Purchase and Equity Compensation Plans

-

-

222,682

1

719

-

1,762

4,878

7,360

Common Stock Repurchased

-

-

(201,702

)

-

-

-

-

(17,897

)

(17,897

)

Cash Dividends Declared Common Stock
($2.01 per share)

-

-

-

-

-

-

(80,536

)

-

(80,536

)

Balance as of September 30, 2020

-

$

-

40,060,675

$

580

$

588,632

$

14,399

$

1,797,763

$

(1,039,635

)

$

1,361,739

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

Table 7a

Three Months Ended Three Months Ended Three Months Ended
September 30, 2021 June 30, 2021 September 30, 2020
Average Income/ Yield/ Average Income/ Yield/ Average Income/ Yield/
(dollars in millions) Balance Expense Rate Balance Expense Rate Balance Expense Rate
Earning Assets
Interest-Bearing Deposits in Other Banks

$

3.2

$

-

0.23

%

$

2.2

$

-

0.04

%

$

2.6

$

-

0.45

%

Funds Sold

999.5

0.4

0.15

946.2

0.3

0.11

584.2

0.1

0.10

Investment Securities
Available-for-Sale
Taxable

4,454.9

16.3

1.46

4,290.8

16.3

1.53

2,918.6

14.3

1.96

Non-Taxable

10.1

0.1

4.34

12.3

0.1

4.27

25.8

0.3

4.22

Held-to-Maturity
Taxable

4,294.6

16.5

1.53

3,496.2

13.4

1.53

3,257.7

15.7

1.93

Non-Taxable

64.8

0.4

2.37

41.5

0.3

2.53

54.1

0.4

2.66

Total Investment Securities

8,824.4

33.3

1.51

7,840.8

30.1

1.54

6,256.2

30.7

1.96

Loans Held for Sale

24.6

0.2

2.80

25.7

0.2

2.86

15.9

0.1

3.24

Loans and Leases 1
Commercial and Industrial

1,644.8

17.0

4.09

1,934.5

16.8

3.49

1,917.0

14.1

2.93

Commercial Mortgage

2,952.7

21.9

2.94

2,883.5

21.3

2.96

2,722.3

21.7

3.18

Construction

289.9

2.5

3.38

285.6

2.6

3.66

234.0

2.1

3.60

Commercial Lease Financing

109.3

0.4

1.58

105.7

0.4

1.54

110.7

0.5

1.82

Residential Mortgage

4,253.2

34.8

3.27

4,234.3

35.6

3.35

3,988.7

36.7

3.68

Home Equity

1,621.4

12.2

2.97

1,573.4

12.1

3.09

1,625.2

14.1

3.45

Automobile

718.7

6.2

3.41

710.4

6.1

3.45

708.3

6.4

3.59

Other 2

368.3

5.7

6.16

368.9

6.0

6.53

433.6

7.6

6.96

Total Loans and Leases

11,958.3

100.7

3.35

12,096.3

100.9

3.34

11,739.8

103.2

3.50

Other

31.5

0.2

2.02

32.3

0.2

2.26

33.3

0.2

1.81

Total Earning Assets 3

21,841.5

134.8

2.45

20,943.5

131.7

2.52

18,632.0

134.3

2.88

Cash and Due from Banks

252.2

256.1

234.3

Other Assets

899.3

874.0

874.8

Total Assets

$

22,993.0

$

22,073.6

$

19,741.1

Interest-Bearing Liabilities
Interest-Bearing Deposits
Demand

$

4,707.1

0.7

0.06

$

4,452.4

0.7

0.07

$

3,465.5

0.4

0.04

Savings

7,687.0

1.8

0.09

7,533.0

1.8

0.09

6,886.0

1.7

0.10

Time

1,267.0

1.4

0.44

1,418.4

1.7

0.47

1,568.3

3.8

0.97

Total Interest-Bearing Deposits

13,661.1

3.9

0.11

13,403.8

4.2

0.12

11,919.8

5.9

0.20

Securities Sold Under Agreements to Repurchase

547.8

3.4

2.45

570.3

3.5

2.41

602.9

3.6

2.35

Other Debt

10.4

0.2

7.04

30.2

0.2

3.22

60.5

0.3

2.22

Total Interest-Bearing Liabilities

14,219.3

7.5

0.21

14,004.3

7.9

0.22

12,583.2

9.8

0.31

Net Interest Income

$

127.3

$

123.8

$

124.5

Interest Rate Spread

2.24

%

2.30

%

2.57

%

Net Interest Margin

2.32

%

2.37

%

2.67

%

Noninterest-Bearing Demand Deposits

6,812.7

6,294.5

5,350.4

Other Liabilities

362.9

361.9

439.7

Shareholders' Equity

1,598.1

1,412.9

1,367.8

Total Liabilities and Shareholders' Equity

$

22,993.0

$

22,073.6

$

19,741.1

1

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

2

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

3

Interest income includes taxable-equivalent basis adjustments, based upon a federal statutory tax rate of 21%, of $315,000, $269,000, and $295,000 for the three months ended September 30, 2021, June 30, 2021, and September 30, 2020, respectively.
Bank of Hawaii Corporation and Subsidiaries
Average Balances and Interest Rates - Taxable-Equivalent Basis

Table 7b

Nine Months Ended

Nine Months Ended

September 30, 2021

September 30, 2020

Average

Income/

Yield/

Average

Income/

Yield/

(dollars in millions)

Balance

Expense

Rate

Balance

Expense

Rate

Earning Assets
Interest-Bearing Deposits in Other Banks

$

2.9

$

-

0.44

%

$

2.2

$

-

0.76

%

Funds Sold

833.7

0.8

0.12

428.3

0.8

0.24

Investment Securities
Available-for-Sale
Taxable

4,252.9

48.4

1.52

2,745.7

45.1

2.19

Non-Taxable

11.5

0.4

4.29

30.1

1.0

4.37

Held-to-Maturity
Taxable

3,728.9

42.9

1.53

3,084.4

51.0

2.21

Non-Taxable

48.2

0.9

2.46

54.4

1.1

2.66

Total Investment Securities

8,041.5

92.6

1.54

5,914.6

98.2

2.21

Loans Held for Sale

25.5

0.5

2.81

20.8

0.5

3.35

Loans and Leases 1
Commercial and Industrial

1,826.9

48.1

3.52

1,763.9

45.2

3.43

Commercial Mortgage

2,894.5

64.5

2.98

2,631.9

69.2

3.51

Construction

280.0

7.3

3.51

234.3

7.1

4.04

Commercial Lease Financing

107.1

1.2

1.52

111.0

1.6

1.88

Residential Mortgage

4,211.8

106.2

3.36

3,941.3

109.5

3.70

Home Equity

1,596.4

36.9

3.09

1,656.8

43.6

3.51

Automobile

712.5

18.4

3.46

710.2

19.0

3.57

Other 2

373.2

18.1

6.48

460.8

23.9

6.93

Total Loans and Leases

12,002.4

300.7

3.35

11,510.2

319.1

3.70

Other

32.4

0.5

2.17

33.9

0.5

1.95

Total Earning Assets 3

20,938.4

395.1

2.52

17,910.0

419.1

3.12

Cash and Due from Banks

259.6

271.7

Other Assets

881.2

871.9

Total Assets

$

22,079.2

$

19,053.6

Interest-Bearing Liabilities
Interest-Bearing Deposits
Demand

$

4,450.6

2.0

0.06

$

3,268.1

1.9

0.08

Savings

7,414.6

5.0

0.09

6,693.9

11.0

0.22

Time

1,437.1

5.3

0.49

1,712.2

15.2

1.19

Total Interest-Bearing Deposits

13,302.3

12.3

0.12

11,674.2

28.1

0.32

Short-Term Borrowings

0.8

-

0.09

38.3

0.2

0.52

Securities Sold Under Agreements to Repurchase

572.7

10.4

2.40

603.4

11.6

2.54

Other Debt

33.5

0.8

3.03

62.6

1.4

2.90

Total Interest-Bearing Liabilities

13,909.3

23.5

0.22

12,378.5

41.3

0.44

Net Interest Income

$

371.6

$

377.8

Interest Rate Spread

2.30

%

2.68

%

Net Interest Margin

2.37

%

2.82

%

Noninterest-Bearing Demand Deposits

6,316.8

4,917.4

Other Liabilities

389.5

413.3

Shareholders' Equity

1,463.6

1,344.4

Total Liabilities and Shareholders' Equity

$

22,079.2

$

19,053.6

1

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

2

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

3

Interest income includes taxable-equivalent basis adjustments, based upon a federal statutory tax rate of 21%, of $836,000 and $1,010,000 for the nine months ended September 30, 2021 and September 30, 2020, respectively.
Bank of Hawaii Corporation and Subsidiaries
Analysis of Change in Net Interest Income - Taxable-Equivalent Basis Table 8a
Three Months Ended September 30, 2021
Compared to June 30, 2021
(dollars in millions)

Volume 1

Rate 1

Total

Change in Interest Income:
Funds Sold

$

-

$

0.1

$

0.1

Investment Securities
Available-for-Sale
Taxable

0.6

(0.6

)

-

Held-to-Maturity
Taxable

3.1

-

3.1

Non-Taxable

0.1

-

0.1

Total Investment Securities

3.8

(0.6

)

3.2

Loans and Leases
Commercial and Industrial

(4.0

)

4.2

0.2

Commercial Mortgage

0.7

(0.1

)

0.6

Construction

0.1

(0.2

)

(0.1

)

Commercial Lease Financing

0.1

(0.1

)

-

Residential Mortgage

0.2

(1.0

)

(0.8

)

Home Equity

0.5

(0.4

)

0.1

Automobile

0.1

-

0.1

Other 2

-

(0.3

)

(0.3

)

Total Loans and Leases

(2.3

)

2.1

(0.2

)

Total Change in Interest Income

1.5

1.6

3.1

Change in Interest Expense:
Interest-Bearing Deposits
Demand

0.1

(0.1

)

-

Time

(0.2

)

(0.1

)

(0.3

)

Total Interest-Bearing Deposits

(0.1

)

(0.2

)

(0.3

)

Securities Sold Under Agreements to Repurchase

(0.1

)

-

(0.1

)

Other Debt

(0.2

)

0.2

-

Total Change in Interest Expense

(0.4

)

-

(0.4

)

Change in Net Interest Income

$

1.9

$

1.6

$

3.5

1

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

2

Comprised of other consumer revolving credit, installment, and consumer lease financing.
Bank of Hawaii Corporation and Subsidiaries
Analysis of Change in Net Interest Income - Taxable-Equivalent Basis Table 8b
Three Months Ended September 30, 2021
Compared to September 30, 2020
(dollars in millions)

Volume 1

Rate 1

Total

Change in Interest Income:
Funds Sold

$

0.2

$

0.1

$

0.3

Investment Securities
Available-for-Sale
Taxable

6.3

(4.3

)

2.0

Non-Taxable

(0.2

)

-

(0.2

)

Held-to-Maturity
Taxable

4.4

(3.6

)

0.8

Non-Taxable

0.1

(0.1

)

-

Total Investment Securities

10.6

(8.0

)

2.6

Loans Held for Sale

0.1

-

0.1

Loans and Leases
Commercial and Industrial

(2.1

)

5.0

2.9

Commercial Mortgage

1.8

(1.6

)

0.2

Construction

0.5

(0.1

)

0.4

Commercial Lease Financing

-

(0.1

)

(0.1

)

Residential Mortgage

2.3

(4.2

)

(1.9

)

Home Equity

-

(1.9

)

(1.9

)

Automobile

0.1

(0.3

)

(0.2

)

Other 2

(1.1

)

(0.8

)

(1.9

)

Total Loans and Leases

1.5

(4.0

)

(2.5

)

Total Change in Interest Income

12.4

(11.9

)

0.5

Change in Interest Expense:
Interest-Bearing Deposits
Demand

0.2

0.1

0.3

Savings

0.2

(0.1

)

0.1

Time

(0.6

)

(1.8

)

(2.4

)

Total Interest-Bearing Deposits

(0.2

)

(1.8

)

(2.0

)

Securities Sold Under Agreements to Repurchase

(0.3

)

0.1

(0.2

)

Other Debt

(0.4

)

0.3

(0.1

)

Total Change in Interest Expense

(0.9

)

(1.4

)

(2.3

)

Change in Net Interest Income

$

13.3

$

(10.5

)

$

2.8

1

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

2

Comprised of other consumer revolving credit, installment, and consumer lease financing.
Bank of Hawaii Corporation and Subsidiaries
Analysis of Change in Net Interest Income - Taxable-Equivalent Basis Table 8c
Nine Months Ended September 30, 2021
Compared to September 30, 2020
(dollars in millions)

Volume 1

Rate 1

Total

Change in Interest Income:
Funds Sold

$

0.5

$

(0.5

)

$

-

Investment Securities
Available-for-Sale
Taxable

19.9

(16.6

)

3.3

Non-Taxable

(0.6

)

-

(0.6

)

Held-to-Maturity
Taxable

9.4

(17.5

)

(8.1

)

Non-Taxable

(0.1

)

(0.1

)

(0.2

)

Total Investment Securities

28.6

(34.2

)

(5.6

)

Loans Held for Sale

0.1

(0.1

)

-

Loans and Leases
Commercial and Industrial

6.4

(3.5

)

2.9

Commercial Mortgage

6.5

(11.2

)

(4.7

)

Construction

1.2

(1.0

)

0.2

Commercial Lease Financing

(0.1

)

(0.3

)

(0.4

)

Residential Mortgage

7.2

(10.5

)

(3.3

)

Home Equity

(1.5

)

(5.2

)

(6.7

)

Automobile

-

(0.6

)

(0.6

)

Other 2

(4.3

)

(1.5

)

(5.8

)

Total Loans and Leases

15.4

(33.8

)

(18.4

)

Total Change in Interest Income

44.6

(68.6

)

(24.0

)

Change in Interest Expense:
Interest-Bearing Deposits
Demand

0.6

(0.5

)

0.1

Savings

1.1

(7.1

)

(6.0

)

Time

(2.1

)

(7.8

)

(9.9

)

Total Interest-Bearing Deposits

(0.4

)

(15.4

)

(15.8

)

Short-Term Borrowings

(0.1

)

(0.1

)

(0.2

)

Securities Sold Under Agreements to Repurchase

(0.6

)

(0.6

)

(1.2

)

Other Debt

(0.7

)

0.1

(0.6

)

Total Change in Interest Expense

(1.8

)

(16.0

)

(17.8

)

Change in Net Interest Income

$

46.4

$

(52.6

)

$

(6.2

)

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 Nine Months Ended

September 30,

June 30,

September 30,

September 30,

(dollars in thousands)

2021

2021

2020

2021

2020

Salaries

$

34,676

$

33,413

$

34,046

$

99,658

$

100,271

Incentive Compensation

4,677

5,172

2,683

15,763

6,069

Share-Based Compensation

3,335

3,174

1,442

9,093

4,754

Commission Expense

1,772

2,599

1,800

6,807

4,821

Retirement and Other Benefits

4,746

5,289

4,164

15,552

13,316

Payroll Taxes

2,825

3,026

2,624

9,819

9,949

Medical, Dental, and Life Insurance

3,222

3,204

3,422

8,850

11,394

Separation Expense

1,194

284

1,770

3,317

6,555

Total Salaries and Benefits

$

56,447

$

56,161

$

51,951

$

168,859

$

157,129

Bank of Hawaii Corporation and Subsidiaries
Loan and Lease Portfolio Balances

Table 10

September 30,

June 30,

March 31,

December 31,

September 30,

(dollars in thousands)

2021

2021

2021

2020

2020

Commercial
Commercial and Industrial

$

1,325,446

$

1,257,305

$

1,288,496

$

1,357,610

$

1,376,843

PPP 1

268,480

513,513

725,485

517,683

531,639

Commercial Mortgage

2,994,520

2,944,435

2,859,246

2,854,829

2,745,611

Construction

296,052

277,393

281,164

259,798

250,943

Lease Financing

107,526

110,500

104,980

110,766

111,831

Total Commercial

4,992,024

5,103,146

5,259,371

5,100,686

5,016,867

Consumer
Residential Mortgage

4,272,540

4,264,180

4,216,976

4,130,513

4,044,228

Home Equity

1,680,229

1,594,781

1,577,500

1,604,538

1,605,486

Automobile

727,234

714,729

710,407

708,800

709,937

Other 2

400,723

364,542

376,449

395,483

417,090

Total Consumer

7,080,726

6,938,232

6,881,332

6,839,334

6,776,741

Total Loans and Leases

$

12,072,750

$

12,041,378

$

12,140,703

$

11,940,020

$

11,793,608

Deposits

September 30,

June 30,

March 31,

December 31,

September 30,

(dollars in thousands)

2021

2021

2021

2020

2020

Consumer

$

10,150,199

$

9,848,285

$

9,746,713

$

9,347,725

$

8,903,808

Commercial

8,767,733

8,675,909

8,241,102

7,302,832

7,159,531

Public and Other

1,575,746

1,645,515

1,568,836

1,561,064

1,675,544

Total Deposits

$

20,493,678

$

20,169,709

$

19,556,651

$

18,211,621

$

17,738,883

1

The PPP amounts presented, which are reported net of deferred costs and fees, were previously included as a component of the Commercial and Industrial loan class.

2

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

September 30,

June 30,

March 31,

December 31,

September 30,

(dollars in thousands)

2021

2021

2021

2020

2020

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

$

209

$

258

$

293

$

441

$

475

Commercial Mortgage

8,309

8,413

8,503

8,527

8,615

Total Commercial

8,518

8,671

8,796

8,968

9,090

Consumer
Residential Mortgage

4,348

2,437

1,804

3,223

3,543

Home Equity

5,422

5,534

4,951

3,958

3,661

Total Consumer

9,770

7,971

6,755

7,181

7,204

Total Non-Accrual Loans and Leases

18,288

16,642

15,551

16,149

16,294

Foreclosed Real Estate

2,332

2,332

2,332

2,332

2,332

Total Non-Performing Assets

$

20,620

$

18,974

$

17,883

$

18,481

$

18,626

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

$

-

$

-

$

9

$

-

$

-

Total Commercial

-

-

9

-

-

Consumer
Residential Mortgage

$

4,776

$

4,069

$

4,069

$

5,274

$

6,607

Home Equity

2,946

4,498

4,906

3,187

2,571

Automobile

395

277

604

925

156

Other 1

593

434

828

1,160

258

Total Consumer

8,710

9,278

10,407

10,546

9,592

Total Accruing Loans and Leases Past Due 90 Days or More

$

8,710

$

9,278

$

10,416

$

10,546

$

9,592

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

$

62,787

$

74,926

$

74,216

$

68,065

$

58,650

Total Loans and Leases

$

12,072,750

$

12,041,378

$

12,140,703

$

11,940,020

$

11,793,608

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

0.15

%

0.14

%

0.13

%

0.14

%

0.14

%

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

0.17

%

0.16

%

0.15

%

0.15

%

0.16

%

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

0.17

%

0.17

%

0.17

%

0.18

%

0.18

%

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

0.17

%

0.15

%

0.13

%

0.14

%

0.14

%

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

0.24

%

0.23

%

0.23

%

0.24

%

0.24

%

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

$

18,974

$

17,883

$

18,481

$

18,626

$

22,701

Additions

3,171

2,229

2,992

434

938

Reductions
Payments

(889

)

(722

)

(2,481

)

(490

)

(3,729

)

Return to Accrual Status

(606

)

(416

)

(1,014

)

-

(1,035

)

Sales of Foreclosed Real Estate

-

-

-

-

(175

)

Charge-offs/Write-downs

(30

)

-

(95

)

(89

)

(74

)

Total Reductions

(1,525

)

(1,138

)

(3,590

)

(579

)

(5,013

)

Balance at End of Quarter

$

20,620

$

18,974

$

17,883

$

18,481

$

18,626

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

Nine Months Ended

September 30,

June 30,

September 30,

September 30,

(dollars in thousands)

2021

2021

2020

2021

2020

Balance at Beginning of Period

$

186,371

$

203,779

$

175,958

$

221,303

116,849

CECL Adoption (Day 1) Impact

-

-

-

-

(5,072

)

Loans and Leases Charged-Off
Commercial
Commercial and Industrial

(196

)

(456

)

(171

)

(900

)

(1,520

)

Consumer
Residential Mortgage

(197

)

(115

)

-

(316

)

(84

)

Home Equity

(289

)

(107

)

(43

)

(412

)

(316

)

Automobile

(576

)

(1,209

)

(489

)

(3,894

)

(6,103

)

Other 1

(2,187

)

(2,422

)

(1,644

)

(8,523

)

(9,784

)

Total Loans and Leases Charged-Off

(3,445

)

(4,309

)

(2,347

)

(14,045

)

(17,807

)

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

118

144

231

374

2,044

Commercial Mortgage

-

-

-

-

40

Consumer
Residential Mortgage

173

481

414

1,609

795

Home Equity

216

527

727

1,276

2,024

Automobile

943

1,172

1,313

3,034

2,865

Other 1

802

801

1,119

2,459

2,645

Total Recoveries on Loans and Leases Previously Charged-Off

2,252

3,125

3,804

8,752

10,413

Net Recovered (Charged-Off) - Loans and Leases

(1,193

)

(1,184

)

1,457

(5,293

)

(7,394

)

Net Charged-Off - Accrued Interest Receivable

(70

)

(124

)

-

(502

)

Provision for Credit Losses:
Loans and Leases

(11,272

)

(16,774

)

28,600

(43,039

)

102,600

Accrued Interest Receivable

(703

)

(828

)

-

(1,531

)

-

Unfunded Commitments

1,575

1,502

(202

)

3,770

(1,170

)

Balance at End of Period 2

$

174,708

$

186,371

$

205,813

$

174,708

$

205,813

Components
Allowance for Credit Losses - Loans and Leases

$

167,920

180,385

203,496

$

167,920

203,496

Allowance for Credit Losses - Accrued Interest Receivable

667

1,440

-

667

-

Reserve for Unfunded Commitments

6,121

4,546

2,317

6,121

2,317

Total Reserve for Credit Losses

$

174,708

$

186,371

$

205,813

$

174,708

$

205,813

Average Loans and Leases Outstanding

$

11,958,321

$

12,096,308

$

11,739,785

$

12,002,426

$

11,510,222

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

0.04

%

0.04

%

(0.05

%)

0.06

%

0.09

%

Ratio of Allowance for Credit Losses to Loans and Leases Outstanding 3

1.39

%

1.50

%

1.73

%

1.39

%

1.73

%

1

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

2

Included in this analysis is activity related to the Company's reserve for unfunded commitments, which is separately recorded in other liabilities in the Consolidated Statements of Condition.

3

The numerator comprises the Allowance for Credit Losses - Loans and Leases.
Bank of Hawaii 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 September 30, 2021
Net Interest Income

$

72,062

$

50,088

$

4,669

$

126,819

Provision for Credit Losses

1,235

(42

)

(11,593

)

(10,400

)

Net Interest Income After Provision for Credit Losses

70,827

50,130

16,262

137,219

Noninterest Income

32,046

7,906

1,426

41,378

Noninterest Expense

(71,377

)

(15,924

)

(9,218

)

(96,519

)

Income Before Income Taxes

31,496

42,112

8,470

82,078

Provision for Income Taxes

(8,001

)

(10,373

)

(1,651

)

(20,025

)

Net Income

$

23,495

$

31,739

$

6,819

$

62,053

Total Assets as of September 30, 2021

$

7,530,513

$

5,087,831

$

10,347,039

$

22,965,383

Three Months Ended September 30, 2020
Net Interest Income

$

73,868

$

47,797

$

2,501

$

124,166

Provision for Credit Losses

(1,372

)

(85

)

30,057

28,600

Net Interest Income (Loss) After Provision for Credit Losses

75,240

47,882

(27,556

)

95,566

Noninterest Income

31,776

7,672

2,286

41,734

Noninterest Expense

(69,408

)

(15,430

)

(5,111

)

(89,949

)

Income (Loss) Before Income Taxes

37,608

40,124

(30,381

)

47,351

Provision for Income Taxes

(9,627

)

(9,784

)

9,900

(9,511

)

Net Income (Loss)

$

27,981

$

30,340

$

(20,481

)

$

37,840

Total Assets as of September 30, 2020

$

7,383,822

$

5,027,836

$

7,697,831

$

20,109,489

Bank of Hawaii Corporation and Subsidiaries
Business Segments Selected Financial Information Table 13b

Consumer

Commercial

Treasury

Consolidated

(dollars in thousands)

Banking

Banking

and Other

Total

Nine Months Ended September 30, 2021
Net Interest Income

$

212,991

$

146,269

$

11,642

$

370,902

Provision for Credit Losses

5,088

205

(46,093

)

(40,800

)

Net Interest Income After Provision for Credit Losses

207,903

146,064

57,735

411,702

Noninterest Income

98,344

22,339

8,096

128,779

Noninterest Expense

(222,426

)

(47,343

)

(22,142

)

(291,911

)

Income Before Income Taxes

83,821

121,060

43,689

248,570

Provision for Income Taxes

(20,840

)

(29,634

)

(8,561

)

(59,035

)

Net Income

$

62,981

$

91,426

$

35,128

$

189,535

Total Assets as of September 30, 2021

$

7,530,513

$

5,087,831

$

10,347,039

$

22,965,383

Nine Months Ended September 30, 2020
Net Interest Income

$

221,003

$

144,253

$

11,567

$

376,823

Provision for Credit Losses

8,215

(819

)

95,204

102,600

Net Interest Income (Loss) After Provision for Credit Losses

212,788

145,072

(83,637

)

274,223

Noninterest Income

93,309

26,483

19,359

139,151

Noninterest Expense

(210,744

)

(47,552

)

(16,857

)

(275,153

)

Income (Loss) Before Income Taxes

95,353

124,003

(81,135

)

138,221

Provision for Income Taxes

(24,235

)

(30,278

)

27,782

(26,731

)

Net Income (Loss)

$

71,118

$

93,725

$

(53,353

)

$

111,490

Total Assets as of September 30, 2020

$

7,383,822

$

5,027,836

$

7,697,831

$

20,109,489

Bank of Hawaii Corporation and Subsidiaries
Selected Quarterly Financial Data

Table 14

Three Months Ended

September 30,

June 30,

March 31,

December 31,

September 30,

(dollars in thousands, except per share amounts)

2021

2021

2021

2020

2020

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

$

100,570

$

100,894

$

99,299

$

98,471

$

103,189

Income on Investment Securities
Available-for-Sale

16,396

16,467

15,837

15,449

14,558

Held-to-Maturity

16,754

13,576

13,300

14,113

15,967

Deposits

2

-

7

1

3

Funds Sold

382

260

137

115

149

Other

159

182

185

167

151

Total Interest Income

134,263

131,379

128,765

128,316

134,017

Interest Expense
Deposits

3,837

4,152

4,329

4,861

5,891

Securities Sold Under Agreements to Repurchase

3,423

3,470

3,533

3,614

3,622

Funds Purchased

-

-

1

5

-

Short-Term Borrowings

-

-

-

-

1

Other Debt

184

243

333

337

337

Total Interest Expense

7,444

7,865

8,196

8,817

9,851

Net Interest Income

126,819

123,514

120,569

119,499

124,166

Provision for Credit Losses

(10,400)

(16,100)

(14,300)

15,200

28,600

Net Interest Income After Provision for Credit Losses

137,219

139,614

134,869

104,299

95,566

Noninterest Income
Trust and Asset Management

11,415

11,682

11,278

11,239

10,752

Mortgage Banking

3,136

3,058

5,862

6,851

4,047

Service Charges on Deposit Accounts

6,510

6,065

6,128

6,335

6,027

Fees, Exchange, and Other Service Charges

13,604

13,807

13,607

12,143

12,296

Investment Securities Gains (Losses), Net

(1,259)

2,423

(1,203)

(1,193)

(1,121)

Annuity and Insurance

735

911

702

670

881

Bank-Owned Life Insurance

1,897

2,063

1,917

2,353

1,806

Other

5,340

4,422

4,679

6,860

7,046

Total Noninterest Income

41,378

44,431

42,970

45,258

41,734

Noninterest Expense
Salaries and Benefits

56,447

56,161

56,251

50,200

51,951

Net Occupancy

3,079

5,047

9,090

14,536

7,281

Net Equipment

8,924

8,796

8,878

9,574

9,223

Data Processing

4,722

4,557

6,322

4,604

4,691

Professional Fees

2,948

3,114

3,406

3,174

2,743

FDIC Insurance

1,594

1,669

1,654

1,484

1,282

Other

18,805

17,183

13,264

15,082

12,778

Total Noninterest Expense

96,519

96,527

98,865

98,654

89,949

Income Before Provision for Income Taxes

82,078

87,518

78,974

50,903

47,351

Provision for Income Taxes

20,025

19,985

19,025

8,589

9,511

Net Income

$

62,053

$

67,533

$

59,949

$

42,314

$

37,840

Preferred Stock Dividends

1,006

-

-

-

-

Net Income Available to Common Shareholders

$

61,047

$

67,533

$

59,949

$

42,314

$

37,840

Basic Earnings Per Common Share

$

1.53

$

1.69

$

1.51

$

1.06

$

0.95

Diluted Earnings Per Common Share

$

1.52

$

1.68

$

1.50

$

1.06

$

0.95

Balance Sheet Totals
Loans and Leases

$

12,072,750

$

12,041,378

$

12,140,703

$

11,940,020

$

11,793,608

Total Assets

22,965,383

22,672,183

21,947,271

20,603,651

20,109,489

Total Deposits

20,493,678

20,169,709

19,556,651

18,211,621

17,738,883

Total Shareholders' Equity

1,597,109

1,583,531

1,360,221

1,374,507

1,361,739

Performance Ratios
Return on Average Assets

1.07

%

1.23

%

1.15

%

0.83

%

0.76

%

Return on Average Shareholders' Equity

15.41

19.17

17.65

12.26

11.01

Return on Average Common Equity

17.08

19.61

17.65

12.26

11.01

Efficiency Ratio 1

57.38

57.47

60.45

59.88

54.22

Net Interest Margin 2

2.32

2.37

2.43

2.48

2.67

1

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

2

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

Table 15

Eight Months Ended

Year Ended

($ in millions; jobs in thousands)

August 31, 2021

December 31, 2020

December 31, 2019

Hawaii Economic Trends
State General Fund Revenues 1

$

5,325.4

21.2

%

$

6,415.1

(12.3)

%

$

7,316.5

5.5

%

General Excise and Use Tax Revenue 1

$

2,367.9

11.6

%

$

3,038.8

(15.6)

%

$

3,602.2

5.1

%

Jobs 2

601.8

588.2

659.7

August 31,

December 31,

(spot rates)

2021

2020

2019

Unemployment, seasonally adjusted 3
Statewide

7.0

%

10.3

%

2.1

%

Oahu

6.0

9.3

2.0

Island of Hawaii

6.6

10.1

2.5

Maui

8.5

14.3

2.0

Kauai

8.9

13.9

2.1

September 30,

December 31,

(percentage change, except months of inventory)

2021

2020

2019

2018

Housing Trends (Single Family Oahu) 4
Median Home Price

20.2

%

5.2

%

(0.1)

%

4.6

%

Home Sales Volume (units)

24.2

%

2.3

%

3.9

%

(7.7)

%

Months of Inventory

1.2

1.4

2.5

2.8

Monthly Visitor Arrivals,

Percentage Change

(in thousands)

Not Seasonally Adjusted

from Previous Year

Tourism 5
August 31, 2021

722.4

3,133.1

July 31, 2021

879.6

3,798.4

June 30, 2021

791.1

4,534.7

May 31, 2021

629.7

6,807.4

April 30, 2021

484.1

10,506.3

March 31, 2021

439.8

1.1

February 28, 2021

235.3

(71.6)

January 31, 2021

172.0

(80.1)

December 31, 2020

235.8

(75.2)

November 30, 2020

183.8

(77.3)

October 31, 2020

76.6

(90.4)

September 30, 2020

18.9

(97.4)

August 31, 2020

22.3

(97.6)

July 31, 2020

22.6

(97.7)

June 30, 2020

17.1

(98.2)

May 31, 2020

9.1

(98.9)

April 30, 2020

4.6

(99.5)

March 31, 2020

434.9

(53.7)

February 29, 2020

828.1

5.8

January 31, 2020

862.6

5.1

December 31, 2019

952.4

5.8

November 30, 2019

809.1

3.9

October 31, 2019

796.2

4.3

September 30, 2019

738.2

3.1

August 31, 2019

926.4

9.6

July 31, 2019

995.2

5.9

June 30, 2019

951.6

6.1

May 31, 2019

841.4

4.6

April 30, 2019

856.3

6.6

March 31, 2019

939.1

3.9

February 28, 2019

782.7

0.5

January 31, 2019

820.6

3.0

1 Source: Hawaii Department of Business, Economic Development & Tourism
2 Source: U. S. Bureau of Labor Statistics
3 Source: UHERO
4 Source: Honolulu Board of REALTORS
5 Source: Hawaii Tourism Authority

View source version on businesswire.com: https://www.businesswire.com/news/home/20211025005224/en/

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Source: Bank of Hawaii Corporation