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8-K

BANK OF HAWAII CORP (BOH)

8-K 2020-01-27 For: 2020-01-27
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Added on April 04, 2026

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D. C. 20549

FORM 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Date of Report January 27, 2020
(Date of earliest event reported)

BANK OF HAWAII CORP

(Exact name of registrant as specified in its charter)

Delaware 1-6887 99-0148992
(State of Incorporation) (Commission File Number) (IRS Employer Identification No.)
130 Merchant Street Honolulu Hawaii 96813
--- --- --- ---
(Address of principal executive offices) (City) (State) (Zip Code)

(888) 643-3888

(Registrant's telephone number, including area code)

N/A

(Former name or former address, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class Trading Symbol Name of each exchange on which registered
Common Stock $.01 Par Value BOH New York Stock Exchange

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

☐  Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐  Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐  Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐  Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4 (c))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company   ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o

Item 2.02.                                       Results of Operations and Financial Condition.

On January 27, 2020, Bank of Hawaii Corporation announced its results of operations for the quarter ended December 31, 2019.  The public announcement was made by means of a press release, the text of which is furnished as Exhibit 99.1 hereto and incorporated herein by reference.

Item 9.01.                                       Financial Statements and Exhibits.

(d) Exhibits

Exhibit No.

99.1 January 27, 2020 Press Release: Bank of Hawaii Corporation Fourth Quarter 2019 Financial Results.  Any internet addresses provided in this release are for informational purposes only and are not intended to be hyperlinks.  Furnished herewith.

Signatures

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Date: January 27, 2020 Bank of Hawaii Corporation
By: /s/ Mark A. Rossi
Mark A. Rossi
Vice Chairman and Corporate Secretary

Document

Bank of Hawaii Corporation 2019 Financial Results

•2019 Record Earnings of $5.56 Per Diluted Share

•2019 Net Income $225.9 Million

•Diluted Earnings Per Share $1.45 for the Fourth Quarter of 2019

•Net Income $58.1 Million for the Fourth Quarter of 2019

•Board of Directors Declares Dividend of $0.67 Per Share

•Board of Directors Increases Share Repurchase Authorization by $100 Million

FOR IMMEDIATE RELEASE

HONOLULU, HI (January 27, 2020) -- Bank of Hawaii Corporation (NYSE: BOH) today reported diluted earnings per share of $5.56 for the full year of 2019, an increase of 6.3 percent from diluted earnings per share of $5.23 in 2018. Net income for the year was $225.9 million, up $6.3 million or 2.9 percent from net income of $219.6 million in the previous year. The return on average assets for the full year of 2019 was 1.29 percent unchanged from 1.29 percent in 2018. The return on average equity for the full year of 2019 was 17.65 percent compared with 17.63 percent in 2018. The efficiency ratio for the full year of 2019 improved to 55.68 percent compared with 56.71 percent in 2018.

“Bank of Hawaii finished 2019 with strong financial performance and made significant progress on our strategic initiatives," said Peter Ho, Chairman, President, and CEO. “Our loan balances grew 5.2 percent in 2019 and our deposit balances grew 5.0 percent compared with 2018. Our asset quality, capital and liquidity all remain strong. During the fourth quarter we continued to reduce our leveraged lease exposure with the early buyout of a lease which reduced our loan balances by $42.7 million.”

Diluted earnings per share were $1.45 for the fourth quarter of 2019, an increase from $1.29 in the third quarter of 2019 and $1.30 in the fourth quarter of 2018. Net income for the fourth quarter of 2019 was $58.1 million, up from $52.1 million in the previous quarter and $53.9 million in the same quarter last year. The return on average assets for the fourth quarter of 2019 was 1.29 percent compared with 1.17 percent in the third quarter of 2019 and 1.26 percent in the fourth quarter last year. The return on average equity for the fourth quarter of 2019 was 17.84 percent compared with 16.02 percent in the third quarter of 2019 and 17.05 percent in the fourth quarter last year. The efficiency ratio for the fourth quarter of 2019 was 54.26 percent compared with 58.55 percent in the previous quarter and 57.75 percent in the same quarter last year.

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Bank of Hawaii Corporation 2019 Financial Results        Page 2

Financial Highlights

Net interest income, on a taxable-equivalent basis, was $499.9 million for the full year of 2019, an increase of $8.4 million from net interest income of $491.5 million in 2018. Net interest income, on a taxable-equivalent basis, for the fourth quarter of 2019 was $124.2 million, a decrease of $1.0 million compared with net interest income of $125.2 million in the third quarter of 2019 and the fourth quarter last year. Analyses of changes in net interest income are included in Tables 8a, 8b and 8c.

The net interest margin for the full year of 2019 was 3.03 percent, a decrease of 2 basis points from the net interest margin of 3.05 percent in 2018. The net interest margin was 2.95 percent in the fourth quarter of 2019, a decrease of 6 basis points from the previous quarter and 15 basis points from the same quarter last year.

The provision for credit losses for the full year of 2019 was $16.0 million compared with a provision for credit losses of $13.4 million in 2018. Results for the fourth quarter of 2019 included a provision for credit losses of $4.8 million compared with $4.3 million in the previous quarter and $2.0 million in the same quarter last year.

Noninterest income for the full year of 2019 was $183.3 million, an increase of $14.4 million or 8.5 percent compared with noninterest income of $168.9 million in 2018. The increase from the previous year was primarily due to growth in mortgage banking income, higher gains on sales of leased assets, increased customer derivative activity, and higher service charges on deposits that were partially offset by a decline in credit card fees resulting from the sale of the credit card portfolio in the fourth quarter of 2018. Noninterest income was $47.7 million in the fourth quarter of 2019 compared with noninterest income of $46.5 million in the third quarter of 2019 and $42.1 million in the fourth quarter of 2018. Noninterest income in the fourth quarter of 2019 included a gain of $3.8 million related to the early buyout of a leveraged lease that was partially offset by a reduction in mortgage banking income and customer derivative activity. Noninterest income during the third quarter of 2019 included a negative adjustment of $0.5 million related to a change in the Visa Class B conversion. There were no significant items in noninterest income during the fourth quarter of 2018.

Noninterest expense for the full year of 2019 was $379.2 million, an increase of $7.6 million or 2.0 percent compared with noninterest expense of $371.6 million in 2018. The increase from the previous year was primarily due to increased depreciation and equipment costs related to the Company’s strategic initiatives, higher salaries and benefits, and increased legal costs that were partially offset by a reduction in credit card expenses due to the sale of the portfolio. Noninterest expense was $93.1 million in the fourth quarter of 2019 compared with noninterest expense of $100.3 million in the third quarter of 2019 and $95.9 million in the fourth quarter of 2018. There were no significant items in noninterest expense during the fourth quarter of 2019. Noninterest expense during the third quarter of 2019 included a $6.0 million increase in the legal reserve. Noninterest expense in the fourth quarter of 2018 included $3.0 million in one-time significant items related to a medical expense, an operational loss, and legal expenses. An analysis of noninterest expenses related to salaries and benefits is included in Table 9.

The effective tax rate for the full year of 2019 was 20.96 percent compared with the effective tax rate of 18.73 percent for 2018. The effective tax rate for the fourth quarter of 2019 was 21.15 percent compared with 22.08 percent in the previous quarter and 20.92 percent during the same quarter last year.

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

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Bank of Hawaii Corporation 2019 Financial Results        Page 3

Asset Quality

The Company’s strong overall asset quality continued to remain stable during the fourth quarter of 2019. Total non-performing assets were $20.1 million at December 31, 2019, down from $21.6 million at September 30, 2019 and up from $12.9 million at December 31, 2018. Non-performing assets as a percentage of total loans and leases and foreclosed real estate were 0.18 percent at December 31, 2019 compared with 0.20 percent at September 30, 2019 and 0.12 percent at December 31, 2018.

Accruing loans and leases past due 90 days or more were $8.4 million at December 31, 2019 compared with $6.1 million at September 30, 2019 and $6.6 million at December 31, 2018. Restructured loans and leases not included in non-accrual loans or accruing loans past due 90 days or more were $63.1 million at December 31, 2019 compared with $46.2 million at September 30, 2019 and $48.7 million at December 31, 2018. More information on non-performing assets and accruing loans and leases past due 90 days or more is presented in Table 11.

Net charge-offs for the full year of 2019 were $12.7 million or 0.12 percent of total average loans and leases compared with net charge-offs of $14.1 million or 0.14 percent of total average loans and leases in 2018. Net charge-offs during the fourth quarter of 2019 were $3.7 million or 0.13 percent annualized of total average loans and leases outstanding and were comprised of charge-offs of $6.2 million partially offset by recoveries of $2.6 million. Net charge-offs during the third quarter of 2019 were $3.0 million or 0.11 percent annualized of total average loans and leases outstanding and were comprised of charge-offs of $5.8 million and recoveries of $2.8 million. Net charge-offs during the fourth quarter of 2018 were $4.0 million or 0.15 percent annualized of total average loans and leases outstanding and were comprised of charge-offs of $6.9 million and recoveries of $2.9 million.

The allowance for loan and lease losses was $110.0 million at December 31, 2019, an increase from $108.9 million at September 30, 2019 and $106.7 million at December 31, 2018. The ratio of the allowance for loan and lease losses to total loans and leases outstanding was 1.00 percent at December 31, 2019, unchanged from September 30, 2019 and down 2 basis points from December 31, 2018. The total reserve for unfunded commitments of $6.8 million at December 31, 2019 was unchanged from the prior quarter and the same quarter last year. Details of loan and lease charge-offs, recoveries, and the components of the total reserve for credit losses are summarized in Table 12.

Total assets were $18.10 billion at December 31, 2019, an increase of 2.4 percent from total assets of $17.67 billion at September 30, 2019 and an increase of 5.6 percent from total assets of $17.14 billion at December 31, 2018. Average total assets were $17.54 billion during the full year of 2019, an increase of 3.3 percent from average total assets of $16.97 billion during 2018.

The investment securities portfolio was $5.66 billion at December 31, 2019, an increase of 2.2 percent from total securities of $5.54 billion at September 30, 2019 and an increase of 3.1 percent from total securities of $5.49 billion at December 31, 2018. The investment securities portfolio remains largely comprised of securities issued by U.S. government agencies and included $2.62 billion in securities available for sale and $3.04 billion in securities held to maturity at December 31, 2019.

Total loans and leases were $10.99 billion at December 31, 2019, an increase of 1.0 percent from total loans and leases of $10.88 billion at September 30, 2019 and 5.2 percent from total loans and leases of $10.45 billion at December 31, 2018. Adjusted for the previously mentioned early buyout of a leveraged lease, total loans increased 1.4 percent from the previous quarter and 5.6 percent from the same quarter last year.

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Bank of Hawaii Corporation 2019 Financial Results        Page 4

The commercial portfolio grew to $4.21 billion at the end of the fourth quarter of 2019, an increase of 1.4 percent from commercial loans of $4.16 billion at the end of the third quarter of 2019 and 5.9 percent from commercial loans of $3.98 billion at the end of the fourth quarter last year. Adjusted for the previously mentioned early buyout of a leveraged lease, commercial loans increased 2.4 percent from the previous quarter and 7.0 percent from the same quarter last year. Consumer loans grew to $6.78 billion at December 31, 2019, an increase of 0.8 percent from consumer loans of $6.72 billion at the end of the third quarter of 2019 and 4.8 percent from consumer loans of $6.47 billion at the end of the fourth quarter last year. Average total loans and leases during the full year of 2019 were $10.69 billion, an increase of 6.4 percent from average loans and leases of $10.04 billion during 2018. Loan and lease portfolio balances are summarized in Table 10.

Total deposits were $15.78 billion at December 31, 2019, an increase of 2.9 percent from total deposits of $15.34 billion at September 30, 2019 and an increase of 5.0 percent from total deposits of $15.03 billion at December 31, 2018. Consumer deposits increased to $8.12 billion at December 31, 2019, an increase of 2.9 percent from consumer deposits of $7.89 billion at the end of the third quarter of 2019 and an increase of 5.1 percent from $7.73 billion at the end of the fourth quarter last year. Commercial deposits increased to $6.32 billion at the end of the fourth quarter of 2019, an increase of 2.8 percent from $6.15 billion at the end of the third quarter of 2019 and an increase of 3.7 percent from $6.10 billion at the end of the fourth quarter last year. Other deposits, including public funds, were $1.34 billion at December 31, 2019, an increase of 3.7 percent from total other deposits of $1.29 billion at September 30, 2019 and an increase of 11.6 percent from $1.20 billion at December 31, 2018. Average total deposits during the full year of 2019 were $15.23 billion, an increase of 3.2 percent compared with average total deposits of $14.76 billion during 2018. Deposit balances are summarized in Tables 7a, 7b, and 10.

During the fourth quarter of 2019, the Company repurchased 336.2 thousand shares of common stock at a total cost of $30.0 million under its share repurchase program. The average cost was $89.11 per share repurchased. From the beginning of the share repurchase program initiated during July 2001 through December 31, 2019, the Company has repurchased 56.9 million shares and returned nearly $2.3 billion to shareholders at an average cost of $40.38 per share. From January 2 through January 24, 2020 the Company repurchased an additional 71.5 thousand shares of common stock at an average cost of $93.50 per share repurchased. The Company’s Board of Directors increased the authorization under the share repurchase program by an additional $100.0 million. Remaining buyback authority under the share repurchase program was $120.4 million at January 24, 2020.

Total shareholders’ equity was $1.29 billion at December 31, 2019, down slightly from September 30, 2019, and up from $1.27 billion at December 31, 2018. The Tier 1 Capital Ratio was 12.18 percent at December 31, 2019 compared with 12.33 percent at September 30, 2019 and 13.07 percent at December 31, 2018. The Tier 1 Leverage Ratio at December 31, 2019 was 7.25 percent compared with 7.32 percent at September 30, 2019 and 7.60 percent at December 31, 2018.

The Company’s Board of Directors declared a quarterly cash dividend of $0.67 per share on the Company’s outstanding shares. The dividend will be payable on March 13, 2020 to shareholders of record at the close of business on February 28, 2020.

Hawaii Economy

General economic conditions in Hawaii remained stable during 2019 due to low interest rates, a relatively healthy construction sector and growing visitor arrivals. For the first eleven months of 2019 total visitor arrivals increased 5.4 percent and visitor spending increased 0.5 percent compared to the same period in 2018. Total visitor days rose 2.7 percent compared to the first eleven months of 2018.

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Bank of Hawaii Corporation 2019 Financial Results        Page 5

The statewide seasonally-adjusted unemployment rate in Hawaii continued to remain low at 2.6 percent in December 2019 compared with 3.5 percent nationally.

Real estate prices on Oahu remained steady during 2019 with a modest decline in total annual sales and stable median prices. For the full year of 2019, the median sales price of a single-family home on Oahu decreased 0.1 percent and the median price of a condominium on Oahu increased 1.2 percent compared with the same period in 2018. The volume of single-family home sales on Oahu increased 3.9 percent and the volume of condominium sales on Oahu decreased 4.8 percent in 2019 compared with 2018. As of December 31, 2019, months of inventory of single-family homes and condominiums on Oahu were 2.5 months and 3.4 months, respectively. More information on current Hawaii economic trends is presented in Table 15.

Conference Call Information

The Company will review its 2019 financial results today at 8:00 a.m. Hawaii Time (1:00 p.m. Eastern Time). The call will be accessible via teleconference and via the investor relations link of Bank of Hawaii Corporation's website, www.boh.com. The toll-free number is 1 (844) 543-5235 in the United States and Canada and 1 (703) 318-2209 for other international callers. Use the pass code “Bank of Hawaii” to access the call. A replay will be available for one week beginning approximately 11:00 a.m. Hawaii Time on Monday, January 27, 2020. The replay number is 1 (855) 859-2056 in the United States and Canada and 1 (404) 537-3406 from other international locations. Enter the conference ID 1787817 when prompted. In addition, a 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", such as forecasts of our financial results and condition, expectations for our operations and business prospects, and our assumptions used in those forecasts and expectations. Do not unduly rely on forward-looking statements. Actual results might differ significantly from our forecasts and expectations because of a variety of factors. More information about these factors is contained in Bank of Hawaii Corporation's Annual Report on Form 10-K for the year ended December 31, 2018, which was filed with the U.S. Securities and Exchange Commission. We do not promise to update forward-looking statements to reflect later events or circumstances

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

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Bank of Hawaii Corporation and Subsidiaries
Financial Highlights Table 1
Three Months Ended Year Ended
December 31, September 30, December 31, December 31,
(dollars in thousands, except per share amounts) 2019 2019 2018 2019 2018
For the Period:
Operating Results
Net Interest Income $ 123,885 $ 124,896 $ 123,973 $ 497,715 $ 486,352
Provision for Credit Losses 4,750 4,250 2,000 16,000 13,425
Total Noninterest Income 47,702 46,507 42,108 183,338 168,923
Total Noninterest Expense 93,096 100,349 95,911 379,227 371,624
Net Income 58,143 52,052 53,911 225,913 219,602
Basic Earnings Per Share 1.46 1.30 1.30 5.59 5.26
Diluted Earnings Per Share 1.45 1.29 1.30 5.56 5.23
Dividends Declared Per Share 0.67 0.65 0.62 2.59 2.34
Performance Ratios
Return on Average Assets 1.29 % 1.17 % 1.26 % 1.29 % 1.29 %
Return on Average Shareholders' Equity 17.84 16.02 17.05 17.65 17.63
Efficiency Ratio ^1^ 54.26 58.55 57.75 55.68 56.71
Net Interest Margin ^2^ 2.95 3.01 3.10 3.03 3.05
Dividend Payout Ratio^3^ 45.89 50.00 47.69 46.33 44.49
Average Shareholders' Equity to Average Assets 7.26 7.32 7.39 7.30 7.34
Average Balances
Average Loans and Leases $ 10,878,672 $ 10,770,720 $ 10,320,051 $ 10,688,424 $ 10,043,661
Average Assets 17,821,004 17,605,394 16,988,550 17,537,570 16,970,992
Average Deposits 15,441,097 15,330,691 14,779,511 15,228,066 14,757,724
Average Shareholders' Equity 1,292,930 1,289,417 1,254,704 1,280,082 1,245,672
Per Share of Common Stock
Book Value $ 32.14 $ 32.00 $ 30.56 $ 32.14 $ 30.56
Tangible Book Value 31.35 31.22 29.80 31.35 29.80
Market Value
Closing 95.16 85.93 67.32 95.16 67.32
High 95.68 88.20 82.80 95.68 89.09
Low 81.29 79.13 63.64 66.54 63.64
December 31, September 30, December 31,
2019 2019 2018
As of Period End:
Balance Sheet Totals
Loans and Leases $ 10,990,892 $ 10,881,298 $ 10,448,774
Total Assets 18,095,496 17,672,140 17,143,974
Total Deposits 15,784,482 15,340,752 15,027,242
Other Debt 85,565 110,585 135,643
Total Shareholders' Equity 1,286,832 1,291,490 1,268,200
Asset Quality
Non-Performing Assets $ 20,117 $ 21,645 $ 12,930
Allowance for Loan and Lease Losses 110,027 108,936 106,693
Allowance to Loans and Leases Outstanding 1.00 % 1.00 % 1.02 %
Capital Ratios
Common Equity Tier 1 Capital Ratio 12.18 % 12.33 % 13.07 %
Tier 1 Capital Ratio 12.18 12.33 13.07
Total Capital Ratio 13.28 13.44 14.21
Tier 1 Leverage Ratio 7.25 7.32 7.60
Total Shareholders' Equity to Total Assets 7.11 7.31 7.40
Tangible Common Equity to Tangible Assets ^4^ 6.95 7.14 7.23
Tangible Common Equity to Risk-Weighted Assets^4^ 11.85 12.10 12.52
Non-Financial Data
Full-Time Equivalent Employees 2,124 2,124 2,122
Branches 68 67 69
ATMs 387 379 382
^1^ Efficiency ratio is defined as noninterest expense divided by total revenue (net interest income and total noninterest income).
^2^Net interest margin is defined as net interest income, on a taxable-equivalent basis, as a percentage of average earning assets.
^3^ Dividend payout ratio is defined as dividends declared per share divided by basic earnings per share.
^4^ Tangible common equity to tangible assets and tangible common equity to risk-weighted assets are Non-GAAP financial measures. See Table 2 “Reconciliation of Non-GAAP Financial Measures."
Bank of Hawaii Corporation and Subsidiaries
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Reconciliation of Non-GAAP Financial Measures Table 2
December 31, September 30, December 31,
(dollars in thousands) 2019 2019 2018
Total Shareholders' Equity $ 1,286,832 $ 1,291,490 $ 1,268,200
Less: Goodwill 31,517 31,517 31,517
Tangible Common Equity $ 1,255,315 $ 1,259,973 $ 1,236,683
Total Assets $ 18,095,496 $ 17,672,140 $ 17,143,974
Less: Goodwill 31,517 31,517 31,517
Tangible Assets $ 18,063,979 $ 17,640,623 $ 17,112,457
Risk-Weighted Assets, determined in accordance
with prescribed regulatory requirements $ 10,589,061 $ 10,416,560 $ 9,878,904
Total Shareholders' Equity to Total Assets 7.11 % 7.31 % 7.40 %
Tangible Common Equity to Tangible Assets (Non-GAAP) 6.95 % 7.14 % 7.23 %
Tier 1 Capital Ratio 12.18 % 12.33 % 13.07 %
Tangible Common Equity to Risk-Weighted Assets (Non-GAAP) 11.85 % 12.10 % 12.52 %
Bank of Hawaii Corporation and Subsidiaries
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Consolidated Statements of Income Table 3
Three Months Ended Year Ended
December 31, September 30, December 31, December 31,
(dollars in thousands, except per share amounts) 2019 2019 2018 2019 2018
Interest Income
Interest and Fees on Loans and Leases $ 109,223 $ 110,877 $ 107,404 $ 439,012 $ 410,597
Income on Investment Securities
Available-for-Sale 16,158 17,512 13,043 62,174 50,152
Held-to-Maturity 18,750 18,796 21,482 81,616 84,310
Deposits 8 9 10 41 34
Funds Sold 723 656 727 3,553 3,723
Other 239 233 352 1,001 1,357
Total Interest Income 145,101 148,083 143,018 587,397 550,173
Interest Expense
Deposits 16,407 18,055 13,172 68,374 41,143
Securities Sold Under Agreements to Repurchase 4,071 4,257 4,671 17,522 18,519
Funds Purchased 25 146 440 840 609
Short-Term Borrowings — 1 88 38 145
Other Debt 713 728 674 2,908 3,405
Total Interest Expense 21,216 23,187 19,045 89,682 63,821
Net Interest Income 123,885 124,896 123,973 497,715 486,352
Provision for Credit Losses 4,750 4,250 2,000 16,000 13,425
Net Interest Income After Provision for Credit Losses 119,135 120,646 121,973 481,715 472,927
Noninterest Income
Trust and Asset Management 11,157 10,930 10,558 44,233 43,877
Mortgage Banking 3,199 4,864 2,148 13,686 8,437
Service Charges on Deposit Accounts 7,835 7,592 7,562 30,074 28,811
Fees, Exchange, and Other Service Charges 14,533 14,900 14,576 57,893 57,482
Investment Securities Gains (Losses), Net (906) (1,469) (841) (3,986) (3,938)
Annuity and Insurance 1,272 1,278 1,409 6,934 5,822
Bank-Owned Life Insurance 1,879 1,647 1,941 7,015 7,199
Other 8,733 6,765 4,755 27,489 21,233
Total Noninterest Income 47,702 46,507 42,108 183,338 168,923
Noninterest Expense
Salaries and Benefits 51,664 54,345 54,856 216,106 213,208
Net Occupancy 8,824 8,803 8,918 33,800 34,742
Net Equipment 7,930 7,637 6,364 29,295 23,852
Data Processing 4,828 4,676 5,151 18,757 17,846
Professional Fees 3,257 2,184 2,467 10,071 9,992
FDIC Insurance 1,376 1,257 1,336 5,192 7,732
Other 15,217 21,447 16,819 66,006 64,252
Total Noninterest Expense 93,096 100,349 95,911 379,227 371,624
Income Before Provision for Income Taxes 73,741 66,804 68,170 285,826 270,226
Provision for Income Taxes 15,598 14,752 14,259 59,913 50,624
Net Income $ 58,143 $ 52,052 $ 53,911 $ 225,913 $ 219,602
Basic Earnings Per Share $ 1.46 $ 1.30 $ 1.30 $ 5.59 $ 5.26
Diluted Earnings Per Share $ 1.45 $ 1.29 $ 1.30 $ 5.56 $ 5.23
Dividends Declared Per Share $ 0.67 $ 0.65 $ 0.62 $ 2.59 $ 2.34
Basic Weighted Average Shares 39,880,619 40,190,508 41,325,456 40,384,328 41,714,770
Diluted Weighted Average Shares 40,179,016 40,450,742 41,601,649 40,649,570 41,999,399
Bank of Hawaii Corporation and Subsidiaries
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Consolidated Statements of Comprehensive Income Table 4
Three Months Ended Year Ended
December 31, September 30, December 31, December 31,
(dollars in thousands) 2019 2019 2018 2019 2018
Net Income $ 58,143 $ 52,052 $ 53,911 $ 225,913 $ 219,602
Other Comprehensive Income (Loss), Net of Tax:
Net Unrealized Gains (Losses) on Investment Securities (5,856) 5,405 11,169 22,677 (6,525)
Defined Benefit Plans (3,482) 245 (2,974) (2,746) (2,326)
Other Comprehensive Income (Loss) (9,338) 5,650 8,195 19,931 (8,851)
Comprehensive Income $ 48,805 $ 57,702 $ 62,106 $ 245,844 $ 210,751
Bank of Hawaii Corporation and Subsidiaries
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Consolidated Statements of Condition Table 5
September 30, December 31,
(dollars in thousands) 2019 2018
Assets
Interest-Bearing Deposits in Other Banks 4,979 $ 2,946 $ 3,028
Funds Sold 108,446 198,860
Investment Securities
Available-for-Sale 2,594,394 2,007,942
Held-to-Maturity (Fair Value of 3,062,882; 2,972,273; and 3,413,994) 2,946,910 3,482,092
Loans Held for Sale 36,720 10,987
Loans and Leases 10,881,298 10,448,774
Allowance for Loan and Lease Losses (108,936) (106,693)
Net Loans and Leases 10,772,362 10,342,081
Total Earning Assets 16,461,778 16,044,990
Cash and Due from Banks 259,492 324,081
Premises and Equipment, Net 179,453 151,837
Operating Lease Right-of-Use Assets 101,005 —
Accrued Interest Receivable 47,897 51,230
Foreclosed Real Estate 2,939 1,356
Mortgage Servicing Rights 24,408 24,310
Goodwill 31,517 31,517
Bank-Owned Life Insurance 286,936 283,771
Other Assets 276,715 230,882
Total Assets 18,095,496 $ 17,672,140 $ 17,143,974
Liabilities
Deposits
Noninterest-Bearing Demand 4,489,525 $ 4,392,706 $ 4,739,596
Interest-Bearing Demand 3,000,865 3,002,925
Savings 6,141,098 5,539,199
Time 1,806,083 1,745,522
Total Deposits 15,340,752 15,027,242
Short-Term Borrowings — 199
Securities Sold Under Agreements to Repurchase 604,299 504,296
Other Debt 110,585 135,643
Operating Lease Liabilities 108,264 —
Retirement Benefits Payable 39,682 40,494
Accrued Interest Payable 8,435 8,253
Taxes Payable and Deferred Taxes 21,089 19,736
Other Liabilities 147,544 139,911
Total Liabilities 16,380,650 15,875,774
Shareholders' Equity
Common Stock (.01 par value; authorized 500,000,000 shares;
issued / outstanding: December 31, 2019 - 58,166,910 / 40,039,695;
September 30, 2019 - 58,176,305 / 40,359,259;
and December 31, 2018 - 58,063,689 / 41,499,898) 579 577
Capital Surplus 580,200 571,704
Accumulated Other Comprehensive Loss (21,774) (51,043)
Retained Earnings 1,730,437 1,641,314
Treasury Stock, at Cost (Shares: December 31, 2019 - 18,127,215;
September 30, 2019 - 17,817,046; and December 31, 2018 - 16,563,791) (997,952) (894,352)
Total Shareholders' Equity 1,291,490 1,268,200
Total Liabilities and Shareholders' Equity 18,095,496 $ 17,672,140 $ 17,143,974

All values are in US Dollars.

Bank of Hawaii Corporation and Subsidiaries
Consolidated Statements of Shareholders' Equity Table 6
Accum.
Other
Compre-
hensive
Common Shares Common Capital Income Retained Treasury
(dollars in thousands) Outstanding Stock Surplus (Loss) Earnings Stock Total
Balance as of December 31, 2017 42,401,443 $ 576 $ 561,161 $ (34,715) $ 1,512,218 $ (807,372) $ 1,231,868
Net Income — — — — 219,602 — 219,602
Other Comprehensive Loss — — — (8,851) — — (8,851)
Reclassification of the Income Tax Effects of the
Tax Cuts and Jobs Act from AOCI — — — (7,477) 7,477 — —
Share-Based Compensation — — 8,146 — — — 8,146
Common Stock Issued under Purchase and Equity
219,210 1 2,397 — 513 5,008 7,919
Common Stock Repurchased (1,120,755) — — — — (91,988) (91,988)
Cash Dividends Declared (2.34 per share) — — — — (98,496) — (98,496)
Balance as of December 31, 2018 41,499,898 $ 577 $ 571,704 $ (51,043) $ 1,641,314 $ (894,352) $ 1,268,200
Net Income — — — — 225,913 — 225,913
Other Comprehensive Income — — — 19,931 — — 19,931
Share-Based Compensation — — 8,337 — — — 8,337
Common Stock Issued under Purchase and Equity
212,924 2 2,525 — (334) 5,385 7,578
Common Stock Repurchased (1,673,127) — — — — (137,649) (137,649)
Cash Dividends Declared (2.59 per share) — — — — (105,478) — (105,478)
Balance as of December 31, 2019 40,039,695 $ 579 $ 582,566 $ (31,112) $ 1,761,415 $ (1,026,616) $ 1,286,832

All values are in US Dollars.

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
December 31, 2019 September 30, 2019 December 31, 2018
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 $ 3.4 $ — 0.90 % $ 3.1 $ — 1.19 % $ 3.3 $ — 1.21 %
Funds Sold 177.7 0.7 1.59 121.1 0.7 2.12 128.2 0.7 2.22
Investment Securities
2,578.3 15.9 2.46 2,647.9 17.1 2.59 1,480.5 10.0 2.70
33.4 0.4 4.35 42.6 0.5 4.45 556.4 3.8 2.77
2,994.7 18.4 2.46 2,873.7 18.5 2.57 3,360.5 20.0 2.38
61.7 0.4 2.70 65.2 0.4 2.72 235.1 1.9 3.16
Total Investment Securities 5,668.1 35.1 2.47 5,629.4 36.5 2.59 5,632.5 35.7 2.53
Loans Held for Sale 31.0 0.3 3.67 24.3 0.2 3.94 12.1 0.2 4.63
Loans and Leases 1
1,356.1 13.3 3.90 1,383.8 14.4 4.14 1,351.1 14.3 4.21
2,479.7 25.5 4.08 2,423.7 26.2 4.28 2,256.0 24.2 4.25
179.1 2.1 4.73 126.0 1.6 5.10 179.8 2.2 4.79
135.4 0.8 2.38 161.8 1.0 2.57 173.2 1.0 2.42
3,850.4 36.7 3.81 3,809.6 36.5 3.83 3,615.8 35.1 3.88
1,683.4 15.7 3.70 1,689.2 16.1 3.79 1,652.4 15.7 3.78
715.2 6.5 3.59 707.0 6.4 3.59 641.8 6.0 3.73
479.4 8.5 7.02 469.6 8.5 7.16 450.0 8.8 7.72
Total Loans and Leases 10,878.7 109.1 3.99 10,770.7 110.7 4.09 10,320.1 107.3 4.14
Other 34.9 0.2 2.74 35.0 0.3 2.66 36.8 0.4 3.82
Total Earning Assets 3 16,793.8 145.4 3.45 16,583.6 148.4 3.56 16,133.0 144.3 3.56
Cash and Due from Banks 222.2 231.5 234.3
Other Assets 805.0 790.3 621.3
Total Assets $ 17,821.0 $ 17,605.4 $ 16,988.6
Interest-Bearing Liabilities
Interest-Bearing Deposits
$ 2,990.3 1.0 0.14 $ 2,950.2 1.1 0.15 $ 2,888.3 1.5 0.20
6,245.0 8.0 0.51 6,122.0 8.8 0.57 5,494.5 4.5 0.32
1,842.3 7.4 1.59 1,851.0 8.2 1.75 1,800.7 7.2 1.59
Total Interest-Bearing Deposits 11,077.6 16.4 0.59 10,923.2 18.1 0.66 10,183.5 13.2 0.51
Short-Term Borrowings 5.8 — 1.66 27.1 0.1 2.13 89.6 0.5 2.31
Securities Sold Under Agreements to Repurchase 604.3 4.1 2.64 513.8 4.3 3.24 504.3 4.7 3.62
Other Debt 106.2 0.7 2.67 110.6 0.7 2.62 145.2 0.7 1.85
Total Interest-Bearing Liabilities 11,793.9 21.2 0.71 11,574.7 23.2 0.79 10,922.6 19.1 0.69
Net Interest Income $ 124.2 $ 125.2 $ 125.2
2.74 % 2.77 % 2.87 %
2.95 % 3.01 % 3.10 %
Noninterest-Bearing Demand Deposits 4,363.5 4,407.5 4,596.0
Other Liabilities 370.7 333.8 215.3
Shareholders' Equity 1,292.9 1,289.4 1,254.7
Total Liabilities and Shareholders' Equity $ 17,821.0 $ 17,605.4 $ 16,988.6
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 352,000, 296,000, and 1,263,000

All values are in US Dollars.

Bank of Hawaii Corporation and Subsidiaries
Average Balances and Interest Rates - Taxable-Equivalent Basis Table 7b
Year Ended Year Ended
December 31, 2019 December 31, 2018
Average Income/ Yield/ Average Income/ Yield/
(dollars in millions) Balance Expense Rate Balance Expense Rate
Earning Assets
Interest-Bearing Deposits in Other Banks $ 3.1 $ — 1.33 % $ 3.2 $ — 1.05 %
Funds Sold 165.7 3.6 2.14 200.0 3.7 1.86
Investment Securities
2,210.5 58.9 2.66 1,537.7 37.6 2.44
109.6 4.1 3.78 577.9 15.9 2.76
3,148.2 78.3 2.49 3,468.4 78.4 2.26
137.8 4.2 3.04 236.5 7.5 3.17
Total Investment Securities 5,606.1 145.5 2.60 5,820.5 139.4 2.39
Loans Held for Sale 21.7 0.9 3.92 14.0 0.6 4.31
Loans and Leases 1
1,370.9 57.9 4.23 1,304.8 51.9 3.98
2,400.6 102.4 4.27 2,164.6 89.7 4.14
145.2 7.4 5.07 184.9 8.6 4.68
154.4 3.7 2.43 176.8 4.1 2.29
3,768.2 144.7 3.84 3,546.5 136.0 3.84
1,689.4 64.1 3.80 1,620.8 61.1 3.77
694.9 25.1 3.62 591.2 23.2 3.92
464.8 33.3 7.16 454.1 35.6 7.85
Total Loans and Leases 10,688.4 438.6 4.10 10,043.7 410.2 4.08
Other 35.1 1.0 2.85 39.0 1.4 3.48
Total Earning Assets 3 16,520.1 589.6 3.57 16,120.4 555.3 3.44
Cash and Due from Banks 234.0 241.6
Other Assets 783.5 609.0
Total Assets $ 17,537.6 $ 16,971.0
Interest-Bearing Liabilities
Interest-Bearing Deposits
$ 2,945.9 5.0 0.17 $ 2,958.8 4.7 0.16
6,034.0 32.4 0.54 5,434.3 13.6 0.25
1,816.3 31.0 1.71 1,725.9 22.8 1.32
Total Interest-Bearing Deposits 10,796.2 68.4 0.63 10,119.0 41.1 0.41
Short-Term Borrowings 36.5 0.9 2.41 35.5 0.8 2.13
Securities Sold Under Agreements to Repurchase 531.9 17.5 3.29 504.7 18.5 3.67
Other Debt 111.8 2.9 2.60 211.3 3.4 1.61
Total Interest-Bearing Liabilities 11,476.4 89.7 0.78 10,870.5 63.8 0.59
Net Interest Income $ 499.9 $ 491.5
2.79 % 2.85 %
3.03 % 3.05 %
Noninterest-Bearing Demand Deposits 4,431.9 4,638.7
Other Liabilities 349.2 216.1
Shareholders' Equity 1,280.1 1,245.7
Total Liabilities and Shareholders' Equity $ 17,537.6 $ 16,971.0
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 2,230,000 and 5,170,000

All values are in US Dollars.

Bank of Hawaii Corporation and Subsidiaries
Analysis of Change in Net Interest Income - Taxable-Equivalent Basis Table 8a
Three Months Ended December 31, 2019
Compared to September 30, 2019
(dollars in millions) Volume ^1^ Rate ^1^ Total
Change in Interest Income:
Funds Sold $ 0.2 $ (0.2) $ —
Investment Securities
Available-for-Sale
Taxable (0.4) (0.8) (1.2)
Non-Taxable (0.1) — (0.1)
Held-to-Maturity
Taxable 0.7 (0.8) (0.1)
Total Investment Securities 0.2 (1.6) (1.4)
Loans Held for Sale 0.1 — 0.1
Loans and Leases
Commercial and Industrial (0.3) (0.8) (1.1)
Commercial Mortgage 0.6 (1.3) (0.7)
Construction 0.6 (0.1) 0.5
Commercial Lease Financing (0.1) (0.1) (0.2)
Residential Mortgage 0.3 (0.1) 0.2
Home Equity — (0.4) (0.4)
Automobile 0.1 — 0.1
Other ^2^ 0.2 (0.2) —
Total Loans and Leases 1.4 (3.0) (1.6)
Other (0.1) — (0.1)
Total Change in Interest Income 1.8 (4.8) (3.0)
Change in Interest Expense:
Interest-Bearing Deposits
Demand — (0.1) (0.1)
Savings 0.1 (0.9) (0.8)
Time — (0.8) (0.8)
Total Interest-Bearing Deposits 0.1 (1.8) (1.7)
Short-Term Borrowings (0.1) — (0.1)
Securities Sold Under Agreements to Repurchase 0.7 (0.9) (0.2)
Total Change in Interest Expense 0.7 (2.7) (2.0)
Change in Net Interest Income $ 1.1 $ (2.1) $ (1.0)
^1^The change in interest income and expense not solely due to changes in volume or rate has been allocated on a pro-rata basis to the volume and rate columns.
^2^ Comprised of other consumer revolving credit, installment, and consumer lease financing.
Bank of Hawaii Corporation and Subsidiaries
--- --- --- --- --- --- --- ---
Analysis of Change in Net Interest Income - Taxable-Equivalent Basis Table 8b
Three Months Ended December 31, 2019
Compared to December 31, 2018
(dollars in millions) Volume ^1^ Rate ^1^ Total
Change in Interest Income:
Funds Sold $ 0.2 $ (0.2) $ —
Investment Securities
Available-for-Sale
Taxable 6.8 (0.9) 5.9
Non-Taxable (4.9) 1.5 (3.4)
Held-to-Maturity
Taxable (2.2) 0.6 (1.6)
Non-Taxable (1.2) (0.3) (1.5)
Total Investment Securities (1.5) 0.9 (0.6)
Loans Held for Sale 0.2 (0.1) 0.1
Loans and Leases
Commercial and Industrial 0.1 (1.1) (1.0)
Commercial Mortgage 2.3 (1.0) 1.3
Construction — (0.1) (0.1)
Commercial Lease Financing (0.2) — (0.2)
Residential Mortgage 2.2 (0.6) 1.6
Home Equity 0.3 (0.3) —
Automobile 0.7 (0.2) 0.5
Other ^2^ 0.5 (0.8) (0.3)
Total Loans and Leases 5.9 (4.1) 1.8
Other (0.1) (0.1) (0.2)
Total Change in Interest Income 4.7 (3.6) 1.1
Change in Interest Expense:
Interest-Bearing Deposits
Demand — (0.5) (0.5)
Savings 0.7 2.8 3.5
Time 0.2 — 0.2
Total Interest-Bearing Deposits 0.9 2.3 3.2
Short-Term Borrowings (0.4) (0.1) (0.5)
Securities Sold Under Agreements to Repurchase 0.8 (1.4) (0.6)
Other Debt (0.3) 0.3 —
Total Change in Interest Expense 1.0 1.1 2.1
Change in Net Interest Income $ 3.7 $ (4.7) $ (1.0)
^1^The change in interest income and expense not solely due to changes in volume or rate has been allocated on a pro-rata basis to the volume and rate columns.
^2^ Comprised of other consumer revolving credit, installment, and consumer lease financing.
Bank of Hawaii Corporation and Subsidiaries
--- --- --- --- --- --- --- ---
Analysis of Change in Net Interest Income - Taxable-Equivalent Basis Table 8c
Year Ended December 31, 2019
Compared to December 31, 2018
(dollars in millions) Volume ^1^ Rate ^1^ Total
Change in Interest Income:
Funds Sold $ (0.7) $ 0.6 $ (0.1)
Investment Securities
Available-for-Sale
Taxable 17.7 3.6 21.3
Non-Taxable (16.2) 4.4 (11.8)
Held-to-Maturity
Taxable (7.6) 7.5 (0.1)
Non-Taxable (3.0) (0.3) (3.3)
Total Investment Securities (9.1) 15.2 6.1
Loans Held for Sale 0.3 — 0.3
Loans and Leases
Commercial and Industrial 2.7 3.3 6.0
Commercial Mortgage 10.0 2.7 12.7
Construction (1.9) 0.7 (1.2)
Commercial Lease Financing (0.6) 0.2 (0.4)
Residential Mortgage 8.5 0.2 8.7
Home Equity 2.6 0.4 3.0
Automobile 3.8 (1.9) 1.9
Other^2^ 0.9 (3.2) (2.3)
Total Loans and Leases 26.0 2.4 28.4
Other (0.1) (0.3) (0.4)
Total Change in Interest Income 16.4 17.9 34.3
Change in Interest Expense:
Interest-Bearing Deposits
Demand — 0.3 0.3
Savings 1.6 17.2 18.8
Time 1.3 6.9 8.2
Total Interest-Bearing Deposits 2.9 24.4 27.3
Short-Term Borrowings — 0.1 0.1
Securities Sold Under Agreements to Repurchase 1.0 (2.0) (1.0)
Other Debt (2.0) 1.5 (0.5)
Total Change in Interest Expense 1.9 24.0 25.9
Change in Net Interest Income $ 14.5 $ (6.1) $ 8.4
^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 Year Ended
December 31, September 30, December 31, December 31,
(dollars in thousands) 2019 2019 2018 2019 2018
Salaries $ 33,465 $ 33,458 $ 33,603 $ 132,237 $ 132,884
Incentive Compensation 4,864 5,681 5,715 21,913 20,687
Share-Based Compensation 1,475 2,025 1,417 8,573 8,074
Commission Expense 2,080 1,760 1,158 6,474 4,418
Retirement and Other Benefits 4,279 4,185 4,369 18,151 17,313
Payroll Taxes 2,386 2,519 2,277 11,795 11,389
Medical, Dental, and Life Insurance 2,903 3,908 5,237 15,202 16,134
Separation Expense 212 809 1,080 1,761 2,309
Total Salaries and Benefits $ 51,664 $ 54,345 $ 54,856 $ 216,106 $ 213,208
Bank of Hawaii Corporation and Subsidiaries
--- --- --- --- --- --- --- --- --- --- --- --- --- --- ---
Loan and Lease Portfolio Balances Table 10
December 31, September 30, June 30, March 31, December 31,
(dollars in thousands) 2019 2019 2019 2019 2018
Commercial
Commercial and Industrial $ 1,379,152 $ 1,361,011 $ 1,408,729 $ 1,331,345 $ 1,331,149
Commercial Mortgage 2,518,051 2,477,296 2,411,289 2,381,213 2,302,356
Construction 194,170 154,754 119,228 132,775 170,061
Lease Financing 122,454 163,672 163,070 154,919 176,226
Total Commercial 4,213,827 4,156,733 4,102,316 4,000,252 3,979,792
Consumer
Residential Mortgage 3,891,100 3,846,511 3,785,006 3,702,553 3,673,796
Home Equity 1,676,073 1,681,951 1,694,577 1,698,666 1,681,442
Automobile 720,286 713,424 703,523 676,730 658,133
Other ^1^ 489,606 482,679 473,707 470,408 455,611
Total Consumer 6,777,065 6,724,565 6,656,813 6,548,357 6,468,982
Total Loans and Leases $ 10,990,892 $ 10,881,298 $ 10,759,129 $ 10,548,609 $ 10,448,774
Deposits
December 31, September 30, June 30, March 31, December 31,
(dollars in thousands) 2019 2019 2019 2019 2018
Consumer $ 8,118,494 $ 7,893,454 $ 7,880,284 $ 7,944,793 $ 7,726,731
Commercial 6,324,214 6,153,492 6,178,984 6,162,042 6,098,186
Public and Other 1,341,774 1,293,806 1,429,553 1,160,475 1,202,325
Total Deposits $ 15,784,482 $ 15,340,752 $ 15,488,821 $ 15,267,310 $ 15,027,242
^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
December 31, September 30, June 30, March 31, December 31,
(dollars in thousands) 2019 2019 2019 2019 2018
Non-Performing Assets
Non-Accrual Loans and Leases
Commercial
Commercial and Industrial $ 830 $ 573 $ 552 $ 393 $ 542
Commercial Mortgage 9,244 11,088 11,310 5,911 2,040
Total Commercial 10,074 11,661 11,862 6,304 2,582
Consumer
Residential Mortgage 4,125 4,258 4,697 5,599 5,321
Home Equity 3,181 2,787 2,486 2,797 3,671
Total Consumer 7,306 7,045 7,183 8,396 8,992
Total Non-Accrual Loans and Leases 17,380 18,706 19,045 14,700 11,574
Foreclosed Real Estate 2,737 2,939 2,737 3,225 1,356
Total Non-Performing Assets $ 20,117 $ 21,645 $ 21,782 $ 17,925 $ 12,930
Accruing Loans and Leases Past Due 90 Days or More
Commercial
Commercial and Industrial $ — $ 81 $ — $ 66 $ 10
Total Commercial — 81 — 66 10
Consumer
Residential Mortgage $ 1,839 $ 2,032 $ 1,859 $ 903 $ 2,446
Home Equity 4,125 2,320 2,981 3,381 2,684
Automobile 949 582 607 734 513
Other ^1^ 1,493 1,076 963 1,033 914
Total Consumer 8,406 6,010 6,410 6,051 6,557
Total Accruing Loans and Leases Past Due 90 Days or More $ 8,406 $ 6,091 $ 6,410 $ 6,117 $ 6,567
Restructured Loans on Accrual Status
and Not Past Due 90 Days or More $ 63,103 $ 46,178 $ 48,563 $ 48,571 $ 48,731
Total Loans and Leases $ 10,990,892 $ 10,881,298 $ 10,759,129 $ 10,548,609 $ 10,448,774
Ratio of Non-Accrual Loans and Leases to Total Loans and Leases 0.16 % 0.17 % 0.18 % 0.14 % 0.11 %
Ratio of Non-Performing Assets to Total Loans and Leases
and Foreclosed Real Estate 0.18 % 0.20 % 0.20 % 0.17 % 0.12 %
Ratio of Commercial Non-Performing Assets to Total Commercial
Loans and Leases and Commercial Foreclosed Real Estate 0.24 % 0.28 % 0.29 % 0.16 % 0.06 %
Ratio of Consumer Non-Performing Assets to Total Consumer
Loans and Leases and Consumer Foreclosed Real Estate 0.15 % 0.15 % 0.15 % 0.18 % 0.16 %
Ratio of Non-Performing Assets and Accruing Loans and Leases
Past Due 90 Days or More to Total Loans and Leases
and Foreclosed Real Estate 0.26 % 0.25 % 0.26 % 0.23 % 0.19 %
Quarter to Quarter Changes in Non-Performing Assets
Balance at Beginning of Quarter $ 21,645 $ 21,782 $ 17,925 $ 12,930 $ 13,798
Additions 883 1,035 6,186 8,217 4,509
Reductions
Payments (495) (984) (441) (989) (3,759)
Return to Accrual Status (1,673) — (1,344) (316) (605)
Sales of Foreclosed Real Estate (201) — (374) — (653)
Charge-offs/Write-downs (42) (188) (170) (1,917) (360)
Total Reductions (2,411) (1,172) (2,329) (3,222) (5,377)
Balance at End of Quarter $ 20,117 $ 21,645 $ 21,782 $ 17,925 $ 12,930
^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 Year Ended
December 31, September 30, December 31, December 31,
(dollars in thousands) 2019 2019 2018 2019 2018
Balance at Beginning of Period $ 115,758 $ 114,494 $ 115,512 $ 113,515 $ 114,168
Loans and Leases Charged-Off
Commercial
Commercial and Industrial (307) (239) (365) (1,122) (1,505)
Commercial Mortgage — — — (1,616) —
Consumer
Residential Mortgage (50) (7) (1) (112) (101)
Home Equity (245) (215) (406) (900) (665)
Automobile (1,990) (1,696) (2,335) (7,130) (8,218)
Other ^1^ (3,651) (3,598) (3,781) (13,075) (14,075)
Total Loans and Leases Charged-Off (6,243) (5,755) (6,888) (23,955) (24,564)
Recoveries on Loans and Leases Previously Charged-Off
Commercial
Commercial and Industrial 293 318 803 1,513 2,039
Consumer
Residential Mortgage 699 649 112 1,927 807
Home Equity 577 428 367 2,339 2,001
Automobile 512 660 949 2,961 2,902
Other ^1^ 503 714 660 2,549 2,737
Total Recoveries on Loans and Leases Previously Charged-Off 2,584 2,769 2,891 11,289 10,486
Net Loans and Leases Charged-Off (3,659) (2,986) (3,997) (12,666) (14,078)
Provision for Credit Losses 4,750 4,250 2,000 16,000 13,425
Balance at End of Period ^2^ $ 116,849 $ 115,758 $ 113,515 $ 116,849 $ 113,515
Components
Allowance for Loan and Lease Losses $ 110,027 $ 108,936 $ 106,693 $ 110,027 $ 106,693
Reserve for Unfunded Commitments 6,822 6,822 6,822 6,822 6,822
Total Reserve for Credit Losses $ 116,849 $ 115,758 $ 113,515 $ 116,849 $ 113,515
Average Loans and Leases Outstanding $ 10,878,672 $ 10,770,720 $ 10,320,051 $ 10,688,424 $ 10,043,661
Ratio of Net Loans and Leases Charged-Off to
Average Loans and Leases Outstanding (annualized) 0.13 % 0.11 % 0.15 % 0.12 % 0.14 %
Ratio of Allowance for Loan and Lease Losses to Loans and Leases Outstanding 1.00 % 1.00 % 1.02 % 1.00 % 1.02 %
^1^ Comprised of other revolving credit, installment, and lease financing.
^2^Included in this analysis is activity related to the Company's reserve for unfunded commitments, which is separately recorded in other liabilities in the Consolidated Statements of Condition.
Bank of Hawaii Corporation and Subsidiaries
--- --- --- --- --- --- --- --- --- --- --- ---
Business Segments Selected Financial Information Table 13a
Investment
Services and
Retail Commercial Private Treasury Consolidated
(dollars in thousands) Banking Banking Banking and Other Total
Three Months Ended December 31, 2019
Net Interest Income $ 66,410 $ 45,475 $ 9,689 $ 2,311 $ 123,885
Provision for Credit Losses 3,818 (165) 1 1,096 4,750
Net Interest Income After Provision for Credit Losses 62,592 45,640 9,688 1,215 119,135
Noninterest Income 21,377 10,624 13,929 1,772 47,702
Noninterest Expense (52,720) (21,071) (15,774) (3,531) (93,096)
Income Before Provision for Income Taxes 31,249 35,193 7,843 (544) 73,741
Provision for Income Taxes (7,842) (6,345) (2,067) 656 (15,598)
Net Income $ 23,407 $ 28,848 $ 5,776 $ 112 $ 58,143
Total Assets as of December 31, 2019 $ 6,732,811 $ 4,254,261 $ 321,700 $ 6,786,724 $ 18,095,496
Three Months Ended December 31, 2018
Net Interest Income $ 67,452 $ 46,429 $ 10,235 $ (143) $ 123,973
Provision for Credit Losses 4,481 (484) (1) (1,996) 2,000
Net Interest Income After Provision for Credit Losses 62,971 46,913 10,236 1,853 121,973
Noninterest Income 20,339 6,338 13,397 2,034 42,108
Noninterest Expense (53,417) (20,912) (17,583) (3,999) (95,911)
Income Before Provision for Income Taxes 29,893 32,339 6,050 (112) 68,170
Provision for Income Taxes (7,465) (7,714) (1,595) 2,515 (14,259)
Net Income $ 22,428 $ 24,625 $ 4,455 $ 2,403 $ 53,911
Total Assets as of December 31, 2018 $ 6,365,263 $ 3,958,523 $ 349,832 $ 6,470,356 $ 17,143,974
Bank of Hawaii Corporation and Subsidiaries
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Business Segments Selected Financial Information Table 13b
Investment
Services and
Retail Commercial Private Treasury Consolidated
(dollars in thousands) Banking Banking Banking and Other Total
Year Ended December 31, 2019
Net Interest Income $ 266,429 $ 185,259 $ 39,374 $ 6,653 $ 497,715
Provision for Credit Losses 11,670 976 15 3,339 16,000
Net Interest Income After Provision for Credit Losses 254,759 184,283 39,359 3,314 481,715
Noninterest Income 86,682 33,362 55,696 7,598 183,338
Noninterest Expense (216,688) (84,616) (64,974) (12,949) (379,227)
Income Before Provision for Income Taxes 124,753 133,029 30,081 (2,037) 285,826
Provision for Income Taxes (30,725) (28,852) (7,929) 7,593 (59,913)
Net Income $ 94,028 $ 104,177 $ 22,152 $ 5,556 $ 225,913
Total Assets as of December 31, 2019 $ 6,732,811 $ 4,254,261 $ 321,700 $ 6,786,724 $ 18,095,496
Year Ended December 31, 2018
Net Interest Income $ 264,459 $ 179,577 $ 41,222 $ 1,094 $ 486,352
Provision for Credit Losses 14,898 (760) (61) (652) 13,425
Net Interest Income After Provision for Credit Losses 249,561 180,337 41,283 1,746 472,927
Noninterest Income 79,004 23,733 55,338 10,848 168,923
Noninterest Expense (211,761) (81,344) (65,847) (12,672) (371,624)
Income Before Provision for Income Taxes 116,804 122,726 30,774 (78) 270,226
Provision for Income Taxes (29,172) (28,496) (8,113) 15,157 (50,624)
Net Income $ 87,632 $ 94,230 $ 22,661 $ 15,079 $ 219,602
Total Assets as of December 31, 2018 $ 6,365,263 $ 3,958,523 $ 349,832 $ 6,470,356 $ 17,143,974
Bank of Hawaii Corporation and Subsidiaries
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Selected Quarterly Financial Data Table 14
Three Months Ended
December 31, September 30, June 30, March 31, December 31,
(dollars in thousands, except per share amounts) 2019 2019 2019 2019 2018
Quarterly Operating Results
Interest Income
Interest and Fees on Loans and Leases $ 109,223 $ 110,877 $ 110,401 $ 108,511 $ 107,404
Income on Investment Securities
Available-for-Sale 16,158 17,512 15,072 13,432 13,043
Held-to-Maturity 18,750 18,796 22,149 21,921 21,482
Deposits 8 9 9 15 10
Funds Sold 723 656 730 1,444 727
Other 239 233 210 319 352
Total Interest Income 145,101 148,083 148,571 145,642 143,018
Interest Expense
Deposits 16,407 18,055 18,628 15,284 13,172
Securities Sold Under Agreements to Repurchase 4,071 4,257 4,623 4,571 4,671
Funds Purchased 25 146 512 157 440
Short-Term Borrowings — 1 1 36 88
Other Debt 713 728 710 757 674
Total Interest Expense 21,216 23,187 24,474 20,805 19,045
Net Interest Income 123,885 124,896 124,097 124,837 123,973
Provision for Credit Losses 4,750 4,250 4,000 3,000 2,000
Net Interest Income After Provision for Credit Losses 119,135 120,646 120,097 121,837 121,973
Noninterest Income
Trust and Asset Management 11,157 10,930 11,385 10,761 10,558
Mortgage Banking 3,199 4,864 3,336 2,287 2,148
Service Charges on Deposit Accounts 7,835 7,592 7,283 7,364 7,562
Fees, Exchange, and Other Service Charges 14,533 14,900 14,252 14,208 14,576
Investment Securities Gains (Losses), Net (906) (1,469) (776) (835) (841)
Annuity and Insurance 1,272 1,278 1,806 2,578 1,409
Bank-Owned Life Insurance 1,879 1,647 1,779 1,710 1,941
Other 8,733 6,765 6,385 5,606 4,755
Total Noninterest Income 47,702 46,507 45,450 43,679 42,108
Noninterest Expense
Salaries and Benefits 51,664 54,345 53,511 56,586 54,856
Net Occupancy 8,824 8,803 8,579 7,594 8,918
Net Equipment 7,930 7,637 6,895 6,833 6,364
Data Processing 4,828 4,676 4,727 4,526 5,151
Professional Fees 3,257 2,184 2,177 2,453 2,467
FDIC Insurance 1,376 1,257 1,290 1,269 1,336
Other 15,217 21,447 15,546 13,796 16,819
Total Noninterest Expense 93,096 100,349 92,725 93,057 95,911
Income Before Provision for Income Taxes 73,741 66,804 72,822 72,459 68,170
Provision for Income Taxes 15,598 14,752 15,903 13,660 14,259
Net Income $ 58,143 $ 52,052 $ 56,919 $ 58,799 $ 53,911
Basic Earnings Per Share $ 1.46 $ 1.30 $ 1.40 $ 1.44 $ 1.30
Diluted Earnings Per Share $ 1.45 $ 1.29 $ 1.40 $ 1.43 $ 1.30
Balance Sheet Totals
Loans and Leases $ 10,990,892 $ 10,881,298 $ 10,759,129 $ 10,548,609 $ 10,448,774
Total Assets 18,095,496 17,672,140 17,688,845 17,446,413 17,143,974
Total Deposits 15,784,482 15,340,752 15,488,821 15,267,310 15,027,242
Total Shareholders' Equity 1,286,832 1,291,490 1,285,948 1,269,690 1,268,200
Performance Ratios
Return on Average Assets 1.29 % 1.17 % 1.31 % 1.38 % 1.26 %
Return on Average Shareholders' Equity 17.84 16.02 17.97 18.81 17.05
Efficiency Ratio^1^ 54.26 58.55 54.69 55.22 57.75
Net Interest Margin ^2^ 2.95 3.01 3.04 3.12 3.10
^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
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Hawaii Economic Trends Table 15
Eleven Months Ended Year Ended
($ in millions; jobs in thousands) November 30, 2019 December 31, 2018 December 31, 2017
Hawaii Economic Trends
State General Fund Revenues^1^ $ 6,749.3 6.0 % $ 6,933.1 6.9 % $ 6,485.0 4.3 %
General Excise and Use Tax Revenue ^1^ $ 3,316.0 5.4 % $ 3,426.5 2.3 % $ 3,349.8 4.5 %
Jobs^2^ 645.3 660.0 664.5
December 31,
(spot rates) 2019 2018 2017
Unemployment ^3^
Statewide, seasonally adjusted 2.6 % 2.6 % 2.3 %
Oahu 2.1 2.2 1.7
Island of Hawaii 3.0 2.9 2.0
Maui 2.2 2.2 1.8
Kauai 2.5 2.3 1.7
December 31,
(percentage change, except months of inventory) 2019 2018 2017 2016
Housing Trends (Single Family Oahu)^4^
Median Home Price (0.1) % 4.6 % 2.7 % 5.0 %
Home Sales Volume (units) 3.9 % (7.7) % 6.3 % 6.5 %
Months of Inventory 2.5 2.8 2.1 2.5
Monthly Visitor Arrivals, Percentage Change
(in thousands) Not Seasonally Adjusted from Previous Year
Tourism ^5^
November 30, 2019 811.4 4.2
October 31, 2019 800.4 4.8
September 30, 2019 741.3 3.5
August 31, 2019 928.2 9.8
July 31, 2019 997.9 6.2
June 30, 2019 951.6 6.1
May 31, 2019 841.4 4.6
April 30, 2019 856.3 6.6
March 31, 2019 939.1 3.9
February 28, 2019 782.6 0.5
January 31, 2019 820.6 3.0
December 31, 2018 910.1 3.4
November 30, 2018 778.5 3.9
October 31, 2018 763.7 3.5
September 30, 2018 716.1 2.2
August 31, 2018 845.1 3.2
July 31, 2018 939.4 5.3
June 30, 2018 897.1 7.3
May 31, 2018 804.1 7.0
April 30, 2018 803.0 6.6
March 31, 2018 903.6 12.5
February 28, 2018 778.6 10.3
January 31, 2018 796.5 5.4
^1^ Source: Hawaii Department of Business, Economic Development & Tourism
^2^ Source: U. S. Bureau of Labor Statistics
^3^ Source: Hawaii Department of Labor and Industrial Relations, County jobs data not seasonally adjusted.
^4^ Source: Honolulu Board of REALTORS
^5^Source: Hawaii Tourism Authority

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