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Bank of Hawai‘i Corporation Third Quarter 2022 Financial Results

  • Diluted Earnings Per Common Share $1.28
  • Net Income $52.8 Million
  • Board of Directors Declares Dividend of $0.70 Per Common Share

Bank of Hawai‘i Corporation (NYSE: BOH) today reported diluted earnings per common share of $1.28 for the third quarter of 2022, compared with diluted earnings per common share of $1.38 in the previous quarter and $1.52 in the same quarter last year. Net income for the third quarter of 2022 was $52.8 million, down 7.1% from the second quarter of 2022 and down 14.9% from the third quarter of 2021. The decrease from the second quarter of 2022 was primarily due to a one-time pre-tax charge of $6.9 million related to our agreement to sell assets that will terminate certain leveraged leases and a decrease in the negative provision for credit losses. The decrease from the third quarter of 2021 was primarily due to the aforementioned charge, a decrease in the negative provision for credit losses and lower PPP income in the current quarter and one-time items in the third quarter of 2021.

This press release features multimedia. View the full release here: https://www.businesswire.com/news/home/20221024005301/en/

“Bank of Hawai‘i continued to perform well during the third quarter of 2022," said Peter Ho, Chairman, President, and CEO. “We experienced quality core market loan growth and continued net interest income and margin expansion. Asset quality, capital, and liquidity remained strong.”

Financial Highlights

  • The return on average assets for the third quarter of 2022 was 0.91% compared with 1.00% in the previous quarter and 1.07% in the same quarter of 2021.
  • The return on average common equity for the third quarter of 2022 was 16.98% compared with 18.19% in the previous quarter and 17.08% in the same quarter of 2021.
  • Net interest income for the third quarter of 2022 was $141.7 million, an increase of 6.6% from the second quarter of 2022 and an increase of 11.7% from the third quarter of 2021. Net interest margin was 2.60% in the third quarter of 2022, an increase of 13 basis points compared to the previous quarter and an increase of 28 basis points from the same quarter of 2021.
    • The increase in net interest income and margin in the third quarter of 2022 compared to prior periods was due to the higher rate environment and continued strong loan growth.
    • Net interest income for the second quarter of 2022 included $1.1 million of interest recoveries.
  • There was no provision for credit losses for the third quarter of 2022 compared with a net benefit of $2.5 million in the previous quarter and a net benefit of $10.4 million in the same quarter of 2021.
  • Noninterest income was $30.7 million in the third quarter of 2022, a decrease of 27.3% from the previous quarter and a decrease of 25.9% from the same quarter of 2021 primarily due to one-time items in the current quarter.
    • Noninterest income in the current quarter included a one-time pre-tax charge of $6.9 million related to our agreement to sell assets that will terminate leveraged leases related to 31 locomotives. The sale and lease termination will complete the Company’s process of exiting the leveraged lease market. In addition, noninterest income in the current quarter also included a negative adjustment of $0.9 million related to a change in the Visa Class B conversion ratio.
  • Noninterest expense was $105.7 million in the third quarter of 2022, an increase of 2.7% from the previous quarter and an increase of 9.6% from the same quarter of 2021.
    • Compared to the same period in 2021, noninterest expense included the impact of higher salaries and benefits, including $1.8 million in separation expenses, and higher occupancy expenses, primarily due to a one-time benefit in the same quarter of last year from the sale of property.
    • 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 separation expenses.
  • The effective tax rate for the third quarter of 2022 was 20.7% compared with 23.8% in the previous quarter and 24.4% during the same quarter of 2021.
    • The lower effective tax rate in the current quarter is primarily due to tax benefits related to the aforementioned agreement to sell assets that will terminate certain leveraged leases.

Asset Quality

The Company’s overall asset quality remained strong during the third quarter of 2022.

  • Total non-performing assets were $13.9 million at September 30, 2022, down by $1.6 million from June 30, 2022 and down $6.8 million from September 30, 2021. Non-performing assets as a percentage of total loans and leases and foreclosed real estate were 0.10% at the end of the quarter, a decrease of 2 basis points from the end of the prior quarter and a decrease of 7 basis points from the same quarter of 2021.
  • Net loan and lease charge-offs during the third quarter of 2022 were $1.1 million or 0.03% annualized of total average loans and leases outstanding.
    • Net loan and lease charge-offs for the third quarter of 2022 were comprised of charge-offs of $2.9 million partially offset by recoveries of $1.7 million.
    • Compared to the prior quarter, net loan and lease charge-offs increased by $0.5 million or 1 basis point annualized on total average loans and leases outstanding.
    • Compared to the same quarter of 2021, net loan and lease charge-offs decreased by $0.05 million or 1 basis point annualized on total average loans and leases outstanding.
  • The allowance for credit losses on loans and leases was $146.4 million at September 30, 2022, a decrease of $2.1 million from June 30, 2022 and a decrease of $21.5 million from September 30, 2021. The ratio of the allowance for credit losses to total loans and leases outstanding was 1.10% at the end of the quarter, down 5 basis points from the end of the prior quarter and down 29 basis points from the end of the same quarter of 2021.

Balance Sheet

  • Total assets were $23.1 billion at September 30, 2022, a decrease of 0.4% from June 30, 2022 and an increase of 0.7% from September 30, 2021.
  • The investment securities portfolio was $7.9 billion at September 30, 2022, a decrease of 4.7% from June 30, 2022 and a decrease of 14.8% from September 30, 2021.
    • During the third quarter, the Company transferred investment securities with total fair value of approximately $1.3 billion from available-for-sale to held-to-maturity.
    • The investment portfolio remains largely comprised of securities issued by U.S. government agencies and U.S. government-sponsored enterprises.
  • Total loans and leases were $13.3 billion at September 30, 2022, an increase of 2.9% from June 30, 2022 and an increase of 10.3% from September 30, 2021.
    • Total loans and leases excluding PPP loans were $13.3 billion at September 30, 2022, an increase of 2.9% from June 30, 2022 and an increase of 12.7% from September 30, 2021.
  • Total deposits were $20.9 billion at September 30, 2022, a decrease of 0.7% from June 30, 2022 and an increase of 1.9% from September 30, 2021.

Capital and Dividends

  • The Tier 1 Capital Ratio was 12.72% at September 30, 2022 compared with 13.01% at June 30, 2022 and 13.47% at September 30, 2021.
  • The Tier 1 Leverage Ratio was 7.28% at September 30, 2022 compared with 7.29% at June 30, 2022 and 7.10% at September 30, 2021.
  • The Company repurchased 187.5 thousand shares of common stock at a total cost of $15.0 million under its share repurchase program in the third quarter of 2022 at an average cost of $79.84 per share repurchased.
    • Total remaining buyback authority under the share repurchase program was $50.9 million at September 30, 2022.
  • The Company’s Board of Directors declared a quarterly cash dividend of $0.70 per share on the Company’s outstanding common shares. The dividend will be payable on December 14, 2022 to shareholders of record at the close of business on November 30, 2022.
  • On October 4, 2022, the Board of Directors declared the quarterly dividend payment of $10.94 per share, equivalent to $0.2735 per depositary share, on its preferred stock. The depositary shares representing the Series A Preferred Stock are traded on the NYSE under the symbol “BOH.PRA.” The dividend will be payable on November 1, 2022 to shareholders of record of the preferred stock at the close of business on October 17, 2022.

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 Hawai‘i Corporation's website, www.boh.com.

Forward-Looking Statements

This news release, and other statements made by the Company in connection with it may contain "forward-looking statements" (as defined in the Private Securities Litigation Reform Act of 1995) that involve risks and uncertainties that could cause results to be materially different from expectations. Forecasts of our financial results and condition, expectations for our operations and business prospects, and our assumptions used in those forecasts and expectations are examples of certain of these forward-looking statements. Do not unduly rely on forward-looking statements. Actual results might differ significantly from our forecasts and expectations because of a variety of factors. More information about these factors is contained in Bank of Hawai‘i Corporation's Annual Report on Form 10-K for the year ended December 31, 2021 and its Form 10-Q for the fiscal quarters ended March 31, 2022 and June 30, 2022, which were filed with the U.S. Securities and Exchange Commission. These forward-looking statements are not guarantees of future performance and speak only as of the date made, and, except as required by law, the Company undertakes no obligation to update or revise any forward-looking statements to reflect subsequent events, new information or future circumstances.

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

Bank of 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)

2022

 

2022

 

2021

 

2022

 

2021

For the Period:
Operating Results
Net Interest Income

$

141,655

$

132,902

 

$

126,819

 

$

399,820

 

$

370,902

 

Provision for Credit Losses

 

-

 

(2,500

)

 

(10,400

)

 

(8,000

)

 

(40,800

)

Total Noninterest Income

 

30,660

 

42,158

 

 

41,378

 

 

116,369

 

 

128,779

 

Total Noninterest Expense

 

105,749

 

102,939

 

 

96,519

 

 

312,562

 

 

291,911

 

Pre-Provision Net Revenue

 

66,566

 

72,121

 

 

71,678

 

 

203,627

 

 

207,770

 

Net Income

 

52,801

 

56,862

 

 

62,053

 

 

164,497

 

 

189,535

 

Net Income Available to Common Shareholders

 

50,832

 

54,893

 

 

61,047

 

 

158,590

 

 

188,529

 

Basic Earnings Per Common Share

 

1.28

 

1.38

 

 

1.53

 

 

4.00

 

 

4.73

 

Diluted Earnings Per Common Share

 

1.28

 

1.38

 

 

1.52

 

 

3.98

 

 

4.70

 

Dividends Declared Per Common Share

 

0.70

 

0.70

 

 

0.70

 

 

2.10

 

 

2.04

 

 
Performance Ratios
Return on Average Assets

 

0.91

%

 

1.00

%

 

1.07

%

 

0.96

%

 

1.15

%

Return on Average Shareholders' Equity

 

15.31

 

16.40

 

 

15.41

 

 

15.25

 

 

17.31

 

Return on Average Common Equity

 

16.98

 

18.19

 

 

17.08

 

 

16.81

 

 

18.10

 

Efficiency Ratio 1

 

61.37

 

58.80

 

 

57.38

 

 

60.55

 

 

58.42

 

Net Interest Margin 2

 

2.60

 

2.47

 

 

2.32

 

 

2.47

 

 

2.37

 

Dividend Payout Ratio 3

 

54.69

 

50.72

 

 

45.75

 

 

52.50

 

 

43.13

 

Average Shareholders' Equity to Average Assets

 

5.91

 

6.08

 

 

6.95

 

 

6.28

 

 

6.63

 

 
Average Balances
Average Loans and Leases

$

13,126,717

$

12,700,825

 

$

11,958,321

 

$

12,709,045

 

$

12,002,426

 

Average Assets

 

23,135,820

 

22,891,262

 

 

22,993,036

 

 

22,959,246

 

 

22,079,174

 

Average Deposits

 

20,863,681

 

20,569,363

 

 

20,473,777

 

 

20,621,310

 

 

19,619,053

 

Average Shareholders' Equity

 

1,367,946

 

1,390,653

 

 

1,598,076

 

 

1,441,706

 

 

1,463,566

 

 
Per Share of Common Stock
Book Value 4

$

27.55

$

29.09

 

$

35.16

 

$

27.55

 

$

35.16

 

Tangible Book Value

 

26.76

 

28.30

 

 

34.38

 

 

26.76

 

 

34.38

 

Market Value
Closing

 

76.12

 

74.40

 

 

82.17

 

 

76.12

 

 

82.17

 

High

 

85.45

 

84.93

 

 

87.12

 

 

92.38

 

 

99.10

 

Low

 

70.89

 

70.97

 

 

75.68

 

 

70.89

 

 

75.65

 

 

September 30,

 

June 30,

 

December 31,

 

September 30,

2022

 

2022

 

2021

 

2021

As of Period End:
Balance Sheet Totals
Loans and Leases

$

13,321,606

 

$

12,951,573

 

$

12,259,076

 

$

12,072,750

 

Total Assets

 

23,134,040

 

 

23,232,699

 

 

22,784,941

 

 

22,965,383

 

Total Deposits

 

20,888,773

 

 

21,025,681

 

 

20,360,108

 

 

20,493,678

 

Other Debt

 

10,319

 

 

10,343

 

 

10,391

 

 

10,414

 

Total Shareholders' Equity

 

1,282,384

 

 

1,348,746

 

 

1,611,611

 

 

1,597,109

 

 
Asset Quality
Non-Performing Assets

$

13,868

 

$

15,493

 

$

18,966

 

$

20,620

 

Allowance for Credit Losses - Loans and Leases

 

146,436

 

 

148,512

 

 

157,821

 

 

167,920

 

Allowance to Loans and Leases Outstanding 5

 

1.10

%

 

1.15

%

 

1.29

%

 

1.39

%

 
Capital Ratios 6
Common Equity Tier 1 Capital Ratio

 

11.42

%

 

11.66

%

 

12.12

%

 

12.02

%

Tier 1 Capital Ratio

 

12.72

 

 

13.01

 

 

13.56

 

 

13.47

 

Total Capital Ratio

 

13.82

 

 

14.14

 

 

14.81

 

 

14.72

 

Tier 1 Leverage Ratio

 

7.28

 

 

7.29

 

 

7.32

 

 

7.10

 

Total Shareholders' Equity to Total Assets

 

5.54

 

 

5.81

 

 

7.07

 

 

6.95

 

Tangible Common Equity to Tangible Assets 7

 

4.64

 

 

4.90

 

 

6.15

 

 

6.04

 

Tangible Common Equity to Risk-Weighted Assets 7

 

7.97

 

 

8.72

 

 

11.44

 

 

11.46

 

 
Non-Financial Data
Full-Time Equivalent Employees

 

2,115

 

 

2,114

 

 

2,056

 

 

2,049

 

Branches

 

51

 

 

54

 

 

54

 

 

54

 

ATMs

 

316

 

 

310

 

 

307

 

 

303

 

1 Efficiency ratio is defined as noninterest expense divided by total revenue (net interest income and total noninterest income).
2 Net interest margin is defined as net interest income, on a taxable-equivalent basis, as a percentage of average earning assets.
3 Dividend payout ratio is defined as dividends declared per common share divided by basic earnings per common share.
4 Book Value was revised from $35.30 for the three months ended and nine months ended September 30, 2021.
5 The numerator comprises the Allowance for Credit Losses - Loans and Leases.
6 Regulatory capital ratios as of September 30, 2022 are preliminary.
7 Tangible common equity to tangible assets and tangible common equity to risk-weighted assets are Non-GAAP financial measures.
Tangible common equity is defined by the Company as common shareholders' equity minus goodwill.
See Table 2 "Reconciliation of Non-GAAP Financial Measures"
Bank of Hawaii Corporation and Subsidiaries
Reconciliation of Non-GAAP Financial Measures Table 2

September 30,

 

June 30,

 

December 31,

 

September 30,

(dollars in thousands)

2022

 

2022

 

2021

 

2021

 
Total Shareholders' Equity

$

1,282,384

 

$

1,348,746

 

$

1,611,611

 

$

1,597,109

 

Less: Preferred Stock

 

180,000

 

 

180,000

 

 

180,000

 

 

180,000

 

Goodwill

 

31,517

 

 

31,517

 

 

31,517

 

 

31,517

 

Tangible Common Equity

$

1,070,867

 

$

1,137,229

 

$

1,400,094

 

$

1,385,592

 

 
Total Assets

 

23,134,040

 

 

23,232,699

 

 

22,784,941

 

 

22,965,383

 

Less: Goodwill

 

31,517

 

 

31,517

 

 

31,517

 

 

31,517

 

Tangible Assets

$

23,102,523

 

$

23,201,182

 

$

22,753,424

 

$

22,933,866

 

 
Risk-Weighted Assets, determined in accordance with prescribed regulatory requirements 1

$

13,428,188

 

$

13,038,852

 

$

12,236,805

 

$

12,093,010

 

 
Total Shareholders' Equity to Total Assets

 

5.54

%

 

5.81

%

 

7.07

%

 

6.95

%

Tangible Common Equity to Tangible Assets (Non-GAAP)

 

4.64

%

 

4.90

%

 

6.15

%

 

6.04

%

 
Tier 1 Capital Ratio 1

 

12.72

%

 

13.01

%

 

13.56

%

 

13.47

%

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

 

7.97

%

 

8.72

%

 

11.44

%

 

11.46

%

1 Regulatory capital ratios as of September 30, 2022 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)

2022

 

2022

 

2021

 

2022

 

2021

Interest Income
Interest and Fees on Loans and Leases

$

115,013

 

$

101,663

 

$

100,570

 

$

311,115

 

$

300,763

 

Income on Investment Securities
Available-for-Sale

 

16,995

 

 

17,984

 

 

16,396

 

 

52,079

 

 

48,700

 

Held-to-Maturity

 

20,243

 

 

18,838

 

 

16,754

 

 

57,782

 

 

43,630

 

Deposits

 

10

 

 

5

 

 

2

 

 

19

 

 

9

 

Funds Sold

 

2,335

 

 

719

 

 

382

 

 

3,181

 

 

779

 

Other

 

322

 

 

353

 

 

159

 

 

877

 

 

526

 

Total Interest Income

 

154,918

 

 

139,562

 

 

134,263

 

 

425,053

 

 

394,407

 

Interest Expense
Deposits

 

10,296

 

 

3,535

 

 

3,837

 

 

16,184

 

 

12,318

 

Securities Sold Under Agreements to Repurchase

 

2,745

 

 

2,794

 

 

3,423

 

 

8,311

 

 

10,426

 

Funds Purchased

 

40

 

 

57

 

 

-

 

 

99

 

 

1

 

Short-Term Borrowings

 

-

 

 

92

 

 

-

 

 

92

 

 

-

 

Other Debt

 

182

 

 

182

 

 

184

 

 

547

 

 

760

 

Total Interest Expense

 

13,263

 

 

6,660

 

 

7,444

 

 

25,233

 

 

23,505

 

Net Interest Income

 

141,655

 

 

132,902

 

 

126,819

 

 

399,820

 

 

370,902

 

Provision for Credit Losses

 

-

 

 

(2,500

)

 

(10,400

)

 

(8,000

)

 

(40,800

)

Net Interest Income After Provision for Credit Losses

 

141,655

 

 

135,402

 

 

137,219

 

 

407,820

 

 

411,702

 

Noninterest Income
Trust and Asset Management

 

10,418

 

 

11,457

 

 

11,415

 

 

33,151

 

 

34,375

 

Mortgage Banking

 

1,002

 

 

1,247

 

 

3,136

 

 

4,989

 

 

12,056

 

Service Charges on Deposit Accounts

 

7,526

 

 

7,309

 

 

6,510

 

 

22,107

 

 

18,703

 

Fees, Exchange, and Other Service Charges

 

13,863

 

 

14,193

 

 

13,604

 

 

41,008

 

 

41,018

 

Investment Securities Losses, Net

 

(2,147

)

 

(1,295

)

 

(1,259

)

 

(4,987

)

 

(39

)

Annuity and Insurance

 

1,034

 

 

870

 

 

735

 

 

2,695

 

 

2,348

 

Bank-Owned Life Insurance

 

2,486

 

 

2,658

 

 

1,897

 

 

7,493

 

 

5,877

 

Other

 

(3,522

)

 

5,719

 

 

5,340

 

 

9,913

 

 

14,441

 

Total Noninterest Income

 

30,660

 

 

42,158

 

 

41,378

 

 

116,369

 

 

128,779

 

Noninterest Expense
Salaries and Benefits

 

59,938

 

 

57,769

 

 

56,447

 

 

177,631

 

 

168,859

 

Net Occupancy

 

10,186

 

 

9,930

 

 

3,079

 

 

29,942

 

 

17,216

 

Net Equipment

 

9,736

 

 

9,543

 

 

8,924

 

 

28,432

 

 

26,598

 

Data Processing

 

4,616

 

 

4,607

 

 

4,722

 

 

13,783

 

 

15,601

 

Professional Fees

 

3,799

 

 

3,542

 

 

2,948

 

 

10,599

 

 

9,468

 

FDIC Insurance

 

1,680

 

 

1,590

 

 

1,594

 

 

4,772

 

 

4,917

 

Other

 

15,794

 

 

15,958

 

 

18,805

 

 

47,403

 

 

49,252

 

Total Noninterest Expense

 

105,749

 

 

102,939

 

 

96,519

 

 

312,562

 

 

291,911

 

Income Before Provision for Income Taxes

 

66,566

 

 

74,621

 

 

82,078

 

 

211,627

 

 

248,570

 

Provision for Income Taxes

 

13,765

 

 

17,759

 

 

20,025

 

 

47,130

 

 

59,035

 

Net Income

$

52,801

 

$

56,862

 

$

62,053

 

$

164,497

 

$

189,535

 

Preferred Stock Dividends

 

1,969

 

 

1,969

 

 

1,006

 

 

5,908

 

 

1,006

 

Net Income Available to Common Shareholders

$

50,832

 

$

54,893

 

$

61,047

 

$

158,589

 

$

188,529

 

Basic Earnings Per Common Share

$

1.28

 

$

1.38

 

$

1.53

 

$

4.00

 

$

4.73

 

Diluted Earnings Per Common Share

$

1.28

 

$

1.38

 

$

1.52

 

$

3.98

 

$

4.70

 

Dividends Declared Per Common Share

$

0.70

 

$

0.70

 

$

0.70

 

$

2.10

 

$

2.04

 

Basic Weighted Average Common Shares

 

39,567,047

 

 

39,693,593

 

 

39,881,437

 

 

39,670,409

 

 

39,870,450

 

Diluted Weighted Average Common Shares

 

39,758,209

 

 

39,842,608

 

 

40,080,919

 

 

39,848,795

 

 

40,088,899

 

 
Bank of Hawaii Corporation and Subsidiaries
Consolidated Statements of Comprehensive Income (Loss) Table 4

Three Months Ended

 

Nine Months Ended

September 30,

 

June 30,

 

September 30,

 

September 30,

(dollars in thousands)

2022

 

2022

 

2021

 

2022

 

2021

Net Income

$

52,801

 

$

56,862

 

$

62,053

 

$

164,497

 

$

189,535

 

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

 

(79,600

)

 

(122,647

)

 

(7,541

)

 

(382,371

)

 

(57,714

)

Defined Benefit Plans

 

354

 

 

352

 

 

441

 

 

1,059

 

 

1,324

 

Other Comprehensive Loss

 

(79,246

)

 

(122,295

)

 

(7,100

)

 

(381,312

)

 

(56,390

)

Comprehensive Income (Loss)

$

(26,445

)

$

(65,433

)

$

54,953

 

$

(216,815

)

$

133,145

 

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

September 30,

 

June 30,

 

December 31,

 

September 30,

(dollars in thousands)

2022

 

2022

 

2021

 

2021

Assets
Interest-Bearing Deposits in Other Banks

$

5,429

 

$

2,264

 

$

2,571

 

$

2,188

 

Funds Sold

 

402,714

 

 

576,430

 

 

361,536

 

 

422,063

 

Investment Securities
Available-for-Sale

 

2,424,608

 

 

3,955,476

 

 

4,276,056

 

 

4,353,520

 

Held-to-Maturity (Fair Value of $4,668,074; $3,823,739; $4,646,619; and $4,895,763)

 

5,461,160

 

 

4,321,693

 

 

4,694,780

 

 

4,899,880

 

Loans Held for Sale

 

418

 

 

4,514

 

 

26,746

 

 

21,965

 

Loans and Leases

 

13,321,606

 

 

12,951,573

 

 

12,259,076

 

 

12,072,750

 

Allowance for Credit Losses

 

(146,436

)

 

(148,512

)

 

(157,821

)

 

(167,920

)

Net Loans and Leases

 

13,175,170

 

 

12,803,061

 

 

12,101,255

 

 

11,904,830

 

Total Earning Assets

 

21,469,499

 

 

21,663,438

 

 

21,462,944

 

 

21,604,446

 

Cash and Due from Banks

 

247,506

 

 

260,672

 

 

196,327

 

 

231,711

 

Premises and Equipment, Net

 

208,251

 

 

202,063

 

 

199,393

 

 

199,144

 

Operating Lease Right-of-Use Assets

 

94,613

 

 

91,901

 

 

95,621

 

 

97,007

 

Accrued Interest Receivable

 

50,143

 

 

47,141

 

 

45,242

 

 

46,751

 

Foreclosed Real Estate

 

1,040

 

 

2,332

 

 

2,332

 

 

2,332

 

Mortgage Servicing Rights

 

23,104

 

 

23,540

 

 

22,251

 

 

22,099

 

Goodwill

 

31,517

 

 

31,517

 

 

31,517

 

 

31,517

 

Bank-Owned Life Insurance

 

451,407

 

 

448,925

 

 

344,587

 

 

293,230

 

Other Assets

 

556,960

 

 

461,170

 

 

384,727

 

 

437,146

 

Total Assets

$

23,134,040

 

$

23,232,699

 

$

22,784,941

 

$

22,965,383

 

 
Liabilities
Deposits
Noninterest-Bearing Demand

$

7,300,157

 

$

7,374,055

 

$

7,275,287

 

$

7,111,693

 

Interest-Bearing Demand

 

4,399,625

 

 

4,339,520

 

 

4,628,567

 

 

4,768,725

 

Savings

 

7,954,006

 

 

8,054,899

 

 

7,456,165

 

 

7,540,345

 

Time

 

1,234,985

 

 

1,257,207

 

 

1,000,089

 

 

1,072,915

 

Total Deposits

 

20,888,773

 

 

21,025,681

 

 

20,360,108

 

 

20,493,678

 

Securities Sold Under Agreements to Repurchase

 

425,490

 

 

425,490

 

 

450,490

 

 

450,490

 

Other Debt

 

10,319

 

 

10,343

 

 

10,391

 

 

10,414

 

Operating Lease Liabilities

 

102,705

 

 

99,722

 

 

103,210

 

 

104,452

 

Retirement Benefits Payable

 

37,053

 

 

37,532

 

 

38,494

 

 

49,802

 

Accrued Interest Payable

 

3,405

 

 

2,545

 

 

2,499

 

 

3,415

 

Taxes Payable

 

13,527

 

 

10,607

 

 

11,901

 

 

9,815

 

Other Liabilities

 

370,384

 

 

272,033

 

 

196,237

 

 

246,208

 

Total Liabilities

 

21,851,656

 

 

21,883,953

 

 

21,173,330

 

 

21,368,274

 

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

 

180,000

 

 

180,000

 

 

180,000

 

 

180,000

 

Common Stock ($.01 par value; authorized 500,000,000 shares; issued / outstanding: September 30, 2022 - 58,728,796 / 40,011,473; June 30, 2022 - 58,727,909 / 40,182,659; December 31, 2021 - 58,554,669 / 40,253,193; and September 30, 2021 - 58,559,089 / 40,305,801)

 

582

 

 

582

 

 

581

 

 

580

 

Capital Surplus

 

615,985

 

 

611,694

 

 

602,508

 

 

598,341

 

Accumulated Other Comprehensive Loss

 

(447,694

)

 

(368,448

)

 

(66,382

)

 

(48,568

)

Retained Earnings

 

2,024,641

 

 

2,002,005

 

 

1,950,375

 

 

1,916,861

 

Treasury Stock, at Cost (Shares: September 30, 2022 - 18,717,323; June 30, 2022 - 18,545,250; December 31, 2021 - 18,301,476; and September 30, 2021 - 18,253,288)

 

(1,091,130

)

 

(1,077,087

)

 

(1,055,471

)

 

(1,050,105

)

Total Shareholders' Equity

 

1,282,384

 

 

1,348,746

 

 

1,611,611

 

 

1,597,109

 

Total Liabilities and Shareholders' Equity

$

23,134,040

 

$

23,232,699

 

$

22,784,941

 

$

22,965,383

 

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

 

 

 

 

 

 

 

 

 

 

Other

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Compre-

 

 

 

 

 

 

Preferred

 

 

 

Common

 

 

 

 

 

hensive

 

 

 

 

 

 

Shares

 

Preferred

 

Shares

 

Common

 

Capital

 

Income

 

Retained

 

Treasury

 

 

(dollars in thousands)

Outstanding

 

Stock

 

Outstanding

 

Stock

 

Surplus

 

(Loss)

 

Earnings

 

Stock

 

Total

Balance as of December 31, 2021

180,000

$

180,000

40,253,193

 

$

581

$

602,508

 

$

(66,382

)

$

1,950,375

 

$

(1,055,471

)

$

1,611,611

 

Net Income

-

 

-

-

 

 

-

 

-

 

 

-

 

 

164,497

 

 

-

 

 

164,497

 

Other Comprehensive Loss

-

 

-

-

 

 

-

 

-

 

 

(381,312

)

 

-

 

 

-

 

 

(381,312

)

Share-Based Compensation

-

 

-

-

 

 

-

 

11,947

 

 

-

 

 

-

 

 

-

 

 

11,947

 

Common Stock Issued under Purchase and Equity Compensation Plans

-

 

-

247,966

 

 

1

 

1,530

 

 

-

 

 

256

 

 

3,889

 

 

5,676

 

Common Stock Repurchased

-

 

-

(489,686

)

 

-

 

-

 

 

-

 

 

-

 

 

(39,548

)

 

(39,548

)

Cash Dividends Declared Common Stock ($2.10 per share)

-

 

-

-

 

 

-

 

-

 

 

-

 

 

(84,579

)

 

-

 

 

(84,579

)

Cash Dividends Declared Preferred Stock

-

 

-

-

 

 

-

 

-

 

 

-

 

 

(5,908

)

 

-

 

 

(5,908

)

Balance as of September 30, 2022

180,000

$

180,000

40,011,473

 

$

582

$

615,985

 

$

(447,694

)

$

2,024,641

 

$

(1,091,130

)

$

1,282,384

 

 
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

 

 
Bank of Hawaii Corporation and Subsidiaries
Average Balances and Interest Rates - Taxable-Equivalent Basis 1 Table 7a
Three Months Ended Three Months Ended Three Months Ended
September 30, 2022 June 30, 2022 September 30, 2021
Average Income/ Yield/ Average Income/ Yield/ Average Income/ Yield/
(dollars in millions) Balance Expense 2 Rate Balance Expense 2 Rate Balance Expense 2 Rate
Earning Assets
Interest-Bearing Deposits in Other Banks

$

2.9

$

-

1.32

%

$

3.5

$

-

0.59

%

$

3.2

$

-

0.23

%

Funds Sold

 

411.8

 

2.3

2.22

 

273.5

 

0.7

1.04

 

999.5

 

0.4

0.15

Investment Securities
Available-for-Sale
Taxable

 

3,481.9

 

17.0

1.95

 

4,123.1

 

18.0

1.74

 

4,454.9

 

16.3

1.46

Non-Taxable

 

2.5

 

-

1.56

 

2.9

 

-

1.99

 

10.1

 

0.1

4.34

Held-to-Maturity
Taxable

 

4,645.7

 

20.1

1.73

 

4,377.0

 

18.7

1.71

 

4,294.6

 

16.5

1.53

Non-Taxable

 

35.6

 

0.2

2.10

 

35.7

 

0.2

2.10

 

64.8

 

0.4

2.37

Total Investment Securities

 

8,165.7

 

37.3

1.82

 

8,538.7

 

36.9

1.73

 

8,824.4

 

33.3

1.51

Loans Held for Sale

 

4.3

 

0.1

4.46

 

6.3

 

0.1

4.06

 

24.6

 

0.2

2.80

Loans and Leases 3
Commercial and Industrial

 

1,353.8

 

12.5

3.66

 

1,330.0

 

9.9

2.99

 

1,252.8

 

9.1

2.88

Paycheck Protection Program

 

28.0

 

0.2

3.02

 

38.7

 

0.5

5.26

 

392.0

 

7.9

7.98

Commercial Mortgage

 

3,530.9

 

33.3

3.74

 

3,357.2

 

26.2

3.13

 

2,952.7

 

21.9

2.94

Construction

 

233.0

 

2.8

4.81

 

222.6

 

2.4

4.39

 

289.9

 

2.5

3.38

Commercial Lease Financing

 

89.1

 

0.4

1.58

 

94.2

 

0.3

1.44

 

109.3

 

0.4

1.58

Residential Mortgage

 

4,526.6

 

37.4

3.30

 

4,445.7

 

36.4

3.26

 

4,253.2

 

34.8

3.27

Home Equity

 

2,144.8

 

16.4

3.04

 

2,032.9

 

14.4

2.85

 

1,621.4

 

12.2

2.97

Automobile

 

795.5

 

6.4

3.19

 

759.1

 

6.1

3.20

 

718.7

 

6.2

3.41

Other 4

 

425.0

 

5.9

5.48

 

420.4

 

5.6

5.38

 

368.3

 

5.7

6.16

Total Loans and Leases

 

13,126.7

 

115.3

3.49

 

12,700.8

 

101.8

3.21

 

11,958.3

 

100.7

3.35

Other

 

36.9

 

0.3

3.49

 

38.2

 

0.3

3.70

 

31.5

 

0.2

2.02

Total Earning Assets

 

21,748.3

 

155.3

2.84

 

21,561.0

 

139.8

2.60

 

21,841.5

 

134.8

2.45

Cash and Due from Banks

 

233.5

 

238.4

 

252.2

Other Assets

 

1,154.0

 

1,091.9

 

899.3

Total Assets

$

23,135.8

$

22,891.3

$

22,993.0

 
Interest-Bearing Liabilities
Interest-Bearing Deposits
Demand

$

4,286.0

 

1.4

0.13

$

4,442.2

 

0.7

0.06

$

4,707.1

 

0.7

0.06

Savings

 

7,962.0

 

6.6

0.33

 

7,692.8

 

1.9

0.10

 

7,687.0

 

1.8

0.09

Time

 

1,146.9

 

2.3

0.79

 

950.4

 

0.9

0.40

 

1,267.0

 

1.4

0.44

Total Interest-Bearing Deposits

 

13,394.9

 

10.3

0.30

 

13,085.4

 

3.5

0.11

 

13,661.1

 

3.9

0.11

Short-Term Borrowings

 

4.9

 

0.1

3.17

 

59.8

 

0.1

0.98

 

-

 

-

-

Securities Sold Under Agreements to Repurchase

 

425.5

 

2.7

2.52

 

447.7

 

2.8

2.47

 

547.8

 

3.4

2.45

Other Debt

 

10.3

 

0.2

7.05

 

10.4

 

0.3

7.05

 

10.4

 

0.2

7.04

Total Interest-Bearing Liabilities

 

13,835.6

 

13.3

0.38

 

13,603.3

 

6.7

0.20

 

14,219.3

 

7.5

0.21

Net Interest Income

$

142.0

$

133.1

$

127.3

Interest Rate Spread

2.46

%

2.40

%

2.24

%

Net Interest Margin

2.60

%

2.47

%

2.32

%

Noninterest-Bearing Demand Deposits

 

7,468.8

 

7,484.0

 

6,812.7

Other Liabilities

 

463.5

 

413.3

 

362.9

Shareholders' Equity

 

1,367.9

 

1,390.7

 

1,598.1

Total Liabilities and Shareholders' Equity

$

23,135.8

$

22,891.3

$

22,993.0

1 Due to rounding, the amounts presented in this table may not tie to other amounts presented elsewhere in this report.
2 Interest income includes taxable-equivalent basis adjustments, based upon a federal statutory tax rate of 21%, of $343,000, $221,000, and $315,000
for the three months ended September 30, 2022, June 30, 2022, and September 30, 2021, respectively.
3 Non-performing loans and leases are included in the respective average loan and lease balances. Income, if any, on such loans and leases is recognized on a cash basis.
4 Comprised of other consumer revolving credit, installment, and consumer lease financing.
Bank of Hawaii Corporation and Subsidiaries          
Average Balances and Interest Rates - Taxable-Equivalent Basis 1   Table 7b

Nine Months Ended

 

 

Nine Months Ended

September 30, 2022

 

 

September 30, 2021

Average

 

Income/

 

Yield/

 

Average

 

Income/

 

Yield/

(dollars in millions)

Balance

 

Expense 2

 

Rate

 

Balance

 

Expense 2

 

Rate

Earning Assets          
Interest-Bearing Deposits in Other Banks

$

3.3

 

$

-

 

0.76

%

 

$

2.9

 

$

-

 

0.44

%

Funds Sold

 

308.6

 

 

3.2

 

1.36

 

 

833.7

 

 

0.8

 

0.12

Investment Securities          
Available-for-Sale          
Taxable

 

3,998.2

 

 

52.0

 

1.74

 

 

4,252.9

 

 

48.4

 

1.52

Non-Taxable

 

2.8

 

 

-

 

1.84

 

 

11.5

 

 

0.4

 

4.29

Held-to-Maturity          
Taxable

 

4,530.4

 

 

57.4

 

1.69

 

 

3,728.9

 

 

42.9

 

1.53

Non-Taxable

 

35.7

 

 

0.6

 

2.10

 

 

48.2

 

 

0.9

 

2.46

Total Investment Securities

 

8,567.1

 

 

110.0

 

1.71

 

 

8,041.5

 

 

92.6

 

1.54

Loans Held for Sale

 

8.1

 

 

0.2

 

3.43

 

 

25.5

 

 

0.5

 

2.81

Loans and Leases 3          
Commercial and Industrial

 

1,339.0

 

 

31.4

 

3.13

 

 

1,281.0

 

 

28.1

 

2.94

Paycheck Protection Program

 

51.7

 

 

2.5

 

6.59

 

 

545.9

 

 

20.0

 

4.90

Commercial Mortgage

 

3,350.3

 

 

81.3

 

3.25

 

 

2,894.5

 

 

64.5

 

2.98

Construction

 

227.7

 

 

7.3

 

4.30

 

 

280.0

 

 

7.3

 

3.51

Commercial Lease Financing

 

94.0

 

 

1.0

 

1.49

 

 

107.1

 

 

1.2

 

1.52

Residential Mortgage

 

4,439.1

 

 

108.6

 

3.26

 

 

4,211.8

 

 

106.2

 

3.36

Home Equity

 

2,026.5

 

 

44.1

 

2.91

 

 

1,596.4

 

 

36.9

 

3.09

Automobile

 

764.2

 

 

18.4

 

3.21

 

 

712.5

 

 

18.4

 

3.46

Other 4

 

416.5

 

 

17.0

 

5.44

 

 

373.2

 

 

18.1

 

6.48

Total Loans and Leases

 

12,709.0

 

 

311.6

 

3.27

 

 

12,002.4

 

 

300.7

 

3.35

Other

 

37.2

 

 

0.9

 

3.14

 

 

32.4

 

 

0.5

 

2.17

Total Earning Assets

 

21,633.3

 

 

425.9

 

2.63

 

 

20,938.4

 

 

395.1

 

2.52

Cash and Due from Banks

 

235.0

     

 

259.6

   
Other Assets

 

1,090.9

     

 

881.2

   
Total Assets

$

22,959.2

     

$

22,079.2

   
           
Interest-Bearing Liabilities          
Interest-Bearing Deposits          
Demand

$

4,459.9

 

 

2.6

 

0.08

 

$

4,450.6

 

 

2.0

 

0.06

Savings

 

7,733.3

 

 

9.5

 

0.16

 

 

7,414.6

 

 

5.0

 

0.09

Time

 

1,023.6

 

 

4.1

 

0.53

 

 

1,437.1

 

 

5.3

 

0.49

Total Interest-Bearing Deposits

 

13,216.8

 

 

16.2

 

0.16

 

 

13,302.3

 

 

12.3

 

0.12

Short-Term Borrowings

 

23.9

 

 

0.2

 

1.05

 

 

0.8

 

 

-

 

0.09

Securities Sold Under Agreements to Repurchase

 

441.1

 

 

8.3

 

2.48

 

 

572.7

 

 

10.4

 

2.40

Other Debt

 

10.3

 

 

0.6

 

7.05

 

 

33.5

 

 

0.8

 

3.03

Total Interest-Bearing Liabilities

 

13,692.1

 

 

25.3

 

0.25

 

 

13,909.3

 

 

23.5

 

0.22

Net Interest Income  

$

400.6

     

$

371.6

 
Interest Rate Spread    

2.38

%

     

2.30

%

Net Interest Margin    

2.47

%

     

2.37

%

Noninterest-Bearing Demand Deposits

 

7,404.5

     

 

6,316.8

   
Other Liabilities

 

420.9

     

 

389.5

   
Shareholders' Equity

 

1,441.7

     

 

1,463.6

   
Total Liabilities and Shareholders' Equity

$

22,959.2

     

$

22,079.2

   
1 Due to rounding, the amounts presented in this table may not tie to other amounts presented elsewhere in this report.
2 Interest income includes taxable-equivalent basis adjustments, based upon a federal statutory tax rate of 21%, of $818,000 and $836,000
for nine months ended September 30, 2022 and September 30, 2021, respectively.
3 Non-performing loans and leases are included in the respective average loan and lease balances. Income, if any, on such loans and leases is recognized on a cash basis.
4 Comprised of other consumer revolving credit, installment, and consumer lease financing.
 
Bank of Hawaii Corporation and Subsidiaries
Analysis of Change in Net Interest Income - Taxable-Equivalent Basis Table 8a

Three Months Ended September 30, 2022

Compared to June 30, 2022

(dollars in millions)

Volume 1

 

Rate 1

 

Total

Change in Interest Income:
Funds Sold

$

0.5

 

$

1.1

 

$

1.6

 

Investment Securities
Available-for-Sale
Taxable

 

(3.0

)

 

2.0

 

 

(1.0

)

Held-to-Maturity
Taxable

 

1.2

 

 

0.2

 

 

1.4

 

Total Investment Securities

 

(1.8

)

 

2.2

 

 

0.4

 

Loans and Leases
Commercial and Industrial

 

0.2

 

 

2.4

 

 

2.6

 

Paycheck Protection Program

 

(0.1

)

 

(0.2

)

 

(0.3

)

Commercial Mortgage

 

1.5

 

 

5.6

 

 

7.1

 

Construction

 

0.1

 

 

0.3

 

 

0.4

 

Commercial Lease Financing

 

0.1

 

 

-

 

 

0.1

 

Residential Mortgage

 

0.6

 

 

0.4

 

 

1.0

 

Home Equity

 

0.9

 

 

1.1

 

 

2.0

 

Automobile

 

0.3

 

 

-

 

 

0.3

 

Other 2

 

0.1

 

 

0.2

 

 

0.3

 

Total Loans and Leases

 

3.7

 

 

9.8

 

 

13.5

 

Total Change in Interest Income

 

2.4

 

 

13.1

 

 

15.5

 

 
Change in Interest Expense:
Interest-Bearing Deposits
Demand

 

-

 

 

0.7

 

 

0.7

 

Savings

 

0.1

 

 

4.6

 

 

4.7

 

Time

 

0.2

 

 

1.2

 

 

1.4

 

Total Interest-Bearing Deposits

 

0.3

 

 

6.5

 

 

6.8

 

Short-Term Borrowings

 

(0.2

)

 

0.2

 

 

-

 

Securities Sold Under Agreements to Repurchase

 

(0.2

)

 

0.1

 

 

(0.1

)

Other Debt

 

-

 

 

(0.1

)

 

(0.1

)

Total Change in Interest Expense

 

(0.1

)

 

6.7

 

 

6.6

 

 
Change in Net Interest Income

$

2.5

 

$

6.4

 

$

8.9

 

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, 2022

Compared to September 30, 2021

(dollars in millions)

Volume 1

Rate 1

Total

Change in Interest Income:
Funds Sold

$

(0.4

)

$

2.3

 

$

1.9

 

Investment Securities
Available-for-Sale
Taxable

 

(4.0

)

 

4.7

 

 

0.7

 

Non-Taxable

 

(0.1

)

 

-

 

 

(0.1

)

Held-to-Maturity
Taxable

 

1.4

 

 

2.2

 

 

3.6

 

Non-Taxable

 

(0.2

)

 

-

 

 

(0.2

)

Total Investment Securities

 

(2.9

)

 

6.9

 

 

4.0

 

Loans Held for Sale

 

(0.2

)

 

0.1

 

 

(0.1

)

Loans and Leases
Commercial and Industrial

 

0.8

 

 

2.6

 

 

3.4

 

Paycheck Protection Program

 

(4.6

)

 

(3.1

)

 

(7.7

)

Commercial Mortgage

 

4.8

 

 

6.6

 

 

11.4

 

Construction

 

(0.6

)

 

0.9

 

 

0.3

 

Commercial Lease Financing

 

(0.1

)

 

0.1

 

 

-

 

Residential Mortgage

 

2.3

 

 

0.3

 

 

2.6

 

Home Equity

 

4.0

 

 

0.2

 

 

4.2

 

Automobile

 

0.6

 

 

(0.4

)

 

0.2

 

Other 2

 

0.9

 

 

(0.7

)

 

0.2

 

Total Loans and Leases

 

8.1

 

 

6.5

 

 

14.6

 

Other

 

-

 

 

0.1

 

 

0.1

 

Total Change in Interest Income

 

4.6

 

 

15.9

 

 

20.5

 

 
Change in Interest Expense:
Interest-Bearing Deposits
Demand

 

(0.1

)

 

0.8

 

 

0.7

 

Savings

 

0.1

 

 

4.7

 

 

4.8

 

Time

 

(0.1

)

 

1.0

 

 

0.9

 

Total Interest-Bearing Deposits

 

(0.1

)

 

6.5

 

 

6.4

 

Short-Term Borrowings

 

0.1

 

 

-

 

 

0.1

 

Securities Sold Under Agreements to Repurchase

 

(0.8

)

 

0.1

 

 

(0.7

)

Total Change in Interest Expense

 

(0.8

)

 

6.6

 

 

5.8

 

 
Change in Net Interest Income

$

5.4

 

$

9.3

 

$

14.7

 

1 The change in interest income and expense not solely due to changes in volume or rate has been allocated on a pro-rata basis to the volume and rate columns.
2 Comprised of other consumer revolving credit, installment, and consumer lease financing.
Bank of Hawaii Corporation and Subsidiaries
Analysis of Change in Net Interest Income - Taxable-Equivalent Basis Table 8c

Nine Months Ended September 30, 2022

Compared to September 30, 2021

(dollars in millions)

Volume 1

 

Rate 1

 

Total

Change in Interest Income:
Funds Sold

$

(0.8

)

$

3.2

 

$

2.4

 

Investment Securities
Available-for-Sale
Taxable

 

(3.0

)

 

6.6

 

 

3.6

 

Non-Taxable

 

(0.3

)

 

(0.1

)

 

(0.4

)

Held-to-Maturity
Taxable

 

9.9

 

 

4.6

 

 

14.5

 

Non-Taxable

 

(0.2

)

 

(0.1

)

 

(0.3

)

Total Investment Securities

 

6.4

 

 

11.0

 

 

17.4

 

Loans Held for Sale

 

(0.4

)

 

0.1

 

 

(0.3

)

Loans and Leases
Commercial and Industrial

 

1.3

 

 

2.0

 

 

3.3

 

Paycheck Protection Program

 

(22.6

)

 

5.1

 

 

(17.5

)

Commercial Mortgage

 

10.8

 

 

6.0

 

 

16.8

 

Construction

 

(1.5

)

 

1.5

 

 

-

 

Commercial Lease Financing

 

(0.1

)

 

(0.1

)

 

(0.2

)

Residential Mortgage

 

5.7

 

 

(3.3

)

 

2.4

 

Home Equity

 

9.4

 

 

(2.2

)

 

7.2

 

Automobile

 

1.3

 

 

(1.3

)

 

-

 

Other 2

 

2.0

 

 

(3.1

)

 

(1.1

)

Total Loans and Leases

 

6.3

 

 

4.6

 

 

10.9

 

Other

 

0.1

 

 

0.3

 

 

0.4

 

Total Change in Interest Income

 

11.6

 

 

19.2

 

 

30.8

 

 
Change in Interest Expense:
Interest-Bearing Deposits
Demand

 

-

 

 

0.6

 

 

0.6

 

Savings

 

0.2

 

 

4.3

 

 

4.5

 

Time

 

(1.6

)

 

0.4

 

 

(1.2

)

Total Interest-Bearing Deposits

 

(1.4

)

 

5.3

 

 

3.9

 

Short-Term Borrowings

 

0.2

 

 

-

 

 

0.2

 

Securities Sold Under Agreements to Repurchase

 

(2.5

)

 

0.4

 

 

(2.1

)

Other Debt

 

(0.8

)

 

0.6

 

 

(0.2

)

Total Change in Interest Expense

 

(4.5

)

 

6.3

 

 

1.8

 

 
Change in Net Interest Income

$

16.1

 

$

12.9

 

$

29.0

 

1 The change in interest income and expense not solely due to changes in volume or rate has been allocated on a pro-rata basis to the volume and rate columns.
2 Comprised of other consumer revolving credit, installment, and consumer lease financing.
 
Bank of Hawaii Corporation and Subsidiaries
Salaries and Benefits Table 9

Three Months Ended

 

Nine Months Ended

September 30,

 

June 30,

 

September 30,

 

September 30,

(dollars in thousands)

2022

 

2022

 

2021

 

2022

 

2021

Salaries

$

37,792

$

36,721

$

34,676

$

109,445

$

99,658

Incentive Compensation

 

5,885

 

6,073

 

4,677

 

18,069

 

15,763

Share-Based Compensation

 

3,558

 

3,962

 

3,335

 

11,319

 

9,093

Commission Expense

 

1,005

 

1,232

 

1,772

 

3,878

 

6,807

Retirement and Other Benefits

 

4,448

 

4,036

 

4,746

 

13,177

 

15,552

Payroll Taxes

 

2,826

 

3,034

 

2,825

 

10,804

 

9,819

Medical, Dental, and Life Insurance

 

2,605

 

2,591

 

3,222

 

8,430

 

8,850

Separation Expense

 

1,819

 

120

 

1,194

 

2,509

 

3,317

Total Salaries and Benefits

$

59,938

$

57,769

$

56,447

$

177,631

$

168,859

 
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)

2022

 

2022

 

2022

 

2021

 

2021

Commercial
Commercial and Industrial

$

1,368,966

$

1,323,830

$

1,354,757

$

1,361,921

$

1,325,446

Paycheck Protection Program

 

22,955

 

31,964

 

57,809

 

126,779

 

268,480

Commercial Mortgage

 

3,591,943

 

3,464,126

 

3,257,689

 

3,152,130

 

2,994,520

Construction

 

236,498

 

246,177

 

248,363

 

220,254

 

296,052

Lease Financing

 

73,989

 

89,535

 

98,107

 

105,108

 

107,526

Total Commercial

 

5,294,351

 

5,155,632

 

5,016,725

 

4,966,192

 

4,992,024

Consumer
Residential Mortgage

 

4,585,723

 

4,486,571

 

4,405,718

 

4,309,602

 

4,272,540

Home Equity

 

2,185,484

 

2,101,612

 

1,958,285

 

1,836,588

 

1,680,229

Automobile

 

820,640

 

775,065

 

742,934

 

736,565

 

727,234

Other 1

 

435,408

 

432,693

 

420,830

 

410,129

 

400,723

Total Consumer

 

8,027,255

 

7,795,941

 

7,527,767

 

7,292,884

 

7,080,726

Total Loans and Leases

$

13,321,606

$

12,951,573

$

12,544,492

$

12,259,076

$

12,072,750

 
 
Deposits

September 30,

 

June 30,

 

March 31,

 

December 31,

 

September 30,

(dollars in thousands)

2022

 

2022

 

2022

 

2021

 

2021

Consumer

$

10,507,946

$

10,554,121

$

10,654,192

$

10,438,844

$

10,150,199

Commercial

 

8,841,781

 

8,824,609

 

8,818,477

 

8,641,932

 

8,767,733

Public and Other

 

1,539,046

 

1,646,951

 

1,243,618

 

1,279,332

 

1,575,746

Total Deposits

$

20,888,773

$

21,025,681

$

20,716,287

$

20,360,108

$

20,493,678

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

September 30,

 

June 30,

 

March 31,

 

December 31,

 

September 30,

(dollars in thousands)

2022

 

2022

 

2022

 

2021

 

2021

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

$

49

 

$

85

 

$

99

 

$

243

 

$

209

 

Commercial Mortgage

 

3,396

 

 

3,462

 

 

8,065

 

 

8,205

 

 

8,309

 

Total Commercial

 

3,445

 

 

3,547

 

 

8,164

 

 

8,448

 

 

8,518

 

Consumer
Residential Mortgage

 

4,945

 

 

5,179

 

 

3,845

 

 

3,305

 

 

4,348

 

Home Equity

 

4,438

 

 

4,435

 

 

5,638

 

 

4,881

 

 

5,422

 

Total Consumer

 

9,383

 

 

9,614

 

 

9,483

 

 

8,186

 

 

9,770

 

Total Non-Accrual Loans and Leases

 

12,828

 

 

13,161

 

 

17,647

 

 

16,634

 

 

18,288

 

Foreclosed Real Estate

 

1,040

 

 

2,332

 

 

2,332

 

 

2,332

 

 

2,332

 

Total Non-Performing Assets

$

13,868

 

$

15,493

 

$

19,979

 

$

18,966

 

$

20,620

 

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

$

-

 

$

-

 

$

22

 

$

-

 

$

-

 

Total Commercial

 

-

 

 

-

 

 

22

 

 

-

 

 

-

 

Consumer
Residential Mortgage

 

3,279

 

 

2,638

 

 

4,113

 

 

3,159

 

 

4,776

 

Home Equity

 

1,061

 

 

2,029

 

 

2,722

 

 

3,456

 

 

2,946

 

Automobile

 

467

 

 

359

 

 

504

 

 

729

 

 

395

 

Other 1

 

513

 

 

508

 

 

649

 

 

426

 

 

593

 

Total Consumer

 

5,320

 

 

5,534

 

 

7,988

 

 

7,770

 

 

8,710

 

Total Accruing Loans and Leases Past Due 90 Days or More

$

5,320

 

$

5,534

 

$

8,010

 

$

7,770

 

$

8,710

 

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

$

44,641

 

$

46,024

 

$

54,136

 

$

60,519

 

$

62,787

 

Total Loans and Leases

$

13,321,606

 

$

12,951,573

 

$

12,544,492

 

$

12,259,076

 

$

12,072,750

 

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

 

0.10

%

 

0.10

%

 

0.14

%

 

0.14

%

 

0.15

%