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Bank of Hawai‘i Corporation Second Quarter 2023 Financial Results

  • Diluted Earnings Per Common Share $1.12
  • Net Income $46.1 Million
  • Total Deposits Up 0.1% Linked Quarter
  • Immediately Available Liquidity Increased to $8.5 Billion
  • Board of Directors Declares Dividend of $0.70 Per Common Share

Bank of Hawai‘i Corporation (NYSE: BOH) today reported diluted earnings per common share of $1.12 for the second quarter of 2023, compared with diluted earnings per common share of $1.14 in the previous quarter and $1.38 in the same quarter of 2022. Net income for the second quarter of 2023 was $46.1 million, down 1.7% from the previous quarter and down 19.0% from the same quarter of 2022. The return on average common equity for the second quarter of 2023 was 14.95% compared with 15.79% in the previous quarter and 18.19% in the same quarter of 2022.

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“Bank of Hawai‘i delivered solid financial results in the second quarter of 2023,” said Peter Ho, Chairman, President, and CEO. “Our brand strength, built through 125 years of building lasting and long-standing relationships with the consumers, businesses and municipalities of Hawai‘i, helped us deliver yet another quarter of stable deposit performance. Total deposits were up modestly from a quarter ago. We also added additional liquidity to the balance sheet with cash and other immediately available borrowing lines growing to $8.5 billion at quarter end. Loans grew 0.7% with growth coming from both our consumer and commercial businesses. Credit quality remained pristine with non-performing assets of 0.08% at quarter end and net charge offs of 0.04% in the quarter. CRE loans and office CRE loans were 27.3% and 2.7% of total loans at quarter end with both categories having weighted average LTVs of 56%. Scheduled maturities for CRE loans and office CRE loans total 10% and 3% respectively through 2024. Finally, our capital position improved in the quarter, as measured by CET 1, Tier 1 Capital, Total Capital and Tier 1 Leverage.”

Financial Highlights

Net interest income for the second quarter of 2023 was $124.3 million, a decrease of 8.5% from the previous quarter and a decrease of 6.4% from the same quarter of 2022. The decrease in net interest income in the second quarter of 2023 was primarily due to higher funding costs, partially offset by higher earning asset yields.

Net interest margin was 2.22% in the second quarter of 2023, a decrease of 25 basis points from the previous quarter and from the same quarter of 2022. The decrease in net interest margin was due to higher funding costs and increased liquidity, partially offset by higher earning asset yields.

The average yield on loans and leases was 4.19% in the second quarter of 2023, up 16 basis points from the prior quarter and up 98 basis points from the same quarter of 2022. The average yield on total earning assets was 3.56% in the second quarter of 2023, up 14 basis points from the prior quarter and up 96 basis points from the same quarter of 2022. The average cost of interest-bearing deposits was 1.54% in the second quarter of 2023, up 45 basis points from the prior quarter and up 143 basis points from the same quarter of 2022. The average cost of total deposits, including noninterest-bearing deposits, was 1.08%, up 33 basis points from the prior quarter and up 101 basis points from the same quarter of 2022. The changes in yields and rates over the linked quarter and year over year period reflected the higher rate environment, including higher benchmark interest rates.

Noninterest income was $43.3 million in the second quarter of 2023, an increase of 6.2% from the previous quarter and an increase of 2.6% from the same period in 2022. Noninterest income in the second quarter of 2023 included $1.5 million from the sale of a low-income housing tax credit investment, while noninterest income in the first quarter of 2023 included a negative adjustment of $0.6 million related to a change in the Visa Class B conversion ratio. Adjusted noninterest income in the second quarter of 2023 was $41.7 million, up 1.0% from adjusted noninterest income in the prior quarter and down 1.0% from the same period in 2022.

Noninterest expense was $104.0 million in the second quarter of 2023, a decrease of 7.0% from the previous quarter and an increase of 1.1% from the same quarter of 2022. Noninterest expense in the first quarter of 2023 included seasonal payroll expenses of approximately $4.0 million and separation expenses of $3.1 million. Adjusted for these items in the prior quarter, noninterest expense decreased by 0.8% quarter over quarter.

The effective tax rate for the second quarter of 2023 was 24.57% compared with 25.38% in the previous quarter and 23.80% during the same quarter of 2022. The decrease in the effective tax rate on a linked quarter basis was mainly due to an unfavorable discrete tax item in the first quarter and an increase in benefits from tax credit investments in the current quarter. The year over year increase was primarily due to lower benefits from tax credit investments and benefits from leveraged leases that have since been terminated which were included in the effective tax rate for the second quarter of 2022.

Asset Quality

The Company’s overall asset quality remained strong during the second quarter of 2023. Provision for credit losses for the second quarter of 2023 was $2.5 million compared with $2.0 million in the previous quarter and a net benefit of $2.5 million in the same quarter of 2022.

Total non-performing assets were $11.5 million at June 30, 2023, down $0.6 million from March 31, 2023 and down $4.0 million from June 30, 2022. Non-performing assets as a percentage of total loans and leases and foreclosed real estate were 0.08% at the end of the quarter, a decrease of 1 basis point from the end of the prior quarter and a decrease of 4 basis points from the same quarter of 2022.

Net loan and lease charge-offs during the second quarter of 2023 were $1.4 million or 4 basis points annualized of total average loans and leases outstanding. Net loan and lease charge-offs for the second quarter of 2023 were comprised of charge-offs of $3.5 million partially offset by recoveries of $2.1 million. Compared to the prior quarter, net loan and lease charge-offs decreased by $1.3 million or 4 basis points annualized on total average loans and leases outstanding. Compared to the same quarter of 2022, net loan and lease charge-offs increased by $0.7 million or 2 basis points annualized on total average loans and leases outstanding.

The allowance for credit losses on loans and leases was $145.4 million at June 30, 2023, an increase of $1.8 million from March 31, 2023 and a decrease of $3.1 million from June 30, 2022. The ratio of the allowance for credit losses to total loans and leases outstanding was 1.04% at the end of the quarter, flat from the end of the prior quarter and down 10 basis points from the end of the same quarter of 2022.

Balance Sheet

Total assets were $24.9 billion at June 30, 2023, an increase of 4.2% from March 31, 2023 and an increase of 7.4% from June 30, 2022, primarily due to growth in our earning assets.

Total funds sold and cash and due from banks was $1.7 billion at June 30, 2023, an increase of $1.1 billion from March 31, 2023 and $0.8 billion from June 30, 2022 and represented 6.7% of total assets. The growth was due to an increase in short-duration term funding of $1.3 billion that enhanced on balance sheet liquidity and provides a hedge against rising short-term rates.

The investment securities portfolio was $7.9 billion at June 30, 2023, a decrease of 3.2% from March 31, 2023 and a decrease of 4.9% from June 30, 2022. These decreases were due to cashflows from the portfolio not being reinvested into securities. The investment portfolio remains largely comprised of securities issued by U.S. government agencies and U.S. government-sponsored enterprises.

Total loans and leases were $13.9 billion at June 30, 2023, an increase of 0.7% from March 31, 2023 and an increase of 7.4% from June 30, 2022. Total commercial loans were $5.6 billion at June 30, 2023, an increase of 0.8% from the prior quarter and an increase of 8.9% from the same quarter of 2022. The increase from the same period in 2022 was primarily due to an increase in our commercial mortgage and commercial and industrial portfolios. Total consumer loans were $8.3 billion as of June 30, 2023, an increase of 0.5% from the prior quarter and 6.5% from the same period in 2022, primarily driven by increases in our residential mortgage and home equity portfolios.

Total deposits were $20.5 billion at June 30, 2023, an increase of 0.1% from March 31, 2023 and a decrease of 2.5% from June 30, 2022. Noninterest-bearing deposits made up 29% of total deposit balances as of June 30, 2023, down from 31% as of March 31, 2023 and 35% as of June 30, 2022. Average deposits were $20.0 billion for the second quarter of 2023, down 2.0% from $20.4 billion in the prior quarter, and down 2.7% from the second quarter of 2022. As of June 30, 2023 insured and collateralized deposits represent 61% of total deposit balances, up from 58% as of March 31, 2023 and 57% as of June 30, 2022.

Capital and Dividends

The Company’s capital levels remain well above regulatory well-capitalized minimums.

The Tier 1 Capital Ratio was 12.21% at June 30, 2023 compared with 12.10% at March 31, 2023 and 13.01% at June 30, 2022. The Tier 1 Leverage Ratio was 7.21% at June 30, 2023 compared with 7.19% at March 31, 2023 and 7.29% at June 30, 2022. The increase from the prior quarter was due to an increase in Tier 1 capital as a result of retained earnings growth partially offset by an increase in risk-weighted and average total assets, as a result of loan growth and increased liquidity over the period. The decrease from the same period in 2022 in the Tier 1 Capital Ratio was due to an increase in risk-weighted assets, and the decline in the Tier 1 Leverage Ratio was due to an increase in average total assets, both as a result of increased liquidity and loan growth over the period.

No shares of common stock were repurchased under the share repurchase program in the second quarter of 2023. Total remaining buyback authority under the share repurchase program was $126.0 million at June 30, 2023.

The Company’s Board of Directors declared a quarterly cash dividend of $0.70 per share on the Company’s outstanding common shares. The dividend will be payable on September 15, 2023 to shareholders of record at the close of business on August 31, 2023.

On July 7, 2023, the Board of Directors declared the quarterly dividend payment of $10.94 per share, equivalent to $0.2735 per depositary share, on its preferred stock. The depositary shares representing the Series A Preferred Stock are traded on the NYSE under the symbol “BOH.PRA.” The dividend will be payable on August 1, 2023 to shareholders of record of the preferred stock as of the close of business on July 17, 2023.

Conference Call Information

The Company will review its second quarter financial results today at 8:00 a.m. Hawaii Time (2:00 p.m. Eastern Time). The live call, including a slide presentation, will be accessible on the investor relations link of Bank of Hawai‘i Corporation's website, www.boh.com. The webcast can be accessed via the link: https://register.vevent.com/register/BIa86de171556d47818c0a5a7106c5f8bd. A replay of the conference call will be available for one year beginning approximately 11:00 a.m. Hawaii Time on Monday, July 24, 2023. The replay will be accessible via the same link. In addition, the replay will be available on the Company's website, www.boh.com.

Forward-Looking Statements

This news release, and other statements made by the Company in connection with it may contain "forward-looking statements" (as defined in the Private Securities Litigation Reform Act of 1995) that involve risks and uncertainties that could cause results to be materially different from expectations. Forecasts of our financial results and condition, expectations for our operations and business prospects, and our assumptions used in those forecasts and expectations are examples of certain of these forward-looking statements. Do not unduly rely on forward-looking statements. Actual results might differ significantly from our forecasts and expectations because of a variety of factors. More information about these factors is contained in Bank of Hawai‘i Corporation's Annual Report on Form 10-K for the year ended December 31, 2022 and its Form 10-Q for the fiscal quarter ended March 31, 2023, which were filed with the U.S. Securities and Exchange Commission. These forward-looking statements are not guarantees of future performance and speak only as of the date made, and, except as required by law, the Company undertakes no obligation to update or revise any forward-looking statements to reflect subsequent events, new information or future circumstances.

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

Bank of Hawai‘i Corporation and Subsidiaries
Financial Highlights

Table 1

Three Months Ended

Six Months Ended

June 30,

March 31,

June 30,

June 30,

(dollars in thousands, except per share amounts)

2023

2023

2022

2023

2022

For the Period:
Operating Results
Net Interest Income

$

124,348

 

$

135,955

 

$

132,902

 

$

260,303

 

$

258,165

 

Provision for Credit Losses

 

2,500

 

 

2,000

 

 

(2,500

)

 

4,500

 

 

(8,000

)

Total Noninterest Income

 

43,255

 

 

40,737

 

 

42,158

 

 

83,992

 

 

85,709

 

Total Noninterest Expense

 

104,036

 

 

111,919

 

 

102,939

 

 

215,955

 

 

206,813

 

Pre-Provision Net Revenue

 

63,567

 

 

64,773

 

 

72,121

 

 

128,340

 

 

137,061

 

Net Income

 

46,061

 

 

46,842

 

 

56,862

 

 

92,903

 

 

111,696

 

Net Income Available to Common Shareholders

 

44,092

 

 

44,873

 

 

54,893

 

 

88,965

 

 

107,758

 

Basic Earnings Per Common Share

 

1.12

 

 

1.14

 

 

1.38

 

 

2.27

 

 

2.71

 

Diluted Earnings Per Common Share

 

1.12

 

 

1.14

 

 

1.38

 

 

2.26

 

 

2.70

 

Dividends Declared Per Common Share

 

0.70

 

 

0.70

 

 

0.70

 

 

1.40

 

 

1.40

 

 
Performance Ratios
Return on Average Assets

 

0.77

%

 

0.80

%

 

1.00

%

 

0.78

%

 

0.98

%

Return on Average Shareholders' Equity

 

13.55

 

 

14.25

 

 

16.40

 

 

13.90

 

 

15.23

 

Return on Average Common Equity

 

14.95

 

 

15.79

 

 

18.19

 

 

15.36

 

 

16.73

 

Efficiency Ratio 1

 

62.07

 

 

63.34

 

 

58.80

 

 

62.72

 

 

60.14

 

Net Interest Margin 2

 

2.22

 

 

2.47

 

 

2.47

 

 

2.34

 

 

2.41

 

Dividend Payout Ratio 3

 

62.50

 

 

61.40

 

 

50.72

 

 

61.67

 

 

51.66

 

Average Shareholders' Equity to Average Assets

 

5.65

 

 

5.59

 

 

6.08

 

 

5.62

 

 

6.47

 

 
Average Balances
Average Loans and Leases

$

13,876,754

 

$

13,717,483

 

$

12,700,825

 

$

13,797,559

 

$

12,496,747

 

Average Assets

 

24,114,443

 

 

23,865,478

 

 

22,891,262

 

 

23,990,649

 

 

22,869,496

 

Average Deposits

 

20,018,601

 

 

20,430,882

 

 

20,569,363

 

 

20,223,603

 

 

20,498,115

 

Average Shareholders' Equity

 

1,363,059

 

 

1,332,889

 

 

1,390,653

 

 

1,348,057

 

 

1,479,197

 

 
Per Share of Common Stock
Book Value

$

29.66

 

$

29.62

 

$

29.09

 

$

29.66

 

$

29.09

 

Tangible Book Value

 

28.87

 

 

28.83

 

 

28.30

 

 

28.87

 

 

28.30

 

Market Value
Closing

 

41.23

 

 

52.08

 

 

74.40

 

 

41.23

 

 

74.40

 

High

 

52.37

 

 

81.73

 

 

84.93

 

 

81.73

 

 

92.38

 

Low

 

30.83

 

 

34.71

 

 

70.97

 

 

30.83

 

 

70.97

 

 

June 30,

March 31,

December 31,

June 30,

2023

2023

2022

2022

As of Period End:
Balance Sheet Totals
Loans and Leases

$

13,914,889

 

$

13,824,522

 

$

13,646,420

 

$

12,951,573

 

Total Assets

 

24,947,936

 

 

23,931,977

 

 

23,606,877

 

 

23,232,699

 

Total Deposits

 

20,508,615

 

 

20,491,300

 

 

20,615,696

 

 

21,025,681

 

Other Debt

 

1,760,243

 

 

510,269

 

 

410,294

 

 

10,343

 

Total Shareholders' Equity

 

1,358,279

 

 

1,354,430

 

 

1,316,995

 

 

1,348,746

 

 
Asset Quality
Non-Performing Assets

$

11,477

 

$

12,124

 

$

12,647

 

$

15,493

 

Allowance for Credit Losses - Loans and Leases

 

145,367

 

 

143,577

 

 

144,439

 

 

148,512

 

Allowance to Loans and Leases Outstanding 4

 

1.04

%

 

1.04

%

 

1.06

%

 

1.15

%

 
Capital Ratios 5
Common Equity Tier 1 Capital Ratio

 

11.00

%

 

10.88

%

 

10.92

%

 

11.66

%

Tier 1 Capital Ratio

 

12.21

 

 

12.10

 

 

12.15

 

 

13.01

 

Total Capital Ratio

 

13.24

 

 

13.13

 

 

13.17

 

 

14.14

 

Tier 1 Leverage Ratio

 

7.21

 

 

7.19

 

 

7.37

 

 

7.29

 

Total Shareholders' Equity to Total Assets

 

5.44

 

 

5.66

 

 

5.58

 

 

5.81

 

Tangible Common Equity to Tangible Assets 6

 

4.60

 

 

4.78

 

 

4.69

 

 

4.90

 

Tangible Common Equity to Risk-Weighted Assets 6

 

7.97

 

 

7.97

 

 

7.76

 

 

8.72

 

 
Non-Financial Data
Full-Time Equivalent Employees

 

2,025

 

 

2,025

 

 

2,076

 

 

2,114

 

Branches

 

51

 

 

51

 

 

51

 

 

54

 

ATMs

 

320

 

 

320

 

 

320

 

 

310

 

1

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

2

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

3

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

4

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

5

Regulatory capital ratios as of June 30, 2023 are preliminary.

6

Tangible common equity to tangible assets and tangible common equity to risk-weighted assets are Non-GAAP financial measures.

Tangible common equity is defined by the Company as common shareholders' equity minus goodwill.

See Table 2 "Reconciliation of Non-GAAP Financial Measures".

 
Bank of Hawai‘i Corporation and Subsidiaries
Reconciliation of Non-GAAP Financial Measures

Table 2

June 30,

 

March 31,

 

December 31,

 

June 30,

(dollars in thousands)

2023

 

2023

 

2022

 

2022

 
Total Shareholders' Equity

$

1,358,279

 

$

1,354,430

 

$

1,316,995

 

$

1,348,746

 

Less: Preferred Stock

 

180,000

 

 

180,000

 

 

180,000

 

 

180,000

 

Goodwill

 

31,517

 

 

31,517

 

 

31,517

 

 

31,517

 

Tangible Common Equity

$

1,146,762

 

$

1,142,913

 

$

1,105,478

 

$

1,137,229

 

 
Total Assets

$

24,947,936

 

$

23,931,977

 

$

23,606,877

 

$

23,232,699

 

Less: Goodwill

 

31,517

 

 

31,517

 

 

31,517

 

 

31,517

 

Tangible Assets

$

24,916,419

 

$

23,900,460

 

$

23,575,360

 

$

23,201,182

 

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

$

14,391,943

 

$

14,341,397

 

$

14,238,798

 

$

13,035,674

 

 
Total Shareholders' Equity to Total Assets

 

5.44

%

 

5.66

%

 

5.58

%

 

5.81

%

Tangible Common Equity to Tangible Assets (Non-GAAP)

 

4.60

%

 

4.78

%

 

4.69

%

 

4.90

%

 
Tier 1 Capital Ratio 1

 

12.21

%

 

12.10

%

 

12.15

%

 

13.01

%

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

 

7.97

%

 

7.97

%

 

7.76

%

 

8.72

%

1

Regulatory capital ratios as of June 30, 2023 are preliminary.

 
Bank of Hawai‘i Corporation and Subsidiaries
Consolidated Statements of Income

Table 3

Three Months Ended

 

Six Months Ended

June 30,

 

March 31,

 

June 30,

 

June 30,

(dollars in thousands, except per share amounts)

2023

 

2023

 

2022

 

2023

 

2022

Interest Income
Interest and Fees on Loans and Leases

$

144,541

 

$

136,501

 

$

101,663

 

$

281,042

 

$

196,102

 

Income on Investment Securities
Available-for-Sale

 

23,301

 

 

23,893

 

 

17,984

 

 

47,194

 

 

35,084

 

Held-to-Maturity

 

23,375

 

 

23,948

 

 

18,838

 

 

47,323

 

 

37,539

 

Deposits

 

18

 

 

27

 

 

5

 

 

45

 

 

9

 

Funds Sold

 

6,395

 

 

3,366

 

 

719

 

 

9,761

 

 

846

 

Other

 

2,121

 

 

597

 

 

353

 

 

2,718

 

 

555

 

Total Interest Income

 

199,751

 

 

188,332

 

 

139,562

 

 

388,083

 

 

270,135

 

Interest Expense
Deposits

 

53,779

 

 

37,794

 

 

3,535

 

 

91,573

 

 

5,888

 

Securities Sold Under Agreements to Repurchase

 

5,436

 

 

5,377

 

 

2,794

 

 

10,813

 

 

5,566

 

Funds Purchased

 

184

 

 

704

 

 

57

 

 

888

 

 

59

 

Short-Term Borrowings

 

2,510

 

 

3,203

 

 

92

 

 

5,713

 

 

92

 

Other Debt

 

13,494

 

 

5,299

 

 

182

 

 

18,793

 

 

365

 

Total Interest Expense

 

75,403

 

 

52,377

 

 

6,660

 

 

127,780

 

 

11,970

 

Net Interest Income

 

124,348

 

 

135,955

 

 

132,902

 

 

260,303

 

 

258,165

 

Provision for Credit Losses

 

2,500

 

 

2,000

 

 

(2,500

)

 

4,500

 

 

(8,000

)

Net Interest Income After Provision for Credit Losses

 

121,848

 

 

133,955

 

 

135,402

 

 

255,803

 

 

266,165

 

Noninterest Income
Trust and Asset Management

 

11,215

 

 

10,690

 

 

11,457

 

 

21,905

 

 

22,733

 

Mortgage Banking

 

1,176

 

 

1,004

 

 

1,247

 

 

2,180

 

 

3,987

 

Service Charges on Deposit Accounts

 

7,587

 

 

7,737

 

 

7,309

 

 

15,324

 

 

14,581

 

Fees, Exchange, and Other Service Charges

 

14,150

 

 

13,808

 

 

14,193

 

 

27,958

 

 

27,145

 

Investment Securities Losses, Net

 

(1,310

)

 

(1,792

)

 

(1,295

)

 

(3,102

)

 

(2,840

)

Annuity and Insurance

 

1,038

 

 

1,271

 

 

870

 

 

2,309

 

 

1,661

 

Bank-Owned Life Insurance

 

2,876

 

 

2,842

 

 

2,658

 

 

5,718

 

 

5,007

 

Other

 

6,523

 

 

5,177

 

 

5,719

 

 

11,700

 

 

13,435

 

Total Noninterest Income

 

43,255

 

 

40,737

 

 

42,158

 

 

83,992

 

 

85,709

 

Noninterest Expense
Salaries and Benefits

 

56,175

 

 

65,088

 

 

57,769

 

 

121,263

 

 

117,693

 

Net Occupancy

 

9,991

 

 

9,872

 

 

9,930

 

 

19,863

 

 

19,756

 

Net Equipment

 

10,573

 

 

10,375

 

 

9,543

 

 

20,948

 

 

18,696

 

Data Processing

 

4,599

 

 

4,583

 

 

4,607

 

 

9,182

 

 

9,167

 

Professional Fees

 

4,651

 

 

3,883

 

 

3,542

 

 

8,534

 

 

6,800

 

FDIC Insurance

 

3,173

 

 

3,234

 

 

1,590

 

 

6,407

 

 

3,092

 

Other

 

14,874

 

 

14,884

 

 

15,958

 

 

29,758

 

 

31,609

 

Total Noninterest Expense

 

104,036

 

 

111,919

 

 

102,939

 

 

215,955

 

 

206,813

 

Income Before Provision for Income Taxes

 

61,067

 

 

62,773

 

 

74,621

 

 

123,840

 

 

145,061

 

Provision for Income Taxes

 

15,006

 

 

15,931

 

 

17,759

 

 

30,937

 

 

33,365

 

Net Income

$

46,061

 

$

46,842

 

$

56,862

 

$

92,903

 

$

111,696

 

Preferred Stock Dividends

 

1,969

 

 

1,969

 

 

1,969

 

 

3,938

 

 

3,938

 

Net Income Available to Common Shareholders

$

44,092

 

$

44,873

 

$

54,893

 

$

88,965

 

$

107,758

 

Basic Earnings Per Common Share

$

1.12

 

$

1.14

 

$

1.38

 

$

2.27

 

$

2.71

 

Diluted Earnings Per Common Share

$

1.12

 

$

1.14

 

$

1.38

 

$

2.26

 

$

2.70

 

Dividends Declared Per Common Share

$

0.70

 

$

0.70

 

$

0.70

 

$

1.40

 

$

1.40

 

Basic Weighted Average Common Shares

 

39,241,559

 

 

39,276,833

 

 

39,693,593

 

 

39,259,279

 

 

39,722,985

 

Diluted Weighted Average Common Shares

 

39,317,521

 

 

39,465,889

 

 

39,842,608

 

 

39,382,359

 

 

39,896,700

 

 
Bank of Hawai‘i Corporation and Subsidiaries
Consolidated Statements of Comprehensive Income (Loss)

Table 4

Three Months Ended

Six Months Ended

June 30,

March 31,

June 30,

June 30,

(dollars in thousands)

2023

2023

2022

2023

2022

Net Income

$

46,061

 

$

46,842

 

$

56,862

 

$

92,903

 

$

111,696

 

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

 

(18,217

)

 

29,276

 

 

(122,647

)

 

11,059

 

 

(302,771

)

Defined Benefit Plans

 

84

 

 

84

 

 

352

 

 

168

 

 

705

 

Other Comprehensive Income (Loss)

 

(18,133

)

 

29,360

 

 

(122,295

)

 

11,227

 

 

(302,066

)

Comprehensive Income (Loss)

$

27,928

 

$

76,202

 

$

(65,433

)

$

104,130

 

$

(190,370

)

 
Bank of Hawai‘i Corporation and Subsidiaries
Consolidated Statements of Condition

Table 5

June 30,

March 31,

December 31,

June 30,

(dollars in thousands)

2023

2023

2022

2022

Assets
Interest-Bearing Deposits in Other Banks

$

2,261

 

$

2,554

 

$

3,724

 

$

2,264

 

Funds Sold

 

1,273,109

 

 

272,018

 

 

81,364

 

 

576,430

 

Investment Securities
Available-for-Sale

 

2,666,723

 

 

2,815,083

 

 

2,844,823

 

 

3,955,476

 

Held-to-Maturity (Fair Value of $4,411,003; $4,601,876; $4,615,393; and $3,823,739)

 

5,202,698

 

 

5,312,815

 

 

5,414,139

 

 

4,321,693

 

Loans Held for Sale

 

3,359

 

 

2,149

 

 

1,035

 

 

4,514

 

Loans and Leases

 

13,914,889

 

 

13,824,522

 

 

13,646,420

 

 

12,951,573

 

Allowance for Credit Losses

 

(145,367

)

 

(143,577

)

 

(144,439

)

 

(148,512

)

Net Loans and Leases

 

13,769,522

 

 

13,680,945

 

 

13,501,981

 

 

12,803,061

 

Total Earning Assets

 

22,917,672

 

 

22,085,564

 

 

21,847,066

 

 

21,663,438

 

Cash and Due from Banks

 

398,072

 

 

337,413

 

 

316,679

 

 

260,672

 

Premises and Equipment, Net

 

200,297

 

 

203,131

 

 

206,777

 

 

202,063

 

Operating Lease Right-of-Use Assets

 

89,286

 

 

91,387

 

 

92,307

 

 

91,901

 

Accrued Interest Receivable

 

64,720

 

 

63,175

 

 

61,002

 

 

47,141

 

Foreclosed Real Estate

 

1,040

 

 

1,040

 

 

1,040

 

 

2,332

 

Mortgage Servicing Rights

 

21,626

 

 

22,102

 

 

22,619

 

 

23,540

 

Goodwill

 

31,517

 

 

31,517

 

 

31,517

 

 

31,517

 

Bank-Owned Life Insurance

 

456,889

 

 

455,602

 

 

453,882

 

 

448,925

 

Other Assets

 

766,817

 

 

641,046

 

 

573,988

 

 

461,170

 

Total Assets

$

24,947,936

 

$

23,931,977

 

$

23,606,877

 

$

23,232,699

 

 
Liabilities
Deposits
Noninterest-Bearing Demand

$

5,968,344

 

$

6,385,872

 

$

6,714,982

 

$

7,374,055

 

Interest-Bearing Demand

 

4,119,166

 

 

4,283,801

 

 

4,232,567

 

 

4,339,520

 

Savings

 

7,756,426

 

 

7,898,874

 

 

7,962,410

 

 

8,054,899

 

Time

 

2,664,679

 

 

1,922,753

 

 

1,705,737

 

 

1,257,207

 

Total Deposits

 

20,508,615

 

 

20,491,300

 

 

20,615,696

 

 

21,025,681

 

Short-Term Borrowings

 

-

 

 

325,000

 

 

-

 

 

-

 

Securities Sold Under Agreements to Repurchase

 

725,490

 

 

725,490

 

 

725,490

 

 

425,490

 

Other Debt

 

1,760,243

 

 

510,269

 

 

410,294

 

 

10,343

 

Operating Lease Liabilities

 

97,768

 

 

99,746

 

 

100,526

 

 

99,722

 

Retirement Benefits Payable

 

26,434

 

 

26,768

 

 

26,991

 

 

37,532

 

Accrued Interest Payable

 

26,737

 

 

13,061

 

 

9,698

 

 

2,545

 

Taxes Payable

 

132

 

 

11,039

 

 

7,104

 

 

10,607

 

Other Liabilities

 

444,238

 

 

374,874

 

 

394,083

 

 

272,033

 

Total Liabilities

 

23,589,657

 

 

22,577,547

 

 

22,289,882

 

 

21,883,953

 

Shareholders' Equity
Preferred Stock ($.01 par value; authorized 180,000 shares; issued / outstanding: June 30, 2023; March 31, 2023; December 31, 2022; and June 30, 2022 - 180,000)

 

180,000

 

 

180,000

 

 

180,000

 

 

180,000

 

Common Stock ($.01 par value; authorized 500,000,000 shares; issued / outstanding: June 30, 2023 - 58,771,036 / 39,725,348; March 31, 2023 - 58,722,929 / 39,646,506; December 31, 2022 - 58,733,625 / 39,835,750; and June 30, 2022 - 58,727,909 / 40,182,659)

 

583

 

 

583

 

 

582

 

 

582

 

Capital Surplus

 

628,202

 

 

624,126

 

 

620,578

 

 

611,694

 

Accumulated Other Comprehensive Loss

 

(423,431

)

 

(405,298

)

 

(434,658

)

 

(368,448

)

Retained Earnings

 

2,091,289

 

 

2,074,428

 

 

2,055,912

 

 

2,002,005

 

Treasury Stock, at Cost (Shares: June 30, 2023 - 19,045,688; March 31, 2023 - 19,076,423; December 31, 2022 - 18,897,875; and June 30, 2022 - 18,545,250)

 

(1,118,364

)

 

(1,119,409

)

 

(1,105,419

)

 

(1,077,087

)

Total Shareholders' Equity

 

1,358,279

 

 

1,354,430

 

 

1,316,995

 

 

1,348,746

 

Total Liabilities and Shareholders' Equity

$

24,947,936

 

$

23,931,977

 

$

23,606,877

 

$

23,232,699

 

 
Bank of Hawai‘i Corporation and Subsidiaries
Consolidated Statements of Shareholders' Equity

Table 6

 

 

 

 

 

 

 

 

 

 

Accumulated

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other

 

 

 

 

 

 

Preferred

 

 

 

Common

 

 

 

 

 

Comprehensive

 

 

 

 

 

 

Shares

 

Preferred

 

Shares

 

Common

 

Capital

 

Income

 

Retained

 

Treasury

 

 

(dollars in thousands)

Outstanding

 

Stock

 

Outstanding

 

Stock

 

Surplus

 

(Loss)

 

Earnings

 

Stock

 

Total

Balance as of December 31, 2022

180,000

$

180,000

39,835,750

 

$

582

$

620,578

 

$

(434,658

)

$

2,055,912

 

$

(1,105,419

)

$

1,316,995

 

Net Income

-

 

-

-

 

 

-

 

-

 

 

-

 

 

92,903

 

 

-

 

 

92,903

 

Other Comprehensive Income

-

 

-

-

 

 

-

 

-

 

 

11,227

 

 

-

 

 

-

 

 

11,227

 

Share-Based Compensation

-

 

-

-

 

 

-

 

7,672

 

 

-

 

 

-

 

 

-

 

 

7,672

 

Common Stock Issued under Purchase and Equity Compensation Plans

-

 

-

94,765

 

 

1

 

(48

)

 

-

 

 

2,286

 

 

986

 

 

3,225

 

Common Stock Repurchased

-

 

-

(205,167

)

 

-

 

-

 

 

-

 

 

-

 

 

(13,931

)

 

(13,931

)

Cash Dividends Declared Common Stock ($1.40 per share)

-

 

-

-

 

 

-

 

-

 

 

-

 

 

(55,874

)

 

-

 

 

(55,874

)

Cash Dividends Declared Preferred Stock

-

 

-

-

 

 

-

 

-

 

 

-

 

 

(3,938

)

 

-

 

 

(3,938

)

Balance as of June 30, 2023

180,000

$

180,000

39,725,348

 

$

583

$

628,202

 

$

(423,431

)

$

2,091,289

 

$

(1,118,364

)

$

1,358,279

 

 
Balance as of December 31, 2021

180,000

$

180,000

40,253,193

 

$

581

$

602,508

 

$

(66,382

)

$

1,950,375

 

$

(1,055,471

)

$

1,611,611

 

Net Income

-

 

-

-

 

 

-

 

-

 

 

-

 

 

111,696

 

 

-

 

 

111,696

 

Other Comprehensive Loss

-

 

-

-

 

 

-

 

-

 

 

(302,066

)

 

-

 

 

-

 

 

(302,066

)

Share-Based Compensation

-

 

-

-

 

 

-

 

8,172

 

 

-

 

 

-

 

 

-

 

 

8,172

 

Common Stock Issued under Purchase and Equity Compensation Plans

-

 

-

228,225

 

 

1

 

1,014

 

 

-

 

 

346

 

 

2,697

 

 

4,058

 

Common Stock Repurchased

-

 

-

(298,759

)

 

-

 

-

 

 

-

 

 

-

 

 

(24,313

)

 

(24,313

)

Cash Dividends Declared Common Stock ($1.40 per share)

-

 

-

-

 

 

-

 

-

 

 

-

 

 

(56,474

)

 

-

 

 

(56,474

)

Cash Dividends Declared Preferred Stock

-

 

-

-

 

 

-

 

-

 

 

-

 

 

(3,938

)

 

-

 

 

(3,938

)

Balance as of June 30, 2022

180,000

$

180,000

40,182,659

 

$

582

$

611,694

 

$

(368,448

)

$

2,002,005

 

$

(1,077,087

)

$

1,348,746

 

 
Bank of Hawai‘i Corporation and Subsidiaries
Average Balances and Interest Rates - Taxable-Equivalent Basis 1

Table 7a

Three Months Ended

Three Months Ended

Three Months Ended

June 30, 2023

March 31, 2023

June 30, 2022

Average

Income /

Yield /

Average

Income /

Yield /

Average

Income /

Yield /

(dollars in millions)

Balance

Expense 2

Rate

Balance

Expense 2

Rate

Balance

Expense 2

Rate

Earning Assets
Interest-Bearing Deposits in Other Banks

$

5.1

$

-

1.48

%

$

1.7

$

-

6.25

%

$

3.5

$

-

0.59

%

Funds Sold

 

500.1

 

6.4

5.06

 

295.9

 

3.4

4.55

 

 

273.5

 

0.7

1.04

Investment Securities
Available-for-Sale
Taxable

 

2,741.1

 

23.2

3.39

 

2,820.3

 

23.8

3.40

 

 

4,123.1

 

18.0

1.74

Non-Taxable

 

9.6

 

0.1

4.40

 

9.6

 

0.1

4.38

 

 

2.9

 

-

1.99

Held-to-Maturity
Taxable

 

5,231.3

 

23.2

1.78

 

5,336.2

 

23.8

1.78

 

 

4,377.0

 

18.7

1.71

Non-Taxable

 

35.2

 

0.2

2.10

 

35.3

 

0.2

2.10

 

 

35.7

 

0.2

2.10

Total Investment Securities

 

8,017.2

 

46.7

2.33

 

8,201.4

 

47.9

2.34

 

 

8,538.7

 

36.9

1.73

Loans Held for Sale

 

2.7

 

-

5.50

 

1.5

 

-

5.30

 

 

6.3

 

0.1

4.06

Loans and Leases 3
Commercial and Industrial

 

1,456.1

 

17.5

4.82

 

1,411.4

 

16.2

4.67

 

 

1,330.0

 

9.9

2.99

Paycheck Protection Program

 

14.5

 

-

1.30

 

16.9

 

0.1

2.35

 

 

38.7

 

0.5

5.26

Commercial Mortgage

 

3,814.9

 

49.3

5.19

 

3,736.9

 

45.1

4.90

 

 

3,357.2

 

26.2

3.13

Construction

 

246.8

 

3.5

5.70

 

280.4

 

3.9

5.65

 

 

222.6

 

2.4

4.39

Commercial Lease Financing

 

65.4

 

0.3

1.67

 

66.9

 

-

(0.14

)

 

94.2

 

0.3

1.44

Residential Mortgage

 

4,704.0

 

41.2

3.50

 

4,666.0

 

39.9

3.42

 

 

4,445.7

 

36.4

3.26

Home Equity

 

2,272.3

 

19.0

3.35

 

2,239.4

 

18.2

3.30

 

 

2,032.9

 

14.4

2.85

Automobile

 

879.3

 

7.7

3.53

 

871.8

 

7.3

3.37

 

 

759.1

 

6.1

3.20

Other 4

 

423.5

 

6.4

6.04

 

427.8

 

6.2

5.83

 

 

420.4

 

5.6

5.38

Total Loans and Leases

 

13,876.8

 

144.9

4.19

 

13,717.5

 

136.9

4.03

 

 

12,700.8

 

101.8

3.21

Other

 

94.8

 

2.2

8.94

 

67.2

 

0.6

3.56

 

 

38.2

 

0.3

3.70

Total Earning Assets

 

22,496.7

 

200.2

3.56

 

22,285.2

 

188.8

3.42

 

 

21,561.0

 

139.8

2.60

Cash and Due from Banks

 

316.6

 

319.1

 

238.4

Other Assets

 

1,301.1

 

1,261.2

 

1,091.9

Total Assets

$

24,114.4

$

23,865.5

$

22,891.3

 
Interest-Bearing Liabilities
Interest-Bearing Deposits
Demand

$

4,037.4

 

7.5

0.75

$

4,215.9

 

5.2

0.50

 

$

4,442.2

 

0.7

0.06

Savings

 

7,667.6

 

26.6

1.39

 

8,009.0

 

20.6

1.05

 

 

7,692.8

 

1.9

0.10

Time

 

2,296.1

 

19.7

3.44

 

1,789.9

 

12.0

2.71

 

 

950.4

 

0.9

0.40

Total Interest-Bearing Deposits

 

14,001.1

 

53.8

1.54

 

14,014.8

 

37.8

1.09

 

 

13,085.4

 

3.5

0.11

Funds Purchased

 

14.6

 

0.2

5.00

 

60.4

 

0.7

4.66

 

 

25.3

 

-

0.89

Short-Term Borrowings

 

195.2

 

2.5

5.09

 

265.0

 

3.2

4.84

 

 

34.5

 

0.1

1.06

Securities Sold Under Agreements to Repurchase

 

725.5

 

5.4

2.96

 

725.5

 

5.4

2.96

 

 

447.7

 

2.8

2.47

Other Debt

 

1,255.8

 

13.5

4.31

 

499.6

 

5.3

4.30

 

 

10.4

 

0.3

7.05

Total Interest-Bearing Liabilities

 

16,192.2

 

75.4

1.87

 

15,565.3

 

52.4

1.36

 

 

13,603.3

 

6.7

0.20

Net Interest Income

$

124.8

$

136.4

$

133.1

Interest Rate Spread

1.69

%

2.06

%

2.40

%

Net Interest Margin

2.22

%

2.47

%

2.47

%

Noninterest-Bearing Demand Deposits

 

6,017.5

 

6,416.1

 

7,484.0

Other Liabilities

 

541.6

 

551.2

 

413.3

Shareholders' Equity

 

1,363.1

 

1,332.9

 

1,390.7

Total Liabilities and Shareholders' Equity

$

24,114.4

$

23,865.5

$

22,891.3

1

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

2

Interest income includes taxable-equivalent basis adjustments, based upon a federal statutory tax rate of 21%, of $471,000, $495,000, and $221,000 for the three months ended June 30, 2023, March 31, 2023, and June 30, 2022, respectively.

3

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

4

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

 
Bank of Hawai‘i Corporation and Subsidiaries
Average Balances and Interest Rates - Taxable-Equivalent Basis 1 Table 7b
Six Months Ended Six Months Ended
June 30, 2023 June 30, 2022
Average Income / Yield / Average Income / Yield /
(dollars in millions) Balance Expense 2 Rate Balance Expense 2 Rate
Earning Assets
Interest-Bearing Deposits in Other Banks

$

3.4

$

-

2.68

%

$

3.5

$

-

0.52

%

Funds Sold

 

398.6

 

9.8

4.87

 

256.1

 

0.8

0.66

Investment Securities
Available-for-Sale
Taxable

 

2,780.4

 

47.0

3.40

 

4,260.6

 

35.1

1.65

Non-Taxable

 

9.6

 

0.2

4.39

 

3.0

 

-

1.96

Held-to-Maturity
Taxable

 

5,283.6

 

47.0

1.78

 

4,471.7

 

37.2

1.67

Non-Taxable

 

35.2

 

0.4

2.10

 

35.8

 

0.4

2.10

Total Investment Securities

 

8,108.8

 

94.6

2.34

 

8,771.1

 

72.7

1.66

Loans Held for Sale

 

2.1

 

0.1

5.42

 

10.0

 

0.2

3.19

Loans and Leases 3
Commercial and Industrial

 

1,433.8

 

33.8

4.75

 

1,331.5

 

18.9

2.86

Paycheck Protection Program

 

15.7

 

0.1

1.86

 

63.7

 

2.3

7.39

Commercial Mortgage

 

3,776.2

 

94.5

5.04

 

3,258.5

 

48.0

2.97

Construction

 

263.5

 

7.4

5.68

 

225.1

 

4.5

4.03

Commercial Lease Financing

 

66.1

 

0.3

0.76

 

96.5

 

0.7

1.44

Residential Mortgage

 

4,685.2

 

81.0

3.46

 

4,394.8

 

71.2

3.24

Home Equity

 

2,255.9

 

37.2

3.33

 

1,966.3

 

27.7

2.84

Automobile

 

875.6

 

15.0

3.45

 

748.3

 

11.9

3.22

Other 4

 

425.6

 

12.5

5.94

 

412.1

 

11.1

5.42

Total Loans and Leases

 

13,797.6

 

281.8

4.11

 

12,496.8

 

196.3

3.16

Other

 

81.0

 

2.7

6.70

 

37.3

 

0.6

2.97

Total Earning Assets

 

22,391.5

 

389.0

3.49

 

21,574.8

 

270.6

2.52

Cash and Due from Banks

 

317.8

 

235.8

Other Assets

 

1,281.3

 

1,058.9

Total Assets

$

23,990.6

$

22,869.5

 
Interest-Bearing Liabilities
Interest-Bearing Deposits
Demand

$

4,126.2

 

12.7

0.62

$

4,548.2

 

1.2

0.05

Savings

 

7,837.3

 

47.2

1.21

 

7,617.1

 

2.9

0.08

Time

 

2,044.4

 

31.7

3.12

 

960.9

 

1.8

0.37

Total Interest-Bearing Deposits

 

14,007.9

 

91.6

1.32

 

13,126.2

 

5.9

0.09

Funds Purchased

 

37.4

 

0.9

4.72

 

16.2

 

0.1

0.72

Short-Term Borrowings

 

229.9

 

5.7

4.94

 

17.3

 

0.1

1.06

Securities Sold Under Agreements to Repurchase

 

725.5

 

10.8

2.96

 

449.1

 

5.6

2.47

Other Debt

 

879.8

 

18.7

4.31

 

10.4

 

0.3

7.05

Total Interest-Bearing Liabilities

 

15,880.5

 

127.7

1.62

 

13,619.2

 

12.0

0.18

Net Interest Income

$

261.3

$

258.6

Interest Rate Spread

1.87

%

2.34

%

Net Interest Margin

2.34

%

2.41

%

Noninterest-Bearing Demand Deposits

 

6,215.7

 

7,371.9

Other Liabilities

 

546.3

 

399.2

Shareholders' Equity

 

1,348.1

 

1,479.2

Total Liabilities and Shareholders' Equity

$

23,990.6

$

22,869.5

1

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

2

Interest income includes taxable-equivalent basis adjustments, based upon a federal statutory tax rate of 21%, of $966,000 and $475,000 for the six months ended June 30, 2023 and June 30, 2022, respectively.

3

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

4

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

 
Bank of Hawai‘i Corporation and Subsidiaries
Analysis of Change in Net Interest Income - Taxable-Equivalent Basis

Table 8a

Three Months Ended June 30, 2023
Compared to March 31, 2023
(dollars in millions) Volume 1 Rate 1 Total
Change in Interest Income:
Funds Sold

$

2.6

 

$

0.4

 

$

3.0

 

Investment Securities
Available-for-Sale
Taxable

 

(0.6

)

 

-

 

 

(0.6

)

Held-to-Maturity
Taxable

 

(0.5

)

 

(0.1

)

 

(0.6

)

Total Investment Securities

 

(1.1

)

 

(0.1

)

 

(1.2

)

Loans and Leases
Commercial and Industrial

 

0.7

 

 

0.6

 

 

1.3

 

Paycheck Protection Program

 

(0.1

)

 

-

 

 

(0.1

)

Commercial Mortgage

 

1.1

 

 

3.1

 

 

4.2

 

Construction

 

(0.4

)

 

-

 

 

(0.4

)

Commercial Lease Financing

 

-

 

 

0.3

 

 

0.3

 

Residential Mortgage

 

0.3

 

 

1.0

 

 

1.3

 

Home Equity

 

0.4

 

 

0.4

 

 

0.8

 

Automobile

 

0.1

 

 

0.3

 

 

0.4

 

Other 2

 

(0.1

)

 

0.3

 

 

0.2

 

Total Loans and Leases

 

2.0

 

 

6.0

 

 

8.0

 

Other

 

0.4

 

 

1.2

 

 

1.6

 

Total Change in Interest Income

 

3.9

 

 

7.5

 

 

11.4

 

 
Change in Interest Expense:
Interest-Bearing Deposits
Demand

 

(0.2

)

 

2.5

 

 

2.3

 

Savings

 

(0.9

)

 

6.9

 

 

6.0

 

Time

 

3.9

 

 

3.8

 

 

7.7

 

Total Interest-Bearing Deposits

 

2.8

 

 

13.2

 

 

16.0

 

Funds Purchased

 

(0.5

)

 

-

 

 

(0.5

)

Short-Term Borrowings

 

(0.9

)

 

0.2

 

 

(0.7

)

Other Debt

 

8.2

 

 

-

 

 

8.2

 

Total Change in Interest Expense

 

9.6

 

 

13.4

 

 

23.0

 

 
Change in Net Interest Income

$

(5.7

)

$

(5.9

)

$

(11.6

)

 

1

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

2

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

 
Bank of Hawai‘i Corporation and Subsidiaries
Analysis of Change in Net Interest Income - Taxable-Equivalent Basis

Table 8b

Three Months Ended June 30, 2023
Compared to June 30, 2022
(dollars in millions) Volume 1 Rate 1 Total
Change in Interest Income:
Funds Sold

$

1.0

 

$

4.7

 

$

5.7

 

Investment Securities
Available-for-Sale
Taxable

 

(7.6

)

 

12.8

 

 

5.2

 

Non-Taxable

 

0.1

 

 

-

 

 

0.1

 

Held-to-Maturity
Taxable

 

3.7

 

 

0.8

 

 

4.5

 

Total Investment Securities

 

(3.8

)

 

13.6

 

 

9.8

 

Loans Held for Sale

 

(0.1

)

 

-

 

 

(0.1

)

Loans and Leases
Commercial and Industrial

 

1.0

 

 

6.6

 

 

7.6

 

Paycheck Protection Program

 

(0.2

)

 

(0.3

)

 

(0.5

)

Commercial Mortgage

 

4.0

 

 

19.1

 

 

23.1

 

Construction

 

0.3

 

 

0.8

 

 

1.1

 

Commercial Lease Financing

 

(0.1

)

 

0.1

 

 

-

 

Residential Mortgage

 

2.2

 

 

2.6

 

 

4.8

 

Home Equity

 

1.8

 

 

2.8

 

 

4.6

 

Automobile

 

1.0

 

 

0.6

 

 

1.6

 

Other 2

 

-

 

 

0.8

 

 

0.8

 

Total Loans and Leases

 

10.0

 

 

33.1

 

 

43.1

 

Other

 

1.0

 

 

0.9

 

 

1.9

 

Total Change in Interest Income

 

8.1

 

 

52.3

 

 

60.4

 

 
Change in Interest Expense:
Interest-Bearing Deposits
Demand

 

(0.1

)

 

6.9

 

 

6.8

 

Savings

 

-

 

 

24.7

 

 

24.7

 

Time

 

2.9

 

 

15.9

 

 

18.8

 

Total Interest-Bearing Deposits

 

2.8

 

 

47.5

 

 

50.3

 

Funds Purchased

 

-

 

 

0.2

 

 

0.2

 

Short-Term Borrowings

 

1.3

 

 

1.1

 

 

2.4

 

Securities Sold Under Agreements to Repurchase

 

2.0

 

 

0.6

 

 

2.6

 

Other Debt

 

13.4

 

 

(0.2

)

 

13.2

 

Total Change in Interest Expense

 

19.5

 

 

49.2

 

 

68.7

 

 
Change in Net Interest Income

$

(11.4

)

$

3.1

 

$

(8.3

)

1

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

2

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

 
Bank of Hawai‘i Corporation and Subsidiaries
Analysis of Change in Net Interest Income - Taxable-Equivalent Basis

Table 8c

Six Months Ended June 30, 2023
Compared to June 30, 2022
(dollars in millions) Volume 1 Rate 1 Total
Change in Interest Income:
Funds Sold

$

0.8

 

$

8.2

 

$

9.0

 

Investment Securities
Available-for-Sale
Taxable

 

(15.4

)

 

27.3

 

 

11.9

 

Non-Taxable

 

0.1

 

 

0.1

 

 

0.2

 

Held-to-Maturity
Taxable

 

7.1

 

 

2.7

 

 

9.8

 

Total Investment Securities

 

(8.2

)

 

30.1

 

 

21.9

 

Loans Held for Sale

 

(0.2

)

 

0.1

 

 

(0.1

)

Loans and Leases
Commercial and Industrial

 

1.6

 

 

13.3

 

 

14.9

 

Paycheck Protection Program

 

(1.1

)

 

(1.1

)

 

(2.2

)

Commercial Mortgage

 

8.6

 

 

37.9

 

 

46.5

 

Construction

 

0.9

 

 

2.0

 

 

2.9

 

Commercial Lease Financing

 

(0.3

)

 

(0.1

)

 

(0.4

)

Residential Mortgage

 

4.8

 

 

5.0

 

 

9.8

 

Home Equity

 

4.4

 

 

5.1

 

 

9.5

 

Automobile

 

2.2

 

 

0.9

 

 

3.1

 

Other 2

 

0.3

 

 

1.1

 

 

1.4

 

Total Loans and Leases

 

21.4

 

 

64.1

 

 

85.5

 

Other

 

1.0

 

 

1.1

 

 

2.1

 

Total Change in Interest Income

 

14.8

 

 

103.6

 

 

118.4

 

 
Change in Interest Expense:
Interest-Bearing Deposits
Demand

 

(0.1

)

 

11.6

 

 

11.5

 

Savings

 

0.1

 

 

44.2

 

 

44.3

 

Time

 

3.9

 

 

26.0

 

 

29.9

 

Total Interest-Bearing Deposits

 

3.9

 

 

81.8

 

 

85.7

 

Funds Purchased

 

0.2

 

 

0.6

 

 

0.8

 

Short-Term Borrowings

 

4.3

 

 

1.3

 

 

5.6

 

Securities Sold Under Agreements to Repurchase

 

3.9

 

 

1.3

 

 

5.2

 

Other Debt

 

18.6

 

 

(0.2

)

 

18.4

 

Total Change in Interest Expense

 

30.9

 

 

84.8

 

 

115.7

 

 
Change in Net Interest Income

$

(16.1

)

$

18.8

 

$

2.7

 

1

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

2

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

Bank of Hawai‘i Corporation and Subsidiaries
Salaries and Benefits

Table 9

Three Months Ended

 

Six Months Ended

June 30,

 

March 31,

 

June 30,

 

June 30,

(dollars in thousands)

2023

 

2023

 

2022

 

2023

 

2022

Salaries

$

37,962

 

$

38,617

 

$

36,721

 

$

76,579

 

$

71,653

 

Incentive Compensation

 

2,984

 

 

3,997

 

 

6,073

 

 

6,981

 

 

12,184

 

Share-Based Compensation

 

4,096

 

 

3,159

 

 

3,962

 

 

7,255

 

 

7,761

 

Commission Expense

 

775

 

 

647

 

 

1,232

 

 

1,422

 

 

2,873

 

Retirement and Other Benefits

 

3,489

 

 

5,888

 

 

4,036

 

 

9,377

 

 

8,729

 

Payroll Taxes

 

3,310

 

 

5,848

 

 

3,034

 

 

9,158

 

 

7,978

 

Medical, Dental, and Life Insurance

 

3,568

 

 

3,864

 

 

2,591

 

 

7,432

 

 

5,825

 

Separation Expense

 

(9

)

 

3,068

 

 

120

 

 

3,059

 

 

690

 

Total Salaries and Benefits

$

56,175

 

$

65,088

 

$

57,769

 

$

121,263

 

$

117,693

 

 
Bank of Hawai‘i Corporation and Subsidiaries
Loan and Lease Portfolio Balances Table 10
June 30, March 31, December 31, September 30, June 30,
(dollars in thousands)

 

2023

 

 

2023

 

 

2022

 

 

2022

 

 

2022

 

Commercial
Commercial and Industrial

$

1,502,676

$

1,425,916

)

$

1,389,066

)

$

1,368,966

)

$

1,323,830

)

Paycheck Protection Program

 

13,789

 

 

15,175

 

 

19,579

 

 

22,955

 

 

31,964

 

Commercial Mortgage

 

3,796,769

 

 

3,826,283

 

 

3,725,542

 

 

3,591,943

 

 

3,464,126

 

Construction

 

236,428

 

 

232,903

 

 

260,825

 

 

236,498

 

 

246,177

 

Lease Financing

 

62,779

 

 

65,611

 

 

69,491

 

 

73,989

 

 

89,535

 

Total Commercial

 

5,612,441

 

 

5,565,888

 

 

5,464,503

 

 

5,294,351

 

 

5,155,632

 

Consumer
Residential Mortgage

 

4,721,976

 

 

4,691,298

 

 

4,653,072

 

 

4,585,723

 

 

4,486,571

 

Home Equity

 

2,278,105

 

 

2,260,001

 

 

2,225,950

 

 

2,185,484

 

 

2,101,612

 

Automobile

 

878,767

 

 

877,979

 

 

870,396

 

 

820,640

 

 

775,065

 

Other 1

 

423,600

 

 

429,356

 

 

432,499

 

 

435,408

 

 

432,693

 

Total Consumer

 

8,302,448

 

 

8,258,634

 

 

8,181,917

 

 

8,027,255

 

 

7,795,941

 

Total Loans and Leases

$

13,914,889

 

$

13,824,522

 

$

13,646,420

 

$

13,321,606

 

$

12,951,573

 

 
1 Comprised of other revolving credit, installment, and lease financing.
 
 
Deposits
June 30, March 31, December 31, September 30, June 30,
(dollars in thousands)

 

2023

 

 

2023

 

 

2022

 

 

2022

 

 

2022

 

Consumer

$

10,018,931

 

$

10,158,833

 

$

10,304,335

 

$

10,507,946

 

$

10,554,121

 

Commercial

 

8,019,971

 

 

8,594,441

 

 

8,569,670

 

 

8,841,781

 

 

8,824,609

 

Public and Other

 

2,469,713

 

 

1,738,026

 

 

1,741,691

 

 

1,539,046

 

 

1,646,951

 

Total Deposits

$

20,508,615

 

$

20,491,300

 

$

20,615,696

 

$

20,888,773

 

$

21,025,681

 

 
 
Average Deposits
Three Months Ended
June 30, March 31, December 31, September 30, June 30,
(dollars in thousands)

 

2023

 

 

2023

 

 

2022

 

 

2022

 

 

2022

 

Consumer

$

9,977,239

 

$

10,178,988

 

$

10,295,563

 

$

10,485,895

 

$

10,617,060

 

Commercial

 

8,138,358

 

 

8,611,960

 

 

8,588,198

 

 

9,002,432

 

 

8,874,988

 

Public and Other

 

1,903,004

 

 

1,639,934

 

 

1,457,566

 

 

1,375,354

 

 

1,077,315

 

Total Deposits

$

20,018,601

 

$

20,430,882

 

$

20,341,327

 

$

20,863,681

 

$

20,569,363

 

 
Bank of Hawai‘i Corporation and Subsidiaries
Non-Performing Assets and Accruing Loans and Leases Past Due 90 Days or More

Table 11

June 30,

 

March 31,

 

December 31,

 

September 30,

 

June 30,

(dollars in thousands)

2023

 

2023

 

2022

 

2022

 

2022

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

$

17

 

$

31

 

$

37

 

$ <