Skip to main content

Bank of Hawai‘i Corporation Third Quarter 2023 Financial Results

  • Diluted Earnings Per Common Share $1.17
  • Net Income $47.9 Million
  • Total Deposits Up 1.4% Linked Quarter
  • 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 $1.17 for the third quarter of 2023, compared with diluted earnings per common share of $1.12 in the previous quarter and $1.28 in the same quarter of 2022. Net income for the third quarter of 2023 was $47.9 million, up 4.0% from the previous quarter and down 9.3% from the same quarter of 2022. The return on average common equity for the third quarter of 2023 was 15.38% compared with 14.95% in the previous quarter and 16.98% in the same quarter of 2022.

This press release features multimedia. View the full release here: https://www.businesswire.com/news/home/20231023382031/en/

“Bank of Hawai‘i delivered another quarter of solid financial results,” said Peter Ho, Chairman, President, and CEO. “Total deposits were up 1.4% linked quarter, and average deposits were up by 2.4%, driven by growth in core relationship deposits. Our credit quality remained strong, with non-performing assets of 0.08% at quarter end and net charge offs of 0.06% in the quarter. NIM declined modestly by 9 basis points, while our core noninterest income and operating expense remained steady. Finally, one of our key priorities this quarter was to support our clients, employees, and community as we coped with the tragic situation in Maui. Taking care of our community has always been a fundamental priority and we will continue to support our community as we build a stronger Maui.”

Financial Highlights

Net interest income for the third quarter of 2023 was $120.9 million, a decrease of 2.7% from the previous quarter and a decrease of 14.6% from the same quarter of 2022. The decrease in net interest income in the third quarter of 2023 was primarily due to higher funding costs, partially offset by higher earning asset yields.

Net interest margin was 2.13% in the third quarter of 2023, a decrease of 9 basis points from the previous quarter and 47 basis points 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 4.34% in the third quarter of 2023, up 15 basis points from the prior quarter and up 85 basis points from the same quarter of 2022. The average yield on total earning assets was 3.72% in the third quarter of 2023, up 16 basis points from the prior quarter and up 88 basis points from the same quarter of 2022. The average cost of interest-bearing deposits was 1.95% in the third quarter of 2023, up 41 basis points from the prior quarter and up 165 basis points from the same quarter of 2022. The average cost of total deposits, including noninterest-bearing deposits, was 1.40%, up 32 basis points from the prior quarter and up 120 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 $50.3 million in the third quarter of 2023, an increase of 16.4% from the previous quarter and an increase of 64.2% from the same period in 2022. Noninterest income in the third quarter of 2023 included a $14.7 million gain from the early termination of private repurchase agreements, partially offset by a $4.6 million net loss related to investment securities sales and a negative $0.8 million adjustment related to a change in the Visa Class B conversion ratio. Noninterest income in the second quarter of 2023 included $1.5 million from the sale of a low-income housing tax credit investment. Noninterest income in the third quarter of 2022 included a one-time pre-tax charge of $6.9 million related to our agreement to sell assets that terminated certain leveraged leases and a negative $0.9 million adjustment related to a change in the Visa Class B conversion ratio. Adjusted for these items, noninterest income in the third quarter of 2023 was $41.0 million, down 1.6% from adjusted noninterest income in the previous quarter, and up 6.6% from adjusted noninterest income in the same period in 2022.

Noninterest expense was $105.6 million in the third quarter of 2023, an increase of 1.5% from the previous quarter and a decrease of 0.1% from the same quarter of 2022. Noninterest expense in the third quarter of 2023 included separation expenses of $2.1 million and extraordinary expenses related to the Maui wildfires of $0.4 million. Noninterest expense in the third quarter of 2022 included $1.8 million in separation expenses. Adjusted noninterest expense in the third quarter of 2023 was $103.1 million, down 0.9% from the previous quarter and down 0.8% from adjusted noninterest expense in the same period in 2022.

The effective tax rate for the third quarter of 2023 was 24.76% compared with 24.57% in the previous quarter and 20.68% during the same quarter of 2022. The increase in the effective tax rate on a linked quarter basis was mainly due to a decrease in benefits from tax credit investments from the second quarter. The year over year increase was primarily due to tax benefits in the third quarter of 2022 related to the aforementioned agreement to sell assets that terminated certain leveraged leases.

Asset Quality

The Company’s overall asset quality remained strong during the third quarter of 2023. Provision for credit losses for the third quarter of 2023 was $2.0 million compared with $2.5 million in the previous quarter. The Company had no provision for credit loss in the third quarter of 2022.

Total non-performing assets were $11.5 million at September 30, 2023, flat from June 30, 2023 and down $2.3 million from September 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, flat from the end of the prior quarter and a decrease of 2 basis points from the same quarter of 2022.

Net loan and lease charge-offs during the third quarter of 2023 were $2.0 million or 6 basis points annualized of total average loans and leases outstanding. Net loan and lease charge-offs for the third quarter of 2023 were comprised of charge-offs of $3.6 million partially offset by recoveries of $1.6 million. Compared to the prior quarter, net loan and lease charge-offs increased by $0.7 million or 2 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 $0.9 million or 3 basis points annualized on total average loans and leases outstanding.

The allowance for credit losses on loans and leases was $145.3 million at September 30, 2023, a decrease of $0.1 million from June 30, 2023 and a decrease of $1.2 million from September 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 6 basis points from the same quarter of 2022.

Balance Sheet

Total assets were $23.5 billion at September 30, 2023, a decrease of 5.6% from June 30, 2023 and an increase of 1.8% from September 30, 2022. The decrease from the prior quarter was primarily due to a decrease in funds sold. The increase from the same period in 2022 was primarily due to an increase in our loans and leases.

Total funds sold and cash and due from banks was $0.6 billion at September 30, 2023, a decrease of $1.0 billion from June 30, 2023 and flat from September 30, 2022. The decrease was primarily due to termination of $1.8 billion of wholesale funding during the quarter, including Federal Home Loan Bank advances and private repurchase agreements.

The investment securities portfolio was $7.5 billion at September 30, 2023, a decrease of 5.0% from June 30, 2023 and a decrease of 5.2% from September 30, 2022. These decreases were due to sales of $159.1 million of investment securities during the quarter and 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 September 30, 2023, flat from June 30, 2023 and an increase of 4.5% from September 30, 2022. Total commercial loans were $5.7 billion at September 30, 2023, an increase of 1.2% from the prior quarter and an increase of 7.3% from the same quarter of 2022. The increase from the same period in 2022 was primarily due to increases in our commercial mortgage and commercial and industrial portfolios. Total consumer loans were $8.2 billion as of September 30, 2023, a decrease of 0.8% from the prior quarter and an increase of 2.7% from the same period in 2022. The increase from the same period in 2022 was primarily driven by increases in our residential mortgage and home equity portfolios.

Total deposits were $20.8 billion at September 30, 2023, an increase of 1.4% from June 30, 2023 and a decrease of 0.4% from September 30, 2022. Noninterest-bearing deposits made up 27% of total deposit balances as of September 30, 2023, down from 29% as of June 30, 2023, and down from 35% as of September 30, 2022. Average deposits were $20.5 billion for the third quarter of 2023, up 2.4% from $20.0 billion in the prior quarter, and down 1.8% from $20.9 billion in the third quarter of 2022. As of September 30, 2023, insured and uninsured but collateralized deposits represent 58% of total deposit balances, down from 61% as of June 30, 2023, and up from 56% as of September 30, 2022. As of September 30, 2023, our readily available liquidity of $9.6 billion exceeded total uninsured and uncollateralized deposits.

Capital and Dividends

The Company’s capital levels increased quarter over quarter and remain well above regulatory well-capitalized minimums.

The Tier 1 Capital Ratio was 12.53% at September 30, 2023 compared with 12.21% at June 30, 2023 and 12.72% at September 30, 2022. The Tier 1 Leverage Ratio was 7.22% at September 30, 2023, up 1 basis point from 7.21% at June 30, 2023 and down 6 basis points from 7.28% at September 30, 2022. The increases from the prior quarter were due to an increase in Tier 1 capital as a result of retained earnings growth and a decrease in risk-weighted assets. The decreases from the same period in 2022 were due to an increase in risk-weighted assets and average total assets, as a result of loan growth over the period.

No shares of common stock were repurchased under the share repurchase program in the third quarter of 2023. Total remaining buyback authority under the share repurchase program was $126.0 million at September 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 December 14, 2023 to shareholders of record at the close of business on November 30, 2023.

On October 5, 2023, the Company announced that 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, 2023 to shareholders of record of the preferred stock as of the close of business on October 17, 2023.

Conference Call Information

The Company will review its third quarter financial results today at 8:00 a.m. Hawai‘i 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/BId0e4643fbbd64cdfae5f15202d1ffbba. A replay of the conference call will be available for one year beginning approximately 11:00 a.m. Hawai‘i Time on Monday, October 23, 2023. The replay will be available on the Company's website, www.boh.com.

Investor Announcements

Investors and others should note that the Company intends to announce financial and other information to the Company’s investors using the Company’s investor relations website at https://ir.boh.com, social media channels, press releases, SEC filings and public conference calls and webcasts, all for purposes of complying with the Company’s disclosure obligations under Regulation FD. Accordingly, investors should monitor these channels, as information is updated, and new information is posted.

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 and June 30, 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 Hawai‘i 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 website, 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 Nine Months Ended

September 30,

 

June 30,

 

September 30,

 

September 30,

(dollars in thousands, except per share amounts)

2023

 

2023

 

2022

 

2023

 

2022

For the Period:
Operating Results
Net Interest Income

$

120,937

 

$

124,348

 

$

141,655

 

$

381,240

 

$

399,820

 

Provision for Credit Losses

 

2,000

 

 

2,500

 

 

-

 

 

6,500

 

 

(8,000

)

Total Noninterest Income

 

50,334

 

 

43,255

 

 

30,660

 

 

134,326

 

 

116,369

 

Total Noninterest Expense

 

105,601

 

 

104,036

 

 

105,749

 

 

321,556

 

 

312,562

 

Pre-Provision Net Revenue

 

65,670

 

 

63,567

 

 

66,566

 

 

194,010

 

 

203,627

 

Net Income

 

47,903

 

 

46,061

 

 

52,801

 

 

140,806

 

 

164,497

 

Net Income Available to Common Shareholders

 

45,934

 

 

44,092

 

 

50,832

 

 

134,899

 

 

158,590

 

Basic Earnings Per Common Share

 

1.17

 

 

1.12

 

 

1.28

 

 

3.44

 

 

4.00

 

Diluted Earnings Per Common Share

 

1.17

 

 

1.12

 

 

1.28

 

 

3.42

 

 

3.98

 

Dividends Declared Per Common Share

 

0.70

 

 

0.70

 

 

0.70

 

 

2.10

 

 

2.10

 

 
Performance Ratios
Return on Average Assets

 

0.78

%

 

0.77

%

 

0.91

%

 

0.78

%

 

0.96

%

Return on Average Shareholders' Equity

 

13.92

 

 

13.55

 

 

15.31

 

 

13.91

 

 

15.25

 

Return on Average Common Equity

 

15.38

 

 

14.95

 

 

16.98

 

 

15.37

 

 

16.81

 

Efficiency Ratio 1

 

61.66

 

 

62.07

 

 

61.37

 

 

62.37

 

 

60.55

 

Net Interest Margin 2

 

2.13

 

 

2.22

 

 

2.60

 

 

2.27

 

 

2.47

 

Dividend Payout Ratio 3

 

59.83

 

 

62.50

 

 

54.69

 

 

61.05

 

 

52.50

 

Average Shareholders' Equity to Average Assets

 

5.60

 

 

5.65

 

 

5.91

 

 

5.61

 

 

6.28

 

 
Average Balances
Average Loans and Leases

$

13,903,214

 

$

13,876,754

 

$

13,126,717

 

$

13,833,164

 

$

12,709,045

 

Average Assets

 

24,387,421

 

 

24,114,443

 

 

23,135,820

 

 

24,124,360

 

 

22,959,246

 

Average Deposits

 

20,492,082

 

 

20,018,601

 

 

20,863,681

 

 

20,314,079

 

 

20,621,310

 

Average Shareholders' Equity

 

1,365,143

 

 

1,363,059

 

 

1,367,946

 

 

1,353,815

 

 

1,441,706

 

 
Per Share of Common Stock
Book Value

$

29.78

 

$

29.66

 

$

27.55

 

$

29.78

 

$

27.55

 

Tangible Book Value

 

28.99

 

 

28.87

 

 

26.76

 

 

28.99

 

 

26.76

 

Market Value
Closing

 

49.69

 

 

41.23

 

 

76.12

 

 

49.69

 

 

76.12

 

High

 

58.63

 

 

52.37

 

 

85.45

 

 

81.73

 

 

92.38

 

Low

 

39.02

 

 

30.83

 

 

70.89

 

 

30.83

 

 

70.89

 

 
September 30, June 30, December 31, September 30,

2023

2023

2022

2022

As of Period End:
Balance Sheet Totals
Loans and Leases

$

13,919,491

 

$

13,914,889

 

$

13,646,420

 

$

13,321,606

 

Total Assets

 

23,549,785

 

 

24,947,936

 

 

23,606,877

 

 

23,134,040

 

Total Deposits

 

20,802,309

 

 

20,508,615

 

 

20,615,696

 

 

20,888,773

 

Other Debt

 

560,217

 

 

1,760,243

 

 

410,294

 

 

10,319

 

Total Shareholders' Equity

 

1,363,840

 

 

1,358,279

 

 

1,316,995

 

 

1,282,384

 

 
Asset Quality
Non-Performing Assets

$

11,519

 

$

11,477

 

$

12,647

 

$

13,868

 

Allowance for Credit Losses - Loans and Leases

 

145,263

 

 

145,367

 

 

144,439

 

 

146,436

 

Allowance to Loans and Leases Outstanding 4

 

1.04

%

 

1.04

%

 

1.06

%

 

1.10

%

 
Capital Ratios 5
Common Equity Tier 1 Capital Ratio

 

11.29

%

 

11.00

%

 

10.92

%

 

11.42

%

Tier 1 Capital Ratio

 

12.53

 

 

12.21

 

 

12.15

 

 

12.72

 

Total Capital Ratio

 

13.56

 

 

13.24

 

 

13.17

 

 

13.82

 

Tier 1 Leverage Ratio

 

7.22

 

 

7.21

 

 

7.37

 

 

7.28

 

Total Shareholders' Equity to Total Assets

 

5.79

 

 

5.44

 

 

5.58

 

 

5.54

 

Tangible Common Equity to Tangible Assets 6

 

4.90

 

 

4.60

 

 

4.69

 

 

4.64

 

Tangible Common Equity to Risk-Weighted Assets 6

 

8.10

 

 

7.97

 

 

7.76

 

 

7.97

 

 
Non-Financial Data
Full-Time Equivalent Employees

 

1,919

 

 

2,025

 

 

2,076

 

 

2,115

 

Branches

 

51

 

 

51

 

 

51

 

 

51

 

ATMs

 

320

 

 

320

 

 

320

 

 

316

 

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 September 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
September 30, June 30, December 31, September 30,
(dollars in thousands)

2023

 

2023

 

2022

 

2022

 
Total Shareholders' Equity

$

1,363,840

 

$

1,358,279

 

$

1,316,995

 

$

1,282,384

 

Less: Preferred Stock

 

180,000

 

 

180,000

 

 

180,000

 

 

180,000

 

Goodwill

 

31,517

 

 

31,517

 

 

31,517

 

 

31,517

 

Tangible Common Equity

$

1,152,323

 

$

1,146,762

 

$

1,105,478

 

$

1,070,867

 

 
Total Assets

$

23,549,785

 

$

24,947,936

 

$

23,606,877

 

$

23,134,040

 

Less: Goodwill

 

31,517

 

 

31,517

 

 

31,517

 

 

31,517

 

Tangible Assets

$

23,518,268

 

$

24,916,419

 

$

23,575,360

 

$

23,102,523

 

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

$

14,222,825

 

$

14,391,943

 

$

14,238,798

 

$

13,428,188

 

 
Total Shareholders' Equity to Total Assets

 

5.79

%

 

5.44

%

 

5.58

%

 

5.54

%

Tangible Common Equity to Tangible Assets (Non-GAAP)

 

4.90

%

 

4.60

%

 

4.69

%

 

4.64

%

 
Tier 1 Capital Ratio 1

 

12.53

%

 

12.21

%

 

12.15

%

 

12.72

%

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

 

8.10

%

 

7.97

%

 

7.76

%

 

7.97

%

1

Regulatory capital ratios as of September 30, 2023 are preliminary.
Bank of Hawai‘i 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)

2023

2023

2022

2023

2022

Interest Income
Interest and Fees on Loans and Leases

$

151,245

 

$

144,541

 

$

115,013

 

$

432,287

 

$

311,115

 

Income on Investment Securities
Available-for-Sale

 

23,552

 

 

23,301

 

 

16,995

 

 

70,746

 

 

52,079

 

Held-to-Maturity

 

22,838

 

 

23,375

 

 

20,243

 

 

70,161

 

 

57,782

 

Deposits

 

18

 

 

18

 

 

10

 

 

63

 

 

19

 

Funds Sold

 

12,828

 

 

6,395

 

 

2,335

 

 

22,589

 

 

3,181

 

Other

 

1,464

 

 

2,121

 

 

322

 

 

4,182

 

 

877

 

Total Interest Income

 

211,945

 

 

199,751

 

 

154,918

 

 

600,028

 

 

425,053

 

Interest Expense
Deposits

 

72,153

 

 

53,779

 

 

10,296

 

 

163,726

 

 

16,184

 

Securities Sold Under Agreements to Repurchase

 

4,034

 

 

5,436

 

 

2,745

 

 

14,847

 

 

8,311

 

Funds Purchased

 

-

 

 

184

 

 

40

 

 

888

 

 

99

 

Short-Term Borrowings

 

-

 

 

2,510

 

 

-

 

 

5,713

 

 

92

 

Other Debt

 

14,821

 

 

13,494

 

 

182

 

 

33,614

 

 

547

 

Total Interest Expense

 

91,008

 

 

75,403

 

 

13,263

 

 

218,788

 

 

25,233

 

Net Interest Income

 

120,937

 

 

124,348

 

 

141,655

 

 

381,240

 

 

399,820

 

Provision for Credit Losses

 

2,000

 

 

2,500

 

 

-

 

 

6,500

 

 

(8,000

)

Net Interest Income After Provision for Credit Losses

 

118,937

 

 

121,848

 

 

141,655

 

 

374,740

 

 

407,820

 

Noninterest Income
Trust and Asset Management

 

10,548

 

 

11,215

 

 

10,418

 

 

32,453

 

 

33,151

 

Mortgage Banking

 

1,059

 

 

1,176

 

 

1,002

 

 

3,239

 

 

4,989

 

Service Charges on Deposit Accounts

 

7,843

 

 

7,587

 

 

7,526

 

 

23,167

 

 

22,107

 

Fees, Exchange, and Other Service Charges

 

13,824

 

 

14,150

 

 

13,863

 

 

41,782

 

 

41,008

 

Investment Securities Losses, Net

 

(6,734

)

 

(1,310

)

 

(2,147

)

 

(9,836

)

 

(4,987

)

Annuity and Insurance

 

1,156

 

 

1,038

 

 

1,034

 

 

3,465

 

 

2,695

 

Bank-Owned Life Insurance

 

2,749

 

 

2,876

 

 

2,486

 

 

8,467

 

 

7,493

 

Other

 

19,889

 

 

6,523

 

 

(3,522

)

 

31,589

 

 

9,913

 

Total Noninterest Income

 

50,334

 

 

43,255

 

 

30,660

 

 

134,326

 

 

116,369

 

Noninterest Expense
Salaries and Benefits

 

58,825

 

 

56,175

 

 

59,938

 

 

180,088

 

 

177,631

 

Net Occupancy

 

10,327

 

 

9,991

 

 

10,186

 

 

30,190

 

 

29,942

 

Net Equipment

 

9,477

 

 

10,573

 

 

9,736

 

 

30,425

 

 

28,432

 

Data Processing

 

4,706

 

 

4,599

 

 

4,616

 

 

13,888

 

 

13,783

 

Professional Fees

 

3,846

 

 

4,651

 

 

3,799

 

 

12,380

 

 

10,599

 

FDIC Insurance

 

3,361

 

 

3,173

 

 

1,680

 

 

9,768

 

 

4,772

 

Other

 

15,059

 

 

14,874

 

 

15,794

 

 

44,817

 

 

47,403

 

Total Noninterest Expense

 

105,601

 

 

104,036

 

 

105,749

 

 

321,556

 

 

312,562

 

Income Before Provision for Income Taxes

 

63,670

 

 

61,067

 

 

66,566

 

 

187,510

 

 

211,627

 

Provision for Income Taxes

 

15,767

 

 

15,006

 

 

13,765

 

 

46,704

 

 

47,130

 

Net Income

$

47,903

 

$

46,061

 

$

52,801

 

$

140,806

 

$

164,497

 

Preferred Stock Dividends

 

1,969

 

 

1,969

 

 

1,969

 

 

5,908

 

 

5,908

 

Net Income Available to Common Shareholders

$

45,934

 

$

44,092

 

$

50,832

 

$

134,898

 

$

158,589

 

Basic Earnings Per Common Share

$

1.17

 

$

1.12

 

$

1.28

 

$

3.44

 

$

4.00

 

Diluted Earnings Per Common Share

$

1.17

 

$

1.12

 

$

1.28

 

$

3.42

 

$

3.98

 

Dividends Declared Per Common Share

$

0.70

 

$

0.70

 

$

0.70

 

$

2.10

 

$

2.10

 

Basic Weighted Average Common Shares

 

39,274,626

 

 

39,241,559

 

 

39,567,047

 

 

39,264,450

 

 

39,670,409

 

Diluted Weighted Average Common Shares

 

39,420,531

 

 

39,317,521

 

 

39,758,209

 

 

39,392,433

 

 

39,848,795

 

Bank of Hawai‘i 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)

2023

 

2023

 

2022

 

2023

 

2022

Net Income

$

47,903

 

$

46,061

 

$

52,801

 

$

140,806

 

$

164,497

 

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

 

(18,264

)

 

(18,217

)

 

(79,600

)

 

(7,205

)

 

(382,371

)

Defined Benefit Plans

 

84

 

 

84

 

 

354

 

 

252

 

 

1,059

 

Other Comprehensive Loss

 

(18,180

)

 

(18,133

)

 

(79,246

)

 

(6,953

)

 

(381,312

)

Comprehensive Income (Loss)

$

29,723

 

$

27,928

 

$

(26,445

)

$

133,853

 

$

(216,815

)

Bank of Hawai‘i Corporation and Subsidiaries
Consolidated Statements of Condition Table 5
September 30, June 30, December 31, September 30,
(dollars in thousands)

2023

2023

2022

2022

Assets
Interest-Bearing Deposits in Other Banks

$

4,676

 

$

2,261

 

$

3,724

 

$

5,429

 

Funds Sold

 

386,086

 

 

1,273,109

 

 

81,364

 

 

402,714

 

Investment Securities
Available-for-Sale

 

2,387,324

 

 

2,666,723

 

 

2,844,823

 

 

2,424,608

 

Held-to-Maturity (Fair Value of $4,104,469; $4,411,003; $4,615,393; and $4,668,074)

 

5,088,013

 

 

5,202,698

 

 

5,414,139

 

 

5,461,160

 

Loans Held for Sale

 

1,450

 

 

3,359

 

 

1,035

 

 

418

 

Loans and Leases

 

13,919,491

 

 

13,914,889

 

 

13,646,420

 

 

13,321,606

 

Allowance for Credit Losses

 

(145,263

)

 

(145,367

)

 

(144,439

)

 

(146,436

)

Net Loans and Leases

 

13,774,228

 

 

13,769,522

 

 

13,501,981

 

 

13,175,170

 

Total Earning Assets

 

21,641,777

 

 

22,917,672

 

 

21,847,066

 

 

21,469,499

 

Cash and Due from Banks

 

261,464

 

 

398,072

 

 

316,679

 

 

247,506

 

Premises and Equipment, Net

 

196,094

 

 

200,297

 

 

206,777

 

 

208,251

 

Operating Lease Right-of-Use Assets

 

86,896

 

 

89,286

 

 

92,307

 

 

94,613

 

Accrued Interest Receivable

 

65,541

 

 

64,720

 

 

61,002

 

 

50,143

 

Foreclosed Real Estate

 

1,040

 

 

1,040

 

 

1,040

 

 

1,040

 

Mortgage Servicing Rights

 

21,273

 

 

21,626

 

 

22,619

 

 

23,104

 

Goodwill

 

31,517

 

 

31,517

 

 

31,517

 

 

31,517

 

Bank-Owned Life Insurance

 

458,260

 

 

456,889

 

 

453,882

 

 

451,407

 

Other Assets

 

785,923

 

 

766,817

 

 

573,988

 

 

556,960

 

Total Assets

$

23,549,785

 

$

24,947,936

 

$

23,606,877

 

$

23,134,040

 

 
Liabilities
Deposits
Noninterest-Bearing Demand

$

5,687,442

 

$

5,968,344

 

$

6,714,982

 

$

7,300,157

 

Interest-Bearing Demand

 

3,925,469

 

 

4,119,166

 

 

4,232,567

 

 

4,399,625

 

Savings

 

8,530,384

 

 

7,756,426

 

 

7,962,410

 

 

7,954,006

 

Time

 

2,659,014

 

 

2,664,679

 

 

1,705,737

 

 

1,234,985

 

Total Deposits

 

20,802,309

 

 

20,508,615

 

 

20,615,696

 

 

20,888,773

 

Securities Sold Under Agreements to Repurchase

 

150,490

 

 

725,490

 

 

725,490

 

 

425,490

 

Other Debt

 

560,217

 

 

1,760,243

 

 

410,294

 

 

10,319

 

Operating Lease Liabilities

 

95,453

 

 

97,768

 

 

100,526

 

 

102,705

 

Retirement Benefits Payable

 

26,074

 

 

26,434

 

 

26,991

 

 

37,053

 

Accrued Interest Payable

 

33,434

 

 

26,737

 

 

9,698

 

 

3,405

 

Taxes Payable

 

6,965

 

 

132

 

 

7,104

 

 

13,527

 

Other Liabilities

 

511,003

 

 

444,238

 

 

394,083

 

 

370,384

 

Total Liabilities

 

22,185,945

 

 

23,589,657

 

 

22,289,882

 

 

21,851,656

 

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

 

180,000

 

 

180,000

 

 

180,000

 

 

180,000

 

Common Stock ($.01 par value; authorized 500,000,000 shares;
issued / outstanding: September 30, 2023 - 58,767,820 / 39,748,700;
June 30, 2023 - 58,771,036 / 39,725,348; December 31, 2022 - 58,733,625 / 39,835,750;
and September 30, 2022 - 58,728,796 / 40,011,473)

 

583

 

 

583

 

 

582

 

 

582

 

Capital Surplus

 

632,425

 

 

628,202

 

 

620,578

 

 

615,985

 

Accumulated Other Comprehensive Loss

 

(441,611

)

 

(423,431

)

 

(434,658

)

 

(447,694

)

Retained Earnings

 

2,108,702

 

 

2,091,289

 

 

2,055,912

 

 

2,024,641

 

Treasury Stock, at Cost (Shares: September 30, 2023 - 19,019,120; June 30, 2023 - 19,045,688;
December 31, 2022 - 18,897,875; and September 30, 2022 - 18,717,323)

 

(1,116,259

)

 

(1,118,364

)

 

(1,105,419

)

 

(1,091,130

)

Total Shareholders' Equity

 

1,363,840

 

 

1,358,279

 

 

1,316,995

 

 

1,282,384

 

Total Liabilities and Shareholders' Equity

$

23,549,785

 

$

24,947,936

 

$

23,606,877

 

$

23,134,040

 

Bank of Hawai‘i Corporation and Subsidiaries
Consolidated Statements of Shareholders' Equity Table 6
Accumulated
Preferred Common Other
Shares Preferred Shares Common Capital Comprehensive 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

-

 

-

 

-

 

 

-

 

-

 

 

-

 

 

140,806

 

 

-

 

 

140,806

 

Other Comprehensive Loss

-

 

-

 

-

 

 

-

 

-

 

 

(6,953

)

 

-

 

 

-

 

 

(6,953

)

Share-Based Compensation

-

 

-

 

-

 

 

-

 

11,979

 

 

-

 

 

-

 

 

-

 

 

11,979

 

Common Stock Issued under Purchase and
Equity Compensation Plans

-

 

-

 

121,040

 

 

1

 

(132

)

 

-

 

 

1,716

 

 

3,216

 

 

4,801

 

Common Stock Repurchased

-

 

-

 

(208,090

)

 

-

 

-

 

 

-

 

 

-

 

 

(14,056

)

 

(14,056

)

Cash Dividends Declared Common Stock ($2.10 per share)

-

 

-

 

-

 

 

-

 

-

 

 

-

 

 

(83,824

)

 

-

 

 

(83,824

)

Cash Dividends Declared Preferred Stock

-

 

-

 

-

 

 

-

 

-

 

 

-

 

 

(5,908

)

 

-

 

 

(5,908

)

Balance as of September 30, 2023

180,000

$

180,000

39,748,700

 

$

583

$

632,425

 

$

(441,611

)

$

2,108,702

 

$

(1,116,259

)

$

1,363,840

 

 
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

 

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
September 30, 2023 June 30, 2023 September 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

$

2.9

$

-

2.40

%

$

5.1

$

-

1.48

%

$

2.9

$

-

1.32

%

Funds Sold

 

944.8

 

12.8

5.31

 

 

500.1

 

6.4

5.06

 

 

411.8

 

2.3

2.22

 

Investment Securities
Available-for-Sale
Taxable

 

2,605.4

 

23.5

3.60

 

 

2,741.1

 

23.2

3.39

 

 

3,481.9

 

17.0

1.95

 

Non-Taxable

 

3.5

 

-

3.21

 

 

9.6

 

0.1

4.40

 

 

2.5

 

-

1.56

 

Held-to-Maturity
Taxable

 

5,118.6

 

22.7

1.77

 

 

5,231.3

 

23.2

1.78

 

 

4,645.7

 

20.1

1.73

 

Non-Taxable

 

35.0

 

0.2

2.10

 

 

35.2

 

0.2

2.10

 

 

35.6

 

0.2

2.10

 

Total Investment Securities

 

7,762.5

 

46.4

2.39

 

 

8,017.2

 

46.7

2.33

 

 

8,165.7

 

37.3

1.82

 

Loans Held for Sale

 

3.8

 

0.1

6.28

 

 

2.7

 

-

5.50

 

 

4.3

 

0.1

4.46

 

Loans and Leases 3
Commercial and Industrial

 

1,515.0

 

18.9

4.96

 

 

1,456.1

 

17.5

4.82

 

 

1,353.8

 

12.5

3.66

 

Paycheck Protection Program

 

13.1

 

-

1.32

 

 

14.5

 

-

1.30

 

 

28.0

 

0.2

3.02

 

Commercial Mortgage

 

3,792.6

 

51.1

5.35

 

 

3,814.9

 

49.3

5.19

 

 

3,530.9

 

33.3

3.74

 

Construction

 

241.9

 

3.7

6.09

 

 

246.8

 

3.5

5.70

 

 

233.0

 

2.8

4.81

 

Commercial Lease Financing

 

62.6

 

0.3

1.84

 

 

65.4

 

0.3

1.67

 

 

89.1

 

0.4

1.58

 

Residential Mortgage

 

4,715.3

 

42.8

3.62

 

 

4,704.0

 

41.2

3.50

 

 

4,526.6

 

37.4

3.30

 

Home Equity

 

2,283.5

 

20.1

3.49

 

 

2,272.3

 

19.0

3.35

 

 

2,144.8

 

16.4

3.04

 

Automobile

 

868.0

 

8.2

3.75

 

 

879.3

 

7.7

3.53

 

 

795.5

 

6.4

3.19

 

Other 4

 

411.2

 

6.5

6.24

 

 

423.5

 

6.4

6.04

 

 

425.0

 

5.9

5.48

 

Total Loans and Leases

 

13,903.2

 

151.6

4.34

 

 

13,876.8

 

144.9

4.19

 

 

13,126.7

 

115.3

3.49

 

Other

 

91.6

 

1.5

6.40

 

 

94.8

 

2.2

8.94

 

 

36.9

 

0.3

3.49

 

Total Earning Assets

 

22,708.8

 

212.4

3.72

 

 

22,496.7

 

200.2

3.56

 

 

21,748.3

 

155.3

2.84

 

Cash and Due from Banks

 

289.8

 

316.6

 

233.5

Other Assets

 

1,388.8

 

1,301.1

 

1,154.0

Total Assets

$

24,387.4

$

24,114.4

$

23,135.8

 
Interest-Bearing Liabilities
Interest-Bearing Deposits
Demand

$

3,929.7

 

6.6

0.67

 

$

4,037.4

 

7.5

0.75

 

$

4,286.0

 

1.4

0.13

 

Savings

 

7,952.6

 

39.1

1.95

 

 

7,667.6

 

26.6

1.39

 

 

7,962.0

 

6.6

0.33

 

Time

 

2,767.8

 

26.5

3.79

 

 

2,296.1

 

19.7

3.44

 

 

1,146.9

 

2.3

0.79

 

Total Interest-Bearing Deposits

 

14,650.1

 

72.2

1.95

 

 

14,001.1

 

53.8

1.54

 

 

13,394.9

 

10.3

0.30

 

Funds Purchased

 

-

 

-

-

 

 

14.6

 

0.2

5.00

 

 

4.9

 

0.1

3.17

 

Short-Term Borrowings

 

-

 

-

-

 

 

195.2

 

2.5

5.09

 

 

-

 

-

-

 

Securities Sold Under Agreements to Repurchase

 

528.5

 

4.0

2.99

 

 

725.5

 

5.4

2.96

 

 

425.5

 

2.7

2.52

 

Other Debt

 

1,365.7

 

14.8

4.31

 

 

1,255.8

 

13.5

4.31

 

 

10.3

 

0.2

7.05

 

Total Interest-Bearing Liabilities

 

16,544.3

 

91.0

2.18

 

 

16,192.2

 

75.4

1.87

 

 

13,835.6

 

13.3

0.38

 

Net Interest Income

$

121.4

$

124.8

$

142.0

Interest Rate Spread

1.54

%

1.69

%

2.46

%

Net Interest Margin

2.13

%

2.22

%

2.60

%

Noninterest-Bearing Demand Deposits

 

5,842.0

 

6,017.5

 

7,468.8

Other Liabilities

 

636.0

 

541.6

 

463.5

Shareholders' Equity

 

1,365.1

 

1,363.1

 

1,367.9

Total Liabilities and Shareholders' Equity

$

24,387.4

$

24,114.4

$

23,135.8

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 $437,000, $471,000, and $343,000 for the three months ended September 30, 2023, June 30, 2023, and September 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
Nine Months Ended Nine Months Ended
September 30, 2023 September 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

$

3.2

$

0.1

2.60

%

$

3.3

$

-

0.76

%

Funds Sold

 

582.7

 

22.6

5.11

 

 

308.6

 

3.2

1.36

 

Investment Securities
Available-for-Sale
Taxable

 

2,721.5

 

70.6

3.46

 

 

3,998.2

 

52.0

1.74

 

Non-Taxable

 

7.6

 

0.2

4.22

 

 

2.8

 

-

1.84

 

Held-to-Maturity
Taxable

 

5,227.8

 

69.7

1.78

 

 

4,530.4

 

57.4

1.69

 

Non-Taxable

 

35.2

 

0.6

2.10

 

 

35.7

 

0.6

2.10

 

Total Investment Securities

 

7,992.1

 

141.1

2.36

 

 

8,567.1

 

110.0

1.71

 

Loans Held for Sale

 

2.7

 

0.1

5.82

 

 

8.1

 

0.2

3.43

 

Loans and Leases 3
Commercial and Industrial

 

1,461.2

 

52.7

4.82

 

 

1,339.0

 

31.4

3.13

 

Paycheck Protection Program

 

14.8

 

0.2

1.70

 

 

51.7

 

2.5

6.59

 

Commercial Mortgage

 

3,781.7

 

145.6

5.15

 

 

3,350.3

 

81.3

3.25

 

Construction

 

256.2

 

11.1

5.81

 

 

227.7

 

7.3

4.30

 

Commercial Lease Financing

 

64.9

 

0.5

1.11

 

 

94.0

 

1.0

1.49

 

Residential Mortgage

 

4,695.4

 

123.8

3.51

 

 

4,439.1

 

108.6

3.26

 

Home Equity

 

2,265.2

 

57.3

3.38

 

 

2,026.5

 

44.1

2.91

 

Automobile

 

873.0

 

23.2

3.55

 

 

764.2

 

18.4

3.21

 

Other 4

 

420.8

 

19.0

6.04

 

 

416.5

 

17.0

5.44

 

Total Loans and Leases

 

13,833.2

 

433.4

4.19

 

 

12,709.0

 

311.6

3.27

 

Other

 

84.6

 

4.1

6.59

 

 

37.2

 

0.9

3.14

 

Total Earning Assets

 

22,498.5

 

601.4

3.57

 

 

21,633.3

 

425.9

2.63

 

Cash and Due from Banks

 

308.4

 

235.0

Other Assets

 

1,317.5

 

1,090.9

Total Assets

$

24,124.4

$

22,959.2

 
Interest-Bearing Liabilities
Interest-Bearing Deposits
Demand

$

4,060.0

 

19.3

0.64

 

$

4,459.9

 

2.6

0.08

 

Savings

 

7,876.1

 

86.3

1.46

 

 

7,733.3

 

9.5

0.16

 

Time

 

2,288.2

 

58.1

3.40

 

 

1,023.6

 

4.1

0.53

 

Total Interest-Bearing Deposits

 

14,224.3

 

163.7

1.54

 

 

13,216.8

 

16.2

0.16

 

Funds Purchased

 

24.8

 

0.9

4.72

 

 

12.4

 

0.1

1.05

 

Short-Term Borrowings

 

152.4

 

5.7

4.94

 

 

11.5

 

0.1

1.06

 

Securities Sold Under Agreements to Repurchase

 

659.1

 

14.8

2.97

 

 

441.1

 

8.3

2.48

 

Other Debt

 

1,043.6

 

33.7

4.31

 

 

10.3

 

0.6

7.05

 

Total Interest-Bearing Liabilities

 

16,104.2

 

218.8

1.81

 

 

13,692.1

 

25.3

0.25

 

Net Interest Income

$

382.6

$

400.6

Interest Rate Spread

1.76

%

2.38

%

Net Interest Margin

2.27

%

2.47

%

Noninterest-Bearing Demand Deposits

 

6,089.8

 

7,404.5

Other Liabilities

 

576.6

 

420.9

Shareholders' Equity

 

1,353.8

 

1,441.7

Total Liabilities and Shareholders' Equity

$

24,124.4

$

22,959.2

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 $1,403,000 and $818,000 for the nine months ended September 30, 2023 and September 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 September 30, 2023
Compared to June 30, 2023
(dollars in millions) Volume 1 Rate 1 Total
Change in Interest Income:
Funds Sold

$

6.1

 

$

0.3

 

$

6.4

 

Investment Securities
Available-for-Sale
Taxable

 

(1.1

)

 

1.4

 

 

0.3

 

Non-Taxable

 

(0.1

)

 

-

 

 

(0.1

)

Held-to-Maturity
Taxable

 

(0.5

)

 

-

 

 

(0.5

)

Total Investment Securities

 

(1.7

)

 

1.4

 

 

(0.3

)

Loans Held for Sale

 

0.1

 

 

-

 

 

0.1

 

Loans and Leases
Commercial and Industrial

 

0.8

 

 

0.6

 

 

1.4

 

Commercial Mortgage

 

(0.2

)

 

2.0

 

 

1.8

 

Construction

 

(0.1

)

 

0.3

 

 

0.2

 

Residential Mortgage

 

0.2

 

 

1.4

 

 

1.6

 

Home Equity

 

0.1

 

 

1.0

 

 

1.1

 

Automobile

 

(0.1

)

 

0.6

 

 

0.5

 

Other 2

 

(0.2

)

 

0.3

 

 

0.1

 

Total Loans and Leases

 

0.5

 

 

6.2

 

 

6.7

 

Other

 

(0.1

)

 

(0.6

)

 

(0.7

)

Total Change in Interest Income

 

4.9

 

 

7.3

 

 

12.2

 

 
Change in Interest Expense:
Interest-Bearing Deposits
Demand

 

(0.2

)

 

(0.7

)

 

(0.9

)

Savings

 

1.1

 

 

11.4

 

 

12.5

 

Time

 

4.5

 

 

2.3

 

 

6.8

 

Total Interest-Bearing Deposits

 

5.4

 

 

13.0

 

 

18.4

 

Funds Purchased

 

(0.2

)

 

-

 

 

(0.2

)

Short-Term Borrowings

 

(2.5

)

 

-

 

 

(2.5

)

Securities Sold Under Agreements to Repurchase

 

(1.4

)

 

-

 

 

(1.4

)

Other Debt

 

1.3

 

 

-

 

 

1.3

 

Total Change in Interest Expense

 

2.6

 

 

13.0

 

 

15.6

 

 
Change in Net Interest Income

$

2.3

 

$

(5.7

)

$

(3.4

)

1

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

2

Comprised of other consumer revolving credit, installment, and consumer lease financing.
Bank of Hawai‘i Corporation and Subsidiaries
Analysis of Change in Net Interest Income - Taxable-Equivalent Basis Table 8b
Three Months Ended September 30, 2023
Compared to September 30, 2022
(dollars in millions) Volume 1 Rate 1 Total
Change in Interest Income:
Funds Sold

$

5.1

 

$

5.4

 

$

10.5

 

Investment Securities
Available-for-Sale
Taxable

 

(5.1

)

 

11.6

 

 

6.5

 

Held-to-Maturity
Taxable

 

2.1

 

 

0.5

 

 

2.6

 

Total Investment Securities

 

(3.0

)

 

12.1

 

 

9.1

 

Loans and Leases
Commercial and Industrial

 

1.6

 

 

4.8

 

 

6.4

 

Paycheck Protection Program

 

(0.1

)

 

(0.1

)

 

(0.2

)

Commercial Mortgage

 

2.6

 

 

15.2

 

 

17.8

 

Construction

 

0.1

 

 

0.8

 

 

0.9

 

Commercial Lease Financing

 

(0.2

)

 

0.1

 

 

(0.1

)

Residential Mortgage

 

1.7

 

 

3.7

 

 

5.4

 

Home Equity

 

1.2

 

 

2.5

 

 

3.7

 

Automobile

 

0.6

 

 

1.2

 

 

1.8

 

Other 2

 

(0.2

)

 

0.8

 

 

0.6

 

Total Loans and Leases

 

7.3

 

 

29.0

 

 

36.3

 

Other

 

0.7

 

 

0.5

 

 

1.2

 

Total Change in Interest Income

 

10.1

 

 

47.0

 

 

57.1

 

 
Change in Interest Expense:
Interest-Bearing Deposits
Demand

 

(0.1

)

 

5.3

 

 

5.2

 

Savings

 

-

 

 

32.5

 

 

32.5

 

Time

 

6.6

 

 

17.6

 

 

24.2

 

Total Interest-Bearing Deposits

 

6.5

 

 

55.4

 

 

61.9

 

Funds Purchased

 

(0.1

)

 

-

 

 

(0.1

)

Securities Sold Under Agreements to Repurchase

 

0.7

 

 

0.6

 

 

1.3

 

Other Debt

 

14.7

 

 

(0.1

)

 

14.6

 

Total Change in Interest Expense

 

21.8

 

 

55.9

 

 

77.7

 

 
Change in Net Interest Income

$

(11.7

)

$

(8.9

)

$

(20.6

)

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 8c
Nine Months Ended September 30, 2023
Compared to September 30, 2022
(dollars in millions) Volume 1 Rate 1 Total
Change in Interest Income:
Interest-Bearing Deposits in Other Banks

$

0.1

 

$

-

 

$

0.1

 

Funds Sold

 

4.7

 

 

14.7

 

 

19.4

 

Investment Securities
Available-for-Sale
Taxable

 

(20.6

)

 

39.2

 

 

18.6

 

Non-Taxable

 

0.1

 

 

0.1

 

 

0.2

 

Held-to-Maturity
Taxable

 

9.2

 

 

3.1

 

 

12.3

 

Total Investment Securities

 

(11.3

)

 

42.4

 

 

31.1

 

Loans Held for Sale

 

(0.2

)

 

0.1

 

 

(0.1

)

Loans and Leases
Commercial and Industrial

 

3.1

 

 

18.2

 

 

21.3

 

Paycheck Protection Program

 

(1.2

)

 

(1.1

)

 

(2.3

)

Commercial Mortgage

 

11.6

 

 

52.7

 

 

64.3

 

Construction

 

1.0

 

 

2.8

 

 

3.8

 

Commercial Lease Financing

 

(0.4

)

 

(0.1

)

 

(0.5

)

Residential Mortgage

 

6.5

 

 

8.7

 

 

15.2

 

Home Equity

 

5.6

 

 

7.6

 

 

13.2

 

Automobile

 

2.7

 

 

2.1

 

 

4.8

 

Other 2

 

0.1

 

 

1.9

 

 

2.0

 

Total Loans and Leases

 

29.0

 

 

92.8

 

 

121.8

 

Other

 

1.7

 

 

1.5

 

 

3.2

 

Total Change in Interest Income

 

24.0

 

 

151.5

 

 

175.5

 

 
Change in Interest Expense:
Interest-Bearing Deposits
Demand

 

(0.3

)

 

17.0

 

 

16.7

 

Savings

 

0.2

 

 

76.6

 

 

76.8

 

Time

 

10.0

 

 

44.0

 

 

54.0

 

Total Interest-Bearing Deposits

 

9.9

 

 

137.6

 

 

147.5

 

Funds Purchased

 

0.2

 

 

0.6

 

 

0.8

 

Short-Term Borrowings

 

4.3

 

 

1.3

 

 

5.6

 

Securities Sold Under Agreements to Repurchase

 

4.7

 

 

1.8

 

 

6.5

 

Other Debt

 

33.4

 

 

(0.3

)

 

33.1

 

Total Change in Interest Expense

 

52.5

 

 

141.0

 

 

193.5

 

 
Change in Net Interest Income

$

(28.5

)

$

10.5

 

$

(18.0

)

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 Hawai‘i 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)

2023

2023

2022

2023

2022

Salaries

$

39,426

$

37,962

 

$

37,792

$

116,005

$

109,445

Incentive Compensation

 

2,956

 

2,984

 

 

5,885

 

9,937

 

18,069

Share-Based Compensation

 

4,072

 

4,096

 

 

3,558

 

11,327

 

11,319

Commission Expense

 

676

 

775

 

 

1,005

 

2,098

 

3,878

Retirement and Other Benefits

 

3,809

 

3,489

 

 

4,448

 

13,186

 

13,177

Payroll Taxes

 

2,921

 

3,310

 

 

2,826

 

12,079

 

10,804

Medical, Dental, and Life Insurance

 

2,835

 

3,568

 

 

2,605

 

10,267

 

8,430

Separation Expense

 

2,130

 

(9

)

 

1,819

 

5,189

 

2,509

Total Salaries and Benefits

$

58,825

$

56,175

 

$

59,938

$

180,088

$

177,631

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

2023

 

2023

 

2023

 

2022

 

2022

Commercial
Commercial and Industrial

$

1,569,572

$

1,502,676

$

1,425,916

$

1,389,066

$

1,368,966

Paycheck Protection Program

 

12,529

 

13,789

 

15,175

 

19,579

 

22,955

Commercial Mortgage

 

3,784,339

 

3,796,769

 

3,826,283

 

3,725,542

 

3,591,943

Construction

 

251,507

 

236,428

 

232,903

 

260,825

 

236,498

Lease Financing

 

61,522

 

62,779

 

65,611

 

69,491

 

73,989

Total Commercial

 

5,679,469

 

5,612,441

 

5,565,888

 

5,464,503

 

5,294,351

Consumer
Residential Mortgage

 

4,699,140

 

4,721,976

 

4,691,298

 

4,653,072

 

4,585,723

Home Equity

 

2,285,974

 

2,278,105

 

2,260,001

 

2,225,950

 

2,185,484

Automobile

 

856,113

 

878,767

 

877,979

 

870,396

 

820,640

Other 1

 

398,795

 

423,600

 

429,356

 

432,499

 

435,408

Total Consumer

 

8,240,022

 

8,302,448

 

8,258,634

 

8,181,917

 

8,027,255

Total Loans and Leases

$

13,919,491

$

13,914,889

$

13,824,522

$

13,646,420

$

13,321,606

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