Bank of Hawaii Corporation 2013 Financial Results
| |
| • | 2013 Diluted Earnings Per Share $3.38 |
| |
| • | 2013 Net Income $150.5 Million |
| |
| • | Diluted Earnings Per Share for the Fourth Quarter of 2013 $0.88 |
| |
| • | Net Income for the Fourth Quarter of 2013 $39.1 Million |
| |
| • | Board of Directors Declares Dividend of $0.45 Per Share |
FOR IMMEDIATE RELEASE
HONOLULU, HI (January 27, 2014) -- Bank of Hawaii Corporation (NYSE: BOH) today reported diluted earnings per share of $0.88 for the fourth quarter of 2013, up from $0.85 per share in the previous quarter, and down from $0.90 per share in the same quarter last year. Net income for the fourth quarter of 2013 was $39.1 million, compared to net income of $37.7 million in the third quarter of 2013 and $40.3 million in the same quarter last year.
Loan and lease balances were $6.1 billion at December 31, 2013, up 1.5 percent from September 30, 2013 and up 4.1 percent compared with December 31, 2012. Deposit growth remained strong during the quarter, increasing 2.6 percent from September 30, 2013 and 3.3 percent from December 31, 2012. The net interest margin increased to 2.85 percent during the fourth quarter of 2013 compared with 2.83 percent in the previous quarter.
“Bank of Hawaii finished 2013 with another quarter of solid financial performance," said Peter Ho, Chairman, President, and CEO. “During the quarter loan balances and deposits continued to grow. Our net interest margin improved, credit quality remained stable, our capital ratios remain quite strong, and we maintained our focus on disciplined expense management.”
The return on average assets for the fourth quarter of 2013 was 1.12 percent, compared with 1.09 percent in the third quarter of 2013 and 1.19 percent in the fourth quarter last year. The return on average equity for the fourth quarter of 2013 was 15.36 percent, compared with 15.02 percent in the third quarter of 2013 and 15.47 percent in the fourth quarter last year. The return on average assets for the full year of 2013 was 1.10 percent compared with 1.22 percent in 2012. The return on average equity for the full year of 2013 was 14.78 percent compared with 16.23 percent in 2012.
- more -
Bank of Hawaii Corporation 2013 Financial Results Page 2
Financial Highlights
Net interest income, on a taxable-equivalent basis, for the fourth quarter of 2013 was $94.8 million, an increase of $1.3 million from net interest income of $93.5 million in the third quarter of 2013, and up $2.1 million from net interest income of $92.7 million in the fourth quarter last year. Net interest income, on a taxable-equivalent basis, for the full year of 2013 was $369.1 million, a decrease of $17.6 million from net interest income of $386.7 million in 2012. Analyses of changes in net interest income are included in Tables 8a, 8b and 8c.
The net interest margin was 2.85 percent in the fourth quarter of 2013, an improvement of 2 basis points from the third quarter of 2013 and down 2 basis points from the net interest margin of 2.87 percent in the fourth quarter last year. The net interest margin for the full year of 2013 was 2.81 percent, a 16 basis point decrease from the net interest margin of 2.97 percent in 2012.
Noninterest income was $45.3 million for the fourth quarter of 2013, up $0.2 million from noninterest income of $45.1 million in the third quarter of 2013 and down $7.7 million compared with noninterest income of $53.0 million in the fourth quarter of 2012. Noninterest income included mortgage banking revenue of $2.8 million in the fourth quarter of 2013 compared with $4.1 million in the previous quarter and $11.3 million in the same quarter last year. Noninterest income for the full year of 2013 was $186.2 million compared with noninterest income of $200.3 million in 2012. The decrease in noninterest revenue compared with the previous year was the result of lower mortgage banking revenue which totaled $19.2 million in 2013 compared with a historical high of $35.6 million in 2012.
Noninterest expense was $82.4 million in the fourth quarter of 2013, down $0.6 million from noninterest expense of $83.0 million in the third quarter of 2013, and down $1.0 million from noninterest expenses of $83.5 million in the fourth quarter of 2012. There were no significant noninterest expense items in the fourth quarter of 2013. Noninterest expense in the third quarter of 2013 included separation expense of $1.8 million. Noninterest expense in the fourth quarter of 2012 included total charges of $1.5 million related to the closure of branches in American Samoa. The components of salaries and benefits are presented in Table 9. Noninterest expense for the full year of 2013 was $331.0 million, down $3.3 million, or 1.0 percent, from noninterest expense of $334.3 million in 2012.
The efficiency ratio for the fourth quarter of 2013 was 59.99 percent compared with 61.01 percent in the previous quarter and 58.24 percent in the same quarter last year. The efficiency ratio for the full year of 2013 was 60.71 percent compared with 57.88 percent during the full year of 2012.
The effective tax rate for the fourth quarter of 2013 was 28.96 percent compared with 28.91 percent in the previous quarter and 32.67 percent in the same quarter last year. The effective tax rate for the full year of 2013 was 29.73 percent compared with 31.46 percent for the full year of 2012. The lower effective tax rates during 2013 were due to the release of tax reserves and low-income housing and other tax credits.
The Company’s business segments are defined as Retail Banking, Commercial Banking, Investment Services, and Treasury & Other. Results are determined based on the Company’s internal financial management reporting process and organizational structure. Selected financial information for the business segments is included in Tables 13a and 13b.
Asset Quality
The Company’s overall asset quality remained stable during the fourth quarter of 2013. Total non-performing assets were $39.7 million at December 31, 2013, up from $33.8 million at September 30,
- more -
Bank of Hawaii Corporation 2013 Financial Results Page 3
2013 and $37.1 million at December 31, 2012. The increase in non-performing assets was largely due to the addition of one commercial loan in Guam. Non-performing assets continue to remain above historical levels due to the lengthy judicial foreclosure process for residential mortgage loans. Non-performing assets, as a percentage of total loans and leases and foreclosed real estate, were 0.65 percent at December 31, 2013, up from 0.56 percent at September 30, 2013 and 0.63 percent at December 31, 2012.
Accruing loans and leases past due 90 days or more were $9.9 million at December 31, 2013, down from $11.4 million at September 30, 2013 and $10.4 million at December 30, 2012. Restructured loans not included in non-accrual loans or accruing loans past due 90 days or more were $51.1 million at December 31, 2013, up from $39.8 million at September 30, 2013, and $31.8 million at December 31, 2012. The increase in restructured loans was primarily due to the restructure of a commercial loan in Hawaii which is expected to be fully repaid during the first quarter of 2014. Restructured loans are primarily comprised of residential mortgage loans with lowered monthly payments to accommodate the borrowers’ financial needs for a period of time. More information on non-performing assets and accruing loans and leases past due 90 days or more is presented in Table 11.
Net charge-offs during the fourth quarter of 2013 were $8.2 million or 0.54 percent annualized of total average loans and leases outstanding. Loan and lease charge-offs of $10.4 million during the quarter were partially offset by recoveries of $2.2 million. Fourth quarter charge-offs included $6.6 million related to a commercial loan in Guam. Net charge-offs during the third quarter of 2013 were $0.9 million or 0.06 percent annualized, and were comprised of charge-offs of $4.7 million and recoveries of $3.8 million. Net charge-offs during the fourth quarter of 2012 were $2.1 million, or 0.15 percent annualized, and were comprised of charge-offs of $5.4 million and recoveries of $3.3 million. Net charge-offs for the full year of 2013 were $13.4 million, or 0.23 percent of total average loans and leases, compared with $10.7 million or 0.19 percent of total average loans and leases in 2012.
The allowance for loan and lease losses was $115.5 million at December 31, 2013, down $8.2 million from the allowance for loan and lease losses of $123.7 million at September 30, 2013 and down $13.4 million from the allowance for loan and lease losses of $128.9 million at December 31, 2012. The ratio of the allowance for loan and lease losses to total loans and leases outstanding was 1.89 percent at December 31, 2013, a decrease of 17 basis points from the previous quarter and 31 basis points from the same quarter last year. The reserve for unfunded commitments at December 31, 2013 was unchanged from the prior quarter and remained at $6.1 million. Details of loan and lease charge-offs, recoveries, and the components of the total reserve for credit losses are summarized in Table 12.
Other Financial Highlights
The Company’s total assets increased to $14.08 billion at December 31, 2013, up $235.4 million from total assets of $13.85 billion at September 30, 2013, and up $355.9 million from total assets of $13.73 billion at December 31, 2012. Average total assets were $13.86 billion during the fourth quarter of 2013, up $95.2 million from average total assets of $13.77 billion during the third quarter of 2013, and up $348.4 million from average total assets of $13.52 billion during the fourth quarter of 2012.
Total loans and leases increased to $6.10 billion at December 31, 2013, up from $6.01 billion at September 30, 2013, and up from $5.85 billion at December 31, 2012. The commercial loan portfolio was $2.53 billion at the end of the fourth quarter of 2013, up 2.0 percent from commercial loans of $2.48 billion at the end of the third quarter of 2013 and up 9.2 percent from commercial loans of $2.32 billion at the end of the fourth quarter last year. Consumer loans were $3.57 billion at December 31, 2013, up 1.1 percent from consumer loans of $3.53 billion at the end of the third quarter of 2013 and up 0.8 percent from consumer loans of $3.54 billion at the end of the fourth quarter last year. Average total loans and leases were $6.05 billion during the fourth quarter of 2013, up from $5.89 billion during the previous
- more -
Bank of Hawaii Corporation 2013 Financial Results Page 4
quarter and $5.80 billion during the same quarter last year. Loan and lease portfolio balances, including the higher risk loans and leases outstanding, are summarized in Table 10.
Deposit generation continued to remain strong during the fourth quarter of 2013. Total deposits increased to $11.91 billion at December 31, 2013, up from total deposits of $11.61 billion at September 30, 2013 and $11.53 billion at December 31, 2012. Average total deposits were $11.57 billion in the fourth quarter of 2013, up from $11.48 billion during the previous quarter and $11.38 billion during the same quarter last year. Deposit balances are summarized in Tables 7a, 7b, and 10.
Long-term debt was $174.7 million at December 31, 2013, essentially unchanged from September 30, 2013 and up $46.7 million from December 31, 2012. The increase in long-term debt during 2013 was primarily for asset/liability management purposes.
As a result of the strong deposit growth, which exceeded loan growth during the fourth quarter, the investment portfolio increased to $6.99 billion at December 31, 2013, compared to $6.91 billion at September 30, 2013, and $6.96 billion at December 31, 2012. The investment portfolio remains largely comprised of securities issued by U. S. government agencies and includes $4.74 billion in securities held to maturity and $2.24 billion in securities available for sale.
During the fourth quarter of 2013, the Company repurchased 86.3 thousand shares of common stock at a total cost of $5.0 million under its share repurchase program. The average cost was $57.87 per share repurchased. From January 2 through January 24, 2014, the Company repurchased an additional 56.0 thousand shares of common stock at an average cost of $58.95 per share repurchased. From the beginning of the share repurchase program initiated during July 2001 through December 31, 2013, the Company has repurchased 50.9 million shares and returned $1.9 billion to shareholders at an average cost of $36.54 per share. Remaining buyback authority under the share repurchase program was $34.0 million at December 31, 2013.
Total shareholders’ equity was $1.01 billion at December 31, 2013, up from $0.99 billion at September 30, 2013, and down from $1.02 billion at December 31, 2012. The ratio of tangible common equity to risk-weighted assets was 15.49 percent at December 31, 2013 compared with 15.43 percent at September 30, 2013 and 17.24 percent at December 31, 2012. The Tier 1 leverage ratio at December 31, 2013 was 7.07 percent, up from 6.95 percent at September 30, 2013 and 6.83 percent at December 31, 2012.
The Company’s Board of Directors declared a quarterly cash dividend of $0.45 per share on the Company’s outstanding shares. The dividend will be payable on March 14, 2014 to shareholders of record at the close of business on February 28, 2014.
Hawaii Economy
General economic conditions in Hawaii continue to be healthy, led by a strong tourism industry, relatively low unemployment, rising real estate prices, and accelerating construction activity. For the first eleven months of 2013, total visitor arrivals increased by 3.0 percent and visitor spending increased by 2.9 percent compared to the same period in 2012. While the rate of visitor growth has eased from the prior year, 2013 is on track to be another record year for tourism in Hawaii. The statewide seasonally-adjusted unemployment rate was at 4.4 percent in November 2013, compared to 7.0 percent nationally. The volume of single-family home sales on Oahu was 4.6 percent higher in 2013 compared to 2012 and the volume of condominium sales on Oahu was 11.8 percent higher compared to 2012. The median price of single-family home sales on Oahu increased 4.8 percent in 2013 and the median price of condominium sales on Oahu was 4.6 percent higher compared to 2012. As of December 31, 2013, months of inventory
- more -
Bank of Hawaii Corporation 2013 Financial Results Page 5
of single-family homes and condominiums on Oahu remained low at approximately 2.7 months and 2.9 months, respectively. According to the National Housing Trend Report for December 2013, Honolulu has the third lowest median number of days on the market for housing inventory in the United States.
Conference Call Information
The Company will review its 2013 financial results today at 1:00 p.m. Hawaii Time (6:00 p.m. Eastern Time). The call will be accessible via teleconference and via the Investor Relations link of Bank of Hawaii Corporation’s web site, www.boh.com. Conference call participants located in the United States or Canada should dial 1 (800) 708-4540. All other international conference call participants should dial 1 (847) 619-6397. Use the pass code “Bank of Hawaii” to access the call. A replay will be available for one week beginning on Monday, January 27, 2014 by dialing 1 (888) 843-7419 in the United States or Canada and 1 (630) 652-3042 from other international locations. Enter the pass code number 36402452# when prompted. A replay of the conference call will also be available via the Investor Relations link on the Company’s website, www.boh.com.
Forward-Looking Statements
This news release, and other statements made by the Company in connection with it may contain "forward-looking statements", such as forecasts of our financial results and condition, expectations for our operations and business prospects, and our assumptions used in those forecasts and expectations. Do not unduly rely on forward-looking statements. Actual results might differ significantly from our forecasts and expectations because of a variety of factors. More information about these factors is contained in Bank of Hawaii Corporation's Annual Report on Form 10-K for the year ended December 31, 2012, which was filed with the U.S. Securities and Exchange Commission. We do not promise to update forward-looking statements to reflect later events or circumstances
Bank of Hawaii Corporation is a regional financial services company serving businesses, consumers and governments in Hawaii, American Samoa, and the West Pacific. The Company’s principal subsidiary, Bank of Hawaii, was founded in 1897 and is the largest independent financial institution in Hawaii. For more information about Bank of Hawaii Corporation, see the Company’s web site, www.boh.com.
# # # #
|
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| Bank of Hawaii Corporation and Subsidiaries | | | | | | | | | |
| Financial Highlights | | | | | | | | | Table 1a |
| |
| | Three Months Ended | | Year Ended | |
| | December 31, | | | September 30, | | | December 31, | | | December 31, | |
| (dollars in thousands, except per share amounts) | 2013 | | | 2013 | | | 2012 | | | 2013 | | | 2012 | | |
| For the Period: | | | | | | | | | | |
| Operating Results | | | | | | | | | | |
| Net Interest Income | $ | 92,120 | | | $ | 90,887 | | | $ | 90,310 | | | $ | 358,907 | | | $ | 377,271 | | |
| Provision for Credit Losses | - | | | - | | | - | | | - | | | 979 | | |
| Total Noninterest Income | 45,278 | | | 45,126 | | | 52,982 | | | 186,223 | | | 200,286 | | |
| Total Noninterest Expense | 82,424 | | | 82,977 | | | 83,456 | | | 330,969 | | | 334,288 | | |
| Net Income | 39,055 | | | 37,704 | | | 40,287 | | | 150,502 | | | 166,076 | | |
| Basic Earnings Per Share | 0.88 | | | 0.85 | | | 0.90 | | | 3.39 | | | 3.68 | | |
| Diluted Earnings Per Share | 0.88 | | | 0.85 | | | 0.90 | | | 3.38 | | | 3.67 | | |
| Dividends Declared Per Share | 0.45 | | | 0.45 | | | 0.45 | | | 1.80 | | | 1.80 | | |
| | | | | | | | | | | |
| Performance Ratios | | | | | | | | | | |
| Return on Average Assets | 1.12 | | % | 1.09 | | % | 1.19 | | % | 1.10 | | % | 1.22 | | % |
| Return on Average Shareholders' Equity | 15.36 | | | 15.02 | | | 15.47 | | | 14.78 | | | 16.23 | | |
Efficiency Ratio 1 | 59.99 | | | 61.01 | | | 58.24 | | | 60.71 | | | 57.88 | | |
Net Interest Margin 2 | 2.85 | | | 2.83 | | | 2.87 | | | 2.81 | | | 2.97 | | |
Dividend Payout Ratio 3 | 51.14 | | | 52.94 | | | 50.00 | | | 53.10 | | | 48.91 | | |
| Average Shareholders' Equity to Average Assets | 7.28 | | | 7.23 | | | 7.67 | | | 7.44 | | | 7.52 | | |
| | | | | | | | | | | |
| Average Balances | | | | | | | | | | |
| Average Loans and Leases | $ | 6,053,607 | | | $ | 5,892,888 | | | $ | 5,798,057 | | | $ | 5,883,686 | | | $ | 5,680,279 | | |
| Average Assets | 13,864,914 | | | 13,769,699 | | | 13,516,519 | | | 13,692,133 | | | 13,609,188 | | |
| Average Deposits | 11,571,905 | | | 11,479,185 | | | 11,376,875 | | | 11,396,801 | | | 10,935,016 | | |
| Average Shareholders' Equity | 1,008,813 | | | 995,661 | | | 1,036,223 | | | 1,018,287 | | | 1,023,256 | | |
| | | | | | | | | | | |
| Per Share of Common Stock | | | | | | | | | | |
| Book Value | $ | 22.75 | | | $ | 22.29 | | | $ | 22.83 | | | $ | 22.75 | | | $ | 22.83 | | |
| Tangible Book Value | 22.04 | | | 21.58 | | | 22.12 | | | 22.04 | | | 22.12 | | |
| Market Value | | | | | | | | | | |
| Closing | 59.14 | | | 54.45 | | | 44.05 | | | 59.14 | | | 44.05 | | |
| High | 59.92 | | | 57.13 | | | 46.38 | | | 59.92 | | | 49.99 | | |
| Low | 53.16 | | | 50.50 | | | 41.41 | | | 44.88 | | | 41.41 | | |
| | | | | | | | | | | |
| | | | | | December 31, | | | September 30, | | | December 31, | | |
| | | | | | 2013 | | | 2013 | | | 2012 | | |
| As of Period End: | | | | | | | | | | |
| Balance Sheet Totals | | | | | | | | | | |
| Loans and Leases | | | | | $ | 6,095,387 | | | $ | 6,006,642 | | | $ | 5,854,521 | | |
| Total Assets | | | | | 14,084,280 | | | 13,848,871 | | | 13,728,372 | | |
| Total Deposits | | | | | 11,914,656 | | | 11,608,134 | | | 11,529,482 | | |
| Long-Term Debt | | | | | 174,706 | | | 174,717 | | | 128,055 | | |
| Total Shareholders' Equity | | | | | 1,011,976 | | | 992,686 | | | 1,021,665 | | |
| | | | | | | | | | | |
| Asset Quality | | | | | | | | | | |
| Allowance for Loan and Lease Losses | | | | | $ | 115,454 | | | $ | 123,680 | | | $ | 128,857 | | |
| Non-Performing Assets | | | | | 39,650 | | | 33,832 | | | 37,083 | | |
| | | | | | | | | | | |
| Financial Ratios | | | | | | | | | | |
| Allowance to Loans and Leases Outstanding | | | | | 1.89 | | % | 2.06 | | % | 2.20 | | % |
| Tier 1 Capital Ratio | | | | | 15.55 | | | 15.42 | | | 16.13 | | |
| Total Capital Ratio | | | | | 16.81 | | | 16.68 | | | 17.39 | | |
| Tier 1 Leverage Ratio | | | | | 7.07 | | | 6.95 | | | 6.83 | | |
| Total Shareholders' Equity to Total Assets | | | | | 7.19 | | | 7.17 | | | 7.44 | | |
Tangible Common Equity to Tangible Assets 4 | | | | | 6.98 | | | 6.96 | | | 7.23 | | |
Tangible Common Equity to Risk-Weighted Assets 4 | | | | | 15.49 | | | 15.43 | | | 17.24 | | |
| | | | | | | | | | | |
| Non-Financial Data | | | | | | | | | | |
| Full-Time Equivalent Employees | | | | | 2,196 | | | 2,205 | | | 2,276 | | |
| Branches and Offices | | | | | 74 | | | 74 | | | 76 | | |
| ATMs | | | | | 466 | | | 468 | | | 494 | | |
| | | | | | | | | | | |
1 Efficiency ratio is defined as noninterest expense divided by total revenue (net interest income and total noninterest income). |
2 Net interest margin is defined as net interest income, on a taxable-equivalent basis, as a percentage of average earning assets. |
3 Dividend payout ratio is defined as dividends declared per share divided by basic earnings per share. |
4 Tangible common equity to tangible assets and tangible common equity to risk-weighted assets are Non-GAAP financial measures. See Table 1b “Reconciliation of Non-GAAP Financial Measures." |
|
| | | | | | | | | | | | | | |
| Bank of Hawaii Corporation and Subsidiaries | | | | | |
| Reconciliation of Non-GAAP Financial Measures | | | | | Table 1b |
|
| | | | December 31, |
| | September 30, |
| | December 31, |
|
| (dollars in thousands) | 2013 |
| | 2013 |
| | 2012 |
|
| | | | | | | | |
| Total Shareholders' Equity | $ | 1,011,976 |
| | $ | 992,686 |
| | $ | 1,021,665 |
|
| Less: | Goodwill | 31,517 |
| | 31,517 |
| | 31,517 |
|
| | Intangible Assets | - |
| | - |
| | 33 |
|
| Tangible Common Equity | $ | 980,459 |
| | $ | 961,169 |
| | $ | 990,115 |
|
| | | | | | | | |
| Total Assets | $ | 14,084,280 |
| | $ | 13,848,871 |
| | $ | 13,728,372 |
|
| Less: | Goodwill | 31,517 |
| | 31,517 |
| | 31,517 |
|
| | Intangible Assets | - |
| | - |
| | 33 |
|
| Tangible Assets | $ | 14,052,763 |
| | $ | 13,817,354 |
| | $ | 13,696,822 |
|
| | | | | | | | |
| Risk-Weighted Assets, determined in accordance | | | | | |
| with prescribed regulatory requirements | $ | 6,330,532 |
| | $ | 6,228,293 |
| | $ | 5,744,722 |
|
| | | | | | | | |
| Total Shareholders' Equity to Total Assets | 7.19 | % | | 7.17 | % | | 7.44 | % |
| Tangible Common Equity to Tangible Assets (Non-GAAP) | 6.98 | % | | 6.96 | % | | 7.23 | % |
| | | | | | | | |
| Tier 1 Capital Ratio | 15.55 | % | | 15.42 | % | | 16.13 | % |
| Tangible Common Equity to Risk-Weighted Assets (Non-GAAP) | 15.49 | % | | 15.43 | % | | 17.24 | % |
|
| | | | | | | | | | | | | | | | |
| Bank of Hawaii Corporation and Subsidiaries | | | | | | |
| Net Significant Items | | | | | | Table 2 |
|
| | Three Months Ended | | Year Ended |
| | December 31, |
| September 30, |
| December 31, |
| | December 31, |
| (dollars in thousands) | 2013 |
| 2013 |
| 2012 |
| | 2013 |
| 2012 |
|
| Net Gains on Disposal of Leased Equipment | $ - |
| $ - |
| $ - |
| | $ - |
| $ | 2,473 |
|
| Decrease in Allowance for Loan and Lease Losses | 8,225 |
| 896 |
| 2,114 |
| | 13,403 |
| 9,749 |
|
| Planned Branch Closures in American Samoa | - |
| - |
| (1,105) |
| | - |
| (1,105) |
|
Separation Expense 1 | (394) |
| (1,753) |
| (556) |
| | (4,486) |
| (2,394) |
|
| PC Refresh | - |
| - |
| - |
| | - |
| (1,163) |
|
| Significant Items Before the Provision (Benefit) for Income Taxes | 7,831 |
| (857) |
| 453 |
| | 8,917 |
| 7,560 |
|
| Income Taxes Impact Related to Lease Transactions | - |
| - |
| - |
| | - |
| (2,733) |
|
| Release of Tax Reserve | - |
| (1,267) |
| - |
| | (2,357) |
| - |
|
| Income Tax Impact | 2,741 |
| (300) |
| 159 |
| | 3,121 |
| 1,430 |
|
| Net Significant Items | $ | 5,090 |
| $ | 710 |
| $ | 294 |
| | $ | 8,153 |
| $ | 8,863 |
|
| | | | | | | |
1 Includes $360 thousand for the planned branch closures in American Samoa in the fourth quarter of 2012. | | |
|
| | | | | | | | | | | | | | | | |
| Bank of Hawaii Corporation and Subsidiaries |
| Consolidated Statements of Income | | | | | | Table 3 |
|
| | Three Months Ended | | Year Ended |
| | December 31, |
| September 30, |
| December 31, |
| | December 31, |
| (dollars in thousands, except per share amounts) | 2013 |
| 2013 |
| 2012 |
| | 2013 |
| 2012 |
|
| Interest Income | | | | | | |
| Interest and Fees on Loans and Leases | $ | 63,809 |
| $ | 63,918 |
| $ | 64,627 |
| | $ | 253,276 |
| $ | 257,896 |
|
| Income on Investment Securities | | | | | | |
| Available-for-Sale | 10,608 |
| 12,038 |
| 15,349 |
| | 53,570 |
| 65,972 |
|
| Held-to-Maturity | 26,882 |
| 24,137 |
| 20,253 |
| | 90,062 |
| 94,952 |
|
| Deposits | 3 |
| 3 |
| 3 |
| | 10 |
| 9 |
|
| Funds Sold | 105 |
| 177 |
| 180 |
| | 415 |
| 533 |
|
| Other | 302 |
| 301 |
| 283 |
| | 1,172 |
| 1,127 |
|
| Total Interest Income | 101,709 |
| 100,574 |
| 100,695 |
| | 398,505 |
| 420,489 |
|
| Interest Expense | | | | | | |
| Deposits | 2,418 |
| 2,500 |
| 2,753 |
| | 10,143 |
| 12,376 |
|
| Securities Sold Under Agreements to Repurchase | 6,530 |
| 6,551 |
| 7,158 |
| | 26,837 |
| 28,897 |
|
| Funds Purchased | 8 |
| 4 |
| 4 |
| | 44 |
| 21 |
|
| Short-Term Borrowings | 2 |
| - |
| - |
| | 2 |
| - |
|
| Long-Term Debt | 631 |
| 632 |
| 470 |
| | 2,572 |
| 1,924 |
|
| Total Interest Expense | 9,589 |
| 9,687 |
| 10,385 |
| | 39,598 |
| 43,218 |
|
| Net Interest Income | 92,120 |
| 90,887 |
| 90,310 |
| | 358,907 |
| 377,271 |
|
| Provision for Credit Losses | - |
| - |
| - |
| | - |
| 979 |
|
| Net Interest Income After Provision for Credit Losses | 92,120 |
| 90,887 |
| 90,310 |
| | 358,907 |
| 376,292 |
|
| Noninterest Income | | | | | | |
| Trust and Asset Management | 12,240 |
| 11,717 |
| 12,066 |
| | 47,932 |
| 45,229 |
|
| Mortgage Banking | 2,823 |
| 4,132 |
| 11,268 |
| | 19,186 |
| 35,644 |
|
| Service Charges on Deposit Accounts | 9,326 |
| 9,385 |
| 9,459 |
| | 37,124 |
| 37,621 |
|
| Fees, Exchange, and Other Service Charges | 12,670 |
| 12,732 |
| 12,333 |
| | 50,469 |
| 48,965 |
|
| Investment Securities Gains (Losses), Net | - |
| - |
| - |
| | - |
| (77) |
|
| Insurance | 2,295 |
| 2,177 |
| 2,550 |
| | 9,190 |
| 9,553 |
|
| Bank-Owned Life Insurance | 1,895 |
| 1,365 |
| 1,557 |
| | 5,892 |
| 6,805 |
|
| Other | 4,029 |
| 3,618 |
| 3,749 |
| | 16,430 |
| 16,546 |
|
| Total Noninterest Income | 45,278 |
| 45,126 |
| 52,982 |
| | 186,223 |
| 200,286 |
|
| Noninterest Expense | | | | | | |
| Salaries and Benefits | 43,643 |
| 46,552 |
| 46,116 |
| | 184,211 |
| 184,408 |
|
| Net Occupancy | 9,602 |
| 9,847 |
| 11,867 |
| | 38,745 |
| 42,965 |
|
| Net Equipment | 4,837 |
| 4,572 |
| 4,705 |
| | 18,366 |
| 19,723 |
|
| Data Processing | 3,827 |
| 3,697 |
| 3,058 |
| | 13,840 |
| 13,202 |
|
| Professional Fees | 2,669 |
| 2,119 |
| 2,611 |
| | 9,405 |
| 9,623 |
|
| FDIC Insurance | 1,954 |
| 1,913 |
| 1,892 |
| | 7,765 |
| 7,873 |
|
| Other | 15,892 |
| 14,277 |
| 13,207 |
| | 58,637 |
| 56,494 |
|
| Total Noninterest Expense | 82,424 |
| 82,977 |
| 83,456 |
| | 330,969 |
| 334,288 |
|
| Income Before Provision for Income Taxes | 54,974 |
| 53,036 |
| 59,836 |
| | 214,161 |
| 242,290 |
|
| Provision for Income Taxes | 15,919 |
| 15,332 |
| 19,549 |
| | 63,659 |
| 76,214 |
|
| Net Income | $ | 39,055 |
| $ | 37,704 |
| $ | 40,287 |
| | $ | 150,502 |
| $ | 166,076 |
|
| Basic Earnings Per Share | $ | 0.88 |
| $ | 0.85 |
| $ | 0.90 |
| | $ | 3.39 |
| $ | 3.68 |
|
| Diluted Earnings Per Share | $ | 0.88 |
| $ | 0.85 |
| $ | 0.90 |
| | $ | 3.38 |
| $ | 3.67 |
|
| Dividends Declared Per Share | $ | 0.45 |
| $ | 0.45 |
| $ | 0.45 |
| | $ | 1.80 |
| $ | 1.80 |
|
| Basic Weighted Average Shares | 44,223,281 |
| 44,267,356 |
| 44,623,823 |
| | 44,380,948 |
| 45,115,441 |
|
| Diluted Weighted Average Shares | 44,496,313 |
| 44,479,472 |
| 44,740,109 |
| | 44,572,725 |
| 45,249,300 |
|
|
| | | | | | | | | | | | | | | | | | | | |
| Bank of Hawaii Corporation and Subsidiaries | | | | | | |
| Consolidated Statements of Comprehensive Income | | | | | | Table 4 |
|
| | | Three Months Ended | | Year Ended |
| | | December 31, |
| September 30, | | December 31, | | | December 31, |
| (dollars in thousands) | 2013 |
| 2013 | | 2012 | | | 2013 |
| 2012 | |
| Net Income | $ | 39,055 |
| $ | 37,704 | | $ | 40,287 | | | $ | 150,502 |
| $ | 166,076 | |
| Other Comprehensive Income (Loss), Net of Tax: | | | | | | |
| | Net Unrealized Losses on Investment Securities | (6,006) |
| (6,986) | | (9,858) | | | (69,206) |
| (3,155) | |
| | Defined Benefit Plans | 7,694 |
| 202 | | (3,358) | | | 8,175 |
| (2,900) | |
| Total Other Comprehensive Income (Loss) | 1,688 |
| (6,784) | | (13,216) | | | (61,031) |
| (6,055) | |
| Comprehensive Income | $ | 40,743 |
| $ | 30,920 | | $ | 27,071 | | | $ | 89,471 |
| $ | 160,021 | |
|
| | | | | | | | | |
| Bank of Hawaii Corporation and Subsidiaries | | | |
| Consolidated Statements of Condition | | | Table 5 |
|
| | December 31, |
| September 30, |
| December 31, |
|
| (dollars in thousands) | 2013 |
| 2013 |
| 2012 |
|
| Assets | | | |
| Interest-Bearing Deposits | $ | 3,617 |
| $ | 3,048 |
| $ | 3,393 |
|
| Funds Sold | 271,414 |
| 254,940 |
| 185,682 |
|
| Investment Securities | | | |
| Available-for-Sale | 2,243,697 |
| 2,277,136 |
| 3,367,557 |
|
| Held to Maturity (Fair Value of $4,697,587; $4,621,491; and $3,687,676) | 4,744,519 |
| 4,633,399 |
| 3,595,065 |
|
| Loans Held for Sale | 6,435 |
| 18,795 |
| 21,374 |
|
| Loans and Leases | 6,095,387 |
| 6,006,642 |
| 5,854,521 |
|
| Allowance for Loan and Lease Losses | (115,454) |
| (123,680) |
| (128,857) |
|
| Net Loans and Leases | 5,979,933 |
| 5,882,962 |
| 5,725,664 |
|
| Total Earning Assets | 13,249,615 |
| 13,070,280 |
| 12,898,735 |
|
| Cash and Noninterest-Bearing Deposits | 188,715 |
| 131,228 |
| 163,786 |
|
| Premises and Equipment | 108,636 |
| 105,181 |
| 105,005 |
|
| Accrued Interest Receivable | 43,930 |
| 46,047 |
| 43,077 |
|
| Foreclosed Real Estate | 3,205 |
| 3,036 |
| 3,887 |
|
| Mortgage Servicing Rights | 28,123 |
| 28,015 |
| 25,240 |
|
| Goodwill | 31,517 |
| 31,517 |
| 31,517 |
|
| Other Assets | 430,539 |
| 433,567 |
| 457,125 |
|
| Total Assets | $ | 14,084,280 |
| $ | 13,848,871 |
| $ | 13,728,372 |
|
| | | | |
| Liabilities | | | |
| Deposits | | | |
| Noninterest-Bearing Demand | $ | 3,681,128 |
| $ | 3,524,638 |
| $ | 3,367,185 |
|
| Interest-Bearing Demand | 2,355,608 |
| 2,320,452 |
| 2,163,473 |
|
| Savings | 4,560,150 |
| 4,503,963 |
| 4,399,316 |
|
| Time | 1,317,770 |
| 1,259,081 |
| 1,599,508 |
|
| Total Deposits | 11,914,656 |
| 11,608,134 |
| 11,529,482 |
|
| Funds Purchased | 9,982 |
| 9,983 |
| 11,296 |
|
| Securities Sold Under Agreements to Repurchase | 770,049 |
| 847,239 |
| 758,947 |
|
| Long-Term Debt | 174,706 |
| 174,717 |
| 128,055 |
|
| Retirement Benefits Payable | 34,965 |
| 47,338 |
| 47,658 |
|
| Accrued Interest Payable | 4,871 |
| 6,040 |
| 4,776 |
|
| Taxes Payable and Deferred Taxes | 34,907 |
| 40,364 |
| 88,014 |
|
| Other Liabilities | 128,168 |
| 122,370 |
| 138,479 |
|
| Total Liabilities | 13,072,304 |
| 12,856,185 |
| 12,706,707 |
|
| Shareholders' Equity | | | |
| Common Stock ($.01 par value; authorized 500,000,000 shares; | | | |
| issued / outstanding: December 31, 2013 - 57,480,846 / 44,490,385; | | | |
| September 30, 2013 - 57,487,855 / 44,539,247; | | | |
| and December 31, 2012 - 57,319,352 / 44,754,835) | 572 |
| 572 |
| 571 |
|
| Capital Surplus | 522,505 |
| 520,510 |
| 515,619 |
|
| Accumulated Other Comprehensive Income (Loss) | (31,823) |
| (33,510) |
| 29,208 |
|
| Retained Earnings | 1,151,754 |
| 1,132,996 |
| 1,084,477 |
|
| Treasury Stock, at Cost (Shares: December 31, 2013 - 12,990,461; | | | |
| September 30, 2013 - 12,948,608; and December 31, 2012 - 12,564,517) | (631,032) |
| (627,882) |
| (608,210) |
|
| Total Shareholders' Equity | 1,011,976 |
| 992,686 |
| 1,021,665 |
|
| Total Liabilities and Shareholders' Equity | $ | 14,084,280 |
| $ | 13,848,871 |
| $ | 13,728,372 |
|
|
| | | | | | | | | | | | | | | | | | | | | |
| Bank of Hawaii Corporation and Subsidiaries |
| Consolidated Statements of Shareholders' Equity | | Table 6 |
|
| | | | | | | Accum. |
| | | |
| | | | | | | Other |
| | | |
| | | | | | | Compre- |
| | | |
| | | | Common | | | hensive |
| | | |
| | | | Shares | Common |
| Capital |
| Income |
| Retained |
| Treasury |
| |
| (dollars in thousands) | Outstanding | Stock |
| Surplus |
| (Loss) |
| Earnings |
| Stock |
| Total |
|
| Balance as of December 31, 2011 | 45,947,116 | $ | 571 |
| $ | 507,558 |
| $ | 35,263 |
| $ | 1,003,938 |
| $ | (544,663 | ) | $ | 1,002,667 |
|
| Net Income | | - | - |
| - |
| - |
| 166,076 |
| - |
| 166,076 |
|
| Other Comprehensive Loss | - | - |
| - |
| (6,055) |
| - |
| - |
| (6,055) |
|
| Share-Based Compensation | - | - |
| 7,537 |
| - |
| - |
| - |
| 7,537 |
|
| Common Stock Issued under Purchase and Equity | | | | | | | |
| Compensation Plans and Related Tax Benefits | 565,956 | - |
| 524 |
| - |
| (3,892) |
| 17,897 |
| 14,529 |
|
| Common Stock Repurchased | (1,758,237) | - |
| - |
| - |
| - |
| (81,444) |
| (81,444) |
|
| Cash Dividends Paid ($1.80 per share) | - | - |
| - |
| - |
| (81,645) |
| - |
| (81,645) |
|
| Balance as of December 31, 2012 | 44,754,835 | $ | 571 |
| $ | 515,619 |
| $ | 29,208 |
| $ | 1,084,477 |
| $ | (608,210 | ) | $ | 1,021,665 |
|
| | | | | | | | | | |
| Net Income | | - | $ - |
| $ - |
| $ - |
| $ | 150,502 |
| $ - |
| $ | 150,502 |
|
| Other Comprehensive Loss | - | - |
| - |
| (61,031) |
| | | (61,031) |
|
| Share-Based Compensation | - | - |
| 5,546 |
| - |
| - |
| - |
| 5,546 |
|
| Common Stock Issued under Purchase and Equity | | | | | | | |
| Compensation Plans and Related Tax Benefits | 505,691 | 1 |
| 1,340 |
| - |
| (2,691) |
| 16,833 |
| 15,483 |
|
| Common Stock Repurchased | (770,141) | - |
| - |
| - |
| - |
| (39,655) |
| (39,655) |
|
| Cash Dividends Paid ($1.80 per share) | - | - |
| - |
| - |
| (80,534) |
| - |
| (80,534) |
|
| Balance as of December 31, 2013 | 44,490,385 | $ | 572 |
| $ | 522,505 |
| $ | (31,823 | ) | $ | 1,151,754 |
| $ | (631,032 | ) | $ | 1,011,976 |
|
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Bank of Hawaii Corporation and Subsidiaries |
| Average Balances and Interest Rates - Taxable-Equivalent Basis | | | | | | | | Table 7a |
| | | Three Months Ended | | Three Months Ended | | Three Months Ended | |
| | | December 31, 2013 | | September 30, 2013 | | December 31, 2012 | |
| | | Average |
| Income/ | | Yield/ | | Average | | Income/ | | Yield/ | | Average |
| Income/ | | Yield/ | |
| (dollars in millions) | Balance |
| Expense | | Rate | | Balance | | Expense | | Rate | | Balance |
| Expense | | Rate | |
| Earning Assets | | | | | | | | | | | | |
| Interest-Bearing Deposits | $ | 3.2 |
| $ - | | 0.42 | % | $ | 4.3 | | $ - | | 0.30 | % | $ | 4.4 |
| $ - | | 0.29 | % |
| Funds Sold | 222.8 |
| 0.1 | | 0.18 | | 335.3 | | 0.2 | | 0.21 | | 332.1 |
| 0.2 | | 0.21 | |
| Investment Securities | | | | | | | | | | | | |
| | Available-for-Sale | 2,274.8 |
| 12.4 | | 2.17 | | 2,495.9 | | 13.7 | | 2.18 | | 3,277.2 |
| 17.6 | | 2.15 | |
| | Held-to-Maturity | 4,653.4 |
| 27.7 | | 2.38 | | 4,385.5 | | 25.0 | | 2.28 | | 3,406.3 |
| 20.3 | | 2.38 | |
| Loans Held for Sale | 7.8 |
| 0.1 | | 5.07 | | 16.7 | | 0.2 | | 4.42 | | 18.9 |
| 0.2 | | 4.36 | |
Loans and Leases 1 | | | | | | | | | | | | |
| | Commercial and Industrial | 906.3 |
| 7.8 | | 3.42 | | 877.3 | | 7.7 | | 3.49 | | 811.3 |
| 7.8 | | 3.84 | |
| | Commercial Mortgage | 1,237.0 |
| 12.4 | | 3.97 | | 1,164.9 | | 12.1 | | 4.12 | | 1,063.6 |
| 11.2 | | 4.18 | |
| | Construction | 115.2 |
| 1.3 | | 4.63 | | 120.1 | | 1.4 | | 4.71 | | 104.5 |
| 1.2 | | 4.77 | |
| | Commercial Lease Financing | 255.6 |
| 1.4 | | 2.14 | | 253.0 | | 1.5 | | 2.32 | | 275.9 |
| 1.7 | | 2.46 | |
| | Residential Mortgage | 2,284.4 |
| 24.8 | | 4.35 | | 2,255.9 | | 25.3 | | 4.49 | | 2,369.5 |
| 27.5 | | 4.64 | |
| | Home Equity | 767.7 |
| 7.8 | | 4.04 | | 757.6 | | 7.9 | | 4.13 | | 771.3 |
| 8.1 | | 4.18 | |
| | Automobile | 248.9 |
| 3.4 | | 5.39 | | 240.6 | | 3.3 | | 5.43 | | 205.6 |
| 3.0 | | 5.73 | |
| | Other 2 | 238.5 |
| 4.9 | | 8.08 | | 223.5 | | 4.6 | | 8.23 | | 196.4 |
| 4.0 | | 8.15 | |
| Total Loans and Leases | 6,053.6 |
| 63.8 | | 4.19 | | 5,892.9 | | 63.8 | | 4.31 | | 5,798.1 |
| 64.5 | | 4.44 | |
| Other | 77.5 |
| 0.3 | | 1.55 | | 78.1 | | 0.3 | | 1.54 | | 79.5 |
| 0.3 | | 1.43 | |
Total Earning Assets 3 | 13,293.1 |
| 104.4 | | 3.13 | | 13,208.7 | | 103.2 | | 3.11 | | 12,916.5 |
| 103.1 | | 3.19 | |
| Cash and Noninterest-Bearing Deposits | 136.8 |
| | | | 140.3 | | | | | 144.8 |
| | | |
| Other Assets | 435.0 |
| | | | 420.7 | | | | | 455.2 |
| | | |
| Total Assets | $ | 13,864.9 |
| | | | $ | 13,769.7 | | | | | $ | 13,516.5 |
| | | |
| | | | | | | | | | | | | | |
| Interest-Bearing Liabilities | | | | | | | | | | | | |
| Interest-Bearing Deposits | | | | | | | | | | | | |
| | Demand | $ | 2,245.5 |
| 0.1 | | 0.03 | | $ | 2,147.8 | | 0.1 | | 0.03 | | $ | 2,011.2 |
| 0.1 | | 0.03 | |
| | Savings | 4,499.5 |
| 1.0 | | 0.09 | | 4,485.3 | | 1.0 | | 0.09 | | 4,451.4 |
| 1.0 | | 0.09 | |
| | Time | 1,331.2 |
| 1.3 | | 0.38 | | 1,401.5 | | 1.4 | | 0.38 | | 1,755.6 |
| 1.6 | | 0.36 | |
| Total Interest-Bearing Deposits | 8,076.2 |
| 2.4 | | 0.12 | | 8,034.6 | | 2.5 | | 0.12 | | 8,218.2 |
| 2.7 | | 0.13 | |
| Short-Term Borrowings | 28.3 |
| - | | 0.15 | | 11.7 | | - | | 0.14 | | 11.0 |
| - | | 0.14 | |
| Securities Sold Under Agreements to Repurchase | 832.6 |
| 6.6 | | 3.07 | | 847.2 | | 6.6 | | 3.03 | | 776.8 |
| 7.2 | | 3.61 | |
| Long-Term Debt | 174.7 |
| 0.6 | | 1.44 | | 174.7 | | 0.6 | | 1.44 | | 36.7 |
| 0.5 | | 5.12 | |
| Total Interest-Bearing Liabilities | 9,111.8 |
| 9.6 | | 0.41 | | 9,068.2 | | 9.7 | | 0.42 | | 9,042.7 |
| 10.4 | | 0.45 | |
| Net Interest Income | | $ | 94.8 | | | | | $ | 93.5 | | | | | $ | 92.7 | | | |
| | Interest Rate Spread | | | 2.72 | % | | | 2.69 | % | | | 2.74 | % |
| | Net Interest Margin | | | 2.85 | % | | | 2.83 | % | | | 2.87 | % |
| Noninterest-Bearing Demand Deposits | 3,495.7 |
| | | | 3,444.6 | | | | | 3,158.7 |
| | | |
| Other Liabilities | 248.6 |
| | | | 261.2 | | | | | 278.9 |
| | | |
| Shareholders' Equity | 1,008.8 |
| | | | 995.7 | | | | | 1,036.2 |
| | | |
| Total Liabilities and Shareholders' Equity | $ | 13,864.9 |
| | | | $ | 13,769.7 | | | | | $ | 13,516.5 |
| | | |
| | | | | | | | | | | | | | |
1 Non-performing loans and leases are included in the respective average loan and lease balances. Income, if any, on such loans and leases is recognized on a cash basis. |
2 Comprised of other consumer revolving credit, installment, and consumer lease financing. |
3 Interest income includes taxable-equivalent basis adjustments, based upon a federal statutory tax rate of 35%, of $2,696,000, $2,597,000, and $2,394,000 for the three months ended December 31, 2013, September 30, 2013, and December 31, 2012, respectively. |
|
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Bank of Hawaii Corporation and Subsidiaries | | | | | | | | |
| Average Balances and Interest Rates - Taxable-Equivalent Basis | Table 7b |
| | | Year Ended | | Year Ended | |
| | | December 31, 2013 | | December 31, 2012 | |
| | | Average | | Income/ | | Yield/ | | Average | | Income/ | | Yield/ | |
| (dollars in millions) | Balance | | Expense | | Rate | | Balance | | Expense | | Rate | |
| Earning Assets | | | | | | | | |
| Interest-Bearing Deposits | $ | 4.0 | | $ - | | 0.26 | % | $ | 3.7 | | $ - | | 0.26 | % |
| Funds Sold | 221.2 | | 0.4 | | 0.19 | | 263.5 | | 0.5 | | 0.20 | |
| Investment Securities | | | | | | | | |
| | Available-for-Sale | 2,822.5 | | 61.6 | | 2.18 | | 3,346.3 | | 75.0 | | 2.24 | |
| | Held-to-Maturity | 4,086.6 | | 91.8 | | 2.25 | | 3,636.7 | | 95.0 | | 2.61 | |
| Loans Held for Sale | 16.4 | | 0.7 | | 4.18 | | 14.7 | | 0.6 | | 4.29 | |
Loans and Leases 1 | | | | | | | | |
| | Commercial and Industrial | 865.8 | | 30.9 | | 3.57 | | 800.2 | | 31.3 | | 3.91 | |
| | Commercial Mortgage | 1,152.9 | | 46.9 | | 4.06 | | 988.2 | | 42.9 | | 4.34 | |
| | Construction | 114.6 | | 5.4 | | 4.75 | | 101.9 | | 5.1 | | 5.04 | |
| | Commercial Lease Financing | 261.6 | | 6.0 | | 2.31 | | 283.3 | | 6.8 | | 2.39 | |
| | Residential Mortgage | 2,275.8 | | 101.7 | | 4.47 | | 2,349.6 | | 111.3 | | 4.74 | |
| | Home Equity | 761.5 | | 31.4 | | 4.12 | | 773.2 | | 33.4 | | 4.31 | |
| | Automobile | 232.3 | | 12.7 | | 5.48 | | 196.8 | | 11.7 | | 5.96 | |
| | Other 2 | 219.2 | | 18.0 | | 8.21 | | 187.1 | | 15.2 | | 8.11 | |
| Total Loans and Leases | 5,883.7 | | 253.0 | | 4.30 | | 5,680.3 | | 257.7 | | 4.54 | |
| Other | 78.3 | | 1.2 | | 1.50 | | 79.9 | | 1.1 | | 1.41 | |
Total Earning Assets 3 | 13,112.7 | | 408.7 | | 3.12 | | 13,025.1 | | 429.9 | | 3.30 | |
| Cash and Noninterest-Bearing Deposits | 138.9 | | | | | 137.2 | | | | |
| Other Assets | 440.5 | | | | | 446.9 | | | | |
| Total Assets | $ | 13,692.1 | | | | | $ | 13,609.2 | | | | |
| | | | | | | | | | |
| Interest-Bearing Liabilities | | | | | | | | |
| Interest-Bearing Deposits | | | | | | | | |
| | Demand | 2,140.5 | | 0.6 | | 0.03 | | 1,938.6 | | 0.5 | | 0.03 | |
| | Savings | 4,461.4 | | 3.9 | | 0.09 | | 4,447.8 | | 4.5 | | 0.10 | |
| | Time | 1,406.2 | | 5.6 | | 0.40 | | 1,524.6 | | 7.4 | | 0.48 | |
| Total Interest-Bearing Deposits | 8,008.1 | | 10.1 | | 0.13 | | 7,911.0 | | 12.4 | | 0.16 | |
| Short-Term Borrowings | 31.7 | | - | | 0.15 | | 15.1 | | - | | 0.14 | |
| Securities Sold Under Agreements to Repurchase | 809.4 | | 26.9 | | 3.32 | | 1,335.7 | | 28.9 | | 2.16 | |
| Long-Term Debt | 171.0 | | 2.6 | | 1.50 | | 31.5 | | 1.9 | | 6.10 | |
| Total Interest-Bearing Liabilities | 9,020.2 | | 39.6 | | 0.44 | | 9,293.3 | | 43.2 | | 0.47 | |
| Net Interest Income | | $ | 369.1 | | | | | $ | 386.7 | | | |
| | Interest Rate Spread | | | 2.68 | % | | | 2.83 | % |
| | Net Interest Margin | | | 2.81 | % | | | 2.97 | % |
| Noninterest-Bearing Demand Deposits | 3,388.7 | | | | | 3,024.0 | | | | |
| Other Liabilities | 264.9 | | | | | 268.6 | | | | |
| Shareholders' Equity | 1,018.3 | | | | | 1,023.3 | | | | |
| Total Liabilities and Shareholders' Equity | $ | 13,692.1 | | | | | $ | 13,609.2 | | | | |
| | | | | | | | | | | | |
1 Non-performing loans and leases are included in the respective average loan and lease balances. Income, if any, on such loans and leases is recognized on a cash basis. |
2 Comprised of other consumer revolving credit, installment, and consumer lease financing. |
3 Interest income includes taxable-equivalent basis adjustments, based upon a federal statutory tax rate of 35%, of $10,194,000 and $9,473,000 for the year ended December 31, 2013 and 2012, respectively. |
|
| | | | | | | | | |
| Bank of Hawaii Corporation and Subsidiaries | | | |
| Analysis of Change in Net Interest Income - Taxable-Equivalent Basis | | | Table 8a |
|
| | Three Months Ended December 31, 2013 |
| | Compared to September 30, 2013 |
| (dollars in millions) | Volume 1 |
| Rate 1 |
| Total |
|
| Change in Interest Income: | | | |
| Funds Sold | $ | (0.1 | ) | $ - |
| $ | (0.1 | ) |
| Investment Securities | | | |
| Available-for-Sale | (1.2 | ) | (0.1 | ) | (1.3 | ) |
| Held-to-Maturity | 1.5 |
| 1.2 |
| 2.7 |
|
| Loans Held for Sale | (0.1 | ) | - |
| (0.1 | ) |
| Loans and Leases | | | |
| Commercial and Industrial | 0.3 |
| (0.2 | ) | 0.1 |
|
| Commercial Mortgage | 0.7 |
| (0.4 | ) | 0.3 |
|
| Construction | (0.1 | ) | - |
| (0.1 | ) |
| Commercial Lease Financing | - |
| (0.1 | ) | (0.1 | ) |
| Residential Mortgage | 0.3 |
| (0.8 | ) | (0.5 | ) |
| Home Equity | 0.1 |
| (0.2 | ) | (0.1 | ) |
| Automobile | 0.1 |
| - |
| 0.1 |
|
Other 2 | 0.4 |
| (0.1 | ) | 0.3 |
|
| Total Loans and Leases | 1.8 |
| (1.8 | ) | - |
|
| Total Change in Interest Income | 1.9 |
| (0.7 | ) | 1.2 |
|
| | | | |
| Change in Interest Expense: | | | |
| Interest-Bearing Deposits | | | |
| Time | (0.1 | ) | - |
| (0.1 | ) |
| Total Interest-Bearing Deposits | (0.1 | ) | - |
| (0.1 | ) |
| Securities Sold Under Agreements to Repurchase | (0.1 | ) | 0.1 |
| - |
|
| Total Change in Interest Expense | (0.2 | ) | 0.1 |
| (0.1 | ) |
| | | | |
| Change in Net Interest Income | $ | 2.1 |
| $ | (0.8 | ) | $ | 1.3 |
|
| | | | |
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 Hawaii Corporation and Subsidiaries | | | |
| Analysis of Change in Net Interest Income - Taxable-Equivalent Basis | | | Table 8b |
|
| | Three Months Ended December 31, 2013 |
| | Compared to December 31, 2012 |
| (dollars in millions) | Volume 1 |
| Rate 1 |
| Total |
|
| Change in Interest Income: | | | |
| Funds Sold | $ | (0.1 | ) | $ - |
| $ | (0.1 | ) |
| Investment Securities | | | |
| Available-for-Sale | (5.5 | ) | 0.3 |
| (5.2 | ) |
| Held-to-Maturity | 7.4 |
| - |
| 7.4 |
|
| Loans Held for Sale | (0.1 | ) | - |
| (0.1 | ) |
| Loans and Leases | | | |
| Commercial and Industrial | 0.9 |
| (0.9 | ) | - |
|
| Commercial Mortgage | 1.8 |
| (0.6 | ) | 1.2 |
|
| Construction | 0.1 |
| - |
| 0.1 |
|
| Commercial Lease Financing | (0.1 | ) | (0.2 | ) | (0.3 | ) |
| Residential Mortgage | (1.0 | ) | (1.7 | ) | (2.7 | ) |
| Home Equity | - |
| (0.3 | ) | (0.3 | ) |
| Automobile | 0.6 |
| (0.2 | ) | 0.4 |
|
Other 2 | 0.9 |
| - |
| 0.9 |
|
| Total Loans and Leases | 3.2 |
| (3.9 | ) | (0.7 | ) |
| Total Change in Interest Income | 4.9 |
| (3.6 | ) | 1.3 |
|
| | | | |
| Change in Interest Expense: | | | |
| Interest-Bearing Deposits | | | |
| Time | (0.4 | ) | 0.1 |
| (0.3 | ) |
| Total Interest-Bearing Deposits | (0.4 | ) | 0.1 |
| (0.3 | ) |
| Securities Sold Under Agreements to Repurchase | 0.5 |
| (1.1 | ) | (0.6 | ) |
| Long-Term Debt | 0.7 |
| (0.6 | ) | 0.1 |
|
| Total Change in Interest Expense | 0.8 |
| (1.6 | ) | (0.8 | ) |
| | | | |
| Change in Net Interest Income | $ | 4.1 |
| $ | (2.0 | ) | $ | 2.1 |
|
| | | | |
1 The change in interest income and expense not solely due to changes in volume or rate has been allocated on a pro-rata basis to the volume and rate columns. |
2 Comprised of other consumer revolving credit, installment, and consumer lease financing. | | |
|
| | | | | | | | | |
| Bank of Hawaii Corporation and Subsidiaries | | | |
| Analysis of Change in Net Interest Income - Taxable-Equivalent Basis | | | Table 8c |
|
| | Year Ended December 31, 2013 |
| | Compared to December 31, 2012 |
| (dollars in millions) | Volume 1 |
| Rate 1 |
| Total |
|
| Change in Interest Income: | | | |
| Funds Sold | $ | (0.1 | ) | $ - |
| $ | (0.1 | ) |
| Investment Securities | | | |
| Available-for-Sale | (11.5 | ) | (1.9 | ) | (13.4 | ) |
| Held-to-Maturity | 11.0 |
| (14.2 | ) | (3.2 | ) |
| Loans Held for Sale | 0.1 |
| - |
| 0.1 |
|
| Loans and Leases | | | |
| Commercial and Industrial | 2.5 |
| (2.9 | ) | (0.4 | ) |
| Commercial Mortgage | 6.9 |
| (2.9 | ) | 4.0 |
|
| Construction | 0.6 |
| (0.3 | ) | 0.3 |
|
| Commercial Lease Financing | (0.6 | ) | (0.2 | ) | (0.8 | ) |
| Residential Mortgage | (3.4 | ) | (6.2 | ) | (9.6 | ) |
| Home Equity | (0.5 | ) | (1.5 | ) | (2.0 | ) |
| Automobile | 2.0 |
| (1.0 | ) | 1.0 |
|
Other 2 | 2.6 |
| 0.2 |
| 2.8 |
|
| Total Loans and Leases | 10.1 |
| (14.8 | ) | (4.7 | ) |
| Other | - |
| 0.1 |
| 0.1 |
|
| Total Change in Interest Income | 9.6 |
| (30.8 | ) | (21.2 | ) |
| | | | |
| Change in Interest Expense: | | | |
| Interest-Bearing Deposits | | | |
| Demand | 0.1 |
| - |
| 0.1 |
|
| Savings | - |
| (0.6 | ) | (0.6 | ) |
| Time | (0.6 | ) | (1.2 | ) | (1.8 | ) |
| Total Interest-Bearing Deposits | (0.5 | ) | (1.8 | ) | (2.3 | ) |
| Securities Sold Under Agreements to Repurchase | (13.9 | ) | 11.9 |
| (2.0 | ) |
| Long-Term Debt | 3.1 |
| (2.4 | ) | 0.7 |
|
| Total Change in Interest Expense | (11.3 | ) | 7.7 |
| (3.6 | ) |
| | | | |
| Change in Net Interest Income | $ | 20.9 |
| $ | (38.5 | ) | $ | (17.6 | ) |
| | | | |
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 Hawaii Corporation and Subsidiaries | | | | | |
| Salaries and Benefits | | | | | | Table 9 |
|
| | Three Months Ended | | Year Ended |
| | December 31, |
| September 30, |
| December 31, |
| | December 31, |
| (dollars in thousands) | 2013 |
| 2013 |
| 2012 |
| | 2013 |
| 2012 |
|
| Salaries | $ | 28,636 |
| $ | 28,985 |
| $ | 29,378 |
| | $ | 115,389 |
| $ | 115,208 |
|
| Incentive Compensation | 4,681 |
| 4,242 |
| 4,248 |
| | 16,568 |
| 16,926 |
|
| Share-Based Compensation | 1,158 |
| 1,333 |
| 1,701 |
| | 4,932 |
| 6,961 |
|
| Commission Expense | 1,222 |
| 1,888 |
| 1,953 |
| | 6,874 |
| 6,993 |
|
| Retirement and Other Benefits | 3,183 |
| 4,144 |
| 3,821 |
| | 15,289 |
| 16,014 |
|
| Payroll Taxes | 2,091 |
| 2,335 |
| 2,071 |
| | 11,242 |
| 10,593 |
|
| Medical, Dental, and Life Insurance | 2,278 |
| 1,872 |
| 2,388 |
| | 9,431 |
| 9,319 |
|
| Separation Expense | 394 |
| 1,753 |
| 556 |
| | 4,486 |
| 2,394 |
|
| Total Salaries and Benefits | $ | 43,643 |
| $ | 46,552 |
| $ | 46,116 |
| | $ | 184,211 |
| $ | 184,408 |
|
|
| | | | | | | | | | | | | | | | | | | | | |
| Bank of Hawaii Corporation and Subsidiaries |
| Loan and Lease Portfolio Balances | | | | | Table 10 |
|
| | | | December 31, |
| September 30, | | June 30, | | March 31, | | December 31, | |
| (dollars in thousands) | 2013 |
| 2013 | | 2013 | | 2013 | | 2012 | |
| Commercial | | | | | |
| | Commercial and Industrial | $ | 911,367 |
| $ | 895,040 | | $ | 875,702 | | $ | 834,801 | | $ | 829,512 | |
| | Commercial Mortgage | 1,247,510 |
| 1,203,670 | | 1,160,977 | | 1,104,718 | | 1,097,425 | |
| | Construction | 107,349 |
| 124,230 | | 107,016 | | 117,797 | | 113,987 | |
| | Lease Financing | 262,207 |
| 255,550 | | 257,067 | | 269,107 | | 274,969 | |
| Total Commercial | 2,528,433 |
| 2,478,490 | | 2,400,762 | | 2,326,423 | | 2,315,893 | |
| Consumer | | | | | |
| | Residential Mortgage | 2,282,894 |
| 2,282,305 | | 2,252,117 | | 2,275,209 | | 2,349,916 | |
| | Home Equity | 773,385 |
| 765,841 | | 751,790 | | 757,877 | | 770,376 | |
| | Automobile | 255,986 |
| 246,704 | | 233,475 | | 220,362 | | 209,832 | |
| | Other 1 | 254,689 |
| 233,302 | | 221,008 | | 203,098 | | 208,504 | |
| Total Consumer | 3,566,954 |
| 3,528,152 | | 3,458,390 | | 3,456,546 | | 3,538,628 | |
| Total Loans and Leases | $ | 6,095,387 |
| $ | 6,006,642 | | $ | 5,859,152 | | $ | 5,782,969 | | $ | 5,854,521 | |
| | | | | | | | |
| | | | | | | | |
| Higher Risk Loans and Leases Outstanding | | | | | |
| | | | December 31, |
| September 30, | | June 30, | | March 31, | | December 31, | |
| (dollars in thousands) | 2013 |
| 2013 | | 2013 | | 2013 | | 2012 | |
Residential Land Loans 2 | $ | 11,922 |
| $ | 13,635 | | $ | 13,708 | | $ | 13,996 | | $ | 14,984 | |
Home Equity Loans 3 | 12,594 |
| 12,588 | | 13,578 | | 20,786 | | 19,914 | |
Air Transportation 4 | 26,152 |
| 26,492 | | 26,436 | | 27,115 | | 27,782 | |
| Total Higher Risk Loans | $ | 50,668 |
| $ | 52,715 | | $ | 53,722 | | $ | 61,897 | | $ | 62,680 | |
| | | | | | | | |
1 Comprised of other revolving credit, installment, and lease financing. | | | | |
2 We consider all of our residential land loans, which are consumer loans secured by unimproved lots, to be of higher risk due to the volatility in the value of the underlying collateral. |
3 Higher risk home equity loans are defined as those loans originated in 2005 or later, with current monitoring credit scores below 600, and with original loan-to-value ratios greater than 70%. |
4 We consider all of our air transportation leases to be of higher risk due to the weak financial profile of the industry. | |
| | | | | | | | |
| | | | | | | | |
| Deposits | | | | | |
| | | | December 31, |
| September 30, | | June 30, | | March 31, | | December 31, | |
| (dollars in thousands) | 2013 |
| 2013 | | 2013 | | 2013 | | 2012 | |
| Consumer | $ | 5,829,352 |
| $ | 5,707,125 | | $ | 5,626,515 | | $ | 5,607,862 | | $ | 5,537,624 | |
| Commercial | 4,814,076 |
| 4,680,370 | | 4,537,120 | | 4,505,835 | | 4,576,410 | |
| Public and Other | 1,271,228 |
| 1,220,639 | | 1,285,563 | | 1,138,163 | | 1,415,448 | |
| Total Deposits | $ | 11,914,656 |
| $ | 11,608,134 | | $ | 11,449,198 | | $ | 11,251,860 | | $ | 11,529,482 | |
|
| | | | | | | | | | | | | | | | | | | | | | |
| Bank of Hawaii Corporation and Subsidiaries | | | | | |
| Non-Performing Assets and Accruing Loans and Leases Past Due 90 Days or More | | Table 11 |
|
| | | | December 31, | | September 30, | | June 30, | | March 31, | | December 31, | |
| (dollars in thousands) | 2013 | | 2013 | | 2013 | | 2013 | | 2012 | |
| Non-Performing Assets | | | | | |
| Non-Accrual Loans and Leases | | | | | |
| | Commercial | | | | | |
| | | Commercial and Industrial | $ | 11,929 | | $ | 5,295 | | $ | 4,909 | | $ | 5,033 | | $ | 5,534 | |
| | | Commercial Mortgage | 2,512 | | 2,355 | | 2,772 | | 2,910 | | 3,030 | |
| | | Construction | - | | - | | - | | - | | 833 | |
| | | Lease Financing | - | | - | | 16 | | - | | - | |
| | Total Commercial | 14,441 | | 7,650 | | 7,697 | | 7,943 | | 9,397 | |
| | Consumer | | | | | |
| | | Residential Mortgage | 20,264 | | 20,637 | | 22,876 | | 24,700 | | 21,725 | |
| | | Home Equity | 1,740 | | 2,509 | | 2,602 | | 2,413 | | 2,074 | |
| | Total Consumer | 22,004 | | 23,146 | | 25,478 | | 27,113 | | 23,799 | |
| Total Non-Accrual Loans and Leases | 36,445 | | 30,796 | | 33,175 | | 35,056 | | 33,196 | |
| Foreclosed Real Estate | 3,205 | | 3,036 | | 3,256 | | 3,318 | | 3,887 | |
| Total Non-Performing Assets | $ | 39,650 | | $ | 33,832 | | $ | 36,431 | | $ | 38,374 | | $ | 37,083 | |
| | | | | | | | |
| Accruing Loans and Leases Past Due 90 Days or More | | | | | |
| Commercial | | | | | |
| | Commercial and Industrial | $ | 1,173 | | $ | 8 | | $ - | | $ | 230 | | $ | 27 | |
| Total Commercial | 1,173 | | 8 | | - | | 230 | | 27 | |
| Consumer | | | | | |
| | Residential Mortgage | 4,564 | | 7,460 | | 6,876 | | 5,967 | | 6,908 | |
| | Home Equity | 3,009 | | 2,896 | | 2,768 | | 4,538 | | 2,701 | |
| | Automobile | 322 | | 193 | | 95 | | 241 | | 186 | |
| | Other 1 | 790 | | 841 | | 855 | | 676 | | 587 | |
| Total Consumer | 8,685 | | 11,390 | | 10,594 | | 11,422 | | 10,382 | |
| Total Accruing Loans and Leases Past Due 90 Days or More | $ | 9,858 | | $ | 11,398 | | $ | 10,594 | | $ | 11,652 | | $ | 10,409 | |
| Restructured Loans on Accrual Status | | | | | |
| and Not Past Due 90 Days or More | $ | 51,123 | | $ | 39,845 | | $ | 39,154 | | $ | 30,065 | | $ | 31,844 | |
| Total Loans and Leases | $ | 6,095,387 | | $ | 6,006,642 | | $ | 5,859,152 | | $ | 5,782,969 | | $ | 5,854,521 | |
| | | | | | | | |
| Ratio of Non-Accrual Loans and Leases to Total Loans and Leases | 0.60 | % | 0.51 | % | 0.57 | % | 0.61 | % | 0.57 | % |
| | | | | | | | |
| Ratio of Non-Performing Assets to Total Loans and Leases, | | | | | |
| | and Foreclosed Real Estate | 0.65 | % | 0.56 | % | 0.62 | % | 0.66 | % | 0.63 | % |
| | | | | | | | |
| Ratio of Commercial Non-Performing Assets to Total Commercial | | | | | |
| | Loans and Leases and Commercial Foreclosed Real Estate | 0.61 | % | 0.35 | % | 0.37 | % | 0.39 | % | 0.45 | % |
| | | | | | | | |
| Ratio of Consumer Non-Performing Assets to Total Consumer | | | | | |
| | Loans and Leases and Consumer Foreclosed Real Estate | 0.68 | % | 0.71 | % | 0.80 | % | 0.85 | % | 0.75 | % |
| | | | | | | | |
| Ratio of Non-Performing Assets and Accruing Loans and Leases | | | | | |
| | Past Due 90 Days or More to Total Loans and Leases | | | | | |
| | and Foreclosed Real Estate | 0.81 | % | 0.75 | % | 0.80 | % | 0.86 | % | 0.81 | % |
| | | | | | | | |
| Quarter to Quarter Changes in Non-Performing Assets | | | | | |
| Balance at Beginning of Quarter | $ | 33,832 | | $ | 36,431 | | $ | 38,374 | | $ | 37,083 | | $ | 40,284 | |
| Additions | 13,040 | | 3,395 | | 2,647 | | 7,304 | | 3,837 | |
| Reductions | | | | | |
| | Payments | (932 | ) | (2,954 | ) | (1,306 | ) | (2,630 | ) | (3,994 | ) |
| | Return to Accrual Status | (2,308 | ) | (1,166 | ) | (1,978 | ) | (1,132 | ) | (728 | ) |
| | Sales of Foreclosed Real Estate | (1,431 | ) | (1,498 | ) | (1,257 | ) | (1,910 | ) | (1,354 | ) |
| | Charge-offs/Write-downs | (2,551 | ) | (376 | ) | (49 | ) | (341 | ) | (962 | ) |
| Total Reductions | (7,222 | ) | (5,994 | ) | (4,590 | ) | (6,013 | ) | (7,038 | ) |
| Balance at End of Quarter | $ | 39,650 | | $ | 33,832 | | $ | 36,431 | | $ | 38,374 | | $ | 37,083 | |
| | | | | | | | |
1 Comprised of other revolving credit, installment, and lease financing. |
|
| | | | | | | | | | | | | | | | | | | | |
| Bank of Hawaii Corporation and Subsidiaries | | | | | | |
| Reserve for Credit Losses | | | | | | Table 12 |
|
| | | | Three Months Ended | | Year Ended |
| | | | December 31, |
| September 30, | | December 31, | | | December 31, |
| (dollars in thousands) | 2013 |
| 2013 | | 2012 | | | 2013 |
| 2012 |
|
| Balance at Beginning of Period | $ | 129,747 |
| $ | 130,494 | | $ | 136,390 | | | $ | 134,276 |
| $ | 144,025 |
|
| Loans and Leases Charged-Off | | | | | | |
| | Commercial | | | | | | |
| | | Commercial and Industrial | (6,828 | ) | (607 | ) | (589 | ) | | (8,083 | ) | (3,617 | ) |
| | | Construction | - |
| - | | - | | | - |
| (330 | ) |
| | | Lease Financing | - |
| (16 | ) | - | | | (16 | ) | - |
|
| | Consumer | | | | | | |
| | | Residential Mortgage | (185 | ) | (405 | ) | (831 | ) | | (2,013 | ) | (4,408 | ) |
| | | Home Equity | (721 | ) | (1,106 | ) | (1,558 | ) | | (5,220 | ) | (6,717 | ) |
| | | Automobile | (670 | ) | (457 | ) | (646 | ) | | (2,131 | ) | (2,082 | ) |
| | | Other 1 | (2,039 | ) | (2,083 | ) | (1,806 | ) | | (7,657 | ) | (7,005 | ) |
| Total Loans and Leases Charged-Off | (10,443 | ) | (4,674 | ) | (5,430 | ) | | (25,120 | ) | (24,159 | ) |
| Recoveries on Loans and Leases Previously Charged-Off | | | | | | |
| | Commercial | | | | | | |
| | | Commercial and Industrial | 308 |
| 498 | | 904 | | | 1,681 |
| 3,939 |
|
| | | Commercial Mortgage | 14 |
| 519 | | 19 | | | 557 |
| 67 |
|
| | | Construction | 8 |
| 11 | | 5 | | | 365 |
| 8 |
|
| | | Lease Financing | 8 |
| 11 | | 11 | | | 41 |
| 177 |
|
| | Consumer | | | | | | |
| | | Residential Mortgage | 828 |
| 1,290 | | 1,039 | | | 3,540 |
| 2,820 |
|
| | | Home Equity | 246 |
| 614 | | 342 | | | 1,943 |
| 1,335 |
|
| | | Automobile | 363 |
| 348 | | 478 | | | 1,628 |
| 1,931 |
|
| | | Other 1 | 442 |
| 488 | | 518 | | | 1,962 |
| 3,154 |
|
| Total Recoveries on Loans and Leases Previously Charged-Off | 2,217 |
| 3,779 | | 3,316 | | | 11,717 |
| 13,431 |
|
| Net Loans and Leases Charged-Off | (8,226 | ) | (895 | ) | (2,114 | ) | | (13,403 | ) | (10,728 | ) |
| Provision for Credit Losses | - |
| - | | - | | | - |
| 979 |
|
| Provision for Unfunded Commitments | - |
| 148 | | - | | | 648 |
| - |
|
Balance at End of Period 2 | $ | 121,521 |
| $ | 129,747 | | $ | 134,276 | | | $ | 121,521 |
| $ | 134,276 |
|
| | | | | | | | | |
| Components | | | | | | |
| Allowance for Loan and Lease Losses | $ | 115,454 |
| $ | 123,680 | | $ | 128,857 | | | $ | 115,454 |
| $ | 128,857 |
|
| Reserve for Unfunded Commitments | 6,067 |
| 6,067 | | 5,419 | | | 6,067 |
| 5,419 |
|
| Total Reserve for Credit Losses | $ | 121,521 |
| $ | 129,747 | | $ | 134,276 | | | $ | 121,521 |
| $ | 134,276 |
|
| | | | | | | | | |
| Average Loans and Leases Outstanding | $ | 6,053,607 |
| $ | 5,892,888 | | $ | 5,798,057 | | | $ | 5,883,686 |
| $ | 5,680,279 |
|
| | | | | | | | | |
| Ratio of Net Loans and Leases Charged-Off to | | | | | | |
| | Average Loans and Leases Outstanding (annualized) | 0.54 | % | 0.06 | % | 0.15 | % | | 0.23 | % | 0.19 | % |
| Ratio of Allowance for Loan and Lease Losses | | | | | | |
| | to Loans and Leases Outstanding | 1.89 | % | 2.06 | % | 2.20 | % | | 1.89 | % | 2.20 | % |
| | | | | | | | | |
1 Comprised of other revolving credit, installment, and lease financing. | | | | | | |
2 Included in this analysis is activity related to the Company's reserve for unfunded commitments, which is separately recorded in other liabilities in the Consolidated Statements of Condition. |
|
| | | | | | | | | | | | | | | | | | | |
| Bank of Hawaii Corporation and Subsidiaries | | | | | |
| Business Segments Selected Financial Information | | | | | Table 13a |
|
| | Retail |
| Commercial | | Investment | | Treasury | | Consolidated | |
| (dollars in thousands) | Banking |
| Banking | | Services | | and Other | | Total | |
| Three Months Ended December 31, 2013 | | | | | |
| Net Interest Income | $ | 42,155 |
| $ | 25,647 | | $ | 2,614 | | $ | 21,704 | | $ | 92,120 | |
| Provision for Credit Losses | 1,790 |
| 6,419 | | (19) | | (8,190) | | - | |
| Net Interest Income After Provision for Credit Losses | 40,365 |
| 19,228 | | 2,633 | | 29,894 | | 92,120 | |
| Noninterest Income | 20,377 |
| 6,564 | | 14,862 | | 3,475 | | 45,278 | |
| Noninterest Expense | (50,015) |
| (16,296) | | (13,353) | | (2,760) | | (82,424) | |
| Income Before Provision for Income Taxes | 10,727 |
| 9,496 | | 4,142 | | 30,609 | | 54,974 | |
| Provision for Income Taxes | (3,970) |
| (3,054) | | (1,533) | | (7,362) | | (15,919) | |
| Net Income | 6,757 |
| 6,442 | | 2,609 | | 23,247 | | 39,055 | |
| Total Assets as of December 31, 2013 | $ | 3,658,495 |
| $ | 2,426,452 | | $ | 189,421 | | $ | 7,809,912 | | $ | 14,084,280 | |
| | | | | | |
Three Months Ended December 31, 2012 1 | | | | | |
| Net Interest Income | $ | 43,553 |
| $ | 25,780 | | $ | 2,955 | | $ | 18,022 | | $ | 90,310 | |
| Provision for Credit Losses | 2,768 |
| (584) | | (69) | | (2,115) | | - | |
| Net Interest Income After Provision for Credit Losses | 40,785 |
| 26,364 | | 3,024 | | 20,137 | | 90,310 | |
| Noninterest Income | 28,422 |
| 6,006 | | 15,347 | | 3,207 | | 52,982 | |
| Noninterest Expense | (51,857) |
| (15,166) | | (13,438) | | (2,995) | | (83,456) | |
| Income Before Provision for Income Taxes | 17,350 |
| 17,204 | | 4,933 | | 20,349 | | 59,836 | |
| Provision for Income Taxes | (6,420) |
| (5,928) | | (1,825) | | (5,376) | | (19,549) | |
| Net Income | 10,930 |
| 11,276 | | 3,108 | | 14,973 | | 40,287 | |
Total Assets as of December 31, 2012 1 | $ | 3,663,287 |
| $ | 2,196,682 | | $ | 190,383 | | $ | 7,678,020 | | $ | 13,728,372 | |
| | | | | | |
1 Certain prior period information has been reclassified to conform to current presentation. | | | |
|
| | | | | | | | | | | | | | | | | | | |
| Bank of Hawaii Corporation and Subsidiaries | | | | | |
| Business Segments Selected Financial Information | | | | | Table 13b |
|
| | Retail |
| Commercial | | Investment | | Treasury | | Consolidated | |
| (dollars in thousands) | Banking |
| Banking | | Services | | and Other | | Total | |
| Year Ended December 31, 2013 | | | | | |
| Net Interest Income | $ | 164,597 |
| $ | 99,623 | | $ | 10,552 | | $ | 84,135 | | $ | 358,907 | |
| Provision for Credit Losses | 8,565 |
| 4,918 | | (71) | | (13,412) | | - | |
| Net Interest Income After Provision for Credit Losses | 156,032 |
| 94,705 | | 10,623 | | 97,547 | | 358,907 | |
| Noninterest Income | 88,063 |
| 26,946 | | 59,308 | | 11,906 | | 186,223 | |
| Noninterest Expense | (200,853) |
| (64,253) | | (54,307) | | (11,556) | | (330,969) | |
| Income Before Provision for Income Taxes | 43,242 |
| 57,398 | | 15,624 | | 97,897 | | 214,161 | |
| Provision for Income Taxes | (16,000) |
| (19,467) | | (5,781) | | (22,411) | | (63,659) | |
| Net Income | 27,242 |
| 37,931 | | 9,843 | | 75,486 | | 150,502 | |
| Total Assets as of December 31, 2013 | $ | 3,658,495 |
| $ | 2,426,452 | | $ | 189,421 | | $ | 7,809,912 | | $ | 14,084,280 | |
| | | | | | |
| | | | | | |
Year Ended December 31, 2012 1 | | | | | |
| Net Interest Income | $ | 177,083 |
| $ | 103,754 | | $ | 12,448 | | $ | 83,986 | | $ | 377,271 | |
| Provision for Credit Losses | 11,916 |
| (1,382) | | 196 | | (9,751) | | 979 | |
| Net Interest Income After Provision for Credit Losses | 165,167 |
| 105,136 | | 12,252 | | 93,737 | | 376,292 | |
| Noninterest Income | 104,654 |
| 26,408 | | 57,454 | | 11,770 | | 200,286 | |
| Noninterest Expense | (206,740) |
| (62,165) | | (55,543) | | (9,840) | | (334,288) | |
| Income Before Provision for Income Taxes | 63,081 |
| 69,379 | | 14,163 | | 95,667 | | 242,290 | |
| Provision for Income Taxes | (23,340) |
| (19,864) | | (5,240) | | (27,770) | | (76,214) | |
| Net Income | 39,741 |
| 49,515 | | 8,923 | | 67,897 | | 166,076 | |
Total Assets as of December 31, 2012 1 | $ | 3,663,287 |
| $ | 2,196,682 | | $ | 190,383 | | $ | 7,678,020 | | $ | 13,728,372 | |
| | | | | | |
1 Certain prior period information has been reclassified to conform to current presentation. | | | |
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Bank of Hawaii Corporation and Subsidiaries |
| Selected Quarterly Financial Data | | | | | | | | | Table 14 |
| | Three Months Ended | |
| | December 31, |
| | September 30, | | | June 30, | | | March 31, | | | December 31, | | |
| (dollars in thousands, except per share amounts) | 2013 |
| | 2013 | | | 2013 | | | 2013 | | | 2012 | | |
| Quarterly Operating Results | | | | | | | | | | |
| Interest Income | | | | | | | | | | |
| Interest and Fees on Loans and Leases | $ | 63,809 |
| | $ | 63,918 | | | $ | 62,729 | | | $ | 62,820 | | | $ | 64,627 | | |
| Income on Investment Securities | | | | | | | | | | |
| Available-for-Sale | 10,608 |
| | 12,038 | | | 15,073 | | | 15,851 | | | 15,349 | | |
| Held-to-Maturity | 26,882 |
| | 24,137 | | | 19,189 | | | 19,854 | | | 20,253 | | |
| Deposits | 3 |
| | 3 | | | 1 | | | 3 | | | 3 | | |
| Funds Sold | 105 |
| | 177 | | | 74 | | | 59 | | | 180 | | |
| Other | 302 |
| | 301 | | | 285 | | | 284 | | | 283 | | |
| Total Interest Income | 101,709 |
| | 100,574 | | | 97,351 | | | 98,871 | | | 100,695 | | |
| Interest Expense | | | | | | | | | | |
| Deposits | 2,418 |
| | 2,500 | | | 2,579 | | | 2,646 | | | 2,753 | | |
| Securities Sold Under Agreements to Repurchase | 6,530 |
| | 6,551 | | | 6,751 | | | 7,005 | | | 7,158 | | |
| Funds Purchased | 8 |
| | 4 | | | 10 | | | 22 | | | 4 | | |
| Short-Term Borrowings | 2 |
| | - | | | - | | | - | | | - | | |
| Long-Term Debt | 631 |
| | 632 | | | 671 | | | 638 | | | 470 | | |
| Total Interest Expense | 9,589 |
| | 9,687 | | | 10,011 | | | 10,311 | | | 10,385 | | |
| Net Interest Income | 92,120 |
| | 90,887 | | | 87,340 | | | 88,560 | | | 90,310 | | |
| Provision for Credit Losses | - |
| | - | | | - | | | - | | | - | | |
| Net Interest Income After Provision for Credit Losses | 92,120 |
| | 90,887 | | | 87,340 | | | 88,560 | | | 90,310 | | |
| Noninterest Income | | | | | | | | | | |
| Trust and Asset Management | 12,240 |
| | 11,717 | | | 12,089 | | | 11,886 | | | 12,066 | | |
| Mortgage Banking | 2,823 |
| | 4,132 | | | 5,820 | | | 6,411 | | | 11,268 | | |
| Service Charges on Deposit Accounts | 9,326 |
| | 9,385 | | | 9,112 | | | 9,301 | | | 9,459 | | |
| Fees, Exchange, and Other Service Charges | 12,670 |
| | 12,732 | | | 13,133 | | | 11,934 | | | 12,333 | | |
| Investment Securities Gains (Losses), Net | - |
| | - | | | - | | | - | | | - | | |
| Insurance | 2,295 |
| | 2,177 | | | 2,393 | | | 2,325 | | | 2,550 | | |
| Bank-Owned Life Insurance | 1,895 |
| | 1,365 | | | 1,335 | | | 1,297 | | | 1,557 | | |
| Other | 4,029 |
| | 3,618 | | | 4,159 | | | 4,624 | | | 3,749 | | |
| Total Noninterest Income | 45,278 |
| | 45,126 | | | 48,041 | | | 47,778 | | | 52,982 | | |
| Noninterest Expense | | | | | | | | | | |
| Salaries and Benefits | 43,643 |
| | 46,552 | | | 45,341 | | | 48,675 | | | 46,116 | | |
| Net Occupancy | 9,602 |
| | 9,847 | | | 9,661 | | | 9,635 | | | 11,867 | | |
| Net Equipment | 4,837 |
| | 4,572 | | | 4,380 | | | 4,577 | | | 4,705 | | |
| Data Processing | 3,827 |
| | 3,697 | | | 3,050 | | | 3,266 | | | 3,058 | | |
| Professional Fees | 2,669 |
| | 2,119 | | | 2,391 | | | 2,226 | | | 2,611 | | |
| FDIC Insurance | 1,954 |
| | 1,913 | | | 1,949 | | | 1,949 | | | 1,892 | | |
| Other | 15,892 |
| | 14,277 | | | 14,409 | | | 14,059 | | | 13,207 | | |
| Total Noninterest Expense | 82,424 |
| | 82,977 | | | 81,181 | | | 84,387 | | | 83,456 | | |
| Income Before Provision for Income Taxes | 54,974 |
| | 53,036 | | | 54,200 | | | 51,951 | | | 59,836 | | |
| Provision for Income Taxes | 15,919 |
| | 15,332 | | | 16,437 | | | 15,971 | | | 19,549 | | |
| Net Income | $ | 39,055 |
| | $ | 37,704 | | | $ | 37,763 | | | $ | 35,980 | | | $ | 40,287 | | |
| | | | | | | | | | | |
| Basic Earnings Per Share | $ | 0.88 |
| | $ | 0.85 | | | $ | 0.85 | | | $ | 0.81 | | | $ | 0.90 | | |
| Diluted Earnings Per Share | $ | 0.88 |
| | $ | 0.85 | | | $ | 0.85 | | | $ | 0.81 | | | $ | 0.90 | | |
| | | | | | | | | | | |
| Balance Sheet Totals | | | | | | | | | | |
| Loans and Leases | $ | 6,095,387 |
| | $ | 6,006,642 | | | $ | 5,859,152 | | | $ | 5,782,969 | | | $ | 5,854,521 | | |
| Total Assets | 14,084,280 |
| | 13,848,871 | | | 13,733,418 | | | 13,525,667 | | | 13,728,372 | | |
| Total Deposits | 11,914,656 |
| | 11,608,134 | | | 11,449,198 | | | 11,251,860 | | | 11,529,482 | | |
| Total Shareholders' Equity | 1,011,976 |
| | 992,686 | | | 986,368 | | | 1,026,104 | | | 1,021,665 | | |
| | | | | | | | | | | |
| Performance Ratios | | | | | | | | | | |
| Return on Average Assets | 1.12 |
| % | 1.09 | | % | 1.12 | | % | 1.08 | | % | 1.19 | | % |
| Return on Average Shareholders' Equity | 15.36 |
| | 15.02 | | | 14.64 | | | 14.10 | | | 15.47 | | |
Efficiency Ratio 1 | 59.99 |
| | 61.01 | | | 59.96 | | | 61.90 | | | 58.24 | | |
Net Interest Margin 2 | 2.85 |
| | 2.83 | | | 2.77 | | | 2.82 | | | 2.87 | | |
| | | | | | | | | | | |
1 Efficiency ratio is defined as noninterest expense divided by total revenue (net interest income and noninterest income). | | | |
2 Net interest margin is defined as net interest income, on a taxable-equivalent basis, as a percentage of average earning assets. | |
|
| | | | | | | | | | | | | | | | | | |
| Bank of Hawaii Corporation and Subsidiaries | | | | | | | | | | |
| Hawaii Economic Trends | | | | | | | | | Table 15 |
| | Eleven Months Ended | | Year Ended | |
| ($ in millions; jobs in thousands) | November 30, 2013 | | December 31, 2012 | | December 31, 2011 | |
| Hawaii Economic Trends | | | | | | | | | | | |
State General Fund Revenues 1 | $ | 5,013.3 |
| 4.1 | % | $ | 5,259.1 |
| | 12.8 | % | $ | 4,662.5 |
| | 8.1 | % |
General Excise and Use Tax Revenue 1 | $ | 2,679.3 |
| 2.3 | % | $ | 2,844.7 |
| | 9.9 | % | $ | 2,588.5 |
| | 8.8 | % |
Jobs 2 | 622.4 |
| | | 619.3 |
| | | | 614.2 |
| | | |
|
| | | | | | | | | | | | | | | | | | | |
| | November 30, | | September 30, | | June 30, | | December 31, | |
| (spot rates) | 2013 | | 2013 | | 2013 | | 2012 | | 2011 | | 2010 | |
Unemployment 3 | | | | | | | | | | | | |
| Statewide, seasonally adjusted | 4.4 | % | 4.3 | % | 4.6 | % | 5.2 | % | 6.2 | % | 6.3 | % |
| | | | | | | | | | | | | |
| Oahu | 4.2 | | 4.1 | | 4.7 | | 4.3 | | 5.4 | | 4.8 | |
| Island of Hawaii | 6.2 | | 6.1 | | 7.5 | | 6.9 | | 8.9 | | 8.6 | |
| Maui | 4.9 | | 4.8 | | 5.4 | | 5.2 | | 7.1 | | 7.4 | |
| Kauai | 5.5 | | 5.2 | | 5.9 | | 6.0 | | 7.8 | | 7.8 | |
| | | | | | | | | | | | | |
| | December 31, | | September 30, | | June 30, | | December 31, | |
| (percentage change, except months of inventory) | 2013 | | 2013 | | 2013 | | 2012 | | 2011 | | 2010 | |
Housing Trends (Single Family Oahu) 4 | | | | | | | | | | | | |
| Median Home Price | 4.8 | % | 3.3 | % | 0.8 | % | 7.8 | % | (3.0) | % | 3.1 | % |
| Home Sales Volume (units) | 4.6 | % | 7.0 | % | 11.6 | % | 6.5 | % | (2.7) | % | 13.4 | % |
| Months of Inventory | 2.7 | | 2.8 | | 2.7 | | 2.5 | | 4.8 | | 6.0 | |
| | | | | | | | | | | | | |
| | | | | | Monthly Visitor Arrivals, | | Percentage Change | |
| (in thousands) | | | | | Seasonally Adjusted | | from Previous Month | |
Tourism 5 | | | | | | | | | | | | |
| October 31, 2013 | | | | | | | 649.9 | | | | 0.5 | % |
| September 30, 2013 | | | | | | | 646.7 | | | | (4.5) | |
| August 31, 2013 | | | | | | | 677.0 | | | | 1.2 | |
| July 31, 2013 | | | | | | | 668.7 | | | | (3.7) | |
| June 30, 2013 | | | | | | | 694.3 | | | | 1.9 | |
| May 31, 2013 | | | | | | | 681.2 | | | | 2.5 | |
| April 30, 2013 | | | | | | | 664.4 | | | | (6.1) | |
| March 31, 2013 | | | | | | | 707.3 | | | | 4.9 | |
| February 28, 2013 | | | | | | | 674.2 | | | | 0.2 | |
| January 31, 2013 | | | | | | | 673.2 | | | | (0.8) | |
| December 31, 2012 | | | | | | | 678.5 | | | | (2.5) | |
| November 30, 2012 | | | | | | | 696.2 | | | | 5.5 | |
| October 31, 2012 | | | | | | | 659.8 | | | | 0.6 | |
| September 30, 2012 | | | | | | | 655.7 | | | | (0.4) | |
| August 31, 2012 | | | | | | | 658.6 | | | | 3.1 | |
| July 31, 2012 | | | | | | | 639.0 | | | | (2.7) | |
| June 30, 2012 | | | | | | | 656.6 | | | | 0.8 | |
| May 31, 2012 | | | | | | | 651.7 | | | | 1.5 | |
| April 30, 2012 | | | | | | | 641.9 | | | | (2.0) | |
| March 31, 2012 | | | | | | | 654.9 | | | | 3.4 | |
| February 29, 2012 | | | | | | | 633.5 | | | | (1.1) | |
| January 31, 2012 | | | | | | | 640.6 | | | | 2.0 | |
| December 31, 2011 | | | | | | | 628.3 | | | | 2.0 | |
| November 30, 2011 | | | | | | | 616.3 | | | | 0.9 | |
| | | | | | | | | | | | | |
1 Source: Hawaii Department of Business, Economic Development & Tourism | | | | | | | | |
2 Source: U. S. Bureau of Labor, preliminary figure | | | | | | | | | | | |
3 Source: Hawaii Department of Labor and Industrial Relations | | | | | | | | | | |
4 Source: Honolulu Board of REALTORS | | | | | | | | | | | | |
5 Source: University of Hawaii Economic Research Organization | | | | | | | | | |
| Note: Certain prior period seasonally adjusted information has been revised. | | | | | | | | | |
