Bank of Hawaii Corporation Third Quarter 2014 Financial Results
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| • | Diluted Earnings Per Share $0.95 |
| |
| • | Net Income $41.8 Million |
| |
| • | Board of Directors Declares Dividend of $0.45 Per Share |
FOR IMMEDIATE RELEASE
HONOLULU, HI (October 27, 2014) -- Bank of Hawaii Corporation (NYSE: BOH) today reported diluted earnings per share of $0.95 for the third quarter of 2014, up from $0.94 in the second quarter of 2014, and up from $0.85 in the third quarter of 2013. Net income for the third quarter of 2014 was $41.8 million, an increase from net income of $41.5 million in the previous quarter and $37.7 million in the same quarter last year.
“Bank of Hawaii Corporation continued to perform well during the third quarter of 2014,” said Peter Ho, Chairman, President, and CEO. “Loan balances grew 2.8 percent from the previous quarter and average deposits grew 1.4 percent. Our margin remained relatively stable as loan growth partially offset the lower interest rate environment. Asset quality continued to be strong during the quarter and our expenses were well controlled.”
The return on average assets for the third quarter of 2014 was 1.15 percent, down slightly from 1.17 percent in the previous quarter and up from 1.09 percent in the same quarter last year. The return on average equity for the third quarter of 2014 was 15.57 percent, down from 15.87 percent for the second quarter of 2014 and up from 15.02 percent in the third quarter of 2013.
For the nine-month period ended September 30, 2014, net income was $121.9 million, an increase from net income of $111.4 million for the same period last year. Diluted earnings per share were $2.75 for the nine-month period in 2014 compared with diluted earnings per share of $2.50 for the same period in 2013. The 2014 year-to-date return on average assets was 1.15 percent compared with 1.09 percent for the same period in 2013. The 2014 year-to-date return on average equity was 15.53 percent compared with 14.59 percent for the nine months ended September 30, 2013.
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Bank of Hawaii Corporation Third Quarter 2014 Financial Results Page 2
Financial Highlights
Net interest income, on a taxable equivalent basis, for the third quarter of 2014 was $98.3 million, up $1.0 million from net interest income of $97.3 million in the second quarter of 2014 and up $4.8 million from net interest income of $93.5 million in the third quarter of 2013. Net interest income for the nine-month period in 2014 was $291.6 million compared with net interest income of $274.3 million for the same period in 2013. Analyses of the changes in net interest income are included in Tables 8a, 8b, and 8c.
The net interest margin was 2.85 percent for the third quarter of 2014, a 1 basis point decrease from the net interest margin of 2.86 percent in the second quarter of 2014, and a 2 basis point increase from the net interest margin of 2.83 percent in the third quarter of 2013. The net interest margin for the first nine months of 2014 was 2.86 percent compared with 2.81 percent for the same nine-month period last year.
The Company recorded a negative provision for credit losses of $2.7 million in the third quarter of 2014 compared with a negative provision of $2.2 million in the second quarter of 2014 and no provision recorded in the third quarter of 2013. The negative provision for credit losses for the third quarter of 2014 was primarily due to a reduction in the specific reserve related to one commercial client. The first nine months of 2014 included a negative provision for credit losses of $4.9 million compared to no provision for the first nine months of 2013. The negative provision for the first nine months of 2014 reflects the continued strength of our credit risk profile, several large commercial loan recoveries, as well as the reduction in the specific reserve related to one commercial client as noted above.
Noninterest income was $45.0 million in the third quarter of 2014, an increase of $0.5 million compared with $44.5 million in the second quarter of 2014, and a decrease of $0.1 million compared with $45.1 million in the third quarter of 2013. Noninterest income in the third quarter of 2014 included a net gain of $1.9 million resulting from the sale of 23,000 Visa Class B shares (9,478 Class A equivalents). Noninterest income in the second quarter of 2014 included a gain of $2.0 million from the sale of 23,500 Visa Class B shares. The Company also contributed 5,700 Visa Class B shares (2,349 Class A equivalents) to the Bank of Hawaii Foundation during the third quarter of 2014. The contribution of Visa shares to the Bank of Hawaii Foundation has no impact on noninterest expense; however, the contributions favorably impact the effective tax rate. As of September 30, 2014, the Company has 424,214 Visa Class B shares remaining (174,819 Class A equivalents). Noninterest income for the nine-months ended September 30, 2014 was $134.2 million, a decrease of $6.7 million compared with noninterest income of $140.9 million for the same period in 2013. The decrease was primarily due to a reduction of $10.9 million in mortgage banking income which was partially offset by net gains of $5.8 million on the sales of Visa Class B shares during the period.
Noninterest expense was $81.0 million in the third quarter of 2014, essentially flat with the previous quarter, and down $2.0 million compared with $83.0 million in the same quarter last year. Noninterest expense for the nine-months ended September 30, 2014 was $245.7 million, a decrease of $2.8 million compared with noninterest expense of $248.5 million for the same period in 2013. An analysis of noninterest expenses related to salaries and benefits is included in Table 9.
The efficiency ratio for the third quarter of 2014 was 57.74 percent, down from 58.38 percent in the previous quarter and 61.01 percent in the same quarter last year. The efficiency ratio for the nine-month period ended September 30, 2014 was 58.88 percent, an improvement from the efficiency ratio of 60.96 percent for the same period last year.
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Bank of Hawaii Corporation Third Quarter 2014 Financial Results Page 3
The effective tax rate for the third quarter of 2014 was 32.59 percent compared with 30.86 percent in the previous quarter and 28.91 percent during the same quarter last year. The effective tax rate for the nine-month period ended September 30, 2014 was 30.93 percent compared to 29.99 percent for the same period last year. 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 continued to remain strong during the third quarter of 2014. Total non-performing assets declined to $33.3 million at September 30, 2014, down from non-performing assets of $34.4 million at June 30, 2014 and $33.8 million at September 30, 2013. As a percentage of total loans and leases and foreclosed real estate, non-performing assets declined to 0.50 percent at September 30, 2014, down from 0.53 percent at June 30, 2014 and 0.56 percent at September 30, 2013.
Accruing loans and leases past due 90 days or more were $9.1 million at September 30, 2014, down from $9.7 million at June 30, 2014 and $11.4 million at September 30, 2013. Restructured loans and leases not included in non-accrual loans or accruing loans past due 90 days or more were $45.2 million at September 30, 2014 and primarily comprised of residential mortgage loans with lowered monthly payments to accommodate our 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 loans and leases charged off during the third quarter of 2014 were $0.8 million or 0.05 percent annualized of total average loans and leases outstanding. Loan and lease charge-offs of $3.7 million during the quarter were partially offset by recoveries of $2.9 million. The Company recorded a net recovery of loans and leases previously charged off of $1.9 million during the second quarter of 2014 as loan and lease charge-offs of $4.0 million were more than offset by recoveries of $5.9 million. Net charge-offs during the third quarter of 2013 were $0.9 million or 0.06 percent annualized of total average loans and leases outstanding, and were comprised of $4.7 million in charge-offs partially offset by recoveries of $3.8 million. Net charge-offs in the nine-month period ended September 30, 2014 were $0.2 million, or 0.00 percent annualized of total average loans and leases outstanding compared with net charge-offs of $5.2 million, or 0.12 percent annualized of total average loans and leases outstanding for the same period in 2013.
The allowance for loan and lease losses was reduced to $110.4 million at September 30, 2014. The ratio of the allowance for loan and lease losses to total loans and leases was 1.67 percent at September 30, 2014, a decrease of 10 basis points from the previous quarter commensurate with continued improvements in credit quality and the Hawaii economy. The reserve for unfunded commitments at September 30, 2014 was unchanged at $5.9 million. Details of loan and lease charge-offs, recoveries, and the components of the total reserve for credit losses are summarized in Table 12.
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Bank of Hawaii Corporation Third Quarter 2014 Financial Results Page 4
Other Financial Highlights
Total assets were $14.51 billion at September 30, 2014, down from total assets of $14.84 billion at June 30, 2014 and up from $13.85 billion at September 30, 2013. Average total assets were $14.37 billion during the third quarter of 2014, up from $14.25 billion during the previous quarter and $13.77 billion during the same quarter last year.
The investment securities portfolio was $6.78 billion at September 30, 2014, down from $6.91 billion at June 30, 2014 and $6.91 billion at September 30, 2013. The portfolio remains largely comprised of securities issued by U. S. government agencies and included $4.56 billion in securities held to maturity and $2.22 billion in securities available for sale at September 30, 2014.
Total loans and leases increased to $6.61 billion at September 30, 2014, up from $6.43 billion at June 30, 2014 and $6.01 billion at September 30, 2013. Average total loans and leases were $6.49 billion during the third quarter of 2014, up from $6.27 billion during the second quarter of 2014 and $5.89 billion during the same quarter last year. The commercial loan portfolio increased to $2.73 billion at the end of the quarter, up from commercial loans of $2.69 billion at the end of the previous quarter, and up from $2.48 billion at the end of the same quarter last year. Total consumer loans increased to $3.88 billion at the end of the third quarter of 2014, up from $3.73 billion at the end of the second quarter of 2014, and up from $3.53 billion at the end of the third quarter of 2013 in all loan categories. Loan and lease portfolio balances, including the higher risk loans and leases outstanding, are summarized in Table 10.
Total deposits were $12.36 billion at September 30, 2014, down from $12.67 billion at June 30, 2014, and up from $11.61 billion at September 30, 2013. The decrease from the previous quarter was largely due to strong growth in short-term public and commercial deposits at the end of the second quarter. Average total deposits were $12.20 billion during the third quarter of 2014, up from $12.03 billion during the previous quarter and $11.48 billion during the same quarter last year.
During the third quarter of 2014, the Company repurchased 340.9 thousand shares of common stock at a total cost of $19.8 million under its share repurchase program. The average cost was $58.00 per share repurchased. From the beginning of the share repurchase program initiated during July 2001 through September 30, 2014, the Company has repurchased 51.7 million shares and returned over $1.9 billion to shareholders at an average cost of $36.86 per share. Remaining buyback authority under the share repurchase program was $89.2 million at September 30, 2014. From October 1 through October 24, 2014, the Company repurchased an additional 144.0 thousand shares of common stock at an average cost of $55.58 per share.
Total shareholders’ equity was $1.06 billion at September 30, 2014, compared with $1.05 billion at June 30, 2014, and $1.0 billion at September 30, 2013. The ratio of tangible common equity to risk-weighted assets was 15.23 percent at the end of the third quarter of 2014, compared with 15.54 percent at the end of the second quarter of 2014 and 15.62 percent at the end of the same quarter last year. The Tier 1 leverage ratio at September 30, 2014 was 7.19 percent, down from 7.20 percent at June 30, 2014 and up from 7.16 percent at September 30, 2013.
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 December 12, 2014 to shareholders of record at the close of business on November 28, 2014.
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Bank of Hawaii Corporation Third Quarter 2014 Financial Results Page 5
Hawaii Economy
General economic conditions in Hawaii continued to remain positive during the third quarter of 2014 due to an expanding construction industry, stable tourism, low unemployment, and a strong real estate market. For the first eight months of 2014, total visitor spending increased 2.1% while total visitor arrivals remained relatively unchanged compared to the same period in 2013. The statewide seasonally-adjusted unemployment rate was 4.2 percent in September 2014 compared to 5.9 percent nationally. For the first nine months of 2014, the volume of single-family home sales on Oahu increased 1.6 percent, while the volume of condominium sales on Oahu decreased 0.4 percent compared with the same period in 2013. The median price of single-family homes on Oahu increased 4.6 percent, while the median price of condominiums on Oahu increased 5.4 percent for the first nine months of 2014 compared to the same nine-month period in 2013. As of September 30, 2014, months of inventory of single-family homes and condominiums on Oahu remained low at approximately 2.9 months and 3.3 months, respectively. More information on current Hawaii economic trends is presented in Table 15.
Conference Call Information
The Company will review its third quarter 2014 financial results today at 6:00 p.m. Eastern Time (12:00 p.m. Hawaii Time). The conference 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. 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, October 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 38213055# 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, 2013, which was filed with the U.S. Securities and Exchange Commission. We have not committed 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.
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| Bank of Hawaii Corporation and Subsidiaries | | | | | | | |
| Financial Highlights | | | | | | | | | Table 1a |
| |
| | Three Months Ended | | Nine Months Ended | |
| | September 30, | | June 30, | | September 30, | | September 30, | |
| (dollars in thousands, except per share amounts) | 2014 | | 2014 | | 2013 | | 2014 | | 2013 | |
| For the Period: | | | | | | | | | | |
| Operating Results | | | | | | | | | | |
| Net Interest Income | $ | 95,379 |
| | $ | 94,412 |
| | $ | 90,887 |
| | $ | 283,024 |
| | $ | 266,787 |
| |
| Provision for Credit Losses | (2,665 | ) | | (2,199 | ) | | — |
| | (4,864 | ) | | — |
| |
| Total Noninterest Income | 44,950 |
| | 44,481 |
| | 45,126 |
| | 134,199 |
| | 140,945 |
| |
| Total Noninterest Expense | 81,030 |
| | 81,082 |
| | 82,977 |
| | 245,659 |
| | 248,545 |
| |
| Net Income | 41,769 |
| | 41,490 |
| | 37,704 |
| | 121,851 |
| | 111,447 |
| |
| Basic Earnings Per Share | 0.95 |
| | 0.94 |
| | 0.85 |
| | 2.77 |
| | 2.51 |
| |
| Diluted Earnings Per Share | 0.95 |
| | 0.94 |
| | 0.85 |
| | 2.75 |
| | 2.50 |
| |
| Dividends Declared Per Share | 0.45 |
| | 0.45 |
| | 0.45 |
| | 1.35 |
| | 1.35 |
| |
| | | | | | | | | | | |
| Performance Ratios | | | | | | | | | | |
| Return on Average Assets | 1.15 |
| % | 1.17 |
| % | 1.09 |
| % | 1.15 |
| % | 1.09 |
| % |
| Return on Average Shareholders' Equity | 15.57 |
| | 15.87 |
| | 15.02 |
| | 15.53 |
| | 14.59 |
| |
Efficiency Ratio 1 | 57.74 |
| | 58.38 |
| | 61.01 |
| | 58.88 |
| | 60.96 |
| |
Net Interest Margin 2 | 2.85 |
| | 2.86 |
| | 2.83 |
| | 2.86 |
| | 2.81 |
| |
Dividend Payout Ratio 3 | 47.37 |
| | 47.87 |
| | 52.94 |
| | 48.74 |
| | 53.78 |
| |
| Average Shareholders' Equity to Average Assets | 7.41 |
| | 7.36 |
| | 7.23 |
| | 7.38 |
| | 7.49 |
| |
| | | | | | | | | | | |
| Average Balances | | | | | | | | | | |
| Average Loans and Leases | $ | 6,488,780 |
| | $ | 6,274,595 |
| | $ | 5,892,888 |
| | $ | 6,290,548 |
| | $ | 5,826,424 |
| |
| Average Assets | 14,372,375 |
| | 14,253,384 |
| | 13,769,699 |
| | 14,221,143 |
| | 13,633,907 |
| |
| Average Deposits | 12,200,654 |
| | 12,030,010 |
| | 11,479,185 |
| | 12,016,485 |
| | 11,337,792 |
| |
| Average Shareholders' Equity | 1,064,589 |
| | 1,048,429 |
| | 995,661 |
| | 1,048,924 |
| | 1,021,480 |
| |
| | | | | | | | | | | |
| Per Share of Common Stock | | | | | | | | | | |
| Book Value | $ | 24.04 |
| | $ | 23.72 |
| | $ | 22.29 |
| | $ | 24.04 |
| | $ | 22.29 |
| |
| Tangible Book Value | 23.32 |
| | 23.01 |
| | 21.58 |
| | 23.32 |
| | 21.58 |
| |
| Market Value | | | | | | | | | | |
| Closing | 56.81 |
| | 58.69 |
| | 54.45 |
| | 56.81 |
| | 54.45 |
| |
| High | 60.75 |
| | 61.73 |
| | 57.13 |
| | 61.73 |
| | 57.13 |
| |
| Low | 55.55 |
| | 53.45 |
| | 50.50 |
| | 53.45 |
| | 44.88 |
| |
| | | | | | | | | | | |
| | | | September 30, |
| | June 30, |
| | December 31, |
| | September 30, |
| |
| | | | 2014 |
| | 2014 |
| | 2013 |
| | 2013 |
| |
| As of Period End: | | | | | | | | | | |
| Balance Sheet Totals | | | | | | | | | | |
| Loans and Leases | | | $ | 6,606,350 |
| | $ | 6,426,353 |
| | $ | 6,095,387 |
| | $ | 6,006,642 |
| |
| Total Assets | | | 14,510,166 |
| | 14,844,505 |
| | 14,084,280 |
| | 13,848,871 |
| |
| Total Deposits | | | 12,361,441 |
| | 12,670,034 |
| | 11,914,656 |
| | 11,608,134 |
| |
| Long-Term Debt | | | 173,926 |
| | 173,671 |
| | 174,706 |
| | 174,717 |
| |
| Total Shareholders' Equity | | | 1,057,413 |
| | 1,050,801 |
| | 1,011,976 |
| | 992,686 |
| |
| | | | | | | | | | | |
| Asset Quality | | | | | | | | | | |
| Allowance for Loan and Lease Losses | | | $ | 110,362 |
| | $ | 113,838 |
| | $ | 115,454 |
| | $ | 123,680 |
| |
| Non-Performing Assets | | | 33,307 |
| | 34,389 |
| | 39,650 |
| | 33,832 |
| |
| | | | | | | | | | | |
| Financial Ratios | | | | | | | | | | |
| Allowance to Loans and Leases Outstanding | | 1.67 |
| % | 1.77 |
| % | 1.89 |
| % | 2.06 |
| % |
Tier 1 Capital Ratio 4 | | | 15.32 |
| | 15.66 |
| | 16.05 |
| | 16.04 |
| |
Total Capital Ratio 4 | | | 16.57 |
| | 16.91 |
| | 17.31 |
| | 17.30 |
| |
Tier 1 Leverage Ratio 4 | | | 7.19 |
| | 7.20 |
| | 7.24 |
| | 7.16 |
| |
| Total Shareholders' Equity to Total Assets | | | 7.29 |
| | 7.08 |
| | 7.19 |
| | 7.17 |
| |
Tangible Common Equity to Tangible Assets 5 | | 7.09 |
| | 6.88 |
| | 6.98 |
| | 6.96 |
| |
Tangible Common Equity to Risk-Weighted Assets 4, 5 | | 15.23 |
| | 15.54 |
| | 15.67 |
| | 15.62 |
| |
| | | | | | | | | | | |
| Non-Financial Data | | | | | | | | | | |
| Full-Time Equivalent Employees | | | 2,170 |
| | 2,194 |
| | 2,196 |
| | 2,205 |
| |
| Branches | | | 74 |
| | 74 |
| | 74 |
| | 74 |
| |
| ATMs | | | 459 |
| | 457 |
| | 466 |
| | 468 |
| |
| | | | | | | | | | | |
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 Financial ratios as of December 31, 2013 and September 30, 2013 were revised to conform to the current period calculation. | | | | | |
5 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." |
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| Bank of Hawaii Corporation and Subsidiaries | | | | | |
| Reconciliation of Non-GAAP Financial Measures | | | | | Table 1b |
|
| | | September 30, |
| | June 30, |
| | December 31, |
| | September 30, |
|
| (dollars in thousands) | 2014 |
| | 2014 |
| | 2013 |
| | 2013 |
|
| Total Shareholders' Equity | $ | 1,057,413 |
| | $ | 1,050,801 |
| | $ | 1,011,976 |
| | $ | 992,686 |
|
| Less: | Goodwill | 31,517 |
| | 31,517 |
| | 31,517 |
| | 31,517 |
|
| Tangible Common Equity | $ | 1,025,896 |
| | $ | 1,019,284 |
| | $ | 980,459 |
| | $ | 961,169 |
|
| | | | | | | | | |
| Total Assets | $ | 14,510,166 |
| | $ | 14,844,505 |
| | $ | 14,084,280 |
| | $ | 13,848,871 |
|
| Less: | Goodwill | 31,517 |
| | 31,517 |
| | 31,517 |
| | 31,517 |
|
| Tangible Assets | $ | 14,478,649 |
| | $ | 14,812,988 |
| | $ | 14,052,763 |
| | $ | 13,817,354 |
|
| | | | | | | | | |
| Risk-Weighted Assets, determined in accordance | | | | | | | |
| | with prescribed regulatory requirements 1 | $ | 6,737,853 |
| | $ | 6,559,897 |
| | $ | 6,258,178 |
| | $ | 6,153,642 |
|
| | | | | | | | | |
| Total Shareholders' Equity to Total Assets | 7.29 | % | | 7.08 | % | | 7.19 | % | | 7.17 | % |
| Tangible Common Equity to Tangible Assets (Non-GAAP) | 7.09 | % | | 6.88 | % | | 6.98 | % | | 6.96 | % |
| | | | | | | | | |
Tier 1 Capital Ratio 1 | 15.32 | % | | 15.66 | % | | 16.05 | % | | 16.04 | % |
Tangible Common Equity to Risk-Weighted Assets (Non-GAAP) 1 | 15.23 | % | | 15.54 | % | | 15.67 | % | | 15.62 | % |
| | | | | | | | | |
| | | | | | | | | |
1 Risk-weighted assets and financial ratios as of December 31, 2013 and September 30, 2013 were revised to conform to the current period calculation. | | |
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| | | | | | | | | | | | | | | | |
| Bank of Hawaii Corporation and Subsidiaries | | | |
| Net Significant Items | | | | | | Table 2 |
|
| | Three Months Ended | | Nine Months Ended |
| | September 30, |
| June 30, |
| September 30, |
| | September 30, |
| (dollars in thousands) | 2014 |
| 2014 |
| 2013 |
| | 2014 |
| 2013 |
|
| Investment Securities Gains, Net | $ | 1,858 |
| $ | 2,079 |
| $ | — |
| | $ | 6,097 |
| $ | — |
|
| Decrease in Allowance for Loan and Lease Losses | 3,476 |
| 288 |
| 896 |
| | 5,092 |
| 5,178 |
|
| Separation Expense | (14 | ) | (87 | ) | (1,753 | ) | | (650 | ) | (4,092 | ) |
| Operating Losses | — |
| — |
| — |
| | (730 | ) | — |
|
| Significant Items Before the Provision (Benefit) for Income Taxes | 5,320 |
| 2,280 |
| (857 | ) | | 9,809 |
| 1,086 |
|
| Release of Tax Reserve | — |
| — |
| (1,267 | ) | | (1,249 | ) | (2,357 | ) |
| Income Tax Impact | 2,085 |
| 894 |
| (300 | ) | | 3,845 |
| 380 |
|
| Net Significant Items | $ | 3,235 |
| $ | 1,386 |
| $ | 710 |
| | $ | 7,213 |
| $ | 3,063 |
|
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| | | | | | | | | | | | | | | | |
| Bank of Hawaii Corporation and Subsidiaries | | | |
| Consolidated Statements of Income | | | | Table 3 |
|
| | Three Months Ended | | Nine Months Ended |
| | September 30, | June 30, | September 30, | | September 30, |
| (dollars in thousands, except per share amounts) | 2014 | 2014 | 2013 | | 2014 | 2013 |
| Interest Income | | | | | | |
| Interest and Fees on Loans and Leases | $ | 68,089 |
| $ | 65,818 |
| $ | 63,918 |
| | $ | 197,433 |
| $ | 189,467 |
|
| Income on Investment Securities | | | | | | |
| Available-for-Sale | 10,286 |
| 10,697 |
| 12,038 |
| | 31,743 |
| 42,962 |
|
| Held-to-Maturity | 26,067 |
| 26,938 |
| 24,137 |
| | 80,894 |
| 63,180 |
|
| Deposits | 3 |
| 1 |
| 3 |
| | 7 |
| 7 |
|
| Funds Sold | 176 |
| 168 |
| 177 |
| | 481 |
| 310 |
|
| Other | 302 |
| 302 |
| 301 |
| | 906 |
| 870 |
|
| Total Interest Income | 104,923 |
| 103,924 |
| 100,574 |
| | 311,464 |
| 296,796 |
|
| Interest Expense | | | | | | |
| Deposits | 2,391 |
| 2,393 |
| 2,500 |
| | 7,142 |
| 7,725 |
|
| Securities Sold Under Agreements to Repurchase | 6,523 |
| 6,465 |
| 6,551 |
| | 19,385 |
| 20,307 |
|
| Funds Purchased | 3 |
| 4 |
| 4 |
| | 10 |
| 36 |
|
| Long-Term Debt | 627 |
| 650 |
| 632 |
| | 1,903 |
| 1,941 |
|
| Total Interest Expense | 9,544 |
| 9,512 |
| 9,687 |
| | 28,440 |
| 30,009 |
|
| Net Interest Income | 95,379 |
| 94,412 |
| 90,887 |
| | 283,024 |
| 266,787 |
|
| Provision for Credit Losses | (2,665 | ) | (2,199 | ) | — |
| | (4,864 | ) | — |
|
| Net Interest Income After Provision for Credit Losses | 98,044 |
| 96,611 |
| 90,887 |
| | 287,888 |
| 266,787 |
|
| Noninterest Income | | | | | | |
| Trust and Asset Management | 11,716 |
| 12,005 |
| 11,717 |
| | 35,573 |
| 35,692 |
|
| Mortgage Banking | 1,646 |
| 1,804 |
| 4,132 |
| | 5,455 |
| 16,363 |
|
| Service Charges on Deposit Accounts | 9,095 |
| 8,638 |
| 9,385 |
| | 26,611 |
| 27,798 |
|
| Fees, Exchange, and Other Service Charges | 13,390 |
| 13,370 |
| 12,732 |
| | 39,699 |
| 37,799 |
|
| Investment Securities Gains, Net | 1,858 |
| 2,079 |
| — |
| | 6,097 |
| — |
|
| Insurance | 2,348 |
| 1,930 |
| 2,177 |
| | 6,401 |
| 6,895 |
|
| Bank-Owned Life Insurance | 1,644 |
| 1,519 |
| 1,365 |
| | 4,765 |
| 3,997 |
|
| Other | 3,253 |
| 3,136 |
| 3,618 |
| | 9,598 |
| 12,401 |
|
| Total Noninterest Income | 44,950 |
| 44,481 |
| 45,126 |
| | 134,199 |
| 140,945 |
|
| Noninterest Expense | | | | | | |
| Salaries and Benefits | 45,530 |
| 45,081 |
| 46,552 |
| | 137,508 |
| 140,568 |
|
| Net Occupancy | 9,334 |
| 9,254 |
| 9,847 |
| | 28,005 |
| 29,143 |
|
| Net Equipment | 4,473 |
| 4,669 |
| 4,572 |
| | 13,745 |
| 13,529 |
|
| Data Processing | 3,665 |
| 3,842 |
| 3,697 |
| | 11,156 |
| 10,013 |
|
| Professional Fees | 1,835 |
| 2,613 |
| 2,119 |
| | 6,708 |
| 6,736 |
|
| FDIC Insurance | 1,750 |
| 2,055 |
| 1,913 |
| | 5,881 |
| 5,811 |
|
| Other | 14,443 |
| 13,568 |
| 14,277 |
| | 42,656 |
| 42,745 |
|
| Total Noninterest Expense | 81,030 |
| 81,082 |
| 82,977 |
| | 245,659 |
| 248,545 |
|
| Income Before Provision for Income Taxes | 61,964 |
| 60,010 |
| 53,036 |
| | 176,428 |
| 159,187 |
|
| Provision for Income Taxes | 20,195 |
| 18,520 |
| 15,332 |
| | 54,577 |
| 47,740 |
|
| Net Income | $ | 41,769 |
| $ | 41,490 |
| $ | 37,704 |
| | $ | 121,851 |
| $ | 111,447 |
|
| Basic Earnings Per Share | $ | 0.95 |
| $ | 0.94 |
| $ | 0.85 |
| | $ | 2.77 |
| $ | 2.51 |
|
| Diluted Earnings Per Share | $ | 0.95 |
| $ | 0.94 |
| $ | 0.85 |
| | $ | 2.75 |
| $ | 2.50 |
|
| Dividends Declared Per Share | $ | 0.45 |
| $ | 0.45 |
| $ | 0.45 |
| | $ | 1.35 |
| $ | 1.35 |
|
| Basic Weighted Average Shares | 43,859,396 |
| 44,053,899 |
| 44,267,356 |
| | 44,034,047 |
| 44,433,967 |
|
| Diluted Weighted Average Shares | 44,088,553 |
| 44,246,431 |
| 44,479,472 |
| | 44,250,033 |
| 44,588,777 |
|
|
| | | | | | | | | | | | | | | | | |
| Bank of Hawaii Corporation and Subsidiaries | | | | |
| Consolidated Statements of Comprehensive Income | | | Table 4 |
|
| | | Three Months Ended | | Nine Months Ended |
| | | September 30, | June 30, | September 30, | | September 30, |
| (dollars in thousands) | 2014 | 2014 | 2013 | | 2014 | 2013 |
| Net Income | $ | 41,769 |
| $ | 41,490 |
| $ | 37,704 |
| | $ | 121,851 |
| $ | 111,447 |
|
| Other Comprehensive Income (Loss), Net of Tax: | | | | | | |
| | Net Unrealized Gains (Losses) on Investment Securities | 403 |
| 8,617 |
| (6,986 | ) | | 15,291 |
| (63,199 | ) |
| | Defined Benefit Plans | 157 |
| 156 |
| 202 |
| | 469 |
| 481 |
|
| Total Other Comprehensive Income (Loss) | 560 |
| 8,773 |
| (6,784 | ) | | 15,760 |
| (62,718 | ) |
| Comprehensive Income | $ | 42,329 |
| $ | 50,263 |
| $ | 30,920 |
| | $ | 137,611 |
| $ | 48,729 |
|
|
| | | | | | | | | | | | |
| Bank of Hawaii Corporation and Subsidiaries |
| Consolidated Statements of Condition | | | | Table 5 |
|
| | September 30, |
| June 30, |
| December 31, |
| September 30, |
|
| (dollars in thousands) | 2014 |
| 2014 |
| 2013 |
| 2013 |
|
| Assets | | | | |
| Interest-Bearing Deposits | $ | 3,883 |
| $ | 4,552 |
| $ | 3,617 |
| $ | 3,048 |
|
| Funds Sold | 377,303 |
| 796,275 |
| 271,414 |
| 254,940 |
|
| Investment Securities | | | | |
| Available-for-Sale | 2,220,913 |
| 2,209,763 |
| 2,243,697 |
| 2,277,136 |
|
| Held-to-Maturity (Fair Value of $4,576,396; $4,743,012; $4,697,587; and $4,621,491) | 4,557,614 |
| 4,704,551 |
| 4,744,519 |
| 4,633,399 |
|
| Loans Held for Sale | 2,382 |
| 3,678 |
| 6,435 |
| 18,795 |
|
| Loans and Leases | 6,606,350 |
| 6,426,353 |
| 6,095,387 |
| 6,006,642 |
|
| Allowance for Loan and Lease Losses | (110,362 | ) | (113,838 | ) | (115,454 | ) | (123,680 | ) |
| Net Loans and Leases | 6,495,988 |
| 6,312,515 |
| 5,979,933 |
| 5,882,962 |
|
| Total Earning Assets | 13,658,083 |
| 14,031,334 |
| 13,249,615 |
| 13,070,280 |
|
| Cash and Noninterest-Bearing Deposits | 172,386 |
| 141,950 |
| 188,715 |
| 131,228 |
|
| Premises and Equipment | 107,560 |
| 108,116 |
| 108,636 |
| 105,181 |
|
| Accrued Interest Receivable | 46,641 |
| 44,311 |
| 43,930 |
| 46,047 |
|
| Foreclosed Real Estate | 3,562 |
| 3,944 |
| 3,205 |
| 3,036 |
|
| Mortgage Servicing Rights | 25,559 |
| 26,397 |
| 28,123 |
| 28,015 |
|
| Goodwill | 31,517 |
| 31,517 |
| 31,517 |
| 31,517 |
|
| Other Assets | 464,858 |
| 456,936 |
| 430,539 |
| 433,567 |
|
| Total Assets | $ | 14,510,166 |
| $ | 14,844,505 |
| $ | 14,084,280 |
| $ | 13,848,871 |
|
| | | | | |
| Liabilities | | | | |
| Deposits | | | | |
| Noninterest-Bearing Demand | $ | 3,824,544 |
| $ | 4,070,334 |
| $ | 3,681,128 |
| $ | 3,524,638 |
|
| Interest-Bearing Demand | 2,369,434 |
| 2,566,240 |
| 2,355,608 |
| 2,320,452 |
|
| Savings | 4,738,364 |
| 4,525,593 |
| 4,560,150 |
| 4,503,963 |
|
| Time | 1,429,099 |
| 1,507,867 |
| 1,317,770 |
| 1,259,081 |
|
| Total Deposits | 12,361,441 |
| 12,670,034 |
| 11,914,656 |
| 11,608,134 |
|
| Funds Purchased | 8,459 |
| 8,467 |
| 9,982 |
| 9,983 |
|
| Securities Sold Under Agreements to Repurchase | 700,203 |
| 745,626 |
| 770,049 |
| 847,239 |
|
| Long-Term Debt | 173,926 |
| 173,671 |
| 174,706 |
| 174,717 |
|
| Retirement Benefits Payable | 35,152 |
| 35,017 |
| 34,965 |
| 47,338 |
|
| Accrued Interest Payable | 6,086 |
| 5,099 |
| 4,871 |
| 6,040 |
|
| Taxes Payable and Deferred Taxes | 42,468 |
| 42,131 |
| 34,907 |
| 40,364 |
|
| Other Liabilities | 125,018 |
| 113,659 |
| 128,168 |
| 122,370 |
|
| Total Liabilities | 13,452,753 |
| 13,793,704 |
| 13,072,304 |
| 12,856,185 |
|
| Shareholders' Equity | | | | |
| Common Stock ($.01 par value; authorized 500,000,000 shares; | | | | |
| issued / outstanding: September 30, 2014 - 57,633,855 / 43,993,729; | | | | |
| June 30, 2014 - 57,631,552 / 44,297,228; December 31, 2013 - 57,480,846 / 44,490,385; | | | | |
| and September 30, 2013 - 57,487,855 / 44,539,247) | 573 |
| 573 |
| 572 |
| 572 |
|
| Capital Surplus | 529,530 |
| 527,284 |
| 522,505 |
| 520,510 |
|
| Accumulated Other Comprehensive Loss | (16,063 | ) | (16,623 | ) | (31,823 | ) | (33,510 | ) |
| Retained Earnings | 1,213,339 |
| 1,191,512 |
| 1,151,754 |
| 1,132,996 |
|
| Treasury Stock, at Cost (Shares: September 30, 2014 - 13,640,126; June 30, 2014 - 13,334,324; | | | | |
| December 31, 2013 - 12,990,461; and September 30, 2013 - 12,948,608) | (669,966 | ) | (651,945 | ) | (631,032 | ) | (627,882 | ) |
| Total Shareholders' Equity | 1,057,413 |
| 1,050,801 |
| 1,011,976 |
| 992,686 |
|
| Total Liabilities and Shareholders' Equity | $ | 14,510,166 |
| $ | 14,844,505 |
| $ | 14,084,280 |
| $ | 13,848,871 |
|
|
| | | | | | | | | | | | | | | | | | | | | |
| Bank of Hawaii Corporation and Subsidiaries | | | | |
| Consolidated Statements of Shareholders' Equity | | | | Table 6 |
|
| | | | | | Accum. |
| | | |
| | | | | | Other |
| | | |
| | | | | | Compre- |
| | | |
| | | | | | hensive |
| | | |
| | Common Shares | | Common |
| Capital |
| Income |
| Retained |
| Treasury |
| |
| (dollars in thousands) | Outstanding |
| Stock |
| Surplus |
| (Loss) |
| Earnings |
| Stock |
| Total |
|
| Balance as of December 31, 2013 | 44,490,385 |
| $ | 572 |
| $ | 522,505 |
| $ | (31,823 | ) | $ | 1,151,754 |
| $ | (631,032 | ) | $ | 1,011,976 |
|
| Net Income | — |
| — |
| — |
| — |
| 121,851 |
| — |
| 121,851 |
|
| Other Comprehensive Income | — |
| — |
| — |
| 15,760 |
| — |
| — |
| 15,760 |
|
| Share-Based Compensation | — |
| — |
| 5,831 |
| — |
| — |
| — |
| 5,831 |
|
| Common Stock Issued under Purchase and Equity | | | | | | | |
| | Compensation Plans and Related Tax Benefits | 314,579 |
| 1 |
| 1,194 |
| — |
| (318 | ) | 7,976 |
| 8,853 |
|
| Common Stock Repurchased | (811,235 | ) | — |
| — |
| — |
| — |
| (46,910 | ) | (46,910 | ) |
| Cash Dividends Declared ($1.35 per share) | — |
| — |
| — |
| — |
| (59,948 | ) | — |
| (59,948 | ) |
| Balance as of September 30, 2014 | 43,993,729 |
| $ | 573 |
| $ | 529,530 |
| $ | (16,063 | ) | $ | 1,213,339 |
| $ | (669,966 | ) | $ | 1,057,413 |
|
| | | | | | | | |
| Balance as of December 31, 2012 | 44,754,835 |
| $ | 571 |
| $ | 515,619 |
| $ | 29,208 |
| $ | 1,084,477 |
| $ | (608,210 | ) | $ | 1,021,665 |
|
| Net Income | — |
| — |
| — |
| — |
| 111,447 |
| — |
| 111,447 |
|
| Other Comprehensive Loss | — |
| — |
| — |
| (62,718 | ) | | | (62,718 | ) |
| Share-Based Compensation | — |
| — |
| 4,226 |
| — |
| — |
| — |
| 4,226 |
|
| Common Stock Issued under Purchase and Equity | | | | | | | |
| | Compensation Plans and Related Tax Benefits | 444,951 |
| 1 |
| 665 |
| — |
| (2,458 | ) | 13,521 |
| 11,729 |
|
| Common Stock Repurchased | (660,539 | ) | — |
| — |
| — |
| — |
| (33,193 | ) | (33,193 | ) |
| Cash Dividends Declared ($1.35 per share) | — |
| — |
| — |
| — |
| (60,470 | ) | — |
| (60,470 | ) |
| Balance as of September 30, 2013 | 44,539,247 |
| $ | 572 |
| $ | 520,510 |
| $ | (33,510 | ) | $ | 1,132,996 |
| $ | (627,882 | ) | $ | 992,686 |
|
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| 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 | |
| | | September 30, 2014 | | June 30, 2014 | | September 30, 2013 | |
| | | 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 | $ | 4.1 |
| $ | — |
| 0.24 |
| % | $ | 4.0 |
| $ | — |
| 0.12 |
| % | $ | 4.3 |
| $ | — |
| 0.30 |
| % |
| Funds Sold | 326.2 |
| 0.2 |
| 0.21 |
| | 308.3 |
| 0.2 |
| 0.22 |
| | 335.3 |
| 0.2 |
| 0.21 |
| |
| Investment Securities | | | | | | | | | | | | |
| | Available-for-Sale | 2,212.0 |
| 12.3 |
| 2.22 |
| | 2,226.7 |
| 12.7 |
| 2.28 |
| | 2,495.9 |
| 13.7 |
| 2.18 |
| |
| | Held-to-Maturity | 4,641.1 |
| 26.9 |
| 2.32 |
| | 4,756.8 |
| 27.8 |
| 2.34 |
| | 4,385.5 |
| 25.0 |
| 2.28 |
| |
| Loans Held for Sale | 2.0 |
| — |
| 4.03 |
| | 3.6 |
| — |
| 4.33 |
| | 16.7 |
| 0.2 |
| 4.42 |
| |
Loans and Leases 1 | | | | | | | | | | | | |
| | Commercial and Industrial | 980.8 |
| 8.9 |
| 3.61 |
| | 950.2 |
| 8.1 |
| 3.42 |
| | 877.3 |
| 7.7 |
| 3.49 |
| |
| | Commercial Mortgage | 1,350.6 |
| 13.3 |
| 3.89 |
| | 1,302.2 |
| 12.7 |
| 3.91 |
| | 1,164.9 |
| 12.1 |
| 4.12 |
| |
| | Construction | 126.2 |
| 1.3 |
| 4.20 |
| | 103.2 |
| 1.2 |
| 4.48 |
| | 120.1 |
| 1.4 |
| 4.71 |
| |
| | Commercial Lease Financing | 235.1 |
| 2 |
| 3.33 |
| | 241.2 |
| 1.7 |
| 2.80 |
| | 253.0 |
| 1.5 |
| 2.32 |
| |
| | Residential Mortgage | 2,396.7 |
| 25.3 |
| 4.22 |
| | 2,323.5 |
| 25.4 |
| 4.38 |
| | 2,255.9 |
| 25.3 |
| 4.49 |
| |
| | Home Equity | 823.3 |
| 8.1 |
| 3.92 |
| | 805.9 |
| 7.9 |
| 3.93 |
| | 757.6 |
| 7.9 |
| 4.13 |
| |
| | Automobile | 296.6 |
| 4 |
| 5.29 |
| | 280.6 |
| 3.7 |
| 5.33 |
| | 240.6 |
| 3.3 |
| 5.43 |
| |
| | Other 2 | 279.5 |
| 5.2 |
| 7.45 |
| | 267.8 |
| 5.1 |
| 7.65 |
| | 223.5 |
| 4.6 |
| 8.23 |
| |
| Total Loans and Leases | 6,488.8 |
| 68.1 |
| 4.18 |
| | 6,274.6 |
| 65.8 |
| 4.20 |
| | 5,892.9 |
| 63.8 |
| 4.31 |
| |
| Other | 71.4 |
| 0.3 |
| 1.69 |
| | 74.1 |
| 0.3 |
| 1.63 |
| | 78.1 |
| 0.3 |
| 1.54 |
| |
Total Earning Assets 3 | 13,745.6 |
| 107.8 |
| 3.13 |
| | 13,648.1 |
| 106.8 |
| 3.13 |
| | 13,208.7 |
| 103.2 |
| 3.11 |
| |
| Cash and Noninterest-Bearing Deposits | 152.4 |
| | | | 138.3 |
| | | | 140.3 |
| | | |
| Other Assets | 474.4 |
| | | | 467.0 |
| | | | 420.7 |
| | | |
| Total Assets | $ | 14,372.4 |
| | | | $ | 14,253.4 |
| | | | $ | 13,769.7 |
| | | |
| | | | | | | | | | | | | | |
| Interest-Bearing Liabilities | | | | | | | | | | | | |
| Interest-Bearing Deposits | | | | | | | | | | | | |
| | Demand | $ | 2,417.4 |
| 0.2 |
| 0.03 |
| | $ | 2,359.2 |
| 0.2 |
| 0.03 |
| | $ | 2,147.8 |
| 0.1 |
| 0.03 |
| |
| | Savings | 4,591.4 |
| 1.0 |
| 0.09 |
| | 4,540.3 |
| 1.0 |
| 0.09 |
| | 4,485.3 |
| 1.0 |
| 0.09 |
| |
| | Time | 1,440.1 |
| 1.2 |
| 0.34 |
| | 1,506.5 |
| 1.2 |
| 0.33 |
| | 1,401.5 |
| 1.4 |
| 0.38 |
| |
| Total Interest-Bearing Deposits | 8,448.9 |
| 2.4 |
| 0.11 |
| | 8,406.0 |
| 2.4 |
| 0.11 |
| | 8,034.6 |
| 2.5 |
| 0.12 |
| |
| Short-Term Borrowings | 9.3 |
| — |
| 0.14 |
| | 9.3 |
| — |
| 0.14 |
| | 11.7 |
| — |
| 0.14 |
| |
Securities Sold Under Agreements to Repurchase | 715.6 |
| 6.5 |
| 3.57 |
| | 789.9 |
| 6.5 |
| 3.24 |
| | 847.2 |
| 6.6 |
| 3.03 |
| |
| Long-Term Debt | 173.8 |
| 0.6 |
| 1.44 |
| | 175.3 |
| 0.6 |
| 1.49 |
| | 174.7 |
| 0.6 |
| 1.44 |
| |
| Total Interest-Bearing Liabilities | 9,347.6 |
| 9.5 |
| 0.40 |
| | 9,380.5 |
| 9.5 |
| 0.40 |
| | 9,068.2 |
| 9.7 |
| 0.42 |
| |
| Net Interest Income | | $ | 98.3 |
| | | | $ | 97.3 |
| | | | $ | 93.5 |
| | |
| | Interest Rate Spread | | | 2.73 |
| % | | | 2.73 |
| % | | | 2.69 |
| % |
| | Net Interest Margin | | | 2.85 |
| % | | | 2.86 |
| % | | | 2.83 |
| % |
| Noninterest-Bearing Demand Deposits | 3,751.8 |
| | | | 3,624.0 |
| | | | 3,444.6 |
| | | |
| Other Liabilities | 208.4 |
| | | | 200.5 |
| | | | 261.2 |
| | | |
| Shareholders' Equity | 1,064.6 |
| | | | 1,048.4 |
| | | | 995.7 |
| | | |
Total Liabilities and Shareholders' Equity | $ | 14,372.4 |
| | | | $ | 14,253.4 |
| | | | $ | 13,769.7 |
| | | |
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
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 $2,873,000, $2,874,000, and $2,597,000 for the three months ended | |
| | September 30, 2014, June 30, 2014, and September 30, 2013, respectively. | | |
|
| | | | | | | | | | | | | | | | | | | |
| Bank of Hawaii Corporation and Subsidiaries | | | | |
| Average Balances and Interest Rates - Taxable-Equivalent Basis | | | | Table 7b |
| |
| | | Nine Months Ended | | Nine Months Ended | |
| | | September 30, 2014 | | September 30, 2013 | |
| | | Average |
| Income/ |
| Yield/ |
| | Average |
| Income/ |
| Yield/ |
| |
| (dollars in millions) | Balance |
| Expense |
| Rate |
| | Balance |
| Expense |
| Rate |
| |
| Earning Assets | | | | | | | | |
| Interest-Bearing Deposits | $ | 4.6 |
| $ | — |
| 0.20 |
| % | $ | 4.2 |
| $ | — |
| 0.22 |
| % |
| Funds Sold | 301.9 |
| 0.5 |
| 0.21 |
| | 220.7 |
| 0.3 |
| 0.19 |
| |
| Investment Securities | | | | | | | | |
| | Available-for-Sale | 2,221.6 |
| 37.6 |
| 2.26 |
| | 3,007.0 |
| 49.2 |
| 2.18 |
| |
| | Held-to-Maturity | 4,716.9 |
| 83.5 |
| 2.36 |
| | 3,895.6 |
| 64.1 |
| 2.19 |
| |
| Loans Held for Sale | 3.3 |
| 0.1 |
| 4.43 |
| | 19.3 |
| 0.6 |
| 4.05 |
| |
Loans and Leases 1 | | | | | | | | |
| | Commercial and Industrial | 951.8 |
| 24.8 |
| 3.48 |
| | 852.1 |
| 23.1 |
| 3.62 |
| |
| | Commercial Mortgage | 1,301.3 |
| 38.6 |
| 3.97 |
| | 1,124.6 |
| 34.5 |
| 4.10 |
| |
| | Construction | 109.0 |
| 3.6 |
| 4.35 |
| | 114.4 |
| 4.1 |
| 4.79 |
| |
| | Commercial Lease Financing | 240.6 |
| 5.1 |
| 2.81 |
| | 263.6 |
| 4.7 |
| 2.36 |
| |
| | Residential Mortgage | 2,336.1 |
| 75.1 |
| 4.29 |
| | 2,273.0 |
| 76.8 |
| 4.51 |
| |
| | Home Equity | 803.8 |
| 23.7 |
| 3.94 |
| | 759.4 |
| 23.6 |
| 4.14 |
| |
| | Automobile | 280.3 |
| 11.2 |
| 5.33 |
| | 226.6 |
| 9.3 |
| 5.51 |
| |
| | Other 2 | 267.6 |
| 15.3 |
| 7.66 |
| | 212.7 |
| 13.1 |
| 8.26 |
| |
| Total Loans and Leases | 6,290.5 |
| 197.4 |
| 4.19 |
| | 5,826.4 |
| 189.2 |
| 4.34 |
| |
| Other | 74.1 |
| 0.9 |
| 1.63 |
| | 78.6 |
| 0.9 |
| 1.48 |
| |
Total Earning Assets 3 | 13,612.9 |
| 320.0 |
| 3.14 |
| | 13,051.8 |
| 304.3 |
| 3.11 |
| |
| Cash and Noninterest-Bearing Deposits | 144.5 |
| | | | 139.7 |
| | | |
| Other Assets | 463.7 |
| | | | 442.4 |
| | | |
| Total Assets | $ | 14,221.1 |
| | | | $ | 13,633.9 |
| | | |
| | | | | | | | | | |
| Interest-Bearing Liabilities | | | | | | | | |
| Interest-Bearing Deposits | | | | | | | | |
| | Demand | $ | 2,367.8 |
| 0.5 |
| 0.03 |
| | $ | 2,105.1 |
| 0.4 |
| 0.03 |
| |
| | Savings | 4,549.4 |
| 2.9 |
| 0.09 |
| | 4,448.5 |
| 3.0 |
| 0.09 |
| |
| | Time | 1,440.1 |
| 3.7 |
| 0.35 |
| | 1,431.6 |
| 4.3 |
| 0.41 |
| |
| Total Interest-Bearing Deposits | 8,357.3 |
| 7.1 |
| 0.11 |
| | 7,985.2 |
| 7.7 |
| 0.13 |
| |
| Short-Term Borrowings | 9.5 |
| — |
| 0.14 |
| | 32.9 |
| — |
| 0.14 |
| |
| Securities Sold Under Agreements to Repurchase | 766.4 |
| 19.4 |
| 3.34 |
| | 801.5 |
| 20.3 |
| 3.34 |
| |
| Long-Term Debt | 174.6 |
| 1.9 |
| 1.45 |
| | 169.7 |
| 2.0 |
| 1.53 |
| |
| Total Interest-Bearing Liabilities | 9,307.8 |
| 28.4 |
| 0.40 |
| | 8,989.3 |
| 30.0 |
| 0.44 |
| |
| Net Interest Income | | $ | 291.6 |
| | | | $ | 274.3 |
| | |
| | Interest Rate Spread | | | 2.74 |
| % | | | 2.67 |
| % |
| | Net Interest Margin | | | 2.86 |
| % | | | 2.81 |
| % |
| Noninterest-Bearing Demand Deposits | 3,659.2 |
| | | | 3,352.6 |
| | | |
| Other Liabilities | 205.2 |
| | | | 270.5 |
| | | |
| Shareholders' Equity | 1,048.9 |
| | | | 1,021.5 |
| | | |
| Total Liabilities and Shareholders' Equity | $ | 14,221.1 |
| | | | $ | 13,633.9 |
| | | |
| | | | | | | | | | |
| | | | | | | | | | |
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 $8,571,000 and $7,498,000 for the | | |
| | nine months ended September 30, 2014 and 2013, respectively. | | | | | |
|
| | | | | | | | | |
| Bank of Hawaii Corporation and Subsidiaries | | | |
| Analysis of Change in Net Interest Income - Taxable-Equivalent Basis | | Table 8a |
|
| | Three Months Ended September 30, 2014 |
| | Compared to June 30, 2014 |
| (dollars in millions) | Volume 1 |
| Rate 1 |
| Total |
|
| Change in Interest Income: | | | |
| Investment Securities | | | |
| Available-for-Sale | $ | (0.1 | ) | $ | (0.3 | ) | $ | (0.4 | ) |
| Held-to-Maturity | (0.7 | ) | (0.2 | ) | (0.9 | ) |
| Loans and Leases | | | |
| Commercial and Industrial | 0.3 |
| 0.5 |
| 0.8 |
|
| Commercial Mortgage | 0.6 |
| — |
| 0.6 |
|
| Construction | 0.2 |
| (0.1 | ) | 0.1 |
|
| Commercial Lease Financing | — |
| 0.3 |
| 0.3 |
|
| Residential Mortgage | 0.8 |
| (0.9 | ) | (0.1 | ) |
| Home Equity | 0.2 |
| — |
| 0.2 |
|
| Automobile | 0.3 |
| — |
| 0.3 |
|
Other 2 | 0.3 |
| (0.2 | ) | 0.1 |
|
| Total Loans and Leases | 2.7 |
| (0.4 | ) | 2.3 |
|
| Total Change in Interest Income | 1.9 |
| (0.9 | ) | 1.0 |
|
| | | | |
| Change in Interest Expense: | | | |
| Securities Sold Under Agreements to Repurchase | (0.7 | ) | 0.7 |
| — |
|
| Total Change in Interest Expense | (0.7 | ) | 0.7 |
| — |
|
| | | | |
| Change in Net Interest Income | $ | 2.6 |
| $ | (1.6 | ) | $ | 1.0 |
|
| | | | |
| | | | |
1 The change in interest income and expense not solely due to changes in volume or rate has been allocated on a pro-rata basis to the volume and rate columns. |
2 Comprised of other consumer revolving credit, installment, and consumer lease financing. |
|
| | | | | | | | | |
| Bank of Hawaii Corporation and Subsidiaries | | |
| Analysis of Change in Net Interest Income - Taxable-Equivalent Basis | | Table 8b |
|
| | Three Months Ended September 30, 2014 |
| | Compared to September 30, 2013 |
| (dollars in millions) | Volume 1 |
| Rate 1 |
| Total |
|
| Change in Interest Income: | | | |
| Investment Securities | | | |
| Available-for-Sale | $ | (1.6 | ) | $ | 0.2 |
| $ | (1.4 | ) |
| Held-to-Maturity | 1.5 |
| 0.4 |
| 1.9 |
|
| Loans Held for Sale | (0.2 | ) | — |
| (0.2 | ) |
| Loans and Leases | | | |
| Commercial and Industrial | 0.9 |
| 0.3 |
| 1.2 |
|
| Commercial Mortgage | 1.9 |
| (0.7 | ) | 1.2 |
|
| Construction | 0.1 |
| (0.2 | ) | (0.1 | ) |
| Commercial Lease Financing | (0.1 | ) | 0.6 |
| 0.5 |
|
| Residential Mortgage | 1.5 |
| (1.5 | ) | — |
|
| Home Equity | 0.6 |
| (0.4 | ) | 0.2 |
|
| Automobile | 0.8 |
| (0.1 | ) | 0.7 |
|
Other 2 | 1.1 |
| (0.5 | ) | 0.6 |
|
| Total Loans and Leases | 6.8 |
| (2.5 | ) | 4.3 |
|
| Total Change in Interest Income | 6.5 |
| (1.9 | ) | 4.6 |
|
| | | | |
| Change in Interest Expense: | | | |
| Interest-Bearing Deposits | | | |
| Demand | 0.1 |
| — |
| 0.1 |
|
| Time | — |
| (0.2 | ) | (0.2 | ) |
| Total Interest-Bearing Deposits | 0.1 |
| (0.2 | ) | (0.1 | ) |
| Securities Sold Under Agreements to Repurchase | (1.1 | ) | 1.0 |
| (0.1 | ) |
| Total Change in Interest Expense | (1.0 | ) | 0.8 |
| (0.2 | ) |
| | | | |
| Change in Net Interest Income | $ | 7.5 |
| $ | (2.7 | ) | $ | 4.8 |
|
| | | | |
| | | | |
1 The change in interest income and expense not solely due to changes in volume or rate has been allocated on a pro-rata basis to the volume and rate columns. |
2 Comprised of other consumer revolving credit, installment, and consumer lease financing. | |
|
| | | | | | | | | |
| Bank of Hawaii Corporation and Subsidiaries | | |
| Analysis of Change in Net Interest Income - Taxable-Equivalent Basis | | Table 8c |
|
| | Nine Months Ended September 30, 2014 |
| | Compared to September 30, 2013 |
| (dollars in millions) | Volume 1 |
| Rate 1 |
| Total |
|
| Change in Interest Income: | | | |
| Funds Sold | $ | 0.1 |
| $ | 0.1 |
| $ | 0.2 |
|
| Investment Securities | | | |
| Available-for-Sale | (13.3 | ) | 1.7 |
| (11.6 | ) |
| Held-to-Maturity | 14.3 |
| 5.1 |
| 19.4 |
|
| Loans Held for Sale | (0.5 | ) | — |
| (0.5 | ) |
| Loans and Leases | | | |
| Commercial and Industrial | 2.6 |
| (0.9 | ) | 1.7 |
|
| Commercial Mortgage | 5.3 |
| (1.2 | ) | 4.1 |
|
| Construction | (0.2 | ) | (0.3 | ) | (0.5 | ) |
| Commercial Lease Financing | (0.4 | ) | 0.8 |
| 0.4 |
|
| Residential Mortgage | 2.1 |
| (3.8 | ) | (1.7 | ) |
| Home Equity | 1.3 |
| (1.2 | ) | 0.1 |
|
| Automobile | 2.2 |
| (0.3 | ) | 1.9 |
|
Other 2 | 3.2 |
| (1.0 | ) | 2.2 |
|
| Total Loans and Leases | 16.1 |
| (7.9 | ) | 8.2 |
|
| Other | (0.1 | ) | 0.1 |
| — |
|
| Total Change in Interest Income | 16.6 |
| (0.9 | ) | 15.7 |
|
| | | | |
| Change in Interest Expense: | | | |
| Interest-Bearing Deposits | | | |
| Demand | 0.1 |
| — |
| 0.1 |
|
| Savings | — |
| (0.1 | ) | (0.1 | ) |
| Time | — |
| (0.6 | ) | (0.6 | ) |
| Total Interest-Bearing Deposits | 0.1 |
| (0.7 | ) | (0.6 | ) |
| Securities Sold Under Agreements to Repurchase | (0.9 | ) | — |
| (0.9 | ) |
| Long-Term Debt | 0.1 |
| (0.2 | ) | (0.1 | ) |
| Total Change in Interest Expense | (0.7 | ) | (0.9 | ) | (1.6 | ) |
| | | | |
| Change in Net Interest Income | $ | 17.3 |
| $ | — |
| $ | 17.3 |
|
| | | | |
| | | | |
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 | | | | |
| Salaries and Benefits | | | | | | Table 9 |
|
| | Three Months Ended | | Nine Months Ended |
| | September 30, | June 30, | September 30, | | September 30, |
| (dollars in thousands) | 2014 | 2014 | 2013 | | 2014 | 2013 |
| Salaries | $ | 28,990 |
| $ | 28,544 |
| $ | 28,985 |
| | $ | 85,448 |
| $ | 86,753 |
|
| Incentive Compensation | 4,242 |
| 4,359 |
| 4,242 |
| | 12,832 |
| 11,887 |
|
| Share-Based Compensation | 2,226 |
| 2,271 |
| 1,333 |
| | 6,466 |
| 3,774 |
|
| Commission Expense | 1,283 |
| 1,106 |
| 1,888 |
| | 3,448 |
| 5,652 |
|
| Retirement and Other Benefits | 4,056 |
| 3,811 |
| 4,144 |
| | 12,853 |
| 12,106 |
|
| Payroll Taxes | 2,162 |
| 2,179 |
| 2,335 |
| | 7,909 |
| 9,151 |
|
| Medical, Dental, and Life Insurance | 2,557 |
| 2,724 |
| 1,872 |
| | 7,902 |
| 7,153 |
|
| Separation Expense | 14 |
| 87 |
| 1,753 |
| | 650 |
| 4,092 |
|
| Total Salaries and Benefits | $ | 45,530 |
| $ | 45,081 |
| $ | 46,552 |
| | $ | 137,508 |
| $ | 140,568 |
|
|
| | | | | | | | | | | | | | | | |
| Bank of Hawaii Corporation and Subsidiaries | | | |
| Loan and Lease Portfolio Balances | | | | Table 10 |
|
| | | September 30, |
| June 30, |
| March 31, |
| December 31, |
| September 30, |
|
| (dollars in thousands) | 2014 |
| 2014 |
| 2014 |
| 2013 |
| 2013 |
|
| Commercial | | | | | |
| | Commercial and Industrial | $ | 991,157 |
| $ | 988,940 |
| $ | 955,599 |
| $ | 911,367 |
| $ | 895,040 |
|
| | Commercial Mortgage | 1,373,289 |
| 1,345,549 |
| 1,284,181 |
| 1,247,510 |
| 1,203,670 |
|
| | Construction | 132,097 |
| 121,434 |
| 91,452 |
| 107,349 |
| 124,230 |
|
| | Lease Financing | 232,381 |
| 237,585 |
| 240,931 |
| 262,207 |
| 255,550 |
|
| Total Commercial | 2,728,924 |
| 2,693,508 |
| 2,572,163 |
| 2,528,433 |
| 2,478,490 |
|
| Consumer | | | | | |
| | Residential Mortgage | 2,444,989 |
| 2,355,085 |
| 2,305,153 |
| 2,282,894 |
| 2,282,305 |
|
| | Home Equity | 838,206 |
| 811,180 |
| 797,341 |
| 773,385 |
| 765,841 |
|
| | Automobile | 306,003 |
| 287,794 |
| 273,553 |
| 255,986 |
| 246,704 |
|
| | Other 1 | 288,228 |
| 278,786 |
| 261,647 |
| 254,689 |
| 233,302 |
|
| Total Consumer | 3,877,426 |
| 3,732,845 |
| 3,637,694 |
| 3,566,954 |
| 3,528,152 |
|
| Total Loans and Leases | $ | 6,606,350 |
| $ | 6,426,353 |
| $ | 6,209,857 |
| $ | 6,095,387 |
| $ | 6,006,642 |
|
| | | | | | | |
| | | | | | | |
| Higher Risk Loans and Leases Outstanding | | | | |
| | | September 30, |
| June 30, |
| March 31, |
| December 31, |
| September 30, |
|
| (dollars in thousands) | 2014 |
| 2014 |
| 2014 |
| 2013 |
| 2013 |
|
Residential Land Loans 2 | $ | 9,117 |
| $ | 10,016 |
| $ | 11,086 |
| $ | 11,922 |
| $ | 13,635 |
|
Home Equity Loans 3 | 9,914 |
| 11,307 |
| 11,846 |
| 12,594 |
| 12,588 |
|
Air Transportation Leases 4 | 21,668 |
| 24,917 |
| 24,969 |
| 26,152 |
| 26,492 |
|
| Total Higher Risk Loans and Leases | $ | 40,699 |
| $ | 46,240 |
| $ | 47,901 |
| $ | 50,668 |
| $ | 52,715 |
|
| | | | | | | |
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 | | | | |
| | | September 30, |
| June 30, |
| March 31, |
| December 31, |
| September 30, |
|
| (dollars in thousands) | 2014 |
| 2014 |
| 2014 |
| 2013 |
| 2013 |
|
| Consumer | $ | 5,972,435 |
| $ | 5,938,123 |
| $ | 5,960,485 |
| $ | 5,829,352 |
| $ | 5,707,125 |
|
| Commercial | 5,070,080 |
| 5,207,026 |
| 4,742,308 |
| 4,814,076 |
| 4,680,370 |
|
| Public and Other | 1,318,926 |
| 1,524,885 |
| 1,341,680 |
| 1,271,228 |
| 1,220,639 |
|
| Total Deposits | $ | 12,361,441 |
| $ | 12,670,034 |
| $ | 12,044,473 |
| $ | 11,914,656 |
| $ | 11,608,134 |
|
|
| | | | | | | | | | | | | | | | | |
| Bank of Hawaii Corporation and Subsidiaries | | | | |
| Non-Performing Assets and Accruing Loans and Leases Past Due 90 Days or More | | Table 11 |
|
| | | | September 30, |
| June 30, |
| March 31, |
| December 31, |
| September 30, |
|
| (dollars in thousands) | 2014 |
| 2014 |
| 2014 |
| 2013 |
| 2013 |
|
| Non-Performing Assets | | | | | |
| Non-Accrual Loans and Leases | | | | | |
| | Commercial | | | | | |
| | | Commercial and Industrial | $ | 8,952 |
| $ | 10,437 |
| $ | 11,239 |
| $ | 11,929 |
| $ | 5,295 |
|
| | | Commercial Mortgage | 1,366 |
| 1,403 |
| 1,421 |
| 2,512 |
| 2,355 |
|
| | Total Commercial | 10,318 |
| 11,840 |
| 12,660 |
| 14,441 |
| 7,650 |
|
| | Consumer | | | | | |
| | | Residential Mortgage | 16,756 |
| 15,818 |
| 19,003 |
| 20,264 |
| 20,637 |
|
| | | Home Equity | 2,671 |
| 2,787 |
| 1,935 |
| 1,740 |
| 2,509 |
|
| | Total Consumer | 19,427 |
| 18,605 |
| 20,938 |
| 22,004 |
| 23,146 |
|
| Total Non-Accrual Loans and Leases | 29,745 |
| 30,445 |
| 33,598 |
| 36,445 |
| 30,796 |
|
| Foreclosed Real Estate | 3,562 |
| 3,944 |
| 3,450 |
| 3,205 |
| 3,036 |
|
| Total Non-Performing Assets | $ | 33,307 |
| $ | 34,389 |
| $ | 37,048 |
| $ | 39,650 |
| $ | 33,832 |
|
| | | | | | | | |
| Accruing Loans and Leases Past Due 90 Days or More | | | | |
| Commercial | | | | | |
| | Commercial and Industrial | $ | 14 |
| $ | — |
| $ | 150 |
| $ | 1,173 |
| $ | 8 |
|
| Total Commercial | 14 |
| — |
| 150 |
| 1,173 |
| 8 |
|
| Consumer | | | | | |
| | Residential Mortgage | 4,819 |
| 6,082 |
| 5,729 |
| 4,564 |
| 7,460 |
|
| | Home Equity | 2,816 |
| 2,505 |
| 2,845 |
| 3,009 |
| 2,896 |
|
| | Automobile | 612 |
| 236 |
| 346 |
| 322 |
| 193 |
|
| | Other 1 | 842 |
| 844 |
| 644 |
| 790 |
| 841 |
|
| Total Consumer | 9,089 |
| 9,667 |
| 9,564 |
| 8,685 |
| 11,390 |
|
| Total Accruing Loans and Leases Past Due 90 Days or More | $ | 9,103 |
| $ | 9,667 |
| $ | 9,714 |
| $ | 9,858 |
| $ | 11,398 |
|
| Restructured Loans on Accrual Status | | | | | |
| and Not Past Due 90 Days or More | $ | 45,169 |
| $ | 43,625 |
| $ | 44,473 |
| $ | 51,123 |
| $ | 39,845 |
|
| Total Loans and Leases | $ | 6,606,350 |
| $ | 6,426,353 |
| $ | 6,209,857 |
| $ | 6,095,387 |
| $ | 6,006,642 |
|
| | | | | | | | |
| Ratio of Non-Accrual Loans and Leases to Total Loans and Leases | 0.45 | % | 0.47 | % | 0.54 | % | 0.60 | % | 0.51 | % |
| | | | | | | | |
| Ratio of Non-Performing Assets to Total Loans and Leases | | | | | |
| | and Foreclosed Real Estate | 0.50 | % | 0.53 | % | 0.60 | % | 0.65 | % | 0.56 | % |
| | | | | | | | |
| Ratio of Commercial Non-Performing Assets to Total Commercial Loans | | | | | |
| | and Leases and Commercial Foreclosed Real Estate | 0.42 | % | 0.48 | % | 0.53 | % | 0.61 | % | 0.35 | % |
| | | | | | | | |
| Ratio of Consumer Non-Performing Assets to Total Consumer Loans | | | | | |
| | and Leases and Consumer Foreclosed Real Estate | 0.56 | % | 0.57 | % | 0.64 | % | 0.68 | % | 0.71 | % |
| | | | | | | | |
| 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 | 0.64 | % | 0.69 | % | 0.75 | % | 0.81 | % | 0.75 | % |
| | | | | | | | |
| Quarter to Quarter Changes in Non-Performing Assets | | | | | |
| Balance at Beginning of Quarter | $ | 34,389 |
| $ | 37,048 |
| $ | 39,650 |
| $ | 33,832 |
| $ | 36,431 |
|
| Additions | 2,565 |
| 2,798 |
| 2,491 |
| 13,040 |
| 3,395 |
|
| Reductions | | | | | |
| | Payments | (2,381 | ) | (2,753 | ) | (1,855 | ) | (932 | ) | (2,954 | ) |
| | Return to Accrual Status | (704 | ) | (904 | ) | (1,864 | ) | (2,308 | ) | (1,166 | ) |
| | Sales of Foreclosed Real Estate | (449 | ) | (1,782 | ) | (737 | ) | (1,431 | ) | (1,498 | ) |
| | Charge-offs/Write-downs | (113 | ) | (18 | ) | (637 | ) | (2,551 | ) | (376 | ) |
| Total Reductions | (3,647 | ) | (5,457 | ) | (5,093 | ) | (7,222 | ) | (5,994 | ) |
| Balance at End of Quarter | $ | 33,307 |
| $ | 34,389 |
| $ | 37,048 |
| $ | 39,650 |
| $ | 33,832 |
|
| | | | | | | | |
| | | | | | | | |
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 | | Nine Months Ended |
| | | | September 30, | June 30, | September 30, | | September 30, |
| (dollars in thousands) | 2014 | 2014 | 2013 | | 2014 | 2013 |
| Balance at Beginning of Period | $ | 119,725 |
| $ | 120,136 |
| $ | 130,494 |
| | $ | 121,521 |
| $ | 134,276 |
|
| Loans and Leases Charged-Off | | | | | | |
| | Commercial | | | | | | |
| | | Commercial and Industrial | (229 | ) | (749 | ) | (607 | ) | | (1,797 | ) | (1,255 | ) |
| | | Lease Financing | — |
| (66 | ) | (16 | ) | | (66 | ) | (16 | ) |
| | Consumer | | | | | | |
| | | Residential Mortgage | (22 | ) | (323 | ) | (405 | ) | | (674 | ) | (1,828 | ) |
| | | Home Equity | (475 | ) | (553 | ) | (1,106 | ) | | (1,379 | ) | (4,499 | ) |
| | | Automobile | (957 | ) | (711 | ) | (457 | ) | | (2,585 | ) | (1,461 | ) |
| | | Other 1 | (1,978 | ) | (1,595 | ) | (2,083 | ) | | (5,195 | ) | (5,618 | ) |
| Total Loans and Leases Charged-Off | (3,661 | ) | (3,997 | ) | (4,674 | ) | | (11,696 | ) | (14,677 | ) |
| Recoveries on Loans and Leases Previously Charged-Off | | | | | | |
| | Commercial | | | | | | |
| | | Commercial and Industrial | 1,177 |
| 2,132 |
| 498 |
| | 4,229 |
| 1,373 |
|
| | | Commercial Mortgage | 14 |
| 15 |
| 519 |
| | 43 |
| 543 |
|
| | | Construction | 8 |
| 8 |
| 11 |
| | 21 |
| 357 |
|
| | | Lease Financing | 3 |
| 1 |
| 11 |
| | 6 |
| 33 |
|
| | Consumer | | | | | | |
| | | Residential Mortgage | 299 |
| 2,335 |
| 1,290 |
| | 2,906 |
| 2,712 |
|
| | | Home Equity | 531 |
| 351 |
| 614 |
| | 1,433 |
| 1,697 |
|
| | | Automobile | 322 |
| 343 |
| 348 |
| | 1,110 |
| 1,265 |
|
| | | Other 1 | 496 |
| 723 |
| 488 |
| | 1,720 |
| 1,520 |
|
| Total Recoveries on Loans and Leases Previously Charged-Off | 2,850 |
| 5,908 |
| 3,779 |
| | 11,468 |
| 9,500 |
|
| Net Loans and Leases Recovered (Charged-Off) | (811 | ) | 1,911 |
| (895 | ) | | (228 | ) | (5,177 | ) |
| Provision for Credit Losses | (2,665 | ) | (2,199 | ) | — |
| | (4,864 | ) | — |
|
| Provision for Unfunded Commitments | — |
| (123 | ) | 148 |
| | (180 | ) | 648 |
|
Balance at End of Period 2 | $ | 116,249 |
| $ | 119,725 |
| $ | 129,747 |
| | $ | 116,249 |
| $ | 129,747 |
|
| | | | | | | | | |
| Components | | | | | | |
| Allowance for Loan and Lease Losses | $ | 110,362 |
| $ | 113,838 |
| $ | 123,680 |
| | $ | 110,362 |
| $ | 123,680 |
|
| Reserve for Unfunded Commitments | 5,887 |
| 5,887 |
| 6,067 |
| | 5,887 |
| 6,067 |
|
| Total Reserve for Credit Losses | $ | 116,249 |
| $ | 119,725 |
| $ | 129,747 |
| | $ | 116,249 |
| $ | 129,747 |
|
| | | | | | | | | |
| Average Loans and Leases Outstanding | $ | 6,488,780 |
| $ | 6,274,595 |
| $ | 5,892,888 |
| | $ | 6,290,548 |
| $ | 5,826,424 |
|
| | | | | | | | | |
| Ratio of Net Loans and Leases Charged-Off (Recovered) to | | | | | | |
| | Average Loans and Leases Outstanding (annualized) | 0.05 | % | (0.12 | )% | 0.06 | % | | — | % | 0.12 | % |
Ratio of Allowance for Loan and Lease Losses to Loans and Leases Outstanding | 1.67 | % | 1.77 | % | 2.06 | % | | 1.67 | % | 2.06 | % |
| | | | | | | | | |
| | | | | | | | | |
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 September 30, 2014 | | | | | |
| Net Interest Income | $ | 46,863 |
| $ | 31,533 |
| $ | 2,676 |
| $ | 14,307 |
| $ | 95,379 |
|
| Provision for Credit Losses | 1,853 |
| (834 | ) | (9 | ) | (3,675 | ) | (2,665 | ) |
| Net Interest Income After Provision for Credit Losses | 45,010 |
| 32,367 |
| 2,685 |
| 17,982 |
| 98,044 |
|
| Noninterest Income | 20,265 |
| 5,692 |
| 14,459 |
| 4,534 |
| 44,950 |
|
| Noninterest Expense | (48,963 | ) | (16,190 | ) | (13,443 | ) | (2,434 | ) | (81,030 | ) |
| Income Before Provision for Income Taxes | 16,312 |
| 21,869 |
| 3,701 |
| 20,082 |
| 61,964 |
|
| Provision for Income Taxes | (5,807 | ) | (7,669 | ) | (1,370 | ) | (5,349 | ) | (20,195 | ) |
| Net Income | $ | 10,505 |
| $ | 14,200 |
| $ | 2,331 |
| $ | 14,733 |
| $ | 41,769 |
|
| Total Assets as of September 30, 2014 | $ | 3,936,206 |
| $ | 2,640,763 |
| $ | 192,739 |
| $ | 7,740,458 |
| $ | 14,510,166 |
|
| | | | | | |
| | | | | | |
Three Months Ended September 30, 2013 1 | | | | | |
| Net Interest Income | $ | 41,404 |
| $ | 25,119 |
| $ | 2,574 |
| $ | 21,790 |
| $ | 90,887 |
|
| Provision for Credit Losses | 1,629 |
| (691 | ) | (19 | ) | (919 | ) | — |
|
| Net Interest Income After Provision for Credit Losses | 39,775 |
| 25,810 |
| 2,593 |
| 22,709 |
| 90,887 |
|
| Noninterest Income | 21,785 |
| 6,411 |
| 14,348 |
| 2,582 |
| 45,126 |
|
| Noninterest Expense | (50,150 | ) | (15,746 | ) | (13,590 | ) | (3,491 | ) | (82,977 | ) |
| Income Before Provision for Income Taxes | 11,410 |
| 16,475 |
| 3,351 |
| 21,800 |
| 53,036 |
|
| Provision for Income Taxes | (4,222 | ) | (5,666 | ) | (1,240 | ) | (4,204 | ) | (15,332 | ) |
| Net Income | $ | 7,188 |
| $ | 10,809 |
| $ | 2,111 |
| $ | 17,596 |
| $ | 37,704 |
|
| Total Assets as of September 30, 2013 | $ | 3,611,412 |
| $ | 2,356,723 |
| $ | 199,556 |
| $ | 7,681,180 |
| $ | 13,848,871 |
|
| | | | | | |
| | | | | | |
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 |
|
| Nine Months Ended September 30, 2014 | | | | | |
| Net Interest Income | $ | 134,776 |
| $ | 86,316 |
| $ | 7,895 |
| $ | 54,037 |
| $ | 283,024 |
|
| Provision for Credit Losses | 2,895 |
| (2,164 | ) | (303 | ) | (5,292 | ) | (4,864 | ) |
| Net Interest Income After Provision for Credit Losses | 131,881 |
| 88,480 |
| 8,198 |
| 59,329 |
| 287,888 |
|
| Noninterest Income | 59,890 |
| 17,223 |
| 43,206 |
| 13,880 |
| 134,199 |
|
| Noninterest Expense | (147,737 | ) | (49,215 | ) | (40,842 | ) | (7,865 | ) | (245,659 | ) |
| Income Before Provision for Income Taxes | 44,034 |
| 56,488 |
| 10,562 |
| 65,344 |
| 176,428 |
|
| Provision for Income Taxes | (16,017 | ) | (19,572 | ) | (3,908 | ) | (15,080 | ) | (54,577 | ) |
| Net Income | $ | 28,017 |
| $ | 36,916 |
| $ | 6,654 |
| $ | 50,264 |
| $ | 121,851 |
|
| Total Assets as of September 30, 2014 | $ | 3,936,206 |
| $ | 2,640,763 |
| $ | 192,739 |
| $ | 7,740,458 |
| $ | 14,510,166 |
|
| | | | | | |
| | | | | | |
Nine Months Ended September 30, 2013 1 | | | | | |
| Net Interest Income | $ | 122,442 |
| $ | 73,975 |
| $ | 7,938 |
| $ | 62,432 |
| $ | 266,787 |
|
| Provision for Credit Losses | 6,775 |
| (1,501 | ) | (52 | ) | (5,222 | ) | — |
|
| Net Interest Income After Provision for Credit Losses | 115,667 |
| 75,476 |
| 7,990 |
| 67,654 |
| 266,787 |
|
| Noninterest Income | 67,686 |
| 20,382 |
| 44,446 |
| 8,431 |
| 140,945 |
|
| Noninterest Expense | (150,838 | ) | (47,957 | ) | (40,954 | ) | (8,796 | ) | (248,545 | ) |
| Income Before Provision for Income Taxes | 32,515 |
| 47,901 |
| 11,482 |
| 67,289 |
| 159,187 |
|
| Provision for Income Taxes | (12,030 | ) | (16,413 | ) | (4,248 | ) | (15,049 | ) | (47,740 | ) |
| Net Income | $ | 20,485 |
| $ | 31,488 |
| $ | 7,234 |
| $ | 52,240 |
| $ | 111,447 |
|
Total Assets as of September 30, 2013 | $ | 3,611,412 |
| $ | 2,356,723 |
| $ | 199,556 |
| $ | 7,681,180 |
| $ | 13,848,871 |
|
| | | | | | |
| | | | | | |
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 | |
| | September 30, |
| | June 30, |
| | March 31, |
| | December 31, |
| | September 30, |
| |
| (dollars in thousands, except per share amounts) | 2014 |
| | 2014 |
| | 2014 |
| | 2013 |
| | 2013 |
| |
| Quarterly Operating Results | | | | | | | | | | |
| Interest Income | | | | | | | | | | |
| Interest and Fees on Loans and Leases | $ | 68,089 |
| | $ | 65,818 |
| | $ | 63,526 |
| | $ | 63,809 |
| | $ | 63,918 |
| |
| Income on Investment Securities | | | | | | | | | | |
| Available-for-Sale | 10,286 |
| | 10,697 |
| | 10,760 |
| | 10,608 |
| | 12,038 |
| |
| Held-to-Maturity | 26,067 |
| | 26,938 |
| | 27,889 |
| | 26,882 |
| | 24,137 |
| |
| Deposits | 3 |
| | 1 |
| | 3 |
| | 3 |
| | 3 |
| |
| Funds Sold | 176 |
| | 168 |
| | 137 |
| | 105 |
| | 177 |
| |
| Other | 302 |
| | 302 |
| | 302 |
| | 302 |
| | 301 |
| |
| Total Interest Income | 104,923 |
| | 103,924 |
| | 102,617 |
| | 101,709 |
| | 100,574 |
| |
| Interest Expense | | | | | | | | | | |
| Deposits | 2,391 |
| | 2,393 |
| | 2,358 |
| | 2,418 |
| | 2,500 |
| |
| Securities Sold Under Agreements to Repurchase | 6,523 |
| | 6,465 |
| | 6,397 |
| | 6,530 |
| | 6,551 |
| |
| Funds Purchased | 3 |
| | 4 |
| | 3 |
| | 8 |
| | 4 |
| |
| Short-Term Borrowings | — |
| | — |
| | — |
| | 2 |
| | — |
| |
| Long-Term Debt | 627 |
| | 650 |
| | 626 |
| | 631 |
| | 632 |
| |
| Total Interest Expense | 9,544 |
| | 9,512 |
| | 9,384 |
| | 9,589 |
| | 9,687 |
| |
| Net Interest Income | 95,379 |
| | 94,412 |
| | 93,233 |
| | 92,120 |
| | 90,887 |
| |
| Provision for Credit Losses | (2,665 | ) | | (2,199 | ) | | — |
| | — |
| | — |
| |
| Net Interest Income After Provision for Credit Losses | 98,044 |
| | 96,611 |
| | 93,233 |
| | 92,120 |
| | 90,887 |
| |
| Noninterest Income | | | | | | | | | | |
| Trust and Asset Management | 11,716 |
| | 12,005 |
| | 11,852 |
| | 12,240 |
| | 11,717 |
| |
| Mortgage Banking | 1,646 |
| | 1,804 |
| | 2,005 |
| | 2,823 |
| | 4,132 |
| |
| Service Charges on Deposit Accounts | 9,095 |
| | 8,638 |
| | 8,878 |
| | 9,326 |
| | 9,385 |
| |
| Fees, Exchange, and Other Service Charges | 13,390 |
| | 13,370 |
| | 12,939 |
| | 12,670 |
| | 12,732 |
| |
| Investment Securities Gains, Net | 1,858 |
| | 2,079 |
| | 2,160 |
| | — |
| | — |
| |
| Insurance | 2,348 |
| | 1,930 |
| | 2,123 |
| | 2,295 |
| | 2,177 |
| |
| Bank-Owned Life Insurance | 1,644 |
| | 1,519 |
| | 1,602 |
| | 1,895 |
| | 1,365 |
| |
| Other | 3,253 |
| | 3,136 |
| | 3,209 |
| | 4,029 |
| | 3,618 |
| |
| Total Noninterest Income | 44,950 |
| | 44,481 |
| | 44,768 |
| | 45,278 |
| | 45,126 |
| |
| Noninterest Expense | | | | | | | | | | |
| Salaries and Benefits | 45,530 |
| | 45,081 |
| | 46,897 |
| | 43,643 |
| | 46,552 |
| |
| Net Occupancy | 9,334 |
| | 9,254 |
| | 9,417 |
| | 9,602 |
| | 9,847 |
| |
| Net Equipment | 4,473 |
| | 4,669 |
| | 4,603 |
| | 4,837 |
| | 4,572 |
| |
| Data Processing | 3,665 |
| | 3,842 |
| | 3,649 |
| | 3,827 |
| | 3,697 |
| |
| Professional Fees | 1,835 |
| | 2,613 |
| | 2,260 |
| | 2,669 |
| | 2,119 |
| |
| FDIC Insurance | 1,750 |
| | 2,055 |
| | 2,076 |
| | 1,954 |
| | 1,913 |
| |
| Other | 14,443 |
| | 13,568 |
| | 14,645 |
| | 15,892 |
| | 14,277 |
| |
| Total Noninterest Expense | 81,030 |
| | 81,082 |
| | 83,547 |
| | 82,424 |
| | 82,977 |
| |
| Income Before Provision for Income Taxes | 61,964 |
| | 60,010 |
| | 54,454 |
| | 54,974 |
| | 53,036 |
| |
| Provision for Income Taxes | 20,195 |
| | 18,520 |
| | 15,862 |
| | 15,919 |
| | 15,332 |
| |
| Net Income | $ | 41,769 |
| | $ | 41,490 |
| | $ | 38,592 |
| | $ | 39,055 |
| | $ | 37,704 |
| |
| | | | | | | | | | | |
| Basic Earnings Per Share | $ | 0.95 |
| | $ | 0.94 |
| | $ | 0.87 |
| | $ | 0.88 |
| | $ | 0.85 |
| |
| Diluted Earnings Per Share | $ | 0.95 |
| | $ | 0.94 |
| | $ | 0.87 |
| | $ | 0.88 |
| | $ | 0.85 |
| |
| | | | | | | | | | | |
| Balance Sheet Totals | | | | | | | | | | |
| Loans and Leases | $ | 6,606,350 |
| | $ | 6,426,353 |
| | $ | 6,209,857 |
| | $ | 6,095,387 |
| | $ | 6,006,642 |
| |
| Total Assets | 14,510,166 |
| | 14,844,505 |
| | 14,263,118 |
| | 14,084,280 |
| | 13,848,871 |
| |
| Total Deposits | 12,361,441 |
| | 12,670,034 |
| | 12,044,473 |
| | 11,914,656 |
| | 11,608,134 |
| |
| Total Shareholders' Equity | 1,057,413 |
| | 1,050,801 |
| | 1,028,904 |
| | 1,011,976 |
| | 992,686 |
| |
| | | | | | | | | | | |
| Performance Ratios | | | | | | | | | | |
| Return on Average Assets | 1.15 |
| % | 1.17 |
| % | 1.12 |
| % | 1.12 |
| % | 1.09 |
| % |
| Return on Average Shareholders' Equity | 15.57 |
| | 15.87 |
| | 15.15 |
| | 15.36 |
| | 15.02 |
| |
Efficiency Ratio 1 | 57.74 |
| | 58.38 |
| | 60.54 |
| | 59.99 |
| | 61.01 |
| |
Net Interest Margin 2 | 2.85 |
| | 2.86 |
| | 2.87 |
| | 2.85 |
| | 2.83 |
| |
| | | | | | | | | | | |
| | | | | | | | | | | |
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 |
| | Eight Months Ended | | | Year Ended |
| ($ in millions; jobs in thousands) | August 31, 2014 | | | December 31, 2013 | December 31, 2012 |
| Hawaii Economic Trends | | | | | | | | | | | | |
State General Fund Revenues 1 | $ | 3,618.8 |
| (0.9 | ) | % | | $ | 5,451.3 |
| | 3.7 |
| % | $ | 5,259.1 |
| | 12.8 |
| % |
General Excise and Use Tax Revenue 1 | $ | 2,002.3 |
| 0.5 |
| % | | $ | 2,907.6 |
| | 2.2 |
| % | $ | 2,844.7 |
| | 9.9 |
| % |
Jobs 2 | 634.1 |
| | | | 623.1 |
| | | | 619.3 |
| | | |
| | | | | | | | | | | | | |
| | | | | | | | September 30, | | December 31, |
| (spot rates) | | | | | | | 2014 | | 2013 | 2012 | |
Unemployment 3 | | | | | | | | | | | | |
| Statewide, seasonally adjusted | | | | | | | 4.2 |
| % | 4.7 |
| % | 5.1 |
| % |
| | | | | | | | | | | | | |
| Oahu | | | | | | | 4.0 |
| | 3.8 |
| | 4.2 |
| |
| Island of Hawaii | | | | | | | 5.4 |
| | 5.9 |
| | 6.9 |
| |
| Maui | | | | | | | 4.3 |
| | 4.7 |
| | 5.2 |
| |
| Kauai | | | | | | | 4.8 |
| | 5.2 |
| | 6.1 |
| |
| | | | | | | | | | | | | |
| | | | | | | | August 31, | | December 31, |
| (percentage change, except months of inventory) | | | | | | 2014 | | 2013 | 2012 | |
Housing Trends (Single Family Oahu) 4 | | | | | | | | | | | | |
| Median Home Price | | | | | | | 4.6 |
| % | 4.8 |
| % | 7.8 |
| % |
| Home Sales Volume (units) | | | | | | | 1.6 |
| % | 4.6 |
| % | 6.5 |
| % |
| Months of Inventory | | | | | | | 2.9 |
| | 2.7 |
| | 2.5 |
| |
| | | | | | | | | | | | | |
| | | | | | Monthly Visitor Arrivals, | | Percentage Change |
| (in thousands) | | | | | Not Seasonally Adjusted | | from Previous Year |
Tourism 5 | | | | | | | | | | | | |
| August 31, 2014 | | | | | | | 730.7 |
| | | | (1.3 | ) | |
| July 31, 2014 | | | | | | | 772.1 |
| | | | 2.5 |
| |
| June 30, 2014 | | | | | | | 725.1 |
| | | | 1.9 |
| |
| May 31, 2014 | | | | | | | 649.1 |
| | | | 1.8 |
| |
| April 30, 2014 | | | | | | | 662.6 |
| | | | (0.7 | ) | |
| March 31, 2014 | | | | | | | 728.8 |
| | | | (5.2 | ) | |
| February 28, 2014 | | | | | | | 646.8 |
| | | | (4.3 | ) | |
| January 31, 2014 | | | | | | | 682.6 |
| | | | 0.1 |
| |
| December 31, 2013 | | | | | | | 722.4 |
| | | | (1.9 | ) | |
| November 30, 2013 | | | | | | | 620.1 |
| | | | (5.5 | ) | |
| October 31, 2013 | | | | | | | 636.2 |
| | | | (1.6 | ) | |
| September 30, 2013 | | | | | | | 594.2 |
| | | | (1.0 | ) | |
| August 31, 2013 | | | | | | | 740.6 |
| | | | 2.1 |
| |
| July 31, 2013 | | | | | | | 753.3 |
| | | | 4.6 |
| |
| June 30, 2013 | | | | | | | 711.3 |
| | | | 5.0 |
| |
| May 31, 2013 | | | | | | | 637.5 |
| | | | 2.4 |
| |
| April 30, 2013 | | | | | | | 667.0 |
| | | | 3.1 |
| |
| March 31, 2013 | | | | | | | 769.1 |
| | | | 7.6 |
| |
| February 28, 2013 | | | | | | | 675.5 |
| | | | 7.8 |
| |
| January 31, 2013 | | | | | | | 681.9 |
| | | | 5.9 |
| |
| December 31, 2012 | | | | | | | 733.7 |
| | | | 6.3 |
| |
| November 30, 2012 | | | | | | | 651.2 |
| | | | 14.5 |
| |
| October 31, 2012 | | | | | | | 640.7 |
| | | | 8.6 |
| |
| September 30, 2012 | | | | | | | 595.0 |
| | | | 6.1 |
| |
| August 31, 2012 | | | | | | | 725.6 |
| | | | 11.0 |
| |
| July 31, 2012 | | | | | | | 720.4 |
| | | | 7.8 |
| |
| June 30, 2012 | | | | | | | 677.2 |
| | | | 11.5 |
| |
| May 31, 2012 | | | | | | | 622.9 |
| | | | 12.5 |
| |
| | | | | | | | | | | | | |
1 Source: Hawaii Department of Business, Economic Development & Tourism | | | | | | | |
2 Source: U. S. Bureau of Labor | | | | | | | | | | |
3 Source: Hawaii Department of Labor and Industrial Relations | | | | | | | | | |
4 Source: Honolulu Board of REALTORS | | | | | | | | | | |
5 Source: Hawaii Tourism Authority | | | | | | | | | |
| Note: Certain prior period seasonally adjusted information has been revised. | | | | | | | | | |
