Exhibit 99.1
Bank of Hawaii Corporation 2012 Financial Results
· 2012 Diluted Earnings Per Share $3.67
· 2012 Net Income $166.1 Million
· Diluted Earnings Per Share for the Fourth Quarter of 2012 $0.90
· Net Income for the Fourth Quarter of 2012 $40.3 Million
· Board of Directors Declares Dividend of $0.45 Per Share
FOR IMMEDIATE RELEASE
HONOLULU, HI (January 30, 2013) -- Bank of Hawaii Corporation (NYSE: BOH) today reported diluted earnings per share of $0.90 for the fourth quarter of 2012, down from $0.92 per share in the previous quarter, and up from $0.85 per share in the same quarter last year. Net income for the fourth quarter of 2012 was $40.3 million, compared to net income of $41.2 million in the third quarter of 2012 and $39.2 million in the same quarter last year.
Loan and lease balances were $5.9 billion at December 31, 2012, up 5.7 percent compared with December 31, 2011. Deposit growth remained strong during the quarter, increasing 8.8 percent to $11.5 billion at December 31, 2012. The allowance for loan and lease losses decreased by $2.1 million from the third quarter to $128.9 million at December 31, 2012 and represents 2.20 percent of outstanding loans and leases.
“We are very pleased with the continued stability and strength of our earnings,” said Peter S. Ho, Chairman, President, and CEO. “During the quarter loan balances increased across most categories and deposits continued to grow. Credit quality remained solid, our balance sheet and capital ratios are strong, and we maintained our focus on disciplined expense management.”
The return on average assets for the fourth quarter of 2012 was 1.19 percent, compared with 1.22 percent in the previous quarter and 1.17 percent in the same quarter last year. The return on average equity for the fourth quarter of 2012 was 15.47 percent, compared with 16.02 percent in the previous quarter and 15.23 percent in the same quarter last year. The return on average assets for the full year of 2012 was 1.22 percent, unchanged from 2011. The return on average equity for the full year of 2012 was 16.23 percent, an increase from the return on average equity of 15.69 percent in 2011.
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Bank of Hawaii Corporation 2012 Financial Results | | Page 2 |
Financial Highlights
Net interest income, on a taxable-equivalent basis, for the fourth quarter of 2012 was $92.7 million, down $3.5 million from net interest income of $96.2 million in the third quarter of 2012 and down $4.5 million from net interest income of $97.2 million in the fourth quarter last year. Net interest income, on a taxable-equivalent basis, for the full year of 2012 was $386.7 million, a decrease of $5.6 million from net interest income of $392.3 million in 2011. Analyses of changes in net interest income are included in Tables 8a, 8b and 8c.
The net interest margin was 2.87 percent for the fourth quarter of 2012, an 11 basis point decrease from the previous quarter and a 17 basis point decrease from the same quarter last year. The net interest margin for the full year of 2012 was 2.97 percent, a 16 basis point decrease from 3.13 percent in 2011. The reduction in the net interest margin was largely the result of lower interest rates which resulted in decreased yields on loans and investments.
During the fourth and third quarters of 2012, the Company did not record a provision for credit losses. Net loans and leases charged-off were $2.1 million in the fourth quarter of 2012 and $1.5 million in the third quarter of 2012. During the fourth quarter of 2011 the provision for credit losses was $2.2 million, or $4.8 million less than net charge-offs. The provision for credit losses for the full year of 2012 was $1.0 million compared with $12.7 million in 2011.
Noninterest income was $53.0 million for the fourth quarter of 2012, up $0.6 million or 1.2 percent compared with noninterest income of $52.4 million in the third quarter of 2012 and up $9.6 million or 22.1 percent compared with noninterest income of $43.4 million in the fourth quarter of 2011. The increase compared with the prior year quarter was largely due to strong mortgage banking revenue of $11.3 million during the fourth quarter of 2012 compared with $3.4 million in the fourth quarter last year. Noninterest income for the full year of 2012 was $200.3 million compared with noninterest income of $197.7 million in 2011.
Noninterest expense was $83.5 million in the fourth quarter of 2012, down $1.4 million or 1.7 percent from noninterest expense of $84.9 million in the third quarter of 2012, and down $0.9 million or 1.1 percent from noninterest expenses of $84.4 million in the fourth quarter of 2011. Noninterest expense in the fourth quarter of 2012 included total charges of $1.5 million related to the Company’s previously announced plans to close two branches in American Samoa. Noninterest expense in the third quarter of 2012 included an increase in profit sharing and incentive accruals of $1.0 million, $1.0 million related to the launch of a new consumer credit card product, and $1.0 million in separation expense. There were no significant noninterest expense items in the fourth quarter of 2011. Noninterest expense for the full year of 2012 was $334.3 million, down $13.9 million from noninterest expense of $348.2 million in 2011. Results for 2011 included a second quarter litigation settlement of $9.0 million.
The efficiency ratio for the fourth quarter of 2012 was 58.24 percent compared with 58.13 percent in the previous quarter and 60.42 percent in the same quarter last year. The efficiency ratio for the full year of 2012 was 57.88 percent compared with 59.23 percent during the full year of 2011.
The effective tax rate for the fourth quarter of 2012 was 32.67 percent compared with 32.55 percent in the previous quarter and 26.06 percent in the same quarter last year. The effective tax rate for the full year of 2012 was 31.46 percent compared with 29.49 percent for the full year of 2011. The effective tax rate for the fourth quarter of 2011 was favorably impacted by the release of tax reserves determined during the quarter.
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Bank of Hawaii Corporation 2012 Financial Results | | Page 3 |
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 in the fourth quarter of 2012 reflects the improving Hawaii economy. Total non-performing assets decreased to $37.1 million at December 31, 2012 compared with $40.3 million at September 30, 2012 and $40.8 million at December 31, 2011. As a percentage of total loans and leases, including foreclosed real estate; non-performing assets were 0.63 percent at the end of the fourth quarter of 2012, down from 0.70 percent as of the end of the third quarter and 0.74 percent at the end of the fourth quarter last year.
Accruing loans and leases past due 90 days or more were $10.4 million at December 31, 2012, up from $7.5 million at September 30, 2012 and $9.2 million at December 30, 2011. The increase in accruing loan and leases past due compared with the prior quarter is in residential mortgages and are three loans that are expected to return to current status. Restructured loans not included in non-accrual loans or accruing loans past due 90 days or more were $31.8 million at December 31, 2012, up slightly from $31.4 million at September 30, 2012, and down from $33.7 million at December 31, 2011. 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 2012 were $2.1 million or 0.15 percent annualized of total average loans and leases outstanding. Loan and lease charge-offs of $5.4 million during the quarter were partially offset by recoveries of $3.3 million. Net charge-offs during the third quarter of 2012 were $1.5 million or 0.10 percent annualized, and were comprised of charge-offs of $5.0 million and recoveries of $3.5 million. Net charge-offs during the fourth quarter of 2011 were $7.0 million, or 0.51 percent annualized, and were comprised of charge-offs of $9.6 million and recoveries of $2.6 million. Net charge-offs for the full year of 2012 were $10.7 million, or 0.19 percent of total average loans and leases, down from $21.4 million, or 0.40 percent of total average loans and leases in 2011.
The allowance for loan and lease losses was $128.9 million at December 31, 2012, down $2.1 million from the allowance for loan and lease losses of $131.0 million at September 30, 2012 and down $9.7 million from the allowance for loan and lease losses of $138.6 million at December 31, 2011. The ratio of the allowance for loan and lease losses to total loans and leases was 2.20 percent at December 31, 2012, a decrease of 7 basis points from the previous quarter and 30 basis points from the same quarter last year. The reserve for unfunded commitments at December 31, 2012 was unchanged from September 30, 2012 and remained at $5.4 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
Total assets increased to $13.73 billion at December 31, 2012, up $345.9 million from total assets of $13.38 billion at September 30, 2012, and down $118.0 million from total assets of $13.85 billion at December 31, 2011. Average total assets were $13.52 billion during the fourth quarter of 2012, up $25.7 million from average total assets of $13.49 billion during the third quarter of 2012, and up $158.9 million from average total assets of $13.36 billion during the fourth quarter of 2011.
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Bank of Hawaii Corporation 2012 Financial Results | | Page 4 |
Total loans and leases grew to $5.85 billion at December 31, 2012, up $72.2 million or 1.2 percent from total loans and leases of $5.78 billion at the end of the previous quarter, and up $316.2 million or 5.7 percent from total loans and leases of $5.54 billion at December 31, 2011. Average total loans and leases were $5.80 billion during the fourth quarter of 2012, up from $5.72 billion during the previous quarter, and up from $5.42 billion during the same quarter last year. Loan and lease portfolio balances, including the higher risk loans outstanding, are summarized in Table 10.
Deposit generation continued to remain strong during the fourth quarter of 2012, increasing to $11.53 billion at December 31, 2012, up $308.9 million or 2.8 percent from total deposits of $11.22 billion at September 30, 2012, and up $936.9 million or 8.8 percent from total deposits of $10.59 billion at December 31, 2011. Securities sold under agreements to repurchase were $758.9 million at December 31, 2012, down $59.1 million from $818.1 million at September 30, 2012, and down $1.17 billion from $1.93 billion at December 31, 2011. Average total deposits were $11.38 billion in the fourth quarter of 2012, higher than average deposits of $11.30 billion during the previous quarter, and up from average deposits of $10.16 billion during the same quarter last year. Deposit balances are summarized in Tables 7a, 7b, and 10.
Long-term debt was $128.1 million at December 31, 2012, up from $28.1 million at September 30, 2012 and $30.7 million at December 31, 2011. The increase in long-term debt 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 $6.96 billion at December 31, 2012, compared to $6.60 billion at September 30, 2012, and was down slightly from $7.11 billion at December 31, 2011. The investment portfolio remains largely comprised of securities issued by U. S. government agencies.
During the fourth quarter of 2012, the Company repurchased 339.0 thousand shares of common stock at a total cost of $14.9 million under its share repurchase program. The average cost was $44.06 per share repurchased. From January 2 through January 25, 2013, the Company repurchased an additional 34.0 thousand shares of common stock at an average cost of $46.60 per share repurchased. From the beginning of the share repurchase program initiated during July 2001 through December 31, 2012, the Company has repurchased 50.3 million shares and returned over $1.8 billion to shareholders at an average cost of $36.34 per share. Remaining buyback authority under the share repurchase program was $67.9 million at January 25, 2013.
Total shareholders’ equity was $1.02 billion at December 31, 2012, down slightly from September 30, 2012, and up from $1.00 billion at December 31, 2011. The ratio of tangible common equity to risk-weighted assets was 17.24 percent at December 31, 2012 compared with 17.43 percent at September 30, 2012 and 17.93 percent at December 31, 2011. The Tier 1 leverage ratio at December 31, 2012 was 6.83 percent, up from 6.78 percent at September 30, 2012 and 6.73 percent at December 31, 2011.
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, 2013 to shareholders of record at the close of business on February 28, 2013.
Hawaii Economy
Hawaii’s economy continued to improve during the fourth quarter of 2012 primarily due to a strong visitor industry. A record 8.0 million total visitors arrived in Hawaii during 2012, up 9.6 percent compared with 2011, and exceeding the previous high of 7.6 million visitors during 2006. Total visitor spending reached a record high of $14.3 billion in 2012, up 18.7 percent compared with 2011, and was
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Bank of Hawaii Corporation 2012 Financial Results | | Page 5 |
largely due to strong spending by international visitors. The statewide seasonally-adjusted unemployment rate continued to decline during the fourth quarter of 2012 to 5.2% in December compared with 7.8% nationally. Median sales prices for single-family homes and condominiums as well as closed sales on Oahu increased during 2012 compared with the prior year. Months of inventory at December 31, 2012 for single-family homes on Oahu declined to 2.5 and 3.0 for condominiums. More information on current Hawaii economic trends is presented in Table 15.
Conference Call Information
The Company will review its 2012 financial results today at 8:00 a.m. Hawaii Time (1:00 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. The conference call number for participants in the United States is 800-299-9086. International participants should call 617-786-2903. Use the pass code “Bank of Hawaii” to access the call. A replay of the conference call will be available for one week beginning Wednesday, January 30, 2013 by calling 888-286-8010 in the United States or 617-801-6888 internationally and entering the number 46643910 when prompted. A replay will also be available via the Investor Relations link of the Company’s web site.
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, 2011, 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.
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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) | | | 2012 | | 2012 | | 2011 | | | 2012 | | 2011 | | |
For the Period: | | | | | | | | | | | | |
Operating Results | | | | | | | | | | | |
Net Interest Income | | $ | 90,310 | | $ | 93,632 | | $ | 96,246 | | $ | 377,271 | | $ | 390,208 | |
Provision for Credit Losses | | - | | - | | 2,219 | | 979 | | 12,690 | |
Total Noninterest Income | | 52,982 | | 52,374 | | 43,407 | | 200,286 | | 197,655 | |
Total Noninterest Expense | | 83,456 | | 84,878 | | 84,382 | | 334,288 | | 348,193 | |
Net Income | | 40,287 | | 41,232 | | 39,229 | | 166,076 | | 160,043 | |
Basic Earnings Per Share | | 0.90 | | 0.92 | | 0.85 | | 3.68 | | 3.40 | |
Diluted Earnings Per Share | | 0.90 | | 0.92 | | 0.85 | | 3.67 | | 3.39 | |
Dividends Declared Per Share | | 0.45 | | 0.45 | | 0.45 | | 1.80 | | 1.80 | |
| | | | | | | | | | | |
Performance Ratios | | | | | | | | | | | |
Return on Average Assets | | 1.19 | % | 1.22 | % | 1.17 | % | 1.22 | % | 1.22 | | % |
Return on Average Shareholders’ Equity | | 15.47 | | 16.02 | | 15.23 | | 16.23 | | 15.69 | |
Efficiency Ratio 1 | | 58.24 | | 58.13 | | 60.42 | | 57.88 | | 59.23 | |
Net Interest Margin 2 | | 2.87 | | 2.98 | | 3.04 | | 2.97 | | 3.13 | |
Dividend Payout Ratio 3 | | 50.00 | | 48.91 | | 52.94 | | 48.91 | | 52.94 | |
Average Shareholders’ Equity to Average Assets | | 7.67 | | 7.59 | | 7.65 | | 7.52 | | 7.78 | |
| | | | | | | | | | | |
Average Balances | | | | | | | | | | | |
Average Loans and Leases | | $ | 5,798,057 | | $ | 5,716,421 | | $ | 5,420,352 | | $ | 5,680,279 | | $ | 5,349,938 | |
Average Assets | | 13,516,519 | | 13,490,835 | | 13,357,646 | | 13,609,188 | | 13,105,029 | |
Average Deposits | | 11,376,875 | | 11,301,668 | | 10,160,392 | | 10,935,016 | | 9,924,697 | |
Average Shareholders’ Equity | | 1,036,223 | | 1,023,804 | | 1,022,012 | | 1,023,256 | | 1,020,065 | |
| | | | | | | | | | | |
Per Share of Common Stock | | | | | | | | | | | |
Book Value | | $ | 22.83 | | $ | 22.77 | | $ | 21.82 | | $ | 22.83 | | $ | 21.82 | |
Market Price | | | | | | | | | | | |
Closing | | 44.05 | | 45.62 | | 44.49 | | 44.05 | | 44.49 | |
High | | 46.38 | | 48.92 | | 45.13 | | 49.99 | | 49.26 | |
Low | | 41.41 | | 45.29 | | 34.50 | | 41.41 | | 34.50 | |
| | | | | | | | | | | |
| | | | | | December 31, | | September 30, | | December 31, | |
| | | | | | 2012 | | 2012 | | 2011 | | |
As of Period End: | | | | | | | | | | | |
Balance Sheet Totals | | | | | | | | | | | |
Loans and Leases | | | | | | $ | 5,854,521 | | $ | 5,782,304 | | $ | 5,538,304 | |
Total Assets | | | | | | 13,728,372 | | 13,382,425 | | 13,846,391 | |
Total Deposits | | | | | | 11,529,482 | | 11,220,547 | | 10,592,623 | |
Long-Term Debt | | | | | | 128,055 | | 28,065 | | 30,696 | |
Total Shareholders’ Equity | | | | | | 1,021,665 | | 1,024,562 | | 1,002,667 | |
| | | | | | | | | | | |
Asset Quality | | | | | | | | | | | |
Allowance for Loan and Lease Losses | | | | | | $ | 128,857 | | $ | 130,971 | | $ | 138,606 | |
Non-Performing Assets | | | | | | 37,083 | | 40,284 | | 40,790 | |
| | | | | | | | | | | |
Financial Ratios | | | | | | | | | | | |
Allowance to Loans and Leases Outstanding | | | | | | 2.20 | % | 2.27 | % | 2.50 | | % |
Tier 1 Capital Ratio | | | | | | 16.13 | | 16.12 | | 16.68 | |
Total Capital Ratio | | | | | | 17.39 | | 17.39 | | 17.95 | |
Tier 1 Leverage Ratio | | | | | | 6.83 | | 6.78 | | 6.73 | |
Total Shareholders’ Equity to Total Assets | | | | | | 7.44 | | 7.66 | | 7.24 | |
Tangible Common Equity to Tangible Assets 4 | | | | | | 7.23 | | 7.44 | | 7.03 | |
Tangible Common Equity to Risk-Weighted Assets 4 | | | | 17.24 | | 17.43 | | 17.93 | |
| | | | | | | | | | | |
Non-Financial Data | | | | | | | | | | | |
Full-Time Equivalent Employees | | | | | | 2,276 | | 2,304 | | 2,370 | |
Branches and Offices | | | | | | 76 | | 77 | | 81 | |
ATMs | | | | | | 494 | | 495 | | 506 | |
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, a non-GAAP financial measure, is defined by the Company as shareholders’ equity minus goodwill and intangible assets. Intangible assets are included as a component of other assets in the Consolidated Statements of Condition.
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Bank of Hawaii Corporation and Subsidiaries
Reconciliation of Non-GAAP Financial Measures | | Table 1b | |
| | December 31, | | September 30, | | December 31, | |
| | | | | | | |
(dollars in thousands) | | 2012 | | 2012 | | 2011 | |
| | | | | | | |
Total Shareholders’ Equity | | $ | 1,021,665 | | $ | 1,024,562 | | $ | 1,002,667 | |
Less: Goodwill | | 31,517 | | 31,517 | | 31,517 | |
Intangible Assets | | 33 | | 46 | | 83 | |
Tangible Common Equity | | $ | 990,115 | | $ | 992,999 | | $ | 971,067 | |
| | | | | | | |
Total Assets | | $ | 13,728,372 | | $ | 13,382,425 | | $ | 13,846,391 | |
Less: Goodwill | | 31,517 | | 31,517 | | 31,517 | |
Intangible Assets | | 33 | | 46 | | 83 | |
Tangible Assets | | $ | 13,696,822 | | $ | 13,350,862 | | $ | 13,814,791 | |
| | | | | | | |
Risk-Weighted Assets, determined in accordance with prescribed | | | | | | | | | | |
regulatory requirements | | $ | 5,744,722 | | $ | 5,697,581 | | $ | 5,414,481 | |
| | | | | | | |
Total Shareholders’ Equity to Total Assets | | 7.44 | % | 7.66 | % | 7.24 | % |
Tangible Common Equity to Tangible Assets (Non-GAAP) | | 7.23 | % | 7.44 | % | 7.03 | % |
| | | | | | | |
Tier 1 Capital Ratio | | 16.13 | % | 16.12 | % | 16.68 | % |
Tangible Common Equity to Risk-Weighted Assets (Non-GAAP) | | 17.24 | % | 17.43 | % | 17.93 | % |
7
Bank of Hawaii Corporation and Subsidiaries
Net Significant Income (Expense) Items | | Table 2 | |
| | Three Months Ended | | Year Ended |
| | | December 31, | | September 30, | | December 31, | | December 31, |
(dollars in thousands) | | | 2012 | | 2012 | | 2011 | | | 2012 | | 2011 |
Investment Securities Gains, Net | | | $ | - | | $ | - | | $ | - | | | $ | - | | $ | 6,366 |
Gain on Mutual Fund Sale | | | - | | - | | - | | | - | | 1,956 |
Gains (Losses) on Disposal of Leased Equipment | | | - | | - | | - | | | 2,473 | | - |
Decrease in Allowance for Loan and Lease Losses | | | 2,114 | | 1,472 | | 4,804 | | | 9,749 | | 8,752 |
Planned Branch Closures in American Samoa | | | (1,465) | | - | | - | | | (1,465) | | - |
Bank of Hawaii Charitable Foundation | | | - | | - | | - | | | - | | (2,000) |
PC Refresh | | | - | | - | | - | | | (1,163) | | - |
Settlement Related to Overdraft Claims | | | - | | - | | - | | | - | | (9,000) |
Significant Income (Expense) Items Before the Provision (Benefit) for Income Taxes | | | 649 | | 1,472 | | 4,804 | | | 9,594 | | 6,074 |
Income Taxes Impact Related to Lease Transactions | | | - | | - | | - | | | (3,083) | | - |
Income Tax Impact | | | 227 | | 515 | | 1,681 | | | 2,492 | | 2,126 |
Net Significant Income (Expense) Items | | | $ | 422 | | $ | 957 | | $ | 3,123 | | | $ | 10,185 | | $ | 3,948 |
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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) | | | 2012 | | 2012 | | 2011 | | | | 2012 | | 2011 | |
Interest Income | | | | | | | | | | | | | | |
Interest and Fees on Loans and Leases | | | $ | 64,627 | | $ | 64,668 | | $ | 64,760 | | | | $ | 257,896 | | $ | 262,239 | |
Income on Investment Securities | | | | | | | | | | | | | | |
Available-for-Sale | | | 15,349 | | 15,922 | | 19,107 | | | | 65,972 | | 103,363 | |
Held-to-Maturity | | | 20,253 | | 23,232 | | 23,608 | | | | 94,952 | | 72,138 | |
Deposits | | | 3 | | 3 | | 2 | | | | 9 | | 8 | |
Funds Sold | | | 180 | | 105 | | 120 | | | | 533 | | 828 | |
Other | | | 283 | | 283 | | 280 | | | | 1,127 | | 1,117 | |
Total Interest Income | | | 100,695 | | 104,213 | | 107,877 | | | | 420,489 | | 439,693 | |
Interest Expense | | | | | | | | | | | | | | |
Deposits | | | 2,753 | | 2,931 | | 3,736 | | | | 12,376 | | 18,321 | |
Securities Sold Under Agreements to Repurchase | | | 7,158 | | 7,185 | | 7,392 | | | | 28,897 | | 29,171 | |
Funds Purchased | | | 4 | | 7 | | 5 | | | | 21 | | 20 | |
Long-Term Debt | | | 470 | | 458 | | 498 | | | | 1,924 | | 1,973 | |
Total Interest Expense | | | 10,385 | | 10,581 | | 11,631 | | | | 43,218 | | 49,485 | |
Net Interest Income | | | 90,310 | | 93,632 | | 96,246 | | | | 377,271 | | 390,208 | |
Provision for Credit Losses | | | - | | - | | 2,219 | | | | 979 | | 12,690 | |
Net Interest Income After Provision for Credit Losses | | | 90,310 | | 93,632 | | 94,027 | | | | 376,292 | | 377,518 | |
Noninterest Income | | | | | | | | | | | | | | |
Trust and Asset Management | | | 12,066 | | 11,050 | | 11,025 | | | | 45,229 | | 45,046 | |
Mortgage Banking | | | 11,268 | | 11,745 | | 3,401 | | | | 35,644 | | 14,664 | |
Service Charges on Deposit Accounts | | | 9,459 | | 9,346 | | 9,606 | | | | 37,621 | | 38,733 | |
Fees, Exchange, and Other Service Charges | | | 12,333 | | 11,907 | | 12,401 | | | | 48,965 | | 60,227 | |
Investment Securities Gains (Losses), Net | | | - | | 13 | | 282 | | | | (77 | ) | 6,366 | |
Insurance | | | 2,550 | | 2,326 | | 2,312 | | | | 9,553 | | 10,957 | |
Other | | | 5,306 | | 5,987 | | 4,380 | | | | 23,351 | | 21,662 | |
Total Noninterest Income | | | 52,982 | | 52,374 | | 43,407 | | | | 200,286 | | 197,655 | |
Noninterest Expense | | | | | | | | | | | | | | |
Salaries and Benefits | | | 46,116 | | 47,231 | | 44,927 | | | | 184,408 | | 182,816 | |
Net Occupancy | | | 11,867 | | 10,524 | | 11,253 | | | | 42,965 | | 43,169 | |
Net Equipment | | | 4,705 | | 4,523 | | 4,748 | | | | 19,723 | | 18,849 | |
Professional Fees | | | 2,611 | | 2,494 | | 1,926 | | | | 9,623 | | 8,623 | |
FDIC Insurance | | | 1,892 | | 1,822 | | 2,027 | | | | 7,873 | | 9,346 | |
Other | | | 16,265 | | 18,284 | | 19,501 | | | | 69,696 | | 85,390 | |
Total Noninterest Expense | | | 83,456 | | 84,878 | | 84,382 | | | | 334,288 | | 348,193 | |
Income Before Provision for Income Taxes | | | 59,836 | | 61,128 | | 53,052 | | | | 242,290 | | 226,980 | |
Provision for Income Taxes | | | 19,549 | | 19,896 | | 13,823 | | | | 76,214 | | 66,937 | |
Net Income | | | $ | 40,287 | | $ | 41,232 | | $ | 39,229 | | | | $ | 166,076 | | $ | 160,043 | |
Basic Earnings Per Share | | | $ | 0.90 | | $ | 0.92 | | $ | 0.85 | | | | $ | 3.68 | | $ | 3.40 | |
Diluted Earnings Per Share | | | $ | 0.90 | | $ | 0.92 | | $ | 0.85 | | | | $ | 3.67 | | $ | 3.39 | |
Dividends Declared Per Share | | | $ | 0.45 | | $ | 0.45 | | $ | 0.45 | | | | $ | 1.80 | | $ | 1.80 | |
Basic Weighted Average Shares | | | 44,623,823 | | 44,913,348 | | 46,195,147 | | | | 45,115,441 | | 47,064,925 | |
Diluted Weighted Average Shares | | | 44,740,109 | | 45,050,638 | | 46,324,734 | | | | 45,249,300 | | 47,224,981 | |
9
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) | | 2012 | | 2012 | | 2011 | | | | 2012 | | 2011 | |
Net Income | | $ | 40,287 | | $ | 41,232 | | $ | 39,229 | | | | $ | 166,076 | | $ | 160,043 | |
Other Comprehensive Income (Loss), Net of Tax: | | | | | | | | | | | | | |
Net Unrealized Gains (Losses) on Investment Securities | | (9,858 | ) | 9,770 | | (1,965 | ) | | | (3,155 | ) | 16,411 | |
Defined Benefit Plans | | (3,358 | ) | 152 | | (9,526 | ) | | | (2,900 | ) | (8,113 | ) |
Other Comprehensive Income (Loss) | | (13,216 | ) | 9,922 | | (11,491 | ) | | | (6,055 | ) | 8,298 | |
Comprehensive Income | | $ | 27,071 | | $ | 51,154 | | $ | 27,738 | | | | $ | 160,021 | | $ | 168,341 | |
10
Bank of Hawaii Corporation and Subsidiaries | | |
Consolidated Statements of Condition | | Table 5 |
| | December 31, | | September 30, | | December 31, | |
(dollars in thousands) | | 2012 | | 2012 | | 2011 | |
Assets | | | | | | | |
Interest-Bearing Deposits | | $ | 3,393 | | $ | 4,673 | | $ | 3,036 | |
Funds Sold | | 185,682 | | 251,664 | | 512,384 | |
Investment Securities | | | | | | | |
Available-for-Sale | | 3,367,557 | | 3,124,209 | | 3,451,885 | |
Held to Maturity (Fair Value of $3,687,676; $3,587,997; and $3,754,206) | | 3,595,065 | | 3,475,259 | | 3,657,796 | |
Loans Held for Sale | | 21,374 | | 25,971 | | 18,957 | |
Loans and Leases | | 5,854,521 | | 5,782,304 | | 5,538,304 | |
Allowance for Loan and Lease Losses | | (128,857 | ) | (130,971 | ) | (138,606 | ) |
Net Loans and Leases | | 5,725,664 | | 5,651,333 | | 5,399,698 | |
Total Earning Assets | | 12,898,735 | | 12,533,109 | | 13,043,756 | |
Cash and Noninterest-Bearing Deposits | | 163,786 | | 153,599 | | 154,489 | |
Premises and Equipment | | 105,005 | | 107,144 | | 103,550 | |
Customers’ Acceptances | | 173 | | 242 | | 476 | |
Accrued Interest Receivable | | 43,077 | | 47,192 | | 43,510 | |
Foreclosed Real Estate | | 3,887 | | 3,067 | | 3,042 | |
Mortgage Servicing Rights | | 25,240 | | 23,980 | | 24,279 | |
Goodwill | | 31,517 | | 31,517 | | 31,517 | |
Other Assets | | 456,952 | | 482,575 | | 441,772 | |
Total Assets | | $ | 13,728,372 | | $ | 13,382,425 | | $ | 13,846,391 | |
| | | | | | | |
Liabilities | | | | | | | |
Deposits | | | | | | | |
Noninterest-Bearing Demand | | $ | 3,367,185 | | $ | 2,985,561 | | $ | 2,850,923 | |
Interest-Bearing Demand | | 2,163,473 | | 2,034,319 | | 2,005,983 | |
Savings | | 4,399,316 | | 4,480,733 | | 4,398,638 | |
Time | | 1,599,508 | | 1,719,934 | | 1,337,079 | |
Total Deposits | | 11,529,482 | | 11,220,547 | | 10,592,623 | |
Funds Purchased | | 11,296 | | 10,942 | | 10,791 | |
Securities Sold Under Agreements to Repurchase | | 758,947 | | 818,080 | | 1,925,998 | |
Long-Term Debt | | 128,055 | | 28,065 | | 30,696 | |
Banker’s Acceptances | | 173 | | 242 | | 476 | |
Retirement Benefits Payable | | 47,658 | | 41,872 | | 46,949 | |
Accrued Interest Payable | | 4,776 | | 5,997 | | 5,330 | |
Taxes Payable and Deferred Taxes | | 88,014 | | 94,369 | | 95,840 | |
Other Liabilities | | 138,306 | | 137,749 | | 135,021 | |
Total Liabilities | | 12,706,707 | | 12,357,863 | | 12,843,724 | |
Shareholders’ Equity | | | | | | | |
Common Stock ($.01 par value; authorized 500,000,000 shares; issued / outstanding: December 31, 2012 - 57,319,352 / 44,754,835; September 30, 2012 - 57,315,093 / 45,004,813; and December 31, 2011 - 57,134,470 / 45,947,116) | | 571 | | 571 | | 571 | |
Capital Surplus | | 515,619 | | 513,758 | | 507,558 | |
Accumulated Other Comprehensive Income | | 29,208 | | 42,424 | | 35,263 | |
Retained Earnings | | 1,084,477 | | 1,065,245 | | 1,003,938 | |
Treasury Stock, at Cost (Shares: December 31, 2012 - 12,564,517; September 30, 2012 - 12,310,280; and December 31, 2011 - 11,187,354) | | (608,210 | ) | (597,436 | ) | (544,663 | ) |
Total Shareholders’ Equity | | 1,021,665 | | 1,024,562 | | 1,002,667 | |
Total Liabilities and Shareholders’ Equity | | $ | 13,728,372 | | $ | 13,382,425 | | $ | 13,846,391 | |
11
Bank of Hawaii Corporation and Subsidiaries | |
| |
Consolidated Statements of Shareholders’ Equity | Table 6 |
| | | | | | | | Accum. | | | | | | | |
| | | | | | | | Other | | | | | | | |
| | | | | | | | Compre- | | | | | | | |
| | Common Shares | | Common | | Capital | | hensive | | Retained | | Treasury | | | |
(dollars in thousands) | | Outstanding | | Stock | | Surplus | | Income | | Earnings | | Stock | | Total | |
Balance as of December 31, 2010 | | 48,097,672 | | $ | 570 | | $ | 500,888 | | $ | 26,965 | | $ | 932,629 | | $ | (449,919 | ) | $ | 1,011,133 | |
Net Income | | - | | - | | - | | - | | 160,043 | | - | | 160,043 | |
Other Comprehensive Income | | - | | - | | - | | 8,298 | | - | | - | | 8,298 | |
Share-Based Compensation | | - | | - | | 6,216 | | - | | - | | - | | 6,216 | |
Common Stock Issued under Purchase and Equity | | | | | | | | | | | | | | | |
Compensation Plans and Related Tax Benefits | | 389,470 | | 1 | | 454 | | - | | (3,843 | ) | 16,800 | | 13,412 | |
Common Stock Repurchased | | (2,540,026 | ) | - | | - | | - | | - | | (111,544 | ) | (111,544 | ) |
Cash Dividends Paid ($1.80 per share) | | - | | - | | - | | - | | (84,891 | ) | - | | (84,891 | ) |
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 | |
12
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, 2012 | | | | September 30, 2012 | | December 31, 2011 | |
| | 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 | | $ | 4.4 | | $ | - | | 0.29 | % | | $ | 4.0 | | $ | - | | 0.33 | % | $ | 3.9 | | $ | - | | 0.23 | % |
Funds Sold | | 332.1 | | 0.2 | | 0.21 | | | 221.5 | | 0.1 | | 0.19 | | 239.0 | | 0.1 | | 0.20 | |
Investment Securities | | | | | | | | | | | | | | | | | | | | |
Available-for-Sale | | 3,277.2 | | 17.6 | | 2.15 | | | 3,247.8 | | 18.3 | | 2.26 | | 3,763.7 | | 19.9 | | 2.12 | |
Held-to-Maturity | | 3,406.3 | | 20.3 | | 2.38 | | | 3,617.3 | | 23.2 | | 2.57 | | 3,259.8 | | 23.6 | | 2.90 | |
Loans Held for Sale | | 18.9 | | 0.2 | | 4.36 | | | 15.8 | | 0.2 | | 4.32 | | 14.7 | | 0.2 | | 4.73 | |
Loans and Leases 1 | | | | | | | | | | | | | | | | | | | | |
Commercial and Industrial | | 811.3 | | 7.8 | | 3.84 | | | 797.2 | | 7.7 | | 3.86 | | 798.3 | | 8.0 | | 3.99 | |
Commercial Mortgage | | 1,063.6 | | 11.2 | | 4.18 | | | 993.2 | | 10.8 | | 4.32 | | 929.0 | | 10.9 | | 4.66 | |
Construction | | 104.5 | | 1.2 | | 4.77 | | | 100.1 | | 1.3 | | 4.97 | | 85.7 | | 1.1 | | 4.84 | |
Commercial Lease Financing | | 275.9 | | 1.7 | | 2.46 | | | 278.5 | | 1.7 | | 2.42 | | 311.0 | | 2.1 | | 2.68 | |
Residential Mortgage | | 2,369.5 | | 27.5 | | 4.64 | | | 2,391.8 | | 28.1 | | 4.70 | | 2,163.1 | | 27.3 | | 5.05 | |
Home Equity | | 771.3 | | 8.1 | | 4.18 | | | 770.2 | | 8.3 | | 4.28 | | 778.1 | | 9.0 | | 4.57 | |
Automobile | | 205.6 | | 3.0 | | 5.73 | | | 194.9 | | 2.9 | | 5.90 | | 190.7 | | 3.1 | | 6.40 | |
Other 2 | | 196.4 | | 4.0 | | 8.15 | | | 190.5 | | 3.9 | | 8.09 | | 164.5 | | 3.2 | | 7.76 | |
Total Loans and Leases | | 5,798.1 | | 64.5 | | 4.44 | | | 5,716.4 | | 64.7 | | 4.51 | | 5,420.4 | | 64.7 | | 4.75 | |
Other | | 79.5 | | 0.3 | | 1.43 | | | 80.1 | | 0.3 | | 1.41 | | 79.9 | | 0.3 | | 1.40 | |
Total Earning Assets 3 | | 12,916.5 | | 103.1 | | 3.19 | | | 12,902.9 | | 106.8 | | 3.30 | | 12,781.4 | | 108.8 | | 3.40 | |
Cash and Noninterest-Bearing Deposits | | 144.8 | | | | | | | 134.9 | | | | | | 142.2 | | | | | |
Other Assets | | 455.2 | | | | | | | 453.0 | | | | | | 434.0 | | | | | |
Total Assets | | $ | 13,516.5 | | | | | | | $ | 13,490.8 | | | | | | $ | 13,357.6 | | | | | |
| | | | | | | | | | | | | | | | | | | | |
Interest-Bearing Liabilities | | | | | | | | | | | | | | | | | | | | |
Interest-Bearing Deposits | | | | | | | | | | | | | | | | | | | | |
Demand | | 2,011.2 | | 0.1 | | 0.03 | | | 1,968.8 | | 0.1 | | 0.03 | | 1,799.9 | | 0.1 | | 0.03 | |
Savings | | 4,451.4 | | 1.0 | | 0.09 | | | 4,456.2 | | 1.0 | | 0.09 | | 4,447.8 | | 1.4 | | 0.13 | |
Time | | 1,755.6 | | 1.6 | | 0.36 | | | 1,823.2 | | 1.8 | | 0.38 | | 1,145.4 | | 2.2 | | 0.76 | |
Total Interest-Bearing Deposits | | 8,218.2 | | 2.7 | | 0.13 | | | 8,248.2 | | 2.9 | | 0.14 | | 7,393.1 | | 3.7 | | 0.20 | |
Short-Term Borrowings | | 11.0 | | - | | 0.14 | | | 18.5 | | - | | 0.15 | | 20.4 | | - | | 0.08 | |
Securities Sold Under Agreements to Repurchase | | 776.8 | | 7.2 | | 3.61 | | | 853.0 | | 7.2 | | 3.30 | | 1,848.9 | | 7.4 | | 1.57 | |
Long-Term Debt | | 36.7 | | 0.5 | | 5.12 | | | 28.0 | | 0.5 | | 6.52 | | 30.7 | | 0.5 | | 6.49 | |
Total Interest-Bearing Liabilities | | 9,042.7 | | 10.4 | | 0.45 | | | 9,147.7 | | 10.6 | | 0.46 | | 9,293.1 | | 11.6 | | 0.49 | |
Net Interest Income | | | | $ | 92.7 | | | | | | | $ | 96.2 | | | | | | $ | 97.2 | | | |
Interest Rate Spread | | | | | | 2.74 | % | | | | | | 2.84 | % | | | | | 2.91 | % |
Net Interest Margin | | | | | | 2.87 | % | | | | | | 2.98 | % | | | | | 3.04 | % |
Noninterest-Bearing Demand Deposits | | 3,158.7 | | | | | | | 3,053.5 | | | | | | 2,767.3 | | | | | |
Other Liabilities | | 278.9 | | | | | | | 265.8 | | | | | | 275.2 | | | | | |
Shareholders’ Equity | | 1,036.2 | | | | | | | | 1,023.8 | | | | | | 1,022.0 | | | | | |
Total Liabilities and Shareholders’ Equity | | $ | 13,516.5 | | | | | | | | $ | 13,490.8 | | | | | | $ | 13,357.6 | | | | | |
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 $2,394,000, $2,529,000 and $938,000 for the three months ended December 31, 2012, September 30, 2012, and December 31, 2011, respectively.
13
Bank of Hawaii Corporation and Subsidiaries | |
Average Balances and Interest Rates - Taxable-Equivalent Basis | Table 7b | |
| | | | | | | |
| | Year Ended | | | Year Ended | | |
| | December 31, 2012 | | | December 31, 2011 | | |
| | Average | | | Income/ | | | Yield/ | | | Average | | | Income/ | | Yield/ | | |
(dollars in millions) | | Balance | | | Expense | | | Rate | | | Balance | | | Expense | | Rate | | |
Earning Assets | | | | | | | | | | | | | | | | | | |
Interest-Bearing Deposits | | $ | 3.7 | | | $ | - | | | 0.26 | % | | $ | 4.2 | | | $ | - | | 0.19 | | % |
Funds Sold | | 263.5 | | | 0.5 | | | 0.20 | | | 380.2 | | | 0.8 | | 0.22 | | |
Investment Securities | | | | | | | | | | | | | | | | | | |
Available-for-Sale | | 3,346.3 | | | 75.0 | | | 2.24 | | | 4,439.8 | | | 105.4 | | 2.37 | | |
Held-to-Maturity | | 3,636.7 | | | 95.0 | | | 2.61 | | | 2,279.6 | | | 72.2 | | 3.16 | | |
Loans Held for Sale | | 14.7 | | | 0.6 | | | 4.29 | | | 11.0 | | | 0.5 | | 4.54 | | |
Loans and Leases 1 | | | | | | | | | | | | | | | | | | |
Commercial and Industrial | | 800.2 | | | 31.3 | | | 3.91 | | | 790.6 | | | 31.8 | | 4.02 | | |
Commercial Mortgage | | 988.2 | | | 42.9 | | | 4.34 | | | 887.1 | | | 42.8 | | 4.82 | | |
Construction | | 101.9 | | | 5.1 | | | 5.04 | | | 80.1 | | | 4.0 | | 5.06 | | |
Commercial Lease Financing | | 283.3 | | | 6.8 | | | 2.39 | | | 322.1 | | | 8.7 | | 2.71 | | |
Residential Mortgage | | 2,349.6 | | | 111.3 | | | 4.74 | | | 2,126.9 | | | 111.5 | | 5.24 | | |
Home Equity | | 773.2 | | | 33.4 | | | 4.31 | | | 784.9 | | | 37.4 | | 4.76 | | |
Automobile | | 196.8 | | | 11.7 | | | 5.96 | | | 194.4 | | | 13.2 | | 6.78 | | |
Other 2 | | 187.1 | | | 15.2 | | | 8.11 | | | 163.8 | | | 12.4 | | 7.57 | | |
Total Loans and Leases | | 5,680.3 | | | 257.7 | | | 4.54 | | | 5,349.9 | | | 261.8 | | 4.89 | | |
Other | | 79.9 | | | 1.1 | | | 1.41 | | | 79.9 | | | 1.1 | | 1.40 | | |
Total Earning Assets 3 | | 13,025.1 | | | 429.9 | | | 3.30 | | | 12,544.6 | | | 441.8 | | 3.52 | | |
Cash and Noninterest-Bearing Deposits | | 137.2 | | | | | | | | | 135.3 | | | | | | | |
Other Assets | | 446.9 | | | | | | | | | 425.1 | | | | | | | |
Total Assets | | $ | 13,609.2 | | | | | | | | | $ | 13,105.0 | | | | | | | |
| | | | | | | | | | | | | | | | | | |
Interest-Bearing Liabilities | | | | | | | | | | | | | | | | | | |
Interest-Bearing Deposits | | | | | | | | | | | | | | | | | | |
Demand | | 1,938.6 | | | 0.5 | | | 0.03 | | | 1,786.7 | | | 0.7 | | 0.04 | | |
Savings | | 4,447.8 | | | 4.5 | | | 0.10 | | | 4,501.0 | | | 7.3 | | 0.16 | | |
Time | | 1,524.6 | | | 7.4 | | | 0.48 | | | 1,067.8 | | | 10.3 | | 0.96 | | |
Total Interest-Bearing Deposits | | 7,911.0 | | | 12.4 | | | 0.16 | | | 7,355.5 | | | 18.3 | | 0.25 | | |
Short-Term Borrowings | | 15.1 | | | - | | | 0.14 | | | 18.2 | | | - | | 0.11 | | |
Securities Sold Under Agreements to Repurchase | | 1,335.7 | | | 28.9 | | | 2.16 | | | 1,845.8 | | | 29.2 | | 1.58 | | |
Long-Term Debt | | 31.5 | | | 1.9 | | | 6.10 | | | 31.6 | | | 2.0 | | 6.23 | | |
Total Interest-Bearing Liabilities | | 9,293.3 | | | 43.2 | | | 0.47 | | | 9,251.1 | | | 49.5 | | 0.53 | | |
Net Interest Income | | | | | $ | 386.7 | | | | | | | | | $ | 392.3 | | | | |
Interest Rate Spread | | | | | | | | 2.83 | % | | | | | | | 2.99 | | % |
Net Interest Margin | | | | | | | | 2.97 | % | | | | | | | 3.13 | | % |
Noninterest-Bearing Demand Deposits | | 3,024.0 | | | | | | | | | 2,569.2 | | | | | | |
Other Liabilities | | 268.6 | | | | | | | | | 264.6 | | | | | | |
Shareholders’ Equity | | 1,023.3 | | | | | | | | | 1,020.1 | | | | | | |
Total Liabilities and Shareholders’ Equity | | $ | 13,609.2 | | | | | | | | | $ | 13,105.0 | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | |
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 $9,473,000 and $2,080,000 for the year ended December 31, 2012 and 2011, respectively.
14
Bank of Hawaii Corporation and Subsidiaries | |
Analysis of Change in Net Interest Income - Taxable-Equivalent Basis | Table 8a |
| Three Months Ended December 31, 2012 |
| | Compared to September 30, 2012 | |
(dollars in millions) | | Volume | 1 | Rate | 1 | Total | |
Change in Interest Income: | | | | | | | |
Funds Sold | | $ | 0.1 | | $ | - | | $ | 0.1 | |
Investment Securities | | | | | | | |
Available-for-Sale | | 0.2 | | (0.9 | ) | (0.7 | ) |
Held-to-Maturity | | (1.3 | ) | (1.6 | ) | (2.9 | ) |
Loans and Leases | | | | | | | |
Commercial and Industrial | | 0.1 | | - | | 0.1 | |
Commercial Mortgage | | 0.7 | | (0.3 | ) | 0.4 | |
Construction | | 0.1 | | (0.2 | ) | (0.1 | ) |
Residential Mortgage | | (0.3 | ) | (0.3 | ) | (0.6 | ) |
Home Equity | | - | | (0.2 | ) | (0.2 | ) |
Automobile | | 0.2 | | (0.1 | ) | 0.1 | |
Other 2 | | 0.1 | | - | | 0.1 | |
Total Loans and Leases | | 0.9 | | (1.1 | ) | (0.2 | ) |
Total Change in Interest Income | | (0.1 | ) | (3.6 | ) | (3.7 | ) |
| | | | | | | |
Change in Interest Expense: | | | | | | | |
Interest-Bearing Deposits | | | | | | | |
Time | | (0.1 | ) | (0.1 | ) | (0.2 | ) |
Total Interest-Bearing Deposits | | (0.1 | ) | (0.1 | ) | (0.2 | ) |
Securities Sold Under Agreements to Repurchase | | (0.6 | ) | 0.6 | | - | |
Long-Term Debt | | 0.1 | | (0.1 | ) | - | |
Total Change in Interest Expense | | (0.6 | ) | 0.4 | | (0.2 | ) |
| | | | | | | |
Change in Net Interest Income | | $ | 0.5 | | $ | (4.0 | ) | $ | (3.5 | ) |
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.
15
Bank of Hawaii Corporation and Subsidiaries | |
Analysis of Change in Net Interest Income - Taxable-Equivalent Basis | Table 8b |
| | Three Months Ended December 31, 2012 | |
| | Compared to December 31, 2011 | |
(dollars in millions) | | Volume | 1 | Rate | 1 | Total | |
Change in Interest Income: | | | | | | | |
Funds Sold | | $ | 0.1 | | $ | - | | $ | 0.1 | |
Investment Securities | | | | | | | |
Available-for-Sale | | (2.6 | ) | 0.3 | | (2.3 | ) |
Held-to-Maturity | | 1.1 | | (4.4 | ) | (3.3 | ) |
Loans and Leases | | | | | | | |
Commercial and Industrial | | 0.1 | | (0.3 | ) | (0.2 | ) |
Commercial Mortgage | | 1.5 | | (1.2 | ) | 0.3 | |
Construction | | 0.2 | | (0.1 | ) | 0.1 | |
Commercial Lease Financing | | (0.2 | ) | (0.2 | ) | (0.4 | ) |
Residential Mortgage | | 2.5 | | (2.3 | ) | 0.2 | |
Home Equity | | (0.1 | ) | (0.8 | ) | (0.9 | ) |
Automobile | | 0.2 | | (0.3 | ) | (0.1 | ) |
Other 2 | | 0.6 | | 0.2 | | 0.8 | |
Total Loans and Leases | | 4.8 | | (5.0 | ) | (0.2 | ) |
Total Change in Interest Income | | 3.4 | | (9.1 | ) | (5.7 | ) |
| | | | | | | |
Change in Interest Expense: | | | | | | | |
Interest-Bearing Deposits | | | | | | | |
Savings | | - | | (0.4 | ) | (0.4 | ) |
Time | | 0.9 | | (1.5 | ) | (0.6 | ) |
Total Interest-Bearing Deposits | | 0.9 | | (1.9 | ) | (1.0 | ) |
Securities Sold Under Agreements to Repurchase | | (6.0 | ) | 5.8 | | (0.2 | ) |
Long-Term Debt | | 0.1 | | (0.1 | ) | - | |
Total Change in Interest Expense | | (5.0 | ) | 3.8 | | (1.2 | ) |
| | | | | | | |
Change in Net Interest Income | | $ | 8.4 | | $ | (12.9 | ) | $ | (4.5 | ) |
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.
16
Bank of Hawaii Corporation and Subsidiaries | |
Analysis of Change in Net Interest Income - Taxable-Equivalent Basis | Table 8c |
| | Year Ended December 31, 2012 | |
| | Compared to December 31, 2011 | |
(dollars in millions) | | Volume 1 | | Rate 1 | | Total | |
Change in Interest Income: | | | | | | | |
Funds Sold | | $ | (0.2 | ) | $ | (0.1 | ) | $ | (0.3 | ) |
Investment Securities | | | | | | | |
Available-for-Sale | | (24.8 | ) | (5.6 | ) | (30.4 | ) |
Held-to-Maturity | | 37.1 | | (14.3 | ) | 22.8 | |
Loans Held for Sale | | 0.1 | | - | | 0.1 | |
Loans and Leases | | | | | | | |
Commercial and Industrial | | 0.4 | | (0.9 | ) | (0.5 | ) |
Commercial Mortgage | | 4.6 | | (4.5 | ) | 0.1 | |
Construction | | 1.1 | | - | | 1.1 | |
Commercial Lease Financing | | (1.0 | ) | (0.9 | ) | (1.9 | ) |
Residential Mortgage | | 11.1 | | (11.3 | ) | (0.2 | ) |
Home Equity | | (0.5 | ) | (3.5 | ) | (4.0 | ) |
Automobile | | 0.1 | | (1.6 | ) | (1.5 | ) |
Other 2 | | 1.9 | | 0.9 | | 2.8 | |
Total Loans and Leases | | 17.7 | | (21.8 | ) | (4.1 | ) |
Total Change in Interest Income | | 29.9 | | (41.8 | ) | (11.9 | ) |
| | | | | | | |
Change in Interest Expense: | | | | | | | |
Interest-Bearing Deposits | | | | | | | |
Demand | | 0.1 | | (0.3 | ) | (0.2 | ) |
Savings | | (0.1 | ) | (2.7 | ) | (2.8 | ) |
Time | | 3.4 | | (6.3 | ) | (2.9 | ) |
Total Interest-Bearing Deposits | | 3.4 | | (9.3 | ) | (5.9 | ) |
Securities Sold Under Agreements to Repurchase | | (9.4 | ) | 9.1 | | (0.3 | ) |
Long-Term Debt | | - | | (0.1 | ) | (0.1 | ) |
Total Change in Interest Expense | | (6.0 | ) | (0.3 | ) | (6.3 | ) |
| | | | | | | |
Change in Net Interest Income | | $ | 35.9 | | $ | (41.5 | ) | $ | (5.6 | ) |
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.
17
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) | | 2012 | | 2012 | | 2011 | | 2012 | | 2011 | |
Salaries | | $ | 29,378 | | $ | 29,312 | | $ | 28,330 | | $ | 115,208 | | $ | 115,512 | |
Incentive Compensation | | 4,248 | | 4,492 | | 3,881 | | 16,926 | | 16,367 | |
Share-Based Compensation and Cash Grants for the Purchase of Company Stock | | 1,701 | | 1,817 | | 1,819 | | 6,961 | | 5,720 | |
Commission Expense | | 1,953 | | 1,750 | | 1,701 | | 6,993 | | 6,489 | |
Retirement and Other Benefits | | 3,821 | | 4,322 | | 4,429 | | 16,014 | | 16,829 | |
Payroll Taxes | | 2,071 | | 2,267 | | 2,030 | | 10,593 | | 10,645 | |
Medical, Dental, and Life Insurance | | 2,388 | | 2,255 | | 2,322 | | 9,319 | | 9,039 | |
Separation Expense | | 556 | | 1,016 | | 415 | | 2,394 | | 2,215 | |
Total Salaries and Benefits | | $ | 46,116 | | $ | 47,231 | | $ | 44,927 | | $ | 184,408 | | $ | 182,816 | |
18
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) | | 2012 | | 2012 | | 2012 | | 2012 | | 2011 | |
Commercial | | | | | | | | | | | |
Commercial and Industrial | | $ | 829,512 | | $ | 808,621 | | $ | 781,688 | | $ | 788,718 | | $ | 817,170 | |
Commercial Mortgage | | 1,097,425 | | 1,039,556 | | 961,984 | | 948,196 | | 938,250 | |
Construction | | 113,987 | | 101,818 | | 97,668 | | 110,184 | | 98,669 | |
Lease Financing | | 274,969 | | 277,328 | | 281,020 | | 285,860 | | 311,928 | |
Total Commercial | | 2,315,893 | | 2,227,323 | | 2,122,360 | | 2,132,958 | | 2,166,017 | |
Consumer | | | | | | | | | | | |
Residential Mortgage | | 2,349,916 | | 2,392,871 | | 2,401,331 | | 2,319,485 | | 2,215,892 | |
Home Equity | | 770,376 | | 770,284 | | 766,839 | | 773,643 | | 780,691 | |
Automobile | | 209,832 | | 200,788 | | 194,339 | | 193,851 | | 192,506 | |
Other 1 | | 208,504 | | 191,038 | | 186,614 | | 178,995 | | 183,198 | |
Total Consumer | | 3,538,628 | | 3,554,981 | | 3,549,123 | | 3,465,974 | | 3,372,287 | |
Total Loans and Leases | | $ | 5,854,521 | | $ | 5,782,304 | | $ | 5,671,483 | | $ | 5,598,932 | | $ | 5,538,304 | |
Higher Risk Loans and Leases Outstanding
| | | | | | | | | | | |
| | December 31, | | September 30, | | June 30, | | March 31, | | December 31, | |
(dollars in thousands) | | 2012 | | 2012 | | 2012 | | 2012 | | 2011 | |
Residential Land Loans 2 | | $ | 14,984 | | $ | 16,513 | | $ | 16,703 | | $ | 17,602 | | $ | 18,163 | |
Home Equity Loans 3 | | 19,914 | | 19,774 | | 22,029 | | 21,359 | | 21,413 | |
Air Transportation 4 | | 27,782 | | 27,765 | | 27,633 | | 27,548 | | 36,144 | |
Total Higher Risk Loans | | $ | 62,680 | | $ | 64,052 | | $ | 66,365 | | $ | 66,509 | | $ | 75,720 | |
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) | | 2012 | | 2012 | | 2012 | | 2012 | | 2011 | |
Consumer | | $ | 5,537,624 | | $ | 5,369,724 | | $ | 5,360,325 | | $ | 5,377,804 | | $ | 5,241,827 | |
Commercial | | 4,576,410 | | 4,394,745 | | 4,403,095 | | 4,307,931 | | 4,320,712 | |
Public and Other | | 1,415,448 | | 1,456,078 | | 1,784,573 | | 935,435 | | 1,030,084 | |
Total Deposits | | $ | 11,529,482 | | $ | 11,220,547 | | $ | 11,547,993 | | $ | 10,621,170 | | $ | 10,592,623 | |
19
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) | | 2012 | | 2012 | | 2012 | | 2012 | | 2011 | |
Non-Performing Assets | | | | | | | | | | | |
Non-Accrual Loans and Leases | | | | | | | | | | | |
Commercial | | | | | | | | | | | |
Commercial and Industrial | | $ | 5,534 | | $ | 5,635 | | $ | 5,778 | | $ | 5,852 | | $ | 6,243 | |
Commercial Mortgage | | 3,030 | | 2,671 | | 2,737 | | 2,113 | | 2,140 | |
Construction | | 833 | | 953 | | 1,182 | | 1,482 | | 2,080 | |
Lease Financing | | - | | - | | - | | 4 | | 5 | |
Total Commercial | | 9,397 | | 9,259 | | 9,697 | | 9,451 | | 10,468 | |
Consumer | | | | | | | | | | | |
Residential Mortgage | | 21,725 | | 25,456 | | 26,803 | | 26,356 | | 25,256 | |
Home Equity | | 2,074 | | 2,502 | | 2,425 | | 2,069 | | 2,024 | |
Total Consumer | | 23,799 | | 27,958 | | 29,228 | | 28,425 | | 27,280 | |
Total Non-Accrual Loans and Leases | | 33,196 | | 37,217 | | 38,925 | | 37,876 | | 37,748 | |
Foreclosed Real Estate | | 3,887 | | 3,067 | | 2,569 | | 3,530 | | 3,042 | |
Total Non-Performing Assets | | $ | 37,083 | | $ | 40,284 | | $ | 41,494 | | $ | 41,406 | | $ | 40,790 | |
| | | | | | | | | | | |
Accruing Loans and Leases Past Due 90 Days or More | | | | | | | | | | | |
Commercial | | | | | | | | | | | |
Commercial and Industrial | | $ | 27 | | $ | - | | $ | 1 | | $ | 2 | | $ | 1 | |
Total Commercial | | 27 | | - | | 1 | | 2 | | 1 | |
Consumer | | | | | | | | | | | |
Residential Mortgage | | 6,908 | | 3,988 | | 4,229 | | 6,590 | | 6,422 | |
Home Equity | | 2,701 | | 2,755 | | 2,445 | | 2,829 | | 2,194 | |
Automobile | | 186 | | 154 | | 98 | | 124 | | 170 | |
Other 1 | | 587 | | 578 | | 395 | | 543 | | 435 | |
Total Consumer | | 10,382 | | 7,475 | | 7,167 | | 10,086 | | 9,221 | |
Total Accruing Loans and Leases Past Due 90 Days or More | | $ | 10,409 | | $ | 7,475 | | $ | 7,168 | | $ | 10,088 | | $ | 9,222 | |
Restructured Loans on Accrual Status | | | | | | | | | | | |
and Not Past Due 90 Days or More | | $ | 31,844 | | $ | 31,426 | | $ | 31,124 | | $ | 29,539 | | $ | 33,703 | |
Total Loans and Leases | | $ | 5,854,521 | | $ | 5,782,304 | | $ | 5,671,483 | | $ | 5,598,932 | | $ | 5,538,304 | |
| | | | | | | | | | | |
Ratio of Non-Accrual Loans and Leases to Total Loans and Leases | | 0.57% | | 0.64% | | 0.69% | | 0.68% | | 0.68% |
| | | | | | | | | | |
Ratio of Non-Performing Assets to Total Loans and Leases, and Foreclosed Real Estate | | 0.63% | | 0.70% | | 0.73% | | 0.74% | | 0.74% |
| | | | | | | | | | |
Ratio of Commercial Non-Performing Assets to Total Commercial Loans and Leases, and Commercial Foreclosed Real Estate | | 0.45% | | 0.46% | | 0.51% | | 0.53% | | 0.56% |
| | | | | | | | | | |
Ratio of Consumer Non-Performing Assets to Total Consumer Loans and Leases and Consumer Foreclosed Real Estate | | 0.75% | | 0.84% | | 0.87% | | 0.87% | | 0.85% |
| | | | | | | | | | |
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% | | 0.83% | | 0.86% | | 0.92% | | 0.90% |
| | | | | | | | | | | |
Quarter to Quarter Changes in Non-Performing Assets | | | | | | | | | | | |
Balance at Beginning of Quarter | | $ | 40,284 | | $ | 41,494 | | $ | 41,406 | | $ | 40,790 | | $ | 37,770 | |
Additions | | 3,837 | | 2,878 | | 7,574 | | 5,334 | | 8,653 | |
Reductions | | | | | | | | | | | |
Payments | | (3,994 | ) | (2,408 | ) | (2,942 | ) | (2,524 | ) | (1,173 | ) |
Return to Accrual Status | | (728 | ) | (1,083 | ) | (2,085 | ) | (535 | ) | (2,421 | ) |
Sales of Foreclosed Real Estate | | (1,354 | ) | (424 | ) | (2,247 | ) | (1,049 | ) | (1,320 | ) |
Charge-offs/Write-downs | | (962 | ) | (173 | ) | (212 | ) | (610 | ) | (719 | ) |
Total Reductions | | (7,038 | ) | (4,088 | ) | (7,486 | ) | (4,718 | ) | (5,633 | ) |
Balance at End of Quarter | | $ | 37,083 | | $ | 40,284 | | $ | 41,494 | | $ | 41,406 | | $ | 40,790 | |
1 Comprised of other revolving credit, installment, and lease financing.
20
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) | | 2012 | | 2012 | | 2011 | | 2012 | | 2011 | |
Balance at Beginning of Period | | $ | 136,390 | | $ | 137,862 | | $ | 148,829 | | $ | 144,025 | | $ | 152,777 | |
Loans and Leases Charged-Off | | | | | | | | | | | |
Commercial | | | | | | | | | | | |
Commercial and Industrial | | (589 | ) | (519 | ) | (733 | ) | (3,617 | ) | (8,112 | ) |
Construction | | - | | - | | - | | (330 | ) | - | |
Consumer | | | | | | | | | | | |
Residential Mortgage | | (831 | ) | (628 | ) | (2,888 | ) | (4,408 | ) | (8,174 | ) |
Home Equity | | (1,558 | ) | (1,061 | ) | (3,714 | ) | (6,717 | ) | (10,853 | ) |
Automobile | | (646 | ) | (472 | ) | (688 | ) | (2,082 | ) | (3,229 | ) |
Other 1 | | (1,806 | ) | (2,354 | ) | (1,585 | ) | (7,005 | ) | (6,392 | ) |
Total Loans and Leases Charged-Off | | (5,430 | ) | (5,034 | ) | (9,608 | ) | (24,159 | ) | (36,760 | ) |
Recoveries on Loans and Leases Previously Charged-Off | | | | | | | | | | | |
Commercial | | | | | | | | | | | |
Commercial and Industrial | | 904 | | 578 | | 469 | | 3,939 | | 2,434 | |
Commercial Mortgage | | 19 | | 14 | | 8 | | 67 | | 538 | |
Construction | | 5 | | 3 | | - | | 8 | | - | |
Lease Financing | | 11 | | 83 | | 29 | | 177 | | 3,528 | |
Consumer | | | | | | | | | | | |
Residential Mortgage | | 1,039 | | 739 | | 531 | | 2,820 | | 2,152 | |
Home Equity | | 342 | | 258 | | 469 | | 1,335 | | 1,695 | |
Automobile | | 478 | | 433 | | 528 | | 1,931 | | 2,479 | |
Other 1 | | 518 | | 1,454 | | 551 | | 3,154 | | 2,492 | |
Total Recoveries on Loans and Leases Previously | | | | | | | | | | | |
Charged-Off | | 3,316 | | 3,562 | | 2,585 | | 13,431 | | 15,318 | |
Net Loans and Leases Charged-Off | | (2,114 | ) | (1,472 | ) | (7,023 | ) | (10,728 | ) | (21,442 | ) |
Provision for Credit Losses | | - | | - | | 2,219 | | 979 | | 12,690 | |
Balance at End of Period 2 | | $ | 134,276 | | $ | 136,390 | | $ | 144,025 | | $ | 134,276 | | $ | 144,025 | |
| | | | | | | | | | | |
Components | | | | | | | | | | | |
Allowance for Loan and Lease Losses | | $ | 128,857 | | $ | 130,971 | | $ | 138,606 | | $ | 128,857 | | $ | 138,606 | |
Reserve for Unfunded Commitments | | 5,419 | | 5,419 | | 5,419 | | 5,419 | | 5,419 | |
Total Reserve for Credit Losses | | $ | 134,276 | | $ | 136,390 | | $ | 144,025 | | $ | 134,276 | | $ | 144,025 | |
| | | | | | | | | | | |
Average Loans and Leases Outstanding | | $ | 5,798,057 | | $ | 5,716,421 | | $ | 5,420,352 | | $ | 5,680,279 | | $ | 5,349,938 | |
| | | | | | | | | | | |
Ratio of Net Loans and Leases Charged-Off to Average Loans and Leases Outstanding (annualized) | | 0.15% | | 0.10% | | 0.51% | | 0.19% | | 0.40% | |
Ratio of Allowance for Loan and Lease Losses to Loans and Leases Outstanding | | 2.20% | | 2.27% | | 2.50% | | 2.20% | | 2.50% | |
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.
21
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, 2012 | | | | | | | | | | | |
Net Interest Income | | $ | 38,487 | | $ | 30,842 | | $ | 2,955 | | $ | 18,026 | | $ | 90,310 | |
Provision for Credit Losses | | 2,403 | | (219 | ) | (70 | ) | (2,114 | ) | - | |
Net Interest Income After Provision for Credit Losses | | 36,084 | | 31,061 | | 3,025 | | 20,140 | | 90,310 | |
Noninterest Income | | 25,664 | | 8,764 | | 15,347 | | 3,207 | | 52,982 | |
Noninterest Expense | | (44,403 | ) | (22,863 | ) | (13,438 | ) | (2,752 | ) | (83,456 | ) |
Income Before Provision for Income Taxes | | 17,345 | | 16,962 | | 4,934 | | 20,595 | | 59,836 | |
Provision for Income Taxes | | (6,418 | ) | (5,838 | ) | (1,825 | ) | (5,468 | ) | (19,549 | ) |
Net Income | | 10,927 | | 11,124 | | 3,109 | | 15,127 | | 40,287 | |
Total Assets as of December 31, 2012 | | $ | 3,365,123 | | $ | 2,497,642 | | $ | 190,383 | | $ | 7,675,224 | | $ | 13,728,372 | |
| | | | | | | | | | | |
Three Months Ended December 31, 2011 1 | | | | | | | | | | | |
Net Interest Income | | $ | 42,333 | | $ | 33,727 | | $ | 3,784 | | $ | 16,402 | | $ | 96,246 | |
Provision for Credit Losses | | 7,236 | | (212 | ) | (1 | ) | (4,804 | ) | 2,219 | |
Net Interest Income After Provision for Credit Losses | | 35,097 | | 33,939 | | 3,785 | | 21,206 | | 94,027 | |
Noninterest Income | | 17,513 | | 8,907 | | 13,636 | | 3,351 | | 43,407 | |
Noninterest Expense | | (45,447 | ) | (22,572 | ) | (14,124 | ) | (2,239 | ) | (84,382 | ) |
Income Before Provision for Income Taxes | | 7,163 | | 20,274 | | 3,297 | | 22,318 | | 53,052 | |
Provision for Income Taxes | | (2,651 | ) | (7,070 | ) | (1,219 | ) | (2,883 | ) | (13,823 | ) |
Net Income | | 4,512 | | 13,204 | | 2,078 | | 19,435 | | 39,229 | |
Total Assets as of December 31, 2011 1 | | $ | 3,147,765 | | $ | 2,337,214 | | $ | 218,088 | | $ | 8,143,324 | | $ | 13,846,391 | |
1 Certain prior period information has been reclassified to conform to current presentation.
22
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, 2012 | | | | | | | | | | | | | | | | |
Net Interest Income | | $ | 156,911 | | | $ | 123,911 | | | $ | 12,448 | | | $ | 84,001 | | | $ | 377,271 | | |
Provision for Credit Losses | | 11,443 | | | (909 | ) | | 196 | | | (9,751 | ) | | 979 | | |
Net Interest Income After Provision for Credit Losses | | 145,468 | | | 124,820 | | | 12,252 | | | 93,752 | | | 376,292 | | |
Noninterest Income | | 93,482 | | | 37,580 | | | 57,454 | | | 11,770 | | | 200,286 | | |
Noninterest Expense | | (179,580 | ) | | (90,110 | ) | | (55,543 | ) | | (9,055 | ) | | (334,288 | ) | |
Income Before Provision for Income Taxes | | 59,370 | | | 72,290 | | | 14,163 | | | 96,467 | | | 242,290 | | |
Provision for Income Taxes | | (21,967 | ) | | (20,941 | ) | | (5,240 | ) | | (28,066 | ) | | (76,214 | ) | |
Net Income | | 37,403 | | | 51,349 | | | 8,923 | | | 68,401 | | | 166,076 | | |
Total Assets as of December 31, 2012 | | $ | 3,365,123 | | | $ | 2,497,642 | | | $ | 190,383 | | | $ | 7,675,224 | | | $ | 13,728,372 | | |
| | | | | | | | | | | | | | | | |
Year Ended December 31, 2011 1 | | | | | | | | | | | | | | | | |
Net Interest Income | | $ | 173,979 | | | $ | 137,354 | | | $ | 15,137 | | | $ | 63,738 | | | $ | 390,208 | | |
Provision for Credit Losses | | 22,341 | | | (938 | ) | | 64 | | | (8,777 | ) | | 12,690 | | |
Net Interest Income After Provision for Credit Losses | | 151,638 | | | 138,292 | | | 15,073 | | | 72,515 | | | 377,518 | | |
Noninterest Income | | 84,008 | | | 37,132 | | | 59,891 | | | 16,624 | | | 197,655 | | |
Noninterest Expense | | (186,567 | ) | | (93,935 | ) | | (59,180 | ) | | (8,511 | ) | | (348,193 | ) | |
Income Before Provision for Income Taxes | | 49,079 | | | 81,489 | | | 15,784 | | | 80,628 | | | 226,980 | | |
Provision for Income Taxes | | (18,160 | ) | | (28,286 | ) | | (5,841 | ) | | (14,650 | ) | | (66,937 | ) | |
Net Income | | 30,919 | | | 53,203 | | | 9,943 | | | 65,978 | | | 160,043 | | |
Total Assets as of December 31, 2011 1 | | $ | 3,147,765 | | | $ | 2,337,214 | | | $ | 218,088 | | | $ | 8,143,324 | | | $ | 13,846,391 | | |
1 Certain prior period information has been reclassified to conform to current presentation.
23
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) | | 2012 | | 2012 | | 2012 | | 2012 | | 2011 | |
Quarterly Operating Results | | | | | | | | | | | | | | | | |
Interest Income | | | | | | | | | | | | | | | | |
Interest and Fees on Loans and Leases | | $ | 64,627 | | | $ | 64,668 | | | $ | 63,910 | | | $ | 64,691 | | | $ | 64,760 | | |
Income on Investment Securities | | | | | | | | | | | | | | | | |
Available-for-Sale | | 15,349 | | | 15,922 | | | 16,988 | | | 17,713 | | | 19,107 | | |
Held-to-Maturity | | 20,253 | | | 23,232 | | | 25,054 | | | 26,413 | | | 23,608 | | |
Deposits | | 3 | | | 3 | | | 1 | | | 2 | | | 2 | | |
Funds Sold | | 180 | | | 105 | | | 119 | | | 129 | | | 120 | | |
Other | | 283 | | | 283 | | | 281 | | | 280 | | | 280 | | |
Total Interest Income | | 100,695 | | | 104,213 | | | 106,353 | | | 109,228 | | | 107,877 | | |
Interest Expense | | | | | | | | | | | | | | | | |
Deposits | | 2,753 | | | 2,931 | | | 3,219 | | | 3,473 | | | 3,736 | | |
Securities Sold Under Agreements to Repurchase | | 7,158 | | | 7,185 | | | 7,250 | | | 7,304 | | | 7,392 | | |
Funds Purchased | | 4 | | | 7 | | | 5 | | | 5 | | | 5 | | |
Long-Term Debt | | 470 | | | 458 | | | 498 | | | 498 | | | 498 | | |
Total Interest Expense | | 10,385 | | | 10,581 | | | 10,972 | | | 11,280 | | | 11,631 | | |
Net Interest Income | | 90,310 | | | 93,632 | | | 95,381 | | | 97,948 | | | 96,246 | | |
Provision for Credit Losses | | - | | | - | | | 628 | | | 351 | | | 2,219 | | |
Net Interest Income After Provision for Credit Losses | | 90,310 | | | 93,632 | | | 94,753 | | | 97,597 | | | 94,027 | | |
Noninterest Income | | | | | | | | | | | | | | | | |
Trust and Asset Management | | 12,066 | | | 11,050 | | | 11,195 | | | 10,918 | | | 11,025 | | |
Mortgage Banking | | 11,268 | | | 11,745 | | | 7,581 | | | 5,050 | | | 3,401 | | |
Service Charges on Deposit Accounts | | 9,459 | | | 9,346 | | | 9,225 | | | 9,591 | | | 9,606 | | |
Fees, Exchange, and Other Service Charges | | 12,333 | | | 11,907 | | | 12,326 | | | 12,399 | | | 12,401 | | |
Investment Securities Gains (Losses), Net | | - | | | 13 | | | - | | | (90 | ) | | 282 | | |
Insurance | | 2,550 | | | 2,326 | | | 2,399 | | | 2,278 | | | 2,312 | | |
Other | | 5,306 | | | 5,987 | | | 4,122 | | | 7,936 | | | 4,380 | | |
Total Noninterest Income | | 52,982 | | | 52,374 | | | 46,848 | | | 48,082 | | | 43,407 | | |
Noninterest Expense | | | | | | | | | | | | | | | | |
Salaries and Benefits | | 46,116 | | | 47,231 | | | 44,037 | | | 47,024 | | | 44,927 | | |
Net Occupancy | | 11,867 | | | 10,524 | | | 10,058 | | | 10,516 | | | 11,253 | | |
Net Equipment | | 4,705 | | | 4,523 | | | 4,669 | | | 5,826 | | | 4,748 | | |
Professional Fees | | 2,611 | | | 2,494 | | | 2,386 | | | 2,132 | | | 1,926 | | |
FDIC Insurance | | 1,892 | | | 1,822 | | | 2,088 | | | 2,071 | | | 2,027 | | |
Other | | 16,265 | | | 18,284 | | | 17,509 | | | 17,638 | | | 19,501 | | |
Total Noninterest Expense | | 83,456 | | | 84,878 | | | 80,747 | | | 85,207 | | | 84,382 | | |
Income Before Provision for Income Taxes | | 59,836 | | | 61,128 | | | 60,854 | | | 60,472 | | | 53,052 | | |
Provision for Income Taxes | | 19,549 | | | 19,896 | | | 20,107 | | | 16,662 | | | 13,823 | | |
Net Income | | $ | 40,287 | | | $ | 41,232 | | | $ | 40,747 | | | $ | 43,810 | | | $ | 39,229 | | |
| | | | | | | | | | | | | | | | |
Basic Earnings Per Share | | $0.90 | | | $0.92 | | | $0.90 | | | $0.96 | | | $0.85 | | |
Diluted Earnings Per Share | | $0.90 | | | $0.92 | | | $0.90 | | | $0.95 | | | $0.85 | | |
| | | | | | | | | | | | | | | | |
Balance Sheet Totals | | | | | | | | | | | | | | | | |
Loans and Leases | | $ | 5,854,521 | | | $ | 5,782,304 | | | $ | 5,671,483 | | | $ | 5,598,932 | | | $ | 5,538,304 | | |
Total Assets | | 13,728,372 | | | 13,382,425 | | | 13,915,626 | | | 13,759,409 | | | 13,846,391 | | |
Total Deposits | | 11,529,482 | | | 11,220,547 | | | 11,547,993 | | | 10,621,170 | | | 10,592,623 | | |
Total Shareholders’ Equity | | 1,021,665 | | | 1,024,562 | | | 1,003,825 | | | 995,897 | | | 1,002,667 | | |
| | | | | | | | | | | | | | | | |
Performance Ratios | | | | | | | | | | | | | | | | |
Return on Average Assets | | 1.19 | | % | 1.22 | | % | 1.19 | | % | 1.29 | | % | 1.17 | | % |
Return on Average Shareholders’ Equity | | 15.47 | | | 16.02 | | | 16.19 | | | 17.26 | | | 15.23 | | |
Efficiency Ratio 1 | | 58.24 | | | 58.13 | | | 56.77 | | | 58.35 | | | 60.42 | | |
Net Interest Margin 2 | | 2.87 | | | 2.98 | | | 2.98 | | | 3.06 | | | 3.04 | | |
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.
24
Bank of Hawaii Corporation and Subsidiaries | | |
Hawaii Economic Trends | Table 15 |
| | Eleven Months Ended | | Year Ended | | |
($ in millions; jobs in thousands) | | November 30, 2012 | | December 31, 2011 | | | December 31, 2010 | | |
Hawaii Economic Trends | | | | | | | | | | | | | |
State General Fund Revenues 1 | | $ | 4,814.8 | | 13.0 | % | | $ | 4,662.5 | 8.1 | % | $ | 4,314.1 | 7.4 | | % |
General Excise and Use Tax Revenue 1 | | $ | 2,620.0 | | 9.9 | | | $ | 2,588.5 | 8.8 | | $ | 2,379.9 | 3.6 | | |
Jobs 2 | | 609.6 | | | | | 618.7 | | | 614.1 | | | |
| | | | | | | | | | | | | |
| | December 31, | | September 30, | | December 31, | |
(spot rates) | | 2012 | | 2012 | | 2011 | | 2010 | | 2009 | |
Unemployment 3 | | | | | | | | | | | | | | | |
Statewide, seasonally adjusted | | 5.2 | | % | 5.7 | | % | 6.2 | % | 6.3 | | % | 6.9 | | % |
| | | | | | | | | | | | | | | |
Oahu | | 4.3 | | | 5.0 | | | 5.4 | | 4.8 | | | 5.4 | | |
Island of Hawaii | | 6.9 | | | 7.9 | | | 8.9 | | 8.6 | | | 9.5 | | |
Maui | | 5.2 | | | 6.0 | | | 7.1 | | 7.4 | | | 8.8 | | |
Kauai | | 6.0 | | | 6.8 | | | 7.8 | | 7.8 | | | 8.7 | | |
| | | | | | | | | | | | | | | | |
| | December 31, | | September 30, | | December 31, | |
(percentage change, except months of inventory) | | 2012 | | 2012 | | 2011 | | 2010 | | 2009 | |
Housing Trends (Single Family Oahu) 4 | | | | | | | | | | | | | | | | |
Median Home Price | | 7.8 | | % | 8.8 | | % | (3.0 | ) | % | 3.1 | | % | (7.3 | ) | % |
Home Sales Volume (units) | | 6.5 | | % | 3.5 | | % | (2.7 | ) | % | 13.4 | | % | (1.8 | ) | % |
Months of Inventory | | 2.5 | | | 3.3 | | | 4.8 | | | 6.0 | | | 6.8 | | |
| | | | | | | | | | | | | | | | |
| | Monthly Visitor Arrivals, | | Percentage Change | | |
(in thousands) | | Seasonally Adjusted | | from Previous Month | | |
Tourism 5 | | | | | | |
| | | | | | |
October 31, 2012 | | 648.9 | | 1.3 | | % |
September 30, 2012 | | 640.9 | | (2.6 | ) | |
August 31, 2012 | | 657.8 | | 3.6 | | |
July 31, 2012 | | 634.9 | | (1.9 | ) | |
June 30, 2012 | | 647.2 | | (0.8 | ) | |
May 30, 2012 | | 652.4 | | 2.7 | | |
April 30, 2012 | | 635.0 | | (4.8 | ) | |
March 31, 2012 | | 666.7 | | 4.9 | | |
February 29, 2012 | | 635.5 | | (2.4 | ) | |
January 31, 2012 | | 651.1 | | 3.1 | | |
December 31, 2011 | | 631.3 | | 2.6 | | |
November 30, 2011 | | 615.2 | | 1.7 | | |
October 31, 2011 | | 604.8 | | (1.2 | ) | |
September 30, 2011 | | 612.0 | | 3.8 | | |
August 31, 2011 | | 589.8 | | 0.9 | | |
July 31, 2011 | | 584.3 | | 1.3 | | |
June 30, 2011 | | 577.0 | | (0.1 | ) | |
May 31, 2011 | | 577.8 | | (0.7 | ) | |
April 30, 2011 | | 581.9 | | (0.9 | ) | |
March 31, 2011 | | 587.4 | | (3.0 | ) | |
February 28, 2011 | | 605.5 | | (0.3 | ) | |
January 31, 2011 | | 607.5 | | 2.5 | | |
December 31, 2010 | | 592.6 | | - | | |
November 30, 2010 | | 592.9 | | (1.5 | ) | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
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: University of Hawaii Economic Research Organization.
Note: Certain prior period seasonally adjusted information has been revised.
25
