New ETF Book by Larry Connors - Click here to read more
--Board of Directors Declares Dividend of $0.45 Per Share
Bank of Hawaii Corporation (NYSE:BOH) today reported diluted earnings per share of $0.65 for the second quarter of 2009, down from diluted earnings per share of $1.00 in the same quarter last year. Net income for the second quarter of 2009 was $31.0 million compared to net income of $48.3 million in the second quarter of 2008. Results for the second quarter of 2009 included FDIC insurance expense of $9.0 million compared with $0.2 million in the second quarter of 2008. Second quarter 2009 results also included a provision for credit losses of $28.7 million compared to a provision for credit losses of $7.2 million in the same quarter last year. The return on average assets for the second quarter of 2009 was 1.06 percent, compared to 1.85 percent during the same quarter last year. The return on average equity for the second quarter of 2009 was 14.49 percent compared to 24.82 percent for the second quarter of 2008.
During the quarter, the Company sold a loan made to a major mall owner, restructured a leveraged lease that involved a bankrupt automobile manufacturer, and wrote down the carrying value of a non-relationship syndicated credit that was subsequently sold. The result of these three transactions was an increase in net charge-offs of $13.6 million.
Average deposits increased $471 million during the second quarter of 2009. Shareholders' equity increased $12 million to $846 million at June 30, 2009. The allowance for loan and lease losses increased $3 million during the second quarter of 2009 and currently represents 2.23 percent of outstanding loans and leases.
"We continued to pursue our near-term strategies of maintaining strong liquidity, reserves, and capital during the second quarter of 2009," said Allan R. Landon, Chairman, and CEO. "Our profitability during the quarter was helped by increased net interest income. The Company's results included an industry-wide FDIC assessment and losses from the resolution of three significant credits. Bank of Hawaii has a strong balance sheet and is well prepared."
For the six months ended June 30, 2009, net income was $67.0 million, down $38.5 million compared to net income of $105.5 million for the same period last year. Diluted earnings per share were $1.40 for the first half of 2009, down from $2.18 for the first half of 2008. The year-to-date return on average assets was 1.18 percent, down from 2.01 percent for the same period in 2008. The year-to-date return on average equity was 16.13 percent, down from 27.33 percent for the six months ended June 30, 2008.
Results for the first six months of 2009 included gains of $13.7 million from the disposition of leased equipment and the sale of the Company's retail insurance brokerage business. These gains were offset by increases in the allowance for loan and lease losses and expenses for legal contingencies, an industry-wide FDIC assessment, and early debt retirement. Results for the first half of 2008 included $25.3 million from the redemption of Visa shares and a lessee's early buy-out of an aircraft lease. Partially offsetting these prior year gains were expenses for employee incentives, legal contingencies, a call premium on Capital Securities, an increase in the allowance for loan and lease losses, and contributions to the Bank of Hawaii Charitable Foundation. Details of these items are included in Table 2.
Financial Highlights
Net interest income, on a taxable equivalent basis, for the second quarter of 2009 was $103.2 million, down $4.2 million from net interest income of $107.4 million in the second quarter of 2008, and up $5.9 million from net interest income of $97.3 million in the first quarter of 2009. The decrease in net interest income compared to the second quarter of 2008 was largely due to a lower net interest margin resulting from greater liquidity being held at low yields, lower interest rates, and lower levels of loans. The increase compared to the first quarter of 2009 was mainly due to a higher level of earning assets. For the six months ended June 30, 2009, net interest income on a taxable-equivalent basis was $200.5 million compared to $209.8 million for the same period in 2008. Analyses of the changes in net interest income are included in Tables 7a, 7b and 7c.
The net interest margin was 3.73 percent for the second quarter of 2009, a 68 basis point decrease from 4.41 percent in the second quarter of 2008 and a decrease of 3 basis points from 3.76 percent in the first quarter of 2009. For the six months ended June 30, 2009, the net interest margin was 3.75 percent compared to 4.29 percent for the same six months in 2008. The decrease in the net interest margin was largely the result of lower interest rates and the Company's strategy to increase liquidity and reduce risk.
Results for the second quarter of 2009 included a provision for credit losses of $28.7 million compared with $7.2 million in the second quarter of 2008 and $24.9 million in the first quarter of 2009. The provision for credit losses exceeded net charge-offs by $3.0 million in the second quarter of 2009. The provision for credit losses exceeded net charge-offs by $2.5 million in the second quarter of 2008 and exceeded net charge-offs by $10.9 million in the first quarter of 2009.
Noninterest income was $59.8 million for the second quarter of 2009, a decrease of $0.7 million compared to $60.5 million in the second quarter of 2008, and a decrease of $10.5 million compared to $70.4 million in the first quarter of 2009. Noninterest income in the second quarter of 2009 included a gain of $2.8 million related to the Company's sale of its equity interest in an aircraft lease to a cargo carrier and $0.9 million due to the previously mentioned sale of the retail insurance brokerage business. Results for the first quarter of 2009 included a gain of $10.0 million related to the disposition of leveraged leases for two watercraft.
Noninterest expense was $89.6 million in the second quarter of 2009, up $5.7 million from $83.9 million in the same quarter last year, and up $1.7 million from $87.9 million in the previous quarter. Noninterest expense in the second quarter of 2009 included FDIC insurance expense of $9.0 million, including the Company's $5.7 million share of an industry-wide assessment. FDIC insurance expense in the second quarter of 2008 was $0.2 million and $1.8 million in the first quarter of 2009. Salaries and benefits decreased during the second quarter of 2009 primarily due to a reduction in the reserves for medical and dental expenses, and lower payroll taxes. An analysis of salary and benefit expenses is included in Table 8.
The efficiency ratio for the second quarter of 2009 was 55.07 percent, compared with an efficiency ratio of 50.01 percent in the same quarter last year and 52.52 percent in the previous quarter. The efficiency ratio for the first half of 2009 was 53.78 percent compared with 49.80 percent for the same period last year.
The effective tax rate for the second quarter of 2009 was 30.18 percent compared to 37.03 percent during the same quarter last year and 34.00 percent in the previous quarter. The lower effective tax rate in the second quarter of 2009 was primarily due to accounting for the termination of the leveraged lease that resulted in a $1.6 million income tax benefit.
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 12a and 12b.
Asset Quality
Credit quality continued to reflect the weak economy during the second quarter of 2009. Non-accrual loans and leases were $38.6 million at the end of June 30, 2009, up from $6.5 million at June 30, 2008, and down from $40.0 million at March 31, 2009. As a percentage of total loans and leases, non-accrual loans and leases were 0.63 percent at June 30, 2009. The decrease in non-accrual loans and leases compared to the prior quarter was due to the previously mentioned sale of a commercial loan made to a mall owner, which was partially offset by an increase in consumer non-accrual loans. The increase in non-accrual consumer loans was largely due to land loans, second homes, and investor properties on neighbor islands. More information on changes in nonperforming assets is presented in Table 10.
During the quarter, the Company restructured an existing leveraged lease covering 31 locomotives, which was originally guaranteed by an automotive company that went through bankruptcy proceedings. The restructured lease is now accounted for as a direct financing lease. In terminating the existing leveraged lease transaction, the Company removed $17.9 million from lease outstandings, recognized $45.9 million in the new direct financing lease, and recognized $32.4 million in non-recourse debt. As a result of the restructuring, the Company recorded a $4.4 million charge-off and a $1.6 million income tax benefit.
Net charge-offs during the second quarter of 2009 were $25.7 million compared to $4.7 million in the second quarter last year and $14.0 million in the first quarter of 2009. Net charge-offs for the second quarter of 2009 included $6.9 million for the previously discussed commercial loan sold during the quarter, $4.4 million as a result of the lease restructuring, and $2.3 million related to a syndicated credit that was sold. The remaining net charge-offs were largely in the consumer portfolio.
The allowance for loan and lease losses was $137.4 million at June 30, 2009, up from $102.5 million at June 30, 2008, and up from $134.4 million at March 31, 2009. The ratio of the allowance for loan and lease losses to total loans and leases increased to 2.23 percent at June 30, 2009. The reserve for unfunded commitments at June 30, 2009 was $5.4 million. Details of charge-offs, recoveries and the components of the total reserve for credit losses are summarized in Table 11.
Other Financial Highlights
Total assets were $12.19 billion at June 30, 2009, up $1.82 billion from $10.37 billion at June 30, 2008, and up $747 million from $11.45 billion at March 31, 2009. Average total assets were $11.75 billion during the second quarter of 2009, up $1.25 billion from $10.50 billion during the second quarter last year, and up $657 million from $11.10 billion during the previous quarter. The growth in assets was the result of the Company's strong deposit generation.
Total loans and leases were $6.15 billion at June 30, 2009, down $368 million from $6.52 billion at June 30, 2008, and down $189 million compared with $6.34 billion at March 31, 2009. Average loans and leases were $6.26 billion during the second quarter of 2009, down $273 million from average loans and leases of $6.53 billion during the second quarter last year, and down $188 million from $6.45 billion during the previous quarter. Total commercial loans were $2.33 billion at June 30, 2009, down $44 million from $2.37 billion at June 30, 2008, and down slightly from March 31, 2009. Total consumer loans were $3.82 billion at June 30, 2009, down in all loan products compared with previous quarters due to reduced consumer demand. Loan and lease portfolio balances are summarized in Tables 6a, 6b, and 9.
Total deposits were $9.02 billion at June 30, 2009, up $1.12 billion from $7.90 billion at June 30, 2008, and down $193 million from $9.21 billion at March 31, 2009. The increase in total deposits compared with the same period last year was widespread among deposit categories. The decrease in deposits compared with the previous quarter was due to a reduction in public funds, partially offset by continued growth in consumer and commercial deposits. Average total deposits were $9.22 billion during the second quarter of 2009, up $1.26 billion from $7.96 billion during the second quarter last year, and up $471 million from $8.75 billion during the previous quarter. Deposit balances are summarized in Table 9.
Total long-term debt was $91.4 million at June 30, 2009, down $113.9 million from long-term debt of $205.4 million at June 30, 2008, and up $32.4 million from $59.0 million at March 31, 2009. The decrease compared to the same quarter last year was due to the repayment of $119.0 million in subordinated notes and the early payment of $25.0 million in privately placed notes during the first quarter of 2009. The increase in long-term debt compared to the previous quarter was due to the accounting for the previously discussed leveraged lease restructure.
Consistent with the Company's plans to build capital levels, no shares were repurchased during the second quarter of 2009. Remaining buyback authority under the share repurchase program was $85.4 million at June 30, 2009. Total shareholders' equity was $845.9 million at June 30, 2009, up from $767.6 million at June 30, 2008, and up from $833.9 million at March 31, 2009. The ratio of tangible common equity to risk weighted assets was 13.02 percent at June 30, 2009, up from 10.81 percent at June 30, 2008, and up from 12.47 percent at March 31, 2009. At June 30, 2009, the Tier 1 leverage ratio was 6.66 percent compared to 7.01 percent at June 30, 2008 and 6.94 percent at March 31, 2009. The decrease in the Tier 1 leverage ratio compared with the prior quarters was due to significant growth in marketable securities.
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 September 15, 2009 to shareholders of record at the close of business on August 31, 2009.
Hawaii Economy
Hawaii's economy continued to reflect weakness during the second quarter of 2009. The statewide unemployment rate increased to 7.4 percent on a seasonally adjusted basis during the quarter and total jobs contracted 3.1 percent from the beginning of the year. Residential real estate prices in Hawaii have held their value better than many U.S. mainland markets. While total 30 days-plus mortgage delinquencies in the state of Hawaii rose to 5.64 percent, they remain significantly below the national average of 8.22 percent. Bank of Hawaii's 30 days-plus mortgage delinquencies were 1.07 percent at June 30, 2009. Visitor levels, both arrivals and expenditures, remain below the comparable periods last year, although arrivals from the Pacific states, the largest regional market, rose 5.4 percent in May, the first increase since February 2008. More information on Hawaii economic trends is presented in Table 14.
Conference Call Information
The Company will review its second quarter 2009 financial results today at 8:00 a.m. Hawaii Time (2:00 p.m. Eastern 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. The conference call number for participants in the United States is 866-383-8008. International participants should call 617-597-5341. No pass code is required. A replay of the conference call will be available for one week beginning Monday, July 27, 2009 by calling 888-286-8010 in the United States or 617-801-6888 internationally and entering the pass code number 75775269 when prompted. A replay will also be available on 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, 2008, 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.
Bank of Hawaii Corporation and Subsidiaries
Financial Highlights (Unaudited) Table 1
Three Months Ended Six Months Ended
(dollars in thousands, except per share amounts) June 30, March 31, June 30, June 30,
2009 2009 2008 2009 2008
For the Period:
Operating Results
Net Interest Income $ 102,851 $ 97,062 $ 107,168 $ 199,913 $ 209,348
Provision for Credit Losses 28,690 24,887 7,172 53,577 21,599
Total Noninterest Income 59,832 70,365 60,539 130,197 146,664
Total Noninterest Expense 89,584 87,933 83,862 177,517 177,294
Net Income 31,006 36,040 48,282 67,046 105,497
Basic Earnings Per Share 0.65 0.76 1.01 1.41 2.20
Diluted Earnings Per Share 0.65 0.75 1.00 1.40 2.18
Dividends Declared Per Share 0.45 0.45 0.44 0.90 0.88
Performance Ratios
Return on Average Assets 1.06 % 1.32 % 1.85 % 1.18 % 2.01 %
Return on Average Shareholders' Equity 14.49 17.86 24.82 16.13 27.33
Efficiency Ratio (1) 55.07 52.52 50.01 53.78 49.80
Operating Leverage (2) (8.04 ) 2.41 (11.62 ) (14.62 ) 16.01
Net Interest Margin (3) 3.73 3.76 4.41 3.75 4.29
Dividend Payout Ratio (4) 69.23 59.21 43.56 63.83 40.00
Average Shareholders' Equity to Average Assets 7.30 7.37 7.45 7.34 7.34
Average Balances
Average Loans and Leases $ 6,258,403 $ 6,446,513 $ 6,531,587 $ 6,351,938 $ 6,559,753
Average Assets 11,753,580 11,096,322 10,504,421 11,426,766 10,574,162
Average Deposits 9,222,130 8,751,374 7,958,171 8,988,053 7,955,360
Average Shareholders' Equity 858,139 818,218 782,429 838,288 776,293
Market Price Per Share of Common Stock
Closing $ 35.83 $ 32.98 $ 47.80 $ 35.83 $ 47.80
High 41.42 45.24 57.37 45.24 57.37
Low 31.35 25.33 46.62 25.33 40.95
June 30, March 31, December 31, June 30,
2009 2009 2008 2008
As of Period End:
Balance Sheet Totals
Loans and Leases $ 6,149,911 $ 6,338,726 $ 6,530,233 $ 6,518,128
Total Assets 12,194,695 11,448,128 10,763,475 10,371,149
Total Deposits 9,019,661 9,212,791 8,292,098 7,903,990
Long-Term Debt 91,432 59,003 203,285 205,351
Total Shareholders' Equity 845,885 833,935 790,704 767,558
Asset Quality
Allowance for Loan and Lease Losses $ 137,416 $ 134,416 $ 123,498 $ 102,498
Non-Performing Assets 39,054 40,329 14,949 6,680
Financial Ratios
Allowance to Loans and Leases Outstanding 2.23 % 2.12 % 1.89 % 1.57 %
Tier 1 Capital Ratio 12.56 12.02 11.24 10.86
Total Capital Ratio 13.82 13.28 12.49 12.12
Leverage Ratio (5) 6.66 6.94 7.30 7.01
Tangible Common Equity to Total Assets (6) 6.65 6.97 7.01 7.06
Tangible Common Equity to Risk-Weighted Assets (6) 13.02 12.47 11.28 10.81
Non-Financial Data
Full-Time Equivalent Employees 2,533 2,587 2,581 2,534
Branches and Offices 85 85 85 84
ATMs 486 463 462 417
(1) Efficiency ratio is defined as noninterest expense divided by total revenue (net interest income and total noninterest income). (2) Operating leverage is defined as the percentage change in income before the provision for credit losses and the provision for income taxes. Measures are presented on a linked quarter basis. (3) Net interest margin is defined as net interest income, on a taxable equivalent basis, as a percentage of average earning assets. (4) Dividend payout ratio is defined as dividends declared per share divided by basic earnings per share. (5) Leverage ratio as of June 30, 2008 was revised from 7.04%. (6) 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 (Unaudited).
Bank of Hawaii Corporation and Subsidiaries
Net Significant Income (Expense) Items (Unaudited) Table 2
Three Months Ended Six Months Ended
(dollars in thousands) June 30, March 31, June 30, June 30,
2009 2009 2008 2009 2008
Gain on Disposal of Leased Equipment $ 2,782 $ 10,036 $ - $ 12,818 $ 11,588
Gain on Sale of BOHIS 852 - - 852 -
Gain on Mandatory Redemption of Visa Shares - - - - 13,737
Increase in Allowance for Loan and Lease Losses (3,000 ) (10,918 ) (2,500 ) (13,918 ) (11,500 )
FDIC Special Assessment (5,744 ) - - (5,744 ) -
Market Premium on Repurchased Long-Term Privately Placed Debt - (875 ) - (875 ) -
Cash Grants for the Purchase of Company Stock - - - - (4,640 )
Employee Incentive Awards - - - - (4,386 )
Legal Contingencies - (1,500 ) - (1,500 ) (3,016 )
Bank of Hawaii Charitable Foundation and Other Contributions - - - - (2,250 )
Call Premium on Capital Securities - - - - (991 )
Separation Expense - - - - (615 )
Reversal of Visa Legal Costs - - - - 5,649
Significant Income (Expense) Items Before the Benefit for Income (5,110 ) (3,257 ) (2,500 ) (8,367 ) 3,576
Taxes
Benefit for Income Taxes (1,472 ) (780 ) (875 ) (2,252 ) (4,256 )
Net Significant Income (Expense) Items $ (3,638 ) $ (2,477 ) $ (1,625 ) $ (6,115 ) $ 7,832
Bank of Hawaii Corporation and Subsidiaries
Consolidated Statements of Income (Unaudited) Table 3
Three Months Ended Six Months Ended
(dollars in thousands, except per share amounts) June 30, March 31, June 30, June 30,
2009 2009 2008 (1) 2009 2008 (1)
Interest Income
Interest and Fees on Loans and Leases $ 83,342 $ 86,592 $ 97,959 $ 169,934 $ 202,372
Income on Investment Securities
Trading - 594 1,209 594 2,369
Available-for-Sale 38,155 32,301 35,321 70,456 69,572
Held-to-Maturity 2,369 2,567 3,033 4,936 6,272
Deposits 5 10 204 15 399
Funds Sold 526 577 420 1,103 1,412
Other 276 276 489 552 915
Total Interest Income 124,673 122,917 138,635 247,590 283,311
Interest Expense
Deposits 14,481 17,025 20,238 31,506 47,703
Securities Sold Under Agreements to Repurchase 6,477 6,652 7,488 13,129 18,105
Funds Purchased 5 5 270 10 903
Short-Term Borrowings - - 12 - 46
Long-Term Debt 859 2,173 3,459 3,032 7,206
Total Interest Expense 21,822 25,855 31,467 47,677 73,963
Net Interest Income 102,851 97,062 107,168 199,913 209,348
Provision for Credit Losses 28,690 24,887 7,172 53,577 21,599
Net Interest Income After Provision for Credit Losses 74,161 72,175 99,996 146,336 187,749
Noninterest Income
Trust and Asset Management 11,881 11,632 15,460 23,513 30,546
Mortgage Banking 5,443 8,678 2,738 14,121 7,035
Service Charges on Deposit Accounts 12,910 13,386 12,411 26,296 24,494
Fees, Exchange, and Other Service Charges 15,410 14,976 16,103 30,386 31,494
Investment Securities Gains, Net 12 56 157 68 287
Insurance 4,744 5,641 5,590 10,385 12,720
Other 9,432 15,996 8,080 25,428 40,088
Total Noninterest Income 59,832 70,365 60,539 130,197 146,664
Noninterest Expense
Salaries and Benefits 44,180 47,028 45,984 91,208 101,457
Net Occupancy 10,008 10,328 11,343 20,336 21,786
Net Equipment 4,502 4,316 4,474 8,818 8,795
Professional Fees 4,005 2,549 2,588 6,554 5,201
FDIC Insurance 8,987 1,814 247 10,801 496
Other 17,902 21,898 19,226 39,800 39,559
Total Noninterest Expense 89,584 87,933 83,862 177,517 177,294
Income Before Provision for Income Taxes 44,409 54,607 76,673 99,016 157,119
Provision for Income Taxes 13,403 18,567 28,391 31,970 51,622
Net Income $ 31,006 $ 36,040 $ 48,282 $ 67,046 $ 105,497
Basic Earnings Per Share $ 0.65 $ 0.76 $ 1.01 $ 1.41 $ 2.20
Diluted Earnings Per Share $ 0.65 $ 0.75 $ 1.00 $ 1.40 $ 2.18
Dividends Declared Per Share $ 0.45 $ 0.45 $ 0.44 $ 0.90 $ 0.88
Basic Weighted Average Shares 47,682,604 47,566,005 47,733,278 47,624,521 47,849,945
Diluted Weighted Average Shares 47,948,531 47,802,249 48,300,049 47,876,509 48,423,619
(1 )Certain prior period information has been reclassified to conform to current presentation.
Bank of Hawaii Corporation and Subsidiaries
Consolidated Statements of Condition (Unaudited) Table 4
(dollars in thousands) June 30, March 31, December 31, June 30,
2009 2009 2008 2008 (1)
Assets
Interest-Bearing Deposits $ 4,537 $ 5,031 $ 5,094 $ 6,056
Funds Sold 656,000 895,595 405,789 -
Investment Securities
Trading - - 91,500 94,347
Available-for-Sale 4,292,911 3,106,608 2,519,239 2,646,506
Held-to-Maturity (Fair Value of $214,484; $233,633; $242,175; and 209,807 228,177 239,635 260,592
$255,905)
Loans Held for Sale 40,994 24,121 21,540 11,183
Loans and Leases 6,149,911 6,338,726 6,530,233 6,518,128
Allowance for Loan and Lease Losses (137,416 ) (134,416 ) (123,498 ) (102,498 )
Net Loans and Leases 6,012,495 6,204,310 6,406,735 6,415,630
Total Earning Assets 11,216,744 10,463,842 9,689,532 9,434,314
Cash and Noninterest-Bearing Deposits 294,022 299,393 385,599 280,635
Premises and Equipment 112,681 114,536 116,120 117,323
Customers' Acceptances 2,084 822 1,308 1,856
Accrued Interest Receivable 43,042 36,928 39,905 42,295
Foreclosed Real Estate 438 346 428 229
Mortgage Servicing Rights 24,731 23,528 21,057 30,272
Goodwill 34,959 34,959 34,959 34,959
Other Assets 465,994 473,774 474,567 429,266
Total Assets $ 12,194,695 $ 11,448,128 $ 10,763,475 $ 10,371,149
Liabilities
Deposits
Noninterest-Bearing Demand $ 2,109,270 $ 1,970,041 $ 1,754,724 $ 1,876,782
Interest-Bearing Demand 1,589,300 1,926,576 1,854,611 1,631,586
Savings 4,054,039 3,905,709 3,104,863 2,816,222
Time 1,267,052 1,410,465 1,577,900 1,579,400
Total Deposits 9,019,661 9,212,791 8,292,098 7,903,990
Funds Purchased 8,670 9,665 15,734 69,400
Short-Term Borrowings 10,000 10,000 4,900 10,180
Securities Sold Under Agreements to Repurchase 1,799,794 844,283 1,028,835 1,028,518
Long-Term Debt (includes $119,275 and $121,326 carried at fair 91,432 59,003 203,285 205,351
value as of December 31, 2008 and June 30, 2008, respectively)
Banker's Acceptances 2,084 822 1,308 1,856
Retirement Benefits Payable 54,286 54,450 54,776 29,478
Accrued Interest Payable 7,765 10,010 13,837 13,588
Taxes Payable and Deferred Taxes 226,936 258,505 229,699 250,125
Other Liabilities 128,182 154,664 128,299 91,105
Total Liabilities 11,348,810 10,614,193 9,972,771 9,603,591
Shareholders' Equity
Common Stock ($.01 par value; authorized 500,000,000 shares; 569 569 568 568
issued / outstanding: June 30, 2009 - 57,028,940 / 47,881,083;
March 31, 2009 - 57,019,595 / 47,803,544; December 31, 2008 -
57,019,887 / 47,753,371; and June 30, 2008 - 57,016,182 /
47,941,409)
Capital Surplus 491,784 491,352 492,515 489,335
Accumulated Other Comprehensive Loss (1,870 ) (1,319 ) (28,888 ) (15,813 )
Retained Earnings 811,121 802,195 787,924 745,244
Treasury Stock, at Cost (Shares: June 30, 2009 - 9,147,857; March (455,719 ) (458,862 ) (461,415 ) (451,776 )
31, 2009 - 9,216,051; December 31, 2008 - 9,266,516; and June 30,
2008 - 9,074,773)
Total Shareholders' Equity 845,885 833,935 790,704 767,558
Total Liabilities and Shareholders' Equity $ 12,194,695 $ 11,448,128 $ 10,763,475 $ 10,371,149
(1 )Certain prior period information has been reclassified to conform to current presentation.
Bank of Hawaii Corporation and Subsidiaries
Consolidated Statements of Shareholders' Equity (Unaudited) Table 5
(dollars in thousands) Accum.
Other
Compre- Compre-
Common Capital hensive Retained Treasury hensive
Total Stock Surplus Loss Earnings Stock Income
Balance as of December 31, 2008 $ 790,704 $ 568 $ 492,515 $ (28,888 ) $ 787,924 $ (461,415 )
Comprehensive Income:
Net Income 67,046 - - - 67,046 - $ 67,046
Other Comprehensive Income, Net of Tax:
Change in Unrealized Gains and Losses on Investment Securities 26,302 - - 26,302 - - 26,302
Available-for-Sale
Amortization of Net Loss Related to Pension and Postretirement 716 - - 716 - - 716
Benefit Plans
Total Comprehensive Income $ 94,064
Share-Based Compensation 944 - 944 - - -
Net Tax Benefits related to Share-Based Compensation (430 ) - (430 ) - - -
Common Stock Issued under Purchase and Equity Compensation Plans 4,517 1 (1,245 ) - (791 ) 6,552
(152,582 shares)
Common Stock Repurchased (24,870 shares) (856 ) - - - - (856 )
Cash Dividends Paid (43,058 ) - - - (43,058 ) -
Balance as of June 30, 2009 $ 845,885 $ 569 $ 491,784 $ (1,870 ) $ 811,121 $ (455,719 )
Balance as of December 31, 2007 $ 750,255 $ 567 $ 484,790 $ (5,091 ) $ 688,638 $ (418,649 )
Cumulative-Effect Adjustment of a Change in Accounting Principle,
Net of Tax:
SFAS No. 159, "The Fair Value Option for Financial Assets and (2,736 ) - - - (2,736 ) -
Financial Liabilities, including an amendment of FASB Statement
No. 115"
Comprehensive Income:
Net Income 105,497 - - - 105,497 - $ 105,497
Other Comprehensive Income, Net of Tax:
Change in Unrealized Gains and Losses on Investment Securities (10,820 ) - - (10,820 ) - - (10,820 )
Available-for-Sale
Amortization of Net Loss Related to Pension and Postretirement 98 - - 98 - - 98
Benefit Plans
Total Comprehensive Income $ 94,775
Share-Based Compensation 3,072 - 3,072 - - -
Net Tax Benefits related to Share-Based Compensation 1,304 - 1,304 - - -
Common Stock Issued under Purchase and Equity Compensation Plans 8,478 1 169 - (3,812 ) 12,120
(276,946 shares)
Common Stock Repurchased (923,330 shares) (45,247 ) - - - - (45,247 )
Cash Dividends Paid (42,343 ) - - - (42,343 ) -
Balance as of June 30, 2008 $ 767,558 $ 568 $ 489,335 $ (15,813 ) $ 745,244 $ (451,776 )
Bank of Hawaii Corporation and Subsidiaries
Average Balances and Interest Rates - Taxable Equivalent Basis Table 6a
(Unaudited)
(dollars in millions) Three Months Ended Three Months Ended Three Months Ended
June 30, 2009 March 31, 2009 June 30, 2008( 1)
Average Income/ Yield/ Average Income/ Yield/ Average Income/ Yield/
Balance Expense Rate Balance Expense Rate Balance Expense Rate
Earning Assets
Interest-Bearing Deposits $ 5.2 $ - 0.36 % $ 4.9 $ - 0.84 % $ 33.0 $ 0.2 2.45 %
Funds Sold 833.2 0.5 0.25 912.9 0.6 0.25 81.9 0.4 2.03
Investment Securities
Trading - - - 48.8 0.6 4.87 97.6 1.2 4.96
Available-for-Sale 3,662.1 38.5 4.21 2,628.7 32.5 4.95 2,649.9 35.6 5.37
Held-to-Maturity 219.9 2.4 4.31 235.0 2.6 4.37 269.6 3.1 4.50
Loans Held for Sale 24.1 0.2 4.21 21.8 0.2 4.41 9.3 0.1 5.78
Loans and Leases (2)
Commercial and Industrial 984.1 9.9 4.02 1,031.3 10.4 4.11 1,060.7 14.3 5.42
Commercial Mortgage 763.8 9.9 5.22 730.6 9.6 5.32 663.0 10.1 6.15
Construction 144.5 1.5 4.03 154.1 1.6 4.21 177.3 2.5 5.76
Commercial Lease Financing 450.2 3.5 3.13 462.9 3.7 3.16 470.6 4.1 3.50
Residential Mortgage 2,359.0 34.6 5.88 2,437.4 36.3 5.96 2,494.1 38.0 6.09
Home Equity 999.3 12.6 5.07 1,028.7 13.0 5.13 983.7 14.3 5.85
Automobile 325.5 6.5 7.96 356.3 7.0 7.94 423.1 8.6 8.16
Other (3) 232.0 4.6 7.89 245.2 4.8 7.86 259.1 5.9 9.11
Total Loans and Leases 6,258.4 83.1 5.32 6,446.5 86.4 5.40 6,531.6 97.8 6.01
Other 79.7 0.3 1.39 79.7 0.3 1.39 79.6 0.5 2.46
Total Earning Assets (4) 11,082.6 125.0 4.52 10,378.3 123.2 4.77 9,752.5 138.9 5.71
Cash and Noninterest-Bearing Deposits 203.9 243.4 272.9
Other Assets 467.1 474.6 479.0
Total Assets $ 11,753.6 $ 11,096.3 $ 10,504.4
Interest-Bearing Liabilities
Interest-Bearing Deposits
Demand $ 1,907.7 0.3 0.07 $ 1,888.6 0.3 0.06 $ 1,561.2 1.2 0.29
Savings 4,036.9 7.8 0.77 3,533.0 8.2 0.94 2,861.3 6.5 0.92
Time 1,330.6 6.4 1.92 1,500.8 8.5 2.30 1,646.5 12.5 3.07
Total Interest-Bearing Deposits 7,275.2 14.5 0.80 6,922.4 17.0 1.00 6,069.0 20.2 1.34
Short-Term Borrowings 16.4 - 0.12 18.7 - 0.11 61.2 0.3 1.82
Securities Sold Under Agreements to Repurchase 1,168.2 6.5 2.20 935.4 6.7 2.85 1,060.2 7.5 2.81
Long-Term Debt 71.1 0.8 4.84 148.2 2.2 5.88 224.3 3.5 6.18
Total Interest-Bearing Liabilities 8,530.9 21.8 1.02 8,024.7 25.9 1.30 7,414.7 31.5 1.70
Net Interest Income $ 103.2 $ 97.3 $ 107.4
Interest Rate Spread 3.50 % 3.47 % 4.01 %
Net Interest Margin 3.73 % 3.76 % 4.41 %
Noninterest-Bearing Demand Deposits 1,946.9 1,829.0 1,889.2
Other Liabilities 417.7 424.4 418.1
Shareholders' Equity 858.1 818.2 782.4
Total Liabilities and Shareholders' Equity $ 11,753.6 $ 11,096.3 $ 10,504.4
(1 )Certain prior period information has been reclassified to conform to current presentation. (2 )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. (3) Comprised of other consumer revolving credit, installment, and consumer lease financing. (4) Interest income includes taxable equivalent basis adjustments, based upon a federal statutory tax rate of 35%, of $331,000, $226,000, and $239,000 for the three months ended June 30, 2009, March 31, 2009, and June 30, 2008, respectively.
Bank of Hawaii Corporation and Subsidiaries
Average Balances and Interest Rates - Taxable Equivalent Basis Table 6b
(Unaudited)
(dollars in millions) Six Months Ended Six Months Ended
June 30, 2009 June 30, 2008( 1)
Average Income/ Yield/ Average Income/ Yield/
Balance Expense Rate Balance Expense Rate
Earning Assets
Interest-Bearing Deposits $ 5.0 $ - 0.59 % $ 30.2 $ 0.4 2.62 %
Funds Sold 872.8 1.1 0.25 110.1 1.4 2.54
Investment Securities
Trading 24.3 0.6 4.90 96.7 2.4 4.90
Available-for-Sale 3,148.3 71.0 4.51 2,640.8 70.0 5.31
Held-to-Maturity 227.4 4.9 4.34 277.5 6.3 4.52
Loans Held for Sale 23.0 0.5 4.30 9.9 0.3 5.59
Loans and Leases (2)
Commercial and Industrial 1,007.6 20.3 4.06 1,062.9 30.9 5.84
Commercial Mortgage 747.3 19.5 5.27 656.0 20.5 6.30
Construction 149.3 3.1 4.12 188.5 5.9 6.27
Commercial Lease Financing 456.5 7.2 3.14 474.2 8.1 3.43
Residential Mortgage 2,398.0 71.0 5.92 2,495.4 76.2 6.11
Home Equity 1,013.9 25.6 5.10 988.6 30.7 6.23
Automobile 340.8 13.4 7.95 430.9 17.5 8.17
Other (3) 238.5 9.3 7.88 263.3 12.3 9.43
Total Loans and Leases 6,351.9 169.4 5.36 6,559.8 202.1 6.18
Other 79.7 0.6 1.39 79.5 0.9 2.30
Total Earning Assets (4) 10,732.4 248.1 4.64 9,804.5 283.8 5.80
Cash and Noninterest-Bearing Deposits 223.6 283.5
Other Assets 470.8 486.2
Total Assets $ 11,426.8 $ 10,574.2
Interest-Bearing Liabilities
Interest-Bearing Deposits
Demand $ 1,898.2 0.6 0.07 $ 1,556.1 3.4 0.44
Savings 3,786.4 16.0 0.85 2,808.2 15.8 1.13
Time 1,415.2 14.9 2.12 1,696.9 28.5 3.38
Total Interest-Bearing Deposits 7,099.8 31.5 0.89 6,061.2 47.7 1.58
Short-Term Borrowings 17.6 - 0.11 70.4 1.0 2.67
Securities Sold Under Agreements to Repurchase 1,052.4 13.1 2.48 1,112.2 18.1 3.24
Long-Term Debt 109.4 3.0 5.56 232.0 7.2 6.22
Total Interest-Bearing Liabilities 8,279.2 47.6 1.16 7,475.8 74.0 1.98
Net Interest Income $ 200.5 $ 209.8
Interest Rate Spread 3.48 % 3.82 %
Net Interest Margin 3.75 % 4.29 %
Noninterest-Bearing Demand Deposits 1,888.3 1,894.2
Other Liabilities 421.0 427.9
Shareholders' Equity 838.3 776.3
Total Liabilities and Shareholders' Equity $ 11,426.8 $ 10,574.2
(1 )Certain prior period information has been reclassified to conform to current presentation. (2 )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. (3) Comprised of other consumer revolving credit, installment, and consumer lease financing. (4) Interest income includes taxable equivalent basis adjustments, based upon a federal statutory tax rate of 35%, of $557,000 and $477,000 for the six months ended June 30, 2009 and 2008, respectively.
Bank of Hawaii Corporation and Subsidiaries
Analysis of Change in Net Interest Income - Taxable Equivalent Table 7a
Basis (Unaudited)
(dollars in millions) Three Months Ended June 30, 2009
Compared to March 31, 2009
Volume (1) Rate (1) Time (1) Total
Change in Interest Income:
Funds Sold $ (0.1 ) $ - $ - $ (0.1 )
Investment Securities
Trading (0.3 ) (0.3 ) - (0.6 )
Available-for-Sale 11.2 (5.5 ) 0.3 6.0
Held-to-Maturity (0.2 ) (0.1 ) 0.1 (0.2 )
Loans and Leases
Commercial and Industrial (0.4 ) (0.2 ) 0.1 (0.5 )
Commercial Mortgage 0.4 (0.2 ) 0.1 0.3
Construction (0.1 ) - - (0.1 )
Commercial Lease Financing (0.1 ) (0.1 ) - (0.2 )
Residential Mortgage (1.5 ) (0.6 ) 0.4 (1.7 )
Home Equity (0.3 ) (0.1 ) - (0.4 )
Automobile (0.6 ) - 0.1 (0.5 )
Other (2) (0.2 ) - - (0.2 )
Total Loans and Leases (2.8 ) (1.2 ) 0.7 (3.3 )
Total Change in Interest Income 7.8 (7.1 ) 1.1 1.8
Change in Interest Expense:
Interest-Bearing Deposits
Savings 1.1 (1.6 ) 0.1 (0.4 )
Time (0.9 ) (1.3 ) 0.1 (2.1 )
Total Interest-Bearing Deposits 0.2 (2.9 ) 0.2 (2.5 )
Securities Sold Under Agreements to Repurchase 1.4 (1.7 ) 0.1 (0.2 )
Long-Term Debt (1.0 ) (0.4 ) - (1.4 )
Total Change in Interest Expense 0.6 (5.0 ) 0.3 (4.1 )
Change in Net Interest Income $ 7.2 $ (2.1 ) $ 0.8 $ 5.9
(1) The changes for each category of interest income and expense are allocated between the portion of changes attributable to the variance in volume, rate, and time for that category. (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 Table 7b
Basis (Unaudited)
(dollars in millions) Three Months Ended June 30, 2009
Compared to June 30, 2008
Volume (1) Rate (1) Total
Change in Interest Income:
Interest-Bearing Deposits $ (0.1 ) $ (0.1 ) $ (0.2 )
Funds Sold 0.8 (0.7 ) 0.1
Investment Securities
Trading (0.6 ) (0.6 ) (1.2 )
Available-for-Sale 11.7 (8.8 ) 2.9
Held-to-Maturity (0.6 ) (0.1 ) (0.7 )
Loans Held for Sale 0.2 (0.1 ) 0.1
Loans and Leases
Commercial and Industrial (0.9 ) (3.5 ) (4.4 )
Commercial Mortgage For full details on Bank of Hawaii Corp (BOH) click here. Bank of Hawaii Corp (BOH) has Short Term PowerRatings of 6. Details on Bank of Hawaii Corp (BOH) Short Term PowerRatings is available at This Link.
More News:
Market Updates |
Stock Alerts |
All Trading News |
Stock Index
About TradingMarkets | Contact | Advertise | Careers | Link to Us | Site Map | Help | Terms & Conditions | Privacy Policy | Return Policy | Testimonials | Feedback
The Connors Group, Inc. ("Company") is not an investment advisory service, nor a registered investment advisor or broker-dealer and does not purport to tell or suggest which securities or currencies customers should buy or sell for themselves. The analysts and employees or affiliates of Company may hold positions in the stocks, currencies or industries discussed here. You understand and acknowledge that there is a very high degree of risk involved in trading securities and/or currencies. The Company, the authors, the publisher, and all affiliates of Company assume no responsibility or liability for your trading and investment results. Factual statements on the Company's website, or in its publications, are made as of the date stated and are subject to change without notice.
It should not be assumed that the methods, techniques, or indicators presented in these products will be profitable or that they will not result in losses. Past results of any individual trader or trading system published by Company are not indicative of future returns by that trader or system, and are not indicative of future returns which be realized by you. In addition, the indicators, strategies, columns, articles and all other features of Company's products (collectively, the "Information") are provided for informational and educational purposes only and should not be construed as investment advice. Examples presented on Company's website are for educational purposes only. Such set-ups are not solicitations of any order to buy or sell. Accordingly, you should not rely solely on the Information in making any investment. Rather, you should use the Information only as a starting point for doing additional independent research in order to allow you to form your own opinion regarding investments. You should always check with your licensed financial advisor and tax advisor to determine the suitability of any investment.
HYPOTHETICAL OR SIMULATED PERFORMANCE RESULTS HAVE CERTAIN INHERENT LIMITATIONS. UNLIKE AN ACTUAL PERFORMANCE RECORD, SIMULATED RESULTS DO NOT REPRESENT ACTUAL TRADING AND MAY NOT BE IMPACTED BY BROKERAGE AND OTHER SLIPPAGE FEES. ALSO, SINCE THE TRADES HAVE NOT ACTUALLY BEEN EXECUTED, THE RESULTS MAY HAVE UNDER- OR OVER-COMPENSATED FOR THE IMPACT, IF ANY, OF CERTAIN MARKET FACTORS, SUCH AS LACK OF LIQUIDITY. SIMULATED TRADING PROGRAMS IN GENERAL ARE ALSO SUBJECT TO THE FACT THAT THEY ARE DESIGNED WITH THE BENEFIT OF HINDSIGHT. NO REPRESENTATION IS BEING MADE THAT ANY ACCOUNT WILL OR IS LIKELY TO ACHIEVE PROFITS OR LOSSES SIMILAR TO THOSE SHOWN.
The Connors Group, Inc.
10 Exchange Place, Suite 1800
Jersey City, NJ 07302
© Copyright 2009 The Connors Group, Inc.