Bank of Hawaii Corporation Second Quarter 2009 Financial Results
Do you know when to trade BOH ?
BOH | Quote | Chart | News | PowerRating -- --Net Income for the Quarter $31.0 Million
--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 1.4 (1.6 ) (0.2 )
Construction (0.4 ) (0.6 ) (1.0 )
Commercial Lease Financing (0.2 ) (0.4 ) (0.6 )
Residential Mortgage (2.0 ) (1.4 ) (3.4 )
Home Equity 0.2 (1.9 ) (1.7 )
Automobile (1.9 ) (0.2 ) (2.1 )
Other (2) (0.6 ) (0.7 ) (1.3 )
Total Loans and Leases (4.4 ) (10.3 ) (14.7 )
Other - (0.2 ) (0.2 )
Total Change in Interest Income 7.0 (20.9 ) (13.9 )
Change in Interest Expense:
Interest-Bearing Deposits
Demand 0.2 (1.1 ) (0.9 )
Savings 2.4 (1.1 ) 1.3
Time (2.1 ) (4.0 ) (6.1 )
Total Interest-Bearing Deposits 0.5 (6.2 ) (5.7 )
Short-Term Borrowings (0.1 ) (0.2 ) (0.3 )
Securities Sold Under Agreements to Repurchase 0.7 (1.7 ) (1.0 )
Long-Term Debt (2.0 ) (0.7 ) (2.7 )
Total Change in Interest Expense (0.9 ) (8.8 ) (9.7 )
Change in Net Interest Income $ 7.9 $ (12.1 ) $ (4.2 )
(1) The changes for each category of interest income and
expense are allocated between the portion of changes attributable to
the variance in volume and rate 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 7c
Basis (Unaudited)
(dollars in millions) Six Months Ended June 30, 2009
Compared to June 30, 2008
Volume (1) Rate (1) Total
Change in Interest Income:
Interest-Bearing Deposits $ (0.2 ) $ (0.2 ) $ (0.4 )
Funds Sold 2.0 (2.3 ) (0.3 )
Investment Securities
Trading (1.8 ) - (1.8 )
Available-for-Sale 12.4 (11.4 ) 1.0
Held-to-Maturity (1.1 ) (0.3 ) (1.4 )
Loans Held for Sale 0.3 (0.1 ) 0.2
Loans and Leases
Commercial and Industrial (1.5 ) (9.1 ) (10.6 )
Commercial Mortgage 2.6 (3.6 ) (1.0 )
Construction (1.0 ) (1.8 ) (2.8 )
Commercial Lease Financing (0.3 ) (0.6 ) (0.9 )
Residential Mortgage (2.9 ) (2.3 ) (5.2 )
Home Equity 0.7 (5.8 ) (5.1 )
Automobile (3.6 ) (0.5 ) (4.1 )
Other (2) (1.1 ) (1.9 ) (3.0 )
Total Loans and Leases (7.1 ) (25.6 ) (32.7 )
Other - (0.3 ) (0.3 )
Total Change in Interest Income 4.5 (40.2 ) (35.7 )
Change in Interest Expense:
Interest-Bearing Deposits
Demand 0.6 (3.4 ) (2.8 )
Savings 4.7 (4.5 ) 0.2
Time (4.2 ) (9.4 ) (13.6 )
Total Interest-Bearing Deposits 1.1 (17.3 ) (16.2 )
Short-Term Borrowings (0.4 ) (0.6 ) (1.0 )
Securities Sold Under Agreements to Repurchase (0.9 ) (4.1 ) (5.0 )
Long-Term Debt (3.5 ) (0.7 ) (4.2 )
Total Change in Interest Expense (3.7 ) (22.7 ) (26.4 )
Change in Net Interest Income $ 8.2 $ (17.5 ) $ (9.3 )
(1) The changes for each category of interest income and
expense are allocated between the portion of changes attributable to
the variance in volume and rate for that category.
(2) Comprised of other consumer revolving credit,
installment, and consumer lease financing.
Bank of Hawaii Corporation and Subsidiaries
Salaries and Benefits (Unaudited) Table 8
(dollars in thousands) Three Months Ended Six Months Ended
June 30, March 31, June 30, June 30,
2009 2009 2008 2009 2008
Salaries $ 30,732 $ 29,845 $ 30,019 $ 60,577 $ 58,922
Incentive Compensation 3,407 3,292 4,122 6,699 10,389
Share-Based Compensation and Cash Grants for the Purchase of Company 604 787 1,124 1,391 7,412
Stock
Commission Expense 1,750 2,255 1,992 4,005 3,865
Retirement and Other Benefits 3,804 4,619 3,499 8,423 8,725
Payroll Taxes 2,344 3,500 2,491 5,844 5,905
Medical, Dental, and Life Insurance 1,236 2,664 2,470 3,900 4,969
Separation Expense 303 66 267 369 1,270
Total Salaries and Benefits $ 44,180 $ 47,028 $ 45,984 $ 91,208 $ 101,457
Bank of Hawaii Corporation and Subsidiaries
Loan and Lease Portfolio Balances (Unaudited) Table 9
(dollars in thousands) June 30, March 31, December 31, September 30, June 30,
2009 2009 2008 2008 (1) 2008 (1)
Commercial
Commercial and Industrial $ 932,444 $ 1,000,640 $ 1,053,781 $ 1,077,314 $ 1,052,319
Commercial Mortgage 788,226 726,193 740,779 708,961 680,784
Construction 140,455 153,754 153,952 153,364 168,678
Lease Financing 468,030 454,822 468,140 467,279 471,443
Total Commercial 2,329,155 2,335,409 2,416,652 2,406,918 2,373,224
Consumer
Residential Mortgage 2,309,971 2,402,061 2,461,824 2,478,925 2,485,558
Home Equity 977,632 1,016,381 1,033,221 1,004,437 989,683
Automobile 309,877 343,642 369,789 395,015 413,338
Other (2) 223,276 241,233 248,747 254,163 256,325
Total Consumer 3,820,756 4,003,317 4,113,581 4,132,540 4,144,904
Total Loans and Leases $ 6,149,911 $ 6,338,726 $ 6,530,233 $ 6,539,458 $ 6,518,128
Air Transportation Credit Exposure (3) (Unaudited)
(dollars in thousands) June 30, March 31, December 31, September 30, June 30,
2009 2009 2008 2008 2008
Passenger Carriers Based In the United States $ 56,774 $ 56,876 $ 60,189 $ 60,260 $ 60,603
Passenger Carriers Based Outside the United States 5,374 5,433 5,672 5,809 7,161
Cargo Carriers - 13,994 13,831 13,689 13,568
Total Air Transportation Credit Exposure $ 62,148 $ 76,303 $ 79,692 $ 79,758 $ 81,332
Deposits (Unaudited)
June 30, March 31, December 31, September 30, June 30,
(dollars in thousands) 2009 2009 2008 2008 2008
Consumer 4,747,612 4,702,494 4,593,248 4,460,965 4,463,632
Commercial 3,828,521 3,645,842 3,221,668 2,835,699 3,013,234
Public and Other 443,528 864,455 477,182 361,820 427,124
Total Deposits $ 9,019,661 $ 9,212,791 $ 8,292,098 $ 7,658,484 $ 7,903,990
(1 )Certain prior period information has been reclassified
to conform to current presentation.
(2) Comprised of other revolving credit, installment, and
lease financing.
(3) Exposure includes leveraged leases and a direct
financing lease.
Bank of Hawaii Corporation and Subsidiaries
Non-Performing Assets and Accruing Loans and Leases Past Due 90 Table 10
Days or More (Unaudited)
(dollars in thousands) June 30, March 31, December 31, September 30, June 30,
2009 2009 2008 2008 2008
Non-Performing Assets
Non-Accrual Loans and Leases( 1)
Commercial
Commercial and Industrial $ 10,511 $ 21,839 $ 3,869 $ 574 $ 1,119
Commercial Mortgage 1,219 - - - -
Construction 6,548 5,001 5,001 - -
Lease Financing 956 910 133 149 329
Total Commercial 19,234 27,750 9,003 723 1,448
Consumer
Residential Mortgage 16,265 9,230 3,904 3,749 3,784
Home Equity 2,567 1,620 1,614 1,162 1,189
Other (2) 550 1,383 - - 30
Total Consumer 19,382 12,233 5,518 4,911 5,003
Total Non-Accrual Loans and Leases 38,616 39,983 14,521 5,634 6,451
Foreclosed Real Estate 438 346 428 293 229
Total Non-Performing Assets $ 39,054 $ 40,329 $ 14,949 $ 5,927 $ 6,680
Accruing Loans and Leases Past Due 90 Days or More 1
Commercial
Commercial and Industrial $ 13 $ - $ 6,785 $ - $ -
Lease Financing - 257 268 - -
Total Commercial 13 257 7,053 - -
Consumer
Residential Mortgage 4,657 4,794 4,192 3,455 2,601
Home Equity 2,879 1,720 1,077 296 201
Automobile 769 776 743 758 625
Other (2) 1,270 1,100 1,134 926 756
Total Consumer 9,575 8,390 7,146 5,435 4,183
Total Accruing Loans and Leases Past Due 90 Days or More $ 9,588 $ 8,647 $ 14,199 $ 5,435 $ 4,183
Total Loans and Leases $ 6,149,911 $ 6,338,726 $ 6,530,233 $ 6,539,458 $ 6,518,128
Ratio of Non-Accrual Loans and Leases to Total Loans and Leases 0.63 % 0.63 % 0.22 % 0.09 % 0.10 %
Ratio of Non-Performing Assets to Total Loans and Leases and 0.63 % 0.64 % 0.23 % 0.09 % 0.10 %
Foreclosed Real Estate
Ratio of Commercial Non-Performing Assets to Total Commercial 0.83 % 1.19 % 0.37 % 0.03 % 0.06 %
Loans and Leases
Ratio of Consumer Non-Performing Assets to Total Consumer Loans 0.52 % 0.31 % 0.14 % 0.13 % 0.13 %
and Leases and Foreclosed Real Estate
Ratio of Non-Performing Assets and Accruing Loans and Leases Past 0.79 % 0.77 % 0.45 % 0.17 % 0.17 %
Due 90 Days or More to Total Loans and Leases
Quarter to Quarter Changes in Non-Performing Assets
Balance at Beginning of Quarter $ 40,329 $ 14,949 $ 5,927 $ 6,680 $ 6,045
Additions 22,459 29,164 15,464 1,355 2,900
Reductions
Payments (15,593 ) (874 ) (2,440 ) (955 ) (630 )
Return to Accrual Status (230 ) (768 ) (1,468 ) (756 ) (943 )
Sales of Foreclosed Real Estate - (82 ) - - -
Charge-offs/Write-downs (7,911 ) (2,060 ) (2,534 ) (397 ) (692 )
Total Reductions (23,734 ) (3,784 ) (6,442 ) (2,108 ) (2,265 )
Balance at End of Quarter $ 39,054 $ 40,329 $ 14,949 $ 5,927 $ 6,680
(1) As of June 30, 2009, troubled debt restructurings which
were not included in non-accrual loans and accruing loans past due
90 days or more were $2.3 million.
(2) Comprised of other revolving credit, installment, and
lease financing.
Bank of Hawaii Corporation and Subsidiaries
Reserve for Credit Losses (Unaudited) Table 11
(dollars in thousands) Three Months Ended Six Months Ended
June 30, March 31, June 30, June 30,
2009 2009 2008 2009 2008
Balance at Beginning of Period $ 139,835 $ 128,667 $ 105,167 $ 128,667 $ 96,167
Loans and Leases Charged-Off
Commercial
Commercial and Industrial (12,249 ) (6,464 ) (1,396 ) (18,713 ) (2,785 )
Lease Financing (4,473 ) (20 ) (142 ) (4,493 ) (276 )
Consumer
Residential Mortgage (1,814 ) (827 ) (133 ) (2,641 ) (133 )
Home Equity (3,303 ) (2,316 ) (473 ) (5,619 ) (1,279 )
Automobile (2,121 ) (2,982 ) (2,187 ) (5,103 ) (5,102 )
Other (1) (3,643 ) (3,577 ) (1,954 ) (7,220 ) (4,757 )
Total Loans and Leases Charged-Off (27,603 ) (16,186 ) (6,285 ) (43,789 ) (14,332 )
Recoveries on Loans and Leases Previously Charged-Off
Commercial
Commercial and Industrial 228 542 201 770 1,187
Lease Financing 30 2 2 32 5
Consumer
Residential Mortgage 126 145 17 271 95
Home Equity 76 96 26 172 47
Automobile 735 727 700 1,462 1,496
Other (1) 718 705 667 1,423 1,403
Total Recoveries on Loans and Leases Previously Charged-Off 1,913 2,217 1,613 4,130 4,233
Net Loans and Leases Charged-Off (25,690 ) (13,969 ) (4,672 ) (39,659 ) (10,099 )
Provision for Credit Losses 28,690 24,887 7,172 53,577 21,599
Provision for Unfunded Commitments - 250 - 250 -
Balance at End of Period (2) $ 142,835 $ 139,835 $ 107,667 $ 142,835 $ 107,667
Components
Allowance for Loan and Lease Losses $ 137,416 $ 134,416 $ 102,498 $ 137,416 $ 102,498
Reserve for Unfunded Commitments 5,419 5,419 5,169 5,419 5,169
Total Reserve for Credit Losses $ 142,835 $ 139,835 $ 107,667 $ 142,835 $ 107,667
Average Loans and Leases Outstanding $ 6,258,403 $ 6,446,513 $ 6,531,587 $ 6,351,938 $ 6,559,753
Ratio of Net Loans and Leases Charged-Off to Average Loans and 1.65 % 0.88 % 0.29 % 1.26 % 0.31 %
Leases Outstanding (annualized)
Ratio of Allowance for Loan and Lease Losses to Loans and Leases 2.23 % 2.12 % 1.57 % 2.23 % 1.57 %
Outstanding
(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 (Unaudited).
Bank of Hawaii Corporation and Subsidiaries
Business Segments Selected Financial Information (Unaudited) Table 12a
(dollars in thousands) Retail Commercial Investment Treasury Consolidated
Banking Banking Services and Other Total
Three Months Ended June 30, 2009
Net Interest Income $ 53,631 $ 43,376 $ 4,326 $ 1,518 $ 102,851
Provision for Credit Losses 11,465 16,480 746 (1 ) 28,690
Net Interest Income After Provision for Credit Losses 42,166 26,896 3,580 1,519 74,161
Noninterest Income 25,169 16,774 14,615 3,274 59,832
Noninterest Expense (42,587 ) (29,119 ) (15,797 ) (2,081 ) (89,584 )
Income Before Provision for Income Taxes 24,748 14,551 2,398 2,712 44,409
Provision for Income Taxes (9,170 ) (5,205 ) (887 ) 1,859 (13,403 )
Net Income $ 15,578 $ 9,346 $ 1,511 $ 4,571 $ 31,006
Total Assets as of June 30, 2009 $ 3,299,113 $ 2,939,637 $ 267,546 $ 5,688,399 $ 12,194,695
Three Months Ended June 30, 2008 (1)
Net Interest Income $ 59,529 $ 43,285 $ 3,938 $ 416 $ 107,168
Provision for Credit Losses 2,571 4,652 (1 ) (50 ) 7,172
Net Interest Income After Provision for Credit Losses 56,958 38,633 3,939 466 99,996
Noninterest Income 23,644 13,623 19,019 4,253 60,539
Noninterest Expense (40,380 ) (26,195 ) (16,363 ) (924 ) (83,862 )
Income Before Provision for Income Taxes 40,222 26,061 6,595 3,795 76,673
Provision for Income Taxes (14,882 ) (9,655 ) (2,440 ) (1,414 ) (28,391 )
Net Income $ 25,340 $ 16,406 $ 4,155 $ 2,381 $ 48,282
Total Assets as of June 30, 2008 (1) $ 3,638,301 $ 3,008,887 $ 242,443 $ 3,481,518 $ 10,371,149
(1 )Certain prior period information has been reclassified
to conform to current presentation.
Bank of Hawaii Corporation and Subsidiaries
Business Segments Selected Financial Information (Unaudited) Table 12b
(dollars in thousands) Retail Commercial Investment Treasury Consolidated
Banking Banking Services and Other Total
Six Months Ended June 30, 2009
Net Interest Income (Loss) $ 107,021 $ 84,966 $ 8,318 $ (392 ) $ 199,913
Provision for Credit Losses 25,981 26,291 1,550 (245 ) 53,577
Net Interest Income (Loss) After Provision for Credit Losses 81,040 58,675 6,768 (147 ) 146,336
Noninterest Income 53,444 40,891 29,060 6,802 130,197
Noninterest Expense (84,895 ) (56,656 ) (32,357 ) (3,609 ) (177,517 )
Income Before Provision for Income Taxes 49,589 42,910 3,471 3,046 99,016
Provision for Income Taxes (18,360 ) (15,676 ) (1,284 ) 3,350 (31,970 )
Net Income $ 31,229 $ 27,234 $ 2,187 $ 6,396 $ 67,046
Total Assets as of June 30, 2009 $ 3,299,113 $ 2,939,637 $ 267,546 $ 5,688,399 $ 12,194,695
Six Months Ended June 30, 2008 (1)
Net Interest Income (Loss) $ 117,922 $ 86,144 $ 7,808 $ (2,526 ) $ 209,348
Provision for Credit Losses 10,523 11,878 (1 ) (801 ) 21,599
Net Interest Income (Loss) After Provision for Credit Losses 107,399 74,266 7,809 (1,725 ) 187,749
Noninterest Income 48,491 39,570 37,280 21,323 146,664
Noninterest Expense (80,997 ) (53,721 ) (33,226 ) (9,350 ) (177,294 )
Income Before Provision for Income Taxes 74,893 60,115 11,863 10,248 157,119
Provision for Income Taxes (27,710 ) (22,295 ) (4,389 ) 2,772 (51,622 )
Net Income $ 47,183 $ 37,820 $ 7,474 $ 13,020 $ 105,497
Total Assets as of June 30, 2008 (1) $ 3,638,301 $ 3,008,887 $ 242,443 $ 3,481,518 $ 10,371,149
(1 )Certain prior period information has been reclassified
to conform to current presentation.
Bank of Hawaii Corporation and Subsidiaries
Selected Quarterly Financial Data (Unaudited) Table 13
Three Months Ended
(dollars in thousands, except per share amounts) June 30, March 31, December 31, September 30, June 30,
2009 2009 2008 (1) 2008 (1) 2008 (1)
Quarterly Operating Results
Interest Income
Interest and Fees on Loans and Leases $ 83,342 $ 86,592 $ 95,598 $ 92,744 $ 97,959
Income on Investment Securities
Trading - 594 1,152 1,174 1,209
Available-for-Sale 38,155 32,301 34,352 35,152 35,321
Held-to-Maturity 2,369 2,567 2,735 2,870 3,033
Deposits 5 10 25 33 204
Funds Sold 526 577 48 141 420
Other 276 276 276 490 489
Total Interest Income 124,673 122,917 134,186 132,604 138,635
Interest Expense
Deposits 14,481 17,025 16,960 17,736 20,238
Securities Sold Under Agreements to Repurchase 6,477 6,652 7,984 7,675 7,488
Funds Purchased 5 5 175 507 270
Short-Term Borrowings - - 103 13 12
Long-Term Debt 859 2,173 3,110 3,098 3,459
Total Interest Expense 21,822 25,855 28,332 29,029 31,467
Net Interest Income 102,851 97,062 105,854 103,575 107,168
Provision for Credit Losses 28,690 24,887 18,558 20,358 7,172
Net Interest Income After Provision for Credit Losses 74,161 72,175 87,296 83,217 99,996
Noninterest Income
Trust and Asset Management 11,881 11,632 12,275 14,193 15,460
Mortgage Banking 5,443 8,678 508 621 2,738
Service Charges on Deposit Accounts 12,910 13,386 13,306 13,045 12,411
Fees, Exchange, and Other Service Charges 15,410 14,976 14,897 15,604 16,103
Investment Securities Gains, Net 12 56 86 159 157
Insurance 4,744 5,641 5,953 5,902 5,590
Other 9,432 15,996 7,438 7,462 8,080
Total Noninterest Income 59,832 70,365 54,463 56,986 60,539
Noninterest Expense
Salaries and Benefits 44,180 47,028 43,737 46,764 45,984
Net Occupancy 10,008 10,328 11,548 11,795 11,343
Net Equipment 4,502 4,316 4,573 4,775 4,474
Professional Fees 4,005 2,549 3,040 3,270 2,588
FDIC Insurance 8,987 1,814 693 321 247
Other 17,902 21,898 19,099 19,865 19,226
Total Noninterest Expense 89,584 87,933 82,690 86,790 83,862
Income Before Provision for Income Taxes 44,409 54,607 59,069 53,413 76,673
Provision for Income Taxes 13,403 18,567 19,762 6,004 28,391
Net Income $ 31,006 $ 36,040 $ 39,307 $ 47,409 $ 48,282
Basic Earnings Per Share $ 0.65 $ 0.76 $ 0.83 $ 1.00 $ 1.01
Diluted Earnings Per Share $ 0.65 $ 0.75 $ 0.82 $ 0.99 $ 1.00
Balance Sheet Totals
Loans and Leases $ 6,149,911 $ 6,338,726 $ 6,530,233 $ 6,539,458 $ 6,518,128
Total Assets 12,194,695 11,448,128 10,763,475 10,335,047 10,371,149
Total Deposits 9,019,661 9,212,791 8,292,098 7,658,484 7,903,990
Total Shareholders' Equity 845,885 833,935 790,704 780,020 767,558
Performance Ratios
Return on Average Assets 1.06 % 1.32 % 1.52 % 1.82 % 1.85 %
Return on Average Shareholders' Equity 14.49 17.86 19.56 24.17 24.82
Efficiency Ratio (2) 55.07 52.52 51.58 54.05 50.01
Net Interest Margin (3) 3.73 3.76 4.43 4.33 4.41
(1 )Certain prior period information has been reclassified
to conform to current presentation.
(2) The efficiency ratio is defined as noninterest expense
divided by total revenue (net interest income and noninterest
income).
(3) The net interest margin is defined as net interest
income, on a fully-taxable equivalent basis, as a percentage of
average earning assets.
Bank of Hawaii Corporation and Subsidiaries
Hawaii Economic Trends (Unaudited) Table 14
(percentage change) Five Months Ended Year Ended
May 31, December 31,
2009 2008 2007
Hawaii Economic Trends
State General Fund Revenues (1) (9.9 ) % (1.5 ) % 3.6 %
General Excise and Use Tax Revenue (2) (13.9 ) (2.0 ) 6.8
Jobs (1) (3.1 ) (0.7 ) 1.0
(annual percentage, except June) June 30, December 31,
2009 2008 2007
Unemployment (3)
Statewide, seasonally adjusted 7.4 % 4.0 % 2.6 %
Oahu 6.9 3.5 2.5
Island of Hawaii 11.5 5.5 3.3
Maui 9.7 4.5 2.8
Kauai 11.1 4.4 2.5
(percentage change, except months of inventory) June 30, December 31,
2009 2008 2007
Housing Trends (Single Family Oahu) (4)
Median Home Price (9.0 ) % (3.0 ) % 2.1 %
Home Sales Volume (units) 9.5 (24.4 ) (10.2 )
Months of Inventory 7.6 8.0 6.0
(in thousands) May 31, April 30, March 31, February 28, January 31, December 31,
2009 2009 2009 2009 2009 2008
Tourism (1)
Monthly Visitor Arrivals, seasonally adjusted 554.5 555.1 509.6 549.4 540.0 517.4
Percentage change from previous month (0.1 ) % 8.9 % (7.2 ) % 1.7 % 4.4 % (4.1 ) %
(1 )Source: University of Hawaii Economic Research
Organization.
(2 )Source: Hawaii Department of Business, Economic
Development & Tourism.
(3 )Source: University of Hawaii Economic Research
Organization, State of Hawaii Department of Labor and Industrial
Relations.
(4 )Source: Honolulu Board of REALTORS.
SOURCE: Bank of Hawaii Corporation
Bank of Hawaii Corporation
Investor/Analyst Inquiries:
Cindy Wyrick, 808-694-8430
cindy.wyrick@boh.com
or
Media Inquiries:
Stafford Kiguchi, 808-694-8580
stafford.kiguchi@boh.com
For full details on Bank of Hawaii Corp (BOH) BOH. Bank of Hawaii Corp (BOH) has Short Term PowerRatings at TradingMarkets. Details on Bank of Hawaii Corp (BOH) Short Term PowerRatings is available at This Link.
- Bank of Hawaii: The Trend Continues Lower (BOH) - 03/11/10
- Bank of Hawaii: Making a Move, Down 0.8% (BOH) - 03/08/10
- Bank of Hawaii Downward Momentum Looks to Continue (BOH) - 03/03/10
- Conference Calls Today: 2-3:50 P.M. EST - 02/24/10
- Downtrend Spotted in Shares of Bank of Hawaii (BOH) - 02/23/10
- More News >>
