Bank of Hawaii Corporation First Quarter 2011 Financial Results

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Mon Apr 18, 2011 7:00am EDT

Bank of Hawaii Corporation First Quarter 2011 Financial Results

  • Diluted Earnings Per Share $0.88
  • Net Income $42.4 Million
  • Board of Directors Declares Dividend of $0.45 Per Share

Bank of Hawaii Corporation (NYSE: BOH) today reported diluted earnings per share of $0.88 for the first quarter of 2011, up from $0.84 in the previous quarter. Net income for the first quarter of 2011 was $42.4 million, up $1.8 million or 4.4 percent compared to net income of $40.6 million in the fourth quarter of 2010.

Deposit growth remained strong during the first quarter, increasing to $9.9 billion at March 31, 2011. Loan balances continued to stabilize with growth in commercial loan demand partially offsetting declines in the consumer loan portfolio. In response to market conditions and consistent with the Company’s ongoing capital management strategy, $2.2 billion of investment securities held in the available-for-sale portfolio were reclassified to the held-to-maturity portfolio during the first quarter. The allowance for loan and lease losses remained unchanged at $147.4 million and currently represents 2.77 percent of outstanding loans and leases.

“Bank of Hawaii Corporation began 2011 with solid financial performance,” said Peter S. Ho, Chairman, President and CEO. “Our net interest margin improved and credit costs continue to come down as the Hawaii economy maintains its recovery. Our hearts and prayers go out to the people of Japan as they recover from the disasters of March 11. The Hawaii economy will certainly be impacted somewhat in the short term although it is too early to determine how protracted the effects will be.”

The return on average assets for the first quarter of 2011 was 1.32 percent, up from 1.24 percent in the previous quarter. The return on average equity for the first quarter of 2011 was 16.86 percent compared to 15.08 percent for the fourth quarter of 2010. The efficiency ratio for the first quarter of 2011 was 56.04 percent, an improvement from 60.05 percent in the previous quarter.

Financial Highlights

Net interest income, on a taxable equivalent basis, for the first quarter of 2011 was $100.1 million, up $3.5 million from net interest income of $96.6 million in the fourth quarter of 2010 and down $7.8 million from net interest income of $107.9 million in the first quarter of 2010. Results for the first quarter of 2010 included net interest recoveries of $2.8 million. Analyses of the changes in net interest income are included in Tables 7a and 7b.

The net interest margin was 3.24 percent for the first quarter of 2011, a 9 basis point increase from 3.15 percent in the fourth quarter of 2010 and a 48 basis point decrease from 3.72 percent in the first quarter of 2010. Adjusted for the previously mentioned net interest recoveries, the net interest margin in the first quarter of 2010 was 3.62 percent.

Results for the first quarter of 2011 included a provision for credit losses of $4.7 million compared with $5.3 million in the fourth quarter of 2010 and $20.7 million in the first quarter of 2010. The provision for credit losses equaled net charge-offs during the first quarter of 2011 and fourth quarter of 2010. The provision for credit losses exceeded net charge-offs of $18.0 million by $2.7 million in the first quarter of 2010.

Noninterest income was $53.9 million for the first quarter of 2011, an increase of $2.4 million compared to noninterest income of $51.5 million in the fourth quarter of 2010, and a decrease of $17.9 million compared to noninterest income of $71.8 million in the first quarter of 2010. Noninterest income in the first quarter of 2011 included net gains of $6.1 million on the sales of investment securities. Noninterest income in the first quarter of 2010 included $20.0 million in net gains on the sales of investment securities. Adjusted for the net gains on securities sales, the decrease in noninterest income was largely due to a reduction in overdraft fees, which were $1.7 million lower than the fourth quarter of 2010 and $3.5 million lower than the same quarter last year.

Noninterest expense was $86.1 million in the first quarter of 2011, down $2.6 million from noninterest expense of $88.7 million in the fourth quarter of 2010, and up $4.4 million from noninterest expense of $81.7 million in the same quarter last year. Noninterest expense in the fourth quarter of 2010 included $1.9 million for employee incentives, $1.2 million for a refresh of personal computers, and a donation of $1.0 million to the Bank of Hawaii Foundation. Partially offsetting these expenses were gains of $2.3 million on the sale of foreclosed real estate and the extinguishment of retiree life insurance obligations. An analysis of salary and benefit expenses is included in Table 8.

The effective tax rate for the first quarter of 2011 was 32.60 percent compared to 24.51 percent in the previous quarter and 31.53 percent during the same quarter last year. The lower effective tax rate for the fourth quarter of 2010 was primarily due to an adjustment to tax reserves determined during the quarter. The lower effective tax rate for the first quarter of 2010 was primarily due to the expected utilization of capital losses resulting from the sale of a low-income housing investment.

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 Table 12.

Asset Quality

Overall credit quality continues to improve and reflects a recovering Hawaii economy, with most metrics showing positive movement through 2010 and the first quarter of 2011. Non-performing assets were $34.6 million at March 31, 2011, down from $37.8 million at December 31, 2010, and down from $41.6 million at March 31, 2010. The improvement was primarily due to the return to accrual of previously modified residential mortgages. As a percentage of total loans and leases, including loans held for sale and foreclosed real estate, non-performing assets were 0.65 percent at March 31, 2011, down from 0.71 percent as of December 31, 2010, and down from 0.74 percent at March 31, 2010.

Accruing loans and leases past due 90 days or more were $5.6 million at March 31, 2011, down from $7.6 million at December 31, 2010, and down from $16.0 million at March 31, 2010. Restructured loans not included in non-accrual loans or accruing loans past due 90 days or more were $29.5 million at March 31, 2011 and primarily comprised of loans with lowered monthly payments to accommodate the borrowers’ financial needs for a period of time. More information on non-performing assets and accruing loans and leases past due 90 days or more is presented in Table 10.

Net charge-offs during the first quarter of 2011 were $4.7 million or 0.36 percent annualized of total average loans and leases outstanding. Charge-offs of $7.4 million during the quarter were partially offset by recoveries of $2.7 million. Net charge-offs in the fourth quarter of 2010 were $5.3 million, or 0.39 percent annualized of total average loans and leases outstanding, and were comprised of charge-offs of $15.7 million partially offset by recoveries of $10.4 million. Net charge-offs during the first quarter of 2010 were $18.0 million, or 1.28 percent annualized of total average loans and leases outstanding, and were comprised of charge-offs of $20.8 million partially offset by recoveries of $2.8 million. Details of charge-offs, recoveries and the components of the total reserve for credit losses are summarized in Table 11.

The allowance for loan and lease losses was $147.4 million at March 31, 2011, unchanged from December 31, 2010, and up $1.0 million from $146.4 million at March 31, 2010. The ratio of the allowance for loan and lease losses to total loans and leases was 2.77 percent at March 31, 2011. The reserve for unfunded commitments at March 31, 2011 remains unchanged at $5.4 million. The level of the allowance for loan and leases losses at March 31, 2011 includes management’s assessment of the recent global events in Japan and higher energy prices, and the direct and indirect impact on tourism, employment, discretionary spending, and oil prices in Hawaii. However, with continued stability in the Hawaii economy and continued improvements in credit quality, including reductions in the higher risk loan segments, a lower level of the allowance for loan and lease losses may be required in future periods.

Other Financial Highlights

Total assets were $13.0 billion at March 31, 2011, down from total assets of $13.1 billion at December 31, 2010, and up from total assets of $12.4 billion at March 31, 2010. Average total assets were $13.0 billion during the first quarter of 2011, essentially flat with the previous quarter, and up from average assets of $12.4 billion during the same quarter last year.

As previously mentioned, $2.2 billion in available-for-sale investment securities were reclassified to the held-to-maturity category during the first quarter of 2011. As of March 31, 2011, the total carrying value of the investment securities portfolio was $6.5 billion, down from $6.7 billion at December 31, 2010, and up from $5.6 billion at March 31, 2010.

Total loans were $5.3 billion at March 31, 2011, down $8.9 million from December 31, 2010 as growth in commercial lending and residential mortgages were offset by continued declines in home equity, auto lending, and other consumer loans. Average total loans were $5.3 billion during the first quarter of 2011, essentially flat with the previous quarter, and down from average loans of $5.7 billion during the first quarter last year.

Total deposits were $9.9 billion at March 31, 2011, up $23.4 million from December 31, 2010, and up $418.3 million from total deposits of $9.5 billion at March 31, 2010. Average total deposits were $9.9 billion in the first quarter of 2011, higher than average deposits of $9.7 billion during the previous quarter, and up from $9.4 billion during the first quarter last year. The increase compared with the previous quarter was largely due to strong growth in noninterest bearing demand deposits.

During the first quarter of 2011, the Company repurchased 442.5 thousand shares of common stock at a total cost of $20.8 million under its share repurchase program. The average cost was $46.93 per share repurchased. From April 1 through April 15, 2011, the Company repurchased an additional 92.5 thousand shares of common stock at an average cost of $47.63 per share repurchased. From the beginning of the share repurchase program initiated during July 2001 through March 31, 2011, the Company has repurchased 46.5 million shares and returned nearly $1.7 billion to shareholders at an average cost of $35.66 per share. Remaining buyback authority under the share repurchase program was $43.1 million at March 31, 2011.

Total shareholders’ equity was $996.2 million at March 31, 2011, compared to $1.01 billion at December 31, 2010 and $939.4 million at March 31, 2010. The ratio of tangible common equity to risk-weighted assets was 19.04 percent at March 31, 2011, compared with 19.29 percent at December 31, 2010 and 16.75 percent at March 31, 2010. The Tier 1 leverage ratio at March 31, 2011 was 7.16 percent, up from 7.15 percent at December 31, 2010 and 6.97 percent at March 31, 2010.

The Company’s Board of Directors has declared a quarterly cash dividend of $0.45 per share on the Company’s outstanding shares. The dividend will be payable on June 14, 2011 to shareholders of record at the close of business on May 31, 2011.

Hawaii Economy

Hawaii’s economy continued to improve during the first quarter of 2011 due to increasing visitor arrivals and spending. For the first two months of 2011, visitor arrivals increased 11.9% and visitor spending rose 19.3% compared to the same period in 2010. Hotel occupancy and revenue per available room have also continued to show signs of improvement. Overall, state job growth has begun to stabilize and the statewide seasonally-adjusted unemployment rate remained at 6.3% at the end of March 2011. The volume of sales and median sales price of single-family homes on Oahu were down slightly in March 2011 largely due to low inventory levels. More information on Hawaii economic trends is presented in Table 14.

On March 11, 2011, a massive earthquake and resulting tsunami devastated portions of northeast Japan. A smaller tsunami inflicted some damage in the State of Hawaii. Visitor arrivals from Japan were approximately 17.4% of the total number of visitors to Hawaii in 2010. At this time, the Company is not able to predict the effects of this disaster on the Hawaii visitor industry or the Hawaii economy. However, it is likely that the number of Japanese visitors will decline due to this event, at least in the near term.

Conference Call Information

The Company will review its first quarter 2011 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 the Investor Relations link of Bank of Hawaii Corporation’s web site, www.boh.com. Conference call participants in the United States should dial 800-798-2801. International participants should dial 617-614-6205. Use the pass code “Bank of Hawaii” to access the call. A replay will be available for one week beginning Monday, April 18, 2010 by calling 888-286-8010 in the United States or 617-801-6888 internationally and entering the pass code number 89606650 when prompted. A replay will also be available via the Investor Relations link 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, 2010, 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   Table 1a
  Three Months Ended
March 31,   December 31,   March 31,
(dollars in thousands, except per share amounts)   2011   2010   2010

For the Period:

Operating Results
Net Interest Income $ 99,697 $ 96,273 $ 107,653
Provision for Credit Losses 4,691 5,278 20,711
Total Noninterest Income 53,922 51,477 71,782
Total Noninterest Expense 86,082 88,722 81,706
Net Income 42,360 40,578 52,736
Basic Earnings Per Share 0.89 0.84 1.10
Diluted Earnings Per Share 0.88 0.84 1.09
Dividends Declared Per Share 0.45 0.45 0.45
 
Performance Ratios
Return on Average Assets 1.32 % 1.24

%

 

1.73

%

Return on Average Shareholders' Equity 16.86 15.08 22.54
Efficiency Ratio 1 56.04 60.05 45.54
Operating Leverage 2 14.42 (17.86 ) 1.99
Net Interest Margin 3 3.24 3.15 3.72
Dividend Payout Ratio 4 50.56 53.57 40.91
Average Shareholders' Equity to Average Assets 7.86 8.23 7.67
 
Average Balances
Average Loans and Leases $ 5,311,781 $ 5,317,815 $ 5,686,923
Average Assets 12,965,633 12,964,973 12,377,785
Average Deposits 9,873,727 9,677,452 9,390,615
Average Shareholders' Equity 1,018,788 1,067,429 949,073
 
Market Price Per Share of Common Stock
Closing $ 47.82 $ 47.21 $ 44.95
High 49.23 48.27 50.42
Low 44.32 42.94 41.60
 
March 31, December 31, March 31,
    2011     2010   2010

As of Period End:

Balance Sheet Totals
Loans and Leases $ 5,326,929 $ 5,335,792 $ 5,610,081
Total Assets 12,962,304 13,126,787 12,435,670
Total Deposits 9,912,391 9,888,995 9,494,084
Long-Term Debt 32,643 32,652 90,309
Total Shareholders' Equity 996,225 1,011,133 939,372
 
Asset Quality
Allowance for Loan and Lease Losses $ 147,358 $ 147,358 $ 146,358
Non-Performing Assets 5 34,592 37,786 41,624
 
Financial Ratios
Allowance to Loans and Leases Outstanding 2.77 % 2.76

%

 

2.61

%

Tier 1 Capital Ratio 18.41 18.28 15.93
Total Capital Ratio 19.68 19.55 17.20
Tier 1 Leverage Ratio 7.16 7.15 6.97
Total Shareholders' Equity to Total Assets 7.69 7.70 7.55
Tangible Common Equity to Tangible Assets 6 7.46 7.48 7.32
Tangible Common Equity to Risk-Weighted Assets 6 19.04 19.29 16.75
 
Non-Financial Data
Full-Time Equivalent Employees 2,381 2,399 2,400
Branches and Offices 82 82 83
ATMs 506 502 483
 

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

Excluded from non-performing assets was a contractually binding non-accrual loan held for sale of $7.5 million as of March 31, 2011.

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.

 
Bank of Hawaii Corporation and Subsidiaries
Reconciliation of Non-GAAP Financial Measures   Table 1b
  March 31,   December 31,   March 31,
(dollars in thousands)   2011   2010   2010
Total Shareholders' Equity $ 996,225 $ 1,011,133 $ 939,372
Less: Goodwill 31,517 31,517 31,517
  Intangible Assets     131       154       214  
Tangible Common Equity   $ 964,577     $ 979,462     $ 907,641  
 
Total Assets $ 12,962,304 $ 13,126,787 $ 12,435,670
Less: Goodwill 31,517 31,517 31,517
  Intangible Assets     131       154       214  
Tangible Assets   $ 12,930,656     $ 13,095,116     $ 12,403,939  
 
Risk-Weighted Assets, determined in accordance
with prescribed regulatory requirements $ 5,065,817 $ 5,076,909 $ 5,417,394
 
Total Shareholders' Equity to Total Assets 7.69 % 7.70 % 7.55 %
Tangible Common Equity to Tangible Assets (Non-GAAP) 7.46 % 7.48 % 7.32 %
 
Tier 1 Capital Ratio 18.41 % 18.28 % 15.93 %
Tangible Common Equity to Risk-Weighted Assets (Non-GAAP) 19.04 % 19.29 % 16.75 %
 
Bank of Hawaii Corporation and Subsidiaries
Net Significant Income (Expense) Items   Table 2
  Three Months Ended
March 31,   December 31,   March 31,
(dollars in thousands)   2011   2010   2010
Cash Basis Interest Recoveries $ - $ - $ 2,832
Investment Securities Gains, Net 6,084 - 20,021
Increase in Allowance for Loan and Lease Losses - - (2,700 )
Employee Incentive Awards - (1,949 ) -
Cash Grants for the Purchase of Company Stock - (196 ) -
Settlement Gain on the Extinguishment of Retiree Life Insurance Obligation - 951 -
PC Refresh - (1,192 ) -
Gain on Sale of Foreclosed Real Estate - 1,343 -
Bank of Hawaii Foundation     -     (1,000 )     -  
Significant Income (Expense) Items Before the Provision (Benefit) for Income Taxes     6,084     (2,043 )     20,153  
Income Tax Impact     2,129     (715 )     7,054  
Net Significant Income (Expense) Items   $ 3,955   $ (1,328 )   $ 13,099  
 
Bank of Hawaii Corporation and Subsidiaries
Consolidated Statements of Income   Table 3
  Three Months Ended
March 31,   December 31,   March 31,
(in thousands, except per share and share amounts)   2011   2010   2010
Interest Income
Interest and Fees on Loans and Leases $ 66,593 $ 67,915 $ 77,271
Income on Investment Securities
Available-for-Sale 37,669 39,546 43,841
Held-to-Maturity 7,633 1,388 1,863
Deposits (2 ) 7 13
Funds Sold 251 160 309
Other     279       279       277
Total Interest Income     112,423       109,295       123,574
Interest Expense
Deposits 5,232 5,918 8,307
Securities Sold Under Agreements to Repurchase 7,041 6,425 6,429
Funds Purchased 6 7 7
Long-Term Debt     447       672       1,178
Total Interest Expense     12,726       13,022       15,921
Net Interest Income 99,697 96,273 107,653
Provision for Credit Losses     4,691       5,278       20,711
Net Interest Income After Provision for Credit Losses     95,006       90,995       86,942
Noninterest Income
Trust and Asset Management 11,806 11,190 11,708
Mortgage Banking 3,122 4,549 3,464
Service Charges on Deposit Accounts 9,932 11,632 13,814
Fees, Exchange, and Other Service Charges 14,945 15,196 14,504
Investment Securities Gains (Losses), Net 6,084 (1 ) 20,021
Insurance 2,771 2,309 2,715
Other     5,262       6,602       5,556
Total Noninterest Income     53,922       51,477       71,782
Noninterest Expense
Salaries and Benefits 46,782 46,809 44,564
Net Occupancy 10,327 10,504 10,144
Net Equipment 4,698 5,902 4,558
Professional Fees 2,158 2,116 1,992
FDIC Insurance 3,244 3,198 3,100
Other     18,873       20,193       17,348
Total Noninterest Expense     86,082       88,722       81,706
Income Before Provision for Income Taxes 62,846 53,750 77,018
Provision for Income Taxes     20,486       13,172       24,282
Net Income   $ 42,360     $ 40,578     $ 52,736
Basic Earnings Per Share $ 0.89 $ 0.84 $ 1.10
Diluted Earnings Per Share $ 0.88 $ 0.84 $ 1.09
Dividends Declared Per Share $ 0.45 $ 0.45 $ 0.45
Basic Weighted Average Shares 47,851,612 48,034,234 47,914,412
Diluted Weighted Average Shares     48,074,656       48,275,474       48,289,427
 
Bank of Hawaii Corporation and Subsidiaries
Consolidated Statements of Condition   Table 4
  March 31,   December 31,   March 31,
(dollars in thousands)   2011   2010   2010
Assets
Interest-Bearing Deposits $ 5,394 $ 3,472 $ 4,910
Funds Sold 419,379 438,327 269,410
Investment Securities
Available-for-Sale 4,045,096 6,533,874 5,447,239
Held-to-Maturity (Fair Value of $2,437,803; $134,028; and $173,646) 2,426,710 127,249 167,099
Loans Held for Sale 16,160 17,564 11,143
Loans and Leases 5,326,929 5,335,792 5,610,081
Allowance for Loan and Lease Losses     (147,358 )     (147,358 )     (146,358 )
Net Loans and Leases     5,179,571       5,188,434       5,463,723  
Total Earning Assets     12,092,310       12,308,920       11,363,524  
Cash and Noninterest-Bearing Deposits 223,068 165,748 355,398
Premises and Equipment 106,729 108,170 110,310
Customers' Acceptances 779 437 677
Accrued Interest Receivable 41,309 41,151 42,180
Foreclosed Real Estate 2,793 1,928 3,192
Mortgage Servicing Rights 25,919 25,379 26,082
Goodwill 31,517 31,517 31,517
Other Assets     437,880       443,537       502,790  
Total Assets   $ 12,962,304     $ 13,126,787     $ 12,435,670  
 
Liabilities
Deposits
Noninterest-Bearing Demand $ 2,568,942 $ 2,447,713 $ 2,194,280
Interest-Bearing Demand 1,811,705 1,871,718 1,669,586
Savings 4,515,921 4,526,893 4,515,597
Time     1,015,823       1,042,671       1,114,621  
Total Deposits     9,912,391       9,888,995       9,494,084  
Funds Purchased 9,478 9,478 8,888
Short-Term Borrowings 6,900 6,200 7,317
Securities Sold Under Agreements to Repurchase 1,745,083 1,901,084 1,529,047
Long-Term Debt 32,643 32,652 90,309
Banker's Acceptances 779 437 677
Retirement Benefits Payable 30,707 30,885 36,895
Accrued Interest Payable 6,605 5,007 7,766
Taxes Payable and Deferred Taxes 124,774 121,517 224,112
Other Liabilities     96,719       119,399       97,203  
Total Liabilities     11,966,079       12,115,654       11,496,298  
Shareholders' Equity
Common Stock ($.01 par value; authorized 500,000,000 shares;
issued / outstanding: March 31, 2011 - 57,120,240 / 47,760,878;
December 31, 2010 - 57,115,287 / 48,097,672;
and March 31, 2010 - 57,027,543 / 48,040,830) 570 570 570
Capital Surplus 502,029 500,888 494,653
Accumulated Other Comprehensive Income 7,936 26,965 18,063
Retained Earnings 951,817 932,629 874,305
Treasury Stock, at Cost (Shares: March 31, 2011 - 9,359,362;
December 31, 2010 - 9,017,615; and March 31, 2010 - 8,986,713)     (466,127 )     (449,919 )     (448,219 )
Total Shareholders' Equity     996,225       1,011,133       939,372  
Total Liabilities and Shareholders' Equity   $ 12,962,304     $ 13,126,787     $ 12,435,670  
 
Bank of Hawaii Corporation and Subsidiaries
Consolidated Statements of Shareholders' Equity   Table 5
        Accum.      
Other
Compre- Compre-
Common Capital hensive Retained Treasury hensive
(dollars in thousands)   Total   Stock   Surplus   Income   Earnings   Stock   Income
Balance as of December 31, 2010 $ 1,011,133 $ 570 $ 500,888 $ 26,965 $ 932,629 $ (449,919 )
Comprehensive Income:
Net Income 42,360 - - - 42,360 - $ 42,360
Other Comprehensive Income, Net of Tax:
Net Unrealized Losses on Investment Securities,
Net of Reclassification Adjustment (19,500 ) - - (19,500 ) - - (19,500 )
Amortization of Net Losses Related to Defined Benefit Plans 471 - - 471 - -   471  
Total Comprehensive Income $ 23,331  
Share-Based Compensation 744 - 744 - - -
Common Stock Issued under Purchase and Equity
Compensation Plans and Related Tax Benefits (130,609 shares) 4,530 - 397 - (1,588 ) 5,721
Common Stock Repurchased (467,403 shares) (21,929 ) - - - - (21,929 )
Cash Dividends Paid ($0.45 per share)     (21,584 )     -     -       -       (21,584 )     -  
Balance as of March 31, 2011   $ 996,225     $ 570   $ 502,029     $ 7,936     $ 951,817     $ (466,127 )
 
Balance as of December 31, 2009 $ 895,973 $ 569 $ 494,318 $ 6,925 $ 843,521 $ (449,360 )
Comprehensive Income:
Net Income 52,736 - - - 52,736 - $ 52,736
Other Comprehensive Income, Net of Tax:
Net Unrealized Gains on Investment Securities,
Net of Reclassification Adjustment 10,757 - - 10,757 - - 10,757
Amortization of Net Losses Related to Defined Benefit Plans 381 - - 381 - -   381  
Total Comprehensive Income $ 63,874  
Share-Based Compensation 714 - 714 - - -
Common Stock Issued under Purchase and Equity
Compensation Plans and Related Tax Benefits (52,481 shares) 1,785 1 (379 ) - (320 ) 2,483
Common Stock Repurchased (30,594 shares) (1,342 ) - - - - (1,342 )
Cash Dividends Paid ($0.45 per share)     (21,632 )     -     -       -       (21,632 )     -  
Balance as of March 31, 2010   $ 939,372     $ 570   $ 494,653     $ 18,063     $ 874,305     $ (448,219 )
 
Bank of Hawaii Corporation and Subsidiaries
Average Balances and Interest Rates - Taxable Equivalent Basis   Table 6
    Three Months Ended   Three Months Ended   Three Months Ended
March 31, 2011 December 31, 2010 March 31, 2010
Average   Income/   Yield/ Average   Income/   Yield/ Average   Income/   Yield/
(dollars in millions)   Balance   Expense   Rate   Balance   Expense   Rate   Balance   Expense   Rate
Earning Assets
Interest-Bearing Deposits $ 4.0 $ - (0.16 )% $ 3.2 $ - 0.81 % $ 5.8 $ - 0.92

%

Funds Sold 457.2 0.3 0.22 211.4 0.2 0.30 463.1 0.3 0.27
Investment Securities
Available-for-Sale 5,646.9 38.0 2.70 6,468.5 39.8 2.46 5,241.0 44.1 3.37
Held-to-Maturity 901.0 7.6 3.39 134.8 1.4 4.12 174.1 1.9 4.28
Loans Held for Sale 8.5 0.1 5.65 13.2 0.1 4.77 8.8 0.5 23.80
Loans and Leases 1
Commercial and Industrial 775.8 7.9 4.11 752.7 7.8 4.13 788.5 10.2 5.25
Commercial Mortgage 851.2 10.3 4.93 838.0 10.5 5.00 838.0 10.5 5.09
Construction 80.6 1.0 5.05 86.1 1.1 5.09 108.0 1.3 4.99
Commercial Lease Financing 333.6 2.3 2.75 352.6 2.3 2.57 407.4 3.4 3.33
Residential Mortgage 2,100.6 28.6 5.44 2,078.1 28.4 5.46 2,160.6 30.9 5.73
Home Equity 796.0 9.6 4.91 821.3 10.3 4.95 909.4 11.3 5.02
Automobile 203.1 3.6 7.14 214.4 4.0 7.38 272.6 5.2 7.73
Other 2     170.9     3.2   7.53       174.6     3.4   7.68       202.4     3.9   7.76  
Total Loans and Leases     5,311.8     66.5   5.04       5,317.8     67.8   5.07       5,686.9     76.7   5.44  
Other     79.9     0.3   1.40       79.9     0.3   1.39       79.8     0.3   1.39  
Total Earning Assets 3     12,409.3     112.8   3.65       12,228.8     109.6   3.57       11,659.5     123.8   4.27  
Cash and Noninterest-Bearing Deposits 134.5 240.3 229.8
Other Assets   421.8   495.9   488.5
Total Assets $ 12,965.6 $ 12,965.0 $ 12,377.8
 
Interest-Bearing Liabilities
Interest-Bearing Deposits
Demand $ 1,805.0 0.2 0.04 $ 1,769.4 0.2 0.06 $ 1,662.0 0.3 0.07
Savings 4,536.9 2.2 0.20 4,486.7 2.6 0.23 4,434.2 4.4 0.40
Time     1,045.9     2.8   1.10       1,050.9     3.1   1.18       1,136.5     3.6   1.29  
Total Interest-Bearing Deposits     7,387.8     5.2   0.29       7,307.0     5.9   0.32       7,232.7     8.3   0.47  
Short-Term Borrowings 17.1 - 0.13 20.1 - 0.14 28.7 - 0.10
Securities Sold Under Agreements to Repurchase 1,761.2 7.1 1.60 1,774.8 6.4 1.42 1,531.7 6.4 1.68
Long-Term Debt     32.7     0.4   5.48       40.0     0.7   6.72       90.3     1.2   5.25  
Total Interest-Bearing Liabilities     9,198.8     12.7   0.56       9,141.9     13.0   0.56       8,883.4     15.9   0.72  
Net Interest Income $ 100.1 $ 96.6 $ 107.9
Interest Rate Spread 3.09 % 3.01 % 3.55 %
Net Interest Margin 3.24 % 3.15 % 3.72 %
Noninterest-Bearing Demand Deposits 2,485.8 2,370.5 2,157.9
Other Liabilities 262.2 385.2 387.4
Shareholders' Equity   1,018.8   1,067.4   949.1
Total Liabilities and Shareholders' Equity $ 12,965.6 $ 12,965.0 $ 12,377.8
 

1

Non-performing loans and leases are included in the respective average loan and lease balances. Income, if any, on such loans and leases is recognized on a cash basis.

2

Comprised of other consumer revolving credit, installment, and consumer lease financing.

3

Interest income includes taxable equivalent basis adjustments, based upon a federal statutory tax rate of 35%, of $383,000, $300,000, and $239,000 for the three months ended March 31, 2011, December 31, 2010, and March 31, 2010, respectively.

 
Bank of Hawaii Corporation and Subsidiaries
Analysis of Change in Net Interest Income - Taxable Equivalent Basis   Table 7a
  Three Months Ended March 31, 2011
Compared to December 31, 2010
(dollars in millions)   Volume 1   Rate 1   Time 1   Total
Change in Interest Income:      
Funds Sold $ 0.1 $ - $ - $ 0.1
Investment Securities
Available-for-Sale (5.4 ) 3.6 - (1.8 )
Held-to-Maturity 6.5 (0.3 ) - 6.2
Loans and Leases
Commercial and Industrial 0.3 - (0.2 ) 0.1
Commercial Mortgage 0.1 (0.1 ) (0.2 ) (0.2 )
Construction (0.1 ) - - (0.1 )
Commercial Lease Financing (0.1 ) 0.1 - -
Residential Mortgage 0.3 (0.1 ) - 0.2
Home Equity (0.4 ) (0.1 ) (0.2 ) (0.7 )
Automobile (0.2 ) (0.1 ) (0.1 ) (0.4 )
Other 2     -       (0.1 )     (0.1 )     (0.2 )
Total Loans and Leases     (0.1 )     (0.4 )     (0.8 )     (1.3 )
Total Change in Interest Income     1.1       2.9       (0.8 )     3.2  
 
Change in Interest Expense:
Interest-Bearing Deposits
Savings (0.1 ) (0.3 ) - (0.4 )
Time     -       (0.2 )     (0.1 )     (0.3 )
Total Interest-Bearing Deposits     (0.1 )     (0.5 )     (0.1 )     (0.7 )
Securities Sold Under Agreements to Repurchase - 0.8 (0.1 ) 0.7
Long-Term Debt     (0.1 )     (0.2 )     -       (0.3 )
Total Change in Interest Expense     (0.2 )     0.1       (0.2 )     (0.3 )
 
Change in Net Interest Income   $ 1.3     $ 2.8     $ (0.6 )   $ 3.5  

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 Basis   Table 7b
  Three Months Ended March 31, 2011
Compared to March 31, 2010
(dollars in millions)   Volume 1   Rate 1   Total
Change in Interest Income:    
Investment Securities
Available-for-Sale $ 3.2 $ (9.3 ) $ (6.1 )
Held-to-Maturity 6.2 (0.5 ) 5.7
Loans Held for Sale - (0.4 ) (0.4 )
Loans and Leases
Commercial and Industrial (0.2 ) (2.1 ) (2.3 )
Commercial Mortgage 0.2 (0.4 ) (0.2 )
Construction (0.3 ) - (0.3 )
Commercial Lease Financing (0.6 ) (0.5 ) (1.1 )
Residential Mortgage (0.8 ) (1.5 ) (2.3 )
Home Equity (1.4 ) (0.3 ) (1.7 )
Automobile (1.2 ) (0.4 ) (1.6 )
Other 2     (0.6 )     (0.1 )     (0.7 )
Total Loans and Leases     (4.9 )     (5.3 )     (10.2 )
Total Change in Interest Income     4.5       (15.5 )     (11.0 )
 
Change in Interest Expense:
Interest-Bearing Deposits
Demand - (0.1 ) (0.1 )
Savings 0.1 (2.3 ) (2.2 )
Time     (0.3 )     (0.5 )     (0.8 )
Total Interest-Bearing Deposits     (0.2 )     (2.9 )     (3.1 )
Securities Sold Under Agreements to Repurchase 1.0 (0.3 ) 0.7
Long-Term Debt     (0.8 )     -       (0.8 )
Total Change in Interest Expense     -       (3.2 )     (3.2 )
 
Change in Net Interest Income   $ 4.5     $ (12.3 )   $ (7.8 )
 

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   Table 8
  Three Months Ended
March 31,   December 31,   March 31,
(dollars in thousands)   2011   2010   2010
Salaries $ 29,075 $ 30,350 $ 29,143
Incentive Compensation 3,466 5,248 3,446
Share-Based Compensation and Cash Grants for the Purchase of Company Stock 675 1,220 556
Commission Expense 1,663 2,225 1,346
Retirement and Other Benefits 4,962 3,564 4,109
Payroll Taxes 4,039 2,033 3,433
Medical, Dental, and Life Insurance 2,223 1,018 2,480
Separation Expense     679     1,151     51
Total Salaries and Benefits   $ 46,782   $ 46,809   $ 44,564
 
Bank of Hawaii Corporation and Subsidiaries
Loan and Lease Portfolio Balances   Table 9
  March 31,   December 31,   September 30,   June 30,   March 31,
(dollars in thousands)     2011     2010     2010     2010     2010
Commercial
Commercial and Industrial $ 771,923 $ 772,624 $ 736,385 $ 758,851 $ 782,298
Commercial Mortgage 883,360 863,385 817,752 816,165 834,086
Construction 80,360 80,325 88,671 88,823 104,349
Lease Financing     331,491     334,997     353,962     399,744     398,939
Total Commercial     2,067,134     2,051,331     1,996,770     2,063,583     2,119,672
Consumer
Residential Mortgage 2,108,376 2,094,189 2,073,340 2,087,380 2,138,094
Home Equity 787,179 807,479 836,990 861,196 892,109
Automobile 196,649 209,008 221,265 238,671 260,472
Other 1     167,591     173,785     183,689     190,081     199,734
Total Consumer     3,259,795     3,284,461     3,315,284     3,377,328     3,490,409
Total Loans and Leases   $ 5,326,929   $ 5,335,792   $ 5,312,054   $ 5,440,911   $ 5,610,081
 
 
Higher Risk Loans Outstanding
March 31, December 31, September 30, June 30, March 31,
(dollars in thousands)     2011     2010     2010     2010     2010
Residential Home Building 2 $ 14,744 $ 14,964 $ 18,444 $ 18,993 $ 29,475
Residential Land Loans 3 21,595 23,745 28,149 30,262 33,514
Home Equity Loans 4 23,783 23,179 23,957 25,055 24,595
Air Transportation 5     37,440     37,879     38,611     39,165     39,743
Total Higher Risk Loans   $ 97,562   $ 99,767   $ 109,161   $ 113,475   $ 127,327
 

1 Comprised of other revolving credit, installment, and lease financing.

2 Residential home building loans were $32.9 million as of March 31, 2011. Higher risk loans within this segment are defined as those loans with a well-defined weakness or weaknesses that jeopardizes the orderly repayment of the loan.

3 We consider all of our residential land loans, which are consumer loans secured by unimproved lots, to be of higher risk due to the volatility in the value of the underlying collateral.

4 Higher risk home equity loans are defined as those loans originated in 2005 or later, with current monitoring credit scores below 600, and with original loan-to-value ratios greater than 70%.

5 We consider all of our air transportation leases to be of higher risk due to the weak financial profile of the industry.

 
 
Deposits
March 31, December 31, September 30, June 30, March 31,
(dollars in thousands)     2011     2010     2010     2010    

2010 6

Consumer $ 5,097,056 $ 5,082,802 $ 4,976,317 $ 4,925,579 $ 4,940,576
Commercial 4,326,495 4,292,108 4,053,306 4,036,679 4,126,287
Public and Other     488,840     514,085     572,839     362,401     427,221
Total Deposits   $ 9,912,391   $ 9,888,995   $ 9,602,462   $ 9,324,659   $ 9,494,084
 

6 Certain prior period information has been reclassified to conform to current presentation.

 

Bank of Hawaii Corporation and Subsidiaries
Non-Performing Assets and Accruing Loans and Leases Past Due 90 Days or More   Table 10
  March 31,   December 31,   September 30,   June 30,   March 31,
(dollars in thousands)   2011   2010   2010   2010   2010
Non-Performing Assets 1
Non-Accrual Loans and Leases
Commercial
Commercial and Industrial $ 1,107 $ 1,642 $ 1,287 $ 741 $ 3,342
Commercial Mortgage 3,421 3,503 5,071 3,476 1,662
Construction 288 288 3,569 5,640 7,297
Lease Financing     9       19       117       63       73  
Total Commercial     4,825       5,452       10,044       9,920       12,374  
Consumer
Residential Mortgage 24,372 28,152 26,917 27,491 23,214
Home Equity     2,602       2,254       2,303       2,638       2,844  
Total Consumer     26,974       30,406       29,220       30,129       26,058  
Total Non-Accrual Loans and Leases     31,799       35,858       39,264       40,049       38,432  
Foreclosed Real Estate     2,793       1,928       5,910       3,192       3,192  
Total Non-Performing Assets   $ 34,592     $ 37,786     $ 45,174     $ 43,241     $ 41,624  
 
Accruing Loans and Leases Past Due 90 Days or More
Commercial
Commercial and Industrial $ - $ - $ 62 $ - $ 2,192
Construction     -       -       -       -       2,170  
Total Commercial     -       -       62       -       4,362  
Consumer
Residential Mortgage 3,614 5,399 8,031 9,019 8,136
Home Equity 1,100 1,067 1,246 2,256 1,608
Automobile 260 410 348 464 571

Other 2

    578       707       857       1,161       1,345  
Total Consumer     5,552       7,583       10,482       12,900       11,660  
Total Accruing Loans and Leases Past Due 90 Days or More   $ 5,552     $ 7,583     $ 10,544     $ 12,900     $ 16,022  
 
Restructured Loans on Accrual Status
and Not Past Due 90 Days or More   $ 29,513     $ 23,723     $ 23,021     $ 13,558     $ 15,686  
 
Total Loans and Leases   $ 5,326,929     $ 5,335,792     $ 5,312,054     $ 5,440,911     $ 5,610,081  
 
Ratio of Non-Accrual Loans and Leases to Total Loans and Leases     0.60 %     0.67 %     0.74 %     0.74 %     0.69 %
 
Ratio of Non-Performing Assets to Total Loans and Leases,
Loans Held for Sale, and Foreclosed Real Estate     0.65 %     0.71 %     0.85 %     0.79 %     0.74 %
 
Ratio of Commercial Non-Performing Assets to Total Commercial Loans and
Leases, Commercial Loans Held for Sale, and Commercial Foreclosed Real Estate     0.31 %     0.31 %     0.75 %     0.62 %     0.72 %
 
Ratio of Consumer Non-Performing Assets to Total Consumer Loans
and Leases and Consumer Foreclosed Real Estate     0.86 %     0.95 %     0.91 %     0.90 %     0.76 %
 
Ratio of Non-Performing Assets and Accruing Loans and Leases
Past Due 90 Days or More to Total Loans and Leases,
Loans Held for Sale, and Foreclosed Real Estate     0.75 %     0.85 %     1.04 %     1.03 %     1.02 %
 
Quarter to Quarter Changes in Non-Performing Assets 1
Balance at Beginning of Quarter $ 37,786 $ 45,174 $ 43,241 $ 41,624 $ 48,331
Additions 5,799 8,175 10,606 10,761 9,533
Reductions
Payments (2,164 ) (5,019 ) (3,432 ) (4,414 ) (5,689 )
Return to Accrual Status (6,408 ) (1,250 ) (964 ) - (3,505 )
Transfer to Foreclosed Real Estate (208 ) (1,133 ) (2,070 ) - -
Sales of Foreclosed Real Estate - (5,427 ) (700 ) - -
Charge-offs/Write-downs     (213 )     (2,734 )     (1,507 )     (4,730 )     (7,046 )
Total Reductions     (8,993 )     (15,563 )     (8,673 )     (9,144 )     (16,240 )
Balance at End of Quarter   $ 34,592     $ 37,786     $ 45,174     $ 43,241     $ 41,624  
 

1

Excluded from non-performing assets was a contractually binding non-accrual loan held for sale of $7.5 million as of March 31, 2011

2

Comprised of other revolving credit, installment, and lease financing.

 
Bank of Hawaii Corporation and Subsidiaries
Reserve for Credit Losses   Table 11
  Three Months Ended
March 31,   December 31,   March 31,
(dollars in thousands)     2011       2010       2010  
Balance at Beginning of Period $ 152,777 $ 152,777 $ 149,077
Loans and Leases Charged-Off
Commercial
Commercial and Industrial (1,657 ) (6,528 ) (3,906 )
Commercial Mortgage - (745 ) (303 )
Construction - - (857 )
Lease Financing - (95 ) (190 )
Consumer
Residential Mortgage (1,751 ) (3,182 ) (3,255 )
Home Equity (1,359 ) (1,859 ) (7,436 )
Automobile (1,029 ) (1,116 ) (2,027 )
Other 1     (1,564 )     (2,137 )     (2,822 )
Total Loans and Leases Charged-Off     (7,360 )     (15,662 )     (20,796 )
Recoveries on Loans and Leases Previously Charged-Off
Commercial
Commercial and Industrial 572 424 858
Commercial Mortgage - 44 24
Construction - 7,321 -
Lease Financing 50 118 1
Consumer
Residential Mortgage 259 190 422
Home Equity 339 967 100
Automobile 649 727 753
Other 1     800       593       627  
Total Recoveries on Loans and Leases Previously Charged-Off     2,669       10,384       2,785  
Net Loans and Leases Charged-Off (4,691 ) (5,278 ) (18,011 )
Provision for Credit Losses     4,691       5,278       20,711  
Balance at End of Period 2   $ 152,777     $ 152,777     $ 151,777  
 
Components
Allowance for Loan and Lease Losses $ 147,358 $ 147,358 $ 146,358
Reserve for Unfunded Commitments     5,419       5,419       5,419  
Total Reserve for Credit Losses   $ 152,777     $ 152,777     $ 151,777  
 
Average Loans and Leases Outstanding   $ 5,311,781     $ 5,317,815     $ 5,686,923  
 
Ratio of Net Loans and Leases Charged-Off to
Average Loans and Leases Outstanding (annualized) 0.36 % 0.39 % 1.28 %
Ratio of Allowance for Loan and Lease Losses to Loans and Leases Outstanding 2.77 % 2.76 % 2.61 %
 

1

Comprised of other revolving credit, installment, and lease financing.

2

Included in this analysis is activity related to the Company's reserve for unfunded commitments, which is separately recorded in other liabilities in the Consolidated Statements of Condition.

 
Bank of Hawaii Corporation and Subsidiaries
Business Segments Selected Financial Information   Table 12
         
Retail Commercial Investment Treasury Consolidated
(dollars in thousands)   Banking   Banking   Services   and Other   Total
Three Months Ended March 31, 2011
Net Interest Income $ 44,424 $ 35,004 $ 3,863 $ 16,406 $ 99,697
Provision for Credit Losses     5,043       (188 )     (140 )     (24 )     4,691  
Net Interest Income After Provision for Credit Losses 39,381 35,192 4,003 16,430 95,006
Noninterest Income 20,120 9,058 15,051 9,693 53,922
Noninterest Expense     (43,899 )     (24,422 )     (15,403 )     (2,358 )     (86,082 )
Income Before Provision for Income Taxes 15,602 19,828 3,651 23,765 62,846
Provision for Income Taxes     (5,773 )     (6,832 )     (1,351 )     (6,530 )     (20,486 )
Net Income     9,829       12,996       2,300       17,235       42,360  
Total Assets as of March 31, 2011   $ 3,046,673     $ 2,264,528     $ 234,847     $ 7,416,256     $ 12,962,304  
 
 
Three Months Ended March 31, 2010 1
Net Interest Income $ 49,305 $ 41,127 $ 4,323 $ 12,898 $ 107,653
Provision for Credit Losses     15,356       5,141       215       (1 )     20,711  
Net Interest Income After Provision for Credit Losses 33,949 35,986 4,108 12,899 86,942
Noninterest Income 23,466 10,019 15,027 23,270 71,782
Noninterest Expense     (42,333 )     (23,862 )     (14,045 )     (1,466 )     (81,706 )
Income Before Provision for Income Taxes 15,082 22,143 5,090 34,703 77,018
Provision for Income Taxes     (5,580 )     (7,999 )     (1,884 )     (8,819 )     (24,282 )
Net Income     9,502       14,144       3,206       25,884       52,736  
Total Assets as of March 31, 2010 1   $ 3,227,358     $ 2,418,556     $ 298,103     $ 6,491,653     $ 12,435,670  
 

1

Certain prior period information has been reclassified to conform to current presentation.

 
Bank of Hawaii Corporation and Subsidiaries
Selected Quarterly Financial Data   Table 13
  Three Months Ended
March 31,   December 31,   September 30,   June 30,   March 31,
(dollars in thousands, except per share amounts)   2011   2010   2010   2010   2010
Quarterly Operating Results
Interest Income
Interest and Fees on Loans and Leases $ 66,593 $ 67,915 $ 70,198 $ 71,997 $ 77,271
Income on Investment Securities
Available-for-Sale 37,669 39,546 40,775 44,989 43,841
Held-to-Maturity 7,633 1,388 1,553 1,700 1,863
Deposits (2 ) 7 5 3 13
Funds Sold 251 160 211 396 309
Other     279       279       278       277       277  
Total Interest Income     112,423       109,295       113,020       119,362       123,574  
Interest Expense
Deposits 5,232 5,918 7,041 7,930 8,307
Securities Sold Under Agreements to Repurchase 7,041 6,425 6,670 6,472 6,429
Funds Purchased 6 7 10 6 7
Long-Term Debt     447       672       673       1,026       1,178  
Total Interest Expense     12,726       13,022       14,394       15,434       15,921  
Net Interest Income 99,697 96,273 98,626 103,928 107,653
Provision for Credit Losses     4,691       5,278       13,359       15,939       20,711  
Net Interest Income After Provision for Credit Losses     95,006       90,995       85,267       87,989       86,942  
Noninterest Income
Trust and Asset Management 11,806 11,190 10,534 11,457 11,708
Mortgage Banking 3,122 4,549 6,811 3,752 3,464
Service Charges on Deposit Accounts 9,932 11,632 12,737 14,856 13,814
Fees, Exchange, and Other Service Charges 14,945 15,196 15,500 15,806 14,504
Investment Securities Gains (Losses), Net 6,084 (1 ) 7,877 14,951 20,021
Insurance 2,771 2,309 2,646 2,291 2,715
Other     5,262       6,602       7,020       5,761       5,556  
Total Noninterest Income     53,922       51,477       63,125       68,874       71,782  
Noninterest Expense
Salaries and Benefits 46,782 46,809 46,840 47,500 44,564
Net Occupancy 10,327 10,504 10,186 10,154 10,144
Net Equipment 4,698 5,902 4,545 4,366 4,558
Professional Fees 2,158 2,116 905 2,091 1,992
FDIC Insurance 3,244 3,198 3,159 3,107 3,100
Other     18,873       20,193       24,255       18,700       17,348  
Total Noninterest Expense     86,082       88,722       89,890       85,918       81,706  
Income Before Provision for Income Taxes 62,846 53,750 58,502 70,945 77,018
Provision for Income Taxes     20,486       13,172       14,438       24,381       24,282  
Net Income   $ 42,360     $ 40,578     $ 44,064     $ 46,564     $ 52,736  
 
Basic Earnings Per Share $ 0.89 $ 0.84 $ 0.91 $ 0.97 $ 1.10
Diluted Earnings Per Share $ 0.88 $ 0.84 $ 0.91 $ 0.96 $ 1.09
 
Balance Sheet Totals
Loans and Leases $ 5,326,929 $ 5,335,792 $ 5,312,054 $ 5,440,911 $ 5,610,081
Total Assets 12,962,304 13,126,787 12,716,603 12,855,845 12,435,670
Total Deposits 9,912,391 9,888,995 9,602,462 9,324,659 9,494,084
Total Shareholders' Equity 996,225 1,011,133 1,039,561 1,013,011 939,372
 
Performance Ratios
Return on Average Assets 1.32 % 1.24 % 1.37 % 1.48 % 1.73 %
Return on Average Shareholders' Equity 16.86 15.08 16.64 19.01 22.54
Efficiency Ratio 1 56.04 60.05 55.57 49.72 45.54
Net Interest Margin 2 3.24 3.15 3.27 3.51 3.72
 

1

The efficiency ratio is defined as noninterest expense divided by total revenue (net interest income and noninterest income).

2

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   Table 14
  One Month Ended   Year Ended
($ in millions; jobs in thousands)   January 31, 2011   December 31, 2010   December 31, 2009
Hawaii Economic Trends        
State General Fund Revenues 1 $ 391.6 0.1 % $ 4,314.1 7.4 % $ 4,018.2 (12.8 )%
General Excise and Use Tax Revenue 1 $ 227.0 18.9 $ 2,379.9 3.6 $ 2,296.3 (10.6 )
Jobs, seasonally adjusted 2 594.5 0.8 589.9 0.9 584.7 (3.5 )
                         
March 31, December 31, September 30, December 31,
(annual percentage, except 2010 and 2011)       2011   2010   2010   2009   2008
Unemployment 3
Statewide, seasonally adjusted 6.3 % 6.3 % 6.5 % 6.9 % 5.6 %
 
Oahu 5.1 4.8 5.4 5.3 4.3
Island of Hawaii 9.5 8.7 9.5 9.4 7.3
Maui 7.8 7.4 8.0 8.7 6.8
Kauai 8.5 7.9 8.7 8.7 7.7
                         
March 31, December 31,
(percentage change, except months of inventory)       2011   2010   2009
Housing Trends (Single Family Oahu) 4
Median Home Price (5.5 )% 3.1 % (7.3 )%
Home Sales Volume (units) 3.8 % 13.4 % (1.8 )%
Months of Inventory 5.4 6.0 6.8
                         
Monthly Visitor Arrivals, Percentage Change
(in thousands)           Seasonally Adjusted   from Previous Month
Tourism 2
 
February 28, 2011 607.5 (0.9 )%
January 31, 2011 613.2 2.4
December 31, 2010 598.3 (1.9 )
November 30, 2010 609.8 1.6
October 31, 2010 600.3 1.1
September 30, 2010 593.9 (0.9 )
August 31, 2010 599.5 1.0
July 31, 2010 593.4 2.4
June 30, 2010 579.4 (0.4 )
May 31, 2010 581.8 1.8
April 30, 2010 571.6 2.1
March 31, 2010 559.4 2.4
February 28, 2010 545.9 (0.6 )
January 31, 2010 549.3 1.2
 

1

Source: Hawaii Department of Business, Economic Development & Tourism.

2

Source: University of Hawaii Economic Research Organization.

3

Source: University of Hawaii Economic Research Organization, State of Hawaii Department of Labor and Industrial Relations.

4

Source: Honolulu Board of REALTORS.

Note: Certain prior period seasonally adjusted information has been revised.

Bank of Hawaii Corporation
Media Inquiries:
Stafford Kiguchi, 808-694-8580
Mobile: 808-265-6367
Stafford.Kiguchi@boh.com
or
Investor/Analyst Inquiries:
Cindy Wyrick, 808-694-8430
Cindy.Wyrick@boh.com

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