August 9, 2022

error page

Business is my step

Bank of Hawaii Corporation 2020 Financial Results

21 min read
  • 2020 Earnings $3.86 Per Diluted Share

  • 2020 Net Income $153.8 Million

  • Diluted Earnings Per Share $1.06 for Fourth Quarter of 2020

  • Net Income $42.3 Million for Fourth Quarter of 2020

  • Board of Directors Declares Dividend of $0.67 Per Share

Bank of Hawaii Corporation (NYSE: BOH) today reported diluted earnings per share of $3.86 for the full year of 2020 compared with diluted earnings per share of $5.56 in 2019. Net income for the year was $153.8 million compared with net income of $225.9 million in the previous year. The return on average assets for the full year of 2020 was 0.79 percent compared with 1.29 percent in 2019. The return on average equity for the full year of 2020 was 11.38 percent compared with 17.65 percent in 2019. The efficiency ratio for the full year of 2020 improved to 54.91 percent compared with 55.68 percent in 2019.

This press release features multimedia. View the full release here: https://www.businesswire.com/news/home/20210125005184/en/

“Bank of Hawaii finished 2020 with solid financial performance despite the many challenges we faced during the year due to the COVID-19 pandemic,” said Peter Ho, Chairman, President, and CEO. “Our loan balances grew 8.6 percent in 2020 and our deposit balances reached another record high, growing 15.4 percent compared with the prior year. Total assets expanded to a new record high of $20.6 billion at the end of the year. Our overall asset quality remained stable and our capital and liquidity all remain strong. During the year our disciplined approach to expense management allowed us to continue making significant progress on our strategic initiatives which position us well for continued growth in the future.”

Diluted earnings per share were $1.06 for the fourth quarter of 2020, an increase from $0.95 in the third quarter of 2020 and down from $1.45 in the fourth quarter of 2019. Net income for the fourth quarter of 2020 was $42.3 million, up from $37.8 million in the previous quarter and down from $58.1 million in the same quarter in 2019. The return on average assets for the fourth quarter of 2020 was 0.83 percent compared with 0.76 percent in the third quarter of 2020 and 1.29 percent in the fourth quarter of 2019. The return on average equity for the fourth quarter of 2020 was 12.26 percent compared with 11.01 percent in the third quarter of 2020 and 17.84 percent in the fourth quarter of 2019. The efficiency ratio for the fourth quarter of 2020 was 59.88 percent compared with 54.22 percent in the previous quarter and 54.26 percent in the same quarter in 2019.

Financial Highlights

Net interest income, on a taxable-equivalent basis, was $497.6 million for the full year of 2020, a decrease of $2.3 million from net interest income of $499.9 million in 2019. Net interest income, on a taxable-equivalent basis, for the fourth quarter of 2020 was $119.8 million, a decrease of $4.7 million compared with net interest income of $124.5 million in the third quarter of 2020 and down $4.4 million from net interest income of $124.2 million in the fourth quarter of 2019. Net interest income in the fourth quarter of 2020 included a charge of $3.0 million related to an impairment in the residual value of a leveraged lease which had a negative impact of 6 basis points on the net interest margin. Analyses of changes in net interest income are included in Tables 8a, 8b and 8c.

The net interest margin for the full year of 2020 was 2.73 percent, a decrease of 30 basis points from the net interest margin of 3.03 percent in 2019. Adjusted for the lease impairment, the decrease in the net interest margin is largely due to lower rates and higher levels of liquidity from continued strong deposit growth. The net interest margin was 2.48 percent in the fourth quarter of 2020, a decrease of 19 basis points from the previous quarter and 47 basis points from the same quarter in 2019.

The provision for credit losses for the full year of 2020 was $117.8 million compared with a provision for credit losses of $16.0 million in 2019. Results for the fourth quarter of 2020 included a provision for credit losses of $15.2 million compared with $28.6 million in the previous quarter and $4.8 million in the same quarter in 2019.

Noninterest income for the full year of 2020 was $184.4 million, an increase of $1.1 million or 0.6 percent compared with noninterest income of $183.3 million in 2019. Noninterest income was $45.3 million in the fourth quarter of 2020 compared with noninterest income of $41.7 million in the third quarter of 2020 and $47.7 million in the fourth quarter of 2019. The increase in noninterest income during the fourth quarter of 2020 compared with the prior quarter is largely due to an increase in mortgage banking income.

Noninterest expense for the full year of 2020 was $373.8 million, a decrease of $5.4 million or 1.4 percent compared with noninterest expense of $379.2 million in 2019. Noninterest expense was $98.7 million in the fourth quarter of 2020 compared with noninterest expense of $89.9 million in the third quarter of 2020 and $93.1 million in the fourth quarter of 2019. Noninterest expense in the fourth quarter of 2020 included $6.1 million in charges related to the decision to permanently close twelve branches and reduce the current number of cash-only ATMs. Noninterest expense in the fourth quarter also included a charge of $0.8 million related to the true-up of amortization on an investment. Noninterest expense during the third quarter of 2020 included a gain of $1.9 million related to the sale of a branch building partially offset by $1.8 million in severance. There were no significant items in noninterest expense during the fourth quarter of 2019. An analysis of noninterest expenses related to salaries and benefits is included in Table 9.

The effective tax rate for the full year of 2020 was 18.68 percent compared with 20.96 percent for the full year of 2019. The effective tax rate for the fourth quarter of 2020 was 16.87 percent compared with 20.09 percent in the previous quarter and 21.15 percent during the same quarter in 2019. The decrease in the effective tax rate for the fourth quarter of 2020 is primarily due to a return to provision adjustment of $1.6 million.

The Company’s business segments are defined as Consumer Banking, Commercial Banking, and Treasury & Other. Results for the business segments are determined based on the Company’s internal financial management reporting process and organizational structure. Selected financial information is included in Tables 13a and 13b.

Asset Quality

The Company’s overall asset quality continued to remain relatively stable during the fourth quarter of 2020. Total non-performing assets were $18.5 million at December 31, 2020, down from $18.6 million at September 30, 2020 and $20.1 million at December 31, 2019. Non-performing assets as a percentage of total loans and leases and foreclosed real estate were 0.15 percent at December 31, 2020 compared with 0.16 percent at September 30, 2020 and 0.18 percent at December 31, 2019.

Accruing loans and leases past due 90 days or more were $10.5 million at December 31, 2020 compared with $9.6 million at September 30, 2020 and $8.4 million at December 31, 2019. Restructured loans and leases not included in non-accrual loans or accruing loans past due 90 days or more were $68.1 million at December 31, 2020 compared with $58.7 million at September 30, 2020 and $63.1 million at December 31, 2019. More information on non-performing assets and accruing loans and leases past due 90 days or more is presented in Table 11.

Net charge-offs for the full year of 2020 were $7.1 million or 0.06 percent of total average loans and leases compared with net charge-offs of $12.7 million or 0.12 percent of total average loans and leases in 2019. Net charge-offs during the fourth quarter of 2020 were a net recovery of $0.3 million and were comprised of charge-offs of $3.2 million fully offset by recoveries of $3.5 million. Net charge-offs during the third quarter of 2020 were a net recovery of $1.5 million as loan charge-offs of $2.3 million were fully offset by recoveries of $3.8 million. Net charge-offs during the fourth quarter of 2019 were $3.7 million or 0.13 percent annualized of total average loans and leases outstanding and were comprised of charge-offs of $6.2 million and recoveries of $2.6 million.

The allowance for credit losses was $216.3 million at December 31, 2020, an increase from $203.5 million at September 30, 2020 and $110.0 million at December 31, 2019. The ratio of the allowance for credit losses to total loans and leases outstanding was 1.81 percent at December 31, 2020, up from 1.73 percent at September 30, 2020 and 1.00 percent at December 31, 2019. The reserve for unfunded commitments was $2.4 million at December 31, 2020, a slight increase from $2.3 million at the end of the prior quarter and down from $6.8 million at the end of the same quarter in 2019. Details of loan and lease charge-offs, recoveries, and the components of the total reserve for credit losses are summarized in Table 12.

Other Financial Highlights

Total assets increased to a new record of $20.6 billion at December 31, 2020 compared with total assets of $20.1 billion at September 30, 2020 and total assets of $18.1 billion at December 31, 2019. Average total assets were $19.4 billion for the full year of 2020, an increase of 10.5 percent from average total assets of $17.5 billion during 2019.

The investment securities portfolio was $7.1 billion at December 31, 2020, up from total securities of $6.4 billion at September 30, 2020 and $5.7 billion at December 31, 2019 due to growth in deposits that continued to outpace loan growth. The portfolio remains largely comprised of securities issued by U.S. government agencies and includes $3.3 billion in securities held to maturity and $3.8 billion in securities available for sale at December 31, 2020. The securities portfolio at September 30, 2020 included $3.2 billion in securities held to maturity and $3.2 billion in securities available for sale compared with $3.0 billion in securities held to maturity and $2.6 billion in securities available for sale at December 31, 2019.

Total loans and leases were $11.9 billion at December 31, 2020, an increase of 1.2 percent from total loans and leases of $11.8 billion at September 30, 2020 and up 8.6 percent from total loans and leases of $11.0 billion at December 31, 2019. Average total loans and leases were $11.6 billion during the full year of 2020, an increase of 8.5 percent from average total loans and leases of $10.7 billion during 2019.

The commercial loan portfolio was $5.1 billion at the end of December 31, 2020, an increase of $83.8 million or 1.7 percent from $5.0 billion at the end of the third quarter of 2020 and up $886.9 million or 21.0 percent from $4.2 billion at the end of the fourth quarter of 2019. Consumer loans were $6.8 billion at December 31, 2020, an increase of $62.6 million or 0.9 percent from $6.8 billion at the end of the third quarter of 2020 and up $62.3 million or 0.9 percent from $6.8 billion at the end of the fourth quarter of 2019. Loan and lease portfolio balances are summarized in Table 10.

Total deposits were $18.2 billion at December 31, 2020, an increase of 2.7 percent from total deposits of $17.7 billion at September 30, 2020 and up 15.4 percent from total deposits of $15.8 billion at December 31, 2019. Average total deposits were $16.9 billion during the full year of 2020, an increase of 11.0 percent from average total deposits of $15.2 billion during 2019.

Consumer deposits were $9.3 billion at December 31, 2020, an increase of $443.9 million or 5.0 percent from $8.9 billion at the end of the third quarter of 2020 and an increase of $1.2 billion or 15.1 percent from $8.1 billion at the end of the fourth quarter of 2019. Commercial deposits were $7.3 billion at December 31, 2020, an increase of $143.3 million or 2.0 percent from $7.2 billion at the end of the third quarter of 2020 and an increase of $978.6 million or 15.5 percent from $6.3 billion at the end of the fourth quarter of 2019. Other deposits, including public funds, were $1.6 billion at December 31, 2020, a decrease of $114.5 million or 6.8 percent from $1.7 billion at the end of the third quarter of 2020 and an increase of $219.3 million or 16.3 percent from $1.3 billion at the end of the fourth quarter of 2019. Deposit balances are summarized in Tables 7a, 7b, and 10.

Total shareholders’ equity was $1.4 billion at December 31, 2020, an increase of $12.8 million from September 30, 2020, and up $87.7 million from December 31, 2019. There were no shares repurchased during the fourth quarter of 2020. The Tier 1 Capital Ratio was 12.06 percent at December 31, 2020 compared with 12.09 percent at September 30, 2020 and 12.18 percent at December 31, 2019. The Tier 1 Leverage Ratio at December 31, 2020 was 6.71 percent compared with 6.81 percent at September 30, 2020 and 7.25 percent at December 31, 2019. The decrease in the Tier 1 Leverage ratio is due to balance sheet growth related to the significant increase in customer deposits.

The Company’s Board of Directors declared a quarterly cash dividend of $0.67 per share on the Company’s outstanding shares. The dividend will be payable on March 12, 2021 to shareholders of record at the close of business on February 26, 2021.

Conference Call Information

The Company will review its 2020 financial results today at 8:00 a.m. Hawaii Time (1:00 p.m. Eastern Time). The live call, including a slide presentation, will be accessible on the investor relations link of Bank of Hawaii Corporation’s website, www.boh.com. The webcast link is https://edge.media-server.com/mmc/p/ukntid8g. The toll-free number for the teleconference is 1 (844) 543-5235 in the United States and Canada and 1 (703) 318-2209 for other international callers. Use the pass code “Bank of Hawaii” to access the call. A replay of the conference call will be available for one week beginning approximately 11:00 a.m. Hawaii Time on Monday, January 25, 2021. The replay number is 1 (855) 859-2056 in the United States and Canada and 1 (404) 537-3406 from other international locations. Enter the conference ID 4199179 when prompted. In addition, the replay will be available on the Company’s website, www.boh.com.

Forward-Looking Statements

This news release, and other statements made by the Company in connection with it may contain “forward-looking statements” (as defined in the Private Securities Litigation Reform Act of 1995) that involve risks and uncertainties that could cause results to be materially different from expectations. Forecasts of our financial results and condition, expectations for our operations and business prospects, and our assumptions used in those forecasts and expectations are examples of certain of these forward-looking statements. 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, 2019, and its Form 10-Qs for the fiscal quarters ended March 31, 2020, June 30, 2020 and October 31, 2020, which were filed with the U.S. Securities and Exchange Commission. These forward-looking statements are not guarantees of future performance and speak only as of the date made, and, except as required by law, the Company undertakes no obligation to update or revise any forward-looking statements to reflect subsequent events, new information or future circumstances.

Bank of Hawaii Corporation is an independent regional financial services company serving businesses, consumers, and governments in Hawaii and the West Pacific. The Company’s principal subsidiary, Bank of Hawaii, was founded in 1897. 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 1

Three Months Ended

Year Ended

December 31,

September 30,

December 31,

December 31,

(dollars in thousands, except per share amounts)

2020

2020

2019

2020

2019

For the Period:

Operating Results

Net Interest Income

$

119,499

$

124,166

$

123,885

$

496,322

$

497,715

Provision for Credit Losses

15,200

28,600

4,750

117,800

16,000

Total Noninterest Income

45,258

41,734

47,702

184,409

183,338

Total Noninterest Expense

98,654

89,949

93,096

373,807

379,227

Net Income

42,314

37,840

58,143

153,804

225,913

Basic Earnings Per Share

1.06

0.95

1.46

3.87

5.59

Diluted Earnings Per Share

1.06

0.95

1.45

3.86

5.56

Dividends Declared Per Share

0.67

0.67

0.67

2.68

2.59

Performance Ratios

Return on Average Assets

0.83

%

0.76

%

1.29

%

0.79

%

1.29

%

Return on Average Shareholders’ Equity

12.26

11.01

17.84

11.38

17.65

Efficiency Ratio 1

59.88

54.22

54.26

54.91

55.68

Net Interest Margin 2

2.48

2.67

2.95

2.73

3.03

Dividend Payout Ratio 3

63.21

70.53

45.89

69.25

46.33

Average Shareholders’ Equity to Average Assets

6.74

6.93

7.26

6.97

7.30

Average Balances

Average Loans and Leases

$

11,835,929

$

11,739,785

$

10,878,672

$

11,592,093

$

10,688,424

Average Assets

20,382,633

19,741,139

17,821,004

19,387,693

17,537,570

Average Deposits

17,819,116

17,270,206

15,441,097

16,900,186

15,228,066

Average Shareholders’ Equity

1,372,971

1,367,756

1,292,930

1,351,583

1,280,082

Per Share of Common Stock

Book Value

$

34.26

$

33.99

$

32.14

$

34.26

$

32.14

Tangible Book Value

33.47

33.21

31.35

33.47

31.35

Market Value

Closing

76.62

50.52

95.16

76.62

95.16

High

80.38

61.94

95.68

95.53

95.68

Low

49.25

48.77

81.29

46.70

66.54

December 31,

September 30,

December 31,

2020

2020

2019

As of Period End:

Balance Sheet Totals

Loans and Leases

$

11,940,020

$

11,793,608

$

10,990,892

Total Assets

20,603,651

20,109,489

18,095,496

Total Deposits

18,211,621

17,738,883

15,784,482

Other Debt

60,481

60,502

85,565

Total Shareholders’ Equity

1,374,507

1,361,739

1,286,832

Asset Quality

Non-Performing Assets

$

18,481

$

18,626

$

20,117

Allowance for Credit Losses

216,252

203,496

110,027

Allowance to Loans and Leases Outstanding

1.81

%

1.73

%

1.00

%

Capital Ratios 4

Common Equity Tier 1 Capital Ratio

12.06

%

12.09

%

12.18

%

Tier 1 Capital Ratio

12.06

12.09

12.18

Total Capital Ratio

13.31

13.35

13.28

Tier 1 Leverage Ratio

6.71

6.81

7.25

Total Shareholders’ Equity to Total Assets

6.67

6.77

7.11

Tangible Common Equity to Tangible Assets 5

6.53

6.63

6.95

Tangible Common Equity to Risk-Weighted Assets 5

11.89

12.02

11.85

Non-Financial Data

Full-Time Equivalent Employees

2,022

2,038

2,124

Branches

65

67

68

ATMs

357

358

387

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

2 Net interest margin is defined as net interest income, on a taxable-equivalent basis, as a percentage of average earning assets.

3 Dividend payout ratio is defined as dividends declared per share divided by basic earnings per share.

4 Regulatory capital ratios as of December 31, 2020 are preliminary.

5 Tangible common equity to tangible assets and tangible common equity to risk-weighted assets are Non-GAAP financial measures. See Table 2 “Reconciliation of Non-GAAP Financial Measures.”

Bank of Hawaii Corporation and Subsidiaries

Reconciliation of Non-GAAP Financial Measures

Table 2

December 31,

September 30,

December 31,

(dollars in thousands)

2020

2020

2019

Total Shareholders’ Equity

$

1,374,507

$

1,361,739

$

1,286,832

Less: Goodwill

31,517

31,517

31,517

Tangible Common Equity

$

1,342,990

$

1,330,222

$

1,255,315

Total Assets

$

20,603,651

$

20,109,489

$

18,095,496

Less: Goodwill

31,517

31,517

31,517

Tangible Assets

$

20,572,134

$

20,077,972

$

18,063,979

Risk-Weighted Assets, determined in accordance

with prescribed regulatory requirements

$

11,295,077

$

11,068,888

$

10,589,061

Total Shareholders’ Equity to Total Assets

6.67

%

6.77

%

7.11

%

Tangible Common Equity to Tangible Assets (Non-GAAP)

6.53

%

6.63

%

6.95

%

Tier 1 Capital Ratio

12.06

%

12.09

%

12.18

%

Tangible Common Equity to Risk-Weighted Assets (Non-GAAP)

11.89

%

12.02

%

11.85

%

Note: Risk-Weighted Assets and Regulatory capital ratios as of December 31, 2020 are preliminary.

Bank of Hawaii Corporation and Subsidiaries

Consolidated Statements of Income

Table 3

Three Months Ended

Year Ended

December 31,

September 30,

December 31,

December 31,

(dollars in thousands, except per share amounts)

2020

2020

2019

2020

2019

Interest Income

Interest and Fees on Loans and Leases

$

98,471

$

103,189

$

109,223

$

417,498

$

439,012

Income on Investment Securities

Available-for-Sale

15,449

14,558

16,158

61,294

62,174

Held-to-Maturity

14,113

15,967

18,750

66,055

81,616

Deposits

1

3

8

14

41

Funds Sold

115

149

723

902

3,553

Other

167

151

239

661

1,001

Total Interest Income

128,316

134,017

145,101

546,424

587,397

Interest Expense

Deposits

4,861

5,891

16,407

32,966

68,374

Securities Sold Under Agreements to Repurchase

3,614

3,622

4,071

15,281

17,522

Funds Purchased

5

25

95

840

Short-Term Borrowings

1

62

38

Other Debt

337

337

713

1,698

2,908

Total Interest Expense

8,817

9,851

21,216

50,102

89,682

Net Interest Income

119,499

124,166

123,885

496,322

497,715

Provision for Credit Losses

15,200

28,600

4,750

117,800

16,000

Net Interest Income After Provision for Credit Losses

104,299

95,566

119,135

378,522

481,715

Noninterest Income

Trust and Asset Management

11,239

10,752

11,157

43,456

44,233

Mortgage Banking

6,851

4,047

3,199

17,871

13,686

Service Charges on Deposit Accounts

6,335

6,027

7,835

24,910

30,074

Fees, Exchange, and Other Service Charges

12,143

12,296

14,533

47,056

57,893

Investment Securities Gains (Losses), Net

(1,193

)

(1,121

)

(906

)

9,932

(3,986

)

Annuity and Insurance

670

881

1,272

3,362

6,934

Bank-Owned Life Insurance

2,353

1,806

1,879

7,388

7,015

Other

6,860

7,046

8,733

30,434

27,489

Total Noninterest Income

45,258

41,734

47,702

184,409

183,338

Noninterest Expense

Salaries and Benefits

50,200

51,951

51,664

207,329

216,106

Net Occupancy

14,536

7,281

8,824

39,533

33,800

Net Equipment

9,574

9,223

7,930

35,448

29,295

Data Processing

4,604

4,691

4,828

18,499

18,757

Professional Fees

3,174

2,743

3,257

12,186

10,071

FDIC Insurance

1,484

1,282

1,376

5,780

5,192

Other

15,082

12,778

15,217

55,032

66,006

Total Noninterest Expense

98,654

89,949

93,096

373,807

379,227

Income Before Provision for Income Taxes

50,903

47,351

73,741

189,124

285,826

Provision for Income Taxes

8,589

9,511

15,598

35,320

59,913

Net Income

$

42,314

$

37,840

$

58,143

$

153,804

$

225,913

Basic Earnings Per Share

$

1.06

$

0.95

$

1.46

$

3.87

$

5.59

Diluted Earnings Per Share

$

1.06

$

0.95

$

1.45

$

3.86

$

5.56

Dividends Declared Per Share

$

0.67

$

0.67

$

0.67

$

2.68

$

2.59

Basic Weighted Average Shares

39,773,851

39,745,120

39,880,619

39,726,210

40,384,328

Diluted Weighted Average Shares

39,963,736

39,869,135

40,179,016

39,892,107

40,649,570

Bank of Hawaii Corporation and Subsidiaries

Consolidated Statements of Comprehensive Income

Table 4

Three Months Ended

Year Ended

December 31,

September 30,

December 31,

December 31,

(dollars in thousands)

2020

2020

2019

2020

2019

Net Income

$

42,314

$

37,840

$

58,143

$

153,804

$

225,913

Other Comprehensive Income (Loss), Net of Tax:

Net Unrealized Gains (Losses) on Investment Securities

(961

)

(4,900

)

(5,856

)

43,428

22,677

Defined Benefit Plans

(5,616

)

374

(3,482

)

(4,494

)

(2,746

)

Other Comprehensive Income (Loss)

(6,577

)

(4,526

)

(9,338

)

38,934

19,931

Comprehensive Income

$

35,737

$

33,314

$

48,805

$

192,738

$

245,844

Bank of Hawaii Corporation and Subsidiaries

Consolidated Statements of Condition

Table 5

December 31,

September 30,

December 31,

(dollars in thousands)

2020

2020

2019

Assets

Interest-Bearing Deposits in Other Banks

$

1,646

$

4,233

$

4,979

Funds Sold

333,022

736,524

254,574

Investment Securities

Available-for-Sale

3,791,689

3,190,313

2,619,003

Held-to-Maturity (Fair Value of $3,348,693; $3,288,668; and $3,062,882)

3,262,727

3,198,830

3,042,294

Loans Held for Sale

82,565

39,062

Loans and Leases

11,940,020

11,793,608

10,990,892

Allowance for Credit Losses

(216,252

)

(203,496

)

(110,027

)

Net Loans and Leases

11,723,768

11,590,112

10,880,865

Total Earning Assets

19,195,417

18,720,012

16,840,777

Cash and Due from Banks

279,420

260,167

299,105

Premises and Equipment, Net

199,695

199,021

188,388

Operating Lease Right-of-Use Assets

99,542

96,200

100,838

Accrued Interest Receivable

49,303

57,370

46,476

Foreclosed Real Estate

2,332

2,332

2,737

Mortgage Servicing Rights

19,652

21,887

25,022

Goodwill

31,517

31,517

31,517

Bank-Owned Life Insurance

291,480

291,231

287,962

Other Assets

435,293

429,752

272,674

Total Assets

$

20,603,651

$

20,109,489

$

18,095,496

Liabilities

Deposits

Noninterest-Bearing Demand

$

5,749,612

$

5,428,567

$

4,489,525

Interest-Bearing Demand

4,040,733

3,824,448

3,127,205

Savings

6,759,213

6,763,891

6,365,321

Time

1,662,063

1,721,977

1,802,431

Total Deposits

18,211,621

17,738,883

15,784,482

Securities Sold Under Agreements to Repurchase

600,590

602,106

604,306

Other Debt

60,481

60,502

85,565

Operating Lease Liabilities

107,412

103,869

108,210

Retirement Benefits Payable

51,197

43,505

44,504

Accrued Interest Payable

5,117

6,613

8,040

Taxes Payable and Deferred Taxes

2,463

12,124

16,085

Other Liabilities

190,263

180,148

157,472

Total Liabilities

19,229,144

18,747,750

16,808,664

Shareholders’ Equity

Common Stock ($.01 par value; authorized 500,000,000 shares;

issued / outstanding: December 31, 2020 – 58,285,624 / 40,119,312;

September 30, 2020 – 58,248,690 / 40,060,675;

and December 31, 2019 – 58,166,910 / 40,039,695)

580

580

579

Capital Surplus

591,360

588,632

582,566

Accumulated Other Comprehensive Gain (Loss)

7,822

14,399

(31,112

)

Retained Earnings

1,811,979

1,797,763

1,761,415

Treasury Stock, at Cost (Shares: December 31, 2020 – 18,166,312;

September 30, 2020 – 18,188,015; and December 31, 2019 – 18,127,215)

(1,037,234

)

(1,039,635

)

(1,026,616

)

Total Shareholders’ Equity

1,374,507

1,361,739

1,286,832

Total Liabilities and Shareholders’ Equity

$

20,603,651

$

20,109,489

$

18,095,496

Bank of Hawaii Corporation and Subsidiaries

Consolidated Statements of Shareholders’ Equity

Table 6

Accum.

Other

Compre-

hensive

Common Shares

Common

Capital

Income

Retained

Treasury

(dollars in thousands)

Outstanding

Stock

Surplus

(Loss)

Earnings

Stock

Total

Balance as of December 31, 2018

41,499,898

$

577

$

571,704

$

(51,043

)

$

1,641,314

$

(894,352

)

$

1,268,200

Net Income

225,913

225,913

Other Comprehensive Income

19,931

19,931

Share-Based Compensation

8,337

8,337

Common Stock Issued under Purchase and Equity

Compensation Plans and Related Tax Benefits

212,924

2

2,525

(334

)

5,385

7,578

Common Stock Repurchased

(1,673,127

)

(137,649

)

(137,649

)

Cash Dividends Declared ($2.59 per share)

(105,478

)

(105,478

)

Balance as of December 31, 2019

40,039,695

$

579

$

582,566

$

(31,112

)

$

1,761,415

$

(1,026,616

)

$

1,286,832

Net Income

153,804

153,804

Other Comprehensive Income

38,934

38,934

Cumulative Change in Accounting Principle

3,632

3,632

Share-Based Compensation

7,577

7,577

Common Stock Issued under Purchase and Equity

Compensation Plans and Related Tax Benefits

283,482

1

1,217

562

7,388

9,168

Common Stock Repurchased

(203,865

)

(18,006

)

(18,006

)

Cash Dividends Declared ($2.68 per share)

(107,434

)

(107,434

)

Balance as of December 31, 2020

40,119,312

$

580

$

591,360

$

7,822

$

1,811,979

$

(1,037,234

)

$

1,374,507

Bank of Hawaii Corporation and Subsidiaries

Average Balances and Interest Rates – Taxable-Equivalent Basis

Table 7a

Three Months Ended

Three Months Ended

Three Months Ended

December 31, 2020

September 30, 2020

December 31, 2019

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 in Other Banks

$

2.2

$

0.16

%

$

2.6

$

0.45

%

$

3.4

$

0.90

%

Funds Sold

451.6

0.1

0.10

584.2

0.1

0.10

177.7

0.7

1.59

Investment Securities

Available-for-Sale

Taxable

3,605.8

15.3

1.69

2,918.6

14.3

1.96

2,578.3

15.9

2.46

Non-Taxable

20.2

0.2

4.33

25.8

0.3

4.22

33.4

0.4

4.35

Held-to-Maturity

Taxable

3,246.7

13.9

1.71

3,257.7

15.7

1.93

2,994.7

18.4

2.46

Non-Taxable

47.1

0.3

2.66

54.1

0.4

2.66

61.7

0.4

2.70

Total Investment Securities

6,919.8

29.7

1.71

6,256.2

30.7

1.96

5,668.1

35.1

2.47

Loans Held for Sale

15.1

0.1

2.98

15.9

0.1

3.24

31.0

0.3

3.67

Loans and Leases 1

Commercial and Industrial

1,897.4

14.0

2.95

1,917.0

14.1

2.93

1,356.1

13.3

3.90

Commercial Mortgage

2,768.0

21.7

3.12

2,722.3

21.7

3.18

2,479.7

25.5

4.08

Construction

257.4

2.3

3.62

234.0

2.1

3.60

179.1

2.1

4.73

Commercial Lease Financing

112.2

(2.5)

(9.07)

110.7

0.5

1.82

135.4

0.8

2.38

Residential Mortgage

4,089.7

36.4

3.57

3,988.7

36.7

3.68

3,850.4

36.7

3.81

Home Equity

1,600.9

13.2

3.28

1,625.2

14.1

3.45

1,683.4

15.7

3.70

Automobile

706.1

6.4

3.59

708.3

6.4

3.59

715.2

6.5

3.59

Other 2

404.2

7.0

6.85

433.6

7.6

6.96

479.4

8.5

7.02

Total Loans and Leases

11,835.9

98.5

3.32

11,739.8

103.2

3.50

10,878.7

109.1

3.99

Other

33.3

0.2

2.01

33.3

0.2

1.81

34.9

0.2

2.74

Total Earning Assets 3

19,257.9

128.6

2.66

18,632.0

134.3

2.88

16,793.8

145.4

3.45

Cash and Due from Banks

240.4

234.3

222.2

Other Assets

884.3

874.8

805.0

Total Assets

$

20,382.6

$

19,741.1

$

17,821.0

Interest-Bearing Liabilities

Interest-Bearing Deposits

Demand

$

3,899.5

0.6

0.06

$

3,465.5

0.4

0.04

$

2,990.3

1.0

0.14

Savings

6,728.8

1.4

0.08

6,886.0

1.7

0.10

6,245.0

8.0

0.51

Time

1,696.0

2.9

0.68

1,568.3

3.8

0.97

1,842.3

7.4

1.59

Total Interest-Bearing Deposits

12,324.3

4.9

0.16

11,919.8

5.9

0.20

11,077.6

16.4

0.59

Short-Term Borrowings

19.2

0.10

5.8

1.66

Securities Sold Under Agreements to Repurchase

600.9

3.6

2.35

602.9

3.6

2.35

604.3

4.1

2.64

Other Debt

60.5

0.3

2.22

60.5

0.3

2.22

106.2

0.7

2.67

Total Interest-Bearing Liabilities

13,004.9

8.8

0.27

12,583.2

9.8

0.31

11,793.9

21.2

0.71

Net Interest Income

$

119.8

$

124.5

$

124.2

Interest Rate Spread

2.39

%

2.57

%

2.74

%

Net Interest Margin

2.48

%

2.67

%

2.95

%

Noninterest-Bearing Demand Deposits

5,494.8

5,350.4

4,363.5

Other Liabilities

509.9

439.7

370.7

Shareholders’ Equity

1,373.0

1,367.8

1,292.9

Total Liabilities and Shareholders’ Equity

$

20,382.6

$

19,741.1

$

17,821.0

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

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

3 Interest income includes taxable-equivalent basis adjustments, based upon a federal statutory tax rate of 21%, of $287,000, $295,000, and $352,000 for the three months ended December 31, 2020, September 30, 2020, and December 31, 2019, respectively.

Bank of Hawaii Corporation and Subsidiaries

Average Balances and Interest Rates – Taxable-Equivalent Basis

Table 7b

Year Ended

Year Ended

December 31, 2020

December 31, 2019

Average

Income/

Yield/

Average

Income/

Yield/

(dollars in millions)

Balance

Expense

Rate

Balance

Expense

Rate

Earning Assets

Interest-Bearing Deposits in Other Banks

$

2.2

$

0.61

%

$

3.1

$

1.33

%

Funds Sold

434.1

0.9

0.21

165.7

3.6

2.14

Investment Securities

Available-for-Sale

Taxable

2,961.9

60.3

2.04

2,210.5

58.9

2.66

Non-Taxable

27.6

1.2

4.36

109.6

4.1

3.78

Held-to-Maturity

Taxable

3,125.2

65.0

2.08

3,148.2

78.3

2.49

Non-Taxable

52.6

1.4

2.66

137.8

4.2

3.04

Total Investment Securities

6,167.3

127.9

2.07

5,606.1

145.5

2.60

Loans Held for Sale

19.4

0.6

3.28

21.7

0.9

3.92

Loans and Leases 1

Commercial and Industrial

1,797.5

59.3

3.30

1,370.9

57.9

4.23

Commercial Mortgage

2,666.1

90.9

3.41

2,400.6

102.4

4.27

Construction

240.1

9.4

3.92

145.2

7.4

5.07

Commercial Lease Financing

111.3

(1.0)

(0.88)

154.4

3.7

2.43

Residential Mortgage

3,978.7

146.0

3.67

3,768.2

144.7

3.84

Home Equity

1,642.7

56.8

3.46

1,689.4

64.1

3.80

Automobile

709.1

25.3

3.57

694.9

25.1

3.62

Other 2

446.6

30.9

6.91

464.8

33.3

7.16

Total Loans and Leases

11,592.1

417.6

3.60

10,688.4

438.6

4.10

Other

33.7

0.7

1.96

35.1

1.0

2.85

Total Earning Assets 3

18,248.8

547.7

3.00

16,520.1

589.6

3.57

Cash and Due from Banks

263.8

234.0

Other Assets

875.1

783.5

Total Assets

$

19,387.7

$

17,537.6

Interest-Bearing Liabilities

Interest-Bearing Deposits

Demand

$

3,426.8

2.5

0.07

$

2,945.9

5.0

0.17

Savings

6,702.7

12.4

0.19

6,034.0

32.4

0.54

Time

1,708.1

18.1

1.06

1,816.3

31.0

1.71

Total Interest-Bearing Deposits

11,837.6

33.0

0.28

10,796.2

68.4

0.63

Short-Term Borrowings

33.5

0.2

0.47

36.5

0.9

2.41

Securities Sold Under Agreements to Repurchase

602.7

15.2

2.54

531.9

17.5

3.29

Other Debt

62.1

1.7

2.73

111.8

2.9

2.60

Total Interest-Bearing Liabilities

12,535.9

50.1

0.40

11,476.4

89.7

0.78

Net Interest Income

$

497.6

$

499.9

Interest Rate Spread

2.60

%

2.79

%

Net Interest Margin

2.73

%

3.03

%

Noninterest-Bearing Demand Deposits

5,062.6

4,431.9

Other Liabilities

437.6

349.2

Shareholders’ Equity

1,351.6

1,280.1

Total Liabilities and Shareholders’ Equity

$

19,387.7

$

17,537.6

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

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

3 Interest income includes taxable-equivalent basis adjustments, based upon a federal statutory tax rate of 21%, of $1,297,000 and $2,230,000 for the year ended December 31, 2020 and December 31, 2019, respectively.

Bank of Hawaii Corporation and Subsidiaries

Analysis of Change in Net Interest Income – Taxable-Equivalent Basis

Table 8a

Three Months Ended December 31, 2020

Compared to September 30, 2020

(dollars in millions)

Volume 1

Rate 1

Total

Change in Interest Income:

Investment Securities

Available-for-Sale

Taxable

$

3.2

$

(2.2

)

$

1.0

Non-Taxable

(0.1

)

(0.1

)

Held-to-Maturity

Taxable

(0.1

)

(1.7

)

(1.8

)

Non-Taxable

(0.1

)

(0.1

)

Total Investment Securities

2.9

(3.9

)

(1.0

)

Loans and Leases

Commercial and Industrial

(0.2

)

0.1

(0.1

)

Commercial Mortgage

0.4

(0.4

)

Construction

0.2

0.2

Commercial Lease Financing

(3.0

)

(3.0

)

Residential Mortgage

0.9

(1.2

)

(0.3

)

Home Equity

(0.2

)

(0.7

)

(0.9

)

Other 2

(0.5

)

(0.1

)

(0.6

)

Total Loans and Leases

0.6

(5.3

)

(4.7

)

Total Change in Interest Income

3.5

(9.2

)

(5.7

)

Change in Interest Expense:

Interest-Bearing Deposits

Demand

0.2

0.2

Savings

(0.3

)

(0.3

)

Time

0.3

(1.2

)

(0.9

)

Total Interest-Bearing Deposits

0.3

(1.3

)

(1.0

)

Total Change in Interest Expense

0.3

(1.3

)

(1.0

)

Change in Net Interest Income

$

3.2

$

(7.9

)

$

(4.7

)

1 The change in interest income and expense not solely due to changes in volume or rate has been allocated on a pro-rata basis to the volume and rate columns.

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

Bank of Hawaii Corporation and Subsidiaries

Analysis of Change in Net Interest Income – Taxable-Equivalent Basis

Table 8b

Three Months Ended December 31, 2020

Compared to December 31, 2019

(dollars in millions)

Volume 1

Rate 1

Total

Change in Interest Income:

Funds Sold

$

0.5

$

(1.1

)

$

(0.6

)

Investment Securities

Available-for-Sale

Taxable

5.2

(5.8

)

(0.6

)

Non-Taxable

(0.2

)

(0.2

)

Held-to-Maturity

Taxable

1.5

(6.0

)

(4.5

)

Non-Taxable

(0.1

)

(0.1

)

Total Investment Securities

6.4

(11.8

)

(5.4

)

Loans Held for Sale

(0.1

)

(0.1

)

(0.2

)

Loans and Leases

Commercial and Industrial

4.5

(3.8

)

0.7

Commercial Mortgage

2.7

(6.5

)

(3.8

)

Construction

0.8

(0.6

)

0.2

Commercial Lease Financing

(0.1

)

(3.2

)

(3.3

)

Residential Mortgage

2.2

(2.5

)

(0.3

)

Home Equity

(0.8

)

(1.7

)

(2.5

)

Automobile

(0.1

)

(0.1

)

Other 2

(1.3

)

(0.2

)

(1.5

)

Total Loans and Leases

7.9

(18.5

)

(10.6

)

Total Change in Interest Income

14.7

(31.5

)

(16.8

)

Change in Interest Expense:

Interest-Bearing Deposits

Demand

0.3

(0.7

)

(0.4

)

Savings

0.6

(7.2

)

(6.6

)

Time

(0.5

)

(4.0

)

(4.5

)

Total Interest-Bearing Deposits

0.4

(11.9

)

(11.5

)

Securities Sold Under Agreements to Repurchase

(0.1

)

(0.4

)

(0.5

)

Other Debt

(0.3

)

(0.1

)

(0.4

)

Total Change in Interest Expense

(12.4

)

(12.4

)

Change in Net Interest Income

$

14.7

$

(19.1

)

$

(4.4

)

1 The change in interest income and expense not solely due to changes in volume or rate has been allocated on a pro-rata basis to the volume and rate columns.

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

Bank of Hawaii Corporation and Subsidiaries

Analysis of Change in Net Interest Income – Taxable-Equivalent Basis

Table 8c

Year Ended December 31, 2020

Compared to December 31, 2019

(dollars in millions)

Volume 1

Rate 1

Total

Change in Interest Income:

Funds Sold

$

2.4

$

(5.1

)

$

(2.7

)

Investment Securities

Available-for-Sale

Taxable

17.2

(15.8

)

1.4

Non-Taxable

(3.5

)

0.6

(2.9

)

Held-to-Maturity

Taxable

(0.6

)

(12.7

)

(13.3

)

Non-Taxable

(2.3

)

(0.5

)

(2.8

)

Total Investment Securities

10.8

(28.4

)

(17.6

)

Loans Held for Sale

(0.1

)

(0.2

)

(0.3

)

Loans and Leases

Commercial and Industrial

15.7

(14.3

)

1.4

Commercial Mortgage

10.5

(22.0

)

(11.5

)

Construction

4.0

(2.0

)

2.0

Commercial Lease Financing

(0.8

)

(3.9

)

(4.7

)

Residential Mortgage

7.9

(6.6

)

1.3

Home Equity

(1.7

)

(5.6

)

(7.3

)

Automobile

0.5

(0.3

)

0.2

Other 2

(1.3

)

(1.1

)

(2.4

)

Total Loans and Leases

34.8

(55.8

)

(21.0

)

Other

(0.3

)

(0.3

)

Total Change in Interest Income

47.9

(89.8

)

(41.9

)

Change in Interest Expense:

Interest-Bearing Deposits

Demand

0.7

(3.2

)

(2.5

)

Savings

3.3

(23.3

)

(20.0

)

Time

(1.7

)

(11.2

)

(12.9

)

Total Interest-Bearing Deposits

2.3

(37.7

)

(35.4

)

Short-Term Borrowings

(0.1

)

(0.6

)

(0.7

)

Securities Sold Under Agreements to Repurchase

2.1

(4.4

)

(2.3

)

Other Debt

(1.3

)

0.1

(1.2

)

Total Change in Interest Expense

3.0

(42.6

)

(39.6

)

Change in Net Interest Income

$

44.9

$

(47.2

)

$

(2.3

)

1 The change in interest income and expense not solely due to changes in volume or rate has been allocated on a pro-rata basis to the volume and rate columns.

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

Bank of Hawaii Corporation and Subsidiaries

Salaries and Benefits

Table 9

Three Months Ended

Year Ended

December 31,

September 30,

December 31,

December 31,

(dollars in thousands)

2020

2020

2019

2020

2019

Salaries

$

33,907

$

34,046

$

33,465

$

134,178

$

132,237

Incentive Compensation

3,084

2,683

4,864

9,153

21,913

Share-Based Compensation

2,029

1,442

1,475

6,783

8,573

Commission Expense

2,164

1,800

2,080

6,985

6,474

Retirement and Other Benefits

5,212

4,164

4,279

18,528

18,151

Payroll Taxes

2,292

2,624

2,386

12,241

11,795

Medical, Dental, and Life Insurance

1,523

3,422

2,903

12,917

15,202

Separation Expense

(11

)

1,770

212

6,544

1,761

Total Salaries and Benefits

$

50,200

$

51,951

$

51,664

$

207,329

$

216,106

Bank of Hawaii Corporation and Subsidiaries

Loan and Lease Portfolio Balances

Table 10

December 31,

September 30,

June 30,

March 31,

December 31,

(dollars in thousands)

2020

2020

2020

2020

2019

Commercial

Commercial and Industrial

$

1,875,293

$

1,908,482

$

1,956,939

$

1,558,232

$

1,379,152

Commercial Mortgage

2,854,829

2,745,611

2,707,534

2,616,243

2,518,051

Construction

259,798

250,943

245,099

245,390

194,170

Lease Financing

110,766

111,831

113,187

110,704

122,454

Total Commercial

5,100,686

5,016,867

5,022,759

4,530,569

4,213,827

Consumer

Residential Mortgage

4,130,513

4,044,228

3,989,393

3,928,183

3,891,100

Home Equity

1,604,538

1,605,486

1,640,887

1,692,154

1,676,073

Automobile

708,800

709,937

700,702

716,214

720,286

Other 1

395,483

417,090

451,629

485,660

489,606

Total Consumer

6,839,334

6,776,741

6,782,611

6,822,211

6,777,065

Total Loans and Leases

$

11,940,020

$

11,793,608

$

11,805,370

$

11,352,780

$

10,990,892

Deposits

December 31,

September 30,

June 30,

March 31,

December 31,

(dollars in thousands)

2020

2020

2020

2020

2019

Consumer

$

9,347,725

$

8,903,808

$

8,766,885

$

8,294,464

$

8,118,494

Commercial

7,302,832

7,159,531

7,295,033

6,358,583

6,324,214

Public and Other

1,561,064

1,675,544

1,361,237

1,402,314

1,341,774

Total Deposits

$

18,211,621

$

17,738,883

$

17,423,155

$

16,055,361

$

15,784,482

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

Bank of Hawaii Corporation and Subsidiaries

Non-Performing Assets and Accruing Loans and Leases Past Due 90 Days or More

Table 11

December 31,

September 30,

June 30,

March 31,

December 31,

(dollars in thousands)

2020

2020

2020

2020

2019

Non-Performing Assets

Non-Accrual Loans and Leases

Commercial

Commercial and Industrial

$

441

$

475

$

459

$

634

$

830

Commercial Mortgage

8,527

8,615

8,672

9,048

9,244

Total Commercial

8,968

9,090

9,131

9,682

10,074

Consumer

Residential Mortgage

3,223

3,543

5,888

4,330

4,125

Home Equity

3,958

3,661

5,176

4,086

3,181

Total Consumer

7,181

7,204

11,064

8,416

7,306

Total Non-Accrual Loans and Leases

16,149

16,294

20,195

18,098

17,380

Foreclosed Real Estate

2,332

2,332

2,506

2,506

2,737

Total Non-Performing Assets

$

18,481

$

18,626

$

22,701

$

20,604

$

20,117

Accruing Loans and Leases Past Due 90 Days or More

Consumer

Residential Mortgage

$

5,274

$

6,607

$

4,937

$

3,024

$

1,839

Home Equity

3,187

2,571

3,519

3,426

4,125

Automobile

925

156

133

866

949

Other 1

1,160

258

296

1,205

1,493

Total Consumer

10,546

9,592

8,885

8,521

8,406

Total Accruing Loans and Leases Past Due 90 Days or More

$

10,546

$

9,592

$

8,885

$

8,521

$

8,406

Restructured Loans on Accrual Status

and Not Past Due 90 Days or More

$

68,065

$

58,650

$

59,713

$

61,425

$

63,103

Total Loans and Leases

$

11,940,020

$

11,793,608

$

11,805,370

$

11,352,780

$

10,990,892

Ratio of Non-Accrual Loans and Leases to Total Loans and Leases

0.14

%

0.14

%

0.17

%

0.16

%

0.16

%

Ratio of Non-Performing Assets to Total Loans and Leases

and Foreclosed Real Estate

0.15

%

0.16

%

0.19

%

0.18

%

0.18

%

Ratio of Commercial Non-Performing Assets to Total Commercial Loans and

Leases and Commercial Foreclosed Real Estate

0.18

%

0.18

%

0.18

%

0.21

%

0.24

%

Ratio of Consumer Non-Performing Assets to Total Consumer Loans

and Leases and Consumer Foreclosed Real Estate

0.14

%

0.14

%

0.20

%

0.16

%

0.15

%

Ratio of Non-Performing Assets and Accruing Loans and Leases

Past Due 90 Days or More to Total Loans and Leases

and Foreclosed Real Estate

0.24

%

0.24

%

0.27

%

0.26

%

0.26

%

Quarter to Quarter Changes in Non-Performing Assets

Balance at Beginning of Quarter

$

18,626

$

22,701

$

20,604

$

20,117

$

21,645

Additions

434

938

5,856

1,754

883

Reductions

Payments

(490

)

(3,729

)

(2,736

)

(315

)

(495

)

Return to Accrual Status

(1,035

)

(822

)

(437

)

(1,673

)

Sales of Foreclosed Real Estate

(175

)

(231

)

(201

)

Charge-offs/Write-downs

(89

)

(74

)

(201

)

(284

)

(42

)

Total Reductions

(579

)

(5,013

)

(3,759

)

(1,267

)

(2,411

)

Balance at End of Quarter

$

18,481

$

18,626

$

22,701

$

20,604

$

20,117

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

Bank of Hawaii Corporation and Subsidiaries

Reserve for Credit Losses

Table 12

Three Months Ended

Year Ended

December 31,

September 30,

December 31,

December 31,

(dollars in thousands)

2020

2020

2019

2020

2019

Balance at Beginning of Period

$

205,813

$

175,958

$

115,758

$

116,849

$

113,515

CECL Adoption (Day 1) Impact

(5,072

)

Loans and Leases Charged-Off

Commercial

Commercial and Industrial

(177

)

(171

)

(307

)

(1,697

)

(1,122

)

Commercial Mortgage

(1,616

)

Consumer

Residential Mortgage

(120

)

(50

)

(204

)

(112

)

Home Equity

(81

)

(43

)

(245

)

(397

)

(900

)

Automobile

(393

)

(489

)

(1,990

)

(6,496

)

(7,130

)

Other 1

(2,460

)

(1,644

)

(3,651

)

(12,244

)

(13,075

)

Total Loans and Leases Charged-Off

(3,231

)

(2,347

)

(6,243

)

(21,038

)

(23,955

)

Recoveries on Loans and Leases Previously Charged-Off

Commercial

Commercial and Industrial

244

231

293

2,288

1,513

Commercial Mortgage

40

Consumer

Residential Mortgage

497

414

699

1,292

1,927

Home Equity

868

727

577

2,892

2,339

Automobile

910

1,313

512

3,775

2,961

Other 1

968

1,119

503

3,613

2,549

Total Recoveries on Loans and Leases Previously Charged-Off

3,487

3,804

2,584

13,900

11,289

Net Loans and Leases Recovered (Charged-Off)

256

1,457

(3,659

)

(7,138

)

(12,666

)

Provision for Credit Losses

15,200

28,600

4,750

117,800

16,000

Provision for Unfunded Commitments

34

(202

)

(1,136

)

Balance at End of Period 2

$

221,303

$

205,813

$

116,849

$

221,303

$

116,849

Components

Allowance for Credit Losses

$

216,252

$

203,496

$

110,027

$

216,252

$

110,027

Allowance for Accrued Interest Receivable 3

2,700

2,700

Reserve for Unfunded Commitments

2,351

2,317

6,822

2,351

6,822

Total Reserve for Credit Losses

$

221,303

$

205,813

$

116,849

$

221,303

$

116,849

Average Loans and Leases Outstanding

$

11,835,929

$

11,739,785

$

10,878,672

$

11,592,093

$

10,688,424

Ratio of Net Loans and Leases Charged-Off (Recovered) to

Average Loans and Leases Outstanding (annualized)

(0.01

%)

(0.05

%)

0.13

%

0.06

%

0.12

%

Ratio of Allowance for Credit Losses to Loans and Leases Outstanding

1.81

%

1.73

%

1.00

%

1.81

%

1.00

%

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.

3 On December 31 2020, the Company recorded a $2.7 million reserve on accrued interest receivable related to loans in which payment forbearances were granted to borrowers impacted by the COVID-19 pandemic. The reserve was recorded as a contra-asset against accrued interest receivable with the offset to provision for credit losses.

Bank of Hawaii Corporation and Subsidiaries

Business Segments Selected Financial Information

Table 13a

Consumer

Commercial

Treasury

Consolidated

(dollars in thousands)

Banking

Banking

and Other

Total

Three Months Ended December 31, 2020

Net Interest Income

$

71,707

$

44,373

$

3,419

$

119,499

Provision for Credit Losses

(128

)

(129

)

15,457

15,200

Net Interest Income (Loss) After Provision for Credit Losses

71,835

44,502

(12,038

)

104,299

Noninterest Income

35,091

8,040

2,127

45,258

Noninterest Expense

(78,433

)

(15,742

)

(4,479

)

(98,654

)

Income (Loss) Before Income Taxes

28,493

36,800

(14,390

)

50,903

Provision for Income Taxes

(7,242

)

(9,804

)

8,457

(8,589

)

Net Income (Loss)

$

21,251

$

26,996

$

(5,933

)

$

42,314

Total Assets as of December 31, 2020

$

7,478,813

$

5,116,807

$

8,008,031

$

20,603,651

Three Months Ended December 31, 2019 1

Net Interest Income

$

76,099

$

45,475

$

2,311

$

123,885

Provision for Credit Losses

3,819

(165

)

1,096

4,750

Net Interest Income After Provision for Credit Losses

72,280

45,640

1,215