Recent Quotes View Full List My Watchlist Create Watchlist Indicators DJI Nasdaq Composite SPX Gold Crude Oil EL&P Market Index Markets Stocks ETFs Tools Overview News Currencies International Treasuries Bank of Hawaii Corporation First Quarter 2022 Financial Results By: Bank of Hawaii Corporation via Business Wire April 25, 2022 at 06:45 AM EDT Diluted Earnings Per Common Share $1.32 Net Income $54.8 Million Board of Directors Declares Dividend of $0.70 Per Common Share Bank of Hawaii Corporation (NYSE: BOH) today reported diluted earnings per common share of $1.32 for the first quarter of 2022, compared with diluted earnings per common share of $1.55 in the previous quarter and $1.50 in the same quarter last year. Net income for the first quarter of 2022 was $54.8 million, down 14.1% from the fourth quarter of 2021 and down 8.5% from the first quarter of 2021. This press release features multimedia. View the full release here: https://www.businesswire.com/news/home/20220425005225/en/ “Bank of Hawaii had a good start to 2022 with solid operating performance," said Peter Ho, Chairman, President, and CEO. “We saw good continuing momentum in core loan and deposit growth and expansion in core net interest margin. Asset quality continued its stable trend, and capital and liquidity remain strong.” Financial Highlights The return on average assets for the first quarter of 2022 was 0.97% compared with 1.12% in the previous quarter and 1.15% in the same quarter of 2021. The return on average common equity for the first quarter of 2022 was 15.44% compared with 17.40% in the previous quarter and 17.65% in the same quarter of 2021. The decrease from prior quarter was primarily driven by lower provision release and seasonal payroll expenses. The decrease from prior year was primarily driven by lower provision release. Net interest income for the first quarter of 2022 was $125.3 million, a decrease of 0.9% from the fourth quarter of 2021 and an increase of 3.9% from the first quarter of 2021. Net interest margin was 2.34% in the first quarter of 2022, unchanged compared to the previous quarter and a decrease of 9 basis points from the same quarter of 2021. One-time significant items in the fourth quarter of 2021 included a negative $0.9 million adjustment to net interest income for deferred mortgage loan fees related to prior quarters of 2021. The adjustment had a negative impact of 2 basis points on the net interest margin. The provision for credit losses for the first quarter of 2022 was a net benefit of $5.5 million compared with a net benefit of $9.7 million in the previous quarter and a net benefit of $14.3 million in the same quarter of 2021. Noninterest income was $43.6 million in the first quarter of 2022, an increase of 2.3% from the previous quarter and an increase of 1.4% from the same quarter of 2021. Noninterest expense was $103.9 million in the first quarter of 2022, an increase of 2.2% from the previous quarter and an increase of 5.1% from the same quarter of 2021. Noninterest expense in the first quarter of 2022 included seasonal payroll expenses of approximately $3.7 million. One-time significant items in the fourth quarter of 2021 included $1.2 million related to an increase in vacation carryover limits. Noninterest expense in the first quarter of 2021 included seasonal payroll expenses of approximately $2.1 million, charges related to the rollout of contactless cards of $1.9 million, and separation expenses of $1.8 million. The effective tax rate for the first quarter of 2022 was 22.15% compared with 17.08% in the previous quarter and 24.09% during the same quarter of 2021. The fourth quarter of 2021 included a $3.6 million benefit due to larger than expected tax credits from 2020 and a reduction in the valuation allowance related to low-income housing partnerships. Asset Quality The Company’s overall asset quality continued to remain strong during the first quarter of 2022. Total non-performing assets were $20.0 million at March 31, 2022, up by $1.0 million from December 31, 2021 and up $2.1 million from March 31, 2021. Non-performing assets as a percentage of total loans and leases and foreclosed real estate were 0.16% at the end of the quarter, an increase of 1 basis point from the end of both the prior quarter and same quarter of 2021. Net loan and lease charge-offs during the first quarter of 2022 were $1.5 million or 0.05% annualized of total average loans and leases outstanding. Net loan and lease charge-offs for the first quarter of 2022 were comprised of charge-offs of $3.9 million partially offset by recoveries of $2.4 million. Compared to the prior quarter, net loan and lease charge-offs increased by $0.8 million or 3 basis points annualized on total average loans and leases outstanding. Compared to the same quarter of 2021, net loan and lease charge-offs decreased by $1.4 million or 5 basis points annualized on total average loans and leases outstanding. The allowance for credit losses on loans and leases was $152.0 million at March 31, 2022, a decrease of $5.8 million from December 31, 2021 and $46.3 million from March 31, 2021. The ratio of the allowance for credit losses to total loans and leases outstanding was 1.21% at the end of the quarter, down 8 basis points from the end of the prior quarter and down 42 basis points from the end of the same quarter of 2021. Balance Sheet Total assets were $23.0 billion at March 31, 2022, an increase of 0.9% from December 31, 2021 and an increase of 4.8% from March 31, 2021. The investment securities portfolio was $8.7 billion at March 31, 2022, a decrease of 2.5% from December 31, 2021 and an increase of 16.8% from March 31, 2021. The investment portfolio remains largely comprised of securities issued by U.S. government agencies and U.S. government-sponsored enterprises. The increase from March 31, 2021 was primarily due to growth in deposits that outpaced loan growth. Total loans and leases were $12.5 billion at March 31, 2022, an increase of 2.3% from December 31, 2021 and an increase of 3.3% from March 31, 2021. Total loans and leases excluding PPP loans were $12.5 billion at March 31, 2022, an increase of 2.9% from December 31, 2021 and an increase of 9.4% from March 31, 2021. Total deposits reached a new record high of $20.7 billion at March 31, 2022, an increase of 1.7% from December 31, 2021 and an increase of 5.9% from March 31, 2021. Capital and Dividends The Tier 1 Capital Ratio was 13.22% at March 31, 2022 compared with 13.56% at December 31, 2021 and 12.35% at March 31, 2021. The increase from the same period in 2021 was driven by the issuance of $180 million of Fixed Rate Non-Cumulative Perpetual Preferred Stock, Series A in the second quarter of 2021. The Tier 1 Leverage Ratio was 7.30% at March 31, 2022 compared with 7.32% at December 31, 2021 and 6.61% at March 31, 2021. The increase from the same period in 2021 was driven by the aforementioned issuance of preferred stock in the second quarter of 2021. The Company repurchased 116.8 thousand shares of common stock at a total cost of $10.0 million under its share repurchase program in the first quarter of 2022 at an average cost of $85.34 per share repurchased. Total remaining buyback authority under the share repurchase program was $75.8 million at March 31, 2022. The Company’s Board of Directors declared a quarterly cash dividend of $0.70 per share on the Company’s outstanding common shares. The dividend will be payable on June 14, 2022 to shareholders of record at the close of business on May 31, 2022. On April 5, 2022, the Board of Directors declared the quarterly dividend payment of $10.94 per share, equivalent to $0.2735 per depositary share, on its preferred stock. The depositary shares representing the Series A Preferred Stock are traded on the NYSE under the symbol “BOH.PRA.” The dividend will be payable on May 2, 2022 to shareholders of record of the preferred stock at the close of business on April 18, 2022. Conference Call Information The Company will review its first quarter financial results today at 8:00 a.m. Hawaii Time (2:00 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/5x73dqat. 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, April 25, 2022. 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 4637209 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, 2021 which was 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 Hawai'i, 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 March 31, December 31, March 31, (dollars in thousands, except per share amounts) 2022 2021 2021 For the Period: Operating Results Net Interest Income $ 125,263 $ 126,388 $ 120,569 Provision for Credit Losses (5,500 ) (9,700 ) (14,300 ) Total Noninterest Income 43,551 42,574 42,970 Total Noninterest Expense 103,874 101,678 98,865 Net Income 54,834 63,837 59,949 Basic Earnings Per Common Share 1.33 1.56 1.51 Diluted Earnings Per Common Share 1.32 1.55 1.50 Dividends Declared Per Common Share 0.70 0.70 0.67 Performance Ratios Return on Average Assets 0.97 % 1.12 % 1.15 % Return on Average Shareholders' Equity 14.18 15.92 17.65 Return on Average Common Equity 15.44 17.40 17.65 Efficiency Ratio 1 61.53 60.18 60.45 Net Interest Margin 2 2.34 2.34 2.43 Dividend Payout Ratio 3 52.63 44.87 44.37 Average Shareholders' Equity to Average Assets 6.87 7.02 6.51 Average Balances Average Loans and Leases $ 12,290,402 $ 12,086,705 $ 11,952,587 Average Assets 22,847,488 22,666,280 21,150,670 Average Deposits 20,426,076 20,222,470 18,665,222 Average Shareholders' Equity 1,568,725 1,590,600 1,377,272 Per Share of Common Stock Book Value $ 31.50 $ 35.57 $ 33.67 Tangible Book Value 30.71 34.78 32.89 Market Value Closing 83.92 83.76 89.49 High 92.38 88.96 99.10 Low 79.60 78.73 75.65 March 31, December 31, March 31, 2022 2021 2021 As of Period End: Balance Sheet Totals Loans and Leases $ 12,544,492 $ 12,259,076 $ 12,140,703 Total Assets 23,000,317 22,784,941 21,947,271 Total Deposits 20,716,287 20,360,108 19,556,651 Other Debt 10,367 10,391 60,459 Total Shareholders' Equity 1,448,885 1,611,611 1,360,221 Asset Quality Non-Performing Assets $ 19,979 $ 18,966 $ 17,883 Allowance for Credit Losses - Loans and Leases 152,028 157,821 198,343 Allowance to Loans and Leases Outstanding 4 1.21 % 1.29 % 1.63 % Capital Ratios 5 Common Equity Tier 1 Capital Ratio 11.83 % 12.12 % 12.35 % Tier 1 Capital Ratio 13.22 13.56 12.35 Total Capital Ratio 14.41 14.81 13.61 Tier 1 Leverage Ratio 7.30 7.32 6.61 Total Shareholders' Equity to Total Assets 6.30 7.07 6.20 Tangible Common Equity to Tangible Assets 6 5.39 6.15 6.06 Tangible Common Equity to Risk-Weighted Assets 6 9.77 11.44 11.78 Non-Financial Data Full-Time Equivalent Employees 2,084 2,056 2,058 Branches 54 54 63 ATMs 307 307 361 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 common share divided by basic earnings per common share. 4 The numerator comprises the Allowance for Credit Losses - Loans and Leases. 5 Regulatory capital ratios as of March 31, 2022 are preliminary. 6 Tangible common equity to tangible assets and tangible common equity to risk-weighted assets are Non-GAAP financial measures. Tangible common equity is defined by the Company as common shareholders' equity minus goodwill. See Table 2 "Reconciliation of Non-GAAP Financial Measures". Bank of Hawaii Corporation and Subsidiaries Reconciliation of Non-GAAP Financial Measures Table 2 March 31, December 31, March 31, (dollars in thousands) 2022 2021 2021 Total Shareholders' Equity $ 1,448,885 $ 1,611,611 $ 1,360,221 Less: Preferred Stock 180,000 180,000 - Goodwill 31,517 31,517 31,517 Tangible Common Equity $ 1,237,368 $ 1,400,094 $ 1,328,704 Total Assets 23,000,317 22,784,941 21,947,271 Less: Goodwill 31,517 31,517 31,517 Tangible Assets $ 22,968,800 $ 22,753,424 $ 21,915,754 Risk-Weighted Assets, determined in accordance with prescribed regulatory requirements 1 $ 12,663,646 $ 12,236,805 $ 11,275,565 Total Shareholders' Equity to Total Assets 6.30 % 7.07 % 6.20 % Tangible Common Equity to Tangible Assets (Non-GAAP) 5.39 % 6.15 % 6.06 % Tier 1 Capital Ratio 1 13.22 % 13.56 % 12.35 % Tangible Common Equity to Risk-Weighted Assets (Non-GAAP) 1 9.77 % 11.44 % 11.78 % 1 Regulatory capital ratios as of March 31, 2022 are preliminary. Bank of Hawaii Corporation and Subsidiaries Consolidated Statements of Income Table 3 Three Months Ended March 31, December 31, March 31, (dollars in thousands, except per share amounts) 2022 2021 2021 Interest Income Interest and Fees on Loans and Leases $ 94,439 $ 97,853 $ 99,299 Income on Investment Securities Available-for-Sale 17,100 15,850 15,837 Held-to-Maturity 18,701 18,325 13,300 Deposits 4 1 7 Funds Sold 127 104 137 Other 202 176 185 Total Interest Income 130,573 132,309 128,765 Interest Expense Deposits 2,353 2,898 4,329 Securities Sold Under Agreements to Repurchase 2,772 2,834 3,533 Funds Purchased 2 6 1 Other Debt 183 183 333 Total Interest Expense 5,310 5,921 8,196 Net Interest Income 125,263 126,388 120,569 Provision for Credit Losses (5,500 ) (9,700 ) (14,300 ) Net Interest Income After Provision for Credit Losses 130,763 136,088 134,869 Noninterest Income Trust and Asset Management 11,276 11,693 11,278 Mortgage Banking 2,740 2,908 5,862 Service Charges on Deposit Accounts 7,272 6,861 6,128 Fees, Exchange, and Other Service Charges 12,952 14,439 13,607 Investment Securities Losses, Net (1,545 ) (1,258 ) (1,203 ) Annuity and Insurance 791 876 702 Bank-Owned Life Insurance 2,349 1,907 1,917 Other 7,716 5,148 4,679 Total Noninterest Income 43,551 42,574 42,970 Noninterest Expense Salaries and Benefits 59,924 59,434 56,251 Net Occupancy 9,826 9,028 9,090 Net Equipment 9,153 9,105 8,878 Data Processing 4,560 4,696 6,322 Professional Fees 3,258 3,427 3,406 FDIC Insurance 1,502 1,619 1,654 Other 15,651 14,369 13,264 Total Noninterest Expense 103,874 101,678 98,865 Income Before Provision for Income Taxes 70,440 76,984 78,974 Provision for Income Taxes 15,606 13,147 19,025 Net Income $ 54,834 $ 63,837 $ 59,949 Preferred Stock Dividends 1,969 1,969 - Net Income Available to Common Shareholders $ 52,865 $ 61,868 $ 59,949 Basic Earnings Per Common Share $ 1.33 $ 1.56 $ 1.51 Diluted Earnings Per Common Share $ 1.32 $ 1.55 $ 1.50 Dividends Declared Per Common Share $ 0.70 $ 0.70 $ 0.67 Basic Weighted Average Common Shares 39,752,679 39,741,063 39,827,590 Diluted Weighted Average Common Shares 39,956,391 39,955,525 40,071,477 Bank of Hawaii Corporation and Subsidiaries Consolidated Statements of Comprehensive Income (Loss) Table 4 Three Months Ended March 31, December 31, March 31, (dollars in thousands) 2022 2021 2021 Net Income $ 54,834 $ 63,837 $ 59,949 Other Comprehensive Loss, Net of Tax: Net Unrealized Losses on Investment Securities (180,124 ) (26,244 ) (50,050 ) Defined Benefit Plans 353 8,430 441 Other Comprehensive Loss (179,771 ) (17,814 ) (49,609 ) Comprehensive Income (Loss) $ (124,937 ) $ 46,023 $ 10,340 Bank of Hawaii Corporation and Subsidiaries Consolidated Statements of Condition Table 5 March 31, December 31, March 31, (dollars in thousands) 2022 2021 2021 Assets Interest-Bearing Deposits in Other Banks $ 2,488 $ 2,571 $ 4,506 Funds Sold 356,373 361,536 1,101,631 Investment Securities Available-for-Sale 4,258,534 4,276,056 4,024,763 Held-to-Maturity (Fair Value of $4,171,262; $4,646,619; $3,477,346) 4,489,615 4,694,780 3,464,360 Loans Held for Sale 5,293 26,746 18,320 Loans and Leases 12,544,492 12,259,076 12,140,703 Allowance for Credit Losses (152,028 ) (157,821 ) (198,343 ) Net Loans and Leases 12,392,464 12,101,255 11,942,360 Total Earning Assets 21,504,767 21,462,944 20,555,940 Cash and Due from Banks 236,193 196,327 286,717 Premises and Equipment, Net 199,743 199,393 198,107 Operating Lease Right-of-Use Assets 93,563 95,621 97,750 Accrued Interest Receivable 45,392 45,242 47,917 Foreclosed Real Estate 2,332 2,332 2,332 Mortgage Servicing Rights 23,968 22,251 22,320 Goodwill 31,517 31,517 31,517 Bank-Owned Life Insurance 446,926 344,587 291,764 Other Assets 415,916 384,727 412,907 Total Assets $ 23,000,317 $ 22,784,941 $ 21,947,271 Liabilities Deposits Noninterest-Bearing Demand 7,500,741 7,275,287 6,227,436 Interest-Bearing Demand 4,591,178 4,628,567 4,379,243 Savings 7,701,849 7,456,165 7,474,580 Time 922,519 1,000,089 1,475,392 Total Deposits 20,716,287 20,360,108 19,556,651 Securities Sold Under Agreements to Repurchase 450,490 450,490 600,490 Other Debt 10,367 10,391 60,459 Operating Lease Liabilities 101,274 103,210 105,820 Retirement Benefits Payable 38,008 38,494 50,687 Accrued Interest Payable 2,545 2,499 4,109 Taxes Payable 17,265 11,901 15,599 Other Liabilities 215,196 196,237 193,235 Total Liabilities 21,551,432 21,173,330 20,587,050 Shareholders' Equity Preferred Stock ($.01 par value; authorized 180,000 shares; issued / outstanding: March 31, 2022 and December 31, 2021 - 180,000) 180,000 180,000 - Common Stock ($.01 par value; authorized 500,000,000 shares; issued / outstanding: March 31, 2022 - 58,717,811 / 40,288,365; December 31, 2021 - 58,554,669 / 40,253,193; and March 31, 2021 - 58,553,365 / 40,394,234) 582 581 580 Capital Surplus 607,061 602,508 594,804 Accumulated Other Comprehensive Loss (246,153 ) (66,382 ) (41,787 ) Retained Earnings 1,974,790 1,950,375 1,844,057 Treasury Stock, at Cost (Shares: March 31, 2022 - 18,429,446; December 31, 2021 - 18,301,476; and March 31, 2021 - 18,159,131) (1,067,395 ) (1,055,471 ) (1,037,433 ) Total Shareholders' Equity 1,448,885 1,611,611 1,360,221 Total Liabilities and Shareholders' Equity $ 23,000,317 $ 22,784,941 $ 21,947,271 Bank of Hawaii Corporation and Subsidiaries Consolidated Statements of Shareholders' Equity Table 6 Accum. Other Compre- Preferred Common hensive Shares Preferred Shares Common Capital Income Retained Treasury (dollars in thousands) Outstanding Stock Outstanding Stock Surplus (Loss) Earnings Stock Total Balance as of December 31, 2021 180,000 $ 180,000 40,253,193 $ 581 $ 602,508 $ (66,382 ) $ 1,950,375 $ (1,055,471 ) $ 1,611,611 Net Income - - - - - - 54,834 - 54,834 Other Comprehensive Loss - - - - - (179,771 ) - - (179,771 ) Share-Based Compensation - - - - 4,010 - - - 4,010 Common Stock Issued under Purchase and Equity Compensation Plans - - 197,783 1 543 - (185 ) 2,036 2,395 Common Stock Repurchased - - (162,611 ) - - - - (13,960 ) (13,960 ) Cash Dividends Declared Common Stock ($0.70 per share) - - - - - - (28,265 ) - (28,265 ) Cash Dividends Declared Preferred Stock - - - - - - (1,969 ) - (1,969 ) Balance as of March 31, 2022 180,000 $ 180,000 40,288,365 $ 582 $ 607,061 $ (246,153 ) $ 1,974,790 $ (1,067,395 ) $ 1,448,885 Balance as of December 31, 2020 - - 40,119,312 580 591,360 7,822 1,811,979 (1,037,234 ) 1,374,507 Net Income - - - - - - 59,949 - 59,949 Other Comprehensive Loss - - - - - (49,609 ) - - (49,609 ) Share-Based Compensation - - - - 2,780 - - - 2,780 Common Stock Issued under Purchase and Equity Compensation Plans - - 310,905 - 664 - (845 ) 2,990 2,809 Common Stock Repurchased - - (35,983 ) - - - - (3,189 ) (3,189 ) Cash Dividends Declared Common Stock ($0.67 per share) - - - - - - (27,026 ) - (27,026 ) Balance as of March 31, 2021 - $ - 40,394,234 $ 580 $ 594,804 $ (41,787 ) $ 1,844,057 $ (1,037,433 ) $ 1,360,221 Bank of Hawaii Corporation and Subsidiaries Average Balances and Interest Rates - Taxable-Equivalent Basis 1 Table 7 Three Months Ended Three Months Ended Three Months Ended March 31, 2022 December 31, 2021 March 31, 2021 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 $ 3.4 $ - 0.45 % $ 2.2 $ - 0.05 % $ 3.2 $ - 0.93 % Funds Sold 238.5 0.1 0.21 273.2 0.1 0.15 550.6 0.1 0.10 Investment Securities Available-for-Sale Taxable 4,399.9 17.1 1.56 4,308.6 15.8 1.47 4,007.9 15.8 1.57 Non-Taxable 3.0 - 1.93 5.8 0.1 3.67 12.3 0.1 4.27 Held-to-Maturity Taxable 4,567.4 18.6 1.63 4,757.4 18.1 1.52 3,385.8 13.1 1.55 Non-Taxable 35.8 0.2 2.10 58.0 0.3 2.31 38.1 0.2 2.55 Total Investment Securities 9,006.1 35.9 1.59 9,129.8 34.3 1.50 7,444.1 29.2 1.57 Loans Held for Sale 13.7 0.1 2.78 20.8 0.1 2.85 26.2 0.2 2.76 Loans and Leases 2 Commercial and Industrial 1,421.9 10.8 3.08 1,478.0 14.6 3.92 1,904.5 14.3 3.05 Commercial Mortgage 3,158.8 21.7 2.80 3,075.1 22.2 2.86 2,846.0 21.3 3.04 Construction 227.6 2.1 3.68 246.8 2.2 3.50 264.1 2.3 3.48 Commercial Lease Financing 98.8 0.4 1.45 107.4 0.3 1.12 106.4 0.4 1.43 Residential Mortgage 4,343.3 34.9 3.21 4,293.6 33.9 3.16 4,146.6 35.9 3.46 Home Equity 1,898.9 13.3 2.83 1,757.8 12.8 2.88 1,594.1 12.6 3.20 Automobile 737.4 5.9 3.23 730.2 6.1 3.34 708.3 6.1 3.51 Other 3 403.7 5.5 5.47 397.8 5.8 5.79 382.6 6.4 6.75 Total Loans and Leases 12,290.4 94.6 3.10 12,086.7 97.9 3.22 11,952.6 99.3 3.35 Other 36.7 0.2 2.21 34.4 0.2 2.05 33.4 0.2 2.21 Total Earning Assets 4 21,588.8 130.9 2.44 21,547.1 132.6 2.45 20,010.1 129.0 2.60 Cash and Due from Banks 233.3 231.3 270.7 Other Assets 1,025.4 887.9 869.9 Total Assets $ 22,847.5 $ 22,666.3 $ 21,150.7 Interest-Bearing Liabilities Interest-Bearing Deposits Demand 4,655.4 0.5 0.04 4,685.7 0.7 0.06 4,186.4 0.6 0.06 Savings 7,540.6 1.1 0.06 7,443.2 1.2 0.06 7,016.6 1.5 0.09 Time 971.5 0.8 0.34 1,019.2 1.0 0.40 1,630.0 2.2 0.56 Total Interest-Bearing Deposits 13,167.5 2.4 0.07 13,148.1 2.9 0.09 12,833.0 4.3 0.14 Short-Term Borrowings 6.8 - 0.11 18.5 - 0.13 2.4 - 0.09 Securities Sold Under Agreements to Repurchase 450.5 2.8 2.46 450.5 2.8 2.46 600.5 3.6 2.35 Other Debt 10.4 0.2 7.05 10.4 0.2 7.05 60.5 0.3 2.22 Total Interest-Bearing Liabilities 13,635.2 5.4 0.16 13,627.5 5.9 0.17 13,496.4 8.2 0.24 Net Interest Income $ 125.5 $ 126.7 $ 120.8 Interest Rate Spread 2.28 % 2.28 % 2.36 % Net Interest Margin 2.34 % 2.34 % 2.43 % Noninterest-Bearing Demand Deposits 7,258.6 7,074.4 5,832.2 Other Liabilities 385.0 373.8 444.8 Shareholders' Equity 1,568.7 1,590.6 1,377.3 Total Liabilities and Shareholders' Equity $ 22,847.5 $ 22,666.3 $ 21,150.7 1 Due to rounding, the amounts presented in this table may not tie to other amounts presented elsewhere in this report. 2 Non-performing loans and leases are included in the respective average loan and lease balances. Income, if any, on such loans and leases is recognized on a cash basis. 3 Comprised of other consumer revolving credit, installment, and consumer lease financing. 4 Interest income includes taxable-equivalent basis adjustments, based upon a federal statutory tax rate of 21%, of $254,000, $280,000, and $252,000 for the three months ended March 31, 2022, December 31, 2021, and March 31, 2021, respectively. Bank of Hawaii Corporation and Subsidiaries Analysis of Change in Net Interest Income - Taxable-Equivalent Basis Table 8a Three Months Ended March 31, 2022 Compared to December 31, 2021 (dollars in millions) Volume 1 Rate 1 Total Change in Interest Income: Investment Securities Available-for-Sale Taxable $ 0.3 $ 1.0 $ 1.3 Non-Taxable (0.1 ) - (0.1 ) Held-to-Maturity Taxable (0.7 ) 1.2 0.5 Non-Taxable (0.1 ) - (0.1 ) Total Investment Securities (0.6 ) 2.2 1.6 Loans and Leases Commercial and Industrial (2.3 ) (1.5 ) (3.8 ) Commercial Mortgage 0.3 (0.8 ) (0.5 ) Construction (0.2 ) 0.1 (0.1 ) Commercial Lease Financing - 0.1 0.1 Residential Mortgage 0.4 0.6 1.0 Home Equity 0.8 (0.3 ) 0.5 Automobile 0.1 (0.3 ) (0.2 ) Other 2 0.1 (0.4 ) (0.3 ) Total Loans and Leases (0.8 ) (2.5 ) (3.3 ) Total Change in Interest Income (1.4 ) (0.3 ) (1.7 ) Change in Interest Expense: Interest-Bearing Deposits Demand - (0.2 ) (0.2 ) Savings - (0.1 ) (0.1 ) Time (0.1 ) (0.1 ) (0.2 ) Total Interest-Bearing Deposits (0.1 ) (0.4 ) (0.5 ) Securities Sold Under Agreements to Repurchase 0.1 (0.1 ) - Total Change in Interest Expense - (0.5 ) (0.5 ) Change in Net Interest Income $ (1.4 ) $ 0.2 $ (1.2 ) 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 March 31, 2022 Compared to March 31, 2021 (dollars in millions) Volume 1 Rate 1 Total Change in Interest Income: Funds Sold $ (0.1 ) $ 0.1 $ - Investment Securities Available-for-Sale Taxable 1.5 (0.2 ) 1.3 Non-Taxable (0.1 ) - (0.1 ) Held-to-Maturity Taxable 4.8 0.7 5.5 Total Investment Securities 6.2 0.5 6.7 Loans Held for Sale (0.1 ) - (0.1 ) Loans and Leases Commercial and Industrial (6.0 ) 2.5 (3.5 ) Commercial Mortgage 2.2 (1.8 ) 0.4 Construction (0.3 ) 0.1 (0.2 ) Commercial Lease Financing 0.1 (0.1 ) - Residential Mortgage 1.7 (2.7 ) (1.0 ) Home Equity 2.2 (1.5 ) 0.7 Automobile 0.3 (0.5 ) (0.2 ) Other 2 0.3 (1.2 ) (0.9 ) Total Loans and Leases 0.5 (5.2 ) (4.7 ) Total Change in Interest Income 6.5 (4.6 ) 1.9 Change in Interest Expense: Interest-Bearing Deposits Demand 0.1 (0.2 ) (0.1 ) Savings 0.1 (0.5 ) (0.4 ) Time (0.7 ) (0.7 ) (1.4 ) Total Interest-Bearing Deposits (0.5 ) (1.4 ) (1.9 ) Securities Sold Under Agreements to Repurchase (1.0 ) 0.2 (0.8 ) Other Debt (0.4 ) 0.3 (0.1 ) Total Change in Interest Expense (1.9 ) (0.9 ) (2.8 ) Change in Net Interest Income $ 8.4 $ (3.7 ) $ 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 Salaries and Benefits Table 9 Three Months Ended March 31, December 31, March 31, (dollars in thousands) 2022 2021 2021 Salaries $ 34,932 $ 35,758 $ 31,569 Incentive Compensation 6,111 6,699 5,914 Share-Based Compensation 3,799 3,396 2,584 Commission Expense 1,641 2,094 2,436 Retirement and Other Benefits 4,693 4,661 5,517 Payroll Taxes 4,944 2,585 3,968 Medical, Dental, and Life Insurance 3,234 3,981 2,424 Separation Expense 570 260 1,839 Total Salaries and Benefits $ 59,924 $ 59,434 $ 56,251 Bank of Hawaii Corporation and Subsidiaries Loan and Lease Portfolio Balances Table 10 March 31, December 31, September 30, June 30, March 31, (dollars in thousands) 2022 2021 2021 2021 2021 Commercial Commercial and Industrial $ 1,354,757 $ 1,361,921 $ 1,325,446 $ 1,257,305 $ 1,288,496 PPP 1 57,809 126,779 268,480 513,513 725,485 Commercial Mortgage 3,257,689 3,152,130 2,994,520 2,944,435 2,859,246 Construction 248,363 220,254 296,052 277,393 281,164 Lease Financing 98,107 105,108 107,526 110,500 104,980 Total Commercial 5,016,725 4,966,192 4,992,024 5,103,146 5,259,371 Consumer Residential Mortgage 4,405,718 4,309,602 4,272,540 4,264,180 4,216,976 Home Equity 1,958,285 1,836,588 1,680,229 1,594,781 1,577,500 Automobile 742,934 736,565 727,234 714,729 710,407 Other 2 420,830 410,129 400,723 364,542 376,449 Total Consumer 7,527,767 7,292,884 7,080,726 6,938,232 6,881,332 Total Loans and Leases $ 12,544,492 $ 12,259,076 $ 12,072,750 $ 12,041,378 $ 12,140,703 Deposits March 31, December 31, September 30, June 30, March 31, (dollars in thousands) 2022 2021 2021 2021 2021 Consumer $ 10,654,192 $ 10,438,844 $ 10,150,199 $ 9,848,285 $ 9,746,713 Commercial 8,818,477 8,641,932 8,767,733 8,675,909 8,241,102 Public and Other 1,243,618 1,279,332 1,575,746 1,645,515 1,568,836 Total Deposits $ 20,716,287 $ 20,360,108 $ 20,493,678 $ 20,169,709 $ 19,556,651 1 The PPP amounts presented, which are reported net of deferred costs and fees, were previously included as a component of the Commercial and Industrial loan class. 2 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 March 31, December 31, September 30, June 30, March 31, (dollars in thousands) 2022 2021 2021 2021 2021 Non-Performing Assets Non-Accrual Loans and Leases Commercial Commercial and Industrial $ 99 $ 243 $ 209 $ 258 $ 293 Commercial Mortgage 8,065 8,205 8,309 8,413 8,503 Total Commercial 8,164 8,448 8,518 8,671 8,796 Consumer Residential Mortgage 3,845 3,305 4,348 2,437 1,804 Home Equity 5,638 4,881 5,422 5,534 4,951 Total Consumer 9,483 8,186 9,770 7,971 6,755 Total Non-Accrual Loans and Leases 17,647 16,634 18,288 16,642 15,551 Foreclosed Real Estate 2,332 2,332 2,332 2,332 2,332 Total Non-Performing Assets $ 19,979 $ 18,966 $ 20,620 $ 18,974 $ 17,883 Accruing Loans and Leases Past Due 90 Days or More Commercial Commercial and Industrial 22 - - - 9 Total Commercial 22 - - - 9 Consumer Residential Mortgage 4,113 3,159 4,776 4,069 4,069 Home Equity 2,722 3,456 2,946 4,498 4,906 Automobile 504 729 395 277 604 Other 1 649 426 593 434 828 Total Consumer 7,988 7,770 8,710 9,278 10,407 Total Accruing Loans and Leases Past Due 90 Days or More $ 8,010 $ 7,770 $ 8,710 $ 9,278 $ 10,416 Restructured Loans on Accrual Status and Not Past Due 90 Days or More $ 54,136 $ 60,519 $ 62,787 $ 74,926 $ 74,216 Total Loans and Leases $ 12,544,492 $ 12,259,076 $ 12,072,750 $ 12,041,378 $ 12,140,703 Ratio of Non-Accrual Loans and Leases to Total Loans and Leases 0.14 % 0.14 % 0.15 % 0.14 % 0.13 % Ratio of Non-Performing Assets to Total Loans and Leases and Foreclosed Real Estate 0.16 % 0.15 % 0.17 % 0.16 % 0.15 % Ratio of Commercial Non-Performing Assets to Total Commercial Loans and Leases and Commercial Foreclosed Real Estate 0.16 % 0.17 % 0.17 % 0.17 % 0.17 % Ratio of Consumer Non-Performing Assets to Total Consumer Loans and Leases and Consumer Foreclosed Real Estate 0.16 % 0.14 % 0.17 % 0.15 % 0.13 % 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 0.22 % 0.22 % 0.24 % 0.23 % 0.23 % Quarter to Quarter Changes in Non-Performing Assets Balance at Beginning of Quarter $ 18,966 $ 20,620 $ 18,974 $ 17,883 $ 18,481 Additions 2,243 357 3,171 2,229 2,992 Reductions Payments (1,230 ) (972 ) (889 ) (722 ) (2,481 ) Return to Accrual Status - (1,038 ) (606 ) (416 ) (1,014 ) Charge-offs/Write-downs - (1 ) (30 ) - (95 ) Total Reductions (1,230 ) (2,011 ) (1,525 ) (1,138 ) (3,590 ) Balance at End of Quarter $ 19,979 $ 18,966 $ 20,620 $ 18,974 $ 17,883 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 March 31, December 31, March 31, (dollars in thousands) 2022 2021 2021 Balance at Beginning of Period $ 164,297 $ 174,708 221,303 Loans and Leases Charged-Off Commercial Commercial and Industrial (349 ) (217 ) (248 ) Consumer Residential Mortgage - - (4 ) Home Equity (68 ) (5 ) (16 ) Automobile (1,530 ) (1,045 ) (2,109 ) Other 1 (1,961 ) (2,007 ) (3,914 ) Total Loans and Leases Charged-Off (3,908 ) (3,274 ) (6,291 ) Recoveries on Loans and Leases Previously Charged-Off Commercial Commercial and Industrial 369 132 112 Consumer Residential Mortgage 54 858 955 Home Equity 515 390 533 Automobile 739 476 919 Other 1 745 746 856 Total Recoveries on Loans and Leases Previously Charged-Off 2,422 2,602 3,375 Net Charged-Off - Loans and Leases (1,486 ) (672 ) (2,916 ) Net Charged-Off - Accrued Interest Receivable (47 ) (39 ) (308 ) Provision for Credit Losses: Loans and Leases (4,307 ) (9,427 ) (14,993 ) Accrued Interest Receivable (367 ) (214 ) - Unfunded Commitments (826 ) (59 ) 693 Balance at End of Period 2 $ 157,264 $ 164,297 $ 203,779 Components Allowance for Credit Losses - Loans and Leases 152,028 157,821 198,343 Allowance for Credit Losses - Accrued Interest Receivable - 414 2,392 Reserve for Unfunded Commitments 5,236 6,062 3,044 Total Reserve for Credit Losses $ 157,264 $ 164,297 $ 203,779 Average Loans and Leases Outstanding $ 12,290,402 $ 12,086,705 $ 11,952,587 Ratio of Net Loans and Leases Charged-Off to Average Loans and Leases Outstanding (annualized) 0.05 % 0.02 % 0.10 % Ratio of Allowance for Credit Losses to Loans and Leases Outstanding 3 1.21 % 1.29 % 1.63 % 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 The numerator comprises the Allowance for Credit Losses - Loans and Leases. Bank of Hawaii Corporation and Subsidiaries Business Segments Selected Financial Information Table 13 Consumer Commercial Treasury Consolidated (dollars in thousands) Banking Banking and Other Total Three Months Ended March 31, 2022 Net Interest Income $ 70,235 $ 46,349 $ 8,679 $ 125,263 Provision for Credit Losses 1,683 (197 ) (6,986 ) (5,500 ) Net Interest Income After Provision for Credit Losses 68,552 46,546 15,665 130,763 Noninterest Income 31,969 10,198 1,384 43,551 Noninterest Expense (81,698 ) (18,669 ) (3,507 ) (103,874 ) Income Before Income Taxes 18,823 38,075 13,542 70,440 Provision for Income Taxes (4,710 ) (9,197 ) (1,699 ) (15,606 ) Net Income $ 14,113 $ 28,878 $ 11,843 $ 54,834 Total Assets as of March 31, 2022 $ 7,900,273 $ 5,174,115 $ 9,925,929 $ 23,000,317 Three Months Ended March 31, 2021 Net Interest Income $ 69,762 $ 47,143 $ 3,664 $ 120,569 Provision for Credit Losses 2,866 50 (17,216 ) (14,300 ) Net Interest Income After Provision for Credit Losses 66,896 47,093 20,880 134,869 Noninterest Income 33,698 7,858 1,414 42,970 Noninterest Expense (78,181 ) (15,677 ) (5,007 ) (98,865 ) Income Before Income Taxes 22,413 39,274 17,287 78,974 Provision for Income Taxes (5,474 ) (9,558 ) (3,993 ) (19,025 ) Net Income $ 16,939 $ 29,716 $ 13,294 $ 59,949 Total Assets as of March 31, 2021 $ 7,556,756 $ 5,224,386 $ 9,166,129 $ 21,947,271 Bank of Hawaii Corporation and Subsidiaries Selected Quarterly Financial Data Table 14 Three Months Ended March 31, December 31, September 30, June 30, March 31, (dollars in thousands, except per share amounts) 2022 2021 2021 2021 2021 Quarterly Operating Results Interest Income Interest and Fees on Loans and Leases $ 94,439 $ 97,853 $ 100,570 $ 100,894 $ 99,299 Income on Investment Securities Available-for-Sale 17,100 15,850 16,396 16,467 15,837 Held-to-Maturity 18,701 18,325 16,754 13,576 13,300 Deposits 4 1 2 - 7 Funds Sold 127 104 382 260 137 Other 202 176 159 182 185 Total Interest Income 130,573 132,309 134,263 131,379 128,765 Interest Expense Deposits 2,353 2,898 3,837 4,152 4,329 Securities Sold Under Agreements to Repurchase 2,772 2,834 3,423 3,470 3,533 Funds Purchased 2 6 - - 1 Other Debt 183 183 184 243 333 Total Interest Expense 5,310 5,921 7,444 7,865 8,196 Net Interest Income 125,263 126,388 126,819 123,514 120,569 Provision for Credit Losses (5,500 ) (9,700 ) (10,400 ) (16,100 ) (14,300 ) Net Interest Income After Provision for Credit Losses 130,763 136,088 137,219 139,614 134,869 Noninterest Income Trust and Asset Management 11,276 11,693 11,415 11,682 11,278 Mortgage Banking 2,740 2,908 3,136 3,058 5,862 Service Charges on Deposit Accounts 7,272 6,861 6,510 6,065 6,128 Fees, Exchange, and Other Service Charges 12,952 14,439 13,604 13,807 13,607 Investment Securities Gains (Losses), Net (1,545 ) (1,258 ) (1,259 ) 2,423 (1,203 ) Annuity and Insurance 791 876 735 911 702 Bank-Owned Life Insurance 2,349 1,907 1,897 2,063 1,917 Other 7,716 5,148 5,340 4,422 4,679 Total Noninterest Income 43,551 42,574 41,378 44,431 42,970 Noninterest Expense Salaries and Benefits 59,924 59,434 56,447 56,161 56,251 Net Occupancy 9,826 9,028 3,079 5,047 9,090 Net Equipment 9,153 9,105 8,924 8,796 8,878 Data Processing 4,560 4,696 4,722 4,557 6,322 Professional Fees 3,258 3,427 2,948 3,114 3,406 FDIC Insurance 1,502 1,619 1,594 1,669 1,654 Other 15,651 14,369 18,805 17,183 13,264 Total Noninterest Expense 103,874 101,678 96,519 96,527 98,865 Income Before Provision for Income Taxes 70,440 76,984 82,078 87,518 78,974 Provision for Income Taxes 15,606 13,147 20,025 19,985 19,025 Net Income $ 54,834 $ 63,837 $ 62,053 $ 67,533 $ 59,949 Preferred Stock Dividends 1,969 1,969 1,006 - - Net Income Available to Common Shareholders $ 52,865 $ 61,868 $ 61,047 $ 67,533 $ 59,949 Basic Earnings Per Common Share $ 1.33 $ 1.56 $ 1.53 $ 1.69 $ 1.51 Diluted Earnings Per Common Share $ 1.32 $ 1.55 $ 1.52 $ 1.68 $ 1.50 Balance Sheet Totals Loans and Leases $ 12,544,492 $ 12,259,076 $ 12,072,750 $ 12,041,378 $ 12,140,703 Total Assets 23,000,317 22,784,941 22,965,383 22,672,183 21,947,271 Total Deposits 20,716,287 20,360,108 20,493,678 20,169,709 19,556,651 Total Shareholders' Equity 1,448,885 1,611,611 1,597,109 1,583,531 1,360,221 Performance Ratios Return on Average Assets 0.97 % 1.12 % 1.07 % 1.23 % 1.15 % Return on Average Shareholders' Equity 14.18 15.92 15.41 19.17 17.65 Return on Average Common Equity 15.44 17.40 17.08 19.61 17.65 Efficiency Ratio 1 61.53 60.18 57.38 57.47 60.45 Net Interest Margin 2 2.34 2.34 2.32 2.37 2.43 1 Efficiency ratio is defined as noninterest expense divided by total revenue (net interest income and noninterest income). 2 Net interest margin is defined as net interest income, on a taxable-equivalent basis, as a percentage of average earning assets. Bank of Hawaii Corporation and Subsidiaries Hawaii Economic Trends Table 15 Two Months Ended Year Ended ($ in millions; jobs in thousands) February 28, 2022 December 31, 2021 December 31, 2020 Hawaii Economic Trends State General Fund Revenues 1 $ 1,543.9 41.1 % $ 8,147.0 27.0 % $ 6,415.1 (12.3 ) % General Excise and Use Tax Revenue 1 706.6 27.8 3,604.3 18.6 3,038.8 (15.6 ) Jobs 2 644.3 642.6 594.4 March 31, December 31, 2022 2021 2020 Unemployment, seasonally adjusted 3 Statewide 4.1 % 4.3 % 9.8 % Honolulu County 4.0 4.1 8.9 Hawaii County 4.0 4.1 9.2 Maui County 4.8 5.1 13.7 Kauai County 4.6 5.9 13.5 March 31, December 31, (percentage change, except months of inventory) 2022 2021 2020 2019 Housing Trends (Single Family Oahu) 4 Median Home Price 20.2 % 19.3 % 5.2 % (0.1 ) % Home Sales Volume (units) (2.6 ) % 17.9 % 2.3 % 3.9 % Months of Inventory 1.0 0.8 1.4 2.5 Monthly Visitor Arrivals, Percentage Change (in thousands) Not Seasonally Adjusted from Previous Year Tourism 5 February 28, 2022 623.7 165.1 % January 31, 2022 567.2 229.8 December 31, 2021 753.7 219.6 November 30, 2021 613.4 233.8 October 31, 2021 550.8 618.2 September 30, 2021 505.9 2,647.9 August 31, 2021 722.4 2,993.0 July 31, 2021 879.6 3,798.4 June 30, 2021 791.1 4,534.7 May 31, 2021 629.7 6,807.4 April 30, 2021 484.1 10,506.3 March 31, 2021 439.8 1.1 February 28, 2021 235.3 (71.6 ) January 31, 2021 172.0 (80.1 ) December 31, 2020 235.8 (75.2 ) November 30, 2020 183.8 (77.3 ) October 31, 2020 76.7 (90.4 ) September 30, 2020 18.4 (97.5 ) August 31, 2020 23.4 (97.5 ) July 31, 2020 22.6 (97.7 ) June 30, 2020 17.1 (98.2 ) May 31, 2020 9.1 (98.9 ) April 30, 2020 4.6 (99.5 ) March 31, 2020 434.9 (53.7 ) February 29, 2020 828.1 5.8 January 31, 2020 862.6 5.1 1 Source: Hawaii Department of Business, Economic Development & Tourism 2 Source: U.S. Bureau of Labor Statistics 3 Source: University of Hawaii Economic Research Organization (UHERO) 4 Source: Honolulu Board of Realtors 5 Source: Hawaii Tourism Authority View source version on businesswire.com: https://www.businesswire.com/news/home/20220425005225/en/Contacts Media Inquiries Melissa Torres-Laing Email: Melissa.Torres-Laing@boh.com Telephone: 808-694-8384 Mobile: 808-859-1703 Investor/Analyst Inquiries Janelle Higa Email: Janelle.Higa@boh.com Telephone: 808-694-8007 Data & News supplied by www.cloudquote.io Stock quotes supplied by Barchart Quotes delayed at least 20 minutes. 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Bank of Hawaii Corporation First Quarter 2022 Financial Results By: Bank of Hawaii Corporation via Business Wire April 25, 2022 at 06:45 AM EDT Diluted Earnings Per Common Share $1.32 Net Income $54.8 Million Board of Directors Declares Dividend of $0.70 Per Common Share Bank of Hawaii Corporation (NYSE: BOH) today reported diluted earnings per common share of $1.32 for the first quarter of 2022, compared with diluted earnings per common share of $1.55 in the previous quarter and $1.50 in the same quarter last year. Net income for the first quarter of 2022 was $54.8 million, down 14.1% from the fourth quarter of 2021 and down 8.5% from the first quarter of 2021. This press release features multimedia. View the full release here: https://www.businesswire.com/news/home/20220425005225/en/ “Bank of Hawaii had a good start to 2022 with solid operating performance," said Peter Ho, Chairman, President, and CEO. “We saw good continuing momentum in core loan and deposit growth and expansion in core net interest margin. Asset quality continued its stable trend, and capital and liquidity remain strong.” Financial Highlights The return on average assets for the first quarter of 2022 was 0.97% compared with 1.12% in the previous quarter and 1.15% in the same quarter of 2021. The return on average common equity for the first quarter of 2022 was 15.44% compared with 17.40% in the previous quarter and 17.65% in the same quarter of 2021. The decrease from prior quarter was primarily driven by lower provision release and seasonal payroll expenses. The decrease from prior year was primarily driven by lower provision release. Net interest income for the first quarter of 2022 was $125.3 million, a decrease of 0.9% from the fourth quarter of 2021 and an increase of 3.9% from the first quarter of 2021. Net interest margin was 2.34% in the first quarter of 2022, unchanged compared to the previous quarter and a decrease of 9 basis points from the same quarter of 2021. One-time significant items in the fourth quarter of 2021 included a negative $0.9 million adjustment to net interest income for deferred mortgage loan fees related to prior quarters of 2021. The adjustment had a negative impact of 2 basis points on the net interest margin. The provision for credit losses for the first quarter of 2022 was a net benefit of $5.5 million compared with a net benefit of $9.7 million in the previous quarter and a net benefit of $14.3 million in the same quarter of 2021. Noninterest income was $43.6 million in the first quarter of 2022, an increase of 2.3% from the previous quarter and an increase of 1.4% from the same quarter of 2021. Noninterest expense was $103.9 million in the first quarter of 2022, an increase of 2.2% from the previous quarter and an increase of 5.1% from the same quarter of 2021. Noninterest expense in the first quarter of 2022 included seasonal payroll expenses of approximately $3.7 million. One-time significant items in the fourth quarter of 2021 included $1.2 million related to an increase in vacation carryover limits. Noninterest expense in the first quarter of 2021 included seasonal payroll expenses of approximately $2.1 million, charges related to the rollout of contactless cards of $1.9 million, and separation expenses of $1.8 million. The effective tax rate for the first quarter of 2022 was 22.15% compared with 17.08% in the previous quarter and 24.09% during the same quarter of 2021. The fourth quarter of 2021 included a $3.6 million benefit due to larger than expected tax credits from 2020 and a reduction in the valuation allowance related to low-income housing partnerships. Asset Quality The Company’s overall asset quality continued to remain strong during the first quarter of 2022. Total non-performing assets were $20.0 million at March 31, 2022, up by $1.0 million from December 31, 2021 and up $2.1 million from March 31, 2021. Non-performing assets as a percentage of total loans and leases and foreclosed real estate were 0.16% at the end of the quarter, an increase of 1 basis point from the end of both the prior quarter and same quarter of 2021. Net loan and lease charge-offs during the first quarter of 2022 were $1.5 million or 0.05% annualized of total average loans and leases outstanding. Net loan and lease charge-offs for the first quarter of 2022 were comprised of charge-offs of $3.9 million partially offset by recoveries of $2.4 million. Compared to the prior quarter, net loan and lease charge-offs increased by $0.8 million or 3 basis points annualized on total average loans and leases outstanding. Compared to the same quarter of 2021, net loan and lease charge-offs decreased by $1.4 million or 5 basis points annualized on total average loans and leases outstanding. The allowance for credit losses on loans and leases was $152.0 million at March 31, 2022, a decrease of $5.8 million from December 31, 2021 and $46.3 million from March 31, 2021. The ratio of the allowance for credit losses to total loans and leases outstanding was 1.21% at the end of the quarter, down 8 basis points from the end of the prior quarter and down 42 basis points from the end of the same quarter of 2021. Balance Sheet Total assets were $23.0 billion at March 31, 2022, an increase of 0.9% from December 31, 2021 and an increase of 4.8% from March 31, 2021. The investment securities portfolio was $8.7 billion at March 31, 2022, a decrease of 2.5% from December 31, 2021 and an increase of 16.8% from March 31, 2021. The investment portfolio remains largely comprised of securities issued by U.S. government agencies and U.S. government-sponsored enterprises. The increase from March 31, 2021 was primarily due to growth in deposits that outpaced loan growth. Total loans and leases were $12.5 billion at March 31, 2022, an increase of 2.3% from December 31, 2021 and an increase of 3.3% from March 31, 2021. Total loans and leases excluding PPP loans were $12.5 billion at March 31, 2022, an increase of 2.9% from December 31, 2021 and an increase of 9.4% from March 31, 2021. Total deposits reached a new record high of $20.7 billion at March 31, 2022, an increase of 1.7% from December 31, 2021 and an increase of 5.9% from March 31, 2021. Capital and Dividends The Tier 1 Capital Ratio was 13.22% at March 31, 2022 compared with 13.56% at December 31, 2021 and 12.35% at March 31, 2021. The increase from the same period in 2021 was driven by the issuance of $180 million of Fixed Rate Non-Cumulative Perpetual Preferred Stock, Series A in the second quarter of 2021. The Tier 1 Leverage Ratio was 7.30% at March 31, 2022 compared with 7.32% at December 31, 2021 and 6.61% at March 31, 2021. The increase from the same period in 2021 was driven by the aforementioned issuance of preferred stock in the second quarter of 2021. The Company repurchased 116.8 thousand shares of common stock at a total cost of $10.0 million under its share repurchase program in the first quarter of 2022 at an average cost of $85.34 per share repurchased. Total remaining buyback authority under the share repurchase program was $75.8 million at March 31, 2022. The Company’s Board of Directors declared a quarterly cash dividend of $0.70 per share on the Company’s outstanding common shares. The dividend will be payable on June 14, 2022 to shareholders of record at the close of business on May 31, 2022. On April 5, 2022, the Board of Directors declared the quarterly dividend payment of $10.94 per share, equivalent to $0.2735 per depositary share, on its preferred stock. The depositary shares representing the Series A Preferred Stock are traded on the NYSE under the symbol “BOH.PRA.” The dividend will be payable on May 2, 2022 to shareholders of record of the preferred stock at the close of business on April 18, 2022. Conference Call Information The Company will review its first quarter financial results today at 8:00 a.m. Hawaii Time (2:00 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/5x73dqat. 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, April 25, 2022. 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 4637209 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, 2021 which was 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 Hawai'i, 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 March 31, December 31, March 31, (dollars in thousands, except per share amounts) 2022 2021 2021 For the Period: Operating Results Net Interest Income $ 125,263 $ 126,388 $ 120,569 Provision for Credit Losses (5,500 ) (9,700 ) (14,300 ) Total Noninterest Income 43,551 42,574 42,970 Total Noninterest Expense 103,874 101,678 98,865 Net Income 54,834 63,837 59,949 Basic Earnings Per Common Share 1.33 1.56 1.51 Diluted Earnings Per Common Share 1.32 1.55 1.50 Dividends Declared Per Common Share 0.70 0.70 0.67 Performance Ratios Return on Average Assets 0.97 % 1.12 % 1.15 % Return on Average Shareholders' Equity 14.18 15.92 17.65 Return on Average Common Equity 15.44 17.40 17.65 Efficiency Ratio 1 61.53 60.18 60.45 Net Interest Margin 2 2.34 2.34 2.43 Dividend Payout Ratio 3 52.63 44.87 44.37 Average Shareholders' Equity to Average Assets 6.87 7.02 6.51 Average Balances Average Loans and Leases $ 12,290,402 $ 12,086,705 $ 11,952,587 Average Assets 22,847,488 22,666,280 21,150,670 Average Deposits 20,426,076 20,222,470 18,665,222 Average Shareholders' Equity 1,568,725 1,590,600 1,377,272 Per Share of Common Stock Book Value $ 31.50 $ 35.57 $ 33.67 Tangible Book Value 30.71 34.78 32.89 Market Value Closing 83.92 83.76 89.49 High 92.38 88.96 99.10 Low 79.60 78.73 75.65 March 31, December 31, March 31, 2022 2021 2021 As of Period End: Balance Sheet Totals Loans and Leases $ 12,544,492 $ 12,259,076 $ 12,140,703 Total Assets 23,000,317 22,784,941 21,947,271 Total Deposits 20,716,287 20,360,108 19,556,651 Other Debt 10,367 10,391 60,459 Total Shareholders' Equity 1,448,885 1,611,611 1,360,221 Asset Quality Non-Performing Assets $ 19,979 $ 18,966 $ 17,883 Allowance for Credit Losses - Loans and Leases 152,028 157,821 198,343 Allowance to Loans and Leases Outstanding 4 1.21 % 1.29 % 1.63 % Capital Ratios 5 Common Equity Tier 1 Capital Ratio 11.83 % 12.12 % 12.35 % Tier 1 Capital Ratio 13.22 13.56 12.35 Total Capital Ratio 14.41 14.81 13.61 Tier 1 Leverage Ratio 7.30 7.32 6.61 Total Shareholders' Equity to Total Assets 6.30 7.07 6.20 Tangible Common Equity to Tangible Assets 6 5.39 6.15 6.06 Tangible Common Equity to Risk-Weighted Assets 6 9.77 11.44 11.78 Non-Financial Data Full-Time Equivalent Employees 2,084 2,056 2,058 Branches 54 54 63 ATMs 307 307 361 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 common share divided by basic earnings per common share. 4 The numerator comprises the Allowance for Credit Losses - Loans and Leases. 5 Regulatory capital ratios as of March 31, 2022 are preliminary. 6 Tangible common equity to tangible assets and tangible common equity to risk-weighted assets are Non-GAAP financial measures. Tangible common equity is defined by the Company as common shareholders' equity minus goodwill. See Table 2 "Reconciliation of Non-GAAP Financial Measures". Bank of Hawaii Corporation and Subsidiaries Reconciliation of Non-GAAP Financial Measures Table 2 March 31, December 31, March 31, (dollars in thousands) 2022 2021 2021 Total Shareholders' Equity $ 1,448,885 $ 1,611,611 $ 1,360,221 Less: Preferred Stock 180,000 180,000 - Goodwill 31,517 31,517 31,517 Tangible Common Equity $ 1,237,368 $ 1,400,094 $ 1,328,704 Total Assets 23,000,317 22,784,941 21,947,271 Less: Goodwill 31,517 31,517 31,517 Tangible Assets $ 22,968,800 $ 22,753,424 $ 21,915,754 Risk-Weighted Assets, determined in accordance with prescribed regulatory requirements 1 $ 12,663,646 $ 12,236,805 $ 11,275,565 Total Shareholders' Equity to Total Assets 6.30 % 7.07 % 6.20 % Tangible Common Equity to Tangible Assets (Non-GAAP) 5.39 % 6.15 % 6.06 % Tier 1 Capital Ratio 1 13.22 % 13.56 % 12.35 % Tangible Common Equity to Risk-Weighted Assets (Non-GAAP) 1 9.77 % 11.44 % 11.78 % 1 Regulatory capital ratios as of March 31, 2022 are preliminary. Bank of Hawaii Corporation and Subsidiaries Consolidated Statements of Income Table 3 Three Months Ended March 31, December 31, March 31, (dollars in thousands, except per share amounts) 2022 2021 2021 Interest Income Interest and Fees on Loans and Leases $ 94,439 $ 97,853 $ 99,299 Income on Investment Securities Available-for-Sale 17,100 15,850 15,837 Held-to-Maturity 18,701 18,325 13,300 Deposits 4 1 7 Funds Sold 127 104 137 Other 202 176 185 Total Interest Income 130,573 132,309 128,765 Interest Expense Deposits 2,353 2,898 4,329 Securities Sold Under Agreements to Repurchase 2,772 2,834 3,533 Funds Purchased 2 6 1 Other Debt 183 183 333 Total Interest Expense 5,310 5,921 8,196 Net Interest Income 125,263 126,388 120,569 Provision for Credit Losses (5,500 ) (9,700 ) (14,300 ) Net Interest Income After Provision for Credit Losses 130,763 136,088 134,869 Noninterest Income Trust and Asset Management 11,276 11,693 11,278 Mortgage Banking 2,740 2,908 5,862 Service Charges on Deposit Accounts 7,272 6,861 6,128 Fees, Exchange, and Other Service Charges 12,952 14,439 13,607 Investment Securities Losses, Net (1,545 ) (1,258 ) (1,203 ) Annuity and Insurance 791 876 702 Bank-Owned Life Insurance 2,349 1,907 1,917 Other 7,716 5,148 4,679 Total Noninterest Income 43,551 42,574 42,970 Noninterest Expense Salaries and Benefits 59,924 59,434 56,251 Net Occupancy 9,826 9,028 9,090 Net Equipment 9,153 9,105 8,878 Data Processing 4,560 4,696 6,322 Professional Fees 3,258 3,427 3,406 FDIC Insurance 1,502 1,619 1,654 Other 15,651 14,369 13,264 Total Noninterest Expense 103,874 101,678 98,865 Income Before Provision for Income Taxes 70,440 76,984 78,974 Provision for Income Taxes 15,606 13,147 19,025 Net Income $ 54,834 $ 63,837 $ 59,949 Preferred Stock Dividends 1,969 1,969 - Net Income Available to Common Shareholders $ 52,865 $ 61,868 $ 59,949 Basic Earnings Per Common Share $ 1.33 $ 1.56 $ 1.51 Diluted Earnings Per Common Share $ 1.32 $ 1.55 $ 1.50 Dividends Declared Per Common Share $ 0.70 $ 0.70 $ 0.67 Basic Weighted Average Common Shares 39,752,679 39,741,063 39,827,590 Diluted Weighted Average Common Shares 39,956,391 39,955,525 40,071,477 Bank of Hawaii Corporation and Subsidiaries Consolidated Statements of Comprehensive Income (Loss) Table 4 Three Months Ended March 31, December 31, March 31, (dollars in thousands) 2022 2021 2021 Net Income $ 54,834 $ 63,837 $ 59,949 Other Comprehensive Loss, Net of Tax: Net Unrealized Losses on Investment Securities (180,124 ) (26,244 ) (50,050 ) Defined Benefit Plans 353 8,430 441 Other Comprehensive Loss (179,771 ) (17,814 ) (49,609 ) Comprehensive Income (Loss) $ (124,937 ) $ 46,023 $ 10,340 Bank of Hawaii Corporation and Subsidiaries Consolidated Statements of Condition Table 5 March 31, December 31, March 31, (dollars in thousands) 2022 2021 2021 Assets Interest-Bearing Deposits in Other Banks $ 2,488 $ 2,571 $ 4,506 Funds Sold 356,373 361,536 1,101,631 Investment Securities Available-for-Sale 4,258,534 4,276,056 4,024,763 Held-to-Maturity (Fair Value of $4,171,262; $4,646,619; $3,477,346) 4,489,615 4,694,780 3,464,360 Loans Held for Sale 5,293 26,746 18,320 Loans and Leases 12,544,492 12,259,076 12,140,703 Allowance for Credit Losses (152,028 ) (157,821 ) (198,343 ) Net Loans and Leases 12,392,464 12,101,255 11,942,360 Total Earning Assets 21,504,767 21,462,944 20,555,940 Cash and Due from Banks 236,193 196,327 286,717 Premises and Equipment, Net 199,743 199,393 198,107 Operating Lease Right-of-Use Assets 93,563 95,621 97,750 Accrued Interest Receivable 45,392 45,242 47,917 Foreclosed Real Estate 2,332 2,332 2,332 Mortgage Servicing Rights 23,968 22,251 22,320 Goodwill 31,517 31,517 31,517 Bank-Owned Life Insurance 446,926 344,587 291,764 Other Assets 415,916 384,727 412,907 Total Assets $ 23,000,317 $ 22,784,941 $ 21,947,271 Liabilities Deposits Noninterest-Bearing Demand 7,500,741 7,275,287 6,227,436 Interest-Bearing Demand 4,591,178 4,628,567 4,379,243 Savings 7,701,849 7,456,165 7,474,580 Time 922,519 1,000,089 1,475,392 Total Deposits 20,716,287 20,360,108 19,556,651 Securities Sold Under Agreements to Repurchase 450,490 450,490 600,490 Other Debt 10,367 10,391 60,459 Operating Lease Liabilities 101,274 103,210 105,820 Retirement Benefits Payable 38,008 38,494 50,687 Accrued Interest Payable 2,545 2,499 4,109 Taxes Payable 17,265 11,901 15,599 Other Liabilities 215,196 196,237 193,235 Total Liabilities 21,551,432 21,173,330 20,587,050 Shareholders' Equity Preferred Stock ($.01 par value; authorized 180,000 shares; issued / outstanding: March 31, 2022 and December 31, 2021 - 180,000) 180,000 180,000 - Common Stock ($.01 par value; authorized 500,000,000 shares; issued / outstanding: March 31, 2022 - 58,717,811 / 40,288,365; December 31, 2021 - 58,554,669 / 40,253,193; and March 31, 2021 - 58,553,365 / 40,394,234) 582 581 580 Capital Surplus 607,061 602,508 594,804 Accumulated Other Comprehensive Loss (246,153 ) (66,382 ) (41,787 ) Retained Earnings 1,974,790 1,950,375 1,844,057 Treasury Stock, at Cost (Shares: March 31, 2022 - 18,429,446; December 31, 2021 - 18,301,476; and March 31, 2021 - 18,159,131) (1,067,395 ) (1,055,471 ) (1,037,433 ) Total Shareholders' Equity 1,448,885 1,611,611 1,360,221 Total Liabilities and Shareholders' Equity $ 23,000,317 $ 22,784,941 $ 21,947,271 Bank of Hawaii Corporation and Subsidiaries Consolidated Statements of Shareholders' Equity Table 6 Accum. Other Compre- Preferred Common hensive Shares Preferred Shares Common Capital Income Retained Treasury (dollars in thousands) Outstanding Stock Outstanding Stock Surplus (Loss) Earnings Stock Total Balance as of December 31, 2021 180,000 $ 180,000 40,253,193 $ 581 $ 602,508 $ (66,382 ) $ 1,950,375 $ (1,055,471 ) $ 1,611,611 Net Income - - - - - - 54,834 - 54,834 Other Comprehensive Loss - - - - - (179,771 ) - - (179,771 ) Share-Based Compensation - - - - 4,010 - - - 4,010 Common Stock Issued under Purchase and Equity Compensation Plans - - 197,783 1 543 - (185 ) 2,036 2,395 Common Stock Repurchased - - (162,611 ) - - - - (13,960 ) (13,960 ) Cash Dividends Declared Common Stock ($0.70 per share) - - - - - - (28,265 ) - (28,265 ) Cash Dividends Declared Preferred Stock - - - - - - (1,969 ) - (1,969 ) Balance as of March 31, 2022 180,000 $ 180,000 40,288,365 $ 582 $ 607,061 $ (246,153 ) $ 1,974,790 $ (1,067,395 ) $ 1,448,885 Balance as of December 31, 2020 - - 40,119,312 580 591,360 7,822 1,811,979 (1,037,234 ) 1,374,507 Net Income - - - - - - 59,949 - 59,949 Other Comprehensive Loss - - - - - (49,609 ) - - (49,609 ) Share-Based Compensation - - - - 2,780 - - - 2,780 Common Stock Issued under Purchase and Equity Compensation Plans - - 310,905 - 664 - (845 ) 2,990 2,809 Common Stock Repurchased - - (35,983 ) - - - - (3,189 ) (3,189 ) Cash Dividends Declared Common Stock ($0.67 per share) - - - - - - (27,026 ) - (27,026 ) Balance as of March 31, 2021 - $ - 40,394,234 $ 580 $ 594,804 $ (41,787 ) $ 1,844,057 $ (1,037,433 ) $ 1,360,221 Bank of Hawaii Corporation and Subsidiaries Average Balances and Interest Rates - Taxable-Equivalent Basis 1 Table 7 Three Months Ended Three Months Ended Three Months Ended March 31, 2022 December 31, 2021 March 31, 2021 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 $ 3.4 $ - 0.45 % $ 2.2 $ - 0.05 % $ 3.2 $ - 0.93 % Funds Sold 238.5 0.1 0.21 273.2 0.1 0.15 550.6 0.1 0.10 Investment Securities Available-for-Sale Taxable 4,399.9 17.1 1.56 4,308.6 15.8 1.47 4,007.9 15.8 1.57 Non-Taxable 3.0 - 1.93 5.8 0.1 3.67 12.3 0.1 4.27 Held-to-Maturity Taxable 4,567.4 18.6 1.63 4,757.4 18.1 1.52 3,385.8 13.1 1.55 Non-Taxable 35.8 0.2 2.10 58.0 0.3 2.31 38.1 0.2 2.55 Total Investment Securities 9,006.1 35.9 1.59 9,129.8 34.3 1.50 7,444.1 29.2 1.57 Loans Held for Sale 13.7 0.1 2.78 20.8 0.1 2.85 26.2 0.2 2.76 Loans and Leases 2 Commercial and Industrial 1,421.9 10.8 3.08 1,478.0 14.6 3.92 1,904.5 14.3 3.05 Commercial Mortgage 3,158.8 21.7 2.80 3,075.1 22.2 2.86 2,846.0 21.3 3.04 Construction 227.6 2.1 3.68 246.8 2.2 3.50 264.1 2.3 3.48 Commercial Lease Financing 98.8 0.4 1.45 107.4 0.3 1.12 106.4 0.4 1.43 Residential Mortgage 4,343.3 34.9 3.21 4,293.6 33.9 3.16 4,146.6 35.9 3.46 Home Equity 1,898.9 13.3 2.83 1,757.8 12.8 2.88 1,594.1 12.6 3.20 Automobile 737.4 5.9 3.23 730.2 6.1 3.34 708.3 6.1 3.51 Other 3 403.7 5.5 5.47 397.8 5.8 5.79 382.6 6.4 6.75 Total Loans and Leases 12,290.4 94.6 3.10 12,086.7 97.9 3.22 11,952.6 99.3 3.35 Other 36.7 0.2 2.21 34.4 0.2 2.05 33.4 0.2 2.21 Total Earning Assets 4 21,588.8 130.9 2.44 21,547.1 132.6 2.45 20,010.1 129.0 2.60 Cash and Due from Banks 233.3 231.3 270.7 Other Assets 1,025.4 887.9 869.9 Total Assets $ 22,847.5 $ 22,666.3 $ 21,150.7 Interest-Bearing Liabilities Interest-Bearing Deposits Demand 4,655.4 0.5 0.04 4,685.7 0.7 0.06 4,186.4 0.6 0.06 Savings 7,540.6 1.1 0.06 7,443.2 1.2 0.06 7,016.6 1.5 0.09 Time 971.5 0.8 0.34 1,019.2 1.0 0.40 1,630.0 2.2 0.56 Total Interest-Bearing Deposits 13,167.5 2.4 0.07 13,148.1 2.9 0.09 12,833.0 4.3 0.14 Short-Term Borrowings 6.8 - 0.11 18.5 - 0.13 2.4 - 0.09 Securities Sold Under Agreements to Repurchase 450.5 2.8 2.46 450.5 2.8 2.46 600.5 3.6 2.35 Other Debt 10.4 0.2 7.05 10.4 0.2 7.05 60.5 0.3 2.22 Total Interest-Bearing Liabilities 13,635.2 5.4 0.16 13,627.5 5.9 0.17 13,496.4 8.2 0.24 Net Interest Income $ 125.5 $ 126.7 $ 120.8 Interest Rate Spread 2.28 % 2.28 % 2.36 % Net Interest Margin 2.34 % 2.34 % 2.43 % Noninterest-Bearing Demand Deposits 7,258.6 7,074.4 5,832.2 Other Liabilities 385.0 373.8 444.8 Shareholders' Equity 1,568.7 1,590.6 1,377.3 Total Liabilities and Shareholders' Equity $ 22,847.5 $ 22,666.3 $ 21,150.7 1 Due to rounding, the amounts presented in this table may not tie to other amounts presented elsewhere in this report. 2 Non-performing loans and leases are included in the respective average loan and lease balances. Income, if any, on such loans and leases is recognized on a cash basis. 3 Comprised of other consumer revolving credit, installment, and consumer lease financing. 4 Interest income includes taxable-equivalent basis adjustments, based upon a federal statutory tax rate of 21%, of $254,000, $280,000, and $252,000 for the three months ended March 31, 2022, December 31, 2021, and March 31, 2021, respectively. Bank of Hawaii Corporation and Subsidiaries Analysis of Change in Net Interest Income - Taxable-Equivalent Basis Table 8a Three Months Ended March 31, 2022 Compared to December 31, 2021 (dollars in millions) Volume 1 Rate 1 Total Change in Interest Income: Investment Securities Available-for-Sale Taxable $ 0.3 $ 1.0 $ 1.3 Non-Taxable (0.1 ) - (0.1 ) Held-to-Maturity Taxable (0.7 ) 1.2 0.5 Non-Taxable (0.1 ) - (0.1 ) Total Investment Securities (0.6 ) 2.2 1.6 Loans and Leases Commercial and Industrial (2.3 ) (1.5 ) (3.8 ) Commercial Mortgage 0.3 (0.8 ) (0.5 ) Construction (0.2 ) 0.1 (0.1 ) Commercial Lease Financing - 0.1 0.1 Residential Mortgage 0.4 0.6 1.0 Home Equity 0.8 (0.3 ) 0.5 Automobile 0.1 (0.3 ) (0.2 ) Other 2 0.1 (0.4 ) (0.3 ) Total Loans and Leases (0.8 ) (2.5 ) (3.3 ) Total Change in Interest Income (1.4 ) (0.3 ) (1.7 ) Change in Interest Expense: Interest-Bearing Deposits Demand - (0.2 ) (0.2 ) Savings - (0.1 ) (0.1 ) Time (0.1 ) (0.1 ) (0.2 ) Total Interest-Bearing Deposits (0.1 ) (0.4 ) (0.5 ) Securities Sold Under Agreements to Repurchase 0.1 (0.1 ) - Total Change in Interest Expense - (0.5 ) (0.5 ) Change in Net Interest Income $ (1.4 ) $ 0.2 $ (1.2 ) 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 March 31, 2022 Compared to March 31, 2021 (dollars in millions) Volume 1 Rate 1 Total Change in Interest Income: Funds Sold $ (0.1 ) $ 0.1 $ - Investment Securities Available-for-Sale Taxable 1.5 (0.2 ) 1.3 Non-Taxable (0.1 ) - (0.1 ) Held-to-Maturity Taxable 4.8 0.7 5.5 Total Investment Securities 6.2 0.5 6.7 Loans Held for Sale (0.1 ) - (0.1 ) Loans and Leases Commercial and Industrial (6.0 ) 2.5 (3.5 ) Commercial Mortgage 2.2 (1.8 ) 0.4 Construction (0.3 ) 0.1 (0.2 ) Commercial Lease Financing 0.1 (0.1 ) - Residential Mortgage 1.7 (2.7 ) (1.0 ) Home Equity 2.2 (1.5 ) 0.7 Automobile 0.3 (0.5 ) (0.2 ) Other 2 0.3 (1.2 ) (0.9 ) Total Loans and Leases 0.5 (5.2 ) (4.7 ) Total Change in Interest Income 6.5 (4.6 ) 1.9 Change in Interest Expense: Interest-Bearing Deposits Demand 0.1 (0.2 ) (0.1 ) Savings 0.1 (0.5 ) (0.4 ) Time (0.7 ) (0.7 ) (1.4 ) Total Interest-Bearing Deposits (0.5 ) (1.4 ) (1.9 ) Securities Sold Under Agreements to Repurchase (1.0 ) 0.2 (0.8 ) Other Debt (0.4 ) 0.3 (0.1 ) Total Change in Interest Expense (1.9 ) (0.9 ) (2.8 ) Change in Net Interest Income $ 8.4 $ (3.7 ) $ 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 Salaries and Benefits Table 9 Three Months Ended March 31, December 31, March 31, (dollars in thousands) 2022 2021 2021 Salaries $ 34,932 $ 35,758 $ 31,569 Incentive Compensation 6,111 6,699 5,914 Share-Based Compensation 3,799 3,396 2,584 Commission Expense 1,641 2,094 2,436 Retirement and Other Benefits 4,693 4,661 5,517 Payroll Taxes 4,944 2,585 3,968 Medical, Dental, and Life Insurance 3,234 3,981 2,424 Separation Expense 570 260 1,839 Total Salaries and Benefits $ 59,924 $ 59,434 $ 56,251 Bank of Hawaii Corporation and Subsidiaries Loan and Lease Portfolio Balances Table 10 March 31, December 31, September 30, June 30, March 31, (dollars in thousands) 2022 2021 2021 2021 2021 Commercial Commercial and Industrial $ 1,354,757 $ 1,361,921 $ 1,325,446 $ 1,257,305 $ 1,288,496 PPP 1 57,809 126,779 268,480 513,513 725,485 Commercial Mortgage 3,257,689 3,152,130 2,994,520 2,944,435 2,859,246 Construction 248,363 220,254 296,052 277,393 281,164 Lease Financing 98,107 105,108 107,526 110,500 104,980 Total Commercial 5,016,725 4,966,192 4,992,024 5,103,146 5,259,371 Consumer Residential Mortgage 4,405,718 4,309,602 4,272,540 4,264,180 4,216,976 Home Equity 1,958,285 1,836,588 1,680,229 1,594,781 1,577,500 Automobile 742,934 736,565 727,234 714,729 710,407 Other 2 420,830 410,129 400,723 364,542 376,449 Total Consumer 7,527,767 7,292,884 7,080,726 6,938,232 6,881,332 Total Loans and Leases $ 12,544,492 $ 12,259,076 $ 12,072,750 $ 12,041,378 $ 12,140,703 Deposits March 31, December 31, September 30, June 30, March 31, (dollars in thousands) 2022 2021 2021 2021 2021 Consumer $ 10,654,192 $ 10,438,844 $ 10,150,199 $ 9,848,285 $ 9,746,713 Commercial 8,818,477 8,641,932 8,767,733 8,675,909 8,241,102 Public and Other 1,243,618 1,279,332 1,575,746 1,645,515 1,568,836 Total Deposits $ 20,716,287 $ 20,360,108 $ 20,493,678 $ 20,169,709 $ 19,556,651 1 The PPP amounts presented, which are reported net of deferred costs and fees, were previously included as a component of the Commercial and Industrial loan class. 2 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 March 31, December 31, September 30, June 30, March 31, (dollars in thousands) 2022 2021 2021 2021 2021 Non-Performing Assets Non-Accrual Loans and Leases Commercial Commercial and Industrial $ 99 $ 243 $ 209 $ 258 $ 293 Commercial Mortgage 8,065 8,205 8,309 8,413 8,503 Total Commercial 8,164 8,448 8,518 8,671 8,796 Consumer Residential Mortgage 3,845 3,305 4,348 2,437 1,804 Home Equity 5,638 4,881 5,422 5,534 4,951 Total Consumer 9,483 8,186 9,770 7,971 6,755 Total Non-Accrual Loans and Leases 17,647 16,634 18,288 16,642 15,551 Foreclosed Real Estate 2,332 2,332 2,332 2,332 2,332 Total Non-Performing Assets $ 19,979 $ 18,966 $ 20,620 $ 18,974 $ 17,883 Accruing Loans and Leases Past Due 90 Days or More Commercial Commercial and Industrial 22 - - - 9 Total Commercial 22 - - - 9 Consumer Residential Mortgage 4,113 3,159 4,776 4,069 4,069 Home Equity 2,722 3,456 2,946 4,498 4,906 Automobile 504 729 395 277 604 Other 1 649 426 593 434 828 Total Consumer 7,988 7,770 8,710 9,278 10,407 Total Accruing Loans and Leases Past Due 90 Days or More $ 8,010 $ 7,770 $ 8,710 $ 9,278 $ 10,416 Restructured Loans on Accrual Status and Not Past Due 90 Days or More $ 54,136 $ 60,519 $ 62,787 $ 74,926 $ 74,216 Total Loans and Leases $ 12,544,492 $ 12,259,076 $ 12,072,750 $ 12,041,378 $ 12,140,703 Ratio of Non-Accrual Loans and Leases to Total Loans and Leases 0.14 % 0.14 % 0.15 % 0.14 % 0.13 % Ratio of Non-Performing Assets to Total Loans and Leases and Foreclosed Real Estate 0.16 % 0.15 % 0.17 % 0.16 % 0.15 % Ratio of Commercial Non-Performing Assets to Total Commercial Loans and Leases and Commercial Foreclosed Real Estate 0.16 % 0.17 % 0.17 % 0.17 % 0.17 % Ratio of Consumer Non-Performing Assets to Total Consumer Loans and Leases and Consumer Foreclosed Real Estate 0.16 % 0.14 % 0.17 % 0.15 % 0.13 % 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 0.22 % 0.22 % 0.24 % 0.23 % 0.23 % Quarter to Quarter Changes in Non-Performing Assets Balance at Beginning of Quarter $ 18,966 $ 20,620 $ 18,974 $ 17,883 $ 18,481 Additions 2,243 357 3,171 2,229 2,992 Reductions Payments (1,230 ) (972 ) (889 ) (722 ) (2,481 ) Return to Accrual Status - (1,038 ) (606 ) (416 ) (1,014 ) Charge-offs/Write-downs - (1 ) (30 ) - (95 ) Total Reductions (1,230 ) (2,011 ) (1,525 ) (1,138 ) (3,590 ) Balance at End of Quarter $ 19,979 $ 18,966 $ 20,620 $ 18,974 $ 17,883 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 March 31, December 31, March 31, (dollars in thousands) 2022 2021 2021 Balance at Beginning of Period $ 164,297 $ 174,708 221,303 Loans and Leases Charged-Off Commercial Commercial and Industrial (349 ) (217 ) (248 ) Consumer Residential Mortgage - - (4 ) Home Equity (68 ) (5 ) (16 ) Automobile (1,530 ) (1,045 ) (2,109 ) Other 1 (1,961 ) (2,007 ) (3,914 ) Total Loans and Leases Charged-Off (3,908 ) (3,274 ) (6,291 ) Recoveries on Loans and Leases Previously Charged-Off Commercial Commercial and Industrial 369 132 112 Consumer Residential Mortgage 54 858 955 Home Equity 515 390 533 Automobile 739 476 919 Other 1 745 746 856 Total Recoveries on Loans and Leases Previously Charged-Off 2,422 2,602 3,375 Net Charged-Off - Loans and Leases (1,486 ) (672 ) (2,916 ) Net Charged-Off - Accrued Interest Receivable (47 ) (39 ) (308 ) Provision for Credit Losses: Loans and Leases (4,307 ) (9,427 ) (14,993 ) Accrued Interest Receivable (367 ) (214 ) - Unfunded Commitments (826 ) (59 ) 693 Balance at End of Period 2 $ 157,264 $ 164,297 $ 203,779 Components Allowance for Credit Losses - Loans and Leases 152,028 157,821 198,343 Allowance for Credit Losses - Accrued Interest Receivable - 414 2,392 Reserve for Unfunded Commitments 5,236 6,062 3,044 Total Reserve for Credit Losses $ 157,264 $ 164,297 $ 203,779 Average Loans and Leases Outstanding $ 12,290,402 $ 12,086,705 $ 11,952,587 Ratio of Net Loans and Leases Charged-Off to Average Loans and Leases Outstanding (annualized) 0.05 % 0.02 % 0.10 % Ratio of Allowance for Credit Losses to Loans and Leases Outstanding 3 1.21 % 1.29 % 1.63 % 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 The numerator comprises the Allowance for Credit Losses - Loans and Leases. Bank of Hawaii Corporation and Subsidiaries Business Segments Selected Financial Information Table 13 Consumer Commercial Treasury Consolidated (dollars in thousands) Banking Banking and Other Total Three Months Ended March 31, 2022 Net Interest Income $ 70,235 $ 46,349 $ 8,679 $ 125,263 Provision for Credit Losses 1,683 (197 ) (6,986 ) (5,500 ) Net Interest Income After Provision for Credit Losses 68,552 46,546 15,665 130,763 Noninterest Income 31,969 10,198 1,384 43,551 Noninterest Expense (81,698 ) (18,669 ) (3,507 ) (103,874 ) Income Before Income Taxes 18,823 38,075 13,542 70,440 Provision for Income Taxes (4,710 ) (9,197 ) (1,699 ) (15,606 ) Net Income $ 14,113 $ 28,878 $ 11,843 $ 54,834 Total Assets as of March 31, 2022 $ 7,900,273 $ 5,174,115 $ 9,925,929 $ 23,000,317 Three Months Ended March 31, 2021 Net Interest Income $ 69,762 $ 47,143 $ 3,664 $ 120,569 Provision for Credit Losses 2,866 50 (17,216 ) (14,300 ) Net Interest Income After Provision for Credit Losses 66,896 47,093 20,880 134,869 Noninterest Income 33,698 7,858 1,414 42,970 Noninterest Expense (78,181 ) (15,677 ) (5,007 ) (98,865 ) Income Before Income Taxes 22,413 39,274 17,287 78,974 Provision for Income Taxes (5,474 ) (9,558 ) (3,993 ) (19,025 ) Net Income $ 16,939 $ 29,716 $ 13,294 $ 59,949 Total Assets as of March 31, 2021 $ 7,556,756 $ 5,224,386 $ 9,166,129 $ 21,947,271 Bank of Hawaii Corporation and Subsidiaries Selected Quarterly Financial Data Table 14 Three Months Ended March 31, December 31, September 30, June 30, March 31, (dollars in thousands, except per share amounts) 2022 2021 2021 2021 2021 Quarterly Operating Results Interest Income Interest and Fees on Loans and Leases $ 94,439 $ 97,853 $ 100,570 $ 100,894 $ 99,299 Income on Investment Securities Available-for-Sale 17,100 15,850 16,396 16,467 15,837 Held-to-Maturity 18,701 18,325 16,754 13,576 13,300 Deposits 4 1 2 - 7 Funds Sold 127 104 382 260 137 Other 202 176 159 182 185 Total Interest Income 130,573 132,309 134,263 131,379 128,765 Interest Expense Deposits 2,353 2,898 3,837 4,152 4,329 Securities Sold Under Agreements to Repurchase 2,772 2,834 3,423 3,470 3,533 Funds Purchased 2 6 - - 1 Other Debt 183 183 184 243 333 Total Interest Expense 5,310 5,921 7,444 7,865 8,196 Net Interest Income 125,263 126,388 126,819 123,514 120,569 Provision for Credit Losses (5,500 ) (9,700 ) (10,400 ) (16,100 ) (14,300 ) Net Interest Income After Provision for Credit Losses 130,763 136,088 137,219 139,614 134,869 Noninterest Income Trust and Asset Management 11,276 11,693 11,415 11,682 11,278 Mortgage Banking 2,740 2,908 3,136 3,058 5,862 Service Charges on Deposit Accounts 7,272 6,861 6,510 6,065 6,128 Fees, Exchange, and Other Service Charges 12,952 14,439 13,604 13,807 13,607 Investment Securities Gains (Losses), Net (1,545 ) (1,258 ) (1,259 ) 2,423 (1,203 ) Annuity and Insurance 791 876 735 911 702 Bank-Owned Life Insurance 2,349 1,907 1,897 2,063 1,917 Other 7,716 5,148 5,340 4,422 4,679 Total Noninterest Income 43,551 42,574 41,378 44,431 42,970 Noninterest Expense Salaries and Benefits 59,924 59,434 56,447 56,161 56,251 Net Occupancy 9,826 9,028 3,079 5,047 9,090 Net Equipment 9,153 9,105 8,924 8,796 8,878 Data Processing 4,560 4,696 4,722 4,557 6,322 Professional Fees 3,258 3,427 2,948 3,114 3,406 FDIC Insurance 1,502 1,619 1,594 1,669 1,654 Other 15,651 14,369 18,805 17,183 13,264 Total Noninterest Expense 103,874 101,678 96,519 96,527 98,865 Income Before Provision for Income Taxes 70,440 76,984 82,078 87,518 78,974 Provision for Income Taxes 15,606 13,147 20,025 19,985 19,025 Net Income $ 54,834 $ 63,837 $ 62,053 $ 67,533 $ 59,949 Preferred Stock Dividends 1,969 1,969 1,006 - - Net Income Available to Common Shareholders $ 52,865 $ 61,868 $ 61,047 $ 67,533 $ 59,949 Basic Earnings Per Common Share $ 1.33 $ 1.56 $ 1.53 $ 1.69 $ 1.51 Diluted Earnings Per Common Share $ 1.32 $ 1.55 $ 1.52 $ 1.68 $ 1.50 Balance Sheet Totals Loans and Leases $ 12,544,492 $ 12,259,076 $ 12,072,750 $ 12,041,378 $ 12,140,703 Total Assets 23,000,317 22,784,941 22,965,383 22,672,183 21,947,271 Total Deposits 20,716,287 20,360,108 20,493,678 20,169,709 19,556,651 Total Shareholders' Equity 1,448,885 1,611,611 1,597,109 1,583,531 1,360,221 Performance Ratios Return on Average Assets 0.97 % 1.12 % 1.07 % 1.23 % 1.15 % Return on Average Shareholders' Equity 14.18 15.92 15.41 19.17 17.65 Return on Average Common Equity 15.44 17.40 17.08 19.61 17.65 Efficiency Ratio 1 61.53 60.18 57.38 57.47 60.45 Net Interest Margin 2 2.34 2.34 2.32 2.37 2.43 1 Efficiency ratio is defined as noninterest expense divided by total revenue (net interest income and noninterest income). 2 Net interest margin is defined as net interest income, on a taxable-equivalent basis, as a percentage of average earning assets. Bank of Hawaii Corporation and Subsidiaries Hawaii Economic Trends Table 15 Two Months Ended Year Ended ($ in millions; jobs in thousands) February 28, 2022 December 31, 2021 December 31, 2020 Hawaii Economic Trends State General Fund Revenues 1 $ 1,543.9 41.1 % $ 8,147.0 27.0 % $ 6,415.1 (12.3 ) % General Excise and Use Tax Revenue 1 706.6 27.8 3,604.3 18.6 3,038.8 (15.6 ) Jobs 2 644.3 642.6 594.4 March 31, December 31, 2022 2021 2020 Unemployment, seasonally adjusted 3 Statewide 4.1 % 4.3 % 9.8 % Honolulu County 4.0 4.1 8.9 Hawaii County 4.0 4.1 9.2 Maui County 4.8 5.1 13.7 Kauai County 4.6 5.9 13.5 March 31, December 31, (percentage change, except months of inventory) 2022 2021 2020 2019 Housing Trends (Single Family Oahu) 4 Median Home Price 20.2 % 19.3 % 5.2 % (0.1 ) % Home Sales Volume (units) (2.6 ) % 17.9 % 2.3 % 3.9 % Months of Inventory 1.0 0.8 1.4 2.5 Monthly Visitor Arrivals, Percentage Change (in thousands) Not Seasonally Adjusted from Previous Year Tourism 5 February 28, 2022 623.7 165.1 % January 31, 2022 567.2 229.8 December 31, 2021 753.7 219.6 November 30, 2021 613.4 233.8 October 31, 2021 550.8 618.2 September 30, 2021 505.9 2,647.9 August 31, 2021 722.4 2,993.0 July 31, 2021 879.6 3,798.4 June 30, 2021 791.1 4,534.7 May 31, 2021 629.7 6,807.4 April 30, 2021 484.1 10,506.3 March 31, 2021 439.8 1.1 February 28, 2021 235.3 (71.6 ) January 31, 2021 172.0 (80.1 ) December 31, 2020 235.8 (75.2 ) November 30, 2020 183.8 (77.3 ) October 31, 2020 76.7 (90.4 ) September 30, 2020 18.4 (97.5 ) August 31, 2020 23.4 (97.5 ) July 31, 2020 22.6 (97.7 ) June 30, 2020 17.1 (98.2 ) May 31, 2020 9.1 (98.9 ) April 30, 2020 4.6 (99.5 ) March 31, 2020 434.9 (53.7 ) February 29, 2020 828.1 5.8 January 31, 2020 862.6 5.1 1 Source: Hawaii Department of Business, Economic Development & Tourism 2 Source: U.S. Bureau of Labor Statistics 3 Source: University of Hawaii Economic Research Organization (UHERO) 4 Source: Honolulu Board of Realtors 5 Source: Hawaii Tourism Authority View source version on businesswire.com: https://www.businesswire.com/news/home/20220425005225/en/Contacts Media Inquiries Melissa Torres-Laing Email: Melissa.Torres-Laing@boh.com Telephone: 808-694-8384 Mobile: 808-859-1703 Investor/Analyst Inquiries Janelle Higa Email: Janelle.Higa@boh.com Telephone: 808-694-8007
Diluted Earnings Per Common Share $1.32 Net Income $54.8 Million Board of Directors Declares Dividend of $0.70 Per Common Share
Bank of Hawaii Corporation (NYSE: BOH) today reported diluted earnings per common share of $1.32 for the first quarter of 2022, compared with diluted earnings per common share of $1.55 in the previous quarter and $1.50 in the same quarter last year. Net income for the first quarter of 2022 was $54.8 million, down 14.1% from the fourth quarter of 2021 and down 8.5% from the first quarter of 2021. This press release features multimedia. View the full release here: https://www.businesswire.com/news/home/20220425005225/en/ “Bank of Hawaii had a good start to 2022 with solid operating performance," said Peter Ho, Chairman, President, and CEO. “We saw good continuing momentum in core loan and deposit growth and expansion in core net interest margin. Asset quality continued its stable trend, and capital and liquidity remain strong.” Financial Highlights The return on average assets for the first quarter of 2022 was 0.97% compared with 1.12% in the previous quarter and 1.15% in the same quarter of 2021. The return on average common equity for the first quarter of 2022 was 15.44% compared with 17.40% in the previous quarter and 17.65% in the same quarter of 2021. The decrease from prior quarter was primarily driven by lower provision release and seasonal payroll expenses. The decrease from prior year was primarily driven by lower provision release. Net interest income for the first quarter of 2022 was $125.3 million, a decrease of 0.9% from the fourth quarter of 2021 and an increase of 3.9% from the first quarter of 2021. Net interest margin was 2.34% in the first quarter of 2022, unchanged compared to the previous quarter and a decrease of 9 basis points from the same quarter of 2021. One-time significant items in the fourth quarter of 2021 included a negative $0.9 million adjustment to net interest income for deferred mortgage loan fees related to prior quarters of 2021. The adjustment had a negative impact of 2 basis points on the net interest margin. The provision for credit losses for the first quarter of 2022 was a net benefit of $5.5 million compared with a net benefit of $9.7 million in the previous quarter and a net benefit of $14.3 million in the same quarter of 2021. Noninterest income was $43.6 million in the first quarter of 2022, an increase of 2.3% from the previous quarter and an increase of 1.4% from the same quarter of 2021. Noninterest expense was $103.9 million in the first quarter of 2022, an increase of 2.2% from the previous quarter and an increase of 5.1% from the same quarter of 2021. Noninterest expense in the first quarter of 2022 included seasonal payroll expenses of approximately $3.7 million. One-time significant items in the fourth quarter of 2021 included $1.2 million related to an increase in vacation carryover limits. Noninterest expense in the first quarter of 2021 included seasonal payroll expenses of approximately $2.1 million, charges related to the rollout of contactless cards of $1.9 million, and separation expenses of $1.8 million. The effective tax rate for the first quarter of 2022 was 22.15% compared with 17.08% in the previous quarter and 24.09% during the same quarter of 2021. The fourth quarter of 2021 included a $3.6 million benefit due to larger than expected tax credits from 2020 and a reduction in the valuation allowance related to low-income housing partnerships. Asset Quality The Company’s overall asset quality continued to remain strong during the first quarter of 2022. Total non-performing assets were $20.0 million at March 31, 2022, up by $1.0 million from December 31, 2021 and up $2.1 million from March 31, 2021. Non-performing assets as a percentage of total loans and leases and foreclosed real estate were 0.16% at the end of the quarter, an increase of 1 basis point from the end of both the prior quarter and same quarter of 2021. Net loan and lease charge-offs during the first quarter of 2022 were $1.5 million or 0.05% annualized of total average loans and leases outstanding. Net loan and lease charge-offs for the first quarter of 2022 were comprised of charge-offs of $3.9 million partially offset by recoveries of $2.4 million. Compared to the prior quarter, net loan and lease charge-offs increased by $0.8 million or 3 basis points annualized on total average loans and leases outstanding. Compared to the same quarter of 2021, net loan and lease charge-offs decreased by $1.4 million or 5 basis points annualized on total average loans and leases outstanding. The allowance for credit losses on loans and leases was $152.0 million at March 31, 2022, a decrease of $5.8 million from December 31, 2021 and $46.3 million from March 31, 2021. The ratio of the allowance for credit losses to total loans and leases outstanding was 1.21% at the end of the quarter, down 8 basis points from the end of the prior quarter and down 42 basis points from the end of the same quarter of 2021. Balance Sheet Total assets were $23.0 billion at March 31, 2022, an increase of 0.9% from December 31, 2021 and an increase of 4.8% from March 31, 2021. The investment securities portfolio was $8.7 billion at March 31, 2022, a decrease of 2.5% from December 31, 2021 and an increase of 16.8% from March 31, 2021. The investment portfolio remains largely comprised of securities issued by U.S. government agencies and U.S. government-sponsored enterprises. The increase from March 31, 2021 was primarily due to growth in deposits that outpaced loan growth. Total loans and leases were $12.5 billion at March 31, 2022, an increase of 2.3% from December 31, 2021 and an increase of 3.3% from March 31, 2021. Total loans and leases excluding PPP loans were $12.5 billion at March 31, 2022, an increase of 2.9% from December 31, 2021 and an increase of 9.4% from March 31, 2021. Total deposits reached a new record high of $20.7 billion at March 31, 2022, an increase of 1.7% from December 31, 2021 and an increase of 5.9% from March 31, 2021. Capital and Dividends The Tier 1 Capital Ratio was 13.22% at March 31, 2022 compared with 13.56% at December 31, 2021 and 12.35% at March 31, 2021. The increase from the same period in 2021 was driven by the issuance of $180 million of Fixed Rate Non-Cumulative Perpetual Preferred Stock, Series A in the second quarter of 2021. The Tier 1 Leverage Ratio was 7.30% at March 31, 2022 compared with 7.32% at December 31, 2021 and 6.61% at March 31, 2021. The increase from the same period in 2021 was driven by the aforementioned issuance of preferred stock in the second quarter of 2021. The Company repurchased 116.8 thousand shares of common stock at a total cost of $10.0 million under its share repurchase program in the first quarter of 2022 at an average cost of $85.34 per share repurchased. Total remaining buyback authority under the share repurchase program was $75.8 million at March 31, 2022. The Company’s Board of Directors declared a quarterly cash dividend of $0.70 per share on the Company’s outstanding common shares. The dividend will be payable on June 14, 2022 to shareholders of record at the close of business on May 31, 2022. On April 5, 2022, the Board of Directors declared the quarterly dividend payment of $10.94 per share, equivalent to $0.2735 per depositary share, on its preferred stock. The depositary shares representing the Series A Preferred Stock are traded on the NYSE under the symbol “BOH.PRA.” The dividend will be payable on May 2, 2022 to shareholders of record of the preferred stock at the close of business on April 18, 2022. Conference Call Information The Company will review its first quarter financial results today at 8:00 a.m. Hawaii Time (2:00 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/5x73dqat. 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, April 25, 2022. 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 4637209 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, 2021 which was 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 Hawai'i, 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 March 31, December 31, March 31, (dollars in thousands, except per share amounts) 2022 2021 2021 For the Period: Operating Results Net Interest Income $ 125,263 $ 126,388 $ 120,569 Provision for Credit Losses (5,500 ) (9,700 ) (14,300 ) Total Noninterest Income 43,551 42,574 42,970 Total Noninterest Expense 103,874 101,678 98,865 Net Income 54,834 63,837 59,949 Basic Earnings Per Common Share 1.33 1.56 1.51 Diluted Earnings Per Common Share 1.32 1.55 1.50 Dividends Declared Per Common Share 0.70 0.70 0.67 Performance Ratios Return on Average Assets 0.97 % 1.12 % 1.15 % Return on Average Shareholders' Equity 14.18 15.92 17.65 Return on Average Common Equity 15.44 17.40 17.65 Efficiency Ratio 1 61.53 60.18 60.45 Net Interest Margin 2 2.34 2.34 2.43 Dividend Payout Ratio 3 52.63 44.87 44.37 Average Shareholders' Equity to Average Assets 6.87 7.02 6.51 Average Balances Average Loans and Leases $ 12,290,402 $ 12,086,705 $ 11,952,587 Average Assets 22,847,488 22,666,280 21,150,670 Average Deposits 20,426,076 20,222,470 18,665,222 Average Shareholders' Equity 1,568,725 1,590,600 1,377,272 Per Share of Common Stock Book Value $ 31.50 $ 35.57 $ 33.67 Tangible Book Value 30.71 34.78 32.89 Market Value Closing 83.92 83.76 89.49 High 92.38 88.96 99.10 Low 79.60 78.73 75.65 March 31, December 31, March 31, 2022 2021 2021 As of Period End: Balance Sheet Totals Loans and Leases $ 12,544,492 $ 12,259,076 $ 12,140,703 Total Assets 23,000,317 22,784,941 21,947,271 Total Deposits 20,716,287 20,360,108 19,556,651 Other Debt 10,367 10,391 60,459 Total Shareholders' Equity 1,448,885 1,611,611 1,360,221 Asset Quality Non-Performing Assets $ 19,979 $ 18,966 $ 17,883 Allowance for Credit Losses - Loans and Leases 152,028 157,821 198,343 Allowance to Loans and Leases Outstanding 4 1.21 % 1.29 % 1.63 % Capital Ratios 5 Common Equity Tier 1 Capital Ratio 11.83 % 12.12 % 12.35 % Tier 1 Capital Ratio 13.22 13.56 12.35 Total Capital Ratio 14.41 14.81 13.61 Tier 1 Leverage Ratio 7.30 7.32 6.61 Total Shareholders' Equity to Total Assets 6.30 7.07 6.20 Tangible Common Equity to Tangible Assets 6 5.39 6.15 6.06 Tangible Common Equity to Risk-Weighted Assets 6 9.77 11.44 11.78 Non-Financial Data Full-Time Equivalent Employees 2,084 2,056 2,058 Branches 54 54 63 ATMs 307 307 361 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 common share divided by basic earnings per common share. 4 The numerator comprises the Allowance for Credit Losses - Loans and Leases. 5 Regulatory capital ratios as of March 31, 2022 are preliminary. 6 Tangible common equity to tangible assets and tangible common equity to risk-weighted assets are Non-GAAP financial measures. Tangible common equity is defined by the Company as common shareholders' equity minus goodwill. See Table 2 "Reconciliation of Non-GAAP Financial Measures". Bank of Hawaii Corporation and Subsidiaries Reconciliation of Non-GAAP Financial Measures Table 2 March 31, December 31, March 31, (dollars in thousands) 2022 2021 2021 Total Shareholders' Equity $ 1,448,885 $ 1,611,611 $ 1,360,221 Less: Preferred Stock 180,000 180,000 - Goodwill 31,517 31,517 31,517 Tangible Common Equity $ 1,237,368 $ 1,400,094 $ 1,328,704 Total Assets 23,000,317 22,784,941 21,947,271 Less: Goodwill 31,517 31,517 31,517 Tangible Assets $ 22,968,800 $ 22,753,424 $ 21,915,754 Risk-Weighted Assets, determined in accordance with prescribed regulatory requirements 1 $ 12,663,646 $ 12,236,805 $ 11,275,565 Total Shareholders' Equity to Total Assets 6.30 % 7.07 % 6.20 % Tangible Common Equity to Tangible Assets (Non-GAAP) 5.39 % 6.15 % 6.06 % Tier 1 Capital Ratio 1 13.22 % 13.56 % 12.35 % Tangible Common Equity to Risk-Weighted Assets (Non-GAAP) 1 9.77 % 11.44 % 11.78 % 1 Regulatory capital ratios as of March 31, 2022 are preliminary. Bank of Hawaii Corporation and Subsidiaries Consolidated Statements of Income Table 3 Three Months Ended March 31, December 31, March 31, (dollars in thousands, except per share amounts) 2022 2021 2021 Interest Income Interest and Fees on Loans and Leases $ 94,439 $ 97,853 $ 99,299 Income on Investment Securities Available-for-Sale 17,100 15,850 15,837 Held-to-Maturity 18,701 18,325 13,300 Deposits 4 1 7 Funds Sold 127 104 137 Other 202 176 185 Total Interest Income 130,573 132,309 128,765 Interest Expense Deposits 2,353 2,898 4,329 Securities Sold Under Agreements to Repurchase 2,772 2,834 3,533 Funds Purchased 2 6 1 Other Debt 183 183 333 Total Interest Expense 5,310 5,921 8,196 Net Interest Income 125,263 126,388 120,569 Provision for Credit Losses (5,500 ) (9,700 ) (14,300 ) Net Interest Income After Provision for Credit Losses 130,763 136,088 134,869 Noninterest Income Trust and Asset Management 11,276 11,693 11,278 Mortgage Banking 2,740 2,908 5,862 Service Charges on Deposit Accounts 7,272 6,861 6,128 Fees, Exchange, and Other Service Charges 12,952 14,439 13,607 Investment Securities Losses, Net (1,545 ) (1,258 ) (1,203 ) Annuity and Insurance 791 876 702 Bank-Owned Life Insurance 2,349 1,907 1,917 Other 7,716 5,148 4,679 Total Noninterest Income 43,551 42,574 42,970 Noninterest Expense Salaries and Benefits 59,924 59,434 56,251 Net Occupancy 9,826 9,028 9,090 Net Equipment 9,153 9,105 8,878 Data Processing 4,560 4,696 6,322 Professional Fees 3,258 3,427 3,406 FDIC Insurance 1,502 1,619 1,654 Other 15,651 14,369 13,264 Total Noninterest Expense 103,874 101,678 98,865 Income Before Provision for Income Taxes 70,440 76,984 78,974 Provision for Income Taxes 15,606 13,147 19,025 Net Income $ 54,834 $ 63,837 $ 59,949 Preferred Stock Dividends 1,969 1,969 - Net Income Available to Common Shareholders $ 52,865 $ 61,868 $ 59,949 Basic Earnings Per Common Share $ 1.33 $ 1.56 $ 1.51 Diluted Earnings Per Common Share $ 1.32 $ 1.55 $ 1.50 Dividends Declared Per Common Share $ 0.70 $ 0.70 $ 0.67 Basic Weighted Average Common Shares 39,752,679 39,741,063 39,827,590 Diluted Weighted Average Common Shares 39,956,391 39,955,525 40,071,477 Bank of Hawaii Corporation and Subsidiaries Consolidated Statements of Comprehensive Income (Loss) Table 4 Three Months Ended March 31, December 31, March 31, (dollars in thousands) 2022 2021 2021 Net Income $ 54,834 $ 63,837 $ 59,949 Other Comprehensive Loss, Net of Tax: Net Unrealized Losses on Investment Securities (180,124 ) (26,244 ) (50,050 ) Defined Benefit Plans 353 8,430 441 Other Comprehensive Loss (179,771 ) (17,814 ) (49,609 ) Comprehensive Income (Loss) $ (124,937 ) $ 46,023 $ 10,340 Bank of Hawaii Corporation and Subsidiaries Consolidated Statements of Condition Table 5 March 31, December 31, March 31, (dollars in thousands) 2022 2021 2021 Assets Interest-Bearing Deposits in Other Banks $ 2,488 $ 2,571 $ 4,506 Funds Sold 356,373 361,536 1,101,631 Investment Securities Available-for-Sale 4,258,534 4,276,056 4,024,763 Held-to-Maturity (Fair Value of $4,171,262; $4,646,619; $3,477,346) 4,489,615 4,694,780 3,464,360 Loans Held for Sale 5,293 26,746 18,320 Loans and Leases 12,544,492 12,259,076 12,140,703 Allowance for Credit Losses (152,028 ) (157,821 ) (198,343 ) Net Loans and Leases 12,392,464 12,101,255 11,942,360 Total Earning Assets 21,504,767 21,462,944 20,555,940 Cash and Due from Banks 236,193 196,327 286,717 Premises and Equipment, Net 199,743 199,393 198,107 Operating Lease Right-of-Use Assets 93,563 95,621 97,750 Accrued Interest Receivable 45,392 45,242 47,917 Foreclosed Real Estate 2,332 2,332 2,332 Mortgage Servicing Rights 23,968 22,251 22,320 Goodwill 31,517 31,517 31,517 Bank-Owned Life Insurance 446,926 344,587 291,764 Other Assets 415,916 384,727 412,907 Total Assets $ 23,000,317 $ 22,784,941 $ 21,947,271 Liabilities Deposits Noninterest-Bearing Demand 7,500,741 7,275,287 6,227,436 Interest-Bearing Demand 4,591,178 4,628,567 4,379,243 Savings 7,701,849 7,456,165 7,474,580 Time 922,519 1,000,089 1,475,392 Total Deposits 20,716,287 20,360,108 19,556,651 Securities Sold Under Agreements to Repurchase 450,490 450,490 600,490 Other Debt 10,367 10,391 60,459 Operating Lease Liabilities 101,274 103,210 105,820 Retirement Benefits Payable 38,008 38,494 50,687 Accrued Interest Payable 2,545 2,499 4,109 Taxes Payable 17,265 11,901 15,599 Other Liabilities 215,196 196,237 193,235 Total Liabilities 21,551,432 21,173,330 20,587,050 Shareholders' Equity Preferred Stock ($.01 par value; authorized 180,000 shares; issued / outstanding: March 31, 2022 and December 31, 2021 - 180,000) 180,000 180,000 - Common Stock ($.01 par value; authorized 500,000,000 shares; issued / outstanding: March 31, 2022 - 58,717,811 / 40,288,365; December 31, 2021 - 58,554,669 / 40,253,193; and March 31, 2021 - 58,553,365 / 40,394,234) 582 581 580 Capital Surplus 607,061 602,508 594,804 Accumulated Other Comprehensive Loss (246,153 ) (66,382 ) (41,787 ) Retained Earnings 1,974,790 1,950,375 1,844,057 Treasury Stock, at Cost (Shares: March 31, 2022 - 18,429,446; December 31, 2021 - 18,301,476; and March 31, 2021 - 18,159,131) (1,067,395 ) (1,055,471 ) (1,037,433 ) Total Shareholders' Equity 1,448,885 1,611,611 1,360,221 Total Liabilities and Shareholders' Equity $ 23,000,317 $ 22,784,941 $ 21,947,271 Bank of Hawaii Corporation and Subsidiaries Consolidated Statements of Shareholders' Equity Table 6 Accum. Other Compre- Preferred Common hensive Shares Preferred Shares Common Capital Income Retained Treasury (dollars in thousands) Outstanding Stock Outstanding Stock Surplus (Loss) Earnings Stock Total Balance as of December 31, 2021 180,000 $ 180,000 40,253,193 $ 581 $ 602,508 $ (66,382 ) $ 1,950,375 $ (1,055,471 ) $ 1,611,611 Net Income - - - - - - 54,834 - 54,834 Other Comprehensive Loss - - - - - (179,771 ) - - (179,771 ) Share-Based Compensation - - - - 4,010 - - - 4,010 Common Stock Issued under Purchase and Equity Compensation Plans - - 197,783 1 543 - (185 ) 2,036 2,395 Common Stock Repurchased - - (162,611 ) - - - - (13,960 ) (13,960 ) Cash Dividends Declared Common Stock ($0.70 per share) - - - - - - (28,265 ) - (28,265 ) Cash Dividends Declared Preferred Stock - - - - - - (1,969 ) - (1,969 ) Balance as of March 31, 2022 180,000 $ 180,000 40,288,365 $ 582 $ 607,061 $ (246,153 ) $ 1,974,790 $ (1,067,395 ) $ 1,448,885 Balance as of December 31, 2020 - - 40,119,312 580 591,360 7,822 1,811,979 (1,037,234 ) 1,374,507 Net Income - - - - - - 59,949 - 59,949 Other Comprehensive Loss - - - - - (49,609 ) - - (49,609 ) Share-Based Compensation - - - - 2,780 - - - 2,780 Common Stock Issued under Purchase and Equity Compensation Plans - - 310,905 - 664 - (845 ) 2,990 2,809 Common Stock Repurchased - - (35,983 ) - - - - (3,189 ) (3,189 ) Cash Dividends Declared Common Stock ($0.67 per share) - - - - - - (27,026 ) - (27,026 ) Balance as of March 31, 2021 - $ - 40,394,234 $ 580 $ 594,804 $ (41,787 ) $ 1,844,057 $ (1,037,433 ) $ 1,360,221 Bank of Hawaii Corporation and Subsidiaries Average Balances and Interest Rates - Taxable-Equivalent Basis 1 Table 7 Three Months Ended Three Months Ended Three Months Ended March 31, 2022 December 31, 2021 March 31, 2021 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 $ 3.4 $ - 0.45 % $ 2.2 $ - 0.05 % $ 3.2 $ - 0.93 % Funds Sold 238.5 0.1 0.21 273.2 0.1 0.15 550.6 0.1 0.10 Investment Securities Available-for-Sale Taxable 4,399.9 17.1 1.56 4,308.6 15.8 1.47 4,007.9 15.8 1.57 Non-Taxable 3.0 - 1.93 5.8 0.1 3.67 12.3 0.1 4.27 Held-to-Maturity Taxable 4,567.4 18.6 1.63 4,757.4 18.1 1.52 3,385.8 13.1 1.55 Non-Taxable 35.8 0.2 2.10 58.0 0.3 2.31 38.1 0.2 2.55 Total Investment Securities 9,006.1 35.9 1.59 9,129.8 34.3 1.50 7,444.1 29.2 1.57 Loans Held for Sale 13.7 0.1 2.78 20.8 0.1 2.85 26.2 0.2 2.76 Loans and Leases 2 Commercial and Industrial 1,421.9 10.8 3.08 1,478.0 14.6 3.92 1,904.5 14.3 3.05 Commercial Mortgage 3,158.8 21.7 2.80 3,075.1 22.2 2.86 2,846.0 21.3 3.04 Construction 227.6 2.1 3.68 246.8 2.2 3.50 264.1 2.3 3.48 Commercial Lease Financing 98.8 0.4 1.45 107.4 0.3 1.12 106.4 0.4 1.43 Residential Mortgage 4,343.3 34.9 3.21 4,293.6 33.9 3.16 4,146.6 35.9 3.46 Home Equity 1,898.9 13.3 2.83 1,757.8 12.8 2.88 1,594.1 12.6 3.20 Automobile 737.4 5.9 3.23 730.2 6.1 3.34 708.3 6.1 3.51 Other 3 403.7 5.5 5.47 397.8 5.8 5.79 382.6 6.4 6.75 Total Loans and Leases 12,290.4 94.6 3.10 12,086.7 97.9 3.22 11,952.6 99.3 3.35 Other 36.7 0.2 2.21 34.4 0.2 2.05 33.4 0.2 2.21 Total Earning Assets 4 21,588.8 130.9 2.44 21,547.1 132.6 2.45 20,010.1 129.0 2.60 Cash and Due from Banks 233.3 231.3 270.7 Other Assets 1,025.4 887.9 869.9 Total Assets $ 22,847.5 $ 22,666.3 $ 21,150.7 Interest-Bearing Liabilities Interest-Bearing Deposits Demand 4,655.4 0.5 0.04 4,685.7 0.7 0.06 4,186.4 0.6 0.06 Savings 7,540.6 1.1 0.06 7,443.2 1.2 0.06 7,016.6 1.5 0.09 Time 971.5 0.8 0.34 1,019.2 1.0 0.40 1,630.0 2.2 0.56 Total Interest-Bearing Deposits 13,167.5 2.4 0.07 13,148.1 2.9 0.09 12,833.0 4.3 0.14 Short-Term Borrowings 6.8 - 0.11 18.5 - 0.13 2.4 - 0.09 Securities Sold Under Agreements to Repurchase 450.5 2.8 2.46 450.5 2.8 2.46 600.5 3.6 2.35 Other Debt 10.4 0.2 7.05 10.4 0.2 7.05 60.5 0.3 2.22 Total Interest-Bearing Liabilities 13,635.2 5.4 0.16 13,627.5 5.9 0.17 13,496.4 8.2 0.24 Net Interest Income $ 125.5 $ 126.7 $ 120.8 Interest Rate Spread 2.28 % 2.28 % 2.36 % Net Interest Margin 2.34 % 2.34 % 2.43 % Noninterest-Bearing Demand Deposits 7,258.6 7,074.4 5,832.2 Other Liabilities 385.0 373.8 444.8 Shareholders' Equity 1,568.7 1,590.6 1,377.3 Total Liabilities and Shareholders' Equity $ 22,847.5 $ 22,666.3 $ 21,150.7 1 Due to rounding, the amounts presented in this table may not tie to other amounts presented elsewhere in this report. 2 Non-performing loans and leases are included in the respective average loan and lease balances. Income, if any, on such loans and leases is recognized on a cash basis. 3 Comprised of other consumer revolving credit, installment, and consumer lease financing. 4 Interest income includes taxable-equivalent basis adjustments, based upon a federal statutory tax rate of 21%, of $254,000, $280,000, and $252,000 for the three months ended March 31, 2022, December 31, 2021, and March 31, 2021, respectively. Bank of Hawaii Corporation and Subsidiaries Analysis of Change in Net Interest Income - Taxable-Equivalent Basis Table 8a Three Months Ended March 31, 2022 Compared to December 31, 2021 (dollars in millions) Volume 1 Rate 1 Total Change in Interest Income: Investment Securities Available-for-Sale Taxable $ 0.3 $ 1.0 $ 1.3 Non-Taxable (0.1 ) - (0.1 ) Held-to-Maturity Taxable (0.7 ) 1.2 0.5 Non-Taxable (0.1 ) - (0.1 ) Total Investment Securities (0.6 ) 2.2 1.6 Loans and Leases Commercial and Industrial (2.3 ) (1.5 ) (3.8 ) Commercial Mortgage 0.3 (0.8 ) (0.5 ) Construction (0.2 ) 0.1 (0.1 ) Commercial Lease Financing - 0.1 0.1 Residential Mortgage 0.4 0.6 1.0 Home Equity 0.8 (0.3 ) 0.5 Automobile 0.1 (0.3 ) (0.2 ) Other 2 0.1 (0.4 ) (0.3 ) Total Loans and Leases (0.8 ) (2.5 ) (3.3 ) Total Change in Interest Income (1.4 ) (0.3 ) (1.7 ) Change in Interest Expense: Interest-Bearing Deposits Demand - (0.2 ) (0.2 ) Savings - (0.1 ) (0.1 ) Time (0.1 ) (0.1 ) (0.2 ) Total Interest-Bearing Deposits (0.1 ) (0.4 ) (0.5 ) Securities Sold Under Agreements to Repurchase 0.1 (0.1 ) - Total Change in Interest Expense - (0.5 ) (0.5 ) Change in Net Interest Income $ (1.4 ) $ 0.2 $ (1.2 ) 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 March 31, 2022 Compared to March 31, 2021 (dollars in millions) Volume 1 Rate 1 Total Change in Interest Income: Funds Sold $ (0.1 ) $ 0.1 $ - Investment Securities Available-for-Sale Taxable 1.5 (0.2 ) 1.3 Non-Taxable (0.1 ) - (0.1 ) Held-to-Maturity Taxable 4.8 0.7 5.5 Total Investment Securities 6.2 0.5 6.7 Loans Held for Sale (0.1 ) - (0.1 ) Loans and Leases Commercial and Industrial (6.0 ) 2.5 (3.5 ) Commercial Mortgage 2.2 (1.8 ) 0.4 Construction (0.3 ) 0.1 (0.2 ) Commercial Lease Financing 0.1 (0.1 ) - Residential Mortgage 1.7 (2.7 ) (1.0 ) Home Equity 2.2 (1.5 ) 0.7 Automobile 0.3 (0.5 ) (0.2 ) Other 2 0.3 (1.2 ) (0.9 ) Total Loans and Leases 0.5 (5.2 ) (4.7 ) Total Change in Interest Income 6.5 (4.6 ) 1.9 Change in Interest Expense: Interest-Bearing Deposits Demand 0.1 (0.2 ) (0.1 ) Savings 0.1 (0.5 ) (0.4 ) Time (0.7 ) (0.7 ) (1.4 ) Total Interest-Bearing Deposits (0.5 ) (1.4 ) (1.9 ) Securities Sold Under Agreements to Repurchase (1.0 ) 0.2 (0.8 ) Other Debt (0.4 ) 0.3 (0.1 ) Total Change in Interest Expense (1.9 ) (0.9 ) (2.8 ) Change in Net Interest Income $ 8.4 $ (3.7 ) $ 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 Salaries and Benefits Table 9 Three Months Ended March 31, December 31, March 31, (dollars in thousands) 2022 2021 2021 Salaries $ 34,932 $ 35,758 $ 31,569 Incentive Compensation 6,111 6,699 5,914 Share-Based Compensation 3,799 3,396 2,584 Commission Expense 1,641 2,094 2,436 Retirement and Other Benefits 4,693 4,661 5,517 Payroll Taxes 4,944 2,585 3,968 Medical, Dental, and Life Insurance 3,234 3,981 2,424 Separation Expense 570 260 1,839 Total Salaries and Benefits $ 59,924 $ 59,434 $ 56,251 Bank of Hawaii Corporation and Subsidiaries Loan and Lease Portfolio Balances Table 10 March 31, December 31, September 30, June 30, March 31, (dollars in thousands) 2022 2021 2021 2021 2021 Commercial Commercial and Industrial $ 1,354,757 $ 1,361,921 $ 1,325,446 $ 1,257,305 $ 1,288,496 PPP 1 57,809 126,779 268,480 513,513 725,485 Commercial Mortgage 3,257,689 3,152,130 2,994,520 2,944,435 2,859,246 Construction 248,363 220,254 296,052 277,393 281,164 Lease Financing 98,107 105,108 107,526 110,500 104,980 Total Commercial 5,016,725 4,966,192 4,992,024 5,103,146 5,259,371 Consumer Residential Mortgage 4,405,718 4,309,602 4,272,540 4,264,180 4,216,976 Home Equity 1,958,285 1,836,588 1,680,229 1,594,781 1,577,500 Automobile 742,934 736,565 727,234 714,729 710,407 Other 2 420,830 410,129 400,723 364,542 376,449 Total Consumer 7,527,767 7,292,884 7,080,726 6,938,232 6,881,332 Total Loans and Leases $ 12,544,492 $ 12,259,076 $ 12,072,750 $ 12,041,378 $ 12,140,703 Deposits March 31, December 31, September 30, June 30, March 31, (dollars in thousands) 2022 2021 2021 2021 2021 Consumer $ 10,654,192 $ 10,438,844 $ 10,150,199 $ 9,848,285 $ 9,746,713 Commercial 8,818,477 8,641,932 8,767,733 8,675,909 8,241,102 Public and Other 1,243,618 1,279,332 1,575,746 1,645,515 1,568,836 Total Deposits $ 20,716,287 $ 20,360,108 $ 20,493,678 $ 20,169,709 $ 19,556,651 1 The PPP amounts presented, which are reported net of deferred costs and fees, were previously included as a component of the Commercial and Industrial loan class. 2 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 March 31, December 31, September 30, June 30, March 31, (dollars in thousands) 2022 2021 2021 2021 2021 Non-Performing Assets Non-Accrual Loans and Leases Commercial Commercial and Industrial $ 99 $ 243 $ 209 $ 258 $ 293 Commercial Mortgage 8,065 8,205 8,309 8,413 8,503 Total Commercial 8,164 8,448 8,518 8,671 8,796 Consumer Residential Mortgage 3,845 3,305 4,348 2,437 1,804 Home Equity 5,638 4,881 5,422 5,534 4,951 Total Consumer 9,483 8,186 9,770 7,971 6,755 Total Non-Accrual Loans and Leases 17,647 16,634 18,288 16,642 15,551 Foreclosed Real Estate 2,332 2,332 2,332 2,332 2,332 Total Non-Performing Assets $ 19,979 $ 18,966 $ 20,620 $ 18,974 $ 17,883 Accruing Loans and Leases Past Due 90 Days or More Commercial Commercial and Industrial 22 - - - 9 Total Commercial 22 - - - 9 Consumer Residential Mortgage 4,113 3,159 4,776 4,069 4,069 Home Equity 2,722 3,456 2,946 4,498 4,906 Automobile 504 729 395 277 604 Other 1 649 426 593 434 828 Total Consumer 7,988 7,770 8,710 9,278 10,407 Total Accruing Loans and Leases Past Due 90 Days or More $ 8,010 $ 7,770 $ 8,710 $ 9,278 $ 10,416 Restructured Loans on Accrual Status and Not Past Due 90 Days or More $ 54,136 $ 60,519 $ 62,787 $ 74,926 $ 74,216 Total Loans and Leases $ 12,544,492 $ 12,259,076 $ 12,072,750 $ 12,041,378 $ 12,140,703 Ratio of Non-Accrual Loans and Leases to Total Loans and Leases 0.14 % 0.14 % 0.15 % 0.14 % 0.13 % Ratio of Non-Performing Assets to Total Loans and Leases and Foreclosed Real Estate 0.16 % 0.15 % 0.17 % 0.16 % 0.15 % Ratio of Commercial Non-Performing Assets to Total Commercial Loans and Leases and Commercial Foreclosed Real Estate 0.16 % 0.17 % 0.17 % 0.17 % 0.17 % Ratio of Consumer Non-Performing Assets to Total Consumer Loans and Leases and Consumer Foreclosed Real Estate 0.16 % 0.14 % 0.17 % 0.15 % 0.13 % 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 0.22 % 0.22 % 0.24 % 0.23 % 0.23 % Quarter to Quarter Changes in Non-Performing Assets Balance at Beginning of Quarter $ 18,966 $ 20,620 $ 18,974 $ 17,883 $ 18,481 Additions 2,243 357 3,171 2,229 2,992 Reductions Payments (1,230 ) (972 ) (889 ) (722 ) (2,481 ) Return to Accrual Status - (1,038 ) (606 ) (416 ) (1,014 ) Charge-offs/Write-downs - (1 ) (30 ) - (95 ) Total Reductions (1,230 ) (2,011 ) (1,525 ) (1,138 ) (3,590 ) Balance at End of Quarter $ 19,979 $ 18,966 $ 20,620 $ 18,974 $ 17,883 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 March 31, December 31, March 31, (dollars in thousands) 2022 2021 2021 Balance at Beginning of Period $ 164,297 $ 174,708 221,303 Loans and Leases Charged-Off Commercial Commercial and Industrial (349 ) (217 ) (248 ) Consumer Residential Mortgage - - (4 ) Home Equity (68 ) (5 ) (16 ) Automobile (1,530 ) (1,045 ) (2,109 ) Other 1 (1,961 ) (2,007 ) (3,914 ) Total Loans and Leases Charged-Off (3,908 ) (3,274 ) (6,291 ) Recoveries on Loans and Leases Previously Charged-Off Commercial Commercial and Industrial 369 132 112 Consumer Residential Mortgage 54 858 955 Home Equity 515 390 533 Automobile 739 476 919 Other 1 745 746 856 Total Recoveries on Loans and Leases Previously Charged-Off 2,422 2,602 3,375 Net Charged-Off - Loans and Leases (1,486 ) (672 ) (2,916 ) Net Charged-Off - Accrued Interest Receivable (47 ) (39 ) (308 ) Provision for Credit Losses: Loans and Leases (4,307 ) (9,427 ) (14,993 ) Accrued Interest Receivable (367 ) (214 ) - Unfunded Commitments (826 ) (59 ) 693 Balance at End of Period 2 $ 157,264 $ 164,297 $ 203,779 Components Allowance for Credit Losses - Loans and Leases 152,028 157,821 198,343 Allowance for Credit Losses - Accrued Interest Receivable - 414 2,392 Reserve for Unfunded Commitments 5,236 6,062 3,044 Total Reserve for Credit Losses $ 157,264 $ 164,297 $ 203,779 Average Loans and Leases Outstanding $ 12,290,402 $ 12,086,705 $ 11,952,587 Ratio of Net Loans and Leases Charged-Off to Average Loans and Leases Outstanding (annualized) 0.05 % 0.02 % 0.10 % Ratio of Allowance for Credit Losses to Loans and Leases Outstanding 3 1.21 % 1.29 % 1.63 % 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 The numerator comprises the Allowance for Credit Losses - Loans and Leases. Bank of Hawaii Corporation and Subsidiaries Business Segments Selected Financial Information Table 13 Consumer Commercial Treasury Consolidated (dollars in thousands) Banking Banking and Other Total Three Months Ended March 31, 2022 Net Interest Income $ 70,235 $ 46,349 $ 8,679 $ 125,263 Provision for Credit Losses 1,683 (197 ) (6,986 ) (5,500 ) Net Interest Income After Provision for Credit Losses 68,552 46,546 15,665 130,763 Noninterest Income 31,969 10,198 1,384 43,551 Noninterest Expense (81,698 ) (18,669 ) (3,507 ) (103,874 ) Income Before Income Taxes 18,823 38,075 13,542 70,440 Provision for Income Taxes (4,710 ) (9,197 ) (1,699 ) (15,606 ) Net Income $ 14,113 $ 28,878 $ 11,843 $ 54,834 Total Assets as of March 31, 2022 $ 7,900,273 $ 5,174,115 $ 9,925,929 $ 23,000,317 Three Months Ended March 31, 2021 Net Interest Income $ 69,762 $ 47,143 $ 3,664 $ 120,569 Provision for Credit Losses 2,866 50 (17,216 ) (14,300 ) Net Interest Income After Provision for Credit Losses 66,896 47,093 20,880 134,869 Noninterest Income 33,698 7,858 1,414 42,970 Noninterest Expense (78,181 ) (15,677 ) (5,007 ) (98,865 ) Income Before Income Taxes 22,413 39,274 17,287 78,974 Provision for Income Taxes (5,474 ) (9,558 ) (3,993 ) (19,025 ) Net Income $ 16,939 $ 29,716 $ 13,294 $ 59,949 Total Assets as of March 31, 2021 $ 7,556,756 $ 5,224,386 $ 9,166,129 $ 21,947,271 Bank of Hawaii Corporation and Subsidiaries Selected Quarterly Financial Data Table 14 Three Months Ended March 31, December 31, September 30, June 30, March 31, (dollars in thousands, except per share amounts) 2022 2021 2021 2021 2021 Quarterly Operating Results Interest Income Interest and Fees on Loans and Leases $ 94,439 $ 97,853 $ 100,570 $ 100,894 $ 99,299 Income on Investment Securities Available-for-Sale 17,100 15,850 16,396 16,467 15,837 Held-to-Maturity 18,701 18,325 16,754 13,576 13,300 Deposits 4 1 2 - 7 Funds Sold 127 104 382 260 137 Other 202 176 159 182 185 Total Interest Income 130,573 132,309 134,263 131,379 128,765 Interest Expense Deposits 2,353 2,898 3,837 4,152 4,329 Securities Sold Under Agreements to Repurchase 2,772 2,834 3,423 3,470 3,533 Funds Purchased 2 6 - - 1 Other Debt 183 183 184 243 333 Total Interest Expense 5,310 5,921 7,444 7,865 8,196 Net Interest Income 125,263 126,388 126,819 123,514 120,569 Provision for Credit Losses (5,500 ) (9,700 ) (10,400 ) (16,100 ) (14,300 ) Net Interest Income After Provision for Credit Losses 130,763 136,088 137,219 139,614 134,869 Noninterest Income Trust and Asset Management 11,276 11,693 11,415 11,682 11,278 Mortgage Banking 2,740 2,908 3,136 3,058 5,862 Service Charges on Deposit Accounts 7,272 6,861 6,510 6,065 6,128 Fees, Exchange, and Other Service Charges 12,952 14,439 13,604 13,807 13,607 Investment Securities Gains (Losses), Net (1,545 ) (1,258 ) (1,259 ) 2,423 (1,203 ) Annuity and Insurance 791 876 735 911 702 Bank-Owned Life Insurance 2,349 1,907 1,897 2,063 1,917 Other 7,716 5,148 5,340 4,422 4,679 Total Noninterest Income 43,551 42,574 41,378 44,431 42,970 Noninterest Expense Salaries and Benefits 59,924 59,434 56,447 56,161 56,251 Net Occupancy 9,826 9,028 3,079 5,047 9,090 Net Equipment 9,153 9,105 8,924 8,796 8,878 Data Processing 4,560 4,696 4,722 4,557 6,322 Professional Fees 3,258 3,427 2,948 3,114 3,406 FDIC Insurance 1,502 1,619 1,594 1,669 1,654 Other 15,651 14,369 18,805 17,183 13,264 Total Noninterest Expense 103,874 101,678 96,519 96,527 98,865 Income Before Provision for Income Taxes 70,440 76,984 82,078 87,518 78,974 Provision for Income Taxes 15,606 13,147 20,025 19,985 19,025 Net Income $ 54,834 $ 63,837 $ 62,053 $ 67,533 $ 59,949 Preferred Stock Dividends 1,969 1,969 1,006 - - Net Income Available to Common Shareholders $ 52,865 $ 61,868 $ 61,047 $ 67,533 $ 59,949 Basic Earnings Per Common Share $ 1.33 $ 1.56 $ 1.53 $ 1.69 $ 1.51 Diluted Earnings Per Common Share $ 1.32 $ 1.55 $ 1.52 $ 1.68 $ 1.50 Balance Sheet Totals Loans and Leases $ 12,544,492 $ 12,259,076 $ 12,072,750 $ 12,041,378 $ 12,140,703 Total Assets 23,000,317 22,784,941 22,965,383 22,672,183 21,947,271 Total Deposits 20,716,287 20,360,108 20,493,678 20,169,709 19,556,651 Total Shareholders' Equity 1,448,885 1,611,611 1,597,109 1,583,531 1,360,221 Performance Ratios Return on Average Assets 0.97 % 1.12 % 1.07 % 1.23 % 1.15 % Return on Average Shareholders' Equity 14.18 15.92 15.41 19.17 17.65 Return on Average Common Equity 15.44 17.40 17.08 19.61 17.65 Efficiency Ratio 1 61.53 60.18 57.38 57.47 60.45 Net Interest Margin 2 2.34 2.34 2.32 2.37 2.43 1 Efficiency ratio is defined as noninterest expense divided by total revenue (net interest income and noninterest income). 2 Net interest margin is defined as net interest income, on a taxable-equivalent basis, as a percentage of average earning assets. Bank of Hawaii Corporation and Subsidiaries Hawaii Economic Trends Table 15 Two Months Ended Year Ended ($ in millions; jobs in thousands) February 28, 2022 December 31, 2021 December 31, 2020 Hawaii Economic Trends State General Fund Revenues 1 $ 1,543.9 41.1 % $ 8,147.0 27.0 % $ 6,415.1 (12.3 ) % General Excise and Use Tax Revenue 1 706.6 27.8 3,604.3 18.6 3,038.8 (15.6 ) Jobs 2 644.3 642.6 594.4 March 31, December 31, 2022 2021 2020 Unemployment, seasonally adjusted 3 Statewide 4.1 % 4.3 % 9.8 % Honolulu County 4.0 4.1 8.9 Hawaii County 4.0 4.1 9.2 Maui County 4.8 5.1 13.7 Kauai County 4.6 5.9 13.5 March 31, December 31, (percentage change, except months of inventory) 2022 2021 2020 2019 Housing Trends (Single Family Oahu) 4 Median Home Price 20.2 % 19.3 % 5.2 % (0.1 ) % Home Sales Volume (units) (2.6 ) % 17.9 % 2.3 % 3.9 % Months of Inventory 1.0 0.8 1.4 2.5 Monthly Visitor Arrivals, Percentage Change (in thousands) Not Seasonally Adjusted from Previous Year Tourism 5 February 28, 2022 623.7 165.1 % January 31, 2022 567.2 229.8 December 31, 2021 753.7 219.6 November 30, 2021 613.4 233.8 October 31, 2021 550.8 618.2 September 30, 2021 505.9 2,647.9 August 31, 2021 722.4 2,993.0 July 31, 2021 879.6 3,798.4 June 30, 2021 791.1 4,534.7 May 31, 2021 629.7 6,807.4 April 30, 2021 484.1 10,506.3 March 31, 2021 439.8 1.1 February 28, 2021 235.3 (71.6 ) January 31, 2021 172.0 (80.1 ) December 31, 2020 235.8 (75.2 ) November 30, 2020 183.8 (77.3 ) October 31, 2020 76.7 (90.4 ) September 30, 2020 18.4 (97.5 ) August 31, 2020 23.4 (97.5 ) July 31, 2020 22.6 (97.7 ) June 30, 2020 17.1 (98.2 ) May 31, 2020 9.1 (98.9 ) April 30, 2020 4.6 (99.5 ) March 31, 2020 434.9 (53.7 ) February 29, 2020 828.1 5.8 January 31, 2020 862.6 5.1 1 Source: Hawaii Department of Business, Economic Development & Tourism 2 Source: U.S. Bureau of Labor Statistics 3 Source: University of Hawaii Economic Research Organization (UHERO) 4 Source: Honolulu Board of Realtors 5 Source: Hawaii Tourism Authority View source version on businesswire.com: https://www.businesswire.com/news/home/20220425005225/en/
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