Diluted Earnings Per Common Share $1.52
Net Income $62.1 Million
Board of Directors Declares Dividend of $0.70 Per Share

Bank of Hawaii Corporation (NYSE:BOH) today reported diluted earnings per common share of $1.52 for the third quarter of 2021, compared with diluted earnings per common share of $1.68 in the previous quarter and $0.95 in the same quarter last year. Net income for the third quarter of 2021 was $62.1 million, down 8.1% from the second quarter of 2021 and up 64.0% from the third quarter of 2020.

This press release features multimedia. View the full release here: https://www.businesswire.com/news/home/20211025005224/en/

"Bank of Hawaii's operating results were solid in the third quarter of 2021," said Peter Ho, Chairman, President, and CEO. "Core consumer and commercial loan and deposit growth was strong in the quarter. Credit quality in the quarter remained good."

Financial Highlights

The return on average assets for the third quarter of 2021 was 1.07% compared with 1.23% in the previous quarter and 0.76% in the same quarter last year.

The return on average common equity for the third quarter of 2021 was 17.08% compared with 19.61% in the previous quarter and 11.01% in the same quarter last year.

Net interest income for the third quarter of 2021 was $126.8 million, an increase of 2.7% from the second quarter of 2021 and an increase of 2.1% from the third quarter of 2020. Net interest margin was 2.32% in the third quarter of 2021, a decrease of 5 basis points from the previous quarter and 35 basis points from the same quarter last year.
- The decrease in the net interest margin from prior year is largely due to higher levels of liquidity from continued strong deposit growth and lower interest rates, partially offset by higher fees from Paycheck Protection Program ("PPP") loans, deployment of excess liquidity and core loan growth.

The provision for credit losses for the third quarter of 2021 was a net benefit of $10.4 million compared with a net benefit of $16.1 million in the previous quarter and net expense of $28.6 million in the same quarter last year.

Noninterest income was $41.4 million in the third quarter of 2021, a decrease of 6.9% from the second quarter of 2021 and a decrease of 0.9% from the third quarter of 2020.
- One-time items in the second quarter of 2021 included a gain of $3.7 million related to the sale of investment securities.

Noninterest expense was $96.5 million in the third quarter of 2021, flat to the second quarter of 2021 and an increase of 7.3% from the third quarter of 2020.
- One-time significant items in the third quarter of 2021 included a gain of $6.3 million related to the sale of property partially offset by $3.8 million of fees related to the early termination of repurchase agreements and $1.2 million in severance.
- One-time significant items in the second quarter of 2021 included fees related to the early termination of FHLB advances and repurchase agreements of $3.2 million offset by a gain on the sale of property of $3.1 million.
- One-time significant items in the third quarter of 2020 included a gain of $1.9 million related to the sale of a branch building partially offset by $1.8 million in severance.

The efficiency ratio during the third quarter of 2021 was 57.38% compared with 57.47% in the previous quarter and 54.22% during the same quarter last year.
- The increase in the efficiency ratio from prior year is driven by an increase in noninterest expense.

The effective tax rate for the third quarter of 2021 was 24.40% compared with 22.84% in the previous quarter and 20.09% during the same quarter last year.
- The increase from same quarter prior year is primarily due to higher pretax book income compared to relatively stable tax adjustments and the delayed impact of the TCJA on the deductibility of deferred executive compensation.

Asset Quality

The Company's overall asset quality continued to remain stable during the third quarter of 2021.

Total non-performing assets were $20.6 million at September 30, 2021, up $1.6 million from June 30, 2021 and $2.0 million from September 30, 2020. Non-performing assets as percentage of total loans and leases and foreclosed real estate were 0.17% at the end of the quarter of 2021, up 1 basis point from the end of the prior quarter and the end of the same quarter last year.

Net loan and lease charge-offs during the third quarter of 2021 were $1.2 million or 0.04% annualized of total average loans and leases outstanding.
- Net loan and lease charge-offs for the third quarter of 2021 were comprised of charge-offs of $3.4 million partially offset by recoveries of $2.3 million.
- Compared to the prior quarter, net loan and lease charge-offs were flat.
- Compared to the third quarter of 2020, net loan and lease charge-offs increased by $2.7 million or 9 basis points annualized on total average loans and leases outstanding.

The allowance for credit losses on loans and leases was $167.9 million at September 30, 2021, a decrease of $12.5 million from June 30, 2021 and $35.6 million from September 30, 2020. The ratio of the allowance for credit losses to total loans and leases outstanding was 1.39% at the end of the quarter, down 11 basis points from the end of the prior quarter and 34 basis points from the end of the same quarter last year.

Balance Sheet

Total assets increased to a new record of $23.0 billion at September 30, 2021, an increase of 1.3% from June 30, 2021 and 14.2% from September 30, 2020.

The investment securities portfolio was $9.3 billion at September 30, 2021, up 9.2% from June 30, 2021 and 44.8% from September 30, 2020 due to growth in deposits that continued to outpace loan growth.
- The investment portfolio remains largely comprised of securities issued by U.S. government agencies and U.S. government-sponsored enterprises.

Total loans and leases were $12.1 billion at September 30, 2021, an increase of 0.3% from June 30, 2021 and 2.4% from September 30, 2020.
- Total loans excluding PPP loans were $11.8 billion at September 30, 2021, an increase of 2.4% from June 30, 2021 and an increase of 4.8% from September 30, 2020.

Total deposits were $20.5 billion at September 30, 2021, an increase of 1.6% from June 30, 2021 and an increase of 15.5% from September 30, 2020.

The Company early terminated $100.0 million of repurchase agreements in the third quarter of 2021.

Capital and Dividends

The Tier 1 Capital Ratio was 13.47% at September 30, 2021 compared with 13.87% at June 30, 2021 and 12.09% at September 30, 2020.
- The increase from the same quarter in the prior year was driven by the issuance of preferred stock in the second quarter of 2021.

The Tier 1 Leverage Ratio was 7.10% at September 30, 2021 compared with 7.31% at June 30, 2021 and 6.81% at September 30, 2020.
- The increase from the same quarter in the prior year 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 Company repurchased 241.3 thousand shares of common stock at a total cost of $20.0 million under its share repurchase program in the third quarter of 2021 at an average cost of $82.89 per share repurchased.
- Total remaining buyback authority under the share repurchase program was $93.1 million at September 30, 2021.

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 December 14, 2021 to shareholders of record at the close of business on November 30, 2021.

On October 5, 2021, the Board of Directors declared the quarterly dividend payment of $10.94 per share, equivalent to $0.2735 per depositary share, on its Fixed Rate Non-Cumulative Perpetual Preferred Stock, Series A. 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 November 1, 2021 to shareholders of record of the preferred stock at the close of business on October 18, 2021.

Conference Call Information

The Company will review its third 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/3r3nw6ad
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, October 25, 2021. The replay number is 1 (855) 859-2056 in the United States and Canada and 1 (404) 537-3406 from other international locations. Enter the conference ID 6897518 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, 2020 and its Form 10-Q for the fiscal quarters ended March 31, 2021 and June 30, 2021, which were filed with the U.S. Securities and Exchange Commission. These forward-looking statements are not guarantees of future performance and speak only as of the date made, and, except as required by law, the Company undertakes no obligation to update or revise any forward-looking statements to reflect subsequent events, new information or future circumstances.

Bank of Hawaii Corporation is an independent regional financial services company serving businesses, consumers, and governments in Hawaii and the West Pacific. The Company's principal subsidiary, Bank of Hawaii, was founded in 1897. For more information about Bank of Hawaii Corporation, see the Company's web site, www.boh.com.


Bank of Hawaii Corporation and Subsidiaries
Financial Highlights														Table 1
	Three Months Ended									Nine Months Ended
		September 30,			June 30,			September 30,		September 30,
(dollars in thousands, except per share amounts)		2021			2021			2020			2021			2020
For the Period:
Operating Results
Net Interest Income	$	126,819		$	123,514		$	124,166		$	370,902		$	376,823
Provision for Credit Losses ¹		(10,400	)		(16,100	)		28,600			(40,800	)		102,600
Total Noninterest Income		41,378			44,431			41,734			128,779			139,151
Total Noninterest Expense		96,519			96,527			89,949			291,911			275,153
Net Income		62,053			67,533			37,840			189,535			111,490
Basic Earnings Per Common Share		1.53			1.69			0.95			4.73			2.81
Diluted Earnings Per Common Share		1.52			1.68			0.95			4.70			2.80
Dividends Declared Per Common Share		0.70			0.67			0.67			2.04			2.01

Performance Ratios
Return on Average Assets		1.07	%		1.23	%		0.76	%		1.15	%		0.78	%
Return on Average Shareholders' Equity		15.41			19.17			11.01			17.31			11.08
Return on Average Common Equity ⁸		17.08			19.61			11.01			18.10			11.08
Efficiency Ratio ²		57.38			57.47			54.22			58.42			53.33
Net Interest Margin ³		2.32			2.37			2.67			2.37			2.82
Dividend Payout Ratio ⁴		45.75			39.64			70.53			42.95			71.53
Average Shareholders' Equity to Average Assets		6.95			6.40			6.93			6.63			7.06

Average Balances
Average Loans and Leases	$	11,958,321		$	12,096,308		$	11,739,785		$	12,002,426		$	11,510,222
Average Assets		22,993,036			22,073,569			19,741,139			22,079,174			19,053,626
Average Deposits		20,473,777			19,698,285			17,270,206			19,619,053			16,591,640
Average Shareholders' Equity		1,598,076			1,412,924			1,367,756			1,463,566			1,344,402

Per Share of Common Stock
Book Value	$	35.30		$	34.80		$	33.99		$	35.30		$	33.99
Tangible Book Value ⁸		34.38			33.91			33.21			34.38			33.21
Market Value
Closing		82.17			84.22			50.52			82.17			50.52
High		87.12			95.95			61.94			99.10			95.53
Low		75.68			81.23			48.77			75.65			46.70

					September 30,			June 30,			December 31,			September 30,
					2021			2021			2020			2020
As of Period End:
Balance Sheet Totals
Loans and Leases				$	12,072,750		$	12,041,378		$	11,940,020		$	11,793,608
Total Assets					22,965,383			22,672,183			20,603,651			20,109,489
Total Deposits					20,493,678			20,169,709			18,211,621			17,738,883
Other Debt					10,414			10,437			60,481			60,502
Total Shareholders' Equity					1,597,109

Bank of Hawaii Corporation Third Quarter 2021 Financial Results