Diluted Earnings Per Common Share $0.93
Total Assets $23.8 Billion and Total Deposits $21.0 Billion at Quarter End
Net Income $40.4 Million
Net Interest Margin 2.18%
Board of Directors Declares Dividend of $0.70 Per Common Share

Bank of Hawai‘i Corporation (NYSE:BOH) today reported diluted earnings per common share of $0.93 for the third quarter of 2024, compared with diluted earnings per common share of $0.81 in the linked quarter and $1.17 in the same period last year. Net income for the third quarter of 2024 was $40.4 million, up 18.4% from the linked quarter and down 15.8% from the same period last year. The return on average common equity for the third quarter of 2024 was 11.50% compared with 10.41% during the linked quarter and 15.38% during the same period last year.

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"For the third quarter 2024, we are pleased to report improved net interest income and noninterest income, alongside controlled expenses and steady loan and deposit performance. Credit remained excellent," said Peter Ho, Chairman and CEO.

Financial Highlights

Net interest income for the third quarter of 2024 was $117.6 million, an increase of 2.4% from the linked quarter and a decrease of 2.7% as compared to the same period last year. The increase from the previous quarter was primarily due to increases in the average balance and yield on our earning assets, partially offset by increases in the average balance and cost of our interest-bearing liabilities. The decrease from same period last year was primarily due to decreases in the average balance of our earnings assets and higher funding costs, partially offset by higher earning asset yields and lower average balance of our interest-bearing liabilities.

Net interest margin was 2.18% in the third quarter of 2024, an increase of 3 basis points from the linked quarter and an increase of 5 basis points from the same period last year. The increase from the linked quarter was primarily due to higher earning asset yields, partially offset by higher funding costs. The increase from the same period last year was primarily due to higher earning asset yields and lower average balance of our earning assets, partially offset by higher funding costs.

The average yield on loans and leases was 4.82% in the third quarter of 2024, up 6 basis points from the linked quarter and up 48 basis points from the same period last year. The average yield on total earning assets was 4.06% in the third quarter of 2024, up 7 basis points from the linked quarter and up 34 basis points from the same period last year. The average cost of interest-bearing deposits was 2.52% in the third quarter of 2024, up 6 basis points from the linked quarter and up 57 basis points from the same period last year. The average cost of total deposits, including noninterest-bearing deposits, was 1.87%, up 6 basis points from the linked quarter and up 47 basis points from the same period last year. The changes in yields and rates over the linked quarter and year over year period reflected deposit mix shift and repricing.

Noninterest income was $45.1 million in the third quarter of 2024, an increase of 7.2% from the linked quarter and a decrease of 10.4% from the same period in 2023. Noninterest income in the third quarter of 2023 included a $14.7 million gain from the early termination of private repurchase agreements, partially offset by a $4.6 million net loss related to investment securities sales and a negative $0.8 million adjustment related to a change in the Visa Class B conversion ratio. Adjusted for these items, noninterest income increased by 9.9% from adjusted noninterest income in the same period in 2023. The increase from the same period last year was primarily due to increases in trust and asset management income, and fees, exchange, and other service charges.

Noninterest expense was $107.1 million in the third quarter of 2024, a decrease of 2.0% from the linked quarter and an increase of 1.4% from the same period last year. Noninterest expense in the second quarter of 2024 included an industry-wide FDIC Special Assessment of $2.6 million, separation expenses of $0.8 million and $0.6 million of other expenses that are not expected to recur in 2024. Noninterest expense in the third quarter of 2023 included separation expenses of $2.1 million and extraordinary expenses related to the Maui wildfires of $0.4 million. Adjusted for these items, noninterest expense increased by 1.7% from adjusted noninterest expense in the linked quarter and increased by 3.9% from adjusted noninterest expense in the same period last year.

The effective tax rate for the third quarter of 2024 was 23.33% compared with 24.77% during the linked quarter and 24.76% during the same period last year. The lower effective tax rate in the third quarter of 2024 as compared to the linked quarter was mainly due to a decrease in discrete items and an increase in tax exempt income. The lower effective tax rate in the third quarter of 2024 as compared to the same period last year was primarily due to an increase in tax benefits from low-income housing investments and an increase in tax exempt income.

Asset Quality

The Company's overall asset quality remained strong during the third quarter of 2024. Provision for credit losses for the third quarter of 2024 was $3.0 million compared with $2.4 million in the linked quarter and $2.0 million in the same period last year.

Total non-performing assets were $19.8 million at September 30, 2024, up $4.6 million from June 30, 2024 and up $8.3 million from September 30, 2023. Non-performing assets as a percentage of total loans and leases and foreclosed real estate were 0.14% at the end of the quarter, an increase of 3 basis points from the linked quarter and an increase of 6 basis points from the same period last year.

Net loan and lease charge-offs during the third quarter of 2024 were $3.8 million or 11 basis points annualized of total average loans and leases outstanding and comprised of gross charge-offs of $5.3 million partially offset by gross recoveries of $1.5 million. Compared to the linked quarter, net loan and lease charge-offs increased by $0.4 million or 1 basis point annualized on total average loans and leases outstanding. Compared to the same period last year, net loan and lease charge-offs increased by $1.8 million or 5 basis points annualized on total average loans and leases outstanding.

The allowance for credit losses on loans and leases was $147.3 million at September 30, 2024, a decrease of $0.1 million from June 30, 2024 and an increase of $2.1 million from September 30, 2023. The ratio of the allowance for credit losses to total loans and leases outstanding was 1.06% at the end of the quarter, down 1 basis point from the linked quarter and up 2 basis points from the same period last year.

Balance Sheet

Total assets were $23.8 billion at September 30, 2024, an increase of 2.1% from June 30, 2024 and an increase of 1.1% from September 30, 2023. The increase from the prior periods was primarily due to an increase in federal funds sold.

The investment securities portfolio was $7.3 billion at September 30, 2024, an increase of 2.1% from June 30, 2024 and a decrease of 2.9% from September 30, 2023. This linked quarter increase was primarily due to the purchases of $236.1 million of floating rate investment securities partially offset by cashflows from the portfolio. The decrease from the same period last year was primarily due to the sale of $159.1 million of investment securities in the third quarter of 2023 and cashflows from the portfolio, partially offset by the above-mentioned purchase of investment securities in the third quarter of 2024. 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 $13.9 billion at September 30, 2024, an increase of 0.6% from June 30, 2024 and flat from September 30, 2023. Total commercial loans were $5.9 billion at September 30, 2024, an increase of 2.0% from June 30, 2024 and an increase of 4.4% from September 30, 2023. The increase from the linked quarter was primarily due to an increase in commercial mortgage portfolio. The increase from the same period last year was primarily due to increases in commercial mortgage, construction and commercial and industrial portfolios. Total consumer loans were $8.0 billion at September 30, 2024, a decrease of 0.3% from the linked quarter and a decrease of 3.1% from the same period last year. The decrease from the linked quarter was primarily due to decreases in our home equity and automobile portfolios, partially offset by an increase in residential mortgage portfolio. The decrease from the same period last year was primarily due to decreases in our residential mortgage, home equity and automobile portfolios.

Total deposits were $21.0 billion at September 30, 2024, an increase of 2.8% from June 30, 2024 and an increase of 0.8% from September 30, 2023. Noninterest-bearing deposits made up 25.8% of total deposit balances at September 30, 2024, down from 26.3% at June 30, 2024 and down from 27.3% at September 30, 2023. Average total deposits were $20.5 billion for the third quarter of 2024, up 0.6% from $20.4 billion in the linked quarter and flat from the same period last year. Insured and uninsured but collateralized deposits represented 58% of total deposit balances at September 30, 2024, down from 59% at June 30, 2024 and flat from September 30, 2023. At the end of the quarter, our readily available liquidity of $10.6 billion exceeded total uninsured and uncollateralized deposits of $8.8 billion.

Capital and Dividends

The Company's capital levels increased quarter over quarter and remain well above regulatory well-capitalized minimums.

The Tier 1 Capital Ratio was 14.05% at September 30, 2024 compared with 13.96% at June 30, 2024 and 12.53% at September 30, 2023. The Tier 1 Leverage Ratio was 8.38% at September 30, 2024, up 1 basis point from 8.37% at June 30, 2024 and up 116 basis points from 7.22% at September 30, 2023. The increases from the linked quarter were due to retained earnings growth and partially offset by increases in risk-weighted assets and average total assets. The increases from the same period last year were primarily due to the issuance of $165.0 million of Fixed Rate Non-Cumulative Perpetual Preferred Stock, Series B, at a rate of 8.00% in the second quarter of 2024.

No shares of common stock were repurchased under the share repurchase program in the third quarter of 2024. Total remaining buyback authority under the share repurchase program was $126.0 million at September 30, 2024.

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 13, 2024 to shareholders of record at the close of business on November 29, 2024.

On October 4, 2024, the Company announced that the Board of Directors declared a quarterly dividend payment of $10.94 per share, equivalent to $0.2735 per depositary share, of Fixed Rate Non-Cumulative Perpetual Preferred Stock, Series A, and a quarterly dividend payment of $20.00 per share, equivalent to $0.5000 per depositary share, of Fixed Rate Non-Cumulative Perpetual Preferred Stock, Series B. The depositary shares representing the Series A Preferred Stock and Series B Preferred Stock are traded on the NYSE under the symbol "BOH.PRA" and "BOH.PRB", respectively. The dividends on the Series A Preferred Stock and Series B Preferred Stock will be payable on November 1, 2024 to shareholders of record of the preferred stock as of the close of business on October 17, 2024.

Conference Call Information

The Company will review its third quarter financial results today at 8:00 a.m. Hawai‘i 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 Hawai‘i Corporation's website, www.boh.com. The webcast can be accessed via the link: https://register.vevent.com/register/BIe5723fafb08d499d83a299d646fa683d. A replay of the conference call will be available for one year beginning approximately 11:00 a.m. Hawai‘i Time on Monday, October 28, 2024. The replay will be available on the Company's website, www.boh.com.

Investor Announcements

Investors and others should note that the Company intends to announce financial and other information to the Company's investors using the Company's investor relations website at https://ir.boh.com, social media channels, press releases, SEC filings and public conference calls and webcasts, all for purposes of complying with the Company's disclosure obligations under Regulation FD. Accordingly, investors should monitor these channels, as information is updated, and new information is posted.

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 Hawai‘i Corporation's Annual Report on Form 10-K for the year ended December 31, 2023 and its Form 10-Q for fiscal quarters ended March 31, 2024 and June 30, 2024, 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 Hawai‘i Corporation is an independent regional financial services company serving businesses, consumers, and governments in Hawai‘i and the West Pacific. The Company's principal subsidiary, Bank of Hawai‘i, was founded in 1897. For more information about Bank of Hawai‘i Corporation, see the Company's website, www.boh.com. Bank of Hawai‘i Corporation is a trade name of Bank of Hawaii Corporation.


Bank of Hawai‘i 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)		2024			2024			2023			2024			2023
For the Period:
Operating Results
Net Interest Income	$	117,618		$	114,846		$	120,937		$	346,402		$	381,240
Provision for Credit Losses		3,000			2,400			2,000			7,400			6,500
Total Noninterest Income		45,110			42,087			50,334			129,482			134,326
Total Noninterest Expense		107,092			109,226			105,601			322,177			321,556
Pre-Provision Net Revenue		55,636			47,707			65,670			153,707			194,010
Net Income		40,358			34,083			47,903			110,832			140,806
Net Income Available to Common Shareholders¹		36,922			32,114			45,934			103,458			134,899
Basic Earnings Per Common Share		0.94			0.81			1.17			2.62			3.44
Diluted Earnings Per Common Share		0.93			0.81			1.17			2.61			3.42
Dividends Declared Per Common Share		0.70			0.70			0.70			2.10			2.10

Performance Ratios
Return on Average Assets		0.69	%		0.59	%		0.78	%		0.64	%		0.78	%
Return on Average Shareholders' Equity		9.90			9.53			13.92			9.92			13.91
Return on Average Common Equity		11.50			10.41			15.38			11.04			15.37
Efficiency Ratio²		65.81			69.60			61.66			67.70			62.37
Net Interest Margin³		2.18			2.15			2.13			2.15			2.27
Dividend Payout Ratio⁴		74.47			86.42			59.83			80.15			61.05
Average Shareholders' Equity to Average Assets		6.95			6.22			5.60			6.42			5.61

Average Balances
Average Loans and Leases	$	13,809,977		$	13,831,797		$	13,903,214		$	13,836,760		$	13,833,164
Average Assets		23,338,529			23,145,107			24,387,421			23,255,372			24,124,360
Average Deposits		20,484,391			20,358,393			20,492,082			20,462,222			20,314,079
Average Shareholders' Equity		1,621,936			1,438,476			1,365,143			1,492,645			1,353,815

Per Share of Common Stock
Book Value	$	33.22		$	31.91		$	29.78		$	33.22		$	29.78
Tangible Book Value		32.43			31.12			28.99			32.43			28.99
Market Value
Closing		62.77			57.21			49.69			62.77			49.69
High		70.44			62.53			58.63			73.73			81.73
Low		55.75			54.50			39.02			54.50			30.83

				September 30,			June 30,			December 31,			September 30,
					2024			2024			2023			2023
As of Period End:
Balance Sheet Totals
Loans and Leases				$	13,918,583		$	13,831,266		$	13,965,026		$	13,919,491
Total Assets					23,799,174			23,300,768			23,733,296			23,549,785
Total Deposits					20,978,322			20,408,502			21,055,045			20,802,309
Other Debt					558,297			560,136			560,190			560,217
Total Shareholders' Equity					1,665,474			1,612,849			1,414,242			1,363,840

Asset Quality
Non-Performing Assets				$	19,781		$	15,179		$	11,747		$	11,519
Allowance for Credit Losses - Loans and Leases					147,331			147,477			146,403			145,263
Allowance to Loans and Leases Outstanding⁵					1.06	%		1.07	%		1.05	%		1.04	%

Capital Ratios⁶
Common Equity Tier 1 Capital Ratio⁷					11.66	%		11.56	%		11.33	%		11.29	%
Tier 1 Capital Ratio⁷					14.05			13.96			12.56			12.53
Total Capital Ratio⁷					15.11			15.02			13.60			13.56
Tier 1 Leverage Ratio					8.38			8.37			7.51			7.22
Total Shareholders' Equity to Total Assets					7.00			6.92			5.96			5.79
Tangible Common Equity to Tangible Assets⁸					5.42			5.31			5.07			4.90
Tangible Common Equity to Risk-Weighted Assets^{7, 8}					9.17			8.80			8.45			8.10

Non-Financial Data
Full-Time Equivalent Employees					1,854			1,910			1,899			1,919
Branches					50			50			51			51
ATMs					317			317			318			320

¹Due to rounding, the amounts presented in this table may not tie to other amounts presented elsewhere in this report.
²Efficiency ratio is defined as noninterest expense divided by total revenue (net interest income and total noninterest income).
³Net interest margin is defined as net interest income, on a taxable-equivalent basis, as a percentage of average earning assets.
⁴Dividend payout ratio is defined as dividends declared per common share divided by basic earnings per common share.
⁵The numerator comprises the Allowance for Credit Losses - Loans and Leases.
⁶Regulatory capital ratios as of September 30, 2024 are preliminary.
⁷Regulatory capital ratios for June 30, 2024 have been updated to reflect final reported ratios.
⁸Tangible 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 Hawai‘i Corporation and Subsidiaries

Reconciliation of Non-GAAP Financial Measures

Table 2

September 30,

June 30,

December 31,

Bank of Hawai'i Corporation Third Quarter 2024 Financial Results