Bank of Hawai‘i Corporation Second Quarter 2023 Financial Results

By: Bank of Hawai‘i Corporation via Business Wire

July 24, 2023 at 06:45 AM EDT

Diluted Earnings Per Common Share $1.12
Net Income $46.1 Million
Total Deposits Up 0.1% Linked Quarter
Immediately Available Liquidity Increased to $8.5 Billion
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 $1.12 for the second quarter of 2023, compared with diluted earnings per common share of $1.14 in the previous quarter and $1.38 in the same quarter of 2022. Net income for the second quarter of 2023 was $46.1 million, down 1.7% from the previous quarter and down 19.0% from the same quarter of 2022. The return on average common equity for the second quarter of 2023 was 14.95% compared with 15.79% in the previous quarter and 18.19% in the same quarter of 2022.

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“Bank of Hawai‘i delivered solid financial results in the second quarter of 2023,” said Peter Ho, Chairman, President, and CEO. “Our brand strength, built through 125 years of building lasting and long-standing relationships with the consumers, businesses and municipalities of Hawai‘i, helped us deliver yet another quarter of stable deposit performance. Total deposits were up modestly from a quarter ago. We also added additional liquidity to the balance sheet with cash and other immediately available borrowing lines growing to $8.5 billion at quarter end. Loans grew 0.7% with growth coming from both our consumer and commercial businesses. Credit quality remained pristine with non-performing assets of 0.08% at quarter end and net charge offs of 0.04% in the quarter. CRE loans and office CRE loans were 27.3% and 2.7% of total loans at quarter end with both categories having weighted average LTVs of 56%. Scheduled maturities for CRE loans and office CRE loans total 10% and 3% respectively through 2024. Finally, our capital position improved in the quarter, as measured by CET 1, Tier 1 Capital, Total Capital and Tier 1 Leverage.”

Financial Highlights

Net interest income for the second quarter of 2023 was $124.3 million, a decrease of 8.5% from the previous quarter and a decrease of 6.4% from the same quarter of 2022. The decrease in net interest income in the second quarter of 2023 was primarily due to higher funding costs, partially offset by higher earning asset yields.

Net interest margin was 2.22% in the second quarter of 2023, a decrease of 25 basis points from the previous quarter and from the same quarter of 2022. The decrease in net interest margin was due to higher funding costs and increased liquidity, partially offset by higher earning asset yields.

The average yield on loans and leases was 4.19% in the second quarter of 2023, up 16 basis points from the prior quarter and up 98 basis points from the same quarter of 2022. The average yield on total earning assets was 3.56% in the second quarter of 2023, up 14 basis points from the prior quarter and up 96 basis points from the same quarter of 2022. The average cost of interest-bearing deposits was 1.54% in the second quarter of 2023, up 45 basis points from the prior quarter and up 143 basis points from the same quarter of 2022. The average cost of total deposits, including noninterest-bearing deposits, was 1.08%, up 33 basis points from the prior quarter and up 101 basis points from the same quarter of 2022. The changes in yields and rates over the linked quarter and year over year period reflected the higher rate environment, including higher benchmark interest rates.

Noninterest income was $43.3 million in the second quarter of 2023, an increase of 6.2% from the previous quarter and an increase of 2.6% from the same period in 2022. Noninterest income in the second quarter of 2023 included $1.5 million from the sale of a low-income housing tax credit investment, while noninterest income in the first quarter of 2023 included a negative adjustment of $0.6 million related to a change in the Visa Class B conversion ratio. Adjusted noninterest income in the second quarter of 2023 was $41.7 million, up 1.0% from adjusted noninterest income in the prior quarter and down 1.0% from the same period in 2022.

Noninterest expense was $104.0 million in the second quarter of 2023, a decrease of 7.0% from the previous quarter and an increase of 1.1% from the same quarter of 2022. Noninterest expense in the first quarter of 2023 included seasonal payroll expenses of approximately $4.0 million and separation expenses of $3.1 million. Adjusted for these items in the prior quarter, noninterest expense decreased by 0.8% quarter over quarter.

The effective tax rate for the second quarter of 2023 was 24.57% compared with 25.38% in the previous quarter and 23.80% during the same quarter of 2022. The decrease in the effective tax rate on a linked quarter basis was mainly due to an unfavorable discrete tax item in the first quarter and an increase in benefits from tax credit investments in the current quarter. The year over year increase was primarily due to lower benefits from tax credit investments and benefits from leveraged leases that have since been terminated which were included in the effective tax rate for the second quarter of 2022.

Asset Quality

The Company’s overall asset quality remained strong during the second quarter of 2023. Provision for credit losses for the second quarter of 2023 was $2.5 million compared with $2.0 million in the previous quarter and a net benefit of $2.5 million in the same quarter of 2022.

Total non-performing assets were $11.5 million at June 30, 2023, down $0.6 million from March 31, 2023 and down $4.0 million from June 30, 2022. Non-performing assets as a percentage of total loans and leases and foreclosed real estate were 0.08% at the end of the quarter, a decrease of 1 basis point from the end of the prior quarter and a decrease of 4 basis points from the same quarter of 2022.

Net loan and lease charge-offs during the second quarter of 2023 were $1.4 million or 4 basis points annualized of total average loans and leases outstanding. Net loan and lease charge-offs for the second quarter of 2023 were comprised of charge-offs of $3.5 million partially offset by recoveries of $2.1 million. Compared to the prior quarter, net loan and lease charge-offs decreased by $1.3 million or 4 basis points annualized on total average loans and leases outstanding. Compared to the same quarter of 2022, net loan and lease charge-offs increased by $0.7 million or 2 basis points annualized on total average loans and leases outstanding.

The allowance for credit losses on loans and leases was $145.4 million at June 30, 2023, an increase of $1.8 million from March 31, 2023 and a decrease of $3.1 million from June 30, 2022. The ratio of the allowance for credit losses to total loans and leases outstanding was 1.04% at the end of the quarter, flat from the end of the prior quarter and down 10 basis points from the end of the same quarter of 2022.

Balance Sheet

Total assets were $24.9 billion at June 30, 2023, an increase of 4.2% from March 31, 2023 and an increase of 7.4% from June 30, 2022, primarily due to growth in our earning assets.

Total funds sold and cash and due from banks was $1.7 billion at June 30, 2023, an increase of $1.1 billion from March 31, 2023 and $0.8 billion from June 30, 2022 and represented 6.7% of total assets. The growth was due to an increase in short-duration term funding of $1.3 billion that enhanced on balance sheet liquidity and provides a hedge against rising short-term rates.

The investment securities portfolio was $7.9 billion at June 30, 2023, a decrease of 3.2% from March 31, 2023 and a decrease of 4.9% from June 30, 2022. These decreases were due to cashflows from the portfolio not being reinvested into securities. 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 June 30, 2023, an increase of 0.7% from March 31, 2023 and an increase of 7.4% from June 30, 2022. Total commercial loans were $5.6 billion at June 30, 2023, an increase of 0.8% from the prior quarter and an increase of 8.9% from the same quarter of 2022. The increase from the same period in 2022 was primarily due to an increase in our commercial mortgage and commercial and industrial portfolios. Total consumer loans were $8.3 billion as of June 30, 2023, an increase of 0.5% from the prior quarter and 6.5% from the same period in 2022, primarily driven by increases in our residential mortgage and home equity portfolios.

Total deposits were $20.5 billion at June 30, 2023, an increase of 0.1% from March 31, 2023 and a decrease of 2.5% from June 30, 2022. Noninterest-bearing deposits made up 29% of total deposit balances as of June 30, 2023, down from 31% as of March 31, 2023 and 35% as of June 30, 2022. Average deposits were $20.0 billion for the second quarter of 2023, down 2.0% from $20.4 billion in the prior quarter, and down 2.7% from the second quarter of 2022. As of June 30, 2023 insured and collateralized deposits represent 61% of total deposit balances, up from 58% as of March 31, 2023 and 57% as of June 30, 2022.

Capital and Dividends

The Company’s capital levels remain well above regulatory well-capitalized minimums.

The Tier 1 Capital Ratio was 12.21% at June 30, 2023 compared with 12.10% at March 31, 2023 and 13.01% at June 30, 2022. The Tier 1 Leverage Ratio was 7.21% at June 30, 2023 compared with 7.19% at March 31, 2023 and 7.29% at June 30, 2022. The increase from the prior quarter was due to an increase in Tier 1 capital as a result of retained earnings growth partially offset by an increase in risk-weighted and average total assets, as a result of loan growth and increased liquidity over the period. The decrease from the same period in 2022 in the Tier 1 Capital Ratio was due to an increase in risk-weighted assets, and the decline in the Tier 1 Leverage Ratio was due to an increase in average total assets, both as a result of increased liquidity and loan growth over the period.

No shares of common stock were repurchased under the share repurchase program in the second quarter of 2023. Total remaining buyback authority under the share repurchase program was $126.0 million at June 30, 2023.

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 September 15, 2023 to shareholders of record at the close of business on August 31, 2023.

On July 7, 2023, 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 August 1, 2023 to shareholders of record of the preferred stock as of the close of business on July 17, 2023.

Conference Call Information

The Company will review its second 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 Hawai‘i Corporation's website, www.boh.com. The webcast can be accessed via the link: https://register.vevent.com/register/BIa86de171556d47818c0a5a7106c5f8bd. A replay of the conference call will be available for one year beginning approximately 11:00 a.m. Hawaii Time on Monday, July 24, 2023. The replay will be accessible via the same link. 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 Hawai‘i Corporation's Annual Report on Form 10-K for the year ended December 31, 2022 and its Form 10-Q for the fiscal quarter ended March 31, 2023, 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 Hawaii 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 web site, 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									Six Months Ended
	June 30,			March 31,			June 30,			June 30,
(dollars in thousands, except per share amounts)	2023			2023			2022			2023			2022
For the Period:
Operating Results
Net Interest Income	$	124,348		$	135,955		$	132,902		$	260,303		$	258,165
Provision for Credit Losses		2,500			2,000			(2,500	)		4,500			(8,000	)
Total Noninterest Income		43,255			40,737			42,158			83,992			85,709
Total Noninterest Expense		104,036			111,919			102,939			215,955			206,813
Pre-Provision Net Revenue		63,567			64,773			72,121			128,340			137,061
Net Income		46,061			46,842			56,862			92,903			111,696
Net Income Available to Common Shareholders		44,092			44,873			54,893			88,965			107,758
Basic Earnings Per Common Share		1.12			1.14			1.38			2.27			2.71
Diluted Earnings Per Common Share		1.12			1.14			1.38			2.26			2.70
Dividends Declared Per Common Share		0.70			0.70			0.70			1.40			1.40

Performance Ratios
Return on Average Assets		0.77	%		0.80	%		1.00	%		0.78	%		0.98	%
Return on Average Shareholders' Equity		13.55			14.25			16.40			13.90			15.23
Return on Average Common Equity		14.95			15.79			18.19			15.36			16.73
Efficiency Ratio ¹		62.07			63.34			58.80			62.72			60.14
Net Interest Margin ²		2.22			2.47			2.47			2.34			2.41
Dividend Payout Ratio ³		62.50			61.40			50.72			61.67			51.66
Average Shareholders' Equity to Average Assets		5.65			5.59			6.08			5.62			6.47

Average Balances
Average Loans and Leases	$	13,876,754		$	13,717,483		$	12,700,825		$	13,797,559		$	12,496,747
Average Assets		24,114,443			23,865,478			22,891,262			23,990,649			22,869,496
Average Deposits		20,018,601			20,430,882			20,569,363			20,223,603			20,498,115
Average Shareholders' Equity		1,363,059			1,332,889			1,390,653			1,348,057			1,479,197

Per Share of Common Stock
Book Value	$	29.66		$	29.62		$	29.09		$	29.66		$	29.09
Tangible Book Value		28.87			28.83			28.30			28.87			28.30
Market Value
Closing		41.23			52.08			74.40			41.23			74.40
High		52.37			81.73			84.93			81.73			92.38
Low		30.83			34.71			70.97			30.83			70.97

				June 30,			March 31,			December 31,			June 30,
				2023			2023			2022			2022
As of Period End:
Balance Sheet Totals
Loans and Leases				$	13,914,889		$	13,824,522		$	13,646,420		$	12,951,573
Total Assets					24,947,936			23,931,977			23,606,877			23,232,699
Total Deposits					20,508,615			20,491,300			20,615,696			21,025,681
Other Debt					1,760,243			510,269			410,294			10,343
Total Shareholders' Equity					1,358,279			1,354,430			1,316,995			1,348,746

Asset Quality
Non-Performing Assets				$	11,477		$	12,124		$	12,647		$	15,493
Allowance for Credit Losses - Loans and Leases					145,367			143,577			144,439			148,512
Allowance to Loans and Leases Outstanding ⁴					1.04	%		1.04	%		1.06	%		1.15	%

Capital Ratios ⁵
Common Equity Tier 1 Capital Ratio					11.00	%		10.88	%		10.92	%		11.66	%
Tier 1 Capital Ratio					12.21			12.10			12.15			13.01
Total Capital Ratio					13.24			13.13			13.17			14.14
Tier 1 Leverage Ratio					7.21			7.19			7.37			7.29
Total Shareholders' Equity to Total Assets					5.44			5.66			5.58			5.81
Tangible Common Equity to Tangible Assets ⁶					4.60			4.78			4.69			4.90
Tangible Common Equity to Risk-Weighted Assets ⁶					7.97			7.97			7.76			8.72

Non-Financial Data
Full-Time Equivalent Employees					2,025			2,025			2,076			2,114
Branches					51			51			51			54
ATMs					320			320			320			310

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 June 30, 2023 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 Hawai‘i Corporation and Subsidiaries
Reconciliation of Non-GAAP Financial Measures							Table 2
	June 30,			March 31,			December 31,			June 30,
(dollars in thousands)	2023			2023			2022			2022

Total Shareholders' Equity	$	1,358,279		$	1,354,430		$	1,316,995		$	1,348,746
Less: Preferred Stock		180,000			180,000			180,000			180,000
Goodwill		31,517			31,517			31,517			31,517
Tangible Common Equity	$	1,146,762		$	1,142,913		$	1,105,478		$	1,137,229

Total Assets	$	24,947,936		$	23,931,977		$	23,606,877		$	23,232,699
Less: Goodwill		31,517			31,517			31,517			31,517
Tangible Assets	$	24,916,419		$	23,900,460		$	23,575,360		$	23,201,182

Risk-Weighted Assets, determined in accordance with prescribed regulatory requirements ¹	$	14,391,943		$	14,341,397		$	14,238,798		$	13,035,674

Total Shareholders' Equity to Total Assets		5.44	%		5.66	%		5.58	%		5.81	%
Tangible Common Equity to Tangible Assets (Non-GAAP)		4.60	%		4.78	%		4.69	%		4.90	%

Tier 1 Capital Ratio ¹		12.21	%		12.10	%		12.15	%		13.01	%
Tangible Common Equity to Risk-Weighted Assets (Non-GAAP) ¹		7.97	%		7.97	%		7.76	%		8.72	%

¹		Regulatory capital ratios as of June 30, 2023 are preliminary.

Bank of Hawai‘i Corporation and Subsidiaries
Consolidated Statements of Income										Table 3
	Three Months Ended									Six Months Ended
	June 30,			March 31,			June 30,			June 30,
(dollars in thousands, except per share amounts)	2023			2023			2022			2023			2022
Interest Income
Interest and Fees on Loans and Leases	$	144,541		$	136,501		$	101,663		$	281,042		$	196,102
Income on Investment Securities
Available-for-Sale		23,301			23,893			17,984			47,194			35,084
Held-to-Maturity		23,375			23,948			18,838			47,323			37,539
Deposits		18			27			5			45			9
Funds Sold		6,395			3,366			719			9,761			846
Other		2,121			597			353			2,718			555
Total Interest Income		199,751			188,332			139,562			388,083			270,135
Interest Expense
Deposits		53,779			37,794			3,535			91,573			5,888
Securities Sold Under Agreements to Repurchase		5,436			5,377			2,794			10,813			5,566
Funds Purchased		184			704			57			888			59
Short-Term Borrowings		2,510			3,203			92			5,713			92
Other Debt		13,494			5,299			182			18,793			365
Total Interest Expense		75,403			52,377			6,660			127,780			11,970
Net Interest Income		124,348			135,955			132,902			260,303			258,165
Provision for Credit Losses		2,500			2,000			(2,500	)		4,500			(8,000	)
Net Interest Income After Provision for Credit Losses		121,848			133,955			135,402			255,803			266,165
Noninterest Income
Trust and Asset Management		11,215			10,690			11,457			21,905			22,733
Mortgage Banking		1,176			1,004			1,247			2,180			3,987
Service Charges on Deposit Accounts		7,587			7,737			7,309			15,324			14,581
Fees, Exchange, and Other Service Charges		14,150			13,808			14,193			27,958			27,145
Investment Securities Losses, Net		(1,310	)		(1,792	)		(1,295	)		(3,102	)		(2,840	)
Annuity and Insurance		1,038			1,271			870			2,309			1,661
Bank-Owned Life Insurance		2,876			2,842			2,658			5,718			5,007
Other		6,523			5,177			5,719			11,700			13,435
Total Noninterest Income		43,255			40,737			42,158			83,992			85,709
Noninterest Expense
Salaries and Benefits		56,175			65,088			57,769			121,263			117,693
Net Occupancy		9,991			9,872			9,930			19,863			19,756
Net Equipment		10,573			10,375			9,543			20,948			18,696
Data Processing		4,599			4,583			4,607			9,182			9,167
Professional Fees		4,651			3,883			3,542			8,534			6,800
FDIC Insurance		3,173			3,234			1,590			6,407			3,092
Other		14,874			14,884			15,958			29,758			31,609
Total Noninterest Expense		104,036			111,919			102,939			215,955			206,813
Income Before Provision for Income Taxes		61,067			62,773			74,621			123,840			145,061
Provision for Income Taxes		15,006			15,931			17,759			30,937			33,365
Net Income	$	46,061		$	46,842		$	56,862		$	92,903		$	111,696
Preferred Stock Dividends		1,969			1,969			1,969			3,938			3,938
Net Income Available to Common Shareholders	$	44,092		$	44,873		$	54,893		$	88,965		$	107,758
Basic Earnings Per Common Share	$	1.12		$	1.14		$	1.38		$	2.27		$	2.71
Diluted Earnings Per Common Share	$	1.12		$	1.14		$	1.38		$	2.26		$	2.70
Dividends Declared Per Common Share	$	0.70		$	0.70		$	0.70		$	1.40		$	1.40
Basic Weighted Average Common Shares		39,241,559			39,276,833			39,693,593			39,259,279			39,722,985
Diluted Weighted Average Common Shares		39,317,521			39,465,889			39,842,608			39,382,359			39,896,700

Bank of Hawai‘i Corporation and Subsidiaries
Consolidated Statements of Comprehensive Income (Loss)									Table 4
	Three Months Ended								Six Months Ended
	June 30,			March 31,		June 30,			June 30,
(dollars in thousands)	2023			2023		2022			2023		2022
Net Income	$	46,061		$	46,842	$	56,862		$	92,903	$	111,696
Other Comprehensive Income (Loss), Net of Tax:
Net Unrealized Gains (Losses) on Investment Securities		(18,217	)		29,276		(122,647	)		11,059		(302,771	)
Defined Benefit Plans		84			84		352			168		705
Other Comprehensive Income (Loss)		(18,133	)		29,360		(122,295	)		11,227		(302,066	)
Comprehensive Income (Loss)	$	27,928		$	76,202	$	(65,433	)	$	104,130	$	(190,370	)

Bank of Hawai‘i Corporation and Subsidiaries
Consolidated Statements of Condition							Table 5
	June 30,			March 31,			December 31,			June 30,
(dollars in thousands)	2023			2023			2022			2022
Assets
Interest-Bearing Deposits in Other Banks	$	2,261		$	2,554		$	3,724		$	2,264
Funds Sold		1,273,109			272,018			81,364			576,430
Investment Securities
Available-for-Sale		2,666,723			2,815,083			2,844,823			3,955,476
Held-to-Maturity (Fair Value of $4,411,003; $4,601,876; $4,615,393; and $3,823,739)		5,202,698			5,312,815			5,414,139			4,321,693
Loans Held for Sale		3,359			2,149			1,035			4,514
Loans and Leases		13,914,889			13,824,522			13,646,420			12,951,573
Allowance for Credit Losses		(145,367	)		(143,577	)		(144,439	)		(148,512	)
Net Loans and Leases		13,769,522			13,680,945			13,501,981			12,803,061
Total Earning Assets		22,917,672			22,085,564			21,847,066			21,663,438
Cash and Due from Banks		398,072			337,413			316,679			260,672
Premises and Equipment, Net		200,297			203,131			206,777			202,063
Operating Lease Right-of-Use Assets		89,286			91,387			92,307			91,901
Accrued Interest Receivable		64,720			63,175			61,002			47,141
Foreclosed Real Estate		1,040			1,040			1,040			2,332
Mortgage Servicing Rights		21,626			22,102			22,619			23,540
Goodwill		31,517			31,517			31,517			31,517
Bank-Owned Life Insurance		456,889			455,602			453,882			448,925
Other Assets		766,817			641,046			573,988			461,170
Total Assets	$	24,947,936		$	23,931,977		$	23,606,877		$	23,232,699

Liabilities
Deposits
Noninterest-Bearing Demand	$	5,968,344		$	6,385,872		$	6,714,982		$	7,374,055
Interest-Bearing Demand		4,119,166			4,283,801			4,232,567			4,339,520
Savings		7,756,426			7,898,874			7,962,410			8,054,899
Time		2,664,679			1,922,753			1,705,737			1,257,207
Total Deposits		20,508,615			20,491,300			20,615,696			21,025,681
Short-Term Borrowings		-			325,000			-			-
Securities Sold Under Agreements to Repurchase		725,490			725,490			725,490			425,490
Other Debt		1,760,243			510,269			410,294			10,343
Operating Lease Liabilities		97,768			99,746			100,526			99,722
Retirement Benefits Payable		26,434			26,768			26,991			37,532
Accrued Interest Payable		26,737			13,061			9,698			2,545
Taxes Payable		132			11,039			7,104			10,607
Other Liabilities		444,238			374,874			394,083			272,033
Total Liabilities		23,589,657			22,577,547			22,289,882			21,883,953
Shareholders' Equity
Preferred Stock ($.01 par value; authorized 180,000 shares; issued / outstanding: June 30, 2023; March 31, 2023; December 31, 2022; and June 30, 2022 - 180,000)		180,000			180,000			180,000			180,000
Common Stock ($.01 par value; authorized 500,000,000 shares; issued / outstanding: June 30, 2023 - 58,771,036 / 39,725,348; March 31, 2023 - 58,722,929 / 39,646,506; December 31, 2022 - 58,733,625 / 39,835,750; and June 30, 2022 - 58,727,909 / 40,182,659)		583			583			582			582
Capital Surplus		628,202			624,126			620,578			611,694
Accumulated Other Comprehensive Loss		(423,431	)		(405,298	)		(434,658	)		(368,448	)
Retained Earnings		2,091,289			2,074,428			2,055,912			2,002,005
Treasury Stock, at Cost (Shares: June 30, 2023 - 19,045,688; March 31, 2023 - 19,076,423; December 31, 2022 - 18,897,875; and June 30, 2022 - 18,545,250)		(1,118,364	)		(1,119,409	)		(1,105,419	)		(1,077,087	)
Total Shareholders' Equity		1,358,279			1,354,430			1,316,995			1,348,746
Total Liabilities and Shareholders' Equity	$	24,947,936		$	23,931,977		$	23,606,877		$	23,232,699

Bank of Hawai‘i Corporation and Subsidiaries
Consolidated Statements of Shareholders' Equity														Table 6
											Accumulated
											Other
	Preferred			Common							Comprehensive
	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, 2022	180,000	$	180,000	39,835,750		$	582	$	620,578		$	(434,658	)	$	2,055,912		$	(1,105,419	)	$	1,316,995
Net Income	-		-	-			-		-			-			92,903			-			92,903
Other Comprehensive Income	-		-	-			-		-			11,227			-			-			11,227
Share-Based Compensation	-		-	-			-		7,672			-			-			-			7,672
Common Stock Issued under Purchase and Equity Compensation Plans	-		-	94,765			1		(48	)		-			2,286			986			3,225
Common Stock Repurchased	-		-	(205,167	)		-		-			-			-			(13,931	)		(13,931	)
Cash Dividends Declared Common Stock ($1.40 per share)	-		-	-			-		-			-			(55,874	)		-			(55,874	)
Cash Dividends Declared Preferred Stock	-		-	-			-		-			-			(3,938	)		-			(3,938	)
Balance as of June 30, 2023	180,000	$	180,000	39,725,348		$	583	$	628,202		$	(423,431	)	$	2,091,289		$	(1,118,364	)	$	1,358,279

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	-		-	-			-		-			-			111,696			-			111,696
Other Comprehensive Loss	-		-	-			-		-			(302,066	)		-			-			(302,066	)
Share-Based Compensation	-		-	-			-		8,172			-			-			-			8,172
Common Stock Issued under Purchase and Equity Compensation Plans	-		-	228,225			1		1,014			-			346			2,697			4,058
Common Stock Repurchased	-		-	(298,759	)		-		-			-			-			(24,313	)		(24,313	)
Cash Dividends Declared Common Stock ($1.40 per share)	-		-	-			-		-			-			(56,474	)		-			(56,474	)
Cash Dividends Declared Preferred Stock	-		-	-			-		-			-			(3,938	)		-			(3,938	)
Balance as of June 30, 2022	180,000	$	180,000	40,182,659		$	582	$	611,694		$	(368,448	)	$	2,002,005		$	(1,077,087	)	$	1,348,746

Bank of Hawai‘i Corporation and Subsidiaries
Average Balances and Interest Rates - Taxable-Equivalent Basis ¹													Table 7a
	Three Months Ended						Three Months Ended						Three Months Ended
	June 30, 2023						March 31, 2023						June 30, 2022
	Average		Income /		Yield /		Average		Income /		Yield /		Average		Income /		Yield /
(dollars in millions)	Balance		Expense ²		Rate		Balance		Expense ²		Rate		Balance		Expense ²		Rate
Earning Assets
Interest-Bearing Deposits in Other Banks	$	5.1	$	-	1.48	%	$	1.7	$	-	6.25	%	$	3.5	$	-	0.59	%
Funds Sold		500.1		6.4	5.06			295.9		3.4	4.55			273.5		0.7	1.04
Investment Securities
Available-for-Sale
Taxable		2,741.1		23.2	3.39			2,820.3		23.8	3.40			4,123.1		18.0	1.74
Non-Taxable		9.6		0.1	4.40			9.6		0.1	4.38			2.9		-	1.99
Held-to-Maturity
Taxable		5,231.3		23.2	1.78			5,336.2		23.8	1.78			4,377.0		18.7	1.71
Non-Taxable		35.2		0.2	2.10			35.3		0.2	2.10			35.7		0.2	2.10
Total Investment Securities		8,017.2		46.7	2.33			8,201.4		47.9	2.34			8,538.7		36.9	1.73
Loans Held for Sale		2.7		-	5.50			1.5		-	5.30			6.3		0.1	4.06
Loans and Leases ³
Commercial and Industrial		1,456.1		17.5	4.82			1,411.4		16.2	4.67			1,330.0		9.9	2.99
Paycheck Protection Program		14.5		-	1.30			16.9		0.1	2.35			38.7		0.5	5.26
Commercial Mortgage		3,814.9		49.3	5.19			3,736.9		45.1	4.90			3,357.2		26.2	3.13
Construction		246.8		3.5	5.70			280.4		3.9	5.65			222.6		2.4	4.39
Commercial Lease Financing		65.4		0.3	1.67			66.9		-	(0.14	)		94.2		0.3	1.44
Residential Mortgage		4,704.0		41.2	3.50			4,666.0		39.9	3.42			4,445.7		36.4	3.26
Home Equity		2,272.3		19.0	3.35			2,239.4		18.2	3.30			2,032.9		14.4	2.85
Automobile		879.3		7.7	3.53			871.8		7.3	3.37			759.1		6.1	3.20
Other ⁴		423.5		6.4	6.04			427.8		6.2	5.83			420.4		5.6	5.38
Total Loans and Leases		13,876.8		144.9	4.19			13,717.5		136.9	4.03			12,700.8		101.8	3.21
Other		94.8		2.2	8.94			67.2		0.6	3.56			38.2		0.3	3.70
Total Earning Assets		22,496.7		200.2	3.56			22,285.2		188.8	3.42			21,561.0		139.8	2.60
Cash and Due from Banks		316.6						319.1						238.4
Other Assets		1,301.1						1,261.2						1,091.9
Total Assets	$	24,114.4					$	23,865.5					$	22,891.3

Interest-Bearing Liabilities
Interest-Bearing Deposits
Demand	$	4,037.4		7.5	0.75		$	4,215.9		5.2	0.50		$	4,442.2		0.7	0.06
Savings		7,667.6		26.6	1.39			8,009.0		20.6	1.05			7,692.8		1.9	0.10
Time		2,296.1		19.7	3.44			1,789.9		12.0	2.71			950.4		0.9	0.40
Total Interest-Bearing Deposits		14,001.1		53.8	1.54			14,014.8		37.8	1.09			13,085.4		3.5	0.11
Funds Purchased		14.6		0.2	5.00			60.4		0.7	4.66			25.3		-	0.89
Short-Term Borrowings		195.2		2.5	5.09			265.0		3.2	4.84			34.5		0.1	1.06
Securities Sold Under Agreements to Repurchase		725.5		5.4	2.96			725.5		5.4	2.96			447.7		2.8	2.47
Other Debt		1,255.8		13.5	4.31			499.6		5.3	4.30			10.4		0.3	7.05
Total Interest-Bearing Liabilities		16,192.2		75.4	1.87			15,565.3		52.4	1.36			13,603.3		6.7	0.20
Net Interest Income			$	124.8					$	136.4					$	133.1
Interest Rate Spread					1.69	%					2.06	%					2.40	%
Net Interest Margin					2.22	%					2.47	%					2.47	%
Noninterest-Bearing Demand Deposits		6,017.5						6,416.1						7,484.0
Other Liabilities		541.6						551.2						413.3
Shareholders' Equity		1,363.1						1,332.9						1,390.7
Total Liabilities and Shareholders' Equity	$	24,114.4					$	23,865.5					$	22,891.3

¹		Due to rounding, the amounts presented in this table may not tie to other amounts presented elsewhere in this report.
²		Interest income includes taxable-equivalent basis adjustments, based upon a federal statutory tax rate of 21%, of $471,000, $495,000, and $221,000 for the three months ended June 30, 2023, March 31, 2023, and June 30, 2022, respectively.
³		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.
⁴		Comprised of other consumer revolving credit, installment, and consumer lease financing.

Bank of Hawai‘i Corporation and Subsidiaries
Average Balances and Interest Rates - Taxable-Equivalent Basis ¹									Table 7b
	Six Months Ended						Six Months Ended
	June 30, 2023						June 30, 2022
	Average		Income /		Yield /		Average		Income /		Yield /
(dollars in millions)	Balance		Expense ²		Rate		Balance		Expense ²		Rate
Earning Assets
Interest-Bearing Deposits in Other Banks	$	3.4	$	-	2.68	%	$	3.5	$	-	0.52	%
Funds Sold		398.6		9.8	4.87			256.1		0.8	0.66
Investment Securities
Available-for-Sale
Taxable		2,780.4		47.0	3.40			4,260.6		35.1	1.65
Non-Taxable		9.6		0.2	4.39			3.0		-	1.96
Held-to-Maturity
Taxable		5,283.6		47.0	1.78			4,471.7		37.2	1.67
Non-Taxable		35.2		0.4	2.10			35.8		0.4	2.10
Total Investment Securities		8,108.8		94.6	2.34			8,771.1		72.7	1.66
Loans Held for Sale		2.1		0.1	5.42			10.0		0.2	3.19
Loans and Leases ³
Commercial and Industrial		1,433.8		33.8	4.75			1,331.5		18.9	2.86
Paycheck Protection Program		15.7		0.1	1.86			63.7		2.3	7.39
Commercial Mortgage		3,776.2		94.5	5.04			3,258.5		48.0	2.97
Construction		263.5		7.4	5.68			225.1		4.5	4.03
Commercial Lease Financing		66.1		0.3	0.76			96.5		0.7	1.44
Residential Mortgage		4,685.2		81.0	3.46			4,394.8		71.2	3.24
Home Equity		2,255.9		37.2	3.33			1,966.3		27.7	2.84
Automobile		875.6		15.0	3.45			748.3		11.9	3.22
Other ⁴		425.6		12.5	5.94			412.1		11.1	5.42
Total Loans and Leases		13,797.6		281.8	4.11			12,496.8		196.3	3.16
Other		81.0		2.7	6.70			37.3		0.6	2.97
Total Earning Assets		22,391.5		389.0	3.49			21,574.8		270.6	2.52
Cash and Due from Banks		317.8						235.8
Other Assets		1,281.3						1,058.9
Total Assets	$	23,990.6					$	22,869.5

Interest-Bearing Liabilities
Interest-Bearing Deposits
Demand	$	4,126.2		12.7	0.62		$	4,548.2		1.2	0.05
Savings		7,837.3		47.2	1.21			7,617.1		2.9	0.08
Time		2,044.4		31.7	3.12			960.9		1.8	0.37
Total Interest-Bearing Deposits		14,007.9		91.6	1.32			13,126.2		5.9	0.09
Funds Purchased		37.4		0.9	4.72			16.2		0.1	0.72
Short-Term Borrowings		229.9		5.7	4.94			17.3		0.1	1.06
Securities Sold Under Agreements to Repurchase		725.5		10.8	2.96			449.1		5.6	2.47
Other Debt		879.8		18.7	4.31			10.4		0.3	7.05
Total Interest-Bearing Liabilities		15,880.5		127.7	1.62			13,619.2		12.0	0.18
Net Interest Income			$	261.3					$	258.6
Interest Rate Spread					1.87	%					2.34	%
Net Interest Margin					2.34	%					2.41	%
Noninterest-Bearing Demand Deposits		6,215.7						7,371.9
Other Liabilities		546.3						399.2
Shareholders' Equity		1,348.1						1,479.2
Total Liabilities and Shareholders' Equity	$	23,990.6					$	22,869.5

¹		Due to rounding, the amounts presented in this table may not tie to other amounts presented elsewhere in this report.
²		Interest income includes taxable-equivalent basis adjustments, based upon a federal statutory tax rate of 21%, of $966,000 and $475,000 for the six months ended June 30, 2023 and June 30, 2022, respectively.
³		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.
⁴		Comprised of other consumer revolving credit, installment, and consumer lease financing.

Bank of Hawai‘i Corporation and Subsidiaries
Analysis of Change in Net Interest Income - Taxable-Equivalent Basis				Table 8a
	Three Months Ended June 30, 2023
	Compared to March 31, 2023
(dollars in millions)	Volume ¹			Rate ¹			Total
Change in Interest Income:
Funds Sold	$	2.6		$	0.4		$	3.0
Investment Securities
Available-for-Sale
Taxable		(0.6	)		-			(0.6	)
Held-to-Maturity
Taxable		(0.5	)		(0.1	)		(0.6	)
Total Investment Securities		(1.1	)		(0.1	)		(1.2	)
Loans and Leases
Commercial and Industrial		0.7			0.6			1.3
Paycheck Protection Program		(0.1	)		-			(0.1	)
Commercial Mortgage		1.1			3.1			4.2
Construction		(0.4	)		-			(0.4	)
Commercial Lease Financing		-			0.3			0.3
Residential Mortgage		0.3			1.0			1.3
Home Equity		0.4			0.4			0.8
Automobile		0.1			0.3			0.4
Other ²		(0.1	)		0.3			0.2
Total Loans and Leases		2.0			6.0			8.0
Other		0.4			1.2			1.6
Total Change in Interest Income		3.9			7.5			11.4

Change in Interest Expense:
Interest-Bearing Deposits
Demand		(0.2	)		2.5			2.3
Savings		(0.9	)		6.9			6.0
Time		3.9			3.8			7.7
Total Interest-Bearing Deposits		2.8			13.2			16.0
Funds Purchased		(0.5	)		-			(0.5	)
Short-Term Borrowings		(0.9	)		0.2			(0.7	)
Other Debt		8.2			-			8.2
Total Change in Interest Expense		9.6			13.4			23.0

Change in Net Interest Income	$	(5.7	)	$	(5.9	)	$	(11.6	)

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 Hawai‘i Corporation and Subsidiaries
Analysis of Change in Net Interest Income - Taxable-Equivalent Basis				Table 8b
	Three Months Ended June 30, 2023
	Compared to June 30, 2022
(dollars in millions)	Volume ¹			Rate ¹			Total
Change in Interest Income:
Funds Sold	$	1.0		$	4.7		$	5.7
Investment Securities
Available-for-Sale
Taxable		(7.6	)		12.8			5.2
Non-Taxable		0.1			-			0.1
Held-to-Maturity
Taxable		3.7			0.8			4.5
Total Investment Securities		(3.8	)		13.6			9.8
Loans Held for Sale		(0.1	)		-			(0.1	)
Loans and Leases
Commercial and Industrial		1.0			6.6			7.6
Paycheck Protection Program		(0.2	)		(0.3	)		(0.5	)
Commercial Mortgage		4.0			19.1			23.1
Construction		0.3			0.8			1.1
Commercial Lease Financing		(0.1	)		0.1			-
Residential Mortgage		2.2			2.6			4.8
Home Equity		1.8			2.8			4.6
Automobile		1.0			0.6			1.6
Other ²		-			0.8			0.8
Total Loans and Leases		10.0			33.1			43.1
Other		1.0			0.9			1.9
Total Change in Interest Income		8.1			52.3			60.4

Change in Interest Expense:
Interest-Bearing Deposits
Demand		(0.1	)		6.9			6.8
Savings		-			24.7			24.7
Time		2.9			15.9			18.8
Total Interest-Bearing Deposits		2.8			47.5			50.3
Funds Purchased		-			0.2			0.2
Short-Term Borrowings		1.3			1.1			2.4
Securities Sold Under Agreements to Repurchase		2.0			0.6			2.6
Other Debt		13.4			(0.2	)		13.2
Total Change in Interest Expense		19.5			49.2			68.7

Change in Net Interest Income	$	(11.4	)	$	3.1		$	(8.3	)

¹		The change in interest income and expense not solely due to changes in volume or rate has been allocated on a pro-rata basis to the volume and rate columns.
²		Comprised of other consumer revolving credit, installment, and consumer lease financing.

Bank of Hawai‘i Corporation and Subsidiaries
Analysis of Change in Net Interest Income - Taxable-Equivalent Basis							Table 8c
	Six Months Ended June 30, 2023
	Compared to June 30, 2022
(dollars in millions)	Volume ¹			Rate ¹			Total
Change in Interest Income:
Funds Sold	$	0.8		$	8.2		$	9.0
Investment Securities
Available-for-Sale
Taxable		(15.4	)		27.3			11.9
Non-Taxable		0.1			0.1			0.2
Held-to-Maturity
Taxable		7.1			2.7			9.8
Total Investment Securities		(8.2	)		30.1			21.9
Loans Held for Sale		(0.2	)		0.1			(0.1	)
Loans and Leases
Commercial and Industrial		1.6			13.3			14.9
Paycheck Protection Program		(1.1	)		(1.1	)		(2.2	)
Commercial Mortgage		8.6			37.9			46.5
Construction		0.9			2.0			2.9
Commercial Lease Financing		(0.3	)		(0.1	)		(0.4	)
Residential Mortgage		4.8			5.0			9.8
Home Equity		4.4			5.1			9.5
Automobile		2.2			0.9			3.1
Other²		0.3			1.1			1.4
Total Loans and Leases		21.4			64.1			85.5
Other		1.0			1.1			2.1
Total Change in Interest Income		14.8			103.6			118.4

Change in Interest Expense:
Interest-Bearing Deposits
Demand		(0.1	)		11.6			11.5
Savings		0.1			44.2			44.3
Time		3.9			26.0			29.9
Total Interest-Bearing Deposits		3.9			81.8			85.7
Funds Purchased		0.2			0.6			0.8
Short-Term Borrowings		4.3			1.3			5.6
Securities Sold Under Agreements to Repurchase		3.9			1.3			5.2
Other Debt		18.6			(0.2	)		18.4
Total Change in Interest Expense		30.9			84.8			115.7

Change in Net Interest Income	$	(16.1	)	$	18.8		$	2.7

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 Hawai‘i Corporation and Subsidiaries
Salaries and Benefits								Table 9
	Three Months Ended							Six Months Ended
	June 30,			March 31,		June 30,		June 30,
(dollars in thousands)	2023			2023		2022		2023		2022
Salaries	$	37,962		$	38,617	$	36,721	$	76,579	$	71,653
Incentive Compensation		2,984			3,997		6,073		6,981		12,184
Share-Based Compensation		4,096			3,159		3,962		7,255		7,761
Commission Expense		775			647		1,232		1,422		2,873
Retirement and Other Benefits		3,489			5,888		4,036		9,377		8,729
Payroll Taxes		3,310			5,848		3,034		9,158		7,978
Medical, Dental, and Life Insurance		3,568			3,864		2,591		7,432		5,825
Separation Expense		(9	)		3,068		120		3,059		690
Total Salaries and Benefits	$	56,175		$	65,088	$	57,769	$	121,263	$	117,693

Bank of Hawai‘i Corporation and Subsidiaries
Loan and Lease Portfolio Balances												Table 10
	June 30,		March 31,			December 31,			September 30,			June 30,
(dollars in thousands)		2023		2023			2022			2022			2022
Commercial
Commercial and Industrial	$	1,502,676	$	1,425,916	)	$	1,389,066	)	$	1,368,966	)	$	1,323,830	)
Paycheck Protection Program		13,789		15,175			19,579			22,955			31,964
Commercial Mortgage		3,796,769		3,826,283			3,725,542			3,591,943			3,464,126
Construction		236,428		232,903			260,825			236,498			246,177
Lease Financing		62,779		65,611			69,491			73,989			89,535
Total Commercial		5,612,441		5,565,888			5,464,503			5,294,351			5,155,632
Consumer
Residential Mortgage		4,721,976		4,691,298			4,653,072			4,585,723			4,486,571
Home Equity		2,278,105		2,260,001			2,225,950			2,185,484			2,101,612
Automobile		878,767		877,979			870,396			820,640			775,065
Other ¹		423,600		429,356			432,499			435,408			432,693
Total Consumer		8,302,448		8,258,634			8,181,917			8,027,255			7,795,941
Total Loans and Leases	$	13,914,889	$	13,824,522		$	13,646,420		$	13,321,606		$	12,951,573

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


Deposits
	June 30,		March 31,			December 31,			September 30,			June 30,
(dollars in thousands)		2023		2023			2022			2022			2022
Consumer	$	10,018,931	$	10,158,833		$	10,304,335		$	10,507,946		$	10,554,121
Commercial		8,019,971		8,594,441			8,569,670			8,841,781			8,824,609
Public and Other		2,469,713		1,738,026			1,741,691			1,539,046			1,646,951
Total Deposits	$	20,508,615	$	20,491,300		$	20,615,696		$	20,888,773		$	21,025,681


Average Deposits
	Three Months Ended
	June 30,		March 31,			December 31,			September 30,			June 30,
(dollars in thousands)		2023		2023			2022			2022			2022
Consumer	$	9,977,239	$	10,178,988		$	10,295,563		$	10,485,895		$	10,617,060
Commercial		8,138,358		8,611,960			8,588,198			9,002,432			8,874,988
Public and Other		1,903,004		1,639,934			1,457,566			1,375,354			1,077,315
Total Deposits	$	20,018,601	$	20,430,882		$	20,341,327		$	20,863,681		$	20,569,363

Bank of Hawai‘i Corporation and Subsidiaries
Non-Performing Assets and Accruing Loans and Leases Past Due 90 Days or More										Table 11
	June 30,			March 31,			December 31,			September 30,			June 30,
(dollars in thousands)	2023			2023			2022			2022			2022
Non-Performing Assets
Non-Accrual Loans and Leases
Commercial
Commercial and Industrial	$	17		$	31		$	37		$	49		$	85
Commercial Mortgage		3,107			3,216			3,309			3,396			3,462
Total Commercial		3,124			3,247			3,346			3,445			3,547
Consumer
Residential Mortgage		3,504			4,199			4,239			4,945			5,179
Home Equity		3,809			3,638			4,022			4,438			4,435
Total Consumer		7,313			7,837			8,261			9,383			9,614
Total Non-Accrual Loans and Leases		10,437			11,084			11,607			12,828			13,161
Foreclosed Real Estate		1,040			1,040			1,040			1,040			2,332
Total Non-Performing Assets	$	11,477		$	12,124		$	12,647		$	13,868		$	15,493

Accruing Loans and Leases Past Due 90 Days or More
Consumer
Residential Mortgage	$	3,560		$	4,566		$	2,429		$	3,279		$	2,638
Home Equity		2,022			1,723			1,673			1,061			2,029
Automobile		577			598			589			467			359
Other ¹		633			632			683			513			508
Total Consumer		6,792			7,519			5,374			5,320			5,534
Total Accruing Loans and Leases Past Due 90 Days or More	$	6,792		$	7,519		$	5,374		$	5,320		$	5,534
Total Loans and Leases	$	13,914,889		$	13,824,522		$	13,646,420		$	13,321,606		$	12,951,573

Ratio of Non-Accrual Loans and Leases to Total Loans and Leases		0.08	%		0.08	%		0.09	%		0.10	%		0.10	%

Ratio of Non-Performing Assets to Total Loans and Leases and Foreclosed Real Estate		0.08	%		0.09	%		0.09	%		0.10	%		0.12	%

Ratio of Non-Performing Assets to Total Assets		0.04	%		0.05	%		0.05	%		0.06	%		0.06	%

Ratio of Commercial Non-Performing Assets to Total Commercial Loans and Leases and Commercial Foreclosed Real Estate		0.06	%		0.06	%		0.06	%		0.07	%		0.07	%

Ratio of Consumer Non-Performing Assets to Total Consumer Loans and Leases and Consumer Foreclosed Real Estate		0.10	%		0.11	%		0.11	%		0.13	%		0.15	%

Ratio of Non-Performing Assets and Accruing Loans and Leases Past Due 90 Days or More to Total Loans and Leases and Foreclosed Real Estate		0.13	%		0.14	%		0.13	%		0.14	%		0.16	%

Quarter to Quarter Changes in Non-Performing Assets
Balance at Beginning of Quarter	$	12,124		$	12,647		$	13,868		$	15,493		$	19,979
Additions		1,116			552			704			489			2,293
Reductions
Payments		(226	)		(778	)		(1,605	)		(706	)		(5,511	)
Return to Accrual Status		(1,527	)		(297	)		(301	)		(116	)		(1,267	)
Sales of Foreclosed Real Estate		-			-			-			(1,292	)		-
Charge-offs / Write-downs		(10	)		-			(19	)		-			(1	)
Total Reductions		(1,763	)		(1,075	)		(1,925	)		(2,114	)		(6,779	)
Balance at End of Quarter	$	11,477		$	12,124		$	12,647		$	13,868		$	15,493

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

Bank of Hawai‘i Corporation and Subsidiaries
Reserve for Credit Losses										Table 12
	Three Months Ended									Six Months Ended
	June 30,			March 31,			June 30,			June 30,
(dollars in thousands)	2023			2023			2022			2023			2022
Balance at Beginning of Period	$	150,579		$	151,247		$	157,264		$	151,247		$	164,297

Loans and Leases Charged-Off
Commercial
Commercial and Industrial		(203	)		(261	)		(233	)		(464	)		(582	)
Consumer
Residential Mortgage		(6	)		-			(80	)		(6	)		(80	)
Home Equity		(5	)		(50	)		(22	)		(55	)		(90	)
Automobile		(1,293	)		(1,663	)		(1,157	)		(2,956	)		(2,687	)
Other ¹		(2,004	)		(2,335	)		(1,854	)		(4,339	)		(3,815	)
Total Loans and Leases Charged-Off		(3,511	)		(4,309	)		(3,346	)		(7,820	)		(7,254	)
Recoveries on Loans and Leases Previously Charged-Off
Commercial
Commercial and Industrial		103			50			51			153			420
Consumer
Residential Mortgage		58			61			920			119			974
Home Equity		578			184			416			762			931
Automobile		777			672			684			1,449			1,423
Other ¹		618			674			644			1,292			1,389
Total Recoveries on Loans and Leases Previously Charged-Off		2,134			1,641			2,715			3,775			5,137
Net Charged-Off - Loans and Leases		(1,377	)		(2,668	)		(631	)		(4,045	)		(2,117	)
Net Charged-Off - Accrued Interest Receivable		-			-			-			-			(47	)
Provision for Credit Losses:
Loans and Leases		3,167			1,806			(2,885	)		4,973			(7,192	)
Accrued Interest Receivable		-			-			-			-			(367	)
Unfunded Commitments		(667	)		194			350			(473	)		(476	)
Total Provision for Credit Losses		2,500			2,000			(2,535	)		4,500			(8,035	)
Balance at End of Period	$	151,702		$	150,579		$	154,098		$	151,702		$	154,098

Components
Allowance for Credit Losses - Loans and Leases	$	145,367		$	143,577		$	148,512		$	145,367		$	148,512
Reserve for Unfunded Commitments		6,335			7,002			5,586			6,335			5,586
Total Reserve for Credit Losses	$	151,702		$	150,579		$	154,098		$	151,702		$	154,098

Average Loans and Leases Outstanding	$	13,876,754		$	13,717,483		$	12,700,825		$	13,797,559		$	12,496,747

Ratio of Net Loans and Leases Charged-Off to Average Loans and Leases Outstanding (annualized)		0.04	%		0.08	%		0.02	%		0.06	%		0.03	%
Ratio of Allowance for Credit Losses to Loans and Leases Outstanding ²		1.04	%		1.04	%		1.15	%		1.04	%		1.15	%

¹		Comprised of other revolving credit, installment, and lease financing.
²		The numerator comprises the Allowance for Credit Losses - Loans and Leases.

Bank of Hawai‘i Corporation and Subsidiaries
Business Segments Selected Financial Information							Table 13a
	Consumer			Commercial			Treasury			Consolidated
(dollars in thousands)	Banking			Banking			and Other			Total
Three Months Ended June 30, 2023
Net Interest Income (Loss)	$	99,814		$	53,673		$	(29,139	)	$	124,348
Provision for Credit Losses		1,392			(15	)		1,123			2,500
Net Interest Income (Loss) After Provision for Credit Losses		98,422			53,688			(30,262	)		121,848
Noninterest Income		31,944			7,939			3,372			43,255
Noninterest Expense		(81,275	)		(19,302	)		(3,459	)		(104,036	)
Income (Loss) Before Income Taxes		49,091			42,325			(30,349	)		61,067
Provision for Income Taxes		(12,645	)		(10,710	)		8,349			(15,006	)
Net Income (Loss)	$	36,446		$	31,615		$	(22,000	)	$	46,061
Total Assets as of June 30, 2023	$	8,739,294		$	5,714,929		$	10,493,713		$	24,947,936

Three Months Ended June 30, 2022 ¹
Net Interest Income	$	76,872		$	49,791		$	6,239		$	132,902
Provision for Credit Losses		632			(1	)		(3,131	)		(2,500	)
Net Interest Income After Provision for Credit Losses		76,240			49,792			9,370			135,402
Noninterest Income		31,868			8,363			1,927			42,158
Noninterest Expense		(82,856	)		(17,014	)		(3,069	)		(102,939	)
Income Before Income Taxes		25,252			41,141			8,228			74,621
Provision for Income Taxes		(6,339	)		(10,252	)		(1,168	)		(17,759	)
Net Income	$	18,913		$	30,889		$	7,060		$	56,862
Total Assets as of June 30, 2022 ¹	$	8,205,352		$	5,339,224		$	9,688,123		$	23,232,699

¹		Certain prior period information has been reclassified to conform to current presentation.

Bank of Hawai‘i Corporation and Subsidiaries
Business Segments Selected Financial Information							Table 13b
	Consumer			Commercial			Treasury			Consolidated
(dollars in thousands)	Banking			Banking			and Other			Total
Six Months Ended June 30, 2023
Net Interest Income (Loss)	$	197,822		$	110,378		$	(47,897	)	$	260,303
Provision for Credit Losses		4,061			(16	)		455			4,500
Net Interest Income (Loss) After Provision for Credit Losses		193,761			110,394			(48,352	)		255,803
Noninterest Income		63,098			16,588			4,306			83,992
Noninterest Expense		(166,348	)		(39,591	)		(10,016	)		(215,955	)
Income (Loss) Before Income Taxes		90,511			87,391			(54,062	)		123,840
Provision for Income Taxes		(23,268	)		(21,503	)		13,834			(30,937	)
Net Income (Loss)	$	67,243		$	65,888		$	(40,228	)	$	92,903
Total Assets as of June 30, 2023	$	8,739,294		$	5,714,929		$	10,493,713		$	24,947,936

Six Months Ended June 30, 2022 ¹
Net Interest Income	$	147,233		$	96,140		$	14,792		$	258,165
Provision for Credit Losses		2,315			(198	)		(10,117	)		(8,000	)
Net Interest Income After Provision for Credit Losses		144,918			96,338			24,909			266,165
Noninterest Income		63,837			18,561			3,311			85,709
Noninterest Expense		(164,666	)		(35,683	)		(6,464	)		(206,813	)
Income Before Income Taxes		44,089			79,216			21,756			145,061
Provision for Income Taxes		(11,053	)		(19,449	)		(2,863	)		(33,365	)
Net Income	$	33,036		$	59,767		$	18,893		$	111,696
Total Assets as of June 30, 2022 ¹	$	8,205,352		$	5,339,224		$	9,688,123		$	23,232,699

¹		Certain prior period information has been reclassified to conform to current presentation.

Bank of Hawai‘i Corporation and Subsidiaries
Selected Quarterly Financial Data										Table 14
	Three Months Ended
	June 30,			March 31,			December 31,			September 30,			June 30,
(dollars in thousands, except per share amounts)	2023			2023			2022			2022			2022
Quarterly Operating Results
Interest Income
Interest and Fees on Loans and Leases	$	144,541		$	136,501		$	128,683		$	115,013		$	101,663
Income on Investment Securities
Available-for-Sale		23,301			23,893			18,476			16,995			17,984
Held-to-Maturity		23,375			23,948			23,708			20,243			18,838
Deposits		18			27			13			10			5
Funds Sold		6,395			3,366			1,093			2,335			719
Other		2,121			597			340			322			353
Total Interest Income		199,751			188,332			172,313			154,918			139,562
Interest Expense
Deposits		53,779			37,794			23,494			10,296			3,535
Securities Sold Under Agreements to Repurchase		5,436			5,377			4,289			2,745			2,794
Funds Purchased		184			704			318			40			57
Short-Term Borrowings		2,510			3,203			1,978			-			92
Other Debt		13,494			5,299			1,496			182			182
Total Interest Expense		75,403			52,377			31,575			13,263			6,660
Net Interest Income		124,348			135,955			140,738			141,655			132,902
Provision for Credit Losses		2,500			2,000			200			-			(2,500	)
Net Interest Income After Provision for Credit Losses		121,848			133,955			140,538			141,655			135,402
Noninterest Income
Trust and Asset Management		11,215			10,690			10,652			10,418			11,457
Mortgage Banking		1,176			1,004			991			1,002			1,247
Service Charges on Deposit Accounts		7,587			7,737			7,513			7,526			7,309
Fees, Exchange, and Other Service Charges		14,150			13,808			13,906			13,863			14,193
Investment Securities Losses, Net		(1,310	)		(1,792	)		(1,124	)		(2,147	)		(1,295	)
Annuity and Insurance		1,038			1,271			1,087			1,034			870
Bank-Owned Life Insurance		2,876			2,842			2,475			2,486			2,658
Other		6,523			5,177			5,672			(3,522	)		5,719
Total Noninterest Income		43,255			40,737			41,172			30,660			42,158
Noninterest Expense
Salaries and Benefits		56,175			65,088			57,639			59,938			57,769
Net Occupancy		9,991			9,872			9,499			10,186			9,930
Net Equipment		10,573			10,375			9,942			9,736			9,543
Data Processing		4,599			4,583			4,579			4,616			4,607
Professional Fees		4,651			3,883			3,958			3,799			3,542
FDIC Insurance		3,173			3,234			1,774			1,680			1,590
Other		14,874			14,884			15,312			15,794			15,958
Total Noninterest Expense		104,036			111,919			102,703			105,749			102,939
Income Before Provision for Income Taxes		61,067			62,773			79,007			66,566			74,621
Provision for Income Taxes		15,006			15,931			17,700			13,765			17,759
Net Income	$	46,061		$	46,842		$	61,307		$	52,801		$	56,862
Preferred Stock Dividends		1,969			1,969			1,969			1,969			1,969
Net Income Available to Common Shareholders	$	44,092		$	44,873		$	59,338		$	50,832		$	54,893

Basic Earnings Per Common Share	$	1.12		$	1.14		$	1.51		$	1.28		$	1.38
Diluted Earnings Per Common Share	$	1.12		$	1.14		$	1.50		$	1.28		$	1.38

Balance Sheet Totals
Loans and Leases	$	13,914,889		$	13,824,522		$	13,646,420		$	13,321,606		$	12,951,573
Total Assets		24,947,936			23,931,977			23,606,877			23,134,040			23,232,699
Total Deposits		20,508,615			20,491,300			20,615,696			20,888,773			21,025,681
Total Shareholders' Equity		1,358,279			1,354,430			1,316,995			1,282,384			1,348,746

Performance Ratios
Return on Average Assets		0.77	%		0.80	%		1.05	%		0.91	%		1.00	%
Return on Average Shareholders' Equity		13.55			14.25			18.91			15.31			16.40
Return on Average Common Equity		14.95			15.79			21.28			16.98			18.19
Efficiency Ratio ¹		62.07			63.34			56.46			61.37			58.80
Net Interest Margin ²		2.22			2.47			2.60			2.60			2.47

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 Hawai‘i Corporation and Subsidiaries
Hawaii Economic Trends								Table 15
	Five Months Ended				Year Ended
(dollars in millions; jobs in thousands)	May 31, 2023				December 31, 2022					December 31, 2021
Hawaii Economic Trends
State General Fund Revenues¹	$	4,204.9	(3.6	)%	$	9,441.3		16.0	%	$	8,137.9		26.9	%
General Excise and Use Tax Revenue¹		1,916.0	9.4			4,263.4		18.3			3,604.3		18.6
Jobs ²		657.4				654.5					642.6

								June 30,		December 31,
								2023		2022			2021
Unemployment, seasonally adjusted³
Statewide								3.0	%		3.7	%	3.2	%
Honolulu County								3.1			3.3		3.7
Hawaii County								3.0			4.7		1.8
Maui County								2.5			4.5		2.4
Kauai County								2.6			4.7		2.7

					June 30,			December 31,
(1-year percentage change, except months of inventory)					2023			2022		2021			2020
Housing Trends (Single Family Oahu) ⁴
Median Home Price						(5.5	)%	11.6	%		19.3	%	5.2	%
Home Sales Volume (units)						(34.6	)%	(23.2	)%		17.9	%	2.3	%
Months of Inventory						2.6		2.1			0.8		1.4

					Monthly Visitor Arrivals,					Percentage Change
(in thousands)					Not Seasonally Adjusted					from Previous Year
Tourism ⁵
May 31, 2023								790.5					2.1	%
April 30, 2023								806.2					(0.4	)
March 31, 2023								892.2					13.6
February 28, 2023								733.6					17.6
January 31, 2023								775.1					36.7
December 31, 2022								858.1					14.0
November 30, 2022								725.5					18.2
October 31, 2022								726.1					31.8
September 30, 2022								691.8					37.1
August 31, 2022								829.7					14.8
July 31, 2022								919.2					4.5
June 30, 2022								841.8					6.4
May 31, 2022								774.1					22.9
April 30, 2022								809.6					67.3
March 31, 2022								785.7					78.7
February 28, 2022								623.7					165.1
January 31, 2022								567.2					229.8
December 31,2021								752.8					219.3
November 30, 2021								614.0					234.1
October 31, 2021								550.8					618.2
September 30, 2021								504.6					2,641.0
August 31, 2021								723.0					2,995.6
July 31, 2021								879.6					3,798.4
June 30, 2021								791.1					4,534.7
May 31, 2021								629.7					6,807.4

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/20230724848205/en/

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Bank of Hawai‘i Corporation Second Quarter 2023 Financial Results

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