BANK OF HAWAII CORP
For the period ended Jun 30, 2024. Filed Jul 23, 2024.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 30, 2024 · Filed Jul 23, 2024
BOH$69.64-0.4%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-03-31; filed 2024-04-23.
0000950170-24-046634
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2024-06-30; filed 2024-07-23.
0000950170-24-085428
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 169 previous paragraphs and 176 current paragraphs.
104 unchanged; 53 reworded; 16 added; 11 removed; 1 previous and 3 current paragraphs rearranged.
Tables are not compared: 20 previous and 20 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (16)
Current report
General economic conditions remained positive during the second quarter of 2024. Hawaii’s economy continued to show growth. Maui rebuilding and incremental return of international travelers continues to support the post-pandemic tourism rebound. On Oahu, visitor arrivals have recovered to pre-pandemic levels supported by the gradual return of the Japanese market. Hawaii’s unemployment rate was 3.0% in May 2024, which was below the U.S. unemployment rate of 4.0%.
Current report
Noninterest income was $42.1 million in the second quarter of 2024, a decrease of 3% from the same quarter of 2023.
Current report
The effective tax rate for the second quarter of 2024 was 24.77% compared with 24.57% during the same quarter of 2023.
Current report
Total assets were $23.3 billion as of June 30, 2024,a decrease of 2% from December 31, 2023.
Current report
Total deposits were $20.4 billion as of June 30, 2024, a decrease of 3% from December 31, 2023.
Current report
The average balance of our earning assets decreased by $959.2 million or 4% in the second quarter of 2024 and by $753.9 million or 3% in the first six months of 2024 compared to the same periods in 2023 primarily due to cashflows from our investment securities portfolio not being reinvested.
Current report
Annuity and insurance income increased by $0.5 million or 53% in the second quarter of 2024 and by $0.3 million or 14% for the first six months of 2024 compared to the same periods in 2023 primarily due to increased customer activity.
Current report
Other noninterest income decreased by $2.6 million or 39% in the second quarter of 2024 and by $2.6 million or 22% for the first six months of 2024 compared to the same periods in 2023. These decreases were primarily due to a gain on sale of a low income housing investment in 2023 and a decrease in customer derivative fees.
Current report
FDIC insurance expense increased by $4.0 million or 126% in the second quarter of 2024 and by $4.4 million or 68% for the first six months of 2024 compared to the same periods in 2023 primarily due to an increase in an industry-wide non-recurring FDIC special assessment.
Current report
The provision for income taxes was $11.2 million in the second quarter of 2024, a decrease of $3.8 million compared to the same period in 2023. The effective tax rate for the second quarter of 2024 was 24.77%, an increase from 24.57% for the same period in 2023. The higher effective tax rate in the second quarter of 2024 compared to the same period in 2023 was primarily due to an increase in discrete items.
Current report
Total loans and leases as of June 30, 2024, decreased by $133.8 million or 1%, from December 31, 2023.
Current report
Net income decreased by 4.0 million or 11% in the second quarter of 2024 compared to the same period in 2023 primarily due to increases in noninterest expense and the provision for credit losses. This was partially offset by an increase in noninterest income. The increase in noninterest expense was primarily due to higher allocated FDIC insurance costs. The increase in the provision for credit losses was primarily due to lower recoveries in the home equity portfolio and higher net charge-offs in the installment loan portfolio. The increase in noninterest income was primarily due to higher trust and asset management fees and higher annuity and insurance income.
Current report
Net income decreased by 1.0 million or 2% in the first six months of 2024 compared to the same period in 2023 primarily due to increases in noninterest expense and the provision for credit losses. This was partially offset by an increase in noninterest income. The increase in noninterest expense was primarily due to higher allocated FDIC insurance costs. The increase in the provision for credit losses was primarily due to higher net charge-offs in the installment loan portfolio and lower recoveries in the home equity portfolio. The increase in noninterest income was primarily due to higher trust and asset management fees, higher institutional investment advisory fees, and higher annuity and insurance income.
Current report
Net income decreased by $5.1 million or 8% in the first six months of 2024 compared to the same period in 2023 primarily due to decreases in interest income and noninterest income, partially offset by a decrease in noninterest expense, and a reduction in the tax provision. The decrease in net interest income was primarily due to lower realized spread on savings and interest bearing deposits, as well as reduced spread on commercial mortgage and commercial and industrial loans. The decrease was partially offset by increased balances and earnings credits on noninterest bearing deposits, inflows to the commercial and industrial and construction portfolios, and improved spreads on the leasing portfolio. The decrease in noninterest income is primarily due to reduced customer derivative program revenue, letter of credit fees, certificate of deposit breakage fees, and gains on sale of leased assets. The decrease was partially offset by an increase in account analysis fees and fees earned on money market sweep balances. The decrease in noninterest expense is primarily due to reduced allocated administrative and support unit expenses, salaries & benefits, and broker charges related to the customer derivative program.
Current report
Commercial and Industrial non-accrual loans were $3.7 million as of June 30, 2024, an increase of $3.6 million from December 31, 2023. The increase was due to the addition of two loans during the quarter ended June 30, 2024.
Current report
For the three and six months ended June 30, 2024, the provision for credit losses was $2.4 million and $4.4 million, respectively, compared to $2.5 million and $4.5 million for the same periods in 2023.
Removed paragraphs (11)
Previous report
In the aftermath of the devastation cause by the Maui wildfires, Hawaii’s economy has proven to be resilient and continues to perform well. Despite a dip in visitor arrivals and spending immediately after the fires, real visitor spending rebounded and hovered near historic highs in the first quarter. There was some softening of U.S. mainland visitor arrivals, however, it was offset by an uptick in visitors from Canada and Japan, representing promising ongoing progress towards regaining Hawaii’s international visitor profile. At the end of 2023, statewide visitor arrivals were about 9% below pre-pandemic levels primarily due to the Maui wildfires. However, the number of visitors to all other islands were at or above pre-pandemic levels.
Previous report
The construction industry, buoyed by large federal and state grants, is expected to expand and require approximately 2,500 workers over the next three years in order to support Maui rebuilding efforts and home building projects on Oahu. On Maui, unemployment claims have decreased indicating a stronger than expected labor market recovery. For the rest of the state, employment rates have remained fairly stable, however, nearly all industries, excluding construction, are expected to experience a slowdown of job gains in 2024. Overall, Hawaii’s unemployment rate increased slightly from December 2023 to 3.1% in March 2024, which remains below the U.S. unemployment rate of 3.8%.
Previous report
Noninterest income was $42.3 million in the first quarter of 2024, an increase of 4% from the same period in 2023.
Previous report
The effective tax rate for the first quarter of 2024 was 24.76% compared with 25.38% during the same quarter of 2023.
Previous report
Total assets were $23.4 billion as of March 31, 2024, a decrease of 1% from December 31, 2023.
Previous report
Total deposits were $20.7 billion as of March 31, 2024, a decrease of 2% from December 31, 2023.
Previous report
The average balance of our earning assets decreased by $0.5 billion or 2% in the first quarter of 2024 compared to the same period in 2023 primarily due to a decrease in our investment securities portfolio. The average balance of our investment securities decreased by $0.9 billion or 10% in the first quarter of 2024 compared to the same period in 2023 primarily due to cashflows from the portfolio not being reinvested into securities. The average balance of our loan and lease portfolio increased by $0.2 billion or 1% in the first quarter of 2024 compared to the same period in 2023 primarily due to an increase in our commercial and industrial portfolio.
Previous report
Total loans and leases as of March 31, 2024, decreased by $111.2 million or 1%, from December 31, 2023, primarily due to reductions in the consumer and commercial mortgage portfolio, offset by growth from commercial and industrial loans and construction loans.
Previous report
Net income increased by $3.0 million or 10% in the first quarter of 2024 compared to the same period in 2023 primarily due to a decrease in noninterest expense and an increase in noninterest income. The decrease in noninterest expense is primarily due to lower salaries and benefits expense, as well as lower allocated marketing expense and lower allocated technology expense. The increase in noninterest income is primarily due to higher trust and asset management income.
Previous report
Residential mortgage non-accrual loans were $3.2 million as of March 31, 2024, an increase of $0.3 million or 9% from December 31, 2023. As of March 31, 2024, our residential mortgage non-accrual loans were comprised of 16 loans with a weighted average current loan-to-value ratio of 67.6%.
Previous report
For the first three months of 2024, the provision for credit losses was $2 million, unchanged from the same period in 2023.
Reworded paragraphs (53)
Previous wording
This report contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements can be identified by the fact that they do not relate strictly to historical or current facts and may include statements concerning, among other things, the anticipated economic and business environment in our service area and elsewhere, credit quality and other financial and business matters in future periods, our future results of operations and financial position, our business strategy and plans and our objectives and future operations. We also may make forward-looking statements in our other documents filed with or furnished to the U.S. Securities and Exchange Commission (the “SEC”). In addition, our senior management may provide forward-looking statements orally to analysts, investors, representatives of the media and others. Our forward-looking statements are based on numerous assumptions, any of which could prove to be inaccurate, and actual results may differ materially from those projected because of a variety of risks and uncertainties, including, but not limited to: (1) general economic conditions either nationally, internationally, or locally may be different than expected, and particularly, any event that negatively impacts the tourism industry in Hawaii; (2) the compounding effects of the COVID-19 pandemic, including reduced tourism in Hawaii, the duration and scope of government mandates or other limitations of or restrictions on travel, volatility in the international and national economy and credit markets, inflation, worker absenteeism, quarantines or other travel or health-related restrictions, the length and severity of the COVID-19 pandemic, the pace of recovery following the COVID-19 pandemic, and the effect of government, business and individual actions intended to mitigate the effects of the COVID-19 pandemic; (3) changes in market interest rates that may affect credit markets and our ability to maintain our net interest margin; (4) changes in our credit quality or risk profile that may increase or decrease the required level of our reserve for credit losses; (5) the impact of legislative and regulatory initiatives, particularly the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (the “Dodd-Frank Act”) and Economic Growth, Regulatory Relief, and Consumer Protection Act of 2018; (6) changes to the amount and timing of proposed common stock repurchases; (7) unanticipated changes in the securities markets, public debt markets, and other capital markets in the U.S. and internationally, including, without limitation, the elimination of the London Interbank Offered Rate (“LIBOR”) as a benchmark interest rate; (8) changes in fiscal and monetary policies of the markets in which we operate; (9) the increased cost of maintaining or the Company’s ability to maintain adequate liquidity and capital, based on the requirements adopted by the Basel Committee on Banking Supervision a…
Excerpt shortened here; the source contains the full paragraph.
Current wording
This report contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements can be identified by the fact that they do not relate strictly to historical or current facts and may include statements concerning, among other things, the anticipated economic and business environment in our service area and elsewhere, credit quality and other financial and business matters in future periods, our future results of operations and financial position, our business strategy and plans and our objectives and future operations. We also may make forward-looking statements in our other documents filed with or furnished to the U.S. Securities and Exchange Commission (the “SEC”). In addition, our senior management may provide forward-looking statements orally to analysts, investors, representatives of the media and others. Our forward-looking statements are based on numerous assumptions, any of which could prove to be inaccurate, and actual results may differ materially from those projected because of a variety of risks and uncertainties, including, but not limited to: (1) general economic conditions either nationally, internationally, or locally may be different than expected, and particularly, any event that negatively impacts the tourism industry in Hawaii; (2) the compounding effects of the COVID-19 pandemic, including reduced tourism in Hawaii, the duration and scope of government mandates or other limitations of or restrictions on travel, volatility in the international and national economy and credit markets, inflation, worker absenteeism, quarantines or other travel or health-related restrictions, the length and severity of the COVID-19 pandemic, the pace of recovery following the COVID-19 pandemic, and the effect of government, business and individual actions intended to mitigate the effects of the COVID-19 pandemic; (3) changes in market interest rates that may affect credit markets and our ability to maintain our net interest margin; (4) changes in our credit quality or risk profile that may increase or decrease the required level of our reserve for credit losses; (5) the impact of legislative and regulatory initiatives, particularly the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (the “Dodd-Frank Act”) and Economic Growth, Regulatory Relief, and Consumer Protection Act of 2018; (6) changes to the amount and timing of proposed common stock repurchases; (7) unanticipated changes in the securities markets, public debt markets, and other capital markets in the U.S. and internationally, (8) changes in fiscal and monetary policies of the markets in which we operate; (9) the increased cost of maintaining or the Company’s ability to maintain adequate liquidity and capital, based on the requirements adopted by the Basel Committee on Banking Supervision and U.S. regulators; (10) changes in accounting standards; (11) changes in tax laws or regulations, including Public Law 115-…
Excerpt shortened here; the source contains the full paragraph.
Previous wording
High housing costs are a challenge throughout the state. On Maui, in particular, residents displaced by the wildfires struggle to find long-term housing. For the first three months of 2024, the median price of single-family home sales and condominium sales on Oahu increased 4.4% and 1.0%, respectively, compared to the same period in 2023. The volume of single-family home sales and condominiums sales on Oahu increased 6.1% and decreased 7.1%, respectively, for the first three months of 2024 compared with the same period in 2023. Inventory of single-family homes and condominiums on Oahu continues to remain low at 2.7 months and 4.0 months, respectively.
Current wording
For the first six months of 2024, the median price of single-family home and condominium sales on Oahu increased by 3.3% and 2.0%, respectively, compared to the same period in 2023. The volume of single-family homes sales on Oahu increased 6.7% and condominium sales decreased 5.8% compared to the same period in 2023. Inventory of single-family homes and condominiums on Oahu was 3.0 months and 4.7 months, respectively.
Previous wording
Net income for the first quarter of 2024 was $36.4 million, a decrease of $10.4 million or 22% compared to the same period in 2023. Diluted earnings per common share was $0.87 for the first quarter of 2024, a decrease of $0.27 or 24% compared to the same period in 2023.
Current wording
Net income for the second quarter of 2024 was $34.1 million, a decrease of $12.0 million or 26% compared to the same period in 2023. Diluted earnings per common share was $0.81 for the second quarter of 2024, a decrease of $0.31 or 28% compared to the same period in 2023.
Previous wording
The return on average common equity for the first quarter of 2024 was 11.20% compared with 15.79% in the same quarter of 2023.
Current wording
The return on average common equity for the second quarter of 2024 was 10.41% compared with 14.95% in the same quarter of 2023.
Previous wording
Net interest income for the first quarter of 2024 was $113.9 million, a decrease of 16% from the same quarter of 2023. The decrease in net interest income in the first quarter of 2024 was primarily due to higher funding costs, partially offset by higher earning asset yields. The net interest margin was 2.11% in the first quarter of 2024, a decrease of 36 basis points from the same period in 2023.
Current wording
Net interest income for the second quarter of 2024 was $114.8 million, a decrease of 8% from the same quarter of 2023. The decrease in net interest income in the second quarter of 2024 was primarily due to higher funding costs, partially offset by higher earning asset yields. The net interest margin was 2.15% in the second quarter of 2024, a decrease of 7 basis points from the same period in 2023.
Previous wording
The provision for credit losses for the first quarter of 2024 and 2023 was $2.0 million.
Current wording
The provision for credit losses for the second quarter of 2024 and 2023 was $2.4 million and $2.5 million, respectively.
Previous wording
Noninterest expense was $105.9 million in the first quarter of 2024, a decrease of 5% from the same quarter of 2023.
Current wording
Noninterest expense was $109.2 million in the second quarter of 2024, an increase of 5% from the same quarter of 2023.
Previous wording
We maintained a strong balance sheet during the first quarter of 2024, with what we believe are appropriate reserves for credit losses, strong liquidity and growing capital.
Current wording
We maintained a strong balance sheet during the second quarter of 2024, with what we believe are appropriate reserves for credit losses, strong liquidity and growing capital.
Previous wording
Total non-performing assets were $11.8 million as of March 31, 2024, up $0.1 million from December 31, 2023. Non-performing assets as a percentage of total loans and leases and foreclosed real estate were 0.09% at the end of the quarter, comparable to the same quarter of 2023.
Current wording
Total non-performing assets ("NPAs") were $15.2 million as of June 30, 2024, up $3.4 million from December 31, 2023. NPAs as a percentage of total loans and leases and foreclosed real estate were 0.11% at the end of the quarter, up 3 basis points compared to the same quarter of 2023.
Previous wording
Net loan and lease charge-offs during the first quarter of 2024 were $2.3 million or 7 basis points annualized of total average loans and leases outstanding. Net loan and lease charge-offs for the first quarter of 2024 were comprised of charge-offs of $3.8 million partially offset by recoveries of $1.5 million. Compared to the same quarter of 2023, net loan and lease charge-offs decreased by $0.4 million or 1 basis point annualized on total average loans and leases outstanding.
Current wording
Net loan and lease charge-offs during the second quarter of 2024 were $3.4 million or 10 basis points annualized of total average loans and leases outstanding. Net loan and lease charge-offs for the second quarter of 2024 were comprised of charge-offs of $4.8 million partially offset by recoveries of $1.4 million. Compared to the same quarter of 2023, net loan and lease charge-offs increased by $2.0 million or 6 basis points annualized on total average loans and leases outstanding.
Previous wording
The allowance for credit losses on loans and leases was $147.7 million as of March 31, 2024, an increase of $1.3 million from December 31, 2023. The ratio of the allowance for credit losses to total loans and leases outstanding was 1.07% at the end of the quarter, up 3 basis points from the same quarter of 2023.
Current wording
The allowance for credit losses on loans and leases was $147.5 million as of June 30, 2024, an increase of $1.1 million from December 31, 2023. The ratio of the allowance for credit losses to total loans and leases outstanding was 1.07% at the end of the quarter, up 2 basis points from December 31, 2023.
Previous wording
The investment securities portfolio was $7.3 billion as of March 31, 2024, a decrease of 2% from December 31, 2023. The investment portfolio remains largely comprised of securities issued by U.S. government agencies and U.S. government-sponsored enterprises.
Current wording
The investment securities portfolio was $7.1 billion as of June 30, 2024, a decrease of 4% from December 31, 2023. The investment portfolio remains largely comprised of securities issued by U.S. government agencies and U.S. government-sponsored enterprises.
Previous wording
Total loans and leases were $13.9 billion as of March 31, 2024, a decrease of 1% from December 31, 2023.
Current wording
Total loans and leases were $13.8 billion as of June 30, 2024, a decrease of 1% from December 31, 2023.
Previous wording
Total shareholders’ equity was $1.4 billion as of March 31, 2024, an increase of 2% from December 31, 2023.
Current wording
Total shareholders’ equity was $1.6 billion as of June 30, 2024, an increase of 14% from December 31, 2023.
Previous wording
No shares of common stock were repurchased under the share repurchase program in the first quarter of 2024. Total remaining buyback authority under the share repurchase program was $126.0 million as of March 31, 2024.
Current wording
No shares of common stock were repurchased under the share repurchase program in the second quarter of 2024. Total remaining buyback authority under the share repurchase program was $126.0 million as of June 30, 2024.
Previous wording
On April 5, 2024, the Company announced that 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 1, 2024 to shareholders of record of the preferred stock as of the close of business on April 16, 2024.
Current wording
On July 8, 2024, the Company announced that 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, 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 August 1, 2024 to shareholders of record of the preferred stock as of the close of business on July 18, 2024.
Previous wording
Interest income includes taxable-equivalent basis adjustments, based upon a federal statutory tax rate of 21%, of $0.7 million and $0.5 million for the three months ended March 31, 2024 and March 31, 2023, respectively.
Current wording
Interest income includes taxable-equivalent basis adjustments, based upon a federal statutory tax rate of 21%, of $0.8 million and $1.5 million for the three and six months June 30, 2024, and $0.5 million and $1.0 million for the three and six months ended June 30, 2023.
Previous wording
Yields on our earning assets increased by 47 basis points in the first quarter of 2024 compared to the same period in 2023. This is primarily due to the higher rate environment in 2024 compared to the prior year.
Current wording
Yields on our earning assets increased by 43 basis points in the second quarter of 2024 compared to the same period in 2023.
Previous wording
Yields on our investment securities portfolio increased by 6 basis points in the first quarter of 2024 compared to the same period in 2023 primarily due to the income received from interest rate swaps that hedge the fair value of our AFS securities portfolio. Yields on funds sold increased by 77 basis points in the first quarter of 2024 compared to the same period in 2023 due to higher rates. Yields on our loan and lease portfolio increased by 60 basis points in the first quarter of 2024 compared to the same period in 2023 due to an increase in yields on our floating rate loan portfolio, higher rates on loans that originated during the period, and income received from interest rate swaps that hedge the fair value of our residential mortgage portfolio.
Current wording
Yields on our investment securities portfolio increased by 7 basis points in the second quarter of 2024 and by 6 basis points in the first six months of 2024 compared to the same periods in 2023 primarily due to the income received from interest rate swaps that hedge the fair value of our AFS securities portfolio. Yields on our loan and lease portfolio increased by 57 basis points in the second quarter of 2024 and by 59 basis points in the first six months of 2024 compared to the same periods in 2023 due to an increase in yields on our floating rate loan portfolio, higher rates on loans that originated during the period, and income received from interest rate swaps that hedge the fair value of our residential mortgage portfolio.
Previous wording
Interest rates paid on our interest-bearing liabilities increased by 111 basis points in the first quarter of 2024 compared to the same period in 2023. The interest rates on interest-bearing deposits increased by 130 basis points in the first quarter of 2024 compared to the same period in 2023 due to the higher rate environment. The rates paid on securities sold under agreements to repurchase increased by 83 basis points in the first quarter of 2024 compared to the same period in 2023 due to the termination of $575 million in repurchase agreements during the third quarter of 2023.
Current wording
Interest rates paid on our interest-bearing liabilities increased by 66 basis points in the second quarter of 2024 and by 88 basis points in the first six months of 2024 compared to the same periods in 2023. The interest rates on interest-bearing deposits increased by 92 basis points in the second quarter of 2024 and by 110 basis points in the first six months of 2024 compared to the same periods in 2023 driven by customer migration to higher rate deposit products as a result of the higher rate environment. The rates paid on securities sold under agreements to repurchase increased by 87 basis points in the second quarter of 2024 and by 85 basis points in the first six months of 2024 compared to the same periods in 2023 due to the termination of $575.0 million in repurchase agreements during the third quarter of 2023 that had lower interest rates compared to the repurchase agreements that remain outstanding and the termination of $50 million in repurchase agreements in May 2024.
Previous wording
The average balances of our interest-bearing deposits for the three months ended March 31, 2024 increased by $961.8 million or 7% compared to the same period in 2023 driven by an increase in savings and time deposits, partially offset by a reduction in interest-bearing demand deposits. The average balance of our interest-bearing demand deposits for the three months ended March 31, 2024 decreased by $451.7 million or 11% compared to the same period in 2023. The average balance of our savings deposits increased by $122.3 million for the three months ended March 31, 2024 compared to the same period in 2023. The average balance of our time deposits for the three months ended March 31, 2024 increased by $1.3 billion or 72% compared to the same period in 2023 driven by customer migration to higher rate deposit products as a result of the higher rate environment.
Current wording
The average balances of our interest-bearing deposits for the three months ended June 30, 2024 increased by $982.5 million or 7% compared to the same period in 2023 driven by an increase in savings and time deposits, partially offset by a reduction in interest-bearing demand deposits. The average balances of our interest-bearing demand deposits for the three and six months ended June 30, 2024 decreased by $248.9 million or 6% and by $349.9 million or 8% compared to the same periods in 2023. The average balances of our savings deposits for the three and six months ended June 30, 2024 increased by $591.6 million and $358.0 million, respectively, compared to the same periods in 2023. The average balances of our time deposits for the three and six months ended June 30, 2024 increased by $639.8 million or 28% and by $964.1 million or 47%, respectively, compared to the same period in 2023 driven by customer migration to higher rate deposit products as a result of the higher rate environment.
Previous wording
The average balances of our securities sold under agreements to repurchase for the three months ended March 31, 2024 decreased by $575.0 million or 79% compared to the same period in 2023. The decrease was due to the termination of $575 million in repurchase agreements in the third quarter of 2023. The average balances of our other debt, which was comprised primarily of Federal Home Loan Bank (“FHLB”) advances increased by $0.1 billion in the first quarter of 2024 compared to the same period in 2023 primarily due to $50.0 million in net FHLB advances since the first quarter of 2023.
Current wording
The average balances of our securities sold under agreements to repurchase for the three and six months ended June 30, 2024 decreased by $603.6 million or 83% and by $589.3 million or 81% compared to the same periods in 2023. The decrease was due to the termination of $575.0 million in repurchase agreements in 2023 and the termination of $50.0 million in repurchase agreements in May 2024. The average balances of our other debt, which was comprised primarily of Federal Home Loan Bank (“FHLB”) advances decreased by $695.6 million in the second quarter of 2024 compared to the same period in 2023 primarily due to the termination of $1.2 billion in FHLB advances during the quarter ended September 30, 2023.
Previous wording
Trust and asset management income is comprised of fees earned from the management and administration of trusts and other customer assets. The management fees are largely based upon the market value of the assets and the fee rate charged to customers. Total trust assets under administration were $11.9 billion and $10.9 billion as of March 31, 2024, and March 31, 2023, respectively. Trust and asset management income increased by $0.5 million or 5% for the first three months of 2024 compared to the same period in 2023 primarily due to an increase in the asset values of our customers' accounts.
Current wording
Trust and asset management income is comprised of fees earned from the management and administration of trusts and other customer assets. The management fees are largely based upon the market value of the assets and the fee rate charged to customers. Total trust assets under administration were $12.3 billion and $10.7 billion as of June 30, 2024 and June 30, 2023, respectively. Trust and asset management income increased by $1.0 million or 9% in the second quarter of 2024 and by $1.5 million or 7% for the first six months of 2024 compared to the same periods in 2023 primarily due to an increase in the asset values of our customers' accounts.
Previous wording
Bank-owned life insurance increased by $0.5 million or 18% for the first three months of 2024 compared to the same period in 2023 primarily due to an increase in the yield on the underlying assets.
Current wording
Bank-owned life insurance increased by $0.5 million or 18% in the second quarter of 2024 and by $1.0 million or 18% for the first six months of 2024 compared to the same periods in 2023 primarily due to an increase in the yield on the underlying assets, partially offset by a decrease in the amount of death benefits received.
Previous wording
Total salaries and benefits expense decreased by $6.9 million or 11% for the first three months of 2024 compared to the same periods in 2023. The decrease was primarily due to a decrease in separation expenses and retirement and other benefits.
Current wording
Total salaries and benefits expense increased by $0.9 million or 2% in the second quarter of 2024 primarily due to an increase in base salaries coupled with separation expenses, partially offset by a decrease in share-based compensation. Total salaries and benefits expense decreased by $6.0 million or 5% for the first six months of 2024 compared to the same period in 2023 mainly due to a decrease in separation expense, payroll taxes, retirement and other benefits, and medical, dental, and life insurance.
Previous wording
Net occupancy expense increased by $0.6 million or 6% for the first three months of 2024 compared to the same period in 2023. This increase was due to an increase in vacancies of spaces that we sublease, and an increase in common area maintenance charges assessed to us by our lessors.
Current wording
Net occupancy expense increased by $0.6 million or 6% in the second quarter of 2024 and by $1.2 million or 6% for the first six months of 2024 compared to the same periods in 2023. These increases were due to an increase in vacancies of spaces that we sublease, and an increase in common area maintenance charges assessed to us by our lessors.
Previous wording
Professional fees increased by $0.8 million or 20% for the first three months of 2024 compared to the same period in 2023 primarily due to an increase in consulting fees and the outsourcing of various support functions.
Current wording
Professional fees increased by $1.1 million or 13% for the first six months of 2024 compared to the same period in 2023 primarily due to an increase in consulting fees and the outsourcing of various support functions.
Previous wording
Total other expense decreased by $0.9 million or 6% for the first quarter of 2024 compared to the same period in 2023. This decrease was primarily due to lower broker's charges as a result of fewer customer swaps and lower energy tax credit partnership amortization expense.
Current wording
Total other expense decreased by $1.3 million or 4% for the six months of 2024 compared to the same period in 2023. This decrease was primarily due to lower advertising expense and lower broker's charges, which was the result of fewer customer swaps during the current period.
Previous wording
The provision for income taxes was $12.0 million in the first quarter of 2024, a decrease of $4.0 million compared to the same period in 2023. The effective tax rate for the first quarter of 2024 was 24.76%, a decrease from 25.38% for the same period in 2023. The lower effective tax rate in the first quarter of 2024 compared to the same period in 2023 was due to an increase in tax exempt income and tax benefits from low-income housing investments.
Current wording
The provision for income taxes was $23.2 million in the first six months of 2024, a decrease of $7.7 million compared to the same period in 2023. The effective tax rate for the first six months of 2024 was 24.76%, a decrease from 24.98% for the same period in 2023. The lower effective tax rate for the first six months of 2024 compared to the same period in 2023 was due to an increase in tax exempt income and an increase in benefits from our LIHTC investments.
Previous wording
The carrying value of our investment securities portfolio was $7.3 billion and $7.4 billion as of March 31, 2024, and December 31, 2023, respectively. The decrease is due to cash flows from the portfolio not being reinvested into securities.
Current wording
The carrying value of our investment securities portfolio was $7.1 billion and $7.4 billion as of June 30, 2024 and December 31, 2023, respectively. The decrease is primarily due to cash flows from the portfolio not being reinvested into securities.
Previous wording
Gross unrealized gains in our investment securities portfolio were $0.7 million as of March 31, 2024, and $0.7 million as of December 31, 2023. Gross unrealized losses in our investment securities portfolio were $1.1 billion as of March 31, 2024, and $1.0 billion as of December 31, 2023. The gross unrealized losses were primarily related to mortgage-backed securities issued by U.S. government agencies or U.S. government-sponsored enterprises. See Note 3 to the Consolidated Financial Statements for more information.
Current wording
Gross unrealized gains in our investment securities portfolio were $0.7 million as of June 30, 2024 and December 31, 2023. Gross unrealized losses in our investment securities portfolio were $1.1 billion as of June 30, 2024, and $1.0 billion as of December 31, 2023. The gross unrealized losses were primarily related to mortgage-backed securities issued by U.S. government agencies or U.S. government-sponsored enterprises. See Note 3 to the unaudited Consolidated Financial Statements for more information.
Previous wording
Commercial loans and leases as of March 31, 2024 remained relatively unchanged from December 31, 2023. Commercial and industrial loans increased by $16.8 million or 1% from December 31, 2023, primarily due to higher corporate demand for funding from the non-profit sector. PPP loans decreased by $1.2 million, or 10% from December 31, 2023, primarily due to paydowns. Commercial mortgage loans decreased by $34.0 million or 1% from December 31, 2023, primarily due to lowered demand from new and existing customers. Construction loans increased by $18.6 million or 6% from December 31, 2023, primarily due to demand from new and existing customers, offset by paydowns and loans converted to commercial mortgages. Lease financing decreased by $2.1 million, or 4% from December 31, 2023, primarily due to paydowns.
Current wording
Commercial loans and leases as of June 30, 2024 remained relatively unchanged from December 31, 2023. Commercial and industrial loans increased by $38.7 million or 2% from December 31, 2023, primarily due to higher demand for funding. PPP loans decreased by $3.4 million or 30% from December 31, 2023, primarily due to paydowns. Commercial mortgage loans decreased by $7.9 million, relatively unchanged from December 31, 2023. Construction loans increased by $11.1 million or 4% from December 31, 2023, primarily due to demand from new and existing customers. Lease financing decreased by $0.6 million or 1% from December 31, 2023, primarily due to paydowns.
Previous wording
Consumer loans and leases as of March 31, 2024, decreased by $109.3 million or 1% from December 31, 2023. Residential mortgage loans decreased by $67.3 million or 1% from December 31, 2023, primarily due to monthly amortizations on our loan portfolio and a decrease in the fair value adjustment of the closed pool of fixed-rate residential mortgages that are designated as the hedged item for our fair value hedges. Home equity portfolio decreased by $23.9 million or 1% from December 31, 2023, as a result of lower new originations. Automobile loans decreased by $12.0 million or 1% from December 31, 2023, as a result of increased competition in a higher rate environment. Other consumer loans decreased by $6.2 million or 2% from December 31, 2023, due to slowdown in new originations and continued loan paydowns, partially offset by increased lease production.
Current wording
Consumer loans and leases as of June 30, 2024, decreased by $171.8 million or 2% from December 31, 2023. Residential mortgage loans decreased by $88.6 million or 2% from December 31, 2023, primarily due to an increase in payoffs, monthly amortization on our loan portfolio and a decrease in the fair value adjustment of the closed pool of fixed-rate residential mortgages that are designated as the hedged item for our fair value hedge instruments. Home equity portfolio decreased by $43.8 million or 2% from December 31, 2023, as a result of lower originations. Automobile loans decreased by $31.6 million or 4% from December 31, 2023, as a result of increased competition in a higher rate environment. Other consumer loans decreased by $7.9 million or 2% from December 31, 2023, due to a slowdown in new originations and continued loan paydowns, partially offset by increased lease production.
Previous wording
Our commercial and consumer lending activities are concentrated primarily in Hawaii and the Pacific Islands. Our commercial loan and lease portfolio to borrowers based on the U.S. Mainland includes participation in shared national credits for customers whose operations and assets extend beyond Hawaii.
Current wording
Our commercial and consumer lending activities are concentrated primarily in Hawaii. Our commercial loan and lease portfolio to borrowers based on the U.S. Mainland includes participation in shared national credits for customers whose operations and assets extend beyond Hawaii.
Previous wording
Derivative financial instruments increased by $58.1 million due to increasing fair values of our interest rate swaps impacted by prevailing interest rates. Low-income housing and other equity investments decreased by $6.5 million due to the amortization of existing investments. Prepaid expenses increased by $4.7 million due to the restart of prepaid insurance in the new fiscal year. Deferred tax assets and tax receivable decreased by $8.6 million due to temporary differences between financial reporting and income tax basis of unrealized losses on investment securities and a lower federal income tax receivable.
Current wording
Low-income housing and other equity investments decreased by $3.1 million due to the amortization of existing investments. Derivative financial instruments increased by $67.0 million due to increasing fair values of our interest rate swaps impacted by prevailing interest rates. Prepaid expenses increased by $5.0 million due to the restart of prepaid insurance in the new fiscal year. Deferred compensation plan assets increased by $5.9 million mainly due to $4.5 million in contributions from plan participants during the period. Deferred tax assets and tax receivable decreased by $1.7 million due to temporary differences between financial reporting and income tax basis of unrealized losses on investment securities offset by a higher federal income tax receivable.
Previous wording
Total deposits were $20.7 billion as of March 31, 2024, a decrease of $378.5 million or 2% from December 31, 2023. Consumer deposits increased by $109.2 million primarily from increases of $86.6 million in time deposits and $22.6 million in core deposits. Commercial deposits decreased by $277.9 million due to a decrease of $278.8 million in core deposits, partially offset by an increase of $0.9 million in time deposits. Public and other deposits decreased by $209.8 million primarily from decreases of $144.2 million in core deposits and $65.6 million in time deposits.
Current wording
Total deposits were $20.4 billion as of June 30, 2024, a decrease of $646.6 million or 3% from December 31, 2023. Consumer deposits increased by $62.6 million due to an increase of $121.3 million in time deposits, partially offset by a decrease of $58.7 million in core deposits, which include all deposits excluding time deposits. Commercial deposits decreased by $605.6 million primarily from decreases of $499.5 million in core deposits and $106.1 million in time deposits. Public and other deposits decreased by $103.6 million due to a decrease of $171.8 million in time deposits, partially offset by an increase of $68.2 million in core deposits.
Previous wording
The increase in Money Market was primarily due to an increase in commercial deposits of $166.1 million offset by $20.9 million decrease in consumer deposits. The decrease in Regular Savings was primarily due to decreases in public deposits of $184.8 million and $37.9 million in commercial deposits, partially offset by an increase of $119.3 million in consumer deposits.
Current wording
The increase in Money Market was primarily due to an increase in commercial deposits of $73.5 million partially offset by $30.1 million decrease in consumer deposits. The decrease in Regular Savings was primarily due to decreases in public deposits of $147.5 million and $17.2 million in commercial deposits, partially offset by an increase of $139.7 million in consumer deposits.
Previous wording
Securities sold under agreements to repurchase were $150.5 million as of March 31, 2024, and December 31, 2023. As of March 31, 2024, the weighted-average maturity was 0.61 years for our repurchase agreements with government entities and 4.96 years for our repurchase agreements with private institutions. As of March 31, 2024, the weighted-average interest rates for outstanding agreements with government entities and private institutions were 1.55% and 3.80%, respectively, with all rates being fixed. Each of our repurchase agreements are accounted for as collateralized financing arrangements (i.e., a secured borrowing) and not as sales and subsequent repurchases of securities.
Current wording
Securities sold under agreements to repurchase were $100.5 million and $150.5 million as of June 30, 2024 and December 31, 2023, respectively. In May 2024, a private institution exercised their right to call on one repurchase agreement with a balance of $50.0 million, resulting in its termination. As of June 30, 2024, the weighted-average maturity was 0.36 years for our repurchase agreements with government entities and 4.38 years for our repurchase agreements with private institutions. The weighted-average interest rates as of June 30, 2024 for outstanding agreements with government entities and private institutions were 1.55% and 3.88%, respectively, with all rates being fixed. Each of our repurchase agreements are accounted for as collateralized financing arrangements (i.e., a secured borrowing) and not as sales and subsequent repurchases of securities.
Previous wording
Table 14 summarizes net income from our business segments. Additional information about segment performance is presented in Note 10 to the Consolidated Financial Statements.
Current wording
Table 14 summarizes net income from our business segments. Additional information about segment performance is presented in Note 10 to the unaudited Consolidated Financial Statements.
Previous wording
Net income decreased by $3.8 million or 11% in the first quarter of 2024 compared to the same period in 2023 primarily due to decreases in net interest income and noninterest income, partially offset by a decrease in noninterest expense. The decrease in net interest income was primarily due to a decrease in noninterest bearing and interest bearing demand deposits along with lower net spreads on interest bearing demand and savings. The decrease in net interest income was partially offset by increases to savings, and time deposit balances along with increased spreads on noninterest bearing deposits. The decrease in noninterest income was primarily due to a decrease in customer derivative program revenue, partially offset by an increase in account analysis revenue and loan fees. The decrease in noninterest expense is primarily due to reduced allocated administrative and support unit expenses, lower salaries & benefits, and lower broker charges related to the customer derivative program.
Current wording
Net income decreased by $1.4 million or 4.4% in the second quarter of 2024 compared to the same period in 2023 primarily due to decreases in net interest income and noninterest income, partially offset by a decrease in noninterest expense. The decrease in net interest income was primarily due to a lower realized net spread on savings deposits and a decrease in time deposit balances. The decrease in net interest income was partially offset by increases to savings and interest bearing deposit balances along with increased spreads on noninterest bearing deposits. The decrease in noninterest income was primarily due to a decrease in customer derivative program revenue and other loan fees, partially offset by an increase in account analysis revenue. The decrease in noninterest expense is primarily due to reduced allocated administrative and support unit expenses, lower salaries & benefits, and lower broker charges related to the customer derivative program.
Showing the first 40 of 53 pairs. Open the source sections for the rest.
Rearranged current paragraphs (3)
Current report — wording carried from elsewhere
On July 8, 2024, the Company announced that the Board of Directors declared the quarterly dividend payment of $8.89 per share, equivalent to $0.2223 per depositary share, on its preferred stock, Series B. The depositary shares representing the Series B Preferred Stock are traded on the NYSE under the symbol “BOH.PRB.” The dividend will be payable on August 1, 2024 to shareholders of record of the preferred stock as of the close of business on July 18, 2024.
Current report — wording carried from elsewhere
Net income decreased by $6.7 million in the second quarter of 2024 compared to the same period in 2023 primarily due to lower net interest income and noninterest income. This was partially offset by a lower provision for income taxes. The decrease in net interest income was primarily due to higher funding costs, partially offset by an increase in interest income from higher asset yields. The decrease in noninterest income is primarily due a $1.5 million gain from the sale of a property in the second quarter of 2023. The provision for income taxes in this business segment represents the residual amount to arrive at the total tax expense for the Company.
Current report — wording carried from elsewhere
In July 2024, the Parent’s Board of Directors declared a quarterly dividend payment of its Fixed Rate Non-Cumulative Perpetual Preferred Stock, Series B, of $8.89 per share, equivalent to $0.2223 per depositary share. The dividend will be payable on August 1, 2024, to shareholders of record of the preferred stock at the close of business on July 18, 2024.
Rearranged previous paragraphs (1)
Previous report — wording carried elsewhere
March 31, 2024, our available-for-sale investment securities portfolio was comprised of securities with an average base duration of approximately 3.68 years.