Bank of Hawaii Q1 financial results

HONOLULU, HI—Bank of Hawaii Corp. yesterday reported diluted earnings per share of $0.87 for the first quarter of 2014, down from $0.88 in the previous quarter and up from $0.81 in the same quarter last year. Net income for the first quarter of 2014 was $38.6 million, a decrease of $0.5 million compared with net income of $39.1 million in the fourth quarter of 2013, and up $2.6 million from net income of $36.0 million in the first quarter of 2013. 
Loan and lease balances increased to $6.2 billion at March 31, 2014, up 1.9 percent from December 31, 2013 and 7.4 percent compared with March 31, 2013. Deposit growth remained strong during the quarter, increasing 1.1 percent from December 31, 2013 and 7.0 percent from March 31, 2013. The net interest margin increased to 2.87 percent during the first quarter of 2014 compared with 2.85 percent in the previous quarter and 2.82 percent in the same quarter last year.

“Bank of Hawaii Corporation had a good start in 2014 with solid performance in the first quarter,” said Peter S. Ho, Chairman, President, and CEO. “Our balance sheet remains strong and we maintained our disciplined approach to risk and capital management. Our loan and deposit balances continued to grow during the quarter and we are continuing to see the benefits of our expense initiatives.”

The return on average assets for the first quarter of 2014 was 1.12 percent, unchanged from the previous quarter and up from 1.08 percent in the same quarter last year. The return on average equity for the first quarter of 2014 was 15.15 percent compared with 15.36 percent in the fourth quarter of 2013 and 14.10 percent in the first quarter of 2013. The efficiency ratio during the first quarter of 2014 was 60.54 percent compared with 59.99 percent in the previous quarter and 61.90 percent in the same quarter last year.

Financial highlights

Net interest income, on a taxable-equivalent basis, for the first quarter of 2014 was $96.1 million, up $1.3 million from net interest income of $94.8 million in the fourth quarter of 2013, and up $5.1 million from net interest income of $91.0 million in the first quarter of 2013.

The net interest margin was 2.87 percent for the first quarter of 2014, an increase of 2 basis points compared with the net interest margin of 2.85 percent in the fourth quarter of 2013, and a 5 basis point increase from 2.82 percent in the first quarter of 2013.

Noninterest income was $44.8 million for the first quarter of 2014, a decrease of $0.5 million compared with noninterest income of $45.3 million in the fourth quarter of 2013, and a decrease of $3.0 million compared with noninterest income of $47.8 million in the first quarter of 2013. Noninterest income included a gain of $2.0 million resulting from the sale of 22,000 Visa Class B shares (9,253 Class A equivalents) during the first quarter of 2014. The Company also contributed 5,500 Visa Class B shares to the Bank of Hawaii Foundation. The contribution had no impact on noninterest expense; however, the contribution did favorably impact the effective tax rate for the first quarter of 2014. As of March 31, 2014, the Company has 482,114 Visa Class B shares remaining (202,777 Class A equivalents). Noninterest income in the first quarter of 2014 included mortgage banking revenue of $2.0 compared with mortgage banking revenue of $2.8 million in the previous quarter and $6.4 million in the same quarter last year.

Noninterest expense was $83.5 million in the first quarter of 2014, up $1.1 million from noninterest expense of $82.4 million in the fourth quarter of 2013, and down $0.8 million from noninterest expense of $84.4 million in the same quarter last year. Noninterest expense in the first quarter of 2014 included seasonal payroll-related expenses resulting from annual payments from the Company’s incentive compensation plans and higher payroll taxes, and a $0.7 million increase in operating losses.

The effective tax rate for the first quarter of 2014 was 29.13 percent compared with 28.96 percent in the previous quarter and 30.74 percent during the same quarter last year.(BOH)