Bank Of Hawaii Corporation · NYSE:BOH
Bank Of Hawaii — Q4 2020 Earnings Presentation
48 slides from Bank Of Hawaii's earnings presentation, Jan 25, 2021
Slide 1: Bank of Hawaii Corporation Fourth Quarter 2020 Financial Report
Bank of Hawaii Corporation fourth quarter 2020 financial report january 25, 2021 Exhibit 99.2
Slide 2: Forward-looking statements
this presentation, and other statements made by the Company in connection with it, may contain forward-looking statements concerning, among other things, forecasts of our financial results and condition, expectations for our operations and business prospects, and our assumptions used in those foreca
Slide 3: Well positioned
4H Bank of Hawaii Corporation stabilizing economy stable revenue & balance sheet growth disciplined expense management fortress capital & liquidity position improving deferral loan population ll positioned
Slide 4: 2020 unemployment experience & forecast
2020 unemployment experience & forecast 4 source: UHERO base case as of 12/19/20 Hawaii unemployment rate
Slide 5: Economic forecast
economic forecast source: UHERO Hawaii unemployment rate 5
Slide 6: Economic forecast
economic forecast source: UHERO 6
Slide 7: Hawaii real estate market
Hawaii real estate market Oahu market indicators – 2020 vs 2019 7 source: Honolulu Board of Realtors, compiled from MLS data
Slide 8: Daily arrivals total passenger count
daily arrivals total passenger count* 8 *source: Department of Business, Economic Development, and Tourism, excluding from Canada 10/15: launch of Safe Travels program
Slide 9: COVID-19 cases
COVID-19 cases 9 source: Washington Post as of 1/20/21 US overall 60
Slide 10: Q4 financial update
4H Bank of Hawaii Corporation Q4 financial update
Slide 11: Financial summary
financial summary $ in millions, except per share amounts 11 note: numbers may not add up due to rounding
Slide 12: Excess liquidity deployed into investment portfolio
12 excess liquidity deployed into high-quality, low-risk investment portfolio investment portfolio Highly liquid and pledgeable Secure and reliable cash flows
Slide 13: Performance metrics
performance metrics 4 Bank of Hawaii ~— Corporation | 4Q 2020 32020 A3Q2020 4Q2019 4 4Q 2019 i 2020 =A 2019 return on assets 0.83% 0.76% 007% 129% — (0.46)% | 0.79% (0.50)% return on equity 12.26% 11.01% 1.25% 17.84% — (5.58)% | 11.38% (6.27)% net interest margin 248% — 267% — (0.19)% 2.95% — (0.47)
Slide 14: Q4 credit update
4H Bank of Hawaii Corporation Q4 credit update
Slide 15: Loan portfolio excluding PPP
loan portfolio excluding PPP 15 40% commercial 68% real estate secured wtd avg LTV 56% 66% w/ BOH ≥ 10 yrs avg balance $0.5 MM CRE C&I residential mortgage home equity auto leasing other construction 60% consumer 84% real estate secured wtd avg LTV 56% 56% w/ BOH ≥ 10 yrs 78% of portfolio secured wi
Slide 16: Customer relief update
customer relief update 77% decline from June 30, 2020 16 15.7% 13.0% 4.1% 3.6% 86% secured
Slide 17: Credit quality
credit quality $ in millions 17 * 60% of total criticized in CRE with 58% wtd avg LTV
Slide 18: 2020 reserve build
2020 reserve build $ in millions 18
Slide 19: Looking forward
4H Bank of Hawaii Corporation looking forward
Slide 20: 2021 macro environment
2021 macro environment 20 economic growth conditioned on COVID-19 conditions and trajectory accommodative monetary environment changed consumer preference
Slide 21: 2021 priorities
2021 priorities 21 continued risk vigilance support the recovery lean into evolving consumer preference self fund growth
Slide 22: Steady market share performance
steady market share performance 3-years 5-years 10-years loans deposits source: FDIC data, Bloomberg exceptional capital & liquidity position customer outreach deep market knowledge digital support the recovery 22 0.9% 1.7% 1.8% 2.9% 4.9% 0.7%
Slide 23: Evolving consumer preference
evolving consumer preference 23 rapid change in certain consumer preferences span of change likely to extend to 18 to 24 months in total from March 2020 degree of snap back dependent on perception – enhancement or inconvenience? “new” normal
Slide 24: Evolving consumer preference: in-person branch transactions
evolving consumer preference 24 down 49% YoY & YTD in-person branch transactions have fallen sharply
Slide 25: Evolving consumer preference: transactor type
evolving consumer preference 25 transactor type
Slide 26: Consumer digital deposit migration
evolving consumer preference 26 consumer digital deposit migration
Slide 27: Growing number of Zelle transactions
evolving consumer preference 27 growing number of Zelle transactions
Slide 28: Core competency: self fund growth
core competency strategic & long-term oriented internally driven never ending self fund growth 28
Slide 29: Proven expense discipline
proven expense discipline 29 Honolulu inflation CAGR: 1.9% 1.4% CAGR 2,022 FTE $ in millions
Slide 30: Commitment to future growth
commitment to future growth 30 2,022 FTE annual innovation expense digital environment digital marketing data analytics customer experience IT capacity build operational efficiency annual innovation expense plus other IT project annual expense annual innovation expense $ in millions
Slide 31: Digital sub-brand and SimpliFi Arena
digital sub-brand launch in 2017 10-year naming agreement with University of Hawaii main and most prominent arena sports venue in the state SimpliFi Arena 31
Slide 32: 2021 programs
2021 programs 4 Bank of Hawaii "Corporation | Branch/ATM optimization efforts + closure of 12 in-store format branches + sunset 50 cash dispensing ATMs + $6.1 million one time cost, $5.1 million in annual savings Voluntary Separation Incentive Program + separation incentive eligible to employees wit
Slide 33: Competitive innovation edge
competitive innovation edge 33
Slide 34: Q&A
4H Bank of Hawaii Corporation Q&A
Slide 35: Bank of Hawaii Corporation Fourth Quarter 2020 Financial Report
Bank of Hawaii Corporation fourth quarter 2020 financial report january 25, 2021
Slide 36: Appendix
4H Bank of Hawaii Corporation appendix
Slide 37: Loan growth
37 CAGR: 8.7% loan growth source: market share calculated from FDIC data per Bloomberg $ in millions
Slide 38: Deposit growth
38 CAGR: 6.6% deposit growth $ in millions source: market share calculated from FDIC data per Bloomberg
Slide 39: Growing low cost deposits
growing low cost deposits 39 continuing to build very low cost funding to mitigate impact of low rates $ in millions
Slide 40: Funding opportunities: loan to deposit ratio vs peers
funding opportunities loan to deposit ratio compared with peers 40 note: S&P Regional Bank Index excluding banks greater than $50 B; 2020 peer data reflects Q3 2020 strong liquidity to fund continued growth
Slide 41: Strong risk-based capital
41 strong risk-based capital, well in excess of required minimums tier 1 capital CET 1 total capital fortress capital position
Slide 42: Unbroken history of dividends
42 note: historical dividends adjusted for stock splits. Financial Crisis recession recession COVID-19 unbroken history of dividends
Slide 43: Consumer relief
43 87% secured with 65% weighted average LTV as of 12/31/20 consumer relief $177 million (1.5%) 666 wtd avg FICO 28% wtd avg DTI 64% wtd avg CLTV 727 wtd avg FICO 16% <700 FICO / >70% CLTV 65% wtd avg LTV 762 wtd avg FICO 8% <700 FICO / >70% LTV * indirect excludes recourse loans ($1MM) **other incl
Slide 44: Commercial relief
44 84% secured with 47% weighted average LTV as of 12/31/20 90% continue to pay interest commercial relief $312 million (2.6%) 69% wtd avg LTV 32% ≤ 65% LTV $2.7 MM avg loan $0.4 MM avg loan 46% wtd avg LTV 91% ≤ 65% LTV $3.2 MM avg loan
Slide 45: High risk industries
45 high risk industries $1,508 million (13%) / $1,360 million (11%) excluding PPP
Slide 46: Retail
46 retail $695 million (6%) – excluding PPP 93% real estate secured 56% wtd avg LTV average exposure $3.5 MM largest exposure $40 MM 60% of portfolio has an LTV ≤ 65% 98.1% is secured or has essential anchor 0.04% unsecured and deferred 99.997% secured or paying interest
Slide 47: Lodging
47 lodging $508 million (4%) – excluding PPP 79% real estate secured 51% wtd avg LTV average exposure $9.4 MM largest exposure $40 MM 80% of portfolio has an LTV ≤ 65% 93% of unsecured outstandings to global hotel and timeshare brands 0.3% unsecured and deferred 99.9% secured or paying interest
Slide 48: Restaurant / entertainment
48 restaurant / entertainment $157 million (1%) – excluding PPP 39% real estate secured 64% wtd avg LTV average exposure $1.7 MM largest exposure $25.9 MM 44% of portfolio has an LTV ≤ 65% $26.8 MM unsecured and deferred average exposure $0.5 MM 99.5% secured or paying interest