Bank Of Hawaii Corporation · NYSE:BOH
Bank Of Hawaii — Q3 2020 Earnings Presentation
53 slides from Bank Of Hawaii's earnings presentation, Oct 26, 2020
Slide 1: Bank of Hawaii Corporation Third Quarter 2020 Financial Results
Bank of Hawaii Corporation Third Quarter 2020 Financial Results October 26, 2020 Exhibit 99.2
Slide 2: Hawaii Unemployment Rate Experience & Forecast
2020 Unemployment Source: UHERO Base Case as of 9/25/20 Hawaii Unemployment Rate Experience & Forecast BAR CHART
Slide 3: Economic Forecast: Hawaii Unemployment Rate
Economic Forecast Source: UHERO Forecast Updates Hawaii Unemployment Rate Line Chart
Slide 4: Economic Forecast: Personal Income and Real GDP
Economic Forecast Personal Income Source: UHERO Forecast Updates BAR CHARTS Real GDP
Slide 5: Hawaii Real Estate Market
Hawaii Real Estate Market Oahu Market Indicators – 2020 vs 2019 SINGLE FAMILY HOMES 2020 YTD 2019 YTD % Sep 2020 Sep 2019 % Closed Sales 2,735 2,774 -1.4% 391 347 12.7% Median Sales Price (000s) $811 $785 3.3% $880 $777 13.3% Median Days on Market 17 23 -26.1% 9 29 -69.0% Months of Inventory 1.9 3.5
Slide 6: Daily Arrivals
Daily Arrivals Source: Hawaii Tourism Authority Trans-Pacific Passenger Arrivals in Thousands BAR CHART
Slide 7: COVID-19 Cases
COVID-19 Cases Source: USAFacts STATES / TERRITORIES WITH LOWEST CASES IN LAST 7 DAYS PER 100,000 Vermont 13 Maine 16 Hawaii 38 New Hampshire 42 Washington, D.C. 52 Oregon 54 New York 54 California 58 Washington 60 Maryland 71 United States 128 Source: NY Times as of 10/21/2020 Hawaii New COVID-19 C
Slide 8: Strong Credit Metrics, Loan and Deposit Growth, Liquidity, Capital
Strong Credit Metrics Continued Stable Loan Growth Strong Deposit Growth Well Managed Funding Costs Strong Liquidity Solid Capital Levels Well Positioned
Slide 9: Credit Overview
4M Bank of Hawaii Credit Overview
Slide 10: Loan Portfolio Excluding PPP
40% Commercial 67% Real Estate Secured Wtd Avg LTV 55% 66% w/ BOH ≥ 10 yrs Avg Balance $0.5 MM CRE C&I Residential Mortgage Home Equity Auto Leasing Other Construction 60% Consumer 83% Real Estate Secured Wtd Avg LTV 56% 56% w/ BOH ≥ 10 yrs 76% of Portfolio Secured with Quality Real Estate with Comb
Slide 11: Credit Quality
Credit Quality $ in millions Net Charge-offs Nonperforming Assets Delinquencies Criticized Bar Charts
Slide 12: Third Quarter 2020 Reserve Build
Portfolio 12/31/2019 CECL adoption impact 1Q20 Build 3/31/2020 2Q20 Build 6/30/2020 3Q20 Build 9/30/2020 Consumer 36.2 17.1 16.9 70.2 30.7 100.9 22.3 123.2 Commercial 73.8 (18.8) 13.0 68.0 4.5 72.5 7.8 80.3 Total 110.0 (1.7) 29.9 138.2 35.2 173.4 30.1 203.5 Coverage 1.00% -0.01% 0.23% 1.22% 0.25% 1.
Slide 13: Customer Relief Update: Deferrals & Extensions as of 9/30/20
Customer Relief Update Deferrals & Extensions as of 9/30/20 $1,528 million (13.0%) Consumer 5.9% Outstandings Commercial 7.1% Outstandings Total Modifications 13.0% Outstandings Pie charts
Slide 14: Weekly Payment Deferrals Granted
Weekly Payment Deferrals Granted 16,778 Accounts as of September 30th Deceleration in Activity Since Peak in April 99% decline since peak Customer Relief Update $ in millions Line Charts
Slide 15: Customer Relief Update: Deferrals & Extensions as of 10/23/20
Customer Relief Update $1,013 Million (8.6%) Deferrals & Extensions as of 10/23/20 Consumer 4.5% Outstandings Commercial 4.1% Outstandings Total Modifications 8.6% Outstandings Pie charts
Slide 16: Customer Relief Update: Deferral and Extension Timeline
Customer Relief Update 45% Decline from June 30, 2020 8.6% 15.7% 13.0% Deferrals and Extension Timeline Bar Chart
Slide 17: Consumer Customer Relief
69% Secured with 61% Weighted Average LTV as of 9/30/20 60% Wtd Avg LTV 780 Wtd Avg FICO 3% <700 FICO/>70% LTV 65% Wtd Avg CLTV 752 Wtd Avg FICO 10% <700 FICO/>70% LTV 675 Wtd Avg FICO 42% ≥ 700 FICO 719 Wtd Avg FICO 64% ≥ 700 FICO Consumer Customer Relief * Indirect excludes recourse loans ($23MM)
Slide 18: Commercial Customer Relief
85% Secured with 51% Weighted Average LTV as of 9/30/20 51% Wtd Avg LTV 81% ≤ 65% LTV $3.6MM Avg Loan 45% Wtd Avg LTV 48% ≤ 65% LTV $2.1MM Avg Loan $0.3MM Avg Loan Commercial Customer Relief $837 million (7.1%) Bar Chart
Slide 19: High Risk Industries
all others Lodging` retail retail lodging High Risk Industries $1,456 million (12%) / $1,305 million (11%) Excluding PPP Retail Balance Growth (Q3 V Q2) Lodging Balance Growth (Q3 V Q2) Restaurant/Entertainment Balance Growth (Q3 V Q2) Bar Charts Pie chart
Slide 20: Retail
Retail $648 million (5%) - Excluding PPP 91% Real Estate Secured 55% Wtd Avg LTV Average Exposure $3.4 MM Largest Exposure $40 MM 66% of Portfolio has an LTV ≤ 65% 96.9% is Secured or has Essential Anchor 0.9% Unsecured and Deferred 99.95% Secured or Paying Interest Real Estate Secured Secured 91% U
Slide 21: Lodging
Lodging $503 million (4%) - Excluding PPP 78% Real Estate Secured 51% Wtd Avg LTV Average Exposure $8.9 MM Largest Exposure $40 MM 79% of Portfolio has an LTV ≤ 65% 93% of Unsecured Outstandings to Global Hotel and Timeshare Brands 5.3% Unsecured and Deferred 95.1% Secured or Paying Interest Real Es
Slide 22: Restaurant/Entertainment
Restaurant/Entertainment $154 million (1%) - Excluding PPP 38% Real Estate Secured 64% Wtd Avg LTV Average Exposure $1.6 MM Largest Exposure $25.7 MM 47% of Portfolio has an LTV ≤ 65% $32.9 MM Unsecured and Deferred Average Exposure $0.5 MM 98.8% Secured or Paying Interest Real Estate Secured Secure
Slide 23: Financial Overview
4M Bank of Hawaii Financial Overview
Slide 24: Stable Net Interest Income
Stable Net Interest Income $ in millions Note: Q2 2020 includes $2.9MM interest recovery Net Interest Income Steady Despite Sharply Lower Interest Rates and Margin Pressure Line Chart
Slide 25: Long History of Deposit Growth
Long History of Deposit Growth History of Deposit Growth by Segment $ in millions CAGR: 6.18% Line Chart
Slide 26: Deposit Rate Trends
Deposit Rate Trends Well-Managed Deposit Rates and Funding Costs Remain Low $ in millions Line Chart
Slide 27: Ample Liquidity to Fund Continued Growth
Ample Liquidity to Fund Continued Growth Loan to Deposit Ratio Compared with Peers Strong Liquidity Note: S&P Regional Bank Index excluding banks greater than $50 B Line Chart
Slide 28: Investment Portfolio & Duration
Investment Portfolio & Duration $ in millions Investment Securities Portfolio Consists of High-Quality Securities Highly liquid and pledgeable Secure and reliable cash flows Duration (yrs) AFS 3.59 HTM 3.49 Total 3.54 Premium Amortization $9.1 Moody’s Rating AAA 96% AA 1% A 3% Total Investment Portf
Slide 29: Long History of Stable Loan Growth
Long History of Stable Loan Growth History of Loan Growth by Segment $ in millions CAGR: 8.47% Bar Chart
Slide 30: Disciplined Expense Management
Disciplined Expense Management $ in millions Source: UHERO, Inflation (Honolulu CPI) NIE CAGR: 0.8% Average Inflation: 1.9% Long Term Disciplined Expense Management Bar Chart
Slide 31: Reserve and Capital Build
Reserve and Capital Build $ in millions Note: Dividend amount shown is pre-tax YTD 2020 Bar Chart
Slide 32: Fortress Capital Position Improving
Growth in Risk-Based Capital, Well in Excess of Required Minimums Fortress Capital Position Improving Tier 1 Capital CET 1 Total Capital Bar Chart
Slide 33: Financial Summary
Financial Summary $ in millions, except per share amounts 3Q 2020 2Q 2020 3Q 2019 ∆ 2Q 2020 ∆ 3Q 2019 Net Interest Income $ 124.2 $ 126.7 $ 124.9 $ (2.5) $ (0.7) Noninterest Income 41.7 51.3 46.5 (9.5) (4.8) Total Revenue 165.9 178.0 171.4 (12.1) (5.5) Noninterest Expense 89.9 88.9 100.3 1.1 (10.4)
Slide 34: Performance Metrics
Performance Metrics 3Q 2020 2Q 2020 3Q 2019 ∆ 2Q 2020 ∆ 3Q 2019 Return on Assets 0.76% 0.82% 1.17% -0.06% -0.41% Return on Equity 11.01% 11.58% 16.02% -0.57% -5.01% Net Interest Margin 2.67% 2.83% 3.01% -0.16% -0.34% Efficiency Ratio 54.2% 50.0% 58.5% 4.3% -4.3% Note: Numbers may not add up due to r
Slide 35: Bank of Hawaii Corporation Third Quarter 2020 Financial Results
Bank of Hawaii Corporation Third Quarter 2020 Financial Results October 26, 2020
Slide 36: Appendix
APPENDIX
Slide 37: Residential Mortgage – Current LTV
Residential Mortgage Current LTV Residential Mortgage – Current LTV Bar Chart
Slide 38: Residential Mortgage – Monitoring FICO
Residential Mortgage Monitoring FICO Residential Mortgage – Monitoring FICO Bar Chart
Slide 39: Home Equity – Current CLTV
Home Equity Current CLTV Home Equity – Current CLTV Bar Chart
Slide 40: Home Equity – Monitoring FICO
Home Equity Monitoring FICO Home Equity – Monitoring FICO Bar Chart
Slide 41: Automobile – DTI
Automobile DTI Automobile – DTI Bar Chart
Slide 42: Automobile – Monitoring FICO
Automobile Monitoring FICO Automobile – Monitoring FICO Bar Chart
Slide 43: Other Consumer – Delinquency Status
Other Consumer Delinquency Status Other Consumer - Delinquency Status Bar Chart
Slide 44: Other Consumer – Monitoring FICO
Other Consumer Monitoring FICO Other Consumer - Monitoring FICO Bar Chart
Slide 45: Commercial & Industrial – Leveraged vs Other
Commercial & Industrial Leveraged vs Other Commercial & Industrial - Leveraged Leveraged 3% Other 97%
Slide 46: Commercial Mortgage – Current LTV
Commercial Mortgage Current LTV Commercial Mortgage - Current LTV Bar Chart
Slide 47: Commercial Mortgage Detail Current LTV
Commercial Mortgage Detail Current LTV CM Industrial - Current LTV CM Multi Family - Current LTV CM Retail - Current LTV CM Lodging - Current LTV Bar Charts
Slide 48: Construction – Current LTV
Construction Current LTV Construction - Current LTV Bar Chart
Slide 49: Lease Financing – Leveraged vs Non-Leveraged
Lease Financing Leveraged vs Non-Leveraged Lease Financing - Leveraged vs Non-Leveraged Leveraged 22% Non-Leveraged 78%
Slide 50: Solid Base of Core Customers and Core Deposits
As of September 30, 2020 Solid Base of Core Customers and Core Deposits 90% Core Consumer and Commercial Customers 90% Core Checking and Savings Deposits Strong Mix of Deposits Public Funds 10% Commercial 40% Consumer 50% Time 10% Savings 38% Checking 52%
Slide 51: Disciplined Capital Management
Disciplined Capital Management $ in millions Bar Chart
Slide 52: Long and Unbroken History of Dividends
Note: Historical dividends adjusted for stock splits. YTD 2020 dividend annualized. Financial Crisis Recession Recession Long and Unbroken History of Dividends Unbroken History of Dividends Line Chart
Slide 53: History of Deposit Growth by Product
History of Deposit Growth by Product $ in millions Bar Chart