Bank of Hawaii Corporation Third Quarter 2006 Financial Results.* Board of Directors Increases Dividend 11 Percent to $0.41 Per Share HONOLULU Honolulu (hŏn'əl  `l, hōnō–), city (1990 pop. -- Bank of Hawaii Bank of Hawaii, a subsidiary of Bank of Hawaii Corporation (NYSE: BOH), is a regional commercial bank headquartered in Honolulu, Hawaii. It is Hawaii's second oldest bank and its largest locally owned bank in that majority of the voting stockholders reside within the state. Corporation (NYSE NYSESee: New York Stock Exchange : BOH BOH Bournemouth (UK) Airport Identifier BOH Bank of Hawaii BOH Board of Health BOH Back Of House BOH Board of Housing (Montana Dept of Commerce) BOH Badge of Honor BOH Bridge Of Hope BOH Bag of Holding ) today reported diluted earnings per share diluted earnings per share An earnings measure calculated by dividing net income less preferred stock dividends for a period by the average number of shares of common stock that would be outstanding if all convertible securities were converted into shares of of $0.93 for the third quarter of 2006, up from $0.85 in the third quarter of 2005 and up from $0.73 in the second quarter of 2006. Net income for the third quarter of 2006 was $46.9 million, up $2.1 million from $44.8 million in the third quarter of 2005 and up $9.7 million from $37.2 million in the second quarter of 2006. The return on average assets for the third quarter of 2006 was 1.81 percent, compared to 1.74 percent in the third quarter of 2005 and 1.47 percent in the second quarter of 2006. The return on average shareholders equity was 27.09 percent for the third quarter of 2006, up from 24.61 percent in the third quarter last year and up from 21.70 percent in the previous quarter. "Bank of Hawaii Corporation had another solid financial performance during the third quarter of 2006 despite a challenging rate environment," said Allan Allan can refer to:
American politician who served as governor of Kansas (1933-1937) and ran unsuccessfully for President on the 1936 Republican ticket. , Chairman and CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. . "Loan growth and asset quality were strong during the third quarter and we were able to stabilize stabilize See peg. net interest income and overall deposit levels." For the nine months ended September September: see month. 30, 2006, net income was $129.4 million, down $7.3 million compared to net income of $136.8 million for the same period last year. Diluted earnings per share were $2.53 for the nine month period in 2006, down from diluted earnings per share of $2.55 for the same period in 2005. Results for 2006 include a charge of $8.8 million, or $0.17 per diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. share, as a result of the May 2006 Tax Increase Prevention and Reconciliation Act ("TIPRA TIPRA Tax Increase Prevention and Reconciliation Act of 2005 (Federal Tax Legislation) "), which repealed the exclusion from federal income taxation of a portion of the income from foreign sales corporations Foreign Sales Corporation (FSC) A special type of corporation created by the Tax Reform Act of 1984 that is designed to provide a tax incentive for exporting U.S.-produced goods. . Excluding the TIPRA adjustment, results for the nine months ended September 30, 2006 were $138.3 million, an increase of $1.5 million compared with the same period last year. Results for the nine month period in 2006 included a provision for credit losses of $7.6 million compared to a provision for credit losses of $3.0 million during the comparable period in 2005. The year-to-date Year-to-date (YTD) The period beginning at the start of the calendar year up to the current date. return on average assets was 1.70 percent, down from 1.83 percent for the same period in 2005. The year-to-date return on average shareholders equity was 24.99 percent, up from 24.72 percent for the nine months ended September 30, 2005. Financial Highlights Net interest income, on a taxable equivalent basis, for the third quarter of 2006 was $100.5 million, down $1.6 million from $102.1 million in the third quarter of 2005 and up $0.5 million from $100.0 million in the second quarter of 2006. An analysis of the change in net interest income from the previous quarter is included in Table 6. The net interest margin was 4.20 percent for the third quarter of 2006, a 10 basis point decrease from 4.30 percent in the third quarter of 2005 and a 5 basis point decrease from 4.25 percent in the second quarter of 2006. The decrease was primarily due to the effects of the inverted yield curve Inverted Yield Curve Usually a chart showing long-term debt instruments that have lower yields than short-term debt instruments. It is sometimes referred to as a negative yield curve. in the third quarter of 2006 and a continued shift in the funding mix. Results for the third quarter of 2006 included a provision for credit losses of $2.8 million compared to $3.0 million in the third quarter of 2005 and $2.1 million in the second quarter of 2006. Noninterest income was $56.9 million for the third quarter of 2006, an increase of $1.4 million or 2.5 percent compared to noninterest income of $55.5 million in the third quarter of 2005 and up $3.7 million or 6.9 percent compared to noninterest income of $53.2 million in the second quarter of 2006. Noninterest expense was $79.8 million in the third quarter of 2006, down $4.8 million or 5.7 percent from noninterest expense of $84.6 million in the same quarter last year and up $1.1 million or 1.3 percent from $78.7 million in the prior quarter. An analysis of salary and benefit expenses is included in Table 7. The efficiency ratio for the third quarter of 2006 was 50.75 percent, an improvement from 53.72 percent in the same quarter last year and from 51.45 percent in the previous quarter. For the nine months ended September 30, 2006, the efficiency ratio was 51.47 percent compared to 52.90 percent for the same period in 2005. The Company's business segments are defined as Retail Banking, Commercial Banking, Investment Services Group, and Treasury and Other Corporate. Results are determined based on the Company's internal financial management reporting process and organizational structure  This article has no lead section.To comply with Wikipedia's lead section guidelines, one should be written. . Selected financial information for the business segments is included in Tables 11a and 11b. Asset Quality Asset quality remained strong during the third quarter of 2006. Non-performing assets were $5.4 million at the end of the quarter, down $2.8 million, or 34.0 percent, compared to $8.3 million at the end of the same quarter last year and essentially flat with the end of the previous quarter. The ratio of non-performing assets to total loans, foreclosed real estate, and other investments at September 30, 2006 was 0.08 percent, down from 0.13 percent at September 30, 2005 and unchanged from June 30, 2006. Non-accrual loans and leases were $5.0 million at September 30, 2006, down $2.2 million or 30.8 percent from $7.2 million at September 30, 2005 and down approximately $0.2 million, or 3.1 percent from $5.1 million at June 30, 2006. Non-accrual loans and leases as a percentage of total loans and leases at September 30, 2006 were 0.08 percent, down from 0.12 percent at September 30, 2005 and unchanged from June 30, 2006. Net charge-offs for the third quarter of 2006 were $2.8 million or 0.17 percent annualized annualized Of or relating to a variable that has been mathematically converted to a yearly rate. Inflation and interest rates are generally annualized since it is on this basis that these two variables are ordinarily stated and compared. of total average loans and leases compared to net charge-offs of $13.0 million or 0.84 percent annualized of total average loans and leases in the same quarter last year. Net charge-offs during the third quarter of 2005 included a $10.0 million write-off Write-Off A reduction in the value of an asset or earnings by the amount of an expense or loss. Companies are able to write off certain expenses that are required to run the business, or have been incurred in the operation of the business and detract from retained revenues. of a fully reserved aircraft lease. Net charge-offs for the second quarter of 2006 were $2.1 million or 0.13 percent annualized of total average loans and leases. Details of the reserve for credit losses are summarized in Table 10. The allowance for loan and lease losses was $90.8 million at September 30, 2006, down $0.9 million from $91.7 million at September 30, 2005 and down $0.2 million from $91.0 million at June 30, 2006. The ratio of allowance for loan and lease losses to total loans was 1.40 percent at September 30, 2006, down from 1.48 percent at September 30, 2005 and down from 1.41 percent at June 30, 2006. The reserve for unfunded commitments at September 30, 2006 was $5.4 million, up from $4.5 million at September 30, 2005 and up from $5.1 million at June 30, 2006. Credit exposure to the air transportation industry is summarized in Table 8. Other Financial Highlights Total assets were $10.37 billion at September 30, 2006, up $286 million from $10.09 billion at September 30, 2005 and up $46 million from $10.33 billion at June 30, 2006. Total loans and leases were $6.49 billion at September 30, 2006, up $287 million from $6.20 billion at September 30, 2005 and up $47 million from $6.44 billion at June 30, 2006. Commercial loans were $2.36 billion at September 30, 2006, up $170 million from $2.19 billion at September 30, 2005 and up $42 million from $2.32 billion at June 30, 2006. Consumer loans were $4.13 billion at September 30, 2006, up $116 million from $4.01 billion at September 30, 2005 and up $6 million from $4.13 billion at June 30, 2006. Total deposits at September 30, 2006 were $7.69 billion, down $69 million from $7.76 billion at September 30, 2005 and down $79 million from $7.77 billion at June 30, 2006. Despite lower deposit balances, the total number of business and consumer deposit accounts increased compared to June 30, 2006 and September 30, 2005. Average total deposits were $7.73 billion during the third quarter of 2006, down $102 million from the same quarter last year and up $4 million from $7.73 billion during the previous quarter. During the third quarter of 2006, the Company repurchased 950.0 thousand shares of common stock at a total cost of $46.6 million under its share repurchase Share Repurchase A program by which a company buys back its own shares from the marketplace, reducing the number of outstanding shares. This is usually an indication that the company's management thinks the shares are undervalued. program. The average cost was $49.03 per share repurchased. From the beginning of the share repurchase program in July 2001 through September 30, 2006, the Company repurchased a total of 42.1 million shares and returned over $1.4 billion to shareholders at an average cost of $34.22 per share. From October 1, 2006 through October 20, 2006, the Company has repurchased an additional 122.5 thousand shares of common stock at an average cost of $48.36 per share. Remaining buyback Buyback The buying back of outstanding shares (repurchase) by a company in order to reduce the number of shares on the market. Companies will buyback shares either to increase the value of shares still available (reducing supply), or to eliminate any threats by shareholders who may authority under the share repurchase program was $102.5 million at October 20, 2006. At September 30, 2006 the Tier 1 leverage ratio was 6.90 percent compared to 6.98 percent at September 30, 2005 and 7.09 percent at June 30, 2006. The Company's Board of Directors has declared a quarterly cash dividend of $0.41 per share on the Company's outstanding shares. The dividend will be payable on December 14, 2006 to shareholders of record at the close of business on November 30, 2006. Financial Outlook The Company's previous earnings estimate of approximately $178 million in net income for the full year of 2006 remains unchanged. An analysis of credit quality is performed quarterly to determine the adequacy of the reserve for credit losses. This analysis determines the timing and amount of the provision for credit losses. Forward-Looking Statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. This news release contains, and other statements made by the Company in connection with this earnings release may contain, forward-looking statements concerning, among other things, the economic and business environment in our service area and elsewhere, credit quality, anticipated net income and other financial and business matters in future periods. 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 for a variety of reasons, including, but not limited to: 1) unanticipated changes in business and economic conditions, the competitive environment, taxing authority interpretations, legislation in Hawaii and the other markets we serve, or the timing and interpretation of proposed accounting standards; 2) changes in our credit quality or risk profile that may increase or decrease the required level of reserve for credit losses; 3) changes in market interest rates that may affect our credit markets and ability to maintain our net interest margin; 4) unpredictable costs and other consequences of legal, tax or regulatory matters involving the Company; 5) changes to the amount and timing of our proposed equity repurchases; 6) real or threatened acts of war Tom Clancy's Op-Center: Acts of War is a technothriller by Jeff Rovin Plot introduction The mobile Regional Operations Center (ROC) in Turkey investigates a dam blown up by Kurdish terrorists. or terrorist activity affecting business conditions; and 7) adverse weather, public health, and other natural hazards or conditions impacting the Company and its customers' operations. For further discussion of these and other risks and uncertainties that could cause actual results to differ materially from such forward-looking statements, please refer to the risk factors discussed in our Annual Report on Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. for the year ended December 31, 2005 filed with the U.S. Securities and Exchange Commission. We do not undertake an obligation to update forward-looking statements to reflect later events or circumstances CIRCUMSTANCES, evidence. The particulars which accompany a fact. 2. The facts proved are either possible or impossible, ordinary and probable, or extraordinary and improbable, recent or ancient; they may have happened near us, or afar off; they are public or . Conference Call Information The Company will review its third quarter 2006 financial results today at 8:00 a.m. Hawaii Time Noun 1. Hawaii Time - standard time in the 10th time zone west of Greenwich, reckoned at the 150th meridian west; used in Hawaii and the western Aleutian Islands Hawaii Standard Time (2:00 p.m. Eastern Time). The presentation will be accessible via teleconference and via the Investor Relations Investor relations The process by which the corporation communicates with its investors. link of Bank of Hawaii Corporation's web site, www.boh.com. The conference call number is 800-299-7928 in the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. or 617-614-3926 for international callers. No passcode is required to access the call. A replay will be available for one week beginning Monday, October 23, 2006 by calling 888-286-8010 in the United States or 617-801-6888 internationally and entering the number 97074126 when prompted. A replay of the presentation will also be available via the Investor Relations link of the Company's web site. Bank of Hawaii Corporation is a regional financial services The examples and perspective in this article or section may not represent a worldwide view of the subject. Please [ improve this article] or discuss the issue on the talk page. company serving businesses, consumers and governments in Hawaii, American Samoa American Samoa, officially Territory of American Samoa, unincorporated territory of the United States (2000 pop. 57,291), comprising the eastern half of the Samoa island chain in the South Pacific. and the West Pacific. The Company's principal subsidiary, Bank of Hawaii, was founded in 1897 and is the largest independent financial institution in Hawaii. For more information about Bank of Hawaii Corporation, see the Company's web site, www.boh.com. [TABLE OMITTED] [TABLE OMITTED] [TABLE OMITTED] [TABLE OMITTED] [TABLE OMITTED] [TABLE OMITTED] [TABLE OMITTED] [TABLE OMITTED] [TABLE OMITTED] [TABLE OMITTED] [TABLE OMITTED] [TABLE OMITTED] [TABLE OMITTED] |
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