2 0 1 6 A N N U A L R E P O R T
FORWARD FOCUSED
Contents
1 Chairman’s Message
3 2016 Financial Summar y
4 Year in Review
8
Focused on Communit y
10 Focused on Our Employees
12 Client Profiles
22 2016 Financial Repor t
24 Stock Price Per formance /
Histor y of Dividends
25 Bank of Hawaii Locations
26 Managing Commit tee
28 Board of Directors
29 Shareholder Information
Forward Focused
Success is often based on timing. As in
surfing, determining when to propel forward
means identifying the best opportunities,
gaining traction and expanding capabilities.
As Bank of Hawaii continues to reposition
itself for the future, the company’s strength
and longevity serve as the foundation for a
steadfast commitment to upward mobility
to ultimately help customers thrive in an
ever-changing world.
© 2017, Bank of Hawaii Corporation. Bank of Hawaii®,
Bankoh® and the Bank of Hawaii logo are registered
trademarks of Bank of Hawaii. SmartMoney Seminar
is a trademark of Bank of Hawaii. Bankoh Investment
Services, Inc. is a non-banking subsidiary of
Bank of Hawaii, member FINRA and SIPC. Cardless
Cash is a trademark of FIS. Hawaiian Tax Free Trust® is a
registered trademark of Acquila Distributors, LLC. Apple
Pay™ is a trademark of Apple Inc. Android™ is a trademark
of Google Inc. Samsung Pay® is a registered trademark
of Samsung Electronics Co. Ltd. Visa® is a registered
trademark of Visa International Service Association
and used pursuant to license from Visa U.S.A. Inc.
MasterCard® is a registered trademark of MasterCard
Worldwide or a subsidiary. AMEX® is a registered
trademark of the American Express Company. China
UnionPay is a trademark of China UnionPay Co., Ltd.
JCB is a registered trademark of JCB Co., Ltd. PayPal®
is a registered trademark of PayPal, Inc. Discover® is a
registered trademark of Discover Financial Services. All
other trademarks and service marks appearing in this
report are the property of their respective owners and no
claim of ownership is made by their use.
Bank of Hawaii proudly announces
the launch of its first digital
Summary Annual Report. Videos
featuring our Chairman, clients,
community and employees can be
viewed at boh.com/aboutus.
Dear Fellow Shareholders,
Bank of Hawaii delivered another year of solid performance in 2016. We finished the year with the highest
earnings per share, and largest total assets and deposit levels in our 119-year history. Our longstanding
strategy of focusing on the island markets we know best was rewarded in 2016.
Our success would not be possible without the hard work of our 2,100 incredible employees who once again
helped Bank of Hawaii earn recognition as Hawaii’s Best Bank by the Honolulu Star-Advertiser and Honolulu
magazine as voted by their readership. On the national level, Bank of Hawaii was recognized as one of the
top 10 performing banks in the country by Forbes for the eighth consecutive year. As you know, risk and
operational conservatism is core to our corporate strategy. We are proud to have our deposits rated Aa2
by Moody’s Investor Services, one of the highest ratings nationally and globally as of Dec. 28, 2016.
I’ll use the following text to expand a bit on our performance for the year, share with you the key drivers
that enabled those results and discuss initiatives we believe critical to our future.
Continued Financial Strength
Diluted earnings per share for 2016 were $4.23 up 14.3 percent
from 2015. We continued to show strong and balanced loan and
deposit growth in 2016. Loans grew 13.6 percent to $8.9 billion
on the strength of 14.7 percent commercial loan growth and
12.8 percent consumer loan growth. Deposits grew 8.1 percent
to $14.3 billion reflecting 8.6 percent consumer deposit growth
and 11.0 percent commercial deposit growth.
Return on equity for 2016 was 15.8 percent as compared to
14.8 percent the prior year. Tier one capital at year end was
a healthy 13.2 percent, well ahead of regulatory requirements.
Our Board approved two dividend increases in 2016. We
continued with our share repurchase activity in 2016. From
2001 through 2016 we repurchased 53.6 million shares
returning more than $2 billion to our shareholders at an average
price per share of $37.84.
Hawaii’s Economy
Hawaii’s economy continued to perform well in 2016. Our visitor
industry achieved record arrival and spending results for the
fifth consecutive year. Spending was up 4.2 percent in 2016 to
$15.7 billion. Arrivals increased 3 percent to 8.9 million visitors.
The market was helped by balanced growth coming from both
domestic and international markets. Tourism officials remain
optimistic for the outlook in 2017.
The Hawaii real estate market continued its upward path. In
2016, the market enjoyed its fourth consecutive year of record
median sale prices for Oahu homes. Single family home prices
on Oahu reached $735,000. Sales volume of single family Oahu
homes increased 6.5 percent and sales of Oahu condominiums
increased 8.4 percent in 2016. The inventory of homes for sale
on Oahu remained low at the end of 2016 with Oahu single
family inventory of 2.5 months and Oahu condominium inventory
of 2.6 months. Real estate conditions on Kauai, Maui and the
Hawaii Island trended positively as well in 2016.
The construction sector continued to expand in 2016 supported
by both private as well as public projects. While activity in the
luxury high rise condominium segment appears to be slowing,
other construction sectors remain solid.
At year end, statewide seasonally adjusted unemployment
stood at 2.9 percent in Hawaii, the lowest level since
September 2007.
Commitment to a Longstanding Strategy
Since 2000, Bank of Hawaii’s corporate strategy has
consistently been to take a laser focus on the markets we
know best (Hawaii, Guam, Saipan and Palau) and to advance
the value of our organization by providing outstanding
products, service and value to the customers of those markets
in an ever-efficient way. Another important component of our
strategy is to actively engage the new ways in which customers
use financial products.
2016 was a strong year for building our relationships with our
customers. Bank of Hawaii accounted for approximately
40 percent and 42 percent of overall deposit and loan growth in
the Hawaii bank market in 2016. These results are the product
of a relentless focus on customer service and a diligent and
never-ending approach to improving our products and services.
For instance, over the past few years, we have been busy
converting our residential mortgage system to a paperless
system from what was previously a paper-intensive system.
The advantages created by our investment in this system along
with the incredible commitment of our mortgage team helped
us maintain the number one market share position in residential
mortgages in the Hawaii market.
Our EASE account, launched last year, has become a
customer favorite. This checkless checking account provides
the community with a terrific alternative to prepaid card
products providing unparalleled access and convenience.
The product is now a meaningful proportion of our new
account openings.
In 2016, we launched the first of our new format branches in
Pearl City. The new branch occupies a third less square footage
than its traditional predecessor, but renders roughly equivalent
customer-serving space. Most of the reduction in overall square
footage was taken from operational back room areas made
possible by newer digital processing technology. We plan to
open several additional new format branches in 2017.
B A N K O F H A W A I I 2 0 1 6 A N N U A L R E P O R T
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CH A IRM AN ’S ME S S SAGE
Our Customers
As noted above, we are making significant investment in our
branches and digital networks. This is not merely a physical
transformation, but also a transformation in how we engage
with our customers. As digital formats like easy deposit
ATMs and mobile phones increasingly take care of routine
transactions, we intend to focus more of our team’s efforts on
building face-to-face relationships with our customers so as to
better understand their challenges, aspirations and needs.
We like to say our new format branches are “built for connection.”
We have made the branch space a more inviting and welcoming
environment for our customers. This is a response to customers’
behavioral shifts. We need to remain relevant in a changing world.
The future requires us to be nimble, responsive and predictive.
We strive to establish long-term, valued and trusted relationships
with our customers. Our goal is to be a trusted advisor and
enabler for our customers.
Commitment to Community
We know we are only as strong as the communities we serve.
One of the things that I am proudest of in our organization is our
team’s unwavering support of our communities. Our Bankoh Blue
Crew generously gave more than 12,000 hours of their time and
talent to 244 community activities and projects in 2016.
Since 2007, the combined efforts of our employees and retirees
have resulted in $5.5 million for 240 local nonprofits through our
Live Kōkua Community Walk and Live Kōkua Giving Campaign.
In 2016 alone, they donated nearly $835,000 toward our two
biggest annual giving efforts of the year.
In addition to donations and event participation, employees
provide support by serving on a multitude of nonprofit boards,
leading fundraising programs and events, and giving back
through volunteer work.
Recognized for their combined efforts to improve the quality
of life for individuals and families, Bank of Hawaii received the
Financial Services Roundtable’s Corporate Social Responsibility
Leadership Award for the sixth consecutive year.
Our Employees—Key to Our Success
Our employees are the key to our success. While it’s clear
we are a financial services company, and while it has become
fashionable in the business world to brand one’s self a
“technology” company where possible, we see ourselves
predominantly as a “people company.” We know our success
comes from great people doing great work for great customers.
We believe it is critical to support our team with ever-
enhanced levels of knowledge and professional development.
The 21st-century workplace is truly becoming one in which
knowledgeable and enabled team members are the key to
maintaining a competitive advantage. We engage our employees
through programs that help them grow professionally and
personally, knowing that their passion to learn lies at the heart
of our success.
2
We believe that a well-educated workforce of tomorrow depends
on accessible education today. In 2016, we established the
Bank of Hawaii College Assistance Program, which provides
tuition reimbursement and access to a college education for
employees who do not have a bachelor’s degree.
We have partnered with Chaminade University of Honolulu to
develop an online program in which enrolled employees have the
flexibility to choose from select majors, regardless of whether or
not they relate to their role at the bank. Additionally, tutorial
support is available to all participants in the program. Our
long-term goal for this program is to have at least 5 percent
of our workforce engaged in this program each year.
In 2016, Bank of Hawaii Foundation honored 35 children of bank
employees with scholarships covering undergraduate studies—
the most since the program’s inception. Since 2014, more than
$300,000 has been awarded to 93 scholars, so they may
continue their education at colleges here in Hawaii and across
the country.
For the third year in a row, we were named among Hawaii’s
“Best Places to Work” by Hawaii Business magazine, and the
No. 3 “Most Family-Friendly” large company in the state.
Executive Appointments
I’m pleased to announce several executive appointments that
are effective March 1, 2017. Kent Lucien, vice chair and
chief financial officer, will become our chief strategy officer.
Dean Shigemura, senior executive vice president, will be
promoted from controller to chief financial officer, succeeding
Kent. Brent Flygar, senior vice president, will be promoted from
financial reporting manager and director of corporate tax to
controller and principal accounting officer, succeeding Dean.
These appointments reflect our continued commitment to
develop and prepare our people for ever-expanding roles and
responsibilities within the organization. Effective leadership
development and long-term career planning are critical to our
success as an organization. I am incredibly excited for Kent,
Dean and Brent in their new roles with the organization.
I want to extend my appreciation to our board of directors
for their support, engagement and active involvement.
They are truly a meaningful force in our success. I’m also
grateful for the confidence our shareholders have shown
in Bank of Hawaii. While we are proud of our achievements
in 2016, our focus is not on our past, but rather on a future
for which we are incredibly passionate and excited about.
Mahalo nui loa,
Peter S. Ho
Chairman, President and CEO
2016 FINANCIAL SUMMARY
Bank of Hawaii Corporation and Subsidiaries (dollars in thousands, except per share amounts)
FOR THE YEAR ENDED DECEMBER 31
2016
2015
Earnings Highlights and Performance Ratios
Net Income
Basic Earnings Per Share
Diluted Earnings Per Share
Dividends Declared Per Share
Net Income to Average Total Assets (ROA)
Net Income to Average Shareholders’ Equity (ROE)
Net Interest Margin 1
Efficiency Ratio 2
Market Price Per Share of Common Stock:
Closing
High
Low
AS OF DECEMBER 31
Statement of Condition Highlights and Performance Ratios
Loans and Leases
Total Assets
Total Deposits
Other Debt
Total Shareholders’ Equity
Book Value Per Common Share
Allowance to Loans and Leases Outstanding
Full-Time Equivalent Employees
Branches and Offices
FOR THE QUARTER ENDED DECEMBER 31
Earnings Highlights and Performance Ratios
Net Income
Basic Earnings Per Share
Diluted Earnings Per Share
Net Income to Average Total Assets (ROA)
Net Income to Average Shareholders’ Equity (ROE)
Net Interest Margin 1
Efficiency Ratio 2
$
$
181,461
4.26
4.23
1.89
1.15 %
15.79 %
2.83 %
57.01 %
88.69
89.72
54.55
$ 8,949,785
16,492,367
14,320,240
267,938
1,161,537
27.24
$
$
1.17 %
2,122
69
43,513
1.03
1.02
1.07 %
14.90 %
2.83 %
58.33 %
$
$
160,704
3.72
3.70
1.80
1.06 %
14.82 %
2.81 %
59.99 %
62.90
70.07
53.90
$ 7,878,985
15,455,016
13,251,103
245,786
1,116,260
25.79
1.31 %
2,164
70
$
$
42,832
1.00
0.99
1.11 %
15.41 %
2.85 %
58.55 %
1 Net interest margin is defined as net interest income, on a taxable-equivalent basis, as a percentage of average earning assets.
2 Efficiency ratio is defined as noninterest expense divided by total revenue (net interest income and total noninterest income).
B A N K O F H A W A I I 2 0 1 6 A N N U A L R E P O R T
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Y E A R IN R E V IEW
Focused on You
and Your Business
N O W A N D F O R T H E F U T U R E
Bank of Hawaii’s first “Branch of Tomorrow” at Pearl City opened for business in November 2016.
Bank of Hawaii is continually looking to the future, pursuing new
ideas to make banking with us the best it can be. We are excited
to be introducing new technology to our customers to make their
everyday transactions easier and more convenient. We also utilize
technology to enable our staff to be more personally available to
our customers to provide for their changing needs over their
lifetime and beyond. We cherish the trust that we have built with
generations of Hawaii’s families and businesses through our
steadfast focus on providing the highest value to our
shareholders, customers, employees and community.
The local and national recognition that we continue to receive
is one way to get a snapshot of how well we’re succeeding.
Here are some of our accolades for 2016:
21ST CENTURY BANKING & EXCEPTIONAL CUSTOMER SERVICE
Fulfilling our customers’ needs to help them build an exciting
future is at the heart of our business. With customer preferences
and innovative technology driving shifts throughout service
industries, Bank of Hawaii has taken a leadership role in providing
the best possible 21st-century banking experience. Enhancements
to our online and mobile banking options, deployment of our easy
deposit ATMs and offering Cardless Cash are some of the many
ways that digital improvements are bringing more convenience to
our customers. At the same time, our extensive branch network
offers further opportunities for us to consult with our clients and
connect them with our personalized services that can help them
meet their immediate and future needs.
• Top 10 Performing Large U.S. Banks,
eighth consecutive year by Forbes
• Hawaii SBA Lender of the Year — Category 1
• Corporate Social Responsibility Leadership Award,
sixth consecutive year by Financial Services Roundtable
• Best Bank, by Honolulu Star-Advertiser readers
• Best Bank, by Honolulu magazine readers
Today’s Branch of Tomorrow
The 2016 reopening of our renovated Pearl City Branch on Oahu
marked the official unveiling of our “Branch of Tomorrow,” the
first of more than 30 branch construction and renovation projects
planned over the next five years. The new branch designs feature
the warmth “of Hawaii,” while offering more convenience to our
customers and increasing the ways we can interact with them to
give them peace of mind about their finances.
4
The initial customer response to our
renovated 3,400-square-foot Pearl City
Branch has been overwhelmingly
positive, especially to the increased
availability of our tellers. No longer seated
behind a teller station, the branch’s
open-floor concept allows tellers greater
mobility to assist customers with their
everyday transactions using their tablets.
Our branch staff are also available to
meet privately in special consultation
areas to help customers with more
complex services, and to teach and
empower customers to take advantage of
some of our latest banking conveniences.
With the largest branch network in the
state of Hawaii, plans are in place to
continue implementation of our “Branch
of Tomorrow” concept at seven locations
in 2017. This includes the relocations of
our Hawaii Kai, Pearlridge, Manoa and
Marine Corps Base Hawaii-Kaneohe Bay
branches on Oahu and our Kihei branch
on Maui, in addition to renovations to our
Main Branch and Safeway Hawaii Kai
Branch.
Digital Banking Solutions for Consumers
Our customers’ needs and requirements
change over time, and so do our banking
solutions. In order to make transactions
easier and faster, we continue to make
significant investments to increase
security and add new features to our
online and mobile banking solutions.
Launched in April 2015, EASE by
Bank of Hawaii is our low-fee alternative to
traditional checking accounts. With 2016
marking the first full year of offering EASE
by Bank of Hawaii, we saw an increase in
account openings of 125 percent
compared to 2015. During the summer
of 2016, Bank of Hawaii also added the
ability for customers to open EASE
accounts online, further enhancing the
convenience of the electronic banking
option that offers no overdraft fees or
paper checks.
Online account opening continues to be
a simple, secure and convenient method
for customers to do their banking.
In 2016, our total online deposits grew
nearly 30 percent.
For Bank of Hawaii customers, their
smartphone is becoming a virtual wallet
with new functionality added every year.
In July, we launched Samsung Pay and
Android Pay for all our debit card
customers in the state of Hawaii. Together
with our launch of Apple Pay in 2015, our
monthly mobile wallet transactions have
increased more than 200 percent in 2016
compared to 2015. Smartphones are now
able to replace traditional debit and credit
cards for most point-of-sale purchases,
and these are safe and secure ways to
pay for in-store or in-app purchases,
utilizing tokenization technology to
replace sensitive account information with
a unique, one-time transaction code for
each purchase.
Our investments also go into the unseen
side of our applications, including protect-
ing our customers’ activities with
industry-leading security features. In
2016, we expanded the use of Touch ID
for our mobile app, a fingerprint identity
sensor that adds a level of security, to
authorize internal transfers and mobile
deposits conducted on devices with
Touch ID capabilities.
ATMs
In April 2016, we completed the
installation of our easy deposit ATMs; they
are now available at nearly all of our
branches and select additional locations.
Customers appreciate the convenience of
making deposits with these envelope- and
deposit-slip-free ATMs. We ended 2016
with 34 percent of all customer deposits
coming from digital channels, which
include our easy deposit ATMs and BOH
Mobile Banking App.
In November, we became the first financial
institution in Hawaii to add the Cardless
Cash feature to our BOH Mobile Banking
app, enabling customers to use their
smartphones to withdraw cash from select
ATMs without the use of a card. After
selecting a withdrawal amount, customers
then scan the one-time QR code at the
ATM. The entire process takes about
15 seconds, and reduces the risk of
customers’ PINs being stolen.
We plan to continue expanding Cardless
Cash locations, making it available
throughout our entire ATM network in
Hawaii and the West Pacific by the end
of 2017.
Mortgage, Consumer
and Dealer Indirect Lending
For many of our customers, a home is the
biggest investment they will make in their
lifetime. We are proud to be Hawaii’s No. 1
residential lender for the fourth year in a
row, both for number of residential loans
recorded and total dollars loaned in 2016.
The personalized service of our loan officers
guided thousands of customers through the
process of becoming first-time homeowners,
in addition to helping thousands more
improve their property and budgets through
refinancing. We offer specialized financing
options including construction loans, and we
are focused on reinvigorating our mortgage
lending for U.S. veterans and service
members. Bank of Hawaii is also the only
local lender that offers customized
Department of Hawaiian Home Lands’
homebuying programs for Native Hawaiians.
In 2016, we continued our focus on housing
solutions by partnering with developers to
finance affordable and workforce housing
options that meet a range of community
needs for local families and kupuna across
the state of Hawaii and in the Western
Pacific. Among them were three phases of
Meheula Vista, 225 affordable rental housing
units for low-income seniors developed by
Catholic Charities Housing Development
Corp. and located in Mililani Mauka on
Oahu; Saipan Comfort Homes, 40 affordable
housing units for families developed by
Triple J Saipan and located near Northern
Marianas College; and the renovation of 44
units at Kaneohe Elderly Apartments on
By using the BOH Mobile Banking app and a
Cardless Cash ATM, customers have an added layer
of security by never having to insert a plastic card
into the ATM.
B A N K O F H A W A I I 2 0 1 6 A N N U A L R E P O R T
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Y E A R IN R E V IEW
Executive Loan Officer Jack Smyth conducts a First-Time Homebuyer SmartMoney Seminar, just one of
76 free-to-the-public seminars held at Bank of Hawaii locations in 2016.
Oahu by Maeva/Fortino, affordable rentals
for low-income seniors. Altogether Bank of
Hawaii helped to finance the construction
of nearly 800 affordable housing units in
2016, with more in the pipeline for 2017.
In 2016, we launched our online loan
application for Bankoh Home EquityLines
and other personal loans in our Consumer
Lending Department. Personal loans
through our new online application
process reached $5 million. This online
convenience along with the availability of
our loan specialists through our branch
network are key reasons why Bank of
Hawaii continues to be Hawaii’s No. 1
home equity lender, helping customers
leverage the equity in their homes to invest
in other meaningful milestones on the way
to a brighter future.
An increased focus on our partnerships
with Hawaii auto dealers in 2016 has
led to continued growth of loans and
leases in our Dealer Indirect Lending
Department. Because all of our loan
servicing is handled locally, we can
provide competitive and flexible financing
programs to our partners. Our combined
auto loan and leasing portfolios grew
from $420 million in 2015 to $507 million
in 2016, making us the No. 2 lender in
the state.
PRIVATE BANKING
For nearly 120 years, Bank of Hawaii has
helped families and professionals build,
manage and preserve their wealth to turn
their vision for the future into reality.
Because every client is unique,
Bank of Hawaii’s Private Banking takes a
personal approach to offering the most
comprehensive banking solutions in as
convenient a manner as possible.
By providing a dedicated relationship
manager who is focused on his or her
client’s banking and borrowing needs,
managing finances can be as easy as
picking up the phone. One call to a
relationship manager can streamline
complex banking activities or bring in
experts to collaborate from other areas
of the bank. From this single point of
contact, clients have access to a full
array of services including basic banking;
customized lending; investments;
financial, estate and tax planning;
charitable giving and trust services.
6
Bankoh Investment Services, Inc.
Our team of Financial Advisors takes the
time to get to know each client’s vision for
his or her financial future, and helps create
personalized plans to attain those goals.
Helping clients achieve their goals at every
stage of their lives, our team offers a broad
array of specialized products and services
including retirement, investment and
education planning; and managed
money, annuities, insurance and
brokerage services. With a full spectrum
of investment advisory and brokerage
services, Bankoh Investment Services,
Inc. is responsible for over $2 billion in
client assets.
Estate Planning and Investment
Services Group
Bank of Hawaii knows that estate planning
is a vital part of our customers’ overall
financial planning. Setting up a trust can
give them greater control in leaving more
of a legacy to loved ones and to the
community. With Hawaii’s growing aging
population, we have seen a need to not
only help customers with their estate plans,
but also to support their heirs once they
are gone. Specialized training, resources
and tools were developed for our
customer-facing employees to support
customers during those challenging times.
Bank of Hawaii’s trust services team can
help ensure that a legacy is preserved,
protected and transferred in a way that
supports the people and institutions that
our customers designate. With their
priorities as a guide, we cultivate
relationships as trusted partners to not
only customers but also their advisors,
family members and beneficiaries.
Our capable trust and estate administration
team includes planning, tax and
investments specialists who can
transition gifts in tax-efficient ways.
Bank of Hawaii is the premiere provider
of fiduciary and investment services in
Hawaii and the Pacific, and includes
management of the oldest and largest
Hawaii municipal bond in the state, the
Hawaiian Tax Free Trust Fund. With a full
spectrum of advisory and broker services,
our trusted team of experts manages
almost $7 billion in assets.
BANKING FOR BUSINESSES
Our tradition of helping businesses grow
extends to businesses of all sizes. We
understand the unique needs of large
corporations, international business
owners, healthcare businesses and small,
family-owned businesses, and we have
the expertise and resources to help them
all succeed.
Digital Banking Solutions for Businesses
We continue to invest in new technology
that goes beyond traditional banking
services to bring better solutions to
meet the everyday needs of our
business clients.
In the summer, we launched a purchase
card (P-card) that can be personalized
by the individual client. We’re rapidly
bringing this product to our corporate
clients, who are realizing benefits from the
ways they streamline the procure-to-pay
process. P-cards can reduce transaction
costs for both the supplier and the buyer
by using electronic invoices and reducing
the need for check disbursements; they
can speed up payments and improve cash
flow; and they can provide better tracking
of expenses.
During the fourth quarter of 2016, we
began to upgrade our online banking
systems for businesses to improve the
customer experience, enhance security
and add capabilities. Bankoh Business
Connections has specialized features for
our commercial and corporate clients via
BBC Pro that allow them to manage wire
transfers, investments, reporting and
merchant services from one login point,
for example. Other features are geared for
smaller business banking clients through
BBC Express. The upgrade to dynamic
display technology means that the user
experience will be optimized for whatever
device they use (computer, tablet or
smartphone). And a special shadowing
feature will allow our banking officers to
view the same screen image as our
customers when assisting them. The
upgrade will continue into 2017.
In 2017, we will continue to invest in
technology for our business clients, adding
special capabilities through hundreds of
new apps. We also plan to launch new
merchant service solutions that work for
large and small businesses by offering
mobile point-of-sale readers that do not
need to be fastened to counters, and can
securely process payments for Visa,
MasterCard, AMEX, Discover, China
UnionPay, JCB, PayPal, Apple Pay,
Samsung Pay and Android Pay via
swipes or dips.
Commercial/Corporate Banking
Our commercial and corporate bankers
are among Hawaii’s most experienced
financial services teams. Their expertise
combined with our investments in leading
edge technology offers our clients
world-class solutions.
In 2016, we were the largest commercial
mortgage lender in the state of Hawaii,
thanks in part to our Fast Track Real
Estate Loan Program. With a streamlined
credit approval process and highly
competitive rates, the highly effective loan
program offers customized financial
solutions for owners, developers and
investors with multi-family, retail, industrial,
office and mixed-use properties.
For the past 30 years, Bank of Hawaii has
been a leader in the captive insurance
industry, currently providing a full suite of
banking and investment products to more
than 80 diverse captive clients. We now
oversee more than $1 billion in investment
assets and deposits for the Hawaii
domicile captive insurance market. Our
Captive Insurance team is one of the most
dedicated in the market, serving a broad
spectrum of businesses from a range of
industries including healthcare, hospitality,
energy, retail, construction and
technology. Increasingly middle-market
companies are pursuing the use of
captives to manage the risks inherent to
their operations. Bank of Hawaii is actively
supporting current and prospective captive
clients presently forming or exploring these
opportunities, all the while remaining very
focused on maintaining and growing this
business with our existing core book of
large corporate clients.
Business Banking
In 2016, we earned the U.S. Small
Business Administration Lender of the
Year Award, recording 58 SBA guaranteed
loans in Hawaii and Guam valued at
$17 million. We are proud to have received
this prestigious award in 12 out of the
past 14 years.
We recognize that small businesses and
entrepreneurs make up the backbone of
Hawaii’s economy. Our local bankers
understand the unique challenges of
doing business in Hawaii and, in addition
to providing the latest in technological
advantages, are available to advise and
support small-business owners to help
them move forward now and for years
to come.
Energy-Efficient Facilities
Bank of Hawaii continues to improve
facilities with eco-friendly innovations as
part of our energy conservation program.
We have significantly reduced energy
expenses and consumption, in large part
due to the installation of photovoltaic
solar panels on 12 branches and two
buildings so far. We switched on
348 PV panels and two high-efficiency
air-conditioning chillers at our downtown
Honolulu headquarters, for a combined
reduction of over 10,000 barrels of oil.
We will continue to strive toward investing
in energy renewable projects as we
renovate branches and facilities.
A passion for helping customers is what motivates
our teams. Because our customers say it better
than anyone, please see the following pages
where a few of them share how our services have
improved their lives and businesses.
Read Bank of Hawaii’s Summary Annual
Report online, which includes extra video
footage from our Chairman, clients, nonprofits
and employees at www.boh.com/aboutus.
B A N K O F H A W A I I 2 0 1 6 A N N U A L R E P O R T
7
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O UR FU T UR E IS O UR COMMUN IT Y
Focused on Community
Bank of Hawaii, its
Foundation & Employees
contributed:
$10,575,218
in the past five years
$2,725,701
in 2016
Bank of Hawaii’s focus on the future includes working to ensure a brighter tomorrow
for everyone in the community, including those who are most in need. It’s a core
value we cultivate by partnering to support the missions of more than 300 nonprofit
agencies each year on all of the islands where we do business.
With Bank of Hawaii Foundation grants and event sponsorships, the volunteer
expertise of our employees on many nonprofit boards, and the grassroots volunteerism
and fundraising by our employees and retirees, we continually strive to strengthen
the communities where we live and work. Here are a few examples of our community
partnerships in 2016.
8
HIKI NŌ, PBS Hawai‘i PBS Hawai‘i’s HIKI NŌ (the Hawaiian phrase for “can do”) mentors students from 90 public, charter and private schools throughout the state of Hawaii, and guides students in sharing the unique stories of their communities, while teaching them 21st-century skills to succeed. Bank of Hawaii Foundation is proud to continue our support of PBS Hawai‘i’s HIKI NŌ. In 2016, the Bank of Hawaii Foundation provided a $100,000 grant, and continues to be a major underwriter of the program since its inception in 2011.Kauai High School sophomore Leanna Thesken captures a moment on camera for her 2016 HIKI NŌ segment, “Food Truck Owner.” Photo courtesy of PBS Hawai‘i. Goodwill Hawaii Goodwill Hawaii helps people with employment barriers to become self-sufficient. As a title sponsor for Goodwill Goes Glam, Goodwill Hawaii’s annual fundraiser, Bank of Hawaii Foundation has supported the nonprofit’s job placement and job training programs since 2012. Four dozen Bankoh Blue Crew volunteers also support the event each year, staffing tables and helping consumers find great deals while helping the community. Bank volunteers also provide free tax return services for low- to moderate-income households through the Volunteer Income Tax Assistance program. In 2016, 22 IRS-certified bank volunteers prepared 330 tax returns at Goodwill’s offices, resulting in $404,272 in refunds for individuals and families.Odie Rose, Goodwill Hawaii support specialist, helps Leann Bantolino build new skills through the nonprofit’s Program for Adults with Intellectual Disabilities. Photo courtesy of Goodwill Hawaii.
www.boh.com/aboutus
B A N K O F H A W A I I 2 0 1 6 A N N U A L R E P O R T
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EPIC ‘Ohana’s Hawaii Youth Opportunities Initiative EPIC ‘Ohana works to enhance the welfare of children and youth through transformative processes that are respectful, collaborative and solution-oriented. Since 2010, Bank of Hawaii has helped more than 500 foster youth in Hawaii open matched savings accounts, known as IDAs (Individual Development Accounts), and make important purchases totaling more than $600,000. The accounts support young people who are transitioning out of the foster care system, with matching funds that are provided so they may make purchases to improve their futures, such as education, housing and transportation. To help these young people succeed, Bank of Hawaii employees also provide financial guidance and advice.BOH’s Kona Banking Center Assistant Manager Melissa Takaki opens up an Individual Development Account, or matched savings account, for Christina Case through EPIC ‘Ohana’s Hawaii Youth Opportunities Initiative. Photo courtesy of EPIC ‘Ohana.Institute for Human Services (IHS) The Institute for Human Services is Hawaii’s oldest and largest human service agency for ending and preventing homelessness. Helping Hawaii’s homeless is a cause that is very important to Bank of Hawaii, who supports the nonprofit in a variety of ways. Bank of Hawaii Foundation provided $25,000 to help fund the initial phase of the IHS rooftop employment training center, which has helped more than 400 clients acquire job skills and placed more than 150 people in jobs earning $15 to $20/hour. Employees raised more than $130,000 for the first Live Kōkua Community Walk in 2007 to benefit IHS. Since then, employees have voted to include IHS as a Live Kōkua Giving Campaign beneficiary three times in the past six years, and Bankoh Blue Crew volunteers regularly serve breakfast twice a month at IHS shelters.IHS’s Kaaahi Women and Family Shelter is a 24/7 multi-service center for women and families with children. It houses up to 110 individuals in a safe and stable environment and is home to the nonprofit’s rooftop garden, which serves as an employment training center. Photo courtesy of IHS. O UR FU T UR E IS O UR EMP LOY EE S
Focused on Our Employees
In today’s world, the customer experience is more prominent than ever. With continued growth of technology in modern
banking, our people are the key to providing our customers with the best 21st-century banking experience coupled
with a personalized touch. Their extensive knowledge, combined with the ability to build long-lasting client relationships
provides the baseline of our success.
Above: In its third year, Bank of Hawaii
Foundation awarded 35 scholarships to children
of bank employees. Seated, first row, from left:
Mary Elizabeth Pascual, Brittny Maze,
Pu‘uwaialoha Medina, Keri Togami, Aubree Kim,
Megan Togami, Rachel Hillen, Rachel Newcomb
and Anela Mattson. Second row: Jessica Lee,
Nathan Lee, Nicole Wheatman, Kylie Nishino,
Diamond Tuisano, Ashlynn Shiraishi, Kaitlin
Tilitile, Ennah Cabading. Standing: Andrew Ines,
Ashton Mayo, William Young, Eleu Akimseu,
Keegan McCrary, Micah Miyasato, Elasia
Hamilton and Mabel Cheng. Not pictured:
Stephanie Aczon, Stephanie Balais, Lark Jason
Canico, Kehaulani Esteban, Natalie Hajinelian,
Devin Jandoc, Dylan Matsuda, Christen
Miyasato, Kelsey Morihara and Tyler Trent.
10
Above Left: BOH Corporate Trainer Shauna Cabel was part of the team to implement the Bank of Hawaii
College Assistance Program, and later signed up for the program to earn her first bachelor’s degree
through Chaminade University’s Professional and Continuing Education program. PACE Director
Michelle Cohen discusses the program with Shauna during a one-on-one tutoring session via Skype.
Above Right: In addition to rotating through various bank divisions within six months, the Bank Associates
cohort also organized two community service activities. On Nov. 5, nearly 95 Bankoh Blue Crew
volunteers worked alongside the BAs to tackle five different activities at the HUGS House.
Clockwise from left: Laura Talaroc, Tina Nakahara and BA Patricia Lam clean the children’s playset.
Left: In February 2016, the Bankoh Rally drew
hundreds of employees to the Hawaii Convention
Center where new bank products, themes
and initiatives were unveiled, including a preview
of Bank of Hawaii’s “Welcome to Tomorrow”
commercial, which debuted during Super Bowl 50.
From left: Steve Franklin, Kevin Sakamoto, Jill Higa,
Jason Sunahara, Ronald Chang and Ali Kang pose
with a “Welcome to Tomorrow” picture frame.
developing future leaders for over
50 years. In addition to their heavy
participation in the community, the
program is a great platform that provides
BAs with an opportunity to acclimate to
the bank’s culture and develop key
relationships with senior leaders across
multiple business units. In 2016,
we welcomed 10 new graduates from
the program.
Bank of Hawaii is committed to a
workplace where all employees are
encouraged to pursue opportunities
for learning and professional growth.
The pursuit of self-improvement and skill
development create unmatched value for
our employees, allowing them to build
career advancement opportunities across
a lifetime.
Bank of Hawaii is committed to hiring the
best people and providing them with
engaging careers that align to their values.
Our employees’ voices and overall
satisfaction with their careers play a
prominent role to the overall success of
the bank. In 2016, Bank of Hawaii was
once again recognized as one of Hawaii’s
“Best Places to Work” based on employee
responses to a confidential survey.
As part of our extensive benefits, we offer
multiple opportunities for employees’
personal and professional education
and development. In August 2016, we
launched the College Assistance Program
(CAP) to provide an opportunity for
employees who are aspiring to obtain
their first bachelor’s degree.
Bank of Hawaii’s partnership with
Chaminade University provides
employees access to online classes
where they can choose from a selection
of majors. With a few employees having
already completed the first term, an
additional 18 participants are anticipated
to enroll in the program in 2017.
One of our most successful development
programs is our Pathways to Professional
Excellence (PPE) program. The program
is designed to provide a broader
perspective on the complexity of the
bank’s multiple services, and introduce
participants to senior leaders in areas
outside their own business unit. In 2016,
23 participants graduated from the
program during which they received
valuable business and interpersonal skills
training to better serve customers and
improve teamwork with coworkers.
During 2016, we introduced a group
of 31 paid interns to several of the
opportunities at Bank of Hawaii that
aligned with their career interests. The
interns were provided with professional
and on-the-job skills development
opportunities. They worked in diverse
areas such as Corporate Compliance,
Private Banking and Commercial Credit.
Management training through
Bank of Hawaii’s Bank Associate (BA)
program has propelled many of our
current managers and executives into
successful careers at the bank. This
intensive six-month program has been
www.boh.com/aboutus
B A N K O F H A W A I I 2 0 1 6 A N N U A L R E P O R T
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PRO F I L E / PR IVAT E BANK ING C L IEN TS
Dr. Tyrie Jenkins and
George Norcross
George: I’ve seen Bank of Hawaii change
over the years, and it’s great to see a
local bank doing such a great job, rated
as one of the top 10 since Forbes began
its ranking. That’s quite an accomplish-
ment, quite a feat for a Hawaii business.
The bank should be proud of it, and
customers should be proud of it. It’s nice
to be part of a success that’s part of
Hawaii.
Tyrie: The name, Bank of Hawaii, says it
all: locally owned, locally managed, with
friendly customer-service oriented
professionals that have a deep knowledge
of banking issues and transactions. I feel
comfortable that they have our best
interests in mind.
Dr. Tyrie Jenkins, owner of Jenkins Eye Care, and
her husband, retiree and small-business owner
George Norcross.
Dr. Tyrie Jenkins: When I opened Jenkins
Eye Care in 1992, I was starting it from
scratch. So I went to a woman banker at
Bank of Hawaii. I had very little collateral,
although I had a history of a successful
practice on the mainland. The bank took
a chance on me and gave me a $75,000
loan to start this practice, which is now
almost 25 years old and one of the largest
refractive and cataract ophthalmology
practices in the state. That whole
experience made me very fond of
Bank of Hawaii.
George Norcross: When I graduated from
‘Iolani, I opened up an account at the
Waialae-Kahala Branch to deposit my
checks when working summer
construction jobs. After I met and married
Ty, we did one of our mortgages with
Bank of Hawaii when their rates became
a little more competitive and never looked
back. I also opened some accounts for
my own small businesses there.
Tyrie: I’ve had multiple business banking
relationships with Bank of Hawaii over the
years, and I think that the latest iteration
has been good because of its business
professional relationships for doctors.
Specific business needs for physicians
are unique, and physicians are often poor
business people because we aren’t really
taught how to conduct a business in
medical school. I think the bank has
recognized this niche market, and having
financial professionals available who
understand the needs for running a
healthcare business is very helpful.
George: This is my only banking
relationship, and it just keeps getting
better and better all the time. My needs
have grown from when I opened my first
savings account. Our Private Banker
Jared Kashiwabara has been fabulous;
there’s no one more helpful. The service
that he provides is impeccable. It’s really
a concierge service.
Tyrie: The expense of running a
small business in Hawaii is high, and
sometimes cash flow is tight when we
have to zero-out the account balances
toward the end of the year. Many times
I need to ask the bank for a short-term
loan to handle the year-end expenses,
and the service is fast and convenient.
I appreciate that if I need something,
I can call Jared, and he’s right on it.
George: Having a bank here in Hawaii is
how you’re going to get the best service
because you’re here face-to-face. I also
like the easy deposit ATMs, and I
appreciate the Bankohana lines at the
branches, which are often a bit shorter.
Tyrie: We also have a relationship with
other bankers who check in on us
regularly. I think it’s nice that our bank is
looking out for us. Sometimes we’ve
discovered new services that we didn’t
even know we needed. They have
introduced us to different types of loans or
different types of savings accounts for
better interest rates. It’s nice to have them
proactively pursuing us to provide the
most cost-effective banking for our needs.
www.boh.com/aboutus
B A N K O F H A W A I I 2 0 1 6 A N N U A L R E P O R T
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PRO F I L E / COR P OR AT E BANK ING C L IEN T
alicia moy
H AWA I ‘ I G A S
Alicia Moy: Throughout our more than
100-year history as the state’s only gas
utility, Hawai‘i Gas has delivered clean,
reliable gas energy to homes and
businesses statewide. Our customers
depend on us to provide synthetic natural
gas and propane for cooking, water
heating, clothes drying and outdoor
lighting.
As Hawaii moves toward a more
renewable energy future, Hawai‘i Gas is
committed to doing our part to make a
positive, sustainable impact on the state’s
energy landscape and provide leadership
in this energy transformation.
Hawai‘i Gas is investing in renewable
natural gas, which can be captured from
wastewater treatment plants and landfills
or developed from energy crops. In 2016,
we were awarded the contract to capture
and process previously unutilized biogas
from the City & County of Honolulu’s
Honouliuli Wastewater Treatment Plant.
This will contribute up to 800,000 therms
per year of biogas to our Oahu pipeline.
To further support the state’s renewable
energy goals, Hawai‘i Gas dedicated the
Waihonu Solar Farm, Oahu’s largest
active solar farm in 2016. With a
combined output of six-and-a-half
megawatts of electricity, it can power
approximately 1,000 homes. This project
represents an important milestone as
Hawai‘i Gas expands beyond gas energy
to serve Hawaii.
Bank of Hawaii was one of the major
financiers for the solar farm. John
McKenna and the bank’s corporate
banking team have been very responsive
to our needs as we continue to explore
ways to incorporate renewable energy
into our portfolio. Bank of Hawaii has
partnered with Hawai‘i Gas for more than
50 years, and we rely on them for a range
of services, including commercial lending,
employee-related benefits services, and
cash management.
Hawai‘i Gas and Bank of Hawaii both
have long histories in the community. We
share similar values and embrace doing
all we can to facilitate positive change for
current and future generations.
Hawai‘i Gas’ vision is to improve Hawaii’s
quality of life as a premier provider of gas
and other clean energy solutions. We
remain committed to diversifying our fuel
mix and increasing supply reliability for
our customers by using cleaner fuels like
natural gas to supplement the synthetic
natural gas that we manufacture and
distribute.
The state’s renewable energy vision
impacts not only power generation,
but also multiple sectors, including
transportation, businesses and
consumers. Making a positive long-term
difference in Hawaii’s renewable energy
future requires partnership among all
stakeholders and the community.
www.boh.com/aboutus
As a company with deep roots in the
islands, we understand the importance
of bringing people together in the spirit of
collaboration to create innovative
solutions for a brighter future for Hawaii.
We will continue to look for opportunities
to partner with others to advance
renewable energy and sustainability for
Hawaii. Hawai‘i Gas has been here for
residents, visitors and businesses of
Hawaii since 1904, and we look forward
to continuing to serve them for the next
100 years.
Hawai‘i Gas President and CEO Alicia Moy.
B A N K O F H A W A I I 2 0 1 6 A N N U A L R E P O R T
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PRO F I L E / INS T IT U T ION A L C L IEN T SERV IC E S
DR. timothy cottrell
and reid gushiken
‘ I O L A N I S C H O O L
I think Bank of Hawaii is unique in that
they are a good fit in terms of both the
quality of their work and the way they
support their customers. We truly believe
they have our best interest in mind and
they work collaboratively with us to
achieve our goals.
Timothy: Our goal is to deliver the
greatest education in the world to our
students, while allowing the school to
remain accessible to working class
families as we have done since the school
was founded more than 150 years ago.
Bank of Hawaii is a wonderful business
partner. When we sit down, we genuinely
feel like we are working toward the same
goal. That is a wonderful relationship to
have with a bank.
‘Iolani’s Head of School Timothy Cottrell, Ph.D.,
and Chief Financial Officer Reid Gushiken.
The history of ‘Iolani is as a school for
working class families who want to invest
in the education of their children. The way
we are affordable for middle-income
families is by virtue of the amount of
financial aid that we can provide. The
investment gains generated from our
endowment allow us to continue investing
in financial aid. Over the last several years,
we’ve been able to increase the amount
we spend on financial aid at a rate that is
double the rate of tuition increases.
What’s really wonderful about the
relationship we have with Bank of Hawaii
is that they know us; they know how
we’ve operated for decades.
Reid: The team that we work with is very
service-oriented. I work with Jianna
Chew, Janet Katakura and Steve Rodgers.
They hear what our needs are, and are
very supportive of the school’s cause.
Also, they’re very competent. They are
smart, they know what they are talking
about, and they’ve also done very well in
managing our fixed income portfolio. The
marketplace has been extremely volatile
since 2008. Despite the uncertainty in
the marketplace, we have been very
pleased with Bank of Hawaii’s ability to
provide us with consistent returns at
comfortable levels of risk.
Reid Gushiken: ‘Iolani School has been a
client of Bank of Hawaii for more than
35 years. Bank of Hawaii has been the
school’s investment custodian from its
inception decades ago. Along the way,
Bank of Hawaii has also assumed
management of the school’s fixed
income portfolio.
Dr. Timothy Cottrell: Bank of Hawaii has
been the stabilizing presence in the
growth of ‘Iolani’s endowment from
modest beginnings to now exceeding
$170 million in total assets. The financial
success of ‘Iolani has gone hand-in-hand
with our relationship with Bank of Hawaii.
Their reliable and steady approach to
helping us steward our endowment
portfolio has allowed us to model the
finances of the school with confidence
and predictability.
Reid: Our endowment is one of our most
important and sacred things to protect,
and we trust Bank of Hawaii in helping us
with that. We wouldn’t entrust this
business to just anyone.
Timothy: Consistent and steady growth of
our endowment allows ‘Iolani to deliver
world leading academic programs for our
students, while keeping tuition down. The
actual costs of educating a child at ‘Iolani
School are significantly higher than the
tuition we charge. Providing access to an
‘Iolani education has been, and always
will be, a top priority for us. In order to
accomplish this, we try to keep our tuition
as low as possible and we invest heavily
in financial aid.
www.boh.com/aboutus
B A N K O F H A W A I I 2 0 1 6 A N N U A L R E P O R T
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PRO F I L E / COMMUN IT Y BANK ING C L IEN TS
MARY ANN and
RYAN SULLIVAN
Mary Ann: Mark even drove to our house
one weekend with papers to sign to make
it more convenient. They definitely make
it easy for us as clients, providing great
service and always seeing what’s
important for us, which is time.
Ryan: It’s very important for us to work
with a bank whose roots are in Hawaii.
We know that our money is being
reinvested in the islands; it’s keeping the
money here and supports the local
economy.
Mary Ann: Between the amazing service,
attention to detail and personal staff, it’s
our go-to bank. It’s Hawaii’s bank!
The Sullivan family in their soon-to-be completed
Oahu home: Mary Ann, Ryan, Elin and Avery. Ryan,
who is an architect at Group 70 International,
designed the house and is overseeing its
construction; Mary Ann is the Hawaii regional client
development manager for Louis Vuitton.
Ryan: We bought an old house
on a great property in our ideal
neighborhood. We decided to tear
it down and in its place build a new,
sustainable, eco-friendly house that would
be our dream house for our growing family.
We were able to do this by securing a
construction loan through the bank.
I’d like to thank the bank for helping us
realize our dream of building our own
house. It’s every architect’s dream to
design their own home, so we are very
fortunate to be able to accomplish this at
this time in our lives.
Mary Ann: Ryan’s the designer and the
project manager, overseeing the day-to-
day construction. I’m looking forward to
seeing the finished product—it’s making
good progress, and we are all really
excited. This is probably our one-and-only
opportunity for Ryan to build and design
a house for us. It’s pretty special, and
we’re extremely grateful.
Ryan Sullivan: Convenience is a big part
of why we bank at Bank of Hawaii; I’ve
had my account at Bank of Hawaii for 30
years. They are conveniently located, and
they make it very easy with technology.
We use online banking, mobile banking,
and easy deposit ATMs. Depositing a
check using a smartphone camera is very
easy—I don’t think I’ve been into a
branch for about two years now.
Everything is on my phone, iPad or
online, and we use our checkcard on a
daily basis.
Mary Ann Sullivan: I’ll actually go into a
branch every now and then; I’m a little old
school sometimes. I like to actually talk to
someone and hand someone a check or
money to deposit. Everyone we’ve come in
contact with is very relatable and reliable,
willing to work with what we have and to
understand our situation.
Ryan: Ryson Matsumura is our
relationship officer; he helped set us on
the road to get our home construction
loan. Ryson introduced us to Mark
Inouye, who’s an executive loan officer.
Working with the two of them made the
loan process very easy. Mark even went
out of his way to meet me at my office on
multiple occasions.
www.boh.com/aboutus
B A N K O F H A W A I I 2 0 1 6 A N N U A L R E P O R T
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PRO F I L E / PER SON A L BANK ING C L IEN T
gordon mark
I’m currently managing several accounts
for my relatives and myself. Tomomi has
to keep track of these various accounts
for me, and when I go in to see her, I ask
her about each one. And she knows
exactly what I’m talking about.
I would never do my banking outside of
Hawaii, because I need to be able to talk
to someone face-to-face. For me,
relationships and people-contact are
essential. As my banking needs have
changed over the years, Tomomi’s been
there to help me.
The bank also provided me with a
brochure entitled, When A Loved One
Passes, to help me with financial and
other important items that needed to be
addressed.
For me, I’m old fashioned, and I’m still
“working” for fun. When it comes to my
finances, I need to have peace of mind.
Bank of Hawaii is a local bank with
people from here that I can relate to, that
I can trust, and people that I can call.
The service is outstanding; it has the
personal touch.
Retired University of Hawaii administrator
and self-taught ukulele virtuoso Gordon Mark.
In addition to teaching private students, Gordon
also volunteers his time teaching ukulele to
youngsters from Farrington High School and the
Queen Lili‘uokalani Children’s Center.
I look at myself as a Bank of Hawaii
customer in a different way because I’ve
also come to know other employees in
different areas of the bank. Malcolm Lau,
who’s a senior vice president at Bank of
Hawaii, has been my longest standing
ukulele student and my protégé. Through
Malcolm, I’ve come to meet other Bank of
Hawaii people at functions, including Jon
Murakami, senior vice president of the
Private Banking Group, and Kimo Wong,
the Chinatown Branch manager. When a
relative recently passed away and I
needed to find a Chinese priest to
conduct special funeral services, I called
Kimo at home on a Sunday to see if he
could help. Rather than wait till Monday,
Kimo immediately did some research and
called me back with suggestions.
Gordon Mark: I’ve been a Bank of Hawaii
client for almost forever. When I was a
student majoring in design at the
University of Hawaii at Mānoa, I used to
bank at the Bank of Hawaii Keeaumoku
Branch because the location was
convenient. My parents lived in Waipahu,
so my mother banked at the Waipahu
location.
The day after I got my BFA degree, I
became the assistant chairman of the Fine
Arts Department at the university. For nine
years, while I was working at UH, I used to
provide the dinner music at the Captain’s
Galley, a fine-dining restaurant at the
Moana Surfrider Hotel in Waikiki. The
university job paid for all the bills; the pay
from the second job went to the bank.
When I retired from UH, I consolidated
and kept everything at the Waipahu
Branch with my parents. Now that I live in
town, I visit the Ward Branch and that’s
where I first met Tomomi Kramer.
Tomomi is my personal banker, and she
has been outstanding. She reminds me of
an old-fashioned doctor, the ones who
used to make house calls. She always
goes above and beyond the call of duty to
make life easier for me. I trust Tomomi
implicitly, and I’m sure all her clients feel
the same way.
www.boh.com/aboutus
B A N K O F H A W A I I 2 0 1 6 A N N U A L R E P O R T
21
20 16 FIN AN C IA L R EP ORT
Consolidated Statements of Income
Bank of Hawaii Corporation and Subsidiaries (dollars in thousands, except per share amounts)
FOR THE YEAR ENDED DECEMBER 31
2016
2015
Interest Income
Interest and Fees on Loans and Leases
Income on Investment Securities
Available-for-Sale
Held-to-Maturity
Deposits
Funds Sold
Other
Total Interest Income
Interest Expense
Deposits
Securities Sold Under Agreements to Repurchase
Funds Purchased
Other Debt
Total Interest Expense
Net Interest Income
Provision for Credit Losses
Net Interest Income After Provision for Credit Losses
Noninterest Income
Trust and Asset Management
Mortgage Banking
Service Charges on Deposit Accounts
Fees, Exchange, and Other Service Charges
Investment Securities Gains, Net
Annuity and Insurance
Bank-Owned Life Insurance
Other
Total Noninterest Income
Noninterest Expense
Salaries and Benefits
Net Occupancy
Net Equipment
Data Processing
Professional Fees
FDIC Insurance
Other
Total Noninterest Expense
Income Before Provision for Income Taxes
Provision for Income Taxes
Net Income
Basic Earnings Per Share
Diluted Earnings Per Share
Dividends Declared Per Share
Basic Weighted Average Shares
Diluted Weighted Average Shares
$
333,239
$ 298,522
41,892
79,087
9
2,861
812
457,900
12,647
23,406
12
4,256
40,321
417,579
4,750
412,829
46,203
19,895
33,654
55,176
10,203
7,017
6,561
18,634
197,343
201,150
30,252
20,578
15,208
10,072
8,615
64,703
350,578
259,594
78,133
41,492
89,650
8
1,133
1,305
432,110
9,626
25,364
12
3,021
38,023
394,087
1,000
393,087
47,685
11,583
34,072
53,353
10,160
7,664
7,039
14,663
186,219
191,963
30,217
20,162
16,472
9,660
8,669
70,961
348,104
231,202
70,498
$
181,461
4.26
$
4.23
$
$
1.89
42,644,100
42,879,783
$ 160,704
3.72
$
3.70
$
$
1.80
43,217,818
43,454,877
Refer to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2016 for the Consolidated Financial Statements,
including Report of Independent Registered Public Accounting Firm, thereon.
22
Consolidated Statements of Condition
Bank of Hawaii Corporation and Subsidiaries (dollars in thousands)
AS OF DECEMBER 31
2016
2015
Assets
Interest-Bearing Deposits in Other Banks
Funds Sold
Investment Securities
Available-for-Sale
Held-to-Maturity (Fair Value of $3,827,527 and $4,006,412)
Loans Held for Sale
Loans and Leases
Allowance for Loan and Lease Losses
Net Loans and Leases
Total Earning Assets
Cash and Due From Banks
Premises and Equipment, Net
Accrued Interest Receivable
Foreclosed Real Estate
Mortgage Servicing Rights
Goodwill
Bank-Owned Life Insurance
Other Assets
Total Assets
Liabilities
Deposits
Noninterest-Bearing Demand
Interest-Bearing Demand
Savings
Time
Total Deposits
Funds Purchased
Securities Sold Under Agreements to Repurchase
Other Debt
Retirement Benefits Payable
Accrued Interest Payable
Taxes Payable and Deferred Taxes
Other Liabilities
Total Liabilities
Shareholders’ Equity
Common Stock ($.01 par value; authorized 500,000,000 shares;
issued / outstanding: December 31, 2016 - 57,856,672 /
42,635,978 and December 31, 2015 - 57,749,071 / 43,282,153)
Capital Surplus
Accumulated Other Comprehensive Loss
Retained Earnings
Treasury Stock, at Cost (Shares: December 31, 2016 - 15,220,694
and December 31, 2015 - 14,466,918)
Total Shareholders’ Equity
Total Liabilities and Shareholders’ Equity
$
3,187
707,343
2,186,041
3,832,997
62,499
8,949,785
(104,273)
8,845,512
15,637,579
169,077
113,505
46,444
1,686
23,663
31,517
274,188
194,708
$ 16,492,367
$ 4,772,727
2,934,107
5,395,699
1,217,707
14,320,240
9,616
523,378
267,938
48,451
5,334
21,674
134,199
15,330,830
576
551,628
(33,906)
1,415,440
(772,201)
1,161,537
$ 16,492,367
$
4,130
592,892
2,256,818
3,982,736
4,808
7,878,985
(102,880)
7,776,105
14,617,489
158,699
111,199
44,719
824
23,002
31,517
268,175
199,392
$ 15,455,016
$ 4,286,331
2,761,930
5,025,191
1,177,651
13,251,103
7,333
628,857
245,786
47,374
5,032
17,737
135,534
14,338,756
575
542,041
(23,557)
1,316,260
(719,059)
1,116,260
$ 15,455,016
Refer to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2016 for the Consolidated Financial Statements,
including Report of Independent Registered Public Accounting Firm, thereon.
B A N K O F H A W A I I 2 0 1 6 A N N U A L R E P O R T
23
STOCK PRICE PERFORMANCE /HISTORY OF DIVIDENDS
Relative stock Price Performance
For the Year Ended December 31, 2016
$145
$140
$135
$130
$125
$120
$115
$110
$105
$100
$95
$90
$85
$80
MARCH 31
JUNE 30
SEPT 30
BOH
S&P BANKS
KBW REGIONAL BANK INDEX
S&P 500
Unbroken History of Dividends
R E C E S S I O N
R E C E S S I O N
F I N A N C I A L C R I S E S
1986
1991
1996
2001
2006
2011
2016
Historical Dividends Adjusted for Stock Splits
$2.00
$1.75
$1.50
$1.25
$1.00
$0.75
$0.50
$0.25
$0.00
24
BANK OF HAWAII LOCATIONS
Facts: Hawaii, Guam, American Samoa, Saipan and Palau
HAWAII
Hawaii business establishments in 2014: 98.0 percent have fewer than 100
employees, 95.0 percent have fewer than 50 employees, and 56.6 percent
have fewer than five employees. 1
Hawaii gross domestic product in 2015: $79.7 billion (in current dollars) 2
- Government (federal civilian & military, and state and local): 21.6%
- Real estate, Rental and Leasing: 19.6%
- Accommodation and Food services: 8.5%
- Retail trade: 6.6%
- Health care and Social assistance: 6.5%
- Construction: 6.0%
- Transportation and Warehousing: 4.4%
- Professional and Technical services: 4.0%
- Finance and insurance: 3.4%
Tourism’s direct and indirect impact on Hawaii gross domestic product
(in current dollars) in 2015: 16.7% 3
State of Hawaii resident population as of July 1, 2016: 1,428,557 4
GUAM
- U.S. Territory
- Capital: Hagatna (Agana)
- Resident population: July 2016 estimate 162,742 5
- Main industries: U.S. military and tourism
AMERICAN SAMOA
- U.S. Territory
- Capital: Pago Pago
- Resident population: July 2016 estimate 54,194 5
- Main industries: tuna canneries and handicrafts
COMMONWEALTH OF THE NORTHERN MARIANA ISLANDS
- Commonwealth in political union with the U.S.
- Capital: Saipan
- Resident population: July 2016 estimate 53,467 5
- Main industries: tourism, banking and construction
PALAU
- Constitutional government in free association with the U.S.
- Capital: Melekeok
- Resident population: July 2016 estimate 21,347 5
- Main industries: tourism, craft items and construction
BANK OF HAWAII BRANCHES AND ATMS
(As of December 31, 2016)
Branches and
In-Store Branches
State of Hawaii
Island of Oahu
Island of Hawaii
Island of Maui
Island of Kauai
Island of Lanai
Island of Molokai
West Pacific
CNMI/Saipan
Guam
Palau
American Samoa
64
36
11
10
5
1
1
5
1
3
1
1
ATMs
399
285
49
38
25
1
1
40
6
31
3
5
Total
70
444
1 Table 12.29, Hawaii DBEDT State of Hawaii Data Book 2014,
pg 89, 2014 Employment and Payrolls in Hawaii:
https://www.hiwi.org/admin/gsipub/htmlarea/uploads/
LFR_QCEW_ES2014.pdf
2 Table 13.05, Hawaii DBEDT State of Hawaii Data Book 2015,
http://files.hawaii.gov/dbedt/economic/databook/
2015-individual/13/130515.xls
from the U.S. Bureau of Economic Analysis,
Gross Domestic Product by Industry 1963 to 2015:
www.bea.gov/regional/index.htm
3 Calculation based on Tables 13.05 and 7.32,
Hawaii DBEDT State of Hawaii Data Book 2015,
http://files.hawaii.gov/dbedt/economic/databook/
2015-individual/07/073215.xls and http://files.hawaii.gov/
dbedt/economic/databook/2015-individual/13/130513.xls
4 Table 1.04, Hawaii DBEDT State of Hawaii Data Book
2016, http://files.hawaii.gov/dbedt/census/popestimate/
2016_state_pop_hi/nst-est2016-01.xlsx
5 Central Intelligence Agency (CIA),
The World Factbook (2016).
B A N K O F H A W A I I 2 0 1 6 A N N U A L R E P O R T
25
MANAGING COMMITTEE
Bank of Hawaii Corporation / Bank of Hawaii
From left: Mary E. Sellers, Peter S. Ho,
From left: Jill F.S. Higa, Derek J. Norris, James C. Polk,
Kent T. Lucien and Mark A. Rossi
Donna A. Tanoue and Wayne Y. Hamano
Peter S. Ho
Chairman, President and
Chief Executive Officer
Sharon M. Crofts
Vice Chair
Client Solutions Group
Kent T. Lucien
Vice Chair
and Chief Strategy Officer
Derek J. Norris
Vice Chair
Residential and Consumer Lending
Wayne Y. Hamano
Vice Chair
and Chief Commercial Officer
James C. Polk
Vice Chair
Consumer Banking Group
Alton T. Kuioka
Vice Chair of Board of Directors
of Bank of Hawaii
Mark A. Rossi
Vice Chair, Chief Administrative Officer,
General Counsel & Corporate Secretary
Mary E. Sellers
Vice Chair
and Chief Risk Officer
Donna A. Tanoue
Vice Chair
Client and Community Relations
26
From left: David Oyadomari, Kevin T. Sakamoto,
From left: Dean Y. Shigemura, Sheh Bertram,
Susan L. Ing and Vincent E. Barfield
Alton T. Kuioka and Sharon M. Crofts
Vincent E. Barfield
Senior Executive Vice President
Investment Services Group
Sheh Bertram
Senior Executive Vice President
and Chief Information Officer
Jill F.S. Higa
Senior Executive Vice President
Branch and Community Banking
Susan L. Ing
Senior Executive Vice President
and Chief Marketing Officer
David Oyadomari
Senior Executive Vice President
Digital Channels Division
Kevin T. Sakamoto
Senior Executive Vice President
Branch Delivery
Dean Y. Shigemura
Senior Executive Vice President
and Chief Financial Officer
B A N K O F H A W A I I 2 0 1 6 A N N U A L R E P O R T
27
BOARD OF DIRECTORS
Bank of Hawaii Corporation / Bank of Hawaii
Board of Directors (seated, from left): Victor K. Nichols, Mary G.F. Bitterman, Peter S. Ho, Barbara J. Tanabe and Kent T. Lucien. (standing from left): Donna A. Tanoue,
Clinton R. Churchill, S. Haunani Apoliona, Robert W. Wo, Michael J. Chun, Raymond P. Vara, Mark A. Burak, Alton T. Kuioka and Robert A. Huret.
Peter S. Ho*
Chairman, President and
Chief Executive Officer
Bank of Hawaii Corporation
and Bank of Hawaii
Victor K. Nichols*
Former CEO of
North America and
President of Global
Consumer Services
Experian
*Bank of Hawaii Corporation
Board of Directors
Robert A. Huret*
Managing Member
FTV Management
Company, LP
Alton T. Kuioka
Vice Chair
Client Relations
Bank of Hawaii
Kent T. Lucien*
Vice Chair and
Chief Strategy Officer
Bank of Hawaii Corporation
and Bank of Hawaii
Barbara J. Tanabe*
Owner and Partner
Ho‘akea Communications LLC
Donna A. Tanoue
Vice Chair
Client and Community Relations
Bank of Hawaii
Raymond P. Vara*
President and
Chief Executive Officer
Hawai‘i Pacific Health
Robert W. Wo*
Owner and Director
C.S. Wo & Sons, Ltd.
S. Haunani Apoliona*
Trustee
Office of Hawaiian Affairs
Mary G.F. Bitterman*
President and Director
The Bernard Osher
Foundation
Mark A. Burak*
Retired Executive
Vice President
Bank of America
Michael J. Chun*
Retired President
and Headmaster
Kamehameha Schools-
Kapalama
Clinton R. Churchill*
Trustee
The Estate of
James Campbell
28
SHAREHOLDER INFORMATION
Corporate Headquarters
Bank of Hawaii Corporation
130 Merchant Street
Honolulu, Hawaii 96813
Annual Meeting
The annual meeting of shareholders
will be held on Friday, April 28, 2017,
at 8:30 a.m. at the Bank of Hawaii
Main Office, 5th Floor, 111 South
King Street, Honolulu, Hawaii.
Transfer Agent and Registrar
Computershare Investor Services, LLC
250 Royall Street,
Canton, MA 02021
Common Stock Listing
NYSE: BOH
The common stock of Bank of Hawaii
Corporation is traded on the New York
Stock Exchange under the ticker symbol
BOH and is quoted daily in leading financial
publications as “Bank of Hawaii.”
Dividend Reinvestment
& Stock Purchase Plan (DRP)
Bank of Hawaii Corporation’s Dividend
Reinvestment and Stock Purchase Plan
(DRP) allows existing shareholders to
purchase common shares of the
company’s stock by either reinvesting
their stock dividends or by optional cash
payments.
- Individuals must possess at least
one share of the company’s stock
to participate in the DRP.
- Shares are purchased on the 10th
business day of each month based
on the average of five trading days
ending on the day of purchase.
- Minimum payment for purchase
of shares is $25 and the maximum
is $5,000 per calendar quarter.
Inquiries
Shareholders with questions about
stock transfer services, share holdings
or dividend reinvestment may contact
Computershare Investor Services, LLC
at 1-888-660-5443 between 7:00 a.m.
and 5:00 p.m. Central Standard Time.
Investors and Analysts Seeking
Financial Information
Cindy Wyrick
Executive Vice President
Investor Relations
Phone: 1-808-694-8430
For General Inquiries
Phone: 1-888-643-3888
www.boh.com
- There are no fees for purchasing
shares or for the safekeeping of stock
certificates. Fees are assessed on
the sale of shares in the DRP.
Detailed information about Bank of Hawaii
Corporation’s DRP can be found online
at www.boh.com or by calling Computershare
Investor Services, LLC at 1-888-660-5443.
Forward-Looking Statements This report contains forward-looking statements concerning, among other things, the economic and business environment
in our service area and elsewhere, credit quality 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 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) unanticipated changes in the securities markets, public
debt markets, and other capital markets in the U.S. and internationally; 3) competitive pressures in the markets for financial services and products;
4) the impact of legislative and regulatory initiatives, particularly the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (the “Dodd-
Frank Act”); 5) changes in fiscal and monetary policies of the markets in which we operate; 6) 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;
7) actual or alleged conduct which could harm our reputation; 8) changes in accounting standards; 9) changes in tax laws or regulations or the
interpretation of such laws and regulations; 10) changes in our credit quality or risk profile that may increase or decrease the required level of our reserve
for credit losses; 11) changes in market interest rates that may affect credit markets and our ability to maintain our net interest margin; 12) the impact
of litigation and regulatory investigations of the Company, including costs, expenses, settlements, and judgments; 13) any failure in or breach of our
operational systems, information systems or infrastructure, or those of our merchants, third-party vendors and other service providers; 14) any
interruption or breach of security of our information systems resulting in failures or disruptions in customer account management, general ledger
processing, and loan or deposit systems; 15) changes to the amount and timing of proposed common stock repurchases; and 16) natural disasters,
public unrest or adverse weather, public health, and other conditions impacting us and our customers’ operations. Given these risks and uncertainties,
investors should not place undue reliance on forward-looking statements as a prediction of actual results. For a detailed discussion of these and other
risks and uncertainties that could cause actual results and events to differ materially from such forward-looking statements please refer to the risk factors
discussed in our Annual Report on Form 10-K for the fiscal year ended December 31, 2016, and any subsequently filed reports with the U.S. Securities
and Exchange Commission. Words such as “believes,” “anticipates,” “expects,” “intends,” “targeted” and similar expressions are intended to identify
forward-looking statements, but are not the exclusive means of identifying such statements. We undertake no obligation to update forward-looking
statements to reflect later events or circumstances.
Bank of Hawaii Corporation is an independent regional financial services company serving businesses, consumers and governments in Hawaii,
American Samoa and the West Pacific. The Company’s principal subsidiary, Bank of Hawaii, was founded in 1897. For more information about
Bank of Hawaii Corporation, see the Company’s website, www.boh.com.
B A N K O F H AWA I I C O R P O R AT I O N
P.O. Box 2900
Honolulu, Hawaii 96846