The fallout from the shutdowns of Silicon Valley Bank and Signature Bank spilled over to regional banks Monday and sent the shares tumbling for publicly traded Hawaii financial institutions.
But executives of the local banks said they are well capitalized financially and that depositors’ money is safe.
Bank of Hawaii’s stock took the biggest hit as shares of the state’s second-largest bank were temporarily halted due to volatility during the day and at one point plunged 45% to $34.71 before ending down 18.4%, or $11.63, at $51.75. Trading volume spiked to 3.27 million shares, nearly 16 times its average daily volume of 206,096 shares.
First Hawaiian Bank, the state’s largest bank, saw its shares sink 12.3%, or $2.84, to $20.19. It was its largest percentage drop since going public at $23 a share on Aug. 4, 2016, and came on trading volume of 3.45 million shares, more than five times its daily volume of 616,860 shares.
The other three local publicly traded banks weren’t hit as hard. Hawaiian Electric Industries Inc., which owns American Savings Bank, the state’s third-largest bank, saw its stock fall 2.9%, or $1.09, to $36.24. Central Pacific Bank, the state’s fourth-largest bank, fell 6.8%, or $1.38, to $18.80. And Territorial Savings Bank, the state’s fifth-largest bank, declined 5.5%, or $1.11, to $19.20.
Bank of Hawaii filed an operational overview Monday with the U.S. Securities and Exchange Commission in light of recent industry and market volatility. Bankoh said in the filing that its “deposits are well- diversified by industry and depositor type.” The bank also said its average consumer balance is $18,000 and that its average commercial balance is $134,000.
“We have ample liquidity and our regulatory capital ratios remain strong,” the bank said in the filing.
Later in the day, the bank issued a statement saying the markets are volatile and that the entire banking industry, in particular, has been affected.
“It’s important to note that Bank of Hawai‘i is as strong as it’s ever been,” it said. “Our branches and call center operations have been normal, and we continue to be committed to serve our customers no matter the economic landscape.”
First Hawaiian Chairman, President and CEO Bob Harrison said the bank continues to monitor the events affecting the banking industry.
“We have not seen any unusual levels of customer activity at First Hawaiian,” he said in a statement. “We have a strong balance sheet, with high capital levels and plenty of liquidity to meet the needs of our customers.”
Central Pacific Chief Financial Officer David Morimoto said the bank has a strong liquidity position highlighted by its $6.7 billion in “Hawaii relationship deposits.”
“Our deposit portfolio is diversified with 52% in commercial accounts and 48% in consumer accounts,” Morimoto said in a statement. “Additionally, 65% of our deposit balances are FDIC insured. Our deposit relationships are long tenured with approximately 50% of our deposit customers having been with CPB for more than 10 years. Finally, we have the ability to quickly obtain wholesale funding in excess of $3 billion.”
Territorial spokesperson Walter Ida said, “It’s been business as usual in our branches.” He said a few customers have had questions about the Federal Deposit Insurance Corp. insurance coverage of $250,000.
The FDIC, which protects all traditional types of deposit accounts (checking, savings, money market deposit accounts and CDs), guarantees up to $250,000 per depositor as well as bank individual retirement accounts up to $250,000 per owner.
On Friday the Hawaii Bankers Association said that its eight member banks, which are members of the FDIC, were unaffected by the closure of Silicon Valley Bank. Signature Bank was shut down over the weekend.
“Hawaii Bankers Association member banks have strong capital,” HBA Executive Director Neal Okabayashi said in a statement. “Customers can bank with confidence knowing that their accounts are safe. At this point, the FDIC has stated that this is an isolated incident, and there is no indication of systemic issues affecting the banking industry.”
American Savings Bank spokesperson Karwin Sui referred the bank’s response to last week’s comments by the Hawaii Bankers Association.
Hawaii Bankers Association members are American Savings Bank, Bank of Hawaii, Central Pacific Bank, Finance Factors, First Hawaiian Bank, Hawaii National Bank, HomeStreet Bank and Territorial Savings Bank.
BANK BLOWOUT
The shares of Hawaii’s five publicly traded banks dropped sharply Monday in the wake of the sudden closures of Silicon Valley Bank and Signature Bank. The banks are listed in order of assets size:
Bank Closing price Net change Pct. change
First Hawaiian Bank $20.19 -$2.84 -12.3%
Bank of Hawaii $51.75 -$11.63 -18.4%
* American Savings Bank $36.24 -$1.09 -2.9%
Central Pacific Bank $18.80 -$1.38 -6.8%
Territorial Savings Bank $19.20 -$1.11 -5.5%
* The numbers reflect the performance of parent company Hawaiian Electric Industries Inc. since ASB is not separately traded.
Source: Bloomberg
