We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Bank of Hawaii (BOH) Up 1.4% Since Last Earnings Report: Can It Continue?
Read MoreHide Full Article
A month has gone by since the last earnings report for Bank of Hawaii (BOH - Free Report) . Shares have added about 1.4% in that time frame, underperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Bank of Hawaii due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
Bank of Hawaii Q2 Earnings Top Estimates, Provisions Fall
Bank of Hawaii reported second-quarter 2021 earnings per share of $1.68, surpassing the Zacks Consensus Estimate of $1.31. Also, the bottom line compares favorably with the 98 cents reported in the prior-year quarter.
Fall in revenues on lower fee income and interest income was a headwind, Also, contraction of the net interest margin (NIM) was a major drag.
Nonetheless, fall in provisions, on improvement in economic conditions, was a key positive factor. In addition, higher deposit balances supported the company to some extent.
The company’s net income came in at $67.5 million, up 73.5% from the prior-year quarter figure.
Revenues Fall, Expenses Flare Up, Deposits Rise
The company’s total revenues declined 5.7% year over year to $167.9 million in the second quarter. Nonetheless, the top line surpassed the Zacks Consensus Estimate of $165 million.
The bank’s NII was $123.5 million, down 2.5% year over year. The NIM shrunk 46 basis points (bps) to 2.37% on low rates and higher levels of liquidity.
Non-interest income came in at $44.4 million, down 13.5% year over year. This decline primarily resulted from a fall in mortgage banking and net investment securities gain.
The bank’s non-interest expenses flared up 8.6% year over year to $96.5 million. This upswing mainly reflects a rise in all components except net occupancy costs.
Efficiency ratio was 57.47% compared with the 49.95% recorded in the year-ago quarter. Notably, a rise in the efficiency ratio reflects lower profitability.
As of Jun 30, 2021, total loans and leases balance decreased slightly from the end of the prior quarter to $12 billion, while total deposits improved 3.1% to $20.2 billion.
Credit Quality: A Mixed Bag
As of Jun 30, 2021, non-performing assets slid 16.3% to $19 million. Moreover, net charge-offs of $1.1 million compare favorably with the $5.1 million recorded in the prior-year quarter. The company recorded negative provision for credit losses of $16.1 million against provisions of $40.4 million in the year-ago quarter.
However, allowance for credit losses jumped 4% year over year to $180.4 million.
Capital and Profitability Ratios
As of Jun 30, 2021, Tier 1 capital ratio was 13.87% compared with 12.04%, as of Jun 30, 2020. Total capital ratio was 15.13%, up from 13.29%. The ratio of tangible common equity to risk weighted assets was 11.85% compared with the 12.07% reported at the end of the year-ago quarter.
Return on average assets expanded 41 bps year over year to 1.23%. Return on average shareholders' equity was 19.6% compared with 11.58%, as of Jun 30, 2020.
Outlook
Non-interest income is expected to be between $42 million and $43 million in 2021.
For 2021, excluding one-time items, non-interest expenses are anticipated to remain approximately $385 million, with the third- and fourth-quarter expenses being approximately the same as the second quarter at $96-$97 million.
Effective tax rate is estimated to be around 24%.
Margin is expected to shrink nearly 5-6 bps in the third quarter, mainly due to continued deposit growth and recent dip in long-term rates. It is expected to stabilize in the fourth quarter.
NII in the third quarter is anticipated to be approximately flat to slightly higher than the second quarter. These estimates exclude the impact of Paycheck Protection Program (PPP) loan prepayments, which have been volatile and unpredictable.
How Have Estimates Been Moving Since Then?
It turns out, estimates revision flatlined during the past month.
VGM Scores
Currently, Bank of Hawaii has a subpar Growth Score of D, however its Momentum Score is doing a bit better with a C. Charting a somewhat similar path, the stock was allocated a grade of B on the value side, putting it in the top 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Bank of Hawaii has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Bank of Hawaii (BOH) Up 1.4% Since Last Earnings Report: Can It Continue?
A month has gone by since the last earnings report for Bank of Hawaii (BOH - Free Report) . Shares have added about 1.4% in that time frame, underperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Bank of Hawaii due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
Bank of Hawaii Q2 Earnings Top Estimates, Provisions Fall
Bank of Hawaii reported second-quarter 2021 earnings per share of $1.68, surpassing the Zacks Consensus Estimate of $1.31. Also, the bottom line compares favorably with the 98 cents reported in the prior-year quarter.
Fall in revenues on lower fee income and interest income was a headwind, Also, contraction of the net interest margin (NIM) was a major drag.
Nonetheless, fall in provisions, on improvement in economic conditions, was a key positive factor. In addition, higher deposit balances supported the company to some extent.
The company’s net income came in at $67.5 million, up 73.5% from the prior-year quarter figure.
Revenues Fall, Expenses Flare Up, Deposits Rise
The company’s total revenues declined 5.7% year over year to $167.9 million in the second quarter. Nonetheless, the top line surpassed the Zacks Consensus Estimate of $165 million.
The bank’s NII was $123.5 million, down 2.5% year over year. The NIM shrunk 46 basis points (bps) to 2.37% on low rates and higher levels of liquidity.
Non-interest income came in at $44.4 million, down 13.5% year over year. This decline primarily resulted from a fall in mortgage banking and net investment securities gain.
The bank’s non-interest expenses flared up 8.6% year over year to $96.5 million. This upswing mainly reflects a rise in all components except net occupancy costs.
Efficiency ratio was 57.47% compared with the 49.95% recorded in the year-ago quarter. Notably, a rise in the efficiency ratio reflects lower profitability.
As of Jun 30, 2021, total loans and leases balance decreased slightly from the end of the prior quarter to $12 billion, while total deposits improved 3.1% to $20.2 billion.
Credit Quality: A Mixed Bag
As of Jun 30, 2021, non-performing assets slid 16.3% to $19 million. Moreover, net charge-offs of $1.1 million compare favorably with the $5.1 million recorded in the prior-year quarter. The company recorded negative provision for credit losses of $16.1 million against provisions of $40.4 million in the year-ago quarter.
However, allowance for credit losses jumped 4% year over year to $180.4 million.
Capital and Profitability Ratios
As of Jun 30, 2021, Tier 1 capital ratio was 13.87% compared with 12.04%, as of Jun 30, 2020. Total capital ratio was 15.13%, up from 13.29%. The ratio of tangible common equity to risk weighted assets was 11.85% compared with the 12.07% reported at the end of the year-ago quarter.
Return on average assets expanded 41 bps year over year to 1.23%. Return on average shareholders' equity was 19.6% compared with 11.58%, as of Jun 30, 2020.
Outlook
Non-interest income is expected to be between $42 million and $43 million in 2021.
For 2021, excluding one-time items, non-interest expenses are anticipated to remain approximately $385 million, with the third- and fourth-quarter expenses being approximately the same as the second quarter at $96-$97 million.
Effective tax rate is estimated to be around 24%.
Margin is expected to shrink nearly 5-6 bps in the third quarter, mainly due to continued deposit growth and recent dip in long-term rates. It is expected to stabilize in the fourth quarter.
NII in the third quarter is anticipated to be approximately flat to slightly higher than the second quarter. These estimates exclude the impact of Paycheck Protection Program (PPP) loan prepayments, which have been volatile and unpredictable.
How Have Estimates Been Moving Since Then?
It turns out, estimates revision flatlined during the past month.
VGM Scores
Currently, Bank of Hawaii has a subpar Growth Score of D, however its Momentum Score is doing a bit better with a C. Charting a somewhat similar path, the stock was allocated a grade of B on the value side, putting it in the top 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Bank of Hawaii has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.