Bank of Hawaii Corporation (BOH - Free Report) reported second-quarter 2022 earnings per share of $1.38, surpassing the Zacks Consensus Estimate of $1.35. Yet, the bottom line declined from $1.68 in the year-ago quarter.
Shares of Bank of Hawaii gained 1.82% following the release of its second-quarter earnings.The results were supported by a significant rise in net interest income (NII). In addition, the improvement in total loans and leases, and deposits reflects a strong balance sheet position. However, high expenses and a fall in fee income were the offsetting factors.
The company’s net income was $56.9 million, down from the prior-year quarter’s $67.5 million.
Revenues & Expenses Rise, Loans & Deposits Up
The company’s total revenues improved 2.4% year over year to $175.1 million in the second quarter. Further, the top line surpassed the Zacks Consensus Estimate of $173.6 million.
The bank’s NII was $132.9 million, up 8% year over year. The net interest margin (NIM) rose 10 basis points (bps) to 2.47%.
Non-interest income was $42.2 million, down 5% year over year. This decline primarily resulted from a fall in mortgage banking, trust and asset management, and annuity and insurance.
The bank’s non-interest expenses increased 7% year over year to $102.9 million. The upswing mainly reflects a rise in salaries and benefits, net occupancy and net equipment costs.
Efficiency ratio was 58.80% compared with 57.47% recorded in the year-ago period. A rise in the efficiency ratio reflects lower profitability.
As of Jun 30, 2022, total loans and leases balance rose 8% from the end of the prior quarter to $12.95 billion, while total deposits increased 4% to $21.03 billion.
Credit Quality – A Mixed Bag
As of Jun 30, 2022, non-performing assets decreased 18% year over year to around $15.49 million. The allowance for credit losses declined 18% to $148.5 million.
However, the company’s provision for credit losses in the second quarter was a net benefit of $2.5 million, lower than the prior year’s net benefit of $16.1 million. In addition, net loans and lease charge-offs were $0.63 million, down from $1.2 million in the prior year’s quarter.
Weak Capital Ratios, Profitability Falls
As of Jun 30, 2022, Tier 1 capital ratio was 13.01%, down from 13.87% as of Jun 30, 2021. Total capital ratio was 14.14%, declining from 15.13%. In addition, the ratio of tangible common equity to risk-weighted assets was 8.72%, down from 11.81% in the year-ago quarter.
Return on average assets declined year over year to 1% from 1.23%. Return on average shareholders' equity was 16.40% compared with 19.17% as of Jun 30, 2021.
Conclusion
Bank of Hawaii’s second-quarter 2022 revenues increased and were backed by high NII. The rise in NIM and decrease in non-performing assets were the encouraging factors. However, the decrease in profitability was a matter of concern.
Currently, Bank of Hawaii carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performance of Other Banks
M&T Bank Corporation (MTB - Free Report) reported net operating earnings per share of $3.10 for second-quarter 2022, meeting the Zacks Consensus Estimate. However, the bottom line compares unfavorably with the $3.45 per share reported in the year-ago period.
A rise in NII on net interest margin expansion and balance sheet strength drove MTB’s results. Yet a rise in expenses was a key undermining factor.
Truist Financial’s (TFC - Free Report) second-quarter 2022 adjusted earnings of $1.20 per share surpassed the Zacks Consensus Estimate of $1.17. However, TFC’s bottom line declined 22.6% from the prior-year quarter.
TFC’s results were aided by average loan growth and higher rates, which drove NII. However, lower non-interest income and a rise in provisions were the major headwinds.
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Bank of Hawaii Corporation (BOH - Free Report) reported second-quarter 2022 earnings per share of $1.38, surpassing the Zacks Consensus Estimate of $1.35. Yet, the bottom line declined from $1.68 in the year-ago quarter.
Shares of Bank of Hawaii gained 1.82% following the release of its second-quarter earnings.The results were supported by a significant rise in net interest income (NII). In addition, the improvement in total loans and leases, and deposits reflects a strong balance sheet position. However, high expenses and a fall in fee income were the offsetting factors.
The company’s net income was $56.9 million, down from the prior-year quarter’s $67.5 million.
Revenues & Expenses Rise, Loans & Deposits Up
The company’s total revenues improved 2.4% year over year to $175.1 million in the second quarter. Further, the top line surpassed the Zacks Consensus Estimate of $173.6 million.
The bank’s NII was $132.9 million, up 8% year over year. The net interest margin (NIM) rose 10 basis points (bps) to 2.47%.
Non-interest income was $42.2 million, down 5% year over year. This decline primarily resulted from a fall in mortgage banking, trust and asset management, and annuity and insurance.
The bank’s non-interest expenses increased 7% year over year to $102.9 million. The upswing mainly reflects a rise in salaries and benefits, net occupancy and net equipment costs.
Efficiency ratio was 58.80% compared with 57.47% recorded in the year-ago period. A rise in the efficiency ratio reflects lower profitability.
As of Jun 30, 2022, total loans and leases balance rose 8% from the end of the prior quarter to $12.95 billion, while total deposits increased 4% to $21.03 billion.
Credit Quality – A Mixed Bag
As of Jun 30, 2022, non-performing assets decreased 18% year over year to around $15.49 million. The allowance for credit losses declined 18% to $148.5 million.
However, the company’s provision for credit losses in the second quarter was a net benefit of $2.5 million, lower than the prior year’s net benefit of $16.1 million. In addition, net loans and lease charge-offs were $0.63 million, down from $1.2 million in the prior year’s quarter.
Weak Capital Ratios, Profitability Falls
As of Jun 30, 2022, Tier 1 capital ratio was 13.01%, down from 13.87% as of Jun 30, 2021. Total capital ratio was 14.14%, declining from 15.13%. In addition, the ratio of tangible common equity to risk-weighted assets was 8.72%, down from 11.81% in the year-ago quarter.
Return on average assets declined year over year to 1% from 1.23%. Return on average shareholders' equity was 16.40% compared with 19.17% as of Jun 30, 2021.
Conclusion
Bank of Hawaii’s second-quarter 2022 revenues increased and were backed by high NII. The rise in NIM and decrease in non-performing assets were the encouraging factors. However, the decrease in profitability was a matter of concern.
Currently, Bank of Hawaii carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performance of Other Banks
M&T Bank Corporation (MTB - Free Report) reported net operating earnings per share of $3.10 for second-quarter 2022, meeting the Zacks Consensus Estimate. However, the bottom line compares unfavorably with the $3.45 per share reported in the year-ago period.
A rise in NII on net interest margin expansion and balance sheet strength drove MTB’s results. Yet a rise in expenses was a key undermining factor.
Truist Financial’s (TFC - Free Report) second-quarter 2022 adjusted earnings of $1.20 per share surpassed the Zacks Consensus Estimate of $1.17. However, TFC’s bottom line declined 22.6% from the prior-year quarter.
TFC’s results were aided by average loan growth and higher rates, which drove NII. However, lower non-interest income and a rise in provisions were the major headwinds.
Zacks Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>
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