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Bank of Hawaii (BOH) Q2 Earnings Top Estimates, Stock Up 1.8%

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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.


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.

Bank of Hawaii Corporation Price, Consensus and EPS Surprise

Bank of Hawaii Corporation Price, Consensus and EPS Surprise

Bank of Hawaii Corporation price-consensus-eps-surprise-chart | Bank of Hawaii Corporation Quote

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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