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Why Is Bank of Hawaii (BOH) Up 13.3% Since Last Earnings Report?
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It has been about a month since the last earnings report for Bank of Hawaii (BOH - Free Report) . Shares have added about 13.3% in that time frame, outperforming 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 catalysts.
Bank of Hawaii Q3 Earnings & Revenues Miss
Bank of Hawaii reported third-quarter 2022 earnings per share of $1.28, missing the Zacks Consensus Estimate of $1.43. Also, the bottom line declined 15.8% from the year-ago quarter.
The results were hurt by higher expenses and a decline in non-interest income. Also, the company’s capital and profitability ratios deteriorated. However, supported by higher interest rates and robust loan balance, Bank of Hawaii witnessed an increase in NII.
Bank of Hawaii’s net income was $52.8 million, down 13.5% from the prior-year quarter.
Revenues & Expenses Rise
The company’s total revenues improved 2.4% year over year to $172.3 million. However, the top line lagged the Zacks Consensus Estimate of $183.6 million.
NII was $141.7 million, up 11.7%. NIM rose 28 basis points (bps) to 2.60%.
Non-interest income was $30.7 million, plunging 25.9%. This decline primarily resulted from the inclusion of a one-time pre-tax charge of $6.9 million related to the company’s agreement to sell assets that will terminate leveraged leases related to 31 locomotives.
Non-interest expenses increased 9.6% year over year to $105.7 million. The upswing mainly reflects a rise in salaries and benefits and net occupancy.
Efficiency ratio was 61.37% compared with 57.38% recorded in the year-ago period. A rise in the efficiency ratio reflects lower profitability.
As of Sep 30, 2022, total loans and leases balance rose 2.9% from the end of the prior quarter to $13.23 billion, while total deposits declined marginally to $20.89 billion.
Credit Quality Solid
As of Sep 30, 2022, non-performing assets decreased 32.7% year over year to $13.9 million. The allowance for credit losses declined 12.8% to $146.4 million.
The company’s provision for credit losses in the third quarter was nil against a net benefit of $10.4 million in the prior-year quarter. In addition, net loans and lease charge-offs were $1.1 million, down from $1.2 million in the prior-year quarter.
Capital & Profitability Ratios Deteriorate
As of Sep 30, 2022, Tier 1 capital ratio was 12.72%, down from 13.47% as of Sep 30, 2021. Total capital ratio was 13.82%, declining from 14.72%. In addition, the ratio of tangible common equity to risk-weighted assets was 7.97%, down from 11.46% in the year-ago quarter.
Further, as of Sep 30, 2022, the common equity tier 1 capital ratio of 11.42% declined from 12.02% in the prior-year period.
Return on average assets was 0.91%, down from 1.07% in the prior year period. Return on average shareholders' equity was 15.31% compared with 15.41% as of Sep 30, 2021.
Share Repurchase Update
During the reported quarter, Bank of Hawaii repurchased 187.5 million shares for $15 million.
Outlook
Loan growth in the high-single-digit range is expected in 2022. The company anticipates NIM to increase 5 bps in the fourth quarter of 2022.
Management expects a non-interest income of $39 million for the fourth quarter, owing to continued pressure on mortgage banking income and wealth management fees.
Management expects expenses of $415 million for 2022. Beginning next year, expense growth is projected to normalize to 4%.
How Have Estimates Been Moving Since Then?
It turns out, estimates revision flatlined during the past month.
The consensus estimate has shifted -5.46% due to these changes.
VGM Scores
Currently, Bank of Hawaii has an average Growth Score of C, though it is lagging a bit on the Momentum Score front with a D. Charting a somewhat similar path, the stock was allocated a grade of C on the value side, putting it in the middle 20% 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.
Performance of an Industry Player
Bank of Hawaii belongs to the Zacks Banks - West industry. Another stock from the same industry, Westamerica (WABC - Free Report) , has gained 0.3% over the past month. More than a month has passed since the company reported results for the quarter ended September 2022.
Westamerica reported revenues of $72.13 million in the last reported quarter, representing a year-over-year change of +32.1%. EPS of $1.29 for the same period compares with $0.82 a year ago.
Westamerica is expected to post earnings of $1.46 per share for the current quarter, representing a year-over-year change of +80.3%. Over the last 30 days, the Zacks Consensus Estimate remained unchanged.
Westamerica has a Zacks Rank #1 (Strong Buy) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of F.
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Why Is Bank of Hawaii (BOH) Up 13.3% Since Last Earnings Report?
It has been about a month since the last earnings report for Bank of Hawaii (BOH - Free Report) . Shares have added about 13.3% in that time frame, outperforming 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 catalysts.
Bank of Hawaii Q3 Earnings & Revenues Miss
Bank of Hawaii reported third-quarter 2022 earnings per share of $1.28, missing the Zacks Consensus Estimate of $1.43. Also, the bottom line declined 15.8% from the year-ago quarter.
The results were hurt by higher expenses and a decline in non-interest income. Also, the company’s capital and profitability ratios deteriorated. However, supported by higher interest rates and robust loan balance, Bank of Hawaii witnessed an increase in NII.
Bank of Hawaii’s net income was $52.8 million, down 13.5% from the prior-year quarter.
Revenues & Expenses Rise
The company’s total revenues improved 2.4% year over year to $172.3 million. However, the top line lagged the Zacks Consensus Estimate of $183.6 million.
NII was $141.7 million, up 11.7%. NIM rose 28 basis points (bps) to 2.60%.
Non-interest income was $30.7 million, plunging 25.9%. This decline primarily resulted from the inclusion of a one-time pre-tax charge of $6.9 million related to the company’s agreement to sell assets that will terminate leveraged leases related to 31 locomotives.
Non-interest expenses increased 9.6% year over year to $105.7 million. The upswing mainly reflects a rise in salaries and benefits and net occupancy.
Efficiency ratio was 61.37% compared with 57.38% recorded in the year-ago period. A rise in the efficiency ratio reflects lower profitability.
As of Sep 30, 2022, total loans and leases balance rose 2.9% from the end of the prior quarter to $13.23 billion, while total deposits declined marginally to $20.89 billion.
Credit Quality Solid
As of Sep 30, 2022, non-performing assets decreased 32.7% year over year to $13.9 million. The allowance for credit losses declined 12.8% to $146.4 million.
The company’s provision for credit losses in the third quarter was nil against a net benefit of $10.4 million in the prior-year quarter. In addition, net loans and lease charge-offs were $1.1 million, down from $1.2 million in the prior-year quarter.
Capital & Profitability Ratios Deteriorate
As of Sep 30, 2022, Tier 1 capital ratio was 12.72%, down from 13.47% as of Sep 30, 2021. Total capital ratio was 13.82%, declining from 14.72%. In addition, the ratio of tangible common equity to risk-weighted assets was 7.97%, down from 11.46% in the year-ago quarter.
Further, as of Sep 30, 2022, the common equity tier 1 capital ratio of 11.42% declined from 12.02% in the prior-year period.
Return on average assets was 0.91%, down from 1.07% in the prior year period. Return on average shareholders' equity was 15.31% compared with 15.41% as of Sep 30, 2021.
Share Repurchase Update
During the reported quarter, Bank of Hawaii repurchased 187.5 million shares for $15 million.
Outlook
Loan growth in the high-single-digit range is expected in 2022. The company anticipates NIM to increase 5 bps in the fourth quarter of 2022.
Management expects a non-interest income of $39 million for the fourth quarter, owing to continued pressure on mortgage banking income and wealth management fees.
Management expects expenses of $415 million for 2022. Beginning next year, expense growth is projected to normalize to 4%.
How Have Estimates Been Moving Since Then?
It turns out, estimates revision flatlined during the past month.
The consensus estimate has shifted -5.46% due to these changes.
VGM Scores
Currently, Bank of Hawaii has an average Growth Score of C, though it is lagging a bit on the Momentum Score front with a D. Charting a somewhat similar path, the stock was allocated a grade of C on the value side, putting it in the middle 20% 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.
Performance of an Industry Player
Bank of Hawaii belongs to the Zacks Banks - West industry. Another stock from the same industry, Westamerica (WABC - Free Report) , has gained 0.3% over the past month. More than a month has passed since the company reported results for the quarter ended September 2022.
Westamerica reported revenues of $72.13 million in the last reported quarter, representing a year-over-year change of +32.1%. EPS of $1.29 for the same period compares with $0.82 a year ago.
Westamerica is expected to post earnings of $1.46 per share for the current quarter, representing a year-over-year change of +80.3%. Over the last 30 days, the Zacks Consensus Estimate remained unchanged.
Westamerica has a Zacks Rank #1 (Strong Buy) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of F.