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Bank of Hawaii (BOH) Stock Down 4.4% Despite Q4 Earnings Beat
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Bank of Hawaii Corporation (BOH - Free Report) reported fourth-quarter 2022 earnings per share of $1.50, surpassing the Zacks Consensus Estimate of $1.45. The bottom line, however, declined 3.2% from the year-ago quarter’s number.
Revenue growth on higher net interest income and decent loan demand acted as tailwinds. However, a rise in expenses and provisions were significant drags. These concerns turned the investors bearish on the stock, as the share price declined 4.4% on yesterday’s trading.
The company’s net income came in at $61.3 million, down 4.1% year over year.
For 2022, earnings per share of $5.48 missed the Zacks Consensus Estimate of $5.62 and decreased 12.3% from 2021. Net income of $225.8 million was down 10.9%.
Revenues & Expenses Rise
The company’s total revenues grew 7.7% year over year to $181.9 million in the fourth quarter surpassing the Zacks Consensus Estimate of $181.1 million.
In 2022, total revenues increased 4.4% to $698.1 million. However, the top line lagged the Zacks Consensus Estimate of $701.6 million.
The bank’s net interest income was $140.7 million, up 11.4%. Net interest margin expanded 26 basis points (bps) to 2.60% on higher rate environment and strong loan growth.
Non-interest income came in at $41.2 million, down 3.3%. The decline primarily resulted from a fall in trust and asset management, mortgage banking and fee, exchange, and other service charges.
Non-interest expenses increased 1% to $102.7 million. The upswing mainly reflected a rise in all components, except salaries and benefits, and data processing.
Efficiency ratio was 56.46% compared with 60.18% recorded in the year-ago period. A decrease in the efficiency ratio reflects increased profitability.
As of Dec 31, 2022, total loans and leases balance increased 2.4% from prior-quarter end to $13.6 billion, while total deposits decreased 1.3% to $20.6 billion.
Credit Quality: A Mixed Bag
As of Dec 31, 2022, non-performing assets and allowance for credit losses decreased 33.3% and 8.5% year over year to $12.6 million and $144.4 million, respectively.
The company recorded provision for credit losses of $0.2 million against a benefit of $9.7 million in the year-ago quarter. Moreover, $3.2 million were recorded in net loans and lease charge-offs against recovery of $1.4 million in the prior-year quarter.
Capital and Profitability Ratios Deteriorate
As of Dec 31, 2022, Tier 1 capital ratio was 12.15%, down from 13.56% as of Dec 31, 2021. Total capital ratio was 13.17%, down from 14.81%. The ratio of tangible common equity to risk-weighted assets was 7.76%, down from 11.44% reported at the end of the year-ago quarter.
Return on average assets shrunk 7 bps year over year to 1.05%. Return on average shareholders' equity was 18.91% compared with 15.92% as of Dec 31, 2021.
Share Repurchase Update
During the reported quarter, Bank of Hawaii repurchased 192,300 shares at an average price of $77.77.
The company's board of birectors announced additional share buyback authorization of $100 million. Hence, as of Jan 20, 2023, $135.9 million remained under the share repurchase program.
Conclusion
Bank of Hawaii’s strong balance-sheet position, higher interest rates and a rise in loan demand will continue to support financials. However, persistently increasing operating expenses and rising provisions are near-term concerns.
Bank of Hawaii Corporation Price, Consensus and EPS Surprise
SVB Financial Group’s fourth-quarter 2022 earnings per share of $4.62 lagged the Zacks Consensus Estimate of $5.26. The bottom line reflects a decline of 25.7% from the prior-year quarter.
Results of SIVB were primarily affected by an increase in expenses and provisions. A decline in non-interest income was another undermining factor. However, an improvement in net interest income (NII), driven by higher rates and loan growth, supported the results to some extent.
BankUnited, Inc.’s (BKU - Free Report) fourth-quarter 2022 earnings per share of 82 cents missed the Zacks Consensus Estimate of $1.11 by a considerable margin. and declined 41.8% from the prior-year quarter. We had projected earnings per share of 96 cents.
Results of BKU were adversely impacted by subdued fee income performance and an increase in credit costs. However, higher NII, a decent rise in loan balance, increasing rates and a fall in expenses acted as tailwinds.
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Bank of Hawaii (BOH) Stock Down 4.4% Despite Q4 Earnings Beat
Bank of Hawaii Corporation (BOH - Free Report) reported fourth-quarter 2022 earnings per share of $1.50, surpassing the Zacks Consensus Estimate of $1.45. The bottom line, however, declined 3.2% from the year-ago quarter’s number.
Revenue growth on higher net interest income and decent loan demand acted as tailwinds. However, a rise in expenses and provisions were significant drags. These concerns turned the investors bearish on the stock, as the share price declined 4.4% on yesterday’s trading.
The company’s net income came in at $61.3 million, down 4.1% year over year.
For 2022, earnings per share of $5.48 missed the Zacks Consensus Estimate of $5.62 and decreased 12.3% from 2021. Net income of $225.8 million was down 10.9%.
Revenues & Expenses Rise
The company’s total revenues grew 7.7% year over year to $181.9 million in the fourth quarter surpassing the Zacks Consensus Estimate of $181.1 million.
In 2022, total revenues increased 4.4% to $698.1 million. However, the top line lagged the Zacks Consensus Estimate of $701.6 million.
The bank’s net interest income was $140.7 million, up 11.4%. Net interest margin expanded 26 basis points (bps) to 2.60% on higher rate environment and strong loan growth.
Non-interest income came in at $41.2 million, down 3.3%. The decline primarily resulted from a fall in trust and asset management, mortgage banking and fee, exchange, and other service charges.
Non-interest expenses increased 1% to $102.7 million. The upswing mainly reflected a rise in all components, except salaries and benefits, and data processing.
Efficiency ratio was 56.46% compared with 60.18% recorded in the year-ago period. A decrease in the efficiency ratio reflects increased profitability.
As of Dec 31, 2022, total loans and leases balance increased 2.4% from prior-quarter end to $13.6 billion, while total deposits decreased 1.3% to $20.6 billion.
Credit Quality: A Mixed Bag
As of Dec 31, 2022, non-performing assets and allowance for credit losses decreased 33.3% and 8.5% year over year to $12.6 million and $144.4 million, respectively.
The company recorded provision for credit losses of $0.2 million against a benefit of $9.7 million in the year-ago quarter. Moreover, $3.2 million were recorded in net loans and lease charge-offs against recovery of $1.4 million in the prior-year quarter.
Capital and Profitability Ratios Deteriorate
As of Dec 31, 2022, Tier 1 capital ratio was 12.15%, down from 13.56% as of Dec 31, 2021. Total capital ratio was 13.17%, down from 14.81%. The ratio of tangible common equity to risk-weighted assets was 7.76%, down from 11.44% reported at the end of the year-ago quarter.
Return on average assets shrunk 7 bps year over year to 1.05%. Return on average shareholders' equity was 18.91% compared with 15.92% as of Dec 31, 2021.
Share Repurchase Update
During the reported quarter, Bank of Hawaii repurchased 192,300 shares at an average price of $77.77.
The company's board of birectors announced additional share buyback authorization of $100 million. Hence, as of Jan 20, 2023, $135.9 million remained under the share repurchase program.
Conclusion
Bank of Hawaii’s strong balance-sheet position, higher interest rates and a rise in loan demand will continue to support financials. However, persistently increasing operating expenses and rising provisions are near-term concerns.
Bank of Hawaii Corporation Price, Consensus and EPS Surprise
Bank of Hawaii Corporation price-consensus-eps-surprise-chart | Bank of Hawaii Corporation Quote
Currently, BOH 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
SVB Financial Group’s fourth-quarter 2022 earnings per share of $4.62 lagged the Zacks Consensus Estimate of $5.26. The bottom line reflects a decline of 25.7% from the prior-year quarter.
Results of SIVB were primarily affected by an increase in expenses and provisions. A decline in non-interest income was another undermining factor. However, an improvement in net interest income (NII), driven by higher rates and loan growth, supported the results to some extent.
BankUnited, Inc.’s (BKU - Free Report) fourth-quarter 2022 earnings per share of 82 cents missed the Zacks Consensus Estimate of $1.11 by a considerable margin. and declined 41.8% from the prior-year quarter. We had projected earnings per share of 96 cents.
Results of BKU were adversely impacted by subdued fee income performance and an increase in credit costs. However, higher NII, a decent rise in loan balance, increasing rates and a fall in expenses acted as tailwinds.