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Bank of Hawaii (BOH) Q4 Earnings Miss Estimates, NII Falls Y/Y
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Bank of Hawaii Corporation (BOH - Free Report) reported fourth-quarter 2023 earnings per share (EPS) of 72 cents, missing the Zacks Consensus Estimate of 89 cents. The bottom line compared unfavorably with $1.50 earned in the year-ago quarter.
The EPS for the reported quarter included an FDIC Special Assessment charge of 29 cents. Excluding this, adjusted EPS would have been $1.01.
BOH's quarterly results were affected by a decline in net interest income (NII) and a rise in provisions and expenses. However, improvement in non-interest income, together with increased loan and deposit balance, acted as a tailwind.
The company’s net income came in at $30.4 million, down 50.4% year over year. Our estimate for the metric was pegged at $31.1 million.
In 2023, earnings per share were $4.14, which declined 24.5% from the previous year and missed the Zacks Consensus Estimate of $4.28. Net income (GAAP) was $171.2 million, down 24.2%.
Revenues Decline, Expenses Rise
BOH’s total revenues fell 13.1% year over year to $158.1 million in the fourth quarter. The top line also missed the Zacks Consensus Estimate of $161.03 million.
In 2023, total revenues were $674 million, down 3.5% year over year. However, the top line surpassed the Zacks Consensus Estimate of $673.2 million.
NII was $115.8 million, down 17.7% year over year, primarily due to higher funding costs, partially offset by higher earning asset yields. Net interest margin (NIM) decreased 47 basis points (bps) to 2.13%. Our estimate for NII and NIM was pinned at $116.5 million and 2.16%, respectively.
Non-interest income came in at $42.3 million, up 2.7% year over year. Our estimate for the same was $41.5 million.
Non-interest expenses increased 12.9% to $116 million. It included the FDIC Special Assessment charge of $14.7 million, which was partly offset by $1.7 million in expense reductions. Adjusted core non-interest expense was $102.9 million. Our estimate for the metric was $102.6 million.
The efficiency ratio was 73.36%, which increased from 56.46% recorded in the year-ago period. A rise in the efficiency ratio reflects lower profitability.
As of Dec 31, 2023, total loans and leases balance increased marginally from the prior-quarter end to $14 billion. Total deposits increased 1.2% sequentially to $21.1 billion. Our estimates for total loans and leases, and total deposits were $13.8 billion and $20.6 billion, respectively.
Credit Quality: Mixed Bag
As of Dec 31, 2023, non-performing assets were $11.7 million, down 7.1% year over year.
Net loans and lease charge-offs were $1.7 million, down 7.1% from the prior-year quarter.
Provision for credit losses was $2.5 million, which jumped substantially from $0.2 million in the year-ago quarter. Our estimate for the metric was $14.2 million.
The allowance for credit losses increased 1.4% to $146.4 million.
Capital Ratios Improve
As of Dec 31, 2023, Tier 1 capital ratio was 12.56%, which increased from 12.15% as of Dec 31, 2022. The total capital ratio was 13.60%, which rose from 13.17%.
The ratio of tangible common equity to risk-weighted assets was 8.45%, which increased from 7.76% at the end of the year-ago quarter.
Profitability Ratios Deteriorate
Return on average assets was 0.51% at the end of fourth quarter, which declined from 1.05% in the prior-year quarter. Return on average shareholders' equity was 8.86%, down from 18.91% as of Dec 31, 2022.
Share Repurchase Update
During the reported quarter, Bank of Hawaii did not repurchase any shares.
Conclusion
Bank of Hawaii's strong balance-sheet position, a rise in non-interest income and steady growth in deposits and loan balances, along with higher interest rates, will continue to support financials. However, a fall in NII on rising funding costs and higher provisions are near-term concerns.
Bank of Hawaii Corporation Price, Consensus and EPS Surprise
Hancock Whitney Corp.’s (HWC - Free Report) fourth-quarter 2023 adjusted earnings per share of $1.26 beat the Zacks Consensus Estimate of $1.08. Adjusted earnings per share, however, compared unfavorably with $1.65 earned in the year-ago quarter.
HWC’s results were impacted by a decline in both NII and non-interest income. Further, a slight decrease in loan balances and an increase in expenses and provisions acted as spoilsports.
WaFd, Inc.’s (WAFD - Free Report) first-quarter fiscal 2024 (ended Dec 31) earnings of 85 cents per share surpassed the Zacks Consensus Estimate of 72 cents. However, the bottom line declined 26.7% year over year.
WAFD’s results primarily benefited from the rise in other income and steady loan balance. In the reported quarter, the company did not record any provision for credit losses. However, a fall in NII and an increase in other expenses acted as spoilsports.
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Bank of Hawaii (BOH) Q4 Earnings Miss Estimates, NII Falls Y/Y
Bank of Hawaii Corporation (BOH - Free Report) reported fourth-quarter 2023 earnings per share (EPS) of 72 cents, missing the Zacks Consensus Estimate of 89 cents. The bottom line compared unfavorably with $1.50 earned in the year-ago quarter.
The EPS for the reported quarter included an FDIC Special Assessment charge of 29 cents. Excluding this, adjusted EPS would have been $1.01.
BOH's quarterly results were affected by a decline in net interest income (NII) and a rise in provisions and expenses. However, improvement in non-interest income, together with increased loan and deposit balance, acted as a tailwind.
The company’s net income came in at $30.4 million, down 50.4% year over year. Our estimate for the metric was pegged at $31.1 million.
In 2023, earnings per share were $4.14, which declined 24.5% from the previous year and missed the Zacks Consensus Estimate of $4.28. Net income (GAAP) was $171.2 million, down 24.2%.
Revenues Decline, Expenses Rise
BOH’s total revenues fell 13.1% year over year to $158.1 million in the fourth quarter. The top line also missed the Zacks Consensus Estimate of $161.03 million.
In 2023, total revenues were $674 million, down 3.5% year over year. However, the top line surpassed the Zacks Consensus Estimate of $673.2 million.
NII was $115.8 million, down 17.7% year over year, primarily due to higher funding costs, partially offset by higher earning asset yields. Net interest margin (NIM) decreased 47 basis points (bps) to 2.13%. Our estimate for NII and NIM was pinned at $116.5 million and 2.16%, respectively.
Non-interest income came in at $42.3 million, up 2.7% year over year. Our estimate for the same was $41.5 million.
Non-interest expenses increased 12.9% to $116 million. It included the FDIC Special Assessment charge of $14.7 million, which was partly offset by $1.7 million in expense reductions. Adjusted core non-interest expense was $102.9 million. Our estimate for the metric was $102.6 million.
The efficiency ratio was 73.36%, which increased from 56.46% recorded in the year-ago period. A rise in the efficiency ratio reflects lower profitability.
As of Dec 31, 2023, total loans and leases balance increased marginally from the prior-quarter end to $14 billion. Total deposits increased 1.2% sequentially to $21.1 billion. Our estimates for total loans and leases, and total deposits were $13.8 billion and $20.6 billion, respectively.
Credit Quality: Mixed Bag
As of Dec 31, 2023, non-performing assets were $11.7 million, down 7.1% year over year.
Net loans and lease charge-offs were $1.7 million, down 7.1% from the prior-year quarter.
Provision for credit losses was $2.5 million, which jumped substantially from $0.2 million in the year-ago quarter. Our estimate for the metric was $14.2 million.
The allowance for credit losses increased 1.4% to $146.4 million.
Capital Ratios Improve
As of Dec 31, 2023, Tier 1 capital ratio was 12.56%, which increased from 12.15% as of Dec 31, 2022. The total capital ratio was 13.60%, which rose from 13.17%.
The ratio of tangible common equity to risk-weighted assets was 8.45%, which increased from 7.76% at the end of the year-ago quarter.
Profitability Ratios Deteriorate
Return on average assets was 0.51% at the end of fourth quarter, which declined from 1.05% in the prior-year quarter. Return on average shareholders' equity was 8.86%, down from 18.91% as of Dec 31, 2022.
Share Repurchase Update
During the reported quarter, Bank of Hawaii did not repurchase any shares.
Conclusion
Bank of Hawaii's strong balance-sheet position, a rise in non-interest income and steady growth in deposits and loan balances, along with higher interest rates, will continue to support financials. However, a fall in NII on rising funding costs and higher 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
Hancock Whitney Corp.’s (HWC - Free Report) fourth-quarter 2023 adjusted earnings per share of $1.26 beat the Zacks Consensus Estimate of $1.08. Adjusted earnings per share, however, compared unfavorably with $1.65 earned in the year-ago quarter.
HWC’s results were impacted by a decline in both NII and non-interest income. Further, a slight decrease in loan balances and an increase in expenses and provisions acted as spoilsports.
WaFd, Inc.’s (WAFD - Free Report) first-quarter fiscal 2024 (ended Dec 31) earnings of 85 cents per share surpassed the Zacks Consensus Estimate of 72 cents. However, the bottom line declined 26.7% year over year.
WAFD’s results primarily benefited from the rise in other income and steady loan balance. In the reported quarter, the company did not record any provision for credit losses. However, a fall in NII and an increase in other expenses acted as spoilsports.