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Why Is Bank of Hawaii (BOH) Up 1% Since Last Earnings Report?
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A month has gone by since the last earnings report for Bank of Hawaii (BOH - Free Report) . Shares have added about 1% in that time frame, underperforming 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’s Q1 Earnings Miss, Expenses Fall Y/Y
Bank of Hawaii reported first-quarter 2024 earnings per share (EPS) of 87 cents, missing the Zacks Consensus Estimate of 92 cents. The bottom line compared unfavorably with $1.14 earned in the year-ago quarter.
The bank’s quarterly results were affected by a decline in NII, along with a drop in loans and deposit balances. Nonetheless, an improvement in non-interest income and a decline in expenses acted as a tailwind.
The company’s net income came in at $36.4 million, down 22.3% year over year.
Revenues Decline, Expenses Fall
Total quarterly revenues fell 11.6% year over year to $156.2 million in the first quarter. The top line also missed the Zacks Consensus Estimate of $160.79 million.
NII was $113.9 million, down 16.2% year over year, primarily due to increased funding costs, partially offset by higher earning asset yields. NIM decreased 36 basis points to 2.11%.
Non-interest income came in at $42.3 million, up 3.8% year over year. This included $0.6 million worth of negative adjustment related to a change in Visa B conversion ratio. Adjusted for this item, the metric increased 2.4% year over year.
Non-interest expenses decreased 5.4% to $105.9 million. It included seasonal payroll expenses of approximately $2.2 million and separation expenses of $0.5 million. Adjusted for these items, the metric for the first quarter of 2024 was $103.2 million, down 1.6% from adjusted noninterest expense recorded in the year-ago quarter.
The efficiency ratio was 67.76%, which increased from 63.34% recorded in the year-ago period. A rise in the efficiency ratio reflects lower profitability.
As of Mar 31, 2024, total loans and leases balance decreased nearly 1% from the previous quarter’s end to $13.9 billion. Total deposits decreased 1.8% sequentially to $20.7 billion.
Credit Quality: A Mixed Bag
As of Mar 31, 2024, non-performing assets were $11.8 million, up nearly 1% year over year.
Net loans and lease charge-offs were $2.3 million, down $0.4 million from the year-ago quarter's level.
Provision for credit losses was $2 million, which remained flat from the year-ago quarter.
The allowance for credit losses increased 2.8% to $147.7 million.
Capital Ratios Improve
As of Mar 31, 2024, the Tier 1 capital ratio was 12.74%, which increased from 12.10% as of Mar 31, 2023. The total capital ratio was 13.81%, which rose from 13.13%.
The ratio of tangible common equity to risk-weighted assets was 8.70%, which increased from 7.97% at the end of the year-ago quarter.
Profitability Ratios Deteriorate
Return on average assets was 0.63% at the end of the first quarter of 2024, which declined from 0.80% reported in the prior-year quarter. Return on average shareholders' equity was 10.34%, down from 14.25% as of Mar 31, 2023.
Share Repurchase Update
During the reported quarter, Bank of Hawaii did not repurchase any shares.
Outlook
Second-Quarter 2024
Given the recent market volatility, the company expects core non-interest income in the second quarter of 2024 to be slightly lower than the previous quarter’s reported figure. The company reported a core non-interest income of $42.3 million in the first quarter.
Full-year 2024
The company expects expenses to be 1-2% higher than normalized expenses of $419 million in 2023, primarily due to inflationary pressures and annual merit increases.
The tax rate is anticipated to be 24.5%.
How Have Estimates Been Moving Since Then?
It turns out, estimates revision have trended downward during the past month.
The consensus estimate has shifted -9.47% due to these changes.
VGM Scores
At this time, Bank of Hawaii has a poor Growth Score of F, however its Momentum Score is doing a bit better with a D. Following the exact same course, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of F. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. It's no surprise Bank of Hawaii has a Zacks Rank #5 (Strong Sell). We expect a below average 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 4.9% over the past month. More than a month has passed since the company reported results for the quarter ended March 2024.
Westamerica reported revenues of $75.84 million in the last reported quarter, representing a year-over-year change of -4.8%. EPS of $1.37 for the same period compares with $1.47 a year ago.
For the current quarter, Westamerica is expected to post earnings of $1.34 per share, indicating a change of -11.3% from the year-ago quarter. The Zacks Consensus Estimate remained unchanged over the last 30 days.
The overall direction and magnitude of estimate revisions translate into a Zacks Rank #4 (Sell) for Westamerica. Also, the stock has a VGM Score of C.
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Why Is Bank of Hawaii (BOH) Up 1% Since Last Earnings Report?
A month has gone by since the last earnings report for Bank of Hawaii (BOH - Free Report) . Shares have added about 1% in that time frame, underperforming 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’s Q1 Earnings Miss, Expenses Fall Y/Y
Bank of Hawaii reported first-quarter 2024 earnings per share (EPS) of 87 cents, missing the Zacks Consensus Estimate of 92 cents. The bottom line compared unfavorably with $1.14 earned in the year-ago quarter.
The bank’s quarterly results were affected by a decline in NII, along with a drop in loans and deposit balances. Nonetheless, an improvement in non-interest income and a decline in expenses acted as a tailwind.
The company’s net income came in at $36.4 million, down 22.3% year over year.
Revenues Decline, Expenses Fall
Total quarterly revenues fell 11.6% year over year to $156.2 million in the first quarter. The top line also missed the Zacks Consensus Estimate of $160.79 million.
NII was $113.9 million, down 16.2% year over year, primarily due to increased funding costs, partially offset by higher earning asset yields. NIM decreased 36 basis points to 2.11%.
Non-interest income came in at $42.3 million, up 3.8% year over year. This included $0.6 million worth of negative adjustment related to a change in Visa B conversion ratio. Adjusted for this item, the metric increased 2.4% year over year.
Non-interest expenses decreased 5.4% to $105.9 million. It included seasonal payroll expenses of approximately $2.2 million and separation expenses of $0.5 million. Adjusted for these items, the metric for the first quarter of 2024 was $103.2 million, down 1.6% from adjusted noninterest expense recorded in the year-ago quarter.
The efficiency ratio was 67.76%, which increased from 63.34% recorded in the year-ago period. A rise in the efficiency ratio reflects lower profitability.
As of Mar 31, 2024, total loans and leases balance decreased nearly 1% from the previous quarter’s end to $13.9 billion. Total deposits decreased 1.8% sequentially to $20.7 billion.
Credit Quality: A Mixed Bag
As of Mar 31, 2024, non-performing assets were $11.8 million, up nearly 1% year over year.
Net loans and lease charge-offs were $2.3 million, down $0.4 million from the year-ago quarter's level.
Provision for credit losses was $2 million, which remained flat from the year-ago quarter.
The allowance for credit losses increased 2.8% to $147.7 million.
Capital Ratios Improve
As of Mar 31, 2024, the Tier 1 capital ratio was 12.74%, which increased from 12.10% as of Mar 31, 2023. The total capital ratio was 13.81%, which rose from 13.13%.
The ratio of tangible common equity to risk-weighted assets was 8.70%, which increased from 7.97% at the end of the year-ago quarter.
Profitability Ratios Deteriorate
Return on average assets was 0.63% at the end of the first quarter of 2024, which declined from 0.80% reported in the prior-year quarter. Return on average shareholders' equity was 10.34%, down from 14.25% as of Mar 31, 2023.
Share Repurchase Update
During the reported quarter, Bank of Hawaii did not repurchase any shares.
Outlook
Second-Quarter 2024
Given the recent market volatility, the company expects core non-interest income in the second quarter of 2024 to be slightly lower than the previous quarter’s reported figure. The company reported a core non-interest income of $42.3 million in the first quarter.
Full-year 2024
The company expects expenses to be 1-2% higher than normalized expenses of $419 million in 2023, primarily due to inflationary pressures and annual merit increases.
The tax rate is anticipated to be 24.5%.
How Have Estimates Been Moving Since Then?
It turns out, estimates revision have trended downward during the past month.
The consensus estimate has shifted -9.47% due to these changes.
VGM Scores
At this time, Bank of Hawaii has a poor Growth Score of F, however its Momentum Score is doing a bit better with a D. Following the exact same course, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of F. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. It's no surprise Bank of Hawaii has a Zacks Rank #5 (Strong Sell). We expect a below average 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 4.9% over the past month. More than a month has passed since the company reported results for the quarter ended March 2024.
Westamerica reported revenues of $75.84 million in the last reported quarter, representing a year-over-year change of -4.8%. EPS of $1.37 for the same period compares with $1.47 a year ago.
For the current quarter, Westamerica is expected to post earnings of $1.34 per share, indicating a change of -11.3% from the year-ago quarter. The Zacks Consensus Estimate remained unchanged over the last 30 days.
The overall direction and magnitude of estimate revisions translate into a Zacks Rank #4 (Sell) for Westamerica. Also, the stock has a VGM Score of C.