A month has gone by since the last earnings report for Bank of Hawaii (BOH Quick QuoteBOH - Free Report) . Shares have lost about 6% in that time frame, underperforming the S&P 500.

Will the recent negative trend continue leading up to its next earnings release, or is Bank of Hawaii due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.

Bank of Hawaii Q4 Earnings & Revenues Miss Estimates, NII Rises Y/Y

Bank of Hawaii reported fourth-quarter 2024 adjusted earnings per share of 85 cents, missing the Zacks Consensus Estimate of 87 cents. The bottom line compared favorably with 72 cents reported in the year-ago quarter.

For 2024, adjusted EPS was $3.46, which missed the Zacks Consensus Estimate of $3.54. This compares unfavorably with $4.14 reported in the year-ago quarter.

BOH’s results were affected by a decline in deposit balances and a rise in provisions. However, the increase in net interest income and strong fee income growth offered some support. 

The company’s net income (GAAP basis) came in at $39.2 million, up 28.8% year over year. 

For 2024, the company reported a net (GAAP basis) of $150 million, which declined 12.4% year over year.

BOH’s Quarterly Revenues Rise, Expenses Decline

BOH’s quarterly revenues increased 3.3% year over year to $163.2 million in the fourth quarter. However, the top line missed the Zacks Consensus Estimate of $164.4 million.

Full-year revenues were $466.6 million, which decreased 30.7% year over year. The top line missed the Zacks Consensus Estimate of $640.3 million. 

NII was $117.6 million, up 3.8% year over year. NIM increased 6 basis points to 2.19%. 

Non-interest income came in at $43 million, up 1.8% year over year. This included a $2.4 million charge incurred in connection with a change in Visa Class B conversion ratio. Adjusted for this item, non-interest income would have been $45.4 million, up 7.5% from the same period in 2023. The rise was primarily due to increases in trust and asset management income, service charges on deposits accounts, and fees, exchange and other service charges. 

Non-interest expenses decreased 6.9% to $107.9 million. It included an industry-wide FDIC Special Assessment of $14.7 million and $1.7 million of expense savings that were not expected to recur in 2024. Adjusted for these items, non-interest expense increased 4.9% from adjusted non-interest expense in the same period last year. The increase was primarily due to higher medical costs that are not expected to repeat. 

The efficiency ratio was 66.12%, down from 73.36% recorded in the year-ago period. A fall in the efficiency ratio reflects increased profitability.

BOH’s Loans Increase, Deposits Decline

As of Dec. 31, 2024, total loans and leases balance increased 1.1% from the prior quarter’s end to $14.1 billion. 

Total deposits moved down 1.6% sequentially to $20.6 billion. 

BOH’s Credit Quality Deteriorates

As of Dec. 31, 2024, non-performing assets were $19.3 million, which jumped 64.3% year over year. 

Net loans and lease charge-offs were $3.4 million, up $1.7 million from the year-ago quarter's level. 

Provision for credit losses was $3.8 million, up 50% from the year-ago quarter’s tally. 

The allowance for credit losses inched up 1.5% to $148.5 million. 

BOH’s Capital Ratios Improve

As of Dec. 31, 2024, the Tier 1 capital ratio was 13.95%, up from 12.56% as of Dec. 31, 2023. The total capital ratio was 15%, which rose from 13.6% in the year-ago period.

The ratio of tangible common equity to risk-weighted assets was 9.08%, which increased from 8.45% at the end of the year-ago quarter.

BOH’s Profitability Ratios Improve

Return on average assets was 0.66% at the end of fourth-quarter 2024, which increased from 0.51% reported in the prior-year quarter. Return on average shareholders' equity was 9.42%, up from 8.86% as of Dec. 31, 2023.

BOH's Share Repurchase Update

During the reported quarter, the Bank of Hawaii did not repurchase any shares. As of Dec. 31, 2024, the total remaining buyback authority under the share repurchase program was $126.0 million.

Outlook

Q1

The company expects expenses to be $44-$45 million for the first quarter.

2025

The company anticipates expenses to be 2-3% higher than the 2024 reported level.

The tax rate is anticipated to be 24%.

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed an upward trend in estimates revision.

The consensus estimate has shifted 12.37% due to these changes.

VGM Scores

At this time, Bank of Hawaii has a subpar Growth Score of D, however its Momentum Score is doing a lot better with a B. However, 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 D. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise Bank of Hawaii has a Zacks Rank #1 (Strong Buy). We expect an above average return from the stock in the next few months.

Performance of an Industry Player

Bank of Hawaii is part of the Zacks Banks - West industry. Over the past month, WaFd (WAFD Quick QuoteWAFD - Free Report) , a stock from the same industry, has gained 0.7%. The company reported its results for the quarter ended December 2024 more than a month ago.

WaFd reported revenues of $171.13 million in the last reported quarter, representing a year-over-year change of +2.8%. EPS of $0.62 for the same period compares with $0.85 a year ago.

For the current quarter, WaFd is expected to post earnings of $0.60 per share, indicating a change of -17.8% from the year-ago quarter. The Zacks Consensus Estimate has changed -3.7% over the last 30 days.

The overall direction and magnitude of estimate revisions translate into a Zacks Rank #4 (Sell) for WaFd. Also, the stock has a VGM Score of F.