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

Bank of Hawaii Corporation BOH reported fourth-quarter 2024 adjusted earnings per share (EPS) 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.Stay up-to-date with all quarterly releases: See Zacks Earnings Calendar.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 (NII) 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. Our estimate for the metric was pegged at $37.3 million.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 DeclineBOH’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%. Our estimate for NII and NIM was pegged at $117 million and 2.17%, respectively.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, noninterest 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. Our estimate for the same was pinned at $46.6 million.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, noninterest expense increased 4.9% from adjusted noninterest expense in the same period last year. The increase was primarily due to higher medical costs that are not expected to repeat. We projected the metric to be $112.1 million.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 DeclineAs of Dec. 31, 2024, total loans and leases balance increased 1.1% from the prior quarter’s end to $14.1 billion. Our estimate for total loans and leases was $14 billion. Total deposits moved down 1.6% sequentially to $20.6 billion. Our estimate for total deposits was $21.3 billion.BOH’s Credit Quality DeterioratesAs of Dec. 31, 2024, non-performing assets were $19.3 million, which jumped 64.3% year over year. Our estimate for the metric was pegged at $14.6 million. Net loans and lease charge-offs were $3.4 million, up $1.7 million from the year-ago quarter's level. Our estimate for the metric was pegged at $3.8 million. Provision for credit losses was $3.8 million, up 50% from the year-ago quarter’s tally. Our estimate for the metric was pegged at $2.4 million.The allowance for credit losses inched up 1.5% to $148.5 million. Our estimate for the metric was pegged at $145.9 million.BOH’s Capital Ratios ImproveAs 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 ImproveReturn 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 UpdateDuring 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.Our View on BOHA rise in NII and fee income will support the top-line growth. Lower expenses and a solid capital position were other positives. However, weak credit quality remains a near-term concern.Bank of Hawaii Corporation Price, Consensus and EPS Surprise Bank of Hawaii Corporation price-consensus-eps-surprise-chart | Bank of Hawaii Corporation QuoteCurrently, BOH carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.Performance of Other BanksEast West Bancorp, Inc’s. EWBC fourth-quarter 2024 adjusted earnings per share (EPS) of $2.08 lagged the Zacks Consensus Estimate of $2.17. Nonetheless, the bottom line increased 4% from the prior-year quarter’s level.EWBC’s results were primarily aided by an increase in NII and non-interest income, alongside lower non-interest expenses. Also, deposit and loan balances increased sequentially in the quarter. However, higher provisions were a headwind.Zions Bancorporation’s ZION fourth-quarter 2024 EPS of $1.34 surpassed the Zacks Consensus Estimate of $1.26. Moreover, the bottom line surged 71.8% from the year-ago quarter’s figure.ZION’s results were primarily aided by higher NII and non-interest income. Higher loans and deposits were other positives. However, higher provisions and a rise in adjusted non-interest expenses were major headwinds.5 Stocks Set to DoubleEach was handpicked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2024. While not all picks can be winners, previous recommendations have soared +143.0%, +175.9%, +498.3% and +673.0%.Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.Today, See These 5 Potential Home Runs >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Zions Bancorporation, N.A. (ZION): Free Stock Analysis Report Bank of Hawaii Corporation (BOH): Free Stock Analysis Report East West Bancorp, Inc. 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