Loan Portfolio and Credit Quality - The company's loan portfolio is significantly secured by real estate, with residential mortgage loans totaling $4.6 billion (32.9% of total loans) and commercial mortgage loans at approximately $4.0 billion (28.6% of total loans) as of December 31, 2024[64]. - Non-performing assets were reported at $19.3 million, or 0.14% of total loans and leases, while criticized loans amounted to $296.2 million, or 2.10% of total loans and leases as of December 31, 2024[75]. - The company's loans and leases portfolio totaled $14.1 billion with an allowance for credit losses of $148.5 million as of December 31, 2024[331]. - The total loans and leases as of December 31, 2024, amounted to $14,075.9 million, an increase from $13,965.0 million in 2023, reflecting a growth of approximately 0.79%[441]. - The total commercial loans reached $6,125.4 million in 2024, up from $5,777.48 million in 2023, representing an increase of about 6%[441]. - Consumer loans totaled $7,950.57 million in 2024, compared to $8,187.54 million in 2023, showing a decrease of approximately 2.9%[441]. - Residential mortgage loans were $4,628.28 million in 2024, slightly down from $4,684.17 million in 2023, a decline of about 1.2%[441]. - The total amount of classified residential mortgage loans was $3,995,000[436]. - The company reported a total of 9,566 non-accrual loans in the consumer segment for 2024, compared to 6,726 in 2023, marking an increase of approximately 42%[443]. Economic and Regulatory Environment - The company is closely monitoring the economic conditions in Hawaiʻi and the West Pacific, as these factors significantly impact loan origination and repayment capabilities[63]. - A prolonged period of high inflation could adversely affect the company's profitability and operational costs, particularly due to the reliance on imported goods[66]. - The company faces risks from potential reductions in U.S. military spending, which is a critical component of the economies in Hawaiʻi and the West Pacific[70]. - Changes in interest rates are expected to influence the company's earnings, as they affect the spread between interest earned on loans and interest paid on deposits[71]. - The Company is subject to extensive regulation by federal bank regulatory agencies, which affects its lending practices, capital structure, and growth[85]. - Increased compliance costs due to the Dodd-Frank Act and other consumer protection laws may adversely affect the Company's financial condition[86]. - The Company is evaluating the potential impact of regulatory proposals on its liquidity and capital management strategies, particularly those under the Dodd-Frank Act[83]. Financial Performance - Net income for 2024 was $149.99 million, a decrease of 12.3% compared to $171.20 million in 2023[338]. - Total interest income increased to $863.8 million in 2024, up from $810.4 million in 2023, reflecting a growth of approximately 6.6%[337]. - The net interest income after provision for credit losses was $455.43 million in 2024, down from $488.03 million in 2023, a decrease of approximately 6.7%[337]. - Basic earnings per common share decreased to $3.48 in 2024 from $4.16 in 2023, a decline of about 16.4%[337]. - Total assets decreased slightly to $23.60 billion in 2024 from $23.73 billion in 2023[336]. - Total deposits fell to $20.63 billion in 2024, down from $21.06 billion in 2023, representing a decline of about 2.0%[336]. - The provision for credit losses was $11.15 million in 2024, compared to $9 million in 2023, indicating a rise of approximately 23.9%[337]. Dividends and Shareholder Equity - The company paid cash dividends of $112.3 million on common shares during 2024, with a quarterly cash dividend of $0.70 per share declared in January 2025[82]. - The company’s ability to declare dividends is subject to regulatory limitations and the financial performance of the bank[81]. - Total shareholders' equity increased to $1.67 billion in 2024 from $1.41 billion in 2023, reflecting a growth of approximately 18.0%[336]. Risk Management and Compliance - The company has expressed concerns regarding the impact of climate change on its operations and the financial condition of its customers, which could lead to increased credit losses[68]. - Cybersecurity threats and attacks pose significant risks to the Company's operations and could result in financial losses and reputational damage[100]. - The Company is subject to greater regulatory scrutiny, which could lead to increased costs and potential reputational harm if compliance is not met[87]. - Changes in capital, leverage, and liquidity requirements could materially affect the Company's future operations and ability to conduct certain activities[91]. - The Company may face penalties or be required to repurchase mortgages if it fails to meet servicing obligations or if servicing standards change[106]. Investment Securities - As of December 31, 2024, the total fair value of the company's investment securities was $2.69 billion, with an amortized cost of $2.95 billion, resulting in gross unrealized losses of $259.14 million[419]. - The company reported net losses on sales of investment securities amounting to $7.51 million for the year ended December 31, 2024, compared to net losses of $11.46 million in 2023[423]. - The company's held-to-maturity investment securities had a total fair value of $3.82 billion as of December 31, 2024, with an amortized cost of $4.62 billion, reflecting gross unrealized losses of $743.73 million[421]. - The company does not believe that the unrealized losses in AFS debt securities represent credit loss impairment, as they are primarily due to interest rate changes[424]. - The company intends to hold the investment securities in unrealized loss positions until recovery of their amortized cost basis, indicating a long-term investment strategy[424]. Loan Modifications and Foreclosures - Loan modifications for borrowers experiencing financial difficulty included term extensions and interest rate reductions, aimed at minimizing economic loss[446]. - The company continues to focus on strategies to manage non-accrual loans and enhance loan performance through various modification options[446]. - Foreclosure proceedings for consumer mortgage loans totaled $6.8 million as of December 31, 2024, compared to $4.9 million in 2023[454].

Core Viewpoint - Bank of Hawaii (BOH) shows potential as a strong investment opportunity due to significant upward revisions in earnings estimates, indicating a positive earnings outlook and potential for continued stock price appreciation [1][2]. Current-Quarter Estimate Revisions - The expected earnings per share for the current quarter is $0.88, reflecting a year-over-year increase of +1.15% - The Zacks Consensus Estimate for Bank of Hawaii has risen by 11.11% over the past 30 days, with one estimate increasing and no negative revisions [4]. Current-Year Estimate Revisions - For the full year, the expected earnings per share is $3.87, representing a change of +9.63% from the previous year - In the last month, four estimates have been revised upward, contributing to an 11.93% increase in the consensus estimate with no negative revisions [5]. Favorable Zacks Rank - The positive estimate revisions have led to Bank of Hawaii achieving a Zacks Rank 1 (Strong Buy), indicating strong potential for outperformance - Research indicates that stocks with Zacks Rank 1 and 2 significantly outperform the S&P 500 [6]. Bottom Line - Strong estimate revisions have resulted in a 6.7% increase in Bank of Hawaii's stock price over the past four weeks, suggesting further upside potential and making it a candidate for portfolio addition [7].

Core Viewpoint - Bank of Hawaii (BOH) has been upgraded to a Zacks Rank 1 (Strong Buy), indicating a positive outlook based on rising earnings estimates, which significantly influence stock prices [1][2][4]. Earnings Estimates and Stock Performance - The Zacks rating system emphasizes the correlation between changes in earnings estimates and stock price movements, making it a valuable tool for investors [2][3]. - For Bank of Hawaii, the increase in earnings estimates suggests an improvement in the company's underlying business, likely leading to higher stock prices [4]. Earnings Estimate Revisions - Bank of Hawaii is projected to earn $3.77 per share for the fiscal year ending December 2025, reflecting a year-over-year increase of 6.8% [7]. - Over the past three months, the Zacks Consensus Estimate for Bank of Hawaii has risen by 11%, indicating a positive trend in earnings expectations [7]. Zacks Rank System - The Zacks Rank system categorizes stocks into five groups based on earnings estimates, with Zacks Rank 1 stocks historically generating an average annual return of +25% since 1988 [6]. - The upgrade of Bank of Hawaii to Zacks Rank 1 places it in the top 5% of Zacks-covered stocks, suggesting strong potential for market-beating returns in the near term [9].

Core Viewpoint - Bank of Hawaii Corporation (BOH) reported mixed financial results for the fourth quarter of 2024, with adjusted earnings per share (EPS) missing estimates, while net income showed year-over-year growth despite a decline in full-year performance [1][2][3]. Financial Performance - Fourth-quarter adjusted EPS was 85 cents, below the Zacks Consensus Estimate of 87 cents, but improved from 72 cents in the same quarter last year [1] - For 2024, adjusted EPS was $3.46, missing the Zacks Consensus Estimate of $3.54 and down from $4.14 in the previous year [2] - Net income on a GAAP basis for the fourth quarter was $39.2 million, up 28.8% year over year, exceeding the estimate of $37.3 million [3] - Full-year net income was $150 million, a decline of 12.4% year over year [3] Revenue and Expenses - Quarterly revenues increased 3.3% year over year to $163.2 million, but fell short of the Zacks Consensus Estimate of $164.4 million [4] - Full-year revenues totaled $466.6 million, down 30.7% year over year, missing the estimate of $640.3 million [4] - Non-interest income was $43 million, up 1.8% year over year, with adjusted figures showing a 7.5% increase [6] - Non-interest expenses decreased 6.9% to $107.9 million, but adjusted expenses increased 4.9% year over year [7] Interest Income and Efficiency - Net interest income (NII) was $117.6 million, up 3.8% year over year, with a net interest margin (NIM) of 2.19%, an increase of 6 basis points [5] - The efficiency ratio improved to 66.12%, down from 73.36% in the prior year, indicating enhanced profitability [8] Loan and Deposit Trends - Total loans and leases increased 1.1% quarter-over-quarter to $14.1 billion, exceeding estimates [9] - Total deposits decreased 1.6% sequentially to $20.6 billion, falling short of estimates [9] Credit Quality - Non-performing assets rose 64.3% year over year to $19.3 million, significantly above estimates [10] - Net loans and lease charge-offs increased to $3.4 million, up $1.7 million from the previous year [10] - Provision for credit losses was $3.8 million, a 50% increase year over year [11] Capital Ratios - Tier 1 capital ratio improved to 13.95%, up from 12.56% a year ago, while the total capital ratio rose to 15% from 13.6% [12] Profitability Ratios - Return on average assets was 0.66%, up from 0.51% in the prior year, and return on average shareholders' equity increased to 9.42% from 8.86% [13] Share Repurchase - No shares were repurchased during the quarter, with a remaining buyback authority of $126 million as of December 31, 2024 [14] Overall Assessment - The rise in NII and fee income supports top-line growth, while lower expenses and a solid capital position are positives; however, weak credit quality remains a concern [15]

Core Insights - Bank of Hawaii announced its earnings for the fourth quarter and the full year, highlighting its strong presence in Hawaii and branches in the American southwest [1] Financial Performance - The bank's earnings report includes details on its performance metrics for the fourth quarter and the entire fiscal year [1] Market Position - Bank of Hawaii trades two issues of preferred shares, indicating its strategy to attract different types of investors [1]

Financial Data and Key Metrics Changes - Bank of Hawaii reported net interest income of $120.2 million for Q4 2024, an increase of 2.2% from the previous quarter [22][35] - Net interest margin (NIM) expanded to 2.19%, with a further improvement to 2.26% by December [22][23] - Average deposits grew by 1.3% to $20.8 billion, while average loans increased by 1.1% to $14 billion [6] Business Line Data and Key Metrics Changes - The loan portfolio is balanced with consumer loans representing 56% and commercial loans 44% [12] - Consumer loans are primarily secured against real estate, with a weighted average loan-to-value (LTV) of 48% [13] - Commercial real estate loans account for $4 billion, or 29% of total loans, with a weighted average LTV of 55% [14] Market Data and Key Metrics Changes - Bank of Hawaii maintains the number one position in market share in Hawaii, with stable economic conditions [8][9] - Unemployment in Hawaii remains below the national average, and the residential real estate market trends are positive [10] Company Strategy and Development Direction - The company is focused on enhancing its wealth management operations to match its consumer and commercial business capabilities [75] - Strategic positioning of the balance sheet is aimed at managing interest rate sensitivity effectively [27] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the stability of credit quality and the potential for continued loan growth, particularly in the commercial sector [51][100] - The company anticipates a diverse range of opportunities for net interest income growth, driven by both loan and deposit growth [100] Other Important Information - Total expenses for Q4 2024 were $107.9 million, with a focus on managing costs effectively [32] - The company declared a dividend of $0.70 per common share for Q1 2025 [38] Q&A Session Summary Question: Is the December margin of 2.26% a good starting point for the first quarter? - Management confirmed that the December margin of 2.26% is a clean number and a good starting point for the first quarter [46] Question: What is the outlook for loan growth and any impact from recent M&A activity? - Management indicated reasonable loan growth expectations, particularly in commercial loans, with no significant changes anticipated from recent M&A activity [50][52] Question: What is the current allocation of the $2 billion of active swaps? - The allocation is approximately $700 million against the available-for-sale (AFS) securities and $1.3 billion against the loan portfolio [82] Question: What initiatives are included in the revenue-enhancing expenses? - Management mentioned initiatives directed at commercial and wealth areas, aimed at enhancing earnings streams [73] Question: What is the outlook for the office loan portfolio due next year? - Management expressed confidence in the renewals of office loans, indicating no issues are expected [62] Question: What would trigger more active share buybacks? - Management indicated that clearer visibility into credit, the economy, and rates would be necessary for considering buybacks [66]

Earnings Overview - Bank of Hawaii Corporation reported solid performance for Q4 2024, marking a strong end to the year [5] Conference Call Participants - Key participants included Chairman and CEO Peter Ho, President and Chief Banking Officer Jim Polk, CFO Dean Shigemura, Chief Risk Officer Brad Shairson, and Deputy CFO Brad Satenberg [3] - The call was hosted by Chang Park, Director of Investor Relations [2][3] Forward-Looking Statements - The conference call included forward-looking statements, with the company acknowledging that actual results may differ from projections [4] - Reference materials, including the slide presentation and earnings release, were made available on the company's website [4]

fourth quarter 2024 highlights earnings highlights strong credit credit remained pristine Bank of Hawai'i Corporation fourth quarter 2024 financial report January 27, 2025 disclosure forward-looking statements this presentation, and other statements made by the Company in connection with it, may contain forward-looking statements concerning, among other things, forecasts of our financial results and condition, expectations for our operations and business prospects, and our assumptions used in those forecast ...

Earnings and Net Income - Diluted earnings per common share for the full year 2024 was $3.46, down from $4.14 in 2023, with net income of $150.0 million, a 12.4% decrease year-over-year[2] - Net income for Q4 2024 was $39.2 million, down 3.0% from the linked quarter but up 28.8% from the same period last year[3] - Net Income for Q4 2024 reached $39.16 million, up from $30.40 million in Q4 2023[27] - Net income for the year ended December 31, 2024, was $149.994 million, compared to $171.202 million in 2023[29] - Net Income for 2023 was $171.2 million, compared to $149.994 million in 2024[32] - Net Income for Q4 2024 rose to $39.16 million, compared to $30.40 million in Q4 2023[46] Net Interest Income and Margin - Net interest income for Q4 2024 was $120.2 million, up 2.2% from the linked quarter and 3.8% year-over-year[4] - Net interest margin for Q4 2024 was 2.19%, up 1 basis point from the linked quarter and 6 basis points year-over-year[5] - Net Interest Income for Q4 2024 increased to $120.18 million, up from $115.79 million in Q4 2023[27] - Net interest income for the year ended December 31, 2024, was $466.580 million, compared to $497.025 million in 2023[29] - Net Interest Income rose to $121.5 million in Q4 2024, compared to $118.7 million in Q3 2024 and $116.4 million in Q4 2023[33] - Net Interest Margin improved to 2.19% in Q4 2024, compared to 2.18% in Q3 2024 and 2.13% in Q4 2023[33] - Net interest income declined to $470.4 million in 2024 from $499.0 million in 2023, with a net interest margin of 2.16% compared to 2.24% in 2023[35] - Net Interest Income for Q4 2024 increased to $120.18 million, up from $115.79 million in Q4 2023[46] - Net Interest Margin for Q4 2024 improved to 2.19%, up from 2.13% in Q4 2023[48] Assets and Liabilities - Total assets at year-end 2024 were $23.6 billion, a 0.8% decrease from Q3 2024 and a 0.6% decrease year-over-year[14] - Total loans and leases at year-end 2024 were $14.1 billion, up 1.1% from Q3 2024 and 0.8% year-over-year[16] - Total deposits at year-end 2024 were $20.6 billion, down 1.6% from Q3 2024 and 2.0% year-over-year[17] - Total assets as of December 31, 2024, were $23.601 billion, compared to $23.733 billion in 2023[31] - Loans and leases as of December 31, 2024, were $14.076 billion, compared to $13.965 billion in 2023[31] - Total Earning Assets increased to $22,125.6 million in Q4 2024, up from $21,756.5 million in Q3 2024 and $21,801.9 million in Q4 2023[33] - Total Loans and Leases reached $13,964.7 million in Q4 2024, slightly up from $13,810.0 million in Q3 2024 and $13,906.1 million in Q4 2023[33] - Interest-Bearing Deposits totaled $15,450.8 million in Q4 2024, up from $15,187.2 million in Q3 2024 and $15,008.3 million in Q4 2023[33] - Total Investment Securities stood at $7,307.0 million in Q4 2024, slightly up from $7,211.7 million in Q3 2024 and $7,412.7 million in Q4 2023[33] - Total Interest-Bearing Liabilities were $16,109.3 million in Q4 2024, up from $15,847.8 million in Q3 2024 and $15,719.0 million in Q4 2023[33] - Total Assets as of December 31, 2024, decreased to $23.60 billion from $23.73 billion in 2023[46] - Total Deposits as of December 31, 2024, decreased to $20.63 billion from $21.06 billion in 2023[48] Capital and Equity - Tier 1 Capital Ratio at year-end 2024 was 13.95%, compared to 14.05% in Q3 2024 and 12.56% year-over-year[19] - Common Equity Tier 1 Capital Ratio for Q4 2024 was 11.59%, up from 11.33% in Q4 2023[27] - Tangible Common Equity to Tangible Assets ratio for Q4 2024 was 5.48%, compared to 5.07% in Q4 2023[28] - Total Shareholders' Equity to Total Assets ratio for Q4 2024 was 7.07%, up from 5.96% in Q4 2023[28] - Total Shareholders' Equity increased from $1.316995 billion in 2022 to $1.414242 billion in 2023 and further to $1.667774 billion in 2024[32] - Shareholders' Equity increased to $1,654.2 million in Q4 2024, up from $1,621.9 million in Q3 2024 and $1,360.6 million in Q4 2023[33] Dividends and Shareholder Returns - The Board of Directors declared a quarterly cash dividend of $0.70 per common share, payable on March 14, 2025[20] - Cash Dividends Declared for Common Stock remained consistent at $2.80 per share, totaling $111.795 million in 2023 and $112.313 million in 2024[32] - Cash Dividends Declared for Preferred Stock increased from $7.877 million in 2023 to $12.644 million in 2024[32] - Preferred Stock Issued in 2024 amounted to $160.614 million[32] Non-Performing Assets and Credit Quality - Non-performing assets at year-end 2024 were $19.3 million, down $0.5 million from Q3 2024 but up $7.6 million year-over-year[11] - Non-Performing Assets increased to $19.30 million in Q4 2024 from $11.75 million in Q4 2023[27] - Provision for Credit Losses in Q4 2024 was $3.75 million, higher than $2.50 million in Q4 2023[46] Employee and Compensation Metrics - Full-Time Equivalent Employees decreased to 1,865 in Q4 2024 from 1,899 in Q4 2023[27] - Total salaries and benefits for 2024 were $232.6 million, slightly lower than the $234.1 million in 2023, with medical, dental, and life insurance costs increasing to $14.9 million from $12.8 million[40] Loan and Deposit Portfolio - The loan and lease portfolio grew to $14.08 billion in December 2024, up from $13.97 billion in December 2023, with commercial loans increasing to $6.13 billion from $5.78 billion[41] - Consumer deposits remained stable at $10.40 billion in December 2024, compared to $10.32 billion in December 2023, while commercial deposits decreased to $8.30 billion from $8.60 billion[42] - Average deposits for the three months ended December 2024 were $20.76 billion, slightly higher than the $20.70 billion in the same period of 2023, with consumer deposits averaging $10.33 billion[43] Interest Income and Expense - Total interest income for the year ended December 31, 2024, was $863.751 million, up from $810.375 million in 2023[29] - Total Interest Income for Q4 2024 was $219.22 million, compared to $210.35 million in Q4 2023[48] - Interest expense rose by $83.8 million in 2024, largely due to a $118.0 million increase in interest-bearing deposits, with savings accounts contributing $72.3 million[39] - Total change in interest income for Q4 2024 compared to Q4 2023 was $9.5 million, with $7.1 million from volume and $2.4 million from rate changes[38] - Total change in interest expense for Q4 2024 compared to Q4 2023 was $4.4 million, with $3.5 million from volume and $0.9 million from rate changes[38] - Interest-bearing deposits contributed $5.0 million to the change in interest expense for Q4 2024 compared to Q4 2023, with $4.1 million from volume and $0.9 million from rate changes[38] Efficiency and Performance Ratios - Return on Average Assets for Q4 2024 was 0.66%, compared to 0.51% in Q4 2023[27] - Efficiency Ratio for Q4 2024 improved to 66.12%, down from 73.36% in Q4 2023[48] Comprehensive Income and Other Metrics - Comprehensive income for the year ended December 31, 2024, was $203.293 million, down from $209.172 million in 2023[30] - Other Comprehensive Income increased from $37.97 million in 2023 to $53.299 million in 2024[32] - Share-Based Compensation decreased from $15.656 million in 2023 to $14.444 million in 2024[32] - Common Stock Repurchased decreased from $14.29 million in 2023 to $5.302 million in 2024[32]

Core Insights - Bank of Hawaii (BOH) reported revenue of $163.23 million for the quarter ended December 2024, reflecting a year-over-year increase of 3.3% [1] - Earnings per share (EPS) for the quarter was $0.85, up from $0.72 in the same quarter last year, but below the consensus estimate of $0.87, resulting in an EPS surprise of -2.30% [1] Financial Performance Metrics - Total Non-Performing Assets amounted to $19.30 million, exceeding the average estimate of $18.43 million [4] - Total Non-Accrual Loans and Leases were reported at $16.64 million, higher than the estimated $15.76 million [4] - Net Interest Margin was reported at 2.2%, matching the average estimate [4] - Average Balance of Total Interest Earning Assets was $22.13 billion, slightly above the estimated $22.05 billion [4] - Net charge-offs to average loans stood at 0.1%, consistent with the average estimate [4] - Efficiency Ratio was reported at 66.1%, better than the average estimate of 66.8% [4] - Net Interest Income (FTE) was $121.50 million, surpassing the estimated $119.54 million [4] - Annuity and Insurance revenue was $1.35 million, below the estimated $1.56 million [4] - Bank-Owned Life Insurance revenue was $3.28 million, lower than the average estimate of $3.76 million [4] - Trust and Asset Management revenue was $12.16 million, exceeding the estimated $11.94 million [4] - Mortgage Banking revenue was $0.94 million, below the estimated $1.08 million [4] - Overall Net Interest Income was reported at $120.18 million, above the average estimate of $118.49 million [4] Stock Performance - Shares of Bank of Hawaii have returned +1% over the past month, compared to a +1.1% change in the Zacks S&P 500 composite [3] - The stock currently holds a Zacks Rank 2 (Buy), indicating potential for outperformance in the near term [3]