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

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]