Bank of Hawaii(US:BOH)2022-01-24 21:13Financial Data and Key Metrics Changes - Bank of Hawaii achieved record net income of $253.4 million and record earnings per common share of $6.25 for 2021 [19] - Net income for the fourth quarter was $63.8 million, translating to $1.55 per common share [19] - Return on assets during the fourth quarter was 1.12%, and return on common equity was 17.4% [31] - Net interest margin in the fourth quarter was 2.34%, an increase of 2 basis points from the third quarter [31] Business Line Data and Key Metrics Changes - Core loans net of PPP waivers increased by $327 million, or 2.8% linked quarter, and by $710 million year-over-year, or 6.2% [13] - Non-interest income totaled $42.6 million in the fourth quarter, up $1.2 million from the third quarter, driven by higher deposit fees and service charges [20] - Non-interest expense in the fourth quarter totaled $101.7 million, up from $96.5 million in the third quarter [22] Market Data and Key Metrics Changes - Unemployment rate improved to about 6% as of November 2021, showing steady recovery from the distressed levels in April 2020 [7] - Single-family home sales on Oahu increased by almost 18% in 2021, with median sales price up 19.3% to $990,000 [8] - The visitor market showed strong performance, nearly reaching parity with 2019 levels during the summer of 2021 [10] Company Strategy and Development Direction - The company plans to continue strategic innovation investments, expecting total expenses to increase by 5.9% over 2021's normalized expenses [29] - The focus remains on maintaining a strong base of low-cost deposits to support growth and take advantage of rising rates [18] - The company aims to enhance market share and revenue growth through strategic initiatives [56] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the return of international travelers in the latter half of 2022, which is expected to positively impact the visitor industry [12] - The company anticipates continued improvement in core margin due to loan and deposit growth and higher interest rates [32] - Management noted that credit metrics remain strong, with a negative provision for credit losses of $9.7 million in the fourth quarter [37] Other Important Information - The company repurchased 87,000 shares of common stock for a total of $7.3 million during the fourth quarter [33] - The Board declared a dividend of $0.70 per common share for the first quarter of 2022 [33] Q&A Session Summary Question: What is the margin guidance assuming higher rates? - The company assumes three rate hikes starting in March, with a long-term outlook of about a 2% 10-year [41] Question: What is the timing of repricing for adjustable loans? - The average repricing period for adjustable loans is roughly three years, with about $400 million repricing in two years or less [42] Question: How should the tax rate be estimated for 2022? - The estimated tax rate for 2022 is expected to be around 23% [61]