Bank of Hawaii Corp (BOH) Q3 2024 Earnings Call Highlights: Strong Capital Ratios and Income ...

In This Article:

  • Net Income: $40.4 million for the third quarter.

  • Earnings Per Share (EPS): $0.93 per common share.

  • Net Interest Income: Increased by $2.8 million in the third quarter.

  • Net Interest Margin (NIM): Increased by 3 basis points.

  • Non-Interest Income: Totaled $45.1 million, up $3 million from the second quarter.

  • Operating Expenses: Reported and core expenses were $107.1 million in the third quarter.

  • Provision for Credit Losses: $3 million for the quarter.

  • Tier 1 Capital Ratio: Increased to 14.05%.

  • Total Capital Ratio: Increased to 15.11%.

  • Dividends: $28 million paid to common shareholders and $3.4 million in preferred stock dividends.

  • Allowance for Credit Losses (ACL): Ended the quarter at $147.3 million.

  • Net Charge-Offs: $3.8 million or 11 basis points annualized.

Release Date: October 28, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

  • Bank of Hawaii Corp (NYSE:BOH) reported an increase in net income and diluted earnings per share for the third quarter of 2024.

  • Net interest income and net interest margin expanded for the second consecutive quarter.

  • The company maintained its top deposit market share position in Hawaii for 2024.

  • Credit quality remains strong with low net charge-offs and stable non-performing assets.

  • Capital levels improved across all measures, with a Tier 1 capital ratio of 14.05% and a total capital ratio of 15.11%.

Negative Points

  • Loan growth has slowed due to suppressed demand from the high rate environment.

  • Deposit mix shift negatively impacted net interest income by $2.6 million in the third quarter.

  • Non-interest bearing and low-yield interest bearing deposit balances declined by $315 million linked quarter.

  • Criticized assets grew slightly, reaching 2.42% at quarter end.

  • The company expects a one-time charge of $2.3 million related to the Visa Class B conversion ratio change in the fourth quarter.

Q & A Highlights

Q: Were there any interest recoveries or one-timers in the margin this quarter? A: Dean Shigemura, CFO: There was a small amount of reversals, about $100,000, so nothing material. The margin in September was 2.17%.

Q: Can you summarize the impact of the rate cut on the margin? A: Dean Shigemura, CFO: We expect net interest income (NII) and margin to gently increase quarter-over-quarter. Asset repricing from cash flows will be partially offset by continued deposit remix. Over the longer term, the Fed funds rate cut will be accretive, initially having a slight negative impact.

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