On July 22, 2024, Bank of Hawaii Corp (BOH, Financial) released its 8-K filing for the second quarter of 2024. The company reported diluted earnings per common share of $0.81, falling short of the analyst estimate of $0.85. Net income for the quarter was $34.1 million, a decrease from both the previous quarter and the same quarter last year.
Company Overview
Bank of Hawaii Corp provides a broad range of financial products and services predominantly to customers in Hawaii, Guam, and other Pacific Islands. The Bank's subsidiaries are engaged in equipment leasing, securities brokerage, investment advisory services, and providing credit insurance. It is organized into three business segments for management reporting purposes: Consumer Banking, Commercial Banking, and Treasury and Other. The majority of the revenue is generated from the Consumer Banking segment, which offers a broad range of financial products and services, including loan, deposit, and insurance products; private banking and international client banking services; trust services; investment management; and institutional investment advisory services.
Performance and Challenges
Bank of Hawaii Corp (BOH, Financial) reported a net interest margin of 2.15%, an increase of 4 basis points from the previous quarter but a decrease of 7 basis points from the same quarter last year. The company faced a significant challenge with an industry-wide FDIC Special Assessment, resulting in a $2.6 million non-recurring charge, which negatively impacted diluted earnings per share by $0.05.
“Bank of Hawai‘i delivered strong financial results in the second quarter of 2024,” said Peter Ho, Chairman and CEO. “Credit quality remained exceptional with non-performing assets of 0.11% at quarter end and net charge-offs of 0.10% during the quarter. Our net interest margin increased by 4 basis points as we continued to benefit from cashflows repricing. Our core noninterest income remained steady while core noninterest expense increased by 2.0%.”
Financial Achievements
Despite the challenges, Bank of Hawaii Corp (BOH, Financial) achieved several financial milestones. The company successfully raised $165 million through a preferred stock offering in late June, strengthening its capital levels. The Tier 1 Capital Ratio increased to 13.99% from 12.74% in the previous quarter, and the Tier 1 Leverage Ratio rose to 8.37% from 7.62%.
Income Statement Highlights
| Metric | Q2 2024 | Q1 2024 | Q2 2023 |
|---|---|---|---|
| Net Interest Income | $114.8 million | $113.9 million | $124.3 million |
| Noninterest Income | $42.1 million | $42.3 million | $43.3 million |
| Noninterest Expense | $109.2 million | $105.9 million | $104.0 million |
| Net Income | $34.1 million | $36.4 million | $46.1 million |
Balance Sheet and Cash Flow Highlights
Total assets were $23.3 billion at the end of Q2 2024, a decrease of 0.5% from the previous quarter and 6.6% from the same quarter last year. Total loans and leases stood at $13.8 billion, a slight decrease from the previous quarter. Total deposits were $20.4 billion, down 1.3% from the previous quarter.
Asset Quality
The company's asset quality remained strong, with non-performing assets at $15.2 million, representing 0.11% of total loans and leases. The allowance for credit losses on loans and leases was $147.5 million, maintaining a ratio of 1.07% to total loans and leases.
Capital and Dividends
Bank of Hawaii Corp (BOH, Financial) declared a quarterly cash dividend of $0.70 per common share, payable on September 16, 2024. The company also announced dividends for its Series A and Series B Preferred Stock.
For more detailed information, readers can access the full 8-K filing.
Explore the complete 8-K earnings release (here) from Bank of Hawaii Corp for further details.
