Bank of Hawaii (BOH) Q2 2024 earnings summary

Executive summary

• Net income for Q2 2024 was $34.1 million, with diluted EPS of $0.81, down 26% year-over-year and impacted by a $2.6 million FDIC special assessment.

• Net interest margin rose to 2.15%, up sequentially but down 7 bps year-over-year; return on average common equity was 10.41%.

• Credit quality remained strong, with non-performing assets at 0.11% and stable delinquencies.

• Capital levels were significantly strengthened by a $165 million preferred stock issuance in June 2024.

• Average loan and deposit levels were stable sequentially but down slightly year-to-date.

Financial highlights

• Net interest income was $114.8 million, up $0.9 million sequentially but down 8% year-over-year.

• Noninterest income totaled $42.1 million, down 0.5% sequentially and 2.7% year-over-year.

• Noninterest expense was $109.2 million, including a $2.6 million FDIC special assessment; adjusted core expenses were $105.3 million.

• Return on average assets was 0.59% for Q2 2024.

• Efficiency ratio increased to 69.60% from 67.76% in Q1 2024.

Outlook and guidance

• Management expects net interest margin to be flat to slightly higher in the second half of 2024, with modest loan growth and slightly higher non-interest income.

• Normalized expenses for 2024 projected to increase 1%-2% from 2023 levels.

• Capital and liquidity are expected to remain strong, with ratios well above regulatory minimums.

• Rate cuts anticipated in the back half of 2024; impact on NII expected to be minimal or slightly negative.

• Forward-looking statements caution that actual results may differ due to various risks and uncertainties.