Bank of Hawaii (BOH) Q3 2024 earnings summary

Executive summary

• Net income for Q3 2024 was $40.4 million, up 18% sequentially but down 16% year-over-year; diluted EPS was $0.93, up from Q2 but down from Q3 2023.

• Return on average common equity was 11.50%, up from Q2 but down from Q3 2023.

• Loans and deposits remained stable, with average total deposits at $20.5B and average total loans and leases at $13.8B.

• Credit quality remained strong, with net charge-offs at $3.8M (0.11%) and non-performing assets at 0.14%.

• Board declared a $0.70 per share dividend; no common stock repurchases in Q3 2024.

Financial highlights

• Net interest income for Q3 2024 was $117.6M, up $2.8M sequentially but down 3% year-over-year.

• Net interest margin was 2.18%, up 3 bps sequentially and 5 bps year-over-year.

• Noninterest income was $45.1M, up $3M sequentially but down 10% year-over-year.

• Noninterest expense was $107.1M, down $2.1M sequentially and up 1% year-over-year.

• Provision for credit losses was $3.0M; effective tax rate was 23.33%.

Outlook and guidance

• Net interest income and margin are expected to gently increase, with longer-term accretion from anticipated Fed rate cuts.

• Core non-interest income for Q4 is expected in the $44–$45M range, excluding a $2.3M one-time charge.

• Normalized core expenses for 2024 are projected to rise 1%–1.5% from 2023’s $419M.

• Management expects continued economic recovery in Hawaii, with strong construction and tourism sectors.

• Interest rate risk is actively managed; NII is expected to increase if rates rise, but could decline if rates fall.