Bank of Hawai‘i Q4 and 2024 Full Year Results
Bank of Hawai‘i Corporation (NYSE: BOH) reported diluted earnings per share of $3.46 for 2024, down from $4.14 in 2023. The company’s net income for the year totaled $150.0 million, reflecting a 12.4% decrease from the previous year. Return on average common equity for 2024 was 10.85%, compared to 13.89% in 2023.
Bank of Hawai‘i Corporation (NYSE: BOH) delivered strong financial results for the fourth quarter and full year of 2024, reflecting positive momentum in key financial metrics. According to Peter Ho, Chairman and CEO, “Bank of Hawai‘i finished 2024 with strong financial performance. In the fourth quarter, our net interest income and margin continued their upward trends, and both average loan and deposit balances saw growth. Throughout 2024, we focused on strengthening our capital, controlling core expenses, and maintaining strong credit quality.”
Fourth Quarter Results
For the fourth quarter of 2024, Bank of Hawai‘i reported diluted earnings per share of $0.85, a slight decrease from $0.93 in the linked quarter but an increase from $0.72 in the same quarter last year. Net income for the period was $39.2 million, down 3.0% from the linked quarter but up 28.8% compared to the same quarter in 2023. The return on average common equity (ROE) for Q4 was 10.30%, down from 11.50% in the previous quarter but up from 9.55% in Q4 of 2023.
Financial Highlights
Net interest income for the fourth quarter was $120.2 million, marking a 2.2% increase from the linked quarter and a 3.8% increase from the same period last year. This increase was driven by higher average balances in earning assets, a slowdown in the shift of deposit mix, and a reduction in funding costs, although lower earning asset yields partially offset these gains. Compared to the same period last year, the increase was primarily due to higher yields on earning assets and an increase in the average balance of earning assets, partially offset by a rise in interest-bearing deposits.
The bank’s net interest margin (NIM) for Q4 was 2.19%, a slight increase of 1 basis point from the previous quarter and an improvement of 6 basis points from the year-ago period. The increase in NIM from the linked quarter was primarily due to lower rates on interest-bearing deposits, partially offset by a decline in earning asset yields. Year-over-year, the improvement was driven by higher yields on earning assets, though partially offset by higher deposit rates.
For loans and leases, the average yield was 4.73%, down 9 basis points from the linked quarter but up 19 basis points from the same period last year. The overall average yield on earning assets in Q4 was 3.97%, which decreased by 9 basis points from the linked quarter but rose by 12 basis points compared to the previous year. The average cost of interest-bearing deposits was 2.37%, down 15 basis points from the linked quarter and up 7 basis points from the prior year. Total deposits in Q4 averaged $20.8 billion, a 1.3% increase from the linked quarter and a 0.3% increase year-over-year.
Noninterest income for Q4 was $43.0 million, a decrease of 4.6% from the linked quarter but an increase of 1.8% from Q4 of 2023. Adjusted for a $2.4 million charge related to a change in the Visa Class B conversion ratio, noninterest income would have been $45.4 million, reflecting a 0.7% increase from the linked quarter and a 7.5% increase compared to the same period last year. Key contributors to the year-over-year increase were growth in trust and asset management income, service charges on deposit accounts, and fees from other services.
Noninterest expense for the quarter was $107.9 million, up 0.8% from the linked quarter but down 6.9% from Q4 of 2023. The prior-year quarter included a one-time $14.7 million FDIC Special Assessment and other nonrecurring costs. When adjusted for these items, noninterest expenses in Q4 2024 increased by 4.9% compared to the same period last year, driven largely by higher medical costs, which are not expected to continue in the future.
Asset Quality and Credit Losses
Bank of Hawai‘i maintained solid asset quality during the quarter. The provision for credit losses for Q4 was $3.8 million, up from $3.0 million in the linked quarter and $2.5 million in Q4 of 2023. Non-performing assets (NPAs) totaled $19.3 million at December 31, 2024, reflecting a slight increase from the same period in 2023. NPAs as a percentage of total loans, leases, and foreclosed real estate were 0.14%, flat from the linked quarter but up slightly year-over-year.
Net loan and lease charge-offs for Q4 were $3.4 million, representing 10 basis points of annualized total average loans and leases. While this was a decrease from the linked quarter, it was higher compared to the same period in 2023. The allowance for credit losses on loans and leases was $148.5 million at the end of the quarter, representing 1.06% of total loans and leases, a modest increase from the prior quarter and from the same period in 2023.
Balance Sheet
As of December 31, 2024, total assets were $23.6 billion, a decrease of 0.8% from the linked quarter and 0.6% from the prior year, primarily due to a decline in cash and cash equivalents. The investment securities portfolio stood at $7.3 billion, up 0.7% from the linked quarter but down 1.3% from the prior year. Total loans and leases grew to $14.1 billion, an increase of 1.1% from the previous quarter and 0.8% from the same period last year.
Total deposits were $20.6 billion, down 1.6% from the linked quarter and 2.0% from the prior year. Noninterest-bearing deposits made up 26.3% of total deposits, an increase from the linked quarter but a decrease from the same period in 2023.
Capital and Dividends
Bank of Hawai‘i’s capital levels remained strong, with a Tier 1 Capital Ratio of 13.95% at December 31, 2024, down slightly from the linked quarter but up from 12.56% at the end of 2023. The Tier 1 Leverage Ratio was 8.31%, slightly down from the prior quarter but up from 7.51% a year earlier. The company’s Board declared a quarterly cash dividend of $0.70 per share, payable on March 14, 2025, to shareholders of record as of February 28, 2025.
Additionally, the company announced dividends on its Fixed Rate Non-Cumulative Perpetual Preferred Stock Series A and Series B, with payments set for February 3, 2025.
