Bank of Hawaii (BOH) Q4 2023 earnings summary

Executive summary

• Q4 2023 net income was $30.4M, diluted EPS was $0.72 and ROE was 9.55%; FY2023 net income was $171.2M, down 24.2%, with diluted EPS of $4.14.

• Period-end deposits rose 1.2% QoQ to $21.055B and 2.1% YoY; loans and leases increased 0.3% QoQ to $13.965B and 2.3% YoY.

• Readily available liquidity totaled $10.2B, exceeding $8.9B of uninsured or uncollateralized deposits.

• Management cited balance-sheet strengthening and positioning for strong 2024 results.

Financial highlights

• Q4 revenue was $158.1M, down $23.8M YoY; net interest income was $115.8M, down 17.7% YoY, mainly from higher funding costs. FY2023 revenue was $673.6M and net interest income was $497.0M.

• Q4 noninterest income was $42.3M, up 2.7% YoY; adjusted for prior-quarter repo termination, securities-sale and Visa items, it rose 3.0% QoQ.

• Reported Q4 noninterest expense was $116.0M, including a $14.7M FDIC assessment; adjusted core expense was $102.9M. FY2023 operating income was $236.1M.

• Q4 provision for credit losses was $2.5M versus $2.0M in Q3 and $0.2M in Q4 2022; FY2023 provision was $9.0M.

• Year-end total assets were $23.7B, loans and leases were $14.0B, and deposits were $21.1B.

Outlook and guidance

• Management characterized net interest margin as stable and said balance-sheet strengthening positioned the business for strong 2024 results.

• Projected repricing, maturities and prepayments totaled $10.1B in year one and $10.2B in year two.

• Pay-fixed/receive-floating swaps were expanded by $1.0B in Q4 to $3.0B notional to hedge part of fixed-rate asset exposure.