The Bank of Hawaii Corp., encouraging the state’s economy to recover from the COVID-19 pandemic faster than expected, has 14.3 million earnings per share, deposits and assets.
“Credit risk remains stable, expense management adjusted for one-offs has been strong, capital and liquidity are growing,” said Peter Ho, chairman, president and CEO of the Bank of Hawaii, on the company’s earnings conference call today. “In short, we continue to have good weather conditions and are able to grow well when the economy allows.”
Bankoh, who bases its financial models on projections from the University of Hawaii Economic Research Organization, is encouraged by economists’ upward revisions for tourism, unemployment, personal income, and gross domestic product, as well as the state’s rising vaccination rates.
“Experience so far suggests a strong trend in the visitor industry, and when you talk to people in the industry, hotels and airlines, there is a fair dose of optimism – being pretty strong for this summer, and most of it of which is, as you can imagine, being driven by US domestic firms, ”Ho said on the call.
Bankoh net income rose to $ 59.9 million for the first quarter, a record for any quarter, with record earnings per share of $ 1.50. That far exceeds analysts’ estimates of $ 1.15 per share. The addition from the bank’s loan loss reserve was a turning point compared to the year-ago quarter when the bank added $ 15.2 million to its reserve. The state’s second-largest bank had a negative impact on earnings last year when it set aside $ 117.8 million for potential loan defaults.
In the year-ago quarter, Bankoh had net income of $ 34.7 million, or 87 cents per share.
The bank also hit a record high in deposits of $ 19.56 billion, up 21.8% from the year-ago quarter and 7.4% more than the December quarter. Net worth rose 18.4% year over year for the sixth straight quarter to a record $ 21.95 billion.
Lending remained in the mid-single digits, up 6.9% to $ 12.14 billion. The bank announced on April 22 that customer deferred credit balances had fallen 85% from their peak to 2.3% of total loans. Bankoh said its return to payment performance was strong, with fewer than 1% of those customers being 30 days or more in arrears at the end of the quarter.
Ho said the bank continues to invest in digital banking and that infrastructure investments across its entire IT platform will be around $ 47 million this year. In the first quarter, the bank presented its customers with contactless debit cards with TV spots that presented the product for MC Hammer’s catchy tune “U Can’t Touch This”. The rollout cost Bankoh $ 1.9 million.
“Contactless cards are a very popular product right now with our consumers for obvious reasons, and we made the decision to happily bite the bullet and … swallow the entire launch in a single quarter,” said Ho. “So hold on we that for the right decision. We think this is the right customer result for our customers and the feedback we have received so far about the rollout has been very positive. “
Bankoh also recently introduced live chat to its mobile platform, which enables the bank to interact with its customers digitally in person, by phone, and now live chat.
“The main focus for us is the customer experience,” said Ho. “For those of us who live here in the 21st century, we know that digitization is an increasing part of the customer experience. We think digitally when it comes to providing online and mobile banking services. So basically to be able to support and serve our customers digitally. And then secondarily, in order to be able to offer our customers products and services via our e-commerce platforms. “
The bank’s revenue, which is composed of net interest income and noninterest income, declined 5% to $ 163.5 million, missing analysts’ estimate of $ 164.7 million.
Bankoh kept its dividend at 67 cents per share. It will be payable to shareholders of record on June 14th after close of business on May 28th.
The company’s shares fell $ 1.10, or 1.2%, to $ 89.83 after earnings announcement.
