BOH Stock Forecast & Price Target

Bank of Hawaii Corp has demonstrated a positive financial performance with a 5.4% increase in net interest income (NII) to $136.7 million, surpassing expectations, alongside a 2.6% rise in noninterest income to $46.0 million. The bank has recorded six consecutive quarters of growth in NII and net interest margin (NIM), with management forecasting approximately 25 basis points of annual NIM expansion, bolstered by favorable changes in the Fed Funds rate. Additionally, deposits experienced a solid growth of 5.4% linked to savings and certificates of deposit, indicating a strong customer base and stable funding conditions.

Bank of Hawaii Corp has experienced a significant contraction in held-for-investment loans, reporting a decline of -3.2% on a last quarter annualized basis, which fell short of the expected growth. This decline in loans contributed to a net interest income miss, totaling $131.3 million, further exacerbated by a slight reduction in the balance sheet compared to forecasts. Additionally, the bank's guidance for FY25 indicates a planned 2%-3% increase in expenses, which raises concerns regarding cost management amid challenges in generating loan growth and potential pressures on yields from declining treasury rates.