Bank of Hawaii Corp.’s stock jumped by its largest amount in more than two years after the company reported a 25.5 percent increase in fourth-quarter earnings.
The state’s second-largest bank, which generated solid loan growth and benefited from rising interest rates, said Monday that net income soared to $53.9 million, or $1.30 a share. The earnings per share were 5 cents shy of analysts’ consensus estimate but, excluding nonrecurring items, were in line with core earnings. In the year-earlier quarter, Bankoh earned $43 million, or $1.01 a share.
Bankoh’s shares rose $3.46, or 4.5 percent, to $80.25 after financial results were released and are now up 19.2 percent since the start of the year. They were both the largest point and percentage gains since Nov. 9, 2016, when the bank’s shares rose $3.82, or 5 percent, to $79.56.
“It was just a good, solid quarter,” Bankoh Chairman, President and CEO Peter Ho said. “We had nice growth in both loans and deposits. Expenses were actually a little bit higher, although most of that difference were in nonrecurring things. Net interest margin picked up, and credit quality continues to be pristine so the fourth quarter allowed us to finish out a pretty solid 2018.”
Loans rose 7.7 percent to $10.45 billion in line with the bank’s expectations.
“We had guided to midsingle-digit loan growth for 2018 for a lot of quarters, so basically we achieved what we’ve been telling our shareholders and Wall Street,” Ho said. “That is a reasonable goal for us again this year, so a repeat of 2018 from the loan production standpoint is in the ballpark of what the economy is affording us right now.”
The bank’s net interest margin — the spread between what it earns on loans and what it pays on deposits — rose 12 basis points to 3.10 percent from 2.98 percent in the year- earlier quarter. Bankoh said its net interest margin would have been 2 basis points higher in the fourth quarter had it not sold its MyBankoh Rewards credit card business — with $51.6 million in outstanding assets — to Barclays Bank Delaware so that it could focus on its co-branded Hawaiian Airlines Bank of Hawaii World Elite MasterCard program.
Deposits edged up 1 percent to $15.03 billion while assets inched up 0.3 percent to $17.14 billion.
FOURTH-QUARTER NET
$53.9 million
YEAR-EARLIER NET
$43 million
