BOH Stock Forecast & Price Target

Bank of Hawaii Corp's financial performance indicates a positive outlook, with noninterest income rising 2.6% quarter-over-quarter to $46.0 million, surpassing forecasts. Net interest income (NII) showed a notable increase of 5.4% to $136.7 million, also slightly above expectations, while deposits grew by 5.4% within a quarter, demonstrating robust demand for savings and CDs. The company's management projects continued expansion in net interest margin (NIM), alongside an anticipated annual increase of approximately 25 basis points, suggesting a positive trajectory for profitability as interest rates potentially decrease.

Bank of Hawaii experienced a high-quality loan contraction of -3.2% on a last quarter annualized basis, significantly missing expectations of +0.8%, indicating a negative trend in loan growth. This contraction, coupled with a net interest income miss of $131.3 million, highlights challenges in generating revenue from the current balance sheet, which is also showing signs of contraction. Furthermore, the company's guidance of a 2%-3% increase in expenses for FY25 raises concerns about cost management amid flat loan growth and potential negative impacts from declining U.S. Treasury rates on reinvested cash flows.