Author: bigwave

November 14, 2020 General Ag News and Notes, Stock Market Post a Comment

Bank Of Hawaii Corporation: Wildly Mixed Performance

Seeking Alpha –
Prepared by Stephanie –

Summary

  • Q3 was a very mixed quarter.
  • Book value improved slightly while the headline numbers were crushed.
  • Asset quality remains a concern, though it is improving.
  • Net interest margin was crushed while non-interest income fell 20%.
  • Shares are overvalued.

As our followers are aware, we have provided an overview of the key metrics of a number of regional banks in the last few weeks. This is mainly because we believe that the financials offer tremendous upside in a post-COVID world. But you have to get in ahead of the herd. For the last few months, we have seen how low interest rates have weighed heavily on banks’ operational performance, and pressure on bond yields have kept these stocks down for months despite the broader averages rebounding with authority since the March lows. However, in just the last few days following the US Presidential Election as well as news of a promising COVID-19 vaccine, bond yields are moving and the outlook for banks has improved. Overall, the banks may have spiked a little too sharply, so let them pull back before you buy. That said, the financials are a sector you should be buying for the long term in our opinion.

Here is the thing. Although provisions for loan losses have spiked this year on fears of borrowers being unable pay their loans, this risk seems to be declining in the last few weeks. This feeling is especially compounded on the belief that we are going to successfully move past COVID next year. One name that we find interesting is the Bank of Hawaii Corporation (BOH). As you can imagine, this is a regional bank in the Hawaiian Islands. The bank has recently reported earnings, and with a 4% dividend yield, we like the stock, but think there are some risks that suggest you should wait for a pullback to buy.

Revenue actually declined
We saw they have good loan activity, increased deposits, and a respectable net interest margin. Overall, the bank saw revenues decline. In Q3, the company reported a top line that fell from Q3 2019. With the present quarter’s revenues of $165.9 million, the company notched a 3.2% decrease in this metric year over year. As we have noted, performance on this line has been mixed with many other regional banks having seen flat to down revenues versus last year, while others saw increases. This was one of the many that posted declines in revenues we had seen.

Earnings follow revenues lower
The decline in revenues year over year was compounded by an increase in loan loss provisions from last year and the sequential quarter. While an increased provision from last year was expected in estimates, the results were better than expected actually. Overall, the financial results for the third quarter largely reflect current conditions at the local, national and global level. The Bank of Hawaii Corporation saw net income of $37.8 million, or $0.95 per share, compared to $52.1 million, or $1.29 per share, in the same quarter of 2019. This was above expectations actually. However, it was a decline from the sequential second quarter’s $0.98 as well. While the headline performance may spook you, keep in mind the Hawaiian economy is heavily dependent on tourism and that has been ravaged. We did note that book value improved.

Book value improves but stretched valuation noted
We like to buy quality banks when they are near or below book value. This bank stock has always traded above book value, so we keep that in mind when looking at valuation. However, the valuation is certainly concerning relative to book. While momentum is so strong right now, the stock is definitely above fair value, especially now that the stock is rocketing higher. With this move, it is expensive. The bank’s stock is $72.10 which is up nicely in the last few weeks but is now way above book value. Book value per share was $33.99 at the end of Q3 2020 compared to $33.76 at the end of Q2 2020. We love to see this movement. Still, shares are expensive when we consider tangible book value per share. Most bank stocks are valued higher than tangible book value, but here we are talking more than a 100% premium. Tangible book was $33.21 at the end of Q3 2020 compared to $32.97 at the start of the quarter. Overall, we think this is really expensive. But maybe it does not matter because it has always been at a premium. Still, we would feel much better if investors waited for the price to fall back toward $60, which is still pricey, even if the stock has always been valued like this.

Movement in loans and deposits
So, with the action in the top and bottom lines, as well as the increases in book value, we need to dig further. We should understand what is going on with loans and deposits. Here is the interesting thing. Loans and deposits are up from a year ago. But as we will see, asset quality is an issue. But the reason the company saw lower headline performance was a severely pinched net interest margin, 2.67% versus 2.83% in Q2 2020, as well as non-interest income dropping 20% from Q2 as well. Still, there was positive movement in loans and deposits.

Total loans and leases were $11.8 billion at September 30, 2020. Average total loans and leases were $11.7 billion during quarter, up slightly from the previous quarter and up 9.0% from $10.8 billion during the same quarter last year. You will note the dichotomy between commercial and consumer holdings. The commercial loan portfolio was $5.0 billion at September 30, 2020, down $5.9 million or 0.1% from June 30, 2020. However, this was up $860.1 million or 20.7% from September 30, 2019. The consumer loan portfolio was $6.8 billion at September 30, 2020, down $5.9 million or 0.1% from June 30, 2020, and up $52.2 million or 0.8% from September 30, 2019.

Consumer deposits were up nicely, while commercial deposits fell sharply. Total deposits were $17.7 billion at September 30, 2020. Average total deposits were $17.3 billion during the third quarter of 2020, up 3.5% from $16.7 billion during the previous quarter and up 12.7% from $15.3 billion during the same quarter last year. Consumer deposits increased to $8.9 billion at September 30, 2020, up $136.9 million or 1.6% from $8.8 billion at June 30, 2020 and up $1.0 billion or 12.8% from $7.9 billion at September 30, 2019.

On the other hand, commercial deposits were $7.2 billion at September 30, 2020, down $135.5 million or 1.9% from $7.3 billion at June 30, 2020 but were up $1.0 billion or 16.3% from $6.2 billion at September 30, 2019. Now, increased loan activity is great, but we have to watch asset quality metrics.

Asset quality is something you should watch each quarter
The quality of the bank’s assets has eroded during the COVID crisis. However, asset quality remained relatively stable during Q3. What killed earnings was the loan loss provisions. Provisions for credit losses did improve to $28.6 million at September 30, 2020 compared with $40.4 million at June 30, 2020 and was also nearly seven times as high as $4.25 million at September 30, 2019. However, the allowance for credit losses was $203.5 million at September 30, 2020 compared with $173.4 million at June 30, 2020.

Total non-performing assets were $18.6 million at September 30, 2020, down from $22.7 million at June 30, 2020 and $21.6 million at September 30, 2019. As a percentage of total loans and leases, including foreclosed real estate, non-performing assets were 0.16%, down from 0.19% at the end of the previous quarter. We saw good movement in charge-offs. Net loan and lease charge-offs during Q3 were actually a net recovery of $1.5 million. Loan and lease charge-offs of $2.3 million during the quarter were fully offset by recoveries of $3.8 million. This was a big improvement from Q2. In Q2, we saw net charge-offs of $5.1 million or 0.18% annualized of total average loans and leases outstanding and comprised of $8.3 million in charge-offs and recoveries of $3.2 million.

Take home here
This was a wildly mixed quarter. While loans and deposits are up, asset quality is an issue, while the ability to make money has eroded thanks to rates. However, the stock has rocketed higher on the back of an improving rate outlook. We think you fade this rally unless you are looking to simply make a momentum trade. Book value improved nicely in the quarter, but shares are overvalued.

November 14, 2020 Fashion Post a Comment

These 9 New Winter Fragrances Are Guaranteed to Get You Compliments

InStyle –
by By Erin Lukas –

Getting a new haircut or color is one way to welcome a new season, but so is switching up your everyday fragrance.

Just like ditching your highlights for a darker shade, a warm, spicy, sensual perfume can get you in the mood for the cooler winter weather ahead, and carry you through the first days of spring.

While winter is often synonymous with the holiday season, this year’s new scents aren’t all smoky fires and sugar cookies. Brands like Krigler, Aerin, and Byredo have remixed the season’s signature scents by mixing them with unexpected notes.

Whether you’re fan of spicy perfumes or swear by florals year round, the fragrance launches of winter 2021 cover all the bases.

Here, nine new perfumes that are guaranteed to get you compliments.

Judith Leiber More Is More

CREDIT: COURTESY

Key notes: Blackcurrant absolute, mandarin, grapefruit, lemongrass, ylang ylang, and orchard.

Scent Vibe: Whatever you want it to be. The bottle contains three refillable cartridges with three juices that can be worn alone or mix and matched.

To buy: $125; judithleibermoreismore.com

The Harmonist Sun Force Parfum

CREDIT: COURTESY
Key notes: Hawaiian Pomelo, Bulgarian Rose, saffron, Cardamom, organic honey, sandalwood.

Scent Vibe: A burst of energy on a rare sunny winter morning.

To buy: $336; neimanmarcus.com

Byredo Tobacco Mandarin

CREDIT: COURTESY
Key notes: Mandarin, coriander, cumin, tobacco, leather, and oud.

Scent vibe: Sweet and smoky, like the old Hinge match you left on read.

To Buy: $330; saksfifthavenue.com

Aerin Ambrette De Noir

CREDIT: COURTESY
Key notes: Rose petals, freesia, ambrette seed, tonka absolute, vanilla bourbon, and cedarwood.

Scent vibe: A floral fragrance for winter? Unexpected and groundbreaking. With the addition of sweet and woodsy notes, this floral scent won’t feel out of place in the chill.

To buy: $240; nordstrom.com

Kilian Angels’ Share Eau de Parfum

CREDIT: COURTESY
Key notes: Cognac oil, tonka bean, cinnamon absolute, and oak wood.

Scent vibe: Sipping on your favorite winter cocktail in the cozy back booth of a dark bar. (Remember those?)

To buy: $195; bykilian.com

Krigler ABRAKAADABRA 221 Perfume

CREDIT: COURTESY
Key notes: Aldehydes, bergamot, pepper, lily of the valley, hawthorn, sandalwood, tonka bean, and white musk.

Scent vibe: Inspired by “Abracadabra,” the change-inducing incantation, a few spritzes of this calming floral scent is a mood-booster.

To buy: $515; krigler.com

EX NIHILO Paris Gold Immortals

CREDIT: COURTESY
Key notes: Pear, bergamot, lysylang, peony, tonka bean, amber, and musk.

Scent vibe: The next best thing to blissfully laying out on a tropical beach.

To buy: $325; us.ex-nihilo-paris.com

Tom Ford Bitter Peach Eau de Parfum

CREDIT: COURTESY
Key Notes: Peach, davana, and patchouli.

Scent vibe: A cozy night in with your quarantine bae.

To buy: $350; sephora.com

Chloé Atelier des Fleurs Tuberosa 1974 Eau de Parfum

CREDIT: COURTESY
Key Notes: Tuberose, citrus bergamia, cinnamon, and oak moss.

Scent vibe: The faint whiff of fresh flowers, grass, and leaves on one of those occasional unseasonably warm winter days.

To buy: $250; nordstrom.com

November 13, 2020 General Ag News and Notes, Shipping Post a Comment

USPS REVEALS HOLIDAY SHIPPING DEADLINES FOR 2020

KDHL –
by LAUREN WELLS –

The holiday season is officially here and that means many of us will be shopping for those we love and can’t be with, especially in light of the COVID-19 pandemic.

With that said, the United States Postal Service has released their shipping deadlines for 2020. This includes international, domestic and military shipping deadlines.

If you are looking to ship something within the contiguous United States, you have four different options if you want your package to arrive by December 25th. (It should be noted this does not include Alaska and Hawaii.)

The deadlines are as follows:

  • USPS Retail Ground Service deadline: December 15th
  • First-Class Mail Service: December 18th
  • Priority Mail Service: December 19th
  • Priority Mail Express Service: December 23rd

If you are looking to send a package to Alaska, your deadlines are as follows:

  • First Class Mail Service: December 18th
  • Priority Mail Service: December 19th
  • Priority Mail Express Service: December 21st

if you are sending a package to Hawaii, here are your deadlines:

  • First Class Mail Service: December 15th
  • Priority Mail Service: December 15th
  • Priority Mail Express Service: December 21st

Make sure you send your gifts and / or packages to the destination by the above date so you can ensure it arrives on time. If you are sending something internationally or through military mail, your deadlines span a greater period of time. To see a full list of those deadlines, click here.

These deadlines likely mean more this year as the pandemic continues through the end of 2020. Families may not be able to travel or spend the holidays together. If this is the case, these deadlines will help make sure your packages arrive on time.

November 13, 2020 Jones Act, Shipping Post a Comment

Biden Focus on Infrastructure, Environmental Improvements Could Lift Jones Act

SEAPOWER –
by John M. Doyle –

ARLINGTON, Va. — President-elect Joseph R. Biden’s Jr. twin goals of rebuilding America’s infrastructure, while protecting the environment, could bolster support for maintaining the 100-year-old law that protects the U.S. maritime industry, according to a Washington think tank analyst.

The Biden campaign “had expressed interest in new infrastructure, in new green initiatives, and the maritime industry is actually a pretty good confluence of the two,” Tim Walton, a fellow at the Hudson Institute’s Center for Defense Concepts and Technology, told a Navy League webinar marking the 100th anniversary of the Jones Act.

Also known as the Merchant Marine Act of 1920, the Jones Act bars foreign-built, foreign-owned or foreign-flagged vessels from conducting coastal and inland waterway trade within the United States and between the United States and its non-contiguous states and territories such as Alaska and Puerto Rico.

The long-standing legislation could figure in plans “where we’re talking about building maritime infrastructure, building low carbon emitting transportation mechanisms, green industries that support our economy in the oceans as we build a blue economy,” Walton added. A “Blue Economy,” according to the World Bank, is built on sustainable use of ocean resources for economic growth, improved livelihoods and jobs and ocean ecosystem health.

Critics say the aged Jones Act has led to higher shipping costs, which are passed along as higher prices to vendors, retailers and consumers. They also maintain higher costs have driven the commercial shipbuilding industry overseas, leading to a smaller pool of qualified U.S. merchant mariners.

Without the law, U.S. Navy and Coast Guard officials have argued there would be no pool of U.S. noncombat ships — or trained American seafarers to man them — in a war or other national emergency. During the Nov. 12 webinar, former Coast Guard Commandant Adm. Paul Zukunft (retired) called for “a coherent maritime national strategy that connects with a national security strategy. That’s where the Jones Act needs to be woven into our national security strategies.”

Former U.S. Rep. Ernest Istook, an Oklahoma Republican, said the need for such a strategy is evident, in a world where 90% of trade is moved by ship, and Great Power competitor China is the world’s biggest shipbuilder, by some measures has the world’s largest navy, and is expanding its commercial ports and naval bases around the world.

Walton’s comment about Biden came after a webinar viewer asked where the Democrat stood on the Jones Act. Both Biden and President Donald Trump support the law, although Trump considered, but later rejected, an extended waiver for foreign carriers to deliver liquid natural gas to hurricane wracked-Puerto Rico and LNG-dependent New England States. Biden incorporated Jones Act support in his campaign’s Buy American/Ship American strategy.

“Historically, the U.S. maritime industry has been a leader in technology,” Walton said, “but now in the 21st century, the Biden administration, as it appears it’s going to be, will have an opportunity, I think, to take some leadership and, as Adm. Zukunft said, actually craft an integrated national strategy for the maritime industry, and then implement it.”

To read the new Navy League special report on the Jones Act and its impact, go here.

November 13, 2020 Cannabis, General Ag News and Notes Post a Comment

State regulators start “Cannabis Regulators Association”

KALB –
by Louisiana Dept. of Agriculture and Forestry –

BATON ROUGE, La. (LDAF) – In an effort to better share institutional knowledge and regulatory practices, Louisiana is one of 19 states now part of the newly formed non-partisan organization called the Cannabis Regulators Association (CANNRA).

The Louisiana Department of Agriculture and Forestry (LDAF) which regulates medical marijuana in Louisiana will be represented by Medical Marijuana Program Director Tabitha Irvin, Esq. CANNRA is being established to assist federal, state, and local jurisdictions that have approved or are considering the legalization of medical and/or recreational cannabis.

“CANNRA is restricted to cannabis regulators to develop best practices and policies and also to support consistent regulatory actions,” said Agriculture and Forestry Commissioner Mike Strain, D.V.M.

Irvin added, “It is an honor to be a founding member of an organization that will develop standards in the industry and provides regulatory guidance to state and federal elected officials. We are also proud to collaborate and welcome the expertise of other states as we regulate products so they are safe for consumers.”

For years, cannabis regulators across the country have relied on each other to share regulatory experiences, institutional expertise, and to provide assistance navigating the numerous evolving policy and regulatory issues associated with legalizing and regulating cannabis. Often the first step for state and local jurisdictions weighing legalization is to engage with regulators from established markets and programs. However, there has never been an organization to facilitate these interactions or help stakeholders find objective data and evidence-based approaches to policymaking and implementation.

CANNRA’s other founding members include the principal cannabis regulators from: Colorado, Delaware, Hawaii, Illinois, Iowa, Maine, Maryland, Massachusetts, Michigan, Minnesota, Nevada, New Jersey, New York, North Dakota, Oregon, Rhode Island, Utah, and Washington.

For more information about the Cannabis Regulators Association visit www.Cann-RA.org or email info@Cann-RA.org.

November 13, 2020 Flowers & Nursery, General Ag News and Notes, Plant Pests and Diseases Post a Comment

Plant containment greenhouse to safeguard Hawaii plant imports

horti daily –

After 2.5 years of planning and construction, the statewide Hawaii Tropical Fruit Growers (HTFG) boasts a new state-of-the-art containment greenhouse. Approved by the Hawaii Dept. of Agriculture (HDOA) last week, the facility is situated in South Kona.

The $263K greenhouse, funded mainly by the state’s Grants-in-Aid program, will provide fruit growers with insect and disease-free plant resources imported from around the world.

“The greenhouse enables us to bring in, effectively isolate and safely propagate fruit we believe will be productive in Hawaii,” explains Mark Suiso, HTFG president. “Hawaii did not evolve naturally with fruit. This facility has technology that will allow us to efficiently introduce desired plants and evaluate them to assure they can safely be released and grown in our state.”

To ensure introduced plants don’t bring in any unintended problems, the 30 X 30-foot greenhouse is surrounded by a five-inch moat and 15-foot concrete barrier and further secured by an electric fence and security system. Specialized USDA-approved micro screen walls will prevent any insects from gaining access and limited staff entry to the greenhouse is through double doors. A solid, specialized plastic roof tops the greenhouse and interior halls between the greenhouse’s eight rooms are blackened with insect traps in each room and hallway.

Ken Love, HTFG executive director, says greenhouse waste water will be treated with bleach before released into a holding tank and finally a septic system. “There is always a concern that water passing through growing media could contain bacteria that might have been missed in the initial plant inspections,” he details. “The bleach treatment will kill any bacteria or virus that travels from the dirt to the drains and into the holding tank.”

According to Love, all chosen imported plants will go through five stages of inspection: by HTFG on-site at exporting farm, by country of origin’s Dept. of Agriculture, by USDA upon arrival in Honolulu, by HDOA in Honolulu, and finally by HTFG before entering greenhouse. Imported plant stock will arrive as small, bare-root trees or cuttings.

Once the seedlings are received at the Kona greenhouse, they will be potted in a sterile and organic nursery mix.

HTFG members will decide what plants to import and clone and they will be quarantined in the 900-square-foot greenhouse over a two-year period before released. The project’s six rooms can each hold about 1,000 trees and two, small tube pot rooms can hold up to 4,000 seedlings.

Love shares virtually unknown fruit like sweet-sour tampoi has “great economic potential” for Hawaii growers as does the creamy, sweet and savory durian, which can currently be exported from Hawaii to the U.S. Mainland.

“We have already arranged to bring in 500 hachiya persimmons from Japan and 1,000 durian from the Philippines,” adds Love. “Other trees are being grown out for us in Borneo, Queensland and India.”

In addition, the specialized containment greenhouse enables HTFG to apply for a specialized Controlled Import Permit to bring in new varieties of citrus and mango. This more restrictive permit is required as Hawaii is already growing citrus and mango and prevention of introducing new pathogens to existing crops is crucial.

Once plants are settled in the greenhouse, smart monitoring systems will result in little interaction between plants and people as the goal is to minimize exposure between the confines of the greenhouse and the outside world.

To nurture seedlings in a controlled setting, the greenhouse has a timed irrigation system that controls misting, fogging and spraying to mimic ideal growing conditions, including those of the equatorial rainforest. Each growing room has Wi-Fi sensors for monitoring and recording temperature and humidity readings.

“The precise production of desired growing conditions will produce healthier plants more quickly,” notes Love. “This includes cuttings from most citrus, Chou ume plum and any desired local plants like those in the mountain apple family.”

The new greenhouse is a sister project to HTFG’s existing statewide fruit tree repositories where trees are available for sharing among organization members, plus to the public at periodic sales. Love says distribution of the greenhouse’s resources will be similar.

“Ultimately, we want to see a diverse selection of fruit grown productively throughout the state and with little dependence on importing it from outside the state,” adds Suiso.

“HTFG especially appreciates the funding efforts of state legislators Mike Gabbard, Richard Creagan, Donovan Dela Cruz and Nicole Lowen. Mahalo to Phyllis Shimabukuro-Geiser, Sharon Hurd, Lance Sakaino and Clare Okumoto of the HDOA; Mike Scharf, Matthew Goo, Peter Follett and Dorothy Alontaga of the USDA; Dr. Robert Paull and Andrea Kawabata of the University of Hawaii; and Kenneth and Ader Takaki of Ken’s Masonry, Mark Dixon Construction and Diamond Sprinklers.”

“Thanks also to HTFG members statewide, especially Brian Lievens, Greg Garriss, Chuck Cope, Shinobu Doucette and Xavier Chung.”

For more information:
Ken Love
kenlove@hawaiiantel.net
HTFG President Mark Suiso
suiso@aloha.net