Bank of Hawaii Q2 Net Income Dips to $48.2M Amid Rising Interest Costs
Ticker: BOH-PB · Form: 10-Q · Filed: Jul 28, 2025 · CIK: 46195
| Field | Detail |
|---|---|
| Company | Bank Of Hawaii Corp (BOH-PB) |
| Form Type | 10-Q |
| Filed Date | Jul 28, 2025 |
| Risk Level | medium |
| Sentiment | bearish |
Sentiment: bearish
Topics: Regional Banking, Net Interest Margin, Earnings Decline, Interest Rate Risk, Hawaii Economy, Financial Performance, Q2 2025 Results
Related Tickers: BOH-PB, WAL, ZION, PACW
TL;DR
**BOH-PB's Q2 dip in net income signals ongoing margin compression; expect continued pressure on regional bank profitability.**
AI Summary
BANK OF HAWAII CORP reported a net income of $48.2 million for the second quarter of 2025, a decrease from $52.1 million in the prior quarter. For the six months ended June 30, 2025, net income was $100.3 million, down from $110.5 million for the same period in 2024. Total revenue for the second quarter of 2025 was $165.4 million, compared to $170.1 million in the first quarter of 2025. Net interest income decreased by $4.5 million to $125.9 million in Q2 2025 from $130.4 million in Q1 2025, primarily due to higher interest expense on deposits and borrowings. Noninterest income saw a slight increase, reaching $39.5 million in Q2 2025 from $39.7 million in Q1 2025, driven by higher mortgage banking income of $5.3 million. The bank's total assets stood at $23.5 billion as of June 30, 2025, a slight decrease from $23.7 billion at December 31, 2024. The allowance for credit losses remained stable at $120.5 million. Strategic outlook emphasizes managing interest rate risk and maintaining asset quality amidst a challenging economic environment.
Why It Matters
This performance indicates that BANK OF HAWAII CORP is navigating a challenging interest rate environment, impacting its profitability. For investors, the decline in net income and net interest income suggests potential headwinds for future earnings growth, especially compared to regional competitors who might be better positioned to manage deposit costs. Employees could face pressure if cost-cutting measures become necessary, while customers might see changes in deposit rates or loan offerings as the bank adjusts its strategy. The broader market will watch how regional banks like BOH-PB adapt to sustained higher interest rates and competitive pressures in deposit gathering.
Risk Assessment
Risk Level: medium — The risk level is medium due to the decline in net income from $52.1 million in Q1 2025 to $48.2 million in Q2 2025, primarily driven by a $4.5 million decrease in net interest income. This indicates sensitivity to interest rate fluctuations and increased funding costs, which could further erode profitability if not managed effectively. The stable allowance for credit losses at $120.5 million suggests asset quality is holding, but the overall trend in net interest margin is a concern.
Analyst Insight
Investors should closely monitor BOH-PB's net interest margin and deposit costs in upcoming quarters. Consider if the current dividend yield adequately compensates for the declining profitability trends, and evaluate the bank's ability to grow noninterest income to offset net interest income pressures.
Financial Highlights
- debt To Equity
- N/A
- revenue
- $165.4M
- operating Margin
- N/A
- total Assets
- $23.5B
- total Debt
- N/A
- net Income
- $48.2M
- eps
- N/A
- gross Margin
- N/A
- cash Position
- N/A
- revenue Growth
- -2.8%
Revenue Breakdown
| Segment | Revenue | Growth |
|---|---|---|
| Net Interest Income | $125.9M | -3.5% |
| Noninterest Income | $39.5M | -0.5% |
| Mortgage Banking Income | $5.3M | N/A |
Key Numbers
- $48.2M — Q2 2025 Net Income (Decreased from $52.1M in Q1 2025, indicating profitability pressure.)
- $125.9M — Q2 2025 Net Interest Income (Down $4.5M from Q1 2025, primarily due to higher interest expense.)
- $23.5B — Total Assets (Slight decrease from $23.7B at December 31, 2024, showing balance sheet stability.)
- $120.5M — Allowance for Credit Losses (Remained stable, suggesting consistent asset quality.)
- $5.3M — Mortgage Banking Income (Increased in Q2 2025, partially offsetting net interest income decline.)
Key Players & Entities
- BANK OF HAWAII CORP (company) — filer of the 10-Q
- $48.2 million (dollar_amount) — net income for Q2 2025
- $52.1 million (dollar_amount) — net income for Q1 2025
- $100.3 million (dollar_amount) — net income for six months ended June 30, 2025
- $110.5 million (dollar_amount) — net income for six months ended June 30, 2024
- $165.4 million (dollar_amount) — total revenue for Q2 2025
- $170.1 million (dollar_amount) — total revenue for Q1 2025
- $125.9 million (dollar_amount) — net interest income for Q2 2025
- $130.4 million (dollar_amount) — net interest income for Q1 2025
- $23.5 billion (dollar_amount) — total assets as of June 30, 2025
FAQ
What was Bank of Hawaii's net income for the second quarter of 2025?
Bank of Hawaii's net income for the second quarter of 2025 was $48.2 million, a decrease from $52.1 million in the first quarter of 2025.
How did Bank of Hawaii's net interest income change in Q2 2025?
Bank of Hawaii's net interest income decreased by $4.5 million, from $130.4 million in Q1 2025 to $125.9 million in Q2 2025, primarily due to higher interest expense on deposits and borrowings.
What were Bank of Hawaii's total assets as of June 30, 2025?
As of June 30, 2025, Bank of Hawaii's total assets stood at $23.5 billion, a slight decrease from $23.7 billion reported at December 31, 2024.
What contributed to Bank of Hawaii's noninterest income in Q2 2025?
Bank of Hawaii's noninterest income reached $39.5 million in Q2 2025, with a notable contribution from mortgage banking income, which increased to $5.3 million.
What is the strategic outlook for Bank of Hawaii regarding interest rates?
Bank of Hawaii's strategic outlook emphasizes managing interest rate risk and maintaining asset quality, indicating a focus on navigating the challenging interest rate environment.
How does Bank of Hawaii's Q2 2025 performance compare to the same period last year?
For the six months ended June 30, 2025, Bank of Hawaii's net income was $100.3 million, which is a decrease from $110.5 million for the same period in 2024.
What is the current allowance for credit losses for Bank of Hawaii?
The allowance for credit losses for Bank of Hawaii remained stable at $120.5 million as of June 30, 2025, indicating consistent assessment of loan portfolio risk.
Should investors be concerned about Bank of Hawaii's declining net income?
Investors should be concerned as the decline in net income from $52.1 million to $48.2 million, driven by reduced net interest income, suggests potential headwinds for future earnings growth and profitability.
What is the primary reason for the decrease in Bank of Hawaii's net interest income?
The primary reason for the decrease in Bank of Hawaii's net interest income is higher interest expense on deposits and borrowings, reflecting the current rising interest rate environment.
What is Bank of Hawaii's CIK number?
Bank of Hawaii's Central Index Key (CIK) number is 0000046195.
Industry Context
The banking industry, particularly in regional markets like Hawaii, faces ongoing challenges related to interest rate sensitivity and economic conditions. Competition for deposits and loans remains a key factor, with banks needing to carefully manage their balance sheets to maintain profitability.
Regulatory Implications
As a financial institution, Bank of Hawaii Corp is subject to stringent regulatory oversight from bodies like the Federal Reserve and FDIC. Compliance with capital requirements, lending standards, and consumer protection laws is paramount and can impact operational flexibility and profitability.
What Investors Should Do
- Monitor Net Interest Margin (NIM) trends
- Assess Asset Quality
- Evaluate Noninterest Income Diversification
Key Dates
- 2025-06-30: End of Second Quarter 2025 — Reporting period for the 10-Q filing, showing net income of $48.2M and total assets of $23.5B.
- 2025-07-28: 10-Q Filing Date — The official filing date of the quarterly report with the SEC.
Glossary
- Net Interest Income
- The difference between the interest income generated by a bank and the interest paid out to its depositors and lenders. (A core component of a bank's profitability, its decrease indicates pressure on lending margins or increased funding costs.)
- Noninterest Income
- Revenue generated by a bank from sources other than interest income, such as fees, service charges, and trading income. (Diversifies revenue streams and can offset declines in net interest income.)
- Allowance for Credit Losses
- An estimate of the amount of loans in a bank's portfolio that are expected to become uncollectible. (Indicates the bank's assessment of asset quality and potential future loan losses.)
- Mortgage Banking Income
- Income generated from originating, selling, and servicing mortgage loans. (A component of noninterest income that can be sensitive to interest rate fluctuations and housing market conditions.)
Year-Over-Year Comparison
Compared to the previous reporting period, Bank of Hawaii Corp experienced a decline in both net income and total revenue for Q2 2025. Net interest income decreased due to rising interest expenses, while noninterest income saw a marginal dip. Total assets showed a slight reduction, indicating a stable but contracting balance sheet. The allowance for credit losses remained consistent, suggesting no immediate concerns regarding asset quality.
Filing Details
This Form 10-Q (Form 10-Q) was filed with the SEC on July 28, 2025 regarding BANK OF HAWAII CORP (BOH-PB).