Bank of Hawaii Q3 Net Income Jumps 32% on Strong Net Interest Income

TL;DR

**BOH is crushing it with a 32% net income jump, signaling a strong buy for regional bank bulls.**

AI Summary

Bank of Hawaii Corporation reported a significant increase in net income for the three months ended September 30, 2025, reaching $53.345 million, up 32.2% from $40.358 million in the same period of 2024. Net interest income also saw a robust increase, rising to $136.675 million from $117.618 million year-over-year, a 16.2% improvement. Total assets grew to $24.014 billion as of September 30, 2025, from $23.601 billion at December 31, 2024. Deposits increased by $447.632 million during the nine months ended September 30, 2025, reaching $21.080 billion. The company's investment securities available-for-sale increased to $3.280 billion from $2.689 billion, while held-to-maturity securities decreased to $4.340 billion from $4.618 billion. A notable strategic change is the sale of its merchant services portfolio on October 1, 2025, expected to result in an $18 million one-time gain in Q4 2025. The provision for credit losses slightly decreased to $2.500 million for the quarter, down from $3.000 million in the prior year, indicating stable credit quality. Shareholders' equity improved to $1.791 billion from $1.667 billion at year-end 2024, driven by net income and other comprehensive income. Basic earnings per common share rose to $1.21 from $0.94.

Why It Matters

This filing reveals Bank of Hawaii's strong financial performance, with significant growth in net income and net interest income, which is crucial for investor confidence in a competitive banking landscape. The increase in deposits and overall assets signals healthy customer engagement and market share in Hawaii, Guam, and other Pacific Islands, potentially putting pressure on regional competitors. The planned $18 million gain from the merchant services portfolio sale indicates strategic asset optimization, which could free up capital for other growth initiatives or shareholder returns. For employees, sustained profitability ensures job security and potential for growth, while customers benefit from a stable and expanding financial institution. The improved shareholders' equity and reduced provision for credit losses suggest a resilient balance sheet, making BOH an attractive option for investors seeking stability and growth in the regional banking sector.

Risk Assessment

Risk Level: low — The risk level is low due to a significant increase in net income by 32.2% to $53.345 million and a decrease in the provision for credit losses to $2.500 million for the quarter, indicating improving asset quality. Furthermore, the company's total deposits increased by $447.632 million, strengthening its funding base.

Analyst Insight

Investors should consider increasing their position in BOH, given the strong net income growth and improved net interest income. The upcoming $18 million gain from the merchant services portfolio sale in Q4 2025 provides an additional positive catalyst.

Financial Highlights

debt To Equity

12.41

revenue

$227,708

total Assets

$24,014,609

total Debt

$650,000

net Income

$53,345

eps

$1.21

cash Position

$985,223

revenue Growth

+3.2%

Revenue Breakdown

Key Numbers

• $53.3M — Net Income (Increased 32.2% from $40.4M in Q3 2024)
• $136.7M — Net Interest Income (Increased 16.2% from $117.6M in Q3 2024)
• $24.01B — Total Assets (Increased from $23.60B at December 31, 2024)
• $21.08B — Total Deposits (Increased by $447.6M during the nine months ended September 30, 2025)
• $2.5M — Provision for Credit Losses (Decreased from $3.0M in Q3 2024)
• $1.21 — Basic EPS (Increased from $0.94 in Q3 2024)
• $1.79B — Total Shareholders' Equity (Increased from $1.67B at December 31, 2024)
• $18M — Expected Gain (From merchant services portfolio sale in Q4 2025)
• 32.2% — Net Income Growth (Year-over-year for Q3 2025)
• 16.2% — Net Interest Income Growth (Year-over-year for Q3 2025)

Key Players & Entities

• BANK OF HAWAII CORP (company) — Registrant and parent company
• Bank of Hawaii (company) — Principal operating subsidiary
• New York Stock Exchange (regulator) — Exchange where BOH common stock and preferred stocks are registered
• $53,345,000 (dollar_amount) — Net income for the three months ended September 30, 2025
• $40,358,000 (dollar_amount) — Net income for the three months ended September 30, 2024
• $136,675,000 (dollar_amount) — Net interest income for the three months ended September 30, 2025
• $117,618,000 (dollar_amount) — Net interest income for the three months ended September 30, 2024
• $2,500,000 (dollar_amount) — Provision for credit losses for the three months ended September 30, 2025
• $18,000,000 (dollar_amount) — One-time gain expected from merchant services portfolio sale in Q4 2025
• $1.21 (dollar_amount) — Basic Earnings Per Common Share for the three months ended September 30, 2025

FAQ

Risk Factors

• Interest Rate Sensitivity [medium — market]: The company's profitability is sensitive to changes in interest rates, which can affect net interest income and the fair value of investment securities. For example, income on cash and cash equivalents decreased by 8.8% year-over-year for the quarter.
• Credit Quality and Loan Portfolio Performance [medium — financial]: While the provision for credit losses slightly decreased to $2.5 million from $3.0 million year-over-year, the net loans and leases balance remained relatively stable at $13.87 billion as of September 30, 2025, indicating continued focus on credit risk management.
• Cybersecurity and Data Breaches [high — operational]: As a financial institution, the company is exposed to risks associated with data security and cyber threats. A breach could lead to financial losses, reputational damage, and regulatory penalties.
• Regulatory Compliance and Changes [high — regulatory]: The company operates in a highly regulated environment. Changes in banking regulations or failure to comply could result in significant fines, sanctions, or operational restrictions.
• Economic Conditions in Hawaii and Pacific Islands [medium — market]: The company's performance is closely tied to the economic health of Hawaii and other Pacific Islands where it operates. Downturns in these regional economies could negatively impact loan demand, credit quality, and overall profitability.
• Strategic Divestitures and Integration [low — strategic]: The sale of the merchant services portfolio on October 1, 2025, is a strategic move expected to generate an $18 million gain. However, such divestitures carry integration risks and may impact future revenue streams.

Industry Context

Bank of Hawaii Corporation operates within the highly competitive U.S. regional banking sector, with a strong focus on the Hawaiian Islands and other Pacific regions. The industry is characterized by evolving customer preferences towards digital banking, increasing regulatory scrutiny, and sensitivity to interest rate fluctuations. Regional banks like Bank of Hawaii often leverage their local market knowledge and community ties to differentiate themselves from larger national institutions.

Regulatory Implications

As a bank holding company, Bank of Hawaii is subject to oversight from multiple regulatory bodies, including the Federal Reserve, FDIC, and state banking authorities. Compliance with capital requirements, consumer protection laws, and anti-money laundering regulations is paramount. Any changes in monetary policy or banking regulations can significantly impact the company's operations, profitability, and strategic decisions.

What Investors Should Do

1. Monitor the impact of the merchant services portfolio sale on Q4 2025 earnings and future strategic direction.
2. Analyze the drivers behind the strong net interest income growth and its sustainability.
3. Evaluate the company's asset allocation strategy, particularly the shift in investment securities.
4. Assess the company's resilience to potential economic downturns in its core markets.

Key Dates

• 2025-09-30: End of Q3 2025 — Reported strong net income growth of 32.2% and net interest income growth of 16.2% year-over-year, with total assets reaching $24.01 billion.
• 2025-10-01: Sale of Merchant Services Portfolio — Strategic divestiture expected to result in an $18 million one-time gain in Q4 2025, potentially streamlining operations.
• 2024-12-31: End of Fiscal Year 2024 — Baseline for year-over-year comparisons; total assets were $23.60 billion and shareholders' equity was $1.67 billion.

Glossary

Available-for-Sale Securities

Investment securities that are not classified as held-to-maturity or trading securities. Their unrealized gains and losses are reported in other comprehensive income. (The company's AFS portfolio increased to $3.28 billion, contributing to overall asset growth and potential for unrealized gains/losses.)

Held-to-Maturity Securities

Investment securities that the company has the intent and ability to hold until their maturity date. They are reported at amortized cost. (The HTM portfolio decreased to $4.34 billion, impacting the company's interest income and asset composition.)

Allowance for Credit Losses

A contra-asset account that represents the estimated amount of uncollectible loans and leases. (A slight decrease in the provision for credit losses to $2.5 million suggests stable credit quality in the loan portfolio.)

Accumulated Other Comprehensive Loss

A component of shareholders' equity that includes unrealized gains and losses on available-for-sale securities, foreign currency translation adjustments, and pension adjustments. (The company's AOCI improved from a loss of $343 million to $276 million, positively impacting total shareholders' equity.)

Net Interest Income

The difference between interest income generated by a bank's assets (like loans and securities) and the interest paid out on its liabilities (like deposits and borrowings). (A key driver of profitability, net interest income increased by 16.2% to $136.7 million, indicating strong performance from core banking operations.)

Year-Over-Year Comparison

Compared to the prior year's filing (likely Q3 2024), Bank of Hawaii Corporation demonstrates robust performance improvements. Net income surged by 32.2% to $53.3 million, and net interest income saw a significant 16.2% increase to $136.7 million, indicating strong operational execution. Total assets grew modestly to $24.01 billion, while shareholders' equity improved to $1.79 billion, reflecting retained earnings and other comprehensive income gains. The provision for credit losses decreased slightly, suggesting stable credit quality, and basic EPS rose to $1.21 from $0.94.

Key Financial Figures

• $0.01 — ich registered Common Stock, par value $0.01 per share BOH New York Stock Exchange

Filing Documents

• boh-20250930.htm (10-Q) — 4129KB
• boh-20250930xex311.htm (EX-31.1) — 10KB
• boh-20250930xex312.htm (EX-31.2) — 10KB
• boh-20250930xex32.htm (EX-32) — 6KB
• 0000046195-25-000037.txt ( ) — 18940KB
• boh-20250930.xsd (EX-101.SCH) — 74KB
• boh-20250930_cal.xml (EX-101.CAL) — 139KB
• boh-20250930_def.xml (EX-101.DEF) — 499KB
• boh-20250930_lab.xml (EX-101.LAB) — 886KB
• boh-20250930_pre.xml (EX-101.PRE) — 702KB
• boh-20250930_htm.xml (XML) — 4831KB

- Financial Information

Part I - Financial Information 2 Item 1.

Financial Statements (Unaudited)

Financial Statements (Unaudited) 2 Consolidated Statements of Condition - September 30, 2025 and December 31, 2024 2 Consolidated Statements of Income - Three and nine months ended September 30, 2025 and 2024 3 Consolidated Statements of Comprehensive Income - Three and nine months ended September 30, 2025 and 2024 4 Consolidated Statements of Shareholders' Equity - Three and nine months ended September 30, 2025 and 2024 5 Consolidated Statements of Cash Flows - Nine months ended September 30, 2025 and 2024 7

Notes to Consolidated Financial Statements

Notes to Consolidated Financial Statements 8 Item 2.

Management's Discussion and Analysis of Financial Condition and Results of Operations

Management's Discussion and Analysis of Financial Condition and Results of Operations 43 Item 3.

Quantitative and Qualitative Disclosures About Market Risk

Quantitative and Qualitative Disclosures About Market Risk 66 Item 4.

Controls and Procedures

Controls and Procedures 66

- Other Information

Part II - Other Information 67 Item 1.

Legal Proceedings

Legal Proceedings 67 Item 1A.

Risk Factors

Risk Factors 67 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 67

Defaults Upon Senior Securities

Item 3. Defaults Upon Senior Securities 67

Mine Safety Disclosures

Item 4. Mine Safety Disclosures 67 Item 5. Other Information 67 Item 6. Exhibits 67

Signatures

Signatures 69 1 Table of Contents

- Financial Information

Part I - Financial Information

Financial Statements

Item 1. Financial Statements Bank of Hawaii Corporation and Subsidiaries Consolidated Statements of Condition (dollars in thousands, except per share amounts) September 30, 2025 (Unaudited) December 31, 2024 Assets Cash and Cash Equivalents $ 985,223 $ 763,571 Investment Securities Available-for-Sale 3,280,410 2,689,528 Held-to-Maturity (Fair Value of $ 3,717,573 and $ 3,820,882 ) 4,340,032 4,618,543 Loans Held for Sale 1,236 2,150 Loans and Leases 14,021,579 14,075,980 Allowance for Credit Losses ( 148,778 ) ( 148,528 ) Net Loans and Leases 13,872,801 13,927,452 Premises and Equipment, Net 196,093 184,480 Operating Lease Right-of-Use Assets 82,804 80,165 Accrued Interest Receivable 69,224 66,367 Mortgage Servicing Rights 17,927 19,199 Goodwill 31,517 31,517 Bank-Owned Life Insurance 494,041 481,184 Other Assets 643,301 736,958 Total Assets $ 24,014,609 $ 23,601,114 Liabilities Deposits Noninterest-Bearing Demand $ 5,400,943 $ 5,423,562 Interest-Bearing Demand 3,813,921 3,784,984 Savings 8,814,451 8,364,916 Time 3,051,354 3,059,575 Total Deposits 21,080,669 20,633,037 Securities Sold Under Agreements to Repurchase 50,000 100,000 Other Debt 558,201 558,274 Operating Lease Liabilities 91,690 88,794 Retirement Benefits Payable 23,352 23,760 Accrued Interest Payable 27,580 34,799 Other Liabilities 391,934 494,676 Total Liabilities 22,223,426 21,933,340 Commitments and Contingencies (Note 11) Shareholders' Equity Preferred Stock (Series A, $ .01 par value; authorized 180,000 shares issued and outstanding) 180,000 180,000 Preferred Stock (Series B, $ .01 par value; authorized 165,000 shares issued and outstanding) 165,000 165,000 Common Stock ($ .01 par value; authorized 500,000,000 shares; issued / outstanding: September 30, 2025 - 58,779,666 / 39,785,201 ); and December 31, 2024 - 58,765,907 / 39,762,255 ) 587 585 Capital Surplus 659,922 647,403 Accumulated Other Comprehensive Loss ( 276,251 ) ( 343,389 ) Retained Earnin

Notes to Consolidated Financial Statements

Notes to Consolidated Financial Statements (Unaudited) Note 1. Summary of Significant Accounting Policies Basis of Presentation Bank of Hawaii Corporation (the "Parent") is a Delaware corporation and a bank holding company headquartered in Honolulu, Hawaii. Bank of Hawaii Corporation and its subsidiaries (collectively, the "Company"), provide a broad range of financial products and services to customers in Hawaii, Guam and other Pacific Islands. The majority of the Company's operations consist of customary commercial and consumer banking services including, but not limited to, lending, leasing, deposit services, trust and investment activities, brokerage services, and trade financing. The accompanying Unaudited Consolidated Financial Statements include the accounts of the Parent and its subsidiaries. The Parent's principal operating subsidiary is Bank of Hawaii (the "Bank"). The Consolidated Financial Statements in this report have not been audited by an independent registered public accounting firm, but, in the opinion of management, reflect all adjustments necessary for a fair presentation of the results for the interim periods. All such adjustments are of a normal recurring nature. Intercompany accounts and transactions have been eliminated in consolidation. Certain prior period information has been reclassified to conform to the current period presentation. Operating results for the interim periods disclosed herein are not necessarily indicative of the results that may be expected for the full fiscal year or any future period. The accompanying Unaudited Consolidated Financial Statements have been prepared in accordance with U.S. generally accepted accounting principles ("GAAP") for interim financial information and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, they do not include all of the information and accompanying notes required by GAAP for complete financial statements and should be read in conjunction with the au

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