Bank of Hawaii (BOH) investor relations material

Executive summary

• Q3 net income was $64.3M, up 20.5% YoY; diluted EPS was $1.49, up 24.2%, and return on average common equity was 15.38%.

• NII rose 14.2% YoY to $156.1M; NIM increased 36 bps YoY to 2.82%, marking its tenth consecutive quarterly expansion.

• Credit quality remained strong overall, though NPAs rose after one commercial mortgage entered nonaccrual due to borrower-specific circumstances.

• Loans and leases grew 2.1% from year-end to $14.4B, while deposits declined 3.3% to $20.5B.

Financial highlights

• Net interest income was $156.1M; total revenue was $198.8M, up $1.9M QoQ and $16.2M YoY.

• Noninterest income was $42.7M, down 7.1% YoY, mainly reflecting lower merchant revenue after the portfolio sale and reduced customer derivative activity.

• Noninterest expense was $112.3M, nearly flat YoY; Q3 net income was $64.3M versus $53.3M YoY, and diluted EPS was $1.49 versus $1.20.

• Provision for credit losses was $2.8M; the Q3 effective tax rate was 23.2%, reflecting higher LIHTC valuation reserves.

• Nine-month net income was $185.5M versus $145.0M; diluted EPS was $4.27 versus $3.24, and NII was $460.6M versus $392.2M.

Outlook and guidance

• Management’s focus remained on enhancing earnings while maintaining financial strength and resilience; asset and deposit repricing continued to support margin expansion.

• Q4 normalized noninterest income was expected at ~$44M and normalized noninterest expense at ~$112.5M.

• Q4 deposit growth was anticipated to resume; loan growth was expected in the low-to-mid-single-digit range, led by commercial lending.

• Normalized expense growth was expected at 2.5%-3% for 2027, subject to strategic opportunities and expense discipline.

• A 25 bps Fed Funds increase was estimated to add $4.1M to quarterly NII from rate-sensitive assets, partly offset by deposit-related headwinds of $3.1M short term and $4.4M long term.