Bank of Hawaii (BOH) Q1 2026 earnings summary

Executive summary

• Net income for Q1 2026 was $57.4 million, with diluted EPS of $1.30, down from the prior quarter but up 31% year-over-year; return on average common equity was 13.90%.

• Net interest margin expanded for the eighth consecutive quarter to 2.74%, up 13 basis points sequentially and 42 bps year-over-year, driven by lower deposit costs and fixed asset repricing.

• Asset quality remained strong, with non-performing assets at $12.1 million (0.09% of loans/leases), net charge-offs at $1.1 million (0.03% annualized), and provision for credit losses at $1.8 million.

• Total loans and leases grew 0.8% sequentially to $14.2 billion, with commercial loans up 2.0% and consumer loans down 0.1%; average noninterest-bearing deposits increased, but total deposits declined 1.1% to $21.0 billion.

• Maintained strong capital and liquidity, with Tier 1 Capital Ratio at 14.40%, CET1 at 12.06%, and substantial liquidity lines and equivalents totaling $10.5B.

Financial highlights

• Net interest income rose to $151.0 million, up 3.9% sequentially and 20% year-over-year.

• Noninterest income was $41.3 million, down 6% year-over-year and 6.6% sequentially, mainly due to lower loan, swap, and trust fees.

• Noninterest expense increased to $116.1 million, up 5% year-over-year and 6% sequentially, driven by payroll, occupancy, professional fees, and non-recurring compensation charges.

• Total revenue for the quarter was $192.3 million.

• Efficiency ratio rose to 60.35% from 57.75% in the prior quarter.

Outlook and guidance

• NIM expected to continue expanding by about 5 basis points per quarter, targeting 2.9% by year-end and 3.25%-3.5% longer term, assuming no rate cuts.

• Annual overhead expense growth forecast lowered to 2.5%-3%; Q2 normalized noninterest expense expected at ~$112 million.

• Loan growth outlook remains in the low to mid-single digit range, pending greater economic certainty.

• Noninterest income for Q2 expected to be ~$42 million.

• Management expects continued focus on prudent risk and capital management, with stable dividend and share repurchase activity.