Bank of Hawaii Corporation

What they do

Bank of Hawaii Corporation is a Delaware bank holding company headquartered in Honolulu. Its principal subsidiary, Bank of Hawaii, was organized in 1897, is chartered by the State of Hawaii, is FDIC-insured and is a member of the Federal Reserve System. The bank provides a broad range of financial products and services to customers in Hawaii, Guam, and other Pacific Islands.

Revenue drivers

• Net interest income — Second quarter 2026 net interest income was $153.6 million, up 1.7% from the linked quarter, with a net interest margin of 2.78%; this is the largest reported revenue line.
• Noninterest income — Second quarter 2026 noninterest income was $43.3 million, up 4.8% from the linked quarter, driven primarily by trust and asset management fees and commissions on annuity and insurance business.
• Consumer Banking / Commercial Banking segments — The Company reports three segments for management purposes: Consumer Banking, Commercial Banking, and Treasury and Other; the filings excerpted here do not disclose segment-level revenue figures.

Recent performance

Second quarter 2026 net income was $63.8 million, or $1.47 diluted earnings per common share, compared with $1.30 in the linked quarter. Return on average common equity was 15.47% for the quarter versus 13.90% in the linked quarter. Net interest income rose 1.7% to $153.6 million and net interest margin expanded 4 basis points to 2.78%, the ninth consecutive quarter of margin expansion. Noninterest expense was $111.2 million, down 4.2% from the linked quarter. Credit quality remained strong, with a provision for credit losses of $3.6 million, up $1.9 million from the linked quarter primarily on higher net loan and lease charge-offs.

Strategy

Management describes steady execution and disciplined balance sheet management, with margin expansion supported by ongoing repricing of fixed-rate assets into higher current rates. Loan originations of all loans, including floating rate loans, were made at an average rate of 5.90% during the quarter. The company continued share repurchases, buying back $17.0 million in the second quarter. Management also cites a disciplined approach to expenses.

Risks

• Geographic and economic concentration — The business is concentrated in Hawaii, Guam and other Pacific Islands, and local conditions there significantly affect loan origination, borrower repayment and collateral values.
• Real estate collateral — The loan portfolio is largely secured by real estate, so a downturn in real estate markets may adversely affect results.
• Interest rate changes — Changes in interest rates could adversely impact results of operations and capital, and the company notes a deposit beta of 35.5% for the downward rate cycle as of the second quarter of 2026.
• Tourism, military and defense dependence — Local economies rely heavily on tourism, the U.S. military, real estate, construction and government, and any reduction in federal defense spending in Hawaii could adversely impact the economy and the company.

Outlook

Management characterizes second quarter 2026 results as reflecting steady execution and disciplined balance sheet management. It notes net interest margin expanded for the ninth consecutive quarter and attributes the expansion to ongoing repricing of cash flows. It also notes total loans and leases increased from the prior quarter while average total deposits were modestly lower in a seasonally lower period. The filings excerpted here contain no specific numeric guidance for future periods.