Group 1 - Bank of Hawai'i Corporation will release its third quarter 2025 financial results on October 27, 2025, before the market opens [1] - The quarterly conference call will take place at 2:00 p.m. Eastern Time (8:00 a.m. Hawai'i Time) on the same day [1] - The live call will include a slide presentation and will be accessible via the investor relations link on the Company's website [1]

Group 1 - Bank of Hawaii Corp. is the holding company for the Bank of Hawai'i, focusing on the Hawaiian Islands with a market share of about one-third [1] - The investment group European Small Cap Ideas offers exclusive access to actionable research on Europe-focused investment opportunities, emphasizing high-quality small-cap ideas for capital gains and dividend income [1] - The group features two model portfolios: the European Small Cap Ideas portfolio and the European REIT Portfolio, along with weekly updates and educational content [1]

Economic Outlook - The Federal Reserve's reduction of interest rates and resilient economic growth is creating a more favorable outlook for the banking sector [1] - Lower borrowing costs are expected to stimulate loan demand and consumer spending, while steady economic expansion will support credit quality and profitability [1] Investment Opportunities - Several S&P 500 banks, including KeyCorp, Bank of Hawaii, and Comerica, are highlighted as appealing investment opportunities due to their solid dividend yields [2] - These banks have attractive income potential and solid fundamentals, making them worthy of investor attention [2] Stock Selection Criteria - The selection of these banks was based on a Zacks Stocks Screener, identifying stocks with a dividend yield exceeding 4% and a Zacks Rank of 2 (Buy) or 3 (Hold) [3] - All three bank stocks have risen more than 10% in the past year, indicating growing market confidence in their earnings power and balance-sheet resilience [3] KeyCorp Overview - KeyCorp, a leading regional bank, offers a diverse range of financial products and services [6] - The bank is well-positioned to benefit from solid loans and deposit balances, lower interest rates, and a robust balance sheet, with expected top-line growth supported by loan demand and Fed rate cuts [7][10] - KeyCorp has a dividend yield of 4.4%, with a payout ratio of 60% and a Zacks Rank of 3 [10] Bank of Hawaii Overview - Bank of Hawaii provides a broad array of financial services in Hawaii and the Pacific Islands [11] - Revenue growth is driven by rising net interest income (NII) and fee income, with expectations for continued increases due to balance sheet actions and Fed rate cuts [12][13] - The bank has a dividend yield of 4.2%, with a payout ratio of 73% and a Zacks Rank of 2 [13] Comerica Overview - Comerica operates in key markets including Texas, California, and Michigan, focusing on financial services [14] - The bank's income generation is supported by a robust loan pipeline, Fed rate cuts, and strong fee income, with a focus on operational efficiency and strategic growth [15][16] - Comerica has a dividend yield of 4.1%, with a payout ratio of 54% and a Zacks Rank of 3 [16] Final Thoughts - Dividend-paying bank stocks like KeyCorp, Bank of Hawaii, and Comerica offer a combination of attractive income and potential growth in a favorable economic environment [17] - With yields above 4%, solid balance sheets, and strategic initiatives, these banks are well-positioned to reward shareholders [17]

Core Viewpoint - Bank of Hawaii (BOH) has been upgraded to a Zacks Rank 2 (Buy), indicating a positive outlook on its earnings estimates, which significantly influence stock prices [1][3]. Earnings Estimates and Stock Price Impact - The Zacks rating system is based on changes in earnings estimates, which are strongly correlated with stock price movements, particularly due to institutional investors' reliance on these estimates for valuation [4][6]. - An increase in earnings estimates typically leads to higher fair value for a stock, prompting institutional investors to buy or sell, thus affecting stock prices [4]. Recent Performance and Outlook - Bank of Hawaii is expected to earn $4.36 per share for the fiscal year ending December 2025, with no year-over-year change, but the Zacks Consensus Estimate has increased by 1.1% over the past three months [8]. - The upgrade to Zacks Rank 2 places Bank of Hawaii in the top 20% of Zacks-covered stocks, suggesting potential for higher stock movement in the near term [10]. Zacks Rating System - The Zacks Rank system classifies stocks into five groups based on earnings estimates, with a proven track record of Zacks Rank 1 stocks generating an average annual return of +25% since 1988 [7]. - The system maintains a balanced distribution of "buy" and "sell" ratings, ensuring that only the top 5% of stocks receive a "Strong Buy" rating, reflecting superior earnings estimate revisions [9].

Core Viewpoint - Bank of Hawaii (BOH) has received an upgrade to a Zacks Rank 2 (Buy), indicating a positive trend in earnings estimates which is a significant factor influencing stock prices [1][3]. Earnings Estimates and Stock Price Impact - The Zacks rating system is based on changes in a company's earnings picture, which is a strong predictor of near-term stock price movements [2][4]. - Rising earnings estimates for Bank of Hawaii suggest an improvement in the company's underlying business, likely leading to an increase in stock price [5][10]. Zacks Rank System - The Zacks Rank system classifies stocks into five groups based on earnings estimates, with a strong historical performance, particularly for Zacks Rank 1 stocks which have averaged a +25% annual return since 1988 [7]. - The upgrade of Bank of Hawaii to Zacks Rank 2 places it in the top 20% of Zacks-covered stocks, indicating a strong potential for market-beating returns in the near term [9][10]. Earnings Estimate Revisions - For the fiscal year ending December 2025, Bank of Hawaii is expected to earn $4.34 per share, with no year-over-year change, but the Zacks Consensus Estimate has increased by 4% over the past three months [8].

Group 1 - Bank of Hawaii (BOH) has experienced significant selling pressure, resulting in a 13.8% decline in stock price over the past four weeks, but analysts expect better earnings than previously predicted [1] - The Relative Strength Index (RSI) for BOH is currently at 27.52, indicating that the stock is in oversold territory and may be poised for a rebound [5] - There has been a consensus among sell-side analysts to raise earnings estimates for BOH, with a 0.1% increase in the consensus EPS estimate over the last 30 days, suggesting potential price appreciation [7] Group 2 - BOH holds a Zacks Rank 2 (Buy), placing it in the top 20% of over 4,000 ranked stocks based on earnings estimate revisions and EPS surprises, indicating a strong potential for a turnaround [8]

Core Viewpoint - Bank of Hawaii (NYSE: BOH) has experienced a period of underperformance, lagging behind the broader regional bank sector by approximately fifteen points in recent months [1] Company Performance - The shares of Bank of Hawaii have been soft over the past few months, indicating challenges in maintaining strong market performance [1] Investment Strategy - The investment approach favored is long-term and buy-and-hold, focusing on stocks that can deliver sustainable high-quality earnings, particularly in the dividend and income sectors [1]

Core Viewpoint - Bank of Hawaii Corporation (BOH) reported strong second-quarter 2025 adjusted earnings per share (EPS) of $1.06, exceeding expectations and showing significant year-over-year growth from 81 cents [1][9] Financial Performance - BOH's net income on a GAAP basis reached $47.6 million, reflecting a 39.8% increase year over year [2] - Quarterly revenues rose by 11.2% year over year to $174.5 million, surpassing the Zacks Consensus Estimate by 3.2% [3] - Net interest income (NII) was $129.6 million, up 12.9% year over year, with a net interest margin (NIM) increase of 24 basis points to 2.39% [3] - Non-interest income increased to $44.8 million, a 6.4% rise year over year, driven by higher fees and service charges [4] Expense Management - Non-interest expenses rose by 1.4% to $110.8 million, primarily due to increased salaries and benefits [5] - The efficiency ratio improved to 63.49%, down from 69.60% in the previous year, indicating enhanced profitability [5] Asset Quality and Credit Metrics - Total loans and leases decreased nearly 1% to $14 billion, while total deposits also fell nearly 1% to $20.8 billion [6] - Non-performing assets increased by 17.8% year over year to $17.9 million, while net loans and lease charge-offs decreased to $2.6 million [7] - Provision for credit losses rose by 35.4% year over year to $3.3 million [7] Capital Position - As of June 30, 2025, the Tier 1 capital ratio improved to 14.17%, and the total capital ratio rose to 15.23% [10] - The ratio of tangible common equity to risk-weighted assets increased to 9.62% [10] Profitability Ratios - Return on average assets was 0.81%, up from 0.59% in the prior-year quarter, while return on average shareholders' equity improved to 11.21% from 9.53% [11] Share Repurchase Program - In the reported quarter, BOH did not repurchase any shares, with a remaining buyback authority of $126 million as of June 30, 2025 [12] Overall Assessment - The rise in NII and fee income supports top-line growth, while a solid capital position is a positive factor [13] - However, lower loan and deposit balances, rising expenses, and deteriorating asset quality present near-term concerns [13]

Part I - Financial Information [Financial Statements (Unaudited)](index=3&type=section&id=Item%201.%20Financial%20Statements%20(Unaudited)) This section presents the unaudited consolidated financial statements for Bank of Hawaii Corporation for the periods ended June 30, 2025, and 2024, including detailed notes on accounting policies and financial data [Consolidated Statements of Condition](index=3&type=section&id=Consolidated%20Statements%20of%20Condition) Total assets increased to **$23.71 billion** as of June 30, 2025, driven by available-for-sale investment securities, while total deposits grew to **$20.80 billion** and shareholders' equity rose to **$1.74 billion** Consolidated Balance Sheet Highlights (in thousands) | Account | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **Total Assets** | **$23,709,752** | **$23,601,114** | | Net Loans and Leases | $13,853,635 | $13,927,452 | | Total Investment Securities (AFS & HTM) | $7,552,857 | $7,308,071 | | **Total Liabilities** | **$21,966,645** | **$21,933,340** | | Total Deposits | $20,798,914 | $20,633,037 | | **Total Shareholders' Equity** | **$1,743,107** | **$1,667,774** | [Consolidated Statements of Income](index=4&type=section&id=Consolidated%20Statements%20of%20Income) Net income for Q2 2025 increased 40% to **$47.6 million**, with diluted EPS rising to **$1.06**, primarily due to a 13% increase in net interest income from lower interest expense Q2 2025 vs Q2 2024 Performance (in thousands, except per share) | Metric | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Net Interest Income | $129,683 | $114,846 | | Provision for Credit Losses | $3,250 | $2,400 | | Noninterest Income | $44,795 | $42,087 | | Noninterest Expense | $110,783 | $109,226 | | **Net Income** | **$47,637** | **$34,083** | | **Diluted EPS** | **$1.06** | **$0.81** | H1 2025 vs H1 2024 Performance (in thousands, except per share) | Metric | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Net Interest Income | $255,490 | $228,784 | | Provision for Credit Losses | $6,500 | $4,400 | | Noninterest Income | $88,853 | $84,372 | | Noninterest Expense | $221,242 | $215,085 | | **Net Income** | **$91,622** | **$70,474** | | **Diluted EPS** | **$2.03** | **$1.68** | [Consolidated Statements of Cash Flows](index=8&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) Net cash provided by operating activities was **$100.0 million** for the six months ended June 30, 2025, with a net increase in cash and cash equivalents of **$5.1 million** driven by financing activities offsetting investing outflows Cash Flow Summary - Six Months Ended June 30 (in thousands) | Activity | 2025 | 2024 | | :--- | :--- | :--- | | Net Cash Provided by Operating Activities | $100,000 | $101,064 | | Net Cash (Used in) Provided by Investing Activities | $(142,716) | $421,566 | | Net Cash Provided by (Used in) Financing Activities | $47,828 | $(598,236) | | **Net Change in Cash and Cash Equivalents** | **$5,112** | **$(75,606)** | [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=46&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses Q2 2025 financial results, highlighting a **40% year-over-year increase** in net income to **$47.6 million**, stable balance sheet, sound credit quality, and well-capitalized ratios, while noting caution on Hawai'i's economic outlook [Earnings Summary](index=48&type=section&id=Earnings%20Summary) The company reported strong Q2 2025 results with net income of **$47.6 million**, up **40% YoY**, and diluted EPS of **$1.06**, driven by a **13% increase** in net interest income and a **24 basis point expansion** in net interest margin to **2.39%** - Net income for Q2 2025 was **$47.6 million**, a **40% increase YoY**, with diluted EPS of **$1.06**[136](index=136&type=chunk) - Net interest margin for Q2 2025 was **2.39%**, an increase of **24 basis points** from Q2 2024[138](index=138&type=chunk) - The Board of Directors declared a quarterly cash dividend of **$0.70 per common share**[139](index=139&type=chunk) [Analysis of Financial Condition](index=58&type=section&id=Analysis%20of%20Financial%20Condition) As of June 30, 2025, total assets stood at **$23.7 billion**, with the investment securities portfolio growing to **$7.6 billion**, while total loans and leases decreased slightly by **0.5%** to **$14.0 billion**, and total deposits increased by **0.8%** to **$20.8 billion** Loan and Lease Portfolio Balances (in thousands) | Category | June 30, 2025 | Dec 31, 2024 | % Change | | :--- | :--- | :--- | :--- | | Total Commercial | $6,104,126 | $6,125,409 | (0.3)% | | Total Consumer | $7,898,052 | $7,950,571 | (0.7)% | | **Total Loans and Leases** | **$14,002,178** | **$14,075,980** | **(0.5)%** | Deposit Balances (in thousands) | Category | June 30, 2025 | Dec 31, 2024 | % Change | | :--- | :--- | :--- | :--- | | Consumer | $10,429,271 | $10,397,777 | 0.3% | | Commercial | $8,243,898 | $8,299,590 | (0.7)% | | Public and Other | $2,125,745 | $1,935,670 | 9.8% | | **Total Deposits** | **$20,798,914** | **$20,633,037** | **0.8%** | - Adjusted uninsured deposits stood at **$7.69 billion** as of June 30, 2025, down slightly from **$7.73 billion** at year-end 2024[182](index=182&type=chunk) [Corporate Risk Profile](index=64&type=section&id=Corporate%20Risk%20Profile) The company maintains a robust risk management framework with strong credit quality, non-performing assets at **$17.9 million**, a stable Allowance for Credit Losses at **$148.5 million**, strong liquidity with a **132%** ratio of readily available liquidity to adjusted uninsured deposits, and capital levels well above regulatory requirements Non-Performing Assets (in thousands) | Category | June 30, 2025 | Dec 31, 2024 | | :--- | :--- | :--- | | Non-Accrual Loans and Leases | $17,539 | $16,643 | | Foreclosed Real Estate | $342 | $2,657 | | **Total Non-Performing Assets** | **$17,881** | **$19,300** | | Ratio of NPAs to Total Loans and F.R.E. | 0.13% | 0.14% | Regulatory Capital Ratios | Ratio | June 30, 2025 | Dec 31, 2024 | | :--- | :--- | :--- | | Common Equity Tier 1 Capital Ratio | 11.81% | 11.59% | | Tier 1 Capital Ratio | 14.17% | 13.95% | | Total Capital Ratio | 15.23% | 15.00% | | Tier 1 Leverage Ratio | 8.46% | 8.31% | - The ratio of readily available liquidity to adjusted uninsured deposits was **132%** at June 30, 2025, an improvement from **116%** at December 31, 2024[226](index=226&type=chunk) - The company's Net Interest Income (NII) sensitivity profile as of June 30, 2025, indicates that a **+200 basis point** parallel rate shock would increase NII by **3.6% ($20.7 million)**, while a **-200 basis point** shock would decrease NII by **3.3% ($18.9 million)**[219](index=219&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=73&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This section directs the reader to the 'Market Risk' section within Item 2, Management's Discussion and Analysis of Financial Condition and Results of Operations, for detailed information on the company's market risk exposures and management strategies - The report refers to the 'Market Risk' section of the MD&A for quantitative and qualitative disclosures about market risk[245](index=245&type=chunk) [Controls and Procedures](index=73&type=section&id=Item%204.%20Controls%20and%20Procedures) Management, including the CEO and CFO, concluded that the company's disclosure controls and procedures were effective as of June 30, 2025, with no material changes identified in internal control over financial reporting during Q2 2025 - The CEO and CFO concluded that the Company's disclosure controls and procedures were effective as of June 30, 2025[246](index=246&type=chunk) - There were no changes during the quarter that materially affected, or are reasonably likely to materially affect, the Company's internal control over financial reporting[247](index=247&type=chunk) Part II - Other Information [Legal Proceedings](index=74&type=section&id=Item%201.%20Legal%20Proceedings) The company reports no pending legal proceedings against it that are likely to have a material adverse effect on its financial position or results of operations - There are no pending legal proceedings expected to have a material adverse effect on the Company's financial position or results[248](index=248&type=chunk) [Risk Factors](index=74&type=section&id=Item%201A.%20Risk%20Factors) The company states that there have been no material changes to the risk factors previously disclosed in its Annual Report on Form 10-K for the year ended December 31, 2024, and its Q1 2025 Form 10-Q - No material changes are reported from the risk factors previously disclosed in the 2024 Form 10-K and Q1 2025 Form 10-Q[249](index=249&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=74&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company reported no unregistered sales of its stock during the quarter, repurchasing **4,264 shares** at an average price of **$67.10 per share** for tax withholdings, with **$126.0 million** remaining under the share repurchase program Issuer Purchases of Equity Securities (Q2 2025) | Period | Total Shares Purchased | Average Price Paid Per Share | | :--- | :--- | :--- | | April 1 - 30, 2025 | 159 | $65.92 | | May 1 - 31, 2025 | 4,105 | $67.15 | | June 1 - 30, 2025 | — | — | | **Total** | **4,264** | **$67.10** | - The repurchased shares were acquired from employees in connection with income tax withholdings related to the vesting of restricted stock[250](index=250&type=chunk) - The remaining buyback authority under the share repurchase program was approximately **$126.0 million** as of the end of the quarter[250](index=250&type=chunk)

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