Core Viewpoint - Bank of Hawaii's stock has underperformed compared to the S&P 500, raising questions about its investment potential and risk profile [1] Group 1: Financial Performance - Bank of Hawaii's net interest income has plateaued over the last five years, showing no growth compared to the broader banking industry [4] - The bank's net interest margin (NIM) averaged a low 2.3% over the past two years, indicating weak profitability of its loan book [6] - Tangible book value per share (TBVPS) has seen a modest annual growth of 1.4% over five years, but it accelerated to 10.7% annually in the last two years, increasing from $28.99 to $35.56 per share [8] Group 2: Valuation and Market Position - Bank of Hawaii's shares are trading at 1.7 times forward price-to-book (P/B) ratio, suggesting that the stock is priced with a lot of positive expectations already factored in [9] - Despite not being a poor business, Bank of Hawaii does not meet the quality investment criteria, and there may be better opportunities available in the market [9]

Group 1 - The stock of Bank of Hawaii Corporation (BOH) is experiencing significant attention due to high implied volatility in the options market, particularly for the Jan 16, 2026 $75.00 Put option [1] - Implied volatility indicates the market's expectation of future price movement, suggesting that investors anticipate a significant change in Bank of Hawaii's stock price, potentially due to an upcoming event [2] - Bank of Hawaii currently holds a Zacks Rank 3 (Hold) in the Banks - West industry, which is in the top 9% of the Zacks Industry Rank, indicating a relatively stable outlook [3] Group 2 - Over the past 60 days, one analyst has raised earnings estimates for Bank of Hawaii for the current quarter, increasing the Zacks Consensus Estimate from $1.14 to $1.20 per share [3] - The high implied volatility may indicate a trading opportunity, as options traders often seek to sell premium on options with high implied volatility, hoping the stock does not move as much as expected by expiration [4]

Group 1 - Bank of Hawaii (BOH) shares have underperformed over the past year, losing approximately 8% of their value and lagging behind the broader regional bank sector [1] - Despite the weak stock performance, there are positive trends at the business level that suggest potential for recovery [1] - The investment strategy focuses on a long-term, buy-and-hold approach, emphasizing stocks that can consistently deliver high-quality earnings, particularly in the dividend and income segment [1]

Core Viewpoint - Bank of Hawaii reported strong Q3 results with an EPS of $1.20, up from $1.06 in the previous quarter, and a 7.1% annualized increase in average deposit balances, but the long-term outlook is less optimistic when analyzed through the Adhishthana Principles [1][6] Financial Performance - The Q3 EPS of Bank of Hawaii was $1.20, an increase from $1.06 in the previous quarter [1] - There was a 7.1% annualized increase in average deposit balances [1] Adhishthana Cycle Analysis - Bank of Hawaii is in Phase 18 of the 18-phase Adhishthana cycle, which is crucial for determining the stock's trajectory [2] - The Guna Triads (Phases 14, 15, and 16) are essential for achieving Nirvana, the highest point in the cycle, but the absence of noticeable Satoguna indicates that Nirvana is unlikely [2][4] - The stock fell nearly 63% during Phases 14 and 15, with Phase 16 characterized by sideways trading, indicating weak triads [4] Future Outlook - Since entering Phase 18 in June 2024, Bank of Hawaii has traded in a tight, sluggish range, which is expected to continue until the phase concludes on December 15, 2025 [5] - The weak triad formation suggests limited upside potential until the current cycle ends, and investors may want to wait for the cycle reset to reassess entry opportunities [6]

Core Insights - Bank of Hawaii Corporation (BOH) reported Q3 2025 earnings per share (EPS) of $1.20, exceeding the Zacks Consensus Estimate of $1.13 and up from 93 cents in the same quarter last year [1][9] - The increase in net interest income (NII) and strong fee income growth contributed to the positive results, alongside higher loan and deposit balances and lower provisions [1][9] - However, rising expenses were a significant concern impacting overall performance [1][14] Financial Performance - The company's net income (GAAP basis) reached $53.3 million, reflecting a 32.2% year-over-year increase [2] - Quarterly revenues rose 12.2% year over year to $182.6 million, surpassing the Zacks Consensus Estimate by 3.7% [3] - NII was reported at $136.7 million, a 16.2% increase year over year, with a net interest margin (NIM) of 2.46%, up 28 basis points [3] - Non-interest income totaled $45.9 million, up 1.9% year over year, with an adjusted increase of 3.4% after accounting for a charge related to Visa Class B conversion [4] - Non-interest expenses increased by 4.9% year over year to $112.4 million, including a severance-related charge of $2.1 million [5] Efficiency and Credit Quality - The efficiency ratio improved to 61.53%, down from 65.81% in the prior year, indicating enhanced profitability [6] - Non-performing assets decreased by 14.7% year over year to $16.9 million, with net loans and lease charge-offs down to $2.6 million [8][9] - Provision for credit losses was $2.5 million, a 16.7% decline from the previous year [8] Capital Ratios and Profitability - As of September 30, 2025, the Tier 1 capital ratio improved to 14.34%, and the total capital ratio rose to 15.40% [11] - The ratio of tangible common equity to risk-weighted assets increased to 9.95% [11] - Return on average assets was 0.88%, up from 0.69% year over year, while return on average shareholders' equity rose to 12.10% from 9.90% [12] Share Repurchase and Outlook - In Q3 2025, Bank of Hawaii did not repurchase any shares, with a remaining buyback authority of $126 million [13] - The outlook remains positive due to rising NII and fee income supporting top-line growth, alongside a solid capital position, although rising expenses continue to pose challenges [14]

Group 1 - The article does not provide any specific content or key points related to a company or industry [1]

Financial Performance - Net income for Q3 2025 was $53.3 million, an increase of $13.0 million, or 32%, compared to Q3 2024[132] - Diluted earnings per share for Q3 2025 was $1.20, an increase of $0.27, or 29%, compared to the same period in 2024[132] - The return on average common equity for Q3 2025 was 13.59%, compared to 11.50% in Q3 2024[134] - Noninterest income for Q3 2025 was $46.0 million, an increase of 2% compared to Q3 2024[134] - Total noninterest income increased by $856 thousand or 1.9% for the three months ended September 30, 2025, compared to the same period in 2024[148] - Commercial Banking net income increased by $4.2 million or 14% in Q3 2025 compared to Q3 2024, driven by a $3.6 million or 7% increase in net interest income[190] - Consumer Banking net income decreased by $3.1 million or 9% in Q3 2025 compared to Q3 2024, primarily due to an increase in noninterest expense and a decrease in net interest income[188] Income and Expenses - Net interest income for Q3 2025 was $136.7 million, an increase of 16% compared to Q3 2024[134] - Total noninterest expense increased by $9.96 million or 9.3% in Q3 2025 compared to Q3 2024, and by $27.89 million or 8.7% for the first nine months of 2025 compared to the same period last year[153] - Total salaries and benefits expense rose by $4.3 million or 7.3% in Q3 2025, and by $13.2 million or 7.6% for the first nine months of 2025, primarily due to increases in base salaries and separation expenses[153] - Provision for income taxes was $14.4 million in Q3 2025, an increase of $2.1 million compared to Q3 2024, with an effective tax rate of 21.3%, down from 23.3% in the prior year[158] Assets and Liabilities - Total assets as of September 30, 2025, were $24.0 billion, an increase of 1.8% from December 31, 2024[134] - Total loans and leases were $14.0 billion as of September 30, 2025, a decrease of 0.4% from December 31, 2024[134] - Total deposits were $21.1 billion as of September 30, 2025, compared to $20.6 billion as of December 31, 2024[137] - The carrying value of the investment securities portfolio was $7.6 billion as of September 30, 2025, up from $7.3 billion at the end of 2024, primarily due to the purchase of $738.1 million in available-for-sale securities[161] - Estimated uninsured deposits increased to $10.09 billion as of September 30, 2025, up from $9.75 billion at the end of 2024[181] Loans and Credit Quality - The allowance for credit losses on loans and leases was $148.8 million as of September 30, 2025, with a ratio of 1.06% to total loans and leases outstanding[134] - Non-performing loans and leases were included in the respective average loan and lease balances, indicating a focus on asset quality management[141] - Loans and leases past due 90 days or more and still accruing interest increased by $3.0 million or 37% to $11.3 million as of September 30, 2025, primarily in the residential mortgage portfolio[201] - The provision for loan losses in Consumer Banking decreased by $0.5 million or 16% in Q3 2025, reflecting lower net charge-offs in the auto loan portfolio[188] Capital and Liquidity - Shareholders' equity increased to $1,748.6 million as of September 30, 2025, up from $1,621.9 million a year earlier, reflecting a growth of 7.8%[140] - The company's total regulatory capital was $2,188,937,000 as of September 30, 2025, compared to $2,133,624,000 at December 31, 2024[235] - The company's Common Equity Tier 1 Capital Ratio improved to 11.98% as of September 30, 2025, compared to 11.59% at December 31, 2024[235] - The company had a remaining borrowing capacity of $7.5 billion with the Federal Reserve Discount Window as of September 30, 2025[227] - The company continues to focus on maintaining a strong liquidity position, with an AFS investment securities portfolio valued at $3.3 billion as of September 30, 2025[231] Market and Investment Performance - The net interest margin improved to 2.46% for the three months ended September 30, 2025, compared to 2.18% for the same period in 2024[140] - The interest rate spread widened to 1.86 for the three months ended September 30, 2025, compared to 1.47 in the same period last year, indicating improved profitability on interest-earning assets[140] - Yields on investment securities portfolio increased by 13 basis points for the three months ended September 30, 2025, primarily due to reinvestment into higher current interest rates[145] Other Notable Items - The Company declared a quarterly cash dividend of $0.70 per share, payable on December 12, 2025[137] - A one-time gain of approximately $18 million is expected from the sale of the economic interests of the merchant services portfolio during the quarter ending December 31, 2025[150] - The company has not repurchased any shares in Q3 2025, maintaining a remaining buyback authority of $126 million[237]

Financial Data and Key Metrics Changes - Fully diluted earnings per share were $1.20, a 29% increase year-over-year and a 13% increase from the previous quarter [3] - Net interest margin improved for the sixth consecutive quarter, rising by seven basis points to 2.46% [3] - Return on common equity improved to 13.6% for the quarter [3] - Average deposits increased by 7% annualized [3] Business Line Data and Key Metrics Changes - Average balance of deposits contributed to the growth in net interest income, which increased by $7 million [15] - Noninterest income rose to $46 million, up from $44.8 million in the previous quarter, driven by higher customer derivative activity and trust earnings [19] - Noninterest expense was $112.4 million, compared to $110.8 million in the prior quarter, influenced by a severance-related charge [20] Market Data and Key Metrics Changes - Bank of Hawaii advanced its number one deposit market share position in Hawaii by 40 basis points as of June 30, 2025 [4] - The loan portfolio is predominantly secured, with 86% of the consumer portfolio consisting of residential mortgage or home equity [9] - The commercial real estate portfolio is well diversified, with no sector representing more than 7% of total loans [10] Company Strategy and Development Direction - The company aims to leverage its dominant market position and brand strength to build wealth market share, particularly in the affluent segment [6][7] - A partnership with Saterra is expected to modernize the broker-dealer platform, enhancing client experience and attracting advisors [7] - The company is focused on improving coordination between commercial and wealth teams to drive cross-marketing opportunities [7] Management's Comments on Operating Environment and Future Outlook - Management anticipates further expansion of net interest margin for several quarters moving forward [5] - The outlook for loan growth remains in the low single digits, with expectations for improvement in the pipeline [32] - Management is optimistic about the potential for capital deployment into share repurchases in the near future [42] Other Important Information - The allowance for credit losses on loans and leases ended the quarter at $148.8 million, with a ratio of 1.06% [14] - The company declared a dividend of $0.70 per common share for the fourth quarter of 2025 [24] Q&A Session Summary Question: Spot rate on total deposits - Total spot rate on deposits is 154 basis points [27] Question: Outlook for achieving 3% NIM - Management believes a 25 basis point increase in NIM per year is reasonable, with potential upside as Fed Funds rates decrease [30][31] Question: Commentary on loan growth outlook - Management expects low single-digit growth to continue, with Q4 anticipated to be better than Q3 [32][33] Question: Changes in wealth management strategy - The partnership with Saterra is progressing well, and the company is focused on enhancing client experience and attracting top advisors [36][38] Question: Capital return and buyback plans - Management is considering share repurchases and is satisfied with current capital levels [41][42] Question: Impact of de-risking on growth - De-risking has not been a headwind for growth, and current portfolios are not expected to impede future growth [46] Question: Expense growth outlook for 2026 - Expected expense growth for 2026 is projected to be in the 3% range [50]

Financial Data and Key Metrics Changes - Fully diluted earnings per share were $1.20, a 29% increase year-over-year and a 13% increase from the previous quarter [3] - Net interest margin improved for the sixth consecutive quarter, rising by seven basis points to 2.46% [3] - Return on common equity improved to 13.6% for the quarter [3] - Average deposits increased by 7% annualized [3] Business Line Data and Key Metrics Changes - The loan portfolio is balanced between consumer and commercial, with consumer loans representing 57% or $7.9 billion of total loans [9] - Commercial loans accounted for $6.1 billion, or 43% of total loans, with 73% secured by real estate [9] - Noninterest income increased to $46 million during the quarter, compared to $44.8 million in the linked quarter [19] Market Data and Key Metrics Changes - Bank of Hawaii advanced its number one deposit market share position in Hawaii by 40 basis points as of June 30, 2025 [4] - The bank's market share has grown by 600 basis points since 2005, outperforming competitors in the Hawaii market [4] Company Strategy and Development Direction - The company aims to leverage its dominant market position and brand strength to build wealth market share, particularly in the affluent segment [6][7] - A partnership with Saterra is expected to modernize the broker-dealer platform, enhancing client experience and attracting top advisors [7] - The bank is focused on improving coordination between commercial and wealth teams to capitalize on cross-marketing opportunities [7] Management's Comments on Operating Environment and Future Outlook - Management anticipates further expansion of net interest margin for several quarters [5] - The outlook for loan growth remains in the low single digits, with expectations for improvement in the pipeline [32] - The company is optimistic about the wealth management segment and plans to continue investing in talent and resources [37] Other Important Information - The allowance for credit losses on loans and leases ended the quarter at $148.8 million, with a ratio of 1.06% [14] - The company recorded a provision for credit losses of $2.5 million, down from $3.3 million in the previous quarter [23] - Capital ratios remained above regulatory thresholds, with tier one capital at 14.3% and total risk-based capital at 15.4% [23] Q&A Session Summary Question: Spot rate on total deposits - The spot rate on total deposits is 154 basis points [27] Question: Outlook for net interest margin (NIM) - Management believes achieving a 3% NIM is possible, with a projected increase of 25 basis points per year [30] Question: Commentary on loan growth outlook - The guidance for loan growth remains in the low single digits, with expectations for improvement in Q4 [32] Question: Changes in wealth management strategy - The partnership with Saterra is progressing well, and the bank is focused on enhancing client experience and attracting top advisors [36] Question: Capital return and buybacks - The company is likely to engage in share repurchases in the current quarter and into next year [41] Question: Credit quality in the office sector - A relationship credit in the office space was exited, contributing to the reduction in Central Business District loans [55]

Financial Data and Key Metrics Changes - Fully diluted earnings per share were $1.2, a 29% increase year-over-year and a 13% increase from the previous quarter [4] - Net interest margin improved for the sixth consecutive quarter, up seven basis points to 2.46% [5] - Return on common equity improved to 13.6% for the quarter [5] - Net income for the quarter was $53.3 million, an increase of $5.7 million compared to the linked quarter [20] Business Line Data and Key Metrics Changes - Average deposits increased by 7% annualized, while end-of-period loans increased modestly [5] - Consumer loans represented over half of total loans at 57%, amounting to $7.9 billion [12] - Commercial loans totaled $6.1 billion, accounting for 43% of total loans [13] Market Data and Key Metrics Changes - Bank of Hawaii advanced its number one deposit market share position in Hawaii by 40 basis points as of June 30, 2025 [6] - The bank's market share has grown by 600 basis points since 2005, outperforming competitors in Hawaii [6] Company Strategy and Development Direction - The company aims to leverage its dominant market position and brand strength to build wealth market share, particularly in the affluent segment [9][10] - A partnership with Saterra is expected to modernize the broker-dealer platform, enhancing client experience and investment products [10] - The bank is focused on improving coordination between commercial and wealth teams to drive cross-marketing opportunities [11] Management's Comments on Operating Environment and Future Outlook - Management anticipates continued expansion of net interest margin and expects to achieve $250 million by year-end [35] - The outlook for loan growth remains in the low single digits, with expectations for improvement in the fourth quarter [38] - Management is optimistic about the potential for further NIM improvement as Fed funds rates decrease [36] Other Important Information - Non-interest income increased to $46 million during the quarter, driven by higher customer derivative activity and elevated loan fees [25] - The company recorded a provision for credit losses of $2.5 million, down from $3.3 million in the linked quarter [28] - Capital ratios remained above regulatory thresholds, with Tier one capital improving to 14.3% [29] Q&A Session Summary Question: Spot rate on total deposits - The total spot rate on deposits is 154 basis points [33] Question: Timeline for achieving 3% NIM - Management believes a 25 basis point pickup in NIM per year is reasonable, with potential upside from Fed funds rate reductions [36][37] Question: Outlook for loan growth - The guidance for loan growth remains in the low single digits, with expectations for improvement in the pipeline [38] Question: Changes on the wealth side - The partnership with Saterra is in production, aiming to enhance client experience and attract top advisors [44][46] Question: Capital return and buybacks - Management is likely to engage in share repurchases in the current quarter and into next year, given the current capital levels [51][52]