Financial Data and Key Metrics Changes - Fully diluted earnings per share increased to $1.20, a 29% rise 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 [14] - Consumer loans represented over half of total loans at 57%, amounting to $7.9 billion, with a focus on secured lending [8] - Commercial loans totaled $6.1 billion, with 73% secured by real estate [8] 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 Hawaii [4] Company Strategy and Development Direction - The company aims to leverage its strong brand and market position to enhance its wealth management segment, which has lagged in growth [5][6] - A partnership with Saterra is expected to modernize the broker-dealer platform, enhancing client experience and attracting advisors [6] - The bank is focused on improving coordination between commercial and wealth teams to capitalize on cross-marketing opportunities [6] Management's Comments on Operating Environment and Future Outlook - Management anticipates further expansion of net interest margin in the coming quarters [5] - The bank's credit quality remains strong, with a diversified portfolio and low delinquency rates [11] - The outlook for loan growth is expected to remain in the low single digits, with improving pipelines [30] Other Important Information - Noninterest income increased to $46 million, driven by higher customer derivative activity and trust earnings [18] - The bank's capital ratios remain above regulatory thresholds, with Tier-One Capital at 14.3% [22] - A dividend of $0.70 per common share was declared for the fourth quarter of 2025 [23] Q&A Session Summary Question: Spot rate on total deposits - The total spot rate on deposits is 154 basis points [25] 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 [26][28] Question: Loan growth outlook - The guidance for loan growth remains in the low single digits, with expectations for improvement in Q4 [30] Question: Wealth management strategy - The partnership with Saterra is progressing well, and the bank is focused on enhancing client experience and attracting top advisors [32][34] Question: Capital return and buybacks - The bank is considering share repurchases and is satisfied with current capital levels [37][38] Question: Credit quality in the office sector - A reduction in loans in the Central Business District was due to exiting a non-core relationship [44]

Bank of Hawai'i Corporation third quarter 2025 financial report forward-looking statements October 27, 2025 this presentation, and other statements made by the Company in connection with it, may contain forward-looking statements concerning, among other things, forecasts of our financial results and condition, expectations for our operations and business prospects, and our assumptions used in those forecasts and expectations. we have not committed to update forward-looking statements to reflect later events ...

Financial Performance - Diluted earnings per common share for Q3 2025 were $1.20, up 13.2% from the linked quarter and up 29.0% from the same period last year[2] - Net income for Q3 2025 was $53.3 million, representing a 12.0% increase from the linked quarter and a 32.2% increase year-over-year[2] - Net income for the three months ended September 30, 2025, was $53,345,000, representing a 12.5% increase from $47,637,000 in the previous quarter and a 32.2% increase from $40,358,000 year-over-year[28] - Basic earnings per common share for the three months ended September 30, 2025, was $1.21, compared to $0.94 in the same quarter last year, representing a growth of 29%[34] - Net income available to common shareholders for Q3 2025 was $48.1 million, up from $36.9 million in Q3 2024, representing a year-over-year increase of 30.0%[55] Income and Expenses - Net interest income for Q3 2025 was $136.7 million, an increase of 5.4% from the linked quarter and 16.2% from the same period last year[4] - Noninterest income was $46.0 million in Q3 2025, a 2.6% increase from the linked quarter and a 1.9% increase year-over-year[8] - Noninterest expense was $112.4 million in Q3 2025, up 1.4% from the linked quarter and up 4.9% from the same period last year[9] - Total noninterest income for the three months ended September 30, 2025, was $45,966,000, a slight increase from $44,795,000 in the previous quarter and comparable to $45,110,000 in the same period last year[28] - Total noninterest expense for the three months ended September 30, 2025, was $112,387,000, an increase from $107,092,000 in the same quarter last year, indicating a rise of 5%[34] Assets and Liabilities - Total assets were $24.0 billion at September 30, 2025, an increase of 1.3% from June 30, 2025[15] - Total loans and leases were $14.0 billion at September 30, 2025, a slight increase of 0.1% from the linked quarter[17] - Total deposits were $21.1 billion at September 30, 2025, an increase of 1.4% from June 30, 2025[18] - Total assets as of September 30, 2025, were $24,014,609,000, compared to $23,799,174,000 as of September 30, 2024[54] - Total deposits increased to $21.1 billion in Q3 2025, up from $21.0 billion in Q3 2024, showing a growth of 0.3%[55] Capital and Ratios - The Tier 1 Capital Ratio was 14.34% at September 30, 2025, up from 14.17% at June 30, 2025[20] - The tangible common equity to tangible assets ratio was 5.90% as of September 30, 2025, compared to 5.77% in the previous quarter and 5.48% year-over-year[31] - The return on average assets was 0.88% for the three months ended September 30, 2025, up from 0.81% in the previous quarter and 0.69% in the same period last year[28] - The return on average shareholders' equity increased to 12.10% for the three months ended September 30, 2025, compared to 11.21% in the previous quarter and 9.90% year-over-year[28] Credit Quality - The provision for credit losses decreased to $2,500,000 for the three months ended September 30, 2025, down from $3,250,000 in the previous quarter and $3,000,000 in the same period last year[28] - Non-performing assets totaled $16,864 as of September 30, 2025, a decrease from $17,881 in June 2025, representing a reduction of approximately 5.67%[52] - The ratio of non-performing assets to total loans and leases and foreclosed real estate was 0.12% as of September 30, 2025, unchanged from the previous quarter[52] - The total reserve for credit losses at the end of the period was $150,051,000, compared to $150,325,000 at the end of September 2024[53] Interest Income and Expense - Total interest income for the three months ended September 30, 2025, was $227,708,000, compared to $220,648,000 in the same quarter last year, reflecting a growth of 3%[34] - The total interest expense for the three months ended September 30, 2025, was $91,033,000, a decrease from $103,030,000 in the same quarter last year, reflecting a decline of 12%[34] - Net interest income after provision for credit losses for the nine months ended September 30, 2025, was $383,165,000, up 13% from $339,002,000 for the same period last year[34] - The total change in interest income for the three months ended September 30, 2025, was $9.2 million, with a volume increase of $5.7 million and a rate increase of $3.5 million compared to June 30, 2025[43]

Core Insights - Bank of Hawaii (BOH) reported a revenue of $182.64 million for the quarter ended September 2025, reflecting a year-over-year increase of 12.2% [1] - Earnings per share (EPS) for the quarter was $1.20, up from $0.93 in the same quarter last year, with an EPS surprise of +6.19% compared to the consensus estimate of $1.13 [1] Financial Performance Metrics - Total Non-Performing Assets were reported at $16.86 million, lower than the average estimate of $20.31 million [4] - Total Non-Accrual Loans and Leases stood at $16.74 million, compared to the estimated $19.98 million [4] - Net Interest Margin was reported at 2.5%, matching the average estimate [4] - Average Balance of Total Interest Earning Assets was $22.38 billion, exceeding the average estimate of $21.24 billion [4] - Net charge-offs to average loans were at 0.1%, consistent with the average estimate [4] - Efficiency Ratio was reported at 61.5%, slightly better than the average estimate of 61.8% [4] - Net Interest Income (FTE) was $138.3 million, surpassing the average estimate of $132.58 million [4] - Annuity and Insurance revenue was $1.1 million, below the average estimate of $1.58 million [4] - Bank-Owned Life Insurance revenue was $3.68 million, exceeding the average estimate of $3.28 million [4] - Trust and Asset Management revenue was $12.6 million, slightly above the average estimate of $12.16 million [4] - Mortgage Banking revenue was $0.91 million, below the average estimate of $0.99 million [4] - Overall Net Interest Income was reported at $136.68 million, higher than the average estimate of $130.96 million [4] Stock Performance - Bank of Hawaii shares have returned -2.9% over the past month, contrasting with the Zacks S&P 500 composite's +2.5% change [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating potential performance in line with the broader market in the near term [3]

Core Insights - Bank of Hawai'i Corporation reported diluted earnings per common share of $1.20 for Q3 2025, an increase from $1.06 in the previous quarter and $0.93 in the same period last year [1] - The net income for Q3 2025 was $53.3 million, reflecting a 12.0% increase from the linked quarter and a 32.2% increase from the same period last year [1] - The return on average common equity for Q3 2025 was 13.59%, compared to 12.50% in the previous quarter [1]

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].