Bank of Hawaii(BOH) - 2025 Q1 - Quarterly Report

Financial Performance - Net income for Q1 2025 was $44.0 million, an increase of $7.6 million or 21% compared to Q1 2024[136] - Diluted earnings per common share for Q1 2025 was $0.97, an increase of $0.10 or 11% compared to Q1 2024[136] - Net interest income for Q1 2025 was $125.8 million, an increase of 10% compared to the same period last year[138] - Noninterest income was $44.1 million in Q1 2025, an increase of 4% compared to the same period last year[138] - The return on average common equity for Q1 2025 was 11.80%, compared with 11.20% in Q1 2024[136] - The effective tax rate for Q1 2025 was 21.67%, down from 24.76% in the same period last year[138] Assets and Liabilities - Total assets were $23.9 billion as of March 31, 2025, an increase of 1.2% from December 31, 2024[138] - Total loans and leases were $14.1 billion as of March 31, 2025, an increase of 0.3% from December 31, 2024[138] - Total deposits were $21.0 billion as of March 31, 2025, compared to $20.6 billion as of December 31, 2024[138] - Average balance of earning assets increased by $286.3 million, or 1%, to $22,023.9 million for the three months ended March 31, 2025 compared to the same period last year[144] - Average balance of interest-bearing liabilities increased by $322.9 million, or 2%, to $16,010.1 million for the three months ended March 31, 2025 compared to the same period last year[145] Income and Expense - Total noninterest expense increased by $4.6 million or 4% in Q1 2025 compared to Q1 2024, reaching $110.5 million[152] - Total salaries and benefits expense rose by $4.7 million or 8% in Q1 2025, primarily due to increases in incentive compensation and medical, dental, and life insurance expenses[152] - Net interest income increased by $12.7 million, driven by a change in interest income of $4.8 million and a decrease in interest expense of $7.9 million[142] Credit Quality - Nonperforming assets and accruing loans and leases past due 90 days or more were monitored closely to manage credit risk effectively[183] - The provision for credit losses in Consumer Banking increased by $1 million or 44% due to higher net charge-offs in auto and installment loans[180] - Total Non-Performing Assets decreased to $17.451 million as of March 31, 2025, down from $19.300 million as of December 31, 2024, representing a reduction of $1.849 million or 9.6%[186] - The Allowance for Credit Losses was $147.707 million as of March 31, 2025, or 1.05% of total loans and leases outstanding, compared to $148.528 million or 1.06% as of December 31, 2024[192] Dividends and Shareholder Returns - The Company declared a quarterly cash dividend of $0.70 per share on outstanding common shares, payable on June 13, 2025[138] - No shares of common stock were repurchased in Q1 2025, with a total of 58.2 million shares repurchased since the program's inception, returning $2.4 billion to shareholders[224] Operational Risk Management - The Company has established an Operational Risk Committee (ORC) to oversee and assess significant operational risks, including cybersecurity risks[228] - The Company continuously strengthens its internal controls to minimize operational risks, although there is no assurance that operational losses will not occur[229] - Management's oversight of operational risk is crucial for achieving the Company's goals and objectives[229] Liquidity and Capital - Shareholders' equity increased by $37.2 million (2%) to $1.7 billion as of March 31, 2025, driven by net income of $44.0 million and other comprehensive income of $25.0 million[223] - The ratio of readily available liquidity to uninsured deposits improved to 129% as of March 31, 2025, up from 116% at December 31, 2024, due to increased cash and cash equivalents and borrowing capacity[213] - Total regulatory capital as of March 31, 2025, was $2,144,280 thousand, with a Common Equity Tier 1 Capital Ratio of 11.58%[221]