Bank of Hawaii(US:BOH)2025-10-28 00:58Financial 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]