Bank of Hawaii(US:BOH)2025-10-27 19:00Financial 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]