Bank of Hawai'i Corporation Third Quarter 2025 Financial Results

• Diluted Earnings Per Common Share of $1.20
• Net Income of $53.3 Million
• Net Interest Income $136.7 Million
• Net Interest Margin 2.46%
• Average Deposits Increased by 7.1% Annualized from the Linked Quarter
• Board of Directors Declares Dividend of $0.70 Per Common Share

Bank of Hawai‘i Corporation (NYSE:BOH) (the "Company") today reported diluted earnings per common share of $1.20 for the third quarter of 2025, compared with $1.06 during the linked quarter and $0.93 during the same period last year. Net income for the third quarter of 2025 was $53.3 million, up 12.0% from the linked quarter and up 32.2% from the same period last year. The return on average common equity for the third quarter of 2025 was 13.59% compared with 12.50% during the linked quarter and 11.50% during the same period last year.

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"Bank of Hawai‘i delivered another quarter of solid results in the third quarter of 2025," said Peter Ho, Chairman and CEO. "We achieved our sixth consecutive quarter of net interest income and margin expansion. Average deposit balances increased by 7.1% annualized and end of period total loans and leases increased modestly. Our credit quality remains exceptional, and we remain focused on prudent expense management and long-term value creation for our stakeholders."

Financial Highlights

Net interest income for the third quarter of 2025 was $136.7 million, an increase of 5.4% from the linked quarter and an increase of 16.2% as compared to the same period last year. The increase from the previous quarter was primarily driven by higher earning assets due to deposit growth and higher earning asset yields, as cash flows from fixed rate assets rolling off at lower interest rates reinvested at higher current rates (fixed asset repricing). The increase from the same period last year was primarily due to lower interest-bearing deposit rates and higher earning assets due to deposit growth.

Net interest margin was 2.46% in the third quarter of 2025, an increase of 7 basis points from the linked quarter and an increase of 28 basis points from the same period last year. As discussed above, the increase from the previous quarter was primarily due to higher earning assets and fixed asset repricing. The increase from the same period last year was primarily due to lower interest-bearing deposit rates.

The average yield on loans and leases was 4.86% in the third quarter of 2025, up 6 basis points from the linked quarter and up 4 basis points from the same period last year. The average yield on total earning assets was 4.08% in the third quarter of 2025, up 7 basis points from the linked quarter and up 2 basis points from the same period last year. The increase in loan yield from the linked quarter is due to new and existing loans earning higher rates than paid off loans. The average rate of interest-bearing deposits was 2.14% in the third quarter of 2025, down 2 basis points from the linked quarter and down 38 basis points from the same period last year. The average quarterly rate of total deposits, including noninterest-bearing deposits, was 1.59%, down 1 basis point from the linked quarter and down 28 basis points from the same period last year. The decrease from the linked quarter was primarily due to a decrease in time deposit rates. The decrease from the same period last year was primarily due to lower benchmark interest rates and overall decreases in rates.

Noninterest income was $46.0 million in the third quarter of 2025, an increase of 2.6% from the linked quarter and an increase of 1.9% from the same period in 2024. Noninterest income in the third quarter included a $0.8 million charge related to a Visa Class B share conversion ratio change, while the linked quarter included a $0.8 million gain related to a BOLI recovery. Adjusted for these items, noninterest income increased by 6.3% from the linked quarter and increased by 3.6% from the same period in 2024. The increases from the linked quarter and same period last year were primarily due to increases in income from trust and asset management, customer derivative program fees, and loan fees, partially offset by lower annuity and insurance income.

Noninterest expense was $112.4 million in the third quarter of 2025, an increase of 1.4% from the linked quarter and an increase of 4.9% from the same period last year. Noninterest expense in the third quarter included a severance-related charge of $2.1 million, while the linked quarter included a severance-related charge of $1.4 million. Adjusted for these items, noninterest expense increased by 0.8% from the linked quarter and increased by 3.0% from the same period in 2024. The increase from the linked quarter was primarily due to higher salaries and benefits, partially offset by other expenses. The increase from the same period last year was primarily due to higher salaries and benefits, partially offset by lower professional fees.

The effective tax rate for the third quarter of 2025 was 21.27% compared with 21.19% during the linked quarter and 23.33% during the same period last year. The lower effective tax rate in the current quarter as compared to the linked quarter was primarily due to an increase in tax-exempt income. Compared to the same period last year, the decrease was primarily due to a decrease in tax expense from discrete items and an increase in tax-exempt income.

Asset Quality

The Company's overall asset quality remained strong during the third quarter of 2025. Provision for credit losses for the third quarter of 2025 was $2.5 million, down $0.8 million from the linked quarter and down $0.5 million in the same period last year.

Total non-performing assets were $16.9 million at September 30, 2025, down $1.0 million from June 30, 2025 and down $2.9 million from September 30, 2024. Non-performing assets as a percentage of total loans and leases and foreclosed real estate were 0.12% at the end of the quarter, a decrease of 1 basis point from the linked quarter and a decrease of 2 basis points from the same period last year.

Net loan and lease charge-offs during the third quarter of 2025 were $2.6 million or 7 basis points annualized of total average loans and leases outstanding and comprised of gross charge-offs of $4.0 million partially offset by gross recoveries of $1.4 million, consistent with net loan and lease charge-offs from the linked quarter. Compared to the same period last year, net loan and lease charge-offs decreased by $1.3 million or 4 basis points annualized on total average loans and leases outstanding.

The allowance for credit losses on loans and leases was $148.8 million at September 30, 2025, an increase of $0.2 million from June 30, 2025 and an increase of $1.4 million from September 30, 2024. The ratio of the allowance for credit losses to total loans and leases outstanding was 1.06% at the end of the quarter, unchanged from the linked quarter and the same period last year.

Balance Sheet

Total assets were $24.0 billion at September 30, 2025, an increase of 1.3% from June 30, 2025 and an increase of 0.9% from September 30, 2024. The increase from the linked quarter was primarily due to increases in cash and cash equivalents and available-for-sale securities, partially offset by a decrease in held-to-maturity securities. The increase from the same period last year was primarily due to increases in available-for-sale investment securities, partially offset by decreases in held-to-maturity securities and cash and cash equivalents.

The investment securities portfolio was $7.6 billion at September 30, 2025, an increase of 0.9% from June 30, 2025 and an increase of 5.0% from September 30, 2024. The increases from the prior periods were primarily due to the purchases of investment securities, partially offset by the amortization of the portfolio. The investment securities portfolio remains largely comprised of securities issued by U.S. government agencies and U.S. government-sponsored enterprises.

Total loans and leases were $14.0 billion at September 30, 2025, an increase of 0.1% from June 30, 2025 and an increase of 0.7% from September 30, 2024. Total commercial loans were $6.1 billion at September 30, 2025, a decrease of 0.1% from June 30, 2025 and an increase of 2.8% from September 30, 2024. The decrease from the linked quarter was primarily due to loan amortization and paydowns within our commercial and industrial portfolio. The increase from the same period last year was primarily due to healthy loan production within our commercial mortgage portfolio, partially offset by loan amortization and paydowns in our commercial and industrial portfolio. Total consumer loans were $7.9 billion at September 30, 2025, an increase of 0.4% from the linked quarter and a decrease of 0.8% from the same period last year. The increase from the linked quarter was primarily due to increased production in the residential mortgage portfolio, partially offset by amortization and paydowns in the automobile portfolio. The decrease from the same period last year was primarily due to declines in our automobile and home equity portfolios.

Total deposits were $21.1 billion at September 30, 2025, an increase of 1.4% from June 30, 2025 and an increase of 0.5% from September 30, 2024. Noninterest-bearing deposits made up 25.6% of total deposit balances at September 30, 2025, down from 26.1% at June 30, 2025 and down from 25.8% at September 30, 2024. Average total deposits were $21.1 billion for the third quarter of 2025, up 1.8% from the linked quarter and up 2.9% from the same period last year.

Capital and Dividends

The Company's capital levels remain well above regulatory well-capitalized minimums.

The Tier 1 Capital Ratio was 14.34% at September 30, 2025 compared with 14.17% at June 30, 2025 and 14.05% at September 30, 2024. The increase from the linked quarter was due to retained earnings growth. The increase from the same period last year was primarily due to retained earnings growth, partially offset by an increase in risk-weighted assets. The Tier 1 Leverage Ratio was 8.44% at September 30, 2025, compared with 8.46% at June 30, 2025 and 8.38% at September 30, 2024. The decrease from the linked quarter was due to an increase in average total assets, partially offset by an increase in retained earnings. The increase from the same period last year was due to an increase in retained earnings, partially offset by an increase in average assets.

No shares of common stock were repurchased under the share repurchase program in the third quarter of 2025. Total remaining buyback authority under the share repurchase program was $126.0 million at September 30, 2025.

The Company's Board of Directors declared a quarterly cash dividend of $0.70 per share on the Company's outstanding common shares. The dividend will be payable on December 12, 2025 to shareholders of record at the close of business on November 28, 2025.

On October 3, 2025, the Company announced that the Board of Directors declared a quarterly dividend payment of $10.94 per share, equivalent to $0.2735 per depositary share, of Fixed Rate Non-Cumulative Perpetual Preferred Stock, Series A, and a quarterly dividend payment of $20.00 per share, equivalent to $0.5000 per depositary share, of Fixed Rate Non-Cumulative Perpetual Preferred Stock, Series B. The depositary shares representing the Series A Preferred Stock and Series B Preferred Stock are traded on the NYSE under the symbol "BOH.PRA" and "BOH.PRB", respectively. The dividends on the Series A Preferred Stock and Series B Preferred Stock will be payable on November 3, 2025 to shareholders of record of the preferred stock as of the close of business on October 17, 2025.

Conference Call Information

The Company will review its third quarter financial results today at 8:00 a.m. Hawai‘i Time (2:00 p.m. Eastern Time). The live call, including a slide presentation, will be accessible on the investor relations link of Bank of Hawai‘i Corporation's website, www.boh.com. The webcast can be accessed via the link: https://register-conf.media-server.com/register/BI5601a213890442eb9322468299a2c8d5. A replay of the conference call will be available for one year beginning at approximately 11:00 a.m. Hawai‘i Time on Monday, October 27, 2025. The replay will be available on the Company's website, www.boh.com.

Investor Announcements

Investors and others should note that the Company intends to announce financial and other information to the Company's investors using the Company's investor relations website at https://ir.boh.com, social media channels, press releases, SEC filings and public conference calls and webcasts, all for purposes of complying with the Company's disclosure obligations under Regulation FD. Accordingly, investors should monitor these channels, as information is updated, and new information is posted.

Forward-Looking Statements

This news release, and other statements made by the Company in connection with it may contain "forward-looking statements" (as defined in the Private Securities Litigation Reform Act of 1995) that involve risks and uncertainties that could cause results to be materially different from expectations. Forecasts of our financial results and condition, expectations for our operations and business prospects, and our assumptions used in those forecasts and expectations are examples of certain of these forward-looking statements. Do not unduly rely on forward-looking statements. Actual results might differ significantly from our forecasts and expectations because of a variety of factors. More information about these factors is contained in Bank of Hawai‘i Corporation's Annual Report on Form 10-K for the year ended December 31, 2024 and its Form 10-Q for fiscal quarters ended March 31, 2025 and June 30, 2025, which were filed with the U.S. Securities and Exchange Commission. These forward-looking statements are not guarantees of future performance and speak only as of the date made, and, except as required by law, the Company undertakes no obligation to update or revise any forward-looking statements to reflect subsequent events, new information or future circumstances.

Bank of Hawai‘i Corporation is an independent regional financial services company serving businesses, consumers, and governments in Hawai‘i and the West Pacific. The Company's principal subsidiary, Bank of Hawai‘i, was founded in 1897. For more information about Bank of Hawai‘i Corporation, see the Company's website, www.boh.com. Bank of Hawai‘i Corporation is a trade name of Bank of Hawaii Corporation.