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Bank of Hawaii Q2 Earnings Beat on Strong NII & Fee Income, Stock Down
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Key Takeaways
BOH posted Q2 EPS of $1.06, beating estimates and rising from 81 cents a year earlier.
Higher NII and fee income drove an 11.2% revenue rise, while expenses and asset quality worsened.
Loans and deposits dipped nearly 1%, while credit loss provisions jumped 35.4% year over year.
Bank of Hawaii Corporation (BOH - Free Report) reported second-quarter 2025 adjusted earnings per share (EPS) of $1.06, beating the Zacks Consensus Estimate of $1.04. The bottom line compared favorably with 81 cents in the year-ago quarter.
BOH’s results benefited from the increase in net interest income (NII) and strong fee income growth. However, lower loan and deposit balances, rising expenses, and deteriorating asset quality acted as key spoilsports. The company’s shares lost 4.3% in yesterday’s after-market hours trading session in light of these negatives.
The company’s net income (GAAP basis) came in at $47.6 million, up 39.8% year over year.
Bank of Hawaii’s Quarterly Revenues & Expenses Rise
BOH’s quarterly revenues increased 11.2% year over year to $174.5 million. The top line surpassed the Zacks Consensus Estimate by 3.2%.
NII was $129.6 million, up 12.9% year over year. NIM increased 24 basis points to 2.39%. Our estimate for NII and NIM was pegged at $124.4 million and 2.33%, respectively.
Non-interest income came in at $44.8 million, up 6.4% year over year. This rise was primarily driven by an increase in fees, exchange, and other service charges, service charges on deposit accounts, bank-owned life insurance income, and other income. Our estimate for the metric was pinned at $44.6 million.
Non-interest expenses rose 1.4% to $110.8 million. The increase was primarily due to higher salaries and benefits, data processing and other expenses, partially offset by lower FDIC insurance and professional fees. Our estimate for the metric was pinned at $107 million.
The efficiency ratio was 63.49%, down from 69.60% in the year-ago period. A fall in the efficiency ratio reflects increased profitability.
BOH’s Loans & Deposits Decrease
As of June 30, 2025, total loans and leases decreased nearly 1% from the prior-quarter end to $14 billion. Our estimate for total loans and leases was $13.8 billion.
Total deposits moved down nearly 1% on a sequential basis to $20.8 billion. Our estimate for total deposits was $20.7 billion.
Bank of Hawaii’s Credit Quality Deteriorates
As of June 30, 2025, non-performing assets were $17.9 million, which rose 17.8% year over year. Our estimate for the metric was pegged at $18.7 million.
Net loans and lease charge-offs were $2.6 million, down $0.8 million from the year-ago quarter. Our estimate for the metric was pegged at $4.6 million.
Provision for credit losses was $3.3 million, up 35.4% from the year-ago quarter. Our estimate for the metric was pegged at $2.9 million.
The allowance for credit losses rose marginally to $148.5 million. Our estimate for the metric was pegged at $146 million.
BOH’s Capital Ratios Improve
As of June 30, 2025, the Tier 1 capital ratio was 14.17%, up from 13.96% as of June 30, 2024. The total capital ratio was 15.23%, which rose from 15.00% in the year-ago period.
The ratio of tangible common equity to risk-weighted assets was 9.62%, which increased from 8.80% at the end of the year-ago quarter.
Bank of Hawaii’s Profitability Ratios Improve
Return on average assets was 0.81% at the end of the second quarter of 2025, which increased from 0.59% in the prior-year quarter. Return on average shareholders' equity was 11.21%, up from 9.53% as of June 30, 2024.
BOH's Share Repurchase Update
In the reported quarter, Bank of Hawaii did not repurchase any shares. As of June 30, 2025, the total remaining buyback authority under the share repurchase program was $126 million.
Our View on Bank of Hawaii
A rise in NII and fee income will support top-line growth. A solid capital position was another positive. However, lower loan and deposit balances are near-term concerns. Also, rising expenses and weak asset quality continue to weigh on overall performance.
Bank of Hawaii Corporation Price, Consensus and EPS Surprise
Synovus Financial Corp. (SNV - Free Report) reported second-quarter 2025 adjusted earnings per share of $1.48, which surpassed the Zacks Consensus Estimate of $1.25 per share. This compares favorably with the earnings of $1.16 per share a year ago.
SNV’s results benefited from strong year-over-year growth in NII and non-interest revenue, along with a fall in provisions for credit losses. Also, improving loan balances was a tailwind. However, an increase in expenses was a major headwind.
First Horizon Corporation’s (FHN - Free Report) second-quarter 2025 adjusted earnings per share (excluding notable items) of 45 cents surpassed the Zacks Consensus Estimate of 41 cents. This compares favorably with 36 cents in the year-ago quarter.
FHN’s results benefited from a rise in NII and non-interest income, along with a decline in expenses. Also, lower provisions and a rise in loans and deposit balances were other positives.
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Bank of Hawaii Q2 Earnings Beat on Strong NII & Fee Income, Stock Down
Key Takeaways
Bank of Hawaii Corporation (BOH - Free Report) reported second-quarter 2025 adjusted earnings per share (EPS) of $1.06, beating the Zacks Consensus Estimate of $1.04. The bottom line compared favorably with 81 cents in the year-ago quarter.
BOH’s results benefited from the increase in net interest income (NII) and strong fee income growth. However, lower loan and deposit balances, rising expenses, and deteriorating asset quality acted as key spoilsports. The company’s shares lost 4.3% in yesterday’s after-market hours trading session in light of these negatives.
The company’s net income (GAAP basis) came in at $47.6 million, up 39.8% year over year.
Bank of Hawaii’s Quarterly Revenues & Expenses Rise
BOH’s quarterly revenues increased 11.2% year over year to $174.5 million. The top line surpassed the Zacks Consensus Estimate by 3.2%.
NII was $129.6 million, up 12.9% year over year. NIM increased 24 basis points to 2.39%. Our estimate for NII and NIM was pegged at $124.4 million and 2.33%, respectively.
Non-interest income came in at $44.8 million, up 6.4% year over year. This rise was primarily driven by an increase in fees, exchange, and other service charges, service charges on deposit accounts, bank-owned life insurance income, and other income. Our estimate for the metric was pinned at $44.6 million.
Non-interest expenses rose 1.4% to $110.8 million. The increase was primarily due to higher salaries and benefits, data processing and other expenses, partially offset by lower FDIC insurance and professional fees. Our estimate for the metric was pinned at $107 million.
The efficiency ratio was 63.49%, down from 69.60% in the year-ago period. A fall in the efficiency ratio reflects increased profitability.
BOH’s Loans & Deposits Decrease
As of June 30, 2025, total loans and leases decreased nearly 1% from the prior-quarter end to $14 billion. Our estimate for total loans and leases was $13.8 billion.
Total deposits moved down nearly 1% on a sequential basis to $20.8 billion. Our estimate for total deposits was $20.7 billion.
Bank of Hawaii’s Credit Quality Deteriorates
As of June 30, 2025, non-performing assets were $17.9 million, which rose 17.8% year over year. Our estimate for the metric was pegged at $18.7 million.
Net loans and lease charge-offs were $2.6 million, down $0.8 million from the year-ago quarter. Our estimate for the metric was pegged at $4.6 million.
Provision for credit losses was $3.3 million, up 35.4% from the year-ago quarter. Our estimate for the metric was pegged at $2.9 million.
The allowance for credit losses rose marginally to $148.5 million. Our estimate for the metric was pegged at $146 million.
BOH’s Capital Ratios Improve
As of June 30, 2025, the Tier 1 capital ratio was 14.17%, up from 13.96% as of June 30, 2024. The total capital ratio was 15.23%, which rose from 15.00% in the year-ago period.
The ratio of tangible common equity to risk-weighted assets was 9.62%, which increased from 8.80% at the end of the year-ago quarter.
Bank of Hawaii’s Profitability Ratios Improve
Return on average assets was 0.81% at the end of the second quarter of 2025, which increased from 0.59% in the prior-year quarter. Return on average shareholders' equity was 11.21%, up from 9.53% as of June 30, 2024.
BOH's Share Repurchase Update
In the reported quarter, Bank of Hawaii did not repurchase any shares. As of June 30, 2025, the total remaining buyback authority under the share repurchase program was $126 million.
Our View on Bank of Hawaii
A rise in NII and fee income will support top-line growth. A solid capital position was another positive. However, lower loan and deposit balances are near-term concerns. Also, rising expenses and weak asset quality continue to weigh on overall performance.
Bank of Hawaii Corporation Price, Consensus and EPS Surprise
Bank of Hawaii Corporation price-consensus-eps-surprise-chart | Bank of Hawaii Corporation Quote
Currently, BOH carries a Zacks Rank #4 (Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performance of Other Banks
Synovus Financial Corp. (SNV - Free Report) reported second-quarter 2025 adjusted earnings per share of $1.48, which surpassed the Zacks Consensus Estimate of $1.25 per share. This compares favorably with the earnings of $1.16 per share a year ago.
SNV’s results benefited from strong year-over-year growth in NII and non-interest revenue, along with a fall in provisions for credit losses. Also, improving loan balances was a tailwind. However, an increase in expenses was a major headwind.
First Horizon Corporation’s (FHN - Free Report) second-quarter 2025 adjusted earnings per share (excluding notable items) of 45 cents surpassed the Zacks Consensus Estimate of 41 cents. This compares favorably with 36 cents in the year-ago quarter.
FHN’s results benefited from a rise in NII and non-interest income, along with a decline in expenses. Also, lower provisions and a rise in loans and deposit balances were other positives.