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BOH Expands Buyback Plan: Can It Sustain Strong Capital Returns?

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Bank of Hawaii Corporation (BOH - Free Report) reinforced its commitment to shareholder returns by expanding its share repurchase authorization by $200 million, bringing the remaining buyback capacity to $268.7 million. Following $20.2 million in repurchases during the third quarter of 2026, management plans another $20 million in buybacks in the fourth quarter. The expanded authorization provides flexibility to accelerate capital distributions, depending on earnings performance and capital requirements.

The decision comes amid improving profitability. Third-quarter net income increased 20.5% year over year to $64.3 million, while earnings per share rose to $1.49 from $1.20. Net interest income increased 14.2% to $156.1 million, supported by a four-basis-point sequential improvement in the net interest margin (NIM) to 2.82%. Notably, margin expansion continued for the tenth consecutive quarter, reflecting higher asset yields and disciplined deposit pricing

BOH's Solid Capital and Liquidity Aid Shareholder Returns

Bank of Hawaii maintains a strong capital position, supporting continued shareholder distributions. Its Tier 1 capital ratio stood at 14.41% at September-end, comfortably above regulatory requirements, while the Tier 1 leverage ratio improved to 8.79% from 8.57% at 2025-end. The company also maintained its quarterly common dividend at 70 cents per share, equivalent to $2.80 annually. It has a dividend yield of 4.3%.

BOH's liquidity position remains resilient. At September-end, the company held $442 million in cash and cash equivalents, and $3.5 billion in available-for-sale securities. These liquidity sources provide financial flexibility to meet funding requirements while supporting capital returns.

Earnings prospects also remain encouraging, with the Zacks Consensus Estimate for BOH’s 2026 earnings pointing to 27% year-over-year growth. Expected earnings improvement, coupled with solid capitalization and ample liquidity, could further strengthen the company’s capacity to generate shareholder value.

Overall, BOH’s expanded share repurchase program underscores management’s confidence in the company’s financial position and earnings outlook. Strong capital adequacy, resilient liquidity and anticipated earnings growth provide support for continued capital returns. However, maintaining a prudent balance between shareholder distributions, balance-sheet resilience and growth opportunities will remain essential.

Banking Peers Also Focus on Shareholder Returns

Citigroup (C - Free Report) repurchased approximately $3 billion in shares in the third quarter of 2026, bringing year-to-date buybacks to $13.3 billion. As of Sept. 30, 2026, $23 billion worth of shares remained available under the share repurchase program. Citigroup returned $4.1 billion to shareholders, including dividends, reflecting its continued focus on capital distributions alongside investments in business growth and improving profitability.

Bank of America (BAC - Free Report) repurchased $6 billion worth of shares in third-quarter 2026, reflecting its commitment to shareholder returns. As of Sept. 30, 2026, almost $11 billion remained under its $40-billion share repurchase authorization. Including $2.2 billion in dividends, Bank of America returned $8.3 billion to shareholders. The buybacks highlight management’s confidence in its capital position, supported by a solid CET1 ratio of 10.9%.

BOH Price Performance & Zacks Rank

Bank of Hawaii shares have jumped 7.6% in the past year compared with the industry’s growth of 13.3%. 

Price Performance

Zacks Investment Research
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The company currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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