Bank of Hawaii surges on Q4 earnings beat, net interest margin expands
Regional bank posts 55.6% YoY profit jump, resumes share repurchases with $121M remaining authority
Bank of Hawaii Corporation shares surged 5.9% in pre-market trading Monday after the regional bank reported fourth-quarter earnings that significantly exceeded analyst expectations, driven by a seventh consecutive quarter of net interest margin expansion.
The Honolulu-based bank posted diluted earnings per share of $1.39 for the quarter ended December 31, surpassing the consensus estimate of $1.28, while total revenue reached $189.7 million against forecasts of $186.2 million. The earnings beat represents an 18.2% improvement over analyst projections, with net income climbing 55.6% year-over-year to $60.9 million.
The standout performance metric came in net interest margin, which expanded 15 basis points sequentially to 2.61%—a 42-basis-point improvement from the same period in 2024. The margin growth was primarily attributed to lower deposit costs and fixed-rate asset repricing, partially offset by floating-rate assets repricing to lower interest rates. The cost of deposits declined to 1.43% from 1.59% in the prior quarter.
"Bank of Hawai'i completed 2025 with strong financial performance," said Peter Ho, Chairman and CEO, in the earnings release. "We continued to deliver consistent growth in net interest income and margin for the seventh consecutive quarter. Noninterest-bearing deposit balances increased 6.6% from the linked quarter and end of period total deposits and total loans and leases increased modestly. Credit quality remains outstanding, and we continue to be disciplined in managing expenses."
For the full year 2025, net income rose 37.3% to $205.9 million, with diluted EPS reaching $4.63 compared to $3.46 in the prior year. The strong performance coincided with the resumption of share repurchases during the fourth quarter, during which the company bought back 76,500 shares at a total cost of $5 million. As of December 31, Bank of Hawaii retains $121 million in remaining buyback authority.
Credit quality metrics remained exceptional, with total non-performing assets declining $2.7 million sequentially to $14.2 million. Non-performing assets represented just 0.10% of total loans and leases and foreclosed real estate. The provision for credit losses held steady at $2.5 million for the quarter, while the allowance for credit losses on loans and leases stood at $146.8 million, representing a coverage ratio of 1.04%.
Total loans and leases reached $14.1 billion at quarter-end, a modest 0.4% increase from September 30, 2025, and flat compared to December 31, 2024. Consumer loans grew 0.9% from the prior quarter and 0.6% year-over-year, primarily driven by residential mortgage production. Commercial loans decreased 0.1% sequentially and 0.6% from the prior year.
Bank of Hawaii, which trades on the New York Stock Exchange under the ticker BOH, has a market capitalization of approximately $2.82 billion. The stock closed Friday at $70.80 and has a 52-week range of $55.68 to $74.99. The company pays an annual dividend of $2.80 per share, yielding 3.78%.
Analysts maintain a consensus target price of $74.00, with ratings split among buy and hold recommendations according to market data. The stock trades at a trailing price-to-earnings ratio of 17.31 and a forward P/E of 13.18, reflecting investor optimism about continued margin expansion and earnings growth in 2026.