Bank of Hawaii Corp.: Q2 FY2026 earnings call

What management said about Q2 FY2026, from the documents filed with the SEC on 27 July 2026: press release. Guidance figures: 3 kept. The quarter’s numbers.

Read the filing

Key takeaways

• Diluted earnings per share increased: Diluted EPS rose 13 percent to $1.47 from $1.30 in the prior quarter, reflecting strong earnings growth driven by improved profitability. Source
• Net income grew 11.1 percent: Net income climbed to $63.8 million from $57.4 million, an 11.1 percent increase from the first quarter, demonstrating strong operational execution. Source
• Return on common equity improved: Return on average common equity strengthened to 15.47 percent from 13.90 percent, demonstrating enhanced returns on shareholder capital deployed. Source
• NIM expanded ninth consecutive quarter: Net interest margin increased 4 basis points to 2.78 percent, marking the ninth consecutive quarter of expansion, driven by fixed-rate asset repricing. Source
• Total loans grew 1.5 percent: Total loans and leases increased 1.5 percent from year-end to $14.3 billion at quarter-end, demonstrating continued lending activity and portfolio expansion. Source
• Non-performing assets declined: Non-performing assets decreased to $11.5 million from $12.1 million, with the ratio improving to 0.08 percent of total loans and leases. Source
• Noninterest expense decreased sharply: Noninterest expense declined to $111.2 million from $116.1 million, a 4.2 percent decrease reflecting disciplined cost management. Source

“Bank of Hawai'i delivered solid second quarter results reflecting steady execution and disciplined balance sheet management.”

Jim Polk, President and Chief Executive Officer

Guidance

Earnings and Profitability

• Diluted earnings per share increased: Diluted EPS rose 13 percent to $1.47 from $1.30 in the prior quarter, reflecting strong earnings growth driven by improved profitability. Source
• Net income grew 11.1 percent: Net income climbed to $63.8 million from $57.4 million, an 11.1 percent increase from the first quarter, demonstrating strong operational execution. Source
• Return on common equity improved: Return on average common equity strengthened to 15.47 percent from 13.90 percent, demonstrating enhanced returns on shareholder capital deployed. Source

Net Interest Margin Expansion

• NIM expanded ninth consecutive quarter: Net interest margin increased 4 basis points to 2.78 percent, marking the ninth consecutive quarter of expansion, driven by fixed-rate asset repricing. Source
• Fixed-rate repricing boosted yields: Average earning asset yield rose 5 basis points to 4.08 percent as fixed-rate assets matured and reinvested at higher current rates. Source
• Loan originations averaged 5.90 percent: New loan originations during the quarter averaged 5.90 percent rate, reflecting current market conditions and generating enhanced yields on portfolio expansion. Source
• Net interest income grew 1.7 percent: Net interest income rose to $153.6 million from $150.9 million, driven by earning asset yield improvements but partially offset by higher costs. Source

“Net interest margin expanded for the ninth consecutive quarter, supported by the ongoing repricing of cash flows.”

Jim Polk, President and Chief Executive Officer

Loan Portfolio Growth

• Total loans grew 1.5 percent: Total loans and leases increased 1.5 percent from year-end to $14.3 billion at quarter-end, demonstrating continued lending activity and portfolio expansion. Source
• Commercial loans expanded 2.6 percent: Commercial loans grew to $6.2 billion, with gains driven by commercial mortgage production and commercial and industrial loan originations. Source
• Consumer loans grew modestly: Consumer loans increased 0.6 percent to $8.0 billion, with residential mortgage production offset partially by customer amortization and paydowns. Source

Deposit Base and Mix

• Total deposits declined from year-end: Total deposits decreased 1.4 percent from year-end to $20.9 billion, reflecting expected seasonal patterns in Hawaii and competitive deposit environment. Source
• Deposit mix shifted higher-cost: Noninterest-bearing deposits declined to 26.7 percent of total from 27.2 percent, with customers shifting toward higher-yielding interest-bearing accounts. Source
• Average deposits down seasonally: Average total deposits declined 0.7 percent to $20.8 billion during the seasonally lower quarter, consistent with historical patterns. Source

“Total loans and leases increased from the prior quarter, while average total deposits were modestly lower during a seasonally lower period.”

Jim Polk, President and Chief Executive Officer

Asset Quality and Charge-Offs

• Non-performing assets declined: Non-performing assets decreased to $11.5 million from $12.1 million, with the ratio improving to 0.08 percent of total loans and leases. Source
• Credit quality remained strong: Overall asset quality remained strong throughout the quarter with declining non-performing assets and maintenance of very low credit loss ratios. Source
• Net charge-offs increased modestly: Net loan and lease charge-offs totaled $3.4 million or 10 basis points annualized, with gross charge-offs of $4.7 million partially offset by recoveries. Source
• Provision for credit losses increased: Provision for credit losses of $3.6 million was up $1.9 million from prior quarter, driven by elevated net charge-offs during the period. Source

Noninterest Income and Expenses

• Noninterest income increased 4.8 percent: Noninterest income rose to $43.3 million from $41.3 million, driven by higher trust and asset management fees and insurance commissions. Source
• Noninterest expense decreased sharply: Noninterest expense declined to $111.2 million from $116.1 million, a 4.2 percent decrease reflecting disciplined cost management. Source

Capital and Shareholder Returns

• Tier 1 capital well above minimums: Tier 1 capital ratio of 14.45 percent remains well above regulatory well-capitalized minimums, providing solid capital buffer for growth. Source
• Share repurchase program continued: The company repurchased 216 thousand shares for $17.0 million during the quarter, with $88.9 million remaining in authorization. Source
• Quarterly dividend per share: Board declared a quarterly dividend of $0.70 per common share, consistent with prior quarters, supporting steady shareholder returns. Source

Coming up, as management said on 27 July 2026

• Common stock dividend payment: Quarterly dividend of $0.70 per share payable September 15, 2026 to shareholders of record at close of business August 31, 2026. Source
• Preferred stock dividend payments: Series A preferred dividend of $10.94 per share and Series B of $20.00 per share both payable August 3, 2026. Source

In management's words

“Credit quality remained strong, and we continued to maintain a disciplined approach to expenses.”

Jim Polk, President and Chief Executive Officer

Risks management discussed

• Operational: Competition for deposits is driving mix shifts toward higher-cost interest-bearing accounts, with elevated deposit rates partially offsetting NIM gains. Source
• Financial: Deposit repricing creates moderate risk; the 35.5 percent downward deposit beta indicates partial depositor sensitivity if rates decline further. Source

Earlier plans management reported on

• On track: Management demonstrated consistent execution of balance sheet repricing strategy with NIM expanding each quarter for nine consecutive periods. Source
• On track: Management maintained controlled expense discipline with noninterest expense declining 4.2 percent and efficiency ratio improving during quarter. Source

Other quarters

• Q1 FY2026 earnings call
• Q4 FY2025 earnings call
• Q3 FY2025 earnings call
• Q2 FY2025 results

Summarised with AI from the documents the company filed with the SEC. Every point is checked against the filing before it is shown: management’s own words word for word, figures against the line or table row they come from. A point that fails the check is left out. Source opens the filing at that line.