Bank of Hawaii (BOH) Q2 2025 earnings summary

Executive summary

• Net income for Q2 2025 was $47.6M, up 40% year-over-year and 8.3% sequentially, with diluted EPS rising to $1.06 from $0.81 in Q2 2024 and $0.97 in Q1 2025.

• Net interest income grew 13% year-over-year to $129.7M, with net interest margin expanding for the fifth consecutive quarter to 2.39%.

• Return on average common equity increased to 12.50% from 10.41% in Q2 2024 and 11.80% in Q1 2025.

• Credit quality remained strong, with net charge-offs at 0.07% and non-performing assets at 0.13%.

• The bank maintained a stable deposit base and continued to remix fixed assets into higher-yielding earning assets, holding a dominant market position with 32.2%–34.1% deposit share.

Financial highlights

• Net interest income rose to $129.7M, up $14.8M year-over-year, and net interest margin improved to 2.39%, up 24 bps year-over-year and 7 bps sequentially.

• Noninterest income was $44.8M, up 6% year-over-year, including a one-time $800,000 BOLI recovery gain; adjusted noninterest income increased 4.5% year-over-year.

• Noninterest expense was $110.8M, up 1.4% year-over-year, with a $1.4M severance charge; excluding non-core items, expenses declined $600,000 from the prior quarter.

• Provision for credit losses was $3.3M; effective tax rate was 21.19%.

• Total assets reached $23.7B, up 0.5% from year-end 2024; total deposits were $20.8B, up 0.8% from December 2024.

Outlook and guidance

• Management expects continued net interest income and margin expansion, targeting NIM of 2.50% by year-end, assuming no rate cuts.

• Noninterest income is forecasted between $44M and $45M for the remainder of the year.

• Expense growth is expected to remain within the 2%-3% range for the year, with a step back in the second half.

• Deposit levels are expected to remain flat, with a focus on growing noninterest-bearing deposits.

• Management highlights economic headwinds in Hawai'i, including federal policy changes and tariffs, but expects NII to benefit from rising rates.