Bank of Hawaii Q3 Earnings Beat on Strong NII, Provisions Decline Y/Y

Bank of Hawaii Corporation BOH reported third-quarter 2025 earnings per share (EPS) of $1.20, which beat the Zacks Consensus Estimate of $1.13. The bottom line compared favorably with 93 cents in the year-ago quarter.BOH’s results benefited from the increase in net interest income (NII) and strong fee income growth. Also, higher loan and deposit balances, along with lower provisions, were encouraging. However, an increase in expenses acted as a key spoilsport.The company’s net income (GAAP basis) came in at $53.3 million, up 32.2% year over year.Bank of Hawaii’s Quarterly Revenues & Expenses RiseBOH’s quarterly revenues increased 12.2% year over year to $182.6 million. The top line surpassed the Zacks Consensus Estimate by 3.7%.NII was $136.7 million, up 16.2% year over year. NIM increased 28 basis points to 2.46%. Our estimate for NII and NIM was pegged at $126.4 million and 2.49%, respectively.Non-interest income came in at $45.9 million, up 1.9% year over year. This included a $0.8 million charge incurred in connection with a change in the Visa Class B conversion ratio. Adjusted for these items, non-interest income increased 3.4% year over year. This rise was primarily driven by an increase in fees, exchange and other service charges, higher trust and asset management, service charges on deposit accounts, bank-owned life insurance income, and other income. Our estimate for the metric was pinned at $44.5 million.Non-interest expenses rose 4.9% year over year to $112.4 million. It included a severance-related charge of $2.1 million. Adjusted for these items, non-interest expense increased 3% from adjusted non-interest expenses recorded in the year-ago quarter. The increase was primarily due to higher salaries and benefits, partially offset by lower professional fees. Our estimate for the metric was pinned at $107.9 million.The efficiency ratio was 61.53%, down from 65.81% in the year-ago period. A fall in the efficiency ratio reflects increased profitability.BOH’s Loans & Deposits IncreaseAs of Sept. 30, 2025, total loans and leases increased slightly from the prior-quarter end to $14 billion. Our estimate for total loans and leases was $11.9 billion.Total deposits moved up 1.3% on a sequential basis to $21.1 billion. Our estimate for total deposits was $18.9  billion.Bank of Hawaii’s Credit Quality ImprovesAs of Sept. 30, 2025, non-performing assets were $16.9 million, which declined 14.7% year over year. Our estimate for the metric was $21.3 million.Net loans and lease charge-offs were $2.6 million, down $1.2 million from the year-ago quarter. Our estimate for the metric was $2.3 million.Provision for credit losses was $2.5 million, down 16.7% from the year-ago quarter. Our estimate for the metric was $3.4 million.The allowance for credit losses rose marginally to $148.8 million. Our estimate for the metric was $149.7 million.BOH’s Capital Ratios ImproveAs of Sept. 30, 2025, the Tier 1 capital ratio was 14.34%, up from 14.05% as of Sept. 30, 2024. The total capital ratio was 15.40%, which rose from 15.11% in the year-ago period.The ratio of tangible common equity to risk-weighted assets was 9.95%, which increased from 9.17% at the end of the year-ago quarter.Bank of Hawaii’s Profitability Ratios ImproveReturn on average assets was 0.88% at the end of the third quarter of 2025, which increased from 0.69% in the prior-year quarter. Return on average shareholders' equity was 12.10%, up from 9.90% as of Sept. 30, 2024.BOH's Share Repurchase UpdateIn the reported quarter, Bank of Hawaii did not repurchase any shares. As of Sept. 30, 2025, the total remaining buyback authority under the share repurchase program was $126 million.Our View on Bank of HawaiiA rise in NII and fee income will support top-line growth. A solid capital position was another positive. Further, higher loan and deposit balances strengthen its balance sheet. However, rising expenses 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 QuoteCurrently, BOH carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.Performance of Other BanksSynovus Financial Corp.'s SNV third-quarter 2025 adjusted earnings per share of $1.46 surpassed the Zacks Consensus Estimate of $1.36 per share. This compares favorably with earnings of $1.23 per share a year ago.SNV’s results benefited from strong year-over-year growth in NII and non-interest revenues, 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 third-quarter 2025 adjusted earnings per share (excluding notable items) of 51 cents surpassed the Zacks Consensus Estimate of 45 cents. This compares favorably with 42 cents in the year-ago quarter.Results benefited from a rise in NII and non-interest income, along with provision benefits. However, a decline in loan and deposit balances acted as a headwind for FHN.Quantum Computing Stocks Set To SoarArtificial intelligence has already reshaped the investment landscape, and its convergence with quantum computing could lead to the most significant wealth-building opportunities of our time.Today, you have a chance to position your portfolio at the forefront of this technological revolution. In our urgent special report, Beyond AI: The Quantum Leap in Computing Power, you'll discover the little-known stocks we believe will win the quantum computing race and deliver massive gains to early investors.Access the Report Free Now >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Synovus Financial Corp. (SNV): Free Stock Analysis Report First Horizon Corporation (FHN): Free Stock Analysis Report Bank of Hawaii Corporation (BOH): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks