Bank of Hawaii Corporation BOH reported first-quarter 2025 adjusted earnings per share (EPS) of 97 cents, beating the Zacks Consensus Estimate of 89 cents. The bottom line compared favorably with 87 cents in the year-ago quarter.

BOH’s results benefited from the increase in net interest income (NII) and strong fee income growth. A rise in loans and deposits was another positive. However, a rise in expenses and weak asset quality were spoilsports.

The company’s net income (GAAP basis) came in at $43.9 million, up 20.9% year over year.

Bank of Hawaii’s Quarterly Revenues & Expenses Rise

BOH’s quarterly revenues increased 8.8% year over year to $169.9 million. The top line surpassed the Zacks Consensus Estimate by 1.3%.

NII was $125.8 million, up 10.4% year over year. NIM increased 21 basis points to 2.32%. Our estimate for NII and NIM was pegged at $123 million and 2.21%, respectively.

Non-interest income came in at $44.1 million, up 4.2% year over year. This rise was primarily driven by an increase in trust and asset management income, service charges on deposit accounts, bank-owned life insurance income, and annuity and insurance income. Our estimate for the metric was pinned at $44.8 million.

Non-interest expenses rose 4.3% to $110.5 million. The increase was primarily due to higher salaries and benefits, and other expenses, partially offset by lower FDIC insurance and professional fees. Our estimate for the metric was pinned at $114.1 million.

The efficiency ratio was 65.03%, down from 67.76% in the year-ago period. A fall in the efficiency ratio reflects increased profitability.

BOH’s Loans & Deposits Increase

As of March 31, 2025, total loans and leases increased marginally from the prior quarter’s end to $14.1 billion. Our estimate for total loans and leases was $13.7 billion.

Total deposits moved up 1.8% sequentially to $21 billion. Our estimate for total deposits was $22.1 billion.

Bank of Hawaii’s Credit Quality Deteriorates

As of March 31, 2025, non-performing assets were $17.5 million, which jumped 47.4% year over year. Our estimate for the metric was pegged at $14.9 million.

Net loans and lease charge-offs were $4.4 million, up $2.3 million from the year-ago quarter. Our estimate for the metric was pegged at $3.5 million.

Provision for credit losses was $3.3 million, up 62.5% from the year-ago quarter. Our estimate for the metric was pegged at $2.4 million.

The allowance for credit losses rose marginally to $147.7 million. Our estimate for the metric was pegged at $147.4 million.

BOH’s Capital Ratios Improve

As of March 31, 2025, the Tier 1 capital ratio was 13.93%, up from 12.74% as of March 31, 2024. The total capital ratio was 14.97%, which rose from 13.81% in the year-ago period.

Story Continues

The ratio of tangible common equity to risk-weighted assets was 9.28%, which increased from 8.70% at the end of the year-ago quarter.

Bank of Hawaii’s Profitability Ratios Improve

Return on average assets was 0.75% at the end of the first quarter of 2025, which increased from 0.63% in the prior-year quarter. Return on average shareholders' equity was 10.65%, up from 10.34% as of March 31, 2024.

BOH's Share Repurchase Update

In the reported quarter, Bank of Hawaii did not repurchase any shares. As of March 31, 2025, the total remaining buyback authority under the share repurchase program was $126 million.

Our View on Bank of Hawaii

A rise in NII and fee income will support top-line growth. A solid capital position and a rise in loan and deposit balances were other positives. However, weak credit quality and a rise in expenses are near-term concerns.

Bank of Hawaii Corporation Price, Consensus and EPS SurpriseBank of Hawaii Corporation Price, Consensus and EPS Surprise

Bank of Hawaii Corporation price-consensus-eps-surprise-chart | Bank of Hawaii Corporation Quote

Currently, 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 Banks

Synovus Financial Corp. SNV reported first-quarter 2025 adjusted earnings per share of $1.30, which surpassed the Zacks Consensus Estimate of $1.11 per share. This compares with earnings of 79 cents per share a year ago. (See the Zacks Earnings Calendar to stay ahead of market-making news.)

SNV’s results benefited from strong year-over-year growth in NII, and a fall in expenses and provisions for credit losses. Also, improving loan balances was a tailwind. However, a decline in non-interest revenues was a major headwind.

First Horizon Corporation’s FHN first-quarter 2025 adjusted earnings per share (excluding notable items) of 42 cents surpassed the Zacks Consensus Estimate of 40 cents. This compares favorably with 35 cents in the year-ago quarter.

FHN’s results benefited from a marginal rise in NII and a decline in expenses. Also, lower provisions were another positive. However, a fall in fee income and a deteriorating capital position were major headwinds.

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