Bank of Hawai‘i Corporation Reports $64.3 Million Net Income in Third Quarter 2026, Announces $0.70 Dividend
Bank of Hawai‘i Corporation (NYSE: BOH) reported net income of $64.3 million for the third quarter of 2026, reflecting continued earnings growth, improved net interest margin, disciplined expense management, and stable overall credit quality. The company also announced a quarterly cash dividend of $0.70 per common share and expanded its share repurchase authorization by $200 million.
For the quarter ended September 30, 2026, Bank of Hawai‘i recorded diluted earnings per common share of $1.49, compared with $1.47 in the second quarter of 2026. Net income increased 0.7% quarter over quarter, demonstrating continued profitability despite changes in deposit balances, operating expenses, and financial market conditions.
The bank’s net interest margin expanded for the tenth consecutive quarter, reaching 2.82%, supported by higher earning asset yields and the continued benefits of asset repricing.
Bank of Hawai‘i also reported total assets of $23.8 billion, loans and leases of $14.4 billion, and total deposits of $20.5 billion as of September 30, 2026.
The results highlight the company’s focus on strengthening earnings, maintaining capital adequacy, and managing financial risks while continuing to serve its commercial and consumer banking customers.
Bank of Hawai‘i Delivers Higher Earnings in Third Quarter 2026
Bank of Hawai‘i Corporation reported net income of $64.3 million for the third quarter of 2026, representing an increase of 0.7% compared with the preceding quarter.
Diluted earnings per common share increased to $1.49 from $1.47 in the second quarter.
The improvement reflects continued progress in the bank’s core earnings performance, supported primarily by higher net interest income and careful management of operating expenses.
Return on average common equity was 15.38% during the third quarter, compared with 15.47% in the previous quarter.
Although the return on equity declined slightly, the bank maintained a double-digit profitability ratio, indicating continued earnings generation relative to its common equity base.
The financial performance came amid ongoing adjustments in the banking sector, including changes in interest rates, deposit pricing, and customer funding preferences.
Bank of Hawai‘i continued to manage these conditions through asset repricing, lending activity, and disciplined balance sheet management.
The company also maintained regulatory capital ratios above well-capitalized minimum requirements, supporting its financial position.
CEO Highlights Expense Discipline and Financial Resilience
Jim Polk, President and Chief Executive Officer of Bank of Hawai‘i Corporation, emphasized the company’s continued financial progress during the third quarter.
According to Polk, the bank delivered another quarter of solid performance, supported by expense discipline and improvements in net interest margin.
He highlighted the tenth consecutive quarterly expansion in net interest margin as an important achievement.
The improvement was driven by the continued repricing of earning assets and the positive effects of deposit pricing actions.
Polk also noted that loan balances increased from the previous quarter, while the bank maintained a resilient funding profile and healthy overall credit quality.
The company’s management remains focused on enhancing earnings while preserving financial strength and operational stability.
This approach reflects the importance of balancing profitability with prudent risk management, particularly in an environment where funding costs and asset yields continue to influence banking performance.
The bank’s third-quarter results demonstrate the financial effects of these priorities across lending, deposits, operating expenses, and capital management.
Net Interest Income Increases to $156.1 Million
Bank of Hawai‘i reported net interest income of $156.1 million during the third quarter of 2026, representing an increase of 1.6% compared with the second quarter.
The improvement was primarily driven by higher yields on earning assets.
Net interest income represents the difference between interest earned on loans, investment securities, and other interest-generating assets and the interest paid on deposits and other funding sources.
For commercial banks, this measure is a central component of operating revenue and profitability.
During the third quarter, Bank of Hawai‘i benefited from the repricing of fixed-rate assets.
As existing fixed-rate assets matured or were repaid, the bank was able to reinvest funds or originate new assets at higher prevailing rates.
This process contributed to a five-basis-point increase in the average yield on earning assets.
However, the positive impact was partially offset by changes in the composition of customer deposits.
The bank experienced a shift from noninterest-bearing deposits and very low-cost interest-bearing deposits toward accounts offering higher interest rates.
This deposit mix shift increased pressure on funding costs, partially offsetting the benefits of higher asset yields.
Despite these challenges, net interest income increased during the quarter.
Net Interest Margin Expands for Tenth Consecutive Quarter
Bank of Hawai‘i reported a net interest margin of 2.82% for the third quarter of 2026, an increase of four basis points compared with the preceding quarter.
The improvement marked the bank’s tenth consecutive quarter of net interest margin expansion.
Net interest margin is an important measure of banking profitability because it reflects the relationship between net interest income and average earning assets.
A higher margin generally indicates that a bank is generating more net interest income relative to its earning asset base.
The third-quarter increase was supported by fixed-rate asset repricing and higher yields on loans and other investments.
The bank also benefited from deposit repricing actions that helped manage interest expenses.
However, the continued movement of customer balances toward higher-yielding deposit products remained a partial offset.
The sustained margin expansion indicates that Bank of Hawai‘i has continued to benefit from changes in its asset portfolio and pricing structure.
Maintaining this trend will depend on future interest rate conditions, deposit competition, loan growth, and the timing of asset repricing.
Loan Yields Improve as New Lending Reflects Higher Rates
The average yield on Bank of Hawai‘i’s total earning assets reached 4.13% during the third quarter of 2026.
This represented an increase of five basis points compared with the previous quarter.
The average yield on loans and leases increased by three basis points to 4.82%.
Management attributed the improvement primarily to fixed-rate asset repricing and new loan production at higher current interest rates.
During the quarter, newly originated loans, including floating-rate loans, carried a weighted average interest rate of 5.89%.
The higher rate on new originations contributed to the gradual improvement in the overall loan portfolio yield.
For banks holding substantial fixed-rate loan portfolios, changes in market interest rates may affect earnings gradually as older loans mature or are replaced.
This process can provide ongoing benefits when newly originated assets carry higher yields than existing portfolio balances.
Bank of Hawai‘i’s results demonstrate the impact of this repricing process on its financial performance.
The bank’s ability to maintain higher earning asset yields will remain influenced by loan demand, credit conditions, and future market interest rates.
Deposit Pricing Remains Relatively Stable
Bank of Hawai‘i continued to manage deposit costs during the third quarter as customers adjusted their savings and deposit preferences.
The average quarterly rate paid on interest-bearing deposits was 1.72%, representing a decrease of one basis point from the second quarter.
The average rate on total deposits, including noninterest-bearing accounts, remained unchanged at 1.27%.
These figures indicate relatively stable overall deposit pricing during the reporting period.
However, the bank continued to experience changes in its deposit mix.
Customers moved some balances from noninterest-bearing and very low-cost deposit accounts into higher-yielding interest-bearing products.
This shift can increase funding costs even when individual deposit rates remain stable or decline slightly.
For financial institutions, maintaining an appropriate balance between deposit retention, pricing competitiveness, and funding expenses is essential to protecting net interest margin.
Bank of Hawai‘i’s third-quarter performance suggests that asset yield improvements were sufficient to offset the pressure created by changes in deposit composition.
Noninterest Income Reaches $42.7 Million
Bank of Hawai‘i reported noninterest income of $42.7 million for the third quarter of 2026, representing a decline of 1.4% compared with the preceding quarter.
Noninterest income includes revenue generated from banking activities outside traditional interest-based lending and investment operations.
These activities may include deposit-related fees, trust services, asset sales, and other financial services.
The third-quarter results included a $0.6 million charge associated with a change in the Visa Class B share conversion ratio.
The second quarter included a similar charge of $0.4 million.
After adjusting for these items, noninterest income declined by 0.9% quarter over quarter.
The decrease was primarily attributed to lower gains on leased asset sales and the absence of seasonally higher trust-related tax services revenue recorded in the previous quarter.
These reductions were partially offset by stronger deposit fee income.
The results indicate that certain fee-based revenue categories experienced modest pressure during the quarter, while deposit-related services provided some support.
Noninterest income remains an important component of the bank’s diversified revenue structure.
Operating Expenses Increase Modestly to $112.3 Million
Bank of Hawai‘i reported noninterest expense of $112.3 million during the third quarter of 2026, representing an increase of 1.0% from the second quarter.
The previous quarter included a $0.5 million net benefit associated with the forfeiture of restricted stock awards.
After adjusting for this benefit, third-quarter noninterest expenses increased by approximately 0.5%.
The increase was primarily driven by higher net equipment expenses and net occupancy costs.
These expenses are associated with the infrastructure and facilities required to support banking operations.
Despite the modest increase, management continued to emphasize expense discipline as an important element of the bank’s operating strategy.
Controlling noninterest expenses is particularly relevant for banks seeking to improve profitability while managing changes in interest income and funding costs.
Bank of Hawai‘i’s relatively limited expense growth helped support its third-quarter earnings performance.
The bank’s ability to maintain operating efficiency will remain important as it continues investing in technology, facilities, and customer service capabilities.
Effective Tax Rate Rises to 23.24%
Bank of Hawai‘i reported an effective tax rate of 23.24% for the third quarter of 2026, compared with 22.31% in the preceding quarter.
The increase was primarily associated with a higher valuation allowance related to low-income housing investments.
A valuation allowance can affect the recognition of certain tax-related benefits and influence a company’s reported effective tax rate.
For financial institutions involved in affordable housing investments, tax accounting considerations can contribute to fluctuations in quarterly tax expenses.
The higher effective tax rate represented a modest additional expense factor during the third quarter.
Despite this increase, Bank of Hawai‘i reported higher net income and diluted earnings per common share compared with the previous quarter.
Credit Quality Remains Stable Despite Increase in Nonperforming Assets
Bank of Hawai‘i stated that its overall asset quality remained stable during the third quarter of 2026.
The provision for credit losses totaled $2.8 million, representing a decrease of $0.9 million compared with the second quarter.
However, total nonperforming assets increased significantly during the reporting period.
Nonperforming assets reached $43.4 million as of September 30, 2026, compared with $11.5 million at June 30, 2026.
This represented an increase of $31.9 million.
Nonperforming assets as a percentage of total loans, leases, and foreclosed real estate increased to 0.30%, up 22 basis points from the previous quarter.
The increase was primarily associated with a single commercial mortgage loan being placed on nonaccrual status.
Management attributed the classification to borrower-specific circumstances affecting that particular lending relationship.
The company indicated that the development was not believed to represent broader deterioration across its loan portfolio.
Nevertheless, the increase in nonperforming assets remains an important credit quality indicator requiring continued monitoring.
Net Charge-Offs Remain Low
Bank of Hawai‘i reported net loan and lease charge-offs of $3.3 million during the third quarter of 2026.
This represented nine basis points of average outstanding loans and leases on an annualized basis.
Gross charge-offs totaled $4.7 million, partially offset by gross recoveries of $1.4 million.
Compared with the preceding quarter, net charge-offs declined by $0.1 million, equivalent to a one-basis-point improvement on an annualized basis.
The relatively low charge-off ratio indicates that realized credit losses remained limited compared with the bank’s overall lending portfolio.
The allowance for credit losses on loans and leases totaled $146.2 million as of September 30, 2026.
This represented a decrease of $0.8 million from June 30, 2026.
The allowance for credit losses equaled 1.02% of outstanding loans and leases, declining by one basis point from the preceding quarter.
These figures reflect the bank’s assessment of expected credit losses within its portfolio.
Although nonperforming assets increased, the lower provision expense and limited net charge-offs supported management’s assessment of stable overall asset quality.
Total Assets Reach $23.8 Billion
Bank of Hawai‘i reported total assets of $23.8 billion as of September 30, 2026.
This represented a decrease of 1.5% compared with December 31, 2025.
The decline was primarily driven by reductions in cash and cash equivalents and held-to-maturity investment securities.
These decreases were partially offset by growth in loans and leases.
The changes reflect ongoing adjustments in the composition of the bank’s balance sheet.
For financial institutions, balance sheet management involves maintaining an appropriate allocation among lending assets, investment securities, cash holdings, and other financial resources.
Changes in asset composition can influence profitability, liquidity, and risk exposure.
Bank of Hawai‘i’s results indicate that the company continued expanding its lending portfolio while certain liquid assets and investment securities declined.
The bank’s total asset position remained substantial, supporting its commercial and consumer banking operations.
Investment Securities Portfolio Totals $7.5 Billion
Bank of Hawai‘i reported an investment securities portfolio of $7.5 billion as of September 30, 2026.
The portfolio decreased by 3.3% compared with December 31, 2025.
The reduction was primarily associated with securities portfolio runoff, including maturities and principal paydowns.
A decline in the fair value of available-for-sale securities also contributed to the decrease.
These factors were partially offset by purchases of additional available-for-sale investment securities.
The bank’s investment portfolio remained largely composed of securities issued by U.S. government agencies and government-sponsored enterprises.
These investments are commonly held by financial institutions for liquidity management, income generation, and balance sheet diversification.
The composition of Bank of Hawai‘i’s securities portfolio reflects its continued emphasis on managing financial assets within an established investment framework.
Changes in market interest rates can affect the fair value of investment securities, particularly fixed-income instruments.
As a result, the portfolio’s reported value may fluctuate even when the underlying securities continue generating contractual cash flows.
Loans and Leases Increase to $14.4 Billion
Bank of Hawai‘i reported total loans and leases of $14.4 billion as of September 30, 2026.
This represented an increase of 2.1% compared with December 31, 2025.
The growth reflects continued lending activity across commercial and consumer banking segments.
Total commercial loans reached $6.3 billion, increasing 3.8% from year-end 2025.
The increase was primarily driven by commercial mortgage lending and commercial and industrial loan production.
Commercial lending supports businesses through financing arrangements associated with property, operations, investment, and other financial requirements.
Bank of Hawai‘i’s commercial loan growth indicates continued activity within these lending categories.
Total consumer loans reached $8.1 billion, representing an increase of 0.7% compared with December 31, 2025.
Consumer lending growth was more moderate than commercial lending growth during the period.
Both commercial and consumer loan originations were partially offset by loan amortization and principal repayments.
The overall increase in loans and leases contributed to the bank’s earning asset base.
Total Deposits Decline to $20.5 Billion
Bank of Hawai‘i reported total deposits of $20.5 billion as of September 30, 2026.
This represented a decrease of 3.3% compared with December 31, 2025.
The reduction was primarily driven by the strategic runoff of public funds and lower commercial deposit balances.
Deposit balances are an important component of bank funding because they provide resources used to support lending, investments, and other financial activities.
Changes in deposit levels can affect liquidity management and funding costs.
The bank reported that noninterest-bearing deposits represented 26.5% of total deposits at the end of September.
This compared with 27.2% as of December 31, 2025.
The decrease reflects a modest reduction in the proportion of deposits that do not require interest payments.
Average total deposits were $20.7 billion during the third quarter, representing a decline of 1.5% compared with the December 31, 2025 balance.
Management attributed the decrease primarily to lower commercial deposit balances.
Despite the reduction, the company described its funding profile as resilient.
Regulatory Capital Ratios Remain Above Required Minimums
Bank of Hawai‘i reported that its capital levels remained well above regulatory well-capitalized minimum requirements.
The company’s Tier 1 Capital Ratio was 14.41% as of September 30, 2026, compared with 14.49% at December 31, 2025.
The modest decline was primarily associated with an increase in risk-weighted assets and common share repurchases.
These factors were partially offset by growth in retained earnings.
The Tier 1 Capital Ratio measures a bank’s core regulatory capital relative to its risk-weighted assets.
It is an important indicator of a financial institution’s ability to absorb losses while maintaining operations.
Bank of Hawai‘i also reported a Tier 1 Leverage Ratio of 8.79%, compared with 8.57% at year-end 2025.
The improvement reflected a reduction in average assets and an increase in retained earnings.
The leverage ratio provides another measure of capital strength by comparing Tier 1 capital with an exposure measure based on average assets.
The bank’s reported capital position supports its ability to maintain lending activities, manage financial risks, and return capital to shareholders.
Bank of Hawai‘i Repurchases $20.2 Million in Common Shares
Bank of Hawai‘i continued its share repurchase activities during the third quarter of 2026.
The company repurchased approximately 256,000 shares of common stock at a total cost of $20.2 million.
The repurchases were completed under its existing share repurchase program.
As of September 30, 2026, the company had $68.7 million in remaining repurchase authorization.
Following the end of the quarter, the Board of Directors approved an additional $200 million in share repurchase authorization.
This increased the total remaining authorization to $268.7 million.
Share repurchase programs allow companies to return capital to shareholders by buying back outstanding common shares.
Such programs can also influence earnings per share and capital ratios, depending on the number of shares repurchased and the financial resources used.
The expanded authorization provides Bank of Hawai‘i with additional flexibility to repurchase shares, subject to market conditions, regulatory considerations, and management decisions.
The authorization does not necessarily require the company to repurchase the full amount.
Board Declares Quarterly Dividend of $0.70 Per Share
Bank of Hawai‘i’s Board of Directors declared a quarterly cash dividend of $0.70 per common share.
The dividend will be payable on December 14, 2026, to shareholders of record at the close of business on November 30, 2026.
The declaration reflects the company’s continued commitment to returning capital to shareholders through regular cash distributions.
Dividend payments are an important component of shareholder returns for many established banking institutions.
However, future dividends remain subject to board approval, financial performance, capital requirements, and other applicable considerations.
The quarterly dividend announcement accompanies the company’s expanded share repurchase authorization.
Together, these capital return initiatives demonstrate Bank of Hawai‘i’s approach to shareholder distributions while maintaining regulatory capital levels above well-capitalized minimum requirements.
Bank of Hawai‘i Maintains Focus on Earnings Growth and Financial Strength
Bank of Hawai‘i Corporation’s third-quarter 2026 financial results reflect continued profitability and improvements in core banking performance.
Net income increased to $64.3 million, diluted earnings per share reached $1.49, and net interest margin expanded to 2.82%.
The bank also reported continued growth in its loan portfolio, supported by commercial mortgage and commercial and industrial lending activity.
Although total deposits declined and nonperforming assets increased, management maintained that the company’s overall funding position and credit quality remained sound.
The increase in nonperforming assets was primarily associated with a single commercial mortgage relationship rather than a broad deterioration in lending performance.
Meanwhile, the bank maintained regulatory capital ratios above required minimums and continued returning capital to shareholders.
The declaration of a $0.70 quarterly dividend and the additional $200 million share repurchase authorization highlight the company’s capital management activities.
As Bank of Hawai‘i moves through the remainder of 2026, its financial performance will continue to be influenced by asset repricing, deposit costs, loan growth, operating expenses, and credit conditions.
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