Bank of Hawai'i — Third Quarter 2026 Earnings Summary

Financial Performance:

• Diluted earnings per common share were $1.49, compared to $1.47 in the linked quarter.
• Net income was $64.3 million, an increase of 0.7% from the linked quarter.
• Return on average common equity was 15.38%, down from 15.47% in the linked quarter.
• Net interest income was $156.1 million, up 1.6% from the linked quarter.
• Net interest margin increased to 2.82%, up 4 basis points from the linked quarter.
• Noninterest income was $42.7 million, down 1.4% from the linked quarter; adjusted for a $0.6 million charge related to a Visa Class B share conversion ratio change, the decrease was 0.9%.
• Noninterest expense was $112.3 million, up 1.0% from the linked quarter; adjusted for a $0.5 million net benefit from the forfeiture of restricted stock awards in the prior quarter, the increase was 0.5%.
• Provision for credit losses was $2.8 million, down $0.9 million from the linked quarter.
• Total assets were $23.8 billion, a decrease of 1.5% from December 31, 2025.
• Total loans and leases were $14.4 billion, an increase of 2.1% from December 31, 2025.
• Total deposits were $20.5 billion, a decrease of 3.3% from December 31, 2025.
• The allowance for credit losses on loans and leases was $146.2 million, a decrease of $0.8 million from June 30, 2026.
• The ratio of the allowance for credit losses to total loans and leases was 1.02% at quarter-end.
• Net loan and lease charge-offs were $3.3 million, or 9 basis points annualized.
• The effective tax rate was 23.24%, compared to 22.31% in the linked quarter.

Guidance and Future Outlook:

• No specific forward guidance or numerical future outlook was provided in the press release.
• Management stated a continued focus on enhancing earnings while maintaining financial strength and resilience.

Business Segments and Product Lines:

• Commercial loans increased 3.8% to $6.3 billion from December 31, 2025, driven by commercial mortgage and commercial and industrial production.
• Consumer loans increased 0.7% to $8.1 billion from December 31, 2025.
• Loan originations during the quarter were originated at a weighted average rate of 5.89%.
• Noninterest income components included Trust and Asset Management ($13.4 million), Fees/Exchange/Other Service Charges ($10.8 million), and Service Charges on Deposit Accounts ($9.1 million).
• Noninterest expense drivers included Salaries and Benefits ($62.3 million), Net Equipment ($11.3 million), and Net Occupancy ($11.2 million).

Market and Competitive Landscape:

• The investment securities portfolio ($7.5 billion) remains largely comprised of securities issued by U.S. government agencies and U.S. government-sponsored enterprises.
• The Company serves businesses, consumers, and governments in Hawai'i and the West Pacific.
• No specific market share data or competitor comparisons were disclosed.

Risks and Challenges:

• Total non-performing assets increased to $43.4 million at September 30, 2026, up $31.9 million from June 30, 2026.
• The increase in non-performing assets was primarily due to a single commercial mortgage placed on non-accrual status due to borrower-specific circumstances.
• Non-performing assets as a percentage of total loans and leases and foreclosed real estate increased to 0.30% from 0.08% in the linked quarter.
• The decrease in total assets was driven by decreases in cash and cash equivalents and held-to-maturity securities.
• The decrease in total deposits was driven by the strategic runoff of public funds and lower commercial deposit balances.
• The higher effective tax rate was due to an increase in valuation allowance related to low-income housing investments.

Management Commentary and Tone:

• Jim Polk, President and CEO, described the quarter as "solid performance, supported by continued expense discipline."
• Management noted that the net interest margin expanded for the tenth consecutive quarter, reflecting asset repricing and positive deposit repricing actions.
• Management highlighted that loan balances increased, the funding profile remained resilient, and credit quality stayed healthy.
• The tone was confident regarding the franchise's financial strength and resilience.

Other Key Points:

• The Company repurchased 256,000 shares of common stock for a total cost of $20.2 million in the third quarter of 2026.
• The Board of Directors increased the share repurchase program authorization by $200 million to $268.7 million subsequent to quarter-end.
• Total remaining buyback authority was $68.7 million at September 30, 2026.
• The Board declared a quarterly cash dividend of $0.70 per share on common stock, payable December 14, 2026.
• The Board declared quarterly dividends on Fixed Rate Non-Cumulative Perpetual Preferred Stock Series A ($10.94 per share) and Series B ($20.00 per share), payable November 2, 2026.
• The Tier 1 Capital Ratio was 14.41% at September 30, 2026.
• The Tier 1 Leverage Ratio was 8.79% at September 30, 2026.
• The Company has 52 branches and 308 ATMs.
• Full-time equivalent employees numbered 1,865 as of September 30, 2026.