Bank of Hawaii Corporation Powers Through Second Quarter with Strong Earnings and Strategic Progress
Bank of Hawaii Corporation reported a solid second quarter in 2026, reflecting continued progress in the underlying earnings power of its franchise. The company delivered diluted earnings per share of $1.47 and net income of $63.8 million, up 13% and 11%, respectively, from the prior quarter.
Executive Vice President Chang Park highlighted the company's results during a conference call, citing a return on average common equity of 15.5%. Net interest income increased to $153.6 million, with the net interest margin expanding by four basis points to 2.78% for the ninth consecutive quarter.
The improvement in the net interest margin was driven by the continued repricing of fixed-rate assets, along with disciplined deposit pricing. The company's average cost of deposits remained essentially stable at 127 basis points. However, the interest rate environment continues to evolve, with rates expected to remain elevated for longer. This could support earning asset yields and further repricing of the company's fixed-rate portfolio.
While the competitive environment for deposits remains elevated as customers prioritize yield, Bank of Hawaii's deposit franchise remains one of its most important structural advantages. The company's leading market position, trusted brand, diversified customer base, and deep relationships across its markets provide a stable core funding base.
Total loans increased $94 million during the quarter, representing annualized growth of approximately 2.6%. Commercial & Industrial (C&I) and residential lending led the increase, while Commercial Real Estate (CRE) growth was affected by payoff activity and the timing of deal closings. Residential mortgage growth benefited from the completion and closing of a large condominium project.
Looking ahead, Bank of Hawaii's commercial pipeline remains encouraging, but consumer loan growth is likely to moderate in the third quarter due to elevated interest rates and the absence of similar residential project closings. The company continues to expect full-year loan growth in the lower mid-single digit range.
Credit quality remains strong, with Chief Risk Officer Brad Shairson providing additional details during the conference call. The company has also made progress on its strategic priorities, including strengthening coordination across commercial banking, the private bank, Bankoh Advisors, and broader advisory capabilities.
