BOH Stock Forecast & Price Target

Bank of Hawaii is supported by exceptional credit quality, with conservative underwriting, low NPAs and charge-offs, and a resilient Hawaiian economy that benefits from tourism, military spending, and ongoing construction. Its outlook is further strengthened by steady net interest margin expansion from 2.11% in 1Q24 to 2.74% in 1Q26, aided by earning-asset repricing, lower deposit costs, and a loyal deposit base with only 1.24% cost of deposits and 27% in noninterest DDA. With CET1 at 12.1%, TCE at 6.2%, and improving profitability expected to lift ROA toward 0.98% this year and 1.11% in 2027, the bank appears well positioned to fund growth, dividends, and share repurchases while expanding fee income through wealth management initiatives.

Bank of Hawaii is facing a negative outlook because loan growth has been persistently weak, with balances unchanged last year and rising just 0.6% in 2024, and management’s own risk factors suggest another shortfall could pressure estimates and sentiment. Although credit quality remains excellent, with 1Q26 net charge-offs at just 0.03% of average loans and conservative underwriting, the bigger concern is that fee income is fading while core noninterest income fell 3.8% LQ to $41.3M and expenses rose 6.0% LQ to $116.1M, above expectations. The bank also remains exposed to a tourism-heavy Hawaii economy, where higher jet fuel prices, airfares, and slower expected visitor growth could weigh on deposits, loan demand, and overall earnings momentum.