BOH Stock Forecast & Price Target

Bank of Hawaii Corp reported a 5.4% quarter-over-quarter increase in net interest income (NII) to $136.7 million, surpassing the projected forecast, while noninterest income also saw a positive increase of 2.6% to $46.0 million. The bank experienced a 5.4% growth in deposits, driven by increases in savings and certificates of deposit, despite some decreases in non-interest-bearing and interest-bearing demand balances. Additionally, Bank of Hawaii's NII and net interest margin (NIM) have shown consistent growth over the past six quarters, with management anticipating further NIM expansion as interest rate conditions evolve.

Bank of Hawaii Corp experienced a significant HFI loan contraction of -3.2% on a last quarter annualized basis, underperforming expectations for a growth rate of +0.8%. This contraction, alongside a net interest income miss of $131.3 million due to a smaller balance sheet than anticipated, raises concerns about the bank's overall financial stability. Additionally, the company's expense guidance of 2%-3% for fiscal year 2025 suggests a challenging financial environment ahead, particularly if declines in U.S. Treasury rates adversely affect reinvested cash flow yields.