Company: BOH
Filing Date: 2025-07-28
Form Type: 10-Q
Source: 0001628280-25-036240
Chunk: 194

Company: BANK OF HAWAII CORP
Filing Date: 2025-07-28
Form: 10-Q
Item: Part I, Item 8
Chunk 194
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 projected prepayments exceed established guidelines. Separate models are utilized to project interest-bearing deposit repricing behavior and deposit account attrition and average lives in various interest rate environments. These models were developed based upon our historical behavior over several interest rate cycles. The models’ forecast results are periodically tested against historical results and have been and may continue to be recalibrated.

We utilize net interest income simulations to analyze short-term income sensitivities to changes in interest rates. Table 17a presents as of June 30, 2025 and December 31, 2024, an estimate of the change in net interest income over the next twelve months that would result from an immediate change in interest rates, moving in a parallel fashion over the entire yield curve, relative to the measured base case scenario. The base case scenario assumes the consolidated statements of condition and interest rates are generally unchanged.

Net Interest Income Sensitivity ProfileTable 17aImpact on Future Annual Net Interest Income(dollars in thousands)June 30, 2025December 31, 2024Immediate Change in Interest Rates (basis points)+400$34,112 6.0 %$31,028 5.6 %+30027,909 4.9 25,281 4.6 +20020,681 3.6 18,783 3.4 +10012,278 2.2 10,393 1.9 -100(8,245)(1.5)(13,029)(2.3)-200(18,947)(3.3)(27,883)(5.0)-300(31,989)(5.6)(43,536)(7.8)-400(64,691)(11.4)(65,753)(11.8)

Based on our net interest income simulation as of June 30, 2025, net interest income is expected to increase as interest rates rise. Rising interest rates would drive higher rates on floating rate loans, interest rate swaps and investment securities, as well as higher reinvestment rates on loan and investment securities cashflows. However, lower interest rates would likely cause an initial decline in net interest income as lower rates would lead to lower yields on loans, swaps, and investment securities, as well as drive higher premium amortization on existing investment securities. Based on our net interest income simulation as of June 30, 2025, NII sensitivity to changes in interest rates for the twelve months subsequent to June 30