Company: BOH
Filing Date: 2025-07-28
Form Type: 10-Q
Source: 0001628280-25-036240
Chunk: 174

Company: BANK OF HAWAII CORP
Filing Date: 2025-07-28
Form: 10-Q
Item: Part I, Item 8
Chunk 174
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 components as well as the spread between interest earned on assets and interest paid on liabilities. Net interest margin is defined as net interest income, on a taxable-equivalent basis, as a percentage of average earning assets.

The average balance of our earning assets for the three and six months ended June 30, 2025 increased by $443.3 million or 2% and $364.6 million or 2%, respectively, compared to the same periods in 2024. These increases were due to increases in the average balances of available-for-sale investment securities and commercial mortgage loans. As compared to the same periods last year, yields on our investment securities portfolio increased by 10 and 7 basis points during the three and six months ended 

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June 30, 2025, respectively, primarily due to the amortization of lower yielding investments being reinvested into new investments at higher current interest rates. This increase was partially offset by lower income earned from interest rate swaps that hedge a portion of our available-for-sale (“AFS”) securities portfolio. Yields on our loan and lease portfolio increased by 4 and 6 basis points during the three and six months ended June 30, 2025, respectively, primarily due to higher rates on home equity lines and residential mortgages originated partially offset by the impact of interest rate swaps that hedge our residential mortgage portfolio.

The average balance of our interest-bearing liabilities for the three and six months ended June 30, 2025 increased by $273.5 million or 2% and $364.5 million or 2%, respectively, compared to the same periods in 2024 primarily due to an increase in savings deposits. As compared to the same periods last year, the cost of our interest-bearing liabilities decreased by 29 and 26 basis points during the three and six months ended June 30, 2025, respectively, primarily due to a decrease in the prevailing interest rate environment, which was driven by 100 basis points of interest rate cuts by the Federal Open Market Committee in late 2024.

Noninterest Income

Table 3 presents the components of noninterest income.

Noninterest IncomeTable 3Three Months Ended June 30,Six Months Ended June 30,(dollars in thousands)20252024Dollar ChangePercent Change20252024Dollar ChangePercent ChangeFees, Exchange, and Other Service Charges$14,383 $13,769 $614 4.5 %$28,820 $27,892 $928