Company: BOH
Filing Date: 2025-10-28
Form Type: 10-Q
Source: 0000046195-25-000037
Chunk: 230

Company: BANK OF HAWAII CORP
Filing Date: 2025-10-28
Form: 10-Q
Item: Part I, Item 2
Chunk 230
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50

Provision for Income Taxes

Table 5 presents our provision for income taxes and effective tax rates.

Provision for Income Taxes and Effective Tax RatesTable 5Three Months Ended September 30,Nine Months Ended September 30,(dollars in thousands)2025202420252024Provision for Income Taxes$14,409 $12,278 $39,388 $35,475 Effective Tax Rates21.3 %23.3 %21.4 %24.2 %

The provision for income taxes was $14.4 million in the third quarter of 2025, an increase of $2.1 million compared to the same period in 2024. The effective tax rate for the third quarter of 2025 was 21.3%, a decrease from 23.3% for the same period in 2024. The lower effective tax rate in the third quarter of 2025 compared to the same period in 2024 was primarily due to a decrease in tax expense from discrete items and an increase in tax-exempt investment income. 

The provision for income taxes was $39.4 million in the first nine months of 2025, an increase of $3.9 million compared to the same period in 2024. The effective tax rate for the first nine months of 2025 was 21.4%, a decrease from 24.2% for the same period in 2024. The lower effective tax rate for the first nine months of 2025 compared to the same period in 2024 was due to a decrease in tax expense from discrete items and an increase in tax-exempt investment income. 

In July 2025, the One Big Beautiful Bill Act (“OBBA”) was enacted, permanently extending several tax provisions originally introduced under the 2017 Tax Cuts and Jobs Act that were set to expire at the end of 2025. The OBBA also introduces changes to certain U.S. corporate tax rules, most of which take effect in 2026. We have evaluated the impact of the OBBA and do not expect any material changes to our effective tax rate or results of operations.

Analysis of Unaudited Statements of Condition

Investment Securities

The carrying value of our investment securities portfolio was $7.6 billion and $7.3 billion as of September 30, 2025 and December 31, 2024, respectively. The increase was primarily due to the purchase of $738.1