Company: BOH
Filing Date: 2025-07-28
Form Type: 10-Q
Source: 0001628280-25-036240
Chunk: 95

Company: BANK OF HAWAII CORP
Filing Date: 2025-07-28
Form: 10-Q
Item: Part I, Item 1
Chunk 95
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-end of the yield curve would lead to floating-rate assets immediately repricing, while liability funding would react on a lag. Thus, net interest income may decrease from the base case in the near term if short-

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term rates were to decrease, although would benefit if short-term rates were to increase and liabilities maintained their ability to lag market rate increases. A movement higher or lower in the long end of the yield curve would lead to assets repricing over time given ongoing cash flows from maturities and prepayments of investment securities and loans. Net interest income may decrease from the base case should long-term rates decline from their current levels, although would benefit if long-term rates were to increase.

Table 17b presents an estimate of the change in EVE 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. Similar to the sensitivity profile above, the base case scenario assumes the consolidated statements of condition and interest rates are generally unchanged.

Economic Value of Equity Sensitivity ProfileTable 17bImpact on Economic Value of Equity(dollars in thousands)June 30, 2025December 31, 2024Immediate Change in Interest Rates (basis points)+400$(506,084)(18.3)%$(1,032,211)(29.1)%+300(389,662)(14.1)(763,479)(21.5)+200(265,775)(9.6)(496,443)(14.0)+100(135,174)(4.9)(238,689)(6.7)-100162,068 5.9 177,198 5.0 -200307,986 11.1 274,546 7.7 -300298,732 10.8 294,363 8.3 -400180,624 6.5 (99,219)(2.8)

Compared to December 31, 2024, EVE sensitivity decreased in the rising rate scenarios and increased in the falling rate scenarios. We implemented new deposit pricing and attrition models during the period, which updated the repricing beta and average life assumptions, and lowered deposit account duration compared to the prior deposit models. Additionally, we increased the notional balance of active and forward starting pay-fixed interest rate swaps. These factors resulted in generally lower asset and liability duration and improved EVE modeling results.

Other Market Risks

In addition to interest rate risk, we are