Company: BOH
Filing Date: 2025-10-28
Form Type: 10-Q
Source: 0000046195-25-000037
Chunk: 203

Company: BANK OF HAWAII CORP
Filing Date: 2025-10-28
Form: 10-Q
Item: Part I, Item 8
Chunk 203
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 net interest income simulation as of September 30, 2025, NII sensitivity to changes in interest rates for the twelve months subsequent to September 30, 2025 declined in both rising rates and falling rates compared to the sensitivity profile for December 31, 2024. These NII sensitivity changes are attributable to an $800 million reduction in the notional amount of active pay-fixed swaps, resulting in an increase in fixed rate asset exposure. 

To analyze the impact of changes in interest rates in a more realistic manner, we also simulate non-parallel interest rate scenarios. These scenarios help to isolate the sensitivity of earnings to various points on the yield curve. Based upon our interest rate simulations, the Company is exposed to movements in both the short and long-end of the yield curve. A movement higher or lower in the short-end of the yield curve would lead to floating-rate assets immediately repricing, while 

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liability funding would react on a lag. Thus, net interest income may decrease from the base case in the near term if short-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)September 30, 2025December 31, 2024Immediate Change in Interest Rates (basis points)+400$(614,852)(20.8)%$(1,032,211)(29.1)%+300(473,539)(16.0)(763,479)(21.5)+200(322,710)(10.9)(496,443)(14.0)+100(163,839)(5.5)(238,689)(6.7)-100190,113 6.4 177,198 5.0