Company: BOH
Filing Date: 2025-07-28
Form Type: 10-Q
Source: 0001628280-25-036240
Chunk: 225

Company: BANK OF HAWAII CORP
Filing Date: 2025-07-28
Form: 10-Q
Item: Part I, Item 2
Chunk 225
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2024 was due to a decrease in tax expense from discrete items and an increase in tax-exempt investment income. 

50

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 June 30, 2025 and December 31, 2024, respectively. The increase was primarily due to the purchase of $517.1 million in available-for-sale investment securities during the six months ended June 30, 2025, of which $259.1 million were floating rate securities. The increase was partially offset by the amortization of existing securities. Floating rate securities represented 18.8% of the investment securities portfolio as of June 30, 2025, compared to 16.5% as of December 31, 2024.

We continually evaluate our investment securities portfolio in conjunction with our response to established asset/liability management objectives, changing market conditions that could affect profitability, and the level of interest rate risk to which we are exposed. These evaluations may cause us to change the level of funds we deploy into investment securities, change the composition of our investment securities portfolio, adjust hedge positions, and change the proportion of investments made into the AFS and held-to-maturity (“HTM”) investment categories.

Mortgage-backed securities issued by Ginnie Mae, Fannie Mae, and Freddie Mac represent the largest concentration in our portfolio. As of June 30, 2025, the issuers of these securities carry credit ratings equivalent to those of the U.S. Government, reflecting the explicit and/or implicit guarantees provided.

Net unrealized losses in our AFS and HTM investment securities were $0.9 billion as of June 30, 2025 and $1.1 billion as of December 31, 2024. See Note 2 Investment Securities to the unaudited Consolidated Financial Statements for more information.

Loans and Leases

Table 6 presents the composition of our loan and lease portfolio by major categories.

Loan and Lease Portfolio BalancesTable 6(dollars in thousands)June 30, 2025December 31, 2024Dollar ChangePercent ChangeCommercialCommercial Mortgage$4,038,956 $4,020,622 $18,334 0.5 %Commercial and Industrial1,597,560 1,705,133 (107,573)(6.3)Construction374,768 308