Company: BOH
Filing Date: 2025-10-28
Form Type: 10-Q
Source: 0000046195-25-000037
Chunk: 104

Company: BANK OF HAWAII CORP
Filing Date: 2025-10-28
Form: 10-Q
Item: Part I, Item 1
Chunk 104
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 curve, relative to the measured base case scenario. The base case scenario assumes the consolidated statements of condition and interest rates are generally unchanged.

Net Interest Income Sensitivity ProfileTable 17aImpact on Future Annual Net Interest Income(dollars in thousands)September 30, 2025December 31, 2024Immediate Change in Interest Rates (basis points)+400$17,359 2.9 %$31,028 5.6 %+30015,780 2.7 25,281 4.6 +20012,918 2.2 18,783 3.4 +1008,127 1.4 10,393 1.9 -100(4,423)(0.7)(13,029)(2.3)-200(11,626)(2.0)(27,883)(5.0)-300(23,736)(4.0)(43,536)(7.8)-400(65,241)(11.0)(65,753)(11.8)

Based on our net interest income simulation as of September 30, 2025, net interest income is expected to increase as interest rates rise. Rising interest rates would drive higher rates on floating rate loans, interest rate swaps and investment securities, as well as higher reinvestment rates on loan and investment securities cashflows. However, lower interest rates would likely cause an initial decline in net interest income as lower rates would lead to lower yields on loans, swaps, and investment securities, as well as drive higher premium amortization on existing investment securities. Based on our 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