Bank of Hawaii’s second quarter results were met with a negative market reaction, as revenue growth came in below Wall Street expectations despite a solid 12% year-over-year increase. Management attributed the shortfall to seasonally lower deposits and persistent competition for funding, which limited opportunities for deposit cost improvement. CEO Jim Polk emphasized that net interest margin expanded for the ninth consecutive quarter, driven by ongoing repricing of fixed assets and disciplined deposit pricing, but acknowledged that the deposit environment remains highly competitive. Polk described the bank’s core deposit franchise as a critical strength supporting stability, though he noted that “the competitive environment for deposits remains elevated as customers continue to prioritize yield.”

Is now the time to buy BOH? Find out in our full research report (it’s free for active Edge members).

While we enjoy listening to the management’s commentary, our favorite part of earnings calls is the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.

Our Top 5 Analyst Questions From Bank of Hawaii’s Q2 Earnings Call

• Jeff Rulis (D.A. Davidson) asked about the sustainability of wealth management growth without market tailwinds. CEO Jim Polk responded that fee growth is supported by both ongoing production and recent investments, making it sustainable even if markets soften.
• Matthew Clark (Piper Sandler) inquired about deposit pricing competition and the need for promotional rates. CFO Brad Satenberg said competition has led to some upward movement in CD rates, but exception pricing remains limited and manageable.
• Jared Shaw (Barclays) sought clarity on the expected pace of share repurchases. Satenberg indicated $20 million per quarter in the near term, with further plans to be reevaluated going into 2027.
• Andrew Terrell (Stephens) questioned the drivers behind the loan growth outlook, particularly on commercial lending. Polk explained that a healthy pipeline and delayed project closings give confidence in meeting low- to mid-single digit loan growth targets.
• Kelly Motta (KBW) asked about expense discipline and the impact of public deposit runoff. Satenberg confirmed that expense guidance remains unchanged and that the runoff targets higher-cost public deposits, which should help manage funding costs.

Catalysts in Upcoming Quarters

In the coming quarters, the StockStory team will be watching (1) whether Bank of Hawaii can sustain net interest margin expansion amid heightened deposit competition, (2) the pace of commercial loan growth and the successful closing of projects in the pipeline, and (3) the impact of strategic runoff of high-cost public deposits on overall funding costs. Progress in wealth management and continued credit stability will also be important signposts.

Bank of Hawaii currently trades at $79.90, down from $83.97 just before the earnings. At this price, is it a buy or sell? See for yourself in our full research report (it’s free).

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