BOH: Unique Deposits And Asset Repricing Will Shape Earnings Outlook Ahead

Analysts have modestly raised their price target on Bank of Hawaii to $75 from $68, citing expectations that the bank's unique Hawaii deposit base, along with tailwinds from fixed rate asset repricing, will support stronger net interest margin performance and higher earnings.

Analyst Commentary

Recent Street commentary reflects a more constructive stance on Bank of Hawaii, with price targets moving higher as analysts reassess both earnings power and the resilience of the bank's funding base.

Bullish Takeaways

• Bullish analysts highlight the unique, relatively insulated deposit base in Hawaii as a key competitive advantage that supports stable funding costs and underpins higher valuation multiples.
• Tailwinds from fixed rate asset repricing and securities repositioning are expected to lift net interest margin, driving better than previously modeled earnings growth over the near to medium term.
• Upward revisions to earnings estimates and price targets signal improving confidence in execution, particularly in managing interest rate risk and repositioning the balance sheet.
• The move from a more cautious to a neutral stance is viewed as a sign that downside risks to profitability and capital are better understood and increasingly reflected in the stock.

Bearish Takeaways

• Bearish analysts remain cautious on valuation, noting that despite price target increases, the shares may still face limits to multiple expansion given slower structural growth in the regional economy.
• There is concern that net interest margin improvements could prove cyclical, with less room for upside if rate cuts arrive sooner than expected or competitive pressures on deposits intensify.
• Execution risk around further balance sheet repositioning, including managing securities and swap portfolios, is seen as a potential source of earnings volatility.
• Some analysts continue to flag that, while trends are improving, returns on equity may remain only modestly above the cost of capital, constraining long term re rating potential.

What's in the News

• Completed a long-running share repurchase program, retiring a total of 10,791,354 shares, or 24.77% of shares outstanding, for $695.67 million under the buyback authorized in July 2011 (company filing).
• No additional share repurchases were executed between July 1, 2025 and September 30, 2025, leaving capital deployment skewed toward balance sheet strength rather than incremental buybacks in the most recent quarter (company filing).
• Reported third quarter 2025 net loan and lease charge-offs of $2.6 million, or 7 basis points annualized of total average loans and leases, unchanged from the prior quarter and reflecting stable credit performance (company results).
• Third quarter 2025 net loan and lease charge-offs decreased by $1.3 million year over year, improving by 4 basis points annualized on total average loans and leases outstanding (company results).

Valuation Changes

• Fair Value Estimate remains unchanged at $72.67, indicating no material revision to intrinsic value despite the higher analyst price target.
• Discount Rate has edged down slightly from 6.96% to 6.96%, reflecting a marginally lower perceived risk profile or cost of equity.
• Revenue Growth is effectively unchanged at about 9.80%, suggesting stable expectations for top line expansion.
• Net Profit Margin remained steady at approximately 30.93%, indicating no meaningful shift in modeled profitability levels.
• Future P/E was held essentially flat at 12.50x, signaling that valuation multiples used in the framework are consistent with prior assumptions.