Bank of Hawai‘i net interest income climbs following late-2025 FOMC rate cuts

Bank of Hawai‘i (NYSE:BOH) reported a sequential increase in net interest income for the first quarter ended March 31, 2026, as the institution began to realize the benefits of a shifting interest rate environment.

The bank announced net income available to common shareholders of $57.4 million, or $1.30 per diluted share, compared to $1.39 in the fourth quarter of 2025.

A central highlight of the quarter was the performance of the bank's core lending business.

Net interest income reached $151 million, representing a 3.9% increase from the linked quarter.

This growth was primarily attributed to a 22 basis point decline in interest-bearing deposit rates, a direct result of the Federal Open Market Committee (FOMC) interest rate cuts implemented in late 2025.

The expansion in interest income was achieved despite a 4 basis point decline in earning asset yields.

This slight yield compression occurred as floating-rate assets repriced downward in alignment with the broader market, partially offsetting the gains the bank realized from reinvesting maturing fixed-rate assets into higher-yielding instruments.

Profitability metrics remained solid, though they reflected the impact of the sequential earnings dip.

The return on average common equity (ROE) for the first quarter was 13.90%, down from the 15.03% reported in the linked quarter.

Similarly, the return on average assets was 0.98% for the period.