Bank of Hawaii Corporation (BOH): BCG Matrix [Dec-2025 Updated]

You want to know where Bank of Hawaii Corporation (BOH) is allocating capital, so I mapped their core segments using the latest Q3 2025 figures to give you the quick picture. We see clear Stars driving performance with a 2.46% Net Interest Margin and 16.2% NII growth, all sitting atop rock-solid Cash Cows boasting a $21.1 billion core deposit base and 54 consecutive years of dividend payments, but there are also legacy Dogs in shrinking loan books and big Question Marks surrounding their $4.0 billion Commercial Real Estate segment and recent tech investments. See the detailed breakdown below to understand the precise strategic positioning of each piece of the BOH puzzle.

Background of Bank of Hawaii Corporation (BOH)

Bank of Hawaii Corporation (BOH) is a financial holding company based in Honolulu, Hawaii, which has been operating since it was founded in 1897. The corporation provides a full suite of financial services, primarily through its main subsidiary, Bank of Hawaii, serving individuals, businesses, and institutional clients throughout Hawaii and select Pacific Island markets. As of late 2025, the bank maintains a dominant position in its core market, holding approximately 33-34% market share in Hawaii.

The economic backdrop in Hawaii as of September 30, 2025, showed resilience, with a low unemployment rate of 2.7% in August 2025, which was well below the national average. This stability, bolstered by domestic travel and construction investments, supports Bank of Hawaii Corporation's operations. The bank's strategic focus includes wealth management and high-net-worth segments, which are expected to drive future growth.

Looking at the most recent figures, Bank of Hawaii Corporation reported solid performance for the third quarter of 2025. Diluted earnings per common share reached $1.20 for Q3 2025, up from $1.06 in the linked quarter. Net income for the third quarter was $53.3 million, representing a 32.2% increase compared to the same period last year. The return on average common equity for Q3 2025 stood at 13.59%.

Key profitability drivers in the third quarter of 2025 included a net interest income of $136.7 million, which was up 16.2% year-over-year, and the net interest margin expanded to 2.46%, an increase of 28 basis points from the prior year. This margin expansion reflects the beneficial impact of higher earning asset yields as fixed-rate assets repriced at current, higher rates. Average deposit balances saw a notable increase, growing by 7.1% annualized from the linked quarter, with total deposits reaching $21.1 billion at September 30, 2025.

Bank of Hawaii Corporation continues its commitment to shareholders, with the Board of Directors declaring a quarterly cash dividend of $0.70 per common share for the period. The bank has maintained dividend payments for 54 consecutive years, signaling remarkable financial stability. The company's Tier 1 Capital Ratio remained strong at 14.34% as of Q3 2025, well above regulatory requirements.

Bank of Hawaii Corporation (BOH) - BCG Matrix: Stars

You're looking at the business units within Bank of Hawaii Corporation (BOH) that are currently leading the charge-those operating in high-growth areas while maintaining a commanding market presence. These are the Stars, the segments that consume significant resources to maintain their leading position but are essential for the bank's future Cash Cow status.

The primary indicators pointing to Star performance are the strong momentum in core lending and interest income generation, coupled with the bank's entrenched market leadership in Hawaii. The consistent expansion of the Net Interest Margin (NIM) over six consecutive quarters shows that the asset side of the balance sheet is performing exceptionally well in the current rate environment, which is exactly what you want from a market leader.

Here are the key financial highlights supporting the classification of these high-performing segments as Stars:

• - Net Interest Margin (NIM) expansion, reaching 2.46% in Q3 2025.
• - Net Interest Income (NII) growth, up 16.2% year-over-year to $136.7 million.
• - Strategic Wealth Management focus, targeting high-net-worth clients for future noninterest income growth.
• - Commercial Loan portfolio, showing healthier year-over-year growth of 2.8% in Q3 2025.

To give you a clearer picture of the performance underpinning this Star status, look at the core profitability metrics from the third quarter of 2025:

The high market share component of the Star definition is well-established for Bank of Hawaii Corporation in its core geography. This dominance provides the necessary platform to invest in and grow these high-potential areas, like the Wealth Management push mentioned above.

Consider the market positioning that feeds this success:

• - Deposit market share in Hawaii: Approximately 34%.
• - Unaided brand awareness in Hawaii: 82%.
• - Average deposit balances growth: Increased at a 7% annualized rate in Q3 2025.

The bank is actively managing its asset mix to capitalize on this strong funding base, which is a key action for a Star. For instance, management executed fixed-rate asset remixing, converting $594 million of securities at a 4.1% roll-off rate into new securities with a 6.3% roll-on rate. This repositioning is expected to increase quarterly NII by approximately $1.7 million. That's smart money moving to maximize returns in a growing segment.

Bank of Hawaii Corporation (BOH) - BCG Matrix: Cash Cows

Cash Cows for Bank of Hawaii Corporation represent the highly established, market-leading businesses that generate significant, reliable cash flow with minimal need for aggressive investment to maintain their position. These units operate in mature markets where competitive advantage has been firmly secured, translating directly into high profit margins and strong cash generation capabilities.

The stability of these Cash Cows is paramount; they fund the company's administrative overhead, service corporate debt, and provide the necessary capital to nurture Question Marks into future Stars. For Bank of Hawaii Corporation, this segment is anchored by its dominant position in the local financial ecosystem.

Here's a look at the key metrics defining the Cash Cow status for Bank of Hawaii Corporation as of 2025:

• - Dominant Hawaii deposit market share, increasing by 40 basis points in 2025.
• - Core deposit base of $21.1 billion, providing a stable, low-cost funding source.
• - Residential Mortgage portfolio, secured by real estate with a low weighted average LTV of 48%.
• - Sustained dividend payment of $0.70 per share, maintained for 54 consecutive years.

The deposit franchise is the quintessential Cash Cow for Bank of Hawaii Corporation. With a market share of 34% in the total Hawaii deposit market as of 2025 Year-to-Date, the bank is a clear leader in a consolidated market where five local competitors hold 95% of the total bank deposit market. This high market share, supported by unmatched brand awareness, allows for the maintenance of a substantial, low-cost funding base.

The stability of this funding is evident in the core deposit base, which stands at $21.1 billion, providing a predictable source of liquidity. The bank's strategy focuses on maintaining this base and improving its cost structure, as seen by the average cost of total deposits being 1.59% in the third quarter of 2025, down from 1.60% in the linked quarter. This focus on efficiency, rather than aggressive growth spending, maximizes the cash yield from this segment.

The quality of the assets funded by these deposits further solidifies the Cash Cow profile. The Residential Mortgage portfolio is a prime example of low-risk, high-stability lending.

The low weighted average LTV of 48% on the residential mortgage portion of the consumer portfolio, combined with a high average FICO score of 800 for these loans, indicates minimal credit risk and high predictability of cash flows. This low-risk profile means less capital needs to be set aside for potential losses, directly boosting distributable cash flow.

The commitment to returning this generated cash to shareholders is a hallmark of a mature Cash Cow. Bank of Hawaii Corporation has demonstrated this through a remarkable track record, paying a quarterly dividend of $0.70 per share recently, a level maintained for 54 consecutive years. This long-term consistency signals management's confidence in the enduring, stable profitability of its core business units. You can see the consistency in the cash distribution below:

• - Latest Quarterly Dividend Declared: $0.70 per share.
• - Consecutive Years of Dividend Payment: 54.
• - Annualized Dividend (based on latest quarterly rate): $2.80 per share.
• - Payout Ratio (Approximate): 85% (based on recent earnings data).

The strategy here is clear: maintain the infrastructure to support the dominant market position and 'milk' the resulting high, stable cash flow. Investments are targeted at efficiency, like the ongoing effort to manage deposit costs, rather than broad market expansion.

Bank of Hawaii Corporation (BOH) - BCG Matrix: Dogs

Dogs are units or products with a low market share and low growth rates. They frequently break even, neither earning nor consuming much cash. Dogs are generally considered cash traps because businesses have money tied up in them, even though they bring back almost nothing in return. These business units are prime candidates for divestiture.

For Bank of Hawaii Corporation (BOH), the elements fitting the Dogs quadrant are characterized by modest or declining performance in specific, non-core areas of the business as of the second quarter of 2025.

The loan exposure outside the core Hawaii market is small, representing a non-core portion of the overall lending activity.

• Mainland U.S. and Western Pacific loan exposure, representing a small, non-core 7% of the total portfolio.
• Home Equity and Automobile loan portfolios, which saw a year-over-year decrease of 1.5% in total consumer loans as of Q2 2025.
• Noninterest-bearing deposits, which have been declining as a percentage of total deposits (down to 26.1% in Q2 2025).
• Overall loan growth remains modest, with total loans/leases edging down 0.8% from the linked quarter (Q1 2025).

The consumer loan portfolio, which includes the lower-performing segments, is still a significant part of the total book, but the declines in specific categories suggest low growth potential for those sub-segments.

The consumer segment shows specific weakness in certain product lines. The total consumer loan book decreased 0.2% from the linked quarter, driven by the following specific portfolio movements.

• Total Consumer Loans balance at June 30, 2025: $7.9 billion.
• Year-over-year decrease in Total Consumer Loans: 1.5%.
• Linked quarter decrease in Total Consumer Loans: 0.2%.

Furthermore, the composition of funding sources shows a segment that is not growing its share, which can be viewed as a low-growth area in terms of funding mix optimization.

• Noninterest-bearing deposits as a percentage of total deposits at June 30, 2025: 26.1%.
• Noninterest-bearing deposits percentage at June 30, 2024: Down from 26.3%.

The overall loan portfolio contraction of 0.8% from March 31, 2025, to $14.0 billion at June 30, 2025, signals a low-growth environment for the total lending business, which is characteristic of the Dog quadrant, even if other areas like Net Interest Margin are performing well due to asset repricing.

Bank of Hawaii Corporation (BOH) - BCG Matrix: Question Marks

You're looking at areas within Bank of Hawaii Corporation (BOH) that are in high-growth markets but haven't captured significant market share yet. These units consume cash now, hoping to become Stars later. Consider the Commercial Real Estate (CRE) segment; while it's the largest commercial segment at $4.0 billion in exposure, its current market share within the broader, growing CRE landscape positions it as a Question Mark, requiring strategic investment to solidify its dominance.

These areas demand capital to accelerate adoption, which shows up clearly in the expense lines. Look at the Noninterest Income, which was only $46.0 million in Q3 2025. That low fee-based revenue contrasts sharply with the necessary spending on future growth drivers. Specifically, Technology and Digital Banking investments are driving higher noninterest expense, hitting $112.4 million in Q3 2025, yet the market share gains from these initiatives are still unproven. Honestly, this is where the cash burn is most visible.

Here's the quick math on the investment drain versus current returns for these growth bets:

The ability to defintely reprice liabilities also impacts the cash available to fuel these Question Marks. We see a significant near-term funding event where over 51% of Certificates of Deposit (CDs) are maturing soon. These maturing funds carry an average rate of 3.61%. Successfully repricing this large block lower would free up capital to either heavily invest in these growth areas or provide a clearer picture of their true cash consumption.

The strategic focus for these Question Marks must center on rapid market share acquisition or divestment. You need to decide which ones have the potential to turn into Stars. The key characteristics defining these units right now include:

• - High growth prospects in their respective markets.
• - Current low market share despite segment size.
• - Significant cash consumption due to necessary investment.
• - Need for quick market adoption to avoid becoming Dogs.

If the market doesn't adopt these offerings quickly, the high growth rate will not translate into profitability, and the investment becomes a drag. Finance: draft 13-week cash view by Friday.