Bank of Hawaii Corporation (BOH): Business Model Canvas [Dec-2025 Updated]

You're looking to understand how a regional powerhouse like Bank of Hawaii Corporation (BOH) actually makes its money in this tricky rate environment, right? Having spent years digging into balance sheets, I can tell you BOH isn't just another bank; it's a deeply entrenched local operator with a fortress risk profile, holding about 33-34% of Hawaii's deposits. We're talking about a firm managing $23.7 billion in assets, driving $136.7 million in Net Interest Income in Q3 2025, all while actively modernizing its wealth platform via Bankoh Advisors. Below, I've mapped out their entire operating model-from their key partnerships with NCR Atleos to their focus on high-quality commercial lending-so you can see exactly where their strengths and next big bets lie.

Bank of Hawaii Corporation (BOH) - Canvas Business Model: Key Partnerships

Cetera

• The networking agreement with Cetera Financial Institutions is expected to finalize later in 2025.
• Bankoh Investment Services, Inc. (BISI), prior to rebranding as Bankoh Advisors, held approximately $2.5 billion in assets under administration as of February 28, 2025.
• Cetera Financial Institutions supports over 450 banks and credit unions.
• Cetera Financial Group oversees more than $545 billion in assets under administration and $235 billion in assets under management, as of September 30, 2024.

NCR Atleos' Allpoint Network

Bank of Hawaii Corporation expanded its nearly 50-year relationship with NCR Atleos, selecting the ATM as a Service (ATMaaS) solution. This partnership provides BOH debit card customers access to:

• Over 55,000 ATMs globally.
• 40,000 Allpoint ATMs locally and across the U.S. without paying ATM fees, as of August 6, 2025.

Mana Up

Bank of Hawaii Corporation serves as the exclusive banking partner at the Founder Level for the local accelerator program. This involves executive mentorship and training initiatives.

SMBC Trust Bank

This collaboration provides private banking and trust services access for Japanese clients investing in Hawaii. SMBC Trust Bank is a subsidiary of the $1.5 trillion Sumitomo Mitsui Banking Corp. The agreement includes discounted wire transfer services between the two banks.

Bank of Hawaii Corporation's total assets stood at $23.7 billion at June 30, 2025. The bank reported net income of $47.6 million for the second quarter of 2025. The Tier 1 Capital Ratio was 14.17% at June 30, 2025. Bank of Hawaii Corporation declared a dividend of $0.70 per common share for Q2 2025.

Bank of Hawaii Corporation (BOH) - Canvas Business Model: Key Activities

You're looking at the core actions Bank of Hawaii Corporation takes to deliver its value proposition, grounded in its Q3 2025 performance data. Here's the quick math on what they are actively doing.

Core lending: Managing a balanced loan book

Bank of Hawaii Corporation manages its loan book with a specific split between consumer and commercial lending, predominantly secured against real estate. The portfolio is structured to maintain this balance while focusing on high-quality, secured assets.

Within the consumer segment, 86% is residential mortgage or home equity, showing a weighted average Loan-to-Value (LTV) of just 48% and a combined weighted average FICO score of 799 for those segments. The commercial book, which is $6.1 billion, is 73% real estate secured with a weighted average LTV of 55%. Commercial Real Estate (CRE) alone accounts for $4 billion, or 29% of total loans.

Strategic balance sheet management: Actively repricing fixed-rate assets and optimizing the deposit mix

The bank is actively managing its balance sheet to improve Net Interest Income (NII). This involves repricing assets as they mature and managing the cost of funds from deposits. In Q3 2025, fixed asset repricing contributed positively to NII, with cash flows from fixed-rate assets rolling off at lower rates being reinvested at higher current rates. Specifically, they remixed $594 million from a roll-off rate of 4.1% into a roll-on rate of 6.3%. This activity, along with lower deposit costs, drove the sixth consecutive quarter of NII growth, increasing by $7.0 million linked-quarter-over-linked-quarter.

Deposit optimization is ongoing; average deposits increased at a 7% annualized rate. However, the deposit mix shift presented a modest headwind, reducing NII by $0.8 million in the quarter. Looking ahead, over 52% of Certificates of Deposit (CDs) maturing in the next three months carried an average rate of 3.5%, with expected renewals at 2.5%-3%, which should help further optimize funding costs.

Wealth platform modernization: Rolling out the new Bankoh Advisors platform to capture mass affluent market share

Bank of Hawaii Corporation is executing a modernization of its wealth management services by rolling out the new Bankoh Advisors platform, which was developed in partnership with Cetera Financial Institutions. This initiative is geared toward enhancing technology, client experience, and investment product offerings to capture market share in the mass affluent space. The predecessor entity, Bankoh Investment Services, Inc. (BISI), held approximately $2.5 billion in assets under administration as of February 28, 2025. The strategy includes fostering stronger client coordination between commercial and wealth teams for cross-marketing opportunities, especially within the Small and Medium Enterprise (SME) segment.

Key aspects of the Bankoh Advisors service include:

• Build a financial plan.
• Grow your wealth.
• Protect your assets.
• Investment strategies.

Regulatory compliance: Maintaining a strong capital position

Maintaining a fortress risk profile means keeping capital ratios well above regulatory minimums. As of September 30, 2025, Bank of Hawaii Corporation's capital position remained strong.

• Tier 1 Capital Ratio: 14.34%
• Total Risk-Based Capital Ratio: 15.40%
• Tier 1 Leverage Ratio: 8.44%

The Tier 1 Capital Ratio of 14.34% is significantly above the required minimums, reflecting growth from retained earnings. Credit quality remains pristine, with the Allowance for Credit Losses (ACL) to total loans and leases outstanding flat at 1.06%.

Bank of Hawaii Corporation (BOH) - Canvas Business Model: Key Resources

The Key Resources for Bank of Hawaii Corporation are deeply rooted in its geographic advantage, balance sheet strength, and foundational technology platform. These resources underpin its ability to generate superior risk-adjusted returns in its unique market.

Dominant Market Position and Brand Equity

Bank of Hawaii Corporation's primary non-tangible resource is its entrenched market presence. The brand itself is a significant asset, translating directly into cost advantages in funding.

• Holding the #1 deposit market share in Hawaii, approximately 33-34%.
• The bank's brand awareness significantly outpaces its closest competitors in the market.
• This dominant position enables the bank to price deposits effectively, creating a cost advantage over rivals.

Financial Capital and Balance Sheet Strength

The sheer size and quality of the balance sheet represent a massive financial resource, providing stability and flexibility. As of the second quarter of 2025, the scale of the operation was substantial.

The capital structure is also a key resource, remaining well above regulatory minimums. The Tier 1 Capital Ratio stood at 14.17% at June 30, 2025.

High-Quality Loan Portfolio

The loan book is a critical earning asset, characterized by conservative underwriting, which supports pristine credit quality. The portfolio composition reflects a focus on secured lending.

• Total Loans and Leases were approximately $14.3519 billion at the end of Q2 2025.
• 80% of the total loan portfolio is real estate-secured.
• The Commercial Real Estate (CRE) segment specifically holds $4 billion in assets, which equates to 29% of total loans as of Q2 2025.
• Consumer loans show strong underwriting with a weighted average FICO score of 800 for residential mortgage/home equity segments.

Digital Infrastructure and Customer Reach

The bank's investment in its digital channels is a necessary resource to serve modern customer expectations and maintain operational efficiency. This infrastructure supports high transaction volumes outside of physical branches.

The digital platform is a key component for future growth and efficiency, enabling self-service capabilities for the customer base.

• Mobile banking app with over 250,000 active users.
• Handling 95% of banking transactions online.

The bank has rolled out major enhancements to its digital products, providing customization and self-serve options like setting alerts and utilizing tracking and budgeting tools.

Bank of Hawaii Corporation (BOH) - Canvas Business Model: Value Propositions

You're looking at the core strengths Bank of Hawaii Corporation delivers to its customers and the market, which is really about deep local roots combined with rock-solid financial discipline. This is what sets Bank of Hawaii Corporation apart in its operating geography.

Localized expertise: Bank of Hawaii Corporation offers deep, long-standing knowledge of the unique Hawaii and West Pacific markets. This isn't just a branch presence; it's about market penetration built over decades. The bank advanced its #1 deposit market share position in Hawaii by 40 basis points as of 6/30/2025 and has grown market share by 600 basis points since 2005, well in excess of any competitor in the Hawaii market. The loan book reflects this focus, with 93% of loans tied to Hawaii, 4% in the Western Pacific, and 3% on the Mainland as of Q3 2025.

Fortress risk profile: The bank consistently emphasizes its fortress risk profile, which is backed by pristine credit quality metrics as of the third quarter of 2025. This discipline translates directly into stability for clients. Non-performing assets as a percentage of total loans and leases and foreclosed real estate stood at just 0.12% at the end of Q3 2025. Furthermore, the Tier 1 Capital Ratio was strong at 14.34% at September 30, 2025.

Here's a quick look at some key performance indicators that underscore this stability and performance:

Comprehensive financial services: Bank of Hawaii Corporation provides a full suite of services, covering the spectrum from everyday banking to managing substantial wealth. The business is structured across three main segments: Consumer Banking, Commercial Banking, and Treasury and Other. The loan portfolio breakdown shows a significant presence in both consumer and business lending as of Q3 2025:

• Consumer loans comprised 57%, totaling $7.9 billion.
• Commercial loans represented 43%, totaling $6.1 billion.

On the sophisticated side, the bank is actively modernizing its wealth offering, recently teaming with Cetera for a new broker-dealer platform named Bankoh Advisors to enhance service for the mass affluent space.

Relationship-based service: Personalized attention is key, especially for the bank's larger clients. The commercial book has a substantial $4 billion in Commercial Real Estate (CRE) assets, which is 29% of total loans. The bank emphasizes stronger client coordination within the high net worth space. This focus on deep relationships within its core geographic footprint supports its dominant market position.

Finance: draft 13-week cash view by Friday.

Bank of Hawaii Corporation (BOH) - Canvas Business Model: Customer Relationships

You're looking at how Bank of Hawaii Corporation builds and keeps its customer base, which is deeply rooted in the local economy. It's a relationship-first model, but with clear digital support running underneath.

Dedicated relationship managers: High-touch service for Commercial and Private Banking clients

The core of Bank of Hawaii Corporation's high-touch approach is client longevity. Honestly, the numbers here speak volumes about trust built over time. A significant portion of their lending book reflects this deep connection.

Here's the quick math on client tenure:

• Approximately 60% of commercial and consumer clients have been with Bank of Hawaii Corporation for over a decade.
• The loan portfolio is heavily concentrated locally: 93% in Hawaii, 4% in the Western Pacific, and just 3% on the Mainland, supporting clients with local operations.

This focus on long-standing relationships is definitely a key part of their 'fortress risk profile,' which helps keep credit quality pristine, like the net charge-off rate reported at just 0.07% in Q2 2025.

Digital self-service: High-volume, low-cost interactions via the mobile and online platforms

While the high-touch service anchors the big relationships, digital channels handle the volume efficiently. Bank of Hawaii Corporation is clearly investing here; they projected an allocation of 1% of core expenses in 2025 toward revenue-enhancing initiatives in mobile and data analytics. This supports their dominant market position, as they hold over 90% of market deposits alongside three other local banks, and their market share advanced by 40 basis points as of June 30, 2025.

The reliance on digital channels mirrors broader trends, where a significant majority of consumers-around 77 percent nationally in 2025 estimates-prefer managing accounts via mobile app or computer.

Community engagement: Local philanthropy and support, which reinforces the brand's trusted status

Community support isn't just goodwill; it's a deliberate reinforcement of the trusted local brand status. For their 125th anniversary in late 2025, Bank of Hawaii Corporation announced a $400,000 community investment.

This engagement takes concrete forms:

• Partnering to plant 6,500 trees across the state.
• The Bank of Hawaii Foundation plans to donate $125 to a nonprofit of choice for each of its approximately 2,100 employees, potentially adding over $260,000 in funds.
• The Foundation focuses on areas like Community Development, Human Services, and Education in Hawaii, Guam, and Saipan.
• They run grant programs, like the Saipan Small Business Revitalization and Development Grant, awarding up to $5,000 per recipient.

Automated service: Utilizing the ATM network and digital tools for transactional efficiency

Automated services ensure transactional needs are met quickly, freeing up relationship managers for more complex needs. While specific ATM network size isn't detailed in recent earnings reports, the focus on digital efficiency is clear from expense allocation and deposit mix. The bank's Consumer Banking segment handles high-volume retail needs, including credit cards, auto loans, and standard deposit accounts. The stability of their dividend, affirmed at $0.70 per common share in late 2025, signals confidence in the underlying operational stability that these automated and digital systems help maintain.

The Consumer Banking segment also supports wealth services, offering investment management and trust services to individuals and high-net-worth clients, which often bridges the gap between automated transactions and dedicated management.

Finance: draft 13-week cash view by Friday.

Bank of Hawaii Corporation (BOH) - Canvas Business Model: Channels

The distribution of Bank of Hawaii Corporation's value proposition relies on a multi-pronged channel strategy, balancing physical presence with digital reach.

Physical branch network: Bank of Hawaii Corporation maintains the most branches of any financial institution in the state of Hawaii. The bank is actively modernizing locations under the strategic 'Branches of Tomorrow' concept across Hawaii and the West Pacific. For instance, in November 2025, Bank of Hawaii Corporation blessed two newly upgraded locations: the Ka'ū Branch, which is 1,920 sq. ft. and features two private Pili rooms, and the Kona Branch, spanning 6,918 sq. ft. with six Pili rooms for consultations. The contractual obligations for real estate property, primarily for branch premises, extend through the year 2052.

Digital platforms: High-volume, low-cost transactions are heavily driven through digital channels. As of the first quarter of 2025, over 245,000 customers had adopted the modernized mobile app. This platform holds a 4.8-star rating. For context on digital transaction volume, the bank processed 7.3 million mobile wallet transactions in 2024.

ATM network: Access is expanded through proprietary ATMs and the Allpoint Network. Bank of Hawaii Corporation debit card holders gain access to 40,000 no-fee ATMs across the United States via the Allpoint network. Globally, this access extends to over 55,000 ATMs. Bank of Hawaii Corporation has the most ATMs of any financial institution in the state.

Relationship officers: Direct sales and high-touch service are facilitated through dedicated personnel. The structure includes Relationship Managers within The Private Bank segment. Furthermore, the role of the Teller is evolving; repetitive tasks are channeled to technology, freeing up staff to become today's Relationship Banker. For commercial clients, the Primary Relationship Officer (PRO) serves as the main contact point between the bank and assigned commercial clients.

Here is a snapshot of the channel scale as of late 2025 data:

The operational support for these channels includes:

• Specialists available from 7 a.m. to 7 p.m. HST, 7 days a week for account self-service support.
• The Ka'ū Branch operates five days a week: Monday through Friday, from 9 a.m. to 1 p.m.
• The Kona Branch operates six days a week: Monday through Friday from 8 a.m. to 4 p.m., and Saturdays from 9 a.m. to 1 p.m.
• The bank's market share in its core market is approximately 33-34%.

Bank of Hawaii Corporation (BOH) - Canvas Business Model: Customer Segments

You're looking at the core groups Bank of Hawaii Corporation (BOH) serves to generate its revenue, which is heavily concentrated in the local market. This focus defines their entire operational strategy.

Hawaii residents form the bedrock of Bank of Hawaii Corporation's consumer business. This group is the core consumer base for essential banking products. For instance, the total consumer loan portfolio stood at $7.9 billion as of September 30, 2025, making up 57% of the total loan book.

Within this consumer base, the emphasis on secured lending is clear. Here's a quick look at the quality metrics for the residential mortgage and home equity portion, which accounts for 86% of the consumer portfolio:

• Weighted average Loan-to-Value (LTV): 48%.
• Combined weighted average FICO score: 799.
• The remaining 14% of consumer loans (auto and personal) have average FICO scores of 731 and 761, respectively.

Small and middle-market businesses (SME) are served through the Commercial Banking segment, which provides commercial lending and cash management services primarily within the local market. As of the third quarter of 2025, the total commercial loan portfolio was $6.1 billion, representing 43% of all loans. The Consumer Banking segment also supports smaller enterprises with small business loans and leases.

Commercial real estate investors and developers represent the single largest identified commercial loan segment. This group drives significant volume within the Commercial Banking segment. The commercial real estate (CRE) exposure was reported at $4 billion in Q3 2025. This single segment equates to 29% of Bank of Hawaii Corporation's total loans.

For clients requiring more sophisticated asset management, high-net-worth and mass affluent individuals are targeted. These clients receive wealth management and private banking services, often channeled through Bankoh Advisors, which the company is modernizing. The Consumer Banking segment also offers private and international client banking, investment, credit, and trust services to individuals and families, and high-net-worth individuals.

To summarize the loan book concentration across these customer-driven activities, you can see the geographic and segment focus:

It's important to note the geographic concentration of these customer relationships, which is a key feature of Bank of Hawaii Corporation's model:

• Lending concentration in Hawaii: 93%.
• Lending in Western Pacific: 4%.
• Lending on the Mainland: 3%.

The bank's strategy is defintely centered on its home turf.

Bank of Hawaii Corporation (BOH) - Canvas Business Model: Cost Structure

You're looking at Bank of Hawaii Corporation's (BOH) cost base as of late 2025, which is heavily influenced by interest rate management and personnel expenses, given the bank's focus on its core Hawaii market and fortress capital profile.

Interest expense: Cost of deposits, which BOH is actively managing to reprice lower. The management team is clearly focused on the cost of funding. For the third quarter of 2025, the average cost of deposits declined by 12 basis points to 159 basis points (or 1.59%). This repricing effort is visible in their Certificate of Deposit (CD) book; over 52% of CDs maturing in the next three months carried an average rate of 3.5%, with expectations for renewals to come in lower, around 2.5%-3%. The benefit of this is seen in the year-over-year NII increase, which was primarily due to lower interest-bearing deposit rates.

Personnel costs: Salaries and benefits, which drove noninterest expense to $112.4 million in Q3 2025. The reported noninterest expense for the third quarter of 2025 hit $112.4 million. This figure included a $2.1 million severance-related charge. The increase from the linked quarter was primarily attributed to higher salaries and benefits and the impact of one additional payday during the quarter. Looking ahead, normalized non-interest expense for the fourth quarter of 2025 was projected to be approximately $109 million.

Technology and infrastructure: Investment in digital platforms and branch modernization. While specific investment figures aren't explicitly broken out in the latest reports, the bank is managing its overall expense base. The recent sale of the merchant services business is expected to reduce quarterly noninterest expense by approximately $2.2 million. This optimization effort supports continued investment in the business model.

Regulatory and compliance costs: Maintaining the 'fortress' capital and risk profile. Maintaining a strong capital position is a core tenet of Bank of Hawaii Corporation's strategy. As of Q3 2025, key capital ratios reflected this focus:

The cost structure is also influenced by the ongoing management of the balance sheet, as shown by the following expense and cost-related data points from recent quarters:

• Noninterest Expense (Q3 2025, including severance): $112.4 million
• Noninterest Expense (Q2 2025, including severance): $110.8 million
• Average Cost of Total Deposits (Q3 2025): 159 basis points
• Average Rate of Interest-Bearing Deposits (Q3 2025): 2.14%
• Severance Charge Included in Q3 2025 Noninterest Expense: $2.1 million

The bank is definitely managing its funding costs aggressively. Finance: review the Q4 2025 projected normalized OpEx against the Q3 actuals by next Tuesday.

Bank of Hawaii Corporation (BOH) - Canvas Business Model: Revenue Streams

You're looking at the core ways Bank of Hawaii Corporation generates its top line, which is heavily weighted toward traditional banking activities, as of late 2025. The primary engine is definitely the spread between what they earn on loans and investments versus what they pay on deposits.

Net Interest Income (NII): Primary Driver

Net Interest Income is the biggest piece of the pie for Bank of Hawaii Corporation. For the third quarter of 2025, NII reached $136.7 million, showing a strong increase of 16.2% compared to the same period last year. This performance is directly tied to the expansion of the Net Interest Margin (NIM), which hit 2.46% in Q3 2025, marking the sixth consecutive quarter of expansion. The drivers here were fixed asset repricing, which added $3.3 million to NII, and lower deposit costs, though this was partially offset by a deposit mix shift that negatively impacted NII by $800,000 in Q3 2025.

Here's a quick look at the key financial metrics driving that NII:

Non-interest Income

This stream covers the fees and charges Bank of Hawaii Corporation collects for services beyond core lending and investing. For the third quarter of 2025, noninterest income was reported at $46.0 million. This figure includes several components that you need to track:

• Fees, exchange and other service charges.
• Higher trust and asset management earnings.
• Service charges on deposit accounts.
• Bank-owned life insurance (BOLI) income.
• Customer derivative activity revenue.

You should note that Q3 2025 noninterest income included a $0.8 million charge related to a Visa Class B share conversion ratio change, while the linked quarter had a $0.8 million gain related to a BOLI recovery.

Loan Interest

Income from the loan portfolio is central to the NII story. As of the end of the third quarter of 2025, total loans and leases stood at $14 billion. This portfolio is balanced between consumer and commercial segments, with consumer loans representing 56% of the total portfolio ($7.9 billion) and commercial loans making up the remaining 44% ($6.1 billion) as of Q2 2025. The average yield on this earning asset was 4.86% in Q3 2025.

Investment Income

Earnings from the investment securities portfolio also contribute to the overall revenue picture, particularly as yields improve. The size of this portfolio was $7.6 billion at June 30, 2025. The yield on earning assets in Q3 2025 benefited from an improvement in the yield on the securities portfolio, alongside the loan portfolio yield. The investment portfolio at that time was largely comprised of securities issued by U.S. government agencies and U.S. government-sponsored enterprises.