BOH Stock Forecast & Price Target

Bank of Hawaii is attractive because its net interest margin has expanded for 10 consecutive quarters, reaching 2.82% on the back of fixed-asset repricing and lower deposit costs, with further upside as repricing continues. The bank also benefits from a scarce and loyal Hawaii deposit franchise, with 35% statewide deposit share and a 1.24% cost of deposits versus the 1.45% peer median, while credit quality remains exceptional at just 0.09% NPAs to loans and OREO and 0.03% net charge-offs to average loans in 1Q26. With a solid CET1 ratio of 12.1%, a TCE ratio of 6.2%, and ongoing buybacks, it appears well positioned to fund growth, sustain capital returns, and support improving profitability.

Bank of Hawaii is facing a weakening core funding profile, as deposits declined 7.9% LQA due to strategic runoff in public funds and softer commercial balances, forcing the bank to rely more heavily on short-term borrowings, which rose $345.0M LQ to $853.1M. Although loans increased 2.4% LQA and management still expects low-mid single-digit loan growth, that pace was below expectations and CRE growth was constrained by runoff in construction and C&I, suggesting a less reliable earnings trajectory. The outlook remains negative because lower NII prompted 2026 and 2027 EPS estimate cuts to $5.85 and $6.60, and the main risks remain slower loan growth, margin pressure, and potential deterioration in the Hawaii or mainland economy.