Bank of Hawaii (BOH) risk factors, 2025 10-K

Other

1. 01There are a number of risks and uncertainties, including those material risk factors described below, that could negatively affect our business, financial condition, results of operations, liquidity and the trading price of our common stock

Risks Related to Macroeconomic and Political Conditions

1. 02Our business is sensitive to regional business and economic conditions, in particular those of Hawaiʻi, Guam and other Pacific Islands
2. 03Our loan portfolio is largely secured by real estate, and a downturn in the real estate market may adversely affect our results of operations
3. 04A sustained period of high inflation or other high cost economic environment could pose a risk to local economies and the financial performance of the Bank
4. 05Climate change and the governmental responses to it could have a material adverse impact on the Bank and its customers
5. 06Disruptions, instability and failures in the banking industry may negatively impact us
6. 07Any reduction in defense spending by the federal government in the State of Hawaiʻi could adversely impact the economy in Hawaiʻi and the West Pacific
7. 08Changes in interest rates could adversely impact our results of operations and capital
8. 09Our allowance for credit losses may prove to be insufficient to absorb losses or appropriately reflect, at any given time, the inherent risk of loss in our loan portfolio
9. 10Consumer protection initiatives and court decisions related to the foreclosure process affect our remedies as a creditor
10. 11Changes in the capital markets could materially affect the level of assets under management and the demand for our other fee-based services

Risks Related to Common Stock

1. 12The Parent’s liquidity is dependent on dividends from the Bank
2. 13The Parent paid cash dividends of $112.3 million on common shares during 2024. In January 2025, the Parent’s Board of Directors declared a quarterly cash dividend of $0.70 per share on the Parent’s outstanding common shares

Risks Related to Regulatory Changes

1. 14Fiscal and monetary policy changes may significantly impact our profitability and liquidity
2. 15Legislation and regulatory initiatives affecting the financial services industry, including new interpretations, restrictions and requirements, could detrimentally affect the Company’s business
3. 16Changes in the capital, leverage, liquidity requirements for financial institutions could materially affect future requirements of the Company
4. 17Changes in income tax laws and interpretations, or in accounting standards, could materially affect our financial condition or results of operations

Risks Related to Business Operations

1. 18A failure in or breach of our operational systems, information systems, or infrastructure, or those of our third party vendors and other service providers, may result in financial losses, loss of customers, or damage to our reputation
2. 19An interruption or breach in security of our information systems or those related to merchants and third party vendors, including as a result of cyber attacks, could disrupt our business, result in the disclosure or misuse of confidential or proprietary information, damage our reputation, or result in financial losses
3. 20ongoing cost of technology investments to improve security, as well as the potential financial and reputational impact of a cyber security incident involving the Company
4. 21Our mortgage banking income may experience significant volatility
5. 22Our mortgage loan servicing business may be impacted if we do not meet our obligations, or if servicing standards change

Risks relating to residential mortgage loan servicing activities may adversely affect our results

1. 23The requirement to record certain assets and liabilities at fair value may adversely affect our financial results
2. 24Natural disasters and adverse weather in Hawaiʻi and the West Pacific may negatively affect real estate property values and our operations
3. 25Competition may adversely affect our business
4. 26Our future performance will depend on our ability to respond timely to technological change
5. 27Negative public opinion could damage our reputation and adversely impact our earnings and liquidity
6. 28We are subject to certain litigation, and our expenses related to this litigation may adversely affect our results
7. 29and large fines and remedial measures that may have been imposed in resolving earlier investigations for the same or similar activities at other financial institutions may be used as the basis for future settlements
8. 30Our performance depends on attracting and retaining key employees and skilled personnel to operate our business effectively
9. 31The soundness of other financial institutions may adversely impact our financial condition or results of operations
10. 32We have experienced increases in FDIC insurance assessments