Investment Securities

9 Months Ended

Sep. 30, 2025

Investments, Debt and Equity Securities [Abstract]

The amortized cost, gross unrealized gains and losses, and fair value of the Company’s investment securities as of September 30, 2025 and December 31, 2024, were as follows:


(dollars in thousands)	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
September 30, 2025
Available-for-Sale:
Debt Securities Issued by the U.S. Treasury and Government Agencies	$	245,946	$	176	$	(4,281)	$	241,841
Debt Securities Issued by States and Political Subdivisions	72,434		—		(6,393)		66,041
Debt Securities Issued by U.S. Government-Sponsored Enterprises	1,004		—		(13)		991
Debt Securities Issued by Corporations	752,393		2,011		(21,477)		732,927
Collateralized Mortgage Obligations:
Residential - Government Agencies or Sponsored Enterprises	1,295,644		2,190		(87,243)		1,210,591
Commercial - Government Agencies or Sponsored Enterprises	351,102		544		(21,461)		330,185
Commercial - Non-Agency	60,644		82		(127)		60,599
Total Collateralized Mortgage Obligations	1,707,390		2,816		(108,831)		1,601,375
Mortgage-Backed Securities:
Residential - Government Agencies or Sponsored Enterprises	681,396		2,966		(47,127)		637,235
Total Mortgage-Backed Securities	681,396		2,966		(47,127)		637,235
Total	$	3,460,563	$	7,969	$	(188,122)	$	3,280,410
Held-to-Maturity:
Debt Securities Issued by the U.S. Treasury and Government Agencies	$	129,463	$	—	$	(9,696)	$	119,767
Debt Securities Issued by Corporations	10,286		—		(1,738)		8,548
Collateralized Mortgage Obligations:
Residential - Government Agencies or Sponsored Enterprises	2,041,489		4		(291,372)		1,750,121
Commercial - Government Agencies or Sponsored Enterprises	409,775		—		(80,542)		329,233
Total Collateralized Mortgage Obligations	2,451,264		4		(371,914)		2,079,354
Mortgage-Backed Securities:
Residential - Government Agencies or Sponsored Enterprises	1,739,033		328		(237,717)		1,501,644
Commercial - Government Agencies or Sponsored Enterprises	9,986		—		(1,726)		8,260
Total Mortgage-Backed Securities	1,749,019		328		(239,443)		1,509,904
Total	$	4,340,032	$	332	$	(622,791)	$	3,717,573


(dollars in thousands)	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
December 31, 2024
Available-for-Sale:
Debt Securities Issued by the U.S. Treasury and Government Agencies	$	257,036	$	221	$	(8,185)	$	249,072
Debt Securities Issued by States and Political Subdivisions	73,208		—		(9,349)		63,859
Debt Securities Issued by U.S. Government-Sponsored Enterprises	1,505		—		(41)		1,464
Debt Securities Issued by Corporations	703,579		376		(32,280)		671,675
Collateralized Mortgage Obligations:
Residential - Government Agencies or Sponsored Enterprises	1,050,299		322		(115,401)		935,220
Commercial - Government Agencies or Sponsored Enterprises	306,696		199		(23,421)		283,474
Total Collateralized Mortgage Obligations	1,356,995		521		(138,822)		1,218,694
Mortgage-Backed Securities:
Residential - Government Agencies or Sponsored Enterprises	555,092		130		(70,458)		484,764
Total Mortgage-Backed Securities	555,092		130		(70,458)		484,764
Total	$	2,947,415	$	1,248	$	(259,135)	$	2,689,528
Held-to-Maturity:
Debt Securities Issued by the U.S. Treasury and Government Agencies	$	131,868	$	—	$	(14,927)	$	116,941
Debt Securities Issued by Corporations	10,490		—		(2,156)		8,334
Collateralized Mortgage Obligations:
Residential - Government Agencies or Sponsored Enterprises	2,185,210		3		(377,149)		1,808,064
Commercial - Government Agencies or Sponsored Enterprises	416,389		—		(92,211)		324,178
Total Collateralized Mortgage Obligations	2,601,599		3		(469,360)		2,132,242
Mortgage-Backed Securities:
Residential - Government Agencies or Sponsored Enterprises	1,864,591		37		(309,093)		1,555,535
Commercial - Government Agencies or Sponsored Enterprises	9,995		—		(2,165)		7,830
Total Mortgage-Backed Securities	1,874,586		37		(311,258)		1,563,365
Total	$	4,618,543	$	40	$	(797,701)	$	3,820,882

The Company elected to exclude accrued interest receivable (“AIR”) from the amortized cost basis of debt securities disclosed throughout this footnote. For AFS debt securities, AIR totaled $11.3 million and $9.0 million as of September 30, 2025 and December 31, 2024, respectively. For held-to-maturity (“HTM”) debt securities, AIR totaled $8.3 million and $8.6 million as of September 30, 2025 and December 31, 2024, respectively.

The following table presents an analysis of the contractual maturities of the Company’s investment securities as of September 30, 2025. Debt securities issued by government agencies (such as Small Business Administration securities), collateralized mortgage obligations, and mortgage-backed securities are disclosed separately in the following table as these investment securities may prepay prior to their scheduled contractual maturity dates.


(dollars in thousands)	Amortized Cost		Fair Value
Available-for-Sale:
Due in One Year or Less	$	126,490	$	125,203
Due After One Year Through Five Years	690,513		672,931
Due After Five Years Through Ten Years	150,762		139,926
	967,765		938,060
Debt Securities Issued by Government Agencies	104,012		103,740
Collateralized Mortgage Obligations:
Residential - Government Agencies or Sponsored Agencies	1,295,644		1,210,591
Commercial - Government Agencies or Sponsored Agencies	351,102		330,185
Commercial - Non-Agency	60,644		60,599
Total Collateralized Mortgage Obligations	1,707,390		1,601,375
Mortgage-Backed Securities:
Residential - Government Agencies or Sponsored Agencies	681,396		637,235


Total Mortgage-Backed Securities	681,396		637,235
Total	$	3,460,563	$	3,280,410
Held-to-Maturity:
Due in One Year or Less	$	5,000	$	4,970
Due After One Year Through Five Years	74,857		70,682
Due After Five Year Through Ten Years	59,892		52,663
	139,749		128,315
Collateralized Mortgage Obligations:
Residential - Government Agencies or Sponsored Agencies	2,041,489		1,750,121
Commercial - Government Agencies or Sponsored Agencies	409,775		329,233
Total Collateralized Mortgage Obligations	2,451,264		2,079,354
Mortgage-Backed Securities:
Residential - Government Agencies or Sponsored Agencies	1,739,033		1,501,644

Commercial - Government Agencies or Sponsored Agencies	9,986		8,260
Total Mortgage-Backed Securities	1,749,019		1,509,904
Total	$	4,340,032	$	3,717,573

Investment securities with carrying values of $7.5 billion and $7.2 billion as of September 30, 2025 and December 31, 2024, respectively, were pledged to secure deposits of governmental entities, securities sold under agreements to repurchase, support the Company's borrowing capacity with the Federal Reserve Bank, and secure derivative transactions.

During the three months ended September 30, 2025 and 2024, the Company recognized net realized losses on sales of investments of $1.9 million and $1.1 million, respectively. During the nine months ended September 30, 2025 and 2024, the Company recognized net realized losses on sales of investments of $4.7 million and $4.2 million, respectively. The losses on sales of investment securities were due to fees paid to the counterparties of the Company's prior Visa Class B share sale transactions, which are expensed as incurred.

The following table summarizes the Company’s AFS debt securities in an unrealized loss position for which an allowance for credit losses was not deemed necessary, aggregated by major security type and length of time in a continuous unrealized loss position:


	Less Than 12 Months				12 Months or Longer				Total
(dollars in thousands)	Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses
September 30, 2025
Available-for-Sale:
Debt Securities Issued by the U.S. Treasury and Government Agencies	$	61,949	$	(248)	$	142,395	$	(4,033)	$	204,344	$	(4,281)
Debt Securities Issued by States and Political Subdivisions	—		—		65,905		(6,393)		65,905		(6,393)
Debt Securities Issued by U.S. Government- Sponsored Enterprises	—		—		992		(13)		992		(13)
Debt Securities Issued by Corporations	74,824		(176)		555,825		(21,301)		630,649		(21,477)
Collateralized Mortgage Obligations:
Residential - Government Agencies or Sponsored Enterprises	83,117		(227)		624,852		(87,016)		707,969		(87,243)
Commercial - Government Agencies or Sponsored Enterprises	76,777		(78)		173,115		(21,383)		249,892		(21,461)
Commercial - Non-Agency	29,548		(127)		—		—		29,548		(127)
Total Collateralized Mortgage Obligations	189,442		(432)		797,967		(108,399)		987,409		(108,831)
Mortgage-Backed Securities:
Residential - Government Agencies or Sponsored Enterprises	—		—		444,626		(47,127)		444,626		(47,127)
Total Mortgage-Backed Securities	—		—		444,626		(47,127)		444,626		(47,127)
Total	$	326,215	$	(856)	$	2,007,710	$	(187,266)	$	2,333,925	$	(188,122)
December 31, 2024
Available-for-Sale:
Debt Securities Issued by the U.S. Treasury and Government Agencies	$	38,854	$	(288)	$	157,456	$	(7,897)	$	196,310	$	(8,185)
Debt Securities Issued by States and Political Subdivisions	—		—		63,644		(9,349)		63,644		(9,349)
Debt Securities Issued by U.S. Government-Sponsored Enterprises	—		—		1,464		(41)		1,464		(41)
Debt Securities Issued by Corporations	24,892		(108)		546,407		(32,172)		571,299		(32,280)
Collateralized Mortgage Obligations:
Residential - Government Agencies or Sponsored Enterprises	153,104		(275)		673,141		(115,126)		826,245		(115,401)
Commercial - Government Agencies or Sponsored Enterprises	92,485		(5)		128,430		(23,416)		220,915		(23,421)
Total Collateralized Mortgage Obligations	245,589		(280)		801,571		(138,542)		1,047,160		(138,822)
Mortgage-Backed Securities:
Residential - Government Agencies or Sponsored Enterprises	135		0		480,189		(70,458)		480,324		(70,458)
Total Mortgage-Backed Securities	135		0		480,189		(70,458)		480,324		(70,458)
Total	$	309,470	$	(676)	$	2,050,731	$	(258,459)	$	2,360,201	$	(259,135)

The Company does not believe the AFS debt securities that were in an unrealized loss position represent a credit loss impairment. As of September 30, 2025 and December 31, 2024, the Company's unrealized losses from AFS debt securities were generated from 355 positions and 386 positions, respectively. As of September 30, 2025 and December 31, 2024, total gross unrealized losses were attributable to changes in interest rates, relative to when the investment securities were purchased, and not due to the credit quality of the investment securities. Mortgage-backed securities issued by U.S. government agencies or U.S. government-sponsored enterprises carry the explicit and/or implicit guarantee of the U.S.

government and have a long history of zero credit loss. Debt securities issued by corporations and non-agency commercial mortgage-backed securities are of high credit quality and the issuers continue to make timely principal and interest payments. As of September 30, 2025, the Company did not have any plans to sell the investment securities that were in an unrealized loss position and it is more likely than not that the Company will not be required to sell the investment securities before recovery of their amortized cost basis, which may be at maturity. In October 2025, the Company initiated the process of repositioning a portion of its AFS securities. As a result, the Company expects to realize a loss on the sale of certain securities during the quarter ending December 31, 2025 that is expected to range from $16 million to $17 million.

Substantially all of the Company’s HTM debt securities are issued by U.S. government agencies or U.S. government-sponsored enterprises. These securities carry the explicit and/or implicit guarantee of the U.S. government and have a long history of zero credit loss. Therefore, the Company did not record an allowance for credit losses for these securities as of September 30, 2025 and December 31, 2024.

Interest income from taxable and non-taxable investment securities for the three and nine months ended September 30, 2025 and 2024 were as follows:


	Three Months Ended September 30,				Nine Months Ended September 30,
(dollars in thousands)	2025		2024		2025		2024
Taxable	$	48,511	$	44,068	$	139,175	$	130,724
Non-Taxable	523		296		1,360		596
Total Interest Income from Investment Securities	$	49,034	$	44,364	$	140,535	$	131,320

BANK OF HAWAII CORP 10-Q