Financial Data and Key Metrics Changes - The company reported net income of $108.8 million or $1.08 per diluted share in Q4 2025, compared to $71.4 million or $0.69 per diluted share in Q3 2025 [15] - Net interest income decreased by $0.4 million or 0.2% to $206.4 million compared to the prior quarter, and decreased by $7.9 million or 3.7% compared to Q4 2024 [15][16] - Non-interest income was $106.6 million, an increase of $62.9 million from the prior quarter, driven by a gain on sale of $62.7 million associated with divestitures [17] - Non-interest expense was $166.7 million for Q4 2025, an increase of $8.8 million from the prior quarter [17] Business Line Data and Key Metrics Changes - Loans decreased by $632.8 million in Q4 2025, including $62.8 million from the indirect portfolio and $72.5 million in loans moving to held for sale due to branch sales [19] - Total deposits decreased by $516.7 million to $22.1 billion as of December 31, 2025, primarily driven by the sale of $641.6 million of deposits in the Arizona and Kansas transaction [19] Market Data and Key Metrics Changes - The ratio of loans held for investment to deposits was 68.8% at the end of Q4 2025, down from 70.1% at the end of Q3 2025 [20] - The company maintained a proactive approach to credit, with criticized loans decreasing by $112.3 million or 9.6% in Q4 2025 [9] Company Strategy and Development Direction - The company is refocusing capital investment and optimizing its balance sheet by exiting markets with lower growth potential and enhancing its presence in high-potential areas [6][10] - A new, flatter organizational structure is being implemented to improve decision-making and support organic growth [12] - The company plans to continue share repurchases as a priority for capital allocation, with an increased authorization of $300 million [21] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the potential for organic growth in 2026, driven by a redesigned banking organization and improved credit culture [32][54] - The company anticipates a slight decline in total loans for 2026, with expectations for modest growth in the latter half of the year [24][25] - Management highlighted the importance of maintaining disciplined credit practices to enhance long-term shareholder value [56] Other Important Information - The company declared a dividend of $0.47 per common share, equating to a 5.7% annualized yield based on the average closing price during Q4 2025 [22] - The Common Equity Tier 1 capital ratio ended Q4 2025 at 14.38%, an increase of 48 basis points from the prior quarter [22] Q&A Session Summary Question: Loan balances and production outlook - Management noted that a significant portion of the decline in loan balances was due to payoffs of criticized loans, which is viewed positively [31] - There is confidence in improved loan production due to a reorganization of the banking structure and increased focus on organic growth [32] Question: Margin expectations - Management expects net interest margin to improve sequentially, with a target of north of 3.5% by the end of 2026 [34] Question: Credit quality and criticized loans - Management indicated that criticized loans have stabilized and are expected to continue trending down, although variability is inherent in credit [41][52] Question: Expense guidance - Management anticipates flat to slightly lower expenses in 2026, with a focus on maintaining discipline across controllable expenses [26][45] Question: Market expansion and hiring - The company is confident in its current footprint and plans to continue hiring in growth markets like Colorado [61][62]

Financial Data and Key Metrics Changes - In Q2 2026, the company originated $42.1 million in loans held for investment, a 42% increase from $29.6 million in the previous quarter [4] - Loan principal payments and payoffs were $46.7 million, a 35% increase from $34.5 million in the prior quarter [4] - Non-performing assets were $999,000, or 8 basis points of total assets, a decrease from $1.9 million at the end of the previous quarter [5] - The net interest margin increased by 3 basis points to 3.03% compared to 3% in the previous quarter [8] - Operating expenses rose to $7.9 million from $7.6 million in the previous quarter [13] Business Line Data and Key Metrics Changes - Loans held for investment decreased by approximately $4.1 million, with declines in multifamily, commercial business, and commercial real estate loans, partially offset by increases in single-family and construction loans [5] - The weighted average rate of loans originated in Q2 2026 was 6.15%, compared to 5.22% for loans held for investment as of December 31, 2025 [10] Market Data and Key Metrics Changes - The company’s loan pipelines are moderately higher than the previous quarter, suggesting origination volume in Q3 2026 will be within the range of recent quarters [4] - Approximately $112.2 million of loans are set to reprice in Q3 2026 at an expected rate 14 basis points lower than current rates [10] Company Strategy and Development Direction - The company is focusing on disciplined balance sheet growth by expanding its loan portfolio, which is deemed suitable for the stable economic environment and ongoing normalization of the yield curve [14] - The company aims to maintain its cash dividend and recognizes stock buybacks as a responsible capital management tool, having repurchased approximately $96,000 of common stock in Q2 2026 [14][15] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the current credit quality, noting no loans in early stages of delinquency and a strong performance of commercial real estate loans [6] - The company believes that any government initiatives to make housing more affordable would be beneficial, especially in California where demand exceeds available inventory [24][25] Other Important Information - The allowance for credit losses to gross loans held for investment was 55 basis points, a slight decrease from 56 basis points in the previous quarter [8] - The company distributed $906,000 in cash dividends to shareholders and repurchased approximately $1.5 million worth of common stock in Q2 2026, representing a 170% distribution of the quarter's net income [15][16] Q&A Session Summary Question: What is the probability that the loan portfolio remains flat over the next four quarters? - Management indicated that it is difficult to predict loan payoffs, but they have been focusing on increasing origination volume each quarter, suggesting a potential for higher origination in Q3 2026 [20] Question: Do loans repricing in the June quarter pose a potential headwind to loan growth? - Management does not foresee significant headwinds from repricing, as the rates are not substantially higher than new loan production [21] Question: Would government plans to make housing more affordable be a net positive for the business? - Management believes that any initiatives to expand available housing would be beneficial, particularly in California where demand significantly outstrips supply [24][25]

Financial Data and Key Metrics Changes - In Q2 2026, the company originated $42.1 million in loans held for investment, a 42% increase from $29.6 million in the prior quarter [5] - Loan principal payments and payoffs increased to $46.7 million, up 35% from $34.5 million in the previous quarter [5] - The net interest margin increased by 3 basis points to 3.03% compared to 3% in the previous quarter [9] - The average cost of deposits decreased to 1.32%, down 2 basis points, while the cost of borrowing decreased by 20 basis points to 4.39% [10] Business Line Data and Key Metrics Changes - Loans held for investment decreased by approximately $4.1 million, with declines in multifamily, commercial business, and commercial real estate loans, partially offset by increases in single-family and construction loans [6] - Non-performing assets were $999,000, or 8 basis points of total assets, a decrease from $1.9 million at the end of the previous quarter [6][7] - The allowance for credit losses to gross loans held for investment was 55 basis points, slightly down from 56 basis points [8] Market Data and Key Metrics Changes - The loan pipelines are moderately higher than last quarter, suggesting origination volume in Q3 2026 will be within the range of recent quarters, between $28 million and $42 million [5] - The weighted average rate of loans originated in Q2 2026 was 6.15%, compared to 5.22% for loans held for investment as of December 31, 2025 [11] Company Strategy and Development Direction - The company focuses on disciplined balance sheet growth by expanding its loan portfolio, which is deemed suitable for the stable economic environment and ongoing normalization of the yield curve [15] - The company aims to maintain its cash dividend and recognizes stock buybacks as a responsible capital management tool, having repurchased approximately $96,000 of common stock in Q2 2026 [15][16] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the current credit quality, noting no loans in early stages of delinquency and a strong performance of commercial real estate loans [7] - The company anticipates opportunities for net interest margin expansion in Q3 2026 due to expected repricing of maturing wholesale funding to lower costs [13] Other Important Information - Operating expenses increased to $7.9 million in Q2 2026 from $7.6 million in the previous quarter, including a $214,000 pre-litigation settlement expense [14] - The company distributed $906,000 in cash dividends and repurchased approximately $1.5 million worth of common stock, representing a 170% distribution of the quarter's net income [16] Q&A Session Summary Question: What is the probability that the loan portfolio is flat over the next four quarters? - Management indicated that it is difficult to predict loan payoffs, but they have been focusing on increasing origination volume each quarter, suggesting a potential for higher origination in Q3 2026 [20] Question: Do loans repricing in the June quarter pose a potential headwind to loan growth? - Management noted that while repricing could have implications, it is not expected to significantly hinder loan growth as the repricing is not substantially higher than current market conditions [21] Question: Would government plans to make housing more affordable be a net positive for the business? - Management believes that any initiatives to expand available housing would be beneficial, especially in California where demand exceeds supply [23][25]

Financial Data and Key Metrics Changes - Full year pre-tax, pre-provision earnings growth of 105% year-over-year, with earnings per share increasing 45% to $3.40 when excluding merger-related charges [3][4] - Fourth quarter net income, excluding merger and restructuring expenses, was $81 million, with diluted earnings per share of $0.84, an 18% increase year-over-year [4][10] - Total assets increased 48% year-over-year to $27.7 billion, with total portfolio loans rising 52% to $19.2 billion [11] Business Line Data and Key Metrics Changes - Loan growth was fully funded by deposit growth, with total loans increasing 6% annualized from the third quarter and 5% year-over-year [8][12] - Non-interest income for the fourth quarter was $43.3 million, a 19% increase year-over-year, driven by the acquisition of Premier [14] - Treasury management revenue reached a record of $6 million, with total wealth management assets under management at $10.4 billion [6][14] Market Data and Key Metrics Changes - Deposits increased 53% year-over-year to $21.7 billion, including $6.9 billion from acquired PFC deposits and $662 million from organic growth [12] - Commercial real estate payoffs totaled $415 million in the fourth quarter and over $900 million for the year, exceeding previous expectations [7][11] Company Strategy and Development Direction - The company successfully integrated Premier Financial, transforming into a $28 billion asset regional financial services partner, ranking among the top 50 publicly traded U.S. financial institutions [5][6] - Continued investment in organic growth through new loan production offices and a new healthcare vertical, optimizing financial center networks and digital banking capabilities [6][9] Management's Comments on Operating Environment and Future Outlook - Management anticipates mid-single-digit year-over-year loan growth during 2026, despite expected elevated commercial real estate payoffs [8][30] - The company expects net interest margin to remain consistent with the fourth quarter margin of 3.61% in the first quarter, with potential increases in subsequent quarters [19][44] Other Important Information - The efficiency ratio for the fourth quarter was just below 52%, reflecting a focus on operational efficiencies and cost control [10][16] - The CET1 ratio improved to 10.34%, with expectations to build 15-20 basis points per quarter moving forward [18][61] Q&A Session Summary Question: Loan growth expectations and payoffs - Management expects a step down in payoffs from the elevated fourth quarter number, estimating $600 million-$800 million in 2026, weighted towards the first half [28][30] Question: Details on the healthcare vertical - The healthcare vertical generated around $500 million in new loans last year and is expected to be a significant growth driver [32][33] Question: Expense guidance and branch evaluations - Management confirmed that branch closures are not reflected in current numbers, and evaluations of the branch network will continue throughout the year [42][43] Question: Margin outlook and factors influencing it - The margin is expected to remain flat in the first quarter, with a step up in the second quarter due to deposit growth and repricing of CDs [44][49] Question: Capital deployment priorities - The company prioritizes dividends, loan growth, and buybacks, with M&A being a distant fourth [59][60]

Financial Data and Key Metrics Changes - The company originated 16% more in new customer volume during the quarter, resulting in a 25% increase in outstanding ledger for active new customers compared to the same quarter last year [3] - Yields improved by 84 basis points year-over-year, indicating an increase in income [4] - Organic growth in ledger was 2.4% year-over-year, a recovery from a decline of 2.4% last year [6] Business Line Data and Key Metrics Changes - The first pay defaults for new customers are 19% lower compared to the same period in fiscal 2022, indicating improved credit performance [4][5] - The average outstanding loan balance declined by approximately 2.5% year-over-year due to stricter underwriting and larger investments in new customers [6] Market Data and Key Metrics Changes - The customer base has grown organically by around 5.4% year-over-year, a significant increase from 2.2% last year [5] - The company has seen substantial improvement in tax filing volume and revenue year-over-year, with expectations for larger tax refunds this year due to tax law changes [9][14] Company Strategy and Development Direction - The company is focused on improving branch operations and personnel management, with a commitment to long-term profitability and soundness of the portfolio [7][10] - There is an ongoing strategy to reduce headcount by 3%-5% in field-level offices, following an increase to build a quality team in anticipation of turnover [19] Management's Comments on Operating Environment and Future Outlook - Management has not observed any degradation in collections or credit quality, with a slight increase in demand noted [13] - The company remains optimistic about the upcoming tax filing season, expecting increased demand and larger refunds [14] Other Important Information - The company has repurchased nearly 600,000 shares, reducing outstanding shares by 11% in the first nine months of the year, with a remaining capacity for repurchases of over $60 million [8] - The current ice storm has affected operations in approximately 10 states, but management remains optimistic about revenue growth [9] Q&A Session Summary Question: Update on the health of the underlying consumer and outlook into tax refund season - Management has not seen a degradation in collections or credit quality, with an increase in demand and expectations for larger tax refunds this year [13][14] Question: Growth in G&A and future trends - Management expects to see a decrease in incentive compensation expenses starting in Q4, following a share-based comp grant last December [16] Question: Increase and subsequent decrease in headcount - The increase was to build a quality team in anticipation of turnover, with a reduction expected to occur quickly within the current quarter [19] Question: Implications of a 10% cap on credit cards - Management believes there would be a severe reduction in access to credit cards for lower credit scores, potentially increasing demand for installment loans [22][23]

Core Insights - First Bank reported solid profitability metrics in Q4 2025, with a return on average assets (ROAA) of 1.21%, up from 1.10% year-over-year, and return on tangible common equity improving to 12.58% from 11.82% [3] - The bank's net interest margin (NIM) for Q4 was 3.74%, an increase of 20 basis points from Q4 2024, while the full-year NIM was 3.69% compared to 3.57% in 2024 [4] - Despite a quarterly decline in total loans, loans were up $149 million, or approximately 5%, over the last 12 months, with commercial and industrial (C&I) loans leading the growth [2] Loan Production and Payoffs - In 2025, First Bank funded $429 million in new loans, with only 20% of that occurring in Q4, and average loan growth for the year was $267 million [2] - Q4 loan payoffs totaled $135 million, representing 47% of all payoffs for the year, and were primarily driven by investor real estate loans [1][2] Deposit Strategy - Total deposits declined by $21 million in Q4, mainly due to a $27.1 million drop in brokered deposits, as the bank focused on profitable relationships [7] - Time deposits were reduced by $38 million, or 18% annualized, contributing to an 8% decrease in money market and savings balances during the quarter [8] Credit Quality - Credit quality was described as mixed, with core commercial real estate (CRE) delinquency at 0.02% at year-end, while non-performing assets to total assets rose to 46 basis points from 36 basis points [10][12] - The allowance for credit losses increased to 1.38% of total loans from 1.25%, driven by charge-offs in the small business portfolio [12] Expenses and Capital Actions - Non-interest income was $2.3 million in Q4, slightly down from $2.4 million in Q3, while non-interest expenses decreased to $17.1 million from $19.7 million [16][17] - The efficiency ratio was reported at 49.46%, remaining below 60% for the 26th consecutive quarter, and tangible book value per share increased to $15.81, up more than 12% annualized [18] Future Outlook - For 2026, First Bank aims for $200 million in net loan growth, with expectations of contributions from asset-based lending and community banking [20] - The bank plans to continue reducing acquisition accounting accretion and anticipates stable margins while lowering deposit costs [20][22]

Core Viewpoint - Summit State Bank reported a significant turnaround in financial performance for the fourth quarter and the full year of 2025, returning to profitability after a net loss in 2024, driven by improved core banking operations and disciplined expense management [3][6][22]. Financial Performance - For Q4 2025, the Bank reported net income of $1,067,000, or $0.16 per diluted share, compared to a net loss of $7,142,000, or $1.06 loss per diluted share in Q4 2024 [1][6]. - For the year ended December 31, 2025, net income was $6,796,000, or $1.01 per diluted share, compared to a net loss of $4,193,000, or $0.62 loss per diluted share in 2024 [2][29]. Operating Results - The annualized return on average assets for Q4 2025 was 0.42%, and the annualized return on average equity was 4.16%, a significant improvement from the annualized losses of 2.59% and 28.05% in Q4 2024 [4][6]. - The net interest margin expanded by 74 basis points to 3.62% in Q4 2025, compared to 2.88% in Q4 2024 [5][6]. Balance Sheet Highlights - Total assets as of December 31, 2025, were $1,004,586,000, with total deposits decreasing by 7% to $891,111,000 compared to the previous year [12][31]. - Net loans decreased by 8% to $831,793,000 as of December 31, 2025, compared to $905,075,000 a year earlier [12][31]. Credit Quality - Non-performing assets were $27,346,000, or 2.72% of total assets, at December 31, 2025, down from $32,191,000 a year earlier [18][21]. - The allowance for credit losses to total loans increased to 1.71% as of December 31, 2025, compared to 1.49% a year earlier, reflecting a conservative approach to reserving [21][22]. Shareholder Equity - Shareholders' equity increased to $101,171,000 at December 31, 2025, compared to $91,723,000 a year earlier, primarily due to retained earnings from net income [15][22]. - Book value per share was $14.94, up from $13.53 a year ago [15][22]. Management Commentary - The CEO emphasized the focus on building a strong foundation for the future, highlighting the positive trajectory in core banking operations and commitment to serving local businesses and families [3][11].

Financial Data and Key Metrics Changes - Fully diluted earnings per share was $1.39, 63% higher year-over-year and 16% higher quarter-over-quarter [3] - Net interest margin improved for the seventh consecutive quarter, up 15 basis points to 2.61% [3] - Return on common equity improved to 15% [3] - Net income for the quarter was $60.9 million, an increase of $7.6 million compared to the linked quarter [11] Business Line Data and Key Metrics Changes - Loans and deposits both grew modestly in the quarter, with non-interest-bearing demand deposits growing 6.6% on a linked basis [3] - Consumer loans represent 57% of total loans, approximately $8 billion, with 86% consisting of residential mortgage and home equity loans [7] - Commercial lending portfolio totals $6.1 billion, representing 43% of total loans, with 73% secured by real estate [7] Market Data and Key Metrics Changes - Bank of Hawaii's market share growth continued in 2025, advancing another 40 basis points [4] - The bank is the clear deposit market share leader in Hawaii [4] - Approximately 93% of loans are based in Hawaii, with 4% in the Western Pacific and 3% on the mainland [6] Company Strategy and Development Direction - The company aims to achieve a net interest margin of near 290 by the end of 2026, driven by fixed asset repricing and improving deposit remix [5] - The bank's unique business model leverages its core Hawaii market and dominant brand position to create superior risk-adjusted returns [4] - The company is focused on enhancing its digital service, marketing, and commerce capabilities to maintain its competitive advantage [4] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the growth of non-interest-bearing deposits, although they expect growth to moderate from the 6% increase seen in Q4 [24] - The outlook for loan growth in 2026 is projected to be mid-single digits, with expectations for improved pipelines in both consumer and commercial lending [29][54] - Management noted that credit quality remains pristine, with a positive economic outlook for Hawaii supporting a reduction in the allowance for credit losses [39] Other Important Information - Noninterest income was $44.3 million during the quarter, impacted by a gain on the sale of the merchant services portfolio and a loss from investment portfolio repositioning [15] - The company resumed its stock repurchase program, purchasing approximately $5 million of common shares at an average price of $65 per share [19] - Capital ratios remained above regulatory thresholds, with Tier 1 capital at 14.5% and total risk-based capital at 15.5% [19] Q&A Session Summary Question: Can you provide insight on non-interest-bearing deposit growth? - Management indicated that the 6% growth in non-interest-bearing deposits may not continue at the same rate, attributing some growth to seasonality and balanced contributions from business segments [24] Question: What is the outlook for loan growth? - Management expressed a positive outlook for loan pipelines, expecting mid-single-digit growth in 2026, with contributions from both consumer and commercial sectors [29][54] Question: What is the status of special mention and classified balances? - Special mention at the end of Q4 was $63.4 million, down from the previous year, with total classified at $298.5 million [38] Question: Can you elaborate on margin expectations? - Management confirmed that the margin target of near 290 is based on year-end projections, not just Q4 averages, and highlighted the importance of fixed asset repricing [33] Question: What is the strategy for capital return and buybacks? - Management plans to increase stock repurchases to the $15 million-$20 million range per quarter, contingent on growth remaining stable [67]

Core Insights - Bank of Hawaii continues to prioritize community service and maintains strong credit performance with a loan portfolio predominantly in Hawaii, comprising 93% of total loans [1][4] - The bank reported a solid quarter with net interest income increasing by 4.6% to $125.8 million, marking the fourth consecutive quarter of improvement [4][11] - Deposit growth was measured, with total deposits growing 7.3% to $21 billion, while credit quality remained strong with net charge-offs at 13 basis points [4][20] Financial Performance - Net interest margin expanded to 2.32%, driven by asset cash flow repricing and lower deposit rates [11][20] - Noninterest income for the first quarter totaled $44.1 million, slightly down from the previous quarter due to market volatility [16][17] - Total expenses for the first quarter were reported at $110.5 million, with a projected increase of 2% to 3% for the year [19][46] Loan Portfolio - The loan portfolio is well-diversified, with consumer loans making up 56% and commercial loans 44% [5][6] - The commercial real estate segment is stable, with a weighted average loan-to-value (LTV) ratio of 55% and no sector exceeding 7% of total loans [6][7] - Credit metrics remain stable, with criticized loans at 2.08% of total loans, primarily secured by real estate [10][20] Market Conditions - Economic conditions in Hawaii remain stable, with unemployment below the national average and a stable visitor market, although some impacts from the Maui market are noted [2][4] - The bank's exposure to tariffs is minimal, with only 4% of the loan portfolio potentially affected, primarily in service-oriented sectors [54][55] - The outlook for loan growth remains cautious but stable, with a solid commercial pipeline and increased consumer applications [34][39]

Core Insights - Bank of Hawaii reported solid performance in Q3 2024, with notable increases in net income and diluted earnings per share on a linked basis [3] - The bank's net interest income and net interest margin (NIM) expanded for the second consecutive quarter, while fee income grew and operating expenses decreased [3][10] - The bank maintains a strong credit quality with low non-performing assets and stable credit metrics [8][19] Lending Philosophy and Portfolio - The bank focuses on core markets in Hawaii and the Western Pacific, leveraging local expertise for credit decisions [1] - Approximately 60% of clients have been with the bank for over 10 years, contributing to a loan portfolio that is 93% Hawaii-based [1] - The loan growth averaged about 6.7% per annum from 2019 to 2023, but has slowed in 2024 due to high interest rates [4] Loan Composition - Consumer loans represent 57% of total loans, predominantly secured against real estate, with 85% being residential mortgages or home equity [4] - The commercial loan portfolio is $5.9 billion, with commercial real estate making up $3.9 billion, or 28% of total loans [5] - The bank's commercial real estate portfolio is well-diversified, with a weighted average loan-to-value (LTV) of 56% [5][7] Market Conditions - Visitor arrivals in Hawaii remain elevated compared to pre-pandemic levels, although Maui arrivals have decreased [2] - Oahu's residential real estate market is stable, with median sales prices increasing modestly and median days on market below 30 [2] - The industrial vacancy rate in Hawaii is at a historic low of 1.05%, while office and retail vacancy rates are stable [6] Financial Performance - Net interest income increased by $2.8 million in Q3, driven by cash flow repricing and an increase in earning assets [10] - Non-interest income totaled $45.1 million, up $3 million from the previous quarter, with improved performance across various segments [17] - The bank's net income for Q3 was $40.4 million, with earnings per common share rising to $0.93 [19] Capital and Credit Quality - The Tier 1 capital ratio increased to 14.05%, and the total capital ratio rose to 15.11% [20] - The allowance for credit losses on loans and leases ended the quarter at $147.3 million, reflecting a stable credit environment [9] - Non-performing assets increased slightly to 14 basis points, with net charge-offs remaining low at $3.8 million [8][19] Dividend and Shareholder Returns - The bank paid out $28 million in dividends to common shareholders and $3.4 million in preferred stock dividends during the quarter [21] - A dividend of $0.70 per common share was declared for Q4 2024 [21]