Financial Data and Key Metrics Changes - Core EPS for Q4 2025 was $0.43 per share, exceeding consensus estimates, with a net interest margin (NIM) of 3.98% and a core return on assets (ROA) of 1.45% [4] - Average deposits grew by 2.8% and total loans increased by 1.2% in Q4, with net interest income rising due to an expanded margin [4][15] - For the year 2025, core EPS was $1.53, up from the consensus estimate of $1.40, and net interest income reached $427.5 million, an increase of $47.2 million year-over-year [8][10] Business Line Data and Key Metrics Changes - Fee income constituted 18% of total revenue, with a focus on growing this through a regional banking model, although it remained flat due to seasonal declines in wealth and mortgage services [6][9] - The provision for credit losses decreased by $4.3 million to $7 million, with non-performing loans (NPLs) increasing slightly to 94 basis points [6][7] - Core non-interest income for Q4 was $24.3 million, down $200,000 from the previous quarter, with SBA gain on sale income increasing but offset by declines in other areas [15] Market Data and Key Metrics Changes - Average deposit growth for the year was 6.1%, with significant contributions from money market accounts and CDs, while non-interest-bearing deposits also increased [9] - The company reported a loan growth of 8.2% annualized for the year, with commercial banking and equipment finance leading the growth [8][9] Company Strategy and Development Direction - The company aims to maintain a focus on low-cost deposit growth and diversify its lending businesses, with a strategic exit from certain markets to concentrate resources elsewhere [10][13] - The acquisition of CenterBank was completed, contributing to overall deposit growth and positioning the company for future expansion [10][12] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in maintaining a strong NIM, projecting it to drift upward to around 4% by the end of 2026, despite anticipated short-term dips due to rate cuts [12][38] - The company is focused on managing credit costs and maintaining strong reserve levels, with expectations for stability in provisions and charge-offs [21][22] Other Important Information - The company repurchased $23.1 million of its stock in Q4, with a total of 2.1 million shares repurchased in 2025 [7][16] - Management indicated that operational expenses are expected to increase by approximately 3% year-over-year, with a focus on maintaining operating leverage [16][40] Q&A Session Summary Question: Credit side impact and loan issues - Management provided guidance on charge-offs at 25-30 basis points and noted that the dealer floor plan loan issue is nearing resolution with a remaining balance of $2.5 million [20][21] Question: Loan growth expectations - Management expects loan growth to continue at a rate of 5-7%, despite elevated payoffs in the previous year [28][29] Question: Buyback strategy - The company will be cautious with buybacks, sensitive to stock price movements, and intends to utilize its capital effectively [30][31] Question: NIM sustainability - Management discussed the potential for NIM to hover around 4% in 2027, with expectations for deposit costs to decrease further [55][56] Question: Securities yields outlook - The securities portfolio is expected to yield around 4.5% to 4.75%, with opportunities for reinvestment as the portfolio rolls over [76][79]

Financial Data and Key Metrics Changes - Fourth quarter net income was $11.4 million, or $1.46 per share, an 8% decrease from the prior quarter but a 21% increase year-over-year [6][2] - Full year 2025 net income reached $46 million, or $5.87 per share, a record for the company and 29% higher than 2024 earnings per share [2] - Fourth quarter net interest margin (NIM) was 4.06%, up 32 basis points year-over-year, while return on assets (ROA) increased to 1.29% [3][6] - Loans grew by $38 million in the fourth quarter, or 6% annualized, while deposits increased by 7%, or $192 million [3][9] Business Line Data and Key Metrics Changes - The Texas franchise has seen loans grow at a 15% annual rate since entering the market, now representing 20% of the loan portfolio [5] - Non-performing loans increased in 2025, but charge-offs remained low, averaging about 6 basis points over the last six years [5][8] - Noninterest income was $4 million, slightly above expectations, with projections for future quarters to be between $3.8 million and $4 million [10] Market Data and Key Metrics Changes - Average non-interest bearing deposits increased by $3 million in the fourth quarter and $40 million in 2025, representing 27% of total deposits [9] - The cost of interest-bearing deposits decreased by 6 basis points in the fourth quarter and 15 basis points since the fourth quarter of 2024 [10] Company Strategy and Development Direction - The company intends to focus on deposit growth to build franchise value and increase profitability when loan growth returns to historical rates [4] - Plans to open a new full-service branch in Houston and close a loan production office, indicating a commitment to expanding the Texas market [4] - The company is optimistic about M&A opportunities in 2026, with a focus on smaller deals that could be paid for in cash [33] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to meet high standards in various economic climates, despite some challenges in the credit environment [5] - There are no negative comments from customers in any markets, with a generally positive outlook as interest rates decrease [24] - Loan growth is expected to be in the mid-single digits for 2026, contingent on lower interest rates [45] Other Important Information - The company reduced its loan-to-deposit ratio to 92% from 98% a year ago, reflecting successful deposit attraction [4] - Noninterest expenses increased to $23 million, in line with expectations, with projections for further increases due to annual raises and new projects [11] Q&A Session Summary Question: Credit side and Class 5 NPAs trajectory - Management noted that some credits in Louisiana and Mississippi are taking longer to resolve, but they expect to see improvements in NPAs as properties are sold or refinanced [16][17] Question: Loan pipeline and portfolio shifts - Management indicated that while there were payoffs in 2025, they expect less of that in 2026, which could support loan growth [20][22] Question: SBA business growth potential - Management anticipates that the SBA business will improve with lower interest rates, although it may not see significant growth immediately [31] Question: M&A as a capital deployment priority - Management is optimistic about pursuing M&A opportunities in 2026, particularly for smaller banks, as their stock price improves [33] Question: Trajectory of NIM and rate sensitivity - Management expects NIM to potentially increase to 4.1%-4.15% throughout the year, despite some competitive pressures on deposit rates [48][50]

Financial Data and Key Metrics Changes - In Q4 2025, the company reported a net income of $11.4 million, or $1.46 per share, which is a record for the company and represents a 29% increase from 2024 earnings per share [3][4] - The net interest margin (NIM) for Q4 was 4.06%, up from 3.82% in Q4 2024, while the return on assets (ROA) increased to 1.29% from 1.12% year-over-year [4][7] - Loans grew by $38 million in Q4, or 6% annualized, while deposits increased by 7%, or $192 million, during the same period [4][11] Business Line Data and Key Metrics Changes - The Texas franchise has shown strong performance, with loans growing at a 15% annual rate since entering the market in 2022, now representing 20% of the loan portfolio [5][6] - Non-performing loans increased in 2025, but charge-offs remained low, averaging about 6 basis points over the last six years [6][10] Market Data and Key Metrics Changes - Average non-interest bearing deposits increased by $3 million in Q4 and $40 million in 2025, representing 27% of total deposits [11] - The cost of interest-bearing deposits decreased by 6 basis points in Q4 and 15 basis points since Q4 2024, with an overall cost of deposits at 1.84% [12] Company Strategy and Development Direction - The company plans to focus on deposit growth to build franchise value and increase profitability when loan growth returns to historical rates [5][6] - The company is optimistic about M&A opportunities in 2026, with a focus on smaller banks, potentially half their size or less [37][39] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to navigate economic challenges and maintain high standards in credit management [6] - There are no negative comments from customers across different markets, indicating a generally positive outlook despite national economic concerns [28] Other Important Information - Noninterest income was $4 million, slightly above expectations, and is expected to increase in the coming quarters [12] - The company has increased its quarterly dividends per share by 55% to $0.31 and repurchased 17% of its shares since 2019 [13] Q&A Session Summary Question: Concerns about Class 5 and NPAs trajectory - Management acknowledged the slow resolution of certain credits but expects to resolve some properties by February, indicating potential for NPAs to decrease [19][20] Question: Loan pipeline composition - Management noted that while there were payoffs in 2025, they anticipate less of that in 2026, which could support loan growth [25] Question: SBA business growth potential - Management indicated that the SBA business could see growth as interest rates decrease, although it may require further investment [35] Question: M&A as a capital deployment priority - Management confirmed that M&A is a priority, with a focus on smaller banks as opportunities arise [36][37] Question: Loan growth capacity and expectations - Management expects mid-single digit loan growth for 2026, potentially increasing if interest rates decrease [49] Question: NIM trajectory and rate sensitivity - Management projected NIM could increase to 4.1-4.15% throughout the year, despite some competitive pressures on deposit rates [52][54]

Core Insights - Bank of Hawaii Corporation (BOH) shares rose nearly 6.1% after reporting better-than-expected fourth-quarter 2025 earnings per share (EPS) of $1.39, exceeding the Zacks Consensus Estimate of $1.25 and up from 85 cents in the same quarter last year [1][10] Financial Performance - The company's net income (GAAP basis) for Q4 2025 was $60.9 million, reflecting a 55.6% year-over-year increase [2] - For the full year 2025, EPS was $4.63, surpassing the Zacks Consensus Estimate of $4.50 and up from $3.46 in 2024. The net income for the year was $205.9 million, a 37.3% increase year over year [3] - Quarterly revenues increased by 16.2% year over year to $189.6 million, exceeding the Zacks Consensus Estimate by 3.9%. Full-year revenues reached $716.6 million, up 12.1% year over year, also surpassing estimates [4] Income and Expenses - Net interest income (NII) for Q4 was $145.4 million, a 20.9% increase year over year, with net interest margin (NIM) rising 42 basis points to 2.61% [4] - Non-interest income was $44.3 million, up 2.8% year over year, driven by higher trust and asset management income [5] - Non-interest expenses rose 1.5% year over year to $109.5 million, with adjusted expenses increasing 3.9% from the previous year [6] Efficiency and Credit Quality - The efficiency ratio improved to 57.75%, down from 66.12% in the prior year, indicating increased profitability [7] - As of December 31, 2025, non-performing assets decreased by 26.6% year over year to $14.2 million, while net loan and lease charge-offs increased to $4.1 million [11] Capital Ratios and Profitability - The Tier 1 capital ratio improved to 14.49%, up from 13.95% a year earlier, and the total capital ratio rose to 15.54% from 15.00% [13] - Return on average assets was 1.01%, up from 0.66% in the prior year, and return on average shareholders' equity increased to 13.33% from 9.42% [14] Share Repurchase - In the reported quarter, Bank of Hawaii repurchased 76.5 thousand shares at a total cost of $5 million, with remaining buyback authority of $121 million [15] Overall Outlook - The rise in NII and fee income is expected to support top-line growth, alongside a solid capital position and higher loan and deposit balances. However, rising expenses remain a concern for overall performance [16]

Group 1 - Standard Chartered estimates that approximately $500 billion will transition from bank deposits to stablecoins by 2028, a reduction from a previous estimate of $1 trillion [1] - The Digital Asset Market Clarity Act is currently under discussion in D.C., which may establish a federal regulatory framework for digital assets and could potentially limit yield earnings for stablecoin holders [2] - Despite delays in passing the bill, it is anticipated that it will reach the President's desk by the end of Q1, with implications for net interest margin (NIM) income for banks [3] Group 2 - Net interest margin (NIM) income is defined as the difference between what banks earn on loans and what they pay on deposits, and is crucial for comparing bank revenues with stablecoins [4] - Regional U.S. banks are more vulnerable to deposit losses due to stablecoin adoption, as they rely on NIM for over 60% of their revenue, unlike diversified banks and investment banks [5] - Investment banks like Goldman Sachs and Morgan Stanley derive less than 20% of their revenue from net interest margin, indicating a lower exposure to risks associated with stablecoin adoption [6] Group 3 - The potential for stablecoin issuers to hold a significant portion of their deposits in the banking system could mitigate net deposit flight from banks, as deposits would remain within the banking system despite the issuance of stablecoins [7]

Popular (NasdaqGS:BPOP) Q4 2025 Earnings call January 27, 2026 10:00 AM ET Speaker3I'd like to hand over to Paul Cardillo. Please go ahead.Speaker4Good morning, and thank you for joining us. With me on the call today is our President and CEO, Javier Ferrer, our CFO, Jorge García, and our CRO, Lidio Soriano. They will review our results for the full year and fourth quarter and then answer your questions. Other members of our management team will also be available during the Q&A session. Before we begin, I wo ...

Financial Data and Key Metrics Changes - The company reported record revenue of $655 million for the full year 2025, with GAAP EPS for Q4 at $0.31 per share and adjusted EPS at $0.33 per share, reflecting an improvement from $0.29 per share in the prior quarter [4][12] - Net interest income grew by $6.2 million or 4.6% quarter-over-quarter, with net interest margin improving to 3.69% [12][16] - Non-interest income increased by $5.5 million or 17% quarter-over-quarter, contributing to a total revenue increase of $11.8 million or 7% [12][17] Business Line Data and Key Metrics Changes - Average loans grew by $414 million quarter-over-quarter, with end-of-period loans increasing by $66 million, totaling $13 billion [14] - Average commercial loans increased by $162 million or 7.1% quarter-over-quarter and $509 million or 26% year-over-year [14] - The company introduced a new franchise finance vertical and significantly grew its SBA lending activity, ranking among the top 50 originators in the U.S. [8] Market Data and Key Metrics Changes - Average total deposits grew by $475 million quarter-over-quarter, with customer non-brokered average deposits increasing by $507 million [15] - The company has a diversified deposit book with an average balance of $19,000 across over 723,000 accounts [15] Company Strategy and Development Direction - The company aims for continued growth in 2026, focusing on optimizing operations, expanding its financial center network, and enhancing consumer and commercial lines of business [9][21] - The successful integration of the Penns Woods acquisition has positioned the company among the top 100 banks in the U.S. by assets [5][9] - The company is committed to maintaining a strong core performance while investing in talent, technology, and new financial centers [4][9] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the trajectory for 2026, providing guidance for another record year with expected revenues between $710 million and $730 million [21] - The company anticipates loan growth in the low-to-mid single digits and deposit growth in the low single digits for 2026 [21] - Management noted a focus on reducing classified assets and maintaining credit quality metrics within internal expectations [19][20] Other Important Information - The company returned more than half of its profits to shareholders through a quarterly dividend of $0.20 per share, marking the 125th consecutive quarter of cash dividends [9] - The adjusted efficiency ratio improved to 59.5% in Q4, reflecting ongoing expense management discipline [13][18] Q&A Session Summary Question: Can you comment on the trend line with the expenses? - Management acknowledged typical seasonal increases in Q1 expenses but expects overall expenses to not reach the same level as Q4 [27][28] Question: Is there a non-recurring performance in Q4 figures? - Management confirmed that there was a slight lift in Q4 due to year-end true-ups of incentive plans [29] Question: What is the impact of purchase accounting on NIM? - Management clarified that the guidance includes normal contractual purchase accounting accretion and noted that the NIM guidance is not contingent on future rate cuts [30][31] Question: Can you provide details on the SBA business growth expectations? - Management indicated a balanced approach to retaining SBA loans on the balance sheet while also generating fee income [44][47] Question: What is the appetite for future M&A? - Management stated that while they are open to conversations, the focus remains on executing the 2026 plan and achieving results from the recent acquisition [84][85]

The regulatory bottleneck in Washington is masking a trillion-dollar threat to the U.S. banking core. The rise of stablecoins is moving beyond emerging markets to become a direct threat to domestic balance sheets, investment bank Standard Chartered said in a Tuesday report. The primary risk for U.S. lenders is the erosion of net interest margin (NIM), according to Geoff Kendrick, head of digital assets research at Standard Chartered. He identified NIM as the most critical vulnerability because it is drive ...

Financial Data and Key Metrics Changes - The company reported a 17.8% increase in diluted earnings per share for the full year of 2025 [5] - Net interest margin (NIM) expanded by 33 basis points to 4% in the fourth quarter [5] - Tangible book value per share grew by more than 14% to $29.05 [5][28] - Diluted earnings per share decreased to $0.90 from $0.96 in the linked quarter, primarily due to a larger provision for credit losses [24] Business Line Data and Key Metrics Changes - Loans held for investment increased by $91 million to $3.14 billion in the fourth quarter, driven by organic growth in multifamily property loans, direct energy loans, and other commercial loans [12] - The indirect auto loan portfolio remained relatively unchanged at $241 million, with a focus on maintaining credit quality [18] - Non-interest income was $10.9 million in the fourth quarter, flat compared to $11.2 million in the linked quarter [21] Market Data and Key Metrics Changes - Loan growth in major metropolitan markets of Dallas, Houston, and El Paso increased by $15 million or 5.8% annualized to $1.03 billion [16] - The Houston market is projected to be a significant growth area, with the Bank of Houston acquisition expected to enhance the company's presence [7][17] Company Strategy and Development Direction - The company is focused on expanding its lending team in high-growth Texas markets and pursuing accretive M&A opportunities [6] - The acquisition of Bank of Houston is expected to complement existing operations and enhance customer relationships [7][9] - The company aims to achieve mid to high single-digit loan growth in 2026, driven by new hires and the BOH acquisition [10][15] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the growth opportunities ahead, particularly in the Houston market [10] - The company is well-capitalized and plans to continue returning income to shareholders through dividends and share buybacks [11] - Management acknowledged potential headwinds in the first quarter of 2026 from expected payoffs in the multifamily property portfolio [16] Other Important Information - The company recorded a $1.8 million provision for credit losses in the fourth quarter, up from $500,000 in the linked quarter [26] - Non-interest expense remained flat at $33 million in the fourth quarter, with expectations for modest increases in the first quarter [27][88] Q&A Session Summary Question: NIM outlook and loan growth impact - Management indicated that while they aim to keep NIM stable, there may be some compression due to competitive pressures and loan growth dynamics [31][32][33] Question: Deposit growth expectations - Management believes they can reduce deposit costs over time with the integration of BOH, which may help offset NIM pressures [34] Question: Payoffs and loan growth expectations - The fourth quarter saw lighter payoffs, aiding net growth, but management anticipates some payoffs in the first quarter of 2026 [44][45] Question: Indirect auto loan portfolio quality - Management noted that the portfolio remains in good condition, with a focus on maintaining high credit quality [50][52] Question: Mortgage banking and fee income strategies - The company is actively hiring mortgage producers and aims to maintain its infrastructure while preparing for a potential upturn in volumes [57] Question: Revenue synergies from BOH acquisition - Management sees opportunities for cross-selling and leveraging existing products to enhance revenue from the Bank of Houston [65][66] Question: Expense management and hiring plans - Management expects modest increases in expenses due to new hires and ongoing technology projects, while maintaining a focus on cost control [87][89]

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