Financial Data and Key Metrics Changes - Fully diluted earnings per share was $1.39, a 63% increase year-over-year and a 16% increase from the previous 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 from the previous quarter [12] 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 [8] - Commercial lending portfolio totals $6.1 billion, representing 43% of total loans, with 73% secured by real estate [8] Market Data and Key Metrics Changes - Bank of Hawaii continues to lead in deposit market share in Hawaii, with market share growth advancing another 40 basis points in 2025 [4] - The average quarterly mix shift of deposits was $25 million compared to $340 million in 2024, indicating a shift from non-interest-bearing to higher-cost deposits [13] Company Strategy and Development Direction - The company aims to leverage its unique core Hawaii market and dominant brand position to create superior risk-adjusted returns [4] - The focus remains on improving customer service and expanding market share, with a strong emphasis on both consumer and commercial segments [51] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the growth of non-interest-bearing deposits, although they expect growth rates to moderate from the current quarter's 6% [25] - 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] Other Important Information - The company reported a provision for credit losses of $2.5 million, unchanged from the linked quarter, resulting in a coverage ratio of 1.04% [19] - Capital ratios remained above regulatory thresholds, with Tier 1 capital at 14.5% and total risk-based capital at 15.5% [20] Q&A Session Summary Question: Non-interest-bearing deposit growth - Management noted a 6% increase in non-interest-bearing deposits, attributing it to a balanced contribution from business segments, but expects growth to moderate [25] Question: Loan pipeline outlook - Management indicated a positive outlook for loan pipelines, with expectations for mid-single-digit growth in 2026 [29][54] Question: Margin update - Management confirmed that the margin target of near 290 is an end-of-year goal, not a fourth-quarter average [33] Question: Special mention and classified balances - Special mention balances at the end of the fourth quarter were $63.4 million, down from the previous year, indicating strong credit quality [39] Question: Fee income opportunities - Management highlighted growth in wealth management fees and a strong pipeline, with expectations for continued growth [75]