Financial Data and Key Metrics Changes - Net income for Q3 2025 totaled $31 million, up 28% year over year from $24 million in Q3 2024, and improved from a net loss of $28 million in Q2 2025 [6][7] - Net interest income reached $127 million, an increase of 8% from the prior quarter and up 21% from Q3 2024 [10] - Net interest margin expanded by 20 basis points to 2.89% for Q3 2025, marking the best linked quarter expansion since 2012 [7][10] Business Line Data and Key Metrics Changes - Loan growth was observed across all major segments: commercial and industrial loans, commercial real estate loans, and residential mortgage loans [7][9] - Gross loans totaled $14.6 billion, up 1.2% quarter over quarter, equivalent to 5% annualized growth [8][9] - Non-interest income showed quarter-over-quarter growth in service fees, international banking fees, and wire transfer fees [11] Market Data and Key Metrics Changes - Deposits totaled $15.8 billion, reflecting a 1% decrease from $15.9 billion as of June 30, primarily due to a reduction in brokered deposits [8] - Non-interest-bearing deposits increased to $3.5 billion, up 1% quarter over quarter [8] Company Strategy and Development Direction - The company is focused on strengthening its deposit franchise and deepening primary banking relationships while optimizing deposit costs [8][9] - Continued investments in talent are aimed at driving sustainable growth and enhancing corporate and commercial banking capabilities [9][16] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about achieving high single-digit loan growth in 2025 and expects net interest income growth of approximately 10% [16] - The company anticipates non-interest income growth of approximately 30% for 2025, excluding notable items from the second quarter [16] Other Important Information - The board declared a quarterly common stock dividend of $0.14 per share, payable on November 21, 2025 [8] - The allowance for credit losses totaled $152.5 million at September 30, 2025, with a coverage ratio of 1.05% of loans receivable [14] Q&A Session Summary Question: Spot rate on deposits and average margin for September - The spot rate for total deposits was 2.82% and for interest-bearing deposits was 3.62%, with the average margin for September at 2.96% [20] Question: Update on Territorial Bancorp acquisition - Operations are being stabilized and expanded, with incremental cost savings being realized, but no significant updates reported this quarter [21] Question: Purchase accounting impact this quarter - Loan accretion for the quarter was $5 million, up from $4 million in the previous quarter [24][25] Question: Maturing CDs in the fourth quarter - There are $2.3 billion of maturing CDs at an average rate of 4.08% [31] Question: Expense side and hiring process - New team members are being added in strategic segments, with a focus on strengthening existing capabilities and optimistic growth prospects [39][41] Question: Impact of government shutdown on SBA loan sales - The SBA has suspended acceptance of new loan applications, but existing loans with approval numbers will proceed as usual [44][45] Question: Challenges with non-accrual loans in commercial real estate - Non-performing loans have been relatively flat, with ongoing efforts to resolve problem credits [46] Question: Loan growth outlook and impact of potential rate decreases - A strong loan pipeline is expected to support growth, with improvements in commercial and industrial loans [51]

Financial Data and Key Metrics Changes - For Q1 2025, the company reported net income of $21.1 million, or 17 cents per diluted common share, compared to 20 cents per diluted common share in Q4 2024 [8][9] - Net interest income after provision expense was $96 million, up 4% from $92 million in Q4 2024 [10] - Non-interest expense for Q1 was $81.3 million, reflecting typical first-quarter increases in salary and employee benefits [10][25] Business Line Data and Key Metrics Changes - Total deposits increased to $14.5 billion, a 1% increase from the previous quarter, with a decrease in broker deposits to less than 7% of total deposits [13] - Loans receivable decreased to $13.3 billion, down 2% from year-end 2024, with residential mortgage loans increasing by 7% and commercial loans decreasing by 5% [14] - Loan production increased by 11% year-over-year, despite elevated paydowns and refinancing activities [15][16] Market Data and Key Metrics Changes - The company noted strong demand from Korean subsidiary sector customers, with an acceleration of direct investments in the U.S. by Korean companies [17][18] - The loan-to-value ratio for commercial real estate loans remained low at approximately 46% [19] Company Strategy and Development Direction - The company aims to strengthen its deposit base and position for prudent growth, focusing on organic loan growth and the integration of Territorial Bank [12][32] - The outlook for 2025 includes high single-digit percentage loan growth and mid-20s percentage growth in non-interest income, reflecting stronger momentum across fee income lines [34] Management's Comments on Operating Environment and Future Outlook - Management expressed caution regarding macroeconomic volatility and the potential for a recession, but remains optimistic about loan demand from Korean customers [17][32] - The company expects net interest income growth to be in the high single-digit percentage range for 2025, revised from low double-digit growth expectations [33] Other Important Information - The merger with Territorial Bank was completed on April 2, 2025, contributing approximately $1.7 billion in stable low-cost deposits [11][12] - The company declared a quarterly common stock dividend of 14 cents per share, payable on May 16, 2025 [12] Q&A Session Summary Question: Impact of fewer rate cuts on NII growth outlook - Management indicated that fewer rate cuts would have a modest downward impact on NII, as the benefits of cutting deposit costs would offset the compression on variable rate loans [38][39] Question: Details on loan verticals for organic growth - Management highlighted positive momentum in pipelines for specialized commercial lending verticals, including healthcare and project finance, supported by recent team expansions [44] Question: Specific segments for loan growth in the second half - Management reiterated confidence in loan growth from Korean subsidiary sectors and specialized teams, with good momentum in their pipelines [48] Question: Asset quality and points of stress - Management reported stable asset quality and proactive monitoring of the portfolio, with borrowers diversifying supply chains to mitigate potential impacts from tariffs [52]