Financial Data and Key Metrics Changes - The net interest margin (NIM) expanded to 3.21%, up 2 basis points from the prior quarter [10] - Net interest income increased to $170.3 million, $1 million higher than the previous quarter [10] - Return on average tangible equity was 15.8% for the fourth quarter and 16.3% for the full year [6] - The effective tax rate for the fourth quarter was 24.8%, expected to return to about 23.2% going forward [6] Business Line Data and Key Metrics Changes - Total loans grew by $183 million in the quarter, or 5.2% on an annualized basis, with significant growth in commercial and industrial (C&I) loans [8] - Retail and commercial deposits increased by $233 million, while public deposits declined by $447 million, resulting in a net increase of $214 million in deposits [10] - Non-interest income was reported at $55.6 million, while non-interest expense was $125.1 million for the fourth quarter [11] Market Data and Key Metrics Changes - The state unemployment rate was 2.2% in November, significantly lower than the national rate of 4.5% [5] - Total visitor arrivals were down 0.2% year-over-year, with spending up 6% to $19.6 billion [5] - The median single-family home price on Oahu was $1.1 million, up 4.3% from the previous year, while the median condo sales price was $512,000, down 5.2% [5][6] Company Strategy and Development Direction - The company expects full-year loan growth to be in the 3%-4% range, driven primarily by commercial real estate (CRE) and C&I loans [15] - Non-interest income is anticipated to remain stable at about $220 million for the year, with expenses expected to be around $520 million in 2026 [15] - The company has a new stock repurchase authorization of $250 million, providing flexibility for capital return [8][59] Management's Comments on Operating Environment and Future Outlook - Management noted that credit risk remains low and stable, with no broad signs of weakness in consumer or commercial books [12] - The company expects to see more normalized growth in the second half of the year, following a period of payoffs in the CRE portfolio [22][28] - Management expressed confidence in maintaining a strong capital position, with a CET1 target of 12% and current levels above 13% [59] Other Important Information - The company repurchased about 1 million shares, utilizing the remaining $26 million of its $100 million purchase authorization for 2025 [8] - The allowance for credit losses increased to $168.5 million, with coverage at 118 basis points of total loans and leases [13] Q&A Session Summary Question: Loan growth trends and pipeline - Management indicated that loan growth was broad-based, with some payoffs in the CRE portfolio affecting expectations, but they anticipate more normalized growth in the future [22][23] Question: Payoffs and paydowns in the industry - Management noted that payoffs have been occurring sooner than expected due to increased competition from permanent lenders, but they expect this trend to normalize [27][28] Question: Deposit trends and NIM expansion - Management confirmed that the interest-bearing deposit beta is expected to decrease to 30%-35% after two rate cuts, with continued focus on reducing deposit costs [29][48] Question: Full year loan growth guidance - Management suggested that loan growth may start lower in the first half of the year but expects a pickup in the second half [44] Question: M&A activity and ideal targets - Management remains open to M&A opportunities, focusing on strong management teams and disciplined lending cultures, particularly in the western U.S. [71][72]