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]

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]

Financial Data and Key Metrics Changes - The company reported a net loss of $39.5 million in Q4, translating to $2.49 per share, primarily due to a $69 million loss from securities portfolio repositioning [9] - On a non-GAAP basis, net income was $9.4 million or $0.59 per share, with non-GAAP pre-tax, pre-provision net income increasing by 31% quarter-over-quarter and 51% year-over-year [9] - Net interest income rose to $31.2 million, driven by balance sheet growth, higher investment security yields, and reduced deposit costs [9] Business Line Data and Key Metrics Changes - Total loan originations for the quarter were $141 million, with $106 million funded, marking one of the strongest quarters in the past decade [4] - For the full year, the company originated $374 million in new loans, including $274 million funded, which was 79% higher than the previous year [4] - Total deposits increased in Q4 due to higher balances from existing clients and new relationships, with a reduction in deposit costs by 10 basis points [6] Market Data and Key Metrics Changes - The company experienced a 35% decline in classified loans quarter-over-quarter, reducing to 1.5% of total loans from 2.4% in the prior quarter [7] - Non-accrual loans improved, decreasing by 14% to 1.3% of total loans compared to 1.5% in the prior quarter [7] Company Strategy and Development Direction - The company executed a balance sheet restructuring that improved net interest margin and net interest income while maintaining strong capital levels [3][8] - The focus remains on attracting new client relationships and expanding existing ones, particularly in growth markets like Greater Sacramento [5][6] - The company aims to continue loan growth in 2026 while managing seasonal outflows typically experienced in the first half of the year [12] Management's Comments on Operating Environment and Future Outlook - Management noted healthy economic conditions in their markets and an expectation for solid loan growth in 2026 [12] - The company is prepared for potential Fed funds rate cuts in 2026, which may allow for targeted deposit cost reductions contributing to margin expansion [10] - Management expressed confidence in the continued improvement of credit quality trends and proactive credit management [7][12] Other Important Information - The allowance for credit losses remains strong at 1.42% of total loans, with only a minor provision for credit losses in Q4 [11] - The board declared a cash dividend of $0.25 per share, marking the 83rd consecutive quarterly dividend [11] Q&A Session Summary Question: Loan production and recent hires - Management indicated that a significant portion of loan production came from recent hires, contributing to a diverse pipeline [16] Question: Deposit cost trends - The average deposit cost was reported at 2.08% in December, with expectations for further reductions in January [17][19] Question: Increase in special mention loans - The increase was attributed to a downgrade in a wine industry credit and upgrades from substandard loans [20][22] Question: Opportunities for new hires - Management sees opportunities across the footprint and plans to continue hiring in various regions [28][31] Question: Client receptivity to deposit rate reductions - Clients have been somewhat receptive, with attrition mainly from rate shoppers seeking higher returns elsewhere [36][37] Question: Margin expansion expectations - Management expects continued margin expansion, supported by targeted deposit cost reductions and back book repricing [39][42] Question: Credit trends and special mention loans - Positive trends in credit quality were noted, with improvements in real estate markets contributing to upgrades [60][62] Question: Expense run rate and capital deployment - Management anticipates a slight increase in expenses due to investments in growth initiatives, while capital levels are deemed adequate [71][73]

Financial Data and Key Metrics Changes - The company reported a net loss of $39.5 million in the fourth quarter, translating to $2.49 per share, primarily due to a $69 million loss from securities portfolio repositioning [9] - On a non-GAAP basis, net income was $9.4 million, or $0.59 per share, with non-GAAP pre-tax, pre-provision net income increasing by 31% quarter-over-quarter and 51% year-over-year [9] - Net interest income rose to $31.2 million, driven by balance sheet growth, higher investment security yields, and reduced deposit costs [9] Business Line Data and Key Metrics Changes - Total loan originations for the quarter were $141 million, with $106 million funded, marking one of the strongest quarters in the past decade [4] - For the full year, the company originated $374 million in new loans, including $274 million funded, which was 79% higher than the previous year [4] - Total deposits increased in the fourth quarter due to higher balances from existing clients and new relationships, with a reduction in deposit costs by 10 basis points [6] Market Data and Key Metrics Changes - The company experienced a 35% decline in classified loans quarter-over-quarter, reducing to 1.5% of total loans from 2.4% in the prior quarter [7] - Non-accrual loans improved, decreasing by 14% to 1.3% of total loans compared to 1.5% in the prior quarter [7] - The loan pipeline remains strong amid healthy demand, with expectations for solid loan growth in 2026 [12] Company Strategy and Development Direction - The company successfully executed a balance sheet restructuring that improved net interest margin and net interest income while maintaining strong capital levels [3][8] - The focus remains on attracting new client relationships and expanding existing ones, particularly in growth markets like Greater Sacramento [5] - The company aims to continue investing in people and initiatives to support profitable growth [12] Management's Comments on Operating Environment and Future Outlook - Management noted relatively healthy economic conditions in their markets, with continued improvements in credit quality [12] - The company anticipates seasonal outflows in the first half of the year but expects to generate solid loan growth and deposit growth through new and existing relationships [12] - Management expressed confidence in achieving targeted mid-single-digit net loan growth for the year, contingent on managing payoffs effectively [55] Other Important Information - The board declared a cash dividend of $0.25 per share, marking the 83rd consecutive quarterly dividend [11] - The company is prepared for potential Fed funds rate cuts in 2026, which may contribute to margin expansion [10] Q&A Session Summary Question: Loan production and recent hires - Management indicated that a significant portion of loan production came from recent hires, contributing to a more diverse pipeline [16] Question: Deposit cost trends - The average deposit cost was reported at 2.08% in December, with expectations for further reductions in January [17][19] Question: Special Mention increase - The increase was attributed to a downgrade in a wine industry credit and upgrades from substandard loans, reflecting a conservative approach [20][22] Question: Opportunities for new hires - Management sees opportunities across the footprint and plans to continue hiring talent to enhance loan originations [28][31] Question: Client receptivity to deposit rate reductions - Clients have been receptive to targeted deposit rate reductions, with some attrition expected from rate-sensitive customers [36][37] Question: Margin expansion outlook - Management discussed the potential for margin expansion, emphasizing the importance of managing deposit costs and loan repricing [39][48]

Financial Data and Key Metrics Changes - As of the record date, there were 10,350,531 shares outstanding, with 8,558,392 shares, or 82.68%, voted [8] - The shareholders ratified the appointment of Deloitte & Touche LLP as auditors for 2026 with 8,534,492 votes in favor [15][16] Business Line Data and Key Metrics Changes - Proposal three authorized an additional 50,000 common shares for issuance under the stock bonus plan, with 7,100,740 votes in favor [18][19] Company Strategy and Development Direction - The company is focused on maintaining strong governance and has recognized the contributions of retiring directors, indicating a commitment to continuity and stability in leadership [24][28] Management's Comments on Operating Environment and Future Outlook - The company encourages participation in its upcoming earnings call scheduled for February 10, which will review first-quarter results and provide an outlook for fiscal year 2026, suggesting a proactive approach to communication with shareholders [30] Other Important Information - The meeting acknowledged the passing of a former board member, highlighting the company's respect for its history and leadership [5] - Resolutions of appreciation were passed for retiring directors, indicating a culture of valuing long-term service and contributions [24][28] Q&A Session Summary - No questions were submitted during the Q&A session, indicating either a lack of inquiries from shareholders or satisfaction with the information provided [30]

Financial Data and Key Metrics Changes - As of the record date, there were 10,350,531 shares outstanding, with 8,558,392 shares, or 82.68%, voted [8] Business Line Data and Key Metrics Changes - No specific data on business lines or key metrics changes was provided in the meeting Market Data and Key Metrics Changes - No specific market data or key metrics changes were discussed during the meeting Company Strategy and Development Direction and Industry Competition - The company is focused on maintaining strong governance with the election of Class B directors and the ratification of Deloitte & Touche as auditors for fiscal year 2026, indicating a commitment to transparency and accountability [10][14] - The authorization of an additional 50,000 common shares for issuance under the stock bonus plan suggests a strategy to incentivize employees and align their interests with shareholders [20] Management's Comments on Operating Environment and Future Outlook - Management did not provide specific comments on the operating environment or future outlook during this meeting, but they encouraged participation in the upcoming earnings call scheduled for February 10, which will review first-quarter results and provide an outlook for fiscal year 2026 [30] Other Important Information - The meeting acknowledged the contributions of retiring directors Nancy Howell Agee and J. Allen Layman, highlighting the company's appreciation for long-term service and commitment to governance [24][28] Q&A Session All Questions and Answers - No questions were submitted during the Q&A session, and the company noted that they would attempt to answer relevant questions if any were posed [30]

Financial Data and Key Metrics Changes - As of the record date, there were 10,350,531 shares outstanding, with 8,558,392 shares, or 82.68%, voted [7] Business Line Data and Key Metrics Changes - No specific data on business lines or key metrics changes was provided in the meeting Market Data and Key Metrics Changes - No specific market data or key metrics changes were discussed during the meeting Company Strategy and Development Direction and Industry Competition - The company has authorized an additional 50,000 common shares for issuance under the stock bonus plan, indicating a focus on incentivizing employees and aligning their interests with shareholders [10][21] Management's Comments on Operating Environment and Future Outlook - The company encourages participation in its upcoming earnings call scheduled for February 10, which will review first-quarter results and provide an outlook for fiscal year 2026 [31] Other Important Information - The meeting recognized the contributions of retiring directors Nancy Howell Agee and J. Allen Layman, highlighting their long service and impact on the company [25][28] Q&A Session All Questions and Answers - No questions were submitted during the meeting, and therefore no responses were provided [31]

Financial Data and Key Metrics Changes - The company reported a net loss of $39.5 million in Q4 2025, or $2.49 per share, primarily due to a $69 million loss from securities portfolio repositioning [9] - On a non-GAAP basis, net income was $9.4 million, or $0.59 per share, with a 31% increase in non-GAAP pre-tax, pre-provision net income quarter-over-quarter and a 51% increase year-over-year [9] - Net interest income rose to $31.2 million, driven by balance sheet growth, higher investment security yields, and reduced deposit costs [9] Business Line Data and Key Metrics Changes - Total loan originations for the quarter were $141 million, with $106 million funded, marking one of the strongest quarters in the past decade [4] - For the full year, the company originated $374 million in new loans, including $274 million funded, which was 79% higher than the previous year [4] - Total deposits increased in Q4 due to higher balances from long-term clients and new relationships, with a 10 basis point reduction in the cost of deposits [5] Market Data and Key Metrics Changes - The company experienced a 35% quarter-over-quarter decline in classified loans, reducing them to 1.5% of total loans from 2.4% in the prior quarter [6] - Non-accrual loans improved, declining 14% to 1.3% of total loans compared to 1.5% in the prior quarter [6] - The overall economic conditions in the company's markets remain relatively healthy, contributing to improved credit quality [12] Company Strategy and Development Direction - The company successfully executed a balance sheet restructuring that improved net interest margin and net interest income while maintaining strong capital levels [3][8] - The focus remains on attracting new client relationships and expanding existing ones, particularly in growth markets like Greater Sacramento [5] - The company aims to continue growing deposits and loan origination while managing seasonal outflows typically experienced in the first half of the year [12] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about solid loan growth in 2026, supported by a strong loan pipeline and healthy demand [12] - The company anticipates continued margin expansion due to targeted deposit cost reductions and favorable market conditions [10][41] - Management noted that proactive credit management has led to improved asset quality trends, with expectations for continued improvement in credit quality [11][60] Other Important Information - The board declared a cash dividend of $0.25 per share, marking the 83rd consecutive quarterly dividend [11] - The company is exploring options for capital deployment, including share repurchase and potential M&A opportunities, while maintaining adequate capital ratios [72] Q&A Session Summary Question: Loan production and recent hires - Management indicated that a significant portion of loan production came from recent hires, contributing to a more diverse pipeline [16] Question: Deposit cost trends - The average deposit cost was reported at 2.08% in December, with expectations for further reductions in January [18][19] Question: Special mention increase - The increase in special mention loans was attributed to a downgrade in the wine industry and upgrades from substandard loans [20][22] Question: Loan growth expectations - Management targets consistent mid-single-digit net loan growth for the year, with potential for higher figures depending on payoffs [56] Question: Credit trends - Management noted ongoing recovery in the real estate market, contributing to improved credit quality, while specific industries like wine are facing challenges [60][61] Question: Expense run rate - The company anticipates a 4.5% expense growth in 2025, with additional investments planned to drive revenue growth [70] Question: Capital levels and deployment - Current capital levels are deemed adequate, with no immediate plans for additional capital raising, but options for share repurchase and M&A are being considered [72]

Financial Data and Key Metrics Changes - In 2025, the company achieved operating income of $1.5 billion and net income of $1.2 billion, equating to $7.99 per diluted share [18] - Cash flow from operations was $1.4 billion, with liquidity remaining strong at over $2.2 billion [19] - For Q4 2025, net income was $266 million, or $1.82 per diluted share, with revenue at $4.4 billion and operating income at $310 million, lower than the previous quarter due to reduced pricing and volume [19][20] Business Line Data and Key Metrics Changes - Steel operations generated operating income of $1.4 billion in 2025, down from $1.6 billion in the prior year, despite record steel shipments of 13.7 million tons [20] - Operating income from mills recycling operations was $97 million, nearly 30% higher than 2024, while Q4 operating income declined by $13 million due to lower pricing and shipments [21] - Steel fabrication platform earnings were $407 million for the year, lower than the previous year, but Q4 saw operating income of $91 million with solid demand for steel joists and deck [22] Market Data and Key Metrics Changes - The domestic steel industry operated at a production utilization rate of 77%, while the company's mills operated at 86%, indicating a competitive advantage [29] - The automotive production estimates for 2026 are expected to remain similar to 2025, with dealer inventories declining further [30] - Non-residential construction is anticipated to benefit from ongoing onshoring activity and infrastructure spending [30] Company Strategy and Development Direction - The company focuses on strategic organic investments in steel and aluminum products, with a disciplined capital allocation strategy aimed at high-return growth [9][25] - The proposed acquisition of BlueScope is seen as a strategic move to unlock value in North American assets, although the offer was rejected by BlueScope's board [10][11] - The company emphasizes a commitment to maintaining investment-grade credit metrics while pursuing growth opportunities [25] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism regarding demand for diversified value-added steel products, supported by stable demand and lower imports [30] - The company is excited about the operational and commercial progress in aluminum, with expectations of reaching 90% utilization by the end of 2026 [46] - Management highlighted the importance of maintaining a strong safety culture and operational execution as key drivers of success [8] Other Important Information - The company issued $800 million in investment-grade unsecured notes to redeem existing notes and for general corporate purposes [24] - Capital investments for 2026 are projected to be around $600 million, with a focus on high-return growth opportunities [24] - The company has a robust pipeline for growth investments, with a track record of delivering profitable growth [16] Q&A Session Summary Question: What is the expected utilization rate for the aluminum rolling mill by the end of 2026? - Management confirmed that the mill is expected to reach 90% utilization by the end of 2026, which is sooner than previously anticipated [46] Question: How should profitability be viewed over the next few quarters given the current aluminum environment? - Management expects the positive EBITDA profile to continue through the year, with improvements anticipated in the second half related to product mix optimization [47][48] Question: What is the company's comfort level regarding potential debt for acquisitions or investments? - Management indicated that the balance sheet has considerable capacity, with a commitment to remain under a 2x net leverage basis [53][54] Question: Can you provide an update on the Sinton facility and any impacts from recent outages? - Management reported a transformer failure at Sinton but confirmed that operations resumed shortly after and that there are no ongoing concerns [64] Question: How are energy costs being managed given recent fluctuations? - Management stated that energy costs represent about 10% of production costs, and they have unique contracts to mitigate impacts from fluctuations [88][89]

Financial Data and Key Metrics Changes - In 2025, the company achieved operating income of $1.5 billion and net income of $1.2 billion, equating to $7.99 per diluted share [18] - Cash flow from operations was $1.4 billion, with liquidity remaining strong at over $2.2 billion [19] - For Q4 2025, net income was $266 million, or $1.82 per diluted share, with revenue at $4.4 billion and operating income at $310 million, lower than the previous quarter due to lower pricing and volume [19][20] Business Line Data and Key Metrics Changes - Steel operations generated operating income of $1.4 billion in 2025, down from $1.6 billion in the prior year, despite record steel shipments of 13.7 million tons [20] - Operating income from mills recycling operations was $97 million, nearly 30% higher than 2024, while Q4 operating income declined by $13 million due to lower pricing and shipments [21] - Steel fabrication platform earnings were $407 million for the year, lower than the previous year, but Q4 operating income was $91 million, indicating a solid demand for steel joists and deck [22] Market Data and Key Metrics Changes - The domestic steel industry operated at an estimated production utilization rate of 77%, while the company's steel mills operated at 86%, indicating a competitive advantage [29] - The automotive production estimates for 2026 are expected to remain similar to 2025, with dealer inventories declining further [30] - Non-residential construction is anticipated to benefit from ongoing onshoring activity and infrastructure spending, contributing to demand for diversified value-added steel products [30] Company Strategy and Development Direction - The company focuses on strategic organic investments in steel and aluminum products, with a disciplined capital allocation strategy aimed at high-return growth [9][25] - The proposed acquisition of BlueScope is seen as a strategic move to unlock value in North American assets, although the offer was rejected by BlueScope's board [10][11] - The company emphasizes a commitment to maintaining investment-grade credit metrics while pursuing growth opportunities [25] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism regarding demand for diversified value-added steel products, supported by stable demand and lower imports [30] - The company is excited about the operational and commercial progress in aluminum, with expectations of reaching 90% utilization by the end of 2026 [45] - The management highlighted a significant domestic supply deficit for aluminum sheet, which is expected to grow, providing a favorable market environment [33] Other Important Information - The company issued $800 million in investment-grade unsecured notes to redeem existing notes and for general corporate purposes [24] - In 2025, the company repurchased $900 million of its common stock, reflecting confidence in its capital foundation and cash flow generation capabilities [25] - The company has a robust pipeline for growth investments, with a projected future through-cycle EBITDA contribution of over $1.4 billion from recent projects [40] Q&A Session Summary Question: Update on aluminum rolling mill utilization - The aluminum rolling mill is expected to reach 90% utilization by the end of 2026, with positive EBITDA anticipated to continue through the year [45][46] Question: Investment capacity and balance sheet comfort level - The company maintains a balance sheet with considerable capacity, aiming to remain under a 2x net leverage ratio [51][52] Question: Status of Sinton facility and recent transformer incident - A transformer failure occurred at the Sinton facility, but operations resumed shortly after, with no ongoing concerns expected [61] Question: Impact of outages on shipment profile - The company had planned maintenance outages in Q4, but no significant outages are expected in Q1 [75] Question: Energy cost considerations - Energy costs are approximately 10% of production costs, and the company has unique contracts to manage fluctuations effectively [87]