First Hawaiian (NASDAQ: FHB) posts $73M Q2 profit, $141M year-to-date

Rhea-AI Filing Summary

First Hawaiian, Inc. reported net income of approximately $73.4 million for the three months ended June 30, 2026, and $141.2 million for the first half of 2026. Diluted earnings per share were $0.60 for the quarter and $1.15 year‑to‑date. Net interest income was $171.0 million in the quarter and $338.5 million for six months, with a $5.6 million quarterly provision for credit losses and $10.6 million year‑to‑date. Noninterest income reached $60.3 million in the quarter and $113.1 million for six months, including service charges, card-related fees, trust and investment services, and bank‑owned life insurance income.

Total assets were $23.6 billion at June 30, 2026, with loans and leases of $14.6 billion and deposits of $20.2 billion. Stockholders’ equity was $2.83 billion. The allowance for credit losses on loans and leases was $168.1 million, and the separate reserve for unfunded commitments recorded in other liabilities was $37.7 million. The securities portfolio totaled about $5.7 billion at amortized cost, primarily U.S. government and agency-related instruments, with unrealized losses attributed to interest‑rate movements rather than credit concerns.

Operating activities provided $172.9 million of cash in the first half of 2026, while investing activities used $174.5 million and financing activities used $463.7 million, reflecting loan growth, a net decrease in deposits, cash dividends of $0.52 per share and $32.0 million of common stock repurchases.

Filing Explained

June 30 share data show 121.7 million outstanding shares alongside 21.0 million treasury shares after repurchases and equity-related issuances.

This Form 10-Q is an unaudited quarterly report covering the period ended June 30, 2026. The company reports $142.7 million of issued common stock representing 142,661,019 shares and 121,680,634 shares outstanding, establishing the current ownership base for common holders.

At June 30, 2026, First Hawaiian also reported 20,980,385 treasury shares.

Repurchases reduce the number of shares outstanding, while issuing additional shares increases the total share count and can reduce an existing holder’s percentage ownership absent offsetting changes; the filing therefore documents both mechanisms affecting holders’ ownership base.

Key Figures

Q2 2026 Net Income: $73,375 (dollars in thousands) Six-Month 2026 Net Income: $141,159 (dollars in thousands) Q2 2026 Diluted EPS: $0.60 per share +5 more

8 metrics

Q2 2026 Net Income $73,375 (dollars in thousands) Net income for the three months ended June 30, 2026

Six-Month 2026 Net Income $141,159 (dollars in thousands) Net income for the six months ended June 30, 2026

Q2 2026 Diluted EPS $0.60 per share Diluted earnings per share for the three months ended June 30, 2026

Total Assets $23,646,049 (dollars in thousands) Total assets as of June 30, 2026

Total Deposits $20,154,181 (dollars in thousands) Total deposits as of June 30, 2026

Loans and Leases $14,577,299 (dollars in thousands) Gross loans and leases as of June 30, 2026

Allowance for Credit Losses $168,056 (dollars in thousands) Allowance for credit losses on loans and leases at June 30, 2026

Cash and Cash Equivalents $1,012,496 (dollars in thousands) Cash and cash equivalents at end of period, June 30, 2026

Key Terms

allowance for credit losses, held-to-maturity, collateralized loan obligations, stock repurchase excise tax, +1 more

5 terms

allowance for credit losses financial

"The Company maintains the allowance for credit losses for loans and leases"

Allowance for credit losses is a reserve set aside by a financial institution to cover potential losses from borrowers who may not repay their loans. It acts like a safety net, helping the institution prepare for loans that might turn sour. For investors, it signals how cautious the institution is about the quality of its loans and potential risks to its financial health.

held-to-maturity financial

"Held-to-maturity, at amortized cost (fair value: $ 3,035,475 as of June 30, 2026)"

A held-to-maturity asset is a debt investment a company plans and is able to keep until the loan or bond reaches its scheduled end, when the principal is repaid. For investors, this classification matters because the holder treats the investment like a locked-in loan—avoiding short-term price swings in financial statements and signaling a steady income expectation, similar to lending money to a friend with a fixed repayment date.

collateralized loan obligations financial

"Collateralized loan obligations – includes structured debt securities backed by a pool of loans"

A collateralized loan obligation is a financial product that pools many corporate loans and repackages them into slices sold to investors, with some slices offering steady, lower returns and others offering higher returns but more risk. Like splitting a pizza into pieces for different tastes, CLOs let investors pick their preferred risk level and help banks fund lending, so changes in CLO performance influence credit availability and can move markets.

stock repurchase excise tax financial

"Stock repurchase excise tax | | | 8 | | | 8"

reserve for unfunded commitments financial

"Rollforward of the Reserve for Unfunded Commitments for the three and six months"

AI-generated analysis. How Rhea-AI works. Not financial advice.

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Available on EDGAR 08/03/2026 - 04:06 PM Accepted by SEC EDGAR 08/03/2026 - 04:04 PM Learn about SEC filing dates

FAQ

What were First Hawaiian (FHB)'s earnings for Q2 2026?

First Hawaiian reported Q2 2026 net income of about $73.4 million, with diluted EPS of $0.60. For the first half of 2026, net income totaled $141.2 million and diluted EPS was $1.15, reflecting both interest and fee-based revenue streams.

How did net interest and noninterest income perform for FHB in the first half of 2026?

For the first half of 2026, First Hawaiian generated $338.5 million in net interest income and $113.1 million in noninterest income. Noninterest income included service charges, credit and debit card fees, other service fees, trust and investment services, and bank‑owned life insurance income.

What was First Hawaiian (FHB)'s balance sheet size and deposit base at June 30, 2026?

At June 30, 2026, First Hawaiian reported total assets of $23,646,049 thousand and total deposits of $20,154,181 thousand. Loans and leases were $14,577,299 thousand, and stockholders’ equity stood at $2,826,028 thousand, according to the consolidated balance sheet.

How large is the allowance for credit losses at First Hawaiian (FHB)?

The allowance for credit losses on loans and leases was $168,056 thousand as of June 30, 2026, only slightly below year‑end 2025. In addition, the company recorded a separate $37,672 thousand reserve for unfunded commitments within other liabilities to cover off‑balance‑sheet exposures.

What does First Hawaiian (FHB)'s investment securities portfolio look like?

At June 30, 2026, available‑for‑sale securities had amortized cost of $2,275,837 thousand and fair value of $2,094,699 thousand, while held‑to‑maturity securities had amortized cost of $3,411,684 thousand and fair value of $3,035,475 thousand. Unrealized losses were attributed to interest‑rate changes, not credit quality.

What shareholder returns did First Hawaiian (FHB) provide in the first half of 2026?

In the first half of 2026, First Hawaiian declared cash dividends totaling $0.52 per share, or $63,534 thousand. The company also repurchased common stock, recording $32,000 thousand of share repurchases and related stock repurchase excise tax accruals and payments during the period.

How did cash flows trend for First Hawaiian (FHB) in the first half of 2026?

Net cash provided by operating activities was $172,902 thousand, while investing activities used $174,492 thousand and financing activities used $463,666 thousand. The largest financing outflows were from a net decrease in deposits, dividend payments and common stock repurchases, reducing cash and equivalents to $1,012,496 thousand.

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

☑  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

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For the quarterly period ended June 30, 2026

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or

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☐  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

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For the transition period from               to               

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Commission File Number  001-14585

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FIRST HAWAIIAN, INC.

(Exact Name of Registrant as Specified in its Charter)

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Delaware	​	99-0156159
(State or Other Jurisdiction of Incorporation or Organization)	​	(I.R.S. Employer Identification No.)

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999 Bishop Street, 29th Floor Honolulu, HI	​	​ 96813
(Address of Principal Executive Offices)	​	(Zip Code)

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(808) 525-7000

(Registrant’s telephone number, including area code)

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Not Applicable

(Former name, former address and former fiscal year, if changed since last report)

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Securities registered pursuant to Section 12(b) of the Act:

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Title of each class:	​	Trading Symbol(s)	​	Name of each exchange on which registered:
Common Stock, par value $0.01 per share	​	FHB	​	NASDAQ Global Select Market

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Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  Yes ☒  No ☐.

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Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (section 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).  Yes ☒  No ☐.

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Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

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Large Accelerated Filer ☒	​	Accelerated filer ☐
Non-accelerated filer ☐ ​	​	Smaller reporting company ☐ Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

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Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).  Yes ☐  No ☒.

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Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date: 121,680,634 shares of Common Stock, par value $0.01 per share, were outstanding as of July 24, 2026.

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Table of Contents

TABLE OF CONTENTS

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FIRST HAWAIIAN, INC.

FORM 10-Q

INDEX

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Part I Financial Information				Page No.
​	Item 1.		Financial Statements (unaudited)	​		2
​	​		Consolidated Statements of Income for the three and six months ended June 30, 2026 and 2025	​		2
​	​		Consolidated Statements of Comprehensive Income for the three and six months ended June 30, 2026 and 2025	​		3
​	​		Consolidated Balance Sheets as of June 30, 2026 and December 31, 2025	​		4
​	​		Consolidated Statements of Stockholders' Equity for the three and six months ended June 30, 2026 and 2025	​		5
​	​		Consolidated Statements of Cash Flows for the six months ended June 30, 2026 and 2025	​		7
​	​		Notes to Consolidated Financial Statements (unaudited)	​		8
​	Item 2.		Management's Discussion and Analysis of Financial Condition and Results of Operations	​		52
​	Item 3.		Quantitative and Qualitative Disclosures about Market Risk	​		91
​	Item 4.		Controls and Procedures	​		91
Part II Other Information				​		91
​	Item 1.		Legal Proceedings	​		91
​	Item 1A.		Risk Factors	​		91
​	Item 5.		Other Information	​		95
​	Item 6.		Exhibits	​		96
​	Exhibit Index				​	96
​	Signatures				​	97

​

​

​

​

​

​

1

Table of Contents

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

​

FIRST HAWAIIAN, INC. AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Three Months Ended

​

Six Months Ended

​

​

June 30,

​

June 30,

(dollars in thousands, except per share amounts)

​

2026

​

2025

​

2026

​

2025

Interest income

​

​

​

​

​

​

​

​

​

​

​

​

Loans and lease financing

​

$

190,727

​

$

193,393

​

$

377,116

​

$

385,495

Available-for-sale investment securities

​

​

15,867

​

​

12,469

​

​

30,751

​

​

25,619

Held-to-maturity investment securities

​

​

15,121

​

​

16,299

​

​

30,184

​

​

32,946

Other

​

​

10,652

​

​

14,578

​

​

24,014

​

​

27,829

Total interest income

​

​

232,367

​

​

236,739

​

​

462,065

​

​

471,889

Interest expense

​

​

​

​

​

​

​

​

​

​

​

​

Deposits

​

​

61,220

​

​

70,289

​

​

123,284

​

​

141,998

Short-term borrowings

​

​

—

​

​

2,627

​

​

—

​

​

5,226

Other

​

​

154

​

​

240

​

​

258

​

​

556

Total interest expense

​

​

61,374

​

​

73,156

​

​

123,542

​

​

147,780

Net interest income

​

​

170,993

​

​

163,583

​

​

338,523

​

​

324,109

Provision for credit losses

​

​

5,600

​

​

4,500

​

​

10,600

​

​

15,000

Net interest income after provision for credit losses

​

​

165,393

​

​

159,083

​

​

327,923

​

​

309,109

Noninterest income

​

​

​

​

​

​

​

​

​

​

​

​

Service charges on deposit accounts

​

​

8,316

​

​

7,830

​

​

16,472

​

​

15,365

Credit and debit card fees

​

​

15,402

​

​

15,913

​

​

30,485

​

​

30,387

Other service charges and fees

​

​

14,409

​

​

13,350

​

​

28,193

​

​

25,517

Trust and investment services income

​

​

9,074

​

​

9,154

​

​

18,220

​

​

18,524

Bank-owned life insurance

​

​

7,069

​

​

4,724

​

​

11,160

​

​

9,095

Investment securities gains, net

​

​

—

​

​

—

​

​

—

​

​

37

Other

​

​

6,011

​

​

2,987

​

​

8,570

​

​

5,510

Total noninterest income

​

​

60,281

​

​

53,958

​

​

113,100

​

​

104,435

Noninterest expense

​

​

​

​

​

​

​

​

​

​

​

​

Salaries and employee benefits

​

​

62,376

​

​

59,501

​

​

126,466

​

​

119,605

Contracted services and professional fees

​

​

18,402

​

​

15,997

​

​

32,366

​

​

30,836

Occupancy

​

​

7,902

​

​

7,934

​

​

15,718

​

​

16,034

Equipment

​

​

14,563

​

​

14,037

​

​

29,344

​

​

27,908

Regulatory assessment and fees

​

​

3,417

​

​

3,759

​

​

6,665

​

​

7,582

Advertising and marketing

​

​

2,178

​

​

2,035

​

​

4,430

​

​

4,214

Card rewards program

​

​

8,403

​

​

8,406

​

​

16,807

​

​

16,325

Other

​

​

13,204

​

​

13,270

​

​

26,534

​

​

25,995

Total noninterest expense

​

​

130,445

​

​

124,939

​

​

258,330

​

​

248,499

Income before provision for income taxes

​

​

95,229

​

​

88,102

​

​

182,693

​

​

165,045

Provision for income taxes

​

​

21,854

​

​

14,855

​

​

41,534

​

​

32,550

Net income

​

$

73,375

​

$

73,247

​

$

141,159

​

$

132,495

Basic earnings per share

​

$

0.60

​

$

0.58

​

$

1.16

​

$

1.05

Diluted earnings per share

​

$

0.60

​

$

0.58

​

$

1.15

​

$

1.05

Basic weighted-average outstanding shares

​

​

121,669,238

​

​

125,321,837

​

​

122,061,243

​

​

125,799,060

Diluted weighted-average outstanding shares

​

​

122,339,836

​

​

125,833,064

​

​

122,830,138

​

​

126,493,569

​

The accompanying notes are an integral part of these unaudited interim consolidated financial statements.

​

​

2

Table of Contents

FIRST HAWAIIAN, INC. AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Unaudited)

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Three Months Ended

​

Six Months Ended

​

​

June 30,

​

June 30,

(dollars in thousands)

​

2026

​

2025

​

2026

​

2025

Net income

​

$

73,375

​ ​ ​

$

73,247

​

$

141,159

​

$

132,495

Other comprehensive income (loss), net of tax:

​

​

​

​

​

​

​

​

​

​

​

​

Net change in investment securities

​

​

14,191

​

​

26,643

​

​

9,505

​

​

56,695

Net change in cash flow derivative hedges

​

​

(1,237)

​

​

118

​

​

(1,158)

​

​

291

Other comprehensive income

​

​

12,954

​

​

26,761

​

​

8,347

​

​

56,986

Total comprehensive income

​

$

86,329

​

$

100,008

​

$

149,506

​

$

189,481

​

The accompanying notes are an integral part of these unaudited interim consolidated financial statements.

​

3

Table of Contents

FIRST HAWAIIAN, INC. AND SUBSIDIARY

CONSOLIDATED BALANCE SHEETS

(Unaudited)

​

​	​	​	​	​	​	​
​	​	June 30,		​	December 31,
(dollars in thousands, except share amount)	​	2026		​	2025
Assets	​	​	​	​	​	​
Cash and due from banks	​	$	263,762	​	$	228,734
Interest-bearing deposits in other banks	​	​	748,734	​	​	1,249,018
Investment securities:	​	​	​	​	​	​
Available-for-sale, at fair value (amortized cost: $2,275,837 as of June 30, 2026 and $2,246,716 as of December 31, 2025)	​	​	2,094,699	​	​	2,076,233
Held-to-maturity, at amortized cost (fair value: $3,035,475 as of June 30, 2026 and $3,188,775 as of December 31, 2025)	​	​	3,411,684	​	​	3,533,082
Loans held for sale	​	​	—	​	​	1,370
Loans and leases	​	​	14,577,299	​	​	14,312,529
Less: allowance for credit losses	​	​	168,056	​	​	168,468
Net loans and leases	​	​	14,409,243	​	​	14,144,061
​	​	​	​	​	​	​
Premises and equipment, net	​	​	304,025	​	​	303,496
Accrued interest receivable	​	​	76,622	​	​	77,641
Bank-owned life insurance	​	​	521,137	​	​	513,182
Goodwill	​	​	995,492	​	​	995,492
Mortgage servicing rights	​	​	4,302	​	​	4,638
Other assets	​	​	816,349	​	​	828,305
Total assets	​	$	23,646,049	​	$	23,955,252
Liabilities and Stockholders' Equity	​	​	​	​	​	​
Deposits:	​	​	​	​	​	​
Interest-bearing	​	$	13,706,392	​	$	13,968,376
Noninterest-bearing	​	​	6,447,789	​	​	6,547,292
Total deposits	​	​	20,154,181	​	​	20,515,668
Retirement benefits payable	​	​	97,409	​	​	99,052
Other liabilities	​	​	568,431	​	​	571,167
Total liabilities	​	​	20,820,021	​	​	21,185,887
​	​	​	​	​	​	​
Commitments and contingent liabilities (Note 11)	​	​	​	​	​	​
​	​	​	​	​	​	​
Stockholders' equity	​	​	​	​	​	​
Common stock ($0.01 par value; authorized 300,000,000 shares; issued/outstanding: 142,661,019 / 121,680,634 as of June 30, 2026; issued/outstanding: 142,184,584 / 122,689,256 as of December 31, 2025)	​	​	1,427	​	​	1,422
Additional paid-in capital	​	​	2,584,578	​	​	2,576,540
Retained earnings	​	​	1,156,028	​	​	1,078,885
Accumulated other comprehensive loss, net	​	​	(359,793)	​	​	(368,140)
Treasury stock (20,980,385 shares as of June 30, 2026 and 19,495,328 shares as of December 31, 2025)	​	​	(556,212)	​	​	(519,342)
Total stockholders' equity	​	​	2,826,028	​	​	2,769,365
Total liabilities and stockholders' equity	​	$	23,646,049	​	$	23,955,252

​

The accompanying notes are an integral part of these unaudited interim consolidated financial statements.

​

​

​

4

Table of Contents

FIRST HAWAIIAN, INC. AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(Unaudited)

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Three Months Ended June 30, 2026

​

​

​

​

​

​

​

​

​

​

​

​

​

Accumulated

​

​

​

​

​

​

​

​

​

​

​

​

​

Additional

​

​

​

​

Other

​

​

​

​

​

​

​

​

Common Stock

​

Paid-In

​

Retained

​

Comprehensive

​

Treasury

​

​

​

(dollars in thousands, except share amounts)

​

Shares

​

Amount

​

Capital

​

Earnings

​

Income (Loss)

​

Stock

​

Total

Balance as of March 31, 2026

​

121,648,973

​

$

1,426

​

$

2,580,501

​

$

1,114,759

​

$

(372,747)

​

$

(556,179)

​

$

2,767,760

Net income

​

—

​

​

—

​

​

—

​

​

73,375

​

​

—

​

​

—

​

​

73,375

Cash dividends declared ($0.26 per share)

​

—

​

​

—

​

​

—

​

​

(31,634)

​

​

—

​

​

—

​

​

(31,634)

Common stock issued under Employee Stock Purchase Plan

​

4,385

​

​

—

​

​

122

​

​

—

​

​

—

​

​

—

​

​

122

Equity-based awards

​

27,276

​

​

1

​

​

3,955

​

​

(472)

​

​

—

​

​

(41)

​

​

3,443

Stock repurchase excise tax

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

8

​

​

8

Other comprehensive income, net of tax

​

—

​

​

—

​

​

—

​

​

—

​

​

12,954

​

​

—

​

​

12,954

Balance as of June 30, 2026

​

121,680,634

​

$

1,427

​

$

2,584,578

​

$

1,156,028

​

$

(359,793)

​

$

(556,212)

​

$

2,826,028

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Six Months Ended June 30, 2026

​

​

​

​

​

​

​

​

​

​

​

​

​

Accumulated

​

​

​

​

​

​

​

​

​

​

​

​

​

Additional

​

​

​

​

Other

​

​

​

​

​

​

​

​

Common Stock

​

Paid-In

​

Retained

​

Comprehensive

​

Treasury

​

​

​

(dollars in thousands, except share amounts)

​

Shares

​

Amount

​

Capital

​

Earnings

​

Income (Loss)

​

Stock

​

Total

Balance as of December 31, 2025

​

122,689,256

​

$

1,422

​

$

2,576,540

​

$

1,078,885

​

$

(368,140)

​

$

(519,342)

​

$

2,769,365

Net income

​

—

​

​

—

​

​

—

​

​

141,159

​

​

—

​

​

—

​

​

141,159

Cash dividends declared ($0.52 per share)

​

—

​

​

—

​

​

—

​

​

(63,534)

​

​

—

​

​

—

​

​

(63,534)

Common stock issued under Employee Stock Purchase Plan

​

4,385

​

​

—

​

​

122

​

​

—

​

​

—

​

​

—

​

​

122

Equity-based awards

​

294,731

​

​

5

​

​

7,916

​

​

(482)

​

​

—

​

​

(4,629)

​

​

2,810

Common stock repurchased

​

(1,307,738)

​

​

—

​

​

—

​

​

—

​

​

—

​

​

(32,000)

​

​

(32,000)

Stock repurchase excise tax

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

(241)

​

​

(241)

Other comprehensive income, net of tax

​

—

​

​

—

​

​

—

​

​

—

​

​

8,347

​

​

—

​

​

8,347

Balance as of June 30, 2026

​

121,680,634

​

$

1,427

​

$

2,584,578

​

$

1,156,028

​

$

(359,793)

​

$

(556,212)

​

$

2,826,028

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

5

Table of Contents

​

​

​

FIRST HAWAIIAN, INC. AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (continued)

(Unaudited)

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Three Months Ended June 30, 2025

​

​

​

​

​

​

​

​

​

​

​

​

​

Accumulated

​

​

​

​

​

​

​

​

​

​

​

​

​

Additional

​

​

​

​

Other

​

​

​

​

​

​

​

​

Common Stock

​

Paid-In

​

Retained

​

Comprehensive

​

Treasury

​

​

​

(dollars in thousands, except share amounts)

​

Shares

​

Amount

​

Capital

​

Earnings

​

Income (Loss)

​

Stock

​

Total

Balance as of March 31, 2025

​

125,692,598

​

$

1,421

​

$

2,564,408

​

$

960,337

​

$

(433,769)

​

$

(443,545)

​

$

2,648,852

Net income

​

—

​

​

—

​

​

—

​

​

73,247

​

​

—

​

​

—

​

​

73,247

Cash dividends declared ($0.26 per share)

​

—

​

​

—

​

​

—

​

​

(32,587)

​

​

—

​

​

—

​

​

(32,587)

Common stock issued under Employee Stock Purchase Plan

​

5,496

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

Equity-based awards

​

27,626

​

​

1

​

​

3,528

​

​

—

​

​

—

​

​

(14)

​

​

3,515

Common stock repurchased

​

(1,042,176)

​

​

—

​

​

—

​

​

—

​

​

—

​

​

(25,000)

​

​

(25,000)

Stock repurchase excise tax

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

(243)

​

​

(243)

Other comprehensive income, net of tax

​

—

​

​

—

​

​

—

​

​

—

​

​

26,761

​

​

—

​

​

26,761

Balance as of June 30, 2025

​

124,683,544

​

$

1,422

​

$

2,567,936

​

$

1,000,997

​

$

(407,008)

​

$

(468,802)

​

$

2,694,545

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Six Months Ended June 30, 2025

​

​

​

​

​

​

​

​

​

​

​

​

​

Accumulated

​

​

​

​

​

​

​

​

​

​

​

​

​

Additional

​

​

​

​

Other

​

​

​

​

​

​

​

​

Common Stock

​

Paid-In

​

Retained

​

Comprehensive

​

Treasury

​

​

​

(dollars in thousands, except share amounts)

​

Shares

​

Amount

​

Capital

​

Earnings

​

Income (Loss)

​

Stock

​

Total

Balance as of December 31, 2024

​

126,422,898

​

$

1,417

​

$

2,560,380

​

$

934,048

​

$

(463,994)

​

$

(414,365)

​

$

2,617,486

Net income

​

—

​

​

—

​

​

—

​

​

132,495

​

​

—

​

​

—

​

​

132,495

Cash dividends declared ($0.52 per share)

​

—

​

​

—

​

​

—

​

​

(65,455)

​

​

—

​

​

—

​

​

(65,455)

Common stock issued under Employee Stock Purchase Plan

​

5,496

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

Equity-based awards

​

271,671

​

​

5

​

​

7,556

​

​

(91)

​

​

—

​

​

(4,011)

​

​

3,459

Common stock repurchased

​

(2,016,521)

​

​

—

​

​

—

​

​

—

​

​

—

​

​

(50,000)

​

​

(50,000)

Stock repurchase excise tax

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

(426)

​

​

(426)

Other comprehensive income, net of tax

​

—

​

​

—

​

​

—

​

​

—

​

​

56,986

​

​

—

​

​

56,986

Balance as of June 30, 2025

​

124,683,544

​

$

1,422

​

$

2,567,936

​

$

1,000,997

​

$

(407,008)

​

$

(468,802)

​

$

2,694,545

​

The accompanying notes are an integral part of these unaudited interim consolidated financial statements.

​

​

​

​

6

Table of Contents

FIRST HAWAIIAN, INC. AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

​	​	​	​	​	​	​
​	​	Six Months Ended
​	​	June 30,
(dollars in thousands)	​	2026		​	2025
Cash flows from operating activities	​	​	​	​	​	​
Net income	​	$	141,159	​	$	132,495
Adjustments to reconcile net income to net cash provided by operating activities:	​	​	​	​	​	​
Provision for credit losses	​	​	10,600	​	​	15,000
Depreciation, amortization and accretion, net	​	​	15,854	​	​	17,770
Deferred income tax provision (benefit)	​	​	7,458	​	​	(3,593)
Stock-based compensation	​	​	7,921	​	​	7,561
Other (gains) losses	​	​	(92)	​	​	6
Originations of loans held for sale	​	​	(9,034)	​	​	(6,818)
Proceeds from sales of loans held for sale	​	​	9,050	​	​	6,715
Net gains on investment securities	​	​	—	​	​	(37)
Premiums paid on cash flow hedges	​	​	(3,784)	​	​	(1,006)
Amortization of premiums on cash flow hedges	​	​	833	​	​	74
Change in assets and liabilities:	​	​	​	​	​	​
Net decrease in other assets	​	​	10,211	​	​	15,081
Net decrease in other liabilities	​	​	(17,274)	​	​	(10,158)
Net cash provided by operating activities	​	​	172,902	​	​	173,090
Cash flows from investing activities	​	​	​	​	​	​
Available-for-sale securities:	​	​	​	​	​	​
Proceeds from maturities and principal repayments	​	​	142,510	​	​	144,154
Proceeds from calls and sales	​	​	24,800	​	​	36,835
Purchases	​	​	(195,595)	​	​	(74,812)
Held-to-maturity securities:	​	​	​	​	​	​
Proceeds from maturities and principal repayments	​	​	138,475	​	​	144,482
Proceeds from calls	​	​	3,118	​	​	3,848
Other investments:	​	​	​	​	​	​
Proceeds from sales	​	​	5,328	​	​	413
Purchases	​	​	(26,829)	​	​	(15,396)
Loans:	​	​	​	​	​	​
Net (increase) decrease in loans and leases resulting from originations and principal repayments	​	​	(222,670)	​	​	52,488
Purchases of loans	​	​	(36,968)	​	​	(3,995)
Proceeds from bank-owned life insurance	​	​	3,245	​	​	693
Purchases of bank-owned life insurance	​	​	(40)	​	​	(2,000)
Purchases of premises, equipment and software	​	​	(9,758)	​	​	(19,310)
Other	​	​	(108)	​	​	(8)
Net cash (used in) provided by investing activities	​	​	(174,492)	​	​	267,392
Cash flows from financing activities	​	​	​	​	​	​
Net decrease in deposits	​	​	(361,487)	​	​	(90,797)
Dividends paid	​	​	(64,750)	​	​	(66,488)
Stock tendered for payment of withholding taxes	​	​	(4,629)	​	​	(4,011)
Proceeds from employee stock purchase plan	​	​	122	​	​	—
Common stock repurchased	​	​	(32,000)	​	​	(50,000)
Stock repurchase excise tax paid in current period	​	​	(922)	​	​	(341)
Net cash used in financing activities	​	​	(463,666)	​	​	(211,637)
Net (decrease) increase in cash and cash equivalents	​	​	(465,256)	​	​	228,845
Cash and cash equivalents at beginning of period	​	​	1,477,752	​	​	1,170,190
Cash and cash equivalents at end of period	​	$	1,012,496	​	$	1,399,035
Supplemental disclosures	​	​	​	​	​	​
Interest paid	​	$	127,088	​	$	153,752
Noncash investing and financing activities:	​	​	​	​	​	​
Available-for-sale securities purchases accrued but unpaid	​	​	—	​	​	14,000
Operating lease right-of-use assets obtained in exchange for new lease obligations	​	​	307	​	​	1,390
Transfers to loans and leases from loans held for sale	​	​	1,336	​	​	—
Obligation to fund low-income housing partnerships	​	​	13,376	​	​	41,121
Stock repurchase excise tax settled in subsequent period	​	​	241	​	​	426

​

The accompanying notes are an integral part of these unaudited interim consolidated financial statements.

​

7

Table of Contents

FIRST HAWAIIAN, INC. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

​

1. Organization and Basis of Presentation

​

First Hawaiian, Inc. (“FHI” or the “Parent”), a bank holding company, owns 100% of the outstanding common stock of First Hawaiian Bank (“FHB” or the “Bank”), its only direct, wholly owned subsidiary. FHB offers a comprehensive suite of banking services to consumer and commercial customers, including loans, deposit products, wealth management, insurance, trust, retirement planning, credit card and merchant processing services.

​

The accompanying unaudited interim consolidated financial statements of First Hawaiian, Inc. and Subsidiary (the “Company”) have been prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations.

​

The accompanying unaudited interim consolidated financial statements and notes thereto should be read in conjunction with the Company’s audited consolidated financial statements and related notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025.

​

In the opinion of management, all adjustments, which consist of normal recurring adjustments necessary for a fair presentation of the interim period consolidated financial information, have been made. Results of operations for interim periods are not necessarily indicative of results to be expected for the entire year. Intercompany account balances and transactions have been eliminated in consolidation.

​

Use of Estimates in the Preparation of Financial Statements

​

The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Management bases its estimates on historical experience and various other assumptions believed to be reasonable. Although these estimates are based on management’s best knowledge of current events, actual results may differ from these estimates.

​

Recent Accounting Pronouncements

​

The following Accounting Standards Updates (“ASUs”) have been issued by the Financial Accounting Standards Board (“FASB”) and are applicable to the Company in future reporting periods.

​

In November 2024, the FASB issued ASU No. 2024-03, Income Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses. This ASU requires public companies to disclose, in the notes to financial statements, specified information about certain costs and expenses at each interim and annual reporting period which include, for example, employee compensation, depreciation, and intangible asset amortization. In addition, certain expense amounts already required to be disclosed under current GAAP will need to be presented within the same disclosure as the other disaggregation requirements prescribed by this ASU. Public entities will also be required to disclose: (1) a qualitative description of the amounts remaining in relevant expense captions that are not separately disaggregated quantitatively and (2) the total amount of selling expenses and, in annual reporting periods, an entity’s definition of selling expenses. The FASB also issued ASU No. 2025-01 in January 2025 to clarify that the effective date of ASU No. 2024-03 for public entities is for annual reporting periods beginning after December 15, 2026, and interim periods within annual reporting periods beginning after December 15, 2027. Further, ASU No. 2024-03 is applied prospectively to financial statements issued for reporting periods beginning after the effective date, meaning that the disclosures required under ASU No. 2024-03 do not need to be included in the financial statements for reporting periods beginning before the effective date that are presented for comparative purposes. Early adoption is permitted. The Company is in the process of evaluating the impact that this new guidance may have on the Company’s consolidated financial statements.

8

Table of Contents

​

In September 2025, the FASB issued ASU No. 2025-06, Intangibles – Goodwill and Other – Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software. This ASU intends to improve the operability of internal-use software accounting guidance by removing all references to software development project stages so that the guidance is neutral to different software development methods. Under current accounting principles, entities are required to capitalize development costs incurred for internal-use software depending on the nature of the costs and the project stage during which they occur. With the removal of software development project stages, the amendments in this ASU require that an entity start capitalizing software costs when both of these conditions are met: (1) management has authorized and committed to funding the software project and (2) it is probable that the project will be completed and the software will be used to perform the function intended (referred to as the “probable-to-complete recognition threshold,” which also takes into consideration whether there is significant uncertainty associated with the development activities of the software (referred to as “significant development uncertainty”)). This ASU is effective for annual reporting periods beginning after December 15, 2027, and interim reporting periods within those annual reporting periods. Early adoption is permitted as of the beginning of an annual reporting period and application of the new guidance can be done prospectively, retrospectively, or through a modified prospective transition approach. The Company is in the process of evaluating the impact that this new guidance may have on the Company’s consolidated financial statements.

​

In November 2025, the FASB issued ASU No. 2025-08, Financial Instruments – Credit Losses (Topic 326): Purchased Loans, which amends the guidance in Accounting Standards Codification (“ASC”) Topic 326 on the accounting for certain purchased loans. Under this ASU, entities must account for acquired loans (excluding credit cards) that meet certain criteria at acquisition (“purchased seasoned loans”) by recognizing them at their purchase price plus an allowance for expected credit losses (known as the “gross-up approach”).  Purchased seasoned loans are defined as either: (1) non-PCD loans (loans that were not purchased with credit deterioration) that are obtained in a business combination, or (2) non-PCD loans that (a) are obtained in an asset acquisition or upon consolidation of a variable interest entity that is not a business and (b) are acquired more than 90 days after their origination date by a transferee that was not involved in their origination. This ASU also introduces an accounting policy election related to the subsequent measurement of expected credit losses for entities that use a method other than a discounted cash flow analysis to estimate credit losses on purchased seasoned loans. If this accounting policy is elected, entities can use the amortized cost basis of the asset to subsequently measure their allowance for credit losses. This ASU is effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods within those annual reporting periods. Early adoption is permitted. The Company is in the process of evaluating the impact that this new guidance may have on the Company’s consolidated financial statements.

​

In November 2025, the FASB issued ASU No. 2025-09, Derivatives and Hedging (Topic 815): Hedge Accounting Improvements. This ASU amends certain aspects of the existing hedge accounting guidance in ASC Topic 815 by enabling entities to apply hedge accounting to a greater number of highly effective economic hedges in the following five areas: (1) similar risk assessment for cash flow hedges, (2) hedging forecasted interest payments on choose-your-rate debt instruments, (3) cash flow hedges of nonfinancial forecasted transactions, (4) net written options as hedging instruments, and (5) foreign-currency-denominated debt instrument as hedging instrument and hedged item (dual hedge). This ASU is effective for annual reporting periods beginning after December 15, 2026, and interim periods within those annual reporting periods. Early adoption is permitted. The Company is in the process of evaluating the impact that this new guidance may have on the Company’s consolidated financial statements.

 ​

​

2. Investment Securities

​

As of June 30, 2026 and December 31, 2025, investment securities consisted predominantly of the following investment categories:

​

Debt securities – includes debt securities issued by U.S. government agencies.

​

Mortgage-backed securities – includes securities backed by notes or receivables secured by mortgage assets with cash flows based on actual or scheduled payments.

​

Collateralized mortgage obligations – includes securities backed by a pool of mortgages with cash flows distributed based on certain rules rather than pass through payments.

​

9

Table of Contents

Collateralized loan obligations – includes structured debt securities backed by a pool of loans, consisting of primarily non-investment grade broadly syndicated corporate loans with additional credit enhancement. These are floating rate securities that have an investment grade rating of AA or better.

​

Debt securities issued by states and political subdivisions – includes general obligation bonds issued by state and local governments.

​

As of June 30, 2026 and December 31, 2025, the Company’s investment securities were classified as either available-for-sale or held-to-maturity. Amortized cost, gross unrealized holding gains and losses and fair value of available-for-sale and held-to-maturity investment securities as of June 30, 2026 and December 31, 2025 were as follows:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

June 30, 2026

​

December 31, 2025

​

​

Amortized

​

Unrealized

​

Unrealized

​

Fair

​

Amortized

​

Unrealized

​

Unrealized

​

Fair

(dollars in thousands)

​

Cost

​

Gains

​

Losses

​

Value

​

Cost

​

Gains

​

Losses

​

Value

Mortgage-backed securities:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Residential - Government agency

​

$

25,704

​

$

419

​

$

(1,086)

​

$

25,037

​

$

30,948

​

$

498

​

$

(1,079)

​

$

30,367

Residential - Government-sponsored enterprises

​

​

925,419

​

​

1,102

​

​

(61,311)

​

​

865,210

​

​

933,206

​

​

3,115

​

​

(58,106)

​

​

878,215

Commercial - Government agency

​

​

230,216

​

​

—

​

​

(46,674)

​

​

183,542

​

​

237,192

​

​

—

​

​

(46,015)

​

​

191,177

Commercial - Government-sponsored enterprises

​

​

39,776

​

​

—

​

​

(754)

​

​

39,022

​

​

42,798

​

​

—

​

​

(1,199)

​

​

41,599

Commercial - Non-agency

​

​

258,824

​

​

735

​

​

(49)

​

​

259,510

​

​

128,464

​

​

589

​

​

(39)

​

​

129,014

Collateralized mortgage obligations:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Government agency

​

​

433,114

​

​

217

​

​

(39,041)

​

​

394,290

​

​

461,160

​

​

1,756

​

​

(36,640)

​

​

426,276

Government-sponsored enterprises

​

​

318,436

​

​

214

​

​

(34,938)

​

​

283,712

​

​

336,451

​

​

847

​

​

(34,302)

​

​

302,996

Collateralized loan obligations

​

​

44,348

​

​

28

​

​

—

​

​

44,376

​

​

76,497

​

​

92

​

​

—

​

​

76,589

Total available-for-sale securities

​

$

2,275,837

​

$

2,715

​

$

(183,853)

​

$

2,094,699

​

$

2,246,716

​

$

6,897

​

$

(177,380)

​

$

2,076,233

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Government agency debt securities

​

$

44,479

​

$

—

​

$

(3,629)

​

$

40,850

​

$

46,182

​

$

—

​

$

(3,235)

​

$

42,947

Mortgage-backed securities:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Residential - Government agency

​

​

35,787

​

​

—

​

​

(4,431)

​

​

31,356

​

​

37,081

​

​

—

​

​

(4,462)

​

​

32,619

Residential - Government-sponsored enterprises

​

​

83,559

​

​

—

​

​

(10,798)

​

​

72,761

​

​

86,681

​

​

—

​

​

(10,661)

​

​

76,020

Commercial - Government agency

​

​

30,162

​

​

—

​

​

(7,289)

​

​

22,873

​

​

30,796

​

​

—

​

​

(7,537)

​

​

23,259

Commercial - Government-sponsored enterprises

​

​

1,072,102

​

​

—

​

​

(102,683)

​

​

969,419

​

​

1,088,838

​

​

227

​

​

(95,314)

​

​

993,751

Collateralized mortgage obligations:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Government agency

​

​

787,083

​

​

—

​

​

(94,631)

​

​

692,452

​

​

823,423

​

​

—

​

​

(84,609)

​

​

738,814

Government-sponsored enterprises

​

​

1,303,309

​

​

—

​

​

(147,942)

​

​

1,155,367

​

​

1,365,087

​

​

—

​

​

(135,145)

​

​

1,229,942

Debt securities issued by states and political subdivisions

​

​

55,203

​

​

—

​

​

(4,806)

​

​

50,397

​

​

54,994

​

​

—

​

​

(3,571)

​

​

51,423

Total held-to-maturity securities

​

$

3,411,684

​

$

—

​

$

(376,209)

​

$

3,035,475

​

$

3,533,082

​

$

227

​

$

(344,534)

​

$

3,188,775

​

Accrued interest receivable related to available-for-sale investment securities was $5.0 million and $5.5 million as of June 30, 2026 and December 31, 2025, respectively. Accrued interest receivable related to held-to-maturity investment securities was $5.9 million and $6.1 million as June 30, 2026 and December 31, 2025, respectively. Accrued interest receivable is recorded separately from the amortized cost basis of investment securities on the Company’s unaudited interim consolidated balance sheets.

​

Proceeds from calls of investment securities were $15.3 million and $0.5 million for the three months ended June 30, 2026 and 2025, respectively. Proceeds from calls of investment securities were $27.9 million and $40.6 million for the six months ended June 30, 2026 and 2025, respectively. There were no sales of investment securities for both the three and six months ended June 30, 2026 and 2025.

​

10

Table of Contents

Interest income from taxable investment securities was $28.0 million and $25.7 million for the three months ended June 30, 2026 and 2025, respectively, and $54.8 million and $52.4 million for the six months ended June 30, 2026 and 2025 respectively. Interest income from non-taxable investment securities was $3.0 million and $3.1 million for the three months ended June 30, 2026 and 2025, respectively, and $6.1 million and $6.2 million for the six months ended June 30, 2026 and 2025, respectively.

​

The amortized cost and fair value of debt securities issued by government agencies and states and political subdivisions, non-agency mortgage-backed securities and collateralized loan obligations as of June 30, 2026, by contractual maturity, are shown below. Mortgage-backed securities and collateralized mortgage obligations issued by government agencies and government-sponsored enterprises are disclosed separately in the table below as remaining expected maturities will differ from contractual maturities as borrowers have the right to prepay obligations.

​

​	​	​	​	​	​	​
​	​	June 30, 2026
​	​	Amortized		​	Fair
(dollars in thousands)	​	Cost		​	Value
Available-for-sale securities	​	​	​	​	​	​
Due in one year or less	​	$	—	​	$	—
Due after one year through five years	​	​	82,936	​	​	83,458
Due after five years through ten years	​	​	36,225	​	​	36,246
Due after ten years	​	​	184,011	​	​	184,182
​	​	​	303,172	​	​	303,886
​	​	​	​	​	​	​
Mortgage-backed securities:	​	​	​	​	​	​
Residential - Government agency	​	​	25,704	​	​	25,037
Residential - Government-sponsored enterprises	​	​	925,419	​	​	865,210
Commercial - Government agency	​	​	230,216	​	​	183,542
Commercial - Government-sponsored enterprises	​	​	39,776	​	​	39,022
Total mortgage-backed securities	​	​	1,221,115	​	​	1,112,811
Collateralized mortgage obligations:	​	​	​	​	​	​
Government agency	​	​	433,114	​	​	394,290
Government-sponsored enterprises	​	​	318,436	​	​	283,712
Total collateralized mortgage obligations	​	​	751,550	​	​	678,002
Total available-for-sale securities	​	$	2,275,837	​	$	2,094,699
​	​	​	​	​	​	​
Held-to-maturity securities	​	​	​	​	​	​
Due in one year or less	​	$	—	​	$	—
Due after one year through five years	​	​	—	​	​	—
Due after five years through ten years	​	​	61,397	​	​	56,930
Due after ten years	​	​	38,285	​	​	34,317
​	​	​	99,682	​	​	91,247
​	​	​	​	​	​	​
Mortgage-backed securities:	​	​	​	​	​	​
Residential - Government agency	​	​	35,787	​	​	31,356
Residential - Government-sponsored enterprises	​	​	83,559	​	​	72,761
Commercial - Government agency	​	​	30,162	​	​	22,873
Commercial - Government-sponsored enterprises	​	​	1,072,102	​	​	969,419
Total mortgage-backed securities	​	​	1,221,610	​	​	1,096,409
Collateralized mortgage obligations:	​	​	​	​	​	​
Government agency	​	​	787,083	​	​	692,452
Government-sponsored enterprises	​	​	1,303,309	​	​	1,155,367
Total collateralized mortgage obligations	​	​	2,090,392	​	​	1,847,819
Total held-to-maturity securities	​	$	3,411,684	​	$	3,035,475

​

11

Table of Contents

At June 30, 2026, pledged securities totaled $4.0 billion, of which $2.3 billion was pledged to secure borrowing capacity, $1.6 billion was pledged to secure public deposits and $40.3 million was pledged to secure other financial transactions. At December 31, 2025, pledged securities totaled $4.2 billion, of which $2.4 billion was pledged to secure borrowing capacity, $1.8 billion was pledged to secure public deposits and $52.6 million was pledged to secure other financial transactions.

​

The Company held no securities of any single issuer, other than debt securities issued by government agencies and government-sponsored enterprises, which were in excess of 10% of stockholders’ equity as of June 30, 2026 and December 31, 2025.

​

The following tables present the unrealized gross losses and fair values of securities in the available-for-sale portfolio by length of time that the 153 and 137 individual securities in each category have been in a continuous loss position as of June 30, 2026 and December 31, 2025, respectively. The unrealized losses on available-for-sale investment securities were attributable to changes in interest rates, relative to when the investment securities were purchased, and not due to the credit quality of the investment securities.

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Time in Continuous Loss as of June 30, 2026

​

​

Less Than 12 Months

​

12 Months or More

​

Total

​

​

Unrealized

​

​

​

​

Unrealized

​

​

​

​

Unrealized

​

​

​

(dollars in thousands)

​

Losses

​

Fair Value

​

Losses

​

Fair Value

​

Losses

​

Fair Value

Mortgage-backed securities:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Residential - Government agency

​

$

—

​

$

—

​

$

(1,086)

​

$

7,855

​

$

(1,086)

​

$

7,855

Residential - Government-sponsored enterprises

​

​

(2,566)

​

​

202,269

​

​

(58,745)

​

​

496,773

​

​

(61,311)

​

​

699,042

Commercial - Government agency

​

​

—

​

​

—

​

​

(46,674)

​

​

183,542

​

​

(46,674)

​

​

183,542

Commercial - Government-sponsored enterprises

​

​

—

​

​

—

​

​

(754)

​

​

39,022

​

​

(754)

​

​

39,022

Commercial - Non-agency

​

​

(23)

​

​

14,482

​

​

(26)

​

​

7,018

​

​

(49)

​

​

21,500

Collateralized mortgage obligations:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Government agency

​

​

(498)

​

​

81,179

​

​

(38,543)

​

​

267,192

​

​

(39,041)

​

​

348,371

Government-sponsored enterprises

​

​

(586)

​

​

37,799

​

​

(34,352)

​

​

216,802

​

​

(34,938)

​

​

254,601

Total available-for-sale securities with unrealized losses

​

$

(3,673)

​

$

335,729

​

$

(180,180)

​

$

1,218,204

​

$

(183,853)

​

$

1,553,933

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Time in Continuous Loss as of December 31, 2025

​

​

Less Than 12 Months

​

12 Months or More

​

Total

​

​

Unrealized

​

​

​

​

Unrealized

​

​

​

​

Unrealized

​

​

​

(dollars in thousands)

​

Losses

​

Fair Value

​

Losses

​

Fair Value

​

Losses

​

Fair Value

Mortgage-backed securities:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Residential - Government agency

​

$

—

​

$

—

​

$

(1,079)

​

$

8,304

​

$

(1,079)

​

$

8,304

Residential - Government-sponsored enterprises

​

​

(509)

​

​

70,705

​

​

(57,597)

​

​

545,262

​

​

(58,106)

​

​

615,967

Commercial - Government agency

​

​

—

​

​

—

​

​

(46,015)

​

​

191,177

​

​

(46,015)

​

​

191,177

Commercial - Government-sponsored enterprises

​

​

—

​

​

—

​

​

(1,199)

​

​

41,599

​

​

(1,199)

​

​

41,599

Commercial - Non-agency

​

​

(39)

​

​

14,475

​

​

—

​

​

—

​

​

(39)

​

​

14,475

Collateralized mortgage obligations:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Government agency

​

​

—

​

​

—

​

​

(36,640)

​

​

287,275

​

​

(36,640)

​

​

287,275

Government-sponsored enterprises

​

​

(183)

​

​

18,296

​

​

(34,119)

​

​

232,210

​

​

(34,302)

​

​

250,506

Total available-for-sale securities with unrealized losses

​

$

(731)

​

$

103,476

​

$

(176,649)

​

$

1,305,827

​

$

(177,380)

​

$

1,409,303

​

At June 30, 2026 and December 31, 2025, the Company did not have any available-for-sale securities with the intent to sell and determined it was more likely than not that the Company would not be required to sell the securities prior to recovery of the amortized cost basis. As the Company had the intent and ability to hold the remaining available-for-sale securities in an unrealized loss position as of June 30, 2026 and December 31, 2025, each security with an unrealized loss position in the above tables has been further assessed to determine if a credit loss exists. As of June 30, 2026 and December 31, 2025, the Company did not expect any credit losses in its available-for-sale debt securities and no credit losses were recognized on available-for-sale securities during the three and six months ended June 30, 2026 and for the year ended December 31, 2025.

​

12

Table of Contents

As of June 30, 2026 and December 31, 2025, the Company’s investment securities were comprised primarily of debt securities, mortgage-backed securities and collateralized mortgage obligations issued by U.S. government agencies and government-sponsored enterprises, with under 7% of the investment securities comprised of collateralized loan obligations rated AA or better, obligations issued by local state and political subdivisions rated AA or better and non-agency commercial mortgage-backed securities rated AAA. For investment securities issued by the U.S. government, its agencies and government-sponsored enterprises, management has concluded that the long history with no credit losses from these issuers indicates an expectation that nonpayment of the amortized cost basis is zero, and these securities are explicitly or implicitly fully guaranteed by the U.S. government. The U.S. government can print its own currency and its currency is routinely held by central banks and other major financial institutions. The dollar is used in international commerce, and commonly is viewed as a reserve currency, all of which qualitatively indicates that historical credit loss information should be minimally affected by current conditions and reasonable and supportable forecasts. For collateralized loan obligations, debt securities issued by local state and political subdivisions and non-agency commercial mortgage-backed securities, these securities are investment grade and highly rated and carry either sufficient credit enhancement or days cash on hand to support timely payments of principal and interest. As a result, the Company does not expect any future payment defaults and has not recorded an allowance for credit losses for its available-for-sale and held-to-maturity debt securities as of June 30, 2026 or December 31, 2025.

​

3. Loans and Leases

​

As of June 30, 2026 and December 31, 2025, loans and leases were comprised of the following:

​

​	​	​	​	​	​	​
​	​	June 30,		​	December 31,
(dollars in thousands)	​	2026		​	2025
Commercial and industrial	​	$	2,339,882	​	$	2,171,333
Commercial real estate	​	​	4,783,130	​	​	4,590,326
Construction	​	​	731,766	​	​	808,275
Residential:	​	​	​	​	​	​
Residential mortgage	​	​	4,044,207	​	​	4,096,300
Home equity line	​	​	1,181,396	​	​	1,178,527
Total residential	​	​	5,225,603	​	​	5,274,827
Consumer	​	​	1,046,461	​	​	1,025,838
Lease financing	​	​	450,457	​	​	441,930
Total loans and leases	​	$	14,577,299	​	$	14,312,529

​

Outstanding loan balances are reported net of deferred loan costs and fees of $54.5 million and $53.9 million at June 30, 2026 and December 31, 2025, respectively.

​

Accrued interest receivable related to loans and leases was $65.7 million and $65.9 million as of June 30, 2026 and December 31, 2025, respectively, and is recorded separately from the amortized cost basis of loans and leases on the Company’s unaudited interim consolidated balance sheets.

​

As of June 30, 2026, residential real estate loans and commercial real estate loans totaling $5.1 billion were pledged to collateralize the Company’s borrowing capacity at the Federal Home Loan Bank of Des Moines (“FHLB”), and consumer, commercial and industrial, commercial real estate, residential real estate loans and pledged securities totaling $4.0 billion were pledged to collateralize the borrowing capacity at the Federal Reserve Bank of San Francisco (“FRB”). As of December 31, 2025, residential real estate loans and commercial real estate loans totaling $4.9 billion were pledged to collateralize the Company’s borrowing capacity at the FHLB, and consumer, commercial and industrial, commercial real estate, residential real estate loans and pledged securities totaling $4.0 billion were pledged to collateralize the borrowing capacity at the FRB. Residential real estate loans collateralized by properties that were in the process of foreclosure totaled $10.1 million and $5.2 million as of June 30, 2026 and December 31, 2025, respectively.

13

Table of Contents

​

In the course of evaluating the credit risk presented by a customer and the pricing that will adequately compensate the Company for assuming that risk, management may require a certain amount of collateral support. The type of collateral held varies, but may include accounts receivable, inventory, land, buildings, equipment, income-producing commercial properties and residential real estate. The Company applies the same collateral policy for loans whether they are funded immediately or on a delayed basis. The loan and lease portfolio is principally located in Hawaii and, to a lesser extent, on the U.S. Mainland, Guam and Saipan. The risk inherent in the portfolio depends upon both the economic stability of the state or territories, which affects property values, and the financial strength and creditworthiness of the borrowers.

​

4. Allowance for Credit Losses

​

The Company maintains the allowance for credit losses for loans and leases (the “ACL”) that is deducted from the amortized cost basis of loans and leases to present the net carrying value of loans and leases expected to be collected. At June 30, 2026, the ACL was $168.1 million, a nominal decrease of $0.4 million from the December 31, 2025 balance of $168.5 million. The measurement of expected credit losses is based on relevant information about past events, including historical experience, current conditions, and reasonable and supportable forecasts that affect the collectibility of the reported amount of loans and leases. The economic outlook used to calculate the ACL as of June 30, 2026 remained relatively stable compared to December 31, 2025. While management utilizes its best judgment and information available, the ultimate appropriateness of the ACL is dependent upon a variety of factors beyond the Company’s control, including the performance of the Company’s loan portfolio, the economy, changes in interest rates and the view of the regulatory authorities toward loan classifications.

​

The Company also maintains an estimated reserve for unfunded commitments included in other liabilities on the unaudited interim consolidated balance sheets. The reserve for unfunded commitments is reduced in the period in which the off-balance sheet financial instruments expire, loan funding occurs, or is otherwise settled.

​

The Company’s methodology is more fully described in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025, which should be read in conjunction with these unaudited interim consolidated financial statements as of and for the three and six months ended June 30, 2026.

​

Rollforward of the Allowance for Credit Losses

​

The following presents the activity in the ACL by class of loans and leases for the three and six months ended June 30, 2026 and 2025:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Three Months Ended June 30, 2026

​

​

Commercial Lending

​

Residential Lending

​

​

​

​

​

​

​

​

Commercial

​

Commercial

​

​

​

​

​

​

​

Home

​

​

​

​

​

​

​

​

and

​

Real

​

​

​

Lease

​

Residential

​

Equity

​

​

​

​

​

​

(dollars in thousands)

​ ​ ​

Industrial

​ ​ ​

Estate

​ ​ ​

Construction

​ ​ ​

Financing

​ ​ ​

Mortgage

​ ​ ​

Line

​ ​ ​

Consumer

​ ​ ​

Total

Allowance for credit losses:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Balance at beginning of period

​

$

23,890

​

$

37,965

​

$

7,240

​

$

2,732

​

$

37,404

​

$

14,728

​

$

45,359

​

$

169,318

Charge-offs

​

​

(769)

​

​

—

​

​

—

​

​

—

​

​

—

​

​

(23)

​

​

(5,490)

​

​

(6,282)

Recoveries

​

​

281

​

​

—

​

​

—

​

​

—

​

​

16

​

​

28

​

​

1,820

​

​

2,145

Provision (benefit)

​

​

(4,614)

​

​

984

​

​

710

​

​

(268)

​

​

(974)

​

​

569

​

​

6,468

​

​

2,875

Balance at end of period

​

$

18,788

​

$

38,949

​

$

7,950

​

$

2,464

​

$

36,446

​

$

15,302

​

$

48,157

​

$

168,056

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Six Months Ended June 30, 2026

​

​

Commercial Lending

​

Residential Lending

​

​

​

​

​

​

​

​

Commercial

​

Commercial

​

​

​

​

​

​

​

Home

​

​

​

​

​

​

​

​

and

​

Real

​

​

​

Lease

​

Residential

​

Equity

​

​

​

​

​

​

(dollars in thousands)

​

Industrial

​

Estate

​

Construction

​

Financing

​

Mortgage

​ ​ ​

Line

​

Consumer

​

Total

Allowance for credit losses:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Balance at beginning of period

​

$

20,833

​

$

38,757

​

$

7,605

​

$

2,778

​

$

36,384

​

$

15,192

​

$

46,919

​

$

168,468

Charge-offs

​

​

(3,394)

​

​

—

​

​

—

​

​

—

​

​

—

​

​

(23)

​

​

(10,334)

​

​

(13,751)

Recoveries

​

​

547

​

​

—

​

​

—

​

​

3

​

​

29

​

​

67

​

​

4,068

​

​

4,714

Provision (benefit)

​

​

802

​

​

192

​

​

345

​

​

(317)

​

​

33

​

​

66

​

​

7,504

​

​

8,625

Balance at end of period

​

$

18,788

​

$

38,949

​

$

7,950

​

$

2,464

​

$

36,446

​

$

15,302

​

$

48,157

​

$

168,056

​

​

​

​

​

14

Table of Contents

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Three Months Ended June 30, 2025

​

​

Commercial Lending

​

Residential Lending

​

​

​

​

​

​

​

​

Commercial

​

Commercial

​

​

​

​

​

​

​

Home

​

​

​

​

​

​

​

​

and

​

Real

​

​

​

Lease

​

Residential

​

Equity

​

​

​

​

​

​

(dollars in thousands)

​ ​ ​

Industrial

​ ​ ​

Estate

​ ​ ​

Construction

​ ​ ​

Financing

​ ​ ​

Mortgage

​ ​ ​

Line

​ ​ ​

Consumer

​ ​ ​

Total

Allowance for credit losses:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Balance at beginning of period

​

$

17,992

​

$

39,370

​

$

9,511

​

$

2,344

​

$

34,374

​

$

10,270

​

$

52,751

​

$

166,612

Charge-offs

​

​

(688)

​

​

—

​

​

—

​

​

(82)

​

​

—

​

​

(16)

​

​

(4,543)

​

​

(5,329)

Recoveries

​

​

196

​

​

—

​

​

—

​

​

—

​

​

109

​

​

32

​

​

1,705

​

​

2,042

Provision (benefit)

​

​

2,561

​

​

(106)

​

​

(566)

​

​

81

​

​

3,482

​

​

904

​

​

(1,856)

​

​

4,500

Balance at end of period

​

$

20,061

​

$

39,264

​

$

8,945

​

$

2,343

​

$

37,965

​

$

11,190

​

$

48,057

​

$

167,825

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Six Months Ended June 30, 2025

​

​

Commercial Lending

​

Residential Lending

​

​

​

​

​

​

​

​

Commercial

​

Commercial

​

​

​

​

​

​

​

Home

​

​

​

​

​

​

​

​

and

​

Real

​

​

​

Lease

​

Residential

​

Equity

​

​

​

​

​

​

(dollars in thousands)

​

Industrial

​

Estate

​

Construction

​

Financing

​

Mortgage

​ ​ ​

Line

​

Consumer

​

Total

Allowance for credit losses:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Balance at beginning of period

​

$

16,332

​

$

40,624

​

$

8,570

​

$

2,269

​

$

39,230

​

$

10,205

​

$

43,163

​

$

160,393

Charge-offs

​

​

(2,147)

​

​

—

​

​

—

​

​

(82)

​

​

—

​

​

(30)

​

​

(9,568)

​

​

(11,827)

Recoveries

​

​

599

​

​

251

​

​

—

​

​

—

​

​

129

​

​

96

​

​

3,684

​

​

4,759

Provision (benefit)

​

​

5,277

​

​

(1,611)

​

​

375

​

​

156

​

​

(1,394)

​

​

919

​

​

10,778

​

​

14,500

Balance at end of period

​

$

20,061

​

$

39,264

​

$

8,945

​

$

2,343

​

$

37,965

​

$

11,190

​

$

48,057

​

$

167,825

​

Rollforward of the Reserve for Unfunded Commitments

​

The following presents the activity in the Reserve for Unfunded Commitments for the three and six months ended June 30, 2026 and 2025:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Three Months Ended June 30, 2026

​

​

Commercial Lending

​

Residential Lending

​

​

​

​

​

​

​

​

Commercial

​

Commercial

​

​

​

​

​

​

​

Home

​

​

​

​

​

​

​

​

and

​

Real

​

​

​

Lease

​

Residential

​

Equity

​

​

​

​

​

​

(dollars in thousands)

​ ​ ​

Industrial

​ ​ ​

Estate

​ ​ ​

Construction

​ ​ ​

Financing

​ ​ ​

Mortgage

​ ​ ​

Line

​ ​ ​

Consumer

​ ​ ​

Total

Reserve for unfunded commitments:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Balance at beginning of period

​

$

7,299

​

$

1,120

​

$

10,022

​

$

—

​

$

37

​

$

16,431

​

$

38

​

$

34,947

Provision (benefit)

​

​

591

​

​

244

​

​

2,033

​

​

—

​

​

(24)

​

​

(102)

​

​

(17)

​

​

2,725

Balance at end of period

​

$

7,890

​

$

1,364

​

$

12,055

​

$

—

​

$

13

​

$

16,329

​

$

21

​

$

37,672

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Six Months Ended June 30, 2026

​

​

Commercial Lending

​

Residential Lending

​

​

​

​

​

​

​

​

Commercial

​

Commercial

​

​

​

​

​

​

​

Home

​

​

​

​

​

​

​

​

and

​

Real

​

​

​

Lease

​

Residential

​

Equity

​

​

​

​

​

​

(dollars in thousands)

​

Industrial

​

Estate

​

Construction

​

Financing

​

Mortgage

​

Line

​

Consumer

​

Total

Reserve for unfunded commitments:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Balance at beginning of period

​

$

7,859

​

$

1,220

​

$

9,772

​

$

—

​

$

44

​

$

16,771

​

$

31

​

$

35,697

Provision (benefit)

​

​

31

​

​

144

​

​

2,283

​

​

—

​

​

(31)

​

​

(442)

​

​

(10)

​

​

1,975

Balance at end of period

​

$

7,890

​

$

1,364

​

$

12,055

​

$

—

​

$

13

​

$

16,329

​

$

21

​

$

37,672

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Three Months Ended June 30, 2025

​

​

Commercial Lending

​

Residential Lending

​

​

​

​

​

​

​

​

Commercial

​

Commercial

​

​

​

​

​

​

​

Home

​

​

​

​

​

​

​

​

and

​

Real

​

​

​

Lease

​

Residential

​

Equity

​

​

​

​

​

​

(dollars in thousands)

​ ​ ​

Industrial

​ ​ ​

Estate

​ ​ ​

Construction

​ ​ ​

Financing

​ ​ ​

Mortgage

​ ​ ​

Line

​ ​ ​

Consumer

​ ​ ​

Total

Reserve for unfunded commitments:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Balance at beginning of period

​

$

8,826

​

$

1,135

​

$

7,579

​

$

—

​

$

87

​

$

15,681

​

$

39

​

$

33,347

Provision (benefit)

​

​

(334)

​

​

(132)

​

​

(176)

​

​

—

​

​

(66)

​

​

724

​

​

(16)

​

​

—

Balance at end of period

​

$

8,492

​

$

1,003

​

$

7,403

​

$

—

​

$

21

​

$

16,405

​

$

23

​

$

33,347

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Six Months Ended June 30, 2025

​

​

Commercial Lending

​

Residential Lending

​

​

​

​

​

​

​

​

Commercial

​

Commercial

​

​

​

​

​

​

​

Home

​

​

​

​

​

​

​

​

and

​

Real

​

​

​

Lease

​

Residential

​

Equity

​

​

​

​

​

​

(dollars in thousands)

​

Industrial

​

Estate

​

Construction

​

Financing

​

Mortgage

​

Line

​

Consumer

​

Total

Reserve for unfunded commitments:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Balance at beginning of period

​

$

8,112

​

$

1,003

​

$

7,818

​

$

—

​

$

3

​

$

15,893

​

$

18

​

$

32,847

Provision (benefit)

​

​

380

​

​

—

​

​

(415)

​

​

—

​

​

18

​

​

512

​

​

5

​

​

500

Balance at end of period

​

$

8,492

​

$

1,003

​

$

7,403

​

$

—

​

$

21

​

$

16,405

​

$

23

​

$

33,347

​

15

Table of Contents

Credit Quality Information

​

The Company performs an internal loan review and grading or scoring procedures on an ongoing basis. The review provides management with periodic information as to the quality of the loan portfolio and effectiveness of the Company’s lending policies and procedures. The objective of the loan review and grading or scoring procedures is to identify, in a timely manner, existing or emerging credit quality issues so that appropriate steps can be initiated to avoid or minimize future losses.

​

Loans and leases subject to grading primarily include: commercial and industrial loans, commercial real estate loans, construction loans and lease financing. Other loans subject to grading include installment loans to businesses or individuals for business and commercial purposes, overdraft lines of credit, commercial credit cards, and other credits as may be determined. Credit quality indicators for internally graded loans and leases are generally updated on an annual basis or on a quarterly basis for those loans and leases deemed to be of potentially higher risk.

​

An internal credit risk rating system is used to determine loan grade and is based on borrower credit risk and transactional risk. The loan grading process is a mechanism used to determine the risk of a particular borrower and is based on the following factors of a borrower: character, earnings and operating cash flow, asset and liability structure, debt capacity, management and controls, borrowing entity, and industry and operating environment.

​

Pass – “Pass” (uncriticized) loans and leases, are not considered to carry greater than normal risk. The borrower has the apparent ability to satisfy obligations to the Company, and therefore no loss in ultimate collection is anticipated.

​

Special Mention – Loans and leases that have potential weaknesses deserve management’s close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for assets or in the institution’s credit position at some future date. Special mention assets are not adversely classified and do not expose an institution to sufficient risk to warrant adverse classification.

​

Substandard – Loans and leases that are inadequately protected by the current financial condition and paying capacity of the obligor or by any collateral pledged. Loans and leases so classified must have a well-defined weakness or weaknesses that jeopardize the collection of the debt. They are characterized by the distinct possibility that the bank may sustain some loss if the deficiencies are not corrected.

​

Doubtful – Loans and leases that have weaknesses found in substandard borrowers with the added provision that the weaknesses make collection of debt in full, on the basis of currently existing facts, conditions, and values, highly questionable and improbable.

​

Loss – Loans and leases classified as loss are considered uncollectible and of such little value that their continuance as an asset is not warranted. This classification does not mean that the loan or lease has absolutely no recovery or salvage value, but rather that it is not practical or desirable to defer writing off this basically worthless asset even though partial recovery may be effected in the future.

​

Loans that are primarily monitored for credit quality using FICO scores include: residential mortgage loans, home equity lines and consumer loans. FICO scores are calculated primarily based on a consideration of payment history, the current amount of debt, the length of credit history available, a recent history of new sources of credit and the mix of credit type. FICO scores are updated on a monthly, quarterly or bi-annual basis, depending on the product type.

​

16

Table of Contents

The amortized cost basis by year of origination and credit quality indicator of the Company’s loans and leases as of June 30, 2026 was as follows:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Revolving

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Loans

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Converted

​

​

​

​

​

Term Loans

​

Revolving

​

to Term

​

​

​

​

​

Amortized Cost Basis by Origination Year

​

Loans

​

Loans

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Amortized

​

Amortized

​

​

​

(dollars in thousands)

​

2026

​

2025

​

2024

​

2023

​

2022

​

Prior

​

Cost Basis

​

Cost Basis

​

Total

Commercial Lending

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Commercial and Industrial

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Risk rating:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Pass

​

$

121,498

​

$

265,147

​

$

116,522

​

$

63,411

​

$

57,461

​

$

302,522

​

$

1,229,183

​

$

30,382

​

$

2,186,126

Special Mention

​

​

439

​

​

6,038

​

​

692

​

​

1,689

​

​

2,473

​

​

807

​

​

8,308

​

​

—

​

​

20,446

Substandard

​

​

145

​

​

687

​

​

2,334

​

​

376

​

​

2,998

​

​

18,736

​

​

15,143

​

​

—

​

​

40,419

Other (1)

​

​

11,798

​

​

14,486

​

​

7,222

​

​

3,453

​

​

2,601

​

​

1,743

​

​

51,588

​

​

—

​

​

92,891

Total Commercial and Industrial

​

​

133,880

​

​

286,358

​

​

126,770

​

​

68,929

​

​

65,533

​

​

323,808

​

​

1,304,222

​

​

30,382

​

​

2,339,882

Current period gross charge-offs

​

​

—

​

​

84

​

​

46

​

​

—

​

​

10

​

​

1,392

​

​

1,862

​

​

—

​

​

3,394

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Commercial Real Estate

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Risk rating:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Pass

​

​

439,619

​

​

723,674

​

​

369,595

​

​

404,872

​

​

658,129

​

​

1,814,129

​

​

117,006

​

​

6,353

​

​

4,533,377

Special Mention

​

​

—

​

​

—

​

​

3,623

​

​

1,652

​

​

104,548

​

​

71,474

​

​

2,376

​

​

—

​

​

183,673

Substandard

​

​

969

​

​

—

​

​

5,309

​

​

695

​

​

37,564

​

​

16,219

​

​

5,207

​

​

—

​

​

65,963

Other (1)

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

117

​

​

—

​

​

—

​

​

117

Total Commercial Real Estate

​

​

440,588

​

​

723,674

​

​

378,527

​

​

407,219

​

​

800,241

​

​

1,901,939

​

​

124,589

​

​

6,353

​

​

4,783,130

Current period gross charge-offs

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Construction

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Risk rating:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Pass

​

​

55,488

​

​

124,793

​

​

219,701

​

​

61,476

​

​

169,561

​

​

31,308

​

​

44,234

​

​

—

​

​

706,561

Substandard

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

904

​

​

—

​

​

—

​

​

904

Other (1)

​

​

3,050

​

​

7,895

​

​

5,419

​

​

3,773

​

​

1,723

​

​

1,762

​

​

679

​

​

—

​

​

24,301

Total Construction

​

​

58,538

​

​

132,688

​

​

225,120

​

​

65,249

​

​

171,284

​

​

33,974

​

​

44,913

​

​

—

​

​

731,766

Current period gross charge-offs

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Lease Financing

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Risk rating:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Pass

​

​

94,390

​

​

63,777

​

​

77,896

​

​

84,839

​

​

35,648

​

​

92,657

​

​

—

​

​

—

​

​

449,207

Special Mention

​

​

—

​

​

—

​

​

77

​

​

419

​

​

74

​

​

—

​

​

—

​

​

—

​

​

570

Substandard

​

​

—

​

​

—

​

​

680

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

680

Total Lease Financing

​

​

94,390

​

​

63,777

​

​

78,653

​

​

85,258

​

​

35,722

​

​

92,657

​

​

—

​

​

—

​

​

450,457

Current period gross charge-offs

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Total Commercial Lending

​

$

727,396

​

$

1,206,497

​

$

809,070

​

$

626,655

​

$

1,072,780

​

$

2,352,378

​

$

1,473,724

​

$

36,735

​

$

8,305,235

Current period gross charge-offs

​

$

—

​

$

84

​

$

46

​

$

—

​

$

10

​

$

1,392

​

$

1,862

​

$

—

​

$

3,394

(continued)

17

Table of Contents

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Revolving

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Loans

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Converted

​

​

​

​

​

Term Loans

​

Revolving

​

to Term

​

​

​

​

​

Amortized Cost Basis by Origination Year

​

Loans

​

Loans

​

​

​

(continued)

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Amortized

​

Amortized

​

​

​

(dollars in thousands)

​

2026

​

2025

​

2024

​

2023

​

2022

​

Prior

​

Cost Basis

​

Cost Basis

​

Total

Residential Lending

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Residential Mortgage

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

FICO:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

740 and greater

​

$

118,185

​

$

192,744

​

$

132,076

​

$

163,841

​

$

426,056

​

$

2,240,745

​

$

—

​

$

—

​

$

3,273,647

680 - 739

​

​

13,300

​

​

21,120

​

​

19,686

​

​

27,538

​

​

62,622

​

​

267,910

​

​

—

​

​

—

​

​

412,176

620 - 679

​

​

6,310

​

​

3,842

​

​

5,882

​

​

4,488

​

​

28,030

​

​

68,426

​

​

—

​

​

—

​

​

116,978

550 - 619

​

​

—

​

​

2,487

​

​

1,953

​

​

1,251

​

​

2,653

​

​

22,325

​

​

—

​

​

—

​

​

30,669

Less than 550

​

​

—

​

​

—

​

​

—

​

​

1,143

​

​

3,504

​

​

14,639

​

​

—

​

​

—

​

​

19,286

No Score (3)

​

​

7,172

​

​

6,764

​

​

3,098

​

​

4,753

​

​

15,334

​

​

49,997

​

​

—

​

​

—

​

​

87,118

Other (2)

​

​

2,645

​

​

22,254

​

​

7,104

​

​

11,039

​

​

13,174

​

​

40,616

​

​

7,501

​

​

—

​

​

104,333

Total Residential Mortgage

​

​

147,612

​

​

249,211

​

​

169,799

​

​

214,053

​

​

551,373

​

​

2,704,658

​

​

7,501

​

​

—

​

​

4,044,207

Current period gross charge-offs

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Home Equity Line

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

FICO:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

740 and greater

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

938,399

​

​

343

​

​

938,742

680 - 739

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

171,860

​

​

1,294

​

​

173,154

620 - 679

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

42,343

​

​

785

​

​

43,128

550 - 619

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

13,793

​

​

624

​

​

14,417

Less than 550

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

11,162

​

​

30

​

​

11,192

No Score (3)

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

763

​

​

—

​

​

763

Total Home Equity Line

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

1,178,320

​

​

3,076

​

​

1,181,396

Current period gross charge-offs

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

23

​

​

—

​

​

23

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Total Residential Lending

​

$

147,612

​

$

249,211

​

$

169,799

​

$

214,053

​

$

551,373

​

$

2,704,658

​

$

1,185,821

​

$

3,076

​

$

5,225,603

Current period gross charge-offs

​

$

—

​

$

—

​

$

—

​

$

—

​

$

—

​

$

—

​

$

23

​

$

—

​

$

23

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Consumer Lending

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

FICO:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

740 and greater

​

$

60,328

​

$

93,986

​

$

54,390

​

$

34,205

​

$

35,359

​

$

12,947

​

$

99,798

​

$

56

​

$

391,069

680 - 739

​

​

49,967

​

​

75,396

​

​

37,212

​

​

20,373

​

​

17,060

​

​

7,497

​

​

85,511

​

​

556

​

​

293,572

620 - 679

​

​

30,116

​

​

38,437

​

​

16,008

​

​

9,023

​

​

9,299

​

​

4,877

​

​

51,080

​

​

896

​

​

159,736

550 - 619

​

​

6,036

​

​

12,294

​

​

8,393

​

​

5,766

​

​

5,734

​

​

3,529

​

​

17,345

​

​

845

​

​

59,942

Less than 550

​

​

1,239

​

​

5,754

​

​

4,578

​

​

2,826

​

​

2,807

​

​

1,750

​

​

5,927

​

​

537

​

​

25,418

No Score (3)

​

​

2,691

​

​

332

​

​

4

​

​

22

​

​

—

​

​

15

​

​

35,963

​

​

165

​

​

39,192

Other (2)

​

​

201

​

​

3,921

​

​

—

​

​

—

​

​

—

​

​

1,485

​

​

71,925

​

​

—

​

​

77,532

Total Consumer Lending

​

$

150,578

​

$

230,120

​

$

120,585

​

$

72,215

​

$

70,259

​

$

32,100

​

$

367,549

​

$

3,055

​

$

1,046,461

Current period gross charge-offs

​

$

60

​

$

1,689

​

$

1,147

​

$

827

​

$

532

​

$

1,262

​

$

4,447

​

$

370

​

$

10,334

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Total Loans and Leases

​

$

1,025,586

​

$

1,685,828

​

$

1,099,454

​

$

912,923

​

$

1,694,412

​

$

5,089,136

​

$

3,027,094

​

$

42,866

​

$

14,577,299

Current period gross charge-offs

​

$

60

​

$

1,773

​

$

1,193

​

$

827

​

$

542

​

$

2,654

​

$

6,332

​

$

370

​

$

13,751

(1) Other credit quality indicators used for monitoring purposes are primarily FICO scores. The majority of the loans in this population were originated to borrowers with a prime FICO score (680 and above). As of June 30, 2026, the majority of the loans in this population were current.

(2) Other credit quality indicators used for monitoring purposes are primarily internal risk ratings. The majority of the loans in this population were graded with a “Pass” rating. As of June 30, 2026, the majority of the loans in this population were current.

(3) No FICO scores are primarily related to loans and leases extended to non-residents. Loans and leases of this nature are primarily secured by collateral and/or are closely monitored for performance.

​

18

Table of Contents

The amortized cost basis by year of origination and credit quality indicator of the Company’s loans and leases as of December 31, 2025 was as follows:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Revolving

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Loans

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Converted

​

​

​

​

​

Term Loans

​

Revolving

​

to Term

​

​

​

​

​

Amortized Cost Basis by Origination Year

​

Loans

​

Loans

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Amortized

​

Amortized

​

​

​

(dollars in thousands)

​

2025

​

2024

​

2023

​

2022

​

2021

​

Prior

​

Cost Basis

​

Cost Basis

​

Total

Commercial Lending

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Commercial and Industrial

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Risk rating:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Pass

​

$

321,132

​

$

120,082

​

$

61,358

​

$

99,174

​

$

150,013

​

$

228,890

​

$

1,007,162

​

$

14,182

​

$

2,001,993

Special Mention

​

​

3,790

​

​

825

​

​

1,900

​

​

1,940

​

​

341

​

​

841

​

​

3,819

​

​

—

​

​

13,456

Substandard

​

​

746

​

​

—

​

​

368

​

​

7,827

​

​

19

​

​

20,435

​

​

38,466

​

​

—

​

​

67,861

Other (1)

​

​

19,067

​

​

9,027

​

​

5,046

​

​

3,560

​

​

1,081

​

​

1,164

​

​

49,078

​

​

—

​

​

88,023

Total Commercial and Industrial

​

​

344,735

​

​

129,934

​

​

68,672

​

​

112,501

​

​

151,454

​

​

251,330

​

​

1,098,525

​

​

14,182

​

​

2,171,333

Current period gross charge-offs

​

​

1

​

​

170

​

​

775

​

​

547

​

​

407

​

​

2,800

​

​

31

​

​

—

​

​

4,731

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Commercial Real Estate

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Risk rating:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Pass

​

​

732,672

​

​

288,924

​

​

389,773

​

​

735,412

​

​

566,285

​

​

1,525,374

​

​

115,640

​

​

6,881

​

​

4,360,961

Special Mention

​

​

—

​

​

681

​

​

37,667

​

​

43,819

​

​

41,393

​

​

21,317

​

​

1,314

​

​

—

​

​

146,191

Substandard

​

​

—

​

​

5,547

​

​

529

​

​

59,126

​

​

989

​

​

16,109

​

​

751

​

​

—

​

​

83,051

Other (1)

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

123

​

​

—

​

​

—

​

​

123

Total Commercial Real Estate

​

​

732,672

​

​

295,152

​

​

427,969

​

​

838,357

​

​

608,667

​

​

1,562,923

​

​

117,705

​

​

6,881

​

​

4,590,326

Current period gross charge-offs

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Construction

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Risk rating:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Pass

​

​

82,330

​

​

218,505

​

​

106,890

​

​

192,608

​

​

77,380

​

​

47,078

​

​

26,917

​

​

—

​

​

751,708

Special Mention

​

​

—

​

​

—

​

​

—

​

​

27,972

​

​

—

​

​

121

​

​

—

​

​

—

​

​

28,093

Substandard

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

904

​

​

—

​

​

—

​

​

904

Other (1)

​

​

7,773

​

​

8,300

​

​

4,760

​

​

4,019

​

​

160

​

​

1,872

​

​

686

​

​

—

​

​

27,570

Total Construction

​

​

90,103

​

​

226,805

​

​

111,650

​

​

224,599

​

​

77,540

​

​

49,975

​

​

27,603

​

​

—

​

​

808,275

Current period gross charge-offs

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Lease Financing

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Risk rating:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Pass

​

​

122,978

​

​

80,669

​

​

89,475

​

​

43,015

​

​

9,087

​

​

91,109

​

​

—

​

​

—

​

​

436,333

Special Mention

​

​

—

​

​

—

​

​

556

​

​

42

​

​

—

​

​

—

​

​

—

​

​

—

​

​

598

Substandard

​

​

—

​

​

4,379

​

​

408

​

​

212

​

​

—

​

​

—

​

​

—

​

​

—

​

​

4,999

Total Lease Financing

​

​

122,978

​

​

85,048

​

​

90,439

​

​

43,269

​

​

9,087

​

​

91,109

​

​

—

​

​

—

​

​

441,930

Current period gross charge-offs

​

​

—

​

​

662

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

662

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Total Commercial Lending

​

$

1,290,488

​

$

736,939

​

$

698,730

​

$

1,218,726

​

$

846,748

​

$

1,955,337

​

$

1,243,833

​

$

21,063

​

$

8,011,864

Current period gross charge-offs

​

$

1

​

$

832

​

$

775

​

$

547

​

$

407

​

$

2,800

​

$

31

​

$

—

​

$

5,393

(continued)

19

Table of Contents

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Revolving

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Loans

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Converted

​

​

​

​

​

Term Loans

​

Revolving

​

to Term

​

​

​

​

​

Amortized Cost Basis by Origination Year

​

Loans

​

Loans

​

​

​

(continued)

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Amortized

​

Amortized

​

​

​

(dollars in thousands)

​

2025

​

2024

​

2023

​

2022

​

2021

​

Prior

​

Cost Basis

​

Cost Basis

​

Total

Residential Lending

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Residential Mortgage

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

FICO:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

740 and greater

​

$

196,591

​

$

146,779

​

$

188,885

​

$

455,130

​

$

881,320

​

$

1,479,533

​

$

—

​

$

—

​

$

3,348,238

680 - 739

​

​

21,211

​

​

19,044

​

​

26,493

​

​

57,219

​

​

94,557

​

​

171,825

​

​

—

​

​

—

​

​

390,349

620 - 679

​

​

7,054

​

​

2,100

​

​

5,535

​

​

24,857

​

​

23,888

​

​

51,817

​

​

—

​

​

—

​

​

115,251

550 - 619

​

​

—

​

​

721

​

​

1,188

​

​

3,126

​

​

6,334

​

​

14,464

​

​

—

​

​

—

​

​

25,833

Less than 550

​

​

—

​

​

1,968

​

​

887

​

​

3,000

​

​

4,653

​

​

9,415

​

​

—

​

​

—

​

​

19,923

No Score (3)

​

​

8,082

​

​

5,093

​

​

5,384

​

​

15,829

​

​

9,523

​

​

44,549

​

​

—

​

​

—

​

​

88,460

Other (2)

​

​

20,152

​

​

7,771

​

​

11,625

​

​

13,530

​

​

13,640

​

​

32,144

​

​

9,384

​

​

—

​

​

108,246

Total Residential Mortgage

​

​

253,090

​

​

183,476

​

​

239,997

​

​

572,691

​

​

1,033,915

​

​

1,803,747

​

​

9,384

​

​

—

​

​

4,096,300

Current period gross charge-offs

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Home Equity Line

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

FICO:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

740 and greater

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

939,884

​

​

1,068

​

​

940,952

680 - 739

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

171,306

​

​

1,520

​

​

172,826

620 - 679

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

40,928

​

​

637

​

​

41,565

550 - 619

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

13,464

​

​

843

​

​

14,307

Less than 550

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

8,069

​

​

71

​

​

8,140

No Score (3)

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

737

​

​

—

​

​

737

Total Home Equity Line

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

1,174,388

​

​

4,139

​

​

1,178,527

Current period gross charge-offs

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

30

​

​

—

​

​

30

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Total Residential Lending

​

$

253,090

​

$

183,476

​

$

239,997

​

$

572,691

​

$

1,033,915

​

$

1,803,747

​

$

1,183,772

​

$

4,139

​

$

5,274,827

Current period gross charge-offs

​

$

—

​

$

—

​

$

—

​

$

—

​

$

—

​

$

—

​

$

30

​

$

—

​

$

30

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Consumer Lending

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

FICO:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

740 and greater

​

$

113,519

​

$

65,981

​

$

42,560

​

$

49,118

​

$

20,240

​

$

4,462

​

$

102,761

​

$

110

​

$

398,751

680 - 739

​

​

86,088

​

​

47,861

​

​

28,552

​

​

24,684

​

​

10,429

​

​

2,974

​

​

87,662

​

​

529

​

​

288,779

620 - 679

​

​

44,816

​

​

20,455

​

​

11,809

​

​

11,804

​

​

5,695

​

​

2,379

​

​

50,406

​

​

963

​

​

148,327

550 - 619

​

​

9,253

​

​

8,439

​

​

6,414

​

​

7,503

​

​

3,497

​

​

2,004

​

​

16,764

​

​

832

​

​

54,706

Less than 550

​

​

2,491

​

​

4,263

​

​

3,213

​

​

3,809

​

​

1,948

​

​

1,287

​

​

5,745

​

​

498

​

​

23,254

No Score (3)

​

​

1,775

​

​

5

​

​

40

​

​

5

​

​

—

​

​

22

​

​

36,868

​

​

156

​

​

38,871

Other (2)

​

​

4,536

​

​

—

​

​

—

​

​

—

​

​

547

​

​

1,009

​

​

67,058

​

​

—

​

​

73,150

Total Consumer Lending

​

$

262,478

​

$

147,004

​

$

92,588

​

$

96,923

​

$

42,356

​

$

14,137

​

$

367,264

​

$

3,088

​

$

1,025,838

Current period gross charge-offs

​

$

802

​

$

2,494

​

$

1,693

​

$

1,873

​

$

947

​

$

2,425

​

$

8,367

​

$

872

​

$

19,473

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Total Loans and Leases

​

$

1,806,056

​

$

1,067,419

​

$

1,031,315

​

$

1,888,340

​

$

1,923,019

​

$

3,773,221

​

$

2,794,869

​

$

28,290

​

$

14,312,529

Current period gross charge-offs

​

$

803

​

$

3,326

​

$

2,468

​

$

2,420

​

$

1,354

​

$

5,225

​

$

8,428

​

$

872

​

$

24,896

(1) Other credit quality indicators used for monitoring purposes are primarily FICO scores. The majority of the loans in this population were originated to borrowers with a prime FICO score (680 and above). As of December 31, 2025, the majority of the loans in this population were current.

(2) Other credit quality indicators used for monitoring purposes are primarily internal risk ratings. The majority of the loans in this population were graded with a “Pass” rating. As of December 31, 2025, the majority of the loans in this population were current.

(3) No FICO scores are primarily related to loans and leases extended to non-residents. Loans and leases of this nature are primarily secured by collateral and/or are closely monitored for performance.

​

There were no loans and leases graded as Doubtful or Loss as of both June 30, 2026 and December 31, 2025.

​

20

Table of Contents

Past-Due Status

​

The Company continually updates its aging analysis for loans and leases to monitor the migration of loans and leases into past due categories. The Company considers loans and leases that are delinquent for 30 days or more to be past due. As of June 30, 2026 and December 31, 2025, the aging analysis of the amortized cost basis of the Company’s past due loans and leases was as follows:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

June 30, 2026

​

​

Past Due

​

​

​

​

​

Loans and

​

​

​

​

​

​

Greater

​

​

​

​

​

​

​

Leases Past

​

​

​

​

​

​

Than or

​

​

​

​

​

​

​

Due 90 Days

​

​

30-59

​

60-89

​

Equal to

​

​

​

​

​

​

​

or More and

​

​

Days

​

Days

​

90 Days

​

Total

​

​

​

Total Loans

​

Still Accruing

(dollars in thousands)

​

Past Due

​

Past Due

​

Past Due

​

Past Due

​

Current

​

and Leases

​

Interest

Commercial and industrial

​

$

8,313

​

$

1,070

​

$

3,393

​

$

12,776

​

$

2,327,106

​

$

2,339,882

​

$

249

Commercial real estate

​

​

752

​

​

2,941

​

​

628

​

​

4,321

​

​

4,778,809

​

​

4,783,130

​

​

—

Construction

​

​

160

​

​

1,420

​

​

904

​

​

2,484

​

​

729,282

​

​

731,766

​

​

—

Lease financing

​

​

—

​

​

—

​

​

565

​

​

565

​

​

449,892

​

​

450,457

​

​

—

Residential mortgage

​

​

14,804

​

​

4,890

​

​

12,119

​

​

31,813

​

​

4,012,394

​

​

4,044,207

​

​

771

Home equity line

​

​

3,565

​

​

2,444

​

​

5,839

​

​

11,848

​

​

1,169,548

​

​

1,181,396

​

​

—

Consumer

​

​

12,476

​

​

5,690

​

​

3,073

​

​

21,239

​

​

1,025,222

​

​

1,046,461

​

​

3,073

Total

​

$

40,070

​

$

18,455

​

$

26,521

​

$

85,046

​

$

14,492,253

​

$

14,577,299

​

$

4,093

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

December 31, 2025

​

​

Past Due

​

​

​

​

​

Loans and

​

​

​

​

​

​

Greater

​

​

​

​

​

​

​

Leases Past

​

​

​

​

​

​

Than or

​

​

​

​

​

​

​

Due 90 Days

​

​

30-59

​

60-89

​

Equal to

​

​

​

​

​

​

​

or More and

​

​

Days

​

Days

​

90 Days

​

Total

​

​

​

Total Loans

​

Still Accruing

(dollars in thousands)

​

Past Due

​

Past Due

​

Past Due

​

Past Due

​

Current

​

and Leases

​

Interest

Commercial and industrial

​

$

3,009

​

$

7,756

​

$

685

​

$

11,450

​

$

2,159,883

​

$

2,171,333

​

$

318

Commercial real estate

​

​

798

​

​

18

​

​

436

​

​

1,252

​

​

4,589,074

​

​

4,590,326

​

​

—

Construction

​

​

2,420

​

​

—

​

​

1,065

​

​

3,485

​

​

804,790

​

​

808,275

​

​

—

Lease financing

​

​

135

​

​

30

​

​

570

​

​

735

​

​

441,195

​

​

441,930

​

​

—

Residential mortgage

​

​

18,387

​

​

6,522

​

​

8,133

​

​

33,042

​

​

4,063,258

​

​

4,096,300

​

​

55

Home equity line

​

​

5,928

​

​

1,642

​

​

4,878

​

​

12,448

​

​

1,166,079

​

​

1,178,527

​

​

—

Consumer

​

​

13,935

​

​

3,995

​

​

2,984

​

​

20,914

​

​

1,004,924

​

​

1,025,838

​

​

2,984

Total

​

$

44,612

​

$

19,963

​

$

18,751

​

$

83,326

​

$

14,229,203

​

$

14,312,529

​

$

3,357

​

Nonaccrual Loans and Leases

​

The Company generally places a loan or lease on nonaccrual status when management believes that collection of principal or interest has become doubtful or when a loan or lease becomes 90 days past due as to principal or interest, unless it is well secured and in the process of collection. The Company charges off a loan or lease when facts indicate that the loan or lease is considered uncollectible.

​

The amortized cost basis of loans and leases on nonaccrual status as of June 30, 2026 and December 31, 2025 and the amortized cost basis of loans and leases on nonaccrual status with no ACL as of June 30, 2026 and December 31, 2025 were as follows:

​

​	​	​	​	​	​	​
​	​	June 30, 2026
​	​	Nonaccrual		​	​	​
​	​	Loans		​	​	​
​	​	and Leases		​	​	​
​	​	With No		​	Nonaccrual
​	​	Allowance		​	Loans
(dollars in thousands)	​	for Credit Losses		​	and Leases
Commercial and industrial	​	$	1,405	​	$	4,054
Commercial real estate	​	​	2,252	​	​	2,879
Construction	​	​	1,627	​	​	1,788
Lease financing	​	​	—	​	​	680
Residential mortgage	​	​	10,322	​	​	18,675
Home equity line	​	​	1,685	​	​	11,425
Total Nonaccrual Loans and Leases	​	$	17,291	​	$	39,501

21

Table of Contents

​

​	​	​	​	​	​	​
​	​	December 31, 2025
​	​	Nonaccrual		​	​	​
​	​	Loans		​	​	​
​	​	and Leases		​	​	​
​	​	With No		​	Nonaccrual
​	​	Allowance		​	Loans
(dollars in thousands)	​	for Credit Losses		​	and Leases
Commercial and industrial	​	$	—	​	$	8,805
Commercial real estate	​	​	2,397	​	​	3,007
Construction	​	​	1,627	​	​	1,788
Lease financing	​	​	—	​	​	734
Residential mortgage	​	​	5,703	​	​	16,423
Home equity line	​	​	856	​	​	10,271
Total Nonaccrual Loans and Leases	​	$	10,583	​	$	41,028

​

For the three and six months ended June 30, 2026, the Company recognized interest income of $0.2 million and $0.3 million, respectively, on nonaccrual loans and leases. For the three and six months ended June 30, 2025, the Company recognized interest income of $0.2 million and $0.6 million, respectively, on nonaccrual loans and leases. Furthermore, for the three and six months ended June 30, 2026, the amount of accrued interest receivables written off by reversing interest income was $0.4 million and $0.7 million, respectively, and for the three and six months ended June 30, 2025, the amount of accrued interest receivables written off by reversing interest income was $0.4 million and $0.7 million, respectively.

​

Collateral-Dependent Loans and Leases

​

Collateral-dependent loans and leases are those for which repayment (on the basis of the Company’s assessment as of the reporting date) is expected to be provided substantially through the operation or sale of the collateral and the borrower is experiencing financial difficulty. As of June 30, 2026 and December 31, 2025, the amortized cost basis of collateral-dependent loans were $22.2 million and $37.7 million, respectively. As of June 30, 2026 and December 31, 2025, these loans were primarily collateralized by residential real estate property, commercial real estate property and borrower assets and the fair value of collateral on substantially all collateral-dependent loans were significantly in excess of their amortized cost basis.

​

Loan Modifications to Borrowers Experiencing Financial Difficulty

​

Commercial and industrial loans with a borrower experiencing financial difficulty may be modified through interest rate reductions, term extensions, and converting revolving credit lines to term loans. Modifications of commercial real estate and construction loans with a borrower experiencing financial difficulty may involve reducing the interest rate for the remaining term of the loan or extending the maturity date at an interest rate lower than the current market rate for new debt with similar risk. Modifications of construction loans with a borrower experiencing financial difficulty may also involve extending the interest-only payment period. Interest continues to accrue on the missed payments and as a result, the effective yield on the loan remains unchanged. Modifications of residential real estate loans with a borrower experiencing financial difficulty may be comprised of loans where monthly payments are lowered to accommodate the borrowers' financial needs for a period of time, including extended interest-only periods and reamortization of the balance. Modifications of consumer loans with a borrower experiencing financial difficulty may involve interest rate reductions and term extensions.

​

Loans modified with a borrower experiencing financial difficulty, whether in default or not, may already be on nonaccrual status and in some cases, partial charge-offs may have already been taken against the outstanding loan balance. Loans modified with a borrower experiencing financial difficulty are evaluated for impairment. As a result, this may have a financial effect of impacting the specific ACL associated with the loan. An ACL for impaired commercial loans, including commercial real estate and construction loans, is measured based on the present value of expected future cash flows discounted at the loan's effective interest rate or if the loan is collateral-dependent, the estimated fair value of the collateral, less any selling costs. An ACL for impaired residential real estate loans is measured based on the estimated fair value of the collateral, less any selling costs. Management exercises significant judgment in developing these estimates.

​

22

Table of Contents

The following tables present, by class of financing receivable and type of modification granted, the amortized cost basis as of June 30, 2026 and 2025, related to loans modified to borrowers experiencing financial difficulty during the three and six months ended June 30, 2026 and 2025, respectively:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Interest Rate Reduction

​

​

​

Three Months Ended

​

​

​

Six Months Ended

​

​

​

​

June 30, 2026

​

​

​

June 30, 2026

​

​

​

​

Amortized

​

% of Total Class

​

​

​

Amortized

​

% of Total Class

​

(dollars in thousands)

​

Cost Basis(1)

​

of Financing Receivable

​

​

Cost Basis(1)

​

of Financing Receivable

​

Consumer

​

$

414

​

0.04

%

​

$

771

​

0.07

%

Total

​

$

414

​

n/m

%

​

$

771

​

n/m

%

n/m – Represents less than 0.01% of total class of financing receivable.

(1) The amortized cost basis reflects all partial paydowns and charge-offs since the modification date and do not include loans modified to borrowers experiencing financial difficulty that have been fully paid off, charged off, or foreclosed upon by the end of the period.

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Interest Rate Reduction

​

​

​

Three Months Ended

​

​

​

Six Months Ended

​

​

​

​

June 30, 2025

​

​

​

June 30, 2025

​

​

​

​

Amortized

​

% of Total Class

​

​

​

Amortized

​

% of Total Class

​

(dollars in thousands)

​

Cost Basis(1)

​

of Financing Receivable

​

​

Cost Basis(1)

​

of Financing Receivable

​

Consumer

​

$

544

​

0.05

%

​

$

1,052

​

0.10

%

Total

​

$

544

​

n/m

%

​

$

1,052

​

n/m

%

n/m – Represents less than 0.01% of total class of financing receivable.

(1) The amortized cost basis reflects all partial paydowns and charge-offs since the modification date and do not include loans modified to borrowers experiencing financial difficulty that have been fully paid off, charged off, or foreclosed upon by the end of the period.

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Term Extension

​

​

​

Three Months Ended

​

​

​

Six Months Ended

​

​

​

​

June 30, 2026

​

​

​

June 30, 2026

​

​

​

​

Amortized

​

% of Total Class

​

​

​

Amortized

​

% of Total Class

​

(dollars in thousands)

​

Cost Basis(1)

​

of Financing Receivable

​

​

Cost Basis(1)

​

of Financing Receivable

​

Commercial and industrial

​

$

74

​

n/m

%

​

$

238

​

0.01

%

Residential mortgage

​

​

—

​

—

​

​

​

253

​

n/m

​

Consumer

​

​

71

​

n/m

​

​

​

141

​

0.01

​

Total

​

$

145

​

n/m

%

​

$

632

​

n/m

%

n/m – Represents less than 0.01% of total class of financing receivable.

(1) The amortized cost basis reflects all partial paydowns and charge-offs since the modification date and do not include loans modified to borrowers experiencing financial difficulty that have been fully paid off, charged off, or foreclosed upon by the end of the period.

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Term Extension

​

​

​

Three Months Ended

​

​

​

Six Months Ended

​

​

​

​

June 30, 2025

​

​

​

June 30, 2025

​

​

​

​

Amortized

​

% of Total Class

​

​

​

Amortized

​

% of Total Class

​

(dollars in thousands)

​

Cost Basis(1)

​

of Financing Receivable

​

​

Cost Basis(1)

​

of Financing Receivable

​

Commercial and industrial

​

$

731

​

0.03

%

​

$

9,620

​

0.41

%

Commercial real estate

​

​

940

​

0.02

​

​

​

1,138

​

0.03

​

Construction

​

​

904

​

0.10

​

​

​

904

​

0.10

​

Residential mortgage

​

​

714

​

0.02

​

​

​

714

​

0.02

​

Consumer

​

​

500

​

0.05

​

​

​

579

​

0.06

​

Total

​

$

3,789

​

0.03

%

​

$

12,955

​

0.09

%

(1) The amortized cost basis reflects all partial paydowns and charge-offs since the modification date and do not include loans modified to borrowers experiencing financial difficulty that have been fully paid off, charged off, or foreclosed upon by the end of the period.

​

​

​

​

​

​

​

23

Table of Contents

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Other-Than-Insignificant Payment Delay

​

​

​

Three Months Ended

​

​

​

Six Months Ended

​

​

​

​

June 30, 2025

​

​

​

June 30, 2025

​

​

​

​

Amortized

​

% of Total Class

​

​

​

Amortized

​

% of Total Class

​

(dollars in thousands)

​

Cost Basis(1)

​

of Financing Receivable

​

​

Cost Basis(1)

​

of Financing Receivable

​

Commercial real estate

​

$

—

​

—

%

​

$

1,005

​

0.02

%

Residential mortgage

​

​

1,184

​

0.03

​

​

​

1,184

​

0.03

​

Total

​

$

1,184

​

n/m

%

​

$

2,189

​

0.02

%

n/m – Represents less than 0.01% of total class of financing receivable.

(1) The amortized cost basis reflects all partial paydowns and charge-offs since the modification date and do not include loans modified to borrowers experiencing financial difficulty that have been fully paid off, charged off, or foreclosed upon by the end of the period.

​

There were no loan modifications to borrowers experiencing financial difficulty for which the Company had modified the terms of the loans in the form of an other-than-insignificant payment delay during both the three and six months ended June 30, 2026.

​

The following tables describe, by class of financing receivable and type of modification granted, the financial effect of the modifications made to borrowers experiencing financial difficulty during the three and six months ended June 30, 2026 and 2025, respectively:

​

​	​	​	​	​
​	​	Interest Rate Reduction
​	​	Financial Effect
​	​	Three Months Ended June 30, 2026	​	Six Months Ended June 30, 2026
Consumer	​	Reduced weighted-average contractual interest rate by 13.52%.	​	Reduced weighted-average contractual interest rate by 13.57%.

​

​	​	​	​	​
​	​	Interest Rate Reduction
​	​	Financial Effect
​	​	Three Months Ended June 30, 2025	​	Six Months Ended June 30, 2025
Consumer	​	Reduced weighted-average contractual interest rate by 12.98%.	​	Reduced weighted-average contractual interest rate by 13.04%.

​

​	​	​	​	​
​	​	Term Extension
​	​	Financial Effect
​	​	Three Months Ended June 30, 2026	​	Six Months Ended June 30, 2026
Commercial and industrial	​	Added a weighted-average 4.9 years to the life of loans.	​	Added a weighted-average 4.9 years to the life of loans.
Residential mortgage	​	—	​	Added a weighted-average 2.0 years to the life of loans.
Consumer	​	Added a weighted-average 4.8 years to the life of loans.	​	Added a weighted-average 4.9 years to the life of loans.

​

​	​	​	​	​
​	​	Term Extension
​	​	Financial Effect
​	​	Three Months Ended June 30, 2025	​	Six Months Ended June 30, 2025
Commercial and industrial	​	Added a weighted-average 2.0 years to the life of loans.	​	Added a weighted-average 0.6 years to the life of loans.
Commercial real estate	​	Added a weighted-average 0.2 years to the life of loans.	​	Added a weighted-average 0.3 years to the life of loans.
Construction	​	Added a weighted-average 0.2 years to the life of loans.	​	Added a weighted-average 0.2 years to the life of loans.
Residential mortgage	​	Added a weighted-average 0.3 years to the life of loans.	​	Added a weighted-average 0.3 years to the life of loans.
Consumer	​	Added a weighted-average 0.1 years to the life of loans.	​	Added a weighted-average 0.7 years to the life of loans.

​

​	​	​	​	​
​	​	Other-Than-Insignificant Payment Delay
​	​	Financial Effect
​	​	Three Months Ended June 30, 2025	​	Six Months Ended June 30, 2025
Commercial real estate	​	—	​	Deferred a weighted-average of $209 thousand in loan payments.
Residential mortgage	​	Deferred a weighted-average of $65 thousand in loan payments.	​	Deferred a weighted-average of $65 thousand in loan payments.

​

24

Table of Contents

The following tables present, by class of financing receivable and type of modification granted, the amortized cost basis, as of June 30, 2026 and 2025, of loans that had a payment default during the three and six months ended June 30, 2026 and 2025, respectively, and were modified in the 12 months before default to borrowers experiencing financial difficulty. The Company is reporting these defaulted loans based on a payment default definition of 30 days past due:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Amortized Cost Basis of Modified Loans That Subsequently Defaulted(1)

​

​

Three Months Ended June 30, 2026

​

Six Months Ended June 30, 2026

(dollars in thousands)

​

Interest Rate Reduction

​

Term Extension

​

Other-Than-Insignificant Payment Delay

​

Interest Rate Reduction

​

Term Extension

​

Other-Than-Insignificant Payment Delay

Commercial and industrial

​

$

—

​

$

570

​

$

—

​

$

—

​

$

594

​

$

—

Residential mortgage

​

​

—

​

​

—

​

​

—

​

​

—

​

​

253

​

​

—

Consumer

​

​

238

​

​

—

​

​

—

​

​

347

​

​

—

​

​

—

Total

​

$

238

​

$

570

​

$

—

​

$

347

​

$

847

​

$

—

(1) The amortized cost basis reflects all partial paydowns and charge-offs since the modification date and do not include loans modified to borrowers experiencing financial difficulty that have been fully paid off, charged off, or foreclosed upon by the end of the period.

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Amortized Cost Basis of Modified Loans That Subsequently Defaulted(1)

​

​

Three Months Ended June 30, 2025

​

Six Months Ended June 30, 2025

(dollars in thousands)

​

Interest Rate Reduction

​

Term Extension

​

​

Other-Than-Insignificant Payment Delay

​

Interest Rate Reduction

​

Term Extension

​

Other-Than-Insignificant Payment Delay

Commercial and industrial

​

$

—

​

$

57

​

$

—

​

$

—

​

$

128

​

$

—

Construction

​

​

—

​

​

904

​

​

—

​

​

—

​

​

904

​

​

—

Residential mortgage

​

​

—

​

​

299

​

​

549

​

​

—

​

​

608

​

​

549

Home equity line

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

Consumer

​

​

410

​

​

4

​

​

—

​

​

501

​

​

20

​

​

—

Total

​

$

410

​

$

1,264

​

$

549

​

$

501

​

$

1,660

​

$

549

(1) The amortized cost basis reflects all partial paydowns and charge-offs since the modification date and do not include loans modified to borrowers experiencing financial difficulty that have been fully paid off, charged off, or foreclosed upon by the end of the period.

​

Performance of the loans that are modified to borrowers experiencing financial difficulty is monitored to understand the effectiveness of the Company’s modification efforts. As of June 30, 2026 and 2025, the aging analysis of the amortized cost basis of the performance of loans that have been modified in the last 12 months related to borrowers experiencing financial difficulty was as follows:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

June 30, 2026

​

​

​

​

Past Due

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Greater Than

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

or Equal to

​

​

​

​

​

​

​

​

​

​

​

​

​

30-59 Days

​

​

60-89 Days

​

​

90 Days

​

​

Total

​

​

​

​

​

​

​

(dollars in thousands)

​

Past Due

​

Past Due

​

Past Due

​

Past Due

​

Current

​

Total

​

Commercial and industrial

​

$

86

​

$

—

​

$

—

​

$

86

​

$

414

​

$

500

​

Residential mortgage

​

​

—

​

​

—

​

​

—

​

​

—

​

​

1,600

​

​

1,600

​

Consumer

​

​

122

​

​

47

​

​

42

​

​

211

​

​

1,321

​

​

1,532

​

Total

​

$

208

​

$

47

​

$

42

​

$

297

​

$

3,335

​

$

3,632

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

June 30, 2025

​

​

​

Past Due

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Greater Than

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

or Equal to

​

​

​

​

​

​

​

​

​

​

​

​

30-59 Days

​

​

60-89 Days

​

​

90 Days

​

​

Total

​

​

​

​

​

​

(dollars in thousands)

​

Past Due

​

Past Due

​

Past Due

​

Past Due

​

Current

​

Total

Commercial and industrial

​

$

—

​

$

—

​

$

16

​

$

16

​

$

9,759

​

$

9,775

Commercial real estate

​

​

—

​

​

—

​

​

—

​

​

—

​

​

2,143

​

​

2,143

Construction

​

​

—

​

​

904

​

​

—

​

​

904

​

​

—

​

​

904

Residential mortgage

​

​

549

​

​

299

​

​

—

​

​

848

​

​

2,058

​

​

2,906

Consumer

​

​

158

​

​

34

​

​

80

​

​

272

​

​

1,935

​

​

2,207

Total

​

$

707

​

$

1,237

​

$

96

​

$

2,040

​

$

15,895

​

$

17,935

​

25

Table of Contents

The Company had commitments to extend credit, standby letters of credit, and commercial letters of credit totaling $6.8 billion and $6.9 billion as of June 30, 2026 and December 31, 2025, respectively. Of the $6.8 billion at June 30, 2026, there were no commitments to lend additional funds to borrowers experiencing financial difficulty for which the Company had modified the terms of the loans in the form of an interest rate reduction, term extension, or other-than-insignificant payment delay during the six months ended June 30, 2026. Of the $6.9 billion at December 31, 2025, there were no commitments to lend additional funds to borrowers experiencing financial difficulty for which the Company had modified the terms of the loans in the form of an interest rate reduction, term extension or other-than-insignificant payment delay during the year ended December 31, 2025.

​

Foreclosed Property

​

As of both June 30, 2026 and December 31, 2025, there were no residential real estate properties held from foreclosed residential mortgage loans.

​

5. Other Assets

​

Bank-Owned Life Insurance

​

During 2026 and 2025, the Company entered into noncash exchanges of certain bank-owned life insurance (“BOLI”) policies in accordance with Internal Revenue Code (“IRC”) Section 1035. Cash surrender value of $2.2 million was transferred into new policies during both the three and six months ended June 30, 2026. Cash surrender value of $81.6 million and $81.7 million were transferred into new policies during the three and six months ended June 30, 2025, respectively. No gain or loss was recognized as part of these exchanges.

​

Mortgage Servicing Rights

​

Mortgage servicing activities include collecting principal, interest, tax and insurance payments from borrowers while accounting for and remitting payments to investors, taxing authorities and insurance companies. The Company also monitors delinquencies and administers foreclosure proceedings.

​

Mortgage loan servicing income is recorded in noninterest income as a part of other service charges and fees and amortization of the servicing assets is recorded in noninterest income as part of other income. The Company’s maximum potential exposure to repurchases is limited to the unpaid principal amount of residential real estate loans serviced for others, which were $1.1 billion as of both June 30, 2026 and December 31, 2025. Servicing fees include contractually specified fees, late charges and ancillary fees and were $0.7 million for both three months ended June 30, 2026 and 2025, and $1.4 million and $1.5 million for the six months ended June 30, 2026 and 2025, respectively.

​

Amortization of mortgage servicing rights (“MSRs”) were $0.2 million for both three months ended June 30, 2026 and 2025, and $0.4 million for both six months ended June 30, 2026 and 2025. The estimated future amortization expenses for MSRs over the next five years are as follows:

​

​	​	​	​
​	​	Estimated
(dollars in thousands)	​	Amortization
Under one year	​	$	595
One to two years	​	​	529
Two to three years	​	​	472
Three to four years	​	​	419
Four to five years	​	​	373

​

The details of the Company’s MSRs are presented below:

​

​	​	​	​	​	​	​
​	​	June 30,		​	December 31,
(dollars in thousands)		2026		​	2025
Gross carrying amount	​	$	70,202	​	$	70,096
Less: accumulated amortization	​	​	65,900	​	​	65,458
Net carrying value	​	$	4,302	​	$	4,638
​	​	​	​	​	​	​

​

26

Table of Contents

The following table presents changes in amortized MSRs for the three and six months ended June 30, 2026 and 2025:

​

​	​	​	​	​	​	​	​	​	​	​	​	​
​	​	Three Months Ended June 30,					​	Six Months Ended June 30,
(dollars in thousands)	​	2026		​	2025		​	2026		​	2025
Balance at beginning of period	​	$	4,470	​	$	4,926	​	$	4,638	​	$	5,078
Originations	​	​	60	​	​	53	​	​	106	​	​	104
Amortization	​	​	(228)	​	​	(151)	​	​	(442)	​	​	(354)
Balance at end of period	​	$	4,302	​	$	4,828	​	$	4,302	​	$	4,828
Fair value of amortized MSRs at beginning of period	​	$	12,016	​	$	13,357	​	$	12,364	​	$	13,404
Fair value of amortized MSRs at end of period	​	$	12,216	​	$	13,042	​	$	12,216	​	$	13,042

​

MSRs are evaluated for impairment if events and circumstances indicate a possible impairment. No impairment of MSRs was recorded for the three and six months ended June 30, 2026 and 2025.

​

The quantitative assumptions used in determining the lower of cost or fair value of the Company’s MSRs as of June 30, 2026 and December 31, 2025 were as follows:

​

​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
​	​	June 30, 2026						​	December 31, 2025						​
​	​	​	​	​	​	​	Weighted	​	​	​	​	​	​	Weighted	​
​	​	Range				​	Average	​	Range				​	Average	​
Conditional prepayment rate	​	6.28	%	-	6.76	%	6.63	%	6.31	%	-	7.00	%	6.83	%
Life in years (of the MSR)	​	6.06	​	-	7.06	​	6.96	​	6.18	​	-	7.09	​	6.93	​
Weighted-average coupon rate	​	3.78	%	-	4.10	%	3.84	%	3.77	%	-	4.10	%	3.84	%
Discount rate	​	10.39	%	-	10.48	%	10.43	%	10.37	%	-	10.45	%	10.40	%

​

The sensitivities surrounding MSRs are expected to have an immaterial impact on fair value.

​

Low-Income Housing Tax Credit Investments

​

The Company has a limited partnership interest or is a member in a limited liability company (“LLC”) in several low-income housing partnerships. These partnerships or LLCs provide funds for the construction and operation of apartment complexes that provide affordable housing to that segment of the population with lower family income. If these developments successfully attract a specified percentage of residents falling in that lower income range, state and/or federal income tax credits are made available to the partners or members. The tax credits are generally recognized over 5 or 10 years. In order to continue receiving the tax credits each year over the life of the partnership or LLC, the low-income residency targets must be maintained.

​

The Company generally accounts for its interests in these low-income housing partnerships using the proportional amortization method. The Company had $297.8 million and $302.3 million in affordable housing and other tax credit investment partnership interests as of June 30, 2026 and December 31, 2025, respectively, included in other assets on the unaudited interim consolidated balance sheets. The amount of amortization of such investments reported in the provision for income taxes was $8.9 million and $7.6 million during the three months ended June 30, 2026 and 2025, respectively, and $17.9 million and $15.2 million during the six months ended June 30, 2026 and 2025, respectively. The affordable housing tax credits and other benefits recognized were $12.0 million and $9.6 million during the three months ended June 30, 2026 and 2025, respectively, and $23.9 million and $19.3 million during the six months ended June 30, 2026 and 2025, respectively, and were included in the provision for income taxes on the unaudited interim consolidated statements of income and net income on the unaudited interim consolidated statements of cash flows.

​

Unfunded commitments to fund these investments were $145.2 million and $153.3 million as of June 30, 2026 and December 31, 2025, respectively. These unfunded commitments are unconditional and legally binding and are recorded in other liabilities in the unaudited interim consolidated balance sheets.

​

6. Transfers of Financial Assets

​

The Company’s transfers of financial assets with continuing interest may include pledges of collateral to secure public deposits and repurchase agreements, FHLB and FRB borrowing capacity and interest rate derivatives.

​

27

Table of Contents

For public deposits and repurchase agreements, the Company enters into bilateral agreements with the entity to pledge investment securities as collateral in the event of default. The right of setoff for a repurchase agreement resembles a secured borrowing, whereby the collateral pledged by the Company would be used to settle the fair value of the repurchase agreement should the Company be in default. The counterparty has the right to sell or repledge the investment securities. The Company is required by the counterparty to maintain adequate collateral levels. In the event the collateral fair value falls below stipulated levels, the Company will pledge additional investment securities. For transfers of assets with the FHLB and the FRB, the Company enters into bilateral agreements to pledge loans and/or securities as collateral to secure borrowing capacity. For interest rate derivatives, the Company enters into bilateral agreements to pledge collateral when either party is in a negative fair value position to mitigate counterparty credit risk. Counterparties to certain interest rate derivatives, the FHLB and the FRB do not have the right to sell or repledge the collateral.

​

The carrying amounts of the assets pledged as collateral to secure public deposits and borrowing capacity as of June 30, 2026 and December 31, 2025 were as follows:

​

​	​	​	​	​	​	​	​
(dollars in thousands)	​	June 30, 2026		​	December 31, 2025
Public deposits	​	$	1,591,568	​	$	1,791,182	​
Federal Home Loan Bank	​	​	5,121,384	​	​	4,891,682	​
Federal Reserve Bank	​	​	3,959,082	​	​	3,970,029	​
Total	​	$	10,672,034	​	$	10,652,893	​

​

As of June 30, 2026 and December 31, 2025, the borrowing capacity with the FHLB was $3.6 billion and $3.3 billion, respectively. The FHLB borrowing capacity was secured by commercial real estate and residential real estate loan collateral as of both June 30, 2026 and December 31, 2025. As of both June 30, 2026 and December 31, 2025, the Company had an undrawn line of credit of $3.3 billion, available from the FRB. The borrowing capacity with the FRB was secured by consumer, commercial and industrial, commercial real estate, residential real estate loans and pledged securities as of both June 30, 2026 and December 31, 2025.

​

As the Company did not enter into reverse repurchase agreements or repurchase agreements, no collateral was accepted  as of June 30, 2026 and December 31, 2025. In addition, no debt was extinguished by in-substance defeasance.

​

​

​

7. Deposits

​

As of June 30, 2026 and December 31, 2025, deposits were categorized as interest-bearing or noninterest-bearing as follows:

​

​	​	​	​	​	​	​
(dollars in thousands)	​	June 30, 2026		​	December 31, 2025
U.S.:	​	​	​	​	​	​
Interest-bearing	​	$	12,186,302	​	$	12,502,417
Noninterest-bearing	​	​	5,642,865	​	​	5,794,973
Foreign:	​	​	​	​	​	​
Interest-bearing	​	​	1,520,090	​	​	1,465,959
Noninterest-bearing	​	​	804,924	​	​	752,319
Total deposits	​	$	20,154,181	​	$	20,515,668

​

28

Table of Contents

The following table presents the maturity distribution of time certificates of deposit as of June 30, 2026:

​

​	​	​	​	​	​	​	​	​	​
​	​	Under		​	$250,000		​	​	​
(dollars in thousands)	​	$250,000		​	or More		​	Total
Three months or less	​	$	841,935	​	$	663,333	​	$	1,505,268
Over three through six months	​	​	675,242	​	​	441,842	​	​	1,117,084
Over six through twelve months	​	​	351,639	​	​	252,414	​	​	604,053
One to two years	​	​	19,098	​	​	4,355	​	​	23,453
Two to three years	​	​	14,561	​	​	1,195	​	​	15,756
Three to four years	​	​	7,465	​	​	6,378	​	​	13,843
Four to five years	​	​	8,469	​	​	541	​	​	9,010
Thereafter	​	​	172	​	​	1,025	​	​	1,197
Total	​	$	1,918,581	​	$	1,371,083	​	$	3,289,664

​

Time certificates of deposit in denominations of $250,000 or more, in the aggregate, were $1.4 billion and $1.5 billion as of June 30, 2026 and December 31, 2025, respectively. Overdrawn deposit accounts are classified as loans and totaled $2.8 million and $3.2 million as of June 30, 2026 and December 31, 2025, respectively.

​

8. Accumulated Other Comprehensive Loss

​

Accumulated other comprehensive income (loss) is defined as the revenues, expenses, gains and losses that are included in comprehensive income (loss), but excluded from net income. The Company’s significant items of accumulated other comprehensive income (loss) are pension and other benefits, net unrealized gains or losses on investment securities and net unrealized gains or losses on cash flow derivative hedges. The Company utilizes a security-by-security approach to releasing income tax effects from accumulated other comprehensive loss.

​

29

Table of Contents

Changes in accumulated other comprehensive income (loss) for the three and six months ended June 30, 2026 and 2025 are presented below:

​

​	​	​	​	​	​	​	​	​	​
​	​	​	​	​	Income		​	​	​
​	​	​	​	​	Tax		​	​	​
​	​	Pre-tax		​	Benefit		​	Net of
(dollars in thousands)	​	Amount		​	(Expense)		​	Tax
Accumulated other comprehensive loss at March 31, 2026	​	$	(508,386)	​	$	135,639	​	$	(372,747)
Three months ended June 30, 2026	​	​	​	​	​	​	​	​	​
Investment securities:	​	​	​	​	​	​	​	​	​
Unrealized net gains arising during the period	​	​	9,650	​	​	(2,575)	​	​	7,075
Reclassification of net losses to net income:	​	​	​	​	​	​	​	​	​
Amortization of unrealized holding losses on held-to-maturity securities	​	​	9,704	​	​	(2,588)	​	​	7,116
Net change in investment securities	​	​	19,354	​	​	(5,163)	​	​	14,191
Cash flow derivative hedges:	​	​	​	​	​	​	​	​	​
Unrealized net losses arising during the period	​	​	(30)	​	​	8	​	​	(22)
Amounts excluded from the assessment of hedge effectiveness	​	​	(1,671)	​	​	456	​	​	(1,215)
Net change in cash flow derivative hedges	​	​	(1,701)	​	​	464	​	​	(1,237)
Other comprehensive income	​	​	17,653	​	​	(4,699)	​	​	12,954
Accumulated other comprehensive loss at June 30, 2026	​	$	(490,733)	​	$	130,940	​	$	(359,793)

​

​	​	​	​	​	​	​	​	​	​
​	​	​	​	​	Income		​	​	​
​	​	​	​	​	Tax		​	​	​
​	​	Pre-tax		​	Benefit		​	Net of
(dollars in thousands)	​	Amount		​	(Expense)		​	Tax
Accumulated other comprehensive loss at December 31, 2025	​	$	(502,104)	​	$	133,964	​	$	(368,140)
Six months ended June 30, 2026	​	​	​	​	​	​	​	​	​
Investment securities:	​	​	​	​	​	​	​	​	​
Unrealized net losses arising during the period	​	​	(10,655)	​	​	2,842	​	​	(7,813)
Reclassification of net losses to net income:	​	​	​	​	​	​	​	​	​
Amortization of unrealized holding losses on held-to-maturity securities	​	​	23,618	​	​	(6,300)	​	​	17,318
Net change in investment securities	​	​	12,963	​	​	(3,458)	​	​	9,505
Cash flow derivative hedges:	​	​	​	​	​	​	​	​	​
Unrealized net losses arising during the period	​	​	(75)	​	​	20	​	​	(55)
Amounts excluded from the assessment of hedge effectiveness	​	​	(1,517)	​	​	414	​	​	(1,103)
Net change in cash flow derivative hedges	​	​	(1,592)	​	​	434	​	​	(1,158)
Other comprehensive income	​	​	11,371	​	​	(3,024)	​	​	8,347
Accumulated other comprehensive loss at June 30, 2026	​	$	(490,733)	​	$	130,940	​	$	(359,793)

​

​	​	​	​	​	​	​	​	​	​
​	​	​	​	​	Income		​	​	​
​	​	​	​	​	Tax		​	​	​
​	​	Pre-tax		​	Benefit		​	Net of
(dollars in thousands)	​	Amount		​	(Expense)		​	Tax
Accumulated other comprehensive loss at March 31, 2025	​	$	(591,574)	​	$	157,805	​	$	(433,769)
Three months ended June 30, 2025	​	​	​	​	​	​	​	​	​
Investment securities:	​	​	​	​	​	​	​	​	​
Unrealized net gains arising during the period	​	​	26,354	​	​	(7,030)	​	​	19,324
Reclassification of net losses to net income:	​	​	​	​	​	​	​	​	​
Amortization of unrealized holding losses on held-to-maturity securities	​	​	9,982	​	​	(2,663)	​	​	7,319
Net change in investment securities	​	​	36,336	​	​	(9,693)	​	​	26,643
Cash flow derivative hedges:	​	​	​	​	​	​	​	​	​
Unrealized net gains arising during the period	​	​	113	​	​	(29)	​	​	84
Amounts excluded from the assessment of hedge effectiveness	​	​	47	​	​	(13)	​	​	34
Net change in cash flow derivative hedges	​	​	160	​	​	(42)	​	​	118
Other comprehensive income	​	​	36,496	​	​	(9,735)	​	​	26,761
Accumulated other comprehensive loss at June 30, 2025	​	$	(555,078)	​	$	148,070	​	$	(407,008)

​

30

Table of Contents

​	​	​	​	​	​	​	​	​	​
​	​	​	​	​	Income		​	​	​
​	​	​	​	​	Tax		​	​	​
​	​	Pre-tax		​	Benefit		​	Net of
(dollars in thousands)	​	Amount		​	(Expense)		​	Tax
Accumulated other comprehensive loss at December 31, 2024	​	$	(632,793)	​	$	168,799	​	$	(463,994)
Six months ended June 30, 2025	​	​	​	​	​	​	​	​	​
Investment securities:	​	​	​	​	​	​	​	​	​
Unrealized net gains arising during the period	​	​	57,717	​	​	(15,395)	​	​	42,322
Reclassification of net losses to net income:	​	​	​	​	​	​	​	​	​
Amortization of unrealized holding losses on held-to-maturity securities	​	​	19,639	​	​	(5,239)	​	​	14,400
Reclassification of net gains to net income:	​	​	​	​	​	​	​	​	​
Investment securities gains, net	​	​	(37)	​	​	10	​	​	(27)
Net change in investment securities	​	​	77,319	​	​	(20,624)	​	​	56,695
Cash flow derivative hedges:	​	​	​	​	​	​	​	​	​
Unrealized net gains arising during the period	​	​	349	​	​	(92)	​	​	257
Amounts excluded from the assessment of hedge effectiveness	​	​	47	​	​	(13)	​	​	34
Net change in cash flow derivative hedges	​	​	396	​	​	(105)	​	​	291
Other comprehensive income	​	​	77,715	​	​	(20,729)	​	​	56,986
Accumulated other comprehensive loss at June 30, 2025	​	$	(555,078)	​	$	148,070	​	$	(407,008)

​

The following table summarizes changes in accumulated other comprehensive income (loss), net of tax, for the periods indicated:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Pensions

​

​

​

​

​

​

​

Accumulated

​

​

and

​

Available-for-Sale

​

Held-to-Maturity

​

Cash Flow

​

Other

​

​

Other

​

Investment

​

Investment

​

Derivative

​

Comprehensive

(dollars in thousands)

​

Benefits

​

Securities

​

Securities

​

Hedges

​

Loss

Three Months Ended June 30, 2026

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Balance at beginning of period

​

$

(4,290)

​

$

(139,895)

​

$

(228,098)

​

$

(464)

​

$

(372,747)

Other comprehensive income (loss)

​

​

—

​

​

7,075

​

​

7,116

​

​

(1,237)

​

​

12,954

Balance at end of period

​

$

(4,290)

​

$

(132,820)

​

$

(220,982)

​

$

(1,701)

​

$

(359,793)

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Six Months Ended June 30, 2026

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Balance at beginning of period

​

$

(4,290)

​

$

(125,007)

​

$

(238,300)

​

$

(543)

​

$

(368,140)

Other comprehensive (loss) income

​

​

—

​

​

(7,813)

​

​

17,318

​

​

(1,158)

​

​

8,347

Balance at end of period

​

$

(4,290)

​

$

(132,820)

​

$

(220,982)

​

$

(1,701)

​

$

(359,793)

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Three Months Ended June 30, 2025

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Balance at beginning of period

​

$

(1,879)

​

$

(170,558)

​

$

(261,420)

​

$

88

​

$

(433,769)

Other comprehensive income

​

​

—

​

​

19,324

​

​

7,319

​

​

118

​

​

26,761

Balance at end of period

​

$

(1,879)

​

$

(151,234)

​

$

(254,101)

​

$

206

​

$

(407,008)

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Six Months Ended June 30, 2025

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Balance at beginning of period

​

$

(1,879)

​

$

(193,529)

​

$

(268,501)

​

$

(85)

​

$

(463,994)

Other comprehensive income

​

​

—

​

​

42,295

​

​

14,400

​

​

291

​

​

56,986

Balance at end of period

​

$

(1,879)

​

$

(151,234)

​

$

(254,101)

​

$

206

​

$

(407,008)

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

9. Regulatory Capital Requirements

​

Federal and state laws and regulations limit the amount of dividends the Company may declare or pay. The Company depends primarily on dividends from FHB as the source of funds for the Company’s payment of dividends.

​

31

Table of Contents

The Company and the Bank are subject to various regulatory capital requirements imposed by federal banking agencies. Failure to meet minimum capital requirements can initiate certain mandatory, and possibly additional discretionary, actions by regulators that, if undertaken, could have a direct material effect on the Company’s and the Bank’s operating activities and financial condition. Under capital adequacy guidelines and the regulatory framework for prompt corrective action, the Company and Bank must meet specific capital guidelines that involve quantitative measures of its assets and certain off-balance sheet items. The capital amounts and classifications are also subject to qualitative judgments by the regulators about components, risk weightings and other factors.

​

Quantitative measures established by regulation to ensure capital adequacy require the Company and Bank to maintain minimum amounts and ratios of Common Equity Tier 1 (“CET1”) capital, Tier 1 capital and total capital to risk-weighted assets, as well as a minimum leverage ratio.

​

The table below sets forth those ratios at June 30, 2026 and December 31, 2025:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

First Hawaiian

​

Minimum

​

Well-

​

​

​

First Hawaiian, Inc.

​

Bank

​

Capital

​

Capitalized

​

(dollars in thousands)

​

Amount

​

Ratio

​

Amount

​

Ratio

​

Ratio(1)

​

Ratio(1)

​

June 30, 2026:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Common equity tier 1 capital to risk-weighted assets

​

$

2,189,274

​

13.27

%

$

2,183,260

​

13.23

%

4.50

%

6.50

%

Tier 1 capital to risk-weighted assets

​

​

2,189,274

​

13.27

%

​

2,183,260

​

13.23

%

6.00

%

8.00

%

Total capital to risk-weighted assets

​

​

2,395,002

​

14.52

%

​

2,388,988

​

14.48

%

8.00

%

10.00

%

Tier 1 capital to average assets (leverage ratio)

​

​

2,189,274

​

9.46

%

​

2,183,260

​

9.44

%

4.00

%

5.00

%

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

December 31, 2025:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Common equity tier 1 capital to risk-weighted assets

​

$

2,142,013

​

13.17

%

$

2,129,855

​

13.10

%

4.50

%

6.50

%

Tier 1 capital to risk-weighted assets

​

​

2,142,013

​

13.17

%

​

2,129,855

​

13.10

%

6.00

%

8.00

%

Total capital to risk-weighted assets

​

​

2,345,269

​

14.42

%

​

2,333,149

​

14.35

%

8.00

%

10.00

%

Tier 1 capital to average assets (leverage ratio)

​

​

2,142,013

​

9.27

%

​

2,129,855

​

9.22

%

4.00

%

5.00

%

(1) As defined by the regulations issued by the Board of Governors of the Federal Reserve System, the Office of the Comptroller of the Currency, and Federal Deposit Insurance Corporation (“FDIC”).

​

Federal regulations require a 2.5% capital conservation buffer designed to absorb losses during periods of economic stress. The capital conservation buffer is composed entirely of CET1, on top of these minimum risk weighted asset ratios, effectively resulting in minimum ratios of (i) 7% CET1 to risk-weighted assets, (ii) 8.5% Tier 1 capital to risk-weighted assets, and (iii) 10.5% total capital to risk-weighted assets. As of June 30, 2026, under the bank regulatory capital guidelines, the Company and Bank were both classified as well-capitalized. Management is not aware of any conditions or events that have occurred since June 30, 2026, to change the capital adequacy category of the Company or the Bank.

​

In January 2026, the Company announced a stock repurchase program for up to $250.0 million of its outstanding common stock during 2026. Under this plan, the Company repurchased 1,307,738 shares at a total cost of $32.0 million during the six months ended June 30, 2026. The timing and exact amount of stock repurchases, if any, will be subject to management’s discretion and various factors, including the Company’s capital position and financial performance, as well as market conditions. The stock repurchase program may be suspended, terminated or modified at any time for any reason.

​

In July 2026, the Company’s Board of Directors declared a quarterly cash dividend of $0.26 per share on our outstanding shares. The dividend is to be paid on August 28, 2026 to shareholders of record at the close of business on August 17, 2026.

​

32

Table of Contents

10. Derivative Financial Instruments

​

The Company enters into derivative contracts primarily to manage its interest rate risk, as well as for customer accommodation purposes. Derivatives used for risk management purposes consist of interest rate floors, swaps, and collars that are designated as either a fair value hedge or a cash flow hedge. The derivatives are recognized on the unaudited interim consolidated balance sheets as either assets or liabilities at fair value. Derivatives entered into for customer accommodation purposes consist of various free-standing interest rate derivative products and foreign exchange contracts. The Company is party to master netting arrangements with its financial institution counterparties; however, the Company does not offset assets and liabilities under these arrangements for financial statement presentation purposes.

​

The following table summarizes the notional amounts and fair values of derivatives held by the Company as of June 30, 2026 and December 31, 2025:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

June 30, 2026

​

December 31, 2025

​

​

​

​

​

Fair Value

​

​

​

​

Fair Value

​

​

Notional

​

Asset

​

Liability

​

Notional

​

Asset

​

Liability

(dollars in thousands)

​

Amount

​

Derivatives(1)

​

Derivatives(2)

​

Amount

​

Derivatives(1)

​

Derivatives(2)

Derivatives designated as hedging instruments:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Interest rate swaps

​

$

58,125

​

$

8,529

​

$

—

​

$

60,000

​

$

7,470

​

$

—

Interest rate collars

​

​

100,000

​

​

—

​

​

(16)

​

​

100,000

​

​

59

​

​

—

Interest rate floors

​

​

900,000

​

​

3,099

​

​

—

​

​

300,000

​

​

1,665

​

​

—

Derivatives not designated as hedging instruments:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Interest rate swaps

​

​

2,938,125

​

​

10,172

​

​

(10,172)

​

​

3,018,578

​

​

12,328

​

​

(12,328)

Visa derivative

​

​

53,174

​

​

—

​

​

(2,300)

​

​

69,748

​

​

—

​

​

(2,300)

Foreign exchange contracts

​

​

704

​

​

—

​

​

—

​

​

807

​

​

—

​

​

—

(1) The positive fair values of derivative assets are included in other assets.

(2) The negative fair values of derivative liabilities are included in other liabilities.

​

Certain interest rate derivatives noted above, are cleared through clearinghouses, rather than directly with counterparties. Those transactions cleared through a clearinghouse require initial margin collateral and variation margin payments depending on the contracts being in a net asset or liability position. As of both June 30, 2026 and December 31, 2025, the amount of initial margin cash collateral posted by the Company was nil. As of both June 30, 2026 and December 31, 2025, the variation margin was nil.

​

As of June 30, 2026, the Company pledged nil in cash and received $20.2 million in cash as collateral for interest rate derivatives. As of December 31, 2025, the Company pledged nil in cash and received $10.5 million in cash as collateral for interest rate derivatives. As of June 30, 2026 and December 31, 2025, the cash collateral includes the excess initial margin for interest rate derivatives cleared through clearinghouses and cash collateral for interest rate derivatives with financial institution counterparties.

​

As of June 30, 2026 and December 31, 2025, the Company received $24.4 million and $22.5 million, respectively, in securities collateral for interest rate derivatives, which is held in a custodial account and is not recorded on the Company’s unaudited interim consolidated balance sheets.

​

Fair Value Hedges

​

To manage the risk related to the Company’s net interest margin, interest rate swaps are utilized to hedge certain fixed-rate loans. These swaps have maturity, amortization and prepayment features that correspond to the loans hedged and are designated and qualify as fair value hedges. Any gain or loss on the swaps, as well as the offsetting loss or gain on the hedged item attributable to the hedged risk, is recognized in current period earnings.

​

33

Table of Contents

At June 30, 2026 and December 31, 2025, the Company carried one interest rate swap with a notional amount of $58.1 million and $60.0 million, respectively, which was designated and qualified as a fair value hedge for a commercial and industrial loan. As of June 30, 2026 and December 31, 2025, the interest rate swap had a positive fair value of $8.5 million and $7.5 million, respectively. The swap matures in 2041. The Company received a USD Federal Funds floating rate and paid a fixed rate of 2.07%.

​

The following table shows the gains and losses recognized in income related to derivatives in fair value hedging relationships for the three and six months ended June 30, 2026 and 2025:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Gains (losses) recognized in

​

Three Months Ended

​

Six Months Ended

​

​

the consolidated statements

​

June 30,

​

June 30,

(dollars in thousands)

​

of income line item

​

2026

​

2025

​

2026

​

2025

Gains (losses) on fair value hedging relationships recognized in interest income:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Recognized on interest rate swap

​

Loans and lease financing

​

$

1,571

​

$

68

​

$

1,059

​

$

132

Recognized on hedged item

​

Loans and lease financing

​

​

(1,574)

​

​

(68)

​

​

(1,060)

​

​

(130)

​

As of June 30, 2026 and December 31, 2025, the following amounts were recorded in the unaudited interim consolidated balance sheets related to the cumulative basis adjustments for fair value hedges:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Cumulative Amount of Fair Value

​

​

​

​

​

​

​

​

​

​

Hedging Adjustment Included in the

​

​

Carrying Amount of the Hedged Asset

​

Carrying Amount of the Hedged Asset

(dollars in thousands)

​

June 30, 2026

​

December 31, 2025

​

June 30, 2026

​

December 31, 2025

Line item in the consolidated balance sheets in which the hedged item is included

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Loans and leases

​

$

49,791

​

$

52,491

​

$

(8,334)

​

$

(7,509)

​

Cash Flow Hedges

​

The Company utilized interest rate collars to manage interest rate risk and protect against downside risk in yields associated with interest payments received on a pool of floating-rate assets. The floating-rate index of the collars (Secured Overnight Financing Rate, or “SOFR”) corresponds to the floating-rate nature of the interest receipts being hedged (based on SOFR). Interest rate collars involve the payments of variable-rate amounts if the collar index exceeds the cap strike rate on the contract and receipts of variable-rate amounts if the collar index falls below the floor strike rate on the contract. No payments are required if the collar index falls between the cap and floor rates. By hedging with interest rate collars, the Company mitigates the adverse impact on interest income associated with possible future decreases in interest rates.

​

As of June 30, 2026 and December 31, 2025, the Company carried one interest rate collar with a notional amount of $100.0 million. As of June 30, 2026, the interest rate collar had a negative fair value of nil. As of December 31, 2025, the interest rate collar had a positive fair value of $0.1 million. The collar matures in 2027. The interest rate collar had a floor strike rate of 2.00% and a cap strike rate of 5.64%.

​

The Company also utilized interest rate floors to manage interest rate risk and protect against downside risk in yields associated with interest payments received on a pool of floating-rate assets. The floating-rate index of the floors (SOFR) correspond to the floating-rate nature of the interest receipts being hedged (based on SOFR). An interest rate floor involves the receipt of variable-rate amounts if the floor index falls below the floor strike rate on the contract. No payments are received if the floor index is above the floor strike rate. By hedging with interest rate floors, the Company mitigates the adverse impact on interest income associated with possible future decreases in interest rates.

​

As of December 31, 2025, the Company carried three interest rate floors with notional amounts totaling $300.0 million and a positive fair value of $1.7 million. These interest rate floors were executed between April and September 2025 and will mature in 2028. The Company paid premiums totaling $2.9 million. These interest rate floors have floor strike rates ranging from 2.95% to 3.00%.

​

34

Table of Contents

During the six months ended June 30, 2026, the Company executed six additional interest rate floors with notional amounts totaling $600.0 million and paid premiums totaling $3.8 million. Three of these floors were executed during the three months ended March 31, 2026. The other three floors were executed during the three months ended June 30, 2026 with notional amounts totaling $300.0 million and premiums paid totaling $1.6 million. The interest rate floors executed during the three and six months ended June 30, 2026 have a floor strike rate of 3.00% and will mature in 2029. As such, as of June 30, 2026, the Company carried nine interest rate floors with notional amounts totaling $900.0 million and a positive fair value of $3.1 million.

​

The interest rate collars and floors are designated and qualify as cash flow hedges. To the extent that the hedge is considered highly effective, the gain or loss on the interest rate collars and floors is reported as a component of other comprehensive income (“OCI”) and reclassified out of accumulated other comprehensive income (“AOCI”) into earnings in the same period that the hedged transaction affects earnings.

​

The assessment of hedge effectiveness excludes the initial time value of the interest rate floors at inception and on an ongoing basis. This initial time value is recognized as an adjustment to OCI, with an offset to interest income, over the life of the floors through an amortization approach.

​

The following table summarizes the effect of cash flow hedging relationships for the three and six months ended June 30, 2026 and 2025:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Three Months Ended

​

Six Months Ended

​

​

June 30,

​

June 30,

(dollars in thousands)

​

2026

​

2025

​

2026

​ ​ ​

2025

Pretax net (losses) gains recognized in OCI - included component

​

$

(30)

​

$

113

​

$

(75)

​

$

349

Pretax net losses recognized in OCI - excluded component

​

​

(2,162)

​

​

(27)

​

​

(2,350)

​

​

(27)

Total pretax net (losses) gains recognized in OCI on cash flow derivative hedges

​

$

(2,192)

​

$

86

​

$

(2,425)

​

$

322

​

​

​

​

​

​

​

​

​

​

​

​

​

Pretax net losses (gains) reclassified from AOCI into income - included component(1)

​

$

—

​

$

—

​

$

—

​

$

—

Pretax net losses reclassified from AOCI into income - excluded component(1)

​

​

491

​

​

74

​

​

833

​

​

74

Total pretax net losses reclassified from AOCI into income(1)

​

$

491

​

$

74

​

$

833

​

$

74

⁽¹⁾ Losses (gains) are reclassified from AOCI into interest income from loans and lease financing.

​

The estimated net amount to be reclassified within the next 12 months out of AOCI into earnings is $2.2 million as a decrease to interest income from loans and lease financing. As of June 30, 2026, the maximum length of time over which forecasted transactions are hedged is approximately three years.

​

Free-Standing Derivative Instruments

​

For the derivatives that are not designated as hedges, changes in fair value are reported in current period earnings. The following table summarizes the impact on pretax earnings of derivatives not designated as hedges, as reported on the unaudited interim consolidated statements of income for the three and six months ended June 30, 2026 and 2025:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Net losses recognized

​

Three Months Ended

​

Six Months Ended

​

​

in the consolidated statements

​

June 30,

​

June 30,

(dollars in thousands)

​

of income line item

​

2026

​

2025

​

2026

​

2025

Derivatives Not Designated As Hedging Instruments:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Interest rate swaps

​

Other noninterest income

​

$

—

​

$

(9)

​

$

—

​

$

(20)

Visa derivative

​

Other noninterest income

​

​

(1,034)

​

​

(903)

​

​

(2,005)

​

​

(2,195)

Foreign exchange contracts

​

Other noninterest income

​

​

—

​

​

6

​

​

—

​

​

—

​

35

Table of Contents

As of June 30, 2026, the Company carried multiple interest rate swaps with notional amounts totaling $2.9 billion, all of which were related to the Company’s customer swap program, with a positive fair value of $10.2 million and a negative fair value of $10.2 million. The Company received floating rates ranging from 3.62% to 6.62% and paid fixed rates ranging from 2.39% to 6.67%. The swaps mature between July 2026 and August 2046. As of December 31, 2025, the Company carried multiple interest rate swaps with notional amounts totaling $3.0 billion, all of which were related to the Company’s customer swap program, with a positive fair value of $12.3 million and a negative fair value of $12.3 million. The Company received floating rates ranging from 3.87% to 6.87% and paid fixed rates ranging from 2.39% to 6.67%. These swaps resulted in net interest expense of nil during both the three and six months ended June 30, 2026 and 2025.

​

The Company’s customer swap program is designed by offering customers a variable-rate loan that is swapped to fixed-rate through an interest rate swap. The Company simultaneously executes an offsetting interest rate swap with a swap dealer. Upfront fees on the dealer swap are recorded in other noninterest income and totaled $1.0 million and $0.1 million for the three months ended June 30, 2026 and 2025, respectively and $1.1 million and $0.5 million for the six months ended June 30, 2026 and 2025, respectively.

​

Visa Class B Restricted Shares

​

In 2016, the Company recorded a $22.7 million net realized gain related to the sale of 274,000 Visa Class B restricted shares. Concurrent with the sale of the Visa Class B restricted shares, the Company entered into a funding swap agreement with the buyer that requires payment to the buyer in the event Visa reduces each member bank’s Class B conversion rate to unrestricted Class A common shares. During 2018 through 2023, Visa funded its litigation escrow account, thereby reducing each member bank’s Class B conversion rate to unrestricted Class A common shares from 1.6483 to 1.5875. Under the terms of the funding swap agreement, the Company will make monthly payments to the buyer based on Visa’s Class A stock price and the number of Visa Class B restricted shares that were sold until the date on which the covered litigation is settled. In April 2024, Visa, Inc. commenced an initial exchange offer (“Visa Exchange Offer”) for all of its outstanding Class B shares (subsequently renamed as “Class B-1 shares”), of which the buyer elected and Visa, Inc. accepted. The buyer received a combination of Visa Class B-2 shares and Visa Class C shares in exchange for the 274,000 Class B-1 shares previously owned by the Company. In April 2026, a similar Exchange Offer was initiated that allowed Visa Class B shareholders to exchange their Visa Class B-1 and/or Visa Class B-2 stock for Visa Class B-3 and Visa Class C stock, which the buyer also elected and Visa, Inc. accepted. The buyer received a combination of Visa Class B-3 and Visa Class C shares in exchange for the 137,000 Class B-2 shares remaining after the initial exchange offer. Visa Class B-3 shares and Visa Class C shares have a current conversion rate to Class A common shares of 1.4953 and 4.0000, respectively. The Company took these exchanges into consideration when valuing the derivative liability (“Visa derivative”) at June 30, 2026 and December 31, 2025. The Visa derivative of $2.3 million was included in the unaudited interim consolidated balance sheets at both June 30, 2026 and December 31, 2025, to provide for the fair value of this liability. There were no sales of these shares prior to 2016. See “Note 15. Fair Value” for more information.

​

Counterparty Credit Risk

​

By using derivatives, the Company is exposed to counterparty credit risk if counterparties to the derivative contracts do not perform as expected. If a counterparty fails to perform, the Company’s counterparty credit risk is equal to the amount reported as a derivative asset, net of cash or other collateral received, and net of derivatives in a loss position with the same counterparty to the extent master netting arrangements exist. The Company minimizes counterparty credit risk through credit approvals, limits, monitoring procedures, executing master netting arrangements and obtaining collateral, where appropriate. Counterparty credit risk related to derivatives is considered in determining fair value.

​

The Company’s interest rate derivative agreements include bilateral collateral agreements with collateral requirements, which begin with exposures in excess of $0.3 million. For each counterparty, the Company reviews the interest rate derivative collateral daily. Collateral for customer interest rate derivative agreements, calculated as the pledged asset less loan balance, requires valuation of the pledged asset. Counterparty credit risk adjustments of nil were recognized during both the three and six months ended June 30, 2026 and 2025.

​

36

Table of Contents

Credit-Risk Related Contingent Features

​

Certain of the Company’s derivative contracts contain provisions whereby if the Company’s credit rating were to be downgraded by certain major credit rating agencies as a result of a merger or material adverse change in the Company’s financial condition, the counterparty could require an early termination of derivative instruments. The aggregate fair value of all derivative instruments with such credit-risk related contingent features that are in a net liability position was nil at both June 30, 2026 and December 31, 2025, for which the Company posted nil in collateral in the normal course of business. If the Company’s credit rating had been downgraded as of June 30, 2026 and December 31, 2025, the Company may have been required to settle the contracts in an amount equal to their fair value.

​

11. Commitments and Contingent Liabilities

​

Contingencies

​

Various legal proceedings are pending or threatened against the Company. After consultation with legal counsel, management does not expect that the aggregate liability, if any, resulting from these proceedings would have a material effect on the Company’s unaudited interim consolidated financial position, results of operations or cash flows.

​

Financial Instruments with Off-Balance Sheet Risk

​

The Company is a party to financial instruments with off-balance sheet risk in the normal course of business to meet the financing needs of its customers. These financial instruments include commitments to extend credit and standby and commercial letters of credit which are not reflected in the unaudited interim consolidated financial statements.

​

Unfunded Commitments to Extend Credit

​

A commitment to extend credit is a legally binding agreement to lend funds to a customer, usually at a stated interest rate and for a specified purpose. Commitments are reported net of participations sold to other institutions. Such commitments have fixed expiration dates and generally require a fee. The extension of a commitment gives rise to credit risk. The actual liquidity requirements or credit risk that the Company will experience is expected to be lower than the contractual amount of commitments to extend credit because a significant portion of those commitments are expected to expire without being drawn upon. Certain commitments are subject to loan agreements containing covenants regarding the financial performance of the customer that must be met before the Company is required to fund the commitment. The Company uses the same credit policies in making commitments to extend credit as it does in making loans. In addition, the Company manages the potential credit risk in commitments to extend credit by limiting the total amount of arrangements, both by individual customer and in the aggregate, by monitoring the size and expiration structure of these portfolios and by applying the same credit standards maintained for all of its related credit activities. Commitments to extend credit are reported net of participations sold to other institutions of $42.2 million and $86.4 million at June 30, 2026 and December 31, 2025, respectively.

​

Standby and Commercial Letters of Credit

​

Standby letters of credit are issued on behalf of customers in connection with contracts between the customers and third parties. Under standby letters of credit, the Company assures that the third parties will receive specified funds if customers fail to meet their contractual obligations. The credit risk to the Company arises from its obligation to make payment in the event of a customer’s contractual default. Standby letters of credit are reported net of participations sold to other institutions of $6.3 million at both June 30, 2026 and December 31, 2025. The Company also had commitments for commercial and similar letters of credit. Commercial letters of credit are issued specifically to facilitate commerce whereby the commitment is typically drawn upon when the underlying transaction between the customer and a third-party is consummated. The maximum amount of potential future payments guaranteed by the Company is limited to the contractual amount of these letters. The credit risk involved in issuing letters of credit is essentially the same as that involved in extending loan facilities to customers. Collateral held supports those commitments for which collateral is deemed necessary. The commitments outstanding as of June 30, 2026 have maturities ranging from July 2026 to June 2028. Substantially all fees received from the issuance of such commitments are deferred and amortized on a straight-line basis over the term of the commitment.

​

37

Table of Contents

Financial instruments with off-balance sheet risk at June 30, 2026 and December 31, 2025 were as follows:

​

​	​	​	​	​	​	​
​	​	June 30,		​	December 31,
(dollars in thousands)	​	2026		​	2025
Financial instruments whose contract amounts represent credit risk:	​	​	​	​	​	​
Commitments to extend credit	​	$	6,554,288	​	$	6,635,946
Standby letters of credit	​	​	252,591	​	​	252,166
Commercial letters of credit	​	​	2,366	​	​	2,040

​

Guarantees

​

The Company sells residential mortgage loans in the secondary market primarily to the Federal National Mortgage Association and the Federal Home Loan Mortgage Corporation that may potentially require repurchase under certain conditions. This risk is managed through the Company’s underwriting practices. The Company services loans sold to investors and loans originated by other originators under agreements that may include repurchase remedies if certain servicing requirements are not met. This risk is managed through the Company’s quality assurance and monitoring procedures. Management does not anticipate any material losses as a result of these transactions.

​

Foreign Exchange Contracts

​

The Company has forward foreign exchange contracts that represent commitments to purchase or sell foreign currencies at a future date at a specified price. The Company’s utilization of forward foreign exchange contracts is subject to the primary underlying risk of movements in foreign currency exchange rates and to additional counterparty risk should its counterparties fail to meet the terms of their contracts. Forward foreign exchange contracts are utilized to mitigate the Company’s risk to satisfy customer demand for foreign currencies and are not used for trading purposes. See “Note 10. Derivative Financial Instruments” for more information.

​

Reorganization Transactions

​

On April 1, 2016, a series of reorganization transactions were undertaken to facilitate FHI’s initial public offering. In connection with the reorganization transactions, FHI distributed its interest in BancWest Holding Inc. (“BWHI”), including Bank of the West (“BOW”), to BNP Paribas (“BNPP”) so that BWHI was held directly by BNPP. As a result of the reorganization transactions that occurred on April 1, 2016, various tax or other contingent liabilities could arise related to the business of BOW, or related to the Company’s operations prior to the reorganization transactions when it was known as BancWest Corporation, including its then wholly owned subsidiary, BOW. Subsequent to the end of the second quarter, in July 2026, a settlement agreement related to certain of these uncertain tax liabilities was approved by the California Franchise Tax Board. As a result, the Company is expected to receive approximately $90.2 million from the settlement, which will be remitted to BNPP pursuant to a tax sharing agreement. The Company will also record an increase to other noninterest expense of approximately $24.3 million and a decrease to the provision for income taxes of approximately $31.0 million in the third quarter of 2026. These amounts are not reflected in the Company’s unaudited interim consolidated financial statements as of and for the quarter ended June 30, 2026, and will be recognized in the third quarter of 2026.

​

38

Table of Contents

12. Revenue from Contracts with Customers

​

Revenue Recognition

​

In accordance with Topic 606, Revenue from Contracts with Customers, revenues are recognized when control of promised goods or services is transferred to customers in an amount that reflects the consideration the Company expects to be entitled to in exchange for those goods or services. To determine revenue recognition for arrangements that an entity determines are within the scope of Topic 606, the Company performs the following five steps: (i) identify the contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when (or as) the Company satisfies a performance obligation. The Company only applies the five-step model to contracts when it is probable that the entity will collect the consideration it is entitled to in exchange for the goods or services it transfers to the customer. At contract inception, once the contract is determined to be within the scope of Topic 606, the Company assesses the goods or services that are promised within each contract and identifies those that contain performance obligations and assesses whether each promised good or service is distinct. The Company then recognizes as revenue the amount of the transaction price that is allocated to the respective performance obligation when (or as) the performance obligation is satisfied.

​

Disaggregation of Revenue

​

During the quarter ended December 31, 2025, the Company realigned its internal organizational and management reporting structure. As a result of this change, the Company reduced its reportable operating segments from three to two. The Company’s reportable segments are now Retail Banking and Commercial Banking. Activities previously reported within the Treasury and Other segment are now included in Corporate/Other, as Treasury exists to support the Company’s operating segments. The change in reportable segments reflects how the Company’s chief operating decision maker currently evaluates performance and allocates resources. In addition, during the third quarter of 2025, the Company made changes to the internal measurement of segment operating profits for the purpose of evaluating segment performance and resource allocation. The Company has reported its selected financial information using the new loan and deposit balance alignments and using two reportable operating segments for the three and six months ended June 30, 2026. The Company has recast the selected financial information for the three and six months ended June 30, 2025 in order to conform with the current presentation. See “Note 16. Reportable Operating Segments” for more information.

​

The following table summarizes the Company’s revenues, which includes net interest income on financial instruments and noninterest income, disaggregated by type of service and business segments and Corporate/Other, for the periods indicated:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Three Months Ended June 30, 2026

​

​

Retail

​

Commercial

​

Corporate/

​

Consolidated

(dollars in thousands)

​

Banking

​

Banking

​

Other

​

Total

Net interest income (expense)(1)

​

$

132,797

​

$

45,102

​

$

(6,906)

​

$

170,993

​

​

​

​

​

​

​

​

​

​

​

​

​

Service charges on deposit accounts

​

​

7,011

​

​

1,188

​

​

117

​

​

8,316

Credit and debit card fees

​

​

—

​

​

13,862

​

​

972

​

​

14,834

Other service charges and fees

​

​

10,853

​

​

766

​

​

561

​

​

12,180

Trust and investment services income

​

​

9,074

​

​

—

​

​

—

​

​

9,074

Other

​

​

218

​

​

3,418

​

​

1,692

​

​

5,328

Not in scope of Topic 606(1)

​

​

1,955

​

​

2,219

​

​

6,375

​

​

10,549

Total noninterest income

​

​

29,111

​

​

21,453

​

​

9,717

​

​

60,281

Total revenue

​

$

161,908

​

$

66,555

​

$

2,811

​

$

231,274

39

Table of Contents

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Six Months Ended June 30, 2026

​

​

Retail

​

Commercial

​

Corporate/

​

Consolidated

(dollars in thousands)

​

Banking

​

Banking

​

Other

​

Total

Net interest income (expense)(1)

​

$

262,917

​

$

89,069

​

$

(13,463)

​

$

338,523

​

​

​

​

​

​

​

​

​

​

​

​

​

Service charges on deposit accounts

​

​

13,690

​

​

2,519

​

​

263

​

​

16,472

Credit and debit card fees

​

​

—

​

​

27,368

​

​

1,975

​

​

29,343

Other service charges and fees

​

​

21,233

​

​

1,387

​

​

1,112

​

​

23,732

Trust and investment services income

​

​

18,220

​

​

—

​

​

—

​

​

18,220

Other

​

​

555

​

​

5,226

​

​

2,552

​

​

8,333

Not in scope of Topic 606(1)

​

​

3,552

​

​

3,557

​

​

9,891

​

​

17,000

Total noninterest income

​

​

57,250

​

​

40,057

​

​

15,793

​

​

113,100

Total revenue

​

$

320,167

​

$

129,126

​

$

2,330

​

$

451,623

(1) Most of the Company’s revenue is not within the scope of Topic 606. The guidance explicitly excludes net interest income from financial assets and liabilities as well as other noninterest income from loans, leases, investment securities, derivative financial instruments and bank-owned life insurance.

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Three Months Ended June 30, 2025

​

​

Retail

​

Commercial

​

Corporate/

​

Consolidated

(dollars in thousands)

​ ​ ​

Banking

​ ​ ​

Banking

​ ​ ​

Other

​ ​ ​

Total

Net interest income (expense)(1)

​

$

127,047

​

$

42,628

​

$

(6,092)

​

$

163,583

​

​

​

​

​

​

​

​

​

​

​

​

​

Service charges on deposit accounts

​

​

6,631

​

​

1,090

​

​

109

​

​

7,830

Credit and debit card fees

​

​

—

​

​

14,375

​

​

965

​

​

15,340

Other service charges and fees

​

​

9,815

​

​

652

​

​

597

​

​

11,064

Trust and investment services income

​

​

9,154

​

​

—

​

​

—

​

​

9,154

Other

​

​

269

​

​

1,516

​

​

1,460

​

​

3,245

Not in scope of Topic 606(1)

​

​

1,885

​

​

1,406

​

​

4,034

​

​

7,325

Total noninterest income

​

​

27,754

​

​

19,039

​

​

7,165

​

​

53,958

Total revenue

​

$

154,801

​

$

61,667

​

$

1,073

​

$

217,541

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Six Months Ended June 30, 2025

​

​

Retail

​

Commercial

​

Corporate/

​

Consolidated

(dollars in thousands)

​ ​ ​

Banking

​ ​ ​

Banking

​ ​ ​

Other

​ ​ ​

Total

Net interest income (expense)(1)

​

$

253,503

​

$

88,566

​

$

(17,960)

​

$

324,109

​

​

​

​

​

​

​

​

​

​

​

​

​

Service charges on deposit accounts

​

​

12,995

​

​

2,153

​

​

217

​

​

15,365

Credit and debit card fees

​

​

—

​

​

27,304

​

​

1,939

​

​

29,243

Other service charges and fees

​

​

18,659

​

​

1,226

​

​

1,112

​

​

20,997

Trust and investment services income

​

​

18,524

​

​

—

​

​

—

​

​

18,524

Other

​

​

471

​

​

2,953

​

​

2,411

​

​

5,835

Not in scope of Topic 606(1)

​

​

3,756

​

​

3,158

​

​

7,557

​

​

14,471

Total noninterest income

​

​

54,405

​

​

36,794

​

​

13,236

​

​

104,435

Total revenue

​

$

307,908

​

$

125,360

​

$

(4,724)

​

$

428,544

(1) Most of the Company’s revenue is not within the scope of Topic 606. The guidance explicitly excludes net interest income from financial assets and liabilities as well as other noninterest income from loans, leases, investment securities, derivative financial instruments and bank-owned life insurance.

​

For the three and six months ended June 30, 2026 and 2025, substantially all of the Company’s revenues under the scope of Topic 606 were related to performance obligations satisfied at a point in time.

​

The following is a discussion of revenues within the scope of Topic 606.

​

Service Charges on Deposit Accounts

Service charges on deposit accounts relate to fees generated from a variety of deposit products and services rendered to customers. Charges include, but are not limited to, overdraft fees, non-sufficient fund fees, dormant fees and monthly service charges. Such fees are recognized concurrent with the event on a daily basis or on a monthly basis depending upon the customer’s cycle date.

​

40

Table of Contents

Credit and Debit Card Fees

Credit and debit card fees primarily represent revenues earned from interchange fees, ATM fees and merchant processing fees. Interchange and network revenues are earned on credit and debit card transactions conducted with payment networks. ATM fees are primarily earned as a result of surcharges assessed to non-FHB customers who use an FHB ATM. Merchant processing fees are primarily earned on transactions in which FHB is the acquiring bank. Such fees are generally recognized concurrently with the delivery of services on a daily basis.

​

Trust and Investment Services Fees

Trust and investment services fees represent revenue earned by directing, holding and managing customers’ assets. Fees are generally computed based on a percentage of the previous period’s value of assets under management. The transaction price (i.e., percentage of assets under management) is established at the inception of each contract. Trust and investment services fees also include fees collected when the Company acts as agent or personal representative and executes security transactions, performs collection and disbursement of income, and completes investment management and other administrative tasks.

​

Other Fees

Other fees primarily include revenues generated from wire transfers, lockboxes, bank issuance of checks and insurance commissions. Such fees are recognized concurrent with the event or on a monthly basis.

​

Contract Balances

​

A contract liability is an entity’s obligation to transfer goods or services to a customer for which the entity has received consideration (or the amount is due) from the customer. The Company received signing bonuses from three vendors in prior years, which are being amortized over the term of the respective contracts. As of June 30, 2026 and December 31, 2025, the Company had contract liabilities of $0.9 million and $1.3 million, respectively, which it expects to recognize over the remaining term of the respective contracts with the vendors. For the three and six months ended June 30, 2026, the Company’s recognized revenues increased and contract liabilities decreased by approximately $0.2 million and $0.5 million, respectively, due to the passage of time. For the three and six months ended June 30, 2025, the Company’s recognized revenues increased and contract liabilities decreased by approximately $0.3 million and $0.5 million, respectively, due to the passage of time. There were no changes in contract liabilities due to changes in transaction price estimates.

​

A contract asset is the right to consideration for transferred goods or services when the amount is conditioned on something other than the passage of time. As of June 30, 2026 and December 31, 2025, there were no material receivables from contracts with customers or contract assets recorded on the Company’s unaudited interim consolidated balance sheets.

​

Other

​

Except for the contract liabilities noted above, the Company did not have any significant performance obligations as of June 30, 2026 and December 31, 2025. The Company also did not have any material contract acquisition costs or use any significant judgments or estimates in recognizing revenue for financial reporting purposes.

​

41

Table of Contents

13. Earnings per Share

​

For the three and six months ended June 30, 2026, the Company made no adjustments to net income for the purpose of computing earnings per share and there were no antidilutive securities. For both the three and six months ended June 30, 2025, the Company made no adjustments to net income for the purpose of computing earnings per share and there were 184,000 antidilutive securities. For the three and six months ended June 30, 2026 and 2025, the computations of basic and diluted earnings per share were as follows:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Three Months Ended June 30,

​

Six Months Ended June 30,

(dollars in thousands, except shares and per share amounts)

​

2026

​

2025

​

2026

​

2025

Numerator:

​

​

​

​

​

​

​

​

​

​

​

​

Net income

​

$

73,375

​

$

73,247

​

$

141,159

​

$

132,495

​

​

​

​

​

​

​

​

​

​

​

​

​

Denominator:

​

​

​

​

​

​

​

​

​

​

​

​

Basic: weighted-average shares outstanding

​

​

121,669,238

​

​

125,321,837

​

​

122,061,243

​

​

125,799,060

Add: weighted-average equity-based awards

​

​

670,598

​

​

511,227

​

​

768,895

​

​

694,509

Diluted: weighted-average shares outstanding

​

​

122,339,836

​

​

125,833,064

​

​

122,830,138

​

​

126,493,569

​

​

​

​

​

​

​

​

​

​

​

​

​

Basic earnings per share

​

$

0.60

​

$

0.58

​

$

1.16

​

$

1.05

Diluted earnings per share

​

$

0.60

​

$

0.58

​

$

1.15

​

$

1.05

​

​

14. Noninterest Income and Noninterest Expense

​

Benefit Plans

​

The following table sets forth the components of net periodic benefit cost for the Company’s pension and postretirement benefit plans for the three and six months ended June 30, 2026 and 2025:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Income line item where recognized in

​

Pension Benefits

​

Other Benefits

(dollars in thousands)

​

the consolidated statements of income

​

2026

​

2025

​

2026

​

2025

Three Months Ended June 30,

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Service cost

​

Salaries and employee benefits

​

$

—

​

$

—

​

$

203

​

$

169

Interest cost

​

Other noninterest expense

​

​

1,713

​

​

1,879

​

​

225

​

​

225

Expected return on plan assets

​

Other noninterest expense

​

​

(831)

​

​

(876)

​

​

—

​

​

—

Recognized net actuarial loss (gain)

​

Other noninterest expense

​

​

278

​

​

383

​

​

(218)

​

​

(301)

Total net periodic benefit cost

​

​

​

$

1,160

​

$

1,386

​

$

210

​

$

93

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Six Months Ended June 30,

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Service cost

​

Salaries and employee benefits

​

$

—

​

$

—

​

$

406

​

$

338

Interest cost

​

Other noninterest expense

​

​

3,425

​

​

3,759

​

​

449

​

​

450

Expected return on plan assets

​

Other noninterest expense

​

​

(1,662)

​

​

(1,752)

​

​

—

​

​

—

Recognized net actuarial loss (gain)

​

Other noninterest expense

​

​

556

​

​

766

​

​

(436)

​

​

(602)

Total net periodic benefit cost

​

​

​

$

2,319

​

$

2,773

​

$

419

​

$

186

​

Leases

​

The Company recognized operating lease income related to lease payments of $1.7 million and $1.6 million for the three months ended June 30, 2026 and 2025, respectively, and $3.4 million and $3.2 million for the six months ended June 30, 2026 and 2025, respectively. In addition, the Company recognized $1.4 million of lease income related to variable lease payments for both the three months ended June 30, 2026 and 2025, and $2.9 million for both the six months ended June 30, 2026 and 2025.

​

​

​

42

Table of Contents

15. Fair Value

​

The Company determines the fair values of its financial instruments based on the requirements established in Accounting Standards Codification Topic 820 (“Topic 820”), Fair Value Measurements, which provides a framework for measuring fair value under GAAP and requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. Topic 820 defines fair value as the exit price, the price that would be received for an asset or paid to transfer a liability, in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date under current market conditions.

​

Fair Value Hierarchy

​

Topic 820 establishes three levels of fair values based on the markets in which the assets or liabilities are traded and the reliability of the assumptions used to determine fair value. The levels are:

​

◾ Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities that the Company has the ability to access.

◾ Level 2: Observable inputs other than Level 1 prices, such as quoted prices for similar assets and liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

◾ Level 3: Valuation is generated from model-based techniques that use significant assumptions not observable in the market. These unobservable assumptions reflect the Company’s own estimates of assumptions that market participants would use in pricing the asset or liability (“Company-level data”). Level 3 assets and liabilities include financial instruments whose value is determined using unobservable inputs to pricing models, discounted cash flow methodologies, or similar techniques, as well as instruments for which the determination of fair value requires significant management judgment or estimation.

​

Topic 820 requires that the Company disclose estimated fair values for certain financial instruments. Financial instruments include such items as investment securities, loans, deposits, interest rate and foreign exchange contracts, swaps and other instruments as defined by the standard. The Company has an organized and established process for determining and reviewing the fair value of financial instruments reported in the Company’s financial statements. The fair value measurements are reviewed to ensure they are reasonable and in line with market experience in similar asset and liability classes.

​

Additionally, the Company may be required to record at fair value other assets on a nonrecurring basis, such as collateral-dependent loans, other real estate owned, other customer relationships, and other intangible assets. These nonrecurring fair value adjustments typically involve the application of lower-of-cost-or-fair-value accounting or write-downs of individual assets.

​

Disclosure of fair values is not required for certain items such as lease financing, obligations for pension and other postretirement benefits, premises and equipment, prepaid expenses, deposit liabilities with no defined or contractual maturity, and income tax assets and liabilities.

​

Reasonable comparisons of fair value information with that of other financial institutions cannot necessarily be made because the standard permits many alternative calculation techniques, and numerous assumptions have been used to estimate the Company’s fair values.

​

43

Table of Contents

Valuation Techniques Used in the Fair Value Measurement of Assets and Liabilities Carried at Fair Value

​

For the assets and liabilities measured at fair value on a recurring basis (categorized in the valuation hierarchy table below), the Company applies the following valuation techniques:

​

Available-for-sale securities

Available-for-sale debt securities are recorded at fair value on a recurring basis. Fair value measurement is based on quoted prices, including estimates by third-party pricing services, if available. If quoted prices are not available, fair values are measured using proprietary valuation models that utilize market observable parameters from active market makers and inter-dealer brokers whereby securities are valued based upon available market data for securities with similar characteristics. Management reviews the pricing information received from the Company’s third-party pricing service to evaluate the inputs and valuation methodologies used to place securities into the appropriate level of the fair value hierarchy and transfers of securities within the fair value hierarchy are made if necessary. On a monthly basis, management reviews the pricing information received from the third-party pricing service which includes a comparison to non-binding third-party broker quotes, as well as a review of market-related conditions impacting the information provided by the third-party pricing service. Management also identifies investment securities which may have traded in illiquid or inactive markets by identifying instances of a significant decrease in the volume or frequency of trades, relative to historical levels, as well as instances of a significant widening of the bid-ask spread in the brokered markets. The Company’s third-party pricing service has also established processes for the Company to submit inquiries regarding quoted prices. Periodically, the Company will challenge the quoted prices provided by the third-party pricing service. The Company’s third-party pricing service will review the inputs to the evaluation in light of the new market data presented by the Company. The Company’s third-party pricing service may then affirm the original quoted price or may update the evaluation on a going forward basis. The Company classifies all available-for-sale securities as Level 2.

​

Derivatives

Most of the Company’s derivatives are traded in over-the-counter markets where quoted market prices are not readily available. For those derivatives, the Company measures fair value on a recurring basis using proprietary valuation models that primarily use market observable inputs, such as yield curves, and option volatilities. The fair value of derivatives includes values associated with counterparty credit risk and the Company’s own credit standing. The Company classifies these derivatives, included in other assets and other liabilities, as Level 2.

​

Concurrent with the sale of the Visa Class B restricted shares, the Company entered into an agreement with the buyer that requires payment to the buyer in the event Visa reduces each member bank’s Class B conversion rate to unrestricted Class A common shares. During 2018 through 2023, Visa funded its litigation escrow account, thereby reducing each member bank’s Class B conversion rate to unrestricted Class A common shares from 1.6483 to 1.5875. As a result of the Visa Exchange Offer, the buyer held a combination of Visa Class B-2 shares and Visa Class C shares that were subsequently exchanged in a similar Exchange Offer. As a result, the buyer now holds a combination of Visa Class B-3 and Visa Class C shares, of which the Visa derivative’s notional is based on. Visa Class B-3 shares and Visa Class C shares have a current conversion rate to Class A common shares of 1.4953 and 4.0000, respectively. The Visa derivative of $2.3 million was included in the unaudited interim consolidated balance sheets at both June 30, 2026 and December 31, 2025, to provide for the fair value of this liability. The potential liability related to this funding swap agreement was determined based on management’s estimate of the timing and the amount of Visa’s litigation settlement and the resulting payments due to the counterparty under the terms of the contract. As such, the funding swap agreement is classified as Level 3 in the fair value hierarchy. The significant unobservable inputs used in the fair value measurement of the Company’s funding swap agreement are the potential future changes in the Class B-3 conversion rate, expected term and growth rate of the market price of Visa Class A common shares. Material increases (or decreases) in any of those inputs may result in a significantly higher (or lower) fair value measurement.

​

44

Table of Contents

Assets and Liabilities Recorded at Fair Value on a Recurring Basis

​

Assets and liabilities measured at fair value on a recurring basis as of June 30, 2026 and December 31, 2025 are summarized below:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​ ​ ​

Fair Value Measurements as of June 30, 2026

​

​

Quoted Prices in

​

Significant

​

​

​

​

​

​

Active Markets for

​

Other

​

Significant

​

​

​

​

Identical Assets

​

Observable

​

Unobservable

​

​

(dollars in thousands)

​

(Level 1)

​

Inputs (Level 2)

​

Inputs (Level 3)

​

Total

Assets

​

​

​

​

​

​

​

​

​

​

​

​

Mortgage-backed securities:

​

​

​

​

​

​

​

​

​

​

​

​

Residential - Government agency(1)

​

$

—

​

$

25,037

​

$

—

​

$

25,037

Residential - Government-sponsored enterprises(1)

​

​

—

​

​

865,210

​

​

—

​

​

865,210

Commercial - Government agency

​

​

—

​

​

183,542

​

​

—

​

​

183,542

Commercial - Government-sponsored enterprises

​

​

—

​

​

39,022

​

​

—

​

​

39,022

Commercial - Non-agency

​

​

—

​

​

259,510

​

​

—

​

​

259,510

Collateralized mortgage obligations:

​

​

​

​

​

​

​

​

​

​

​

​

Government agency

​

​

—

​

​

394,290

​

​

—

​

​

394,290

Government-sponsored enterprises

​

​

—

​

​

283,712

​

​

—

​

​

283,712

Collateralized loan obligations

​

​

—

​

​

44,376

​

​

—

​

​

44,376

Total available-for-sale securities

​

​

—

​

​

2,094,699

​

​

—

​

​

2,094,699

Other assets(2)

​

​

581

​

​

21,800

​

​

—

​

​

22,381

Liabilities

​

​

​

​

​

​

​

​

​

​

​

​

Other liabilities(3)

​

​

—

​

​

(10,188)

​

​

(2,300)

​

​

(12,488)

Total

​

$

581

​

$

2,106,311

​

$

(2,300)

​

$

2,104,592

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​ ​ ​

Fair Value Measurements as of December 31, 2025

​

​

Quoted Prices in

​

Significant

​

​

​

​

​

​

​

Active Markets for

​

Other

​

Significant

​

​

​

​

Identical Assets

​

Observable

​

Unobservable

​

​

(dollars in thousands)

​

(Level 1)

​

Inputs (Level 2)

​

Inputs (Level 3)

​

Total

Assets

​

​

​

​

​

​

​

​

​

​

​

​

Mortgage-backed securities:

​

​

​

​

​

​

​

​

​

​

​

​

Residential - Government agency(1)

​

$

—

​

$

30,367

​

$

—

​

$

30,367

Residential - Government-sponsored enterprises(1)

​

​

—

​

​

878,215

​

​

—

​

​

878,215

Commercial - Government agency

​

​

—

​

​

191,177

​

​

—

​

​

191,177

Commercial - Government-sponsored enterprises

​

​

—

​

​

41,599

​

​

—

​

​

41,599

Commercial - Non-agency

​

​

—

​

​

129,014

​

​

—

​

​

129,014

Collateralized mortgage obligations:

​

​

​

​

​

​

​

​

​

​

​

​

Government agency

​

​

—

​

​

426,276

​

​

—

​

​

426,276

Government-sponsored enterprises

​

​

—

​

​

302,996

​

​

—

​

​

302,996

Collateralized loan obligations

​

​

—

​

​

76,589

​

​

—

​

​

76,589

Total available-for-sale securities

​

​

—

​

​

2,076,233

​

​

—

​

​

2,076,233

Other assets(2)

​

​

595

​

​

21,522

​

​

—

​

​

22,117

Liabilities

​

​

​

​

​

​

​

​

​

​

​

​

Other liabilities(3)

​

​

—

​

​

(12,328)

​

​

(2,300)

​

​

(14,628)

Total

​

$

595

​

$

2,085,427

​

$

(2,300)

​

$

2,083,722

(1) Backed by residential real estate.

(2) Other assets classified as Level 1 include money market funds that have quoted prices in active markets and are related to the Company’s deferred compensation plans. Other assets classified as Level 2 include derivative assets.

(3) Other liabilities include derivative liabilities.

​

45

Table of Contents

For Level 3 assets and liabilities measured at fair value on a recurring or nonrecurring basis as of June 30, 2026 and December 31, 2025, the significant unobservable inputs used in the fair value measurements were as follows:

​

​	​	​	​	​	​	​	​	​	​
​	​	Quantitative Information about Level 3 Fair Value Measurements at June 30, 2026
​	​	​	​	​	​	​	Significant	​	​
(dollars in thousands)	​	Fair value		​	Valuation Technique	​	Unobservable Input	​	Range
Collateral-dependent loans	​	$	612	​	Financial Statement Values	​	Discounts to reflect estimated selling costs	​	0% - 50%
Collateral-dependent loans	​	​	373	​	Appraisal Value(1)	​	Discounts to reflect estimated selling costs	​	7% - 8%
Visa derivative	​	​	(2,300)	​	Discounted Cash Flow	​	Expected Conversion Rate - 1.4953(2)	​	1.3565-1.4953
​	​	​	​	​	​	​	Expected Term - 12 months(3)	​	n/m(3)
​	​	​	​	​	​	​	Growth Rate - 17%(4)	​	-4% - 31%

​

​	​	​	​	​	​	​	​	​	​
​	​	Quantitative Information about Level 3 Fair Value Measurements at December 31, 2025
​	​	​	​	​	​	​	Significant	​	​
(dollars in thousands)	​	Fair value		​	Valuation Technique	​	Unobservable Input	​	Range
Collateral-dependent loans	​	$	13,608	​	Financial Statement Values	​	Discounts to reflect estimated selling costs	​	0% - 50%
Visa derivative	​	​	(2,300)	​	Discounted Cash Flow	​	Expected Conversion Rate - 1.5108(2)	​	1.3848-1.5108
​	​	​	​	​	​	​	Expected Term - 6 months(3)	​	n/m(3)
​	​	​	​	​	​	​	Growth Rate - 13%(4)	​	-11% - 28%

(1) Fair value is generally determined through appraisals of the underlying collateral. The Company may also use another available source of collateral assessment, such as purchase offers, letters of intent, broker price opinions or real property tax assessment values, to determine a reasonable estimate of the fair value of the collateral.

(2) Due to the uncertainty in the movement of the conversion rate, the current conversion rate as of the respective consolidated balance sheet dates was utilized in the fair value calculation.

(3) The expected term was based on a claim filing deadline and subsequent period for claims to be processed. As such, a range is not meaningful to disclose.

(4) The growth rate was based on the arithmetic average of analyst price targets.

​

Changes in Fair Value Levels

​

For the three and six months ended June 30, 2026 and 2025, there were no transfers between fair value hierarchy levels.

​

The changes in Level 3 liabilities measured at fair value on a recurring basis for the three and six months ended June 30, 2026 and 2025 are summarized below:

​

​	​	​	​	​	​	​
​	​	Visa Derivative
(dollars in thousands)	​	2026		​	2025
Three Months Ended June 30,	​	​	​	​	​	​
Balance as of April 1,	​	$	(2,300)	​	$	(2,300)
Total net losses included in other noninterest income	​	​	(1,034)	​	​	(903)
Settlements	​	​	1,034	​	​	903
Balance as of June 30,	​	$	(2,300)	​	$	(2,300)
Total net losses included in net income attributable to the change in unrealized losses related to liabilities still held as of June 30,	​	$	(1,034)	​	$	(903)
​	​	​	​	​	​	​
Six Months Ended June 30,	​	​	​	​	​	​
Balance as of January 1,	​	$	(2,300)	​	$	(2,300)
Total net losses included in other noninterest income	​	​	(2,005)	​	​	(2,195)
Settlements	​	​	2,005	​	​	2,195
Balance as of June 30,	​	$	(2,300)	​	$	(2,300)
Total net losses included in net income attributable to the change in unrealized losses related to liabilities still held as of June 30,	​	$	(2,005)	​	$	(2,195)

​

46

Table of Contents

Assets and Liabilities Carried at Other Than Fair Value

​

The following tables summarize for the periods indicated the estimated fair value of the Company’s financial instruments that are not required to be carried at fair value on a recurring basis, excluding leases and deposit liabilities with no defined or contractual maturity.

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

June 30, 2026

​

​

​

​

​

Fair Value Measurements

​

​

​

​

​

Quoted Prices in

​

Significant

​

Significant

​

​

​

​

​

​

​

Active Markets

​

Other

​

Unobservable

​

​

​

​

​

​

​

for Identical

​

Observable

​

Inputs

​

​

(dollars in thousands)

​

Book Value

​

Assets (Level 1)

​

Inputs (Level 2)

​

(Level 3)

​

Total

Financial assets:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Cash and cash equivalents

​

$

1,012,496

​

$

263,762

​

$

748,734

​

$

—

​

$

1,012,496

Investment securities held-to-maturity

​

​

3,411,684

​

​

—

​

​

3,035,475

​

​

—

​

​

3,035,475

Loans(1)

​

​

14,126,842

​

​

—

​

​

—

​

​

13,629,349

​

​

13,629,349

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Financial liabilities:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Time deposits(2)

​

$

3,289,664

​

$

—

​

$

3,273,300

​

$

—

​

$

3,273,300

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

December 31, 2025

​

​

​

​

​

Fair Value Measurements

​

​

​

​

​

Quoted Prices in

​

Significant

​

Significant

​

​

​

​

​

​

​

Active Markets

​

Other

​

Unobservable

​

​

​

​

​

​

​

for Identical

​

Observable

​

Inputs

​

​

(dollars in thousands)

​

Book Value

​

Assets (Level 1)

​

Inputs (Level 2)

​

(Level 3)

​

Total

Financial assets:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Cash and cash equivalents

​

$

1,477,752

​

$

228,734

​

$

1,249,018

​

$

—

​

$

1,477,752

Investment securities held-to-maturity

​

​

3,533,082

​

​

—

​

​

3,188,775

​

​

—

​

​

3,188,775

Loans held for sale

​

​

1,370

​

​

—

​

​

1,376

​

​

—

​

​

1,376

Loans(1)

​

​

13,870,599

​

​

—

​

​

—

​

​

13,356,550

​

​

13,356,550

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Financial liabilities:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Time deposits(2)

​

$

3,370,133

​

$

—

​

$

3,356,533

​

$

—

​

$

3,356,533

(1) Excludes financing leases of $450.5 million at June 30, 2026 and $441.9 million at December 31, 2025.

(2) Excludes deposit liabilities with no defined or contractual maturity of $16.9 billion as of June 30, 2026 and $17.1 billion as of December 31, 2025.

​

Unfunded loan and lease commitments and letters of credit are not included in the tables above. As of June 30, 2026 and December 31, 2025, the Company had $6.8 billion and $6.9 billion, respectively, of unfunded loan and lease commitments and letters of credit. The Company believes that a reasonable estimate of the fair value of these instruments is the carrying value of deferred fees plus the related reserve for unfunded commitments, which totaled $53.1 million and $49.7 million at June 30, 2026 and December 31, 2025, respectively. No active trading market exists for these instruments, and the estimated fair value does not include value associated with the borrower relationship. The Company does not estimate the fair values of certain unfunded loan and lease commitments that can be canceled by providing notice to the borrower. As Company-level data is incorporated into the fair value measurement, unfunded loan and lease commitments and letters of credit are classified as Level 3.

​

Valuation Techniques Used in the Fair Value Measurement of Assets and Liabilities Carried at the Lower of Cost or Fair Value

​

The Company applies the following valuation techniques to assets measured at the lower of cost or fair value:

​

Mortgage servicing rights

MSRs are carried at the lower of cost or fair value and are therefore subject to fair value measurements on a nonrecurring basis. The fair value of MSRs is determined using models which use significant unobservable inputs, such as estimates of prepayment rates, the resultant weighted average lives of the MSRs and the option-adjusted spread levels. Accordingly, the Company classifies MSRs as Level 3.

47

Table of Contents

​

Collateral-dependent loans

Collateral-dependent loans are those for which repayment is expected to be provided substantially through the operation or sale of the collateral. These loans are measured at fair value on a nonrecurring basis using collateral values as a practical expedient. The fair values of collateral are primarily based on real estate appraisal reports prepared by third-party appraisers less estimated selling costs. The Company may also use another available source of collateral assessment, such as purchase offers, letters of intent, broker price opinions or real property tax assessment values, to determine a reasonable estimate of the fair value of the collateral. The fair value of other collateral such as business assets is typically ascertained by assessing inventory listings and borrower’s financial statements less estimated selling costs. The Company measures the estimated credit losses on collateral-dependent loans by performing a lower of cost or fair value analysis. If the estimated credit losses are determined by the value of the collateral, the net carrying amount is adjusted to fair value on a nonrecurring basis as Level 3 by recognizing an ACL.

​

Other real estate owned

The Company values these properties at fair value at the time the Company acquires them, which establishes their new cost basis. After acquisition, the Company carries such properties at the lower of cost or fair value less estimated selling costs on a nonrecurring basis. Fair value is measured on a nonrecurring basis using collateral values as a practical expedient. The fair values of collateral for other real estate owned are primarily based on real estate appraisal reports prepared by third-party appraisers less disposition costs and are classified as Level 3.

​

Assets and Liabilities Recorded at Fair Value on a Nonrecurring Basis

​

The Company may be required to record certain assets at fair value on a nonrecurring basis in accordance with GAAP. These assets are subject to fair value adjustments that result from the application of lower of cost or fair value accounting or write-downs of individual assets to fair value.

​

The following table provides the level of valuation inputs used to determine each fair value adjustment and the fair value of the related individual assets or portfolio of assets with fair value adjustments on a nonrecurring basis as of June 30, 2026 and December 31, 2025:

​

​	​	​	​	​	​	​	​	​	​
(dollars in thousands)	​	Level 1		​	Level 2		​	Level 3
June 30, 2026	​	​	​	​	​	​	​	​	​
Collateral-dependent loans	​	$	—	​	$	—	​	$	985
December 31, 2025	​	​	​	​	​	​	​	​	​
Collateral-dependent loans	​	$	—	​	$	—	​	$	13,608

​

The Company recognized reductions in expected credit losses on collateral-dependent loans of $6.5 million and $4.1 million for the three and six months ended June 30, 2026, respectively. Total expected credit losses recognized on collateral-dependent loans were $0.7 million and $0.3 million for the three and six months ended June 30, 2025, respectively.

​

16. Reportable Operating Segments

​

The Company’s reportable segments are based on the manner in which management organizes the business for making operating decisions and assessing performance. These segments reflect how discrete financial information is currently evaluated by the chief operating decision maker and how performance is assessed and resources are allocated. The Company’s internal management process measures the performance of these business segments. This process, which is not necessarily comparable with similar information for any other financial institution, uses various techniques to assign balance sheet and income statement amounts to the business segments, including allocations of income, expense, the provision for credit losses and capital. This process is dynamic and requires certain allocations based on judgment and other subjective factors. Unlike financial accounting, there is no comprehensive authoritative guidance for management accounting that is equivalent to GAAP.

​

48

Table of Contents

During the quarter ended December 31, 2025, the Company realigned its internal organizational and management reporting structure. As a result of this change, the Company reduced its reportable operating segments from three to two. The Company’s reportable segments are now Retail Banking and Commercial Banking. Activities previously reported within the Treasury and Other segment are now included in Corporate/Other, as Treasury exists to support the Company’s operating segments. The change in reportable segments reflects how the Company’s chief operating decision maker currently evaluates performance and allocates resources. In addition, during the third quarter of 2025, the Company made changes to the internal measurement of segment operating profits for the purpose of evaluating segment performance and resource allocation. The primary reason for the change was to align loan and deposit balances within the business segment that directly manages them. Specifically, certain loan and deposit balances previously included as part of the Retail Banking and Commercial Banking segments were reclassified among the segments and what is now Corporate/Other. The reallocation of select loan and deposit balances affected net interest income, net interest income after provision for credit losses, provision for income taxes, net income and segment earning assets. The Company has reported its selected financial information using the new loan and deposit balance alignments and using two reportable operating segments for the three and six months ended June 30, 2026. The Company has recast the selected financial information for the three and six months ended June 30, 2025 in order to conform with the current presentation.

​

The net interest income of the business segments reflects the results of a funds transfer pricing process that matches assets and liabilities with similar interest rate sensitivity and maturity characteristics and reflects the allocation of net interest income related to the Company’s overall asset and liability management activities on a proportionate basis. The basis for the allocation of net interest income is a function of the Company’s assumptions that are subject to change based on changes in current interest rates and market conditions. Funds transfer pricing also serves to transfer interest rate risk to Corporate/Other.

​

The Company allocates the provision for credit losses from Corporate/Other (which includes activity within the Company’s support units) to the Retail Banking and Commercial Banking business segments. These allocations are based on direct costs incurred by the Retail Banking and Commercial Banking business segments.

​

Noninterest income and expense includes allocations from support units to the business segments. These allocations are based on actual usage where practicably calculated or by management’s estimate of such usage. Income tax expense is allocated to each business segment as well as Corporate/Other based on the consolidated effective income tax rate for the period shown.

​

Business Segments

​

Retail Banking

Retail Banking offers a broad range of financial products and services to consumers and small businesses. Loan and lease products offered include residential and commercial mortgage loans, home equity lines of credit and loans, automobile loans and leases, secured and unsecured lines of credit, installment loans and small business loans and leases. Deposit products offered include checking, savings, and time deposit accounts. Retail Banking also offers wealth management services. Products and services from Retail Banking are delivered to customers through 49 banking locations throughout the State of Hawaii, Guam and Saipan.

​

Commercial Banking

Commercial Banking offers products that include corporate banking related products, commercial real estate loans, commercial lease financing, secured and unsecured lines of credit, automobile loans and auto dealer financing, business deposit products and credit cards. Commercial lending and deposit products are offered primarily to middle-market and large companies locally, nationally and internationally.

​

49

Table of Contents

Corporate/Other

​

Corporate/Other includes activity within the support units of the Company and not associated with a segment. One such area is Treasury, which includes activities surrounding the management of interest-bearing deposits, investment securities, federal funds sold and purchased, government deposits, short- and long-term borrowings and bank-owned properties (and these assets’ and liabilities’ related interest income and expense). The primary sources of noninterest income are from bank-owned life insurance, net gains from the sale of investment securities, foreign exchange income related to customer driven cross-border wires for business and personal reasons and management of bank-owned properties. The net residual effect of the transfer pricing of assets and liabilities is included in Corporate/Other, along with the elimination of intercompany transactions.

​

Other organizational units within Corporate/Other (such as Technology, Operations, Credit and Risk Management, Human Resources, Finance, Administration, Marketing and Corporate and Regulatory Administration) provide a wide range of support to the Company’s reportable segments. Expenses incurred by these support units are charged to the business segments through an internal cost allocation process.

​

The following tables present selected business segment and Corporate/Other financial information for the periods indicated.

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Three Months Ended

​

Six Months Ended

​

​

June 30, 2026

​

June 30, 2026

​

​

Retail

​

Commercial

​

Corporate/

​

Consolidated

​

Retail

​

Commercial

​

Corporate/

​

Consolidated

(dollars in thousands)

​

Banking

​

Banking

​

Other

​

Total

​

Banking

​

Banking

​

Other

​

Total

Interest income

​

$

84,849

​

$

106,085

​

$

41,433

​

$

232,367

​

$

168,862

​

$

208,511

​

$

84,692

​

$

462,065

Intersegment interest allocations (1)

​

​

(62,800)

​

​

(74,868)

​

​

137,668

​

​

—

​

​

(125,401)

​

​

(147,026)

​

​

272,427

​

​

—

Total interest income

​

​

22,049

​

​

31,217

​

​

179,101

​

​

232,367

​

​

43,461

​

​

61,485

​

​

357,119

​

​

462,065

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Interest expense

​

​

(44,032)

​

​

(14,402)

​

​

(2,940)

​

​

(61,374)

​

​

(88,239)

​

​

(29,421)

​

​

(5,882)

​

​

(123,542)

Intersegment interest allocations (1)

​

​

154,780

​

​

28,287

​

​

(183,067)

​

​

—

​

​

307,695

​

​

57,005

​

​

(364,700)

​

​

—

Total interest expense

​

​

110,748

​

​

13,885

​

​

(186,007)

​

​

(61,374)

​

​

219,456

​

​

27,584

​

​

(370,582)

​

​

(123,542)

Net interest income (expense)

​

​

132,797

​

​

45,102

​

​

(6,906)

​

​

170,993

​

​

262,917

​

​

89,069

​

​

(13,463)

​

​

338,523

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Provision for credit losses

​

​

(1,236)

​

​

(1,639)

​

​

(2,725)

​

​

(5,600)

​

​

(3,706)

​

​

(4,919)

​

​

(1,975)

​

​

(10,600)

Net interest income (expense) after provision for credit losses

​

​

131,561

​

​

43,463

​

​

(9,631)

​

​

165,393

​

​

259,211

​

​

84,150

​

​

(15,438)

​

​

327,923

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Noninterest income

​

​

29,111

​

​

21,453

​

​

9,717

​

​

60,281

​

​

57,250

​

​

40,057

​

​

15,793

​

​

113,100

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Salaries and employee benefits

​

​

(26,261)

​

​

(4,894)

​

​

(31,221)

​

​

(62,376)

​

​

(52,783)

​

​

(9,905)

​

​

(63,778)

​

​

(126,466)

Contracted services and professional fees

​

​

(2,858)

​

​

(4,162)

​

​

(11,382)

​

​

(18,402)

​

​

(5,529)

​

​

(8,181)

​

​

(18,656)

​

​

(32,366)

Occupancy

​

​

(8,268)

​

​

(523)

​

​

889

​

​

(7,902)

​

​

(16,250)

​

​

(1,009)

​

​

1,541

​

​

(15,718)

Equipment

​

​

(1,407)

​

​

(498)

​

​

(12,658)

​

​

(14,563)

​

​

(2,852)

​

​

(974)

​

​

(25,518)

​

​

(29,344)

Card rewards program

​

​

—

​

​

(8,403)

​

​

—

​

​

(8,403)

​

​

—

​

​

(16,807)

​

​

—

​

​

(16,807)

Other segment items (2)

​

​

(32,615)

​

​

(655)

​

​

14,471

​

​

(18,799)

​

​

(70,565)

​

​

(2,536)

​

​

35,472

​

​

(37,629)

Noninterest expense

​

​

(71,409)

​

​

(19,135)

​

​

(39,901)

​

​

(130,445)

​

​

(147,979)

​

​

(39,412)

​

​

(70,939)

​

​

(258,330)

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Income (loss) before (provision) benefit for income taxes

​

​

89,263

​

​

45,781

​

​

(39,815)

​

​

95,229

​

​

168,482

​

​

84,795

​

​

(70,584)

​

​

182,693

(Provision) benefit for income taxes

​

​

(21,021)

​

​

(8,957)

​

​

8,124

​

​

(21,854)

​

​

(40,165)

​

​

(16,590)

​

​

15,221

​

​

(41,534)

Net income (loss)

​

$

68,242

​

$

36,824

​

$

(31,691)

​

$

73,375

​

$

128,317

​

$

68,205

​

$

(55,363)

​

$

141,159

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Other Segment Disclosures:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Depreciation and amortization (3)

​

$

1,509

​

$

38

​

$

3,850

​

$

5,397

​

$

3,039

​

$

84

​

$

7,899

​

$

11,022

Segment earning assets(4)

​

​

7,123,319

​

​

7,457,073

​

​

6,274,112

​

​

20,854,504

​

​

7,123,319

​

​

7,457,073

​

​

6,274,112

​

​

20,854,504

​

50

Table of Contents

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Three Months Ended

​

Six Months Ended

​

​

June 30, 2025

​

June 30, 2025

​

​

Retail

​

Commercial

​

Corporate/

​

Consolidated

​

Retail

​

Commercial

​

Corporate/

​

Consolidated

(dollars in thousands)

​

Banking

​

Banking

​

Other

​

Total

​

Banking

​

Banking

​

Other

​

Total

Interest income

​

$

81,298

​

$

111,751

​

$

43,690

​

$

236,739

​

$

162,350

​

$

222,381

​

$

87,158

​

$

471,889

Intersegment interest allocations (1)

​

​

(61,245)

​

​

(83,068)

​

​

144,313

​

​

—

​

​

(121,449)

​

​

(163,003)

​

​

284,452

​

​

—

Total interest income

​

​

20,053

​

​

28,683

​

​

188,003

​

​

236,739

​

​

40,901

​

​

59,378

​

​

371,610

​

​

471,889

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Interest expense

​

​

(50,628)

​

​

(16,913)

​

​

(5,615)

​

​

(73,156)

​

​

(102,881)

​

​

(33,326)

​

​

(11,573)

​

​

(147,780)

Intersegment interest allocations (1)

​

​

157,622

​

​

30,858

​

​

(188,480)

​

​

—

​

​

315,483

​

​

62,514

​

​

(377,997)

​

​

—

Total interest expense

​

​

106,994

​

​

13,945

​

​

(194,095)

​

​

(73,156)

​

​

212,602

​

​

29,188

​

​

(389,570)

​

​

(147,780)

Net interest income (expense)

​

​

127,047

​

​

42,628

​

​

(6,092)

​

​

163,583

​

​

253,503

​

​

88,566

​

​

(17,960)

​

​

324,109

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Provision for credit losses

​

​

(2,111)

​

​

(2,389)

​

​

—

​

​

(4,500)

​

​

(6,802)

​

​

(7,698)

​

​

(500)

​

​

(15,000)

Net interest income (expense) after provision for credit losses

​

​

124,936

​

​

40,239

​

​

(6,092)

​

​

159,083

​

​

246,701

​

​

80,868

​

​

(18,460)

​

​

309,109

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Noninterest income

​

​

27,754

​

​

19,039

​

​

7,165

​

​

53,958

​

​

54,405

​

​

36,794

​

​

13,236

​

​

104,435

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Salaries and employee benefits

​

​

(25,743)

​

​

(4,964)

​

​

(28,794)

​

​

(59,501)

​

​

(50,355)

​

​

(9,755)

​

​

(59,495)

​

​

(119,605)

Contracted services and professional fees

​

​

(2,919)

​

​

(4,338)

​

​

(8,740)

​

​

(15,997)

​

​

(5,972)

​

​

(8,208)

​

​

(16,656)

​

​

(30,836)

Occupancy

​

​

(7,414)

​

​

(478)

​

​

(42)

​

​

(7,934)

​

​

(14,709)

​

​

(973)

​

​

(352)

​

​

(16,034)

Equipment

​

​

(1,450)

​

​

(472)

​

​

(12,115)

​

​

(14,037)

​

​

(2,845)

​

​

(921)

​

​

(24,142)

​

​

(27,908)

Card rewards program

​

​

—

​

​

(8,406)

​

​

—

​

​

(8,406)

​

​

—

​

​

(16,325)

​

​

—

​

​

(16,325)

Other segment items (2)

​

​

(34,850)

​

​

(1,360)

​

​

17,146

​

​

(19,064)

​

​

(71,620)

​

​

(3,607)

​

​

37,436

​

​

(37,791)

Noninterest expense

​

​

(72,376)

​

​

(20,018)

​

​

(32,545)

​

​

(124,939)

​

​

(145,501)

​

​

(39,789)

​

​

(63,209)

​

​

(248,499)

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Income (loss) before (provision) benefit for income taxes

​

​

80,314

​

​

39,260

​

​

(31,472)

​

​

88,102

​

​

155,605

​

​

77,873

​

​

(68,433)

​

​

165,045

(Provision) benefit for income taxes

​

​

(14,890)

​

​

(6,193)

​

​

6,228

​

​

(14,855)

​

​

(32,750)

​

​

(14,060)

​

​

14,260

​

​

(32,550)

Net income (loss)

​

$

65,424

​

$

33,067

​

$

(25,244)

​

$

73,247

​

$

122,855

​

$

63,813

​

$

(54,173)

​

$

132,495

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Other Segment Disclosures:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Depreciation and amortization (3)

​

$

992

​

$

68

​

$

4,670

​

$

5,730

​

$

2,041

​

$

136

​

$

9,082

​

$

11,259

Segment earning assets(4)

​

​

7,081,942

​

​

7,278,709

​

​

6,676,290

​

​

21,036,941

​

​

7,081,942

​

​

7,278,709

​

​

6,676,290

​

​

21,036,941

(1) Intersegment interest allocations are the result of funds transfer-pricing methodologies that are utilized to allocate a cost for the funding of assets and a credit for the collection of deposits from Corporate/Other to the business segment assets and liabilities.

(2) Other segment items included in segment net income includes advertising and marketing, regulatory assessment and fees, allocations and transfer pricing on non-earning assets, liabilities and equity, and other miscellaneous and administrative fees. Amounts included in the Corporate/Other column are not related to the segments but include the effect of certain expense allocations or transfer pricing to the segments.

(3) The amounts of depreciation and amortization disclosed by the reportable segments and Corporate/Other are included within equipment, occupancy, other segment items, and noninterest income.

(4) Segment earning assets only apply to the Retail Banking and Commercial Banking segments. The Corporate/Other column includes earning assets not associated with a segment (such as investment securities, interest-bearing deposits and federal funds).

​

17. Subsequent Event

​

On July 12, 2026, First Hawaiian, Inc. and TriCo Bancshares (“TriCo”) entered into a definitive agreement (the “Merger Agreement”) under which, on the terms and conditions set forth therein, the Company will acquire TriCo in an all-stock transaction. Under the terms of the agreement, common shareholders of TriCo will receive 2.095 shares of First Hawaiian, Inc. common stock for each share of TriCo common stock, resulting in a transaction value of approximately $2 billion.

​

TriCo is headquartered in Chico, California with reported assets of approximately $10 billion as of March 31, 2026 and is the holding company of Tri Counties Bank. In conjunction with the closing of the Merger Agreement, four members of TriCo’s Board of Directors are expected to join the First Hawaiian, Inc. and First Hawaiian Bank Boards of Directors.

​

The Merger Agreement remains subject to regulatory approval, approval by First Hawaiian, Inc. and TriCo shareholders and the satisfaction of other customary closing conditions. The Merger Agreement is expected to close at the end of 2026.

​

​

51

Table of Contents

​

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

​

Cautionary Note Regarding Forward-Looking Statements

​

This Quarterly Report on Form 10-Q, including the documents incorporated by reference herein, contains, and from time to time our management may make, forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements reflect our current views with respect to, among other things, future events and our financial performance. These statements are often, but not always, made through the use of words or phrases such as “may,” “might,” “should,” “could,” “predict,” “potential,” “believe,” “expect,” “continue,” “will,” “anticipate,” “seek,” “estimate,” “intend,” “plan,” “projection,” “would,” “annualized” and “outlook,” or the negative version of those words or other comparable words or phrases of a future or forward-looking nature. Statements regarding the expected timing, completion and effects of the proposed business combination between First Hawaiian, Inc. (“FHI”) and TriCo Bancshares (“TriCo”) and the plans, objectives and expectations of FHI are forward-looking statements. Statements that are not historical or current facts, are forward-looking statements, and are based on current expectations, estimates and projections about our industry, management’s beliefs and certain assumptions made by management, many of which, by their nature, are inherently uncertain and beyond our control. Accordingly, we caution you that any such forward-looking statements are not guarantees of future performance and are subject to risks, assumptions, estimates and uncertainties that are difficult to predict. Although we believe that the expectations reflected in these forward-looking statements are reasonable as of the date made, actual results may prove to be materially different from the results expressed or implied by the forward-looking statements.

​

A number of important factors could cause our actual results to differ materially from those indicated in these forward-looking statements, including the following: the geographic concentration of our business, current and future market and economic conditions generally or in Hawaii, Guam and Saipan in particular, including inflationary pressures and interest rate environment; our dependence on the real estate markets in which we operate; concentrated exposures to certain asset classes and individual obligors; the effect of changes in interest rates on our business, including our net interest income, net interest margin, the fair value of our investment securities, and our mortgage loan originations, mortgage servicing rights and mortgage loans held for sale; the future value of the investment securities that we own; the possibility of a deterioration in credit quality in our portfolio; the possibility we might underestimate the credit losses inherent in our loan and lease portfolio; our ability to attract and retain customer deposits; our inability to receive dividends from our bank, pay dividends to our common stockholders and satisfy obligations as they become due; our access to sources of liquidity and capital to address our liquidity needs; our ability to attract and retain skilled employees or changes in our management personnel; our ability to maintain our Bank's reputation; the failure to properly use and protect our customer and employee information and data; the possibility of employee misconduct or mistakes; the actual or perceived soundness of other financial institutions; the effectiveness of our risk management and internal disclosure controls and procedures; our ability to keep pace with technological changes; any failure or interruption of our information and communications systems; our ability to effectively compete with other financial services companies and the effects of competition in the financial services industry on our business; our ability to identify and address cybersecurity risks; the occurrence of fraudulent activity or effect of a material breach of, or disruption to, the security of any of our or our vendors’ systems; the development and use of AI; our ability to successfully develop and commercialize new or enhanced products and services; changes in the demand for our products and services; risks associated with the sale of loans and with our use of appraisals in valuing and monitoring loans; the possibility that actual results may differ from estimates and forecasts; fluctuations in the fair value of our assets and liabilities and off-balance sheet exposures; the effects of the failure of any component of our business infrastructure provided by a third party; the potential for environmental liability; the risk of being subject to litigation and the outcome thereof; the impact of, and changes in, applicable laws, regulations and accounting standards and policies; possible changes in trade, monetary and fiscal policies of, and other activities undertaken by, governments, agencies, central banks and similar organizations, including trade and other geopolitical tensions resulting from conflicts in the Middle East, the imposition of tariffs and tightening of export control regulations; the effects of severe weather, geopolitical instability, including war, terrorist attacks, pandemics or other severe health emergencies and natural disasters and other external events; the potential impact of climate change; our ability to maintain consistent growth, earnings and profitability; our likelihood of success in, and the impact of, litigation or regulatory actions; our ability to continue to pay dividends on our common stock;  contingent liabilities and unexpected tax liabilities that may be applicable to us as a result of the Reorganization Transactions; the failure to close our previously announced merger with TriCo when expected or at all because required regulatory, First Hawaiian stockholder, TriCo shareholder or other approvals, or other conditions to closing, are not received or satisfied on a timely basis or at all, and the risk that any regulatory approvals may result in the imposition of conditions that could adversely affect the combined company or the expected benefits of the proposed merger; the occurrence of any event, change or other circumstances that

52

Table of Contents

could give rise to the right of one or both of the parties to terminate the Merger Agreement; the proposed merger being more expensive or taking longer to complete than anticipated, including as a result of unexpected factors or events; the diversion of management’s attention from ongoing business operations and opportunities due to the proposed merger; the dilutive effect of shares of our common stock to be issued in connection with the proposed merger; changes in our or TriCo’s share price before closing; the possibility that the anticipated benefits of the proposed merger with TriCo, including anticipated cost savings and strategic gains, are not realized when expected or at all, including as a result of the impact of, or problems arising from, the integration of the companies or as a result of the strength of the economy, competitive factors in the areas where we do business, or as a result of other unexpected factors or events; potential adverse reactions or changes to business or employee relationships, including those resulting from the announcement or completion of the proposed merger with TriCo; any change in the purchase accounting assumptions used regarding the TriCo assets acquired and liabilities assumed to determine the fair value and credit marks; and the outcome of any legal proceedings that may be instituted against FHI or TriCo related to the proposed merger; and damage to our reputation from any of the factors described above.

​

The foregoing factors should not be considered an exhaustive list and should be read together with the risk factors and other cautionary statements included in our Annual Report on Form 10-K for the year ended December 31, 2025, as well as the risk factors related to the proposed merger with TriCo set forth in Part II, Item 1A of this Quarterly Report. If one or more events related to these or other risks or uncertainties materialize, or if our underlying assumptions prove to be incorrect, actual results may differ materially from what we anticipate. Accordingly, you should not place undue reliance on any such forward-looking statements. Any forward-looking statement speaks only as of the date on which it is made, and we do not undertake any obligation to update any forward-looking statement, whether as a result of new information, future developments or otherwise, except as required by applicable law.

​

Company Overview

​

FHI is a bank holding company, which owns 100% of the outstanding common stock of FHB, its only direct, wholly owned subsidiary. FHB was founded in 1858 under the name Bishop & Company and was the first successful banking partnership in the Kingdom of Hawaii and the second oldest bank formed west of the Mississippi River. The Bank operates its business through two operating segments: Retail Banking and Commercial Banking. All other activities, including Treasury, are reported in Corporate/Other.

​

References to “we,” “our,” “us,” or the “Company” refer to the Parent and its subsidiary that are consolidated for financial reporting purposes.

​

Basis of Presentation

​

The accompanying unaudited interim consolidated financial statements of the Company reflect the results of operations, financial position and cash flows of FHI and its wholly owned subsidiary, FHB. All significant intercompany accounts and transactions have been eliminated in consolidation.

​

The accompanying unaudited interim consolidated financial statements of the Company have been prepared in accordance with GAAP for interim financial information and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, they do not include all of the information and accompanying notes required by GAAP for complete financial statements. In the opinion of management, the accompanying unaudited interim consolidated financial statements reflect normal recurring adjustments necessary for a fair presentation of the results for the interim periods.

​

The accompanying unaudited interim consolidated financial statements of the Company should be read in conjunction with the audited consolidated financial statements and related notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025 and filed with the U.S. Securities and Exchange Commission (the “SEC”).

​

53

Table of Contents

Pending Acquisition

​

On July 12, 2026, FHI and TriCo entered into a definitive agreement (the “Merger Agreement”), pursuant to which, on the terms and subject to the conditions set forth therein, Horizon Merger Sub, Inc., a direct, wholly owned subsidiary of FHI, will merge with and into TriCo, with TriCo surviving the merger. Immediately following the merger, TriCo will merge with and into FHI, with FHI continuing as the surviving entity. Promptly following that second-step merger, Tri Counties Bank will merge with and into First Hawaiian Bank, with First Hawaiian Bank continuing as the surviving bank. Under the terms of the Merger Agreement, each share of TriCo common stock outstanding immediately prior to the effective time, subject to certain exceptions, will be converted into the right to receive 2.095 shares of First Hawaiian common stock, with cash paid in lieu of fractional shares. The exchange ratio is fixed, subject to adjustment as provided in the Merger Agreement.

​

See “Note 17. Subsequent Event” contained in our unaudited interim consolidated financial statements for more information.

​

Voting and Support Agreements

​

On July 12, 2026, concurrently with the execution of the Merger Agreement, FHI entered into voting and support agreements with each member of the TriCo board of directors (the “Voting and Support Agreements”), on identical terms except for the identity of the TriCo director signing the relevant agreement.

​

The Voting and Support Agreements require, among other things, that each of the directors party thereto (in such directors’ capacity as shareholders only) (a) vote all of the shares of TriCo common stock owned by them: (i) in favor of the adoption of the Merger Agreement and (ii) against alternative transactions or other proposals that could prevent or materially delay the Merger, (b) grant a corresponding proxy with respect to their shares under certain circumstances and (c) not, directly or indirectly, sell, assign, transfer or otherwise dispose of their shares of TriCo common stock, subject to certain exceptions.

​

Each of the Voting and Support Agreements will terminate at the earliest of (a) the Effective Time, (b) the termination of the Merger Agreement in accordance with its terms, and (c) any amendment to the Merger Agreement without the prior written consent of the relevant director if such amendment diminishes the Merger Consideration, changes the form of Merger Consideration or extends the termination date of the Merger Agreement other than pursuant to any extension right expressly provided in the Merger Agreement.

​

Hawaii Economy

​

Hawaii’s economy continues to remain resilient in an environment facing challenges, including from: high consumer prices and housing affordability, both of which are expected to continue with the gradual pass-through of tariffs and the ongoing conflict with Iran; a steady out-migration of its population; adverse weather events alongside rising insurance costs; and slower economic growth with a 1.6% forecasted increase in the real gross domestic product for Hawaii in 2026 according to the State of Hawaii Department of Business, Economic Development & Tourism (“DBEDT”) as compared to a 2.2% forecasted increase for the United States overall in 2026 according to the Congressional Budget Office’s Budget and Economic Outlook. Recent geopolitical developments, including the conflicts in the Middle East, elevate uncertainty.

​

Despite these challenges, according to the State of Hawaii DBEDT, the statewide seasonally adjusted unemployment rate was 2.6% at June 30, 2026, which is lower than the national seasonally adjusted unemployment rate of 4.2%.

​

Tourism also remains stable, with the average daily domestic passenger counts for the six months ended June 30, 2026 five percent higher than the average daily domestic passenger counts during the six months ended June 30, 2025, according to the Hawaii Tourism Authority. Hawaii’s economy depends significantly on conditions of the U.S. economy and key international economies, particularly Japan, and the broader demand for travel of these key markets. International visitor arrivals have not yet recovered to pre-pandemic arrival levels and demand for tourism could be negatively impacted by increasing fuel prices.

​

54

Table of Contents

The local Oahu housing market, particularly condominiums, continues to experience some softening as compared to previous years primarily due to continued high interest rates and prices. According to the Honolulu Board of Realtors, the volume of single-family home sales increased by 3.9%, while condominium sales decreased by 2.3%, in each case when comparing the six months ended June 30, 2026 with the same period in 2025. The median price of a single-family home sold on Oahu during the first six months of 2026 was $1,180,000, an increase of 2.6% compared to the same period in 2025. The median price of a condominium sold on Oahu during the first six months of 2026 was $515,000, an increase of 1.5% compared to the median price during the same period in 2025. As of June 30, 2026, months of inventory of single-family homes and condominiums on Oahu were approximately 3.2 and 7.0 months, respectively, as compared to 3.7 and 7.0 months, respectively, as of June 30, 2025.

​

Selected Financial Data

​

Our financial highlights for the periods indicated are presented in Table 1:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Financial Highlights

​

​

​

​

​

​

​

​

​

​

​

Table 1

​

​

For the Three Months Ended

​

​

For the Six Months Ended

​

​

​

June 30,

​

​

June 30,

​

(dollars in thousands, except per share data)

​

2026

​

2025

​

​

2026

​

2025

​

Income Statement Data:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Interest income

​

$

232,367

​

$

236,739

​

​

$

462,065

​

$

471,889

​

Interest expense

​

​

61,374

​

​

73,156

​

​

​

123,542

​

​

147,780

​

Net interest income

​

​

170,993

​

​

163,583

​

​

​

338,523

​

​

324,109

​

Provision for credit losses

​

​

5,600

​

​

4,500

​

​

​

10,600

​

​

15,000

​

Net interest income after provision for credit losses

​

​

165,393

​

​

159,083

​

​

​

327,923

​

​

309,109

​

Noninterest income

​

​

60,281

​

​

53,958

​

​

​

113,100

​

​

104,435

​

Noninterest expense

​

​

130,445

​

​

124,939

​

​

​

258,330

​

​

248,499

​

Income before provision for income taxes

​

​

95,229

​

​

88,102

​

​

​

182,693

​

​

165,045

​

Provision for income taxes

​

​

21,854

​

​

14,855

​

​

​

41,534

​

​

32,550

​

Net income

​

$

73,375

​

$

73,247

​

​

$

141,159

​

$

132,495

​

Basic earnings per share

​

$

0.60

​

$

0.58

​

​

$

1.16

​

$

1.05

​

Diluted earnings per share

​

$

0.60

​

$

0.58

​

​

$

1.15

​

$

1.05

​

Basic weighted-average outstanding shares

​

​

121,669,238

​

​

125,321,837

​

​

​

122,061,243

​

​

125,799,060

​

Diluted weighted-average outstanding shares

​

​

122,339,836

​

​

125,833,064

​

​

​

122,830,138

​

​

126,493,569

​

Dividends declared per share

​

$

0.26

​

$

0.26

​

​

$

0.52

​

$

0.52

​

Dividend payout ratio

​

​

43.33

%

​

44.83

%

​

​

45.22

%

​

49.52

%

Other Financial Information / Performance Ratios(1):

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Net interest margin

​

​

3.25

%

​

3.11

%

​

​

3.22

%

​

3.10

%

Efficiency ratio

​

​

56.17

%

​

57.23

%

​

​

56.95

%

​

57.71

%

Return on average total assets

​

​

1.23

%

​

1.23

%

​

​

1.19

%

​

1.12

%

Return on average tangible assets (non-GAAP)(2)

​

​

1.28

%

​

1.28

%

​

​

1.24

%

​

1.17

%

Return on average total stockholders' equity

​

​

10.52

%

​

11.03

%

​

​

10.19

%

​

10.07

%

Return on average tangible stockholders' equity (non-GAAP)(2)

​

​

16.34

%

​

17.61

%

​

​

15.84

%

​

16.12

%

Noninterest expense to average assets

​

​

2.18

%

​

2.10

%

​

​

2.17

%

​

2.10

%

(continued)

​

55

Table of Contents

​	​	​	​	​	​	​	​
(continued)	​	June 30,		​	December 31,		​
(dollars in thousands, except per share data)	​	2026		​	2025		​
Balance Sheet Data:	​	​	​	​	​	​	​
Cash and cash equivalents	​	$	1,012,496	​	$	1,477,752	​
Investment securities available-for-sale	​	​	2,094,699	​	​	2,076,233	​
Investment securities held-to-maturity	​	​	3,411,684	​	​	3,533,082	​
Loans and leases	​	​	14,577,299	​	​	14,312,529	​
Allowance for credit losses for loans and leases	​	​	168,056	​	​	168,468	​
Goodwill	​	​	995,492	​	​	995,492	​
Total assets	​	​	23,646,049	​	​	23,955,252	​
Total deposits	​	​	20,154,181	​	​	20,515,668	​
Total liabilities	​	​	20,820,021	​	​	21,185,887	​
Total stockholders' equity	​	​	2,826,028	​	​	2,769,365	​
Book value per share	​	$	23.22	​	$	22.57	​
Tangible book value per share (non-GAAP)(2)	​	$	15.04	​	$	14.46	​
​	​	​	​	​	​	​	​
Asset Quality Ratios:	​	​	​	​	​	​	​
Non-accrual loans and leases / total loans and leases	​	​	0.27	%	​	0.29	%
Allowance for credit losses for loans and leases / total loans and leases	​	​	1.15	%	​	1.18	%
Net charge-offs / average total loans and leases(3)	​	​	0.13	%	​	0.11	%

​

​	​	​	​	​	​	​	​
​	​	June 30,		​	December 31,		​
Capital Ratios:	​	2026		​	2025		​
Common Equity Tier 1 Capital Ratio	​	​	13.27	%	​	13.17	%
Tier 1 Capital Ratio	​	​	13.27	%	​	13.17	%
Total Capital Ratio	​	​	14.52	%	​	14.42	%
Tier 1 Leverage Ratio	​	​	9.46	%	​	9.27	%
Total stockholders' equity to total assets	​	​	11.95	%	​	11.56	%
Tangible stockholders' equity to tangible assets (non-GAAP)(2)	​	​	8.08	%	​	7.73	%

(1) Except for the efficiency ratio, amounts are annualized for the three and six months ended June 30, 2026 and 2025.

​

(2) Return on average tangible assets, return on average tangible stockholders’ equity, tangible book value per share and tangible stockholders’ equity to tangible assets are non-GAAP financial measures. We compute our return on average tangible assets as the ratio of net income to average tangible assets. We compute our return on average tangible stockholders’ equity as the ratio of net income to average tangible stockholders’ equity. We compute our tangible book value per share as the ratio of tangible stockholders’ equity to outstanding shares. We compute our tangible stockholders’ equity to tangible assets as the ratio of tangible stockholders’ equity to tangible assets. We believe that these financial measures are useful for investors, regulators, management and others to evaluate financial performance and capital adequacy relative to other financial institutions. Although these non-GAAP financial measures are frequently used by shareholders in the evaluation of a company, they have limitations as analytical tools and should not be considered in isolation or as a substitute for analyses of results as reported under GAAP.

​

(3) Net charge-offs / average total loans and leases is annualized for the six months ended June 30, 2026.

​

​

​

56

Table of Contents

The following table provides a reconciliation of these non-GAAP financial measures with their most closely related GAAP measures for the periods indicated:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

GAAP to Non-GAAP Reconciliation

​

​

​

​

​

​

​

​

​

​

​

Table 2

​

​

​

For the Three Months Ended

​

For the Six Months Ended

​

​

​

​

June 30,

​

June 30,

​

​

(dollars in thousands)

​

2026

​

2025

​

2026

​

2025

​

​

Income Statement Data:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Net income

​

$

73,375

​

$

73,247

​

$

141,159

​

$

132,495

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Average total stockholders' equity

​

$

2,796,857

​

$

2,663,850

​

$

2,792,863

​

$

2,652,975

​

​

Less: average goodwill

​

​

995,492

​

​

995,492

​

​

995,492

​

​

995,492

​

​

Average tangible stockholders' equity

​

$

1,801,365

​

$

1,668,358

​

$

1,797,371

​

$

1,657,483

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Average total assets

​

$

23,954,425

​

$

23,859,410

​

$

24,018,496

​

$

23,874,849

​

​

Less: average goodwill

​

​

995,492

​

​

995,492

​

​

995,492

​

​

995,492

​

​

Average tangible assets

​

$

22,958,933

​

$

22,863,918

​

$

23,023,004

​

$

22,879,357

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Return on average total stockholders' equity(a)

​

​

10.52

%

​

11.03

%

​

10.19

%

​

10.07

%

​

Return on average tangible stockholders' equity (non-GAAP)(a)

​

​

16.34

%

​

17.61

%

​

15.84

%

​

16.12

%

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Return on average total assets(a)

​

​

1.23

%

​

1.23

%

​

1.19

%

​

1.12

%

​

Return on average tangible assets (non-GAAP)(a)

​

​

1.28

%

​

1.28

%

​

1.24

%

​

1.17

%

​

​

​	​	​	​	​	​	​	​
​	​	As of		​	As of		​
​	​	June 30,		​	December 31,		​
(dollars in thousands, except per share data)	​	2026		​	2025		​
Balance Sheet Data:	​	​	​	​	​	​	​
Total stockholders' equity	​	$	2,826,028	​	$	2,769,365	​
Less: goodwill	​	​	995,492	​	​	995,492	​
Tangible stockholders' equity	​	$	1,830,536	​	$	1,773,873	​
​	​	​	​	​	​	​	​
Total assets	​	$	23,646,049	​	$	23,955,252	​
Less: goodwill	​	​	995,492	​	​	995,492	​
Tangible assets	​	$	22,650,557	​	$	22,959,760	​
​	​	​	​	​	​	​	​
Shares outstanding	​	​	121,680,634	​	​	122,689,256	​
​	​	​	​	​	​	​	​
Total stockholders' equity to total assets	​	​	11.95	%	​	11.56	%
Tangible stockholders' equity to tangible assets (non-GAAP)	​	​	8.08	%	​	7.73	%
​	​	​	​	​	​	​	​
Book value per share	​	$	23.22	​	$	22.57	​
Tangible book value per share (non-GAAP)	​	$	15.04	​	$	14.46	​

(a) Annualized for the three and six months ended June 30, 2026 and 2025.

​

​

57

Table of Contents

Financial Highlights

​

Net income was $73.4 million for the three months ended June 30, 2026, an increase of $0.1 million as compared to the same period in 2025. Basic and diluted earnings per share were both $0.60 for the three months ended June 30, 2026, an increase of $0.02 or 3% as compared to the same period in 2025. The slight increase in net income was primarily due to a $7.4 million increase in net interest income and a $6.3 million increase in noninterest income. This was partially offset by a $7.0 million increase in the provision for income taxes, a $5.5 million increase in noninterest expense and a $1.1 million increase in the provision for credit losses (the “Provision”).

​

Our return on average total assets was 1.23% for the three months ended June 30, 2026, consistent with the same period in 2025, and our return on average total stockholders’ equity was 10.52% for the three months ended June 30, 2026, a decrease of 51 basis points from the same period in 2025. Our return on average tangible assets was 1.28% for the three months ended June 30, 2026, consistent with the same period in 2025, and our return on average tangible stockholders’ equity was 16.34% for the three months ended June 30, 2026, a decrease of 127 basis points from the same period in 2025. Our efficiency ratio was 56.17% for the three months ended June 30, 2026 compared to 57.23% for the same period in 2025.

​

Our results for the three months ended June 30, 2026 were highlighted by the following:

​

● Net interest income was $171.0 million for the three months ended June 30, 2026, an increase of $7.4 million or 5% as compared to the same period in 2025. Our net interest margin was 3.25% for the three months ended June 30, 2026, an increase of 14 basis points as compared to the same period in 2025. The increase in net interest income was primarily due to lower deposit funding and borrowing costs, partially offset by lower earning asset yields driven by lower yields in our loan and lease portfolio.

​

● The Provision was $5.6 million for the three months ended June 30, 2026, an increase of $1.1 million or 24% as compared to the same period in 2025. The Provision is recorded to maintain the allowance for credit losses for loans and leases (the “ACL”) and the reserve for unfunded commitments at levels deemed adequate to absorb lifetime expected credit losses in our loan and lease portfolio and unfunded loan and lease commitments as of the balance sheet date.

​

● Noninterest income was $60.3 million for the three months ended June 30, 2026, an increase of $6.3 million or 12% as compared to the same period in 2025. The increase in noninterest income was primarily due to a $3.0 million increase in other noninterest income, a $2.3 million increase in bank-owned life insurance (“BOLI”) income and a $1.1 million increase in other service charges and fees.

​

● Noninterest expense was $130.4 million for the three months ended June 30, 2026, an increase of $5.5 million or 4% as compared to the same period in 2025. The increase in noninterest expense was primarily due to a $2.9 million increase in salaries and employee benefits expense and a $2.4 million increase in contracted services and professional fees.

​

Net income was $141.2 million for the six months ended June 30, 2026, an increase of $8.7 million or 7% as compared to the same period in 2025. Basic earnings per share was $1.16 for the six months ended June 30, 2026, an increase of $0.11 or 10% as compared to the same period in 2025. Diluted earnings per share was $1.15 for the six months ended June 30, 2026, an increase of $0.10 or 10% as compared to the same period in 2025. The increase in net income was primarily due to a $14.4 million increase in net interest income, an $8.7 million increase in noninterest income and a $4.4 million decrease in the Provision. This was partially offset by a $9.8 million increase in noninterest expense and a $9.0 million increase in the provision for income taxes.

​

58

Table of Contents

Our return on average total assets was 1.19% for the six months ended June 30, 2026, an increase of seven basis points from the same period in 2025, and our return on average total stockholders’ equity was 10.19% for the six months ended June 30, 2026, an increase of 12 basis points for the same period in 2025. Our return on average tangible assets was 1.24% for the six months ended June 30, 2026, an increase of seven basis points from the same period in 2025, and our return on average tangible stockholders’ equity was 15.84% for the six months ended June 30, 2026, a decrease of 28 basis points from the same period in 2025. Our efficiency ratio was 56.95% for the six months ended June 30, 2026 compared to 57.71% for the same period in 2025.

​

Our results for the six months ended June 30, 2026 were highlighted by the following:

​

● Net interest income was $338.5 million for the six months ended June 30, 2026, an increase of $14.4 million or 4% as compared to the same period in 2025. Our net interest margin was 3.22% for the six months ended June 30, 2026, an increase of 12 basis points as compared to the same period in 2025. The increase in net interest income was primarily due to lower deposit funding costs and borrowing costs, partially offset by lower earning asset yields driven by lower yields in our loan and lease portfolio.

​

● The Provision was $10.6 million for the six months ended June 30, 2026, a decrease of $4.4 million or 29% for the same period in 2025. The decrease was primarily due to decreases in the provision for commercial and industrial loans, consumer loans, home equity lines and lease financing and the provision for unfunded home equity line commitments. This was partially offset by increases in the provision for commercial real estate loans and residential mortgage loans and the provision for unfunded construction commitments. The Provision is recorded to maintain the ACL and the reserve for unfunded commitments at levels deemed adequate to absorb lifetime expected credit losses in our loan and lease portfolio and unfunded loan and lease commitments as of the balance sheet date.

​

● Noninterest income was $113.1 million for the six months ended June 30, 2026, an increase of $8.7 million or 8% as compared to the same period in 2025. The increase was primarily due to a $3.1 million increase in other noninterest income, a $2.7 million increase in other service charges and fees, a $2.1 million increase in BOLI income and a $1.1 million increase in service charges on deposit accounts.

​

● Noninterest expense was $258.3 million for the six months ended June 30, 2026, an increase of $9.8 million or 4% as compared to the same period in 2025. The increase in noninterest expense was primarily due to a $6.9 million increase in salaries and employee benefits expense, a $1.5 million increase in contracted services and professional fees, a $1.4 million increase in equipment expense, a $0.5 million increase in other noninterest expense and a $0.5 million increase in card rewards program expense, partially offset by a $0.9 million decrease in regulatory assessment and fees.

​

For the six months ended June 30, 2026, we continued to maintain high levels of liquidity and adequate reserves for credit losses. We also remained well-capitalized. Common Equity Tier 1 (“CET1”) was 13.27% as of June 30, 2026, an increase of 10 basis points from December 31, 2025. The increase in CET1 was primarily due to earnings for the six months ended June 30, 2026, partially offset by dividends declared and paid to the Company’s stockholders, common stock repurchased and an increase in risk-weighted assets.

​

● Total loans and leases were $14.6 billion as of June 30, 2026, an increase of $264.8 million or 2% from December 31, 2025. The increase in total loans and leases was primarily due to increases in commercial real estate loans, commercial and industrial loans and consumer loans, partially offset by decreases in construction loans and residential real estate loans.

​

● The ACL was $168.1 million as of June 30, 2026, a decrease of $0.4 million from December 31, 2025. The ratio of our ACL to total loans and leases outstanding was 1.15% as of June 30, 2026 and 1.18% as of December 31, 2025.

​

59

Table of Contents

● Our investment portfolio is comprised of high-grade investment securities, primarily collateralized mortgage obligations issued by the Government National Mortgage Association (“Ginnie Mae”), the Federal National Mortgage Association (“Fannie Mae”) and the Federal Home Loan Mortgage Corporation (“Freddie Mac”) and mortgage-backed securities issued by Ginnie Mae, Freddie Mac, Fannie Mae, Municipal Housing Authorities and non-agency entities. The total carrying value of our investment securities portfolio was $5.5 billion as of June 30, 2026, a decrease of $102.9 million or 2% from December 31, 2025. The lower balances in investment securities were driven by payments and maturities during the six months ended June 30, 2026, which were placed into loans and leases.

​

● Total deposits were $20.2 billion as of June 30, 2026, a decrease of a $361.5 million or 2% from December 31, 2025. The decrease in total deposits was primarily due to a $176.1 million decrease in savings deposit balances, a $99.5 million decrease in demand deposit balances, an $80.5 million decrease in time deposit balances and a $5.4 million decrease in money market deposit balances.

​

● Total stockholders’ equity was $2.8 billion as of June 30, 2026 and December 31, 2025. Earnings of $141.2 million for the period and other comprehensive income, net of tax, of $8.3 million, were partially offset by dividends of $63.5 million declared and paid to the Company’s stockholders and repurchases of common stock of $32.0 million during the six months ended June 30, 2026.

​

Analysis of Results of Operations

​

Net Interest Income

​

For the three months ended June 30, 2026 and 2025, average balances, related income and expenses, on a fully taxable-equivalent basis, and resulting yields and rates are presented in Table 3. An analysis of the change in net interest income, on a fully taxable-equivalent basis, is presented in Table 4.

​

60

Table of Contents

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Average Balances and Interest Rates

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Table 3

​

​

Three Months Ended

​

Three Months Ended

​

​

​

June 30, 2026

​

June 30, 2025

​

​

​

Average

​

Income/

​

Yield/

​

Average

​

Income/

​

Yield/

​

(dollars in millions)

​

Balance

​

Expense

​

Rate

​

Balance

​

Expense

​

Rate

​

Earning Assets

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Interest-Bearing Deposits in Other Banks

​

$

1,142.4

​

$

10.5

​

3.68

%

$

1,276.8

​

$

14.1

​

4.45

%

Available-for-Sale Investment Securities

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Taxable

​

​

2,081.7

​

​

15.8

​

3.05

​

​

1,869.3

​

​

12.5

​

2.67

​

Non-Taxable

​

​

0.4

​

​

—

​

4.42

​

​

1.3

​

​

—

​

5.27

​

Held-to-Maturity Investment Securities

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Taxable

​

​

2,860.7

​

​

12.1

​

1.69

​

​

3,099.9

​

​

13.2

​

1.70

​

Non-Taxable

​

​

590.3

​

​

3.3

​

2.23

​

​

596.5

​

​

3.3

​

2.21

​

Total Investment Securities

​

​

5,533.1

​

​

31.2

​

2.26

​

​

5,567.0

​

​

29.0

​

2.08

​

Loans Held for Sale

​

​

0.6

​

​

—

​

5.68

​

​

0.3

​

​

—

​

6.86

​

Loans and Leases(1)

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Commercial and industrial

​

​

2,275.4

​

​

32.3

​

5.69

​

​

2,291.5

​

​

35.2

​

6.16

​

Commercial real estate

​

​

4,736.0

​

​

67.6

​

5.73

​

​

4,392.5

​

​

66.9

​

6.11

​

Construction

​

​

770.2

​

​

12.4

​

6.48

​

​

900.4

​

​

14.9

​

6.66

​

Residential:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Residential mortgage

​

​

4,038.8

​

​

40.9

​

4.05

​

​

4,104.1

​

​

40.2

​

3.92

​

Home equity line

​

​

1,181.8

​

​

14.2

​

4.82

​

​

1,154.4

​

​

13.4

​

4.64

​

Consumer

​

​

1,044.1

​

​

20.1

​

7.74

​

​

1,013.9

​

​

19.2

​

7.58

​

Lease financing

​

​

441.9

​

​

3.9

​

3.51

​

​

432.1

​

​

4.2

​

3.90

​

Total Loans and Leases

​

​

14,488.2

​

​

191.4

​

5.30

​

​

14,288.9

​

​

194.0

​

5.44

​

Other Earning Assets

​

​

28.7

​

​

0.2

​

2.36

​

​

34.6

​

​

0.4

​

4.94

​

Total Earning Assets(2)

​

​

21,193.0

​

​

233.3

​

4.41

​

​

21,167.6

​

​

237.5

​

4.50

​

Cash and Due from Banks

​

​

239.1

​

​

​

​

​

​

​

222.3

​

​

​

​

​

​

Other Assets

​

​

2,522.3

​

​

​

​

​

​

​

2,469.5

​

​

​

​

​

​

Total Assets

​

$

23,954.4

​

​

​

​

​

​

$

23,859.4

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Interest-Bearing Liabilities

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Interest-Bearing Deposits

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Savings

​

$

6,407.4

​

$

19.6

​

1.23

%

$

6,247.5

​

$

21.0

​

1.35

%

Money Market

​

​

4,321.3

​

​

19.5

​

1.81

​

​

3,822.1

​

​

22.8

​

2.39

​

Time

​

​

3,275.3

​

​

22.1

​

2.71

​

​

3,389.4

​

​

26.5

​

3.14

​

Total Interest-Bearing Deposits

​

​

14,004.0

​

​

61.2

​

1.75

​

​

13,459.0

​

​

70.3

​

2.09

​

Other Short-Term Borrowings

​

​

—

​

​

—

​

—

​

​

250.0

​

​

2.6

​

4.22

​

Other Interest-Bearing Liabilities

​

​

19.5

​

​

0.2

​

3.16

​

​

20.8

​

​

0.2

​

4.62

​

Total Interest-Bearing Liabilities

​

​

14,023.5

​

​

61.4

​

1.76

​

​

13,729.8

​

​

73.1

​

2.14

​

Net Interest Income

​

​

​

​

$

171.9

​

​

​

​

​

​

$

164.4

​

​

​

Interest Rate Spread(3)

​

​

​

​

​

​

​

2.65

%

​

​

​

​

​

​

2.36

%

Net Interest Margin(4)

​

​

​

​

​

​

​

3.25

%

​

​

​

​

​

​

3.11

%

Noninterest-Bearing Demand Deposits

​

​

6,479.3

​

​

​

​

​

​

​

6,821.0

​

​

​

​

​

​

Other Liabilities

​

​

654.7

​

​

​

​

​

​

​

644.7

​

​

​

​

​

​

Stockholders' Equity

​

​

2,796.9

​

​

​

​

​

​

​

2,663.9

​

​

​

​

​

​

Total Liabilities and Stockholders' Equity

​

$

23,954.4

​

​

​

​

​

​

$

23,859.4

​

​

​

​

​

​

(1) Non-performing loans and leases are included in the respective average loan and lease balances. Income, if any, on such loans and leases is recognized on a cash basis.

(2) Interest income includes taxable-equivalent basis adjustments of $0.9 million and $0.8 million for the three months ended June 30, 2026 and 2025, respectively.

(3) Interest rate spread is the difference between the average yield on earning assets and the average rate paid on interest-bearing liabilities, on a fully taxable-equivalent basis.

(4) Net interest margin is net interest income annualized for the three months ended June 30, 2026 and 2025, on a fully taxable-equivalent basis, divided by average total earning assets.

​

61

Table of Contents

​	​	​	​	​	​	​	​	​	​
Analysis of Change in Net Interest Income	​	​	​	​	​	​	​	​	Table 4
​	​	Three Months Ended June 30, 2026
​	​	Compared to June 30, 2025
(dollars in millions)	​	Volume		​	Rate		​	Total (1)
Change in Interest Income:	​	​	​	​	​	​	​	​	​
Interest-Bearing Deposits in Other Banks	​	$	(1.4)	​	$	(2.2)	​	$	(3.6)
Available-for-Sale Investment Securities	​	​	​	​	​	​	​	​	​
Taxable	​	​	1.4	​	​	1.9	​	​	3.3
Held-to-Maturity Investment Securities	​	​	​	​	​	​	​	​	​
Taxable	​	​	(1.0)	​	​	(0.1)	​	​	(1.1)
Total Investment Securities	​	​	0.4	​	​	1.8	​	​	2.2
Loans and Leases	​	​	​	​	​	​	​	​	​
Commercial and industrial	​	​	(0.2)	​	​	(2.7)	​	​	(2.9)
Commercial real estate	​	​	5.0	​	​	(4.3)	​	​	0.7
Construction	​	​	(2.1)	​	​	(0.4)	​	​	(2.5)
Residential:	​	​	​	​	​	​	​	​	​
Residential mortgage	​	​	(0.6)	​	​	1.3	​	​	0.7
Home equity line	​	​	0.3	​	​	0.5	​	​	0.8
Consumer	​	​	0.5	​	​	0.4	​	​	0.9
Lease financing	​	​	0.1	​	​	(0.4)	​	​	(0.3)
Total Loans and Leases	​	​	3.0	​	​	(5.6)	​	​	(2.6)
Other Earning Assets	​	​	—	​	​	(0.2)	​	​	(0.2)
Total Change in Interest Income	​	​	2.0	​	​	(6.2)	​	​	(4.2)
​	​	​	​	​	​	​	​	​	​
Change in Interest Expense:	​	​	​	​	​	​	​	​	​
Interest-Bearing Deposits	​	​	​	​	​	​	​	​	​
Savings	​	​	0.5	​	​	(1.9)	​	​	(1.4)
Money Market	​	​	2.7	​	​	(6.0)	​	​	(3.3)
Time	​	​	(0.9)	​	​	(3.5)	​	​	(4.4)
Total Interest-Bearing Deposits	​	​	2.3	​	​	(11.4)	​	​	(9.1)
Other Short-term Borrowings	​	​	(1.3)	​	​	(1.3)	​	​	(2.6)
Total Change in Interest Expense	​	​	1.0	​	​	(12.7)	​	​	(11.7)
Change in Net Interest Income	​	$	1.0	​	$	6.5	​	$	7.5

(1) The change in interest income and expense not solely due to changes in volume or rate has been allocated on a pro-rata basis to the volume and rate columns.

​

Net interest income, on a fully taxable-equivalent basis, was $171.9 million for the three months ended June 30, 2026, an increase of $7.5 million or 5% compared to the same period in 2025. Our net interest margin was 3.25% for the three months ended June 30, 2026, an increase of 14 basis points from the same period in 2025. The increase in net interest income, on a fully taxable-equivalent basis, was primarily due to lower deposit funding and borrowing costs, partially offset by lower earning asset yields driven by lower yields in our loan and lease portfolio during the three months ended June 30, 2026, compared to the same period in 2025. Deposit funding costs were $61.2 million for the three months ended June 30, 2026, a decrease of $9.1 million or 13% compared to the same period in 2025, primarily due to a decrease in interest rates. Rates paid on our interest-bearing deposits were 1.75% for the three months ended June 30, 2026, a decrease of 34 basis points compared to the same period in 2025, primarily due to rate decreases. Total borrowing costs were nil for the three months ended June 30, 2026, a decrease of $250.0 million compared to the same period in 2025, as $250.0 million of FHLB advances matured during the third quarter of 2025. The yield on our loan and lease portfolio was 5.30% for the three months ended June 30, 2026, a decrease of 14 basis points as compared to the same period in 2025, primarily due to decreases in yields from our adjustable-rate commercial real estate and commercial and industrial loans, which are typically based on the SOFR.

​

For the six months ended June 30, 2026 and 2025, average balances, related income and expenses, on a fully taxable-equivalent basis, and resulting yields and rates are presented in Table 5. An analysis of the change in net interest income, on a fully taxable-equivalent basis, is presented in Table 6.

​

62

Table of Contents

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Average Balances and Interest Rates

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Table 5

​

​

​

Six Months Ended

​

Six Months Ended

​

​

​

​

June 30, 2026

​

June 30, 2025

​

​

​

​

Average

​

Income/

​

Yield/

​

Average

​

Income/

​

Yield/

​

​

(dollars in millions)

​

Balance

​

Expense

​

Rate

​

Balance

​

Expense

​

Rate

​

​ ​ ​

Earning Assets

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​ ​ ​

Interest-Bearing Deposits in Other Banks

​

$

1,297.9

​

$

23.7

​

​

3.68

%

$

1,224.3

​

$

27.0

​

4.44

%

​

Available-for-Sale Investment Securities

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Taxable

​

​

2,066.3

​

​

30.7

​

​

2.98

​

​

1,880.3

​

​

25.6

​

2.73

​

​

Non-Taxable

​

​

0.6

​

​

—

​

​

4.71

​

​

1.3

​

​

—

​

5.38

​

​

Held-to-Maturity Investment Securities

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Taxable

​

​

2,888.4

​

​

24.1

​

​

1.67

​

​

3,131.8

​

​

26.8

​

1.71

​

​

Non-Taxable

​

​

591.4

​

​

6.8

​

​

2.31

​

​

597.7

​

​

7.0

​

2.36

​

​

Total Investment Securities

​

​

5,546.7

​

​

61.6

​

​

2.22

​

​

5,611.1

​

​

59.4

​

2.12

​

​

Loans Held for Sale

​

​

0.8

​

​

—

​

​

5.79

​

​

0.3

​

​

—

​

6.54

​

​

Loans and Leases(1)

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Commercial and industrial

​

​

2,223.3

​

​

63.1

​

​

5.72

​

​

2,244.4

​

​

68.8

​

6.18

​

​

Commercial real estate

​

​

4,672.5

​

​

132.7

​

​

5.73

​

​

4,406.3

​

​

133.3

​

6.10

​

​

Construction

​

​

772.8

​

​

24.8

​

​

6.48

​

​

918.6

​

​

30.4

​

6.67

​

​

Residential:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Residential mortgage

​

​

4,060.2

​

​

81.9

​

​

4.03

​

​

4,127.1

​

​

81.2

​

3.93

​

​

Home equity line

​

​

1,178.6

​

​

27.8

​

​

4.76

​

​

1,152.1

​

​

26.4

​

4.62

​

​

Consumer

​

​

1,039.4

​

​

40.1

​

​

7.79

​

​

1,016.6

​

​

38.1

​

7.56

​

​

Lease financing

​

​

442.6

​

​

8.0

​

​

3.63

​

​

434.3

​

​

8.5

​

3.95

​

​

Total Loans and Leases

​

​

14,389.4

​

​

378.4

​

​

5.29

​

​

14,299.4

​

​

386.7

​

5.44

​

​

Other Earning Assets

​

​

27.6

​

​

0.3

​

​

2.44

​

​

33.3

​

​

0.8

​

5.20

​

​

Total Earning Assets(2)

​

​

21,262.4

​

​

464.0

​

​

4.39

​

​

21,168.4

​

​

473.9

​

4.50

​

​

Cash and Due from Banks

​

​

232.8

​

​

​

​

​

​

​

​

229.0

​

​

​

​

​

​

​

Other Assets

​

​

2,523.3

​

​

​

​

​

​

​

​

2,477.4

​

​

​

​

​

​

​

Total Assets

​

$

24,018.5

​

​

​

​

​

​

​

$

23,874.8

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Interest-Bearing Liabilities

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Interest-Bearing Deposits

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Savings

​

$

6,406.0

​

$

38.5

​

​

1.21

%

$

6,240.1

​

$

42.2

​

1.36

%

​

Money Market

​

​

4,340.0

​

​

39.3

​

​

1.83

​

​

3,871.8

​

​

45.8

​

2.38

​

​

Time

​

​

3,328.0

​

​

45.5

​

​

2.76

​

​

3,353.5

​

​

54.0

​

3.25

​

​

Total Interest-Bearing Deposits

​

​

14,074.0

​

​

123.3

​

​

1.77

​

​

13,465.4

​

​

142.0

​

2.13

​

​

Other Short-Term Borrowings

​

​

—

​

​

—

​

​

—

​

​

250.0

​

​

5.2

​

4.22

​

​

Other Interest-Bearing Liabilities

​

​

16.0

​

​

0.2

​

​

3.25

​

​

24.1

​

​

0.6

​

4.65

​

​

Total Interest-Bearing Liabilities

​

​

14,090.0

​

​

123.5

​

​

1.77

​

​

13,739.5

​

​

147.8

​

2.17

​

​

Net Interest Income

​

​

​

​

$

340.5

​

​

​

​

​

​

​

$

326.1

​

​

​

​

Interest Rate Spread(3)

​

​

​

​

​

​

​

​

2.62

%

​

​

​

​

​

​

2.33

%

​

Net Interest Margin(4)

​

​

​

​

​

​

​

​

3.22

%

​

​

​

​

​

​

3.10

%

​

Noninterest-Bearing Demand Deposits

​

​

6,479.1

​

​

​

​

​

​

​

​

6,851.4

​

​

​

​

​

​

​

Other Liabilities

​

​

656.5

​

​

​

​

​

​

​

​

630.9

​

​

​

​

​

​

​

Stockholders' Equity

​

​

2,792.9

​

​

​

​

​

​

​

​

2,653.0

​

​

​

​

​

​

​

Total Liabilities and Stockholders' Equity

​

$

24,018.5

​

​

​

​

​

​

​

$

23,874.8

​

​

​

​

​

​

​

(1) Non-performing loans and leases are included in the respective average loan and lease balances. Income, if any, on such loans and leases is recognized on a cash basis.

(2) Interest income includes taxable-equivalent basis adjustments of $2.0 million for both the six months ended June 30, 2026 and 2025.

(3) Interest rate spread is the difference between the average yield on earning assets and the average rate paid on interest-bearing liabilities, on a fully taxable-equivalent basis.

(4) Net interest margin is net interest income annualized for the six months ended June 30, 2026 and 2025, on a fully taxable-equivalent basis, divided by average total earning assets.

​

63

Table of Contents

​	​	​	​	​	​	​	​	​	​
Analysis of Change in Net Interest Income	​	​	​	​	​	​	​	​	Table 6
​	​	Six Months Ended June 30, 2026
​	​	Compared to June 30, 2025
(dollars in millions)	​	Volume		​	Rate		​	Total(1)
Change in Interest Income:	​	​	​	​	​	​	​	​	​
Interest-Bearing Deposits in Other Banks	​	$	1.5	​	$	(4.8)	​	$	(3.3)
Available-for-Sale Investment Securities	​	​	​	​	​	​	​	​	​
Taxable	​	​	2.6	​	​	2.5	​	​	5.1
Held-to-Maturity Investment Securities	​	​	​	​	​	​	​	​	​
Taxable	​	​	(2.1)	​	​	(0.6)	​	​	(2.7)
Non-Taxable	​	​	(0.1)	​	​	(0.1)	​	​	(0.2)
Total Investment Securities	​	​	0.4	​	​	1.8	​	​	2.2
Loans and Leases	​	​	​	​	​	​	​	​	​
Commercial and industrial	​	​	(0.6)	​	​	(5.1)	​	​	(5.7)
Commercial real estate	​	​	7.8	​	​	(8.4)	​	​	(0.6)
Construction	​	​	(4.7)	​	​	(0.9)	​	​	(5.6)
Residential:	​	​	​	​	​	​	​	​	​
Residential mortgage	​	​	(1.3)	​	​	2.0	​	​	0.7
Home equity line	​	​	0.6	​	​	0.8	​	​	1.4
Consumer	​	​	0.8	​	​	1.2	​	​	2.0
Lease financing	​	​	0.2	​	​	(0.7)	​	​	(0.5)
Total Loans and Leases	​	​	2.8	​	​	(11.1)	​	​	(8.3)
Other Earning Assets	​	​	(0.1)	​	​	(0.4)	​	​	(0.5)
Total Change in Interest Income	​	​	4.6	​	​	(14.5)	​	​	(9.9)
​	​	​	​	​	​	​	​	​	​
Change in Interest Expense:	​	​	​	​	​	​	​	​	​
Interest-Bearing Deposits	​	​	​	​	​	​	​	​	​
Savings	​	​	1.1	​	​	(4.8)	​	​	(3.7)
Money Market	​	​	5.0	​	​	(11.5)	​	​	(6.5)
Time	​	​	(0.4)	​	​	(8.1)	​	​	(8.5)
Total Interest-Bearing Deposits	​	​	5.7	​	​	(24.4)	​	​	(18.7)
Other Short-Term Borrowings	​	​	(2.6)	​	​	(2.6)	​	​	(5.2)
Other Interest-Bearing Liabilities	​	​	(0.2)	​	​	(0.2)	​	​	(0.4)
Total Change in Interest Expense	​	​	2.9	​	​	(27.2)	​	​	(24.3)
Change in Net Interest Income	​	$	1.7	​	$	12.7	​	$	14.4

(1) The change in interest income and expense not solely due to changes in volume or rate has been allocated on a pro-rata basis to the volume and rate columns.

​

Net interest income, on a fully taxable-equivalent basis, was $340.5 million for the six months ended June 30, 2026, an increase of $14.4 million or 4% compared to the same period in 2025. Our net interest margin was 3.22% for the six months ended June 30, 2026, an increase of 12 basis points from the same period in 2025. The increase in net interest income, on a fully taxable-equivalent basis, was primarily due to lower deposit funding costs and lower borrowing costs, partially offset by lower earning asset yields driven by lower yields in our loan and lease portfolio during the six months ended June 30, 2026 compared to the same period in 2025. Deposit funding costs were $123.3 million for the six months ended June 30, 2026, a decrease of $18.7 million or 13% compared to the same period in 2025, primarily due to a decrease in interest rates. Rates paid on our interest-bearing deposits were 1.77% for the six months ended June 30, 2026, a decrease of 36 basis points compared to the same period in 2025, primarily due to rate decreases. Total borrowing costs were nil for the six months ended June 30, 2026, a decrease of $250.0 million compared to the same period in 2025, as $250.0 million of FHLB advances matured during the third quarter of 2025. The yield on our loan and lease portfolio was 5.29% for the six months ended June 30, 2026, a decrease of 15 basis points as compared to the same period in 2025, primarily due to decreases in yields from our adjustable-rate commercial real estate and commercial and industrial loans, which are typically based on the SOFR.

​

64

Table of Contents

The Federal Reserve influences the general market rates of interest, including the deposit and loan rates offered by many financial institutions. Our loan portfolio is affected by changes in the prime interest rate. The prime rate decreased by 75 basis points in 2025 to end the year at 6.75%, where it remained as at the end of the second quarter of 2026. As noted above, our loan portfolio is also impacted by changes in the SOFR. At June 30, 2026, the one-month and three-month CME Term SOFR interest rates were 3.65% and 3.73%, respectively. At June 30, 2025, the one-month and three-month CME Term SOFR interest rates were 4.32% and 4.29%, respectively. The target range for the federal funds rate, which is the cost of immediately available overnight funds, decreased 75 basis points in 2025 to end the year at 3.50% to 3.75%, where it remained as at June 30, 2026. There continues to be uncertainty in the changing market and economic conditions.

​

Provision for Credit Losses

​

The Provision was $5.6 million for the three months ended June 30, 2026, an increase of $1.1 million or 24% compared to the same period in 2025. The increase was primarily due to increases in the provision for consumer loans, construction loans and commercial real estate loans and the provision for unfunded construction commitments. This was partially offset by decreases in the provision for commercial and industrial loans and residential mortgage loans. We recorded net charge-offs of loans and leases of $4.1 million and $3.3 million for the three months ended June 30, 2026 and 2025, respectively. This represented net charge-offs of 0.11% and 0.09% of average loans and leases, on an annualized basis, for the three months ended June 30, 2026 and 2025, respectively. The Provision was $10.6 million for the six months ended June 30, 2026, a decrease of $4.4 million or 29% compared to the same period in 2025. The decrease was primarily due to decreases in the provision for commercial and industrial loans, consumer loans, home equity lines and lease financing and the provision for unfunded home equity line commitments. This was partially offset by increases in the provision for commercial real estate loans and residential mortgage loans and the provision for unfunded construction commitments. We recorded net charge-offs of loans and leases of $9.0 million and $7.1 million for the six months ended June 30, 2026 and 2025, respectively. This represented net charge-offs of 0.13% and 0.10% of average loans and leases, on an annualized basis, for the six months ended June 30, 2026 and 2025, respectively. The ACL was $168.1 million as of June 30, 2026, a decrease of $0.4 million from December 31, 2025 and represented 1.15% of total outstanding loans and leases as of June 30, 2026, compared to 1.18% of total outstanding loans and leases as of December 31, 2025. The reserve for unfunded commitments was $37.7 million as of June 30, 2026, compared to $35.7 million as of December 31, 2025. The Provision is recorded to maintain the ACL and the reserve for unfunded commitments at levels deemed adequate by management based on the factors noted in the “Risk Governance and Quantitative and Qualitative Disclosures About Market Risk — Credit Risk” section of this MD&A.

​

Noninterest Income

​

Table 7 presents the major components of noninterest income for the three months ended June 30, 2026 and 2025 and Table 8 presents the major components of noninterest income for the six months ended June 30, 2026 and 2025:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Noninterest Income

​

​

​

​

​

​

​

​

​

​

Table 7

​

​

Three Months Ended

​

​

​

​

​

​

​

​

June 30,

​

Dollar

​

Percent

​

(dollars in thousands)

​

2026

​

2025

​

Change

​

Change

​

Service charges on deposit accounts

​

$

8,316

​

$

7,830

​

$

486

​

6

%

Credit and debit card fees

​

​

15,402

​

​

15,913

​

​

(511)

​

(3)

​

Other service charges and fees

​

​

14,409

​

​

13,350

​

​

1,059

​

8

​

Trust and investment services income

​

​

9,074

​

​

9,154

​

​

(80)

​

(1)

​

Bank-owned life insurance

​

​

7,069

​

​

4,724

​

​

2,345

​

50

​

Other

​

​

6,011

​

​

2,987

​

​

3,024

​

n/m

​

Total noninterest income

​

$

60,281

​

$

53,958

​

$

6,323

​

12

%

​

n/m – Denotes a variance that is not a meaningful metric to inform the change in noninterest income for the three months ended June 30, 2026 to the same period in 2025.

​

65

Table of Contents

​

​

​

​

​

​

​

​

​

​

​

​

​

Noninterest Income

​

​

​

​

​

Table 8

​

​

Six Months Ended

​

​

​

​

​

​

​

​

June 30,

​

Dollar

​

Percent

​

(dollars in thousands)

​

2026

​

2025

​

Change

​

Change

​

Service charges on deposit accounts

​

$

16,472

​

$

15,365

​

$

1,107

​

7

%

Credit and debit card fees

​

​

30,485

​

​

30,387

​

​

98

​

—

​

Other service charges and fees

​

​

28,193

​

​

25,517

​

​

2,676

​

10

​

Trust and investment services income

​

​

18,220

​

​

18,524

​

​

(304)

​

(2)

​

Bank-owned life insurance

​

​

11,160

​

​

9,095

​

​

2,065

​

23

​

Investment securities gains, net

​

​

—

​

​

37

​

​

(37)

​

n/m

​

Other

​

​

8,570

​

​

5,510

​

​

3,060

​

56

​

Total noninterest income

​

$

113,100

​

$

104,435

​

$

8,665

​

8

%

n/m – Denotes a variance that is not a meaningful metric to inform the change in noninterest income for the six months ended June 30, 2026 to the same period in 2025.

​

Total noninterest income was $60.3 million for the three months ended June 30, 2026, an increase of $6.3 million or 12% as compared to the same period in 2025. Total noninterest income was $113.1 million for the six months ended June 30, 2026, an increase of $8.7 million or 8% as compared to the same period in 2025.

​

Service charges on deposit accounts were $8.3 million for the three months ended June 30, 2026, an increase of $0.5 million or 6% as compared to the same period in 2025. This increase was primarily due to a $0.6 million increase in overdraft and checking account fees. Service charges on deposit accounts were $16.5 million for the six months ended June 30, 2026, an increase of $1.1 million or 7% as compared to the same period in 2025. This increase was primarily due to a $1.1 million increase in overdraft and checking account fees.

​

Credit and debit card fees were $15.4 million for the three months ended June 30, 2026, a decrease of $0.5 million or 3% as compared to the same period in 2025. This decrease was primarily due to a $0.2 million increase in network association dues and $0.1 million decrease in merchant services revenues. Credit and debit card fees were $30.5 million for the six months ended June 30, 2026, an increase of $0.1 million as compared to the same period in 2025.

​

Other service charges and fees were $14.4 million for the three months ended June 30, 2026, an increase of $1.1 million or 8% as compared to the same period in 2025. This increase was primarily due to a $1.2 million increase in fees from annuities and securities. Other service charges and fees were $28.2 million for the six months ended June 30, 2026, an increase of $2.7 million or 10% as compared to the same period in 2025. This increase was primarily due to a $2.9 million increase in fees from annuities and securities, partially offset by a $0.4 million decrease in online banking fees.

​

Trust and investment services income was $9.1 million for the three months ended June 30, 2026, a decrease of $0.1 million or 1% as compared to the same period in 2025. Trust and investment services income was $18.2 million for the six months ended June 30, 2026, a decrease of $0.3 million or 2% as compared to the same period in 2025.

​

BOLI income was $7.1 million for the three months ended June 30, 2026, an increase of $2.3 million or 50% as compared to the same period in 2025. This increase was primarily due to a $2.3 million increase in BOLI earnings. BOLI income was $11.2 million for the six months ended June 30, 2026, an increase of $2.1 million or 23% as compared to the same period in 2025. This increase was primarily due to a $1.4 million increase in BOLI earnings and a $0.7 million increase in death benefit proceeds from life insurance policies.

​

Other noninterest income was $6.0 million for the three months ended June 30, 2026, an increase of $3.0 million as compared to the same period in 2025. This increase was primarily due to $1.6 million in excise tax refunds received during the three months ended June 30, 2026, a $1.0 million increase in customer-related interest rate swap fees and a $0.8 million class action settlement the Company received during the three months ended June 30, 2026, partially offset by a $0.4 million decrease in insurance proceeds received. Other noninterest income was $8.6 million for the six months ended June 30, 2026, an increase of $3.1 million or 56% as compared to the same period in 2025. This increase was primarily due to $1.7 million in excise tax refunds received during the six months ended June 30, 2026, a $0.8 million class action settlement the Company received during the six months ended June 30, 2026, a $0.6 million increase in volume-based incentives and a $0.5 million increase in customer-related interest rate swap fees, partially offset by a $0.4 million decrease in insurance proceeds received.

​

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Table of Contents

Noninterest Expense

​

Table 9 presents the major components of noninterest expense for the three months ended June 30, 2026 and 2025 and Table 10 presents the major components of noninterest expense for the six months ended June 30, 2026 and 2025:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Noninterest Expense

​

​

​

​

​

​

​

​

​

​

Table 9

​

​

Three Months Ended

​

​

​

​

​

​

​

​

June 30,

​

​

Dollar

​

Percentage

​

(dollars in thousands)

​

2026

​

2025

​

​

Change

​

Change

​

Salaries and employee benefits

​

$

62,376

​

$

59,501

​

$

2,875

​

5

%

Contracted services and professional fees

​

​

18,402

​

​

15,997

​

​

2,405

​

15

​

Occupancy

​

​

7,902

​

​

7,934

​

​

(32)

​

—

​

Equipment

​

​

14,563

​

​

14,037

​

​

526

​

4

​

Regulatory assessment and fees

​

​

3,417

​

​

3,759

​

​

(342)

​

(9)

​

Advertising and marketing

​

​

2,178

​

​

2,035

​

​

143

​

7

​

Card rewards program

​

​

8,403

​

​

8,406

​

​

(3)

​

—

​

Other

​

​

13,204

​

​

13,270

​

​

(66)

​

—

​

Total noninterest expense

​

$

130,445

​

$

124,939

​

$

5,506

​

4

%

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Noninterest Expense

​

​

​

​

​

​

​

​

​

​

Table 10

​

​

Six Months Ended

​

​

​

​

​

​

​

​

June 30,

​

Dollar

​

Percentage

​

(dollars in thousands)

​

2026

​

2025

​

Change

​

Change

​

Salaries and employee benefits

​

$

126,466

​

$

119,605

​

$

6,861

​

6

%

Contracted services and professional fees

​

​

32,366

​

​

30,836

​

​

1,530

​

5

​

Occupancy

​

​

15,718

​

​

16,034

​

​

(316)

​

(2)

​

Equipment

​

​

29,344

​

​

27,908

​

​

1,436

​

5

​

Regulatory assessment and fees

​

​

6,665

​

​

7,582

​

​

(917)

​

(12)

​

Advertising and marketing

​

​

4,430

​

​

4,214

​

​

216

​

5

​

Card rewards program

​

​

16,807

​

​

16,325

​

​

482

​

3

​

Other

​

​

26,534

​

​

25,995

​

​

539

​

2

​

Total noninterest expense

​

$

258,330

​

$

248,499

​

$

9,831

​

4

%

​

Total noninterest expense was $130.4 million for the three months ended June 30, 2026, an increase of $5.5 million or 4% as compared to the same period in 2025. Total noninterest expense was $258.3 million for the six months ended June 30, 2026, an increase of $9.8 million or 4% as compared to the same period in 2025.

​

Salaries and employee benefits expense was $62.4 million for the three months ended June 30, 2026, an increase of $2.9 million or 5% as compared to the same period in 2025. This increase was primarily due to a $1.5 million increase in base salaries and related payroll taxes, a $1.2 million increase in incentive compensation, a $0.6 million increase in group health plan costs and a $0.3 million increase in adjustments made to the deferred compensation plan as a result of market conditions. This was partially offset by a $0.9 million increase in payroll and benefit costs being deferred as loan origination costs. Salaries and employee benefits expense was $126.5 million for the six months ended June 30, 2026, an increase of $6.9 million or 6% as compared to the same period in 2025. This increase was primarily due to a $3.4 million increase in base salaries and related payroll taxes, a $2.6 million increase in incentive compensation, a $1.1 million increase in group health plan costs, a $0.4 million increase in mortgage banking commissions expense and a $0.3 million increase in adjustments made to the deferred compensation plan as a result of market conditions. This was partially offset by a $1.1 million increase in payroll and benefit costs being deferred as loan origination costs.

​

Contracted services and professional fees were $18.4 million for the three months ended June 30, 2026, an increase of $2.4 million or 15% as compared to the same period in 2025. This increase was primarily due to a $4.2 million increase in audit, legal and consultant fees, partially offset by a $1.7 million decrease in outside services, primarily attributable to technology-related projects, marketing and new customer services. Contracted services and professional fees were $32.4 million for the six months ended June 30, 2026, an increase of $1.5 million or 5% as compared to the same period in 2025. This increase was primarily due to a $4.3 million increase in audit, legal and consultant fees, partially offset by a $2.7 million decrease in outside services, primarily attributable to technology-related projects, marketing and new customer services.

​

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Table of Contents

Occupancy expense was $7.9 million for the three months ended June 30, 2026, a minimal change as compared to the same period in 2025. Occupancy expense was $15.7 million for the six months ended June 30, 2026, a decrease of $0.3 million or 2% as compared to the same period in 2025.

​

Equipment expense was $14.6 million for the three months ended June 30, 2026, an increase of $0.5 million or 4% as compared to the same period in 2025. This increase was primarily due to a $0.3 million increase in technology-related amortization and licensing and maintenance fees and a $0.2 million increase in furniture and equipment depreciation. Equipment expense was $29.3 million for the six months ended June 30, 2026, an increase of $1.4 million or 5% as compared to the same period in 2025. This increase was primarily due to a $0.8 million increase in furniture and equipment depreciation and a $0.7 million increase in technology-related amortization and licensing and maintenance fees.

​

Regulatory assessment and fees were $3.4 million for the three months ended June 30, 2026, a decrease of $0.3 million or 9% as compared to the same period in 2025. Regulatory assessment and fees were $6.7 million for the six months ended June 30, 2026, a decrease of $0.9 million or 12% as compared to the same period in 2025. This decrease was primarily due to a decrease in the FDIC insurance assessment. During 2023, the FDIC approved a final rule for a special assessment to replenish the deposit insurance fund following bank failures occurring earlier in the year. As a result, the Company previously recorded a related loss of $16.3 million in the fourth quarter of 2023. During the first quarter of 2024, the FDIC issued a notice that the original loss estimate related to the 2023 bank failures was subsequently increased and that this increase would result in an additional assessment expense to affected institutions. As a result, we recorded a net expense related to the additional special assessment of $3.5 million for the year ended December 31, 2024. In December 2025, the FDIC reduced the rate at which the assessment is collected for the eighth quarter of the collection period, with an invoice payment date of March 30, 2026, from 3.36 basis points to 2.97 basis points. We recorded a reduction in the expense related to the additional special assessment of $2.6 million in 2025 and $0.2 million in the first quarter of 2026.

​

Advertising and marketing expense was $2.2 million for the three months ended June 30, 2026, an increase of $0.1 million or 7% as compared to the same period in 2025. Advertising and marketing expense was $4.4 million for the six months ended June 30, 2026, an increase of $0.2 million or 5% as compared to the same period in 2025.

​

Card rewards program expense was $8.4 million for the three months ended June 30, 2026, a minimal change as compared to the same period in 2025. Card rewards program expense was $16.8 million for the six months ended June 30, 2026, an increase of $0.5 million or 3% as compared to the same period in 2025. This increase was primarily due to a $0.3 million increase in credit card cash reward redemptions and a $0.2 million increase in priority rewards card redemptions.

​

Other noninterest expense was $13.2 million for the three months ended June 30, 2026, a decrease of $0.1 million as compared to the same period in 2025. Other noninterest expense was $26.5 million for the six months ended June 30, 2026, an increase of $0.5 million or 2% as compared to the same period in 2025. This increase was primarily due to a $0.8 million increase in charitable contributions, a $0.3 million increase in postage expenses, a $0.3 million increase in brokers fees and a $0.3 million increase in operational losses and other charge-offs, partially offset by a $1.0 million decrease in software amortization expense and a $0.3 million decrease in pension-related expenses.

​

Provision for Income Taxes

​

The provision for income taxes was $21.9 million (reflecting an effective tax rate of 22.95%) for the three months ended June 30, 2026, compared with a provision for income taxes of $14.9 million (reflecting an effective tax rate of 16.86%) for the same period in 2025. The provision for income taxes was $41.5 million (an effective tax rate of 22.73%) for the six months ended June 30, 2026, compared with a provision for income taxes of $32.6 million (an effective tax rate of 19.72%) for the same period in 2025. The lower effective tax rates in 2025 were primarily due to the revaluation of the California deferred tax assets due to the change in the California apportionment formula for banks.

​

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Table of Contents

Analysis of Business Segments

​

Our business segments are Retail Banking and Commercial Banking, with all other activities, including Treasury, reported in Corporate/Other. Table 11 summarizes net income (loss) from our business segments and Corporate/Other for the three and six months ended June 30, 2026 and 2025. Additional information about operating segment performance and Corporate/Other is presented in “Note 16. Reportable Operating Segments” contained in our unaudited interim consolidated financial statements.

​

During the quarter ended December 31, 2025, we realigned our internal organizational and management reporting structure. As a result of this change, we reduced our reportable operating segments from three to two. Our reportable segments are now Retail Banking and Commercial Banking. Activities previously reported within the Treasury and Other segment are now included in Corporate/Other, as Treasury exists to support our operating segments. The change in reportable segments reflects how our chief operating decision maker currently evaluates performance and allocates resources. In addition, during the third quarter of 2025, we made changes to the internal measurement of segment operating profits for the purpose of evaluating segment performance and resource allocation. The primary reason for the change was to align loan and deposit balances within the business segment that directly manages them. Specifically, certain loan and deposit balances previously included as part of the Retail Banking and Commercial Banking segments were reclassified among the segments and what is now Corporate/Other. The reallocation of select loan and deposit balances affected net interest income, net interest income after provision for credit losses, provision for income taxes, net income and segment earning assets. We have reported our selected financial information using the new loan and deposit balance alignments and using two reportable operating segments for the three and six months ended June 30, 2026. Prior-period segment information has been recast to conform to the current presentation.

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Business Segments and Corporate/Other Net Income (Loss)

​

​

​

​

​

​

​

​

​

​

​

Table 11

​

​

Three Months Ended

​

Six Months Ended

​

​

June 30,

​

June 30,

(dollars in thousands)

​

2026

​

2025

​

2026

​

2025

Retail Banking

​

$

68,242

​

$

65,424

​

$

128,317

​

$

122,855

Commercial Banking

​

​

36,824

​

​

33,067

​

​

68,205

​

​

63,813

Corporate/Other

​

​

(31,691)

​

​

(25,244)

​

​

(55,363)

​

​

(54,173)

Consolidated Total

​

$

73,375

​

$

73,247

​

$

141,159

​

$

132,495

​

Retail Banking.  Our Retail Banking segment includes the financial products and services we provide to consumers and small businesses. Loan and lease products offered include residential and commercial mortgage loans, home equity lines of credit and loans, automobile loans and leases, secured and unsecured lines of credit, installment loans and small business loans and leases. Deposit products offered include checking, savings and time deposit accounts. Our Retail Banking segment also includes our wealth management services. Products and services from Retail Banking are delivered to customers through 49 banking locations throughout the State of Hawaii, Guam and Saipan.

​

Net income for the Retail Banking segment was $68.2 million for the three months ended June 30, 2026, an increase of $2.8 million or 4% as compared to the same period in 2025. The increase in net income for the Retail Banking segment was primarily due to a $5.8 million increase in net interest income, a $1.4 million increase in noninterest income, a $1.0 million decrease in noninterest expense and a $0.9 million decrease in the Provision, partially offset by a $6.1 million increase in the provision for income taxes. The increase in net interest income was primarily due to higher deposit spreads and higher loan spreads. The increase in noninterest income was primarily due to increases in other service charges and fees and service charges on deposit accounts. The decrease in noninterest expense was primarily due to lower overall expenses that were allocated to the Retail Banking segment, partially offset by increases in occupancy expense and salaries and employee benefits expense. The decrease in the Provision allocated to the Retail Banking segment was primarily due to decreases in the provision for commercial and industrial loans and residential mortgage loans, partially offset by increases in the provision for consumer loans, constructions loans and commercial real estate loans. The increase in the provision for income taxes was primarily due to the allocation of the revaluation of the California deferred tax assets in 2025.

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Table of Contents

Net income for the Retail Banking segment was $128.3 million for the six months ended June 30, 2026, an increase of $5.5 million or 4% as compared to the same period in 2025. The increase in net income for the Retail Banking segment was primarily due to a $9.4 million increase in net interest income, a $3.1 million decrease in the Provision and a $2.8 million increase in noninterest income, partially offset by a $7.4 million increase in the provision for income taxes and a $2.5 million increase in noninterest expense. The increase in net interest income was primarily due to higher deposit spreads and higher loan spreads. The decrease in the Provision allocated to the Retail Banking segment was primarily due to decreases in the provision for commercial and industrial loans, consumer loans and home equity lines, partially offset by increases in the provision for commercial real estate loans and residential mortgage loans. The increase in noninterest income was primarily due to increases in other service charges and fees and service charges on deposit accounts, partially offset by a decrease in trust and investment services income. The increase in the provision for income taxes was primarily due to the allocation of the revaluation of the California deferred tax assets in 2025, in addition to an increase in pretax income. The increase in noninterest expense was primarily due to increases in salaries and employee benefits expense and occupancy expense, partially offset by lower overall expenses that were allocated to the Retail Banking segment.

​

Commercial Banking.  Our Commercial Banking segment includes our corporate banking related products, commercial real estate loans, commercial lease financing, secured and unsecured lines of credit, automobile loans and auto dealer financing, business deposit products and credit cards. Commercial lending and deposit products are offered primarily to middle-market and large companies locally, nationally and internationally.

​

Net income for the Commercial Banking segment was $36.8 million for the three months ended June 30, 2026, an increase of $3.8 million or 11% as compared to the same period in 2025. The increase in net income for the Commercial Banking segment was primarily due to a $2.5 million increase in net interest income, a $2.4 million increase in noninterest income, a $0.9 million decrease in noninterest expense and a $0.8 million decrease in the Provision,  partially offset by a $2.8 million increase in the provision for income taxes. The increase in net interest income was primarily due to higher average loan balances and higher loan fees. The increase in noninterest income was primarily due to excise tax refunds received during the three months ended June 30, 2026 and an increase in customer-related interest rate swap fees. The decrease in noninterest expense was primarily due to higher overall credits that were allocated to the Commercial Banking segment. The decrease in the Provision allocated to the Commercial Banking segment was primarily due to decreases in the provision for commercial and industrial loans and residential mortgage loans, partially offset by increases in the provision for consumer loans, construction loans and commercial real estate loans. The increase in the provision for income taxes was primarily due to the allocation of the revaluation of the California deferred tax assets in 2025.

​

Net income for the Commercial Banking segment was $68.2 million for the six months ended June 30, 2026, an increase of $4.4 million or 7% as compared to the same period in 2025. The increase in net income for the Commercial Banking segment was primarily due to a $3.3 million increase in noninterest income and a $2.8 million decrease in the Provision, partially offset by a $2.5 million increase in the provision for income taxes. The increase in noninterest income was primarily due to excise tax refunds received during the six months ended June 30, 2026 and increases in volume-based incentives, customer-related interest rate swap fees and other service charges and fees. The decrease in the Provision allocated to the Commercial Banking segment was primarily due to decreases in the provision for commercial and industrial loans, consumer loans and home equity lines, partially offset by increases in the provision for commercial real estate loans and residential mortgage loans. The increase in the provision for income taxes was primarily due to the allocation of the revaluation of the California deferred tax assets in 2025.

​

Analysis of Financial Condition

​

Liquidity and Capital Resources

​

Liquidity refers to our ability to maintain cash flow that is adequate to fund operations and meet present and future financial obligations through either the sale or maturity of existing assets or by obtaining additional funding through liability management. We consider the effective and prudent management of liquidity to be fundamental to our health and strength. Our objective is to manage our cash flow and liquidity reserves so that they are adequate to fund our obligations and other commitments on a timely basis and at a reasonable cost.

​

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Table of Contents

Liquidity is managed to ensure stable, reliable and cost-effective sources of funds to satisfy demand for credit, deposit withdrawals and investment opportunities. Funding requirements are impacted by loan originations and refinancings, deposit balance changes, liability issuances and settlements and off-balance sheet funding commitments. We consider and comply with various regulatory and internal guidelines regarding required liquidity levels and periodically monitor our liquidity position in light of the changing economic environment and customer activity. Based on periodic liquidity assessments, we may alter our asset, liability and off-balance sheet positions. The Company’s Asset Liability Management Committee (“ALCO”) monitors sources and uses of funds and modifies asset and liability positions as liquidity requirements change. This process, combined with our ability to raise funds in money and capital markets and through private placements, provides flexibility in managing the exposure to liquidity risk.

​

Immediate liquid resources are available in cash, which is primarily on deposit with the Federal Reserve Bank of San Francisco (“FRB”). As of June 30, 2026 and December 31, 2025, cash and cash equivalents were $1.0 billion and $1.5 billion, respectively. Potential sources of liquidity also include investment securities in our available-for-sale portfolio and held-to-maturity portfolio. The carrying values of our available-for-sale investment securities and held-to-maturity investment securities were $2.1 billion and $3.4 billion as of June 30, 2026, respectively. The carrying values of our available-for-sale investment securities and held-to-maturity investment securities were $2.1 billion and $3.5 billion as of December 31, 2025, respectively. As of June 30, 2026 and December 31, 2025, we maintained additional liquidity primarily in collateralized mortgage obligations issued by Ginnie Mae, Fannie Mae and Freddie Mac and mortgage-backed securities issued by Ginnie Mae, Freddie Mac, Fannie Mae, Municipal Housing Authorities and non-agency entities. As of June 30, 2026, our available-for-sale investment securities portfolio was comprised of securities with a weighted average life of approximately 4.4 years and our held-to-maturity investment securities portfolio was comprised of securities with a weighted average life of approximately 6.9 years. These funds offer substantial resources to meet either new loan demand or to help offset reductions in our deposit funding base as they provide quick sources of liquidity by pledging to obtain secured borrowings and repurchase agreements or sales of our available-for-sale securities portfolio. Liquidity is further enhanced by our ability to pledge loans to access secured borrowings from the Federal Home Loan Bank of Des Moines (“FHLB”) and the FRB. As of June 30, 2026, we have borrowing capacity of $3.6 billion from the FHLB and $3.3 billion from the FRB based on the amount of collateral pledged.

​

Our core deposits have historically provided us with a long-term source of stable and relatively lower cost of funding. Our core deposits, defined as all deposits exclusive of time deposits exceeding $250,000, totaled $18.8 billion and $19.1 billion as of June 30, 2026 and December 31, 2025, respectively, which represented 93% of our total deposits as of both June 30, 2026 and December 31, 2025. These core deposits are normally less volatile, often with customer relationships tied to other products offered by the Company; however, deposit levels could decrease if interest rates increase significantly or if corporate customers increase investing activities, including alternative investment options, that reduce deposit balances.

​

The Company’s routine funding requirements are expected to consist primarily of general corporate needs and capital to be returned to our shareholders. We expect to meet these obligations from dividends paid by the Bank to the Parent. Additional sources of liquidity available to us include selling residential real estate loans in the secondary market, taking out short- and long-term borrowings and issuing long-term debt and equity securities.

​

Our material cash requirements from our current and long-term contractual obligations have not changed materially since previously reported as of December 31, 2025. We believe that our existing cash, cash equivalents, investments, and cash expected to be generated from operations, are still sufficient to meet our cash requirements within the next 12 months and beyond.

​

Potential Demands on Liquidity from Off-Balance Sheet Arrangements

​

We have off-balance sheet arrangements, such as variable interest entities, guarantees, and certain financial instruments with off-balance sheet risk, that may affect the Company’s financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources.

71

Table of Contents

​

Variable Interest Entities

​

We hold interests in several unconsolidated variable interest entities (“VIEs”). These unconsolidated VIEs are primarily low-income housing tax credit investments in partnerships and limited liability companies. Variable interests are defined as contractual ownership or other interests in an entity that change with fluctuations in an entity’s net asset value. The primary beneficiary consolidates the VIE. Based on our analysis, we have determined that the Company is not the primary beneficiary of these entities. As a result, we do not consolidate these VIEs. Unfunded commitments to fund these low-income housing tax credit investments were $145.2 million and $153.3 million as of June 30, 2026 and December 31, 2025, respectively.

​

Guarantees

​

We sell residential mortgage loans on the secondary market, primarily to Fannie Mae or Freddie Mac. The agreements under which we sell residential mortgage loans to Fannie Mae or Freddie Mac contain provisions that include various representations and warranties regarding the origination and characteristics of the residential mortgage loans. Although the specific representations and warranties vary among investors, insurance or guarantee agreements, they typically cover ownership of the loan, validity of the lien securing the loan, the absence of delinquent taxes or liens against the property securing the loan, compliance with loan criteria set forth in the applicable agreement, compliance with applicable federal, state and local laws and other matters. The unpaid principal balance of our portfolio of residential mortgage loans sold was $1.1 billion as of both June 30, 2026 and December 31, 2025. The agreements under which we sell residential mortgage loans require delivery of various documents to the investor or its document custodian. Although these loans are primarily sold on a non-recourse basis, we may be obligated to repurchase residential mortgage loans or reimburse investors for losses incurred if a loan review reveals that underwriting and documentation standards were potentially not met in the origination of those loans. Upon receipt of a repurchase request, we work with investors to arrive at a mutually agreeable resolution. Repurchase demands are typically reviewed on an individual loan by loan basis to validate the claims made by the investor to determine if a contractually required repurchase event has occurred. We manage the risk associated with potential repurchases or other forms of settlement through our underwriting and quality assurance practices and by servicing mortgage loans to meet investor and secondary market standards. For the six months ended June 30, 2026, there was one residential mortgage loan repurchase totaling less than $0.1 million and there were no pending repurchase requests.

​

In addition to servicing loans in our portfolio, substantially all of the loans we sell to investors are sold with servicing rights retained. We also service loans originated by other mortgage loan originators. As servicer, our primary duties are to: (1) collect payments due from borrowers; (2) advance certain delinquent payments of principal and interest; (3) maintain and administer any hazard, title or primary mortgage insurance policies relating to the mortgage loans; (4) maintain any required escrow accounts for payment of taxes and insurance and administer escrow payments; and (5) foreclose on defaulted mortgage loans, or loan modifications or short sales. Each agreement under which we act as servicer generally specifies a standard of responsibility for actions taken by the Company in such capacity and provides protection against expenses and liabilities incurred by the Company when acting in compliance with the respective servicing agreements. However, if we commit a material breach of obligations as servicer, we may be subject to termination if the breach is not cured within a specified period following notice. The standards governing servicing and the possible remedies for violations of such standards vary by investor. These standards and remedies are determined by servicing guides issued by the investors as well as the contract provisions established between the investors and the Company. Remedies could include repurchase of an affected loan. For the six months ended June 30, 2026, we had no repurchase requests related to loan servicing activities, nor were there any pending repurchase requests as of June 30, 2026.

​

Although to-date repurchase requests related to representation and warranty provisions and servicing activities have been limited, it is possible that requests to repurchase mortgage loans may increase in frequency as investors more aggressively pursue all means of recovering losses on their purchased loans. However, as of June 30, 2026, management believes that this exposure is not material due to the historical level of repurchase requests and loss trends and thus has not established a liability for losses related to mortgage loan repurchases. As of June 30, 2026, 99% of our residential mortgage loans serviced for investors were current. We maintain ongoing communications with investors and continue to evaluate this exposure by monitoring the level and number of repurchase requests as well as the delinquency rates in loans sold to investors.

72

Table of Contents

​

Financial Instruments with Off-Balance Sheet Risk

​

The Company is a party to financial instruments with off-balance sheet risk in the normal course of business to meet the financing needs of its customers. These financial instruments include commitments to extend credit and standby and commercial letters of credit which are not reflected in the unaudited interim consolidated financial statements.

​

See “Note 11. Commitments and Contingent Liabilities” contained in our unaudited interim consolidated financial statements for more information on our financial instruments with off-balance sheet risk.

​

Investment Securities

​

Table 12 presents the estimated fair value of our available-for-sale investment securities portfolio and amortized cost of our held-to-maturity investment securities portfolio as of June 30, 2026 and December 31, 2025:

​

​	​	​	​	​	​	​
Investment Securities	​	​	​	​	​	Table 12
​	​	June 30,		​	December 31,
(dollars in thousands)	​	2026		​	2025
Mortgage-backed securities:	​	​	​	​	​	​
Residential - Government agency	​	$	25,037	​	$	30,367
Residential - Government-sponsored enterprises	​	​	865,210	​	​	878,215
Commercial - Government agency	​	​	183,542	​	​	191,177
Commercial - Government-sponsored enterprises	​	​	39,022	​	​	41,599
Commercial - Non-agency	​	​	259,510	​	​	129,014
Collateralized mortgage obligations:	​	​	​	​	​	​
Government agency	​	​	394,290	​	​	426,276
Government-sponsored enterprises	​	​	283,712	​	​	302,996
Collateralized loan obligations	​	​	44,376	​	​	76,589
Total available-for-sale securities	​	$	2,094,699	​	$	2,076,233
​	​	​	​	​	​	​
Government agency debt securities	​	$	44,479	​	$	46,182
Mortgage-backed securities:	​	​	​	​	​	​
Residential - Government agency	​	​	35,787	​	​	37,081
Residential - Government-sponsored enterprises	​	​	83,559	​	​	86,681
Commercial - Government agency	​	​	30,162	​	​	30,796
Commercial - Government-sponsored enterprises	​	​	1,072,102	​	​	1,088,838
Collateralized mortgage obligations:	​	​	​	​	​	​
Government agency	​	​	787,083	​	​	823,423
Government-sponsored enterprises	​	​	1,303,309	​	​	1,365,087
Debt securities issued by states and political subdivisions	​	​	55,203	​	​	54,994
Total held-to-maturity securities	​	$	3,411,684	​	$	3,533,082

​

73

Table of Contents

Table 13 presents the maturity distribution at amortized cost and weighted-average yield to maturity of our investment securities portfolio as of June 30, 2026:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Maturities and Weighted-Average Yield on Securities(1)

​

​

Table 13

​

​

June 30, 2026

​

​

1 Year or Less

​

After 1 Year - 5 Years

​

After 5 Years - 10 Years

​

Over 10 Years

​

Total

​

​

​

​

Weighted

​

​

​

Weighted

​

​

​

Weighted

​

​

​

Weighted

​

​

​

Weighted

​

​

​

​

​

​

​

Average

​

​

​

Average

​

​

​

Average

​

​

​

Average

​

​

​

Average

​

Fair

(dollars in millions)

​

Amount

​

Yield

​

Amount

​

Yield

​

Amount

​

Yield

​

Amount

​

Yield

​

Amount

​

Yield

​

Value

Available-for-sale securities

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Mortgage-backed securities:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Residential - Government agency(2)

​

$

—

​

—

%

$

16.8

​

5.44

%

$

8.9

​

2.84

%

$

—

​

—

%

$

25.7

​

4.53

%

$

25.0

Residential - Government-sponsored enterprises(2)

​

​

—

​

—

​

​

624.3

​

1.64

​

​

301.1

​

4.56

​

​

—

​

—

​

​

925.4

​

2.59

​

​

865.2

Commercial - Government agency(2)

​

​

0.7

​

2.53

​

​

200.1

​

1.90

​

​

29.4

​

1.80

​

​

—

​

—

​

​

230.2

​

1.89

​

​

183.6

Commercial - Government-sponsored enterprises(2)

​

​

39.5

​

1.68

​

​

—

​

—

​

​

0.3

​

5.27

​

​

—

​

—

​

​

39.8

​

1.71

​

​

39.0

Commercial - Non-agency

​

​

—

​

—

​

​

74.8

​

5.49

​

​

—

​

—

​

​

184.0

​

5.06

​

​

258.8

​

5.19

​

​

259.5

Collateralized mortgage obligations(2):

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Government agency

​

​

0.4

​

1.80

​

​

307.2

​

2.44

​

​

125.5

​

3.23

​

​

—

​

—

​

​

433.1

​

2.67

​

​

394.3

Government-sponsored enterprises

​

​

1.0

​

1.36

​

​

195.3

​

1.94

​

​

122.1

​

2.37

​

​

—

​

—

​

​

318.4

​

2.10

​

​

283.7

Collateralized loan obligations

​

​

—

​

—

​

​

8.2

​

6.73

​

​

36.2

​

5.59

​

​

—

​

—

​

​

44.4

​

5.80

​

​

44.4

Total available-for-sale securities

​

$

41.6

​

1.69

%

$

1,426.7

​

2.17

%

$

623.5

​

3.77

%

$

184.0

​

5.06

%

$

2,275.8

​

2.83

%

$

2,094.7

Held-to-maturity securities

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Government agency debt securities

​

$

—

​

—

%

$

—

​

—

%

$

23.4

​

1.33

%

$

21.1

​

1.84

%

$

44.5

​

1.58

%

$

40.8

Mortgage-backed securities(2):

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Residential - Government agency

​

​

—

​

—

​

​

—

​

—

​

​

35.8

​

2.13

​

​

—

​

—

​

​

35.8

​

2.13

​

​

31.4

Residential - Government-sponsored enterprises

​

​

—

​

—

​

​

—

​

—

​

​

83.5

​

1.59

​

​

—

​

—

​

​

83.5

​

1.59

​

​

72.8

Commercial - Government agency

​

​

—

​

—

​

​

14.3

​

2.25

​

​

15.9

​

1.78

​

​

—

​

—

​

​

30.2

​

2.00

​

​

22.9

Commercial - Government-sponsored enterprises

​

​

—

​

—

​

​

403.3

​

1.63

​

​

482.9

​

2.05

​

​

185.9

​

2.71

​

​

1,072.1

​

2.01

​

​

969.4

Collateralized mortgage obligations(2):

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Government agency

​

​

—

​

—

​

​

9.8

​

2.20

​

​

777.3

​

1.39

​

​

—

​

—

​

​

787.1

​

1.40

​

​

692.4

Government-sponsored enterprises

​

​

—

​

—

​

​

206.1

​

1.78

​

​

1,078.3

​

1.46

​

​

18.9

​

2.33

​

​

1,303.3

​

1.52

​

​

1,155.4

Debt securities issued by state and political subdivisions

​

​

—

​

—

​

​

—

​

—

​

​

38.0

​

2.20

​

​

17.2

​

2.45

​

​

55.2

​

2.27

​

​

50.4

Total held-to-maturity securities

​

$

—

​

—

%

$

633.5

​

1.70

%

$

2,535.1

​

1.57

%

$

243.1

​

2.59

%

$

3,411.7

​

1.67

%

$

3,035.5

(1) Weighted-average yields were computed on a fully taxable-equivalent basis.

(2) Maturities for mortgage-backed securities and collateralized mortgage obligations anticipate future prepayments.

​

The carrying value of our investment securities portfolio was $5.5 billion as of June 30, 2026, a decrease of $102.9 million or 2% compared to December 31, 2025. The lower balances in investment securities were driven by payments and maturities during the six months ended June 30, 2026, which were placed into loans and leases. Our available-for-sale investment securities are carried at fair value with changes in fair value reflected in other comprehensive income (loss) or through the Provision. Our held-to-maturity investment securities are carried at amortized cost.

​

As of June 30, 2026, we maintained all of our investment securities in either the available-for-sale category (recorded at fair value) or the held-to-maturity category (recorded at amortized cost) in the unaudited interim consolidated balance sheets, with $2.8 billion invested in collateralized mortgage obligations issued by Ginnie Mae, Fannie Mae and Freddie Mac. Our investment securities portfolio also included $2.6 billion in mortgage-backed securities issued by Ginnie Mae, Freddie Mac, Fannie Mae, Municipal Housing Authorities and non-agency entities, $55.2 million in debt securities issued by states and political subdivisions, $44.5 million in debt securities issued by government agencies (U.S. International Development Finance Corporation bonds) and $44.4 million in collateralized loan obligations.

​

We continually evaluate our investment securities portfolio in response to established asset/liability management objectives, changing market conditions that could affect profitability and the level of interest rate risk to which we are exposed. These evaluations may cause us to change the level of funds we deploy into investment securities and change the composition of our investment securities portfolio.

​

Gross unrealized gains in our investment securities portfolio were $2.7 million and $7.1 million as of June 30, 2026 and December 31, 2025, respectively. Gross unrealized losses in our investment securities portfolio were $560.1 million and $521.9 million as of June 30, 2026 and December 31, 2025, respectively. The higher overall unrealized loss position was primarily due to changes in the market value of the securities.

74

Table of Contents

​

For our available-for-sale investment securities, we conduct a regular assessment of our investment securities portfolio to determine whether any securities are impaired. If this assessment indicates that a credit loss exists, the present value of cash flows expected to be collected from the security is compared to the amortized cost basis of the security. If the present value of cash flows expected to be collected is less than the amortized cost basis, a credit loss exists and an allowance for credit losses is recorded for the credit loss, limited by the amount that the fair value is less than the amortized cost basis. Any impairment that has not been recorded through the allowance for credit losses is recognized in other comprehensive income. For the three and six months ended June 30, 2026, we did not record any credit losses related to our available-for-sale investment securities portfolio.

​

For our held-to-maturity investment securities, we utilize the Current Expected Credit Loss (“CECL”) approach to estimate lifetime expected credit losses. Substantially all of our held-to-maturity securities are issued by the U.S. government, its agencies and government-sponsored enterprises. These securities have a long history of no credit losses and carry the explicit or implicit guarantee of the U.S. government. Therefore, as of June 30, 2026, we did not record an allowance for credit losses related to our held-to-maturity investment securities portfolio.

​

We are required to hold non-marketable equity securities, comprised of FHLB stock, as a condition of our membership in the FHLB system. Our FHLB stock is accounted for at cost, which equals par or redemption value. As of both June 30, 2026 and December 31, 2025, we held $10.1 million in FHLB stock, which is recorded as a component of other assets in our unaudited interim consolidated balance sheets.

​

See “Note 2. Investment Securities” contained in our unaudited interim consolidated financial statements for more information on our investment securities portfolio.

​

Loans and Leases

​

Table 14 presents the composition of our loan and lease portfolio by major categories as of June 30, 2026 and December 31, 2025:

​

​	​	​	​	​	​	​
Loans and Leases	​	​	​	​	​	Table 14
​	​	June 30,		​	December 31,
(dollars in thousands)	​	2026		​	2025
Commercial and industrial	​	$	2,339,882	​	$	2,171,333
Commercial real estate	​	​	4,783,130	​	​	4,590,326
Construction	​	​	731,766	​	​	808,275
Residential:	​	​	​	​	​	​
Residential mortgage	​	​	4,044,207	​	​	4,096,300
Home equity line	​	​	1,181,396	​	​	1,178,527
Total residential	​	​	5,225,603	​	​	5,274,827
Consumer	​	​	1,046,461	​	​	1,025,838
Lease financing	​	​	450,457	​	​	441,930
Total loans and leases	​	$	14,577,299	​	$	14,312,529

​

Total loans and leases were $14.6 billion as of June 30, 2026, an increase of $264.8 million or 2% from December 31, 2025. The increase in total loans and leases was due to increases in commercial real estate loans, commercial and industrial loans, consumer loans and lease financing, partially offset by decreases in construction loans and residential real estate loans.

​

Commercial and industrial loans are made primarily to corporations, middle market and small businesses for the purpose of financing equipment acquisition, expansion, working capital and other general business purposes. We also offer a variety of automobile dealer flooring lines to our customers in Hawaii and California to assist with the financing of their inventory. Commercial and industrial loans were $2.3 billion as of June 30, 2026, an increase of $168.5 million or 8% from December 31, 2025. This increase was primarily due to increases in our automobile dealer flooring lines and Shared National Credits portfolio during the six months ended June 30, 2026.

​

75

Table of Contents

Commercial real estate loans are secured by first mortgages on commercial real estate at loan to value (“LTV”) ratios generally not exceeding 75% and a minimum debt service coverage ratio of 1.20 to 1. The commercial properties are predominantly apartments, neighborhood and grocery anchored retail, industrial, office, and to a lesser extent, specialized properties such as hotels. The primary source of repayment for investor property and owner occupied property is cash flow from the property and operating cash flow from the business, respectively. Commercial real estate loans were $4.8 billion as of June 30, 2026, an increase of $192.8 million or 4% from December 31, 2025.

​

Construction loans are for the purchase or construction of a property for which repayment will be generated by the property. Loans in this portfolio are primarily for the purchase of land, as well as for the development of commercial properties, single family homes and condominiums. We classify loans as construction until the completion of the construction phase. Following construction, if a loan is retained by the Bank, the loan is reclassified to the commercial real estate or residential real estate classes of loans. Construction loans were $731.8 million as of June 30, 2026, a decrease of $76.5 million or 10% from December 31, 2025. This decrease was primarily due to payoffs and construction loans reclassified to commercial real estate loans during the six months ended June 30, 2026.

​

Residential real estate loans are generally secured by 1-4 unit residential properties and are underwritten using traditional underwriting systems to assess the credit risks and financial capacity and repayment ability of the consumer. Decisions are primarily based on LTV ratios, debt-to-income (“DTI”) ratios, liquidity and credit scores. LTV ratios generally do not exceed 80%, although higher levels are permitted with mortgage insurance. We offer fixed rate mortgage products and variable rate mortgage products including home equity lines of credit. We offer variable rate mortgage products based on SOFR with interest rates that are subject to change every six months after the third, fifth, seventh or tenth year, depending on the product. Variable rate residential mortgage loans are underwritten at fully-indexed interest rates. We generally do not offer interest-only, payment-option facilities, or any product with negative amortization. Residential real estate loans were $5.2 billion as of June 30, 2026, a decrease of $49.2 million or 1% from December 31, 2025.

​

Consumer loans consist primarily of open- and closed-end direct and indirect credit facilities for personal, automobile and household purchases as well as credit card loans. We seek to maintain reasonable levels of risk in consumer lending by following prudent underwriting guidelines, which include an evaluation of personal credit history, cash flow and collateral values based on existing market conditions. Consumer loans were $1.0 billion as of June 30, 2026, an increase of $20.6 million or 2% from December 31, 2025.

​

Lease financing consists of commercial single investor leases and leveraged leases. Underwriting of new lease transactions is based on our lending policy, including but not limited to an analysis of customer cash flows and secondary sources of repayment, including the value of leased equipment, the guarantors’ cash flows and/or other credit enhancements. No new leveraged leases are being added to the portfolio and all remaining leveraged leases are running off. Lease financing was $450.5 million as of June 30, 2026, an increase of $8.5 million or 2% from December 31, 2025.

​

See “Note 3. Loans and Leases” and “Note 4. Allowance for Credit Losses” contained in our unaudited interim consolidated financial statements and the discussion in “Analysis of Financial Condition — Allowance for Credit Losses” of this MD&A for more information on our loan and lease portfolio.

​

The Company’s loan and lease portfolio includes adjustable-rate loans, primarily tied to CME Term SOFR, Prime and SOFR, hybrid-rate loans, for which the initial rate is fixed for a period from one year to as much as ten years, and fixed rate loans, for which the interest rate does not change through the life of the loan or the remaining life of the loan. Table 15 presents the recorded investment in our loan and lease portfolio as of June 30, 2026 by rate type:

​

76

Table of Contents

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Loans and Leases by Rate Type

​

​

​

​

Table 15

​

​

June 30, 2026

​

​

Adjustable Rate

​

​

​

​

​

​

​

​

​

​

​

​

​

​

CME

​

​

​

​

​

​

​

Hybrid

​

Fixed

​

​

​

​

(dollars in thousands)

​

Prime

​

SOFR

​

Term SOFR

​

Other

​

Total

​

Rate

​

Rate

​

Total

​

Commercial and industrial

​

$

318,101

​

$

596,264

​

$

834,195

​

$

253,958

​

$

2,002,518

​

$

22,762

​

$

314,602

​

$

2,339,882

​

Commercial real estate

​

​

489,301

​

​

450,367

​

​

2,402,766

​

​

1,001,109

​

​

4,343,543

​

​

141,035

​

​

298,552

​

​

4,783,130

​

Construction

​

​

37,759

​

​

52,659

​

​

503,752

​

​

21,160

​

​

615,330

​

​

3,929

​

​

112,507

​

​

731,766

​

Residential:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Residential mortgage

​

​

13,593

​

​

130,935

​

​

57,928

​

​

75,433

​

​

277,889

​

​

718,495

​

​

3,047,823

​

​

4,044,207

​

Home equity line

​

​

322

​

​

—

​

​

—

​

​

—

​

​

322

​

​

984,662

​

​

196,412

​

​

1,181,396

​

Total residential

​

​

13,915

​

​

130,935

​

​

57,928

​

​

75,433

​

​

278,211

​

​

1,703,157

​

​

3,244,235

​

​

5,225,603

​

Consumer

​

​

337,799

​

​

—

​

​

—

​

​

4,262

​

​

342,061

​

​

1,611

​

​

702,789

​

​

1,046,461

​

Lease financing

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

450,457

​

​

450,457

​

Total loans and leases

​

$

1,196,875

​

$

1,230,225

​

$

3,798,641

​

$

1,355,922

​

$

7,581,663

​

$

1,872,494

​

$

5,123,142

​

$

14,577,299

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

% by rate type

​

​

8

%

​

9

%

​

26

%

​

9

%

​

52

%

​

13

%

​

35

%

​

100

%

​

​

Tables 16 and 17 present the geographic distribution of our loan and lease portfolio as of June 30, 2026 and December 31, 2025:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Geographic Distribution of Loan and Lease Portfolio

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Table 16

​

​

June 30, 2026

​

​

​

​

​

U.S.

​

Guam &

​

Foreign &

​

​

​

(dollars in thousands)

​

Hawaii

​

Mainland(1)

​

Saipan

​

Other

​

Total

Commercial and industrial

​

$

1,065,746

​

$

1,119,802

​

$

140,666

​

$

13,668

​

$

2,339,882

Commercial real estate

​

​

2,635,202

​

​

1,759,822

​

​

388,106

​

​

—

​

​

4,783,130

Construction

​

​

318,142

​

​

389,890

​

​

23,734

​

​

—

​

​

731,766

Residential:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Residential mortgage

​

​

3,880,831

​

​

2,546

​

​

160,830

​

​

—

​

​

4,044,207

Home equity line

​

​

1,128,679

​

​

—

​

​

52,717

​

​

—

​

​

1,181,396

Total residential

​

​

5,009,510

​

​

2,546

​

​

213,547

​

​

—

​

​

5,225,603

Consumer

​

​

690,103

​

​

33,675

​

​

319,964

​

​

2,719

​

​

1,046,461

Lease financing

​

​

247,320

​

​

184,593

​

​

18,544

​

​

—

​

​

450,457

Total Loans and Leases

​

$

9,966,023

​

$

3,490,328

​

$

1,104,561

​

$

16,387

​

$

14,577,299

Percentage of Total Loans and Leases

​

​

68%

​

​

24%

​

​

7%

​

​

1%

​

​

100%

(1) For secured loans and leases, classification as U.S. Mainland is made based on where the collateral is located. For unsecured loans and leases, classification as U.S. Mainland is made based on the location where the majority of the borrower’s business operations are conducted.

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Geographic Distribution of Loan and Lease Portfolio

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Table 17

​

​

December 31, 2025

​

​

​

​

​

U.S.

​

Guam &

​

Foreign &

​

​

​

(dollars in thousands)

​

Hawaii

​

Mainland(1)

​

Saipan

​

Other

​

Total

Commercial and industrial

​

$

979,948

​

$

1,031,600

​

$

146,817

​

$

12,968

​

$

2,171,333

Commercial real estate

​

​

2,509,943

​

​

1,678,871

​

​

401,512

​

​

—

​

​

4,590,326

Construction

​

​

359,263

​

​

426,842

​

​

22,170

​

​

—

​

​

808,275

Residential:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Residential mortgage

​

​

3,940,165

​

​

2,575

​

​

153,560

​

​

—

​

​

4,096,300

Home equity line

​

​

1,129,433

​

​

—

​

​

49,094

​

​

—

​

​

1,178,527

Total residential

​

​

5,069,598

​

​

2,575

​

​

202,654

​

​

—

​

​

5,274,827

Consumer

​

​

671,811

​

​

35,426

​

​

314,681

​

​

3,920

​

​

1,025,838

Lease financing

​

​

246,502

​

​

176,946

​

​

18,482

​

​

—

​

​

441,930

Total Loans and Leases

​

$

9,837,065

​

$

3,352,260

​

$

1,106,316

​

$

16,888

​

$

14,312,529

Percentage of Total Loans and Leases

​

​

69%

​

​

23%

​

​

7%

​

​

1%

​

​

100%

(1) For secured loans and leases, classification as U.S. Mainland is made based on where the collateral is located. For unsecured loans and leases, classification as U.S. Mainland is made based on the location where the majority of the borrower’s business operations are conducted.

​

77

Table of Contents

Our lending activities are concentrated primarily in Hawaii. However, we also have lending activities on the U.S. mainland, Guam and Saipan. Our commercial lending activities on the U.S. mainland include automobile dealer flooring activities in California, participation in the Shared National Credits Program and selective commercial real estate projects based on existing customer relationships. Our lease financing portfolio includes commercial leveraged and single investor lease financing activities both in Hawaii and on the U.S. mainland. However, no new leveraged leases are being added to the portfolio and all remaining leveraged leases are running off. Our consumer lending activities are concentrated primarily in Hawaii and, to a smaller extent, in Guam and Saipan.

​

Table 18 presents the contractual maturities of our loan and lease portfolio by major categories and the sensitivities to changes in interest rates as of June 30, 2026:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Maturities for Loan and Lease Portfolio(1)

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Table 18

​

​

June 30, 2026

​

​

Due in One

​

Due After One

​

Due After Five

​

Due After

​

​

​

(dollars in thousands)

​

Year or Less

​

to Five Years

​

to Fifteen Years

​

Fifteen Years

​

Total

Commercial and industrial

​

$

839,823

​

$

1,169,309

​

$

234,433

​

$

96,317

​

$

2,339,882

Commercial real estate

​

​

1,125,248

​

​

2,116,250

​

​

1,517,914

​

​

23,718

​

​

4,783,130

Construction

​

​

231,348

​

​

375,639

​

​

75,337

​

​

49,442

​

​

731,766

Residential:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Residential mortgage

​

​

7,769

​

​

59,249

​

​

375,817

​

​

3,601,372

​

​

4,044,207

Home equity line

​

​

24,612

​

​

67,182

​

​

78,839

​

​

1,010,763

​

​

1,181,396

Total residential

​

​

32,381

​

​

126,431

​

​

454,656

​

​

4,612,135

​

​

5,225,603

Consumer

​

​

99,501

​

​

688,182

​

​

258,778

​

​

—

​

​

1,046,461

Lease financing

​

​

15,518

​

​

213,113

​

​

115,241

​

​

106,585

​

​

450,457

Total Loans and Leases

​

$

2,343,819

​

$

4,688,924

​

$

2,656,359

​

$

4,888,197

​

$

14,577,299

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Total of loans and leases with:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Adjustable interest rates

​

$

2,148,363

​

$

3,576,868

​

$

1,604,676

​

$

251,756

​

$

7,581,663

Hybrid interest rates

​

​

59,522

​

​

116,014

​

​

102,642

​

​

1,594,316

​

​

1,872,494

Fixed interest rates

​

​

135,934

​

​

996,042

​

​

949,041

​

​

3,042,125

​

​

5,123,142

Total Loans and Leases

​

$

2,343,819

​

$

4,688,924

​

$

2,656,359

​

$

4,888,197

​

$

14,577,299

(1) Based on contractual maturities, including extension and renewal options that are not unconditionally cancellable by the Company.

​

Credit Quality

​

We perform an internal loan review and grading or scoring procedures on an ongoing basis. The review provides management with periodic information as to the quality of the loan portfolio and effectiveness of our lending policies and procedures. The objective of the loan review and grading or scoring procedures is to identify, in a timely manner, existing or emerging credit quality issues so that appropriate steps can be initiated to avoid or minimize future losses.

​

For purposes of managing credit risk and estimating the ACL, management has identified three portfolio segments (commercial, residential and consumer) that we use to develop our systematic methodology to determine the ACL. The categorization of loans for the evaluation of credit risk is specific to our credit risk evaluation process and these loan categories are not necessarily the same as the loan categories used for other evaluations of our loan portfolio. See “Note 4. Allowance for Credit Losses” contained in our unaudited interim consolidated financial statements for more information about our approach to estimating the ACL.

​

The following tables and discussion address non-performing assets and loans and leases that are 90 days past due but are still accruing interest.

​

78

Table of Contents

Non-Performing Assets and Loans and Leases Past Due 90 Days or More and Still Accruing Interest

​

Table 19 presents information on our non-performing assets and accruing loans and leases past due 90 days or more as of June 30, 2026 and December 31, 2025:

​

​	​	​	​	​	​	​	​
Non-Performing Assets and Accruing Loans and Leases Past Due 90 Days or More	​	​	​	​	​	Table 19
​	​	June 30,		​	December 31,		​
(dollars in thousands)	​	2026		​	2025		​
Non-Performing Assets	​	​	​	​	​	​	​
Non-Accrual Loans and Leases	​	​	​	​	​	​	​
Commercial Loans:	​	​	​	​	​	​	​
Commercial and industrial	​	$	4,054	​	$	8,805	​
Commercial real estate	​	​	2,879	​	​	3,007	​
Construction	​	​	1,788	​	​	1,788	​
Lease financing	​	​	680	​	​	734	​
Total Commercial Loans	​	​	9,401	​	​	14,334	​
Residential Loans:	​	​	​	​	​	​	​
Residential mortgage	​	​	18,675	​	​	16,423	​
Home equity line	​	​	11,425	​	​	10,271	​
Total Residential Loans	​	​	30,100	​	​	26,694	​
Total Non-Accrual Loans and Leases	​	​	39,501	​	​	41,028	​
Total Non-Performing Assets	​	$	39,501	​	$	41,028	​
​	​	​	​	​	​	​	​
Accruing Loans and Leases Past Due 90 Days or More	​	​	​	​	​	​	​
Commercial and industrial	​	$	249	​	$	318	​
Residential mortgage	​	​	771	​	​	55	​
Consumer	​	​	3,073	​	​	2,984	​
Total Accruing Loans and Leases Past Due 90 Days or More	​	$	4,093	​	$	3,357	​
​	​	​	​	​	​	​	​
Total Loans and Leases	​	$	14,577,299	​	$	14,312,529	​
​	​	​	​	​	​	​	​
Ratio of Non-Accrual Loans and Leases to Total Loans and Leases	​	​	0.27	%	​	0.29	%
Ratio of Non-Performing Assets to Total Loans and Leases and OREO	​	​	0.27	%	​	0.29	%
Ratio of Non-Performing Assets and Accruing Loans and Leases Past Due 90 Days or More to Total Loans and Leases and OREO	​	​	0.30	%	​	0.31	%

​

Table 20 presents the activity in Non-Performing Assets (“NPAs”) for the six months ended June 30, 2026 and 2025:

​

​	​	​	​	​	​	​
Non-Performing Assets	​	​	​	​	​	Table 20
​	​	Six Months Ended June 30,
(dollars in thousands)	​	2026		​	2025
Balance at beginning of period	​	$	41,028	​	$	20,679
Additions	​	​	9,158	​	​	13,554
Reductions	​	​	​	​	​	​
Payments	​	​	(6,196)	​	​	(3,692)
Return to accrual status	​	​	(2,619)	​	​	(1,554)
Charge-offs/write-downs	​	​	(1,870)	​	​	(396)
Total Reductions	​	​	(10,685)	​	​	(5,642)
Balance at end of period	​	$	39,501	​	$	28,591

​

The level of NPAs represents an indicator of the potential for future credit losses. NPAs consist of non-accrual loans and leases and other real estate owned (“OREO”). Changes in the level of non-accrual loans and leases typically represent increases for loans and leases that reach a specified past due status, offset by reductions for loans and leases that are charged-off, paid down, sold, transferred to held for sale classification, transferred to OREO or are no longer classified as non-accrual because they have returned to accrual status as a result of continued performance and an improvement in the borrower’s financial condition and loan repayment capabilities.

​

Total NPAs were $39.5 million as of June 30, 2026, a decrease of $1.5 million or 4% from December 31, 2025. The ratio of our NPAs to total loans and leases and OREO was 0.27% as of June 30, 2026, a decrease of two basis points from December 31, 2025.

​

79

Table of Contents

The largest component of our NPAs is typically residential mortgage loans. The level of these NPAs can remain elevated due to a lengthy judicial foreclosure process in Hawaii. As of June 30, 2026, residential mortgage non-accrual loans were $18.7 million, an increase of $2.3 million or 14% from December 31, 2025. This increase was due to additions in residential mortgage loans totaling $6.3 million, partially offset by returns to accrual status of $2.5 million and payments of $1.5 million. As of June 30, 2026, our residential mortgage non-accrual loans were comprised of 54 loans with a weighted average current LTV ratio of 55%, compared to 59 loans with a weighted average LTV ratio of 52% as of December 31, 2025.

​

As of June 30, 2026, home equity line non-accrual loans were $11.4 million, an increase of $1.2 million or 11% from December 31, 2025. This increase was due to additions in home equity lines totaling $2.4 million, partially offset by payments of $1.1 million and returns to accrual status of $0.1 million.

​

As of June 30, 2026, commercial and industrial non-accrual loans were $4.1 million, a decrease of $4.8 million or 54% from December 31, 2025. This decrease was due to payments of $3.4 million and charge-offs of $1.9 million, partially offset by additions of $0.5 million.

​

As of June 30, 2026, commercial real estate non-accrual loans were $2.9 million, a decrease of $0.1 million or 4% from December 31, 2025, primarily due to payments of $0.1 million.

​

As of June 30, 2026, construction non-accrual loans were $1.8 million, unchanged from December 31, 2025.

​

OREO represents property acquired as the result of borrower defaults on loans. OREO is recorded at fair value, less estimated selling costs, at the time of foreclosure. On an ongoing basis, properties are appraised as required by market conditions and applicable regulations. As of both June 30, 2026 and December 31, 2025, there was no OREO held.

​

Loans and Leases Past Due 90 Days or More and Still Accruing Interest. Loans and leases in this category are 90 days or more past due, as to principal or interest, and are still accruing interest because they are well secured and in the process of collection.

​

Loans and leases past due 90 days or more and still accruing interest were $4.1 million as of June 30, 2026, an increase of $0.7 million or 22% from December 31, 2025. This increase was primarily due to an increase in residential mortgage loans of $0.7 million that were past due 90 days or more and still accruing interest.

​

80

Table of Contents

Allowance for Credit Losses for Loans and Leases & Reserve for Unfunded Commitments

​

Table 21 presents an analysis of our ACL for the periods indicated:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Allowance for Credit Losses and Reserve for Unfunded Commitments

​

​

​

​

​

​

​

​

​

​

​

Table 21

​

​

Three Months Ended June 30,

​

Six Months Ended June 30,

​

(dollars in thousands)

​

2026

​

2025

​

2026

​

2025

​

Balance at Beginning of Period

​

$

204,265

​

$

199,959

​

$

204,165

​

$

193,240

​

Loans and Leases Charged-Off

​

​

​

​

​

​

​

​

​

​

​

​

​

Commercial Loans:

​

​

​

​

​

​

​

​

​

​

​

​

​

Commercial and industrial

​

​

(769)

​

​

(688)

​

​

(3,394)

​

​

(2,147)

​

Lease financing

​

​

—

​

​

(82)

​

​

—

​

​

(82)

​

Total Commercial Loans

​

​

(769)

​

​

(770)

​

​

(3,394)

​

​

(2,229)

​

Home equity line

​

​

(23)

​

​

(16)

​

​

(23)

​

​

(30)

​

Consumer

​

​

(5,490)

​

​

(4,543)

​

​

(10,334)

​

​

(9,568)

​

Total Loans and Leases Charged-Off

​

​

(6,282)

​

​

(5,329)

​

​

(13,751)

​

​

(11,827)

​

Recoveries on Loans and Leases Previously Charged-Off

​

​

​

​

​

​

​

​

​

​

​

​

​

Commercial Loans:

​

​

​

​

​

​

​

​

​

​

​

​

​

Commercial and industrial

​

​

281

​

​

196

​

​

547

​

​

599

​

Commercial real estate

​

​

—

​

​

—

​

​

—

​

​

251

​

Lease financing

​

​

—

​

​

—

​

​

3

​

​

—

​

Total Commercial Loans

​

​

281

​

​

196

​

​

550

​

​

850

​

Residential Loans:

​

​

​

​

​

​

​

​

​

​

​

​

​

Residential mortgage

​

​

16

​

​

109

​

​

29

​

​

129

​

Home equity line

​

​

28

​

​

32

​

​

67

​

​

96

​

Total Residential Loans

​

​

44

​

​

141

​

​

96

​

​

225

​

Consumer

​

​

1,820

​

​

1,705

​

​

4,068

​

​

3,684

​

Total Recoveries on Loans and Leases Previously Charged-Off

​

​

2,145

​

​

2,042

​

​

4,714

​

​

4,759

​

Net Loans and Leases Charged-Off

​

​

(4,137)

​

​

(3,287)

​

​

(9,037)

​

​

(7,068)

​

Provision for Credit Losses

​

​

5,600

​

​

4,500

​

​

10,600

​

​

15,000

​

Balance at End of Period

​

$

205,728

​

$

201,172

​

$

205,728

​

$

201,172

​

Components:

​

​

​

​

​

​

​

​

​

​

​

​

​

Allowance for Credit Losses

​

$

168,056

​

$

167,825

​

$

168,056

​

$

167,825

​

Reserve for Unfunded Commitments

​

​

37,672

​

​

33,347

​

​

37,672

​

​

33,347

​

Total Allowance for Credit Losses and Reserve for Unfunded Commitments

​

$

205,728

​

$

201,172

​

$

205,728

​

$

201,172

​

Average Loans and Leases Outstanding

​

$

14,488,213

​

$

14,288,918

​

$

14,389,365

​

$

14,299,400

​

Ratio of Net Loans and Leases Charged-Off to Average Loans and Leases Outstanding(1)

​

​

0.11

%

​

0.09

%

​

0.13

%

​

0.10

%

Ratio of Allowance for Credit Losses for Loans and Leases to Loans and Leases Outstanding

​

​

1.15

%

​

1.17

%

​

1.15

%

​

1.17

%

Ratio of Allowance for Credit Losses for Loans and Leases to Non-accrual Loans and Leases

​

​

4.25x

​

​

5.87x

​

​

4.25x

​

​

5.87x

​

(1) Annualized for the three and six months ended June 30, 2026 and 2025.

​

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Tables 22 and 23 present the allocation of the ACL by loan and lease category, in both dollars and as a percentage of total loans and leases outstanding as of June 30, 2026 and December 31, 2025:

​

​	​	​	​	​	​	​	​	​
Allocation of the Allowance for Credit Losses by Loan and Lease Category	​	​	​	​	​	​	Table 22
​	​	June 30, 2026
​	​	​	​	​	Allocated	​	Loan	​
​	​	​	​	​	ACL as	​	category as	​
​	​	​	​	​	% of loan or	​	% of total	​
​	​	​	​	​	lease	​	loans and	​
(dollars in thousands)	​	Amount		​	category	​	leases	​
Commercial and industrial	​	$	18,788	​	0.80	%	16.05	%
Commercial real estate	​	​	38,949	​	0.81	​	32.81	​
Construction	​	​	7,950	​	1.09	​	5.02	​
Lease financing	​	​	2,464	​	0.55	​	3.09	​
Total commercial	​	​	68,151	​	0.82	​	56.97	​
Residential mortgage	​	​	36,446	​	0.90	​	27.74	​
Home equity line	​	​	15,302	​	1.30	​	8.11	​
Total residential	​	​	51,748	​	0.99	​	35.85	​
Consumer	​	​	48,157	​	4.60	​	7.18	​
Total	​	$	168,056	​	1.15	%	100.00	%

​

​	​	​	​	​	​	​	​	​
Allocation of the Allowance for Credit Losses by Loan and Lease Category	​	​	​	​	​	​	Table 23
​	​	December 31, 2025
​	​	​	​	​	Allocated	​	Loan	​
​	​	​	​	​	ACL as	​	category as	​
​	​	​	​	​	% of loan or	​	% of total	​
​	​	​	​	​	lease	​	loans and	​
(dollars in thousands)	​	Amount		​	category	​	leases	​
Commercial and industrial	​	$	20,833	​	0.96	%	15.17	%
Commercial real estate	​	​	38,757	​	0.84	​	32.07	​
Construction	​	​	7,605	​	0.94	​	5.65	​
Lease financing	​	​	2,778	​	0.63	​	3.09	​
Total commercial	​	​	69,973	​	0.87	​	55.98	​
Residential mortgage	​	​	36,384	​	0.89	​	28.62	​
Home equity line	​	​	15,192	​	1.29	​	8.23	​
Total residential	​	​	51,576	​	0.98	​	36.85	​
Consumer	​	​	46,919	​	4.57	​	7.17	​
Total	​	$	168,468	​	1.18	%	100.00	%

​

Table 24 presents the net charge-offs (recoveries) to average loans and leases by category during the three and six months ended June 30, 2026 and 2025:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Net Charge-Offs (Recoveries) to Average Loans and Leases By Category(1)

​

​

​

​

​

​

​

​

​

​

Table 24

​

​

Three Months Ended June 30,

​

Six Months Ended June 30,

​

​

​

2026

​

2025

​

2026

​

2025

​

Commercial and industrial

​

​

0.09

%

​

0.09

%

​

0.26

%

​

0.14

%

Commercial real estate

​

​

—

​

​

—

​

​

—

​

​

(0.01)

​

Construction

​

​

—

​

​

—

​

​

—

​

​

—

​

Lease financing

​

​

—

​

​

0.08

​

​

—

​

​

0.04

​

Total commercial

​

​

0.02

​

​

0.03

​

​

0.07

​

​

0.03

​

Residential mortgage

​

​

—

​

​

(0.01)

​

​

—

​

​

(0.01)

​

Home equity line

​

​

—

​

​

(0.01)

​

​

(0.01)

​

​

(0.01)

​

Total residential

​

​

—

​

​

(0.01)

​

​

—

​

​

(0.01)

​

Consumer

​

​

1.41

​

​

1.12

​

​

1.22

​

​

1.17

​

Total loans and leases

​

​

0.11

%

​

0.09

%

​

0.13

%

​

0.10

%

(1) Annualized for the three and six months ended June 30, 2026 and 2025.

​

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As of June 30, 2026, the ACL was $168.1 million or 1.15% of total loans and leases outstanding, compared with an ACL of $168.5 million or 1.18% of total loans and leases outstanding as of December 31, 2025. The reserve for unfunded commitments was $37.7 million as of June 30, 2026, compared to $35.7 million as of December 31, 2025.

​

Net charge-offs of loans and leases were $4.1 million or 0.11% of total average loans and leases, on an annualized basis, for the three months ended June 30, 2026, compared to net charge-offs of $3.3 million or 0.09% for the three months ended June 30, 2025. Net charge-offs in our commercial lending portfolio were $0.5 million and $0.6 million for the three months ended June 30, 2026 and 2025, respectively. Net recoveries in our residential lending portfolio were nil and $0.1 million for the three months ended June 30, 2026 and 2025, respectively. Net charge-offs in our consumer lending portfolio were $3.7 million and $2.8 million for the three months ended June 30, 2026 and 2025, respectively. Net charge-offs in our consumer portfolio segment include those related to credit cards, automobile loans, installment loans and small business lines of credit and reflect the inherent risk associated with these loans.

​

Net charge-offs of loans and leases were $9.0 million or 0.13% of total average loans and leases on an annualized basis, for the six months ended June 30, 2026, compared to $7.1 million or 0.10% of total average loans and leases, on an annualized basis, for the six months ended June 30, 2025. Net charge-offs in our commercial lending portfolio were $2.8 million and $1.4 million for the six months ended June 30, 2026 and 2025, respectively. Net recoveries in our residential lending portfolio were $0.1 million and $0.2 million for the six months ended June 30, 2026 and 2025, respectively. Net charge-offs in our consumer lending portfolio were $6.3 million and $5.9 million for the six months ended June 30, 2026 and 2025, respectively. Net charge-offs in our consumer portfolio segment include those related to credit cards, automobile loans, installment loans and small business lines of credit and reflect the inherent risk associated with these loans.

​

Although we determine the amount of each component of the ACL separately, the ACL as a whole was considered appropriate by management as of June 30, 2026 and December 31, 2025. Furthermore, as of June 30, 2026, the ACL was considered adequate based on our ongoing analysis of estimated expected credit losses, credit risk profiles, current economic outlook, coverage ratios and other relevant factors. The ACL anticipates cyclical losses consistent with a recession and includes a qualitative overlay for potential macroeconomic impacts. We will continue to monitor factors that drive expected credit losses including the uncertainty of the economy, inflation and geopolitical instability. See “Note 4. Allowance for Credit Losses” contained in our unaudited interim consolidated financial statements for more information on the ACL.

​

Goodwill

​

Goodwill was $995.5 million as of both June 30, 2026 and December 31, 2025. Our goodwill originated from the acquisition of the Company by BNP Paribas in December of 2001. Goodwill generated in that acquisition was recorded on the balance sheet of the Bank as a result of push down accounting treatment, and remains on our unaudited interim consolidated balance sheets.

​

The Company’s policy is to assess goodwill for impairment at the reporting unit level on an annual basis or between annual assessments if a triggering event occurs or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying amount. Impairment is the condition that exists when the carrying amount of a reporting unit exceeds its fair value. There was no impairment in our goodwill for the three and six months ended June 30, 2026. Future events, including geopolitical concerns, inflation concerns, global supply chain issues, and other factors affecting the economy, that could cause a significant decline in our expected future cash flows or a significant adverse change in our business or the business climate may necessitate taking charges in future reporting periods related to the impairment of our goodwill.

​

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Other Assets

​

Other assets were $816.3 million as of June 30, 2026, a decrease of $12.0 million or 1% from December 31, 2025. The decrease in other assets was primarily due to decreases of $10.9 million in suspense and clearing accounts, $10.3 million in current tax receivables and deferred tax assets, $4.5 million in low-income housing tax credit (“LIHTC”) investments and $2.7 million in vendor advances. This was partially offset by an increase of $20.7 million in prepaid assets.

​

Deposits

​

Deposits are the primary funding source for the Bank and are acquired from a broad base of local markets, including both individual and corporate customers. We obtain funds from depositors by offering a range of deposit types, including demand, savings, money market and time.

​

Table 25 presents the composition of our deposits as of June 30, 2026 and December 31, 2025:

​

​	​	​	​	​	​	​
Deposits	​	​	​	​	​	Table 25
​	​	June 30,		​	December 31,
(dollars in thousands)		2026			2025
U.S.:	​	​	​	​	​	​
Demand	​	$	5,642,865	​	$	5,794,973
Savings	​	​	5,553,264	​	​	5,721,098
Money Market	​	​	3,795,384	​	​	3,832,783
Time	​	​	2,837,654	​	​	2,948,536
Foreign(1):	​	​	​	​	​	​
Demand	​	​	804,924	​	​	752,319
Savings	​	​	579,482	​	​	587,775
Money Market	​	​	488,598	​	​	456,587
Time	​	​	452,010	​	​	421,597
Total Deposits(2)	​	$	20,154,181	​	$	20,515,668

(1) Foreign deposits were comprised of Guam and Saipan deposit accounts.

(2) Public deposits were $616.3 million as of June 30, 2026, a decrease of $223.2 million or 27% compared to December 31, 2025.

​

Total deposits were $20.2 billion as of June 30, 2026, a decrease of $361.5 million from December 31, 2025. The decrease in deposit balances stemmed primarily from a $124.3 million decrease in public time deposit balances, a $114.7 million decrease in public savings deposit balances and a $105.9 million decrease in non-public demand deposit balances.

​

As of June 30, 2026 and December 31, 2025, the amount of deposits that exceeded FDIC insurance limits were estimated to be $9.8 billion, or 48% of total deposits, and $10.1 billion, or 49% of total deposits, respectively. At June 30, 2026 and December 31, 2025, the Company had $616.3 million and $839.5 million, respectively, of public deposits, all of which were fully collateralized with investment securities. As of June 30, 2026 and December 31, 2025, the amount of deposits excluding public deposits that exceeded FDIC insurance limits were estimated to be $9.2 billion, or 45% of total deposits, and $9.3 billion, or 45% of total deposits, respectively. As of June 30, 2026 and December 31, 2025, deposit accounts above $250,000 were $11.5 billion and $11.9 billion, respectively. As of June 30, 2026 and December 31, 2025, deposit balances over $250,000 in corporate operating accounts were $2.0 billion and $2.1 billion, respectively.

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​

Table 26 presents the estimated amount of time deposits that were in excess of the FDIC insurance limit, further segregated by time remaining until maturity, as of June 30, 2026:

​

​	​	​	​
Uninsured Time Deposits	​	​	Table 26
(dollars in thousands)	​	​	June 30, 2026
Three months or less	​	$	556,661
Over three through six months	​	​	388,481
Over six through twelve months	​	​	227,657
Over twelve months	​	​	13,556
Total(1)	​	$	1,186,355

(1) Includes $9.0 million in public time deposits that are fully collateralized with investment securities.

​

Pension and Postretirement Plan Obligations

​

We have a noncontributory qualified defined benefit pension plan, an unfunded supplemental executive retirement plan (“SERP”), a directors’ retirement plan (a non-qualified pension plan for eligible directors) and a postretirement benefit plan providing life insurance and healthcare benefits that we offer to our directors and employees, as applicable. The noncontributory qualified defined benefit pension plan, the unfunded supplemental executive retirement plan and the directors’ retirement plan are all frozen to new participants. On March 11, 2019, the Company’s board of directors approved an amendment to the SERP to freeze the SERP. As a result of such amendment, effective July 1, 2019, there are no new accruals of benefits, including service accruals. To calculate annual pension costs, we use the following key variables: (1) size of the employee population, length of service and estimated compensation increases; (2) actuarial assumptions and estimates; (3) expected long-term rate of return on plan assets; and (4) discount rate.

​

Pension and postretirement benefit plan obligations, net of pension plan assets, were $85.7 million as of June 30, 2026, a decrease of $1.3 million or 2% from December 31, 2025. This decrease was due to payments of $4.0 million, partially offset by net periodic benefit costs for the six months ended June 30, 2026 of $2.7 million.

​

See “Note 14. Noninterest Income and Noninterest Expense” contained in our unaudited interim consolidated financial statements for more information on our pension and postretirement benefit plans.

​

Capital

​

The bank regulators currently use a combination of risk-based ratios and a leverage ratio to evaluate capital adequacy. The Company and the Bank are subject to the federal bank regulators’ final rules implementing Basel III and various provisions of the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Capital Rules”).

​

The Capital Rules, among other things impose a capital measure called CET1, to which most deductions/adjustments to regulatory capital must be made. In addition, the Capital Rules specify that Tier 1 capital consists of CET1 and “Additional Tier 1 capital” instruments meeting certain specified requirements.

​

Under the Capital Rules, the minimum capital ratios are as follows:

​

● 4.5% CET1 capital to risk-weighted assets,

● 6.0% Tier 1 capital (that is, CET1 capital plus Additional Tier 1 capital) to risk-weighted assets,

● 8.0% Total capital (that is, Tier 1 capital plus Tier 2 capital) to risk-weighted assets, and

● 4.0% Tier 1 capital to average quarterly assets.

The Capital Rules also require a 2.5% capital conservation buffer designed to absorb losses during periods of economic stress. The capital conservation buffer is composed entirely of CET1, on top of these minimum risk weighted asset ratios, effectively resulting in minimum ratios of (i) 7% CET1 to risk-weighted assets, (ii) 8.5% Tier 1 capital to risk-weighted assets, and (iii) 10.5% total capital to risk-weighted assets.

​

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As of June 30, 2026, the Company’s capital levels remained characterized as “well-capitalized” under the Capital Rules. The Company’s regulatory capital ratios, calculated in accordance with the Capital Rules, are presented in Table 27 below. There have been no conditions or events since June 30, 2026 that management believes have changed either the Company’s or the Bank’s capital classifications. CET1 was 13.27% as of June 30, 2026, an increase of 10 basis points from December 31, 2025. The increase in CET1 was primarily due to earnings for the six months ended June 30, 2026, partially offset by dividends declared and paid to the Company’s stockholders, common stock repurchased and an increase in risk-weighted assets.

​

​	​	​	​	​	​	​	​
FHI's Regulatory Capital	​	​	​	​	​	Table 27
​	​	June 30,		​	December 31,		​
(dollars in thousands)	​	2026		​	2025		​
Stockholders' Equity	​	$	2,826,028	​	$	2,769,365	​
Less:	​	​	​	​	​	​	​
Goodwill	​	​	995,492	​	​	995,492	​
Accumulated other comprehensive loss, net	​	​	(359,793)	​	​	(368,140)	​
Tax credit carryforward	​	​	1,055	​	​	—	​
Common Equity Tier 1 Capital and Tier 1 Capital	​	$	2,189,274	​	$	2,142,013	​
Add:	​	​	​	​	​	​	​
Qualifying allowance for credit losses and reserve for unfunded commitments	​	​	205,728	​	​	203,256	​
Total Capital	​	$	2,395,002	​	$	2,345,269	​
Risk-Weighted Assets	​	$	16,495,964	​	$	16,259,605	​
​	​	​	​	​	​	​	​
FHI's Key Regulatory Capital Ratios	​	​	​	​	​	​	​
Common Equity Tier 1 Capital Ratio	​	​	13.27	%	​	13.17	%
Tier 1 Capital Ratio	​	​	13.27	%	​	13.17	%
Total Capital Ratio	​	​	14.52	%	​	14.42	%
Tier 1 Leverage Ratio	​	​	9.46	%	​	9.27	%

​

Total stockholders’ equity was $2.8 billion as of June 30, 2026, an increase of $56.7 million or 2% from December 31, 2025. The increase in stockholders’ equity was primarily due to earnings for the six months ended June 30, 2026 of $141.2 million and other comprehensive income, net of tax, of $8.3 million, primarily due to changes in our investment securities portfolio. This was partially offset by dividends declared and paid to the Company’s stockholders of $63.5 million and common stock repurchased of $32.0 million.

​

In January 2026, the Company announced a stock repurchase program for up to $250.0 million of its outstanding common stock during 2026. Under this plan, the Company repurchased 1,307,738 shares at a total cost of $32.0 million during the six months ended June 30, 2026. The timing and exact amount of stock repurchases, if any, will be subject to management’s discretion and various factors, including the Company’s capital position and financial performance, as well as market conditions. The stock repurchase program may be suspended, terminated or modified at any time for any reason.

​

In July 2026, the Company’s Board of Directors declared a quarterly cash dividend of $0.26 per share on our outstanding shares. The dividend is to be paid on August 28, 2026 to shareholders of record at the close of business on August 17, 2026.

​

Future Application of Accounting Pronouncements

​

For a discussion of the expected impact of accounting pronouncements recently issued but not adopted by us as of June 30, 2026, see “Note 1. Organization and Basis of Presentation — Recent Accounting Pronouncements” to the unaudited interim consolidated financial statements for more information.

​

Risk Governance and Quantitative and Qualitative Disclosures About Market Risk

​

Managing risk is an essential part of successfully operating our business. Management believes that the most prominent risk exposures for the Company are credit risk, market risk, liquidity risk management, capital management and operational risk. See “Analysis of Financial Condition — Liquidity and Capital Resources” and “— Capital” sections of this MD&A for further discussions of liquidity risk management and capital management, respectively.

​

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Credit Risk

​

Credit risk is the risk that borrowers or counterparties will be unable or unwilling to repay their obligations in accordance with the underlying contractual terms. We manage and control credit risk in the loan and lease portfolio by adhering to well-defined underwriting criteria and account administration standards established by management. Written credit policies document underwriting standards, approval levels, exposure limits and other limits or standards deemed necessary and prudent. Portfolio diversification at the obligor, industry, product, and/or geographic location levels is actively managed to mitigate concentration risk. In addition, credit risk management includes an independent credit review process that assesses compliance with commercial, real estate and consumer credit policies, risk ratings and other critical credit information. In addition to implementing risk management practices that are based upon established and sound lending practices, we adhere to sound credit principles. We understand and evaluate our customers’ borrowing needs and capacity to repay, in conjunction with their character and history.

​

Management has identified three categories of loans that we use to develop our systematic methodology to determine the ACL: commercial, residential and consumer.

​

Commercial lending is further categorized into four distinct classes based on characteristics relating to the borrower, transaction and collateral. These classes are: commercial and industrial, commercial real estate, construction and lease financing. Commercial and industrial loans are primarily for the purpose of financing equipment acquisition, expansion, working capital and other general business purposes by medium to larger Hawaii based corporations, as well as U.S. mainland and international companies. Commercial and industrial loans are typically secured by non-real estate assets whereby the collateral is trading assets, enterprise value or inventory. As with many of our customers, our commercial and industrial loan customers are heavily dependent on tourism, government expenditures and real estate values. Commercial real estate loans are secured by real estate, including but not limited to structures and facilities to support activities designated as retail, health care, general office space, warehouse and industrial space. Our Bank’s underwriting policy generally requires that net cash flows from the property be sufficient to service the debt while still maintaining an appropriate amount of reserves. Commercial real estate loans in Hawaii are characterized by having a limited supply of real estate at commercially attractive locations, long delivery time frames for development and high interest rate sensitivity. Our construction lending portfolio consists primarily of land loans, single family and condominium development loans. Financing of construction loans is subject to a high degree of credit risk given the long delivery time frames for such projects. Construction lending activities are underwritten on a project financing basis whereby the cash flows or lease rents from the underlying real estate collateral or the sale of the finished inventory is the primary source of repayment. Market feasibility analysis is typically performed by assessing market comparables, market conditions and demand in the specific lending area and general community. We require presales of finished inventory or preleasing requirements prior to loan funding. However, because this analysis is typically performed on a forward looking basis, real estate construction projects typically present a higher risk profile in our lending activities. Lease financing activities include commercial single investor leases and leveraged leases used to purchase items ranging from computer equipment to transportation equipment. Underwriting of new leasing arrangements typically includes analyzing customer cash flows, evaluating secondary sources of repayment, such as the value of the leased asset, the guarantors’ net cash flows as well as other credit enhancements provided by the lessee.

​

Residential lending is further categorized into the following classes: residential mortgages (loans secured by 1-4 family residential properties and home equity loans) and home equity lines of credit. Our Bank’s underwriting standards typically require LTV ratios of not more than 80%, although higher levels are permitted with accompanying mortgage insurance. First mortgage loans secured by residential properties generally carry a moderate level of credit risk, with an average loan size of approximately $391,000 at June 30, 2026. Residential mortgage loan production is added to our loan portfolio or is sold in the secondary market, based on management’s evaluation of our liquidity, capital and loan portfolio mix as well as market conditions. Changes in interest rates, the economic environment and other market factors have impacted, and will likely continue to impact, the marketability and value of collateral and the financial condition of our borrowers which impacts the level of credit risk inherent in this portfolio, although we remain in a supply constrained housing environment in Hawaii. Geographic concentrations exist for this portfolio as nearly all residential mortgage loans and home equity lines of credit are for residences located in Hawaii, Guam or Saipan. These island locales are susceptible to a wide array of potential natural disasters including, but not limited to, hurricanes, floods, tsunamis and earthquakes. We offer home equity lines of credit with variable rates; fixed rate lock options may be available post-closing. The qualifying debt payments for all lines are underwritten at 0.95% of the credit line amount. Our procedures for underwriting home equity lines of credit include an assessment of an applicant’s overall financial capacity and repayment ability. Decisions are primarily based on repayment ability via debt-to-income ratios, LTV ratios and an evaluation of credit history.

​

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Table of Contents

Consumer lending is further categorized into the following classes of loans: credit cards, automobile loans and other consumer-related installment loans. Consumer loans are either unsecured or secured by the borrower’s personal assets. The average loan size is generally small, and risk is diversified among many borrowers. We offer a wide array of credit cards for business and personal use. In general, our customers are attracted to our credit card offerings on the basis of price, credit limit, reward programs and other product features. Credit card underwriting decisions are generally based on repayment ability of our borrower via DTI ratios, credit bureau information, including payment history, debt burden and credit scores, such as FICO, and analysis of financial capacity. Automobile lending activities include loans and leases secured by new or used automobiles. We originate the majority of our automobile loans and leases on an indirect basis through selected dealerships. Our procedures for underwriting automobile loans include an assessment of an applicant’s overall financial capacity and repayment ability, credit history and the ability to meet existing obligations and payments on the proposed loan or lease. Although an applicant’s creditworthiness is the primary consideration, the underwriting process also includes a comparison of the value of the collateral security to the proposed loan amount. We require borrowers to maintain full coverage automobile insurance on automobile loans and leases, with the Bank listed as either the loss payee or additional insured. Installment loans consist of open and closed end facilities for personal and household purchases. We seek to maintain reasonable levels of risk in installment lending by following prudent underwriting guidelines which include an evaluation of personal credit history and cash flow.

​

Market Risk

​

Market risk is the potential of loss arising from changes in interest rates, foreign exchange rates, equity prices and commodity prices, including the correlation among these factors and their volatility. When the value of an instrument is tied to such external factors, the holder faces market risk. We are exposed to market risk primarily from interest rate risk, which is defined as the risk of loss of net interest income or net interest margin because of changes in interest rates.

​

The potential cash flows, sales or replacement value of many of our assets and liabilities, especially those that earn or pay interest, are sensitive to changes in the general level of interest rates. In the banking industry, changes in interest rates can significantly impact earnings and the safety and soundness of an entity.

​

Interest rate risk arises primarily from our core business activities of extending loans and accepting deposits. This occurs when our interest earning loans and interest-bearing deposits mature or reprice at different times, on a different basis or in unequal amounts. Interest rates may also affect loan demand, credit losses, mortgage origination volume, pre- payment speeds and other items affecting earnings.

​

Many factors affect our exposure to changes in interest rates, such as general economic and financial conditions, customer preferences, historical pricing relationships and repricing characteristics of financial instruments. Our earnings are affected not only by general economic conditions, but also by the monetary and fiscal policies of the United States and its agencies, particularly the Federal Reserve. The monetary policies of the Federal Reserve can influence the overall growth of loans, investment securities and deposits and the level of interest rates earned on assets and paid for liabilities.

​

Market Risk Measurement

​

We primarily use net interest income simulation analysis to measure and analyze interest rate risk. We run various hypothetical interest rate scenarios and compare these results against a measured base case scenario. Our net interest income simulation analysis incorporates various assumptions, which we believe are reasonable but which may have a significant impact on results. These assumptions include: (1) the timing of changes in interest rates, (2) shifts or rotations in the yield curve, (3) re-pricing characteristics for market rate sensitive instruments on and off-balance sheet, (4) differing sensitivities of financial instruments due to differing underlying rate indices and (5) varying loan prepayment speeds for different interest rate scenarios. Because of limitations inherent in any approach used to measure interest rate risk, simulation results are not intended as a forecast of the actual effect of a change in market interest rates on our results but rather as a means to better plan and execute appropriate asset liability management strategies to manage our interest rate risk.

​

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Table of Contents

Table 28 presents, for the 12 months subsequent to June 30, 2026 and December 31, 2025, an estimate of the changes in net interest income that would result from ramps (gradual changes) and shocks (immediate changes) in market interest rates, moving in a parallel fashion over the entire yield curve, relative to the measured base case scenario. Ramp scenarios assume interest rates move gradually in parallel across the yield curve relative to the base case scenario. Shock scenarios assume an immediate and sustained parallel shift in interest rates across the entire yield curve, relative to the base case scenario. The base case scenario assumes that the balance sheet and interest rates are generally unchanged. We evaluate the sensitivity by using a static forecast, where the balance sheets as of June 30, 2026 and December 31, 2025 are held constant.

​

​	​	​	​	​	​	​	​	​	​	​	​
Net Interest Income Sensitivity Profile - Estimated Percentage Change Over 12 Months	​	​	Table 28
​	​	​	Static Forecast			​	​	Static Forecast			​
​	​	June 30, 2026				​	December 31, 2025				​
Gradual Change in Interest Rates (basis points)	​	​	​	​	​	​	​	​	​	​	​
+200	​	​	​	​	3.6	%	​	​	​	3.5	%
+100	​	​	​	​	1.8	​	​	​	​	1.8	​
+50	​	​	​	​	0.9	​	​	​	​	0.9	​
(50)	​	​	​	​	(0.9)	​	​	​	​	(0.9)	​
(100)	​	​	​	​	(1.8)	​	​	​	​	(1.8)	​
​	​	​	​	​	​	​	​	​	​	​	​
Immediate Change in Interest Rates (basis points)	​	​	​	​	​	​	​	​	​	​	​
+200	​	​	​	​	6.6	%	​	​	​	6.3	%
+100	​	​	​	​	3.3	​	​	​	​	3.2	​
+50	​	​	​	​	1.6	​	​	​	​	1.6	​
(50)	​	​	​	​	(1.7)	​	​	​	​	(1.6)	​
(100)	​	​	​	​	(3.0)	​	​	​	​	(3.2)	​

​

​

The table above shows the effects of a simulation which estimates the effect of a gradual and immediate sustained parallel shift in the yield curve of −100, −50, +50, +100 and +200 basis points in market interest rates over a 12-month period on our net interest income.

​

Currently, our interest rate profile, assuming a constant balance sheet, is such that we project net interest income will benefit from higher interest rates as our assets would reprice faster and to a greater degree than our liabilities, while in the case of lower interest rates, our assets would reprice downward and to a greater degree than our liabilities. Other factors such as changes in balance sheet composition or deposit rate behavior could result in a change in repricing sensitivity.

​

Under the static balance sheet forecast as of June 30, 2026, our net interest income sensitivity profile is relatively unchanged in higher  and lower interest rate scenarios compared to similar forecasts as of December 31, 2025. The sensitivity outcomes described above is primarily due to the impact of holding a similar repricing mix as of June 30, 2026 as compared with December 31, 2025.

​

The comparisons above provide insight into the potential effects of changes in interest rates on net interest income. The Company believes that its approach to interest rate risk has appropriately considered its susceptibility to both rising and falling rates and has adopted strategies which minimize the impact of such risks.

​

We also have longer term interest rate risk exposures which may not be appropriately measured by net interest income simulation analysis. We use market value of equity (“MVE”) sensitivity analysis to study the impact of long-term cash flows on earnings and capital. MVE involves discounting present values of all cash flows of on-balance sheet and off-balance sheet items under different interest rate scenarios. The discounted present value of all cash flows represents our MVE. MVE analysis requires modifying the expected cash flows in each interest rate scenario, which will impact the discounted present value. The amount of base case measurement and its sensitivity to shifts in the yield curve allow management to measure longer term repricing option risk in the balance sheet.

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Limitations of Market Risk Measures

​

The results of our simulation analyses are hypothetical, and a variety of factors might cause actual results to differ substantially from what is depicted. For example, if the timing and magnitude of interest rate changes differ from those projected, our net interest income might vary significantly. Non parallel yield curve shifts such as a flattening or steepening of the yield curve or changes in interest rate spreads would also cause our net interest income to be different from that depicted. An increasing interest rate environment could reduce projected net interest income if deposits and other short-term liabilities re-price faster than expected or faster than our assets re-price. Actual results could differ from those projected if we grow assets and liabilities faster or slower than estimated if we experience a net outflow of deposits or if our mix of assets and liabilities otherwise changes. For example, while we maintain relatively high levels of liquidity, a faster than expected withdrawal of deposits out of the bank may cause us to seek higher cost sources of funding. Actual results could also differ from those projected if we experience substantially different prepayment speeds in our loan portfolio than those assumed in the simulation analyses. Finally, these simulation results do not consider all the actions that we may undertake in response to potential or actual changes in interest rates, such as changes to our loan, investment, deposit, funding or hedging strategies.

​

Market Risk Governance

​

We seek to achieve consistent growth in net interest income and capital while managing volatility arising from changes in market interest rates. The objective of our interest rate risk management process is to increase net interest income while operating within acceptable limits established for interest rate risk and maintaining adequate levels of funding and liquidity.

​

To manage the impact on net interest income, we manage our exposure to changes in interest rates through our asset and liability management activities within guidelines established by our ALCO and approved by our board of directors. The ALCO has the responsibility for approving and ensuring compliance with the ALCO management policies, including interest rate risk exposures. The objective of our interest rate risk management process is to maximize net interest income while operating within acceptable limits established for interest rate risk and maintaining adequate levels of funding and liquidity.

​

Through review and oversight by the ALCO, we attempt to engage in strategies that neutralize interest rate risk as much as possible. Our use of derivative financial instruments, as detailed in “Note 10. Derivative Financial Instruments” to the unaudited interim consolidated financial statements, has generally been limited. This is due to natural on balance sheet hedges arising out of offsetting interest rate exposures from loans and investment securities with deposits and other interest-bearing liabilities. In particular, the investment securities portfolio is utilized to manage the interest rate exposure and sensitivity to within the guidelines and limits established by the ALCO. We utilize natural and offsetting economic hedges in an effort to reduce the need to employ off-balance sheet derivative financial instruments to hedge interest rate risk exposures. Expected movements in interest rates are also considered in managing interest rate risk. Thus, as interest rates change, we may use different techniques to manage interest rate risk.

​

Management uses the results of its various simulation analyses to formulate strategies to achieve a desired risk profile within the parameters of our capital and liquidity guidelines.

​

Operational Risk

​

Operational risk is the risk of loss arising from inadequate or failed processes, people or systems, external events (such as natural disasters), or compliance, reputational or legal matters, including the risk of loss resulting from fraud, litigation and breaches in data security. Operational risk is inherent in all of our business ventures and the management of that risk is important to the achievement of our objectives. We have a framework in place that includes the reporting and assessment of any operational risk events, and the assessment of our mitigating strategies within our key business lines. This framework is implemented through our policies, processes and reporting requirements. We measure and report operational risk using the seven operational risk event types projected by the Basel Committee on Banking Supervision in Basel II: (1) external fraud; (2) internal fraud; (3) employment practices and workplace safety; (4) clients, products and business practices; (5) damage to physical assets; (6) business disruption and system failures; and (7) execution, delivery and process management. Our operational risk review process is also a core part of our assessment of material new products or activities.

​

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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

​

See “Part I, Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations — Risk Governance and Quantitative and Qualitative Disclosures About Market Risk.”

​

ITEM 4. CONTROLS AND PROCEDURES

​

Disclosure Controls and Procedures

​

The Company’s management, including the Chief Executive Officer and Chief Financial Officer, conducted an evaluation of the effectiveness of the Company’s disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) as of June 30, 2026. The Company’s disclosure controls and procedures are designed to ensure that information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to the Company’s management, including the Company’s Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosure. Based on this evaluation, the Company’s Chief Executive Officer and Chief Financial Officer concluded that the Company’s disclosure controls and procedures were effective as of June 30, 2026.

​

Changes in Internal Control over Financial Reporting

​

There were no changes in the Company’s internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that occurred during the quarter ended June 30, 2026 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

​

PART II – OTHER INFORMATION

​

ITEM 1. LEGAL PROCEEDINGS

​

The Company operates in a highly regulated environment. From time to time, the Company is party to various litigation matters incidental to the conduct of our business. We are not presently party to any legal proceedings the resolution of which we believe would have a material adverse effect on our business, prospects, financial condition, liquidity, results of operation, cash flows or capital levels.

​

ITEM 1A. RISK FACTORS

​

Item 1A of Part I of the Company’s Annual Report on Form 10-K for the year ended December 31, 2025, filed with the SEC on February 27, 2026 contains a discussion of our risk factors. Except as set forth in this Item 1A and to the extent that additional factual information disclosed in this Quarterly Report on Form 10-Q relates to such risk factors, there are no material changes from the risk factors as disclosed in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025.

​

Risks Related to the Pending Mergers and First Hawaiian Following Completion of the Mergers

​

First Hawaiian and TriCo have incurred and are expected to incur substantial costs related to the mergers.

First Hawaiian and TriCo have incurred and expect to incur a number of significant non-recurring costs associated with the mergers. These costs include legal, financial advisory, accounting, consulting and other advisory fees, severance/employee benefit-related costs, public company filing fees and other regulatory fees, printing and mailing costs and other related costs. Some of these costs are payable by either First Hawaiian or TriCo regardless of whether or not the mergers are completed.

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Combining First Hawaiian and TriCo may be more difficult, costly or time-consuming than expected, and First Hawaiian and TriCo may fail to realize the anticipated strategic benefits of the mergers.

The success of the mergers will depend, in part, on the ability to realize the anticipated strategic and financial benefits from combining the businesses of First Hawaiian and TriCo, including geographic expansion, the enhanced growth opportunities and broader product capabilities of the combined franchise. To realize the anticipated benefits from the mergers, following completion of the mergers, First Hawaiian must successfully integrate the businesses of First Hawaiian and TriCo in a manner that permits those benefits to be realized without adversely affecting current revenues and future growth. If First Hawaiian and TriCo are not able to successfully achieve these objectives, the anticipated benefits of the mergers may not be realized fully or at all or may take longer to realize than expected. In addition, any cost savings of the mergers could be less than anticipated, and integration may result in additional and unforeseen expenses.

First Hawaiian and TriCo have operated and, until the effective time, must continue to operate, independently. It is possible that the integration process could result in the loss of key employees, diminished competitive position, loan and deposit attrition, the disruption of each company’s ongoing businesses or inconsistencies in standards, controls, procedures and policies that adversely affect the companies’ ability to maintain relationships with clients, customers, depositors and employees or to achieve the anticipated benefits of the mergers. The conversion and migration of data, applications, systems and third-party interfaces could also be delayed or unsuccessful and could result in service interruptions, processing errors, data loss, cybersecurity or data-protection incidents, customer disruption or additional costs. Integration efforts between the companies may also divert management attention and resources. These integration matters could have an adverse effect on each of First Hawaiian and TriCo while the mergers are pending and on First Hawaiian for an undetermined period following completion of the mergers.

An inability to realize the full extent of the anticipated benefits of the mergers and the other transactions contemplated by the merger agreement, as well as any delays encountered in the integration process, could have an adverse effect upon the revenues, levels of expenses and operating results of First Hawaiian following the completion of the mergers, which may adversely affect the value of the common stock of First Hawaiian following the completion of the mergers.

The future results of First Hawaiian following the completion of the mergers may suffer if First Hawaiian does not effectively manage its expanded operations.

Following the mergers, the size and geographic scope of the business of First Hawaiian will increase materially, including through the addition of significant branch-based retail and commercial banking operations in Northern and Central California. First Hawaiian’s future success will depend, in part, upon its ability to manage this expanded business, which may pose challenges for management, including challenges related to the management and monitoring of new operations and associated increased costs and complexity. First Hawaiian will also have greater exposure to economic, competitive, credit and other conditions affecting California. TriCo’s loan portfolio includes a substantial concentration in commercial real estate and multifamily loans, and the acquisition will increase First Hawaiian’s exposure to California real estate markets, collateral values and economic conditions. First Hawaiian may encounter challenges in maintaining TriCo’s local customer relationships and operating model while integrating the combined organization. First Hawaiian may also face increased compliance, risk-management, internal-control and supervisory complexity because of the increased size, geographic scope and complexity of its operations. There can be no assurance that First Hawaiian will be successful or that it will realize the expected operating efficiencies, revenue enhancement or other benefits currently anticipated from the mergers.

First Hawaiian may be unable to retain legacy First Hawaiian or TriCo personnel successfully after the completion of the mergers.

The success of the mergers will depend in part on First Hawaiian’s ability to retain the talent and dedication of key employees currently employed by First Hawaiian and TriCo. It is possible that these employees may decide not to remain with the applicable company while the mergers are pending or after the completion of the mergers. If First Hawaiian and TriCo are unable to retain key employees, including management, who are critical to the successful integration and future operations of First Hawaiian following the mergers, First Hawaiian and TriCo could face disruptions in their operations, loss of existing customers, loss of key information, expertise or know-how and unanticipated additional recruitment costs. In addition, following the completion of the mergers, if key employees terminate their employment, First Hawaiian’s business activities following the mergers may be adversely affected, and management’s attention may be diverted from successfully hiring suitable replacements, all of which may cause First Hawaiian’s business following the mergers to suffer. First Hawaiian and TriCo also may not be able to locate or retain suitable replacements for key employees.

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Regulatory approvals may not be received, may take longer than expected, or may impose conditions that are not presently anticipated or that could have an adverse effect on First Hawaiian following the mergers.

Before the mergers and the bank merger may be completed, various approvals, consents, waivers, and/or non-objections must be obtained from the Federal Reserve Board, the FDIC, the Hawaii DFI, the California DFPI and other regulatory authorities in the United States. These approvals could be delayed or not obtained at all, including due to an adverse development in either party’s regulatory standing or in any other factors considered by regulators when granting such approvals; governmental, political or community group inquiries, investigations or opposition; or changes in legislation or the political environment generally.

The approvals that are granted may impose terms and conditions, limitations, obligations or costs, or place restrictions on the conduct of First Hawaiian’s business following the mergers or require changes to the terms of the transactions contemplated by the merger agreement. There can be no assurance that regulators will not impose any such conditions, limitations, obligations or restrictions and that such conditions, limitations, obligations or restrictions will not have the effect of delaying the completion of any of the transactions contemplated by the merger agreement, imposing additional material costs on or materially limiting the revenues of First Hawaiian following the mergers or otherwise reducing the anticipated benefits of the mergers if the mergers were consummated successfully within the expected time frame. In addition, there can be no assurance that any such conditions, terms, obligations or restrictions will not result in the delay or abandonment of the mergers. Additionally, the completion of the mergers is conditioned on the absence of certain orders, injunctions or decrees by any court or governmental entity of competent jurisdiction that would prohibit or make illegal the completion of any of the transactions contemplated by the merger agreement.

In addition, neither First Hawaiian nor TriCo, nor any of their respective subsidiaries, is required or, without the written consent of the other party, permitted, to take any action, commit to take any action or agree to any condition or restriction in connection with obtaining the required permits, consents, approvals and authorizations of governmental entities or regulatory agencies that would reasonably be expected to have, either individually or in the aggregate, a material adverse effect on First Hawaiian as the surviving entity and its subsidiaries, taken as a whole, after giving effect to the mergers and the bank merger (a “materially burdensome regulatory condition”).

If the requisite approvals of First Hawaiian stockholders or TriCo shareholders are not obtained, or other conditions to the closing of the mergers are not met, the merger agreement may be terminated in accordance with its terms and the mergers may not be completed.

The merger agreement is subject to a number of conditions that must be fulfilled in order to complete the mergers. Those conditions include: (i) the approval by First Hawaiian stockholders of the First Hawaiian share issuance proposal and the approval by TriCo shareholders of the TriCo merger proposal; (ii) authorization for listing on Nasdaq of the shares of First Hawaiian common stock to be issued in the merger; (iii) the receipt of requisite regulatory approvals, including approvals, waivers or non-objections, as applicable, from the Federal Reserve Board, the FDIC, the Hawaii DFI and the California DFPI, and the expiration or termination of all statutory waiting periods in respect thereof, without any such requisite regulatory approval having resulted in the imposition of any materially burdensome regulatory condition; (iv) effectiveness of First Hawaiian’s registration statement on Form S-4 relating to the mergers; and (v) the absence of any order, injunction or decree issued by any court or agency of competent jurisdiction or other law preventing or making illegal the completion of the mergers, the bank merger or any of the other transactions contemplated by the merger agreement. Each party’s obligation to complete the mergers is also subject to certain additional customary conditions, including (a) subject to applicable materiality standards, the accuracy of the representations and warranties of the other party, (b) the performance in all material respects by the other party of its obligations under the merger agreement and (c) the receipt by each party of an opinion from its counsel to the effect that the mergers, taken together, will qualify as a reorganization within the meaning of Section 368(a) of the Code. These conditions may not be fulfilled in a timely manner or at all, and, accordingly, the mergers may not be completed. In addition, the parties can mutually decide to terminate the merger agreement at any time, before or after the requisite First Hawaiian stockholder approval and TriCo shareholder approval, or First Hawaiian or TriCo may elect to terminate the merger agreement in certain other circumstances.

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Failure to complete the mergers could negatively impact First Hawaiian.

If the mergers are not completed for any reason, including as a result of First Hawaiian stockholders’ failure to approve the First Hawaiian share issuance proposal or TriCo shareholders’ failure to approve the TriCo merger proposal, there may be various adverse consequences and First Hawaiian may experience negative reactions from the financial markets and from its customers and employees. For example, First Hawaiian’s business may be adversely impacted by the failure to pursue other beneficial opportunities due to the focus of management on the mergers, without realizing any of the anticipated benefits of completing the mergers. Additionally, if the merger agreement is terminated, the market price of First Hawaiian common stock could decline to the extent that current market prices reflect a market assumption that the mergers will be beneficial and will be completed. First Hawaiian also could be subject to litigation related to any failure to complete the mergers or to proceedings commenced against First Hawaiian to perform its obligations under the merger agreement. If the merger agreement is terminated under certain circumstances, either First Hawaiian or TriCo may be required to pay a termination fee of $80 million to the other party.

First Hawaiian and TriCo will be subject to business uncertainties and contractual restrictions while the mergers are pending.

Uncertainty about the effect of the mergers may have an adverse effect on First Hawaiian and TriCo. These uncertainties may impair First Hawaiian’s or TriCo’s ability to attract, retain and motivate key personnel and other employees until the mergers are completed. These uncertainties may also cause customers, suppliers, business partners and others that deal with First Hawaiian or TriCo to seek alternative relationships with third parties, seek to alter their business relationships with First Hawaiian or TriCo or fail to extend existing relationships with First Hawaiian or TriCo. In addition, subject to certain exceptions, First Hawaiian and TriCo have each agreed to operate its business in the ordinary course in all material respects and to refrain from taking certain actions that may adversely affect its ability to consummate the transactions contemplated by the merger agreement on a timely basis without the consent of the other party. These restrictions may prevent First Hawaiian and/or TriCo from pursuing attractive business opportunities that may arise prior to the completion of the mergers.

The merger agreement limits First Hawaiian’s ability to pursue alternatives to the mergers and may discourage other companies from trying to acquire First Hawaiian.

The merger agreement contains “no shop” covenants that restrict each of First Hawaiian’s and TriCo’s ability to, directly or indirectly, among other things, initiate, solicit, knowingly encourage or knowingly facilitate inquiries or proposals with respect to, or, subject to certain exceptions generally related to the exercise of fiduciary duties by each respective board of directors, engage or participate in any negotiations concerning, or provide any confidential or nonpublic information or data relating to, or have or participate in any discussions with any person relating to, any alternative acquisition proposals, subject to certain exceptions. These provisions may discourage a potential third-party acquirer that might have an interest in acquiring all or a significant part of First Hawaiian or TriCo from considering or making that acquisition proposal.

The fixed exchange ratio and the issuance of a substantial number of shares of First Hawaiian common stock will dilute existing First Hawaiian stockholders and may adversely affect the market price of First Hawaiian common stock.

The fixed exchange ratio and the issuance of a substantial number of shares of First Hawaiian common stock will dilute existing First Hawaiian stockholders and may adversely affect the market price of First Hawaiian common stock.

Under the merger agreement, each eligible share of TriCo common stock will be converted into 2.095 shares of First Hawaiian common stock. Because the exchange ratio is fixed, the number of shares of First Hawaiian common stock to be issued in the merger will not be adjusted for changes in the market price of First Hawaiian common stock or TriCo common stock. Changes in the relative market prices or business performance of First Hawaiian and TriCo before the effective time could therefore make the economic terms of the mergers less favorable to First Hawaiian and its existing stockholders than they were on the date the merger agreement was signed.

Upon completion of the mergers, existing First Hawaiian stockholders and former TriCo shareholders are expected to own approximately 65% and 35%, respectively, of the outstanding shares of First Hawaiian common stock. The actual ownership percentages will depend on the number of shares of First Hawaiian common stock and TriCo common stock outstanding and the number and treatment of applicable TriCo equity awards at the effective time. The issuance of the merger consideration will dilute the relative voting and economic interests of existing First Hawaiian stockholders and may result in fluctuations in, or a decrease in, the market price of First Hawaiian common stock.

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The mergers may result in significant goodwill and other intangible assets that could become impaired and adversely affect First Hawaiian’s results of operations.

In accordance with applicable accounting standards, First Hawaiian will account for the mergers as a business combination using the acquisition method of accounting. First Hawaiian will allocate the purchase consideration to the assets acquired and liabilities assumed based on their estimated fair values as of the acquisition date, with the excess recorded as goodwill. The acquisition-date valuations of the assets acquired and liabilities assumed—including loans, securities, deposits, borrowings, identifiable intangible assets and related tax items—will be based on estimates and assumptions and may change as additional information becomes available during the applicable measurement period. Changes in those valuations could affect the amount of goodwill and other assets and liabilities recorded, the amount and timing of accretion, amortization and credit-loss expense and First Hawaiian’s future financial condition and results of operations.

First Hawaiian expects to recognize goodwill and other intangible assets, including a core deposit intangible, in connection with the mergers. Goodwill will not be amortized but will be tested for impairment at least annually and upon the occurrence of events or changes in circumstances indicating that impairment may have occurred. Finite-lived intangible assets, including the core deposit intangible, will be amortized over their estimated useful lives and evaluated for impairment when events or changes in circumstances indicate that their carrying amounts may not be recoverable. Amortization expense and any impairment charge could adversely affect First Hawaiian’s results of operations and book value.

An impairment could result from, among other things, deterioration in the performance of the acquired business, deterioration in economic or market conditions in California or First Hawaiian’s other markets, adverse changes in laws or regulations affecting the banking industry, a decline in First Hawaiian’s stock price or the occurrence of a triggering event that compounds negative financial results, or other events or circumstances that reduce the estimated fair value of the applicable reporting unit or asset.

Stockholder or shareholder litigation related to the mergers could prevent or delay the completion of the mergers, result in the payment of damages or otherwise negatively impact the business and operations of First Hawaiian and TriCo.

Stockholders of First Hawaiian and/or shareholders of TriCo may file lawsuits against First Hawaiian, TriCo and/or the directors or officers of either company in connection with the mergers. One of the conditions to the closing is that no order, injunction or decree issued by any court or agency of competent jurisdiction or other law preventing or making illegal the consummation of the mergers, the bank merger or any of the other transactions contemplated by the merger agreement be in effect. If any plaintiff were successful in obtaining an injunction prohibiting First Hawaiian or TriCo defendants from completing the mergers, the bank merger or any of the other transactions contemplated by the merger agreement, then such injunction may delay or prevent the consummation of the mergers and could result in significant costs to First Hawaiian and/or TriCo, including any cost associated with the indemnification of directors and officers of each company. First Hawaiian and TriCo may incur costs in connection with the defense or settlement of any stockholder or shareholder lawsuits filed in connection with the mergers, the bank merger or any other transactions contemplated by the merger agreement. Such litigation could have an adverse effect on the financial condition and results of operations of First Hawaiian and could prevent or delay the completion of the mergers.

​

ITEM 5. OTHER INFORMATION

​

During the three months ended June 30, 2026, none of the Company’s directors or officers (as defined in Rule 16a-1(f) under the Exchange Act) adopted or terminated any contract, instruction or written plan for the purchase or sale of the Company’s securities that was intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) or any “non-Rule 10b5-1 trading arrangement,” as defined in Item 408(c) of Regulation S-K.

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​

ITEM 6. EXHIBITS

​

A list of exhibits to this Form 10-Q is set forth on the Exhibit Index and is incorporated herein by reference.

​

​

Exhibit Index

​

​	​
Exhibit Number	​
​	​
2.1	Agreement and Plan of Reorganization and Merger, dated as of July 12, 2026, by and among First Hawaiian, Inc., TriCo Bancshares and Horizon Merger Sub, Inc. (incorporated by reference to Exhibit 2.1 of the Registrant’s Current Report on Form 8-K filed on July 15, 2026* (File No. 001-14585))
​	​
3.1	Second Amended and Restated Certificate of Incorporation (incorporated by reference to Exhibit 3.1 to the Current Report on Form 8-K filed by First Hawaiian, Inc. on August 10, 2016 (File No. 001-14585))
​	​
3.2	Certificate of Amendment to Amended and Restated Certificate of Incorporation (incorporated by reference to Exhibit 3.1(a) to the Quarterly Report on Form 10-Q filed by First Hawaiian, Inc. on April 27, 2018 (File No. 001-14585))
​	​
3.3	Fifth Amended and Restated Bylaws of First Hawaiian, Inc., effective as of April 22, 2026 (incorporated by reference to Exhibit 3.1 to the Current Report on Form 8-K filed by First Hawaiian, Inc. on April 24, 2026) (File No. 001-14585))
​	​
10.1	Form of Voting and Support Agreement (incorporated by reference to Exhibit 10.1 of the Registrant’s Current Report on Form 8-K filed on July 15, 2026 (File No. 001-14585))
​	​
31.1	Certification of Chief Executive Officer Pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934, as Amended, Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
​	​
31.2	Certification of Chief Financial Officer Pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934, as Amended, Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
​	​
32.1	Certification of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
​	​
32.2	Certification of Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
​	​
101.INS	XBRL Instance Document – the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document
​	​
101.SCH	Inline XBRL Taxonomy Extension Schema Document
​	​
101.CAL	Inline XBRL Taxonomy Extension Calculation Linkbase Document
​	​
101.LAB	Inline XBRL Taxonomy Extension Label Linkbase Document
​	​
101.PRE	Inline XBRL Taxonomy Extension Presentation Linkbase Document
​	​
101.DEF	Inline XBRL Taxonomy Extension Definition Linkbase Document
​	​
104	Cover Page Interactive Data File – the cover page XBRL tags are embedded within the Inline XBRL document (included in Exhibit 101)

​

* Schedules have been omitted pursuant to Item 601(a)(5) of Regulation S-K. A copy of any omitted schedule will be furnished supplementally to the SEC upon request; provided, however, that the parties may request confidential treatment pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended, for any document so furnished.

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Signatures

​

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

​

		​ ​ ​ ​	​ ​ ​ ​
Date: August 3, 2026		​	First Hawaiian, Inc.
​	​	​	​
​	​	​	​
​	​	​	​
​	By:	​	/s/ Robert S. Harrison
​	​	​	Robert S. Harrison Chairman of the Board, President and Chief Executive Officer (Principal Executive Officer)
​	​	​	​
​	​	​	​
​	​	​	​
​	By:	​	/s/ James M. Moses
​	​	​	James M. Moses Vice Chairman and Chief Financial Officer

​

​

​

​

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