Thank you, Kevin, and thank you, everyone, for joining us as we review our financial results for the fourth quarter of 2025. With me today are Bob Harrison, Chairman, President, and CEO; Jamie Moses, Chief Financial Officer; and Lea Nakamura, Chief Risk Officer.

We have prepared a slide presentation that we will refer to in our remarks today. The presentation is available for downloading and viewing on our website at fhb.com in the Investor Relations section.

During today's call, we will be making forward-looking statements, please refer to slide one for our safe harbor statement. We may also discuss certain non-GAAP financial measures.

The appendix to this presentation contains reconciliations of these non-GAAP financial measurements to the most directly comparable GAAP measurements. Now, I'll turn the call over to Bob.

Aloha, everyone. Thank you for joining us today.

I'll start with some local economic highlights. The state unemployment rate continued to fall and was at 2.2% in November compared to the national unemployment rate of 4.5%.

Through November, total visitor arrivals were down 0.2% compared to last year, primarily due to fewer visitors from Canada. Japan remained a bright spot, up 2.8% on a year-to-date basis.

However, year-to-date spending through November was $19.6 billion, up about 6% compared to the same period of last year. Housing market remained stable, with the median single-family home price on Oahu in December was $1.1 million, up 4.3% from the prior year.

The median condo sales price on Oahu in December was $512,000, down 5.2% from last year. Turning to slide two, we had another strong quarter.

Our NIM expanded, net interest income grew, expenses were well-contained, and credit quality remained strong. Our profitability measures remained solid, with return on average tangible equity at 15.8% in the fourth quarter and 16.3% for the full year.

The effective tax rate in the fourth quarter was 24.8%. This was due to the reversal of a previously accrued tax benefit.

We expect the effective tax rate to return to about 23.2% going forward. Turning to slide three, balance sheet remained solid.

We continue to be well-capitalized with ample liquidity. We had good growth in C&I loans as well as retail and commercial deposits.

During the quarter, we repurchased about 1 million shares, which used the remaining $26 million of our $100 million purchase authorization for 2025. Our new stock repurchase authorization is for $250 million, and unlike prior authorization, the current authorization is not for a specific time frame.

Turning to slide four, total loans grew $183 million in the quarter, or 5.2% on an annualized basis. We had good growth in C&I loans, primarily due to draws on existing lines as well as the addition of a new auto dealer customer.

The CRE growth and decline in construction was primarily due to a couple construction deals that were converted from construction to CRE. Outside of those conversions, balances in both portfolios were relatively flat.

Now, I'll turn it over to Jamie.

Thanks, Bob. Turning to slide five, we saw good growth in retail and commercial deposits, while a lot of the public operating deposits that came in during the third quarter flowed out in the fourth quarter, as we expected.

Retail and commercial deposits increased $233 million, while public deposits declined by $447 million. That dynamic resulted in a net increase in deposits of $214 million in the fourth quarter.

The total cost of deposits fell by 9 basis points to 1.29%, and our non-interest-bearing deposit ratio was 32%. On slide six, net interest income was $170.3 million, $1 million higher than the prior quarter.

The NIM in the fourth quarter was 3.21%, up 2 basis points compared to the prior quarter. The increase in the margin was primarily driven by lower deposit costs and the full-quarter benefit of the borrowing that matured in September, partially offset by lower loan yields.

The exit NIM for the month of December was 3.21%. Turning to slide seven, non-interest income was $55.6 million.

Non-interest expense in the fourth quarter was $125.1 million. Now, I'll turn it over to Lea.

Thank you, Jamie. Moving to slide eight, the bank continues to maintain its strong credit performance and healthy credit metrics.

Credit risk remains low, stable, and well within our expectations. Overall, we're not observing any broad signs of weakness across either the consumer or commercial books.

Classified assets decreased by 7 basis points, while special mention assets increased by 16 basis points. Quarter-to-date net charge-offs were $5 million, or 14 basis points of total loans and leases.

Year-to-date net charge-offs were $16.3 million. Our annual net charge-off rate was 11 basis points, unchanged from the third quarter.

Non-performing assets and 90-day past due loans were 31 basis points of total loans and leases at the end of the fourth quarter, up 5 basis points from the prior quarter, primarily driven by a single relationship. Moving to slide nine, we show our fourth quarter allowance for credit losses broken out by disclosure segments.

The bank recorded a $7.7 million provision in the fourth quarter. The asset ACL increased by $3.2 million to $168.5 million, with coverage increasing to 118 basis points of total loans and leases.

We believe that we continue to be conservatively reserved and ready for a wide range of outcomes. Now, I'll turn it back over to Bob.

Thanks, Lea. Turning to slide 10, we have summarized our current full-year 2026 outlook for some of our key earnings drivers.

Starting with loans, we expect full-year loan growth to be 3% to 4% range. The growth will be driven primarily by CRE and C&I loans.

We anticipate that the full-year NIM will be in the 3.16% to 3.18% range. We continue to expect tailwinds from fixed asset repricing, but additional Fed rate cuts and a decreasing deposit beta will remain headwinds.

We expect non-interest income to be stable and to come in at about $220 million for the year. Finally, we expect expenses to be about $520 million in 2026.

That concludes our prepared remarks, and now we would be happy to take your questions.

All right. Good morning, everybody.

Morning, Dave.

Morning, Dave.

I wanted to start on the loan growth. It was really encouraging to see some of the trends that you guys had and especially to see the C&I growth.

I was hoping to maybe just get some color on, I guess, first of all, how pipelines are shaping up and how much of the growth in C&I was increasing utilization versus new relationship growth. Just kind of curious some of the underlying trends you're seeing there.

Then just some commentary, too, on mainland versus Hawaii as well.

Sure. Great question.

Thanks, Dave. This is Bob.

On the loan growth, when we looked at it, it really was more as far as what happened in the quarter wasn't quite what we thought it would be. We had some payoffs in the CRE portfolio that we had anticipated to come in later, which is why we didn't quite hit the number we had talked about on the third quarter call.

Having said that, it really was pretty broad-based in local, primarily, and some mainland draws under lines, and then a new dealer relationship helped out as well. We'll see more of that, I think, in the quarters to come.

As we look forward, what we're really looking towards is, as far as the pipeline of multi-family is still there. We're very, very busy.

Of course, when you book those deals, it will take a while for them to fund. We're still a little bit outrunning the payoffs that happened in that gap period we talked about on the last call of SVB kind of slowing down production for a while a couple years ago.

That's behind us mostly in the first half of the year, and we expect the second half of the year to start to see more normalized growth in the CRE on the mainland. We are still seeing activity here in Hawaii.

A good amount of the activity this past quarter in Q4 was Hawaii-based, but not exclusively. Does that cover what you were thinking about?

That's extremely helpful. The payoffs and paydowns have been a real headwind in the industry.

Could you maybe touch on what led to maybe some of the payoffs and paydowns coming sooner than expected? As you think about your outlook that you guys have laid out for loan growth, does that contemplate continuation of payoffs and paydowns?

Or is that a risk that y'all are concerned about? Just kind of curious your thoughts on that side.

Sure. I think there's two pieces to that.

The first piece are the payoffs coming sooner than we expected. They have been a bit this year.

I think all the permanent lenders are just as hungry for assets as the banks are. They're coming in maybe a little bit earlier than normal, not like we saw a few years ago when they were coming in before properties were even completed construction, but maybe before full stabilization, you're seeing permanent lenders come in on some of those multi-family projects.

That's kind of a moving up the calendar a bit, but not really a big difference. The paydowns in the industry, as we talked about before, I think we're in that belly of the part of the curve where deals didn't get done a couple years ago after the concerns about liquidity with SVB, First Republic, Signature, et cetera.

We think that should be kind of burning through in the first half of this year, and the back half of the year, that should get better. There is still a high desire for assets out there and of good quality assets, which is the ones we like to fund.

People are looking for that.

Okay. Then maybe just shifted to the other side of the balance sheet.

Core deposit trends have been really good. Y'all already have a low cost of deposits, and you're continuing to take it down further.

A lot of the NIM expansion that we've seen has come from reduction in funding costs. I know your margin guide has, I think, two cuts in there.

As you think about margin expansion going forward, is [unclear] mostly on the funding cost side and the back [unclear] increasing really the tailwind there, and just how has [unclear] been to reducing deposit costs thus far? Have you seen any attrition or much pushback as you've worked through that?

Dave, you kind of cut out there a little bit, but I'm going to answer the question as I think you asked it, and then you can let me know if I missed something for you. I think the margin guide reflects both an ability to continue to cut deposit rates when the Fed cuts, as well as that fixed asset repricing that we continue to talk about, and we've seen those trends over time.

We think that beta is probably going to be a little bit lower go forward than where we were before. Fourth quarter, interest-bearing deposit beta around 35%.

We would anticipate with two rate cuts that the interest-bearing deposit beta on that somewhere between 30% and 35%. Less than where we've been, but still pretty healthy for now, at least.

Then on the fixed asset repricing side, we kind of summarize that for you. Inclusive of all of the paydowns in the securities portfolio as well as fixed-rate cash flows coming out of the loan portfolio, we think that's about $400 million a quarter or so with about 150 basis point repricing accretion on that.

All of those things suppose a particular set of loan growth, and obviously, the way that the pace and timing of Fed rate cuts will impact that as well. That's kind of where we're at on the NIM.

That's great. Thanks.

Hey, good morning.

Morning.

Just to start and just to clarify, the $385 million of fixed cash flows, that's on a quarterly basis, kind of checks with I think we've talked about $1.5 billion in the past on an annual basis?

That was the fourth quarter, to be very specific, Andrew. Yeah.

We didn't put that in the deck. We should have clarified that was a quarter and not some of the annual assumptions we had in there in the rest of that page.

Thank you for clarifying.

Yep. No worries.

Thank you, guys. Could you maybe help me just bifurcating that out a little bit?

I think we have a good sense of relative dollars on either side that you've given, but just I'd want to talk about maybe spread competition you're seeing for new assets today, how much in marginal pick up would you expect from securities cash flow versus where loans are running off versus where you're kind of able to reprice at today. Just we've heard a lot on competition recently from other banks, and curious if you're seeing the same thing on new loan growth.

I would say that there is some spread competition. We've definitely seen that.

We still think it's 180 to 200 basis points on the securities portfolio, and that's pretty fixed. That's pretty well known.

Again, that's about $600 million for the next year, and then about $1 billion on the loan portfolio. A little bit less than that, maybe 100 basis points, somewhere in 80 to 100 basis points pick up on the loans versus the 200 or so on the securities.

Yeah. Okay.

Then just on the full-year loan growth guide of 3% to 4%, it sounds like you might expect some payoffs maybe in the first part of the year, but then better on the second half of the year. I guess the question is, is it fair to think you could start at the low end or even below the guide in terms of loan growth, and then it picks up throughout the year?

Or should we just think about it as kind of ratable 3% to 4% throughout the year?

I think it's not so much more payoffs in the first half of the year. I think it's a normal payoff activity.

There's just were fewer loans that were done a year and a half, 2 years ago that are going to be funding now. It's really less of the new production from that multi-family portfolio, and that should be through that in the back half of the year.

Fair assumption that it should be probably lower in the first half and a pick up in the second half.

Great. Thank you, guys, for taking the questions.

Hello. To clarify on your deposit beta expectations for 30% to 35% after two cuts.

Is the 40, if my calculation is correct, I think I see 47% interest-bearing deposit beta for fourth quarter. Starting in the first or second quarter, does that step down to 30% to 35%?

Is that the right way to interpret?

I think that's the right way to interpret it is that the interest-bearing deposit beta is going to step down over time. I think we're okay with, with two rate cuts, it should continue to be close to what we've had in the past.

That goes to we've got a very low deposit cost, at some point, you just can't keep cutting rates, even though rates are coming down.

Yes, definitely. Thanks for that.

For the expenses, you've had, I guess, 2 years of flattish expense growth. Looks like it's going up about 4% or 5%.

Is this just a normalization of expenses, or are you hiring a little more in 2026, or it's a pretty specific number for the expense guide. How should we think about potentially you beat 520 or coming in above?

How should we think about your expense trajectory? Thanks.

Great question, Janet. Let me kind of back up a little bit and tell you one of the primary reasons why we've been able to hold costs down in the last year or two has been we're still going out trying to hire people, just to answer that part of your question.

It's difficult to find the people we want to hire, we haven't been able to staff all the people we want. The reason for our good expense control over the last couple years has been some of the investments we made in the past in technology enabled us to exit higher-cost delivery whatever it was, higher-cost ways of doing business as we've brought things in-house.

That's really been a huge help for us over the last couple years as we've terminated expensive vendor relationships and been able to take that in-house. Our rate of growth has been increasing over the last couple years, but it's been held down by our ability to reduce costs in other areas of our expense base.

As we go forward into 2026, we see that most of that we've captured, although there'll still be a little bit of it, and we're going back to a little bit more of a normalized expense growth number.

Got it. Thank you.

Hi. Good morning.

Thanks for the question. On capital return in the buyback, you've been pretty diligent with executing the $100 million you'd had for 2025, and you noted the 250 doesn't have any time period associated with it.

I'm just wondering your appetite for continuing on at a similar pace here and how you're thinking through that versus some other maybe M&A aspects of the capital path. Thank you.

Thanks, Kelly. I think that we have a pretty good appetite to continue the pace that we had set last year.

I think there always will be other considerations as well. There will be potentially some opportunism baked into the program that we've set out.

We haven't really made any firm commitments, I would say, internally, even around exactly the pace and timing of the share buyback, other than that we recognize we have plenty of capital to do any number of things with. I think that, obviously, organic growth is what we're really looking for, and then the share buyback is a way for us to return some of that capital.

I think it's kind of a combination of all the things that we are looking at, and that will determine that sort of pace.

Just to add to Jamie's comments, we've messaged for a couple years now a 12% CET1 target, and we're certainly well above that at 13% plus. I think this larger buyback capacity is just an acknowledgment of that and just gives us flexibility to bring it back closer to what we had targeted or what we had messaged in the past.

Got it. That's helpful.

I'll step back. Thank you.

Hey, good morning, everyone.

Morning.

Can we get the spot rate on deposits at the end of the year?

Spot rate on deposits at the end of the year, 1.24% in December.

Okay. In December or at the end of December?

That's December. I'm not sure my calculus is good enough to give you that derivative at the moment.

Okay. Just wondering if it was lower at the end of the year.

Okay. Then on expenses, for the first quarter, can you remind us how the seasonality works, whether or not it's more in the first quarter or second or combination of both?

Just trying to get a sense for the run rate to start the year.

For the most part, the expenses are pretty flat throughout the year. We do see a pick up a little bit in the first quarter.

You can see that in our numbers last year and the year before, and then they kind of decline a little bit from that. In general, I think we're thinking about it pretty flat at the moment.

Okay. Then just your updated thoughts on mainland M&A, any discussions you've been having, whether or not things are more active, and maybe just remind us what your ideal target would look like?

Yeah. No, as Jamie mentioned, our focus is still on growing our core business, but it's still an option for us to consider for M&A.

Some of the things we've talked about in the past, just to reiterate, we'd be looking for a strong management team who'll stick around to be good partners with us, obviously, a disciplined lending culture, which is similar to the way we look at the business, strong deposit franchise. I guess it's a little more touchy-feely, but we want it well-managed.

We're not looking for a fixer-upper if we were looking to partner with somebody. Just for location, west of the Rockies is more what we're familiar with as an organization, and where we've had people on the ground, and where we have had a lot of relationships already.

As far as size, probably somewhere between $2 billion and $15 billion would be the range.

Perfect. Thanks.

Thanks again.

Hi, everyone. On deposits, Jamie, how are you thinking about balances in 1Q?

If I look at your past couple of 1Qs, you typically see a seasonal decline.

I think that's I think that's fair. Again, that's probably something that we that we should expect in in the first quarter.

Then in in totality, throughout the year, I think, we're we're sort of mostly focused on what we can do with commercial and retail deposits. We're expecting kind of low single digits on that for the for the for the entire year.

Then, for us, it's tough to in in totality, the public deposits that we have, they kind of fluctuate, generally speaking, quarter by quarter, week by week, even. I think those in general we should probably see some, normal like state like a GSP-type increase with those things.

I I think that's that's how we're thinking about balances.

Okay. Then on the full-year NIM guide of 3.16% to 3.18%, so that's a pretty tight range.

You expect each quarter to be within that range this year? Thank you.

Probably that's maybe taking it a little too far. I think it really will depend on the amount of rate cuts that we see and the timing of those, and whether they're 25 or whether they're 50.

This contemplates sort of a May-September version of that, and so I guess that's how I'd answer it.

Any direction for the 1Q NIM specifically relative to the 3.21% you printed for 4Q? Thank you.

We think it's going to come down a little bit. We had two rate cuts in the quarter, obviously, one in December.

We think it's probably going to come down a few basis points off of the December number.

Great. Thank you.

Hi, good morning.

Morning.

Hey.

Maybe just going back to the loan growth and trying to bifurcate how much of it is expected to come from some of the increased draws on production in years past versus what the opportunity to kind of re-engage on the mainland with seemingly some better momentum starting there?

Hey, Timur. Not sure I 100% understand your question, but for our existing lines, it's a little hard to predict with our larger corporate and commercial customers exactly when an opportunity will come up that they need to fund versus their line versus a new production.

We are seeing while still continued activity here in Hawaii, for sure, and in Guam. There's just a broader economic base on the West Coast where we operate, and there's a lot of opportunities up there.

We're continuing to pursue new dealer opportunities as well as commercial real estate opportunities on the mainland US, primarily on the West Coast. I don't have a breakdown for you per se, but I guess that's broadly how we're looking at it.

Okay. Maybe another way of asking that, just if you can kind of frame the opportunity set of I think you had mentioned the multi-family production that was booked 12, 18, 24 months ago that is going to start funding up, just how much of an opportunity that's going to be?

I don't have that number handy, but we can look into that.

Okay. Then during the prepared remarks, you had made a comment that you had a couple construction deals that were converted to commercial real estate.

I'm just wondering, is that pretty normal to have kind of the construction piece of it and then do the permanent financing in-house? Is that a pretty normal kind of continuation for you guys?

It depends on the sector. For customers kind of within the footprint, that is very normal.

For the multi-family construction activity we're doing primarily in the mainland on the West Coast, but it's not. It wasn't those deals.

It was really more of our other customers within the footprint. It really depends on the customer segment if that's, quote, normal or not.

Got it. Then just last for me, the C&I yields held up really well this quarter.

I'm just wondering, is that kind of new production maybe offsetting some of the decline in the variable rate portfolio? Or maybe just kind of talk me through internally if you were maybe surprised or that was kind of expected decline within the C&I book, as it seemed to hold up pretty well relative to the type of decline we saw during the 2024 rate-cutting cycle?

I don't have a perfect answer for you, but given that the draws were under lines, existing lines, I think that speaks to why the yield didn't change as much in the fourth quarter. I think if you go back to right when the pandemic happened, you had a lot of back-up lines with very highly-rated customers that just had lower pricing at the time.

When they were drawing, that pricing structurally in those agreements was lower than more of our, quote, normal base. I'd need to do more analysis to make certain of that.

Now that makes sense. Thank you.