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Reportable Operating Segments | 9 Months Ended
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Sep. 30, 2021
Reportable Operating Segments |
Reportable Operating Segments | 17. Reportable Operating Segments ​ The Company’s operations are organized into three business segments – Retail Banking, Commercial Banking, and Treasury and Other. These segments reflect how discrete financial information is currently evaluated by the chief operating decision maker and how performance is assessed and resources 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. ​ 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 Treasury. ​ The Company allocates the provision for credit losses from the Treasury and Other business segment (which is comprised of many of the Company’s support units) to the Retail and Commercial business segments. These allocations are based on direct costs incurred by the Retail and Commercial 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 based on the consolidated effective income tax rate for the period shown. ​ The CARES Act, enacted on March 27, 2020, established, among other COVID-19 relief programs, a loan program (the “PPP”) for fully guaranteed loans (which may then be forgiven) to small businesses. In the second quarter of 2021, 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 PPP loan balances within the business segment that directly manages them. Specifically, PPP loan balances previously included as part of the Retail Banking segment have been reclassified to the Commercial Banking segment. The reallocation of select PPP loan balances affected net interest income, net interest income after provision for credit losses, noninterest expense, provision for income taxes, net income and asset balances. The Company has reported its selected financial information using the new PPP loan balance alignments for the three and nine months ended September 30, 2021. The Company has restated the selected financial information for the three and nine months ended September 30, 2020 in order to conform with the current presentation. ​ 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, automobile loans and leases, personal 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 54 banking locations throughout the State of Hawaii, Guam, and Saipan. ​ Commercial Banking Commercial Banking offers products that include corporate banking, commercial real estate loans, commercial lease financing, 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. ​ Treasury and Other Treasury consists of corporate asset and liability management activities including interest rate risk management. The segment’s assets and liabilities (and related interest income and expense) consist of interest-bearing deposits, investment securities, federal funds sold and purchased, government deposits, short- and long-term borrowings and bank-owned properties. 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 currency requests from merchants and island visitors and management of bank-owned properties. The net residual effect of the transfer pricing of assets and liabilities is included in Treasury, along with the elimination of intercompany transactions. ​ Other organizational units (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 other income earning 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 financial information for the periods indicated. ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | Treasury | ​ | ​ | ​
​ | ​ | Retail | ​ | Commercial | ​ | and | ​ | ​ | ​
(dollars in thousands) |  | Banking |  | Banking |  | Other |  | Total
Three Months Ended September 30, 2021 | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Net interest income (expense) | ​ | $ | 97,547 | ​ | $ | 41,218 | ​ | $ | (6,172) | ​ | $ | 132,593
Benefit of (provision) for credit losses | ​ | ​ | 3,067 | ​ | ​ | 4,233 | ​ | ​ | (3,300) | ​ | ​ | 4,000
Net interest income (expense) after provision for credit losses | ​ | ​ | 100,614 | ​ | ​ | 45,451 | ​ | ​ | (9,472) | ​ | ​ | 136,593
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Noninterest income | ​ | ​ | 22,698 | ​ | ​ | 18,317 | ​ | ​ | 9,089 | ​ | ​ | 50,104
Noninterest expense | ​ | ​ | (60,870) | ​ | ​ | (26,371) | ​ | ​ | (13,795) | ​ | ​ | (101,036)
Income (loss) before (provision) benefit for income taxes | ​ | ​ | 62,442 | ​ | ​ | 37,397 | ​ | ​ | (14,178) | ​ | ​ | 85,661
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
(Provision) benefit for income taxes | ​ | ​ | (15,660) | ​ | ​ | (9,269) | ​ | ​ | 3,547 | ​ | ​ | (21,382)
Net income (loss) | ​ | $ | 46,782 | ​ | $ | 28,128 | ​ | $ | (10,631) | ​ | $ | 64,279
Total assets as of September 30, 2021 | ​ | $ | 6,881,247 | ​ | $ | 6,109,627 | ​ | $ | 12,557,448 | ​ | $ | 25,548,322
​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | Treasury | ​ | ​ | ​
​ | ​ | Retail | ​ | Commercial | ​ | and | ​ | ​ | ​
(dollars in thousands) |  | Banking |  | Banking |  | Other |  | Total
Nine Months Ended September 30, 2021 | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Net interest income (expense) | ​ | $ | 289,107 | ​ | $ | 119,718 | ​ | $ | (15,593) | ​ | $ | 393,232
Benefit of (provision) for credit losses | ​ | ​ | 17,191 | ​ | ​ | 23,728 | ​ | ​ | (1,919) | ​ | ​ | 39,000
Net interest income (expense) after provision for credit losses | ​ | ​ | 306,298 | ​ | ​ | 143,446 | ​ | ​ | (17,512) | ​ | ​ | 432,232
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Noninterest income | ​ | ​ | 68,768 | ​ | ​ | 53,886 | ​ | ​ | 20,689 | ​ | ​ | 143,343
Noninterest expense | ​ | ​ | (185,874) | ​ | ​ | (73,842) | ​ | ​ | (37,014) | ​ | ​ | (296,730)
Income (loss) before (provision) benefit for income taxes | ​ | ​ | 189,192 | ​ | ​ | 123,490 | ​ | ​ | (33,837) | ​ | ​ | 278,845
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
(Provision) benefit for income taxes | ​ | ​ | (47,670) | ​ | ​ | (30,898) | ​ | ​ | 8,436 | ​ | ​ | (70,132)
Net income (loss) | ​ | $ | 141,522 | ​ | $ | 92,592 | ​ | $ | (25,401) | ​ | $ | 208,713
Total assets as of September 30, 2021 | ​ | $ | 6,881,247 | ​ | $ | 6,109,627 | ​ | $ | 12,557,448 | ​ | $ | 25,548,322
​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | Treasury | ​ | ​ | ​
​ | ​ | Retail | ​ | Commercial | ​ | and | ​ | ​ | ​
(dollars in thousands) |  | Banking |  | Banking |  | Other |  | Total
Three Months Ended September 30, 2020 | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Net interest income (expense) | ​ | $ | 96,709 | ​ | $ | 38,851 | ​ | $ | (1,558) | ​ | $ | 134,002
Provision for credit losses | ​ | ​ | (2,141) | ​ | ​ | (1,531) | ​ | ​ | (1,400) | ​ | ​ | (5,072)
Net interest income (expense) after provision for credit losses | ​ | ​ | 94,568 | ​ | ​ | 37,320 | ​ | ​ | (2,958) | ​ | ​ | 128,930
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Noninterest income | ​ | ​ | 24,649 | ​ | ​ | 16,679 | ​ | ​ | 7,570 | ​ | ​ | 48,898
Noninterest expense | ​ | ​ | (57,125) | ​ | ​ | (19,914) | ​ | ​ | (14,590) | ​ | ​ | (91,629)
Income (loss) before (provision) benefit for income taxes | ​ | ​ | 62,092 | ​ | ​ | 34,085 | ​ | ​ | (9,978) | ​ | ​ | 86,199
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
(Provision) benefit for income taxes | ​ | ​ | (15,452) | ​ | ​ | (8,168) | ​ | ​ | 2,522 | ​ | ​ | (21,098)
Net income (loss) | ​ | $ | 46,640 | ​ | $ | 25,917 | ​ | $ | (7,456) | ​ | $ | 65,101
Total assets as of September 30, 2020 | ​ | $ | 6,947,160 | ​ | $ | 6,713,328 | ​ | $ | 8,650,213 | ​ | $ | 22,310,701
​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | Treasury | ​ | ​ | ​
​ | ​ | Retail | ​ | Commercial | ​ | and | ​ | ​ | ​
(dollars in thousands) |  | Banking |  | Banking |  | Other |  | Total
Nine Months Ended September 30, 2020 | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Net interest income | ​ | $ | 278,267 | ​ | $ | 110,830 | ​ | $ | 11,410 | ​ | $ | 400,507
Provision for credit losses | ​ | ​ | (46,517) | ​ | ​ | (47,498) | ​ | ​ | (7,703) | ​ | ​ | (101,718)
Net interest income after provision for credit losses | ​ | ​ | 231,750 | ​ | ​ | 63,332 | ​ | ​ | 3,707 | ​ | ​ | 298,789
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Noninterest income | ​ | ​ | 73,197 | ​ | ​ | 52,530 | ​ | ​ | 18,055 | ​ | ​ | 143,782
Noninterest expense | ​ | ​ | (178,791) | ​ | ​ | (59,481) | ​ | ​ | (41,273) | ​ | ​ | (279,545)
Income (loss) before (provision) benefit for income taxes | ​ | ​ | 126,156 | ​ | ​ | 56,381 | ​ | ​ | (19,511) | ​ | ​ | 163,026
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
(Provision) benefit for income taxes | ​ | ​ | (30,529) | ​ | ​ | (13,769) | ​ | ​ | 5,287 | ​ | ​ | (39,011)
Net income (loss) | ​ | $ | 95,627 | ​ | $ | 42,612 | ​ | $ | (14,224) | ​ | $ | 124,015
Total assets as of September 30, 2020 | ​ | $ | 6,947,160 | ​ | $ | 6,713,328 | ​ | $ | 8,650,213 | ​ | $ | 22,310,701
​

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- Definition The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 31 -URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8924-108599 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 34 -URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8981-108599 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 21 -Subparagraph (a) -URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8721-108599 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 40 -URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e9031-108599 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 32 -Subparagraph (f) -URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8933-108599 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 32 -Subparagraph (e) -URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8933-108599 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 26 -URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8844-108599 Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 41 -URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e9038-108599 Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 32 -Subparagraph (d) -URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8933-108599 Reference 10: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 22 -URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8736-108599 Reference 11: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 42 -URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e9054-108599 Reference 12: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 15 -URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8657-108599 Reference 13: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 21 -Subparagraph (b) -URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8721-108599 Reference 14: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -URI http://asc.fasb.org/topic&trid=2134510 + Details
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