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Reportable Operating Segments
 12 Months Ended
Dec. 31, 2024
Reportable Operating Segments  
Reportable Operating Segments

22. 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 Company’s chief operating decision maker is the chief executive officer, who assesses the segments’ performance by using each segment’s net income. Segment net income is predominantly considered in the annual budget and forecasting process. The chief operating decision maker considers budget-to-actual variances on a monthly basis to monitor profitability of each segment as well as to monitor each segment’s expenditures alongside the performance of each segment and its respective managers.

​

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.

​

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 48 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.

​

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 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 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 years indicated:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Treasury

​

​

​

 

​

​

Retail

​

Commercial

​

and

​

​

​

​

(dollars in thousands)

  

Banking

  

Banking

  

Other

  

Total

​

Year Ended December 31, 2024

​

​

​

​

​

​

​

​

​

​

​

​

​

Interest income

​

$

337,498

​

$

467,950

​

$

174,596

​

$

980,044

​

Intersegment interest allocations (1)

​

​

(256,124)

​

​

(332,273)

​

​

588,397

​

​

—

​

Total interest income

​

​

81,374

​

​

135,677

​

​

762,993

​

​

980,044

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Interest expense

​

​

(242,581)

​

​

(67,017)

​

​

(47,708)

​

​

(357,306)

​

Intersegment interest allocations (1)

​

​

668,002

​

​

117,002

​

​

(785,004)

​

​

—

​

Total interest expense

​

​

425,421

​

​

49,985

​

​

(832,712)

​

​

(357,306)

​

Net interest income (expense)

​

​

506,795

​

​

185,662

​

​

(69,719)

​

​

622,738

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

(Provision) benefit for credit losses

​

​

(8,341)

​

​

(9,167)

​

​

2,758

​

​

(14,750)

​

Net interest income (expense) after (provision) benefit for credit losses

​

​

498,454

​

​

176,495

​

​

(66,961)

​

​

607,988

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Noninterest income

​

​

106,021

​

​

79,442

​

​

340

​

​

185,803

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Salaries and employee benefits

​

​

(99,055)

​

​

(18,959)

​

​

(117,551)

​

​

(235,565)

​

Contracted services and professional fees

​

​

(11,832)

​

​

(16,304)

​

​

(32,776)

​

​

(60,912)

​

Occupancy

​

​

(30,270)

​

​

(1,975)

​

​

3,274

​

​

(28,971)

​

Equipment

​

​

(5,585)

​

​

(1,228)

​

​

(47,089)

​

​

(53,902)

​

Card rewards program

​

​

—

​

​

(33,831)

​

​

—

​

​

(33,831)

​

Other segment items (2)

​

​

(148,789)

​

​

(18,252)

​

​

79,033

​

​

(88,008)

​

Noninterest expense

​

​

(295,531)

​

​

(90,549)

​

​

(115,109)

​

​

(501,189)

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

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

​

​

308,944

​

​

165,388

​

​

(181,730)

​

​

292,602

​

(Provision) benefit for income taxes

​

​

(70,534)

​

​

(32,934)

​

​

40,995

​

​

(62,473)

​

Net income (loss)

​

$

238,410

​

$

132,454

​

$

(140,735)

​

$

230,129

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Other Segment Disclosures:

​

​

​

​

​

​

​

​

​

​

​

​

​

Depreciation and amortization (3)

​

$

4,461

​

$

268

​

$

15,438

​

$

20,167

​

Segment earning assets

​

​

7,404,154

​

​

7,010,115

​

​

6,660,043

​

​

21,074,312

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Treasury

​

​

​

 

​

​

Retail

​

Commercial

​

and

​

​

​

​

(dollars in thousands)

  

Banking

  

Banking

  

Other

  

Total

​

Year Ended December 31, 2023

​

​

​

​

​

​

​

​

​

​

​

​

​

Interest income

​

$

307,102

​

$

447,793

​

$

168,684

​

$

923,579

​

Intersegment interest allocations (1)

​

​

(234,813)

​

​

(303,504)

​

​

538,317

​

​

—

​

Total interest income

​

​

72,289

​

​

144,289

​

​

707,001

​

​

923,579

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Interest expense

​

​

(144,587)

​

​

(49,201)

​

​

(93,664)

​

​

(287,452)

​

Intersegment interest allocations (1)

​

​

530,423

​

​

80,481

​

​

(610,904)

​

​

—

​

Total interest expense

​

​

385,836

​

​

31,280

​

​

(704,568)

​

​

(287,452)

​

Net interest income

​

​

458,125

​

​

175,569

​

​

2,433

​

​

636,127

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Provision for credit losses

​

​

(9,899)

​

​

(14,961)

​

​

(1,770)

​

​

(26,630)

​

Net interest income after provision for credit losses

​

​

448,226

​

​

160,608

​

​

663

​

​

609,497

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Noninterest income

​

​

97,651

​

​

75,358

​

​

27,806

​

​

200,815

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Salaries and employee benefits

​

​

(96,363)

​

​

(19,605)

​

​

(109,787)

​

​

(225,755)

​

Contracted services and professional fees

​

​

(11,511)

​

​

(16,177)

​

​

(38,735)

​

​

(66,423)

​

Occupancy

​

​

(31,108)

​

​

(1,920)

​

​

3,420

​

​

(29,608)

​

Equipment

​

​

(4,965)

​

​

(968)

​

​

(39,176)

​

​

(45,109)

​

Card rewards program

​

​

—

​

​

(31,627)

​

​

—

​

​

(31,627)

​

Other segment items (2)

​

​

(160,784)

​

​

(42,542)

​

​

100,710

​

​

(102,616)

​

Noninterest expense

​

​

(304,731)

​

​

(112,839)

​

​

(83,568)

​

​

(501,138)

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

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

​

​

241,146

​

​

123,127

​

​

(55,099)

​

​

309,174

​

(Provision) benefit for income taxes

​

​

(58,091)

​

​

(27,927)

​

​

11,827

​

​

(74,191)

​

Net income (loss)

​

$

183,055

​

$

95,200

​

$

(43,272)

​

$

234,983

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Other Segment Disclosures:

​

​

​

​

​

​

​

​

​

​

​

​

​

Depreciation and amortization (3)

​

$

4,566

​

$

285

​

$

14,855

​

$

19,706

​

Segment earning assets

​

​

7,498,244

​

​

6,888,492

​

​

7,894,174

​

​

22,280,910

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Treasury

​

​

​

 

​

​

Retail

​

Commercial

​

and

​

​

​

​

(dollars in thousands)

  

Banking

  

Banking

  

Other

  

Total

​

Year Ended December 31, 2022

​

​

​

​

​

​

​

​

​

​

​

​

​

Interest income

​

$

259,686

​

$

251,063

​

$

152,471

​

$

663,220

​

Intersegment interest allocations (1)

​

​

(171,226)

​

​

(123,291)

​

​

294,517

​

​

—

​

Total interest income

​

​

88,460

​

​

127,772

​

​

446,988

​

​

663,220

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Interest expense

​

​

(25,869)

​

​

(12,901)

​

​

(10,901)

​

​

(49,671)

​

Intersegment interest allocations (1)

​

​

373,637

​

​

42,257

​

​

(415,894)

​

​

—

​

Total interest expense

​

​

347,768

​

​

29,356

​

​

(426,795)

​

​

(49,671)

​

Net interest income

​

​

436,228

​

​

157,128

​

​

20,193

​

​

613,549

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

(Provision) benefit for credit losses

​

​

967

​

​

1,154

​

​

(3,513)

​

​

(1,392)

​

Net interest income after (provision) benefit for credit losses

​

​

437,195

​

​

158,282

​

​

16,680

​

​

612,157

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Noninterest income

​

​

94,085

​

​

77,539

​

​

7,901

​

​

179,525

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Salaries and employee benefits

​

​

(83,771)

​

​

(15,720)

​

​

(99,638)

​

​

(199,129)

​

Contracted services and professional fees

​

​

(11,250)

​

​

(16,315)

​

​

(42,462)

​

​

(70,027)

​

Occupancy

​

​

(29,502)

​

​

(1,588)

​

​

56

​

​

(31,034)

​

Equipment

​

​

(4,743)

​

​

(1,091)

​

​

(28,672)

​

​

(34,506)

​

Card rewards program

​

​

—

​

​

(30,990)

​

​

—

​

​

(30,990)

​

Other segment items (2)

​

​

(164,297)

​

​

(44,202)

​

​

133,714

​

​

(74,785)

​

Noninterest expense

​

​

(293,563)

​

​

(109,906)

​

​

(37,002)

​

​

(440,471)

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

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

​

​

237,717

​

​

125,915

​

​

(12,421)

​

​

351,211

​

(Provision) benefit for income taxes

​

​

(58,077)

​

​

(30,158)

​

​

2,709

​

​

(85,526)

​

Net income (loss)

​

$

179,640

​

$

95,757

​

$

(9,712)

​

$

265,685

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Other Segment Disclosures:

​

​

​

​

​

​

​

​

​

​

​

​

​

Depreciation and amortization (3)

​

$

4,953

​

$

228

​

$

17,479

​

$

22,660

​

Segment earning assets

​

​

7,359,579

​

​

6,778,200

​

​

7,731,402

​

​

21,869,181

​

(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 to all 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.
(3)The amounts of depreciation and amortization disclosed by reportable segment are included within equipment, occupancy, other segment items, and noninterest income.

​

Segment earning assets include all earning assets such as interest-bearing deposits, loans and leases, available-for-sale securities, held-to-maturity securities, and other earning assets. Total segment earning assets reconciled to consolidated amounts are as follows:

​

​

​

​

​

​

​

​

​

​

​

​

​

December 31, 

(dollars in thousands)

  

2024

​

2023

​

2022

Total earning assets for reportable segments

​

$

21,074,312

​

$

22,280,910

​

$

21,869,181

Other non-earning assets (1)

​

​

2,753,874

​

​

2,645,564

​

​

2,708,042

Total consolidated assets

​

$

23,828,186

​

$

24,926,474

​

$

24,577,223

​

(1)Other non-earning assets are primarily comprised of fixed assets, receivables and clearing accounts, and other miscellaneous assets that do not generate interest income.